Filed electronically with the Securities and Exchange Commission
                             on September 26, 2008

                                                                File No. 2-81105
                                                              File No. 811-03632

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                                    FORM N-1A


             REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

                             Pre-Effective Amendment
                         Post-Effective Amendment No. 51
                                                     ----
                                     And/or
                        REGISTRATION STATEMENT UNDER THE
                         INVESTMENT COMPANY ACT OF 1940

                                Amendment No. 51
                                             ----

                               DWS Tax Free Trust
                               ------------------
               (Exact Name of Registrant as Specified in Charter)

                                One Beacon Street
                           Boston, Massachusetts 02108
                           ---------------------------
               (Address of Principal Executive Offices) (Zip Code)

       Registrant's Telephone Number, including Area Code: (617) 295-2572
                                                           --------------

                                  John Millette
                                  -------------
                  Deutsche Investment Management Americas Inc.
                                One Beacon Street
                           Boston, Massachusetts 02108
                     (Name and Address of Agent for Service)

It is proposed that this filing will become effective (check appropriate box):

/___/    Immediately upon filing pursuant to paragraph (b)
/ X /    On October 1, 2008 pursuant to paragraph (b)
/___/    60 days after filing pursuant to paragraph (a) (1)
/___/    On __________________ pursuant to paragraph (a) (1)
/___/    75 days after filing pursuant to paragraph (a) (2)
/___/    On __________________ pursuant to paragraph (a) (2) of Rule 485.

         If Appropriate, check the following box:
/___/    This post-effective amendment designates a new effective date for a
         previously filed post-effective amendment

<PAGE>
<PAGE>


                                OCTOBER 1, 2008








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


                     DWS STRATEGIC HIGH YIELD TAX-FREE FUND
                    (formerly DWS High Yield Tax Free Fund)



                        DWS MANAGED MUNICIPAL BOND FUND


                       DWS INTERMEDIATE TAX/AMT FREE FUND


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




                                                                       [Logo]DWS
                                                                      INVESTMENT
                                                             Deutsche Bank Group

<PAGE>

CONTENTS





<TABLE>
<S>      <C>
HOW EACH FUND WORKS
  4      DWS Strategic High Yield Tax-
         Free Fund
 12      DWS Managed Municipal
         Bond Fund
 20      DWS Intermediate Tax/AMT
         Free Fund
 28      Other Policies and Risks
 29      Who Manages and Oversees
         the Funds
 33      Financial Highlights


</TABLE>
<TABLE>
<S>      <C>
HOW TO INVEST IN THE FUNDS
 44      Choosing a Share Class
 50      How to Buy Class A, B and C
         Shares
 51      How to Exchange or Sell
         Class A, B and C Shares
 54      Policies You Should Know
         About
 66      Understanding Distributions
         and Taxes
 70      Appendix
</TABLE>


<PAGE>

HOW EACH FUND WORKS

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


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

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

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


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

<PAGE>



<TABLE>
<S>                                         <C>        <C>        <C>
                                             Class A    Class B    Class C
  ticker symbol                              NOTAX      NOTBX      NOTCX
    fund number                              152        252        352

                                      DWS STRATEGIC HIGH YIELD TAX-FREE FUND
  (formerly DWS High Yield Tax Free Fund)


</TABLE>


            THE FUND'S MAIN INVESTMENT STRATEGY

            The fund seeks to provide a high level of income exempt from
            regular federal income tax.

            Under normal circumstances, the fund invests at least 80% of net
            assets in securities issued by municipalities across the United
            States and in other securities whose income is free from regular
            federal income tax. The fund may invest up to 20% of net assets in
            securities whose income is subject to the federal alternative
            minimum tax (AMT).

            The fund can buy many types of municipal securities of all
            maturities. These may include revenue bonds (which are backed by
            revenues from a particular source) and general obligation bonds
            (which are typically backed by the issuer's ability to levy taxes).
            They may also include municipal lease obligations and investments
            representing an interest therein.


            CREDIT QUALITY POLICIES. This fund normally invests at least 50% of
            total assets in municipal securities of the top four grades of
            credit quality. The fund may invest up to 50% of total assets in
            high yield debt securities (commonly referred to as "junk" bonds),
            which are those below the fourth credit grade (i.e., grade BB/Ba
            and below) and may include debt securities not currently paying
            interest and debt securities in default. Compared to
            investment-grade debt securities, junk bonds generally pay higher
            yields, have higher volatility and higher risk of default on
            payments of interest or principal.


            The portfolio managers look for securities that appear to offer the
            best total return potential. In making their buy and sell
            decisions, the managers typically weigh a number of factors against
            each other, from economic outlooks and possible interest rate
            movements to characteristics of specific securities, such as
            coupon, maturity date and call date, and changes in supply and
            demand within the municipal bond market.


4 | DWS Strategic High Yield Tax-Free Fund
<PAGE>

            Although the managers may adjust the fund's duration (a measure of
            sensitivity to interest rates) over a wider range, they generally
            intend to keep it similar to that of the Lehman Brothers Municipal
            Bond Index, generally between five and nine years.

            In addition, they may use various types of derivative instruments
            (instruments whose value is based on, for example, indices,
            commodities or securities), for hedging purposes or to enhance
            return. Such instruments may include inverse floaters, futures
            contracts, interest rate swaps and other over-the-counter
            derivatives.



            THE MAIN RISKS OF INVESTING IN THE FUND

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

            INTEREST RATE RISK. Generally, fixed income securities will
            decrease in value when interest rates rise. The longer the duration
            of the fund's securities, the more sensitive the fund will be to
            interest rate changes. (As a general rule, a 1% rise in interest
            rates means a 1% fall in value for every year of duration.) As
            interest rates decline, the issuers of securities held by the fund
            may prepay principal earlier than scheduled, forcing the fund to
            reinvest in lower-yielding securities and may reduce the fund's
            income. As interest rates increase, slower than expected principal
            payments may extend the average life of fixed income securities.
            This will have the effect of locking in a below-market interest
            rate, reducing the value






            THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS



This fund is designed for investors who are looking for a tax-advantaged
investment and are willing to accept risk to their
principal and who are interested in the potential for
                                                           high current income.







            of such a security.


            CREDIT RISK. A fund purchasing debt securities faces the risk that
            the creditworthiness of an issuer may decline, causing the value of
            the debt securities to decline. In addition, an issuer may not be
            able to make timely payments on the interest and/
            or principal on the debt security it has issued. Because the
            issuers of high-yield debt securities or junk bonds (debt
            securities rated below the fourth highest category) may be in
            uncertain financial health, the prices of their debt securities can
            be more vulnerable to bad economic news or even the expectation of
            bad news, than investment-grade debt



                                     DWS Strategic High Yield Tax-Free Fund  | 5
<PAGE>


            securities. In some cases, debt securities, particularly high-yield
            debt securities, may decline in credit quality or go into default.
            Because the fund may invest in securities not paying current
            interest or in securities already in default, these risks may be
            more pronounced.

            FOCUSED INVESTING RISK. The fact that the fund may focus on
            investments from a single state or sector of the municipal
            securities market increases risk, because factors affecting the
            state or region, such as economic or fiscal problems, could affect
            a large portion of the fund's securities in a similar manner. For
            example, a state's technology or biotech industries could
            experience a downturn or fail to develop as expected, hurting the
            local economy. States could also face severe fiscal difficulties,
            for example, an economic downturn, increased expenditures on
            domestic security or reduced monetary support from the federal
            government. Over time, these issues may have the ability to impair
            a state's ability to repay its obligations.

            MARKET RISK. Deteriorating market conditions might cause a general
            weakness in the market that reduces the prices of securities in
            that market. Developments in a particular class of debt securities
            or the stock market could also adversely affect the fund by
            reducing the relative attractiveness of debt securities as an
            investment. Also, to the extent that the fund emphasizes debt
            securities from any given state or region, it could be hurt if that
            state or region does not do well.

            DERIVATIVES RISK. Risks associated with derivatives include the
            risk that the derivative is not well correlated with the security,
            index or currency to which it relates; the risk that derivatives
            may result in losses or missed opportunities; the risk that the
            fund will be unable to sell the derivative because of an illiquid
            secondary market; the risk that a counterparty is unwilling or
            unable to meet its obligation; and the risk that the derivative
            transaction could expose the fund to the effects of leverage, which
            could increase the fund's exposure to the market and magnify
            potential losses. There is no guarantee that derivatives, to the
            extent employed, will have the intended effect, and their use could
            cause lower returns or even losses to the fund. The use of
            derivatives by the fund to hedge risk may reduce the opportunity
            for gain by offsetting the positive effect of favorable price
            movements.



6 | DWS Strategic High Yield Tax-Free Fund
<PAGE>

            Other factors that could affect performance include:


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



            -  political or legal actions could change the way the fund's
               dividends are treated for income tax purposes.


            -  at times, market conditions might make it hard to value some
               investments or to get an attractive price for them.


                                     DWS Strategic High Yield Tax-Free Fund  | 7
<PAGE>

THE FUND'S PERFORMANCE HISTORY

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


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


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


The inception date for Class A, B and C shares is May 1, 2001. In the bar
chart, the performance figures for Class A shares before that date are based on
the historical performance of the fund's original share class (Class S),
adjusted to reflect the higher gross total annual operating expenses of Class
A. In the table, the performance figures for each share class prior to its
inception are based on the historical performance of Class S, adjusted to
reflect both the higher gross total annual operating expenses of Classes A, B
or C and the current applicable sales charges of Classes A, B or C. Class S
shares are offered in a different prospectus.

DWS Strategic High Yield Tax-Free Fund


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




<TABLE>
<S>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>
 6.09      2.50      8.79      5.51      9.08      6.26      4.88      5.34      5.88     2.47
1998      1999      2000      2001      2002      2003      2004      2005      2006      2007
</TABLE>







<TABLE>
<CAPTION>
                 2008 TOTAL RETURN AS OF JUNE 30: -1.63%
<S>                                        <C>
FOR THE PERIODS INCLUDED IN THE BAR CHART:
BEST QUARTER: 3.84%, Q3 2002               WORST QUARTER: -1.88%, Q2 1999
</TABLE>




8 | DWS Strategic High Yield Tax-Free Fund
<PAGE>


AVERAGE ANNUAL TOTAL RETURNS (%) AS OF 12/31/2007 (Fund returns include the
effects of maximum sales load.)




<TABLE>
<CAPTION>
                                               1 YEAR       5 YEARS      10 YEARS
<S>                                          <C>           <C>          <C>
 CLASS A
   Return before Taxes                          -2.14          3.99        4.65
   Return after Taxes on Distributions          -2.14          3.83        4.56
   Return after Taxes on Distributions
   and Sale of Fund Shares                      -1.47*         3.83        4.57*
 CLASS B (Return before Taxes)                  -1.24          3.97        4.29
 CLASS C (Return before Taxes)                  1.71           4.16        4.30
 LEHMAN BROTHERS MUNICIPAL BOND
 INDEX (reflects no deductions for fees,
 expenses or taxes)                             3.36           4.30        5.18
</TABLE>




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


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


 The LEHMAN BROTHERS MUNICIPAL BOND INDEX is an unmanaged market-value-weighted
 measure of municipal bonds issued across the United States. Index issues have
 a credit rating of at least Baa and a maturity of at least two years. As part
 of the proposed Barclays acquisition of Lehman Brothers and subject to the
 approval of the U.S. Bankruptcy Court and applicable regulations, the Lehman
 Brothers Municipal Bond Index is expected to become part of Barclays.



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

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



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

RETURN AFTER TAXES ON DISTRIBUTIONS assumes that an investor holds fund shares
at the end of the period. The return reflects taxes only on the fund's
distributions and not on a shareholder's gain or loss from selling fund shares.


RETURN AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES assumes that an
investor sold his or her fund shares at the end of the period. The return
reflects taxes on both the fund's distributions and a shareholder's gain or
loss from selling fund shares.



                                     DWS Strategic High Yield Tax-Free Fund  | 9
<PAGE>

HOW MUCH INVESTORS PAY

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



<TABLE>
<CAPTION>
FEE TABLE                                        CLASS A         CLASS B       CLASS C
<S>                                         <C>                 <C>          <C>
 SHAREHOLDER FEES, paid directly from your investment
___________________________________________________________________________________________
 Maximum Sales Charge (Load) Imposed
 on Purchases (as % of offering price)             4.50%1         None          None
 Maximum Contingent Deferred Sales
 Charge (Load) (as % of redemption
 proceeds)                                       None2             4.00%         1.00%
 Redemption/Exchange Fee on shares
 owned less than 15 days (as % of
 redemption proceeds)3                            2.00             2.00          2.00
 ANNUAL OPERATING EXPENSES, deducted from fund assets
___________________________________________________________________________________________
 Management Fee                                   0.51  %          0.51%         0.51%
 Distribution/Service (12b-1) Fee                 0.24             0.98          0.95
 Interest Expense4                                0.63             0.63          0.63
 Other Expenses5                                  0.21             0.24          0.21
 TOTAL OTHER EXPENSES                             0.84             0.87          0.84
 TOTAL ANNUAL OPERATING EXPENSES                  1.59             2.36          2.30
 Less Expense Waiver/Reimbursement6               0.05             0.07          0.01
 NET ANNUAL OPERATING EXPENSES6                   1.54             2.29          2.29
</TABLE>



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

2   The redemption of shares purchased at net asset value under the Large Order
   NAV Purchase Privilege (see "Policies You Should Know About - Policies
   about transactions") may be subject to a contingent deferred sales charge
   of 0.85% if redeemed within 12 months of purchase and 0.50% if redeemed
   within the following six months.


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



4   Interest expense relates to the fund's liability with respect to floating
   rate notes held by third parties in conjunction with certain inverse
   floater securities transactions. However, the accounting treatment for such
   transactions includes an offsetting interest income item, and accordingly
   has no impact on net investment income, total return or net asset value.

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



6   Through September 30, 2009, the Advisor has contractually agreed to waive
   all or a portion of its management fee and reimburse or pay operating
   expenses of the fund to the extent necessary to maintain the fund's total
   annual operating expenses at 0.91% for Class A shares and 1.66% for both
   Class B and Class C shares, excluding certain expenses such as
   extraordinary expenses, taxes, brokerage and interest.



10 | DWS Strategic High Yield Tax-Free Fund
<PAGE>

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



<TABLE>
<CAPTION>
EXAMPLE                1 YEAR      3 YEARS      5 YEARS      10 YEARS
<S>                   <C>         <C>          <C>          <C>
 EXPENSES, assuming you sold your shares at the end of each period
_________________________________________________________________________
 Class A shares         $600       $  925       $1,272       $2,250
 Class B shares*         632        1,030        1,454        2,323
 Class C shares          332          717        1,229        2,635
 EXPENSES, assuming you kept your shares
_________________________________________________________________________
 Class A shares         $600       $  925       $1,272       $2,250
 Class B shares*         232          730        1,254        2,323
 Class C shares          232          717        1,229        2,635
</TABLE>




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


                                    DWS Strategic High Yield Tax-Free Fund  | 11
<PAGE>


<TABLE>
<S>                                  <C>        <C>        <C>
                                      Class A    Class B    Class C
  ticker symbol                       SMLAX      SMLBX      SMLCX
    fund number                       466        666        766

    DWS MANAGED MUNICIPAL BOND FUND


</TABLE>

            THE FUND'S MAIN INVESTMENT STRATEGY

            The fund seeks to provide income exempt from regular federal
            income tax.

            Under normal circumstances, the fund invests at least 80% of net
            assets, plus the amount of any borrowings for investment purposes,
            in securities issued by municipalities across the United States and
            in other securities whose income is free from regular federal
            income tax. The fund may invest up to 20% of net assets in
            securities whose income is subject to the federal alternative
            minimum tax (AMT).

            The fund can buy many types of municipal securities of all
            maturities. These may include revenue bonds (which are backed by
            revenues from a particular source) and general obligation bonds
            (which are typically backed by the issuer's ability to levy taxes).
            They may also include municipal lease obligations and investments
            representing an interest therein.


            CREDIT QUALITY POLICIES. This fund normally invests at least 65% of
            total assets in municipal securities of the top three grades of
            credit quality. The fund may invest up to 10% of total assets in
            high yield debt securities (commonly referred to as "junk" bonds)
            of the fifth and sixth credit grades (i.e., as low as grade B).
            Compared to investment-grade debt securities, junk bonds generally
            pay higher yields, have higher volatility and higher risk of
            default on payments of interest or principal.


            The portfolio managers look for securities that appear to offer the
            best total return potential. In making their buy and sell
            decisions, the managers typically weigh a number of factors against
            each other, from economic outlooks and possible interest rate
            movements to characteristics of specific securities, such as
            coupon, maturity date and call date, and changes in supply and
            demand within the municipal bond market.


12 | DWS Managed Municipal Bond Fund
<PAGE>

            Although the managers may adjust the fund's duration (a measure of
            sensitivity to interest rates) over a wider range, they generally
            intend to keep it similar to that of the Lehman Brothers Municipal
            Bond Index, generally between five and nine years.

            In addition, they may use various types of derivative instruments
            (instruments whose value is based on, for example, indices,
            commodities or securities), for hedging purposes or to enhance
            return. Such instruments may include inverse floaters, futures
            contracts, interest rate swaps and other over-the-counter
            derivatives.


            THE MAIN RISKS OF INVESTING IN THE FUND

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


            INTEREST RATE RISK. Generally, fixed income securities will
            decrease in value when interest rates rise. The longer the duration
            of the fund's securities, the more sensitive the fund will be to
            interest rate changes. (As a general rule, a 1% rise in interest
            rates means a 1% fall in value for every year of duration.) As
            interest rates decline, the issuers of securities held by the fund
            may prepay principal earlier than scheduled, forcing the fund to
            reinvest in lower-yielding securities and may reduce the fund's
            income. As interest rates increase, slower than expected principal
            payments may extend the average life of fixed income securities.
            This will have the effect of locking in a below-market interest
            rate, reducing the value of such a security.

            CREDIT RISK. A fund purchasing debt securities faces the risk that
            the creditworthiness of an issuer may decline, causing the value of
            the debt securities to decline. In addition, an issuer may not be
            able to make timely payments on the interest and/






            THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS



This fund is designed for investors who are looking for a tax-advantaged
                               investment and are interested in current income.








            or principal on the debt security it has issued. Because the
            issuers of high-yield debt securities or junk bonds (debt
            securities rated below the fourth highest category) may be in
            uncertain financial health, the prices of their debt securities can
            be more vulnerable to bad economic news or even the expectation of
            bad news, than investment-grade debt



                                           DWS Managed Municipal Bond Fund  | 13
<PAGE>


            securities. In some cases, debt securities, particularly high-yield
            debt securities, may decline in credit quality or go into default.
            Because the fund may invest in securities not paying current
            interest or in securities already in default, these risks may be
            more pronounced.

            FOCUSED INVESTING RISK. The fact that the fund may focus on
            investments from a single state or sector of the municipal
            securities market increases risk, because factors affecting the
            state or region, such as economic or fiscal problems, could affect
            a large portion of the fund's securities in a similar manner. For
            example, a state's technology or biotech industries could
            experience a downturn or fail to develop as expected, hurting the
            local economy. States could also face severe fiscal difficulties,
            for example, an economic downturn, increased expenditures on
            domestic security or reduced monetary support from the federal
            government. Over time, these issues may have the ability to impair
            a state's ability to repay its obligations.

            MARKET RISK. Deteriorating market conditions might cause a general
            weakness in the market that reduces the prices of securities in
            that market. Developments in a particular class of debt securities
            or the stock market could also adversely affect the fund by
            reducing the relative attractiveness of debt securities as an
            investment. Also, to the extent that the fund emphasizes debt
            securities from any given state or region, it could be hurt if that
            state or region does not do well.

            DERIVATIVES RISK. Risks associated with derivatives include the
            risk that the derivative is not well correlated with the security,
            index or currency to which it relates; the risk that derivatives
            may result in losses or missed opportunities; the risk that the
            fund will be unable to sell the derivative because of an illiquid
            secondary market; the risk that a counterparty is unwilling or
            unable to meet its obligation; and the risk that the derivative
            transaction could expose the fund to the effects of leverage, which
            could increase the fund's exposure to the market and magnify
            potential losses. There is no guarantee that derivatives, to the
            extent employed, will have the intended effect, and their use could
            cause lower returns or even losses to the fund. The use of
            derivatives by the fund to hedge risk may reduce the opportunity
            for gain by offsetting the positive effect of favorable price
            movements.



14 | DWS Managed Municipal Bond Fund
<PAGE>

            Other factors that could affect performance include:


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



            -  political or legal actions could change the way the fund's
               dividends are treated for income tax purposes.


            -  at times, market conditions might make it hard to value some
               investments or to get an attractive price for them.


                                           DWS Managed Municipal Bond Fund  | 15
<PAGE>

THE FUND'S PERFORMANCE HISTORY

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


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


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


The inception date for Class A, B and C shares is June 11, 2001. In the bar
chart, the performance figures for Class A shares before that date are based on
the historical performance of the fund's original share class (Class S),
adjusted to reflect the higher gross total annual operating expenses of Class
A. In the table, the performance figures for each share class prior to its
inception are based on the historical performance of Class S, adjusted to
reflect both the higher gross total annual operating expenses of Classes A, B
or C and the current applicable sales charges of Classes A, B or C. Class S
shares are offered in a different prospectus.


DWS Managed Municipal Bond Fund

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




<TABLE>
<S>       <C>       <C>        <C>       <C>       <C>       <C>       <C>       <C>       <C>
 6.01      2.15     10.73       4.20      9.85      5.03      2.84      3.60      4.81     3.24
1998      1999      2000       2001      2002      2003      2004      2005      2006      2007
</TABLE>







<TABLE>
<CAPTION>
                 2008 TOTAL RETURN AS OF JUNE 30: -1.19%
<S>                                        <C>
FOR THE PERIODS INCLUDED IN THE BAR CHART:
BEST QUARTER: 5.23%, Q3 2002               WORST QUARTER: -2.13%, Q2 1999
</TABLE>




16 | DWS Managed Municipal Bond Fund
<PAGE>


AVERAGE ANNUAL TOTAL RETURNS (%) AS OF 12/31/2007 (Fund returns include the
effects of maximum sales load.)




<TABLE>
<CAPTION>
                                               1 YEAR       5 YEARS      10 YEARS
<S>                                          <C>           <C>          <C>
 CLASS A
   Return before Taxes                          -1.41         2.95         4.28
   Return after Taxes on Distributions          -1.41         2.75         4.15
   Return after Taxes on Distributions
   and Sale of Fund Shares                      -1.02*        2.85*        4.17*
 CLASS B (Return before Taxes)                  -0.59         2.94         3.96
 CLASS C (Return before Taxes)                  2.48          3.11         3.94
 LEHMAN BROTHERS MUNICIPAL BOND
 INDEX (reflects no deductions for fees,
 expenses or taxes)                             3.36          4.30         5.18
</TABLE>



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

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


 The LEHMAN BROTHERS MUNICIPAL BOND INDEX is an unmanaged market-value-weighted
 measure of municipal bonds issued across the United States. Index issues have
 a credit rating of at least Baa and a maturity of at least two years. As part
 of the proposed Barclays acquisition of Lehman Brothers and subject to the
 approval of the U.S. Bankruptcy Court and applicable regulations, the Lehman
 Brothers Municipal Bond Index is expected to become part of Barclays.



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

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



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

RETURN AFTER TAXES ON DISTRIBUTIONS assumes that an investor holds fund shares
at the end of the period. The return reflects taxes only on the fund's
distributions and not on a shareholder's gain or loss from selling fund shares.


RETURN AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES assumes that an
investor sold his or her fund shares at the end of the period. The return
reflects taxes on both the fund's distributions and a shareholder's gain or
loss from selling fund shares.



                                           DWS Managed Municipal Bond Fund  | 17
<PAGE>

HOW MUCH INVESTORS PAY

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



<TABLE>
<CAPTION>
FEE TABLE                                        CLASS A         CLASS B       CLASS C
<S>                                         <C>                 <C>          <C>
 SHAREHOLDER FEES, paid directly from your investment
___________________________________________________________________________________________
 Maximum Sales Charge (Load) Imposed
 on Purchases (as % of offering price)             4.50%1         None          None
 Maximum Contingent Deferred Sales
 Charge (Load) (as % of redemption
 proceeds)                                       None2             4.00%         1.00%
 Redemption/Exchange Fee on shares
 owned less than 15 days (as % of
 redemption proceeds)3                            2.00             2.00          2.00
 ANNUAL OPERATING EXPENSES, deducted from fund assets
___________________________________________________________________________________________
 Management Fee                                   0.33  %          0.33%         0.33%
 Distribution/Service (12b-1) Fee                 0.24             1.00          1.00
 Interest Expense4                                0.41             0.41          0.41
 Other Expenses5                                  0.18             0.24          0.18
 TOTAL OTHER EXPENSES                             0.59             0.65          0.59
 TOTAL ANNUAL OPERATING EXPENSES                  1.16             1.98          1.92
</TABLE>



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

2   The redemption of shares purchased at net asset value under the Large Order
   NAV Purchase Privilege (see "Policies You Should Know About - Policies
   about transactions") may be subject to a contingent deferred sales charge
   of 0.85% if redeemed within 12 months of purchase and 0.50% if redeemed
   within the following six months.

3   This fee is charged on applicable redemptions or exchanges. Please see
   "Policies about transactions" for further information.


4   Interest expense relates to the fund's liability with respect to floating
   rate notes held by third parties in conjunction with inverse floater
   securities transactions. However, the accounting treatment for such
   transactions includes an offsetting interest income item, and accordingly
   has no impact on net investment income, total return or net asset value.

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


18 | DWS Managed Municipal Bond Fund
<PAGE>


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




<TABLE>
<CAPTION>
EXAMPLE                1 YEAR      3 YEARS      5 YEARS      10 YEARS
<S>                   <C>         <C>          <C>          <C>
 EXPENSES, assuming you sold your shares at the end of each period
_________________________________________________________________________
 Class A shares         $563         $802       $1,060       $1,796
 Class B shares*         601          921        1,268        1,899
 Class C shares          295          603        1,037        2,243
 EXPENSES, assuming you kept your shares
_________________________________________________________________________
 Class A shares         $563         $802       $1,060       $1,796
 Class B shares*         201          621        1,068        1,899
 Class C shares          195          603        1,037        2,243
</TABLE>




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


                                           DWS Managed Municipal Bond Fund  | 19
<PAGE>


<TABLE>
<S>                                     <C>        <C>        <C>
                                         Class A    Class B    Class C
  ticker symbol                          SZMAX      SZMBX      SZMCX
    fund number                          445        645        745

    DWS INTERMEDIATE TAX/AMT FREE FUND


</TABLE>

            THE FUND'S MAIN INVESTMENT STRATEGY

            The fund seeks to provide a high level of income exempt from
            regular federal income taxes and seeks to limit principal
            fluctuation.

            Under normal circumstances, the fund invests at least 80% of net
            assets, plus the amount of any borrowings for investment purposes,
            in securities issued by municipalities across the United States and
            in other securities whose income is free from regular federal
            income tax and alternative minimum tax (AMT). The fund does not
            intend to invest in securities whose income is subject to AMT.

            The fund can buy many types of municipal securities of all
            maturities. These may include revenue bonds (which are backed by
            revenues from a particular source) and general obligation bonds
            (which are typically backed by the issuer's ability to levy taxes).
            They may also include municipal lease obligations and investments
            representing an interest therein.


            CREDIT QUALITY POLICIES. This fund normally invests at least 65% of
            total assets in municipal securities of the top three grades of
            credit quality. The fund could put up to 35% of net assets in debt
            securities rated in the fourth credit grade, which is still
            considered investment-grade.


            The portfolio managers look for securities that appear to offer the
            best total return potential. In making their buy and sell
            decisions, the managers typically weigh a number of factors against
            each other, from economic outlooks and possible interest rate
            movements to characteristics of specific securities, such as
            coupon, maturity date and call date, and changes in supply and
            demand within the municipal bond market.

            Although the managers may adjust the maturity of the fund's
            portfolio between three and ten years, they generally intend to
            keep it between five and ten years.


20 | DWS Intermediate Tax/AMT Free Fund
<PAGE>

            In addition, they may use various types of derivative instruments
            (instruments whose value is based on, for example, indices,
            commodities or securities), for hedging purposes or to enhance
            return. Such instruments may include inverse floaters, futures
            contracts, interest rate swaps and other over-the-counter
            derivatives.


            THE MAIN RISKS OF INVESTING IN THE FUND

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


            INTEREST RATE RISK. Generally, fixed income securities will
            decrease in value when interest rates rise. The longer the duration
            of the fund's securities, the more sensitive the fund will be to
            interest rate changes. (As a general rule, a 1% rise in interest
            rates means a 1% fall in value for every year of duration.) As
            interest rates decline, the issuers of securities held by the fund
            may prepay principal earlier than scheduled, forcing the fund to
            reinvest in lower-yielding securities and may reduce the fund's
            income. As interest rates increase, slower than expected principal
            payments may extend the average life of fixed income securities.
            This will have the effect of locking in a below-market interest
            rate, reducing the value of such a security.

            CREDIT RISK. A fund purchasing debt securities faces the risk that
            the creditworthiness of an issuer may decline, causing the value of
            the debt securities to decline. In addition, an issuer may not be
            able to make timely payments on the interest and/
            or principal on the debt security it has issued. Because the
            issuers of high-yield debt securities or junk bonds (debt






            THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS



This fund is designed for investors who are looking for a tax-advantaged
investment, are interested in higher yield and can accept
                                              moderate risk to their principal.








            securities rated below the fourth highest category) may be in
            uncertain financial health, the prices of their debt securities can
            be more vulnerable to bad economic news or even the expectation of
            bad news, than investment-grade debt securities. In some cases,
            debt securities, particularly high-yield debt securities, may
            decline in credit quality or go into default. Because the fund may
            invest in securities not paying current interest or in securities
            already in default, these risks may be more pronounced.



                                        DWS Intermediate Tax/AMT Free Fund  | 21
<PAGE>


            FOCUSED INVESTING RISK. The fact that the fund may focus on
            investments from a single state or sector of the municipal
            securities market increases risk, because factors affecting the
            state or region, such as economic or fiscal problems, could affect
            a large portion of the fund's securities in a similar manner. For
            example, a state's technology or biotech industries could
            experience a downturn or fail to develop as expected, hurting the
            local economy. States could also face severe fiscal difficulties,
            for example, an economic downturn, increased expenditures on
            domestic security or reduced monetary support from the federal
            government. Over time, these issues may have the ability to impair
            a state's ability to repay its obligations.

            MARKET RISK. Deteriorating market conditions might cause a general
            weakness in the market that reduces the prices of securities in
            that market. Developments in a particular class of debt securities
            or the stock market could also adversely affect the fund by
            reducing the relative attractiveness of debt securities as an
            investment. Also, to the extent that the fund emphasizes debt
            securities from any given state or region, it could be hurt if that
            state or region does not do well.

            DERIVATIVES RISK. Risks associated with derivatives include the
            risk that the derivative is not well correlated with the security,
            index or currency to which it relates; the risk that derivatives
            may result in losses or missed opportunities; the risk that the
            fund will be unable to sell the derivative because of an illiquid
            secondary market; the risk that a counterparty is unwilling or
            unable to meet its obligation; and the risk that the derivative
            transaction could expose the fund to the effects of leverage, which
            could increase the fund's exposure to the market and magnify
            potential losses. There is no guarantee that derivatives, to the
            extent employed, will have the intended effect, and their use could
            cause lower returns or even losses to the fund. The use of
            derivatives by the fund to hedge risk may reduce the opportunity
            for gain by offsetting the positive effect of favorable price
            movements.



22 | DWS Intermediate Tax/AMT Free Fund
<PAGE>

            Other factors that could affect performance include:


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



            -  political or legal actions could change the way the fund's
               dividends are treated for income tax purposes.


            -  at times, market conditions might make it hard to value some
               investments or to get an attractive price for them.


                                        DWS Intermediate Tax/AMT Free Fund  | 23
<PAGE>

THE FUND'S PERFORMANCE HISTORY

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


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


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

The inception date for Class A, B and C shares is June 11, 2001. In the bar
chart, the performance figures for Class A shares before that date are based on
the historical performance of the fund's original share class (Class S),
adjusted to reflect the higher gross total annual operating expenses of Class
A. In the table, the performance figures for each share class prior to its
inception are based on the historical performance of Class S, adjusted to
reflect both the higher gross total annual operating expenses of Classes A, B
or C and the current applicable sales charges of Classes A, B or C. Class S
shares are offered in a different prospectus.

DWS Intermediate Tax/AMT Free Fund

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




<TABLE>
<S>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>
 5.29      1.38      8.16      4.57      8.36      3.55      2.85      1.78      3.42     3.64
1998      1999      2000      2001      2002      2003      2004      2005      2006      2007
</TABLE>







<TABLE>
<CAPTION>
                  2008 TOTAL RETURN AS OF JUNE 30: 0.07%
<S>                                        <C>
FOR THE PERIODS INCLUDED IN THE BAR CHART:
BEST QUARTER: 4.25%, Q3 2002               WORST QUARTER: -2.01%, Q2 2004
</TABLE>




24 | DWS Intermediate Tax/AMT Free Fund
<PAGE>


AVERAGE ANNUAL TOTAL RETURNS (%) AS OF 12/31/2007 (Fund returns include the
effects of maximum sales load.)




<TABLE>
<CAPTION>
                                              1 YEAR      5 YEARS      10 YEARS
<S>                                          <C>         <C>          <C>
 CLASS A
   Return before Taxes                         0.79         2.47         3.66
   Return after Taxes on Distributions         0.79         2.34         3.61
   Return after Taxes on Distributions
   and Sale of Fund Shares                     0.88*        2.45*        3.64*
 CLASS B (Return before Taxes)                 -0.14        2.06         3.13
 CLASS C (Return before Taxes)                 2.86         2.25         3.15
 LEHMAN SEVEN YEAR MUNICIPAL BOND
 INDEX (reflects no deductions for fees,
 expenses or taxes)                            5.06         3.86         4.96
</TABLE>



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

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


 The LEHMAN SEVEN YEAR MUNICIPAL BOND INDEX is an unmanaged, total return
 subset of the Lehman Brothers Municipal Bond Index. It includes maturities of
 six to eight years. As part of the proposed Barclays acquisition of Lehman
 Brothers and subject to the approval of the U.S. Bankruptcy Court and
 applicable regulations, the Lehman Seven Year Municipal Bond Index and Lehman
 Brothers Municipal Bond Index are expected to become part of Barclays.



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

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



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

RETURN AFTER TAXES ON DISTRIBUTIONS assumes that an investor holds fund shares
at the end of the period. The return reflects taxes only on the fund's
distributions and not on a shareholder's gain or loss from selling fund shares.


RETURN AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES assumes that an
investor sold his or her fund shares at the end of the period. The return
reflects taxes on both the fund's distributions and a shareholder's gain or
loss from selling fund shares.



                                        DWS Intermediate Tax/AMT Free Fund  | 25
<PAGE>

HOW MUCH INVESTORS PAY

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



<TABLE>
<CAPTION>
FEE TABLE                                        CLASS A         CLASS B       CLASS C
<S>                                         <C>                 <C>          <C>
 SHAREHOLDER FEES, paid directly from your investment
___________________________________________________________________________________________
 Maximum Sales Charge (Load) Imposed
 on Purchases (as % of offering price)             2.75%1         None          None
 Maximum Contingent Deferred Sales
 Charge (Load) (as % of redemption
 proceeds)                                       None2             4.00%         1.00%
 Redemption/Exchange Fee on shares
 owned less than 15 days (as % of
 redemption proceeds)3                            2.00             2.00          2.00
 ANNUAL OPERATING EXPENSES, deducted from fund assets
___________________________________________________________________________________________
 Management Fee                                   0.32  %          0.32%         0.32%
 Distribution/Service (12b-1) Fee                 0.24             1.00          1.00
 Interest Expense4                                0.13             0.13          0.13
 Other Expenses5                                  0.24             0.27          0.24
 TOTAL OTHER EXPENSES                             0.37             0.40          0.37
 TOTAL ANNUAL OPERATING EXPENSES                  0.93             1.72          1.69
</TABLE>



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

2   The redemption of shares purchased at net asset value under the Large Order
   NAV Purchase Privilege (see "Policies You Should Know About - Policies
   about transactions") may be subject to a contingent deferred sales charge
   of 0.85% if redeemed within 12 months of purchase and 0.50% if redeemed
   within the following six months.

3   This fee is charged on applicable redemptions or exchanges. Please see
   "Policies about transactions" for further information.


4   Interest expense relates to the fund's liability with respect to floating
   rate notes held by third parties in conjunction with certain inverse
   floater securities transactions. However, the accounting treatment for such
   transactions includes an offsetting interest income item, and accordingly
   has no impact on net investment income, total return or net asset value.

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


26 | DWS Intermediate Tax/AMT Free Fund
<PAGE>

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



<TABLE>
<CAPTION>
EXAMPLE                1 YEAR      3 YEARS      5 YEARS      10 YEARS
<S>                   <C>         <C>          <C>          <C>
 EXPENSES, assuming you sold your shares at the end of each period
_________________________________________________________________________
 Class A shares         $367         $563       $  776       $1,387
 Class B shares*         575          842        1,133        1,628
 Class C shares          272          533          918        1,998
 EXPENSES, assuming you kept your shares
_________________________________________________________________________
 Class A shares         $367         $563       $  776       $1,387
 Class B shares*         175          542          933        1,628
 Class C shares          172          533          918        1,998
</TABLE>




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


                                        DWS Intermediate Tax/AMT Free Fund  | 27
<PAGE>

OTHER POLICIES AND RISKS

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

           -  Although major changes tend to be infrequent, each fund's Board
              could change a fund's investment objective without seeking
              shareholder approval. However, the policy of investing at least
              80% of net assets (plus the amount of any borrowings for
              investment purposes in the case of DWS Managed Municipal Bond
              Fund and DWS Intermediate Tax/AMT Free Fund) in municipal
              securities exempt from regular federal income tax (and in the
              case of DWS Intermediate Tax/
              AMT Free Fund, the alternative minimum tax) for each fund cannot
              be changed without shareholder approval.


           -  As a temporary defensive measure, each fund could shift up to 20%
              and DWS Strategic High Yield Tax-Free Fund could shift up to 100%
              of assets into investments such as taxable money market
              securities or other short-term securities that offer comparable
              levels of risk. This could prevent losses, but, while engaged in
              a temporary defensive position, a fund will not be pursuing its
              investment objective. However, portfolio management may choose
              not to use these strategies for various reasons, even in volatile
              market conditions. Temporary investments may be taxable.

           -  Portfolio management measures credit quality at the time it buys
              securities, using independent rating agencies or, for unrated
              securities, its own judgment. All securities must meet the credit
              quality standards applied by portfolio management at the time
              they are purchased. If a security's credit quality changes,
              portfolio management will decide what to do with the security,
              based on its assessment of what would most benefit a fund.



           For more information

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

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


28 | Other Policies and Risks
<PAGE>


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

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



WHO MANAGES AND OVERSEES THE FUNDS


           The investment advisor

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


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


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

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


                                        Who Manages and Oversees the Funds  | 29
<PAGE>


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




<TABLE>
<CAPTION>
FUND NAME                                               FEE PAID
<S>                                                    <C>
           DWS Strategic High Yield Tax-Free Fund         0.52%
           DWS Managed Municipal Bond Fund                0.33%
           DWS Intermediate Tax/AMT Free Fund             0.32%
</TABLE>




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


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


30 | Who Manages and Oversees the Funds
<PAGE>

Portfolio management


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


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


DWS STRATEGIC HIGH YIELD TAX-FREE FUND


Philip G. Condon
Managing Director of Deutsche Asset Management and Lead Portfolio Manager of
the fund.
-  Joined Deutsche Asset Management in 1983 and the fund in 1987.

-  Over 32 years of investment industry experience.

-  BA and MBA, University of Massachusetts at Amherst.

Rebecca L. Flinn

Director of Deutsche Asset Management and Portfolio Manager of the fund.

-  Joined Deutsche Asset Management in 1986 and the fund in 1998.

-  Over 22 years of investment industry experience.

-  BA, University of Redlands, California.


DWS MANAGED MUNICIPAL BOND FUND

Philip G. Condon
Managing Director of Deutsche Asset Management and Co-Lead Portfolio Manager of
the fund.
-  Joined Deutsche Asset Management in 1983 and the fund in 1990.

-  Over 32 years of investment industry experience.

-  BA and MBA, University of Massachusetts at Amherst.

DWS MANAGED MUNICIPAL BOND FUND (CONTINUED)

Ashton P. Goodfield, CFA
Managing Director of Deutsche Asset Management and Co-Lead Portfolio Manager of
the fund.
-  Joined Deutsche Asset Management in 1986 and the fund in 1998.

-  Over 22 years of investment industry experience.

-  BA, Duke University.

Eleanor R. Lynch, CFA
Director of Deutsche Asset Management and Co-Lead Portfolio Manager of the
fund.
-  Joined Deutsche Asset Management in 1995 and the fund in 1999.

-  Over 21 years of investment industry experience.

-  BS, Ursinus College; MS, Drexel
     University.

Matthew J. Caggiano, CFA
Managing Director of Deutsche Asset Management and Portfolio Manager of the
fund.
-  Joined Deutsche Asset Management in 1989 and the fund in 1999.

-  Over 18 years of investment industry experience.

-  BS, Pennsylvania State University; MS, Boston College.

                                        Who Manages and Oversees the Funds  | 31
<PAGE>

DWS INTERMEDIATE TAX/AMT FREE FUND

Philip G. Condon
Managing Director of Deutsche Asset Management and Co-Lead Portfolio Manager of
the fund.
- Joined Deutsche Asset Management in 1983 and the fund in 1998.

- Over 32 years of investment industry experience.

- BA and MBA, University of Massachusetts at Amherst.

Ashton P. Goodfield, CFA
Managing Director of Deutsche Asset Management and Co-Lead Portfolio Manager of
the fund.
- Joined Deutsche Asset Management in 1986 and the fund in 1990.

- Over 22 years of investment industry experience.

- BA, Duke University.

Shelly Deitert
Vice President of Deutsche Asset Management and Portfolio Manager of the fund.
- Joined Deutsche Asset Management in 1997 and the fund in 2002.

- Over 11 years of investment industry experience.

- BA, Taylor University.

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


32 | Who Manages and Oversees the Funds
<PAGE>

FINANCIAL HIGHLIGHTS

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


                                                      Financial Highlights  | 33
<PAGE>


DWS Strategic High Yield Tax-Free Fund - Class A




<TABLE>
<CAPTION>
YEARS ENDED MAY 31,                      2008             2007            2006            2005            2004
<S>                                 <C>              <C>              <C>            <C>              <C>
SELECTED PER SHARE DATA
---------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD                             $  12.83         $  12.78         $ 12.88        $  12.50        $  12.86
--------------------------------      --------         --------         -------        --------        --------
Income from investment operations:
  Net investment income                    .59              .59             .60             .65             .67
________________________________      ________         ________         _______        ________        ________
  Net realized and unrealized
  gain (loss)                           (  .37)             .05          (  .10)            .39          (  .35)
--------------------------------      --------         --------         -------        --------        --------
  TOTAL FROM INVESTMENT
  OPERATIONS                               .22              .64             .50            1.04             .32
________________________________      ________         ________         _______        ________        ________
Less distributions from:
  Net investment income                 (  .59)          (  .59)         (  .60)         (  .65)         (  .67)
________________________________      ________         ________         _______        ________        ________
  Net realized gains                         -                -          (  .00)*        (  .01)         (  .01)
--------------------------------      --------         --------         -------        --------        --------
  TOTAL DISTRIBUTIONS                   (  .59)          (  .59)         (  .60)         (  .66)         (  .68)
________________________________      ________         ________         _______        ________        ________
Redemption fees                            .00*             .00*            .00*            .00*              -
--------------------------------      --------         --------         -------        --------        --------
NET ASSET VALUE, END OF
PERIOD                                $  12.46         $  12.83         $ 12.78        $  12.88        $  12.50
--------------------------------      --------         --------         -------        --------        --------
Total Return (%)a                       1.73b            5.03b             4.01          8.48b           2.48b
--------------------------------      --------         --------         -------        --------        --------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
---------------------------------------------------------------------------------------------------------------------
Net assets, end of period
($ millions)                               334              196             181             182             151
_________________________________     ________         ________         _______        ________        ________
Ratio of expenses before
expense reductions (including
interest expense) (%)c                    1.60             1.20            1.31            1.08            1.08
_________________________________     ________         ________         _______        ________        ________
Ratio of expenses after
expense reductions (including
interest expense) (%)c                    1.57             1.20            1.31            1.02             .88
_________________________________     ________         ________         _______        ________        ________
Ratio of expenses after
expense reductions (excluding
interest expense) (%)                      .94              .96             .98             .90             .80
_________________________________     ________         ________         _______        ________        ________
Ratio of net investment
income (%)                                4.67             4.56            4.70            5.14            5.24
_________________________________     ________         ________         _______        ________        ________
Portfolio turnover rate (%)                 70               57              43              34              44
---------------------------------     --------         --------         -------        --------        --------
</TABLE>



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

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


c   Interest expense represents interest and fees on short term floating rate
   notes issued in conjunction with inverse floating rate securities. Interest
   income from such transactions is included in income from investment
   operations.


*   Amount is less than $.005.

34 | Financial Highlights
<PAGE>


DWS Strategic High Yield Tax-Free Fund - Class B




<TABLE>
<CAPTION>
YEARS ENDED MAY 31,                     2008             2007            2006            2005            2004
<S>                                 <C>             <C>              <C>            <C>              <C>
SELECTED PER SHARE DATA
--------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD                             $  12.84        $  12.78         $ 12.89        $  12.51        $  12.86
--------------------------------      --------        --------         -------        --------        --------
Income from investment operations:
  Net investment income                    .49             .49             .50             .55             .57
________________________________      ________        ________         _______        ________        ________
  Net realized and unrealized
  gain (loss)                           (  .38)            .06          (  .11)            .39          (  .34)
--------------------------------      --------        --------         -------        --------        --------
  TOTAL FROM INVESTMENT
  OPERATIONS                               .11             .55             .39             .94             .23
________________________________      ________        ________         _______        ________        ________
Less distributions from:
  Net investment income                 (  .49)         (  .49)         (  .50)         (  .55)         (  .57)
________________________________      ________        ________         _______        ________        ________
  Net realized gains                         -               -          (  .00)*        (  .01)         (  .01)
--------------------------------      --------        --------         -------        --------        --------
  TOTAL DISTRIBUTIONS                   (  .49)         (  .49)         (  .50)         (  .56)         (  .58)
________________________________      ________        ________         _______        ________        ________
Redemption fees                            .00*            .00*            .00*            .00*              -
--------------------------------      --------        --------         -------        --------        --------
NET ASSET VALUE, END OF
PERIOD                                $  12.46        $  12.84         $ 12.78        $  12.89        $  12.51
--------------------------------      --------        --------         -------        --------        --------
Total Return (%)a                       .88b            4.31b             3.13          7.65b           1.74b
--------------------------------      --------        --------         -------        --------        --------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
--------------------------------------------------------------------------------------------------------------------
Net assets, end of period
($ millions)                                28              41              50              54              56
_________________________________     ________        ________         _______        ________        ________
Ratio of expenses before
expense reductions (including
interest expense) (%)c                    2.37            1.97            2.09            1.85            1.90
_________________________________     ________        ________         _______        ________        ________
Ratio of expenses after
expense reductions (including
interest expense) (%)c                    2.32            1.96            2.09            1.80            1.68
_________________________________     ________        ________         _______        ________        ________
Ratio of expenses after
expense reductions (excluding
interest expense) (%)                     1.69            1.73            1.76            1.68            1.60
_________________________________     ________        ________         _______        ________        ________
Ratio of net investment
income (%)                                3.92            3.79            3.92            4.36            4.44
_________________________________     ________        ________         _______        ________        ________
Portfolio turnover rate (%)                 70              57              43              34              44
---------------------------------     --------        --------         -------        --------        --------
</TABLE>



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

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


c   Interest expense represents interest and fees on short term floating rate
   notes issued in conjunction with inverse floating rate securities. Interest
   income from such transactions is included in income from investment
   operations.


*   Amount is less than $.005.

                                                      Financial Highlights  | 35
<PAGE>


DWS Strategic High Yield Tax-Free Fund - Class C




<TABLE>
<CAPTION>
YEARS ENDED MAY 31,                     2008             2007            2006            2005            2004
<S>                                 <C>             <C>              <C>            <C>              <C>
SELECTED PER SHARE DATA
--------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD                             $  12.84        $  12.78         $ 12.89        $  12.51        $  12.87
--------------------------------      --------        --------         -------        --------        --------
Income from investment
operations:
  Net investment income                    .49             .49             .51             .55             .57
________________________________      ________        ________         _______        ________        ________
  Net realized and unrealized
  gain (loss)                           (  .37)            .06          (  .11)            .39          (  .35)
--------------------------------      --------        --------         -------        --------        --------
  TOTAL FROM INVESTMENT
  OPERATIONS                               .12             .55             .40             .94             .22
________________________________      ________        ________         _______        ________        ________
Less distributions from:
  Net investment income                 (  .49)         (  .49)         (  .51)         (  .55)         (  .57)
________________________________      ________        ________         _______        ________        ________
  Net realized gains                         -               -          (  .00)*        (  .01)         (  .01)
--------------------------------      --------        --------         -------        --------        --------
  TOTAL DISTRIBUTIONS                   (  .49)         (  .49)         (  .51)         (  .56)         (  .58)
________________________________      ________        ________         _______        ________        ________
Redemption fees                            .00*            .00*            .00*            .00*              -
--------------------------------      --------        --------         -------        --------        --------
NET ASSET VALUE, END OF
PERIOD                                $  12.47        $  12.84         $ 12.78        $  12.89        $  12.51
--------------------------------      --------        --------         -------        --------        --------
Total Return (%)a                       .98b            4.31b             3.15          7.66b           1.69b
--------------------------------      --------        --------         -------        --------        --------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
--------------------------------------------------------------------------------------------------------------------
Net assets, end of period
($ millions)                                87              57              64              63              58
_________________________________     ________        ________         _______        ________        ________
Ratio of expenses before
expense reductions (including
interest expense) (%)c                    2.31            1.96            2.07            1.84            1.87
_________________________________     ________        ________         _______        ________        ________
Ratio of expenses after
expense reductions (including
interest expense) (%)c                    2.31            1.96            2.07            1.79            1.65
_________________________________     ________        ________         _______        ________        ________
Ratio of expenses after
expense reductions (excluding
interest expense) (%)                     1.68            1.73            1.74            1.67            1.57
_________________________________     ________        ________         _______        ________        ________
Ratio of net investment
income (%)                                3.93            3.79            3.94            4.37            4.47
_________________________________     ________        ________         _______        ________        ________
Portfolio turnover rate (%)                 70              57              43              34              44
---------------------------------     --------        --------         -------        --------        --------
</TABLE>



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

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


c   Interest expense represents interest and fees on short term floating rate
   notes issued in conjunction with inverse floating rate securities. Interest
   income from such transactions is included in income from investment
   operations.


*   Amount is less than $.005.

36 | Financial Highlights
<PAGE>

DWS Managed Municipal Bond Fund - Class A



<TABLE>
<CAPTION>
YEARS ENDED MAY 31,                      2008             2007             2006           2005          2004
<S>                                 <C>              <C>              <C>              <C>           <C>
SELECTED PER SHARE DATA
-------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD                              $  8.99          $  9.04          $ 9.20          $ 9.04       $  9.50
--------------------------------       -------          -------          -------         ------       -------
Income from investment
operations:
  Net investment income                    .40              .39             .40             .42           .43
________________________________       _______          _______          _______         ______       _______
  Net realized and unrealized
  gain (loss)                            ( .13)             .00*          ( .16)            .16         ( .46)
--------------------------------       -------          -------          -------         ------       -------
  TOTAL FROM INVESTMENT
  OPERATIONS                               .27              .39             .24             .58         ( .03)
________________________________       _______          _______          _______         ______       _______
Less distributions from:
  Net investment income                  ( .40)           ( .39)          ( .40)          ( .42)        ( .43)
________________________________       _______          _______          _______         ______       _______
  Net realized gains                     ( .01)           ( .05)          ( .00)*         ( .00)*           -
--------------------------------       -------          -------          -------         ------       -------
  TOTAL DISTRIBUTIONS                    ( .41)           ( .44)          ( .40)          ( .42)        ( .43)
________________________________       _______          _______          _______         ______       _______
Redemption fees                            .00*             .00*            .00*            .00*            -
--------------------------------       -------          -------          -------         ------       -------
NET ASSET VALUE, END OF
PERIOD                                 $  8.85          $  8.99          $ 9.04          $ 9.20       $  9.04
--------------------------------       -------          -------          -------         ------       -------
Total Return (%)a                       3.08b            4.36b           2.65b             6.53         ( .31)
--------------------------------       -------          -------          -------         ------       -------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
-------------------------------------------------------------------------------------------------------------------
Net assets, end of period
($ millions)                             1,745            1,843           1,949           2,147         2,183
_________________________________      _______          _______          _______         ______       _______
Ratio of expenses before
expense reductions (including
interest expense) (%)c                    1.16             1.04            1.11             .88           .84
_________________________________      _______          _______          _______         ______       _______
Ratio of expenses after
expense reductions (including
interest expense) (%)c                    1.14             1.02            1.09             .88           .84
_________________________________      _______          _______          _______         ______       _______
Ratio of expenses after
expense reductions (excluding
interest expense) (%)                      .73              .73             .74             .74           .75
_________________________________      _______          _______          _______         ______       _______
Ratio of net investment
income (%)                                4.52             4.29            4.38            4.56          4.61
_________________________________      _______          _______          _______         ______       _______
Portfolio turnover rate (%)                 55               19              28              31            24
---------------------------------      -------          -------          -------         ------       -------
</TABLE>



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

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


c   Interest expense represents interest and fees on short term floating rate
   notes issued in conjunction with inverse floating rate securities. Interest
   income from such transactions is included in income from investment
   operations.


*   Amount is less than $.005.

                                                      Financial Highlights  | 37
<PAGE>

DWS Managed Municipal Bond Fund - Class B



<TABLE>
<CAPTION>
YEARS ENDED MAY 31,                      2008             2007             2006             2005           2004
<S>                                 <C>              <C>              <C>              <C>              <C>
SELECTED PER SHARE DATA
----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD                              $  8.99          $  9.04          $ 9.20           $ 9.04         $  9.50
--------------------------------       -------          -------          -------          -------        -------
Income from investment
operations:
  Net investment income                    .34              .32             .33              .35             .36
________________________________       _______          _______          _______          _______        _______
  Net realized and unrealized
  gain (loss)                            ( .13)             .00*          ( .16)             .16           ( .46)
--------------------------------       -------          -------          -------          -------        -------
  Total from investment
  operations                               .21              .32             .17              .51           ( .10)
________________________________       _______          _______          _______          _______        _______
Less distributions from:
  Net investment income                  ( .33)           ( .32)          ( .33)           ( .35)          ( .36)
________________________________       _______          _______          _______          _______        _______
  Net realized gains                     ( .01)           ( .05)          ( .00)*          ( .00)*             -
--------------------------------       -------          -------          -------          -------        -------
  TOTAL DISTRIBUTIONS                    ( .34)           ( .37)          ( .33)           ( .35)          ( .36)
________________________________       _______          _______          _______          _______        _______
Redemption fees                            .00*             .00*            .00*             .00*              -
--------------------------------       -------          -------          -------          -------        -------
NET ASSET VALUE, END OF
PERIOD                                 $  8.86          $  8.99          $ 9.04           $ 9.20         $  9.04
--------------------------------       -------          -------          -------          -------        -------
Total Return (%)a                       2.42b            3.59b           1.88b            5.70b            (1.07)
--------------------------------       -------          -------          -------          -------        -------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
----------------------------------------------------------------------------------------------------------------------
Net assets, end of period
($ millions)                                12               19              26               34              47
_________________________________      _______          _______          _______          _______        _______
Ratio of expenses before
expense reductions (including
interest expense) (%)c                    1.98             1.84            1.88             1.68            1.61
_________________________________      _______          _______          _______          _______        _______
Ratio of expenses after
expense reductions (including
interest expense) (%)c                    1.89             1.77            1.84             1.67            1.61
_________________________________      _______          _______          _______          _______        _______
Ratio of expenses after
expense reductions (excluding
interest expense) (%)                     1.48             1.48            1.49             1.53            1.52
_________________________________      _______          _______          _______          _______        _______
Ratio of net investment
income (%)                                3.77             3.54            3.63             3.77            3.84
_________________________________      _______          _______          _______          _______        _______
Portfolio turnover rate (%)                 55               19              28               31              24
---------------------------------      -------          -------          -------          -------        -------
</TABLE>



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

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


c   Interest expense represents interest and fees on short term floating rate
   notes issued in conjunction with inverse floating rate securities. Interest
   income from such transactions is included in income from investment
   operations.


*   Amount is less than $.005.

38 | Financial Highlights
<PAGE>

DWS Managed Municipal Bond Fund - Class C



<TABLE>
<CAPTION>
YEARS ENDED MAY 31,                      2008             2007             2006           2005          2004
<S>                                 <C>              <C>              <C>              <C>           <C>
SELECTED PER SHARE DATA
-------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD                              $  8.99          $  9.04          $ 9.20          $ 9.04       $  9.50
--------------------------------       -------          -------          -------         ------       -------
Income from investment
operations:
  Net investment income                    .34              .32             .33             .35           .36
________________________________       _______          _______          _______         ______       _______
  Net realized and unrealized
  gain (loss)                            ( .13)             .00*          ( .16)            .16         ( .46)
--------------------------------       -------          -------          -------         ------       -------
  TOTAL FROM INVESTMENT
  OPERATIONS                               .21              .32             .17             .51         ( .10)
________________________________       _______          _______          _______         ______       _______
Less distributions from:
  Net investment income                  ( .34)           ( .32)          ( .33)          ( .35)        ( .36)
________________________________       _______          _______          _______         ______       _______
  Net realized gains                     ( .01)           ( .05)          ( .00)*         ( .00)*           -
--------------------------------       -------          -------          -------         ------       -------
  TOTAL DISTRIBUTIONS                    ( .35)           ( .37)          ( .33)          ( .35)        ( .36)
________________________________       _______          _______          _______         ______       _______
Redemption fees                            .00*             .00*            .00*            .00*            -
--------------------------------       -------          -------          -------         ------       -------
NET ASSET VALUE, END OF
PERIOD                                 $  8.85          $  8.99          $ 9.04          $ 9.20       $  9.04
--------------------------------       -------          -------          -------         ------       -------
Total Return (%)a                       2.32b            3.59b           1.86b             5.72         (1.09)
--------------------------------       -------          -------          -------         ------       -------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
-------------------------------------------------------------------------------------------------------------------
Net assets, end of period
($ millions)                                32               22              22              24            25
_________________________________      _______          _______          _______         ______       _______
Ratio of expenses before
expense reductions (including
interest expense) (%)c                    1.92             1.81            1.88            1.65          1.63
_________________________________      _______          _______          _______         ______       _______
Ratio of expenses after
expense reductions (including
interest expense) (%)c                    1.90             1.78            1.85            1.65          1.63
_________________________________      _______          _______          _______         ______       _______
Ratio of expenses after
expense reductions (excluding
interest expense) (%)                     1.49             1.49            1.50            1.51          1.54
_________________________________      _______          _______          _______         ______       _______
Ratio of net investment
income (%)                                3.76             3.53            3.62            3.80          3.82
_________________________________      _______          _______          _______         ______       _______
Portfolio turnover rate (%)                 55               19              28              31            24
---------------------------------      -------          -------          -------         ------       -------
</TABLE>



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

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


c   Interest expense represents interest and fees on short term floating rate
   notes issued in conjunction with inverse floating rate securities. Interest
   income from such transactions is included in income from investment
   operations.


*   Amount is less than $.005.

                                                      Financial Highlights  | 39
<PAGE>

DWS Intermediate Tax/AMT Free Fund - Class A



<TABLE>
<CAPTION>
YEARS ENDED MAY 31,                      2008             2007            2006           2005           2004
<S>                                 <C>              <C>              <C>            <C>            <C>
SELECTED PER SHARE DATA
-------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD                              $ 11.00         $  11.06        $  11.40       $  11.26        $ 11.81
--------------------------------       -------         --------        --------       --------        -------
Income from investment
operations:
  Net investment income                    .42              .43             .42            .43            .43
________________________________       _______         ________        ________       ________        _______
  Net realized and unrealized
  gain (loss)                              .06           (  .05)         (  .32)           .15         (  .55)
--------------------------------       -------         --------        --------       --------        -------
  TOTAL FROM INVESTMENT
  OPERATIONS                               .48              .38             .10            .58         (  .12)
________________________________       _______         ________        ________       ________        _______
Less distributions from:
  Net investment income                 (  .42)          (  .43)         (  .42)        (  .43)        (  .43)
________________________________       _______         ________        ________       ________        _______
  Net realized gains                    (  .00)*         (  .01)         (  .02)        (  .01)        (  .00)*
--------------------------------       -------         --------        --------       --------        -------
  TOTAL DISTRIBUTIONS                   (  .42)          (  .44)         (  .44)        (  .44)        (  .43)
________________________________       _______         ________        ________       ________        _______
Redemption fees                            .00*             .00*            .00*           .00*             -
--------------------------------       -------         --------        --------       --------        -------
NET ASSET VALUE, END OF
PERIOD                                 $ 11.06         $  11.00        $  11.06       $  11.40        $ 11.26
--------------------------------       -------         --------        --------       --------        -------
Total Return (%)a                      4.46b             3.41b              .90           5.25         ( 1.02)b
--------------------------------       -------         --------        --------       --------        -------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
-------------------------------------------------------------------------------------------------------------------
Net assets, end of period
($ millions)                               119               80             106             93             87
_________________________________      _______         ________        ________       ________        _______
Ratio of expenses before
expense reductions (including
interest expense) (%)c                     .93              .79             .78            .85            .96
_________________________________      _______         ________        ________       ________        _______
Ratio of expenses after
expense reductions (including
interest expense) (%)c                     .93              .79             .78            .85            .94
_________________________________      _______         ________        ________       ________        _______
Ratio of expenses after
expense reductions (excluding
interest expense) (%)                      .80              .79             .78            .85            .94
_________________________________      _______         ________        ________       ________        _______
Ratio of net investment
income (%)                                3.83             3.87            3.80           3.82           3.71
_________________________________      _______         ________        ________       ________        _______
Portfolio turnover rate (%)                 59               45              41             45             21
---------------------------------      -------         --------        --------       --------        -------
</TABLE>



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

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


c   Interest expense represents interest and fees on short term floating rate
   notes issued in conjunction with inverse floating rate securities. Interest
   income from such transactions is included in income from investment
   operations.


*   Amount is less than $.005.

40 | Financial Highlights
<PAGE>

DWS Intermediate Tax/AMT Free Fund - Class B



<TABLE>
<CAPTION>
YEARS ENDED MAY 31,                      2008             2007            2006             2005            2004
<S>                                 <C>              <C>              <C>             <C>              <C>
SELECTED PER SHARE DATA
----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD                              $ 11.01         $  11.07         $  11.41        $  11.26         $ 11.81
--------------------------------       -------         --------         --------        --------         -------
Income from investment
operations:
  Net investment income                    .34              .35              .34             .34             .34
________________________________       _______         ________         ________        ________         _______
  Net realized and unrealized
  gain (loss)                              .06           (  .06)          (  .32)            .16          (  .55)
--------------------------------       -------         --------         --------        --------         -------
  TOTAL FROM INVESTMENT
  OPERATIONS                               .40              .29              .02             .50          (  .21)
________________________________       _______         ________         ________        ________         _______
Less distributions from:
  Net investment income                 (  .34)          (  .34)          (  .34)         (  .34)         (  .34)
________________________________       _______         ________         ________        ________         _______
  Net realized gains                    (  .00)*         (  .01)          (  .02)         (  .01)         (  .00)*
--------------------------------       -------         --------         --------        --------         -------
  TOTAL DISTRIBUTIONS                   (  .34)          (  .35)          (  .36)         (  .35)         (  .34)
________________________________       _______         ________         ________        ________         _______
Redemption fees                            .00*             .00*             .00*            .00*              -
--------------------------------       -------         --------         --------        --------         -------
NET ASSET VALUE, END OF
PERIOD                                 $ 11.07         $  11.01         $  11.07        $  11.41         $ 11.26
--------------------------------       -------         --------         --------        --------         -------
Total Return (%)a                      3.65b             2.62b            .13b            4.54b           ( 1.80)b
--------------------------------       -------         --------         --------        --------         -------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
----------------------------------------------------------------------------------------------------------------------
Net assets, end of period
($ millions)                                 3                5                6               8               9
_________________________________      _______         ________         ________        ________         _______
Ratio of expenses before
expense reductions (including
interest expense) (%)c                    1.72             1.58             1.57            1.63            1.76
_________________________________      _______         ________         ________        ________         _______
Ratio of expenses after
expense reductions (including
interest expense) (%)c                    1.70             1.54             1.55            1.61            1.73
_________________________________      _______         ________         ________        ________         _______
Ratio of expenses after
expense reductions (excluding
interest expense) (%)                     1.57             1.54             1.55            1.61            1.73
_________________________________      _______         ________         ________        ________         _______
Ratio of net investment
income (%)                                3.06             3.12             3.03            3.06            2.92
_________________________________      _______         ________         ________        ________         _______
Portfolio turnover rate (%)                 59               45               41              45              21
---------------------------------      -------         --------         --------        --------         -------
</TABLE>



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

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


c   Interest expense represents interest and fees on short term floating rate
   notes issued in conjunction with inverse floating rate securities. Interest
   income from such transactions is included in income from investment
   operations.


*   Amount is less than $.005.

                                                      Financial Highlights  | 41
<PAGE>

DWS Intermediate Tax/AMT Free Fund - Class C



<TABLE>
<CAPTION>
YEARS ENDED MAY 31,                      2008             2007            2006            2005           2004
<S>                                 <C>              <C>              <C>             <C>            <C>
SELECTED PER SHARE DATA
--------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD                              $ 11.00         $  11.06         $  11.40       $  11.25        $ 11.80
--------------------------------       -------         --------         --------       --------        -------
Income from investment operations:
  Net investment income                    .34              .35              .34            .34            .34
________________________________       _______         ________         ________       ________        _______
  Net realized and unrealized
  gain (loss)                              .06           (  .06)          (  .32)           .16         (  .55)
--------------------------------       -------         --------         --------       --------        -------
  TOTAL FROM INVESTMENT
  OPERATIONS                               .40              .29              .02            .50         (  .21)
________________________________       _______         ________         ________       ________        _______
Less distributions from:
  Net investment income                 (  .34)          (  .34)          (  .34)        (  .34)        (  .34)
________________________________       _______         ________         ________       ________        _______
  Net realized gains                    (  .00)*         (  .01)          (  .02)        (  .01)        (  .00)*
--------------------------------       -------         --------         --------       --------        -------
  TOTAL DISTRIBUTIONS                   (  .34)          (  .35)          (  .36)        (  .35)        (  .34)
________________________________       _______         ________         ________       ________        _______
Redemption fees                            .00*             .00*             .00*           .00*             -
--------------------------------       -------         --------         --------       --------        -------
NET ASSET VALUE, END OF
PERIOD                                 $ 11.06         $  11.00         $  11.06       $  11.40        $ 11.25
--------------------------------       -------         --------         --------       --------        -------
Total Return (%)a                      3.69b             2.62b            .14b             4.54         ( 1.76)b
--------------------------------       -------         --------         --------       --------        -------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
--------------------------------------------------------------------------------------------------------------------
Net assets, end of period
($ millions)                                11                9               11             13             14
_________________________________      _______         ________         ________       ________        _______
Ratio of expenses before
expense reductions (including
interest expense) (%)c                    1.69             1.57             1.55           1.62           1.73
_________________________________      _______         ________         ________       ________        _______
Ratio of expenses after
expense reductions (including
interest expense (%)c                     1.68             1.54             1.54           1.62           1.70
_________________________________      _______         ________         ________       ________        _______
Ratio of expenses after
expense reductions (excluding
interest expense) (%)                     1.55             1.54             1.54           1.62           1.70
_________________________________      _______         ________         ________       ________        _______
Ratio of net investment
income (%)                                3.08             3.12             3.04           3.05           2.95
_________________________________      _______         ________         ________       ________        _______
Portfolio turnover rate (%)                 59               45               41             45             21
---------------------------------      -------         --------         --------       --------        -------
</TABLE>



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

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


c   Interest expense represents interest and fees on short term floating rate
   notes issued in conjunction with inverse floating rate securities. Interest
   income from such transactions is included in income from investment
   operations.


*   Amount is less than $.005.

42 | Financial Highlights
<PAGE>

HOW TO INVEST IN THE FUNDS

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

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

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


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


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

<PAGE>

CHOOSING A SHARE CLASS


We describe each share class in detail on the following pages. But first, you
may want to look at the table below, which gives you a brief description and
comparison of the main features of each class.



<TABLE>
<CAPTION>
 CLASSES AND FEATURES                            POINTS TO HELP YOU COMPARE
<S>                                             <C>
 CLASS A
 -  Sales charge of up to 4.50% (2.75% for       -  Some investors may be able to reduce
  DWS Intermediate Tax/AMT Free Fund)           or eliminate their sales charge; see
  charged when you buy shares                   "Class A shares"
 -  In most cases, no charge when you           -  Total annual expenses are lower than
  sell shares                                   those for Class B or Class C
 -  Up to 0.25% annual shareholder
  servicing fee
 CLASS B
 -  No sales charge when you buy shares          -  The deferred sales charge rate falls to
                                                zero after six years
 -  Deferred sales charge declining from
  4.00%, charged when you sell shares           -  Shares automatically convert to
  you bought within the last six years          Class A after six years, which means
                                                lower annual expenses going forward
 -  0.75% annual distribution fee and up
  to 0.25% annual shareholder servicing
  fee
 CLASS C
 -  No sales charge when you buy shares          -  The deferred sales charge rate for one
                                                year is lower for Class C shares than
 -  Deferred sales charge of 1.00%,
                                                Class B shares, but your shares never
  charged when you sell shares you
                                                convert to Class A, so annual expenses
  bought within the last year
                                                remain higher
 -  0.75% annual distribution fee and up
  to 0.25% annual shareholder servicing
  fee
</TABLE>



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




44 | Choosing a Share Class
<PAGE>


           Class A shares


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

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


           Class A shares of DWS Strategic High Yield Tax-Free Fund and DWS
           Managed Municipal Bond Fund have an up-front sales charge that
           varies with the amount you invest:



<TABLE>
<CAPTION>
                              FRONT-END SALES           FRONT-END SALES
                               CHARGE AS A %         CHARGE AS A % OF YOUR
YOUR INVESTMENT            OF OFFERING PRICE1,2         NET INVESTMENT2
<S>                       <C>                       <C>
  Up to $100,000          4.50%                     4.71%
$  100,000-$249,999       3.50                      3.63
$  250,000-$499,999       2.60                      2.67
$  500,000-$999,999       2.00                      2.04
  $1 million or more            see below                 see below
</TABLE>


           Class A shares of DWS Intermediate Tax/AMT Free Fund have an
           up-front sales charge that varies with the amount you invest:


<TABLE>
<CAPTION>
                              FRONT-END SALES           FRONT-END SALES
                               CHARGE AS A %         CHARGE AS A % OF YOUR
YOUR INVESTMENT            OF OFFERING PRICE1,2         NET INVESTMENT2
<S>                       <C>                       <C>
  Up to $100,000          2.75%                     2.83%
$  100,000-$249,999       2.50                      2.56
$  250,000-$499,999       2.00                      2.04
$  500,000-$999,999       1.50                      1.52
  $1 million or more            see below
</TABLE>


           1   The offering price includes the sales charge.

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


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

           -  you plan to invest at least $100,000 in Class A shares (including
              Class A shares in other retail DWS funds) over the next 24 months
              ("Letter of Intent")

                                                    Choosing a Share Class  | 45
<PAGE>

           -  the amount of Class A shares you already own (including Class A
           shares in other retail DWS funds) plus the amount you're investing
           now in Class A shares is at least $100,000 ("Cumulative Discount")

           -  you are investing a total of $100,000 or more in Class A shares
              of several retail DWS funds on the same day ("Combined
              Purchases")

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

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

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


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


           IN CERTAIN CIRCUMSTANCES, YOU MAY BE ABLE TO BUY CLASS A SHARES
           WITHOUT A SALES CHARGE. For example, the sales charge will be waived
           if you are reinvesting dividends or distributions or if you are
           exchanging an investment in Class A shares of another fund in the
           DWS family of funds for an investment in


46 | Choosing a Share Class
<PAGE>


           Class A shares of a fund. In addition, a sales charge waiver may
           apply to transactions by certain retirement plans and certain other
           entities or persons (e.g., affiliated persons of Deutsche Asset
           Management or the DWS funds) and with respect to certain types of
           investments (e.g., an investment advisory or agency commission
           program under which you pay a fee to an investment advisor or other
           firm for portfolio management or brokerage services).


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

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

           IF YOU'RE INVESTING $1 MILLION OR MORE, either as a lump sum or
           through one of the sales charge reduction features described above,
           you may be eligible to buy Class A shares without a sales charge
           ("Large Order NAV Purchase Privilege"). However, you may be charged
           a contingent deferred sales charge (CDSC) of 0.85% on any shares you
           sell within 12 months of owning them and a similar charge of 0.50%
           on shares you sell within the following six months. This CDSC is
           waived under certain circumstances (see "Policies You Should Know
           About"). Your financial advisor or Shareholder Services can answer
           your questions and help you determine if you're eligible.


           Class B shares

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

           With Class B shares, you pay no up-front sales charge to a fund.
           Class B shares have a 12b-1 plan, under which a distribution fee of
           0.75% and a shareholder servicing fee of up to 0.25% are deducted
           from class assets each year. This means the annual expenses for
           Class B shares are somewhat higher (and their performance
           correspondingly lower) compared to Class A shares. However, unlike
           Class A shares, your entire investment


                                                    Choosing a Share Class  | 47
<PAGE>

           goes to work immediately. After six years, Class B shares
           automatically convert on a tax-free basis to Class A shares, which
           has the net effect of lowering the annual expenses from the seventh
           year on.

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


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


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


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

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

           benefit plans.



           Class C shares

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

           With Class C shares, you pay no up-front sales charge to a fund.
           Class C shares have a 12b-1 plan, under which a distribution fee of
           0.75% and a shareholder servicing fee of up to 0.25% are deducted
           from class assets each year. Because of these fees,


48 | Choosing a Share Class
<PAGE>

           the annual expenses for Class C shares are similar to those of Class
           B shares, but higher than those for Class A shares (and the
           performance of Class C shares is correspondingly lower than that of
           Class A shares).

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

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


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


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


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

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


                                                    Choosing a Share Class  | 49
<PAGE>

How to BUY Class A, B and C Shares




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



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

REGULAR MAIL:

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


EXPRESS, REGISTERED OR CERTIFIED MAIL:

DWS Investments, 210 West 10th Street, Kansas City, MO 64105-1614


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

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


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



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


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




                           How to Exchange or Sell Class A, B and C Shares  | 51
<PAGE>

           Financial intermediary support payments


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


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


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


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

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


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


                           How to Exchange or Sell Class A, B and C Shares  | 53
<PAGE>

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


POLICIES YOU SHOULD KNOW ABOUT


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


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

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

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


           Policies about transactions

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


54 | Policies You Should Know About
<PAGE>

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

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

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

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

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

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

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


           INITIAL PURCHASE MINIMUMS. The minimum initial investment for Class
           A, B and C shares is $1,000, except for investments on behalf of
           participants in certain fee-based and wrap programs offered through
           certain financial intermediaries approved by the



                                            Policies You Should Know About  | 55
<PAGE>

           Advisor, for which there is no minimum initial investment; and IRAs,
           for which the minimum initial investment is $500 per account. The
           minimum initial investment is $500 per account if you establish an
           automatic investment plan. Group retirement plans and certain other
           accounts have similar or lower minimum share balance requirements.


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


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


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



56 | Policies You Should Know About
<PAGE>


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

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

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


                                            Policies You Should Know About  | 57
<PAGE>


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

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


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

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


58 | Policies You Should Know About
<PAGE>

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


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


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





            THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS



                                                                         The DWS






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


           mediaries' methods for tracking and calculating the fee may be
           inadequate or differ in some respects from each fund's. Subject to
           approval by the Advisor or each fund's Board, intermediaries who
           transact business on an omnibus basis may implement the redemption
           fees according to their own operational guidelines (which may be
           different than the funds' policies) and remit the fees to the funds.



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



                                            Policies You Should Know About  | 59
<PAGE>


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

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


           QUICKBUY AND QUICKSELL let you set up a link between a DWS fund
           account and a bank account. Once this link is in place, you can move
           money between the two with a phone call. You'll need to make sure
           your bank has Automated Clearing House


60 | Policies You Should Know About
<PAGE>

           (ACH) services. Transactions take two to three days to be completed
           and there is a $50 minimum and a $250,000 maximum. To set up
           QuickBuy or QuickSell on a new account, see the account application;
           to add it to an existing account, call (800) 621-1048.

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

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

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

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


           EACH FUND ACCEPTS PAYMENT FOR SHARES ONLY IN US DOLLARS by a check
           drawn on a US bank, a bank or Federal Funds wire transfer or an
           electronic bank transfer. Each fund does not






            THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS



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








           accept third party checks. A third party check is a check made
           payable to one or more parties and offered as payment to one or more
           other parties (e.g., a check made payable to you that you offer as
           payment to someone else). Checks should normally be payable to DWS
           Investments and drawn by you or a financial institution on your
           behalf with your name or account number included with the check.



                                            Policies You Should Know About  | 61
<PAGE>

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

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

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

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

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

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


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


           -  withdrawals related to certain retirement or benefit plans

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

62 | Policies You Should Know About
<PAGE>

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

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

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


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


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


           MONEY FROM SHARES YOU SELL is normally sent out within one business
           day of when your order is processed (not when it is received),
           although it could be delayed for up to seven days. There are
           circumstances when it could be longer, including, but not limited
           to, when you are selling shares you bought recently by check or ACH
           (the funds will be placed under a 10 calendar day hold to ensure
           good funds) or when unusual circumstances prompt the SEC to allow
           further delays. Certain expedited redemption processes (e.g.,
           redemption proceeds by wire) may also be delayed or unavailable when
           you are selling shares recently purchased or in the event of the
           closing of the Federal Reserve wire payment system. Each fund
           reserves the right to



                                            Policies You Should Know About  | 63
<PAGE>

           suspend or postpone redemptions as permitted pursuant to Section
           22(e) of the Investment Company Act of 1940. Generally, those
           circumstances are when 1) the New York Stock Exchange is closed
           other than customary weekend or holiday closings; 2) trading on the
           New York Stock Exchange is restricted; 3) an emergency exists which
           makes the disposal of securities owned by a fund or the fair
           determination of the value of a fund's net assets not reasonably
           practicable; or 4) the SEC, by order, permits the suspension of the
           right of redemption. Redemption payments by wire may also be delayed
           in the event of a non-routine closure of the Federal Reserve wire
           payment system. For additional rights reserved by each fund, please
           see "Other rights we reserve."

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


           How each fund calculates share price

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


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



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

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

           WE TYPICALLY VALUE SECURITIES USING INFORMATION FURNISHED BY AN
           INDEPENDENT PRICING SERVICE OR MARKET QUOTATIONS, WHERE APPROPRIATE.
           However, we may use methods approved by a fund's Board, such as a
           fair valuation model, which are intended to reflect fair value when
           pricing service information or market quotations are not readily
           available or when a security's value or a meaningful portion of the
           value of a fund's portfolio is believed



64 | Policies You Should Know About
<PAGE>


           to have been materially affected by a significant event, such as a
           natural disaster, an economic event like a bankruptcy filing, or a
           substantial fluctuation in domestic or foreign markets that has
           occurred between the close of the exchange or market on which the
           security is principally traded (for example, a foreign exchange or
           market) and the close of the New York Stock Exchange. In such a
           case, a fund's value for a security is likely to be different from
           the last quoted market price or pricing service information. In
           addition, due to the subjective and variable nature of fair value
           pricing, it is possible that the value determined for a particular
           asset may be materially different from the value realized upon such
           asset's sale.



           Other rights we reserve

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

           -  withdraw or suspend the offering of shares at any time


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


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


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



                                            Policies You Should Know About  | 65
<PAGE>


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

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


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


UNDERSTANDING DISTRIBUTIONS AND TAXES


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


           INCOME DIVIDENDS ARE DECLARED DAILY AND PAID MONTHLY.



            THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS



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





                                                                   consequences.

           Short-term and long-term capital gains are paid in November or
           December, or otherwise as needed.


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

           YOU CAN CHOOSE HOW TO RECEIVE YOUR DIVIDENDS AND DISTRIBUTIONS. You
           can have them all automatically reinvested in fund shares (at NAV),
           all deposited directly to your bank account or all sent to you by
           check, have one type reinvested and the other sent to you by check
           or have them invested in a different



66 | Understanding Distributions and Taxes
<PAGE>


           fund. Tell us your preference on your application. If you don't
           indicate a preference, your dividends and distributions will all be
           reinvested in shares of the fund without a sales charge (if
           applicable). Distributions are treated the same for federal income
           tax purposes whether you receive them in cash or reinvest them in
           additional shares. Under the terms of employer-sponsored qualified
           plans, and retirement plans, reinvestment (at NAV) is the only
           option.


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

           Each fund intends to distribute tax-exempt interest as exempt-

           interest dividends, which are generally excluded from gross income
           for regular federal income tax purposes, but may be subject to
           alternative minimum tax and state and local income taxes. Their
           distributions from other sources, if any, would be taxable as
           described above.


           Dividends from each fund are generally tax-free for most
           shareholders, meaning that investors who are individuals can receive
           them without incurring federal and (for some investors) state and
           local income tax liability. However, there are a few exceptions:

           -  a portion of a fund's dividends may be taxable if it came from
              investments in taxable securities

           -  because a fund (except DWS Intermediate Tax/AMT Free Fund) can
              invest up to 20% of net assets in securities whose income is
              subject to the federal alternative minimum tax (AMT), you may owe
              taxes on a portion of your dividends if you are among those
              investors who must pay AMT

           -  capital gains distributions may be taxable

                                     Understanding Distributions and Taxes  | 67
<PAGE>


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



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


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


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

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



68 | Understanding Distributions and Taxes
<PAGE>


           shareholder must meet certain holding period and other requirements
           with respect to a fund's shares for the lower tax rates to apply.
           The funds do not expect a significant portion of their distributions
           to constitute qualified dividend income.

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


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


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

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

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




                                     Understanding Distributions and Taxes  | 69
<PAGE>

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



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


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


70 | Appendix
<PAGE>


               DWS Strategic High Yield Tax-Free Fund - Class A





<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               4.50%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER      ANNUAL FEES
              FEES AND        EXPENSE        FEES AND           FEES AND            AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        1.54%             -1.20%       $  9,880.43        $   599.61
   2           10.25%        1.59%              2.17%       $ 10,217.35        $   159.78
   3           15.76%        1.59%              5.66%       $ 10,565.76        $   165.23
   4           21.55%        1.59%              9.26%       $ 10,926.06        $   170.86
   5           27.63%        1.59%             12.99%       $ 11,298.64        $   176.69
   6           34.01%        1.59%             16.84%       $ 11,683.92        $   182.71
   7           40.71%        1.59%             20.82%       $ 12,082.34        $   188.94
   8           47.75%        1.59%             24.94%       $ 12,494.35        $   195.38
   9           55.13%        1.59%             29.20%       $ 12,920.41        $   202.05
  10           62.89%        1.59%             33.61%       $ 13,360.99        $   208.94
  TOTAL                                                                        $ 2,250.19
</TABLE>




DWS Strategic High Yield Tax-Free Fund - Class B






<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER        ANNUAL
              FEES AND        EXPENSE        FEES AND           FEES AND         FEES AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        2.29%              2.71%       $  10,271.00       $   232.10
   2           10.25%        2.36%              5.42%       $  10,542.15       $   245.60
   3           15.76%        2.36%              8.20%       $  10,820.47       $   252.08
   4           21.55%        2.36%             11.06%       $  11,106.13       $   258.73
   5           27.63%        2.36%             13.99%       $  11,399.33       $   265.56
   6           34.01%        2.36%             17.00%       $  11,700.27       $   272.58
   7           40.71%        1.59%             20.99%       $  12,099.25       $   189.21
   8           47.75%        1.59%             25.12%       $  12,511.84       $   195.66
   9           55.13%        1.59%             29.38%       $  12,938.49       $   202.33
  10           62.89%        1.59%             33.80%       $  13,379.69       $   209.23
  TOTAL                                                                        $ 2,323.08
</TABLE>




                                                                  Appendix  | 71
<PAGE>


               DWS Strategic High Yield Tax-Free Fund - Class C





<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                  ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                       OF RETURN:
               0.00%                   $10,000                             5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER       ANNUAL FEES
              FEES AND        EXPENSE        FEES AND           FEES AND             AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES          EXPENSES
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        2.29%              2.71%       $  10,271.00       $    232.10
   2           10.25%        2.30%              5.48%       $  10,548.32       $    239.42
   3           15.76%        2.30%              8.33%       $  10,833.12       $    245.89
   4           21.55%        2.30%             11.26%       $  11,125.62       $    252.53
   5           27.63%        2.30%             14.26%       $  11,426.01       $    259.34
   6           34.01%        2.30%             17.35%       $  11,734.51       $    266.35
   7           40.71%        2.30%             20.51%       $  12,051.34       $    273.54
   8           47.75%        2.30%             23.77%       $  12,376.73       $    280.92
   9           55.13%        2.30%             27.11%       $  12,710.90       $    288.51
  10           62.89%        2.30%             30.54%       $  13,054.09       $    296.30
  TOTAL                                                                        $  2,634.90
</TABLE>



DWS Managed Municipal Bond Fund - Class A





<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               4.50%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER      ANNUAL FEES
              FEES AND        EXPENSE        FEES AND           FEES AND            AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        1.16%             -0.83%       $  9,916.72        $   562.91
   2           10.25%        1.16%              2.98%       $ 10,297.52        $   117.24
   3           15.76%        1.16%              6.93%       $ 10,692.95        $   121.74
   4           21.55%        1.16%             11.04%       $ 11,103.56        $   126.42
   5           27.63%        1.16%             15.30%       $ 11,529.93        $   131.27
   6           34.01%        1.16%             19.73%       $ 11,972.68        $   136.32
   7           40.71%        1.16%             24.32%       $ 12,432.43        $   141.55
   8           47.75%        1.16%             29.10%       $ 12,909.84        $   146.99
   9           55.13%        1.16%             34.06%       $ 13,405.58        $   152.63
  10           62.89%        1.16%             39.20%       $ 13,920.35        $   158.49
  TOTAL                                                                        $ 1,795.56
</TABLE>


72 | Appendix
<PAGE>


DWS Managed Municipal Bond Fund - Class B





<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER        ANNUAL
              FEES AND        EXPENSE        FEES AND           FEES AND         FEES AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        1.98%              3.02%       $ 10,302.00        $   200.99
   2           10.25%        1.98%              6.13%       $ 10,613.12        $   207.06
   3           15.76%        1.98%              9.34%       $ 10,933.64        $   213.31
   4           21.55%        1.98%             12.64%       $ 11,263.83        $   219.75
   5           27.63%        1.98%             16.04%       $ 11,604.00        $   226.39
   6           34.01%        1.98%             19.54%       $ 11,954.44        $   233.23
   7           40.71%        1.16%             24.13%       $ 12,413.49        $   141.33
   8           47.75%        1.16%             28.90%       $ 12,890.17        $   146.76
   9           55.13%        1.16%             33.85%       $ 13,385.15        $   152.40
  10           62.89%        1.16%             38.99%       $ 13,899.14        $   158.25
  TOTAL                                                                        $ 1,899.47
</TABLE>



DWS Managed Municipal Bond Fund - Class C





<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER      ANNUAL FEES
              FEES AND        EXPENSE        FEES AND           FEES AND            AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        1.92%              3.08%       $ 10,308.00        $   194.96
   2           10.25%        1.92%              6.25%       $ 10,625.49        $   200.96
   3           15.76%        1.92%              9.53%       $ 10,952.75        $   207.15
   4           21.55%        1.92%             12.90%       $ 11,290.10        $   213.53
   5           27.63%        1.92%             16.38%       $ 11,637.83        $   220.11
   6           34.01%        1.92%             19.96%       $ 11,996.28        $   226.89
   7           40.71%        1.92%             23.66%       $ 12,365.76        $   233.88
   8           47.75%        1.92%             27.47%       $ 12,746.63        $   241.08
   9           55.13%        1.92%             31.39%       $ 13,139.22        $   248.50
  10           62.89%        1.92%             35.44%       $ 13,543.91        $   256.16
  TOTAL                                                                        $ 2,243.22
</TABLE>


                                                               Appendix  | 73
<PAGE>


DWS Intermediate Tax/AMT Free Fund - Class A





<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                  ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                       OF RETURN:
               2.75%                   $10,000                             5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER       ANNUAL FEES
              FEES AND        EXPENSE        FEES AND           FEES AND             AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES          EXPENSES
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        0.93%              1.21%       $  10,120.81       $    367.28
   2           10.25%        0.93%              5.33%       $  10,532.72       $     96.04
   3           15.76%        0.93%              9.61%       $  10,961.41       $     99.95
   4           21.55%        0.93%             14.08%       $  11,407.54       $    104.02
   5           27.63%        0.93%             18.72%       $  11,871.82       $    108.25
   6           34.01%        0.93%             23.55%       $  12,355.01       $    112.65
   7           40.71%        0.93%             28.58%       $  12,857.85       $    117.24
   8           47.75%        0.93%             33.81%       $  13,381.17       $    122.01
   9           55.13%        0.93%             39.26%       $  13,925.78       $    126.98
  10           62.89%        0.93%             44.93%       $  14,492.56       $    132.15
  TOTAL                                                                        $  1,386.57
</TABLE>



DWS Intermediate Tax/AMT Free Fund - Class B





<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                  ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                       OF RETURN:
               0.00%                   $10,000                             5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER         ANNUAL
              FEES AND        EXPENSE        FEES AND           FEES AND          FEES AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES          EXPENSES
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        1.72%              3.28%       $ 10,328.00        $    174.82
   2           10.25%        1.72%              6.67%       $ 10,666.76        $    180.55
   3           15.76%        1.72%             10.17%       $ 11,016.63        $    186.48
   4           21.55%        1.72%             13.78%       $ 11,377.97        $    192.59
   5           27.63%        1.72%             17.51%       $ 11,751.17        $    198.91
   6           34.01%        1.72%             21.37%       $ 12,136.61        $    205.43
   7           40.71%        0.93%             26.31%       $ 12,630.57        $    115.17
   8           47.75%        0.93%             31.45%       $ 13,144.63        $    119.85
   9           55.13%        0.93%             36.80%       $ 13,679.62        $    124.73
  10           62.89%        0.93%             42.36%       $ 14,236.38        $    129.81
  TOTAL                                                                        $  1,628.34
</TABLE>


74 | Appendix
<PAGE>


DWS Intermediate Tax/AMT Free Fund - Class C





<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER      ANNUAL FEES
              FEES AND        EXPENSE        FEES AND           FEES AND            AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        1.69%              3.31%       $ 10,331.00        $   171.80
   2           10.25%        1.69%              6.73%       $ 10,672.96        $   177.48
   3           15.76%        1.69%             10.26%       $ 11,026.23        $   183.36
   4           21.55%        1.69%             13.91%       $ 11,391.20        $   189.43
   5           27.63%        1.69%             17.68%       $ 11,768.25        $   195.70
   6           34.01%        1.69%             21.58%       $ 12,157.78        $   202.17
   7           40.71%        1.69%             25.60%       $ 12,560.20        $   208.87
   8           47.75%        1.69%             29.76%       $ 12,975.94        $   215.78
   9           55.13%        1.69%             34.05%       $ 13,405.45        $   222.92
  10           62.89%        1.69%             38.49%       $ 13,849.17        $   230.30
  TOTAL                                                                        $ 1,997.81
</TABLE>




                                                                  Appendix  | 75
<PAGE>

TO GET MORE INFORMATION

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

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


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




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





<TABLE>
<S>                      <C>                                         <C>
SEC FILE NUMBER:
DWS Municipal Trust        DWS Strategic High Yield Tax-Free Fund    811-02671
DWS Municipal Trust               DWS Managed Municipal Bond Fund    811-02671
DWS Tax Free Trust             DWS Intermediate Tax/AMT Free Fund    811-03632
</TABLE>








(10/01/08) DNTFIF-1
  [RECYCLE GRAPHIC APPEARS HERE]
                                                                       [Logo]DWS
                                                                      INVESTMENT
                                                             Deutsche Bank Group
<PAGE>


                                OCTOBER 1, 2008








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


                     DWS STRATEGIC HIGH YIELD TAX-FREE FUND
                    (formerly DWS High Yield Tax Free Fund)



                        DWS MANAGED MUNICIPAL BOND FUND


                       DWS INTERMEDIATE TAX/AMT FREE FUND


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




                                                                       [Logo]DWS
                                                                      INVESTMENT
                                                             Deutsche Bank Group

<PAGE>

CONTENTS





<TABLE>
<S>      <C>
HOW EACH FUND WORKS
  4      DWS Strategic High Yield Tax-
         Free Fund
 11      DWS Managed Municipal
         Bond Fund
 18      DWS Intermediate Tax/AMT
         Free Fund
 25      Other Policies and Risks
 26      Who Manages and Oversees
         the Funds
 30      Financial Highlights


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


<PAGE>

HOW EACH FUND WORKS

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


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

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


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

<PAGE>



<TABLE>
<S>                                           <C>
                                                Institutional Class
  ticker symbol                                 NOTIX
    fund number                                 512

                                  DWS STRATEGIC HIGH YIELD TAX-FREE FUND
  (formerly DWS High Yield Tax Free Fund)


</TABLE>


            THE FUND'S MAIN INVESTMENT STRATEGY

            The fund seeks to provide a high level of income exempt from
            regular federal income tax.

            Under normal circumstances, the fund invests at least 80% of net
            assets in securities issued by municipalities across the United
            States and in other securities whose income is free from regular
            federal income tax. The fund may invest up to 20% of net assets in
            securities whose income is subject to the federal alternative
            minimum tax (AMT).

            The fund can buy many types of municipal securities of all
            maturities. These may include revenue bonds (which are backed by
            revenues from a particular source) and general obligation bonds
            (which are typically backed by the issuer's ability to levy taxes).
            They may also include municipal lease obligations and investments
            representing an interest therein.


            CREDIT QUALITY POLICIES. This fund normally invests at least 50% of
            total assets in municipal securities of the top four grades of
            credit quality. The fund may invest up to 50% of total assets in
            high yield debt securities (commonly referred to as "junk" bonds),
            which are those below the fourth credit grade (i.e., grade BB/Ba
            and below) and may include debt securities not currently paying
            interest and debt securities in default. Compared to
            investment-grade debt securities, junk bonds generally pay higher
            yields, have higher volatility and higher risk of default on
            payments of interest or principal.


            The portfolio managers look for securities that appear to offer the
            best total return potential. In making their buy and sell
            decisions, the managers typically weigh a number of factors against
            each other, from economic outlooks and possible interest rate
            movements to characteristics of specific securities, such as
            coupon, maturity date and call date, and changes in supply and
            demand within the municipal bond market.


4 | DWS Strategic High Yield Tax-Free Fund
<PAGE>

            Although the managers may adjust the fund's duration (a measure of
            sensitivity to interest rates) over a wider range, they generally
            intend to keep it similar to that of the Lehman Brothers Municipal
            Bond Index, generally between five and nine years.

            In addition, they may use various types of derivative instruments
            (instruments whose value is based on, for example, indices,
            commodities or securities), for hedging purposes or to enhance
            return. Such instruments may include inverse floaters, futures
            contracts, interest rate swaps and other over-the-counter
            derivatives.


            THE MAIN RISKS OF INVESTING IN THE FUND

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


            INTEREST RATE RISK. Generally, fixed income securities will
            decrease in value when interest rates rise. The longer the duration
            of the fund's securities, the more sensitive the fund will be to
            interest rate changes. (As a general rule, a 1% rise in interest
            rates means a 1% fall in value for every year of duration.) As
            interest rates decline, the issuers of securities held by the fund
            may prepay principal earlier than scheduled, forcing the fund to
            reinvest in lower-yielding securities and may reduce the fund's
            income. As interest rates increase, slower than expected principal
            payments may extend the average life of fixed income securities.
            This will have the effect of locking in a below-market interest
            rate, reducing the value






            THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS



This fund is designed for investors who are looking for a tax-advantaged
investment and are willing to accept risk to their
principal and who are interested in the potential for
                                                           high current income.







            of such a security.


            CREDIT RISK. A fund purchasing debt securities faces the risk that
            the creditworthiness of an issuer may decline, causing the value of
            the debt securities to decline. In addition, an issuer may not be
            able to make timely payments on the interest and/
            or principal on the debt security it has issued. Because the
            issuers of high-yield debt securities or junk bonds (debt
            securities rated below the fourth highest category) may be in
            uncertain financial health, the prices of their debt securities can
            be more vulnerable to bad economic news or even the expectation of
            bad news, than investment-grade debt



                                     DWS Strategic High Yield Tax-Free Fund  | 5
<PAGE>


            securities. In some cases, debt securities, particularly high-yield
            debt securities, may decline in credit quality or go into default.
            Because the fund may invest in securities not paying current
            interest or in securities already in default, these risks may be
            more pronounced.

            FOCUSED INVESTING RISK. The fact that the fund may focus on
            investments from a single state or sector of the municipal
            securities market increases risk, because factors affecting the
            state or region, such as economic or fiscal problems, could affect
            a large portion of the fund's securities in a similar manner. For
            example, a state's technology or biotech industries could
            experience a downturn or fail to develop as expected, hurting the
            local economy. States could also face severe fiscal difficulties,
            for example, an economic downturn, increased expenditures on
            domestic security or reduced monetary support from the federal
            government. Over time, these issues may have the ability to impair
            a state's ability to repay its obligations.

            MARKET RISK. Deteriorating market conditions might cause a general
            weakness in the market that reduces the prices of securities in
            that market. Developments in a particular class of debt securities
            or the stock market could also adversely affect the fund by
            reducing the relative attractiveness of debt securities as an
            investment. Also, to the extent that the fund emphasizes debt
            securities from any given state or region, it could be hurt if that
            state or region does not do well.

            DERIVATIVES RISK. Risks associated with derivatives include the
            risk that the derivative is not well correlated with the security,
            index or currency to which it relates; the risk that derivatives
            may result in losses or missed opportunities; the risk that the
            fund will be unable to sell the derivative because of an illiquid
            secondary market; the risk that a counterparty is unwilling or
            unable to meet its obligation; and the risk that the derivative
            transaction could expose the fund to the effects of leverage, which
            could increase the fund's exposure to the market and magnify
            potential losses. There is no guarantee that derivatives, to the
            extent employed, will have the intended effect, and their use could
            cause lower returns or even losses to the fund. The use of
            derivatives by the fund to hedge risk may reduce the opportunity
            for gain by offsetting the positive effect of favorable price
            movements.



6 | DWS Strategic High Yield Tax-Free Fund
<PAGE>

            Other factors that could affect performance include:


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



            -  political or legal actions could change the way the fund's
               dividends are treated for income tax purposes.


            -  at times, market conditions might make it hard to value some
               investments or to get an attractive price for them.


                                     DWS Strategic High Yield Tax-Free Fund  | 7
<PAGE>

THE FUND'S PERFORMANCE HISTORY

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


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


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


DWS Strategic High Yield Tax-Free Fund


ANNUAL TOTAL RETURN (%) AS OF 12/31 EACH YEAR - INSTITUTIONAL CLASS




<TABLE>
<S>       <C>       <C>       <C>       <C>
 6.36      5.09      5.57      6.15     2.77
2003      2004      2005      2006      2007
</TABLE>







<TABLE>
<CAPTION>
                 2008 TOTAL RETURN AS OF JUNE 30: -1.50%
<S>                                        <C>
FOR THE PERIODS INCLUDED IN THE BAR CHART:
BEST QUARTER: 3.29%, Q3 2006               WORST QUARTER: -1.42%, Q2 2004
</TABLE>




8 | DWS Strategic High Yield Tax-Free Fund
<PAGE>


AVERAGE ANNUAL TOTAL RETURNS (%) as of 12/31/2007




<TABLE>
<CAPTION>
                                                1 YEAR       5 YEARS      INCEPTION*
<S>                                          <C>            <C>          <C>
 INSTITUTIONAL CLASS
   Return before Taxes                           2.77           5.18          5.26
   Return after Taxes on Distributions           2.77           5.17          5.25
   Return after Taxes on Distributions
   and Sale of Fund Shares                       3.35**         5.17          5.24
 LEHMAN BROTHERS MUNICIPAL BOND
 INDEX (reflects no deductions for fees,
 expenses or taxes)                              3.36           4.30          4.45
</TABLE>



*   Institutional Class shares commenced operations on August 19, 2002. Index
   returns begin August 31, 2002.


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


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


 The LEHMAN BROTHERS MUNICIPAL BOND INDEX is an unmanaged market-value-weighted
 measure of municipal bonds issued across the United States. Index issues have
 a credit rating of at least Baa and a maturity of at least two years. As part
 of the proposed Barclays acquisition of Lehman Brothers and subject to the
 approval of the U.S. Bankruptcy Court and applicable regulations, the Lehman
 Brothers Municipal Bond Index is expected to become part of Barclays.



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

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



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

RETURN AFTER TAXES ON DISTRIBUTIONS assumes that an investor holds fund shares
at the end of the period. The return reflects taxes only on the fund's
distributions and not on a shareholder's gain or loss from selling fund shares.


RETURN AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES assumes that an
investor sold his or her fund shares at the end of the period. The return
reflects taxes on both the fund's distributions and a shareholder's gain or
loss from selling fund shares.



                                     DWS Strategic High Yield Tax-Free Fund  | 9
<PAGE>

HOW MUCH INVESTORS PAY

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



<TABLE>
<CAPTION>
FEE TABLE
<S>                                      <C>
 SHAREHOLDER FEES, paid directly from your investment
_______________________________________________________________________
 Redemption/Exchange Fee on shares
 owned less than 15 days (as % of
 redemption proceeds)1                               2.00%
 ANNUAL OPERATING EXPENSES, deducted from fund assets
_______________________________________________________________________
 Management Fee                                      0.51%
 Distribution/Service (12b-1) Fee                   None
 Interest Expense2                                   0.63
 Other Expenses3                                     0.17
 TOTAL OTHER EXPENSES                                0.80
 TOTAL ANNUAL OPERATING EXPENSES                     1.31
 Less Expense Waiver/Reimbursement4                  0.02
 NET ANNUAL OPERATING EXPENSES4                      1.29
</TABLE>



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


2   Interest expense relates to the fund's liability with respect to floating
   rate notes held by third parties in conjunction with inverse floater
   securities transactions. However, the accounting treatment for such
   transactions includes an offsetting interest income item, and accordingly
   has no impact on net investment income, total return or net asset value.

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

4   Through September 30, 2009, the Advisor has contractually agreed to waive
   all or a portion of its management fee and reimburse or pay operating
   expenses of the fund to the extent necessary to maintain the fund's total
   annual operating expenses at 0.66% for Institutional Class shares,
   excluding certain expenses such as extraordinary expenses, taxes, brokerage
   and interest.

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




<TABLE>
<CAPTION>
EXAMPLE                    1 YEAR      3 YEARS      5 YEARS      10 YEARS
<S>                       <C>         <C>          <C>          <C>
 Institutional Class        $131         $413         $716       $1,577
</TABLE>




10 | DWS Strategic High Yield Tax-Free Fund
<PAGE>


<TABLE>
<S>                                    <C>
                                         Institutional Class
  ticker symbol                          SMLIX
    fund number                          544

    DWS MANAGED MUNICIPAL BOND FUND


</TABLE>

            THE FUND'S MAIN INVESTMENT STRATEGY

            The fund seeks to provide income exempt from regular federal
            income tax.

            Under normal circumstances, the fund invests at least 80% of net
            assets, plus the amount of any borrowings for investment purposes,
            in securities issued by municipalities across the United States and
            in other securities whose income is free from regular federal
            income tax. The fund may invest up to 20% of net assets in
            securities whose income is subject to the federal alternative
            minimum tax (AMT).

            The fund can buy many types of municipal securities of all
            maturities. These may include revenue bonds (which are backed by
            revenues from a particular source) and general obligation bonds
            (which are typically backed by the issuer's ability to levy taxes).
            They may also include municipal lease obligations and investments
            representing an interest therein.


            CREDIT QUALITY POLICIES. This fund normally invests at least 65% of
            total assets in municipal securities of the top three grades of
            credit quality. The fund may invest up to 10% of total assets in
            high yield debt securities (commonly referred to as "junk" bonds)
            of the fifth and sixth credit grades (i.e., as low as grade B).
            Compared to investment-grade debt securities, junk bonds generally
            pay higher yields, have higher volatility and higher risk of
            default on payments of interest or principal.


            The portfolio managers look for securities that appear to offer the
            best total return potential. In making their buy and sell
            decisions, the managers typically weigh a number of factors against
            each other, from economic outlooks and possible interest rate
            movements to characteristics of specific securities, such as
            coupon, maturity date and call date, and changes in supply and
            demand within the municipal bond market.


                                           DWS Managed Municipal Bond Fund  | 11
<PAGE>

            Although the managers may adjust the fund's duration (a measure of
            sensitivity to interest rates) over a wider range, they generally
            intend to keep it similar to that of the Lehman Brothers Municipal
            Bond Index, generally between five and nine years.

            In addition, they may use various types of derivative instruments
            (instruments whose value is based on, for example, indices,
            commodities or securities), for hedging purposes or to enhance
            return. Such instruments may include inverse floaters, futures
            contracts, interest rate swaps and other over-the-counter
            derivatives.


            THE MAIN RISKS OF INVESTING IN THE FUND

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


            INTEREST RATE RISK. Generally, fixed income securities will
            decrease in value when interest rates rise. The longer the duration
            of the fund's securities, the more sensitive the fund will be to
            interest rate changes. (As a general rule, a 1% rise in interest
            rates means a 1% fall in value for every year of duration.) As
            interest rates decline, the issuers of securities held by the fund
            may prepay principal earlier than scheduled, forcing the fund to
            reinvest in lower-yielding securities and may reduce the fund's
            income. As interest rates increase, slower than expected principal
            payments may extend the average life of fixed income securities.
            This will have the effect of locking in a below-market interest
            rate, reducing the value of such a security.

            CREDIT RISK. A fund purchasing debt securities faces the risk that
            the creditworthiness of an issuer may decline, causing the value of
            the debt securities to decline. In addition, an issuer may not be
            able to make timely payments on the interest and/






            THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS



This fund is designed for investors who are looking for a tax-advantaged
                               investment and are interested in current income.








            or principal on the debt security it has issued. Because the
            issuers of high-yield debt securities or junk bonds (debt
            securities rated below the fourth highest category) may be in
            uncertain financial health, the prices of their debt securities can
            be more vulnerable to bad economic news or even the expectation of
            bad news, than investment-grade debt



12 | DWS Managed Municipal Bond Fund
<PAGE>


            securities. In some cases, debt securities, particularly high-yield
            debt securities, may decline in credit quality or go into default.
            Because the fund may invest in securities not paying current
            interest or in securities already in default, these risks may be
            more pronounced.

            FOCUSED INVESTING RISK. The fact that the fund may focus on
            investments from a single state or sector of the municipal
            securities market increases risk, because factors affecting the
            state or region, such as economic or fiscal problems, could affect
            a large portion of the fund's securities in a similar manner. For
            example, a state's technology or biotech industries could
            experience a downturn or fail to develop as expected, hurting the
            local economy. States could also face severe fiscal difficulties,
            for example, an economic downturn, increased expenditures on
            domestic security or reduced monetary support from the federal
            government. Over time, these issues may have the ability to impair
            a state's ability to repay its obligations.

            MARKET RISK. Deteriorating market conditions might cause a general
            weakness in the market that reduces the prices of securities in
            that market. Developments in a particular class of debt securities
            or the stock market could also adversely affect the fund by
            reducing the relative attractiveness of debt securities as an
            investment. Also, to the extent that the fund emphasizes debt
            securities from any given state or region, it could be hurt if that
            state or region does not do well.

            DERIVATIVES RISK. Risks associated with derivatives include the
            risk that the derivative is not well correlated with the security,
            index or currency to which it relates; the risk that derivatives
            may result in losses or missed opportunities; the risk that the
            fund will be unable to sell the derivative because of an illiquid
            secondary market; the risk that a counterparty is unwilling or
            unable to meet its obligation; and the risk that the derivative
            transaction could expose the fund to the effects of leverage, which
            could increase the fund's exposure to the market and magnify
            potential losses. There is no guarantee that derivatives, to the
            extent employed, will have the intended effect, and their use could
            cause lower returns or even losses to the fund. The use of
            derivatives by the fund to hedge risk may reduce the opportunity
            for gain by offsetting the positive effect of favorable price
            movements.



                                           DWS Managed Municipal Bond Fund  | 13
<PAGE>

            Other factors that could affect performance include:


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



            -  political or legal actions could change the way the fund's
               dividends are treated for income tax purposes.


            -  at times, market conditions might make it hard to value some
               investments or to get an attractive price for them.


14 | DWS Managed Municipal Bond Fund
<PAGE>

THE FUND'S PERFORMANCE HISTORY

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


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


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

DWS Managed Municipal Bond Fund

ANNUAL TOTAL RETURN (%) AS OF 12/31 EACH YEAR - INSTITUTIONAL CLASS




<TABLE>
<S>       <C>       <C>       <C>       <C>
5.36       2.98      3.77      5.05     3.52
2003      2004      2005      2006      2007
</TABLE>







<TABLE>
<CAPTION>
                 2008 TOTAL RETURN AS OF JUNE 30: -1.05%
<S>                                        <C>
FOR THE PERIODS INCLUDED IN THE BAR CHART:
BEST QUARTER: 3.52%, Q3 2006               WORST QUARTER: -2.07%, Q2 2004
</TABLE>




                                           DWS Managed Municipal Bond Fund  | 15
<PAGE>


AVERAGE ANNUAL TOTAL RETURNS (%) as of 12/31/2007




<TABLE>
<CAPTION>
                                                1 YEAR        5 YEARS       INCEPTION*
<S>                                          <C>            <C>            <C>
 INSTITUTIONAL CLASS
   Return before Taxes                           3.52           4.14           4.28
   Return after Taxes on Distributions           3.50           4.10           4.23
   Return after Taxes on Distributions
   and Sale of Fund Shares                       3.79**         4.20**         4.32**
 LEHMAN BROTHERS MUNICIPAL BOND
 INDEX (reflects no deductions for fees,
 expenses or taxes)                              3.36           4.30           4.45
</TABLE>



*   Institutional Class shares commenced operations on August 19, 2002. Index
   returns begin August 31, 2002.


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


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


 The LEHMAN BROTHERS MUNICIPAL BOND INDEX is an unmanaged market-value-weighted
 measure of municipal bonds issued across the United States. Index issues have
 a credit rating of at least Baa and a maturity of at least two years. As part
 of the proposed Barclays acquisition of Lehman Brothers and subject to the
 approval of the U.S. Bankruptcy Court and applicable regulations, the Lehman
 Brothers Municipal Bond Index is expected to become part of Barclays.



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

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



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

RETURN AFTER TAXES ON DISTRIBUTIONS assumes that an investor holds fund shares
at the end of the period. The return reflects taxes only on the fund's
distributions and not on a shareholder's gain or loss from selling fund shares.


RETURN AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES assumes that an
investor sold his or her fund shares at the end of the period. The return
reflects taxes on both the fund's distributions and a shareholder's gain or
loss from selling fund shares.



16 | DWS Managed Municipal Bond Fund
<PAGE>

HOW MUCH INVESTORS PAY

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



<TABLE>
<CAPTION>
FEE TABLE
<S>                                    <C>
 SHAREHOLDER FEES, paid directly from your investment
_____________________________________________________________________
 Redemption/Exchange Fee on shares
 owned less than 15 days (as % of
 redemption proceeds)1                             2.00%
 ANNUAL OPERATING EXPENSES, deducted from fund assets
_____________________________________________________________________
 Management Fee                                    0.33%
 Distribution/Service (12b-1) Fee                 None
 Interest Expense2                                 0.41
 Other Expenses3                                   0.16
 TOTAL OTHER EXPENSES                              0.57
 TOTAL ANNUAL OPERATING EXPENSES                   0.90
</TABLE>



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


2   Interest expense relates to the fund's liability with respect to floating
   rate notes held by third parties in conjunction with inverse floater
   securities transactions. However, the accounting treatment for such
   transactions includes an offsetting interest income item, and accordingly
   has no impact on net investment income, total return or net asset value.

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


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



<TABLE>
<CAPTION>
EXAMPLE                    1 YEAR      3 YEARS      5 YEARS      10 YEARS
<S>                       <C>         <C>          <C>          <C>
 Institutional Class         $92         $287         $498       $1,108
</TABLE>




                                           DWS Managed Municipal Bond Fund  | 17
<PAGE>


<TABLE>
<S>                                       <C>
                                            Institutional Class
  ticker symbol                             SZMIX
    fund number                             1445

    DWS INTERMEDIATE TAX/AMT FREE FUND


</TABLE>

            THE FUND'S MAIN INVESTMENT STRATEGY

            The fund seeks to provide a high level of income exempt from
            regular federal income taxes and seeks to limit principal
            fluctuation.

            Under normal circumstances, the fund invests at least 80% of net
            assets, plus the amount of any borrowings for investment purposes,
            in securities issued by municipalities across the United States and
            in other securities whose income is free from regular federal
            income tax and alternative minimum tax (AMT). The fund does not
            intend to invest in securities whose income is subject to AMT.

            The fund can buy many types of municipal securities of all
            maturities. These may include revenue bonds (which are backed by
            revenues from a particular source) and general obligation bonds
            (which are typically backed by the issuer's ability to levy taxes).
            They may also include municipal lease obligations and investments
            representing an interest therein.


            CREDIT QUALITY POLICIES. This fund normally invests at least 65% of
            total assets in municipal securities of the top three grades of
            credit quality. The fund could put up to 35% of net assets in debt
            securities rated in the fourth credit grade, which is still
            considered investment-grade.


            The portfolio managers look for securities that appear to offer the
            best total return potential. In making their buy and sell
            decisions, the managers typically weigh a number of factors against
            each other, from economic outlooks and possible interest rate
            movements to characteristics of specific securities, such as
            coupon, maturity date and call date, and changes in supply and
            demand within the municipal bond market.

            Although the managers may adjust the maturity of the fund's
            portfolio between three and ten years, they generally intend to
            keep it between five and ten years.


18 | DWS Intermediate Tax/AMT Free Fund
<PAGE>

            In addition, they may use various types of derivative instruments
            (instruments whose value is based on, for example, indices,
            commodities or securities), for hedging purposes or to enhance
            return. Such instruments may include inverse floaters, futures
            contracts, interest rate swaps and other over-the-counter
            derivatives.


            THE MAIN RISKS OF INVESTING IN THE FUND

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


            INTEREST RATE RISK. Generally, fixed income securities will
            decrease in value when interest rates rise. The longer the duration
            of the fund's securities, the more sensitive the fund will be to
            interest rate changes. (As a general rule, a 1% rise in interest
            rates means a 1% fall in value for every year of duration.) As
            interest rates decline, the issuers of securities held by the fund
            may prepay principal earlier than scheduled, forcing the fund to
            reinvest in lower-yielding securities and may reduce the fund's
            income. As interest rates increase, slower than expected principal
            payments may extend the average life of fixed income securities.
            This will have the effect of locking in a below-market interest
            rate, reducing the value of such a security.

            CREDIT RISK. A fund purchasing debt securities faces the risk that
            the creditworthiness of an issuer may decline, causing the value of
            the debt securities to decline. In addition, an issuer may not be
            able to make timely payments on the interest and/
            or principal on the debt security it has issued. Because the
            issuers of high-yield debt securities or junk bonds (debt






            THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS



This fund is designed for investors who are looking for a tax-advantaged
investment, are interested in higher yield and can accept
                                              moderate risk to their principal.








            securities rated below the fourth highest category) may be in
            uncertain financial health, the prices of their debt securities can
            be more vulnerable to bad economic news or even the expectation of
            bad news, than investment-grade debt securities. In some cases,
            debt securities, particularly high-yield debt securities, may
            decline in credit quality or go into default. Because the fund may
            invest in securities not paying current interest or in securities
            already in default, these risks may be more pronounced.



                                        DWS Intermediate Tax/AMT Free Fund  | 19
<PAGE>


            FOCUSED INVESTING RISK. The fact that the fund may focus on
            investments from a single state or sector of the municipal
            securities market increases risk, because factors affecting the
            state or region, such as economic or fiscal problems, could affect
            a large portion of the fund's securities in a similar manner. For
            example, a state's technology or biotech industries could
            experience a downturn or fail to develop as expected, hurting the
            local economy. States could also face severe fiscal difficulties,
            for example, an economic downturn, increased expenditures on
            domestic security or reduced monetary support from the federal
            government. Over time, these issues may have the ability to impair
            a state's ability to repay its obligations.

            MARKET RISK. Deteriorating market conditions might cause a general
            weakness in the market that reduces the prices of securities in
            that market. Developments in a particular class of debt securities
            or the stock market could also adversely affect the fund by
            reducing the relative attractiveness of debt securities as an
            investment. Also, to the extent that the fund emphasizes debt
            securities from any given state or region, it could be hurt if that
            state or region does not do well.

            DERIVATIVES RISK. Risks associated with derivatives include the
            risk that the derivative is not well correlated with the security,
            index or currency to which it relates; the risk that derivatives
            may result in losses or missed opportunities; the risk that the
            fund will be unable to sell the derivative because of an illiquid
            secondary market; the risk that a counterparty is unwilling or
            unable to meet its obligation; and the risk that the derivative
            transaction could expose the fund to the effects of leverage, which
            could increase the fund's exposure to the market and magnify
            potential losses. There is no guarantee that derivatives, to the
            extent employed, will have the intended effect, and their use could
            cause lower returns or even losses to the fund. The use of
            derivatives by the fund to hedge risk may reduce the opportunity
            for gain by offsetting the positive effect of favorable price
            movements.



20 | DWS Intermediate Tax/AMT Free Fund
<PAGE>

            Other factors that could affect performance include:


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



            -  political or legal actions could change the way the fund's
               dividends are treated for income tax purposes.


            -  at times, market conditions might make it hard to value some
               investments or to get an attractive price for them.


                                        DWS Intermediate Tax/AMT Free Fund  | 21
<PAGE>

THE FUND'S PERFORMANCE HISTORY

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


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


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

DWS Intermediate Tax/AMT Free Fund

ANNUAL TOTAL RETURN (%) AS OF 12/31 EACH YEAR - INSTITUTIONAL CLASS




<TABLE>
<C>       <C>       <C>
 2.07      3.60     3.96
2005      2006      2007
</TABLE>







<TABLE>
<CAPTION>
                  2008 TOTAL RETURN AS OF JUNE 30: 0.32%
<S>                                        <C>
FOR THE PERIODS INCLUDED IN THE BAR CHART:
BEST QUARTER: 2.79%, Q3 2006               WORST QUARTER: -0.79%, Q1 2005
</TABLE>




22 | DWS Intermediate Tax/AMT Free Fund
<PAGE>


AVERAGE ANNUAL TOTAL RETURNS (%) as of 12/31/2007




<TABLE>
<CAPTION>
                                              1 YEAR      INCEPTION*
<S>                                          <C>         <C>
 INSTITUTIONAL CLASS
   Return before Taxes                          3.96         3.24
   Return after Taxes on Distributions          3.96         3.23
   Return after Taxes on Distributions
   and Sale of Fund Shares                      3.92         3.36**
 LEHMAN SEVEN YEAR MUNICIPAL BOND
 INDEX (reflects no deductions for fees,
 expenses or taxes)                             5.06         3.58
</TABLE>



*   Institutional Class shares commenced operations on December 17, 2004. Index
   returns begin December 31, 2004.

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

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


 The LEHMAN SEVEN YEAR MUNICIPAL BOND INDEX is an unmanaged, total return
 subset of the Lehman Brothers Municipal Bond Index. It includes maturities of
 six to eight years. As part of the proposed Barclays acquisition of Lehman
 Brothers and subject to the approval of the U.S. Bankruptcy Court and
 applicable regulations, the Lehman Seven Year Municipal Bond Index and Lehman
 Brothers Municipal Bond Index are expected to become part of Barclays.



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

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



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

RETURN AFTER TAXES ON DISTRIBUTIONS assumes that an investor holds fund shares
at the end of the period. The return reflects taxes only on the fund's
distributions and not on a shareholder's gain or loss from selling fund shares.


RETURN AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES assumes that an
investor sold his or her fund shares at the end of the period. The return
reflects taxes on both the fund's distributions and a shareholder's gain or
loss from selling fund shares.



                                        DWS Intermediate Tax/AMT Free Fund  | 23
<PAGE>

HOW MUCH INVESTORS PAY

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



<TABLE>
<CAPTION>
FEE TABLE
<S>                                    <C>
 SHAREHOLDER FEES, paid directly from your investment
_____________________________________________________________________
 Redemption/Exchange Fee on shares
 owned less than 15 days (as % of
 redemption proceeds)1                             2.00%
 ANNUAL OPERATING EXPENSES, deducted from fund assets
_____________________________________________________________________
 Management Fee                                    0.32%
 Distribution/Service (12b-1) Fee                 None
 Interest Expense2                                 0.13
 Other Expenses3                                   0.17
 TOTAL OTHER EXPENSES                              0.30
 TOTAL ANNUAL OPERATING EXPENSES                   0.62
</TABLE>



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


2   Interest expense relates to the fund's liability with respect to floating
   rate notes held by third parties in conjunction with certain inverse
   floater securities transactions. However, the accounting treatment for such
   transactions includes an offsetting interest income item, and accordingly
   has no impact on net investment income, total return or net asset value.

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


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



<TABLE>
<CAPTION>
EXAMPLE                    1 YEAR      3 YEARS      5 YEARS      10 YEARS
<S>                       <C>         <C>          <C>          <C>
 Institutional Class         $63         $199         $346         $774
</TABLE>




24 | DWS Intermediate Tax/AMT Free Fund
<PAGE>

OTHER POLICIES AND RISKS

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

           -  Although major changes tend to be infrequent, each fund's Board
              could change a fund's investment objective without seeking
              shareholder approval. However, the policy of investing at least
              80% of net assets (plus the amount of any borrowings for
              investment purposes in the case of DWS Managed Municipal Bond
              Fund and DWS Intermediate Tax/AMT Free Fund) in municipal
              securities exempt from regular federal income tax (and in the
              case of DWS Intermediate Tax/
              AMT Free Fund, the alternative minimum tax) for each fund cannot
              be changed without shareholder approval.


           -  As a temporary defensive measure, each fund could shift up to 20%
              and DWS Strategic High Yield Tax-Free Fund could shift up to 100%
              of assets into investments such as taxable money market
              securities or other short-term securities that offer comparable
              levels of risk. This could prevent losses, but, while engaged in
              a temporary defensive position, a fund will not be pursuing its
              investment objective. However, portfolio management may choose
              not to use these strategies for various reasons, even in volatile
              market conditions. Temporary investments may be taxable.

           -  Portfolio management measures credit quality at the time it buys
              securities, using independent rating agencies or, for unrated
              securities, its own judgment. All securities must meet the credit
              quality standards applied by portfolio management at the time
              they are purchased. If a security's credit quality changes,
              portfolio management will decide what to do with the security,
              based on its assessment of what would most benefit a fund.



           For more information

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

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


                                                  Other Policies and Risks  | 25
<PAGE>


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

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



WHO MANAGES AND OVERSEES THE FUNDS


           The investment advisor

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


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


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

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


26 | Who Manages and Oversees the Funds
<PAGE>


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




<TABLE>
<CAPTION>
FUND NAME                                               FEE PAID
<S>                                                    <C>
           DWS Strategic High Yield Tax-Free Fund         0.52%
           DWS Managed Municipal Bond Fund                0.33%
           DWS Intermediate Tax/AMT Free Fund             0.32%
</TABLE>




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


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


                                        Who Manages and Oversees the Funds  | 27
<PAGE>

Portfolio management


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


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


DWS STRATEGIC HIGH YIELD TAX-FREE FUND


Philip G. Condon
Managing Director of Deutsche Asset Management and Lead Portfolio Manager of
the fund.
-  Joined Deutsche Asset Management in 1983 and the fund in 1987.

-  Over 32 years of investment industry experience.

-  BA and MBA, University of Massachusetts at Amherst.

Rebecca L. Flinn

Director of Deutsche Asset Management and Portfolio Manager of the fund.

-  Joined Deutsche Asset Management in 1986 and the fund in 1998.

-  Over 22 years of investment industry experience.

-  BA, University of Redlands, California.


DWS MANAGED MUNICIPAL BOND FUND

Philip G. Condon
Managing Director of Deutsche Asset Management and Co-Lead Portfolio Manager of
the fund.
-  Joined Deutsche Asset Management in 1983 and the fund in 1990.

-  Over 32 years of investment industry experience.

-  BA and MBA, University of Massachusetts at Amherst.

DWS MANAGED MUNICIPAL BOND FUND (CONTINUED)

Ashton P. Goodfield, CFA
Managing Director of Deutsche Asset Management and Co-Lead Portfolio Manager of
the fund.
-  Joined Deutsche Asset Management in 1986 and the fund in 1998.

-  Over 22 years of investment industry experience.

-  BA, Duke University.

Eleanor R. Lynch, CFA
Director of Deutsche Asset Management and Co-Lead Portfolio Manager of the
fund.
-  Joined Deutsche Asset Management in 1995 and the fund in 1999.

-  Over 21 years of investment industry experience.

-  BS, Ursinus College; MS, Drexel
     University.

Matthew J. Caggiano, CFA
Managing Director of Deutsche Asset Management and Portfolio Manager of the
fund.
-  Joined Deutsche Asset Management in 1989 and the fund in 1999.

-  Over 18 years of investment industry experience.

-  BS, Pennsylvania State University; MS, Boston College.

28 | Who Manages and Oversees the Funds
<PAGE>

DWS INTERMEDIATE TAX/AMT FREE FUND

Philip G. Condon
Managing Director of Deutsche Asset Management and Co-Lead Portfolio Manager of
the fund.
- Joined Deutsche Asset Management in 1983 and the fund in 1998.

- Over 32 years of investment industry experience.

- BA and MBA, University of Massachusetts at Amherst.

Ashton P. Goodfield, CFA
Managing Director of Deutsche Asset Management and Co-Lead Portfolio Manager of
the fund.
- Joined Deutsche Asset Management in 1986 and the fund in 1990.

- Over 22 years of investment industry experience.

- BA, Duke University.

Shelly Deitert
Vice President of Deutsche Asset Management and Portfolio Manager of the fund.
- Joined Deutsche Asset Management in 1997 and the fund in 2002.

- Over 11 years of investment industry experience.

- BA, Taylor University.

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


                                        Who Manages and Oversees the Funds  | 29
<PAGE>

FINANCIAL HIGHLIGHTS

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


30 | Financial Highlights
<PAGE>


DWS Strategic High Yield Tax-Free Fund - Institutional Class




<TABLE>
<CAPTION>
YEARS ENDED MAY 31,                     2008           2007            2006            2005           2004
<S>                                 <C>            <C>            <C>              <C>            <C>
SELECTED PER SHARE DATA
-----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD                            $  12.85       $  12.79         $ 12.90        $  12.52       $  12.87
--------------------------------     --------       --------         -------        --------       --------
Income from investment
operations:
  Net investment income                   .62            .62             .63             .67            .67
________________________________     ________       ________         _______        ________       ________
  Net realized and unrealized
  gain (loss)                          (  .37)           .06          (  .10)            .39         (  .34)
--------------------------------     --------       --------         -------        --------       --------
  TOTAL FROM INVESTMENT
  OPERATIONS                              .25            .68             .53            1.06            .33
________________________________     ________       ________         _______        ________       ________
Less distributions from:
  Net investment income                (  .62)        (  .62)         (  .64)         (  .67)        (  .67)
________________________________     ________       ________         _______        ________       ________
  Net realized gains                        -              -          (  .00)*        (  .01)        (  .01)
--------------------------------     --------       --------         -------        --------       --------
  TOTAL DISTRIBUTIONS                  (  .62)        (  .62)         (  .64)         (  .68)        (  .68)
________________________________     ________       ________         _______        ________       ________
Redemption fees                           .00*           .00*            .00*            .00*             -
--------------------------------     --------       --------         -------        --------       --------
NET ASSET VALUE, END OF
PERIOD                               $  12.48       $  12.85         $ 12.79        $  12.90       $  12.52
--------------------------------     --------       --------         -------        --------       --------
Total Return (%)                         2.00           5.40         4.18a              8.67           2.61
--------------------------------     --------       --------         -------        --------       --------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
-----------------------------------------------------------------------------------------------------------------
Net assets, end of period
($ millions)                                6              3               3             .36            .16
_________________________________    ________       ________         _______        ________       ________
Ratio of expenses before
expense reductions (including
interest expense) (%)b                   1.32            .92            1.14             .88            .81
_________________________________    ________       ________         _______        ________       ________
Ratio of expenses after
expense reductions (including
interest expense) (%)b                   1.32            .92            1.11             .88            .81
_________________________________    ________       ________         _______        ________       ________
Ratio of expenses after
expense reductions (excluding
interest expense) (%)                     .69            .69             .78             .76            .73
_________________________________    ________       ________         _______        ________       ________
Ratio of net investment
income (%)                               4.92           4.83            4.90            5.28           5.31
_________________________________    ________       ________         _______        ________       ________
Portfolio turnover rate (%)                70             57              43              34             44
---------------------------------    --------       --------         -------        --------       --------
</TABLE>




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



b   Interest expense represents interest and fees on short term floating rate
   notes issued in conjunction with inverse floating rate securities. Interest
   income from such transactions is included in income from investment
   operations.

*   Amount is less than $.005.


                                                      Financial Highlights  | 31
<PAGE>

DWS Managed Municipal Bond Fund - Institutional Class



<TABLE>
<CAPTION>
YEARS ENDED MAY 31,                    2008          2007          2006            2005           2004
<S>                                 <C>           <C>           <C>           <C>              <C>
SELECTED PER SHARE DATA
-------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD                            $  8.99       $  9.04        $ 9.21         $ 9.05          $ 9.50
--------------------------------     -------       -------        ------         -------         ------
Income from investment operations:
  Net investment income                  .43           .41           .42            .45             .44
________________________________     _______       _______        ______         _______         ______
  Net realized and unrealized
  gain (loss)                          ( .13)          .00*        ( .17)           .16           ( .45)
--------------------------------     -------       -------        ------         -------         ------
  TOTAL FROM INVESTMENT
  OPERATIONS                             .30           .41           .25            .61           ( .01)
________________________________     _______       _______        ______         _______         ______
Less distributions from:
  Net investment income                ( .43)        ( .41)        ( .42)         ( .45)          ( .44)
________________________________     _______       _______        ______         _______         ______
  Net realized gains                   ( .01)        ( .05)        ( .00)*        ( .00)*             -
--------------------------------     -------       -------        ------         -------         ------
  TOTAL DISTRIBUTIONS                  ( .44)        ( .46)        ( .42)         ( .45)          ( .44)
________________________________     _______       _______        ______         _______         ______
Redemption fees                          .00*          .00*          .00*           .00*              -
--------------------------------     -------       -------        ------         -------         ------
NET ASSET VALUE, END OF
PERIOD                               $  8.85       $  8.99        $ 9.04         $ 9.21          $ 9.05
--------------------------------     -------       -------        ------         -------         ------
Total Return (%)                        3.35          4.62          2.82         6.86a            ( .06)a
--------------------------------     -------       -------        ------         -------         ------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
-------------------------------------------------------------------------------------------------------------
Net assets, end of period
($ millions)                               5             4             4            .45             .01
_________________________________    _______       _______        ______         _______         ______
Ratio of expenses before
expense reductions (including
interest expense) (%)b                   .90           .78           .88            .66             .75
_________________________________    _______       _______        ______         _______         ______
Ratio of expenses after
expense reductions (including
interest expense) (%)b                   .90           .78           .88            .63             .63
_________________________________    _______       _______        ______         _______         ______
Ratio of expenses after
expense reductions (excluding
interest expense) (%)                    .49           .49           .53            .49             .54
_________________________________    _______       _______        ______         _______         ______
Ratio of net investment
income (%)                              4.77          4.53          4.59           4.81            4.82
_________________________________    _______       _______        ______         _______         ______
Portfolio turnover rate (%)               55            19            28             31              24
---------------------------------    -------       -------        ------         -------         ------
</TABLE>




a   Total returns would have been lower had certain expenses not been reduced.



b   Interest expense represents interest and fees on short term floating rate
   notes issued in conjunction with inverse floating rate securities. Interest
   income from such transactions is included in income from investment
   operations.

*   Amount is less than $.005.


32 | Financial Highlights
<PAGE>

DWS Intermediate Tax/AMT Free Fund - Institutional Class



<TABLE>
<CAPTION>
YEARS ENDED MAY 31,                                2008           2007           2006          2005A
<S>                                            <C>            <C>            <C>            <C>
SELECTED PER SHARE DATA
----------------------------------------------------------------------------------------            -
NET ASSET VALUE, BEGINNING OF PERIOD             $ 11.00       $  11.07       $  11.41        $ 11.45
-------------------------------------------      -------       --------       --------        -------
Income (loss) from investment operations:
  Net investment income                              .46            .46            .45            .22
___________________________________________      _______       ________       ________        _______
  Net realized and unrealized gain (loss)            .07         (  .06)        (  .32)        (  .04)
-------------------------------------------      -------       --------       --------        -------
  TOTAL FROM INVESTMENT OPERATIONS                   .53            .40            .13            .18
___________________________________________      _______       ________       ________        _______
Less distributions from:
  Net investment income                           (  .46)        (  .46)        (  .45)        (  .22)
___________________________________________      _______       ________       ________        _______
  Net realized gains                              (  .00)*       (  .01)        (  .02)             -
-------------------------------------------      -------       --------       --------        -------
  TOTAL DISTRIBUTIONS                             (  .46)        (  .47)        (  .47)        (  .22)
___________________________________________      _______       ________       ________        _______
Redemption fees                                      .00*           .00*           .00*           .00*
-------------------------------------------      -------       --------       --------        -------
NET ASSET VALUE, END OF PERIOD                   $ 11.07       $  11.00       $  11.07        $ 11.41
-------------------------------------------      -------       --------       --------        -------
Total Return (%)                                    4.88           3.61           1.16           1.58**
-------------------------------------------      -------       --------       --------        -------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
----------------------------------------------------------------------------------------      -------
Net assets, end of period ($ millions)               147            150            151            191
___________________________________________      _______       ________       ________        _______
Ratio of expenses (including interest
expense) (%)b                                        .62            .50            .53            .45*
___________________________________________      _______       ________       ________        _______
Ratio of expenses (excluding interest
expense) (%)                                         .49            .50            .53            .45*
___________________________________________      _______       ________       ________        _______
Ratio of net investment income (%)                  4.14           4.16           4.05           4.38*
___________________________________________      _______       ________       ________        _______
Portfolio turnover rate (%)                           59             45             41             45
-------------------------------------------      -------       --------       --------        -------
</TABLE>



a   For the period from December 20, 2004 (commencement of operations of
   Institutional Class shares) to May 31, 2005.


b   Interest expense represents interest and fees on short term floating rate
   notes issued in conjunction with inverse floating rate securities. Interest
   income from such transactions is included in income from investment
   operations.

*   Amount is less than $.005.


                                                      Financial Highlights  | 33
<PAGE>


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

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


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

<PAGE>

Buying and Selling INSTITUTIONAL CLASS Shares



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

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



           Eligibility requirements

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

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

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

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

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

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

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


                             Buying and Selling Institutional Class Shares  | 35
<PAGE>

           Investment minimum

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

           The minimum initial investment is waived for:

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

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

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

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

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


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


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


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



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

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



36 | Buying and Selling Institutional Class Shares
<PAGE>

           How to contact the transfer agent



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



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



           How to open your account



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




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



           How to BUY and SELL shares

           MAIL:


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



                             Buying and Selling Institutional Class Shares  | 37
<PAGE>


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


           WIRE:


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




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



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

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


38 | Buying and Selling Institutional Class Shares
<PAGE>


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


           TELEPHONE TRANSACTIONS:


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

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



           Financial intermediary support payments


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



                             Buying and Selling Institutional Class Shares  | 39
<PAGE>

           mutual fund "supermarket" platforms and other formal sales programs;
           granting the Distributor access to the financial advisor's sales
           force; granting the Distributor access to the financial advisor's
           conferences and meetings; assistance in training and educating the
           financial advisor's personnel; and obtaining other forms of
           marketing support.

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


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



40 | Buying and Selling Institutional Class Shares
<PAGE>


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


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


POLICIES YOU SHOULD KNOW ABOUT


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


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


                                            Policies You Should Know About  | 41
<PAGE>

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

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


           Policies about transactions

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

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

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

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


42 | Policies You Should Know About
<PAGE>

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

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

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

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


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

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



                                            Policies You Should Know About  | 43
<PAGE>


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

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

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


44 | Policies You Should Know About
<PAGE>


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

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


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

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


                                            Policies You Should Know About  | 45
<PAGE>

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

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

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


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



46 | Policies You Should Know About
<PAGE>


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

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


           QUICKBUY AND QUICKSELL let you set up a link between a DWS fund
           account and a bank account. Once this link is in place, you





            THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS



                                                                         The DWS






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


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


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



                                            Policies You Should Know About  | 47
<PAGE>

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

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

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


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


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





            THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS



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







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


48 | Policies You Should Know About
<PAGE>

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

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


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


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


                                            Policies You Should Know About  | 49
<PAGE>

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


           How each fund calculates share price

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


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



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

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

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



           Other rights we reserve

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

           -  withdraw or suspend the offering of shares at any time

50 | Policies You Should Know About
<PAGE>


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


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


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

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

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


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


                                            Policies You Should Know About  | 51
<PAGE>

UNDERSTANDING DISTRIBUTIONS AND TAXES


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


           INCOME DIVIDENDS ARE DECLARED DAILY AND PAID MONTHLY. Short-term and
           long-term capital gains are paid in November or December, or
           otherwise as needed.


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

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




            THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS



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





                                                                   consequences.

           reinvestment (at NAV) is the only option.

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


52 | Understanding Distributions and Taxes
<PAGE>


           Each fund intends to distribute tax-exempt interest as
           exempt-interest dividends, which are generally excluded from gross
           income for regular federal income tax purposes, but may be subject
           to alternative minimum tax and state and local income taxes. Their
           distributions from other sources, if any, would be taxable as
           described above.


           Dividends from each fund are generally tax-free for most
           shareholders, meaning that investors who are individuals can receive
           them without incurring federal and (for some investors) state and
           local income tax liability. However, there are a few exceptions:

           -  a portion of a fund's dividends may be taxable if it came from
              investments in taxable securities

           -  because a fund (except DWS Intermediate Tax/AMT Free Fund) can
              invest up to 20% of net assets in securities whose income is
              subject to the federal alternative minimum tax (AMT), you may owe
              taxes on a portion of your dividends if you are among those
              investors who must pay AMT

           -  capital gains distributions may be taxable


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



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


           ANY DIRECT INVESTMENTS IN FOREIGN SECURITIES BY A FUND MAY BE
           SUBJECT TO FOREIGN WITHHOLDING TAXES. In that case, a fund's yield
           on those securities would generally be decreased. Shareholders
           generally will not be entitled to claim a credit or deduction with
           respect to foreign taxes paid by the fund. In


                                     Understanding Distributions and Taxes  | 53
<PAGE>

           addition, any investments in foreign securities or foreign
           currencies may increase or accelerate a fund's recognition of
           ordinary income and may affect the timing or amount of the fund's
           distributions. If you invest in a fund through a taxable account,
           your after-tax return could be negatively impacted.


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

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

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


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


54 | Understanding Distributions and Taxes
<PAGE>


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

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

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




                                     Understanding Distributions and Taxes  | 55
<PAGE>

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



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


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


56 | Appendix
<PAGE>


DWS Strategic High Yield Tax-Free Fund - Institutional Class





<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER      ANNUAL FEES
              FEES AND        EXPENSE        FEES AND           FEES AND            AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        1.29%              3.71%       $  10,371.00       $   131.39
   2           10.25%        1.31%              7.54%       $  10,753.69       $   138.37
   3           15.76%        1.31%             11.51%       $  11,150.50       $   143.47
   4           21.55%        1.31%             15.62%       $  11,561.95       $   148.77
   5           27.63%        1.31%             19.89%       $  11,988.59       $   154.26
   6           34.01%        1.31%             24.31%       $  12,430.97       $   159.95
   7           40.71%        1.31%             28.90%       $  12,889.67       $   165.85
   8           47.75%        1.31%             33.65%       $  13,365.30       $   171.97
   9           55.13%        1.31%             38.58%       $  13,858.48       $   178.32
  10           62.89%        1.31%             43.70%       $  14,369.86       $   184.90
  TOTAL                                                                        $ 1,577.25
</TABLE>



DWS Managed Municipal Bond Fund - Institutional Class





<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                  ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                       OF RETURN:
               0.00%                   $10,000                             5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER         ANNUAL
              FEES AND        EXPENSE        FEES AND           FEES AND          FEES AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES          EXPENSES
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        0.90%              4.10%       $ 10,410.00        $    91.85
   2           10.25%        0.90%              8.37%       $ 10,836.81        $    95.61
   3           15.76%        0.90%             12.81%       $ 11,281.12        $    99.53
   4           21.55%        0.90%             17.44%       $ 11,743.65        $   103.61
   5           27.63%        0.90%             22.25%       $ 12,225.13        $   107.86
   6           34.01%        0.90%             27.26%       $ 12,726.37        $   112.28
   7           40.71%        0.90%             32.48%       $ 13,248.15        $   116.89
   8           47.75%        0.90%             37.91%       $ 13,791.32        $   121.68
   9           55.13%        0.90%             43.57%       $ 14,356.76        $   126.67
  10           62.89%        0.90%             49.45%       $ 14,945.39        $   131.86
  TOTAL                                                                        $ 1,107.84
</TABLE>




                                                                  Appendix  | 57
<PAGE>

           DWS Intermediate Tax/AMT Free Fund - Institutional Class




<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER      ANNUAL FEES
              FEES AND        EXPENSE        FEES AND           FEES AND            AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        0.62%              4.38%       $ 10,438.00         $  63.36
   2           10.25%        0.62%              8.95%       $ 10,895.18         $  66.13
   3           15.76%        0.62%             13.72%       $ 11,372.39         $  69.03
   4           21.55%        0.62%             18.71%       $ 11,870.50         $  72.05
   5           27.63%        0.62%             23.90%       $ 12,390.43         $  75.21
   6           34.01%        0.62%             29.33%       $ 12,933.13         $  78.50
   7           40.71%        0.62%             35.00%       $ 13,499.60         $  81.94
   8           47.75%        0.62%             40.91%       $ 14,090.89         $  85.53
   9           55.13%        0.62%             47.08%       $ 14,708.07         $  89.28
  10           62.89%        0.62%             53.52%       $ 15,352.28         $  93.19
  TOTAL                                                                         $ 774.22
</TABLE>




58 | Appendix
<PAGE>

TO GET MORE INFORMATION

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

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


For a free copy of any of these documents or to request other information about
a fund, call (800) 730-1313, or contact DWS Investments at the address listed
below. Each fund's SAI and shareholder reports are also available through the
DWS Investments Web site at www.dws-investments.com. These documents and other
information about each fund are available from the EDGAR Database on the SEC's
Internet site at www.sec.gov. If you like, you may obtain copies of this
information, after paying a copying fee, by e-mailing a request to
publicinfo@sec.gov or by writing the SEC at the address listed below. You can
also review and copy these documents and other information about each fund,
including each fund's SAI, at the SEC's Public Reference Room in Washington,
D.C. Information on the operation of the SEC's Public Reference Room may be
obtained by calling (800) SEC-0330.




<TABLE>
<CAPTION>
DWS INVESTMENTS      SEC                     DISTRIBUTOR
-----------------    --------------------    ------------------------------
<S>                  <C>                     <C>
PO Box 219210        100 F Street, N.E.      DWS Investments Distributors,
Kansas City, MO      Washington, D.C.        Inc.
64121-9210           20549-0102              222 South Riverside Plaza
WWW.DWS-             WWW.SEC.GOV             Chicago, IL 60606-5808
INVESTMENTS.COM      (800) SEC-0330          (800) 621-1148
(800) 730-1313
</TABLE>





<TABLE>
<S>                      <C>                                         <C>
SEC FILE NUMBER:
DWS Municipal Trust        DWS Strategic High Yield Tax-Free Fund    811-02671
DWS Municipal Trust               DWS Managed Municipal Bond Fund    811-02671
DWS Tax Free Trust             DWS Intermediate Tax/AMT Free Fund    811-03632
</TABLE>








(10/01/08) DNTFIF-1-IN
 [RECYCLE GRAPHIC APPEARS HERE]
                                                                       [Logo]DWS
                                                                      INVESTMENT
                                                             Deutsche Bank Group

<PAGE>


                                OCTOBER 1, 2008








                                   PROSPECTUS
                              ------------------
                                    CLASS S


                     DWS STRATEGIC HIGH YIELD TAX-FREE FUND
                    (formerly DWS High Yield Tax Free Fund)



                        DWS MANAGED MUNICIPAL BOND FUND


                       DWS INTERMEDIATE TAX/AMT FREE FUND


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




                                                                       [Logo]DWS
                                                                      INVESTMENT
                                                             Deutsche Bank Group

<PAGE>

CONTENTS





<TABLE>
<S>      <C>
HOW EACH FUND WORKS
  4      DWS Strategic High Yield Tax-
         Free Fund
 11      DWS Managed Municipal
         Bond Fund
 18      DWS Intermediate Tax/AMT
         Free Fund
 25      Other Policies and Risks
 26      Who Manages and Oversees
         the Funds
 30      Financial Highlights


</TABLE>
<TABLE>
<S>      <C>
HOW TO INVEST IN THE FUNDS
 35      How to Buy Class S Shares
 36      How to Exchange or Sell
         Class S Shares
 39      Policies You Should Know
         About
 50      Understanding Distributions
         and Taxes
 54      Appendix
</TABLE>


<PAGE>

HOW EACH FUND WORKS

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


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

CLASS S shares are generally only available to new investors through fee-based

programs of investment dealers that have special agreements with each fund's
distributor, through certain group retirement plans and through certain
registered investment advisors. These dealers and advisors typically charge
ongoing fees for services they provide.


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


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

<PAGE>



<TABLE>
<S>                                           <C>
                                                Class S
  ticker symbol                                 SHYTX
    fund number                                 2008

                      DWS STRATEGIC HIGH YIELD TAX-FREE FUND
  (formerly DWS High Yield Tax Free Fund)


</TABLE>


            THE FUND'S MAIN INVESTMENT STRATEGY

            The fund seeks to provide a high level of income exempt from
            regular federal income tax.

            Under normal circumstances, the fund invests at least 80% of net
            assets in securities issued by municipalities across the United
            States and in other securities whose income is free from regular
            federal income tax. The fund may invest up to 20% of net assets in
            securities whose income is subject to the federal alternative
            minimum tax (AMT).

            The fund can buy many types of municipal securities of all
            maturities. These may include revenue bonds (which are backed by
            revenues from a particular source) and general obligation bonds
            (which are typically backed by the issuer's ability to levy taxes).
            They may also include municipal lease obligations and investments
            representing an interest therein.


            CREDIT QUALITY POLICIES. This fund normally invests at least 50% of
            total assets in municipal securities of the top four grades of
            credit quality. The fund may invest up to 50% of total assets in
            high yield debt securities (commonly referred to as "junk" bonds),
            which are those below the fourth credit grade (i.e., grade BB/Ba
            and below) and may include debt securities not currently paying
            interest and debt securities in default. Compared to
            investment-grade debt securities, junk bonds generally pay higher
            yields, have higher volatility and higher risk of default on
            payments of interest or principal.


            The portfolio managers look for securities that appear to offer the
            best total return potential. In making their buy and sell
            decisions, the managers typically weigh a number of factors against
            each other, from economic outlooks and possible interest rate
            movements to characteristics of specific securities, such as
            coupon, maturity date and call date, and changes in supply and
            demand within the municipal bond market.


4 | DWS Strategic High Yield Tax-Free Fund
<PAGE>

            Although the managers may adjust the fund's duration (a measure of
            sensitivity to interest rates) over a wider range, they generally
            intend to keep it similar to that of the Lehman Brothers Municipal
            Bond Index, generally between five and nine years.

            In addition, they may use various types of derivative instruments
            (instruments whose value is based on, for example, indices,
            commodities or securities), for hedging purposes or to enhance
            return. Such instruments may include inverse floaters, futures
            contracts, interest rate swaps and other over-the-counter
            derivatives.


            THE MAIN RISKS OF INVESTING IN THE FUND

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


            INTEREST RATE RISK. Generally, fixed income securities will
            decrease in value when interest rates rise. The longer the duration
            of the fund's securities, the more sensitive the fund will be to
            interest rate changes. (As a general rule, a 1% rise in interest
            rates means a 1% fall in value for every year of duration.) As
            interest rates decline, the issuers of securities held by the fund
            may prepay principal earlier than scheduled, forcing the fund to
            reinvest in lower-yielding securities and may reduce the fund's
            income. As interest rates increase, slower than expected principal
            payments may extend the average life of fixed income securities.
            This will have the effect of locking in a below-market interest
            rate, reducing the value






            THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS



This fund is designed for investors who are looking for a tax-advantaged
investment and are willing to accept risk to their
principal and who are interested in the potential for
                                                           high current income.







            of such a security.


            CREDIT RISK. A fund purchasing debt securities faces the risk that
            the creditworthiness of an issuer may decline, causing the value of
            the debt securities to decline. In addition, an issuer may not be
            able to make timely payments on the interest and/
            or principal on the debt security it has issued. Because the
            issuers of high-yield debt securities or junk bonds (debt
            securities rated below the fourth highest category) may be in
            uncertain financial health, the prices of their debt securities can
            be more vulnerable to bad economic news or even the expectation of
            bad news, than investment-grade debt



                                     DWS Strategic High Yield Tax-Free Fund  | 5
<PAGE>


            securities. In some cases, debt securities, particularly high-yield
            debt securities, may decline in credit quality or go into default.
            Because the fund may invest in securities not paying current
            interest or in securities already in default, these risks may be
            more pronounced.

            FOCUSED INVESTING RISK. The fact that the fund may focus on
            investments from a single state or sector of the municipal
            securities market increases risk, because factors affecting the
            state or region, such as economic or fiscal problems, could affect
            a large portion of the fund's securities in a similar manner. For
            example, a state's technology or biotech industries could
            experience a downturn or fail to develop as expected, hurting the
            local economy. States could also face severe fiscal difficulties,
            for example, an economic downturn, increased expenditures on
            domestic security or reduced monetary support from the federal
            government. Over time, these issues may have the ability to impair
            a state's ability to repay its obligations.

            MARKET RISK. Deteriorating market conditions might cause a general
            weakness in the market that reduces the prices of securities in
            that market. Developments in a particular class of debt securities
            or the stock market could also adversely affect the fund by
            reducing the relative attractiveness of debt securities as an
            investment. Also, to the extent that the fund emphasizes debt
            securities from any given state or region, it could be hurt if that
            state or region does not do well.

            DERIVATIVES RISK. Risks associated with derivatives include the
            risk that the derivative is not well correlated with the security,
            index or currency to which it relates; the risk that derivatives
            may result in losses or missed opportunities; the risk that the
            fund will be unable to sell the derivative because of an illiquid
            secondary market; the risk that a counterparty is unwilling or
            unable to meet its obligation; and the risk that the derivative
            transaction could expose the fund to the effects of leverage, which
            could increase the fund's exposure to the market and magnify
            potential losses. There is no guarantee that derivatives, to the
            extent employed, will have the intended effect, and their use could
            cause lower returns or even losses to the fund. The use of
            derivatives by the fund to hedge risk may reduce the opportunity
            for gain by offsetting the positive effect of favorable price
            movements.



6 | DWS Strategic High Yield Tax-Free Fund
<PAGE>

            Other factors that could affect performance include:


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



            -  political or legal actions could change the way the fund's
               dividends are treated for income tax purposes.


            -  at times, market conditions might make it hard to value some
               investments or to get an attractive price for them.


                                     DWS Strategic High Yield Tax-Free Fund  | 7
<PAGE>

THE FUND'S PERFORMANCE HISTORY

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


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


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


DWS Strategic High Yield Tax-Free Fund


ANNUAL TOTAL RETURN (%) AS OF 12/31 EACH YEAR - CLASS S




<TABLE>
<S>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>
 6.38      2.23      9.07      5.44      9.12      6.28      4.94      5.52      6.08     2.71
1998      1999      2000      2001      2002      2003      2004      2005      2006      2007
</TABLE>







<TABLE>
<CAPTION>
                 2008 TOTAL RETURN AS OF JUNE 30: -1.43%
<S>                                        <C>
FOR THE PERIODS INCLUDED IN THE BAR CHART:
BEST QUARTER: 3.85%, Q3 2002               WORST QUARTER: -1.81%, Q2 1999
</TABLE>




8 | DWS Strategic High Yield Tax-Free Fund
<PAGE>


AVERAGE ANNUAL TOTAL RETURNS (%) as of 12/31/2007




<TABLE>
<CAPTION>
                                              1 YEAR      5 YEARS      10 YEARS
<S>                                          <C>         <C>          <C>
 CLASS S
   Return before Taxes                         2.71          5.10         5.29
   Return after Taxes on Distributions         2.71          5.09         5.28
   Return after Taxes on Distributions
   and Sale of Fund Shares                     3.29*         5.09         5.28
 LEHMAN BROTHERS MUNICIPAL BOND
 INDEX (reflects no deductions for fees,
 expenses or taxes)                            3.36          4.30         5.18
</TABLE>




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


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


 The LEHMAN BROTHERS MUNICIPAL BOND INDEX is an unmanaged market-value-weighted
 measure of municipal bonds issued across the United States. Index issues have
 a credit rating of at least Baa and a maturity of at least two years. As part
 of the proposed Barclays acquisition of Lehman Brothers and subject to the
 approval of the U.S. Bankruptcy Court and applicable regulations, the Lehman
 Brothers Municipal Bond Index is expected to become part of Barclays.



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

Current performance may be higher or lower than the performance data quoted
above. For more recent performance information, call your financial advisor or
(800) 728-3337 or visit our Web site at www.dws-investments.com.



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

RETURN AFTER TAXES ON DISTRIBUTIONS assumes that an investor holds fund shares
at the end of the period. The return reflects taxes only on the fund's
distributions and not on a shareholder's gain or loss from selling fund shares.


RETURN AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES assumes that an
investor sold his or her fund shares at the end of the period. The return
reflects taxes on both the fund's distributions and a shareholder's gain or
loss from selling fund shares.



                                     DWS Strategic High Yield Tax-Free Fund  | 9
<PAGE>

HOW MUCH INVESTORS PAY


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




<TABLE>
<CAPTION>
FEE TABLE                                          CLASS S
<S>                                      <C>
 SHAREHOLDER FEES, paid directly from your investment
_______________________________________________________________________
 Redemption/Exchange Fee on shares
 owned less than 15 days (as % of
 redemption proceeds)1                               2.00%
 ANNUAL OPERATING EXPENSES, deducted from fund assets
_______________________________________________________________________
 Management Fee                                      0.51%
 Distribution/Service (12b-1) Fee                   None
 Interest Expense2                                   0.63
 Other Expenses3                                     0.38
 TOTAL OTHER EXPENSES                                1.01
 TOTAL ANNUAL OPERATING EXPENSES                     1.52
 Less Expense Waiver/Reimbursement4                  0.23
 NET ANNUAL OPERATING EXPENSES4                      1.29
</TABLE>



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


2   Interest expense relates to the fund's liability with respect to floating
   rate notes held by third parties in conjunction with inverse floater
   securities transactions. However, the accounting treatment for such
   transactions includes an offsetting interest income item, and accordingly
   has no impact on net investment income, total return or net asset value.

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



4   Through September 30, 2009, the Advisor has contractually agreed to waive
   all or a portion of its management fee and reimburse or pay operating
   expenses of the fund to the extent necessary to maintain the fund's total
   operating annual expenses at 0.66% for Class S shares, excluding certain
   expenses such as extraordinary expenses, taxes, brokerage and interest.


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



<TABLE>
<CAPTION>
EXAMPLE               1 YEAR      3 YEARS      5 YEARS      10 YEARS
<S>                  <C>         <C>          <C>          <C>
 Class S shares        $131         $458         $807       $1,793
</TABLE>




10 | DWS Strategic High Yield Tax-Free Fund
<PAGE>


<TABLE>
<S>                                    <C>
                                         Class S
  ticker symbol                          SCMBX
    fund number                          2066

    DWS MANAGED MUNICIPAL BOND FUND


</TABLE>

            THE FUND'S MAIN INVESTMENT STRATEGY

            The fund seeks to provide income exempt from regular federal
            income tax.

            Under normal circumstances, the fund invests at least 80% of net
            assets, plus the amount of any borrowings for investment purposes,
            in securities issued by municipalities across the United States and
            in other securities whose income is free from regular federal
            income tax. The fund may invest up to 20% of net assets in
            securities whose income is subject to the federal alternative
            minimum tax (AMT).

            The fund can buy many types of municipal securities of all
            maturities. These may include revenue bonds (which are backed by
            revenues from a particular source) and general obligation bonds
            (which are typically backed by the issuer's ability to levy taxes).
            They may also include municipal lease obligations and investments
            representing an interest therein.


            CREDIT QUALITY POLICIES. This fund normally invests at least 65% of
            total assets in municipal securities of the top three grades of
            credit quality. The fund may invest up to 10% of total assets in
            high yield debt securities (commonly referred to as "junk" bonds)
            of the fifth and sixth credit grades (i.e., as low as grade B).
            Compared to investment-grade debt securities, junk bonds generally
            pay higher yields, have higher volatility and higher risk of
            default on payments of interest or principal.


            The portfolio managers look for securities that appear to offer the
            best total return potential. In making their buy and sell
            decisions, the managers typically weigh a number of factors against
            each other, from economic outlooks and possible interest rate
            movements to characteristics of specific securities, such as
            coupon, maturity date and call date, and changes in supply and
            demand within the municipal bond market.


                                           DWS Managed Municipal Bond Fund  | 11
<PAGE>

            Although the managers may adjust the fund's duration (a measure of
            sensitivity to interest rates) over a wider range, they generally
            intend to keep it similar to that of the Lehman Brothers Municipal
            Bond Index, generally between five and nine years.

            In addition, they may use various types of derivative instruments
            (instruments whose value is based on, for example, indices,
            commodities or securities), for hedging purposes or to enhance
            return. Such instruments may include inverse floaters, futures
            contracts, interest rate swaps and other over-the-counter
            derivatives.


            THE MAIN RISKS OF INVESTING IN THE FUND

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


            INTEREST RATE RISK. Generally, fixed income securities will
            decrease in value when interest rates rise. The longer the duration
            of the fund's securities, the more sensitive the fund will be to
            interest rate changes. (As a general rule, a 1% rise in interest
            rates means a 1% fall in value for every year of duration.) As
            interest rates decline, the issuers of securities held by the fund
            may prepay principal earlier than scheduled, forcing the fund to
            reinvest in lower-yielding securities and may reduce the fund's
            income. As interest rates increase, slower than expected principal
            payments may extend the average life of fixed income securities.
            This will have the effect of locking in a below-market interest
            rate, reducing the value of such a security.

            CREDIT RISK. A fund purchasing debt securities faces the risk that
            the creditworthiness of an issuer may decline, causing the value of
            the debt securities to decline. In addition, an issuer may not be
            able to make timely payments on the interest and/






            THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS



This fund is designed for investors who are looking for a tax-advantaged
                               investment and are interested in current income.








            or principal on the debt security it has issued. Because the
            issuers of high-yield debt securities or junk bonds (debt
            securities rated below the fourth highest category) may be in
            uncertain financial health, the prices of their debt securities can
            be more vulnerable to bad economic news or even the expectation of
            bad news, than investment-grade debt



12 | DWS Managed Municipal Bond Fund
<PAGE>


            securities. In some cases, debt securities, particularly high-yield
            debt securities, may decline in credit quality or go into default.
            Because the fund may invest in securities not paying current
            interest or in securities already in default, these risks may be
            more pronounced.

            FOCUSED INVESTING RISK. The fact that the fund may focus on
            investments from a single state or sector of the municipal
            securities market increases risk, because factors affecting the
            state or region, such as economic or fiscal problems, could affect
            a large portion of the fund's securities in a similar manner. For
            example, a state's technology or biotech industries could
            experience a downturn or fail to develop as expected, hurting the
            local economy. States could also face severe fiscal difficulties,
            for example, an economic downturn, increased expenditures on
            domestic security or reduced monetary support from the federal
            government. Over time, these issues may have the ability to impair
            a state's ability to repay its obligations.

            MARKET RISK. Deteriorating market conditions might cause a general
            weakness in the market that reduces the prices of securities in
            that market. Developments in a particular class of debt securities
            or the stock market could also adversely affect the fund by
            reducing the relative attractiveness of debt securities as an
            investment. Also, to the extent that the fund emphasizes debt
            securities from any given state or region, it could be hurt if that
            state or region does not do well.

            DERIVATIVES RISK. Risks associated with derivatives include the
            risk that the derivative is not well correlated with the security,
            index or currency to which it relates; the risk that derivatives
            may result in losses or missed opportunities; the risk that the
            fund will be unable to sell the derivative because of an illiquid
            secondary market; the risk that a counterparty is unwilling or
            unable to meet its obligation; and the risk that the derivative
            transaction could expose the fund to the effects of leverage, which
            could increase the fund's exposure to the market and magnify
            potential losses. There is no guarantee that derivatives, to the
            extent employed, will have the intended effect, and their use could
            cause lower returns or even losses to the fund. The use of
            derivatives by the fund to hedge risk may reduce the opportunity
            for gain by offsetting the positive effect of favorable price
            movements.



                                           DWS Managed Municipal Bond Fund  | 13
<PAGE>

            Other factors that could affect performance include:


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



            -  political or legal actions could change the way the fund's
               dividends are treated for income tax purposes.


            -  at times, market conditions might make it hard to value some
               investments or to get an attractive price for them.


14 | DWS Managed Municipal Bond Fund
<PAGE>

THE FUND'S PERFORMANCE HISTORY

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


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


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

DWS Managed Municipal Bond Fund

ANNUAL TOTAL RETURN (%) AS OF 12/31 EACH YEAR - CLASS S




<TABLE>
<S>       <C>       <C>        <C>       <C>        <C>       <C>       <C>       <C>       <C>
 6.23      1.96     10.95       4.44     10.19       5.20      3.10      3.85      5.05     3.47
1998      1999      2000       2001      2002       2003      2004      2005      2006      2007
</TABLE>







<TABLE>
<CAPTION>
                 2008 TOTAL RETURN AS OF JUNE 30: -1.08%
<S>                                        <C>
FOR THE PERIODS INCLUDED IN THE BAR CHART:
BEST QUARTER: 5.17%, Q3 2002               WORST QUARTER: -2.08%, Q2 1999
</TABLE>




                                           DWS Managed Municipal Bond Fund  | 15
<PAGE>


AVERAGE ANNUAL TOTAL RETURNS (%) as of 12/31/2007




<TABLE>
<CAPTION>
                                              1 YEAR      5 YEARS      10 YEARS
<S>                                          <C>         <C>          <C>
 CLASS S
   Return before Taxes                         3.47         4.13         4.99
   Return after Taxes on Distributions         3.45         4.10         4.95
   Return after Taxes on Distributions
   and Sale of Fund Shares                     3.74*        4.19*        4.96*
 LEHMAN BROTHERS MUNICIPAL BOND
 INDEX (reflects no deductions for fees,
 expenses or taxes)                            3.36         4.30         5.18
</TABLE>




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


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


 The LEHMAN BROTHERS MUNICIPAL BOND INDEX is an unmanaged market-value-weighted
 measure of municipal bonds issued across the United States. Index issues have
 a credit rating of at least Baa and a maturity of at least two years. As part
 of the proposed Barclays acquisition of Lehman Brothers and subject to the
 approval of the U.S. Bankruptcy Court and applicable regulations, the Lehman
 Brothers Municipal Bond Index is expected to become part of Barclays.



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

Current performance may be higher or lower than the performance data quoted
above. For more recent performance information, call your financial advisor or
(800) 728-3337 or visit our Web site at www.dws-investments.com.



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

RETURN AFTER TAXES ON DISTRIBUTIONS assumes that an investor holds fund shares
at the end of the period. The return reflects taxes only on the fund's
distributions and not on a shareholder's gain or loss from selling fund shares.


RETURN AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES assumes that an
investor sold his or her fund shares at the end of the period. The return
reflects taxes on both the fund's distributions and a shareholder's gain or
loss from selling fund shares.



16 | DWS Managed Municipal Bond Fund
<PAGE>

HOW MUCH INVESTORS PAY


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




<TABLE>
<CAPTION>
FEE TABLE                                        CLASS S
<S>                                    <C>
 SHAREHOLDER FEES, paid directly from your investment
_____________________________________________________________________
 Redemption/Exchange Fee on shares
 owned less than 15 days (as % of
 redemption proceeds)1                             2.00%
 ANNUAL OPERATING EXPENSES, deducted from fund assets
_____________________________________________________________________
 Management Fee                                    0.33%
 Distribution/Service (12b-1) Fee                 None
 Interest Expense2                                 0.41
 Other Expenses3                                   0.21
 TOTAL OTHER EXPENSES                              0.62
 TOTAL ANNUAL OPERATING EXPENSES                   0.95
</TABLE>



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


2   Interest expense relates to the fund's liability with respect to floating
   rate notes held by third parties in conjunction with inverse floater
   securities transactions. However, the accounting treatment for such
   transactions includes an offsetting interest income item, and accordingly
   has no impact on net investment income, total return or net asset value.

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

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




<TABLE>
<CAPTION>
EXAMPLE               1 YEAR      3 YEARS      5 YEARS      10 YEARS
<S>                  <C>         <C>          <C>          <C>
 Class S shares         $97         $303         $525       $1,166
</TABLE>




                                           DWS Managed Municipal Bond Fund  | 17
<PAGE>


<TABLE>
<S>                                       <C>
                                            Class S
  ticker symbol                             SCMTX
    fund number                             2045

    DWS INTERMEDIATE TAX/AMT FREE FUND


</TABLE>

            THE FUND'S MAIN INVESTMENT STRATEGY

            The fund seeks to provide a high level of income exempt from
            regular federal income taxes and seeks to limit principal
            fluctuation.

            Under normal circumstances, the fund invests at least 80% of net
            assets, plus the amount of any borrowings for investment purposes,
            in securities issued by municipalities across the United States and
            in other securities whose income is free from regular federal
            income tax and alternative minimum tax (AMT). The fund does not
            intend to invest in securities whose income is subject to AMT.

            The fund can buy many types of municipal securities of all
            maturities. These may include revenue bonds (which are backed by
            revenues from a particular source) and general obligation bonds
            (which are typically backed by the issuer's ability to levy taxes).
            They may also include municipal lease obligations and investments
            representing an interest therein.


            CREDIT QUALITY POLICIES. This fund normally invests at least 65% of
            total assets in municipal securities of the top three grades of
            credit quality. The fund could put up to 35% of net assets in debt
            securities rated in the fourth credit grade, which is still
            considered investment-grade.


            The portfolio managers look for securities that appear to offer the
            best total return potential. In making their buy and sell
            decisions, the managers typically weigh a number of factors against
            each other, from economic outlooks and possible interest rate
            movements to characteristics of specific securities, such as
            coupon, maturity date and call date, and changes in supply and
            demand within the municipal bond market.

            Although the managers may adjust the maturity of the fund's
            portfolio between three and ten years, they generally intend to
            keep it between five and ten years.


18 | DWS Intermediate Tax/AMT Free Fund
<PAGE>

            In addition, they may use various types of derivative instruments
            (instruments whose value is based on, for example, indices,
            commodities or securities), for hedging purposes or to enhance
            return. Such instruments may include inverse floaters, futures
            contracts, interest rate swaps and other over-the-counter
            derivatives.


            THE MAIN RISKS OF INVESTING IN THE FUND

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


            INTEREST RATE RISK. Generally, fixed income securities will
            decrease in value when interest rates rise. The longer the duration
            of the fund's securities, the more sensitive the fund will be to
            interest rate changes. (As a general rule, a 1% rise in interest
            rates means a 1% fall in value for every year of duration.) As
            interest rates decline, the issuers of securities held by the fund
            may prepay principal earlier than scheduled, forcing the fund to
            reinvest in lower-yielding securities and may reduce the fund's
            income. As interest rates increase, slower than expected principal
            payments may extend the average life of fixed income securities.
            This will have the effect of locking in a below-market interest
            rate, reducing the value of such a security.

            CREDIT RISK. A fund purchasing debt securities faces the risk that
            the creditworthiness of an issuer may decline, causing the value of
            the debt securities to decline. In addition, an issuer may not be
            able to make timely payments on the interest and/
            or principal on the debt security it has issued. Because the
            issuers of high-yield debt securities or junk bonds (debt






            THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS



This fund is designed for investors who are looking for a tax-advantaged
investment, are interested in higher yield and can accept
                                              moderate risk to their principal.








            securities rated below the fourth highest category) may be in
            uncertain financial health, the prices of their debt securities can
            be more vulnerable to bad economic news or even the expectation of
            bad news, than investment-grade debt securities. In some cases,
            debt securities, particularly high-yield debt securities, may
            decline in credit quality or go into default. Because the fund may
            invest in securities not paying current interest or in securities
            already in default, these risks may be more pronounced.



                                        DWS Intermediate Tax/AMT Free Fund  | 19
<PAGE>


            FOCUSED INVESTING RISK. The fact that the fund may focus on
            investments from a single state or sector of the municipal
            securities market increases risk, because factors affecting the
            state or region, such as economic or fiscal problems, could affect
            a large portion of the fund's securities in a similar manner. For
            example, a state's technology or biotech industries could
            experience a downturn or fail to develop as expected, hurting the
            local economy. States could also face severe fiscal difficulties,
            for example, an economic downturn, increased expenditures on
            domestic security or reduced monetary support from the federal
            government. Over time, these issues may have the ability to impair
            a state's ability to repay its obligations.

            MARKET RISK. Deteriorating market conditions might cause a general
            weakness in the market that reduces the prices of securities in
            that market. Developments in a particular class of debt securities
            or the stock market could also adversely affect the fund by
            reducing the relative attractiveness of debt securities as an
            investment. Also, to the extent that the fund emphasizes debt
            securities from any given state or region, it could be hurt if that
            state or region does not do well.

            DERIVATIVES RISK. Risks associated with derivatives include the
            risk that the derivative is not well correlated with the security,
            index or currency to which it relates; the risk that derivatives
            may result in losses or missed opportunities; the risk that the
            fund will be unable to sell the derivative because of an illiquid
            secondary market; the risk that a counterparty is unwilling or
            unable to meet its obligation; and the risk that the derivative
            transaction could expose the fund to the effects of leverage, which
            could increase the fund's exposure to the market and magnify
            potential losses. There is no guarantee that derivatives, to the
            extent employed, will have the intended effect, and their use could
            cause lower returns or even losses to the fund. The use of
            derivatives by the fund to hedge risk may reduce the opportunity
            for gain by offsetting the positive effect of favorable price
            movements.



20 | DWS Intermediate Tax/AMT Free Fund
<PAGE>

            Other factors that could affect performance include:


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



            -  political or legal actions could change the way the fund's
               dividends are treated for income tax purposes.


            -  at times, market conditions might make it hard to value some
               investments or to get an attractive price for them.


                                        DWS Intermediate Tax/AMT Free Fund  | 21
<PAGE>

THE FUND'S PERFORMANCE HISTORY

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


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


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

DWS Intermediate Tax/AMT Free Fund

ANNUAL TOTAL RETURN (%) AS OF 12/31 EACH YEAR - CLASS S




<TABLE>
<S>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>
 5.58      1.11      8.46      4.80      8.73      3.81      3.05      2.07      3.58     3.87
1998      1999      2000      2001      2002      2003      2004      2005      2006      2007
</TABLE>







<TABLE>
<CAPTION>
                  2008 TOTAL RETURN AS OF JUNE 30: 0.24%
<S>                                          <C>
FOR THE PERIODS INCLUDED IN THE BAR CHART:
BEST QUARTER: 4.22%, Q3 2002                 WORST QUARTER: -1.88% Q2 2004
</TABLE>




22 | DWS Intermediate Tax/AMT Free Fund
<PAGE>


AVERAGE ANNUAL TOTAL RETURNS (%) as of 12/31/2007




<TABLE>
<CAPTION>
                                              1 YEAR      5 YEARS      10 YEARS
<S>                                          <C>         <C>          <C>
 CLASS S
   Return before Taxes                          3.87        3.27         4.25
   Return after Taxes on Distributions          3.87        3.26         4.21
   Return after Taxes on Distributions
   and Sale of Fund Shares                      3.84        3.37*        4.25*
 LEHMAN SEVEN YEAR MUNICIPAL BOND
 INDEX (reflects no deductions for fees,
 expenses or taxes)                             5.06        3.86         4.96
</TABLE>




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


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


 The LEHMAN SEVEN YEAR MUNICIPAL BOND INDEX is an unmanaged, total return
 subset of the Lehman Brothers Municipal Bond Index. It includes maturities of
 six to eight years. As part of the proposed Barclays acquisition of Lehman
 Brothers and subject to the approval of the U.S. Bankruptcy Court and
 applicable regulations, the Lehman Seven Year Municipal Bond Index and Lehman
 Brothers Municipal Bond Index are expected to become part of Barclays.



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

Current performance may be higher or lower than the performance data quoted
above. For more recent performance information, call your financial advisor or
(800) 728-3337 or visit our Web site at www.dws-investments.com.



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

RETURN AFTER TAXES ON DISTRIBUTIONS assumes that an investor holds fund shares
at the end of the period. The return reflects taxes only on the fund's
distributions and not on a shareholder's gain or loss from selling fund shares.


RETURN AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES assumes that an
investor sold his or her fund shares at the end of the period. The return
reflects taxes on both the fund's distributions and a shareholder's gain or
loss from selling fund shares.



                                        DWS Intermediate Tax/AMT Free Fund  | 23
<PAGE>

HOW MUCH INVESTORS PAY


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




<TABLE>
<CAPTION>
FEE TABLE                                        CLASS S
<S>                                    <C>
 SHAREHOLDER FEES, paid directly from your investment
_____________________________________________________________________
 Redemption/Exchange Fee on shares
 owned less than 15 days (as % of
 redemption proceeds)1                             2.00%
 ANNUAL OPERATING EXPENSES, deducted from fund assets
_____________________________________________________________________
 Management Fee                                    0.32%
 Distribution/Service (12b-1) Fee                 None
 Interest Expense2                                 0.13
 Other Expenses3                                   0.30
 TOTAL OTHER EXPENSES                              0.43
 TOTAL ANNUAL OPERATING EXPENSES                   0.75
</TABLE>



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


2   Interest expense relates to the fund's liability with respect to floating
   rate notes held by third parties in conjunction with certain inverse
   floater securities transactions. However, the accounting treatment for such
   transactions includes an offsetting interest income item, and accordingly
   has no impact on net investment income, total return or net asset value.

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


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



<TABLE>
<CAPTION>
EXAMPLE               1 YEAR      3 YEARS      5 YEARS      10 YEARS
<S>                  <C>         <C>          <C>          <C>
 Class S shares         $77         $240         $417         $930
</TABLE>




24 | DWS Intermediate Tax/AMT Free Fund
<PAGE>

OTHER POLICIES AND RISKS

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

           -  Although major changes tend to be infrequent, each fund's Board
              could change a fund's investment objective without seeking
              shareholder approval. However, the policy of investing at least
              80% of net assets (plus the amount of any borrowings for
              investment purposes in the case of DWS Managed Municipal Bond
              Fund and DWS Intermediate Tax/AMT Free Fund) in municipal
              securities exempt from regular federal income tax (and in the
              case of DWS Intermediate Tax/
              AMT Free Fund, the alternative minimum tax) for each fund cannot
              be changed without shareholder approval.


           -  As a temporary defensive measure, each fund could shift up to 20%
              and DWS Strategic High Yield Tax-Free Fund could shift up to 100%
              of assets into investments such as taxable money market
              securities or other short-term securities that offer comparable
              levels of risk. This could prevent losses, but, while engaged in
              a temporary defensive position, a fund will not be pursuing its
              investment objective. However, portfolio management may choose
              not to use these strategies for various reasons, even in volatile
              market conditions. Temporary investments may be taxable.

           -  Portfolio management measures credit quality at the time it buys
              securities, using independent rating agencies or, for unrated
              securities, its own judgment. All securities must meet the credit
              quality standards applied by portfolio management at the time
              they are purchased. If a security's credit quality changes,
              portfolio management will decide what to do with the security,
              based on its assessment of what would most benefit a fund.



           For more information

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

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


                                                  Other Policies and Risks  | 25
<PAGE>


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

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



WHO MANAGES AND OVERSEES THE FUNDS


           The investment advisor

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


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


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

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


26 | Who Manages and Oversees the Funds
<PAGE>


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




<TABLE>
<CAPTION>
FUND NAME                                               FEE PAID
<S>                                                    <C>
           DWS Strategic High Yield Tax-Free Fund         0.52%
           DWS Managed Municipal Bond Fund                0.33%
           DWS Intermediate Tax/AMT Free Fund             0.32%
</TABLE>




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


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


                                        Who Manages and Oversees the Funds  | 27
<PAGE>

Portfolio management


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


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


DWS STRATEGIC HIGH YIELD TAX-FREE FUND


Philip G. Condon
Managing Director of Deutsche Asset Management and Lead Portfolio Manager of
the fund.
-  Joined Deutsche Asset Management in 1983 and the fund in 1987.

-  Over 32 years of investment industry experience.

-  BA and MBA, University of Massachusetts at Amherst.

Rebecca L. Flinn

Director of Deutsche Asset Management and Portfolio Manager of the fund.

-  Joined Deutsche Asset Management in 1986 and the fund in 1998.

-  Over 22 years of investment industry experience.

-  BA, University of Redlands, California.


DWS MANAGED MUNICIPAL BOND FUND

Philip G. Condon
Managing Director of Deutsche Asset Management and Co-Lead Portfolio Manager of
the fund.
-  Joined Deutsche Asset Management in 1983 and the fund in 1990.

-  Over 32 years of investment industry experience.

-  BA and MBA, University of Massachusetts at Amherst.

DWS MANAGED MUNICIPAL BOND FUND (CONTINUED)

Ashton P. Goodfield, CFA
Managing Director of Deutsche Asset Management and Co-Lead Portfolio Manager of
the fund.
-  Joined Deutsche Asset Management in 1986 and the fund in 1998.

-  Over 22 years of investment industry experience.

-  BA, Duke University.

Eleanor R. Lynch, CFA
Director of Deutsche Asset Management and Co-Lead Portfolio Manager of the
fund.
-  Joined Deutsche Asset Management in 1995 and the fund in 1999.

-  Over 21 years of investment industry experience.

-  BS, Ursinus College; MS, Drexel
     University.

Matthew J. Caggiano, CFA
Managing Director of Deutsche Asset Management and Portfolio Manager of the
fund.
-  Joined Deutsche Asset Management in 1989 and the fund in 1999.

-  Over 18 years of investment industry experience.

-  BS, Pennsylvania State University; MS, Boston College.

28 | Who Manages and Oversees the Funds
<PAGE>

DWS INTERMEDIATE TAX/AMT FREE FUND

Philip G. Condon
Managing Director of Deutsche Asset Management and Co-Lead Portfolio Manager of
the fund.
- Joined Deutsche Asset Management in 1983 and the fund in 1998.

- Over 32 years of investment industry experience.

- BA and MBA, University of Massachusetts at Amherst.

Ashton P. Goodfield, CFA
Managing Director of Deutsche Asset Management and Co-Lead Portfolio Manager of
the fund.
- Joined Deutsche Asset Management in 1986 and the fund in 1990.

- Over 22 years of investment industry experience.

- BA, Duke University.

Shelly Deitert
Vice President of Deutsche Asset Management and Portfolio Manager of the fund.
- Joined Deutsche Asset Management in 1997 and the fund in 2002.

- Over 11 years of investment industry experience.

- BA, Taylor University.

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


                                        Who Manages and Oversees the Funds  | 29
<PAGE>

FINANCIAL HIGHLIGHTS

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


30 | Financial Highlights
<PAGE>


DWS Strategic High Yield Tax-Free Fund - Class S




<TABLE>
<CAPTION>
YEARS ENDED MAY 31,                    2008             2007            2006           2005           2004
<S>                               <C>              <C>              <C>            <C>            <C>
SELECTED PER SHARE DATA
-----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD                           $  12.85         $  12.79         $ 12.89       $  12.52       $  12.87
------------------------------      --------         --------         -------       --------       --------
Income from investment
operations:
  Net investment income                  .62              .62             .63            .67            .67
______________________________      ________         ________         _______       ________       ________
  Net realized and unrealized
  gain (loss)                         (  .38)             .06          (  .10)           .38         (  .34)
------------------------------      --------         --------         -------       --------       --------
  TOTAL FROM INVESTMENT
  OPERATIONS                             .24              .68             .53           1.05            .33
______________________________      ________         ________         _______       ________       ________
Less distributions from:
  Net investment income               (  .62)          (  .62)         (  .63)        (  .67)        (  .67)
______________________________      ________         ________         _______       ________       ________
  Net realized gains                       -                -          (  .00)*       (  .01)        (  .01)
------------------------------      --------         --------         -------       --------       --------
  TOTAL DISTRIBUTIONS                 (  .62)          (  .62)         (  .63)        (  .68)        (  .68)
______________________________      ________         ________         _______       ________       ________
Redemption fees                          .00*             .00*            .00*           .00*             -
------------------------------      --------         --------         -------       --------       --------
NET ASSET VALUE, END OF
PERIOD                              $  12.47         $  12.85         $ 12.79       $  12.89       $  12.52
------------------------------      --------         --------         -------       --------       --------
Total Return (%)                      1.90a            5.36a             4.19           8.52         2.59a
------------------------------      --------         --------         -------       --------       --------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
-----------------------------------------------------------------------------------------------------------------
Net assets, end of period ($
millions)                                787              669             473            488            517
______________________________      ________         ________         _______       ________       ________
Ratio of expenses before
expense reductions (including
interest expense) (%)b                  1.53             1.04            1.14            .92            .86
______________________________      ________         ________         _______       ________       ________
Ratio of expenses after
expense reductions (including
interest expense) (%)b                  1.32              .96            1.14            .92            .85
______________________________      ________         ________         _______       ________       ________
Ratio of expenses after
expense reductions (excluding
interest expense) (%)                    .69              .73             .81            .80            .77
______________________________      ________         ________         _______       ________       ________
Ratio of net investment
income (%)                              4.92             4.79            4.87           5.24           5.27
______________________________      ________         ________         _______       ________       ________
Portfolio turnover rate (%)               70               57              43             34             44
------------------------------      --------         --------         -------       --------       --------
</TABLE>



a   Total returns would have been lower had certain expenses not been reduced.


b   Interest expense represents interest and fees on short term floating rate
   notes issued in conjunction with inverse floating rate securities. Interest
   income from such transactions is included in income from investment
   operations.


*   Amount is less than $.005.

                                                      Financial Highlights  | 31
<PAGE>

DWS Managed Municipal Bond Fund - Class S



<TABLE>
<CAPTION>
YEARS ENDED MAY 31,                    2008             2007           2006          2005          2004
<S>                               <C>              <C>              <C>           <C>           <C>
SELECTED PER SHARE DATA
--------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD                            $  9.00          $  9.05         $ 9.21        $ 9.05        $ 9.50
------------------------------       -------          -------         ------        ------        ------
Income from investment operations:
  Net investment income                  .42              .41            .42           .44           .45
______________________________       _______          _______         ______        ______        ______
  Net realized and unrealized
  gain (loss)                          ( .12)             .00*         ( .16)          .16         ( .45)
------------------------------       -------          -------         ------        ------        ------
  TOTAL FROM INVESTMENT
  OPERATIONS                             .30              .41            .26           .60             -
______________________________       _______          _______         ______        ______        ______
Less distributions from:
  Net investment income                ( .42)           ( .41)         ( .42)        ( .44)        ( .45)
______________________________       _______          _______         ______        ______        ______
  Net realized gains                   ( .01)           ( .05)         ( .00)*       ( .00)*           -
------------------------------       -------          -------         ------        ------        ------
  TOTAL DISTRIBUTIONS                  ( .43)           ( .46)         ( .42)        ( .44)        ( .45)
______________________________       _______          _______         ______        ______        ______
Redemption fees                          .00*             .00*           .00*          .00*            -
------------------------------       -------          -------         ------        ------        ------
NET ASSET VALUE, END OF
PERIOD                               $  8.87          $  9.00         $ 9.05        $ 9.21        $ 9.05
------------------------------       -------          -------         ------        ------        ------
Total Return (%)                      3.42a            4.59a            2.88          6.81         ( .01)a
------------------------------       -------          -------         ------        ------        ------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
--------------------------------------------------------------------------------------------------------------
Net assets, end of period ($
millions)                              1,873            1,961            771           789           798
______________________________       _______          _______         ______        ______        ______
Ratio of expenses before
expense reductions (including
interest expense) (%)b                   .95              .82            .86           .63           .65
______________________________       _______          _______         ______        ______        ______
Ratio of expenses after
expense reductions (including
interest expense) (%)b                   .93              .79            .86           .63           .64
______________________________       _______          _______         ______        ______        ______
Ratio of expenses after
expense reductions (excluding
interest expense) (%)                    .52              .50            .51           .49           .55
______________________________       _______          _______         ______        ______        ______
Ratio of net investment
income (%)                              4.74             4.52           4.61          4.82          4.81
______________________________       _______          _______         ______        ______        ______
Portfolio turnover rate (%)               55               19             28            31            24
------------------------------       -------          -------         ------        ------        ------
</TABLE>



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


b   Interest expense represents interest and fees on short term floating rate
   notes issued in conjunction with inverse floating rate securities. Interest
   income from such transactions is included in income from investment
   operations.


*   Amount is less than $.005.

32 | Financial Highlights
<PAGE>

DWS Intermediate Tax/AMT Free Fund - Class S



<TABLE>
<CAPTION>
YEARS ENDED MAY 31,                    2008             2007            2006           2005           2004
<S>                               <C>              <C>              <C>            <C>            <C>
SELECTED PER SHARE DATA
-----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD                            $ 11.00         $  11.06        $  11.41       $  11.26        $ 11.81
------------------------------       -------         --------        --------       --------        -------
Income from investment operations:
  Net investment income                  .44              .46             .45            .46            .46
______________________________       _______         ________        ________       ________        _______
  Net realized and unrealized
  gain (loss)                            .07           (  .06)         (  .33)           .16         (  .55)
------------------------------       -------         --------        --------       --------        -------
  TOTAL FROM INVESTMENT
  OPERATIONS                             .51              .40             .12            .62         (  .09)
______________________________       _______         ________        ________       ________        _______
Less distributions from:
  Net investment income               (  .44)          (  .45)         (  .45)        (  .46)        (  .46)
______________________________       _______         ________        ________       ________        _______
  Net realized gains                  (  .00)*         (  .01)         (  .02)        (  .01)        (  .00)*
------------------------------       -------         --------        --------       --------        -------
  TOTAL DISTRIBUTIONS                 (  .44)          (  .46)         (  .47)        (  .47)        (  .46)
______________________________       _______         ________        ________       ________        _______
Redemption fees                          .00*             .00*            .00*           .00*             -
------------------------------       -------         --------        --------       --------        -------
NET ASSET VALUE, END OF
PERIOD                               $ 11.07         $  11.00        $  11.06       $  11.41        $ 11.26
------------------------------       -------         --------        --------       --------        -------
Total Return (%)                     4.75a             3.65a             1.06           5.62         (  .78)a
------------------------------       -------         --------        --------       --------        -------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
-----------------------------------------------------------------------------------------------------------------
Net assets, end of period ($
millions)                                381              389             398            467            495
______________________________       _______         ________        ________       ________        _______
Ratio of expenses before
expense reductions (including
interest expense) (%)b                   .75              .57             .55            .59            .70
______________________________       _______         ________        ________       ________        _______
Ratio of expenses after
expense reductions (including
interest expense) (%)b                   .74              .55             .55            .59            .69
______________________________       _______         ________        ________       ________        _______
Ratio of expenses after
expense reductions (excluding
interest expense) (%)                    .61              .55             .55            .59            .69
______________________________       _______         ________        ________       ________        _______
Ratio of net investment
income (%)                              4.02             4.11            4.03           4.08           3.95
______________________________       _______         ________        ________       ________        _______
Portfolio turnover rate (%)               59               45              41             45             21
------------------------------       -------         --------        --------       --------        -------
</TABLE>



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


b   Interest expense represents interest and fees on short term floating rate
   notes issued in conjunction with inverse floating rate securities. Interest
   income from such transactions is included in income from investment
   operations.


*   Amount is less than $.005.

                                                      Financial Highlights  | 33
<PAGE>


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

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

Please remember, CLASS S shares are generally only available to new investors
through fee-based programs of investment dealers that have special agreements
with the funds' distributor, through certain group retirement plans and through
certain registered investment advisors. These dealers and advisors typically
charge ongoing fees for services they provide.


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

<PAGE>


How to BUY Class S Shares





<TABLE>
<CAPTION>
 FIRST INVESTMENT                              ADDITIONAL INVESTMENTS
<S>                                           <C>
 $2,500 or more for regular accounts           $50 or more for regular accounts and
 $1,000 or more for IRAs and UTMAs/           IRAs
 UGMAs                                        $50 or more for an account with an
 $1,000 or more for an account with an        Automatic Investment Plan
 Automatic Investment Plan
 BY MAIL OR EXPRESS MAIL (SEE BELOW)
                                              Send a DWS Investments investment
 -  Fill out and sign an application
                                              slip or short note that includes:
 -  Send it to us at the appropriate
                                              -  fund and class name
  address, along with an investment
  check made payable to "DWS                  -  account number
  Investments"                                -  check made payable to "DWS
                                              Investments"
 BY WIRE
 -  Call (800) 728-3337 for instructions      -  Call (800) 728-3337 for instructions
 BY PHONE
 Not available                                -  Call (800) 728-3337 for instructions
 WITH AN AUTOMATIC INVESTMENT PLAN
 -  Fill in the information on our            -  To set up regular investments from a
  application including a check for the       bank checking account, call
  initial investment and a voided check       (800) 728-3337 (minimum $50)
 USING QuickBuy
 Not available                                -  Call (800) 728-3337 to make sure
                                              QuickBuy is set up on your account; if
                                              it is, you can request a transfer from
                                              your bank account of any amount
                                              between $50 and $250,000
 ON THE INTERNET
 -  Register at                               -  Call (800) 728-3337 to ensure you have
  www.dws-investments.com or log in if        electronic services
  already registered                          -  Register at www.dws-
 -  Print out a prospectus and a new          investments.com
  account application                         or log in if already registered
 -  Complete and return the application       -  Follow the instructions for buying
  with your check                             shares with money from your bank
                                              account
</TABLE>



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


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

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



                                                 How to Buy Class S Shares  | 35
<PAGE>


How to EXCHANGE or SELL Class S Shares





<TABLE>
<CAPTION>
 EXCHANGING INTO ANOTHER FUND                    SELLING SHARES
<S>                                             <C>
                                                 Some transactions, including most for
 -  Exchanges into existing accounts:
                                                over $100,000, can only be ordered in
  $50 minimum per fund
                                                writing with a signature guarantee;
 -  Exchanges into new accounts:
                                                please see "Signature Guarantee"
  $2,500 minimum per fund
  $1,000 minimum for IRAs and UTMAs/
  UGMAs
 BY PHONE                                        BY PHONE OR WIRE
 -  Call (800) 728-3337 for instructions        -  Call (800) 728-3337 for instructions
 USING THE AUTOMATED INFORMATION LINE
 -  Call (800) 728-3337 for instructions        -  Call (800) 728-3337 for instructions
 BY MAIL OR EXPRESS MAIL
 (see previous page for address)
 Your instructions should include:              Your instructions should include:
 -  the fund, class and account number          -  the fund, class and account number
  you're exchanging out of                      from which you want to sell shares
 -  the dollar amount or number of shares       -  the dollar amount or number of shares
  you want to exchange                          you want to sell
 -  the name and class of the fund you          -  your name(s), signature(s) and
  want to exchange into                         address, as they appear on your
                                                account
 -  your name(s), signature(s) and
  address, as they appear on your               -  a daytime telephone number
  account
 -  a daytime telephone number
 WITH AN AUTOMATIC EXCHANGE PLAN                 WITH AN AUTOMATIC WITHDRAWAL PLAN
 -  To set up regular exchanges from a          -  To set up regular cash payments from
  fund account, call (800) 728-3337             a DWS fund account, call
                                                (800) 728-3337
 USING QuickSell
 Not available                                  -  Call (800) 728-3337 to make sure
                                                QuickSell is set up on your account; if
                                                it is, you can request a transfer to your
                                                bank account of any amount between
                                                $50 and $250,000
 ON THE INTERNET
 -  Register at www.dws-                        -  Register at www.dws-
  investments.com or log in if already          investments.com or log in if already
  registered                                    registered
 -  Follow the instructions for making on-      -  Follow the instructions for making on-
  line exchanges                                line redemptions
</TABLE>



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


<TABLE>
<S>               <C>
TO REACH US:      WEB SITE: www.dws-investments.com
                  TELEPHONE REPRESENTATIVE: (800) 728-3337, M-F, 9 a.m. - 6 p.m. ET
                  TDD LINE: (800) 972-3006, M-F, 9 a.m.- 6 p.m. ET
</TABLE>




36 | How to Sell or Exchange Class S Shares
<PAGE>

           Financial intermediary support payments


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


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


                                    How to Sell or Exchange Class S Shares  | 37
<PAGE>


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

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


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


38 | How to Sell or Exchange Class S Shares
<PAGE>

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


POLICIES YOU SHOULD KNOW ABOUT


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


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

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

           In order to reduce the amount of mail you receive and to help reduce
           expenses, we generally send a single copy of any shareholder report
           and prospectus to each household. If you do not want the mailing of
           these documents to be combined with those for other members of your
           household, please contact your financial advisor or call (800)
           728-3337.





            THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS



                                                                      Questions?






You can speak to a DWS Investments representative between 9 a.m. and 6 p.m.
                                       Eastern time on any fund business day by
                                                                         calling
                                                                 (800) 728-3337.


           Policies about transactions


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


                                            Policies You Should Know About  | 39
<PAGE>

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

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

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

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

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

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

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


40 | Policies You Should Know About
<PAGE>


           INITIAL PURCHASE MINIMUMS. The minimum initial investment is $2,500,
           except for investments on behalf of participants in certain
           fee-based and wrap programs offered through certain financial
           intermediaries approved by the Advisor, for which there is no
           minimum initial investment; and fiduciary accounts such as IRAs and
           custodial accounts such as Uniform Gifts to Minors Act and Uniform
           Transfers to Minors Act accounts for which the minimum initial
           investment is $1,000 per account. In addition, the minimum initial
           investment is $1,000 if an automatic investment plan of $50 per
           month is established. Group retirement plans and certain other
           accounts have similar or lower minimum share balance requirements.

           SUB-MINIMUM BALANCES. Each fund may close your account and send you
           the proceeds if your balance falls below $2,500 ($1,000 with an
           Automatic Investment Plan funded with $50 or more per month in
           subsequent investments); $250 for retirement accounts. We will give
           you 60 days' notice (90 days for retirement accounts) so you can
           either increase your balance or close your account (these policies
           don't apply to investors with $100,000 or more in DWS fund shares,
           investors in certain fee-based and wrap programs offered through
           certain financial intermediaries approved by the Advisor, or group
           retirement plans and certain other accounts having lower minimum
           share balance requirements).

           Because of the high cost of servicing accounts with low balances, an
           account maintenance fee of $6.25 per quarter (for a $25 annual fee)
           will be assessed on accounts whose balances fail to meet the minimum
           initial investment requirement for a period of 90 days prior to the
           assessment date. The quarterly assessment will occur on or about the
           15th of the last month in each calendar quarter. Please note that
           the fee will be assessed on accounts that fall below the minimum for
           any reason, including due to market value fluctuations, redemptions
           or exchanges. The account maintenance fee will apply to all
           shareholders of the DWS Funds except for: accounts with an automatic
           investment plan, accounts held in an omnibus account through a
           financial services firm, accounts maintained on behalf of
           participants in certain fee based and wrap programs offered through
           certain financial intermediaries approved by the Advisor and
           participant level accounts in group retirement plans held on the
           records of a retirement plan record keeper.



                                            Policies You Should Know About  | 41
<PAGE>

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


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

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



42 | Policies You Should Know About
<PAGE>


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

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

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

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



                                            Policies You Should Know About  | 43
<PAGE>

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

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

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

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

           The redemption fee is applicable to fund shares purchased either
           directly or through a financial intermediary, such as a
           broker-dealer. Transactions through financial intermediaries
           typically are placed with a fund on an omnibus basis and include
           both purchase and sale transactions placed on behalf of multiple
           investors. These purchase and sale transactions are generally


44 | Policies You Should Know About
<PAGE>

           netted against one another and placed on an aggregate basis;
           consequently the identities of the individuals on whose behalf the
           transactions are placed generally are not known to a fund. For this
           reason, each fund has undertaken to notify financial intermediaries
           of their obligation to assess the redemption fee on customer
           accounts and to collect and remit the proceeds to each fund.
           However, due to operational requirements, the intermediaries'
           methods for tracking and calculating the fee may be inadequate or
           differ in some respects from each fund's.


           The redemption fee will not be charged in connection with the
           following exchange or redemption transactions: (i) transactions on
           behalf of participants in certain research wrap programs; (ii)
           transactions on behalf of a shareholder to return any excess IRA
           contributions to the shareholder; (iii) transactions on behalf of a
           shareholder to effect a required minimum distribution on an IRA;
           (iv) transactions on behalf of any mutual fund advised by the
           Advisor and its affiliates (e.g., "funds of funds") or, in the case
           of a master/feeder relationship, redemptions by the feeder fund from
           the master portfolio; (v) transactions on behalf of certain
           unaffiliated mutual funds operating as funds of funds; (vi)
           transactions following death or disability of any registered
           shareholder, beneficial owner or grantor of a living trust with
           respect to shares purchased before death or disability; (vii)
           transactions involving hardship of any registered shareholder;
           (viii) systematic transactions with pre-defined trade dates for
           purchases, exchanges or redemptions, such as automatic account
           rebalancing, or loan origination and repayments; (ix) transactions
           involving shares purchased through the reinvestment of dividends or
           other distributions; (x) transactions involving shares transferred
           from another account in the same fund or converted from another
           class of the same fund (the redemption fee period will carry over to
           the acquired shares); (xi) transactions initiated by a fund or
           administrator (e.g., redemptions for not meeting account minimums,
           to pay account fees funded by share redemptions, or in the event of
           the liquidation or merger of the fund); or (xii) transactions in
           cases when there are legal or contractual limitations or
           restrictions on the imposition of the redemption fee (as determined
           by a fund or its agents in their sole discretion). In addition, the
           redemption fee will not be charged in connection with checkwriting
           transactions for DWS Intermediate Tax/AMT Free Fund. It is the
           policy of the DWS funds to permit approved fund platform providers
           to execute



                                            Policies You Should Know About  | 45
<PAGE>


           transactions with the funds without the imposition of a redemption
           fee if such providers have implemented alternative measures that are
           determined by the Advisor to provide controls on short-term and
           excessive trading that are comparable to the DWS funds' policies.

           THE AUTOMATED INFORMATION LINE IS AVAILABLE 24 HOURS A DAY BY
           CALLING (800) 728-3337. You can use our automated phone services to
           get information on DWS funds generally and on accounts held directly
           at DWS Investments. You can also use this service to make exchanges
           and to purchase and sell shares.


           QUICKBUY AND QUICKSELL let you set up a link between a DWS fund
           account and a bank account. Once this link is in place, you can move
           money between the two with a phone call. You'll need to make sure
           your bank has Automated Clearing House (ACH) services. Transactions
           take two to three days to be completed and there is a $50 minimum
           and a $250,000 maximum. To set up QuickBuy or QuickSell on a new
           account, see the account application; to add it to an existing
           account, call (800) 728-3337.

           TELEPHONE AND ELECTRONIC TRANSACTIONS. Generally, you are
           automatically entitled to telephone and electronic transaction
           privileges, but you may elect not to have them when you open your
           account or by contacting Shareholder Services at (800) 728-3337 at a
           later date.

           Since many transactions may be initiated by telephone or
           electronically, it's important to understand that as long as we take
           reasonable steps to ensure that an order to purchase or redeem
           shares is genuine, such as recording calls or requesting person-





            THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS



                                                                         The DWS






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


           alized security codes or other information, we are not responsible
           for any losses that may occur as a result. For transactions
           conducted over the Internet, we recommend the use of a secure
           Internet browser. In addition, you should verify the accuracy of
           your confirmation statements immediately after you receive them.

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


46 | Policies You Should Know About
<PAGE>

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


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


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

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

           SELLING SHARES OF TRUST ACCOUNTS AND BUSINESS OR ORGANIZATION
           ACCOUNTS may require additional documentation. Please call (800)
           728-3337 or contact your financial advisor for more information.





            THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS



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








           MONEY FROM SHARES YOU SELL is normally sent out within one business
           day of when your order is processed (not when it is received),
           although it could be delayed for up to seven days. There are
           circumstances when it could be longer, including, but not limited
           to, when you are selling shares you bought recently by check or ACH
           (the funds will be placed under a 10 calendar day hold to ensure
           good funds) or when unusual circumstances



                                            Policies You Should Know About  | 47
<PAGE>


           prompt the SEC to allow further delays. Certain expedited redemption
           processes (e.g., redemption proceeds by wire) may also be delayed or
           unavailable when you are selling shares recently purchased or in the
           event of the closing of the Federal Reserve wire payment system.
           Each fund reserves the right to suspend or postpone redemptions as
           permitted pursuant to Section 22(e) of the Investment Company Act of
           1940. Generally, those circumstances are when 1) the New York Stock
           Exchange is closed other than customary weekend or holiday closings;
           2) trading on the New York Stock Exchange is restricted; 3) an
           emergency exists which makes the disposal of securities owned by a
           fund or the fair determination of the value of a fund's net assets
           not reasonably practicable; or 4) the SEC, by order, permits the
           suspension of the right of redemption. Redemption payments by wire
           may also be delayed in the event of a non-routine closure of the
           Federal Reserve wire payment system. For additional rights reserved
           by each fund, please see "Other rights we reserve."


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


           How each fund calculates share price

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


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



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

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

           WE TYPICALLY VALUE SECURITIES USING INFORMATION FURNISHED BY AN
           INDEPENDENT PRICING SERVICE OR MARKET QUOTATIONS, WHERE APPROPRIATE.
           However, we may use methods approved by a fund's Board, such as a
           fair valuation model, which are intended to reflect fair value when
           pricing service information or market quotations are not readily
           available or when a security's value or a meaningful portion of the
           value of a fund's portfolio is believed



48 | Policies You Should Know About
<PAGE>


           to have been materially affected by a significant event, such as a
           natural disaster, an economic event like a bankruptcy filing, or a
           substantial fluctuation in domestic or foreign markets that has
           occurred between the close of the exchange or market on which the
           security is principally traded (for example, a foreign exchange or
           market) and the close of the New York Stock Exchange. In such a
           case, a fund's value for a security is likely to be different from
           the last quoted market price or pricing service information. In
           addition, due to the subjective and variable nature of fair value
           pricing, it is possible that the value determined for a particular
           asset may be materially different from the value realized upon such
           asset's sale.



           Other rights we reserve

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

           -  withdraw or suspend the offering of shares at any time


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


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


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



                                            Policies You Should Know About  | 49
<PAGE>


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

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


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


UNDERSTANDING DISTRIBUTIONS AND TAXES


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


INCOME DIVIDENDS ARE DECLARED DAILY AND PAID MONTHLY. Short-term and long-term
                                         capital gains are paid in November or



            THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS



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





                                                                   consequences.

           December, or otherwise as needed.


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

           YOU CAN CHOOSE HOW TO RECEIVE YOUR DIVIDENDS AND DISTRIBUTIONS. You
           can have them all automatically reinvested in fund shares (at NAV),
           all deposited directly to your bank account or all sent to you by
           check, have one type reinvested and the other sent to you by check
           or have them invested in a different fund. Tell us your preference
           on your application. If you don't



50 | Understanding Distributions and Taxes
<PAGE>


           indicate a preference, your dividends and distributions will all be
           reinvested in shares of the fund without a sales charge (if
           applicable). Distributions are treated the same for federal income
           tax purposes whether you receive them in cash or reinvest them in
           additional shares. Under the terms of employer-sponsored qualified
           plans, and retirement plans, reinvestment (at NAV) is the only
           option.


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

           Each fund intends to distribute tax-exempt interest as exempt-

           interest dividends, which are generally excluded from gross income
           for regular federal income tax purposes, but may be subject to
           alternative minimum tax and state and local income taxes. Their
           distributions from other sources, if any, would be taxable as
           described above.


           Dividends from each fund are generally tax-free for most
           shareholders, meaning that investors who are individuals can receive
           them without incurring federal and (for some investors) state and
           local income tax liability. However, there are a few exceptions:

           -  a portion of a fund's dividends may be taxable if it came from
              investments in taxable securities

           -  because a fund (except DWS Intermediate Tax/AMT Free Fund) can
              invest up to 20% of net assets in securities whose income is
              subject to the federal alternative minimum tax (AMT), you may owe
              taxes on a portion of your dividends if you are among those
              investors who must pay AMT

           -  capital gains distributions may be taxable

                                     Understanding Distributions and Taxes  | 51
<PAGE>


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



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


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


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

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



52 | Understanding Distributions and Taxes
<PAGE>


           shareholder must meet certain holding period and other requirements
           with respect to a fund's shares for the lower tax rates to apply.
           The funds do not expect a significant portion of their distributions
           to constitute qualified dividend income.

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


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


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

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

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




                                     Understanding Distributions and Taxes  | 53
<PAGE>

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



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


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


54 | Appendix
<PAGE>


               DWS Strategic High Yield Tax-Free Fund - Class S





<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER      ANNUAL FEES
              FEES AND        EXPENSE        FEES AND           FEES AND            AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        1.29%              3.71%       $  10,371.00       $   131.39
   2           10.25%        1.52%              7.32%       $  10,731.91       $   160.38
   3           15.76%        1.52%             11.05%       $  11,105.38       $   165.96
   4           21.55%        1.52%             14.92%       $  11,491.85       $   171.74
   5           27.63%        1.52%             18.92%       $  11,891.76       $   177.72
   6           34.01%        1.52%             23.06%       $  12,305.60       $   183.90
   7           40.71%        1.52%             27.34%       $  12,733.83       $   190.30
   8           47.75%        1.52%             31.77%       $  13,176.97       $   196.92
   9           55.13%        1.52%             36.36%       $  13,635.53       $   203.77
  10           62.89%        1.52%             41.10%       $  14,110.05       $   210.87
  TOTAL                                                                        $ 1,792.95
</TABLE>



DWS Managed Municipal Bond Fund - Class S





<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                  ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                       OF RETURN:
               0.00%                   $10,000                             5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER         ANNUAL
              FEES AND        EXPENSE        FEES AND           FEES AND          FEES AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES          EXPENSES
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        0.95%              4.05%       $ 10,405.00        $    96.92
   2           10.25%        0.95%              8.26%       $ 10,826.40        $   100.85
   3           15.76%        0.95%             12.65%       $ 11,264.87        $   104.93
   4           21.55%        0.95%             17.21%       $ 11,721.10        $   109.18
   5           27.63%        0.95%             21.96%       $ 12,195.80        $   113.61
   6           34.01%        0.95%             26.90%       $ 12,689.73        $   118.21
   7           40.71%        0.95%             32.04%       $ 13,203.67        $   122.99
   8           47.75%        0.95%             37.38%       $ 13,738.42        $   127.97
   9           55.13%        0.95%             42.95%       $ 14,294.82        $   133.16
  10           62.89%        0.95%             48.74%       $ 14,873.76        $   138.55
  TOTAL                                                                        $ 1,166.37
</TABLE>




                                                                  Appendix  | 55
<PAGE>

                 DWS Intermediate Tax/AMT Free Fund - Class S




<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER      ANNUAL FEES
              FEES AND        EXPENSE        FEES AND           FEES AND            AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        0.75%              4.25%       $  10,425.00        $   76.59
   2           10.25%        0.75%              8.68%       $  10,868.06        $   79.85
   3           15.76%        0.75%             13.30%       $  11,329.96        $   83.24
   4           21.55%        0.75%             18.11%       $  11,811.48        $   86.78
   5           27.63%        0.75%             23.13%       $  12,313.47        $   90.47
   6           34.01%        0.75%             28.37%       $  12,836.79        $   94.31
   7           40.71%        0.75%             33.82%       $  13,382.35        $   98.32
   8           47.75%        0.75%             39.51%       $  13,951.10        $  102.50
   9           55.13%        0.75%             45.44%       $  14,544.02        $  106.86
  10           62.89%        0.75%             51.62%       $  15,162.14        $  111.40
  TOTAL                                                                         $  930.32
</TABLE>




56 | Appendix
<PAGE>

TO GET MORE INFORMATION

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

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


For a free copy of any of these documents or to request other information about
a fund, call (800) 728-3337, or contact DWS Investments at the address listed
below. Each fund's SAI and shareholder reports are also available through the
DWS Investments Web site at www.dws-investments.com. These documents and other
information about each fund are available from the EDGAR Database on the SEC's
Internet site at www.sec.gov. If you like, you may obtain copies of this
information, after paying a copying fee, by e-mailing a request to
publicinfo@sec.gov or by writing the SEC at the address listed below. You can
also review and copy these documents and other information about each fund,
including each fund's SAI, at the SEC's Public Reference Room in Washington,
D.C. Information on the operation of the SEC's Public Reference Room may be
obtained by calling (800) SEC-0330.




<TABLE>
<CAPTION>
DWS INVESTMENTS      SEC                     DISTRIBUTOR
-----------------    --------------------    ------------------------------
<S>                  <C>                     <C>
PO Box 219151        100 F Street, N.E.      DWS Investments Distributors,
Kansas City, MO      Washington, D.C.        Inc.
64121-9151           20549-0102              222 South Riverside Plaza
WWW.DWS-             WWW.SEC.GOV             Chicago, IL 60606-5808
INVESTMENTS.COM      (800) SEC-0330          (800) 621-1148
(800) 728-3337
</TABLE>





<TABLE>
<S>                      <C>                                         <C>
SEC FILE NUMBER:
DWS Municipal Trust        DWS Strategic High Yield Tax-Free Fund    811-02671
DWS Municipal Trust               DWS Managed Municipal Bond Fund    811-02671
DWS Tax Free Trust             DWS Intermediate Tax/AMT Free Fund    811-03632
</TABLE>








(10/01/08) 08/45/66-2
 [RECYCLE GRAPHIC APPEARS HERE]
                                                                       [Logo]DWS
                                                                      INVESTMENT
                                                             Deutsche Bank Group
<PAGE>


                     DWS Strategic High Yield Tax-Free Fund
                (formerly known as DWS High Yield Tax Free Fund)
                         A series of DWS Municipal Trust
               (Class A, Class B, Class C and Institutional Class)


                         DWS Managed Municipal Bond Fund
                         A series of DWS Municipal Trust
               (Class A, Class B, Class C and Institutional Class)


                       DWS Intermediate Tax/AMT Free Fund
                         A series of DWS Tax Free Trust
               (Class A, Class B, Class C and Institutional Class)













                       STATEMENT OF ADDITIONAL INFORMATION


                                 October 1, 2008


This combined Statement of Additional Information ("SAI") is not a prospectus
and should be read in conjunction with the combined prospectuses for the DWS
Strategic High Yield Tax-Free Fund and DWS Managed Municipal Bond Fund (each a
"Fund"), each a series of DWS Municipal Trust (a "Trust"), and DWS Intermediate
Tax/AMT Free Fund (a "Fund" and collectively with DWS Strategic High Yield
Tax-Free Fund and DWS Managed Municipal Bond fund, the "Funds"), a series of DWS
Tax Free Trust (a "Trust" and collectively with DWS Municipal Trust, the
"Trusts"), dated October 1, 2008 as amended from time to time, copies of which
may be obtained without charge by contacting DWS Investments Distributors, Inc.,
222 South Riverside Plaza, Chicago, Illinois 60606, 1-800-621-1148, or from the
firm from which this SAI was obtained. The prospectuses are also available along
with other materials on the Securities and Exchange Commission's Internet
website (http://www.sec.gov).

Portions of the Annual Reports to Shareholders of each Fund, dated May 31, 2008,
are incorporated by reference, as specified herein. A copy of each Fund's Annual
Report to Shareholders may be obtained without charge by calling 1-800-621-1048.

This SAI is incorporated by reference into the corresponding prospectuses.




                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                                Page
                                                                                                                ----

<S>                                                                                                              <C>
INVESTMENT RESTRICTIONS...........................................................................................2

INVESTMENT POLICIES AND TECHNIQUES................................................................................4
   Portfolio Holdings............................................................................................19

MANAGEMENT OF THE FUNDS..........................................................................................20
   Investment Advisor............................................................................................20
   Compensation of Portfolio Managers............................................................................23

FUND SERVICE PROVIDERS...........................................................................................30
   Administrator.................................................................................................30
   Distributor...................................................................................................31
   Custodian.....................................................................................................35
   Transfer Agent and Shareholder Service Agent..................................................................35
   Legal Counsel.................................................................................................36
   Independent Registered Public Accounting Firm and Reports to Shareholders.....................................36

PORTFOLIO TRANSACTIONS...........................................................................................36

PURCHASE AND REDEMPTION OF SHARES................................................................................39

DIVIDENDS........................................................................................................57

TAXES............................................................................................................58

NET ASSET VALUE..................................................................................................70

TRUSTEES AND OFFICERS............................................................................................71

TRUST ORGANIZATION...............................................................................................82

PROXY VOTING GUIDELINES..........................................................................................84

FINANCIAL STATEMENTS.............................................................................................86

ADDITIONAL INFORMATION...........................................................................................86

RATINGS OF INVESTMENTS...........................................................................................87
</TABLE>


                             INVESTMENT RESTRICTIONS

Except as otherwise indicated, each Fund's investment objective and policies are
not fundamental and may be changed without a vote of shareholders. There can be
no assurance that a Fund's objective will be met.

Each Fund has elected to be classified as a diversified series of an open-end
investment company. A diversified fund may not, with respect to 75% of total
assets, invest more than 5% of total assets in the securities of a single issuer
or invest in more than 10% of the outstanding voting securities of such issuer
(with certain exceptions).

If a percentage restriction on investment or utilization of assets as set forth
under "Investment Restrictions" and "Other Investment Policies" is adhered to at
the time an investment is made, a later change in percentage resulting from
changes in the value or the total cost of a Fund's assets will not be considered
a violation of the restriction.


Unless specified to the contrary, the following fundamental policies may not be
changed without the approval of a majority of the outstanding voting securities
of a Fund which, under the Investment Company Act of 1940, as amended (the "1940
Act"), and the rules thereunder and as used in this SAI, means the lesser of (1)
67% or more of the voting securities present at a meeting, if the holders of
more than 50% of the outstanding voting securities of a Fund are present or
represented by proxy, or (2) more than 50% of the outstanding voting securities
of a Fund.


As a matter of fundamental policy, each Fund may not:

(1)      borrow money, except as permitted under the 1940 Act as interpreted or
         modified by regulatory authority having jurisdiction, from time to
         time;

(2)      issue senior securities, except as permitted under the 1940 Act, as
         interpreted or modified by regulatory authority having jurisdiction,
         from time to time;

(3)      concentrate its investments in a particular industry, as that term is
         used in the 1940 Act, as interpreted or modified by regulatory
         authority having jurisdiction, from time to time;

(4)      engage in the business of underwriting securities issued by others,
         except to the extent that the Fund may be deemed to be an underwriter
         in connection with the disposition of portfolio securities;

(5)      purchase or sell real estate, which term does not include securities of
         companies which deal in real estate or mortgages or investments secured
         by real estate or interests therein, except that the Fund reserves
         freedom of action to hold and to sell real estate acquired as a result
         of the Fund's ownership of securities;

(6)      purchase or sell commodities, except as permitted by the 1940 Act, as
         amended, and as interpreted or modified by the regulatory authority
         having jurisdiction, from time to time;

(7)      make loans except as permitted under the 1940 Act, as interpreted or
         modified by regulatory authority having jurisdiction, from time to
         time;

Additionally, as a matter of fundamental policy, each Fund will:

(8)      under normal circumstances, have at least 80% of its net assets (plus
         the amount of any borrowings for investment purposes in the case of the
         DWS Managed Municipal Bond Fund and the DWS Intermediate Tax/AMT Free
         Fund) invested in securities of municipalities across the United States
         and in other securities whose income is free from regular federal
         income tax.

With respect to fundamental policy (8) above, DWS Managed Municipal Bond Fund
considers any investments in municipal securities that pay interest subject to
the alternative minimum tax ("AMT") as part of the 80% of the Fund's net assets
that must be invested in municipal securities.

Other Investment Policies

The Board of Trustees has voluntarily adopted certain non-fundamental policies
and restrictions which are observed in the conduct of a Fund's affairs. These
represent intentions of the Trustees based upon current circumstances. They
differ from fundamental investment policies in that they may be changed or
amended by action of the Trustees without requiring prior notice to or approval
of the shareholders.

As a matter of non-fundamental policy, each Fund may not:

1.       borrow money in an amount greater than 5% of its total assets, except
         for temporary or emergency purposes;

2.       purchase securities on margin or make short sales, except (i) short
         sales against the box, (ii) in connection with arbitrage transactions,
         (iii) for margin deposits in connection with futures contracts, options
         or other permitted investments, (iv) that transactions in futures
         contracts and options shall not be deemed to constitute selling
         securities short, and (v) that a Fund may obtain such short-term
         credits as may be necessary for the clearance of securities
         transactions;

3.       purchase options, unless the aggregate premiums paid on all such
         options held by a Fund at any time do not exceed 20% of its total
         assets; or sell put options, if as a result, the aggregate value of the
         obligations underlying such put options would exceed 50% of its total
         assets;

4.       enter into futures contracts or purchase options thereon unless
         immediately after the purchase, the value of the aggregate initial
         margin with respect to such futures contracts entered into on behalf of
         a Fund and the premiums paid for such options on futures contracts does
         not exceed 5% of the fair market value of a Fund's total assets;
         provided that in the case of an option that is in-the-money at the time
         of purchase, the in-the-money amount may be excluded in computing the
         5% limit;

5.       purchase warrants if as a result, such securities, taken at the lower
         of cost or market value, would represent more than 5% of the value of a
         Fund's total assets (for this purpose, warrants acquired in units or
         attached to securities will be deemed to have no value); and

6.       lend portfolio securities in an amount greater than 5% of its total
         assets.


The foregoing non-fundamental policies are in addition to policies otherwise
stated in the prospectuses or this SAI.

The DWS Strategic High Yield Tax-Free Fund will invest at least 50% of its total
assets in municipal bonds rated, at the time of purchase, within the four
highest quality rating categories of Moody's Investors Service, Inc. ("Moody's)
(Aaa, Aa, A or Baa), Standard & Poor's Ratings Services ("S&P") or Fitch
Investors Service, Inc. ("Fitch") (AAA, AA, A or BBB), or their equivalents as
determined at the time of purchase by Deutsche Investment Management Americas
Inc. ("DIMA" or the "Advisor"). The Fund may invest, however, up to 50% of its
total assets in bonds rated below Baa by Moody's or below BBB by S&P or Fitch,
or unrated securities considered to be of equivalent quality. If a security's
credit quality is downgraded, the Advisor will decide what to do with the
security, based on its assessment of what would benefit shareholders most.


Normally, the DWS Managed Municipal Bond Fund invests at least 65% of its net
assets in securities rated, or issued by an issuer rated, at the time of
purchase within the three highest quality rating categories of Moody's (Aaa, Aa
or A), S&P or Fitch (AAA, AA or A) or their equivalents, or if unrated, judged
by the Advisor to be of comparable quality at the time of purchase. The Fund may
invest up to 10% of its assets in debt securities rated lower than Baa by
Moody's, BBB by S&P or Fitch or of equivalent quality as determined by the
Advisor, but will not purchase bonds rated below B by Moody's, S&P or Fitch, or
their equivalent.

Normally, DWS Intermediate Tax/AMT Free Fund invests at least 65% of its net
assets in municipal bonds which are rated, at the time of purchase within the
three highest quality rating categories of Moody's (Aaa, Aa or A), S&P or Fitch
(AAA, AA or A) or their equivalents, or if unrated, judged by the Advisor to be
of comparable quality at the time of purchase. The Fund will not invest in any
debt security rated lower than Baa by Moody's, BBB by S&P or Fitch or of
equivalent quality as determined by the Advisor.


For temporary defensive purposes or if an unusual disparity between after-tax
income on taxable and municipal securities makes it advisable, up to 100% of the
DWS Strategic High Yield Tax-Free Fund's assets (20% of assets in the case of
DWS Managed Municipal Bond Fund and DWS Intermediate Tax/AMT Free Fund) may be
held in cash or invested in short-term taxable investments, including US
Government obligations and money market instruments.


Although there is no current intention to do so, each Fund may invest more than
25% of its total assets in industrial development or other private activity
bonds, subject to a Fund's fundamental investment policies. Because these bonds
are frequently subject to regular federal income tax and AMT, investment in
these types of bonds is also subject to a Fund's limitation on investing in
municipal securities whose investment income is subject to these taxes.

                       INVESTMENT POLICIES AND TECHNIQUES

General Investment Objectives and Policies


Descriptions in this SAI of a particular investment practice or technique in
which a Fund may engage are meant to describe the spectrum of investments that
the Advisor in its discretion might, but is not required to, use in managing
each Fund's portfolio assets. The Advisor may in its discretion at any time
employ such practice, technique or instrument for one or more Funds but not for
all funds advised by it. Furthermore, it is possible that certain types of
financial instruments or investment techniques described herein may not be
available, permissible, economically feasible or effective for their intended
purposes in all markets. Certain practices, techniques or instruments may not be
principal activities of the Funds, but, to the extent employed, could from time
to time have a material impact on a Fund's performance. It is possible that
certain investment practices and techniques described below may not be
permissible for a Fund based on its investment restrictions, as described
herein, and in the Funds' applicable prospectus.


Advance Refunded Bonds. A Fund may purchase Municipal Securities that are
subsequently refunded by the issuance and delivery of a new issue of bonds prior
to the date on which the outstanding issue of bonds can be redeemed or paid. The
proceeds from the new issue of bonds are typically placed in an escrow fund
consisting of US Government obligations that are used to pay the interest,
principal and call premium on the issue being refunded. A Fund may also purchase
Municipal Securities that have been refunded prior to purchase by a Fund.


High Yield/High Risk Bonds. DWS Strategic High Yield Tax-Free Fund and DWS
Managed Municipal Bond Fund may also purchase debt securities which are rated
below investment-grade (commonly referred to as "junk bonds"), that is, rated
below Baa by Moody's or below BBB by S&P, and unrated securities judged to be of
equivalent quality as determined by the Advisor. These securities usually entail
greater risk (including the possibility of default or bankruptcy of the issuers
of such securities), generally involve greater volatility of price and risk to
principal and income, and may be less liquid, than securities in the higher
rating categories. The lower the ratings of such debt securities, the more their
risks render them like equity securities. Securities rated D may be in default
with respect to payment of principal or interest. See "Ratings of Investments"
for a more complete description of the ratings assigned by ratings organizations
and their respective characteristics.


Issuers of such high yield securities often are highly leveraged and may not
have available to them more traditional methods of financing. Therefore, the
risk associated with acquiring the securities of such issuers generally is
greater than is the case with higher rated securities. For example, during an
economic downturn or a sustained period of rising interest rates, highly
leveraged issuers of high yield securities may experience financial stress.
During such periods, such issuers may not have sufficient revenues to meet their
interest payment obligations. The issuer's ability to service its debt
obligations may also be adversely affected by specific corporate developments,
or the issuer's inability to meet specific projected business forecasts, or the
unavailability of additional financing. The risk of loss from default by the
issuer is significantly greater for the holders of high yield securities because
such securities are generally unsecured and are often subordinated to other
creditors of the issuer. Prices and yields of high yield securities will
fluctuate over time and, during periods of economic uncertainty, volatility of
high yield securities may adversely affect a Fund's net asset value. In
addition, investments in high yield zero coupon or pay-in-kind bonds, rather
than income-bearing high yield securities, may be more speculative and may be
subject to greater fluctuations in value due to changes in interest rates.

A Fund may have difficulty disposing of certain high-yield securities because
they may have a thin trading market. Because not all dealers maintain markets in
all high yield securities, a Fund anticipates that such securities could be sold
only to a limited number of dealers or institutional investors. The lack of a
liquid secondary market may have an adverse effect on the market price and a
Fund's ability to dispose of particular issues and may also make it more
difficult for a Fund to obtain accurate market quotations for purposes of
valuing a Fund's assets. Market quotations generally are available on many high
yield issues only from a limited number of dealers and may not necessarily
represent firm bids of such dealers or prices for actual sales. Adverse
publicity and investor perceptions may decrease the values and liquidity of high
yield securities. These securities may also involve special registration
responsibilities, liabilities and costs, and liquidity and valuation
difficulties.

Credit quality in the high-yield securities market can change suddenly and
unexpectedly, and even recently issued credit ratings may not fully reflect the
actual risks posed by a particular high-yield security. For these reasons, it is
generally the policy of the Advisor not to rely exclusively on ratings issued by
established credit rating agencies, but to supplement such ratings with its own
independent and on-going review of credit quality. The achievement of a Fund's
investment objective by investment in such securities may be more dependent on
the Advisor's credit analysis than is the case for higher quality bonds. Should
the rating of a portfolio security be downgraded, the Advisor will determine
whether it is in the best interests of a Fund to retain or dispose of such
security.

Prices for high-yield securities may be affected by legislative and regulatory
developments. Also, Congress has from time to time considered legislation which
would restrict or eliminate the corporate tax deduction for interest payments in
these securities and regulate corporate restructurings. Such legislation may
significantly depress the prices of outstanding securities of this type.

A portion of the high-yield securities acquired by the Funds may be purchased
upon issuance, which may involve special risks because the securities so
acquired are new issues. In such instances that Fund may be a substantial
purchaser of the issue and therefore have the opportunity to participate in
structuring the terms of the offering. Although this may enable the Fund to seek
to protect itself against certain of such risks, the considerations discussed
herein would nevertheless remain applicable.


Asset Segregation

Certain investment transactions expose a Fund to an obligation to make future
payments to third parties. Examples of these types of transactions, include, but
are not limited to, reverse repurchase agreements, short sales, dollar rolls,
when-issued, delayed-delivery or forward commitment transactions and certain
derivatives such as swaps, futures, forwards, and options. To the extent that a
Fund engages in such transactions, a Fund will (to the extent required by
applicable law) either (1) segregate cash or liquid assets in the prescribed
amount or (2) otherwise "cover" its future obligations under the transaction,
such as by holding an offsetting investment. If a Fund segregates sufficient
cash or other liquid assets or otherwise "covers" its obligations under such
transactions, a Fund will not consider the transactions to be borrowings for
purposes of its investment restrictions or "senior securities" under the 1940
Act, and therefore, such transactions will not be subject to the 300% asset
coverage requirement under the 1940 Act otherwise applicable to borrowings by a
Fund.

In some cases (e.g., with respect to futures and forwards that are contractually
required to "cash-settle"), a Fund will segregate cash or other liquid assets
with respect to the amount of the daily net (marked-to-market) obligation
arising from the transaction, rather than the notional amount of the underlying
contract. By segregating assets in an amount equal to the net obligation rather
than the notional amount, a Fund will have the ability to employ leverage to a
greater extent than if it set aside cash or other liquid assets equal to the
notional amount of the contract, which may increase the risk associated with
such transactions.

A Fund may utilize methods of segregating assets or otherwise "covering"
transactions that are currently or in the future permitted under the 1940 Act,
the rules and regulation thereunder, or orders issued by the Securities and
Exchange Commission ("SEC") thereunder. For these purposes, interpretations and
guidance provided by the SEC staff may be taken into account when deemed
appropriate by a Fund. Assets used as segregation or cover cannot be sold while
the position in the corresponding transaction is open, unless they are replaced
with other appropriate assets. As a result, the commitment of a large portion of
a Fund's assets for segregation and cover purposes could impede portfolio
management or the Fund's ability to meet redemption requests or other current
obligations.

Segregating assets or otherwise "covering" for these purposes does not
necessarily limit the percentage of the assets of the Fund that may be at risk
with respect to certain derivative transactions.


Illiquid Securities and Restricted Securities. A Fund may purchase securities
that are subject to legal or contractual restrictions on resale ("restricted
securities"). Generally speaking, restricted securities may be sold (i) to
qualified institutional buyers; (ii) in a privately negotiated transaction to a
limited number of purchasers; (iii) in limited quantities after they have been
held for a specified period of time and other conditions are met pursuant to an
exemption from registration; or (iv) in a public offering for which a
registration statement is in effect under the Securities Act of 1933, as amended
(the "1933 Act"). Issuers of restricted securities may not be subject to the
disclosure and other investor protection requirements that would be applicable
if their securities were publicly traded.

Restricted securities are often illiquid, but they may also be liquid. For
example, restricted securities that are eligible for resale under Rule 144A are
often deemed to be liquid.

Each Fund's Board has approved guidelines for use by the Advisor in determining
whether a security is liquid or illiquid. Among the factors the Advisor may
consider in reaching liquidity decisions relating to Rule 144A securities are:
(1) the frequency of trades and quotes for the security; (2) the number of
dealers wishing to purchase or sell the security and the number of other
potential purchasers; (3) dealer undertakings to make a market in the security;
and (4) the nature of the security and the nature of the market for the security
(i.e., the time needed to dispose of the security, the method of soliciting
offers, and the mechanics of the transfer). Issuers of restricted securities may
not be subject to the disclosure and other investor protection requirements that
would be applicable if their securities were publicly traded. Where a
registration statement is required for the resale of restricted securities, a
fund may be required to bear all or part of the registration expenses. A fund
may be deemed to be an "underwriter" for purposes of the Securities Act of 1933,
as amended when selling restricted securities to the public and, in such event,
a fund may be liable to purchasers of such securities if the registration
statement prepared by the issuer is materially inaccurate or misleading.

A Fund may also purchase securities that are not subject to legal or contractual
restrictions on resale, but that are deemed illiquid. Such securities may be
illiquid, for example, because there is a limited trading market for them.

A Fund may be unable to sell a restricted or illiquid security. In addition, it
may be more difficult to determine a market value for restricted or illiquid
securities. Moreover, if adverse market conditions were to develop during the
period between a Fund's decision to sell a restricted or illiquid security and
the point at which a Fund is permitted or able to sell such security, a Fund
might obtain a price less favorable than the price that prevailed when it
decided to sell.


Impact of Large Redemptions and Purchases of Fund Shares. From time to time,
shareholders of a Fund (which may include affiliated and/or non-affiliated
registered investment companies that invest in a Fund) may make relatively large
redemptions or purchases of Fund shares. These transactions may cause a Fund to
have to sell securities or invest additional cash, as the case may be. While it
is impossible to predict the overall impact of these transactions over time,
there could be adverse effects on a Fund's performance to the extent that a Fund
may be required to sell securities or invest cash at times when it would not
otherwise do so. These transactions could also accelerate the realization of
taxable income if sales of securities resulted in capital gains or other income
and could also increase transaction costs, which may impact a Fund's expense
ratio.

Impact of Sub-Prime Mortgage Market. A Fund may invest in mortgage-backed,
asset-backed and other fixed-income securities whose value and liquidity may be
adversely affected by the critical downturn in the sub-prime mortgage lending
market in the US. Sub-prime loans, which have higher interest rates, are made to
borrowers with low credit ratings or other factors that increase the risk of
default. Concerns about widespread defaults on sub-prime loans have also created
heightened volatility and turmoil in the general credit markets. As a result, a
Fund's investments in certain fixed-income securities may decline in value,
their market value may be more difficult to determine, and a Fund may have more
difficulty disposing of them.

Industrial Development and Pollution Control Bonds. Industrial Development and
Pollution Control Bonds (which are types of private activity bonds), although
nominally issued by municipal authorities, are generally not secured by the
taxing power of the municipality, but are secured by the revenues of the
authority derived from payments by the industrial user. Under federal tax
legislation, certain types of Industrial Development Bonds and Pollution Control
Bonds may no longer be issued on a tax-exempt basis, although previously issued
bonds of these types and certain refundings of such bonds are not affected. For
the purposes of the Funds' investment limitation regarding concentration of
investments in any one industry, industrial development or other private
activity bonds ultimately payable by companies within the same industry will be
considered as if they were issued by issuers in the same industry.

Interfund Borrowing and Lending Program. The Funds have received exemptive
relief from the SEC, which permits the Funds to participate in an interfund
lending program among certain investment companies advised by the Advisor. The
interfund lending program allows the participating funds to borrow money from
and loan money to each other for temporary or emergency purposes. The program is
subject to a number of conditions designed to ensure fair and equitable
treatment of all participating funds, including the following: (1) no fund may
borrow money through the program unless it receives a more favorable interest
rate than a rate approximating the lowest interest rate at which bank loans
would be available to any of the participating funds under a loan agreement; and
(2) no fund may lend money through the program unless it receives a more
favorable return than that available from an investment in repurchase agreements
and, to the extent applicable, money market cash swap arrangements. In addition,
a fund may participate in the program only if and to the extent that such
participation is consistent with a fund's investment objectives and policies
(for instance, money market funds would normally participate only as lenders and
tax exempt funds only as borrowers). Interfund loans and borrowings may extend
overnight, but could have a maximum duration of seven days. Loans may be called
on one day's notice. A fund may have to borrow from a bank at a higher interest
rate if an interfund loan is called or not renewed. Any delay in repayment to a
lending fund could result in a lost investment opportunity or additional costs.
The program is subject to the oversight and periodic review of the Boards of the
participating funds. To the extent the Funds are actually engaged in borrowing
through the interfund lending program, the Funds, as a matter of non-fundamental
policy, may not borrow for other than temporary or emergency purposes (and not
for leveraging), except that the Funds may engage in reverse repurchase
agreements and dollar rolls for any purpose.


Investment-Grade Bonds. A fund may purchase "investment-grade" bonds, which are
those rated Aaa, Aa, A or Baa by Moody's or AAA, AA, A or BBB by S&P or, if
unrated, judged to be of equivalent quality as determined by the Advisor.
Moody's considers bonds it rates Baa to have speculative elements as well as
investment-grade characteristics. To the extent that a fund invests in
higher-grade securities, a fund will not be able to avail itself of
opportunities for higher income which may be available at lower grades.

Inverse Floaters. A Fund may invest in inverse floaters. Inverse floaters are
debt instruments typically with a weekly floating rate of interest that bears an
inverse relationship to changes in short-term market interest rates. Investments
in this type of instrument involve special risks as compared to investments in,
for example, a fixed rate municipal security. The debt instrument in which a
Fund invests may be a tender option bond trust (the "trust") which can be
established by a Fund, a financial institution or a broker, consisting of
underlying municipal obligations. Other investors in the trust usually consist
of money market fund investors normally receiving weekly floating interest rate
payments who have put options with the financial institutions. A Fund may enter
into shortfall and forbearance agreements by which a Fund agrees to reimburse
the trust, in certain circumstances, for the difference between the liquidation
value of the fixed rate municipal security held by the trust and the liquidation
value of the floating rate notes. A Fund could lose money and its NAV could
decline as a result of investments in inverse floaters if movements in interest
rates are incorrectly anticipated. Moreover, the markets for inverse floaters
may be less developed and may have less liquidity than the markets for more
traditional municipal securities. A Fund's investments in inverse floaters will
not be considered borrowing within the meaning of the 1940 Act or for purposes
of a Fund's investment restrictions on borrowing.

Investment of Uninvested Cash Balances. A Fund may have cash balances that have
not been invested in portfolio securities ("Uninvested Cash"). Uninvested Cash
may result from a variety of sources, including dividends or interest received
from portfolio securities, unsettled securities transactions, reserves held for
investment strategy purposes, scheduled maturity of investments, liquidation of
investment securities to meet anticipated redemptions and dividend payments, and
new cash received from investors. Uninvested Cash may be invested directly in
money market instruments or other short-term debt obligations. Pursuant to an
Exemptive Order issued by the SEC, a Fund may use Uninvested Cash to purchase
shares of affiliated funds including money market funds, short-term bond funds
and Cash Management QP Trust, or one or more future entities for which the
Advisor acts as trustee or investment advisor that operate as cash management
investment vehicles and that are excluded from the definition of investment
company pursuant to section 3(c)(1) or 3(c)(7) of the 1940 Act (collectively,
the "Central Funds") in excess of the limitations of Section 12(d)(1) of the
1940 Act. Investment by a Fund in shares of the Central Funds will be in
accordance with a Fund's investment policies and restrictions as set forth in
its registration statement.

Certain of the Central Funds comply with Rule 2a-7 under the 1940 Act. The other
Central Funds are or will be short-term bond funds that invest in fixed-income
securities and maintain a dollar weighted average maturity of three years or
less. Each of the Central Funds will be managed specifically to maintain a
highly liquid portfolio, and access to them will enhance the Funds' ability to
manage Uninvested Cash.

A Fund will invest Uninvested Cash in Central Funds only to the extent that a
Fund's aggregate investment in the Central Funds does not exceed 25% of its
total assets. Purchase and sales of shares of Central Funds are made at net
asset value.

Letters of Credit. Municipal obligations, including certificates of
participation, commercial paper and other short-term obligations, may be backed
by an irrevocable letter of credit of a bank which assumes the obligation for
payment of principal and interest in the event of default by the issuer. Only
banks which, in the opinion of the Advisor, are of investment quality comparable
to other permitted investments of a Fund may be used for letter of credit-backed
investments.

Municipal Securities. Municipal obligations are issued by or on behalf of
states, territories and possessions of the United States and their political
subdivisions, agencies and instrumentalities and the District of Columbia to
obtain funds for various public purposes. The interest on these obligations is
generally exempt from regular federal income tax in the hands of most investors.
The two principal classifications of municipal obligations are "notes" and
"bonds."

Municipal notes are generally used to provide for short-term capital needs and
generally have maturities of one year or less. Municipal notes include: Tax
Anticipation Notes, Revenue Anticipation Notes, Bond Anticipation Notes, and
Construction Loan Notes. Tax Anticipation Notes are sold to finance working
capital needs of municipalities. They are generally payable from specific tax
revenues expected to be received at a future date. Revenue Anticipation Notes
are issued in expectation of receipt of other types of revenue. Tax Anticipation
Notes and Revenue Anticipation Notes are issued in anticipation of various
seasonal revenue such as income, sales, use and business taxes. Bond
Anticipation Notes are sold to provide interim financing and Construction Loan
Notes are sold to provide construction financing. These notes are issued in
anticipation of long-term financing in the market. In most cases, these monies
provide for the repayment of the notes. After the projects are successfully
completed and accepted, many projects receive permanent financing through the
Federal Housing Administration under "Fannie Mae" (the Federal National Mortgage
Association) or "Ginnie Mae" (the Government National Mortgage Association).
There are, of course, a number of other types of notes issued for different
purposes and secured differently than those described above.


Municipal bonds, which meet longer-term capital needs and generally have
maturities of more than one year when issued, have two principal
classifications: "general obligation" bonds and "revenue" bonds. Issuers of
general obligation bonds include states, counties, cities, towns and regional
districts. The proceeds of these obligations are used to fund a wide range of
public projects including the construction or improvement of schools, highways
and roads, water and sewer systems and a variety of other public purposes. The
basic security behind general obligation bonds is the issuer's pledge of its
full faith, credit, and taxing power for the payment of principal and interest.
The taxes that can be levied for the payment of debt service may be limited or
unlimited as to rate, amount or special assessments.


The principal security for a revenue bond is generally the net revenues derived
from a particular facility or group of facilities or, in some cases, from the
proceeds of a special excise or other specific revenue source. Revenue bonds
have been issued to fund a wide variety of capital projects including: electric,
gas, water and sewer systems; highways, bridges and tunnels; port and airport
facilities; colleges and universities; and hospitals. Although the principal
security behind these bonds varies widely, many provide additional security in
the form of a debt service reserve fund whose monies may also be used to make
principal and interest payments on the issuer's obligations. Housing finance
authorities have a wide range of security including partially or fully-insured,
rent-subsidized and/or collateralized mortgages, and/or the net revenues from
housing or other public projects. In addition to a debt service reserve fund,
some authorities provide further security in the form of a state's ability
(without obligation) to make up deficiencies in the debt reserve fund. Lease
rental bonds issued by a state or local authority for capital projects are
secured by annual lease rental payments from the state or locality to the
authority sufficient to cover debt service on the authority's obligations.

Some issues of municipal bonds are payable from United States Treasury bonds and
notes or agency obligations held in escrow by a trustee, frequently a commercial
bank. The interest and principal on these US Government securities are
sufficient to pay all interest and principal requirements of the municipal
securities when due. Some escrowed Treasury securities are used to retire
municipal bonds at their earliest call date, while others are used to retire
municipal bonds at their maturity.

Securities purchased for a Fund may include variable/floating rate instruments,
variable mode instruments, put bonds, and other obligations which have a
specified maturity date but also are payable before maturity after notice by the
holder ("demand obligations"). Demand obligations are considered for a Fund's
purposes to mature at the demand date.

There are, in addition, a variety of hybrid and special types of municipal
obligations as well as numerous differences in the security of municipal
obligations both within and between the two principal classifications (i.e.,
notes and bonds) discussed above.

An entire issue of municipal securities may be purchased by one or a small
number of institutional investors such as a Fund. Thus, such an issue may not be
said to be publicly offered. Unlike the equity securities of operating companies
or mutual funds which must be registered under the 1933 Act prior to offer and
sale unless an exemption from such registration is available, municipal
securities, whether publicly or privately offered, may nevertheless be readily
marketable. A secondary market exists for municipal securities which have been
publicly offered as well as securities which have not been publicly offered
initially but which may nevertheless be readily marketable. Municipal securities
purchased for a Fund are subject to the limitations on holdings of securities
which are not readily marketable based on whether it may be sold in a reasonable
time consistent with the customs of the municipal markets (usually seven days)
at a price (or interest rate) which accurately reflects its recorded value. A
Fund believes that the quality standards applicable to their investments enhance
marketability. In addition, stand-by commitments, participation interests and
demand obligations also enhance marketability.

Provisions of the federal bankruptcy statutes relating to the adjustment of
debts of political subdivisions and authorities of states of the United States
provide that, in certain circumstances, such subdivisions or authorities may be
authorized to initiate bankruptcy proceedings without prior notice to or consent
of creditors, which proceedings could result in material and adverse
modification or alteration of the rights of holders of obligations issued by
such subdivisions or authorities.

Litigation challenging the validity under state constitutions of present systems
of financing public education has been initiated or adjudicated in a number of
states, and legislation has been introduced to effect changes in public school
finances in some states. In other instances there has been litigation
challenging the issuance of pollution control revenue bonds or the validity of
their issuance under state or federal law which litigation could ultimately
affect the validity of those Municipal Securities or the tax-free nature of the
interest thereon.

In some cases, municipalities may issue bonds relying on proceeds from
litigation settlements. These bonds may be further secured by debt service
reserve funds established at the time the bonds were issued. Bonds that are
supported in whole or in part by expected litigation proceeds are subject to the
risk that part or all of the expected proceeds may not be received. For example,
a damage award could be overturned or reduced by a court, or the terms of a
settlement or damages award may allow for reduced or discontinued payments if
certain conditions are met. As a result, bonds that rely on proceeds from
litigation proceeds are subject to an increased risk of nonpayment or default.

For the purpose of the Funds' investment restrictions, the identification of the
"issuer" of municipal obligations which are not general obligation bonds is made
by the Advisor on the basis of the characteristics of the obligation as
described above, the most significant of which is the source of funds for the
payment of principal and interest on such obligations.

Municipal Lease Obligations and Participation Interests. Participation interests
represent undivided interests in municipal leases, installment purchase
contracts, conditional sales contracts or other instruments. These are typically
issued by a trust or other entity which has received an assignment of the
payments to be made by the state or political subdivision under such leases or
contracts. They may be variable rate or fixed rate.

Each Fund may purchase from banks participation interests in all or part of
specific holdings of municipal obligations, provided the participation interest
is fully insured. Each participation is backed by an irrevocable letter of
credit or guarantee of the selling bank that the Advisor has determined meets
the prescribed quality standards of a Fund. Therefore, either the credit of the
issuer of the municipal obligation or the selling bank, or both, will meet the
quality standards of the particular Fund. A Fund has the right to sell the
participation back to the bank after seven days' notice for the full principal
amount of a Fund's interest in the municipal obligation plus accrued interest,
but only (i) as required to provide liquidity to a Fund, (ii) to maintain a high
quality investment portfolio or (iii) upon a default under the terms of the
municipal obligation. The selling bank will receive a fee from a Fund in
connection with the arrangement. A Fund will not purchase participation
interests unless in the opinion of bond counsel, counsel for the issuers of such
participations or counsel selected by the Advisor, the interest from such
participations is exempt from regular federal income tax and state income tax
for a Fund.

A municipal lease obligation may take the form of a lease, installment purchase
contract or conditional sales contract which is issued by a state or local
government and authorities to acquire land, equipment and facilities. Income
from such obligations is generally exempt from state and local taxes in the
state of issuance. Municipal lease obligations frequently involve special risks
not normally associated with general obligations or revenue bonds. Leases and
installment purchase or conditional sale contracts (which normally provide for
title in the leased asset to pass eventually to the governmental issuer) have
evolved as a means for governmental issuers to acquire property and equipment
without meeting the constitutional and statutory requirements for the issuance
of debt. The debt issuance limitations are deemed to be inapplicable because of
the inclusion in many leases or contracts of "non-appropriation" clauses that
relieve the governmental issuer of any obligation to make future payments under
the lease or contract unless money is appropriated for such purpose by the
appropriate legislative body on a yearly or other periodic basis. In addition,
such leases or contracts may be subject to the temporary abatement of payments
in the event the issuer is prevented from maintaining occupancy of the leased
premises or utilizing the leased equipment. Although the obligations may be
secured by the leased equipment or facilities, the disposition of the property
in the event of nonappropriation or foreclosure might prove difficult, time
consuming and costly, and result in a delay in recovery or the failure to fully
recover a Fund's original investment.

Certain municipal lease obligations and participation interests may be deemed
illiquid for the purpose of a Fund's limitation on investments in illiquid
securities. Other municipal lease obligations and participation interests
acquired by a Fund may be determined by the Advisor to be liquid securities for
the purpose of such limitation. In determining the liquidity of municipal lease
obligations and participation interests, the Advisor will consider a variety of
factors including: (1) the willingness of dealers to bid for the security; (2)
the number of dealers willing to purchase or sell the obligation and the number
of other potential buyers; (3) the frequency of trades or quotes for the
obligation; and (4) the nature of the marketplace trades. In addition, the
Advisor will consider factors unique to particular lease obligations and
participation interests affecting the marketability thereof. These include the
general creditworthiness of the issuer, the importance to the issuer of the
property covered by the lease and the likelihood that the marketability of the
obligation will be maintained throughout the time the obligation is held by a
Fund.

A fund may purchase participation interests in municipal lease obligations held
by a commercial bank or other financial institution. Such participations provide
a fund with the right to a pro rata undivided interest in the underlying
municipal lease obligations. In addition, such participations generally provide
a fund with the right to demand payment, on not more than seven days' notice, of
all or any part of such fund's participation interest in the underlying
municipal lease obligation, plus accrued interest.


Participation Interests. A Fund may purchase from financial institutions
participation interests in securities in which a fund may invest. A
participation interest gives a fund an undivided interest in the security in the
proportion that the fund's participation interest bears to the principal amount
of the security. These instruments may have fixed, floating or variable interest
rates. If the participation interest is unrated, or has been given a rating
below that which is permissible for purchase by a fund, the participation
interest will be backed by an irrevocable letter of credit or guarantee of a
bank, or the payment obligation will be collateralized by US Government
securities, or, in the case of unrated participation interest, determined by the
Advisor to be of comparable quality to those instruments in which a fund may
invest. For certain participation interests, a fund will have the right to
demand payment, on not more than seven days' notice, for all or any part of a
fund's participation interests in the security, plus accrued interest. As to
these instruments, a Fund generally intends to exercise its right to demand
payment only upon a default under the terms of the security.


Repurchase Agreements. A Fund may invest in repurchase agreements, subject to
its investment guidelines. In a repurchase agreement, a Fund acquires ownership
of a security and simultaneously commits to resell that security to the seller,
typically a bank or broker/dealer.

A repurchase agreement provides a means for a Fund to earn income on funds for
periods as short as overnight. It is an arrangement under which the purchaser
(i.e., a Fund) acquires a security ("Obligation") and the seller agrees, at the
time of sale, to repurchase the Obligation at a specified time and price.
Securities subject to a repurchase agreement are held in a segregated account
and, as described in more detail below, the value of the account is kept at
least equal to the repurchase price on a daily basis. The repurchase price may
be higher than the purchase price, the difference being income to a Fund, or the
purchase and repurchase prices may be the same, with interest at a stated rate
due to a Fund together with the repurchase price upon repurchase. In either
case, income to a Fund is unrelated to the interest rate on the Obligation
itself. Obligations will be held by the custodian or in the Federal Reserve Book
Entry System.

It is not clear whether a court would consider the Obligation purchased by a
Fund subject to a repurchase agreement as being owned by a Fund or as being
collateral for a loan by a Fund to the seller. In the event of the commencement
of bankruptcy or insolvency proceedings with respect to the seller of the
Obligation before repurchase of the Obligation under a repurchase agreement, a
Fund may encounter delay and incur costs before being able to sell the security.
Delays may involve loss of interest or decline in price of the Obligation. If
the court characterizes the transaction as a loan and a Fund has not perfected a
security interest in the Obligation, a Fund may be required to return the
Obligation to the seller's estate and be treated as an unsecured creditor of the
seller. As an unsecured creditor, a Fund would be at risk of losing some or all
of the principal and income involved in the transaction. As with any unsecured
debt obligation purchased for a Fund, the Advisor seeks to reduce the risk of
loss through repurchase agreements by analyzing the creditworthiness of the
obligor, in this case the seller of the Obligation. Apart from the risk of
bankruptcy or insolvency proceedings, there is also the risk that the seller may
fail to repurchase the Obligation, in which case the Fund may incur a loss if
the proceeds to a Fund of the sale to a third party are less than the repurchase
price. However, if the market value (including interest) of the Obligation
subject to the repurchase agreement becomes less than the repurchase price
(including interest), a Fund will direct the seller of the Obligation to deliver
additional securities so that the market value (including interest) of all
securities subject to the repurchase agreement will equal or exceed the
repurchase price.


Reverse Repurchase Agreements. A Fund may enter into "reverse repurchase
agreements," which are repurchase agreements in which the Fund, as the seller of
the securities, agrees to repurchase such securities at an agreed time and
price. A Fund will enter into reverse repurchase agreements only when the
Advisor believes that the interest income to be earned from the investment of
the proceeds of the transaction will be greater than the interest expense of the
transaction. Such transactions may increase fluctuations in the market value of
Fund assets and its yield and may be viewed as a form of leverage.

Securities Backed by Guarantees. A Fund may invest in securities backed by
guarantees from banks, insurance companies and other financial institutions. A
money market fund's ability to maintain a stable share price may depend upon
such guarantees, which are not supported by federal deposit insurance.
Consequently, changes in the credit quality of these institutions could have an
adverse impact on securities they have guaranteed or backed, which could cause
losses to a Fund and affect its share price.

Stand-by Commitments. A stand-by commitment is a right acquired by a Fund, when
it purchases a municipal obligation from a broker, dealer or other financial
institution ("seller"), to sell up to the same principal amount of such
securities back to the seller, at a Fund's option, at a specified price.
Stand-by commitments are also known as "puts." The investment policies of DWS
Strategic High Yield Tax-Free Fund and DWS Managed Municipal Bond Fund permit
the acquisition of stand-by commitments solely to facilitate portfolio
liquidity. The exercise by a Fund of a stand-by commitment is subject to the
ability and willingness of the other party to fulfill its contractual
commitment.


Stand-by commitments acquired by a Fund will have the following features: (1)
they will be in writing and will be physically held by the Fund's custodian; (2)
the Fund's right to exercise them will be unconditional and unqualified; (3)
they will be entered into only with sellers which in the Advisor's opinion
present a minimal risk of default; (4) although stand-by commitments will not be
transferable, municipal obligations purchased subject to such commitments may be
sold to a third party at any time, even though the commitment is outstanding;
and (5) their exercise price will be (i) a Fund's acquisition cost (excluding
any accrued interest which a Fund paid on their acquisition), less any amortized
market premium or plus any amortized original issue discount during the period a
Fund owned the securities, plus (ii) all interest accrued on the securities
since the last interest payment date.

A Fund expects that stand-by commitments generally will be available without the
payment of any direct or indirect consideration. However, if necessary or
advisable, a Fund will pay for stand-by commitments, either separately in cash
or by paying a higher price for portfolio securities which are acquired subject
to the commitments.

It is difficult to evaluate the likelihood of use or the potential benefit of a
stand-by commitment. Therefore, it is expected that the Advisor will determine
that stand-by commitments ordinarily have a "fair value" of zero, regardless of
whether any direct or indirect consideration was paid. However, if the market
price of the security subject to the stand-by commitment is less than the
exercise price of the stand-by commitment, such security will ordinarily be
valued at such exercise price. Where each Fund has paid for a stand-by
commitment, its cost will be reflected as unrealized depreciation for the period
during which the commitment is held.

The Advisor understands that the Internal Revenue Service (the "Service") has
issued a favorable revenue ruling to the effect that, under specified
circumstances, a registered investment company will be the owner of tax-exempt
municipal obligations acquired subject to a put option. The Service has also
issued private letter rulings to certain taxpayers (which do not serve as
precedent for other taxpayers) to the effect that tax-exempt interest received
by a regulated investment company with respect to such obligations will be
tax-exempt in the hands of the company and may be distributed to its
shareholders as exempt-interest dividends. The Service has subsequently
announced that it will not ordinarily issue advance ruling letters as to the
identity of the true owner of property in cases involving the sale of securities
or participation interests therein if the purchaser has the right to cause the
security, or the participation interest therein, to be purchased by either the
seller or a third party. A Fund intends to take the position that it owns any
municipal obligations acquired subject to a Stand-by Commitment and that
tax-exempt interest earned with respect to such municipal obligations will be
tax-exempt in its hands. There is no assurance that the Service will agree with
such position in any particular case.

Strategic Transactions and Derivatives. A Fund may, but is not required to,
utilize various other investment strategies as described below for a variety of
purposes, such as hedging various market risks, managing the effective maturity
or duration of the Fund's portfolio, or enhancing potential gain. These
strategies may be executed through the use of derivative contracts.


In the course of pursuing these investment strategies, the Funds may purchase
and sell exchange-listed and over the counter put and call options on
securities, fixed-income indices and other financial instruments, purchase and
sell futures contracts and options thereon, and enter into various transactions
such as swaps, caps, floors or collars (collectively, all the above are called
"Strategic Transactions"). In addition, Strategic Transactions may also include
new techniques, instruments or strategies that are permitted as regulatory
changes occur. Strategic Transactions may be used without limit (except to the
extent that 80% of the Funds' net assets are required to be invested in
tax-exempt municipal securities, and as limited by the Funds' other investment
restrictions and subject to certain limits imposed by the 1940 Act) to attempt
to protect against possible changes in the market value of securities held in or
to be purchased for a Fund's portfolio resulting from securities markets
fluctuations, to protect the Fund's unrealized gains in the value of its
portfolio securities, to facilitate the sale of such securities for investment
purposes, to manage the effective maturity or duration of a Fund's portfolio, or
to establish a position in the derivatives markets as a temporary substitute for
purchasing or selling particular securities. Some Strategic Transactions may
also be used to enhance potential gain although no more than 5% of each Fund's
assets will be committed to Strategic Transactions entered into for non-hedging
purposes. Any or all of these investment techniques may be used at any time and
in any combination, and there is no particular strategy that dictates the use of
one technique rather than another, as use of any Strategic Transaction is a
function of numerous variables including market conditions. The ability of the
Funds to utilize these Strategic Transactions successfully will depend on the
Advisor's ability to predict pertinent market movements, which cannot be
assured. The Funds will comply with applicable regulatory requirements when
implementing these strategies, techniques and instruments. Strategic
Transactions will not be used to alter fundamental investment purposes and
characteristics of the Funds.


Strategic Transactions, including derivative contracts, have risks associated
with them including possible default by the other party to the transaction,
illiquidity and, to the extent the Advisor's view as to certain market movements
is incorrect, the risk that the use of such Strategic Transactions could result
in losses greater than if they had not been used. Use of put and call options
may result in losses to a Fund, force the sale or purchase of portfolio
securities at inopportune times or for prices higher than (in the case of put
options) or lower than (in the case of call options) current market values,
limit the amount of appreciation a Fund can realize on its investments or cause
a Fund to hold a security it might otherwise sell. The use of options and
futures transactions entails certain other risks. In particular, the variable
degree of correlation between price movements of futures contracts and price
movements in the related portfolio position of a Fund creates the possibility
that losses on the hedging instrument may be greater than gains in the value of
that Fund's position. In addition, futures and options markets may not be liquid
in all circumstances and certain over-the-counter options may have no markets.
As a result, in certain markets, a Fund might not be able to close out a
transaction without incurring substantial losses, if at all. Although the use of
futures and options transactions for hedging should tend to minimize the risk of
loss due to a decline in the value of the hedged position, at the same time they
tend to limit any potential gain which might result from an increase in value of
such position. Finally, the daily variation margin requirements for futures
contracts would create a greater ongoing potential financial risk than would
purchase of options, where the exposure is limited to the cost of the initial
premium. Losses resulting from the use of Strategic Transactions would reduce
net asset value, and possibly income, and such losses can be greater than if the
Strategic Transactions had not been utilized.


General Characteristics of Options. Put options and call options typically have
similar structural characteristics and operational mechanics regardless of the
underlying instrument on which they are purchased or sold. Thus, the following
general discussion relates to each of the particular types of options discussed
in greater detail below. In addition, many Strategic Transactions involving
options require segregation of Fund assets in special accounts, as described
above under "Asset Segregation."


A put option gives the purchaser of the option, upon payment of a premium, the
right to sell, and the writer the obligation to buy, the underlying security,
commodity, index, currency or other instrument at the exercise price. For
instance, a Fund's purchase of a put option on a security might be designed to
protect its holdings in the underlying instrument (or, in some cases, a similar
instrument) against a substantial decline in the market value by giving a Fund
the right to sell such instrument at the option exercise price. A call option,
upon payment of a premium, gives the purchaser of the option the right to buy,
and the seller the obligation to sell, the underlying instrument at the exercise
price. A Fund's purchase of a call option on a security, financial future,
index, currency or other instrument might be intended to protect a Fund against
an increase in the price of the underlying instrument that it intends to
purchase in the future by fixing the price at which it may purchase such
instrument. An American style put or call option may be exercised at any time
during the option period while a European style put or call option may be
exercised only upon expiration or during a fixed period prior thereto. A Fund is
authorized to purchase and sell exchange listed options and over-the-counter
options ("OTC options"). Exchange listed options are issued by a regulated
intermediary such as the Options Clearing Corporation ("OCC"), which guarantees
the performance of the obligations of the parties to such options. The
discussion below uses the OCC as an example, but is also applicable to other
financial intermediaries.

With certain exceptions, OCC issued and exchange listed options generally settle
by physical delivery of the underlying security or currency, although in the
future cash settlement may become available. Index options and Eurodollar
instruments are cash settled for the net amount, if any, by which the option is
"in-the-money" (i.e., where the value of the underlying instrument exceeds, in
the case of a call option, or is less than, in the case of a put option, the
exercise price of the option) at the time the option is exercised. Frequently,
rather than taking or making delivery of the underlying instrument through the
process of exercising the option, listed options are closed by entering into
offsetting purchase or sale transactions that do not result in ownership of the
new option.

A Fund's ability to close out its position as a purchaser or seller of an OCC or
exchange listed put or call option is dependent, in part, upon the liquidity of
the option market. Among the possible reasons for the absence of a liquid option
market on an exchange are: (i) insufficient trading interest in certain options;
(ii) restrictions on transactions imposed by an exchange; (iii) trading halts,
suspensions or other restrictions imposed with respect to particular classes or
series of options or underlying securities including reaching daily price
limits; (iv) interruption of the normal operations of the OCC or an exchange;
(v) inadequacy of the facilities of an exchange or OCC to handle current trading
volume; or (vi) a decision by one or more exchanges to discontinue the trading
of options (or a particular class or series of options), in which event the
relevant market for that option on that exchange would cease to exist, although
outstanding options on that exchange would generally continue to be exercisable
in accordance with their terms.

The hours of trading for listed options may not coincide with the hours during
which the underlying financial instruments are traded. To the extent that the
option markets close before the markets for the underlying financial
instruments, significant price and rate movements can take place in the
underlying markets that cannot be reflected in the option markets.


OTC options are purchased from or sold to securities dealers, financial
institutions or other parties ("Counterparties") through direct bilateral
agreement with the Counterparty. In contrast to exchange listed options, which
generally have standardized terms and performance mechanics, all the terms of an
OTC option, including such terms as method of settlement, term, exercise price,
premium, guarantees and security, are set by negotiation of the parties. A Fund
expects generally to enter into OTC options that have cash settlement
provisions, although it is not required to do so.

Unless the parties provide for it, there is no central clearing or guaranty
function in an OTC option. As a result, if the Counterparty fails to make or
take delivery of the security, currency or other instrument underlying an OTC
option it has entered into with a Fund or fails to make a cash settlement
payment due in accordance with the terms of that option, a Fund will lose any
premium it paid for the option as well as any anticipated benefit of the
transaction. Accordingly, the Advisor must assess the creditworthiness of each
such Counterparty or any guarantor or credit enhancement of the Counterparty's
credit to determine the likelihood that the terms of the OTC option will be
satisfied. A Fund will engage in OTC option transactions only with US government
securities dealers recognized by the Federal Reserve Bank of New York as
"primary dealers," or broker-dealers, domestic or foreign banks or other
financial institutions which have received (or the guarantors of the obligation
of which have received) a short-term credit rating of A-1 from S&P or P-1 from
Moody's or an equivalent rating from any other nationally recognized statistical
rating organization ("NRSRO") or, in the case of OTC currency transactions, are
determined to be of equivalent credit quality by the Advisor. The staff of the
SEC currently takes the position that OTC options purchased by a Fund, and
portfolio securities "covering" the amount of a Fund's obligation pursuant to an
OTC option sold by it (the cost of the sell-back plus the in-the-money amount,
if any) are illiquid, and are subject to a Fund's limitation on investing no
more than 15% of its net assets in illiquid securities.


If a Fund sells a call option, the premium that it receives may serve as a
partial hedge, to the extent of the option premium, against a decrease in the
value of the underlying securities or instruments in its portfolio or will
increase a Fund's income. The sale of put options can also provide income.


A Fund may purchase and sell call options on securities including, but not
limited to, US Treasury and agency securities, municipal obligations,
mortgage-backed securities and Eurodollar instruments that are traded on US and
foreign securities exchanges and in the over-the-counter markets, and on
securities indices and futures contracts. All calls sold by a Fund must be
"covered" (i.e., a Fund must own the securities or futures contract subject to
the call) or must meet the asset segregation requirements described below as
long as the call is outstanding. Even though a Fund will receive the option
premium to help protect it against loss, a call sold by a Fund exposes a Fund
during the term of the option to possible loss of opportunity to realize
appreciation in the market price of the underlying security or instrument and
may require a Fund to hold a security or instrument which it might otherwise
have sold.

A Fund may purchase and sell put options on securities including, but not limted
to, US Treasury and agency securities, mortgage-backed securities, municipal
obligations and Eurodollar instruments (whether or not it holds the above
securities in its portfolio) and on securities indices and futures contracts
other than futures on individual corporate debt and individual equity
securities. A Fund will not sell put options if, as a result, more than 50% of
such Fund's assets would be required to be segregated to cover its potential
obligations under such put options other than those with respect to futures and
options thereon. In selling put options, there is a risk that a Fund may be
required to buy the underlying security at a disadvantageous price above the
market price.


General Characteristics of Futures. A Fund may enter into futures contracts or
purchase or sell put and call options on such futures as a hedge against
anticipated interest rate or fixed-income market changes and for duration
management, risk management and return enhancement purposes. Futures are
generally bought and sold on the commodities exchanges where they are listed
with payment of initial and variation margin as described below. The sale of a
futures contract creates a firm obligation by the seller to deliver to the buyer
the specific type of financial instrument called for in the contract at a
specific future time for a specified price (or, with respect to certain
instruments, such as index futures and Eurodollar instruments, the net cash
amount) and a firm obligation by the buyer to deliver the specified price.
Options on futures contracts are similar to options on securities except that an
option on a futures contract gives the purchaser the right in return for the
premium paid to assume a position in a futures contract and obligates the seller
to deliver such position.


Each Fund has claimed exclusion from the definition of the term "commodity pool
operator" under the regulations of the Commodity Futures Trading Commission.
Therefore, a Fund is not subject to commodity pool operator registration and
regulation under the Commodity Exchange Act. Futures and options on futures may
be entered into for bona fide hedging, risk management (including duration
management) or other portfolio and return enhancement management purposes to the
extent consistent with the exclusion from commodity pool operator registration.
Typically, maintaining a futures contract or selling an option thereon requires
a fund to deposit with a financial intermediary as security for its obligations
an amount of cash or other specified assets (initial margin) which initially is
typically 1% to 10% of the face amount of the contract (but may be higher in
some circumstances). Additional cash or assets (variation margin) may be
required to be deposited thereafter on a daily basis as the marked to market
value of the contract fluctuates. The purchase of an option on financial futures
involves payment of a premium for the option without any further obligation on
the part of a Fund. If a Fund exercises an option on a futures contract it will
be obligated to post initial margin (and potential subsequent variation margin)
for the resulting futures position just as it would for any position. Futures
contracts and options thereon are generally settled by entering into an
offsetting transaction but there can be no assurance that the position can be
offset prior to settlement at an advantageous price, nor that delivery will
occur.

A Fund will not enter into a futures contract or related option (except for
closing transactions) if, immediately thereafter, the sum of the amount of its
initial margin and premiums on open futures contracts and options thereon would
exceed 5% of a Fund's total assets (taken at current value); however, in the
case of an option that is in-the-money at the time of the purchase, the
in-the-money amount may be excluded in calculating the 5% limitation. The
segregation requirements with respect to futures contracts and options thereon
are described above under "Asset Segregation."


Swaps, Caps, Floors and Collars. Among the Strategic Transactions into which a
Fund may enter are interest rate, index and other swaps and the purchase or sale
of related caps, floors and collars. A Fund expects to enter into these
transactions primarily to preserve a return or spread on a particular investment
or portion of its portfolio, as a duration management technique, to protect
against any increase in the price of securities a Fund anticipates purchasing at
a later date or to enhance returns. A Fund will not sell interest rate caps or
floors where it does not own securities or other instruments providing the
income stream a Fund may be obligated to pay. Interest rate swaps involve the
exchange by a Fund with another party of their respective commitments to pay or
receive interest, e.g., an exchange of floating rate payments for fixed rate
payments with respect to a notional amount of principal. An index swap is an
agreement to swap cash flows on a notional amount based on changes in the values
of the reference indices. The purchase of a cap entitles the purchaser to
receive payments on a notional principal amount from the party selling such cap
to the extent that a specified index exceeds a predetermined interest rate or
amount. The purchase of a floor entitles the purchaser to receive payments on a
notional principal amount from the party selling such floor to the extent that a
specified index falls below a predetermined interest rate or amount. A collar is
a combination of a cap and a floor that preserves a certain return within a
predetermined range of interest rates or values.

A Fund will usually enter into swaps on a net basis, i.e., the two payment
streams are netted out in a cash settlement on the payment date or dates
specified in the instrument, with a Fund receiving or paying, as the case may
be, only the net amount of the two payments. A Fund will not enter into any
swap, cap, floor or collar transaction unless, at the time of entering into such
transaction, the unsecured long-term debt of the Counterparty, combined with any
credit enhancements, is rated at least A by S&P or Moody's or has an equivalent
rating from an NRSRO or is determined to be of equivalent credit quality by the
Advisor. If there is a default by the Counterparty, a Fund may have contractual
remedies pursuant to the agreements related to the transaction. The swap market
has grown substantially in recent years with a large number of banks and
investment banking firms acting both as principals and as agents utilizing
standardized swap documentation. As a result, the swap market has become
relatively liquid. Caps, floors and collars are more recent innovations for
which standardized documentation has not yet been fully developed and,
accordingly, they are less liquid than swaps.




Tax Exempt Custodial Receipts. DWS Managed Municipal Bond Fund may purchase
tax-exempt custodial receipts (the "Receipts") which evidence ownership in an
underlying bond that is deposited with a custodian for safekeeping. Holders of
the Receipts receive all payments of principal and interest when paid on the
bonds. Receipts can be purchased in an offering or from a Counterparty
(typically an investment bank). To the extent that any Receipt is illiquid, it
is subject to the Fund's limit on illiquid securities.

Tax Exempt Pass-Through Securities. DWS Strategic High Yield Tax-Free Fund may
purchase tax exempt pass-through certificates. These represent an interest in a
pool or group of fixed-rate long-term debt obligations issued by or on behalf of
primarily not-for-profit institutions, the interest on which is exempt from
federal income taxation, including alternative minimum taxation. Such fixed-rate
long-term debt obligations may be private activity bonds issued by states,
municipalities or public authorities to provide funds, usually through a loan or
lease arrangement, to a non-profit corporation for the purpose of financing or
refinancing the construction or improvement of a facility to be used by the
non-profit corporation. Distributions on tax exempt pass-through certificates
may be adversely affected by defaults in or prepayment of the underlying debt
obligations. Certain tax exempt pass-through certificates are issued in several
classes with different levels of yields and credit protection. The Fund may
invest in lower classes of tax exempt pass-through certificates that have less
credit protection. Tax exempt pass-through certificates have limited liquidity
and certain transfer restrictions may apply. There currently is no trading
market for tax exempt pass-through certificates and there can be no assurance
that such a market will develop.


Third Party Puts. A Fund may purchase long-term fixed rate bonds that have been
coupled with an option granted by a third party financial institution allowing a
Fund at specified intervals to tender (or "put") the bonds to the institution
and receive the face value thereof (plus accrued interest). These third party
puts are available in several different forms, may be represented by custodial
receipts or trust certificates and may be combined with other features such as
interest rate swaps. A Fund receives a short-term rate of interest (which is
periodically reset), and the interest rate differential between that rate and
the fixed rate on the bond is retained by the financial institution. The
financial institution granting the option does not provide credit enhancement,
and in the event that there is a default in the payment of principal or
interest, or downgrading of a bond to below investment grade, or a loss of the
bond's tax-exempt status, the put option will terminate automatically, the risk
to a Fund will be that of holding such a long-term bond and the weighted average
maturity of that Fund's portfolio would be adversely affected.

These bonds coupled with puts may present the same tax issues as are associated
with Stand-By Commitments. As with any Stand-By Commitments acquired by a Fund,
the Fund intends to take the position that it is the owner of any municipal
obligation acquired subject to a third-party put, and that tax-exempt interest
earned with respect to such municipal obligations will be tax-exempt in its
hands. There is no assurance that the Service will agree with such position in
any particular case. Additionally, the federal income tax treatment of certain
other aspects of these investments, including the treatment of tender fees and
swap payments, in relation to various regulated investment company tax
provisions is unclear. However, the Advisor seeks to manage a Fund's portfolio
in a manner designed to minimize any adverse impact from these investments.

US Government Securities. There are two broad categories of US
Government-related debt instruments: (a) direct obligations of the US Treasury,
and (b) securities issued or guaranteed by US Government agencies.

Examples of direct obligations of the US Treasury are Treasury Bills, Notes,
Bonds and other debt securities issued by the US Treasury. These instruments are
backed by the "full faith and credit" of the United States. They differ
primarily in interest rates, the length of maturities and the dates of issuance.
Treasury bills have original maturities of one year or less. Treasury notes have
original maturities of one to ten years and Treasury bonds generally have
original maturities of greater than ten years.

Some agency securities are backed by the full faith and credit of the United
States (such as Maritime Administration Title XI Ship Financing Bonds and Agency
for International Development Housing Guarantee Program Bonds) and others are
backed only by the rights of the issuer to borrow from the US Treasury (such as
Federal Home Loan Bank Bonds and Federal National Mortgage Association Bonds),
while still others, such as the securities of the Federal Farm Credit Bank, are
supported only by the credit of the issuer. With respect to securities supported
only by the credit of the issuing agency or by an additional line of credit with
the US Treasury, there is no guarantee that the US Government will provide
support to such agencies and such securities may involve risk of loss of
principal and interest.

US Government securities may include "zero coupon" securities that have been
stripped by the US Government of their unmatured interest coupons and
collateralized obligations issued or guaranteed by a US Government agency or
instrumentality.

Interest rates on US Government obligations may be fixed or variable. Interest
rates on variable rate obligations are adjusted at regular intervals, at least
annually, according to a formula reflecting then-current specified standard
rates, such as 91-day US Treasury bill rates. These adjustments generally tend
to reduce fluctuations in the market value of the securities.

The government guarantee of the US Government securities in a Fund's portfolio
does not guarantee the net asset value of the shares of that Fund. There are
market risks inherent in all investments in securities and the value of an
investment in a Fund will fluctuate over time. Normally, the value of
investments in US Government securities varies inversely with changes in
interest rates. For example, as interest rates rise the value of investments in
US Government securities will tend to decline, and as interest rates fall the
value of a Fund's investments will tend to increase. In addition, the potential
for appreciation in the event of a decline in interest rates may be limited or
negated by increased principal prepayments with respect to certain
Mortgage-Backed Securities, such as GNMA Certificates. Prepayments of high
interest rate Mortgage-Backed Securities during times of declining interest
rates will tend to lower the return of a Fund and may even result in losses to
the Fund if some securities were acquired at a premium. Moreover, during periods
of rising interest rates, prepayments of Mortgage-Backed Securities may decline,
resulting in the extension of a Fund's average portfolio maturity. As a result,
a Fund's portfolio may experience greater volatility during periods of rising
interest rates than under normal market conditions.

When-Issued Securities. A Fund may from time to time purchase equity and debt
securities on a "when-issued," "delayed delivery" or "forward delivery" basis.
The price of such securities, which may be expressed in yield terms, is fixed at
the time the commitment to purchase is made, but delivery and payment for the
securities takes place at a later date. During the period between purchase and
settlement, no payment is made by a Fund to the issuer and no interest accrues
to a Fund. When a Fund purchases such securities, it immediately assumes the
risks of ownership, including the risk of price fluctuation. Failure to deliver
a security purchased on this basis may result in a loss or missed opportunity to
make an alternative investment.


To the extent that assets of a Fund are held in cash pending the settlement of a
purchase of securities, a Fund would earn no income. While such securities may
be sold prior to the settlement date, the Funds intend to purchase them with the
purpose of actually acquiring them unless a sale appears desirable for
investment reasons. At the time a Fund makes the commitment to purchase a
security on this basis, it will record the transaction and reflect the value of
the security in determining its net asset value. The market value of the
securities may be more or less than the purchase price.


Master/feeder Fund Structure. The Board of Trustees has the discretion to retain
the current distribution arrangement for a Fund while investing in a master fund
in a master/feeder fund structure as described below.

A master/feeder fund structure is one in which a fund (a "feeder fund"), instead
of investing directly in a portfolio of securities, invests most or all of its
investment assets in a separate registered investment company (the "master
fund") with substantially the same investment objective and policies as the
feeder fund. Such a structure permits the pooling of assets of two or more
feeder funds, preserving separate identities or distribution channels at the
feeder fund level. Based on the premise that certain of the expenses of
operating an investment portfolio are relatively fixed, a larger investment
portfolio may eventually achieve a lower ratio of operating expenses to average
net assets. An existing investment company is able to convert to a feeder fund
by selling all of its investments, which involves brokerage and other
transaction costs and realization of a taxable gain or loss, or by contributing
its assets to the master fund and avoiding transaction costs and, if proper
procedures are followed, the realization of taxable gain or loss.


Portfolio Holdings

In addition to the public disclosure of Fund portfolio holdings through required
SEC quarterly filings, a Fund may make its portfolio holdings information
publicly available on the DWS Funds' Web site as described in each Fund's
prospectus. Each Fund does not disseminate non-public information about
portfolio holdings except in accordance with policies and procedures adopted by
each Fund.

Each Fund's procedures permit non-public portfolio holdings information to be
shared with Deutsche Asset Management and its affiliates (collectively "DeAM"),
subadvisors, if any, custodians, independent registered public accounting firms,
attorneys, officers and trustees and each of their respective affiliates and
advisers who require access to this information to fulfill their duties to each
Fund and are subject to the duties of confidentiality, including the duty not to
trade on non-public information, imposed by law or contract, or by each Fund's
procedures. This non-public information may also be disclosed, subject to the
requirements described below, to certain third parties, such as securities
lending agents, financial printers, proxy voting firms, mutual fund analysts and
rating and tracking agencies, or to shareholders in connection with in-kind
redemptions (collectively, "Authorized Third Parties").


Prior to any disclosure of each Fund's non-public portfolio holdings information
to Authorized Third Parties, a person authorized by each Fund's Trustees must
make a good faith determination in light of the facts then known that a Fund has
a legitimate business purpose for providing the information, that the disclosure
is in the best interest of each Fund, and that the recipient assents or
otherwise has a duty to keep the information confidential and to not trade based
on the information received while the information remains non-public. No
compensation is received by each Fund or DeAM for disclosing non-public holdings
information. Periodic reports regarding these procedures will be provided to
each Fund's Trustees.


Portfolio holdings information distributed by the trading desks of DeAM or a
subadvisor for the purpose of facilitating efficient trading of such securities
and receipt of relevant research is not subject to the foregoing requirements.
Non-public portfolio holding information does not include portfolio
characteristics (other than holdings or subsets of holdings) about each Fund and
information derived therefrom, including, but not limited to, how each Fund's
investments are divided among various sectors, industries, countries, value and
growth stocks, bonds, currencies and cash, types of bonds, bond maturities,
duration, bond coupons and bond credit quality ratings so long as the identity
of each Fund's holdings could not be derived from such information.

Registered investment companies that are subadvised by DeAM may be subject to
different portfolio holdings disclosure policies, and neither DeAM nor a Fund's
Trustees exercise control over such policies. In addition, separate account
clients of DeAM have access to their portfolio holdings and are not subject to a
fund's portfolio holdings disclosure policy. The portfolio holdings of some of
the funds subadvised by DeAM and some of the separate accounts managed by DeAM
may substantially overlap with the portfolio holdings of a fund.


DeAM also manages certain unregistered commingled trusts and creates model
portfolios, the portfolio holdings of which may substantially overlap with the
portfolio holdings of a fund. To the extent that investors in these commingled
trusts or recipients of model portfolio holdings information may receive
portfolio holdings information of their trust or of a model portfolio on a
different basis from that on which fund portfolio holdings information is made
public, DeAM has implemented procedures reasonably designed to encourage such
investors and recipients to keep such information confidential, and to prevent
those investors from trading on the basis of non-public holdings information.

There is no assurance that a fund's policies and procedures with respect to the
disclosure of portfolio holdings information will protect a fund from the
potential misuse of portfolio holdings information by those in possession of
that information.



                             MANAGEMENT OF THE FUNDS

Investment Advisor


DIMA, which is part of DeAM, is the investment advisor for each Fund, with
headquarters at 345 Park Avenue, New York, New York. Under the supervision of
the Board of Trustees of the Funds, DIMA makes the Funds' investment decisions,
buys and sells securities for the Funds and conducts research that leads to
these purchase and sale decisions. The Advisor manages each Fund's daily
investment and business affairs subject to the policies established by each
Trust's Board of Trustees. The Advisor is also responsible for selecting brokers
and dealers and for negotiating brokerage commissions and dealer charges. The
Advisor's duties are described in more detail below. DIMA, together with its
predecessors, has more than 80 years of experience managing mutual funds and
provides a full range of investment advisory services to institutional and
retail clients.

DeAM is the marketing name in the US for the asset management activities of
Deutsche Bank AG, DIMA, Deutsche Bank Trust Company Americas and DWS Trust
Company. DeAM is a global asset management organization that offers a wide range
of investing expertise and resources, including hundreds of portfolio managers
and analysts and an office network that reaches the world's major investment
centers. This well-resourced global investment platform brings together a wide
variety of experience and investment insight, across industries, regions, asset
classes and investing styles. DIMA is an indirect, wholly-owned subsidiary of
Deutsche Bank AG. Deutsche Bank AG is a major global banking institution that is
engaged in a wide range of financial services, including investment management,
mutual fund, retail, private and commercial banking, investment banking and
insurance. DWS Investments is part of Deutsche Bank's Asset Management division
and, within the US, represents the retail asset management activities of
Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Investment
Management Americas Inc. and DWS Trust Company.


The Trustees have overall responsibility for the management of each Fund under
Massachusetts law.

The Advisor provides investment counsel for many individuals and institutions,
including insurance companies, industrial corporations, and financial and
banking organizations, as well as providing investment advice to open- and
closed-end SEC registered funds.

In certain cases the investments for a Fund are managed by the same individuals
who manage one or more other mutual funds advised by the Advisor that have
similar names, objectives and investment styles. You should be aware that a Fund
is likely to differ from these other mutual funds in size, cash flow pattern and
tax matters. Accordingly, the holdings and performance of a Fund can be expected
to vary from those of the other mutual funds.

Certain investments may be appropriate for a Fund and also for other clients
advised by the Advisor. Investment decisions for a Fund and other clients are
made with a view to achieving their respective investment objectives and after
consideration of such factors as their current holdings, availability of cash
for investment and the size of their investments generally. Frequently, a
particular security may be bought or sold for only one client or in different
amounts and at different times for more than one but less than all clients.
Likewise, a particular security may be bought for one or more clients when one
or more other clients are selling the security. In addition, purchases or sales
of the same security may be made for two or more clients on the same day. In
such event, such transactions will be allocated among the clients in a manner
believed by the Advisor to be equitable to each. In some cases, this procedure
could have an adverse effect on the price or amount of the securities purchased
or sold by a Fund. Purchase and sale orders for a Fund may be combined with
those of other clients of the Advisor in the interest of achieving the most
favorable net results to a Fund.

Each Fund is managed by a team of investment professionals who each play an
important role in a Fund's management process. Team members work together to
develop investment strategies and select securities for a Fund's portfolio. This
team works for the Advisor or its affiliates and is supported by a large staff
of economists, research analysts, traders and other investment specialists. The
Advisor or its affiliates believe(s) its team approach benefits Fund investors
by bringing together many disciplines and leveraging its extensive resources.
Team members with primary responsibility for management of the Funds, as well as
team members who have other ongoing management responsibilities for each Fund,
are identified in each Fund's prospectus, as of the date of the Fund's
prospectus. Composition of the team may change over time, and Fund shareholders
and investors will be notified of changes affecting individuals with primary
Fund management responsibility.


Investment Management Agreement

In 2006, each Board and each Fund's shareholders approved an amended and
restated investment management agreement (the "Investment Management
Agreements") for its respective Fund. Pursuant to the Investment Management
Agreements, the Advisor provides continuing investment management of the assets
of each Fund. In addition to the investment management of the assets of each
Fund, the Advisor determines the investments to be made for each Fund, including
what portion of its assets remain uninvested in cash or cash equivalents, and
with whom the orders for investments are placed, consistent with a Fund's
policies as stated in its Prospectuses and SAI, or as adopted by a Fund's Board.
The Advisor will also monitor, to the extent not monitored by a Fund's
administrator or other agent, a Fund's compliance with its investment and tax
guidelines and other compliance policies.

The Advisor provides assistance to a Fund's Board in valuing the securities and
other instruments held by a Fund, to the extent reasonably required by valuation
policies and procedures that may be adopted by a Fund.

Pursuant to the Investment Management Agreements, (unless otherwise provided in
the agreement or as determined by a Fund's Board and to the extent permitted by
applicable law), the Advisor pays the compensation and expenses of all the Board
members, officers, and executive employees of a Fund, including a Fund's share
of payroll taxes, who are affiliated persons of the Advisor.

The Investment Management Agreements provide that a Fund is generally
responsible for expenses that include: fees payable to the Advisor; outside
legal, accounting or auditing expenses, including with respect to expenses
related to negotiation, acquisition or distribution of portfolio investments;
maintenance of books and records that are maintained by the Fund, the Fund's
custodian, or other agents of the Fund; taxes and governmental fees; fees and
expenses of the Fund's accounting agent, custodian, sub-custodians,
depositories, transfer agents, dividend reimbursing agents and registrars;
payment for portfolio pricing or valuation services to pricing agents,
accountants, bankers and other specialists, if any; brokerage commissions or
other costs of acquiring or disposing of any portfolio securities or other
instruments of the Fund; and litigation expenses and other extraordinary
expenses not incurred in the ordinary course of the Fund's business.

The Investment Management Agreements allow the Advisor to delegate any of its
duties under the Investment Management Agreements to a subadvisor, subject to a
majority vote of a Board of the Fund, including a majority of a Board who are
not interested persons of a Fund, and, if required by applicable law, subject to
a majority vote of a Fund's shareholders.

The Investment Management Agreements provide that the Advisor shall not be
liable for any error of judgment or mistake of law or for any loss suffered by a
Fund in connection with matters to which the Investment Management Agreement
relates, except a loss resulting from willful malfeasance, bad faith or gross
negligence on the part of the Advisor in the performance of its duties or from
reckless disregard by the Advisor of its obligations and duties under the
Investment Management Agreements. The Investment Management Agreements may be
terminated at any time, without payment of penalty, by either party or by vote
of a majority of the outstanding voting securities of a Fund on 60 days' written
notice.


For all services provided under the Investment Management Agreements, each Fund
pays the Advisor a fee, computed daily and paid monthly, at the annual rate as a
percentage of net assets shown below:

                                  Fund                Management Fee Rate
                                  ----                -------------------


DWS Strategic High Yield Tax-Free Fund*              0.565% to $300 million
                                                    0.515% next $200 million
                                                    0.490% next $500 million
                                                        0.470% thereafter


DWS Intermediate Tax/AMT Free Fund                           0.315%

DWS Managed Municipal Bond Fund                      0.365% to $250 million
                                                    0.345% next $750 million
                                                    0.325% next $1.5 billion
                                                    0.315% next $2.5 billion
                                                    0.295% next $2.5 billion
                                                    0.275% next $2.5 billion
                                                    0.255% next $2.5 billion
                                                       0.235% thereafter


*         Prior to October 1, 2007, DWS Strategic High Yield Tax-Free Fund paid
          the Advisor a fee computed daily and paid monthly, at an annual rate
          as a percentage of net assets, at 0.565% to $300 million, 0.515% next
          $200 million and 0.490% thereafter.


The advisory fees paid by each Fund for its last three fiscal years ended May 31
are shown in the table below:

<TABLE>
<CAPTION>
Fund                                                   2008             2007*             2006*
----                                                   ----             -----             -----


<S>                                                 <C>               <C>               <C>
DWS Strategic High Yield Tax-Free Fund              $5,337,875        $4,649,149        $5,145,687

DWS Managed Municipal Bond Fund                    $12,333,086       $13,116,652       $17,556,013

DWS Intermediate Tax/AMT Free Fund                  $1,987,353        $2,105,572        $3,062,216
</TABLE>

*        Amounts reflect payments to the Advisor under a Fund's prior Investment
         Management Agreement.

Through September 30, 2009, the Advisor has contractually agreed to waive all or
a portion of its management fee and reimburse or pay operating expenses of the
DWS Strategic High Yield Tax-Free Fund to the extent necessary to maintain the
Fund's total annual operating expenses at 0.913% for Class A shares, 1.663% for
both Class B and Class C shares and 0.663% for Institutional Class shares. These
limitations exclude organizational and offering expenses, taxes, brokerage,
interest expense and extraordinary expenses.

In 2006, the Boards and each Fund's shareholders approved a new subadvisor
approval policy for its respective Fund (the "Subadvisor Approval Policy"). The
Subadvisor Approval Policy permits the Advisor, subject to the approval of the
Board, including a majority of its independent board members, to appoint and
replace subadvisors and to amend sub-advisory contracts without obtaining
shareholder approval. Under the Subadvisor Approval Policy, the Board, including
its independent board members, will continue to evaluate and approve all new
sub-advisory contracts between the Advisor and any subadvisor, as well as all
changes to any existing sub-advisory contract. A Fund cannot implement the
Subadvisor Approval Policy without the SEC either adopting revisions to current
rules (as it proposed to do in October 2003) or granting a Fund exemptive relief
from existing rules. A Fund and the Advisor would be subject to certain
conditions imposed by the SEC (and certain conditions that may be imposed in the
future within either exemptive relief or a rule) to ensure that the interests of
a Fund and its shareholders are adequately protected whenever the Advisor acts
under the Subadvisor Approval Policy, including any shareholder notice
requirements.


Compensation of Portfolio Managers


Portfolio managers are eligible for total compensation comprised of base salary
and discretionary incentive compensation.

Base Salary - Base salary generally represents a smaller percentage of portfolio
managers' total compensation than discretionary incentive compensation. Base
salary is linked to job function, responsibilities and financial services
industry peer comparison through the use of extensive market data surveys.

Discretionary Incentive Compensation - Generally, discretionary incentive
compensation comprises a greater proportion of total compensation as a portfolio
manager's seniority and compensation levels increase. Discretionary incentive
compensation is determined based on an analysis of a number of factors,
including among other things, the performance of Deutsche Bank, the performance
of the Asset Management division, and the employee's individual contribution. In
evaluating individual contribution, management will consider a combination of
quantitative and qualitative factors. A portion of the portfolio manager's
discretionary incentive compensation may be delivered in long-term equity
programs (usually in the form of Deutsche Bank equity) (the "Equity Plan"). Top
performing portfolio managers may earn discretionary incentive compensation that
is a multiple of their base salary.

o        The quantitative analysis of a portfolio manager's individual
         performance is based on, among other factors, performance of all of the
         accounts managed by the portfolio manager (which includes the fund and
         any other accounts managed by the portfolio manager) over a one-,
         three-, and five-year period relative to the appropriate Morningstar
         and Lipper peer group universes and/or benchmark index(es) with respect
         to each account. Additionally, the portfolio manager's
         retail/institutional asset mix is weighted, as appropriate for
         evaluation purposes. Generally the benchmark index used is a benchmark
         index set forth in the fund's prospectus to which the fund's
         performance is compared. Additional or different appropriate peer group
         or benchmark indices may also be used. Primary weight is given to
         pre-tax portfolio performance over three-year and five-year time
         periods (adjusted as appropriate if the portfolio manager has served
         for less than five years) with lesser consideration given to portfolio
         performance over a one-year period. The increase or decrease in a
         fund's assets due to the purchase or sale of fund shares is not
         considered a material factor.

o        The qualitative analysis of a portfolio manager's individual
         performance is based on, among other things, the results of an annual
         management and internal peer review process, and management's
         assessment of overall portfolio manager contributions to investor
         relations, the investment process and overall performance (distinct
         from fund and other account performance). Other factors, including
         contributions made to the investment team, as well as adherence to
         Compliance Policies and Procedures, Risk Management procedures, the
         firm's Code of Ethics and "living the values" of the Advisor are also
         factors.

The quantitative analysis of a portfolio manager's performance is given more
weight in determining discretionary incentive compensation than the qualitative
portion.

Certain portfolio managers may also participate in the Equity Plan. The amount
of equity awarded under the long-term equity programs is generally based on the
individual's total compensation package and may comprise from 0% to 30% of the
total compensation award. As discretionary incentive compensation increases, the
percentage of compensation awarded in Deutsche Bank equity also increases.
Portfolio managers may receive a portion of their equity compensation in the
form of shares in the proprietary mutual funds that they manage or support.

Fund Ownership of Portfolio Managers

The following table shows the dollar range of shares owned beneficially and of
record by each member of each Fund's portfolio management team in each Fund as
well as in all DWS Funds as a group (i.e., those funds advised by Deutsche Asset
Management or its affiliates), including investments by their immediate family
members sharing the same household and amounts invested through retirement and
deferred compensation plans. This information is provided as of the Fund's most
recent fiscal year end.

DWS Intermediate Tax/AMT Free Fund




<TABLE>
<CAPTION>
                                                 Dollar Range of                    Dollar Range of All DWS
Name of Portfolio Manager                       Fund Shares Owned                      Fund Shares Owned
-------------------------                       -----------------                      -----------------


<S>                                                     <C>                          <C>        <C>
Ashton Goodfield                                        $0                           $500,001 - $1,000,000
Philip Condon                                   $10,001 - $50,000                       Over $1,000,000
Shelly Deitert                                          $0                            $100,001 - $500,000


DWS Managed Municipal Bond Fund

                                                 Dollar Range of                    Dollar Range of All DWS
Name of Portfolio Manager                       Fund Shares Owned                      Fund Shares Owned
-------------------------                       -----------------                      -----------------


Ashton Goodfield                                        $0                           $500,001 - $1,000,000
Eleanor R. Lynch                                   $1 - $10,000                       $100,001 - $500,000
Matthew Caggiano                                        $0                            $100,001 - $500,000
Philip Condon                                   $10,001 - $50,000                       Over $1,000,000



DWS Strategic High Yield Tax-Free Fund


                                                 Dollar Range of                    Dollar Range of All DWS
Name of Portfolio Manager                       Fund Shares Owned                      Fund Shares Owned
-------------------------                       -----------------                      -----------------


Philip Condon                                   $10,001 - $50,000                       Over $1,000,000
Rebecca Flinn                                           $0                           $500,001 - $1,000,000
</TABLE>


Conflicts of Interest


In addition to managing the assets of each Fund, each Fund's portfolio managers
may have responsibility for managing other client accounts of the Advisor or its
affiliates. The tables below show, for each portfolio manager, the number and
asset size of (1) SEC registered investment companies (or series thereof) other
than the Fund, (2) pooled investment vehicles that are not registered investment
companies and (3) other accounts (e.g., accounts managed for individuals or
organizations) managed by each portfolio manager. Total assets attributed to
each portfolio manager in the tables below include total assets of each account
managed by them, although the manager may only manage a portion of such
account's assets. The tables also show the number of performance based fee
accounts, as well as the total assets of the accounts for which the advisory fee
is based on the performance of the account. This information is provided as of
the Fund's most recent fiscal year end.

DWS Intermediate Tax/AMT Free Fund


Other SEC Registered Investment Companies Managed:


<TABLE>
<CAPTION>
                                                                                 Number of
                                       Number of        Total Assets of         Investment          Total Assets of
                                      Registered          Registered         Company Accounts        Performance-
                                      Investment          Investment         with Performance-         Based Fee
Name of Portfolio Manager              Companies           Companies             Based Fee             Accounts
-------------------------              ---------           ---------             ---------             --------

<S>                                         <C>       <C>                            <C>                  <C>
Ashton Goodfield                            3         $4,438,821,224                 0                    $0
Philip Condon                               8         $7,571,247,326                 0                    $0
Shelly Deitert                              1         $1,721,781,645                 0                    $0


Other Pooled Investment Vehicles Managed:


                                                                              Number of Pooled
                                                                                 Investment
                                      Number of                               Vehicle Accounts      Total Assets of
                                       Pooled          Total Assets of              with             Performance-
                                     Investment       Pooled Investment         Performance-           Based Fee
Name of Portfolio Manager             Vehicles             Vehicles              Based Fee             Accounts
-------------------------             --------             --------              ---------             --------

Ashton Goodfield                            1              $9,959,046                0                    $0
Philip Condon                               1              $9,959,046                0                    $0
Shelly Deitert                              0                      $0                0                    $0


Other Accounts Managed:


                                                                                 Number of
                                                                               Other Accounts       Total Assets of
                                      Number of                                     with             Performance-
                                        Other          Total Assets of          Performance-           Based Fee
Name of Portfolio Manager             Accounts          Other Accounts           Based Fee             Accounts
-------------------------             --------          --------------           ---------             --------

Ashton Goodfield                          0                   $0                     0                    $0
Philip Condon                             0                   $0                     0                    $0
Shelly Deitert                            0                   $0                     0                    $0


DWS Managed Municipal Bond Fund

Other SEC Registered Investment Companies Managed:


                                                                                 Number of
                                      Number of         Total Assets of         Investment          Total Assets of
                                      Registered          Registered         Company Accounts        Performance-
                                      Investment          Investment         with Performance-         Based Fee
Name of Portfolio Manager             Companies            Companies             Based Fee             Accounts
-------------------------             ---------            ---------             ---------             --------

Ashton Goodfield                          3             $1,432,304,730               0                    $0
Eleanor R. Lynch                          2             $1,263,119,583               0                    $0
Matthew Caggiano                          2             $1,181,403,709               0                    $0
Philip Condon                             8             $4,564,730,832               0                    $0


Other Pooled Investment Vehicles Managed:


                                                                              Number of Pooled
                                                                                 Investment
                                      Number of                               Vehicle Accounts      Total Assets of
                                       Pooled          Total Assets of              with             Performance-
                                     Investment       Pooled Investment         Performance-           Based Fee
Name of Portfolio Manager             Vehicles             Vehicles              Based Fee             Accounts
-------------------------             --------             --------              ---------             --------

Ashton Goodfield                          1                $9,959,046                0                    $0
Eleanor R. Lynch                          0                        $0                0                    $0
Matthew Caggiano                          1                $9,959,046                0                    $0
Philip Condon                             1                $9,959,046                0                    $0


Other Accounts Managed:


                                                                                 Number of
                                                                               Other Accounts       Total Assets of
                                      Number of                                     with             Performance-
                                        Other          Total Assets of          Performance-           Based Fee
Name of Portfolio Manager             Accounts          Other Accounts           Based Fee             Accounts
-------------------------             --------          --------------           ---------             --------

Ashton Goodfield                            0                       $0               0                    $0
Eleanor R. Lynch                            0                       $0               0                    $0
Matthew Caggiano                           15           $1,484,216,865               0                    $0
Philip Condon                               0                       $0               0                    $0



DWS Strategic High Yield Tax-Free Fund


Other SEC Registered Investment Companies Managed:


                                                                                 Number of
                                       Number of        Total Assets of         Investment          Total Assets of
                                      Registered          Registered         Company Accounts        Performance-
                                      Investment          Investment         with Performance-         Based Fee
Name of Portfolio Manager              Companies           Companies             Based Fee             Accounts
-------------------------              ---------           ---------             ---------             --------

Philip Condon                              8             $6,996,782,216              0                    $0
Rebecca Flinn                              2             $3,103,517,768              0                    $0


Other Pooled Investment Vehicles Managed:


                                                                              Number of Pooled
                                                                                 Investment
                                      Number of                               Vehicle Accounts      Total Assets of
                                       Pooled          Total Assets of              with             Performance-
                                     Investment       Pooled Investment         Performance-           Based Fee
Name of Portfolio Manager             Vehicles             Vehicles              Based Fee             Accounts
-------------------------             --------             --------              ---------             --------

Philip Condon                             1                 $9,959,046               0                    $0
Rebecca Flinn                             0                         $0               0                    $0


Other Accounts Managed:


                                                                                 Number of
                                                                               Other Accounts       Total Assets of
                                      Number of                                     with             Performance-
                                        Other          Total Assets of          Performance-           Based Fee
Name of Portfolio Manager             Accounts          Other Accounts           Based Fee             Accounts
-------------------------             --------          --------------           ---------             --------

Philip Condon                             0                   $0                     0                    $0
Rebecca Flinn                             0                   $0                     0                    $0
</TABLE>


In addition to the accounts above, an investment professional may manage
accounts in a personal capacity that may include holdings that are similar to,
or the same as, those of the Funds. The Advisor has in place a Code of Ethics
that is designed to address conflicts of interest and that, among other things,
imposes restrictions on the ability of portfolio managers and other "access
persons" to invest in securities that may be recommended or traded in the Funds
and other client accounts.

Real, potential or apparent conflicts of interest may arise when a portfolio
manager has day-to-day portfolio management responsibilities with respect to
more than one fund or account, including the following:


o        Certain investments may be appropriate for each Fund and also for other
         clients advised by the Advisor, including other client accounts managed
         by each Fund's portfolio management team. Investment decisions for each
         Fund and other clients are made with a view to achieving their
         respective investment objectives and after consideration of such
         factors as their current holdings, availability of cash for investment
         and the size of their investments generally. A particular security may
         be bought or sold for only one client or in different amounts and at
         different times for more than one but less than all clients. Likewise,
         because clients of the Advisor may have differing investment
         strategies, a particular security may be bought for one or more clients
         when one or more other clients are selling the security. The investment
         results achieved for each Fund may differ from the results achieved for
         other clients of the Advisor. In addition, purchases or sales of the
         same security may be made for two or more clients on the same day. In
         such event, such transactions will be allocated among the clients in a
         manner believed by the Advisor to be most equitable to each client,
         generally utilizing a pro rata allocation methodology. In some cases,
         the allocation procedure could potentially have an adverse effect or
         positive effect on the price or amount of the securities purchased or
         sold by each Fund. Purchase and sale orders for each Fund may be
         combined with those of other clients of the Advisor in the interest of
         achieving the most favorable net results to each Fund and the other
         clients.

o        To the extent that a portfolio manager has responsibilities for
         managing multiple client accounts, a portfolio manager will need to
         divide time and attention among relevant accounts. The Advisor attempts
         to minimize these conflicts by aligning its portfolio management teams
         by investment strategy and by employing similar investment models
         across multiple client accounts.

o        In some cases, an apparent conflict may arise where the Advisor has an
         incentive, such as a performance-based fee, in managing one account and
         not with respect to other accounts it manages. The Advisor will not
         determine allocations based on whether it receives a performance-based
         fee from the client. Additionally, the Advisor has in place supervisory
         oversight processes to periodically monitor performance deviations for
         accounts with like strategies.

o        The Advisor and its affiliates and the investment team of each Fund may
         manage other mutual funds and separate accounts on a long-short basis.
         The simultaneous management of long and short portfolios creates
         potential conflicts of interest including the risk that short sale
         activity could adversely affect the market value of the long positions
         (and vice versa), the risk arising from sequential orders in long and
         short positions, and the risks associated with receiving opposing
         orders at the same time. The Advisor has adopted procedures that it
         believes are reasonably designed to mitigate these potential conflicts
         of interest. Included in these procedures are specific guidelines
         developed to ensure fair and equitable treatment for all clients whose
         accounts are managed by each Fund's portfolio management team. The
         Advisor and the portfolio management team have established monitoring
         procedures, a protocol for supervisory reviews, as well as compliance
         oversight to ensure that potential conflicts of interest relating to
         this type of activity are properly addressed.

The Advisor is owned by Deutsche Bank AG, a multi-national financial services
company. Therefore, the Advisor is affiliated with a variety of entities that
provide, and/or engage in commercial banking, insurance, brokerage, investment
banking, financial advisory, broker-dealer activities (including sales and
trading), hedge funds, real estate and private equity investing, in addition to
the provision of investment management services to institutional and individual
investors. Since Deutsche Bank AG, its affiliates, directors, officers and
employees (the "Firm") are engaged in businesses and have interests other than
managing asset management accounts, such other activities involve real,
potential or apparent conflicts of interest. These interests and activities
include potential advisory, transactional and financial activities and other
interests in securities and companies that may be directly or indirectly
purchased or sold by the Firm for its clients' advisory accounts. These are
considerations of which advisory clients should be aware and which may cause
conflicts that could be to the disadvantage of the Advisor's advisory clients.
The Advisor has instituted business and compliance policies, procedures and
disclosures that are designed to identify, monitor and mitigate conflicts of
interest and, as appropriate, to report them to a Fund's Board.




Codes of Ethics. The Funds, the Advisor and the Funds' principal underwriter
have each adopted codes of ethics under Rule 17j-1 under the 1940 Act. Board
members, officers of the Trusts and employees of the Advisor and principal
underwriter are permitted to make personal securities transactions, including
transactions in securities that may be purchased or held by the Funds, subject
to requirements and restrictions set forth in the applicable Code of Ethics. The
Advisor's Code of Ethics contains provisions and requirements designed to
identify and address certain conflicts of interest between personal investment
activities and the interests of the Funds. Among other things, the Advisor's
Code of Ethics prohibits certain types of transactions absent prior approval,
imposes time periods during which personal transactions may not be made in
certain securities, and requires the submission of duplicate broker
confirmations and quarterly reporting of securities transactions. Additional
restrictions apply to portfolio managers, traders, research analysts and others
involved in the investment advisory process. Exceptions to these and other
provisions of the Advisor's Code of Ethics may be granted in particular
circumstances after review by appropriate personnel.


Regulatory Matters and Legal Proceedings

On December 21, 2006, DeAM settled proceedings with the SEC and the New York
Attorney General on behalf of Deutsche Asset Management, Inc. ("DAMI") and DIMA,
the investment advisors to many of the DWS Investments funds, regarding
allegations of improper trading of fund shares at DeAM and at the legacy Scudder
and Kemper organizations prior to their acquisition by DeAM in April 2002. These
regulators alleged that although the prospectuses for certain funds in the
regulators' view indicated that the funds did not permit market timing, DAMI and
DIMA breached their fiduciary duty to those funds in that their efforts to limit
trading activity in the funds were not effective at certain times. The
regulators also alleged that DAMI and DIMA breached their fiduciary duty to
certain funds by entering into certain market timing arrangements with
investors. These trading arrangements originated in businesses that existed
prior to the currently constituted DeAM organization, which came together as a
result of various mergers of the legacy Scudder, Kemper and Deutsche fund
groups, and all of the arrangements were terminated prior to the start of the
regulatory investigations that began in the summer of 2003. No current DeAM
employee approved these trading arrangements. Under the terms of the
settlements, DAMI and DIMA neither admitted nor denied any wrongdoing.

The terms of the SEC settlement, which identified improper trading in the legacy
Deutsche and Kemper mutual funds only, provide for payment of disgorgement in
the amount of $17.2 million. The terms of the settlement with the New York
Attorney General provide for payment of disgorgement in the amount of $102.3
million, which is inclusive of the amount payable under the SEC settlement, plus
a civil penalty in the amount of $20 million. The total amount payable by DeAM,
approximately $122.3 million, will be distributed to shareholders of the
affected funds in accordance with a distribution plan to be developed by a
distribution consultant. The funds' investment advisors do not believe these
amounts will have a material adverse financial impact on them or materially
affect their ability to perform under their investment management agreements
with the DWS funds. The above-described amounts are not material to Deutsche
Bank, and have already been reserved.

Among the terms of the settled orders, DeAM is subject to certain undertakings
regarding the conduct of its business in the future, including formation of a
Code of Ethics Oversight Committee to oversee all matters relating to issues
arising under the advisors' Code of Ethics; establishment of an Internal
Compliance Controls Committee having overall compliance oversight responsibility
of the advisors; engagement of an Independent Compliance Consultant to conduct a
comprehensive review of the advisors' supervisory compliance and other policies
and procedures designed to prevent and detect breaches of fiduciary duty,
breaches of the Code of Ethics and federal securities law violations by the
advisors and their employees; and commencing in 2008, the advisors shall undergo
a compliance review by an independent third party.

In addition, DeAM is subject to certain further undertakings relating to the
governance of the mutual funds, including that at least 75% of the members of
the Boards of Trustees/Directors overseeing the DWS Funds continue to be
independent of DeAM; the Chairmen of the DWS Funds' Boards of Trustees/Directors
continue to be independent of DeAM; DeAM maintain existing management fee
reductions for certain funds for a period of five years and not increase
management fees for these certain funds during this period; the funds retain a
senior officer (or independent consultants, as applicable) responsible for
assisting in the review of fee arrangements and monitoring compliance by the
funds and the investment advisors with securities laws, fiduciary duties, codes
of ethics and other compliance policies, the expense of which shall be borne by
DeAM; and periodic account statements, fund prospectuses and the mutual funds'
web site contain additional disclosure and/or tools that assist investors in
understanding the fees and costs associated with an investment in the funds and
the impact of fees and expenses on fund returns.

DeAM has also settled proceedings with the Illinois Secretary of State regarding
market timing matters. The terms of the Illinois settlement provide for investor
education contributions totaling approximately $4 million and a payment in the
amount of $2 million to the Securities Audit and Enforcement Fund.

On September 28, 2006, the SEC and the National Association of Securities
Dealers ("NASD") (now known as the Financial Industry Regulatory Authority, or
"FINRA") announced final agreements in which DIMA, Deutsche Asset Management,
Inc. ("DAMI") and DWS Scudder Distributors, Inc. (now known as DWS Investments
Distributors, Inc. ("DIDI")) settled administrative proceedings regarding
disclosure of brokerage allocation practices in connection with sales of the DWS
Funds' (now known as the DWS Investments Funds) shares during 2001-2003. The
agreements with the SEC and NASD are reflected in orders which state, among
other things, that DIMA and DAMI failed to disclose potential conflicts of
interest to the funds' Boards and to shareholders relating to DIDI's use of
certain funds' brokerage commissions to reduce revenue sharing costs to
broker-dealer firms with whom it had arrangements to market and distribute DWS
Fund shares. These directed brokerage practices were discontinued in October
2003.

Under the terms of the settlements, in which DIMA, DAMI and DIDI neither
admitted nor denied any of the regulators' findings, DIMA, DAMI and DIDI agreed
to pay disgorgement, prejudgment interest and civil penalties in the total
amount of $19.3 million. The portion of the settlements distributed to the funds
was approximately $17.8 million and was paid to the funds as prescribed by the
settlement orders based upon the amount of brokerage commissions from each fund
used to satisfy revenue sharing agreements with broker-dealers who sold fund
shares.

As part of the settlements, DIMA, DAMI and DIDI also agreed to implement certain
measures and undertakings relating to revenue sharing payments including making
additional disclosures in the funds' Prospectuses or Statements of Additional
Information, adopting or modifying relevant policies and procedures and
providing regular reporting to the fund Boards.

Additional information announced by DeAM regarding the terms of the settlements
is available at www.dws-investments.com/regulatory_settlements.

The matters alleged in the regulatory settlements described above also serve as
the general basis of a number of private class action lawsuits involving the DWS
funds. These lawsuits name as defendants various persons, including certain DWS
funds, the funds' investment advisors and their affiliates, and certain
individuals, including in some cases fund Trustees/Directors, officers, and
other parties. Each DWS fund's investment advisor has agreed to indemnify the
applicable DWS funds in connection with these lawsuits, or other lawsuits or
regulatory actions that may be filed making similar allegations.

Based on currently available information, the funds' investment advisors believe
the likelihood that the pending lawsuits will have a material adverse financial
impact on a DWS fund is remote and such actions are not likely to materially
affect their ability to perform under their investment management agreements
with the DWS funds.


                             FUND SERVICE PROVIDERS

Administrator


Each Fund entered into a new administrative services agreement with the Advisor
(the "Administrative Services Agreement"), pursuant to which the Advisor
provides administrative services to the Fund including, among others, providing
the Fund with personnel, preparing and making required filings on behalf of the
Fund, maintaining books and records for the Fund, and monitoring the valuation
of Fund securities. The services provided by the Advisor are described in more
detail below. For all services provided under the Administrative Services
Agreement, the Fund pays the Advisor a fee ("Administration Fee"), computed
daily and paid monthly, of 0.100% of each Fund's average daily net assets. For
the fiscal year ended May 31, 2007, the Advisor received an administrative fee
of $892,683 from DWS Strategic High Yield Tax-Free Fund, $4,005,286 by the DWS
Managed Municipal Bond Fund, and $668,436 from DWS Intermediate Tax/AMT Free
Fund. For the fiscal year ended May 31, 2008, the Advisor received an
administrative fee of $1,035,200 of which $98,347 is unpaid by the DWS Strategic
High Yield Tax-Free Fund, $3,756,535 of which $311,146 is unpaid by the DWS
Managed Municipal Bond Fund, and $630,906 of which $55,575 is unpaid by the DWS
Intermediate Tax/AMT Free Fund.

Under the Administrative Services Agreement, the Advisor, acting as the
Administrator, is obligated on a continuous basis to provide such administrative
services as the Board of a Fund reasonably deems necessary for the proper
administration of a Fund. The Advisor provides a Fund with personnel; arranges
for the preparation and filing of each Fund's tax returns; prepares and submits
reports and meeting materials to the Board and the shareholders; prepares and
files updates to each Fund's prospectus and SAI as well as other reports
required to be filed by the SEC; maintains a Fund's records; provides a Fund
with office space, equipment and services; supervises, negotiates the contracts
of and monitors the performance of third parties contractors; oversees the
tabulation of proxies; monitors the valuation of portfolio securities and
monitors compliance with Board-approved valuation procedures; assists in
establishing the accounting and tax policies of a Fund; assists in the
resolution of accounting issues that may arise with respect to a Fund;
establishes and monitors a Fund's operating expense budgets; reviews and
processes a Fund's bills; assists in determining the amount of dividends and
distributions available to be paid by a Fund, prepares and arranges dividend
notifications and provides information to agents to effect payments thereof;
provides to the Board periodic and special reports; provides assistance with
investor and public relations matters; and monitors the registration of shares
under applicable federal and state law. The Advisor also performs certain fund
accounting services under the Administrative Services Agreement. The
Administrative Services Agreement provides that the Advisor will not be liable
under the Administrative Services Agreement except for willful misfeasance, bad
faith or negligence in the performance of its duties or from the reckless
disregard by it of its duties and obligations thereunder.


Pursuant to an agreement between the Administrator and State Street Bank and
Trust Company ("SSB"), the Administrator has delegated certain administrative
functions to SSB. The costs and expenses of such delegation are borne by the
Administrator, not by the Fund.

Pursuant to DeAM procedures approved by the Boards on behalf of the DWS funds,
proof of claim forms are routinely filed on behalf of the DWS funds by a third
party service provider, with certain limited exceptions. The Boards of the DWS
funds receive periodic reports regarding the implementation of these procedures.


Distributor

Pursuant to each Underwriting and Distribution Services Agreement ("Distribution
Agreement"), DWS Investments Distributors, Inc. ("DIDI" or the "Distributor"),
222 South Riverside Plaza, Chicago, Illinois 60606, an affiliate of the Advisor,
is the principal underwriter and distributor for the Class A, Class B, Class C
and Institutional Class shares of each Fund and acts as agent of each Fund in
the continuous offering of its Shares. The Distribution Agreement will remain in
effect from year to year only if its continuance is approved for each class at
least annually by a vote of the Board members of a Fund, including the Trustees
who are not interested persons of a Fund and who have no direct or indirect
financial interest in the Distribution Agreement.

Each Distribution Agreement automatically terminates in the event of its
assignment and may be terminated for a class at any time without penalty by each
Fund or by DIDI upon 60 days' notice. Termination by each Fund with respect to a
class may be by vote of (i) a majority of the Board members who are not
interested persons of each Fund and who have no direct or indirect financial
interest in the Distribution Agreement, or (ii) a "majority of the outstanding
voting securities" of the class of each Fund, as defined under the 1940 Act. All
material amendments must be approved by the Board of Trustees in the manner
described above with respect to the continuation of the Distribution Agreement.
The provisions concerning continuation, amendment and termination of a
Distribution Agreement are on a series by series and class by class basis.

DIDI bears all of its expenses of providing services pursuant to the
Distribution Agreement, including the payment of any commissions. The Fund pays
the cost for the prospectus and shareholder reports to be typeset and printed
for existing shareholders, and DIDI, as principal underwriter, pays for the
printing and distribution of copies thereof used in connection with the offering
of shares to prospective investors. DIDI also pays for supplementary sales
literature and advertising costs. As indicated under "Purchase of Shares," DIDI
retains the sales charge upon the purchase of Class A shares and pays or allows
concessions or discounts to firms for the sale of the Funds' shares. DIDI
receives no compensation from the funds as principal underwriter for Class A and
Institutional shares. DIDI receives compensation from the Funds as principal
underwriter for Class B and Class C shares.

Shareholder and administrative services are provided to each Fund on behalf of
Class A, Class B and Class C shareholders under a Shareholder Services Agreement
(the "Services Agreement") with DIDI. The Services Agreement continues in effect
from year to year so long as such continuance is approved for the Fund at least
annually by a vote of the Board of the applicable Fund, including the Board
members who are not interested persons of the Fund and who have no direct or
indirect financial interest in the Services Agreement. The Services Agreement
automatically terminates in the event of its assignment and may be terminated at
any time without penalty by the Fund or by DIDI upon 60 days' notice.
Termination with respect to the Class A, B or C shares of a Fund may be by a
vote of (i) the majority of the Board members of the Fund who are not interested
persons of the Fund and who have no direct or indirect financial interest in the
Services Agreement, or (ii) a "majority of the outstanding voting securities" of
the Class A, B or C shares, respectively, as defined under the 1940 Act. The
Services Agreement may not be amended for a class to increase materially the fee
to be paid by the Fund without approval of a majority of the outstanding voting
securities of such class of the Fund, and all material amendments must in any
event be approved by the Board of Trustees in the manner described above with
respect to the continuation of the Services Agreement.

Under the Services Agreement, DIDI may provide or appoint various broker-dealer
firms and other service or administrative firms ("firms") to provide information
and services to investors in a Fund. Typically, DIDI appoints firms that provide
services and facilities for their customers or clients who are investors in a
Fund. Firms appointed by DIDI provide such office space and equipment, telephone
facilities and personnel as is necessary or beneficial for providing information
and services to their clients. Such services and assistance may include, but are
not limited to, establishing and maintaining accounts and records, processing
purchase and redemption transactions, answering routine inquiries regarding a
Fund, providing assistance to clients in changing dividend and investment
options, account designations and addresses and such other administrative
services as may be agreed upon from time to time and permitted by applicable
statute, rule or regulation.

DIDI bears all of its expenses of providing those services pursuant to the
Services Agreement, including the payment of a service fee to firms (as defined
above). As indicated under the Rule 12b-1 Plan, DIDI receives compensation from
the Funds for its services under the Services Agreement.


Rule 12b-1 Plans


Each Fund has adopted a plan pursuant to Rule 12b-1 under the 1940 Act (each a
"Rule 12b-1 Plan") that provides for fees payable as an expense of the Class B
shares and Class C shares that are used by DIDI to pay for distribution services
for those classes. Pursuant to each Rule 12b-1 Plan, shareholder and
administrative services are provided to the applicable Fund on behalf of its
Class A, B and C shareholders under each Fund's Services Agreement with DIDI.
Because 12b-1 fees are paid out of Fund assets on an ongoing basis, they will,
over time, increase the cost of an investment and may cost more than other types
of sales charges.

The Rule 12b-1 distribution plans for Class B and Class C shares provide
alternative methods for paying sales charges and may help funds grow or maintain
asset levels to provide operational efficiencies and economies of scale. Rule
12b-1 service plans provide compensation to DIDI or intermediaries for
post-sales servicing. Since each Distribution Agreement provides for fees
payable as an expense of the Class B shares and the Class C shares that are used
by DIDI to pay for distribution and services for those classes, the agreement is
approved and reviewed separately for the Class B shares and the Class C shares
in accordance with Rule 12b-1 under the 1940 Act, which regulates the manner in
which an investment company may, directly or indirectly, bear the expenses of
distributing its shares. The Distribution Agreement may not be amended to
increase the fee to be paid by a Fund with respect to a class without approval
by a majority of the outstanding voting securities of such class of the Fund.
Similarly, the Services Agreement is approved and reviewed separately for the
Class A shares, Class B shares and Class C shares in accordance with Rule 12b-1.

If a Rule 12b-1 Plan is terminated in accordance with its terms, the obligation
of the applicable Fund to make payments to DIDI pursuant to the Rule 12b-1 Plan
will cease and the Fund will not be required to make any payments not previously
accrued past the termination date. Thus, there is no legal obligation for a Fund
to pay any expenses incurred by DIDI other than fees previously accrued and
payable under a Rule 12b-1 Plan, if for any reason the Rule 12b-1 Plan is
terminated in accordance with its terms. Future fees under the Rule 12b-1 Plan
may or may not be sufficient to cover DIDI for its expenses incurred. On the
other hand, under certain circumstances, DIDI might collect in the aggregate
over certain periods more in fees under the Rule 12b-1 Plan than it has expended
over that same period in providing distribution services for a Fund. In
connection with Class B shares, for example, if shares of a Fund were to
appreciate (resulting in greater asset base against which Rule 12b-1 fees are
charged) and sales of the Fund's shares were to decline (resulting in lower
expenditures by DIDI under the Rule 12b-1 Plan), fees payable could exceed
expenditures. This may also happen over certain periods shorter than the life of
the Rule 12b-1 Plan simply due to the timing of expenses incurred by DIDI that
is not matched to the timing of revenues received. As a result, if DIDI's
expenses are less than the Rule 12b-1 fees, DIDI will retain its full fees and
make a profit.


Distribution Services


Class B and Class C Shares. For its services under the Distribution Agreement,
DIDI receives a fee from each Fund under its Rule 12b-1 Plan, payable monthly,
at the annual rate of 0.75% of average daily net assets of the Fund attributable
to its Class B shares. This fee is accrued daily as an expense of Class B
shares. DIDI also receives any contingent deferred sales charges paid with
respect to Class B shares. DIDI currently compensates firms for sales of Class B
shares at a commission rate of 3.75%.

For its services under the Distribution Agreement, DIDI receives a fee from each
Fund under its Rule 12b-1 Plan, payable monthly, at the annual rate of 0.75% of
average daily net assets of the Fund attributable to Class C shares. This fee is
accrued daily as an expense of Class C shares. DIDI currently advances to firms
the first year distribution fee at a rate of 0.75% of the purchase price of
Class C shares except that DIDI does not advance the first year distribution fee
to firms for sales of Class C shares to employer-sponsored employee benefit
plans using the OmniPlus subaccount record keeping system made available through
ADP, Inc. under an alliance with DIDI and its affiliates. For periods after the
first year, DIDI currently pays firms for sales of Class C shares a distribution
fee, payable quarterly, at an annual rate of 0.75% of net assets attributable to
Class C shares maintained and serviced by the firm. This fee continues until
terminated by DIDI or the applicable Fund. DIDI also receives any contingent
deferred sales charges paid with respect to Class C shares.


Shareholder Services


Class A, Class B and Class C Shares. For its services under the Services
Agreement, DIDI receives a shareholder services fee from each Fund under a Rule
12b-1 Plan, payable monthly, at an annual rate of up to 0.25% of the average
daily net assets of Class A, B and C shares of that Fund.

With respect to Class A Shares of a Fund, DIDI pays each firm a service fee,
payable quarterly, at an annual rate of up to 0.25% of the net assets in Fund
accounts that it maintains and services attributable to Class A Shares of a
Fund, commencing with the month after investment.

With respect to Class B and Class C Shares of a Fund, DIDI currently advances to
firms the first-year service fee at a rate of up to 0.25% of the purchase price
of such shares except that DIDI does not advance the first year service fee to
firms for sales of Class C shares to employer-sponsored employee benefit plans
using the OmniPlus subaccount record keeping system made available through ADP,
Inc. under an alliance with DIDI and its affiliates. For periods after the first
year, DIDI currently intends to pay firms a service fee at a rate of up to 0.25%
(calculated monthly and paid quarterly) of the net assets attributable to Class
B and Class C shares of the Fund maintained and serviced by the firm. Firms to
which service fees may be paid include affiliates of DIDI. In addition DIDI may,
from time to time, pay certain firms from it own resources additional amounts
for ongoing administrative services and assistance provided to their customers
and clients who are shareholders of a Fund.

DIDI also may provide some of the above services and may retain any portion of
the fee under the Services Agreement not paid to firms to compensate itself for
shareholder or administrative functions performed for a Fund. Currently, the
shareholder services fee payable to DIDI is payable at an annual rate of up to
0.25% of net assets based upon Fund assets in accounts for which a firm provides
administrative services and at the annual rate of 0.15% of net assets based upon
Fund assets in accounts for which there is no firm of record (other than DIDI)
listed on a Fund's records. The effective shareholder services fee rate to be
charged against all assets of each Fund while this procedure is in effect will
depend upon the proportion of Fund assets that is held in accounts for which a
firm of record provides shareholder services. The Board of each Fund, in its
discretion, may approve basing the fee to DIDI at the annual rate of 0.25% on
all Fund assets in the future.




Expenses of the Funds paid in connection with the Rule 12b-1 Plans for each
class of shares are set forth below.


<TABLE>
<CAPTION>


                                             12b-1 Compensation to Underwriter and Firms for
                                                    the Fiscal Year Ended May 31, 2008
                                                    ----------------------------------



                                                12b-1          12b-1
                                            Distribution    Shareholder     12b-1 Compensation
                                                Fees       Services Fees      Paid to Firms
                                                ----       -------------      -------------

<S>                                                    <C>       <C>                   <C>
DWS Strategic High Yield
Tax-Free Fund                 Class A                  $0        $220,501              $210,689
                              Class B              $5,848          $9,282               $11,509
                              Class C             $20,736          $3,850               $49,151
DWS Managed Municipal Bond
Fund                          Class A                  $0      $4,277,343            $4,242,435
                              Class B             $23,418         $36,187               $48,797
                              Class C             $57,898         $63,016              $169,936
DWS Intermediate Tax/AMT
Free Fund                     Class A                  $0        $641,632              $573,345
                              Class B             $54,050         $81,382              $111,518
                              Class C            $160,185        $177,371              $402,370



                                                       Other Expenses Paid by Underwriter for the
                                                             Fiscal Year Ended May 31, 2008
                                                             ------------------------------
                                          Advertising,
                                             Sales,
                                           Literature
                                              and                        Marketing
                                          Promotional     Prospectus     and Sales     Postage and   Imputed
                                           Materials       Printing       Expenses       Mailing      Interest
                                           ---------       --------       --------       -------      --------

DWS Strategic High Yield
Tax-Free Fund                 Class A           $67,356         $2,515        $3,343        $26,262          $0
                              Class B              $157             $7            $5            $59     $14,157
                              Class C            $3,004            $89          $175         $1,205          $0
DWS Managed Municipal Bond
Fund                          Class A           $73,240         $2,921        $3,877        $28,557          $0
                              Class B              $649            $24           $37           $256    $108,717
                              Class C           $15,740           $525          $948         $6,285          $0
DWS Intermediate Tax/AMT
Free Fund                     Class A          $172,727         $4,484       $10,597        $70,081          $0
                              Class B            $2,774            $95          $137         $1,087     $24,849
                              Class C           $43,168         $1,328        $2,528        $17,281          $0


</TABLE>




The following table shows the aggregate amount of underwriting commissions paid
to DIDI, the amount in commissions it paid out to brokers and the amount of
underwriting commissions retained by DIDI.


<TABLE>
<CAPTION>
                                                                                                        Aggregate
                                                 Aggregate       Aggregate          Aggregate          Commissions
                                                   Sales        Commissions     Commissions Paid       Retained by
Fund                             Fiscal Year    Commissions    Paid to Firms   to Affiliated Firms         DIDI
----                             -----------    -----------    -------------   -------------------         ----


<S>                                  <C>          <C>              <C>                  <C>               <C>
DWS Strategic High Yield
Tax-Free Fund                        2008         $152,000         $50,000              $2,000            $100,000
                                     2007         $195,000        $115,000             $21,000             $59,000
                                     2006          $93,000         $50,000              $3,000             $40,000
DWS Managed Municipal Bond Fund      2008         $159,000         $79,000             $10,000             $70,000
                                     2007          $83,000         $48,000                  $0             $35,000
                                     2006         $209,000        $119,000             $27,000             $63,000

DWS Intermediate Tax/AMT Free
Fund                                 2008           $6,000              $0                  $0              $6,000
                                     2007           $2,000              $0                  $0              $2,000
                                     2006          $18,000          $5,000              $7,000              $6,000


</TABLE>


Certain Trustees or officers of a Fund are also directors or officers of the
Advisor or DIDI, as indicated under "Trustees and Officers."


Custodian


State Street Bank and Trust Company, (the "Custodian") 225 Franklin St. Boston,
MA 02110, serves as Custodian to the Funds. The Custodian's fee may be reduced
by certain earnings credits in favor of each Fund. Custodian fees of $177, $271
and $428 were not imposed on DWS Strategic High Yield Tax-Free Fund, DWS Managed
Municipal Bond Fund and DWS Intermediate Tax/AMT Free Fund, respectively, after
these credits were applied for the fiscal year ended May 31, 2007. Custodian
fees of $2,901, $4,939 and $1,484 were not imposed on DWS Strategic High Yield
Tax-Free Fund, DWS Managed Municipal Bond Fund and DWS Intermediate Tax/AMT Free
Fund, respectively, after these credits were applied for the fiscal year ended
May 31, 2008.

Transfer Agent and Shareholder Service Agent

DWS Investments Service Company ("DISC" or the "Transfer Agent"), 210 W. 10th
Street, Kansas City, Missouri 64105-1614, an affiliate of the Advisor, is the
transfer agent, dividend-paying agent and shareholder service agent for all
classes of each Fund.

The Transfer Agent receives an annual service fee for each account of a Fund,
based on the type of account. For open retail accounts, the fee is a flat fee
ranging from $20.00 to $27.50 per account, for open wholesale money funds the
fee is $32.50 per account, while for certain retirement accounts serviced on the
recordkeeping system of ADP, Inc., the fee is a flat fee up to $3.60 per account
(as of 2007, indexed to inflation) plus an asset based fee of up to 0.25% of
average net assets. 1/12th of the annual service charge for each account is
charged and payable to the Transfer Agent each month. A fee is charged for any
account which at any time during the month had a share balance in a Fund.
Smaller fees are also charged for closed accounts for which information must be
retained on the Transfer Agent's system for up to 18 months after closing for
tax reporting purposes.

Certain out-of-pocket expenses incurred by the Transfer Agent, including
expenses of printing and mailing routine fund disclosure documents, costs of
record retention and transaction processing costs are reimbursed by a Fund or
are paid directly by a Fund. Certain additional out-of-pocket expenses,
including costs of computer hardware and software, third party record-keeping
and processing of proxy statements, may only be reimbursed by a Fund with the
prior approval of a Fund's Board.

For the year ended May 31, 2008, the amount charged to DWS Strategic High Yield
Tax-Free Fund by DISC aggregated $696,135 of which $668,547 was waived and
$8,608 was unpaid as of May 31, 2008. For the year ended May 31, 2008, the
amount charged to DWS Managed Municipal Bond Fund by DISC aggregated $1,650,144
of which $803,402 was waived and $555,350 was unpaid as of May 31, 2008. For the
year ended May 31, 2008, the amount charged to DWS Intermediate Tax/AMT Free
Fund by DISC aggregated $225,977 of which $40,102 was waived and $103,900 was
unpaid as of May 31, 2008.

Pursuant to a sub-transfer agency agreement between DISC and DST Systems, Inc.
("DST"), DISC has delegated certain transfer agent, dividend paying agent and
shareholder servicing agent functions to DST. The costs and expenses of such
delegation are borne by DISC, not by the Funds.

Each Fund, or the Advisor (including any affiliate of the Advisor), or both, may
pay unaffiliated third parties for providing recordkeeping and other
administrative services with respect to accounts of participants in retirement
plans or other beneficial owners of Fund shares whose interests are generally
held in an omnibus account.

Legal Counsel

Ropes and Gray LLP, One International Place, Boston, MA 02110 acts as counsel
for each Fund and serves as co-counsel to the Independent Trustees of the Funds.

Vedder Price P.C., 222 North LaSalle Street, Chicago, Illinois 60601, serves as
co-counsel to the Independent Trustees of the Funds.


Independent Registered Public Accounting Firm and Reports to Shareholders


The financial highlights of each Fund included in the Fund's prospectus and the
financial statements incorporated by reference into this SAI have been so
included or incorporated by reference in reliance on the report of
PricewaterhouseCoopers LLP, independent registered public accounting firm, given
on the authority of said Firm as experts in auditing and accounting.
PricewaterhouseCoopers LLP audits the financial statements of the Funds and
provides other audit and related services. Shareholders will receive annual
audited financial statements and semi-annual unaudited financial statements.




                             PORTFOLIO TRANSACTIONS


The Advisor is generally responsible for placing the orders for the purchase and
sale of portfolio securities, including the allocation of brokerage. With
respect to those funds for which a sub-investment advisor manages the fund's
investments, references in this section to the "Advisor" should be read to mean
the Sub-Advisor, except as noted below.

The policy of the Advisor in placing orders for the purchase and sale of
securities for the Funds is to seek best execution, taking into account such
factors, among others, as price; commission (where applicable); the
broker-dealer's ability to ensure that securities will be delivered on
settlement date; the willingness of the broker-dealer to commit its capital and
purchase a thinly traded security for its own inventory; whether the
broker-dealer specializes in block orders or large program trades; the
broker-dealer's knowledge of the market and the security; the broker-dealer's
ability to maintain confidentiality; the broker-dealer's ability to provide
access to new issues; the broker-dealer's ability to provide support when
placing a difficult trade; the financial condition of the broker-dealer; and
whether the broker-dealer has the infrastructure and operational capabilities to
execute and settle the trade. The Advisor seeks to evaluate the overall
reasonableness of brokerage commissions with commissions charged on comparable
transactions and compares the brokerage commissions (if any) paid by the Funds
to reported commissions paid by others. The Advisor routinely reviews commission
rates, execution and settlement services performed and makes internal and
external comparisons.

Commission rates on transactions in equity securities on US securities exchanges
are subject to negotiation. Commission rates on transactions in equity
securities on foreign securities exchanges are generally fixed. Purchases and
sales of fixed-income securities and certain over-the-counter securities are
effected on a net basis, without the payment of brokerage commissions.
Transactions in fixed income and certain over-the-counter securities are
generally placed by the Advisor with the principal market makers for these
securities unless the Advisor reasonably believes more favorable results are
available elsewhere. Transactions with dealers serving as market makers reflect
the spread between the bid and asked prices. Purchases of underwritten issues
will include an underwriting fee paid to the underwriter. Money market
instruments are normally purchased in principal transactions directly from the
issuer or from an underwriter or market maker.


It is likely that the broker-dealers selected based on the considerations
described in this section will include firms that also sell shares of the Funds
to their customers. However, the Advisor does not consider sales of shares of
the Funds as a factor in the selection of broker-dealers to execute portfolio
transactions for the Funds and, accordingly, has implemented policies and
procedures reasonably designed to prevent its traders from considering sales of
shares of the Funds as a factor in the selection of broker-dealers to execute
portfolio transactions for the Funds.


The Advisor is permitted by Section 28(e) of the Securities Exchange Act of
1934, as amended ("1934 Act"), when placing portfolio transactions for a Fund,
to cause the Fund to pay brokerage commissions in excess of that which another
broker-dealer might charge for executing the same transaction in order to obtain
research and brokerage services if the Advisor determines that such commissions
are reasonable in relation to the overall services provided. The Advisor may
from time to time, in reliance on Section 28(e) of the 1934 Act, execute
portfolio transactions with broker-dealers that provide research and brokerage
services to the Advisor. Consistent with the Advisor's policy regarding best
execution, where more than one broker is believed to be capable of providing
best execution for a particular trade, the Advisor may take into consideration
the receipt of research and brokerage services in selecting the broker-dealer to
execute the trade. Although certain research and brokerage services from
broker-dealers may be useful to a Fund and to the Advisor, it is the opinion of
the Advisor that such information only supplements its own research effort since
the information must still be analyzed, weighed and reviewed by the Advisor's
staff. To the extent that research and brokerage services of value are received
by the Advisor, the Advisor may avoid expenses that it might otherwise incur.
Research and brokerage services received from a broker-dealer may be useful to
the Advisor and its affiliates in providing investment management services to
all or some of its clients, which includes a Fund. Services received from
broker-dealers that executed securities transactions for a Portfolio will not
necessarily be used by the Advisor specifically to service such Fund.

Research and brokerage services provided by broker-dealers may include, but are
not limited to, information on the economy, industries, groups of securities,
individual companies, statistical information, accounting and tax law
interpretations, political developments, legal developments affecting portfolio
securities, technical market action, pricing and appraisal services, credit
analysis, risk measurement analysis, performance analysis and measurement and
analysis of corporate responsibility issues. Research and brokerage services are
typically received in the form of written or electronic reports, access to
specialized financial publications, telephone contacts and personal meetings
with security analysts, but may also be provided in the form of access to
various computer software and meetings arranged with corporate and industry
representatives.

The Advisor may also select broker-dealers and obtain from them research and
brokerage services that are used in connection with executing trades provided
that such services are consistent with interpretations under Section 28(e) of
the 1934 Act. Typically, these services take the form of computer software
and/or electronic communication services used by the Advisor to facilitate
trading activity with those broker-dealers.


Research and brokerage services may include products obtained from third parties
if the Advisor determines that such product or service constitutes brokerage and
research as defined in Section 28(e) and interpretations thereunder. Currently,
it is the Advisor's policy that Sub-Advisors may not execute portfolio
transactions on behalf of the Funds to obtain third party research and brokerage
services. The Advisor may, in the future, change this policy. Regardless,
certain Sub-Advisors may, as matter of internal policy, limit or preclude third
party research and brokerage services.

The Advisor may use brokerage commissions to obtain certain brokerage products
or services that have a mixed use (i.e., it also serves a function that does not
relate to the investment decision-making process). In those circumstances, the
Advisor will make a good faith judgment to evaluate the various benefits and
uses to which it intends to put the mixed use product or service and will pay
for that portion of the mixed use product or service that it reasonably believes
does not constitute research and brokerage services with its own resources.

DIMA will monitor regulatory developments and market practice in the use of
client commissions to obtain research and brokerage services and may adjust its
portfolio transactions policies in response thereto.

Investment decisions for each Fund and for other investment accounts managed by
the Advisor are made independently of each other in light of differing
conditions. However, the same investment decision may be made for two or more of
such accounts. In such cases, simultaneous transactions are inevitable. To the
extent permitted by law, the Advisor may aggregate the securities to be sold or
purchased for a Fund with those to be sold or purchased for other accounts in
executing transactions. Purchases or sales are then averaged as to price and
commission and allocated as to amount in a manner deemed equitable to each
account. While in some cases this practice could have a detrimental effect on
the price paid or received by, or on the size of the position obtained or
disposed of for, the Fund, in other cases it is believed that the ability to
engage in volume transactions will be beneficial to the Fund.

DIMA and its affiliates and the Funds' management team manage other mutual funds
and separate accounts, some of which use short sales of securities as a part of
its investment strategy. The simultaneous management of long and short
portfolios creates potential conflicts of interest including the risk that short
sale activity could adversely affect the market value of the long positions (and
vice versa), the risk arising from sequential orders in long and short
positions, and the risks associated with receiving opposing orders at the same
time.

DIMA has adopted procedures that it believes are reasonably designed to mitigate
these potential conflicts of interest. Incorporated in the procedures are
specific guidelines developed to ensure fair and equitable treatment for all
clients. DIMA and the investment team have established monitoring procedures and
a protocol for supervisory reviews, as well as compliance oversight to ensure
that potential conflicts of interest relating to this type of activity are
properly addressed.

Deutsche Bank AG or one of its affiliates (or in the case of a Sub-Advisor, the
Sub-Advisor or one of its affiliates) may act as a broker for the Funds and
receive brokerage commissions or other transaction-related compensation from the
Funds in the purchase and sale of securities, options or futures contracts when,
in the judgment of the Advisor, and in accordance with procedures approved by
the Funds' Boards, the affiliated broker will be able to obtain a price and
execution at least as favorable as those obtained from other qualified brokers
and if, in the transaction, the affiliated broker charges the Funds a rate
consistent with that charged to comparable unaffiliated customers in similar
transactions.

The following shows total brokerage commissions paid for the past three fiscal
years:


DWS Strategic High Yield Tax-Free Fund: For the fiscal years ended May 31, 2008,
2007 and 2006, the Fund paid $3,253, $0 and $0 in commissions, respectively.

DWS Managed Municipal Bond Fund: For the fiscal years ended May 31, 2008, 2007
and 2006, the Fund paid $22,010, $0 and $2,448 in commissions, respectively.

DWS Intermediate Tax/AMT Free Fund: For the fiscal years ended May 31, 2008,
2007 and 2006, the Fund paid $0, $0 and $0 in commissions, respectively.

The Funds did not pay any affiliated brokerage commissions for the fiscal year
ended May 31, 2008.

Each Fund is required to identify any securities of its "regular brokers or
dealers" (as such term is defined in the 1940 Act) that the Funds have acquired
during the most recent fiscal year. As of May 31, 2008, the Funds did not hold
any securities of their regular broker dealers.


Portfolio Turnover

Portfolio turnover rate is defined by the SEC as the ratio of the lesser of
sales or purchases to the monthly average value of such securities owned during
the year, excluding all securities whose remaining maturities at the time of
acquisition were one year or less.

Higher levels of activity by a Fund result in higher transaction costs and may
also result in taxes on realized capital gains to be borne by the Fund's
shareholders. Purchases and sales are made whenever necessary, in the Advisor's
discretion, to meet a Fund's objective.

Portfolio turnover rates for the two most recent fiscal years are as follows:


                                                      2008          2007
                                                      ----          ----

DWS Strategic High Yield Tax-Free Fund                70%            57%
DWS Managed Municipal Bond Fund                       55%            19%
DWS Intermediate Tax/AMT Free Fund                    59%            45%


                        PURCHASE AND REDEMPTION OF SHARES

General Information

Policies and procedures affecting transactions in Fund shares can be changed at
any time without notice, subject to applicable law. Transactions may be
contingent upon proper completion of application forms and other documents by
shareholders and their receipt by a Fund's agents. Transaction delays in
processing (and changing account features) due to circumstances within or beyond
the control of a Fund and its agents may occur. Shareholders (or their financial
service firms) are responsible for all losses and fees resulting from bad
checks, cancelled orders or the failure to consummate transactions effected
pursuant to instructions reasonably believed to be genuine.

A distribution will be reinvested in shares of the same Fund and class if the
distribution check is returned as undeliverable.

Information regarding tax-deferred retirement plans is not applicable to the
Funds.


Orders will be confirmed at a price based on the net asset value of a Fund next
determined after receipt in good order by DIDI of the order accompanied by
payment. Orders received by dealers or other financial services firms prior to
the determination of net asset value and received in good order by DIDI prior to
the determination of net asset value will be confirmed at a price based on the
net asset value next determined after receipt by DIDI ("trade date").


Certificates. Share certificates will not be issued. Share certificates now in a
shareholder's possession may be sent to the Transfer Agent for cancellation and
book-entry credit to such shareholder's account. Certain telephone and other
procedures require book-entry holdings. Shareholders with outstanding
certificates bear the risk of loss.


Use of Financial Services Firms. Investment dealers and other firms provide
varying arrangements for their clients to purchase and redeem a Fund's shares,
including higher minimum investments, and may assess transaction or other fees.
Firms may arrange with their clients for other investment or administrative
services. Such firms may independently establish and charge additional amounts
to their clients for such services. Firms also may hold a Fund's shares in
nominee or street name as agent for and on behalf of their customers. In such
instances, a Fund's transfer agent, DWS Investments Service Company (the
"Transfer Agent") will have no information with respect to or control over the
accounts of specific shareholders. Such shareholders may obtain access to their
accounts and information about their accounts only from their firm. Certain of
these firms may receive compensation from a Fund through the Shareholder Service
Agent for record-keeping and other expenses relating to these nominee accounts.
In addition, certain privileges with respect to the purchase and redemption of
shares or the reinvestment of dividends may not be available through such firms.
Some firms may participate in a program allowing them access to their clients'
accounts for servicing including, without limitation, transfers of registration
and dividend payee changes; and may perform functions such as generation of
confirmation statements and disbursement of cash dividends. Such firms,
including affiliates of DIDI, may receive compensation from a Fund through the
Shareholder Service Agent for these services.

Each Fund has authorized one or more financial service institutions, including
certain members of FINRA other than the Distributor ("financial institutions"),
to accept purchase and redemption orders for the Fund's shares. Such financial
institutions may also designate other parties, including plan administrator
intermediaries, to accept purchase and redemption orders on the Fund's behalf.
Orders for purchases or redemptions will be deemed to have been received by a
Fund when such financial institutions or, if applicable, their authorized
designees accept the orders. Subject to the terms of the contract between a Fund
and the financial institution, ordinarily orders will be priced at a Fund's net
asset value next computed after acceptance by such financial institution or its
authorized designees and accepted by a Fund. Further, if purchases or
redemptions of a Fund's shares are arranged and settlement is made at an
investor's election through any other authorized financial institution, that
financial institution may, at its discretion, charge a fee for that service. The
Board of Trustees and the Distributor, also a Fund's principal underwriter, each
has the right to limit the amount of purchases by, and to refuse to sell to, any
person. The Trustees and the Distributor may suspend or terminate the offering
of shares of a Fund at any time for any reason.

DIDI has adopted an Incentive Plan (the "Plan") covering wholesalers that are
regional vice presidents ("DWS Investments Wholesalers"). Generally, DWS
Investments Wholesalers market shares of the DWS funds to financial advisors,
who in turn may recommend that investors purchase shares of a DWS fund. The Plan
is an incentive program that combines a monthly incentive component with a
quarterly strategic bonus component. Under the Plan, DWS Investments Wholesalers
will receive a monetary monthly incentive based on the amount of sales generated
from their marketing of the funds, and that incentive will differ depending on
the product category of the fund. Each fund is assigned to one of three product
categories -- "Strategic," "Tactical" or "all other funds" -- taking into
consideration, among other things, the following criteria, where applicable:

o        The Fund's consistency with DWS Investments' branding and long-term
         strategy.

o        The Fund's competitive performance;

o        The Fund's Morningstar rating;

o        The length of time the Fund's Portfolio Managers have managed the
         Fund/Strategy

o        Market size for the fund category;

o        The Fund's size, including sales and redemptions of the Fund's shares

This information and other factors are presented to a committee comprised of
representatives from various groups within DWS Investments, who review on a
quarterly basis the funds assigned to each product category described above, and
make any changes to those assignments at that time. No one factor, whether
positive or negative, determines a fund's placement in a given category; all
these factors together are considered, and the designation of funds in the
Strategic and Tactical categories represents management's judgment based on the
above criteria. In addition, management may consider a fund's profile over the
course of several review periods before making a change to its category
assignment. These category assignments will be posted quarterly to the DWS
funds' Web site at www.dws-investments.com, approximately one month after the
end of each quarter. DWS Investments Wholesalers receive the highest
compensation for Strategic funds, less for Tactical funds and the lowest for all
other funds. The level of compensation among these categories may differ
significantly.





The prospect of receiving, or the receipt of, additional compensation by a DWS
Investments Wholesaler under the Plan may provide an incentive to favor
marketing the Strategic or Tactical funds over all other funds. The Plan,
however, will not change the price that investors pay for shares of a fund. The
DWS Investments Compliance Department monitors DWS Investments Wholesaler sales
and other activity in an effort to detect unusual activity in the context of the
compensation structure under the Plan. However, investors may wish to take the
Plan and the product category of the fund into account when considering
purchasing a fund or evaluating any recommendations relating to fund shares.


Telephone and Electronic Transaction Procedures. Shareholders have various
telephone, Internet, wire and other electronic privileges available. Each Fund
or its agents will not be liable for any losses, expenses or costs arising out
of fraudulent or unauthorized instructions pursuant to these privileges if that
Fund or its agents reasonably believe, based upon reasonable verification
procedures, that the instructions were genuine. Verification procedures include
recording instructions, requiring certain identifying information before acting
upon instructions and sending written confirmations. During periods when it is
difficult to contact the Shareholder Service Agent, it may be difficult to use
telephone, wire and other privileges.


QuickBuy and QuickSell. QuickBuy and QuickSell permits the transfer of money via
the Automated Clearing House System (minimum $50 and maximum $250,000) from or
to a shareholder's bank, savings and loan, or credit union account in connection
with the purchase or redemption of Fund shares. Shares purchased by check or
through QuickBuy and QuickSell or Direct Deposit may not be redeemed under this
privilege until such Shares have been owned for at least 10 calendar days.
QuickBuy and QuickSell cannot be used with passbook savings accounts or for
certain tax-deferred plans.





Dividend Payment Option. Investors may have dividends and distributions
automatically deposited to their predesignated bank account through DWS
Investments' Dividend Payment Option request form. Shareholders whose
predesignated checking account of record is with a member bank of Automated
Clearing House Network (ACH) can have income and capital gain distributions
automatically deposited to their personal bank account usually within three
business days after the Fund pays its distribution. A Dividend Payment Option
request form can be obtained by visiting our Web site at:
www.dws-investments.com or calling (800) 621-1048. Confirmation Statements will
be mailed to shareholders as notification that distributions have been
deposited.


Purchases

Each Fund reserves the right to withdraw all or any part of the offering made by
its prospectus and to reject purchase orders for any reason. Also, from time to
time, a Fund may temporarily suspend the offering of any class of its shares to
new investors. During the period of such suspension, persons who are already
shareholders of such class of such Fund may be permitted to continue to purchase
additional shares of such class and to have dividends reinvested.

To help the government fight the funding of terrorism and money laundering
activities, federal law requires all financial institutions to obtain, verify
and record information that identifies each person who opens an account. For
more information, please see "Policies You Should Know About" in the Fund
prospectus.


Financial Services Firms' Compensation. Banks and other financial services firms
may provide administrative services related to order placement and payment to
facilitate transactions in shares of a Fund for their clients, and DIDI may pay
them a transaction fee up to the level of the discount or commission allowable
or payable to dealers.

DIDI may, from time to time, pay or allow to firms a 1% commission on the amount
of shares of a Fund sold under the following conditions: (i) the purchased
shares are held in a DWS Investments IRA account, (ii) the shares are purchased
as a direct "roll over" of a distribution from a qualified retirement plan
account maintained on the subaccount record keeping system maintained for DWS
Investments-branded plans by ADP, Inc. under an alliance with DIDI and its
affiliates, (iii) the registered representative placing the trade is a member of
Executive Council, a group of persons designated by DIDI in acknowledgment of
their dedication to the employee benefit plan area, and (iv) the purchase is not
otherwise subject to a commission.

In addition to the discounts or commissions described herein and in the
prospectus, DIDI, the Advisor or its affiliates may pay or allow additional
discounts, commissions or promotional incentives, in the form of cash, to firms
that sell shares of a Fund. In some instances, such amounts may be offered only
to certain firms that sell or are expected to sell during specified time periods
certain minimum amounts of shares of the Fund, or other Funds underwritten by
DIDI.

Upon notice to all dealers, DIDI may re-allow to dealers up to the full
applicable Class A sales charge during periods and for transactions specified in
such notice and such re-allowances may be based upon attainment of minimum sales
levels. During periods when 90% or more of the sales charge is re-allowed, such
dealers may be deemed to be underwriters as that term is defined in the 1933
Act.

DIDI may at its discretion compensate investment dealers or other financial
services firms in connection with the sale of Class A shares of the Funds in
accordance with the Large Order NAV Purchase Privilege and one of the two
compensation schedules up to the following amounts:





<TABLE>
<CAPTION>
Compensation Schedule #1:                                                        Compensation Schedule #2:
Retail Sales and DWS Flex Plan(1)                                                 DWS Retirement Plans(2)
---------------------------------                                                 -----------------------

Amount of                                   As a Percentage of Net    Amount of Shares      As a Percentage of Net
Shares Sold                                       Asset Value               Sold                 Asset Value
-----------                                       -----------               ----                 -----------

<S>  <C>           <C>                               <C>                    <C>                 <C>     <C>
$1 million to $3 million                     0.85% (income funds)
Over $3 million to $50 million                       0.50%             Over $3 million          0.00% - 0.50%
Over $50 million                                     0.25%                    --                       --
</TABLE>

(1)       For purposes of determining the appropriate commission percentage to
          be applied to a particular sale under the foregoing schedule, DIDI
          will consider the cumulative amount invested by the purchaser in a
          Fund and other Funds listed under "Special Features -- Class A Shares
          -- Combined Purchases," including purchases pursuant to the "Combined
          Purchases," "Letter of Intent" and "Cumulative Discount" features
          referred to above.

(2)       Compensation Schedule 2 applies to employer sponsored employee benefit
          plans using the OmniPlus subaccount record keeping system made
          available through ADP, Inc. under an alliance with DIDI and its
          affiliates.

DIDI compensates firms for sales of Class B shares at the time of sale at a
commission rate of up to 3.75% of the amount of Class B shares purchased. DIDI
is compensated by the Fund for services as distributor and principal underwriter
for Class B shares. Except as provided below, for sales of Class C shares, DIDI
advances to firms the first year distribution fee at a rate of 0.75% of the
purchase price of such shares, and, for periods after the first year, DIDI
currently pays firms for sales of Class C shares a distribution fee, payable
quarterly, at an annual rate of 0.75% of net assets attributable to Class C
shares maintained and serviced by the firm. For sales of Class C shares to
employer sponsored employee benefit plans using the OmniPlus subaccount record
keeping system made available through ADP, Inc. under an alliance with DIDI and
its affiliates, DIDI does not advance the first year distribution fee and for
periods after the date of sale, DIDI currently pays firms a distribution fee,
payable quarterly, at an annual rate of 0.75% based on net assets as of the last
business day of the month attributable to Class C shares maintained and serviced
by the firm. DIDI is compensated by the Fund for services as distributor and
principal underwriter for Class C shares.


There are no sales charges for Institutional Class shares of each Fund.



Revenue Sharing


In light of recent regulatory developments, the Advisor, the Distributor and
their affiliates have undertaken to furnish certain additional information below
regarding the level of payments made by them to selected affiliated and
unaffiliated brokers, dealers, participating insurance companies or other
financial intermediaries ("financial advisors") in connection with the sale
and/or distribution of Fund shares or the retention and/or servicing of
investors and Fund shares ("revenue sharing").

The Advisor, the Distributor and/or their affiliates may pay additional
compensation, out of their own assets and not as an additional charge to each
Fund, to financial advisors in connection with the sale and/or distribution of
Fund shares or the retention and/or servicing of Fund investors and Fund shares.
Such revenue sharing payments are in addition to any distribution or service
fees payable under any Rule 12b-1 or service plan of any fund, any record
keeping/sub-transfer agency/networking fees payable by each Fund (generally
through the Distributor or an affiliate) and/or the Distributor to certain
financial advisors for performing such services and any sales charges,
commissions, non-cash compensation arrangements expressly permitted under
applicable rules of FINRA or other concessions described in the fee table or
elsewhere in the Prospectuses or the SAI as payable to all financial advisors.
For example, the Advisor, the Distributor and/or their affiliates may compensate
financial advisors for providing each Fund with "shelf space" or access to a
third party platform or fund offering list, or other marketing programs
including, without limitation, inclusion of each Fund on preferred or
recommended sales lists, mutual fund "supermarket" platforms and other formal
sales programs; granting the Distributor access to the financial advisor's sales
force; granting the Distributor access to the financial advisor's conferences
and meetings; assistance in training and educating the financial advisor's
personnel; and, obtaining other forms of marketing support. The level of revenue
sharing payments made to financial advisors may be a fixed fee or based upon one
or more of the following factors: gross sales, current assets and/or number of
accounts of each Fund attributable to the financial advisor, the particular fund
or fund type or other measures as agreed to by the Advisor, the Distributor
and/or their affiliates and the financial advisors or any combination thereof.
The amount of these payments is determined at the discretion of the Advisor, the
Distributor and/or their affiliates from time to time, may be substantial, and
may be different for different financial advisors based on, for example, the
nature of the services provided by the financial advisor.

The Advisor, the Distributor and/or their affiliates currently make revenue
sharing payments from their own assets in connection with the sale and/or
distribution of DWS Fund shares, or the retention and/or servicing of investors,
to financial advisors in amounts that generally range from .01% up to .50% of
assets of the Fund serviced and maintained by the financial advisor, .05% to
..25% of sales of the Fund attributable to the financial advisor, a flat fee of
$13,350 up to $500,000, or any combination thereof. These amounts are annual
figures typically paid on a quarterly basis and are subject to change at the
discretion of the Advisor, the Distributor and/or their affiliates. Receipt of,
or the prospect of receiving, this additional compensation, may influence your
financial advisor's recommendation of this Fund or of any particular share class
of the Fund. You should review your financial advisor's compensation disclosure
and/or talk to your financial advisor to obtain more information on how this
compensation may have influenced your financial advisor's recommendation of this
Fund.

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

As of the date hereof, each Fund has been advised that the Advisor, the
Distributor and their affiliates expect that the following firms will receive
revenue sharing payments at different points during the coming year as described
above:

Channel: Broker-Dealers and Financial Advisors
----------------------------------------------
AIG Advisors Group
Ameriprise
Cadaret, Grant & Co. Inc.
Capital Analyst, Incorporated
Citigroup Global Markets, Inc. (dba Smith Barney)
Commonwealth Equity Services, LLP (dba Commonwealth Financial Network)
Deutsche Bank Group
Ensemble Financial Services
First Clearing/Wachovia Securities
Fiserv Trust Company
HD Vest Investment Securities, Inc.
ING Group
John Hancock Distributors LLC
LPL Financial
M.L. Stern & Co.
Meridien Financial Group
Merrill Lynch, Pierce, Fenner & Smith Inc.
Morgan Stanley
Oppenheimer & Co., Inc.
Raymond James & Associates
Raymond James Financial Services
RBC Dain Rauscher, Inc
Securities America, Inc.
UBS Financial Services
Wachovia Securities
Wells Fargo Investments, LLC

Channel: Cash Product Platform
------------------------------
Allegheny Investments LTD
Bank of New York (Hare & Co.)
Bear, Stearns Securities Corp.
Brown Brothers Harriman
Brown Investment Advisory & Trust Company
Cadaret Grant & Co.
Chicago Mercantile Exchange
D.A. Davidson & Company
Deutsche Bank Group
Emmett A. Larkin Company
Fiduciary Trust Co. -- International
First Southwest Company
Huntleigh Securities
Lincoln Investment Planning
LPL Financial
Mellon Financial Markets LLC
Penson Financial Services
Pershing Choice Platform
ProFunds Distributors, Inc.
Ridge Clearing & Outsourcing Solutions
Robert W. Baird & Co.
Romano Brothers and Company
SAMCO Capital Markets
Smith Moore & Company
Sungard Institutional Brokerage Inc.
US Bancorp
UBS Financial Services
William Blair & Company

Channel: Third Party Insurance Platforms
----------------------------------------
Allstate Life Insurance Company of New York
Ameritas Life Insurance Group
Annuity Investors Life Insurance Company
Columbus Life Insurance Company
Commonwealth Annuity and Life Insurance Company
Companion Life Insurance Company
Connecticut General Life Insurance Company
Farmers New World Life Insurance Company
Fidelity Security Life Insurance Company
First Allmerica Financial Life Insurance Company
First Great West Life and Annuity Company
Genworth Life Insurance Company of New York
Genworth Life and Annuity Insurance Company
Great West Life and Annuity Insurance Company
Hartford Life Insurance Company
Integrity Life Insurance Company
John Hancock Life Insurance companies
Kemper Investors Life Insurance Company
Lincoln Benefit Life Insurance Company
Lincoln Life & Annuity Company of New York
Lincoln National Life Insurance Company
Massachusetts Mutual Life Insurance Group
MetLife Group
Minnesota Life Insurance Company
National Life Insurance Company
National Integrity Life Insurance Company
Nationwide Group
New York Life Insurance and Annuity Corporation
Phoenix Life Insurance Company
Protective Life Insurance
Provident Mutual Life Insurance
Prudential Insurance Company of America
Sun Life Group
Symetra Life Insurance Company
Transamerica Life Insurance Company
Union Central Life Insurance Company
United of Omaha Life Insurance Company
United Investors Life Insurance Company
Western Southern Life Assurance Company

Any additions, modifications or deletions to the financial advisors identified
above that have occurred since the date hereof are not reflected.

The Advisor, the Distributor or their affiliates may enter into additional
revenue sharing arrangements or change or discontinue existing arrangements with
financial advisors at any time without notice.

The prospect of receiving, or the receipt of additional compensation or
promotional incentives described above by financial advisors may provide such
financial advisors and/or their salespersons with an incentive to favor sales of
shares of the DWS funds or a particular DWS fund over sales of shares of mutual
funds (or non-mutual fund investments) with respect to which the financial
advisor does not receive additional compensation or promotional incentives, or
receives lower levels of additional compensation or promotional incentives.
Similarly, financial advisors may receive different compensation or incentives
that may influence their recommendation of any particular share class of the
Fund or of other funds. These payment arrangements, however, will not change the
price that an investor pays for Fund shares or the amount that the Fund receives
to invest on behalf of an investor and will not increase Fund expenses. You may
wish to take such payment arrangements into account when considering and
evaluating any recommendations relating to Fund shares and you should discuss
this matter with your financial advisor and review your financial advisor's
disclosures.

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





Class A Purchases. The public offering price of DWS Strategic High Yield
Tax-Free Fund and DWS Managed Municipal Bond Fund Class A shares for purchasers
choosing the initial sales charge alternative is the net asset value plus a
sales charge, as set forth below.


<TABLE>
<CAPTION>
                                                                  Sales Charge
                                                                  ------------
                                                                                         Allowed to Dealers
                                           As a Percentage of    As a Percentage of     as a Percentage of
Amount of Purchase                           Offering Price       Net Asset Value*         Offering Price
------------------                           --------------       ----------------         --------------

<S>       <C>                                      <C>                   <C>                   <C>
Less than $100,000                                 4.50%                 4.71%                 4.00%
$100,000 but less than $250,000                    3.50%                 3.63%                 3.00%
$250,000 but less than $500,000                    2.60%                 2.67%                 2.25%
$500,000 but less than $1 million                  2.00%                 2.04%                 1.75%
$1 million and over                                0.00**                0.00**                0.00***
</TABLE>

*        Rounded to the nearest one-hundredth percent.

**       Redemption of shares may be subject to a contingent deferred sales
         charge as discussed below.

***      Commission is payable by DIDI as discussed below.

The public offering price of DWS Intermediate Tax/AMT Free Fund Class A shares
for purchasers choosing the initial sales charge alternative is the net asset
value plus a sales charge, as set forth below:

<TABLE>
<CAPTION>
                                                                   Sales Charge
                                                                   ------------
                                                                                         Allowed to Dealers
                                           As a Percentage of    As a Percentage of     as a Percentage of
Amount of Purchase                           Offering Price       Net Asset Value*         Offering Price
------------------                           --------------       ----------------         --------------

<S>       <C>                                      <C>                   <C>                   <C>
Less than $100,000                                 2.75%                 2.83%                 2.25%
$100,000 but less than $250,000                    2.50%                 2.56%                 2.00%
$250,000 but less than $500,000                    2.00%                 2.04%                 1.75%
$500,000 but less than $1 million                  1.50%                 1.52%                 1.25%
$1 million and over                                0.00**                0.00**                0.00***
</TABLE>

*        Rounded to the nearest one-hundredth percent.

**       Redemption of shares may be subject to a contingent deferred sales
         charge as discussed below.

***      Commission is payable by DIDI as discussed below.

Class A Quantity Discounts. An investor or the investor's dealer or other
financial services firm must notify the Shareholder Service Agent or DIDI
whenever a quantity discount or reduced sales charge is applicable to a
purchase. In order to qualify for a lower sales charge, all orders from an
organized group will have to be placed through a single investment dealer or
other firm and identified as originating from a qualifying purchaser.

Combined Purchases. The Fund's Class A shares may be purchased at the rate
applicable to the sales charge discount bracket attained by combining same day
investments in Class A shares of any DWS Funds that bear a sales charge.

Letter of Intent. The reduced sales charges for Class A shares, as shown in the
applicable prospectus, also apply to the aggregate amount of purchases of Class
A shares of DWS Funds that bear a sales charge made by any purchaser within a
24-month period under a written Letter of Intent ("Letter") provided by DIDI.
The Letter, which imposes no obligation to purchase or sell additional Class A
shares, provides for a price adjustment depending upon the actual amount
purchased within such period. The Letter provides that the first purchase
following execution of the Letter must be at least 5% of the amount of the
intended purchase, and that 5% of the amount of the intended purchase normally
will be held in escrow in the form of shares pending completion of the intended
purchase. If the total investments under the Letter are less than the intended
amount and thereby qualify only for a higher sales charge than actually paid,
the appropriate number of escrowed shares are redeemed and the proceeds used
toward satisfaction of the obligation to pay the increased sales charge. The
Letter for an employer-sponsored employee benefit plan maintained on the
subaccount record keeping system available through ADP, Inc. under an alliance
with DIDI and its affiliates may have special provisions regarding payment of
any increased sales charge resulting from a failure to complete the intended
purchase under the Letter. A shareholder may include the value (at the maximum
offering price, which is determined by adding the maximum applicable sales load
charged to the net asset value) of all Class A shares of such DWS Funds held of
record as of the initial purchase date under the Letter as an "accumulation
credit" toward the completion of the Letter, but no price adjustment will be
made on such shares.

Class A Cumulative Discount. Class A shares of the Fund may also be purchased at
the rate applicable to the discount bracket attained by adding to the cost of
shares being purchased, the value of all Class A shares of DWS Funds that bear a
sales charge (computed at the maximum offering price at the time of the purchase
for which the discount is applicable) already owned by the investor or his or
her immediate family member (including the investor's spouse or life partner and
children or stepchildren age 21 or younger).

For purposes of the Combined Purchases, Letter of Intent and Cumulative Discount
features described above, employer sponsored employee benefit plans using the
Flex subaccount record keeping system available through ADP, Inc. under an
alliance with DIDI and its affiliates may include: (a) Money Market Funds as
"DWS Funds," (b) all classes of shares of any DWS Fund and (c) the value of any
other plan investments, such as guaranteed investment contracts and employer
stock, maintained on such subaccount record keeping system. Once eligible plan
assets under this provision reach the $1,000,000 threshold, a later decline in
assets below the $1,000,000 threshold will not affect the plan's ability to
continue to purchase Class A shares at net asset value.

Class A NAV Sales. Class A shares may be sold at net asset value to:

(a)      a current or former director or trustee of Deutsche or DWS mutual
         funds;

(b)      an employee (including the employee's spouse or life partner and
         children or stepchildren age 21 or younger) of Deutsche Bank or its
         affiliates or of a subadvisor to any fund in the DWS family of funds or
         of a broker-dealer authorized to sell shares of the Fund or service
         agents of the Funds;

(c)      certain professionals who assist in the promotion of DWS mutual funds
         pursuant to personal services contracts with DIDI, for themselves or
         members of their families. DIDI in its discretion may compensate
         financial services firms for sales of Class A shares under this
         privilege at a commission rate of 0.50% of the amount of Class A shares
         purchased;

(d)      any trust, pension, profit-sharing or other benefit plan for only such
         persons listed under the preceding paragraphs (a) and (b);

(e)      persons who purchase such shares through bank trust departments that
         process such trades through an automated, integrated mutual fund
         clearing program provided by a third party clearing firm;

(f)      selected employees (including their spouses or life partners and
         children or stepchildren age 21 or younger) of banks and other
         financial services firms that provide administrative services related
         to order placement and payment to facilitate transactions in shares of
         the Fund for their clients pursuant to an agreement with DIDI or one of
         its affiliates. Only those employees of such banks and other firms who
         as part of their usual duties provide services related to transactions
         in Fund shares qualify;

(g)      unit investment trusts sponsored by Ranson & Associates, Inc. and
         unitholders of unit investment trusts sponsored by Ranson & Associates,
         Inc. or its predecessors through reinvestment programs described in the
         prospectuses of such trusts that have such programs;

(h)      through certain investment advisors registered under the Investment
         Advisers Act of 1940 and other financial services firms acting solely
         as agent for their clients, that adhere to certain standards
         established by DIDI, including a requirement that such shares be sold
         for the benefit of their clients participating in an investment
         advisory program or agency commission program under which such clients
         pay a fee to the investment advisor or other firm for portfolio
         management or agency brokerage services. Such shares are sold for
         investment purposes and on the condition that they will not be resold
         except through redemption or repurchase by the Fund;

(i)      employer sponsored employee benefit plans using the Flex subaccount
         recordkeeping system ("Flex Plans") made available through ADP under an
         alliance with DIDI and its affiliates, established prior to October 1,
         2003, provided that the Flex Plan is a participant-directed plan that
         has not less than 200 eligible employees;

(j)      investors investing $1 million or more, either as a lump sum or through
         the "Combined Purchases," "Letter of Intent" and "Cumulative Discount"
         features referred to above (collectively, the "Large Order NAV Purchase
         Privilege"). The Large Order NAV Purchase Privilege is not available if
         another net asset value purchase privilege is available;

(k)      defined contribution investment only plans with a minimum of $1,000,000
         in plan assets regardless of the amount allocated to the DWS funds;

In addition, Class A shares may be sold at net asset value in connection with:

(l)      the acquisition of the assets of or merger or consolidation with
         another investment company, or to shareholders in connection with the
         investment or reinvestment of income and capital gain dividends, and
         under other circumstances deemed appropriate by DIDI and consistent
         with regulatory requirements; and

(m)      a direct "roll over" of a distribution from a Flex Plan or from
         participants in employer sponsored employee benefit plans maintained on
         the OmniPlus subaccount record keeping system made available through
         ADP, Inc. under an alliance with DIDI and its affiliates into a DWS
         Investments IRA;

(n)      reinvestment of fund dividends and distributions;

(o)      exchanging an investment in Class A shares of another fund in the DWS
         family of funds for an investment in the fund.

Class A shares also may be purchased at net asset value in any amount by members
of the plaintiff class in the proceeding known as Howard and Audrey Tabankin, et
al. v. Kemper Short-Term Global Income Fund, et al., Case No. 93 C 5231 (N.D.
IL). This privilege is generally non-transferable and continues for the lifetime
of individual class members and for a ten-year period for non-individual class
members. To make a purchase at net asset value under this privilege, the
investor must, at the time of purchase, submit a written request that the
purchase be processed at net asset value pursuant to this privilege specifically
identifying the purchaser as a member of the "Tabankin Class." Shares purchased
under this privilege will be maintained in a separate account that includes only
shares purchased under this privilege. For more details concerning this
privilege, class members should refer to the Notice of (i) Proposed Settlement
with Defendants; and (ii) Hearing to Determine Fairness of Proposed Settlement,
dated August 31, 1995, issued in connection with the aforementioned court
proceeding. For sales of Fund shares at net asset value pursuant to this
privilege, DIDI may in its discretion pay investment dealers and other financial
services firms a concession, payable quarterly, at an annual rate of up to 0.25%
of net assets attributable to such shares maintained and serviced by the firm. A
firm becomes eligible for the concession based upon assets in accounts
attributable to shares purchased under this privilege in the month after the
month of purchase and the concession continues until terminated by DIDI. The
privilege of purchasing Class A shares of the Fund at net asset value under this
privilege is not available if another net asset value purchase privilege also
applies.

Class B Purchases. Class B shares of a Fund are offered at net asset value. No
initial sales charge is imposed. Class B shares sold without an initial sales
charge allow the full amount of the investor's purchase payment to be invested
in Class B shares for his or her account. Class B shares have a contingent
deferred sales charge of 4.00% that declines over time (for shares sold within
six years of purchase) and Rule 12b-1 fees, as described in the Funds'
prospectuses and SAI. Class B shares automatically convert to Class A shares
after six years.

Class C Purchases. Class C shares of a Fund are offered at net asset value. No
initial sales charge is imposed, which allows the full amount of the investor's
purchase payment to be invested in Class C shares for his or her account. Class
C shares are subject to a contingent deferred sales charge of 1.00% (for shares
sold within one year of purchase) and Rule 12b-1 fees, as described in the
Funds' prospectus and SAI.

Institutional Class Purchases. Information on how to buy Institutional Class
shares is set forth in the section entitled "Buying and Selling Shares" in a
Fund's prospectus. The following supplements that information. The minimum
initial investment for Institutional Class shares is $1,000,000. The minimum
initial investment may be waived in certain circumstances. The minimum amounts
may be changed at any time in management's discretion.

Investors may invest in Institutional Class shares by setting up an account
directly with DISC or through an authorized service agent. Investors who
establish shareholder accounts directly with DISC should submit purchase and
redemption orders as described in the prospectus. Additionally, each Fund has
authorized brokers to accept purchase and redemption orders for Institutional
Class shares for a Fund. Brokers, including authorized brokers of service
organizations, are, in turn, authorized to designate other intermediaries to
accept purchase and redemption orders on a Fund's behalf. Investors who invest
through brokers, service organizations or their designated intermediaries may be
subject to minimums established by their broker, service organization or
designated intermediary.

To sell shares by bank wire you will need to sign up for these services in
advance when completing your account application.

Multi-Class Suitability. DIDI has established the following procedures regarding
the purchase of Class A, Class B and Class C shares. Orders to purchase Class B
shares of $100,000 or more and orders to purchase Class C shares of $500,000 or
more will be declined with the exception of orders received from financial
representatives acting for clients whose shares are held in an omnibus account
and employer-sponsored employee benefit plans using the subaccount record
keeping system ("System") maintained for DWS Investments-branded plans on record
keeping systems made available through ADP, Inc. under an alliance with DIDI and
its affiliate ("DWS Flex Plans").

The following provisions apply to DWS Investments Flex Plans.

a.       Class B Share DWS Investments Flex Plans. Class B shares have not been
         sold to DWS Investments Flex Plans that were established on the Flex
         System after October 1, 2003. Orders to purchase Class B shares for a
         DWS Investments Flex Plan established on the System prior to October 1,
         2003 that has regularly been purchasing Class B shares will be invested
         instead in Class A shares at net asset value when the combined
         subaccount value in DWS Funds or other eligible assets held by the plan
         is $100,000 or more. This provision will be imposed for the first
         purchase after eligible plan assets reach the $100,000 threshold. A
         later decline in assets below the $100,000 threshold will not affect
         the plan's ability to continue to purchase Class A shares at net asset
         value.

 b.      Class C Share DWS Investments Flex Plans. Orders to purchase Class C
         shares for a DWS Investments Flex Plan, regardless of when such plan
         was established on the Flex System, will be invested instead in Class A
         shares at net asset value when the combined subaccount value in DWS
         Funds or other eligible assets held by the Plan is $1,000,000 or more.
         This provision will be imposed for the first purchase after eligible
         Plan assets reach the $1,000,000 threshold. A later decline in assets
         below the $1,000,000 threshold will not affect the Plan's ability to
         continue to purchase Class A shares at net asset value.

The procedures described above do not reflect in any way the suitability of a
particular class of shares for a particular investor and should not be relied
upon as such. A suitability determination must be made by investors with the
assistance of their financial representative.

Automatic Investment Plan. A shareholder may purchase shares of a Fund through
an automatic investment program. With the Direct Deposit Purchase Plan ("Direct
Deposit"), investments are made automatically (minimum $500 and maximum $250,000
for initial investments and a minimum of $50 and maximum $250,000 for subsequent
investments) from the shareholder's account at a bank, savings and loan or
credit union into the shareholder's Fund account. Termination by a shareholder
will become effective within thirty days after the Shareholder Service Agent has
received the request. The Fund may immediately terminate a shareholder's Direct
Deposit in the event that any item is unpaid by the shareholder's financial
institution.

Minimum Subsequent Investment Policies. For current shareholders of Class A, B
or C shares there is a $50 minimum investment requirement for subsequent
investments in the fund. There is no minimum subsequent investment requirement
in Class A shares for investments on behalf of participants in certain fee-based
and wrap programs offered through financial intermediaries approved by the
Advisor. There is no minimum subsequent investment required for Institutional
Class Shares.

Payroll Investment Plans. A shareholder may purchase shares through Payroll
Direct Deposit or Government Direct Deposit. Under these programs, all or a
portion of a shareholder's net pay or government check is invested each payment
period. A shareholder may terminate participation in these programs by giving
written notice to the shareholder's employer or government agency, as
appropriate. (A reasonable time to act is required.) A Fund is not responsible
for the efficiency of the employer or government agency making the payment or
any financial institutions transmitting payments.





Expedited Purchase Procedures for Existing Shareholders. Shareholders of other
DWS Funds who have submitted an account application and have certified a tax
identification number, clients having a regular investment counsel account with
the Advisor or its affiliates and members of their immediate families, officers
and employees of the Advisor or of any affiliated organization and their
immediate families, members of FINRA, and banks may open an account by wire by
calling (800) 621-1048 for instructions. The investor must send a duly completed
and signed application to the Fund promptly. A subsequent purchase order may be
placed by established shareholders (except by DWS Investments Individual
Retirement Account (IRA), DWS Simplified Profit Sharing and Money Purchase
Pension Plans, DWS Investments 401(k) and DWS Investments 403(b) Plan holders),
members of FINRA, and banks.


Redemptions

Each Fund imposes a redemption fee of 2% of the total redemption amount
(calculated at net asset value, without regard to the effect of any contingent
deferred sales charge; any contingent deferred sales charge is also assessed on
the total redemption amount without regard to the assessment of the 2%
redemption fee) on all Fund shares redeemed or exchanged within 15 days of
buying them (either by purchase or exchange). The redemption fee is paid
directly to the Funds, and is designed to encourage long-term investment and to
offset transaction and other costs associated with short-term or excessive
trading. For purposes of determining whether the redemption fee applies, shares
held the longest time will be treated as being redeemed first and shares held
the shortest time will be treated as being redeemed last. The redemption fee is
applicable to Fund shares purchased either directly or through a financial
intermediary, such as a broker-dealer. Transactions through financial
intermediaries typically are placed with the Funds on an omnibus basis and
include both purchase and sale transactions placed on behalf of multiple
investors. These purchase and sale transactions are generally netted against one
another and placed on an aggregate basis; consequently the identities of the
individuals on whose behalf the transactions are placed generally are not known
to the Funds. For this reason, the Funds have undertaken to notify financial
intermediaries of their obligation to assess the redemption fee on customer
accounts and to collect and remit the proceeds to the Funds. However, due to
operational requirements, the intermediaries' methods for tracking and
calculating the fee may be inadequate or differ in some respects from the
Funds'.


Each Fund may suspend or postpone redemptions as permitted pursuant to Section
22(e) of the 1940 Act. Generally, those circumstances are when: 1) the New York
Stock Exchange is closed other than customary weekend or holiday closings; 2)
trading on the New York Stock Exchange is restricted; 3) an emergency exists
which makes the disposal of securities owned by a fund or the fair determination
of the value of a fund's net assets not reasonably practicable; or 4) the SEC,
by order, permits the suspension of the right of redemption. Redemption payments
by wire may also be delayed in the event of a nonroutine closure of the Federal
Reserve wire payment system.

A request for repurchase (confirmed redemption) may be communicated by a
shareholder through a financial services firm to DIDI, which firms must promptly
submit orders to be effective.


Redemption requests must be unconditional. Redemption requests (and a stock
power for certificated shares) must be duly endorsed by the account holder. As
specified in the prospectus, signatures may need to be guaranteed by a
commercial bank, trust company, savings and loan association, federal savings
bank, member firm of a national securities exchange or other financial
institution permitted by SEC rule. Additional documentation may be required,
particularly from institutional and fiduciary account holders, such as
corporations, custodians (e.g., under the Uniform Transfers to Minors Act),
executors, administrators, trustees or guardians.

If the proceeds of the redemption (prior to the imposition of any contingent
deferred sales charge) are $100,000 or less and the proceeds are payable to the
shareholder of record at the address of record, normally a telephone request or
a written request by any one account holder without a signature guarantee is
sufficient for redemptions by individual or joint account holders, and trust,
executor and guardian account holders, provided the trustee, executor or
guardian is named in the account registration. Other institutional account
holders may exercise this special privilege of redeeming shares by telephone
request or written request without signature guarantee subject to the same
conditions as individual account holders, provided that this privilege has been
pre-authorized by the institutional account holder by written instruction to the
Shareholder Service Agent with signatures guaranteed. This privilege may not be
used to redeem shares held in certificated form and may not be used if the
shareholder's account has had an address change within 15 days of the redemption
request.

Wires. Delivery of the proceeds of a wire redemption of $250,000 or more may be
delayed by a Fund for up to seven days if a Fund or the Shareholder Service
Agent deems it appropriate under then-current market conditions. The ability to
send wires is limited by the business hours and holidays of the firms involved.
A Fund is not responsible for the efficiency of the federal wire system or the
account holder's financial services firm or bank. The account holder is
responsible for any charges imposed by the account holder's firm or bank. To
change the designated account to receive wire redemption proceeds, send a
written request to a Fund's Shareholder Service Agent with signatures guaranteed
as described above or contact the firm through which Fund shares were purchased.

Automatic Withdrawal Plan. The owner of $5,000 or more of a class of a Fund's
shares at the offering price (net asset value plus, in the case of Class A
shares, the initial sales charge) may provide for the payment from the owner's
account of any requested dollar amount to be paid to the owner or a designated
payee monthly, quarterly, semiannually or annually. The minimum periodic payment
is $50. The maximum annual rate at which shares subject to CDSC may be redeemed
is 12% of the net asset value of the account. Shares are redeemed so that the
payee should receive payment approximately the first of the month. Investors
using this Plan must reinvest Fund distributions.

The purchase of Class A shares while participating in a systematic withdrawal
plan will ordinarily be disadvantageous to the investor because the investor
will be paying a sales charge on the purchase of shares at the same time that
the investor is redeeming shares upon which a sales charge may have already been
paid. Therefore, a Fund will not knowingly permit additional investments of less
than $2,000 if the investor is at the same time making systematic withdrawals.

Contingent Deferred Sales Charge (CDSC). The following example will illustrate
the operation of the CDSC. Assume that an investor makes a single purchase of
$10,000 of the Fund's Class B shares and that 16 months later the value of the
shares has grown by $1,000 through reinvested dividends and by an additional
$1,000 of share appreciation to a total of $12,000. If the investor were then to
redeem the entire $12,000 in share value, the CDSC would be payable only with
respect to $10,000 because neither the $1,000 of reinvested dividends nor the
$1,000 of share appreciation is subject to the charge. The charge would be at
the rate of 3.00% ($300) because it was in the second year after the purchase
was made.


The rate of the CDSC is determined by the length of the period of ownership.
Investments are tracked on a monthly basis. The period of ownership for this
purpose begins the first day of the month in which the order for the investment
is received. For example, an investment made in March of the year of investment
will be eligible for the second year's charge if redeemed on or after March of
the following year. In the event no specific order is requested when redeeming
shares subject to a CDSC, the redemption will be made first from shares
representing reinvested dividends and then from the earliest purchase of shares.
DIDI receives any CDSC directly. The charge will not be imposed upon redemption
of reinvested dividends or share appreciation.


The Class A CDSC will be waived in the event of:


(a)      redemptions by a participant-directed qualified retirement plan
         described in Code Section 401(a), a participant-directed non-qualified
         deferred compensation plan described in Code Section 457 or a
         participant-directed qualified retirement plan described in Code
         Section 403(b)(7) which is not sponsored by a K-12 school district;

(b)      redemptions by employer-sponsored employee benefit plans using the
         subaccount record keeping system made available through ADP, Inc. under
         an alliance with DIDI and its affiliates;

(c)      redemption of shares of a shareholder (including a registered joint
         owner) who has died or is disabled (under certain circumstances);

(d)      redemption of shares of a shareholder (including a registered joint
         owner) who after purchase of the shares being redeemed becomes totally
         disabled (as evidenced by a determination by the federal Social
         Security Administration);

(e)      redemptions under the Fund's Automatic Withdrawal Plan at a maximum of
         12% per year of the net asset value of the account;

(f)      redemptions of shares whose dealer of record at the time of the
         investment notifies DIDI that the dealer waives the discretionary
         commission applicable to such Large Order NAV Purchase; and

(g)      redemptions for certain loan advances, hardship provisions or returns
         of excess contributions from retirement plans.

The Class B CDSC will be waived for the circumstances set forth in items (c),
(d), (e) and (g) for Class A shares. In addition, this CDSC will be waived:

(h)      for redemptions made pursuant to any IRA systematic withdrawal based on
         the shareholder's life expectancy including, but not limited to,
         substantially equal periodic payments described in Internal Revenue
         Code Section 72(t)(2)(A)(iv) prior to age 59 1/2;

(i)      for redemptions to satisfy required minimum distributions after age 70
         1/2 from an IRA account (with the maximum amount subject to this waiver
         being based only upon the shareholder's DWS Investments IRA accounts);
         and

(j)      in connection with the following redemptions of shares held by employer
         sponsored employee benefit plans maintained on the subaccount record
         keeping system made available through ADP under an alliance with DIDI
         and its affiliates: (1) to satisfy participant loan advances (note that
         loan repayments constitute new purchases for purposes of the CDSC and
         the conversion privilege), (2) in connection with retirement
         distributions (limited at any one time to 12% of the total value of
         plan assets invested in the Fund), (3) in connection with distributions
         qualifying under the hardship provisions of the Internal Revenue Code,
         (4) representing returns of excess contributions to such plans and (5)
         in connection with direct "roll over" distributions from a Flex Plan
         into a DWS Investments IRA under the Class A net asset value purchase
         privilege.

The Class C CDSC will be waived for the circumstances set forth in items (b),
(c), (d), (e) and (g) for Class A shares and for the circumstances set forth in
items (h) and (i) for Class B shares. In addition, this CDSC will be waived for:

(k)      redemption of shares by an employer sponsored employee benefit plan
         that offers funds in addition to DWS Funds and whose dealer of record
         has waived the advance of the first year administrative service and
         distribution fees applicable to such shares and agrees to receive such
         fees quarterly; and

(l)      redemption of shares purchased through a dealer-sponsored asset
         allocation program maintained on an omnibus record-keeping system
         provided the dealer of record had waived the advance of the first year
         administrative services and distribution fees applicable to such shares
         and has agreed to receive such fees quarterly.


In-kind Redemptions. A Fund reserves the right to honor any request for
redemption or repurchase by making payment in whole or in part in readily
marketable securities. These securities will be chosen by a Fund and valued as
they are for purposes of computing a Fund's net asset value. A shareholder may
incur transaction expenses in converting these securities to cash.


Checkwriting. For DWS Intermediate Tax/AMT Free Fund: the Checkwriting Privilege
is not offered to new investors. The Checkwriting Privilege is available for
shareholders who previously elected this privilege prior to August 19, 2002.
Checks may be used to pay any person, provided that each check is for at least
$100 and not more than $5 million. By using the checks, the shareholder will
receive daily dividend credit on his or her shares until the check has cleared
the banking system. Investors who purchased shares by check may write checks
against those shares only after they have been on a Fund's book for seven
business days. Shareholders who use this service may also use other redemption
procedures. No shareholder may write checks against certificated shares. A Fund
pays the bank charges for this service. However, each Fund will review the cost
of operation periodically and reserve the right to determine if direct charges
to the persons who avail themselves of this service would be appropriate. Each
Fund, DISC and State Street Bank and Trust Company reserve the right at any time
to suspend or terminate the Checkwriting procedure.


Exchanges

Shareholders may request a taxable exchange of their shares for shares of the
corresponding class of other DWS Funds without imposition of a sales charge,
subject to the provisions below. For purposes of calculating any CDSC, amounts
exchanged retain their original cost and purchase date.


Shares of money market funds that were acquired by purchase (not including
shares acquired by dividend reinvestment) are subject to the applicable sales
charge on exchange. Certain series of DWS Target Fund are available on exchange
only during the offering period for such series as described in the applicable
prospectus. Tax Free Money Fund -- Investment Class, NY Tax-Free Money Fund --
Investment Class, Money Market Fund -- Investment Class, Cash Management Fund
Institutional, Cash Reserves Fund Institutional, Cash Reserve Fund, Inc. Prime
Series, Tax-Exempt California Money Market Fund, Cash Account Trust and
Investors Cash Trust are available on exchange but only through a financial
services firm having a services agreement with DIDI. All exchanges among money
funds must meet applicable investor eligibility and investment requirements.
Exchanges may only be made for funds that are available for sale in the
shareholder's state of residence. Currently, Tax-Exempt California Money Market
Fund is available for sale only in California.

Shareholders must obtain prospectus(es) of the fund they are exchanging into
from dealers, other firms or DIDI.


Automatic Exchange Plan. The owner of $1,000 or more of any class of shares of a
DWS Fund may authorize the automatic exchange of a specified amount ($50
minimum) of such shares for shares of the same class of another such DWS Fund.
Exchanges will be made automatically until the shareholder or that Fund
terminates the privilege. Exchanges are subject to the terms and conditions
described above.

Multi-Class Conversions. For purposes of conversion to Class A shares, shares
purchased through the reinvestment of dividends and other distributions paid
with respect to Class B shares in a shareholder's Fund account will be converted
to Class A shares on a pro rata basis.


                                    DIVIDENDS

Each Fund intends to declare daily and distribute monthly substantially all of
its net investment income resulting from investment activity, and, normally, to
make distributions of net realized capital gains (short-term and long-term) will
normally be made in November or December or otherwise as needed to avoid
federal excise tax. Each Fund also intends to distribute all or substantially
all of its investment company taxable income (computed without regard to the
dividends-paid deduction) and all or substantially all of its net capital gains
(that is, the excess of net realized long-term capital gains over net realized
short-term capital losses, including capital loss carryforwards, if any) as
"capital gain dividends" to prevent application of a federal income tax. See
"Taxes" below for more information.




Any dividends or capital gains distributions declared in October, November or
December with a record date in such a month and paid during the following
January will be treated by shareholders for federal income tax purposes as if
received on December 31 of the calendar year declared.

Dividends paid by the Fund with respect to each class of its shares will be
calculated in the same manner, at the same time and on the same day.

The level of income dividends per share (as a percentage of net asset value)
will be lower for Class B and Class C Shares than for Class A Shares primarily
as a result of the distribution services fee applicable to Class B and Class C
Shares. Distributions of capital gains, if any, will be paid in the same amount
for each class.

Income and capital gain dividends, if any, of a Fund will be credited to
shareholder accounts in full and fractional shares of the same class of that
Fund at net asset value on the reinvestment date, except that, upon written
request to the Shareholder Service Agent, a shareholder may select one of the
following options:

1.       To receive income and short-term capital gain dividends in cash and
         long-term capital gain dividends in shares of the same class at net
         asset value; or

2.       To receive income and capital gain dividends in cash.


Dividends will be reinvested in shares of the same class of a Fund unless
shareholders indicate in writing that they wish to receive them in cash (as
previously described) or in shares of other DWS Funds with multiple classes of
shares or DWS Funds as provided in the prospectus. To use this privilege of
investing dividends of a Fund in shares of another DWS Fund, shareholders must
maintain a minimum account value of $1,000 in the Fund distributing the
dividends. A Fund will reinvest dividend checks (and future dividends) in shares
of that same Fund and class if checks are returned as undeliverable. Dividends
and other distributions of a Fund in the aggregate amount of $10 or less are
automatically reinvested in shares of that Fund and class unless the shareholder
requests in writing that a check be issued for that particular distribution.

If a shareholder has elected to reinvest any dividends and/or other
distributions, such distributions will be made in shares of that Fund and
confirmations will be mailed to each shareholder. If a shareholder has chosen to
receive cash, a check will be sent. Distributions of investment company taxable
income and net realized capital gains are taxable, whether made in shares of the
Fund or another DWS Fund or cash.


Each distribution is accompanied by a brief explanation of the form and
character of the distribution. The characterization of distributions on such
correspondence may differ from the characterization for federal tax purposes. In
January of each year each Fund issues to each shareholder a statement of the
federal income tax status of all distributions in the prior calendar year.


Each Fund may at any time vary its foregoing distribution practices and,
therefore, reserves the right from time to time to either distribute or retain
for reinvestment such of its net investment income and its net short-term and
long-term capital gains as its Board determines appropriate under the
then-current circumstances. In particular, and without limiting the foregoing, a
Fund may make additional distributions of net investment income or capital gain
net income in order to satisfy the minimum distribution requirements contained
in the Code.


                                      TAXES


The following is intended to be a general summary of certain federal income tax
consequences of investing in the Funds. It is not intended as a complete
discussion of all such consequences, nor does it purport to deal with all
categories of investors. Investors are therefore advised to consult with their
tax advisors before making an investment in a Fund. The summary is based on the
laws in effect on the date of this SAI and existing judicial and administrative
interpretations thereof, all of which are subject to change, possibly with
retroactive effect.

Taxation of the Fund. Each Fund intends to elect to be treated and to qualify
each year as a regulated investment company under Subchapter M of the Code. In
order to qualify for the special tax treatment accorded regulated investment
companies and their shareholders, each Fund must, among other things:

(a)      derive at least 90% of its gross income for each taxable year from (i)
         dividends, interest, payments with respect to certain securities loans,
         and gains from the sale or other disposition of stock, securities or
         foreign currencies, or other income (including but not limited to gains
         from options, futures, or forward contracts) derived with respect to
         its business of investing in such stock, securities, or currencies and
         (ii) net income derived from interests in "qualified publicly traded
         partnerships" (as defined below);


(b)      diversify its holdings so that, at the end of each quarter of each
         Fund's taxable year, (i) at least 50% of the market value of the Fund's
         total assets is represented by cash and cash items, US Government
         securities, securities of other regulated investment companies, and
         other securities limited in respect of any one issuer to a value not
         greater than 5% of the value of the Fund's total assets and not more
         than 10% of the outstanding voting securities of such issuer, and (ii)
         not more than 25% of the value of the Fund's total assets is invested
         (x) in the securities (other than those of the US Government or other
         regulated investment companies) of any one issuer or of two or more
         issuers which the Fund controls and which are engaged in the same,
         similar, or related trades or businesses, or (y) in the securities of
         one or more qualified publicly traded partnerships (as defined below);
         and


(c)      distribute with respect to each taxable year at least 90% of the sum of
         (i) its investment company taxable income (as that term is defined in
         the Code without regard to the deduction for dividends paid --
         generally taxable ordinary income and the excess, if any, of net
         short-term capital gains over net long-term capital losses) and (ii)
         the excess, if any, of its interest income excludable from gross income
         under section 103(a) over its deduction disallowed under section 265
         and 171(a)(2), for such year.

In general, for purposes of the 90% gross income requirement described in
paragraph (a) above, income derived from a partnership will be treated as
qualifying income only to the extent such income is attributable to items of
income of the partnership which would be qualifying income if realized by the
Funds. However, 100% of the net income derived from an interest in a "qualified
publicly traded partnership" (defined as a partnership (x) interests in which
are traded on an established securities market or readily tradable on a
secondary market or the substantial equivalent thereof and (y) that derives at
least 90% of its income from the passive income sources defined in Code section
7704(d), and (z) that derives less than 90% of its income from qualifying income
described in paragraph (a)(i) above) will be treated as qualifying income. In
addition, although in general the passive loss rules of the Code do not apply to
regulated investment companies, such rules do apply to a regulated investment
company with respect to items attributable to an interest in a qualified
publicly traded partnership. Also, for purposes of paragraph (b) above, the term
"outstanding voting securities of such issuer" will include the equity
securities of a qualified publicly traded partnership.

If the Funds qualify as a regulated investment companies that are accorded
special tax treatment, the Funds will not be subject to federal income tax on
income distributed in a timely manner to its shareholders in the form of
dividends (including Capital Gain Dividends as defined below).

If for any taxable year a Fund does not qualify for the special federal income
tax treatment afforded regulated investment companies, all of its taxable income
will be subject to federal income tax at regular corporate rates (without any
deduction for distributions to its shareholders), and all distributions from
earnings and profits, including any distributions of net tax-exempt income and
net long-term capital gains, will be taxable to shareholders as ordinary income.
Such distributions may be eligible (i) to be treated as qualified dividend
income in the case of shareholders taxed as individuals and (ii) for the
dividends received deduction in the case of corporate shareholders. In addition,
such Fund could be required to recognize unrealized gains, pay substantial taxes
and interest and make substantial distributions before requalifying as a
regulated investment company that is accorded special tax treatment.

As described in "Dividends" above, each Fund intends to distribute at least
annually to shareholders substantially all of its investment company taxable
income (computed without regard to the dividends-paid deduction) and the excess,
if any, of its interest income excludable from gross income under section 103(a)
over its deductions disallowed under sections 265 and 171(a)(2), and may
distribute its net capital gain. Any investment company taxable income retained
by the Funds will be subject to tax at the Fund level at regular corporate
rates. Each Fund may also retain for investment its net capital gain. If the
Funds retain any net capital gain, they will be subject to tax at regular
corporate rates on the amount retained, but may designate the retained amount as
undistributed capital gains, in a notice to their shareholders who (i) will be
required to include in income for federal income tax purposes, as long-term
capital gain, their shares of such undistributed amount against their federal
income tax liabilities, if any, and to claim refunds on a properly-filed US tax
return to the extent the credit exceeds such liabilities. For federal income tax
purposes, the tax basis of shares owned by a shareholder of the Funds will be
increased by an amount equal under current law to the difference between the
amount of undistributed capital gains included in the shareholder's gross income
and the tax deemed paid by the shareholder under clause (ii) of the preceding
sentence.

In determining its net capital gain for Capital Gain Dividend purposes, a
regulated investment company generally must treat any net capital loss or any
net long-term capital loss incurred after October 31 as if it had been incurred
in the succeeding year. Treasury regulations permit a regulated investment
company, in determining its taxable income, to elect to treat all or part of any
net capital loss, any net long-term capital loss or any foreign currency loss
incurred after October 31 as if it had been incurred in the succeeding year.

Each Fund is subject to a 4% nondeductible excise tax on amounts that have been
retained rather than distributed, as required, under a prescribed formula. The
formula requires payment to shareholders during a calendar year of distributions
representing at least 98% of a Funds' taxable ordinary income for the calendar
year and at least 98% of the excess of its capital gains over capital losses
realized during the one-year period ending October 31 (in most cases) of such
year as well as amounts that were neither distributed nor taxed to the Funds
during the prior calendar year. For these purposes, each Fund will be treated as
having distributed any amount on which it has been subject to corporate income
tax in the taxable year ending within the calendar year. A dividend paid to
shareholders in January of a year generally is deemed to have been paid by the
Funds on December 31 of the preceding year, if the dividend was declared and
payable to shareholders of record on a date in October, November or December of
that preceding year. Although the Funds' distribution policies should enable
them to avoid excise tax liability, as discussed in "Dividends" above, the Funds
may retain (and be subject to fund-level income and/or excise tax on) a portion
of its capital gain or other income if it appears to be in the interest of the
Funds.

Exempt-Interest Dividends. Each Fund will be qualified to pay tax-exempt
interest dividends to its shareholders only if, at the end of each quarter of a
Fund's taxable year, at least 50% of the total value of a Fund's assets consists
of securities the interest on which is exempt from federal income tax under Code
section 103(a). The Funds intend to satisfy this requirement. Distributions that
each Fund properly designates as exempt-interest dividends are treated as
interest excludable from shareholders' gross income for federal income tax
purposes but may result in liability for federal individual and corporate
alternative minimum tax purposes. For example, if the Funds invests in "private
activity bonds," certain shareholders may become subject to alternative minimum
tax on the part of the Fund's distributions derived from interest on such bonds.
Note that the Intermediate Tax/AMT Free Fund does not intend to invest in
securities whose income is subject to AMT.

Part or all of the interest on indebtedness, if any, incurred or continued by a
shareholder to purchase or carry shares of a Fund paying exempt-interest
dividends is not deductible. The portion of interest that is not deductible is
equal to the total interest paid or accrued on the indebtedness, multiplied by
the percentage of a Fund's total distributions (not including distributions from
net long-term capital gains) paid to the shareholder that are exempt-interest
dividends. Under rules used by the Internal Revenue Service to determine when
borrowed Funds are considered used for the purpose of purchasing or carrying
particular assets, the purchase of shares may be considered to have been made
with borrowed funds even though such Funds are not directly traceable to the
purchase of shares.

In general, exempt-interest dividends, if any, attributable to interest received
on certain private activity obligations and certain industrial development bonds
will not be tax-exempt to any shareholder who are "substantial users" of the
facilities financed by such obligations or bonds or who are "related persons" of
such substantial users.

The Funds, which are qualified to pay exempt-interest dividends, will inform
investors within 60 days of a Fund's fiscal year-end of the percentage of its
income distributions designated as tax-exempt. The percentage is applied
uniformly to all distributions made during the year. The percentage of income
designated as tax-exempt for any particular distribution may be substantially
different from the percentage of a Fund's income that was tax-exempt during the
period covered by the distribution.

A shareholder who receives Social Security or railroad retirement benefits
should consult his or her tax adviser to determine what effect, if any, an
investment in the Funds may have on the federal taxation of such benefits.
Tax-exempt dividends are included in income for purposes of determining the
amount of benefits that are taxable.

The exemption from federal income tax for exempt-interest dividends does not
necessarily result in exemption for such dividends under the income or other tax
laws of any state or local authority. You are advised to consult with your tax
advisor about state and local tax matters.

Taxable Distributions. As discussed above, the Funds are qualified to pay
exempt-interest dividends to its shareholders. Distributions that the Funds
properly designate as exempt-interest dividends are treated as interest
excludable from shareholders' gross income for federal income tax purposes but
may result in liability for federal alternative minimum tax purposes.

For federal income tax purposes, distributions of investment income, other than
exempt-interest dividends, are generally taxable as ordinary income. Taxes on
distributions of capital gains are determined by how long a Fund owned the
investments that generated them, rather than how long a shareholder has owned
his or her shares. Distributions of net capital gains (that is, the excess of
net long-term capital gains over net short-term capital losses) from the sale of
investments that a Fund owned for more than one year and that are properly
designated by the Fund as capital gain dividends ("Capital Gain Dividends") will
be taxable as long-term capital gains. Distributions of gains from the sale of
investments that a Fund owned for one year or less will be taxable as ordinary
income. If shares of a Fund are sold at a loss after being held for six months
or less, the loss will be disallowed to the extent of any exempt-interest
dividends received on those shares. For the taxable years beginning before
January 1, 2011, distributions of investment income designated by a Fund as
derived from "qualified dividend income" are taxed at the rates applicable to
long-term capital gain, provided holding period and other requirements are met
at both the shareholder and Fund level. Because the Funds invest primarily in
tax-exempt-bonds, the Funds do not expect a significant portion of distributions
to be derived from qualified dividend income.

Long-term capital gain rates applicable to individuals have been temporarily
reduced -- in general, to 15% with lower rates applying to taxpayers in the 10%
and 15% rate brackets -- for taxable years beginning before January 1, 2011.

To the extent that the Fund makes distributions of income received by the Fund
in lieu of tax-exempt interest with respect to securities on loan, such
distributions will not constitute exempt-interest dividends to shareholders.
Similarly, to the extent that the Fund makes distributions of income received by
the Fund in lieu of tax-exempt interest with respect to securities on loan, such
distributions will not constitute exempt-interest dividends to shareholders.

A portion of the interest paid or accrued on certain high yield discount
obligations owned by a Fund may not (and interest paid on debt obligations, if
any, that are considered for tax purposes to be payable in the equity of the
issuer or a related party will not) be deductible to the issuer. This may affect
the cash flow of the issuer. If a portion of the interest paid or accrued on
certain high yield discount obligations is not deductible, that portion will be
treated as a dividend for purposes of the corporate dividends received
deduction. In such cases, if the issuer of the high yield discount obligations
is a domestic corporation, dividend payments by a Fund may be eligible for the
dividends received deduction to the extent of the deemed dividend portion of
such accrued interest.

If the Fund makes a distribution to a shareholder in excess of the Fund's
current and accumulated earnings and profits in any taxable year, the excess
distribution will be treated as a return of capital to the extent of such
shareholder's tax basis in its shares, and thereafter as capital gain. A return
of capital is not taxable, but it reduces a shareholder's tax basis in its
shares, thus reducing any loss or increasing any gain on a subsequent taxable
disposition by the shareholder of its shares.

Special tax rules apply to investments through defined contribution plans and
other tax-qualified plans. Shareholders should consult their tax advisors to
determine the suitability of shares of a Fund as an investment through such
plans and the precise effect of an investment on their particular tax situation.

All distributions by a Fund result in a reduction in the net asset value of that
Fund's shares. Should a distribution reduce the net asset value below a
shareholder's cost basis, such distribution may nevertheless be taxable to the
shareholder as ordinary income or capital gain as described above, even though,
from an investment standpoint, it may constitute a partial return of capital.
Such distributions are likely to occur in respect of shares purchased at a time
when a Fund's net asset value reflects gains that are either unrealized, or
realized but not distributed. Such realized gains may be required to be
distributed even when a Fund's net asset value also reflects unrealized losses.

Distributions are taxable to shareholders even if they are paid from income or
gains earned by a Fund before a shareholder's investment (and thus might have
been reflected in the price the shareholder paid). Distributions are taxable
whether shareholders receive them in cash or reinvest them in additional shares
through the reinvestment privilege. A shareholder whose distributions are
reinvested in shares will be treated as having received a dividend equal to the
fair market value of the new shares issued to the shareholder.

In the event that a Fund makes a distribution to a shareholder in excess of the
Fund's current and accumulated earnings and profits in any taxable year, the
excess distribution will be treated as a return of capital to the extent of such
shareholder's tax basis in its shares, and thereafter as capital gain. A return
of capital is not taxable, but it reduces a shareholder's tax basis in its
shares, thus reducing any loss or increasing any gain on a subsequent taxable
disposition by the shareholder of its shares.

Original Issue Discount, Payment-in-Kind Securities, Market Discount and
Acquisition Discount. Some debt obligations with a fixed maturity date of more
than one year from the date of issuance (and all zero-coupon debt obligations
with a fixed maturity date of more than one year from the date of issuance) that
are acquired by a Fund will be treated as debt obligations that are issued
originally at a discount. Generally, the amount of the original issue discount
("OID") is treated as interest income and is included in taxable income (and
required to be distributed) over the term of the debt security, even though
payment of that amount is not received until a later time, usually when the debt
security matures. In addition, payment-in-kind securities will give rise to
income which is required to be distributed and is taxable even though a Fund
holding the security receives no interest payment in cash on the security during
the year. Interest paid on debt obligations owned by a Fund that are considered
for tax purposes to be payable in the equity of the issuer or a related party
will not be deductible to the issuer, possibly affecting the cash flow of the
issuer.

Some debt obligations with a fixed maturity date of more than one year from the
date of issuance that are acquired by a Fund in the secondary market may be
treated as having market discount. Generally, any gain recognized on the
disposition of, and any partial payment of principal on, a debt security having
market discount is treated as ordinary income to the extent the gain, or
principal payment, does not exceed the "accrued market discount" on such debt
security. Market discount generally accrues in equal daily installments.

Some debt obligations with a fixed maturity date of one year or less from the
date of issuance that are acquired by the Fund may be treated as having
acquisition discount or OID. Generally, the Funds will be required to include
the acquisition discount or OID in income over the term of the debt security,
even though payment of that amount is not received until a later time, usually
when the debt security matures. The Funds may make one or more of the elections
applicable to debt obligations having acquisition discount or OID, which could
affect the character and timing of recognition of income.

If a Fund holds the foregoing kinds of securities, it may be required to pay out
as an income distribution each year an amount which is greater than the total
amount of cash interest the Fund actually received. Such distributions may be
made from the cash assets of the Fund or by liquidation of portfolio securities,
if necessary. A Fund may realize gains or losses from such liquidations. In the
event a Fund realizes net capital gains from such transactions, its shareholders
may receive a larger capital gain distribution than they would in the absence of
such transactions.

Higher-Risk Securities. A Fund may invest in debt obligations that are in the
lowest rating categories or are unrated, including debt obligations of issuers
not currently paying interest or who are in default. Investments in debt
obligations that are at risk of or in default present special tax issues for the
Fund. Tax rules are not entirely clear about issues such as whether the Fund
should recognize market discount on a debt obligation and, if so, the amount of
market discount a Fund should recognize, when a Fund may cease to accrue
interest, original issue discount or market discount, when and to what extent
deductions may be taken for bad debts or worthless securities and how payments
received on obligations in default should be allocated between principal and
income. These and other related issues will be addressed by a Fund when, as and
if it invests in such securities, in order to seek to ensure that it distributes
sufficient income to preserve its status as a regulated investment company and
does not become subject to US federal income or excise tax.

Hedging and Related Transactions. A Fund's transactions in options, futures
contracts, hedging transactions, forward contracts, swap agreements, straddles
and foreign currencies will be subject to special tax rules (including
mark-to-market, constructive sale, straddle, wash sale, short sale and other
rules), the effect of which may be to accelerate the Fund's income, defer
losses, cause adjustments in the holding periods of portfolio securities,
convert capital gains into ordinary income and convert short-term capital losses
into long-term capital losses. These rules could therefore affect the amount,
timing and character of distributions to investors. Each Fund will monitor its
transactions, will determine whether to make certain applicable tax elections
and will make appropriate entries in its books and records.

Certain of each Fund's hedging activities (including transactions, if any, in
foreign currencies or foreign currency-denominated instruments) are likely to
produce a difference between its book income and its taxable income. If a Fund's
book income exceeds its taxable income, the distribution (if any) of such excess
will be treated as (i) a dividend to the extent of the Fund's remaining earnings
and profits (including earnings and profits arising from tax-exempt income),
(ii) thereafter as a return of capital to the extent of the recipient's basis in
the shares, and (iii) thereafter as gain from the sale or exchange of a capital
asset. If a Fund's book income is less than its taxable income and net
tax-exempt income (that is, the excess, if any, of the Fund's interest income
excludable from gross income under section 103(a) over its deductions disallowed
under sections 265 and 171(a)(2)), the Fund could be required to make
distributions exceeding book income to qualify as a regulated investment company
that is accorded special tax treatment.

Backup Withholding. Under the backup withholding provisions of the Code,
redemption proceeds as well as taxable distributions may be subject to federal
income tax withholding for certain shareholders, including those who fail to
furnish a Fund with their taxpayer identification numbers and certifications as
to their tax status, who have under-reported dividend or interest income, or who
fail to certify to the Funds that they are not subject to such withholding. The
backup withholding rules may also apply to distributions that are properly
designated as exempt-interest dividends. The backup withholding tax rate is 28%
for amounts paid through 2010. This rate will expire and the backup withholding
rate will be 31% for amounts paid after December 31, 2010, unless Congress
enacts tax legislation providing otherwise.

Sale or Redemption of Shares. The sale, exchange or redemption of a Fund's
shares may give rise to a gain or loss. In general, any gain or loss realized
upon a taxable disposition of shares will be treated as long-term capital gain
or loss if the shares have been held for more than 12 months. Otherwise, the
gain or loss on the taxable disposition of a Fund's shares will be treated as
short-term capital gain or loss. However, any loss realized upon a taxable
disposition of shares held for six months or less will be treated as long-term,
rather than short-term, to the extent of any long-term capital gain
distributions received (or deemed received) by the shareholder with respect to
the shares. All or a portion of any loss realized upon a taxable disposition of
a Fund's shares will be disallowed if other substantially identical shares of
the Fund are purchased within 30 days before or after the disposition. In such a
case, the basis of the newly purchased shares will be adjusted to reflect the
disallowed loss.

Tax Shelter Reporting Regulations. Under Treasury regulations, if a shareholder
recognizes a loss with respect to a Fund's shares of $2 million or more for an
individual shareholder or $10 million or more for a corporate shareholder, the
shareholder must file with the IRS a disclosure statement on Form 8886. Direct
shareholders of portfolio securities are in many cases excepted from this
reporting requirement, but under current guidance, shareholders of a regulated
investment company are not excepted. Future guidance may extend the current
exception from this reporting requirement to shareholders of most or all
regulated investment companies. The fact that a loss is reportable under these
regulations does not affect the legal determination of whether the taxpayer's
treatment of the loss is proper. Shareholders should consult their tax advisors
to determine the applicability of these regulations in light of their individual
circumstances.

Non-U.S. Shareholders. Distributions properly designated Capital Gain Dividends
paid to non-U.S. investors and exempt-interest dividends generally will not be
subject to withholding of U.S. federal income tax. However, exempt-interest
dividends may be subject to backup withholding (as discussed above). In general,
dividends (other than Capital Gain Dividends) and exempt-interest dividends paid
by a Fund to a shareholder that is not a "U.S. person" within the meaning of the
Code (such shareholder, a "foreign person") are subject to withholding of U.S.
federal income tax at a rate of 30% (or lower applicable treaty rate) even if
they are funded by income or gains (such as portfolio interest, short-term
capital gains, or foreign-source dividend and interest income) that, if paid to
a foreign person directly, would not be subject to withholding. However,
effective for taxable years of a Fund beginning before January 1, 2008, a Fund
will not be required to withhold any amounts (i) with respect to distributions
(other than distributions to a foreign person (w) that has not provided a
satisfactory statement that the beneficial owner is not a U.S. person, (x) to
the extent that the dividend is attributable to certain interest on an
obligation if the foreign person is the issuer or is a 10% shareholder of the
issuer, (y) that is within certain foreign countries that have inadequate
information exchange with the United States, or (z) to the extent the dividend
is attributable to interest paid by a person that is a related person of the
foreign person and the foreign person is a controlled foreign corporation) from
U.S. source interest income that, in general, would not be subject to U.S.
federal income tax if earned directly by an individual foreign person, to the
extent such distributions are properly designated by the Fund, and (ii) with
respect to distributions (other than (a) distributions to an individual foreign
person who is present in the United States for a period or periods aggregating
183 days or more during the year of the distribution) and (b) distributions
subject to special rules regarding the disposition of U.S. real property
interests of net short-term capital gains in excess of net long-term capital
losses, to the extent such distributions are properly designated by the Fund.
Depending on the circumstances, a Fund may make such designations with respect
to all, some or none of its potentially eligible dividends and/or treat such
dividends, in whole or in part, as ineligible for this exemption from
withholding. Pending legislation proposes to extend the exemption from
withholding for interest-related and short-term capital gain distributions for
up to two years, i.e. for taxable years beginning before January 1, 2010. At the
time of this filing, it is unclear whether the legislation will be enacted and,
if enacted, what the term of the extension will be (e.g., for one year or two
years).

In order to qualify for this exemption from withholding, a foreign person will
need to comply with applicable certification requirements relating to its non-US
status (including, in general, furnishing an IRS Form W-8BEN or substitute
Form). In the case of shares held through an intermediary, the intermediary may
withhold even if a Fund makes a designation with respect to a payment. Foreign
persons should contact their intermediaries with regarding the application of
these rules to their accounts.

A beneficial holder of shares who is a foreign person is not, in general,
subject to U.S. federal income tax on gains (and is not allowed a deduction for
losses) realized on the sale of shares of a Fund or on Capital Gain Dividends or
exempt-interest dividends unless (i) such gain or dividend is effectively
connected with the conduct of a trade or of a trade or business carried on by
such holder within the United States or (ii) in the case of an individual
holder, the holder is present in the United States for a period or periods
aggregating 183 days or more during the year of the sale or the receipt of the
Capital Gain Dividend and certain other conditions are met.

In order for a foreign investor to qualify for exemption from the backup
withholding tax rates under income tax treaties, the foreign investor must
comply with special certification and filing requirements. Foreign investors in
the Funds should consult their tax advisers in this regard. Backup withholding
is not an additional tax. Any amounts withheld may be credited against the
shareholder's U.S. federal income tax liability, provided the appropriate
information is furnished to the IRS.

If a shareholder is eligible for the benefits of a tax treaty, any effectively
connected income or gain will generally be subject to U.S. federal income tax on
a net basis only if it is also attributable to a permanent establishment
maintained by the shareholder in the United States.

A beneficial holder of shares who is a foreign person may be subject to state
and local tax and to the U.S. federal estate tax in addition to the federal tax
on income referred to above.

General Considerations. The federal income tax discussion set forth above is for
general information only. Prospective investors should consult their tax
advisers regarding the specific federal tax consequences of purchasing, holding,
and disposing of shares of the Funds, as well as the effects of state, local and
foreign tax law and any proposed tax law changes.




Tax-Equivalent Yield

Tax-equivalent yield is the net annualized taxable yield needed to produce a
specified tax-exempt yield at a given tax rate based on a specified 30-day (or
one-month) period assuming semiannual compounding of income. Tax-equivalent
yield is calculated by dividing that portion of a Fund's yield which is
tax-exempt by one minus a stated income tax rate and adding the product to that
portion, if any, of the yield of a Fund that is not tax-exempt.


Tax-Exempt Versus Taxable Yield. You may want to determine which investment --
tax-exempt or taxable -- will provide you with a higher after-tax return. To
determine the taxable equivalent yield, simply divide the yield from the
tax-exempt investment by the sum of 1 minus your marginal tax rate. The tables
below are provided for your convenience in making this calculation for selected
tax-exempt yields and taxable income levels. These yields are presented for
purposes of illustration only and are not representative of any yield a Fund may
generate. The tables are based upon current law as to the 2008 tax rates
schedules.




FEDERAL


<TABLE>
<CAPTION>
Tax Equivalent Yields
DWS 2008


       Taxable            Effective    Effective    Federal Tax            Taxable
    Income Single        State Rate  Federal Rate     Bracket           Income Joint
    -------------        ----------  ------------     -------           ------------

<S>  <C>  <C>               <C>        <C>           <C>               <C>  <C>
     $0 - $7,550            0.00%      10.00%        10.00%            $0 - $15,100
   $7,551 - $30,650         0.00%      15.00%        15.00%         $15,101 - $61,300
  $30,651 - $74,200         0.00%      25.00%        25.00%         $61,301 - $123,700
  $74,201 - $154,800        0.00%      28.00%        28.00%        $123,701 - $188,450
 $154,801 - $336,550        0.00%      33.00%        33.00%        $188,451 - $336,550
    over $336,551           0.00%      35.00%        35.00%           over $336,551


                   If your combined federal and state effective tax rate in 2007 is:
                       10.00%     15.00%     25.00%      28.00%     33.00%     35.00%
To match these
tax-free yields:             Your taxable investment would have to earn the following yield:

          2.00%         2.22%      2.35%      2.67%       2.78%      2.99%      3.08%
          3.00%         3.33%      3.53%      4.00%       4.17%      4.48%      4.62%
          4.00%         4.44%      4.71%      5.33%       5.56%      5.97%      6.15%
          5.00%         5.56%      5.88%      6.67%       6.94%      7.46%      7.69%
          6.00%         6.67%      7.06%      8.00%       8.33%      8.96%      9.23%
          7.00%         7.78%      8.24%      9.33%       9.72%     10.45%     10.77%
          8.00%         8.89%      9.41%     10.67%      11.11%     11.94%     12.31%
          9.00%        10.00%     10.59%     12.00%      12.50%     13.43%     13.85%
</TABLE>

Please note:

1)       This chart does not take into consideration any state, local or city
         tax rates.

2)       The effective federal tax rates are calculated using the highest
         marginal tax rate within the applicable tax bracket.

3)       Taxable income amounts represent taxable income as defined in the
         Internal Revenue Code.


                                 NET ASSET VALUE

The net asset value of shares of each Fund is computed as of the close of
regular trading on the New York Stock Exchange (the "Exchange") on each day the
Exchange is open for trading (the "Value Time"). The Exchange is scheduled to be
closed on the following holidays: New Year's Day, Dr. Martin Luther King, Jr.
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas, and on the preceding Friday or subsequent Monday
when one of these holidays falls on a Saturday or Sunday, respectively. Net
asset value per share is determined separately for each class of shares by
dividing the value of the total assets of the Fund attributable to the shares of
that class, less all liabilities attributable to that class, by the total number
of shares of that class outstanding. The per share net asset value may be lower
for certain classes of the Fund because of higher expenses borne by these
classes.

An equity security is valued at its most recent sale price on the security's
primary exchange or OTC market as of the Value Time. Lacking any sales, the
security is valued at the calculated mean between the most recent bid quotation
and the most recent asked quotation (the "Calculated Mean") on such exchange or
OTC market as of the Value Time. If it is not possible to determine the
Calculated Mean, the security is valued at the most recent bid quotation on such
exchange or OTC market as of the Value Time. In the case of certain foreign
exchanges or OTC markets, the closing price reported by the exchange or OTC
market (which may sometimes be referred to as the "official close" or the
"official closing price" or other similar term) will be considered the most
recent sale price.

Debt securities are valued as follows. Money market instruments purchased with
an original or remaining maturity of 60 days or less, maturing at par, are
valued at amortized cost. Other money market instruments are valued based on
information obtained from an approved pricing agent or, if such information is
not readily available, by using matrix pricing techniques (formula driven
calculations based primarily on current market yields). Bank loans are valued at
prices supplied by an approved pricing agent (which are intended to reflect the
mean between the bid and asked prices), if available, and otherwise at the mean
of the most recent bid and asked quotations or evaluated prices, as applicable,
based on quotations or evaluated prices obtained from one or more
broker-dealers. Privately placed debt securities, other than Rule 144A debt
securities, initially are valued at cost and thereafter based on all relevant
factors including type of security, size of holding and restrictions on
disposition. Municipal debt securities are valued at prices supplied by an
approved pricing agent (which are intended to reflect the mean between the bid
and asked prices), if available, and otherwise at the mean of the most recent
bid and asked quotations or evaluated price obtained from a broker-dealer. Other
debt securities are valued at prices supplied by an approved pricing agent, if
available, and otherwise at the most recent bid quotation or evaluated price, as
applicable, obtained from one or more broker-dealers. If it is not possible to
value a particular debt security pursuant to the above methods, the security is
valued on the basis of factors including (but not limited to) maturity, coupon,
creditworthiness, currency denomination, and the movement of the market in which
the security is normally traded.


An exchange-traded option contract on securities, currencies and other financial
instruments is valued at its most recent sale price on the relevant exchange.
Lacking any sales, the option contract is valued at the Calculated Mean. If it
is not possible to determine the Calculated Mean, the option contract is valued
at the most recent bid quotation in the case of a purchased option contract or
the most recent asked quotation in the case of a written option contract, in
each case as of the Value Time. An option contract on securities, currencies and
other financial instruments traded in the OTC market is valued on the Value Date
at the evaluated price provided by the broker-dealer with which it was traded.
Futures contracts (and options thereon) are valued at the most recent settlement
price, if available, on the exchange on which they are traded most extensively.
With the exception of stock index futures contracts which trade on the Chicago
Mercantile Exchange, closing settlement times are prior to the close of trading
on the New York Stock Exchange. For stock index futures contracts which trade on
the Chicago Mercantile Exchange, closing settlement prices are normally
available at approximately 4:20 PM Eastern time. If no settlement price is
available, the last traded price on such exchange will be used.

If market quotations for a portfolio asset are not readily available or the
value of a portfolio asset as determined in accordance with Board approved
procedures does not represent the fair market value of the portfolio asset, the
value of the portfolio asset is taken to be an amount which, in the opinion of a
Fund's Pricing Committee (or, in some cases, a Board's Valuation Committee),
represents fair market value. The value of other portfolio holdings owned by a
Fund is determined in a manner which is intended to fairly reflect the fair
market value of the asset on the valuation date, based on valuation procedures
adopted by a Fund's Board and overseen primarily by a Fund's Pricing Committee.


                              TRUSTEES AND OFFICERS

The following table presents certain information regarding the Board Members of
each Trust. Each Board Member's year of birth is set forth in parentheses after
his or her name. Unless otherwise noted, (i) each Board Member has engaged in
the principal occupation(s) noted in the table for at least the most recent five
years, although not necessarily in the same capacity, and (ii) the address of
each Board Member that is not an "interested person" (as defined in the 1940
Act) of each Trust or the Advisor (each, an "Independent Board Member") is c/o
Dawn-Marie Driscoll, PO Box 100176, Cape Coral, FL 33904. The term of office for
each Board Member is until the election and qualification of a successor, or
until such Board Member sooner dies, resigns, is removed or as otherwise
provided in the governing documents of each Trust. Because the Funds do not hold
an annual meeting of shareholders, each Board Member will hold office for an
indeterminate period. The Board Members may also serve in similar capacities
with other funds in the DWS fund complex.

Independent Board Members

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth, Position                                                                   Number of Funds
 with the Trusts and Length of    Business Experience and                                        in DWS Fund
 Time Served(1)                   Directorships During the Past 5 Years                          Complex Overseen
--------------------------------------------------------------------------------------------------------------------
<S>                               <C>                                                                   <C>
Dawn-Marie Driscoll (1946)        President, Driscoll Associates (consulting firm); Executive           133
Chairperson since 2004,(2) and    Fellow, Center for Business Ethics, Bentley College;
Board Member since 1987           formerly: Partner, Palmer & Dodge (1988-1990); Vice President
                                  of Corporate Affairs and General Counsel, Filene's
                                  (1978-1988); Directorships: Trustee of 8 open-end mutual
                                  funds managed by Sun Capital Advisers, Inc. (since 2007);
                                  Director of ICI Mutual Insurance Company (since 2007);
                                  Advisory Board, Center for Business Ethics,
                                  Bentley College; Trustee, Southwest Florida
                                  Community Foundation (charitable
                                  organization); former Directorships:
                                  Investment Company Institute (audit,
                                  executive, nominating committees) and
                                  Independent Directors Council (governance,
                                  executive
                                  committees)
--------------------------------------------------------------------------------------------------------------------
Paul K. Freeman                   Consultant, World Bank/Inter-American Development Bank;               133
(1950)                            formerly: Project Leader, International Institute for Applied
Vice Chairperson since 2008, and  Systems Analysis (1998-2001); Chief Executive Officer, The
Board Member since 1993           Eric Group, Inc. (environmental insurance) (1986-1998)
--------------------------------------------------------------------------------------------------------------------
John W. Ballantine (1946)         Retired; formerly: Executive Vice President and Chief Risk            133
Board Member since 1999           Management Officer, First Chicago NBD Corporation/The First
                                  National Bank of Chicago (1996-1998); Executive Vice
                                  President and Head of International Banking (1995-1996);
                                  Directorships: Healthways Inc. (provider of disease and care
                                  management services); Portland General Electric (utility
                                  company); Stockwell Capital Investments PLC (private equity);
                                  former Directorships: First Oak Brook Bancshares, Inc. and
                                  Oak Brook Bank
--------------------------------------------------------------------------------------------------------------------
 Henry P. Becton, Jr. (1943)      Vice Chair, WGBH Educational Foundation; Directorships:               133
 Board Member since               Association of Public Television Stations; Becton Dickinson
 1990                             and Company(3) (medical technology company); Belo
                                  Corporation(3) (media company); Boston Museum
                                  of Science; Public Radio International; former
                                  Directorships: American Public Television;
                                  Concord Academy; New England Aquarium; Mass.
                                  Corporation for Educational
                                  Telecommunications; Committee for Economic
                                  Development; Public Broadcasting Service
--------------------------------------------------------------------------------------------------------------------
Keith R. Fox (1954)               Managing General Partner, Exeter Capital Partners (a series           133
Board Member since                of private equity funds); Directorships: Progressive Holding
1996                              Corporation (kitchen goods importer and distributor); Natural
                                  History, Inc. (magazine publisher); Box Top Media Inc.
                                  (advertising); The Kennel Shop (retailer)
--------------------------------------------------------------------------------------------------------------------
Kenneth C. Froewiss               Clinical Professor of Finance, NYU Stern School of Business           133
(1945)                            (1997-present); Member, Finance Committee, Association for
Board Member since                Asian Studies (2002-present); Director, Mitsui Sumitomo
2001                              Insurance Group (US) (2004-present); prior thereto, Managing
                                  Director, J.P. Morgan (investment banking firm) (until 1996)
--------------------------------------------------------------------------------------------------------------------
Richard J. Herring                Jacob Safra Professor of International Banking and Professor,         133
(1946)                            Finance Department, The Wharton School, University of
Board Member since                Pennsylvania (since July 1972); Co-Director, Wharton
1990                              Financial Institutions Center (since July 2000); Director,
                                  Japan Equity Fund, Inc. (since September 2007), Thai Capital
                                  Fund, Inc. (since September 2007), Singapore Fund, Inc.
                                  (since September 2007); formerly: Vice Dean and Director,
                                  Wharton Undergraduate Division (July 1995-June 2000);
                                  Director, Lauder Institute of International Management
                                  Studies (July 2000-June 2006)
--------------------------------------------------------------------------------------------------------------------
William McClayton (1944)          Managing Director, Diamond Management & Technology                    133
Board Member since 2004           Consultants, Inc. (global management consulting firm)
                                  (2001-present); Directorship: Board of Managers, YMCA of
                                  Metropolitan Chicago; formerly: Senior Partner, Arthur
                                  Andersen LLP (accounting) (1966-2001); Trustee, Ravinia
                                  Festival
--------------------------------------------------------------------------------------------------------------------
Rebecca W. Rimel                  President and Chief Executive Officer, The Pew Charitable             133
(1951)                            Trusts (charitable organization) (1994 to present); Trustee,
Board Member since                Thomas Jefferson Foundation (charitable organization) (1994
1995                              to present); Trustee, Executive Committee, Philadelphia
                                  Chamber of Commerce (2001 to 2007); Trustee,
                                  Pro Publica (2007-present) (charitable
                                  organization); formerly: Executive Vice
                                  President, The Glenmede Trust Company
                                  (investment trust and wealth management) (1983
                                  to 2004); Board Member, Investor Education
                                  (charitable organization) (2004-2005);
                                  Director, Viasys Health Care(3) (January
                                  2007-June 2007)
--------------------------------------------------------------------------------------------------------------------
William N. Searcy, Jr.            Private investor since October 2003; Trustee of 8 open-end            133
(1946)                            mutual funds managed by Sun Capital Advisers, Inc. (since
Board Member since                October 1998); formerly: Pension & Savings Trust Officer,
1993                              Sprint Corporation(3) (telecommunications) (November
                                  1989-September 2003)
--------------------------------------------------------------------------------------------------------------------
Jean Gleason Stromberg            Retired; formerly: Consultant (1997-2001); Director, US               133
(1943)                            Government Accountability Office (1996-1997); Partner,
Board Member since                Fulbright & Jaworski, L.L.P. (law firm) (1978-1996);
1997                              Directorships: The William and Flora Hewlett Foundation;
                                  Service Source, Inc.; former Directorships: Mutual Fund
                                  Directors Forum (2002-2004), American Bar Retirement
                                  Association (funding vehicle for retirement plans) (1987-1990
                                  and 1994-1996)
--------------------------------------------------------------------------------------------------------------------
Robert H. Wadsworth (1940)        President, Robert H. Wadsworth & Associates, Inc. (consulting
Board Member since 1999           firm) (1983 to present); Director, The Phoenix Boys Choir             136
                                  Association
--------------------------------------------------------------------------------------------------------------------

Interested Board Member

--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth, Position                                                                   Number of Funds
 with the Trusts and Length of    Business Experience and                                        in DWS Fund
 Time Served(1)                   Directorships During the Past 5 Years                          Complex Overseen
--------------------------------------------------------------------------------------------------------------------
 Axel Schwarzer(4)                Managing Director(5), Deutsche Asset Management; Head of              133
 (1958)                           Deutsche Asset Management Americas; CEO of DWS Investments;
 Board Member since               formerly: board member of DWS Investments, Germany
 2006                             (1999-2005); Head of Sales and Product Management for the
                                  Retail and Private Banking Division of
                                  Deutsche Bank in Germany (1997-1999); various
                                  strategic and operational positions for
                                  Deutsche Bank Germany Retail and Private
                                  Banking Division in the field of investment
                                  funds, tax driven instruments and asset
                                  management for corporates (1989-1996)
--------------------------------------------------------------------------------------------------------------------

Officers(6)

--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth, Position
 with the Trusts and Length of    Business Experience and
 Time Served(7)                   Directorships During the Past 5 Years
--------------------------------------------------------------------------------------------------------------------
 Michael G. Clark(8) (1965)       Managing Director(5), Deutsche Asset Management (2006-present); President of
 President, 2006-present          DWS family of funds; Director, ICI Mutual Insurance Company (since
                                  October 2007); formerly: Director of Fund Board Relations (2004-2006) and
                                  Director of Product Development (2000-2004), Merrill Lynch Investment Managers;
                                  Senior Vice President Operations, Merrill Lynch Asset Management (1999-2000)
--------------------------------------------------------------------------------------------------------------------
 John Millette(9) (1962)          Director(5), Deutsche Asset Management
 Vice President and Secretary,
 1999-present
--------------------------------------------------------------------------------------------------------------------
 Paul H. Schubert(8) (1963)       Managing Director(5), Deutsche Asset Management (since July 2004); formerly:
 Chief Financial Officer,         Executive Director, Head of Mutual Fund Services and Treasurer for UBS Family
 2004-present                     of Funds (1998-2004); Vice President and Director of Mutual Fund Finance at UBS
 Treasurer, 2005-present          Global Asset Management (1994-1998)
--------------------------------------------------------------------------------------------------------------------
 Patricia DeFilippis(10) (1963)   Vice President, Deutsche Asset Management (since June 2005); formerly: Counsel,
 Assistant Secretary,             New York Life Investment Management LLC (2003-2005); legal associate, Lord,
 2005-present                     Abbett & Co. LLC (1998-2003)
--------------------------------------------------------------------------------------------------------------------
 Elisa D. Metzger(10)  (1962)     Director(5), Deutsche Asset Management (since September 2005); formerly:
 Assistant Secretary,             Counsel, Morrison and Foerster LLP (1999-2005)
 2005-present
--------------------------------------------------------------------------------------------------------------------
 Caroline Pearson(9) (1962)       Managing Director(5), Deutsche Asset Management
 Assistant Secretary,
 1997-present
--------------------------------------------------------------------------------------------------------------------
 Paul Antosca(9)                  Director(5), Deutsche Asset Management (since 2006); formerly: Vice President,
 (1957)                           The Manufacturers Life Insurance Company (U.S.A.) (1990-2006)
 Assistant Treasurer,
 2007-present
--------------------------------------------------------------------------------------------------------------------
 Jack Clark (9)                   Director(5), Deutsche Asset Management (since 2007); formerly: Vice President,
 (1967)                           State Street Corporation (2002-2007)
 Assistant Treasurer,
 2007-present
--------------------------------------------------------------------------------------------------------------------
 Kathleen Sullivan D'Eramo(9)     Director(5), Deutsche Asset Management
 (1957)
 Assistant Treasurer,
 2003-present
--------------------------------------------------------------------------------------------------------------------
 Diane Kenneally(9)               Director(5), Deutsche Asset Management
 (1966)
 Assistant Treasurer,
 2007-present
--------------------------------------------------------------------------------------------------------------------
 Jason Vazquez(10) (1972)         Vice President, Deutsche Asset Management (since 2006); formerly: AML
 Anti-Money Laundering            Operations Manager for Bear Stearns (2004-2006); Supervising Compliance
 Compliance Officer,              Principal and Operations Manager for AXA Financial (1999-2004)
 2007-present
--------------------------------------------------------------------------------------------------------------------
 Robert Kloby(10) (1962)          Managing Director(5), Deutsche Asset Management (2004-present); formerly: Chief
 Chief Compliance Officer,        Compliance Officer/Chief Risk Officer, Robeco USA (2000-2004); Vice President,
 2006-present                     The Prudential Insurance Company of America (1988-2000); E.F. Hutton and
                                  Company (1984-1988)
--------------------------------------------------------------------------------------------------------------------
 J. Christopher Jackson(10)       Director(5), Deutsche Asset Management (2006-present); formerly: Director,
 (1951)                           Senior Vice President, General Counsel, and Assistant Secretary, Hansberger
 Chief Legal Officer,             Global Investors, Inc. (1996-2006); Director, National Society of Compliance
 2006-present                     Professionals (2002-2005) (2006-2009)
--------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)      The length of time served represents the year in which the Board Member
         joined the board of one or more DWS funds currently overseen by the
         Board.

(2)      Represents the year in which Ms. Driscoll was first appointed
         Chairperson of certain DWS funds.

(3)      A publicly held company with securities registered pursuant to Section
         12 of the Securities Exchange Act of 1934.

(4)      The mailing address of Axel Schwarzer is c/o Deutsche Investment
         Management Americas Inc., 345 Park Avenue, New York, New York 10154.
         Mr. Schwarzer is an interested Board Member by virtue of his positions
         with Deutsche Asset Management. As an interested person, Mr. Schwarzer
         receives no compensation from the Funds.

(5)      Executive title, not a board directorship.

(6)      As a result of their respective positions held with the Advisor, these
         individuals are considered "interested persons" of the Advisor within
         the meaning of the 1940 Act. Interested persons receive no compensation
         from the Funds.

(7)      The length of time served represents the year in which the officer was
         first elected in such capacity for one or more DWS funds.

(8)      Address:  345 Park Avenue, New York, New York 10154.

(9)      Address: One Beacon Street, Boston, Massachusetts 02108.

(10)     Address:  280 Park Avenue, New York, New York 10017.

Certain officers hold similar positions for other investment companies for which
DIMA or an affiliate serves as the Advisor.

Officer's Role with Principal Underwriter:  DWS Investments Distributors, Inc.

 Paul H. Schubert:                         Vice President
 Caroline Pearson:                         Secretary

Board Members' Responsibilities. The officers of each Trust manage its
day-to-day operations under the direction of the Board. The primary
responsibility of the Board is to represent the interests of the Funds and to
provide oversight of the management of the Funds.

Board Committees. The Board has established the following standing committees:
Audit Committee, Nominating and Governance Committee, Contract Committee, Equity
Oversight Committee, Fixed-Income and Quant Oversight Committee, Marketing and
Shareholder Services Committee, and Operations Committee. For each committee,
the Board has adopted a written charter setting forth each committee's
responsibilities. Each committee was reconstituted effective April 1, 2008.

Audit Committee: The Audit Committee, which consists entirely of Independent
Board Members, assists the Board in fulfilling its responsibility for oversight
of (1) the integrity of the financial statements, (2) the Funds' accounting and
financial reporting policies and procedures, (3) the Funds' compliance with
legal and regulatory requirements related to accounting and financial reporting
and (4) the qualifications, independence and performance of the independent
registered public accounting firm for the Funds. It also approves and recommends
to the Board the appointment, retention or termination of the independent
registered public accounting firm for the Funds, reviews the scope of audit and
internal controls, considers and reports to the Board on matters relating to the
Funds' accounting and financial reporting practices, and performs such other
tasks as the full Board deems necessary or appropriate. The Audit Committee
receives annual representations from the independent registered public
accounting firm as to its independence. The members of the Audit Committee are
William McClayton (Chair), Kenneth C. Froewiss (Vice Chair), John W. Ballantine,
Henry P. Becton, Jr., Keith R. Fox and William N. Searcy, Jr. During the
calendar year 2007, the Audit Committee of the Funds' Board held nine (9)
meetings.

Nominating and Governance Committee: The Nominating and Governance Committee,
which consists entirely of Independent Board Members, recommends individuals for
membership on the Board, nominates officers, board and committee chairs, vice
chairs and committee members, and oversees the operations of the Board. The
Nominating and Governance Committee also reviews recommendations by shareholders
for candidates for Board positions. Shareholders may recommend candidates for
Board positions by forwarding their correspondence by US mail or courier service
to Dawn-Marie Driscoll, P.O. Box 100176, Cape Coral, FL 33904. The members of
the Nominating and Governance Committee are Henry P. Becton, Jr. (Chair),
Rebecca W. Rimel (Vice Chair), Paul K. Freeman and William McClayton. During the
calendar year 2007, the Nominating/Corporate Governance Committee of the Funds'
Board performed similar functions and held three (3) meetings.

Contract Committee: The Contract Committee, which consists entirely of
Independent Board Members, reviews at least annually, (a) the Funds' financial
arrangements with DIMA and its affiliates, and (b) the Funds' expense ratios.
The members of the Contract Committee are Robert H. Wadsworth (Chair), Keith R.
Fox (Vice Chair), Henry P. Becton, Jr., Richard J. Herring, William McClayton
and Jean Gleason Stromberg.

Equity Oversight Committee: The Equity Oversight Committee reviews the
investment operations of those Funds that primarily invest in equity securities
(except for those funds managed by a quantitative investment team). The members
of the Equity Oversight Committee are John W. Ballantine (Chair), William
McClayton (Vice Chair), Henry P. Becton, Jr., Keith R. Fox, Richard J. Herring
and Rebecca W. Rimel. During the calendar year 2007, the Equity Oversight
Committee of the Funds' Board performed similar functions and held six (6)
meetings.

Fixed-Income and Quant Oversight Committee: The Fixed-Income and Quant Oversight
Committee reviews the investment operations of those Funds that primarily invest
in fixed-income securities or are managed by a quantitative investment team. The
members of the Fixed-Income and Quant Oversight Committee are William N. Searcy,
Jr. (Chair), Jean Gleason Stromberg (Vice Chair), Dawn-Marie Driscoll, Paul K.
Freeman, Kenneth C. Froewiss and Robert H. Wadsworth. During the calendar year
2007, the Fixed-Income Oversight Committee of the Funds' Board performed similar
functions and held six (6) meetings.

Marketing and Shareholder Services Committee: The Marketing and Shareholder
Services Committee reviews the Funds' marketing program, sales practices and
literature and shareholder services. The members of the Marketing and
Shareholder Services Committee are Richard J. Herring (Chair), Dawn-Marie
Driscoll (Vice Chair), Paul K. Freeman, Rebecca W. Rimel, Jean Gleason Stromberg
and Robert H. Wadsworth. During the calendar year 2007, the
Marketing/Distribution/Shareholder Service Committee of the Funds' Board
performed similar functions and held seven (7) meetings.

The Operations Committee: The Operations Committee reviews the administrative
operations, legal affairs and general compliance matters of the Funds. The
Operations Committee reviews administrative matters related to the operations of
the Funds, policies and procedures relating to portfolio transactions, custody
arrangements, fidelity bond and insurance arrangements, valuation of Fund assets
and securities and such other tasks as the full Board deems necessary or
appropriate. The Operations Committee also oversees the valuation of the Funds'
securities and other assets and determines, as needed, the fair value of Fund
securities or other assets under certain circumstances as described in the
Funds' Valuation Procedures. The Operations Committee has appointed a Valuation
Sub-Committee, which may make determinations of fair value required when the
Operations Committee is not in session. The members of the Operations Committee
are Paul K. Freeman (Chair), Dawn-Marie Driscoll (Vice Chair), John W.
Ballantine, Kenneth C. Froewiss, Rebecca W. Rimel and William N. Searcy, Jr. The
members of the Valuation Sub-Committee are Kenneth C. Froewiss (Chair), John W.
Ballantine, Dawn-Marie Driscoll (Alternate), Paul K. Freeman (Alternate),
Rebecca W. Rimel (Alternate) and William N. Searcy, Jr. (Alternate). During the
calendar year 2007, the Expenses/Operations Committee and Valuation Committee
performed similar functions and each held nine (9) meetings and six (6)
meetings, respectively.

Ad Hoc Committees. In addition to the standing committees described above, from
time to time the Board may also form ad hoc committees to consider specific
issues.

Remuneration. Each Independent Board Member receives compensation from the Funds
for his or her services, which includes retainer fees and specified amounts for
various committee services and for the Board Chairperson. No additional
compensation is paid to any Independent Board Member for travel time to
meetings, attendance at directors' educational seminars or conferences, service
on industry or association committees, participation as speakers at directors'
conferences or service on special fund industry director task forces or
subcommittees. Independent Board Members do not receive any employee benefits
such as pension or retirement benefits or health insurance from the Funds or any
fund in the DWS fund complex.

Board Members who are officers, directors, employees or stockholders of Deutsche
Asset Management or its affiliates receive no direct compensation from the
Funds, although they are compensated as employees of Deutsche Asset Management,
or its affiliates, and as a result may be deemed to participate in fees paid by
the Funds. The following tables show compensation from the Funds and aggregate
compensation from all of the funds in the DWS fund complex received by each
Independent Board Member during the calendar year 2007. Mr. Schwarzer is an
interested person of the Funds and received no compensation from the Funds or
any fund in the DWS fund complex during the relevant periods.




<TABLE>
<CAPTION>

                                                          Aggregate                                    Total
                                    Aggregate         Compensation from         Aggregate           Compensation
                                Compensation from       DWS Managed         Compensation from      from Fund and
                               DWS Strategic High      Municipal Bond        DWS Intermediate         DWS Fund
  Name of Board Member         Yield Tax-Free Fund          Fund            Tax/AMT Free Fund        Complex(1)
  --------------------         -------------------          ----            -----------------        ----------

<S>                                    <C>              <C>                        <C>                <C>
  John W. Ballantine                   $0               $0                         $0                 $215,000
  Henry P. Becton, Jr.(2)            $2,201            $9,165                  $1,512                 $200,000
  Dawn-Marie Driscoll(2)((3))        $2,766           $11,505                  $1,898                 $253,000
  Keith R. Fox((2))                  $2,219            $9,233                  $1,523                 $203,000
  Paul K. Freeman(4)                   $0                $0                        $0                 $265,000
  Kenneth C. Froewiss(2)             $2,186            $9,097                  $1,501                 $200,000
  Richard J. Herring(2)              $2,129            $8,867                  $1,463                 $195,000
  William McClayton(5)                 $0                $0                        $0                 $205,000
  Rebecca W. Rimel(2)                $2,074            $8,639                  $1,426                 $194,000
  William N. Searcy, Jr.(2)          $2,186            $9,097                  $1,501                 $200,000
  Jean Gleason Stromberg((2))        $2,063            $8,595                  $1,418                 $189,000
  Robert H. Wadsworth                  $0                $0                        $0                 $245,250
</TABLE>

(1)      The DWS fund complex is composed of 138 funds as of December 31, 2007.

(2)      Aggregate compensation includes amounts paid to the Board Members for
         special meetings of ad hoc committees of the board in connection with
         the consolidation of the DWS fund boards and various funds, meetings
         for considering fund expense simplification initiatives, and
         consideration of issues specific to the Funds' direct shareholders
         (i.e., those shareholders who did not purchase shares through financial
         intermediaries). Such amounts totaled $1,000 for Mr. Becton, $1,000 for
         Ms. Driscoll, $1,000 for Mr. Fox, $1,000 for Mr. Froewiss, $1,000 for
         Dr. Herring, $5,000 for Ms. Rimel, $1,000 for Mr. Searcy and $1,000 for
         Ms. Stromberg. These meeting fees were borne by the Advisor.

(3)      Includes $50,000 in annual retainer fees received by Ms. Driscoll as
         Chairperson of certain DWS funds.

(4)      Includes $25,000 paid to Dr. Freeman for numerous special meetings of
         an ad hoc committee in connection with board consolidation initiatives
         and $50,000 in annual retainer fees received by Dr. Freeman as
         Chairperson of certain DWS funds.

(5)      Does not include $15,000 to be paid to Mr. McClayton in calendar year
         2008 for numerous special meetings of an ad hoc committee of the former
         Chicago Board in connection with board consolidation initiatives.

Dr. Freeman, prior to his service as Independent Board Member, served as a board
member of certain funds in the Deutsche Bank complex ("DB Funds"). In connection
with his resignation and the resignation of certain other board members of the
DB Funds on July 30, 2002 (the "Effective Date"), which was part of a
restructuring of the boards overseeing the DB Funds, Deutsche Asset Management,
Inc. ("DAMI") agreed to recommend, and, if necessary obtain, directors and
officers ("D&O") liability insurance coverage for the prior board members,
including Dr. Freeman, that is at least as equivalent in scope and amount to the
D&O coverage provided to the prior board members for the six-year period
following the Effective Date. In the event that D&O insurance coverage is not
available in the commercial marketplace on commercially reasonable terms from a
conventional third party insurer, DeAM reserved the right to provide
substantially equivalent protection in the form of an indemnity or financial
guarantee from an affiliate of DeAM. The D&O policy in effect prior to the
Effective Date provided aggregate coverage of $25,000,000, subject to a $250,000
per claim deductible.

Board Member Ownership in the Funds

The following table shows the dollar range of equity securities beneficially
owned by each Board Member in the Funds and DWS fund complex as of June 30,
2008.

<TABLE>
<CAPTION>
                                     Dollar Range of                                                   Aggregate Dollar
                                        Beneficial         Dollar Range of       Dollar Range of      Range of Ownership
                                     Ownership in DWS         Beneficial            Beneficial           in all Funds
                                      Strategic High       Ownership in DWS      Ownership in DWS     Overseen by Board
                                     Yield Tax-Free       Managed Municipal        Intermediate       Member in the DWS
Board Member                               Fund               Bond Fund         Tax/AMT Free Fund      Fund Complex(1)
------------                               ----               ---------         -----------------      ---------------

Independent Board Member:
-------------------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

John W. Ballantine                         None                   None                  None            Over $100,000
Henry P. Becton, Jr.                    $1-$10,000             $1-$10,000            $1-$10,000         Over $100,000
Dawn-Marie Driscoll                   $10,001-$50,000       $10,001-$50,000       $10,001-$50,000       Over $100,000
Keith R. Fox                               None                   None                  None            Over $100,000
Paul K. Freeman                            None                   None                  None            Over $100,000
Kenneth C. Froewiss                        None                   None                  None            Over $100,000
Richard J. Herring                     Over $100,000              None                  None            Over $100,000
William McClayton                          None                   None                  None            Over $100,000
Rebecca W. Rimel                           None                   None                  None            Over $100,000
William N. Searcy, Jr.                     None                   None                  None            Over $100,000
Jean Gleason Stromberg                $10,001-$50,000       $10,001-$50,000             None            Over $100,000
Robert H. Wadsworth                        None                   None                  None            Over $100,000

Interested Board Member:
------------------------

Axel Schwarzer                             None                   None                  None            Over $100,000
</TABLE>

(1)      Securities beneficially owned as defined under the 1934 Act include
         direct and/or indirect ownership of securities where the Board Member's
         economic interest is tied to the securities, employment ownership and
         securities when the Board Member can exert voting power, and when the
         Board Member has authority to sell the securities. The dollar ranges
         are: None, $1-$10,000, $10,001-$50,000, $50,001-$100,000 and over
         $100,000.


Ownership in Securities of the Advisor and Related Companies


As reported to the Funds, the information in the following table reflects
ownership by the Independent Board Members and their immediate family members of
certain securities as of December 31, 2007. Immediate family members can be a
spouse, children residing in the same household including step and adoptive
children, and any dependents. The securities represent ownership in the Advisor
or principal underwriter of the Funds and any persons (other than a registered
investment company) directly or indirectly controlling, controlled by, or under
common control with the Advisor or principal underwriter of the Funds (including
Deutsche Bank AG).


<TABLE>
<CAPTION>
                                   Owner and                                        Value of        Percent of Class
Independent                    Relationship to                     Title of     Securities on an    on an Aggregate
Board Member                     Board Member        Company        Class       Aggregate Basis          Basis
------------                     ------------        -------        -----       ---------------          -----


<S>     <C>    <C>    <C>    <C>    <C>    <C>
John W. Ballantine                                 None
Henry P. Becton, Jr.                               None
Dawn-Marie Driscoll                                None
Keith R. Fox                                       None
Paul K. Freeman                                    None
Kenneth C. Froewiss                                None
Richard J. Herring                                 None
William McClayton                                  None
Rebecca W. Rimel                                   None
William N. Searcy, Jr.                             None
Jean Gleason Stromberg                             None
Robert H. Wadsworth                                None
</TABLE>


Securities Beneficially Owned


As of September 8, 2008, the Board Members and officers of each Trust owned, as
a group, less than 1% of the outstanding shares of each Fund.

To the best of each Fund's knowledge, as of September 8, 2008, no person owned
of record or beneficially 5% or more of any class of the Fund's outstanding
shares, except as noted below.

DWS Strategic High Yield Tax-Free Fund

<TABLE>
<CAPTION>
Name and Address of Investor Ownership                          Shares                      % of Total Shares
--------------------------------------                          ------                      -----------------

<S>                                                          <C>                            <C>
CHARLES SCHWAB & CO INC                                      4,297,681.53                   15.02% of Class A
SPECIAL CUSTODY ACCOUNT FOR THE EXCLUSIVE BENEFIT
OF CUSTOMERS
ATTN MUTUAL FUNDS
SAN FRANCISCO CA  94104-4151

MLPF&S FOR THE SOLE BENEFIT OF                               1,615,932.64                   5.65% of Class A
ITS CUSTOMERS
ATTN FUND ADMINISTRATION 9E540
JACKSONVILLE FL  32246-6484

MLPF&S FOR THE SOLE BENEFIT OF                                297,981.62                    15.86% of Class B
ITS CUSTOMERS
ATTN FUND ADMINISTRATION 9E541
JACKSONVILLE FL  32246-6484

CITIGROUP GLOBAL MARKETS INC                                  125,039.92                    6.65% of Class B
XXXXXXXXXX
ATTN PETER BOOTH 7TH FL
NEW YORK NY  10001-2402

MLPF&S FOR THE SOLE BENEFIT OF                               1,565,031.51                   20.31% of Class C
ITS CUSTOMERS
ATTN FUND ADMINISTRATION 9E542
JACKSONVILLE FL  32246-6484

RAYMOND JAMES & ASSOC INC                                     324,262.33              35.72% of Institutional Class
FBO REINHOLD A PREIK TTEE
U/A DTD APR 15 2008
REINHOLD A PREIK LIVING TRUST
AMELIA ISLAND FL  32034-6443

PERSHING LLC                                                  310,313.49              34.18% of Institutional Class
JERSEY CITY NJ  07303-2052

SEI PRIVATE TR CO                                              81,900.08              9.02% of Institutional Class
FBO DAY PITNEY LLP ID 801
ONE FREEDOM VALLEY DRIVE
OAKS PA  19456

LPL FINANCIAL                                                  54,037.46              5.95% of Institutional Class
FBO CUSTOMER ACCOUNTS
ATTN MUTUAL FUND OPERATIONS
SAN DIEGO CA  92150-9046

CHARLES SCHWAB & CO INC                                      3,980,534.59                   6.36% of Class S
REINVEST ACCOUNT
ATTN MUTUAL FUND DEPT
SAN FRANCISCO CA  94104-4151


DWS Managed Municipal Bond Fund

Name and Address of Investor Ownership                          Shares                      % of Total Shares
--------------------------------------                          ------                      -----------------

MLPF&S FOR THE SOLE BENEFIT OF                                105,266.74                    8.89% of Class B
ITS CUSTOMERS
ATTN FUND ADMINISTRATION (97D81)
JACKSONVILLE FL  32246-6484

MLPF&S FOR THE SOLE BENEFIT OF                                420,355.03                    10.22% of Class C
ITS CUSTOMERS
ATTN FUND ADMINISTRATION (97D83)
JACKSONVILLE FL  32246-6484

CITIGROUP GLOBAL MARKETS INC                                  305,302.55                    7.42% of Class C
XXXXXXXXXX
ATTN PETER BOOTH 7TH FL
NEW YORK NY  10001-2402

MORGAN STANLEY & CO.                                          208,355.62                    5.07% of Class C
HARBORSIDE FINANCIAL CENTER
PLAZA II 3RD FLOOR
JERSEY CITY NJ  07311

LPL FINANCIAL                                                 271,411.81              44.03% of Institutional Class
FBO CUSTOMER ACCOUNTS
ATTN MUTUAL FUND OPERATIONS
SAN DIEGO CA  92150-9046

KNOTFLOAT & CO                                                 69,549.00              11.28% of Institutional Class
BOSTON MA  02206-5496

PERSHING LLC                                                   32,675.83               5.3% of Institutional Class
JERSEY CITY NJ  07303-2052


DWS Intermediate Tax/AMT Free Fund

Name and Address of Investor Ownership                          Shares                      % of Total Shares
--------------------------------------                          ------                      -----------------

MLPF&S FOR THE SOLE BENEFIT OF                               5,426,521.66                   46.25% of Class A
ITS CUSTOMERS
ATTN FUND ADMINISTRATION 97FL6
JACKSONVILLE FL  32246-6484

MORGAN STANLEY & CO.                                         1,132,657.65                   9.65% of Class A
HARBORSIDE FINANCIAL CENTER
PLAZA II 3RD FLOOR
JERSEY CITY NJ  07311

CHARLES SCHWAB & CO INC                                       668,710.91                     5.7% of Class A
SPECIAL CUSTODY ACCOUNT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMERS
ATTN MUTUAL FUNDS
SAN FRANCISCO CA  94104-4151

MLPF&S FOR THE SOLE BENEFIT OF                                 73,050.92                    27.36% of Class B
ITS CUSTOMERS
ATTN FUND ADMINISTRATION 97FL7
JACKSONVILLE FL  32246-6484

CITIGROUP GLOBAL MARKETS INC                                   25,365.66                     9.5% of Class B
XXXXXXXXXX
ATTN PETER BOOTH 7TH FL
NEW YORK NY  10001-2402

MORGAN STANLEY & CO.                                           16,175.92                    6.06% of Class B
HARBORSIDE FINANCIAL CENTER
PLAZA II 3RD FLOOR
JERSEY CITY NJ  07311

MLPF&S FOR THE SOLE BENEFIT OF                                486,699.88                    47.56% of Class C
ITS CUSTOMERS
ATTN FUND ADMINISTRATION #97JS9
JACKSONVILLE FL  32246-6484

MORGAN STANLEY & CO.                                           71,345.07                    6.97% of Class C
HARBORSIDE FINANCIAL CENTER
PLAZA II 3RD FLOOR
JERSEY CITY NJ  07311

NATIONAL FINANCIAL SERVICES CORP                             6,378,319.26             47.45% of Institutional Class
FOR THE EXCLUSIVE BENEFIT OF OUR
NEW YORK NY  10281-1003

CHARLES SCHWAB & CO INC                                      2,623,833.07             19.52% of Institutional Class
SPECIAL CUSTODY ACCOUNT
MUTUAL FUNDS DEPARTMENT
SAN FRANCISCO CA  94104-4151

CHARLES SCHWAB & CO INC                                      4,622,922.88                   12.74% of Class S
ATTN MUTUAL FUNDS DEPT
SAN FRANCISCO CA  94104-4151
</TABLE>


Agreement to Indemnify Independent Trustees for Certain Expenses


In connection with litigation or regulatory action related to possible improper
market timing or other improper trading activity or possible improper marketing
and sales activity in certain DWS Funds (the "Affected Funds"), DIMA has agreed
to indemnify and hold harmless the Affected Funds ("Fund Indemnification
Agreement") against any and all loss, damage, liability and expense, arising
from market timing or marketing and sales matters alleged in any enforcement
actions brought by governmental authorities involving or potentially affecting
the Affected Funds or DIMA ("Enforcement Actions") or that are the basis for
private actions brought by shareholders of the Affected Funds against the
Affected Funds, their directors and officers, DIMA and/or certain other parties
("Private Litigation"), or any proceedings or actions that may be threatened or
commenced in the future by any person (including governmental authorities),
arising from or similar to the matters alleged in the Enforcement Actions or
Private Litigation. In recognition of its undertaking to indemnify the Affected
Funds and in light of the rebuttable presumption generally afforded to
independent directors/trustees of investment companies that they have not
engaged in disabling conduct, DIMA has also agreed, subject to applicable law
and regulation, to indemnify certain (or, with respect to certain Affected
Funds, all) of the Independent Trustees of the Affected Funds, against certain
liabilities the Independent Trustees may incur from the matters alleged in any
Enforcement Actions or Private Litigation or arising from or similar to the
matters alleged in the Enforcement Actions or Private Litigation, and advance
expenses that may be incurred by the Independent Trustees in connection with any
Enforcement Actions or Private Litigation. DIMA is not, however, required to
provide indemnification and advancement of expenses: (1) with respect to any
proceeding or action which the Affected Funds' Board determines that the
Independent Trustees ultimately would not be entitled to indemnification or (2)
for any liability of the Independent Trustees to the Affected Funds or their
shareholders to which the Independent Trustee would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the Independent Trustee's duties as a director or trustee of the Affected
Funds as determined in a final adjudication in such action or proceeding. The
estimated amount of any expenses that may be advanced to the Independent
Trustees or indemnity that may be payable under the indemnity agreements is
currently unknown. These agreements by DIMA will survive the termination of the
investment management agreements between DIMA and the Affected Funds.


                               TRUST ORGANIZATION

Organizational Description


DWS Municipal Trust is a Massachusetts business trust established under a
Declaration of Trust dated September 24, 1976 as amended and restated as of June
2, 2008, as amended. The Trustees of DWS Municipal Trust have established and
designated two series of the Trust: DWS Strategic High Yield Tax-Free Fund and
DWS Managed Municipal Bond Fund, both open ended, diversified investment
companies. Effective October 1, 2002, Scudder Managed Municipal Bonds changed
its name to Scudder Managed Municipal Bond Fund. On February 6, 2006, the Trust
and its series: Scudder High Yield Tax-Free Fund and Scudder Managed Municipal
Bond Fund were renamed DWS Municipal Trust, DWS High Yield Tax Free Fund and DWS
Managed Municipal Bond Fund, respectively. On or about April 1, 2008, DWS High
Yield Tax Free Fund was renamed DWS Strategic High Yield Tax-Free Fund. The
Trust's authorized capital consists of an unlimited number of shares of
beneficial interest, par value $0.01 per share. DWS Intermediate Tax/AMT Free
Fund is a series of DWS Tax Free Trust, a Massachusetts business trust
established under a Declaration of Trust dated December 28, 1982, as amended and
restated as of June 2, 2008. The name and investment objectives of the Fund were
changed effective November 1, 1990. Effective October 1, 2003, Scudder Medium
Term Tax-Free Fund changed its name to Scudder Intermediate Tax/AMT Free Fund.
On February 6, 2006, the Trust and its series: Scudder Intermediate Tax/AMT Free
Fund were renamed DWS Tax Free Trust and DWS Intermediate Tax/AMT Free Fund,
respectively. The Fund's authorized capital consists of an unlimited number of
shares of beneficial interest, $.01 par value.

Currently, Class A, Class B, Class C, Class S and Institutional Class shares are
offered.

Each Trust is a Massachusetts business trust organized under the laws of
Massachusetts and is governed by an Amended and Restated Declaration of Trust
that was approved by shareholders in the second quarter of 2006, as may be
further amended from time to time (each a "Declaration of Trust"). All shares
issued and outstanding are fully paid and non-assessable (except as set forth
below), transferable, have no pre-emptive or conversion rights (except as may be
determined by the Board of Trustees) and are redeemable as described in the SAI
and a Fund's prospectus. Each share has equal rights with each other share of
the same class of the Fund as to voting, dividends, exchanges, conversion
features and liquidation. Shareholders are entitled to one vote for each full
share held and fractional votes for fractional shares held.


A Fund generally is not required to hold meetings of its shareholders. Under the
Declaration of Trust of DWS Municipal Trust, however, shareholder meetings will
be held in connection with the following matters to the extent and as provided
in the Declaration of Trust and as required by applicable law: (a) the election
or removal of trustees if a meeting is called for such purpose; (b) the
termination of the Trust or a Fund; (c) an amendment of the Declaration of
Trust; and (d) such additional matters as may be required by law, the
Declaration of Trust, the By-laws of a Fund, or any registration of a Fund with
the SEC, or as the Trustees may determine to be necessary or desirable.
Shareholders also vote upon changes in fundamental policies or restrictions.

Under the Declaration of Trust of DWS Tax Free Trust, however, shareholder
meetings will be held in connection with the following matters to the extent and
as provided in the Declaration of Trust and as required by applicable law: (a)
the election or removal of trustees if a meeting is called for such purpose; (b)
the termination of the Trust or a Fund; (c) an amendment of the Declaration of
Trust; (d) to the same extent as stockholders of Massachusetts business
corporation as to whether or not a court action, proceeding or claims should or
should not be brought or maintained derivatively or as a class action on behalf
of the Trust or the Shareholders; (e) a merger, consolidation or sale of assets;
(f) the adoption of an investment advisory or management contract; (g) the
incorporation of the Trust or any series; (h) any plan adopted pursuant to Rule
12b-1 (or any successor rule) under the 1940 Act; and (i) such additional
matters as may be required by law, the Declaration of Trust, the By-laws of a
Fund, or any registration of a Fund with the SEC, or as the Trustees may
determine to be necessary or desirable. Shareholders also vote upon changes in
fundamental policies or restrictions.


Each Declaration of Trust provides that shareholder meeting quorum requirements
shall be established in a Trust's By-laws. The By-laws currently in effect
provide that the presence in person or by proxy of the holders of thirty percent
of the shares entitled to vote at a meeting (or of an individual series or class
if required to vote separately) shall constitute a quorum for the transaction of
business at meetings of shareholders of a Trust.

On any matter submitted to a vote of shareholders, all shares of a Trust
entitled to vote shall, except as otherwise provided in a Trust's By-Laws, be
voted in the aggregate as a single class without regard to series or classes of
shares, except (a) when required by applicable law or when the Trustees shall
have determined that the matter affects one or more series or classes of shares
materially differently, shares shall be voted by individual series or class; and
(b) when the Trustees have determined that the matter affects only the interests
of one or more series or classes, only shareholders of such series or classes
shall be entitled to vote thereon.

Each Declaration of Trust provides that a Board of Trustees may, in its
discretion, establish minimum investment amounts for shareholder accounts,
impose fees on accounts that do not exceed a minimum investment amount and
involuntarily redeem shares in any such account in payment of such fees. A Board
of Trustees, in its sole discretion, also may cause a Trust to redeem all of the
shares of a Trust or one or more series or classes held by any shareholder for
any reason, to the extent permissible by the 1940 Act, including (a) if the
shareholder owns shares having an aggregate net asset value of less than a
specified minimum amount, (b) if a particular shareholder's ownership of shares
would disqualify a series from being a regulated investment company, (c) upon a
shareholder's failure to provide sufficient identification to permit a Trust to
verify the shareholder's identity, (d) upon a shareholder's failure to pay for
shares or meet or maintain the qualifications for ownership of a particular
class or series of shares, (e) if a Board of Trustees determines (or pursuant to
policies established by the Board it is determined) that share ownership by a
particular shareholder is not in the best interests of remaining shareholders,
(f) when a Fund is requested or compelled to do so by governmental authority or
applicable law and (g) upon a shareholder's failure to comply with a request for
information with respect to the direct or indirect ownership of shares of a
Trust. A Declaration of Trust also authorizes a Board of Trustees to terminate a
Fund or any class without shareholder approval, and a Trust may suspend the
right of shareholders to require a Trust to redeem shares to the extent
permissible under the 1940 Act.

Upon the termination of a Trust or any series, after paying or adequately
providing for the payment of all liabilities which may include the establishment
of a liquidating trust or similar vehicle, and upon receipt of such releases,
indemnities and refunding agreements as they deem necessary for their
protection, the Trustees may distribute the remaining Trust property or property
of the series, in cash or in kind or partly each, to the shareholders of a Trust
or the series involved, ratably according to the number of shares of a Trust or
such series held by the several shareholders of a Trust or such series on the
date of termination, except to the extent otherwise required or permitted by the
preferences and special or relative rights and privileges of any classes of
shares of a series involved, provided that any distribution to the shareholders
of a particular class of shares shall be made to such shareholders pro rata in
proportion to the number of shares of such class held by each of them. The
composition of any such distribution (e.g., cash, securities or other assets)
shall be determined by a Trust in its sole discretion, and may be different
among shareholders (including differences among shareholders in the same series
or class).

Under Massachusetts law, shareholders of a Massachusetts business trust could,
under certain circumstances, be held personally liable for obligations of a
Fund. A Declaration of Trust, however, disclaims shareholder liability for acts
or obligations of a Fund and requires that notice of such disclaimer be given in
each agreement, obligation, or instrument entered into or executed by a Fund or
a Fund's trustees. Moreover, a Declaration of Trust provides for indemnification
out of Fund property for all losses and expenses of any shareholder held
personally liable for the obligations of a Fund and a Fund may be covered by
insurance which the Trustees consider adequate to cover foreseeable tort claims.
Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is considered by the Advisor remote and not material,
since it is limited to circumstances in which a disclaimer is inoperative and a
Fund itself is unable to meet its obligations.


                             PROXY VOTING GUIDELINES

Each Fund has delegated proxy voting responsibilities to its investment advisor,
subject to each Board's general oversight. Each Fund has delegated proxy voting
to the Advisor with the direction that proxies should be voted consistent with
each Fund's best economic interests. The Advisor has adopted its own Proxy
Voting Policies and Procedures ("Policies"), and Proxy Voting Guidelines
("Guidelines") for this purpose. The Policies address, among other things,
conflicts of interest that may arise between the interests of each Fund, and the
interests of the Advisor and its affiliates, including each Fund's principal
underwriter. The Guidelines set forth the Advisor's general position on various
proposals, such as:

o        Shareholder Rights -- The Advisor generally votes against proposals
         that restrict shareholder rights.

o        Corporate Governance -- The Advisor generally votes for confidential
         and cumulative voting and against supermajority voting requirements for
         charter and bylaw amendments. The Advisor generally votes for proposals
         to restrict a chief executive officer from serving on more than three
         outside board of directors. The Advisor generally votes against
         proposals that require a company to appoint a Chairman who is an
         independent director.

o        Anti-Takeover Matters -- The Advisor generally votes for proposals that
         require shareholder ratification of poison pills or that request boards
         to redeem poison pills, and votes against the adoption of poison pills
         if they are submitted for shareholder ratification. The Advisor
         generally votes for fair price proposals.

o        Compensation Matters -- The Advisor generally votes for executive cash
         compensation proposals, unless they are unreasonably excessive. The
         Advisor generally votes against stock option plans that do not meet the
         Advisor's criteria.

o        Routine Matters -- The Advisor generally votes for the ratification of
         auditors, procedural matters related to the annual meeting and changes
         in company name, and against bundled proposals and adjournment.

The general provisions described above do not apply to investment companies. The
Advisor generally votes proxies solicited by investment companies in accordance
with the recommendations of an independent third party, except for proxies
solicited by or with respect to investment companies for which the Advisor or an
affiliate serves as investment advisor or principal underwriter ("affiliated
investment companies"). The Advisor votes affiliated investment company proxies
in the same proportion as the vote of the investment company's other
shareholders (sometimes called "mirror" or "echo" voting). Master fund proxies
solicited from feeder funds are voted in accordance with applicable requirements
of the Investment Company Act of 1940.

Although the Guidelines set forth the Advisor's general voting positions on
various proposals, the Advisor may, consistent with each Fund's best interests,
determine under some circumstances to vote contrary to those positions.

The Guidelines on a particular issue may or may not reflect the view of
individual members of each Board or of a majority of each Board. In addition,
the Guidelines may reflect a voting position that differs from the actual
practices of the public companies within the Deutsche Bank organization or of
the investment companies for which the Advisor or an affiliate serves as
investment advisor or sponsor.

The Advisor may consider the views of a portfolio company's management in
deciding how to vote a proxy or in establishing general voting positions for the
Guidelines, but management's views are not determinative.

As mentioned above, the Policies describe the way in which the Advisor resolves
conflicts of interest. To resolve conflicts, the advisor, under normal
circumstances, votes proxies in accordance with its Guidelines. If the Advisor
departs from the Guidelines with respect to a particular proxy or if the
Guidelines do not specifically address a certain proxy proposal, a proxy voting
committee established by the advisor will vote the proxy. Before voting any such
proxy, however, the Advisor's conflicts review committee will conduct an
investigation to determine whether any potential conflicts of interest exist in
connection with the particular proxy proposal. If the conflicts review committee
determines that the Advisor has a material conflict of interest, or certain
individuals on the proxy voting committee should be recused from participating
in a particular proxy vote, it will inform the proxy voting committee. If
notified that the Advisor has a material conflict, or fewer than three voting
members are eligible to participate in the proxy vote, typically the Advisor
will engage an independent third party to vote the proxy or follow the proxy
voting recommendations of an independent third party.

Under certain circumstances, the Advisor may not be able to vote proxies or the
Advisor may find that the expected economic costs from voting outweigh the
benefits associated with voting. For example, the Advisor may not vote proxies
on certain foreign securities due to local restrictions or customs. The Advisor
generally does not vote proxies on securities subject to share blocking
restrictions.


You may obtain information about how a fund voted proxies related to its
portfolio securities during the 12-month period ended June 30 by visiting the
Securities and Exchange Commission's Web site at www.sec.gov or by visiting our
Web site at: www.dws-investments.com (click on "proxy voting" at the bottom of
the page).


                              FINANCIAL STATEMENTS


The financial statements, including the investment portfolio of DWS Strategic
High Yield Tax-Free Fund, DWS Managed Municipal Bond Fund and DWS Intermediate
Tax/AMT Free Fund, together with the Report of Independent Registered Public
Accounting Firm, Financial Highlights and notes to financial statements in the
Annual Report to the Shareholders of each Fund, each dated May 31, 2008, are
incorporated herein by reference and are hereby deemed to be a part of this
combined SAI.


                             ADDITIONAL INFORMATION


The CUSIP number of DWS Strategic High Yield Tax-Free Fund -- Class A is
23337W105.

The CUSIP number of DWS Strategic High Yield Tax-Free Fund -- Class B is
23337W204.

The CUSIP number of DWS Strategic High Yield Tax-Free Fund -- Class C is
23337W303.

The CUSIP number of DWS Strategic High Yield Tax-Free Fund -- Institutional
Class is 23337W600.


The CUSIP number of DWS Managed Municipal Bond Fund -- Class A is 23337W709.

The CUSIP number of DWS Managed Municipal Bond Fund -- Class B is 23337W808.

The CUSIP number of DWS Managed Municipal Bond Fund -- Class C is 23337W881.

The CUSIP number of DWS Managed Municipal Bond Fund -- Institutional Class is
23337W857.

The CUSIP number of DWS Intermediate Tax/AMT Free Fund -- Class A is 23337X103.

The CUSIP number of DWS Intermediate Tax/AMT Free Fund -- Class B is 23337X202.

The CUSIP number of DWS Intermediate Tax/AMT Free Fund -- Class C is 23337X301.

The CUSIP number of DWS Intermediate Tax/AMT Free Fund -- Institutional Class is
23337X707.


Each Fund has a fiscal year end of May 31.

This SAI contains the information of DWS Strategic High Yield Tax-Free Fund, DWS
Managed Municipal Bond Fund and DWS Intermediate Tax/AMT Free Fund. Each Fund,
through its combined prospectus, offers only its own share classes, yet it is
possible that one Fund might become liable for a misstatement regarding the
other Fund. The Trustees of each Fund have considered this, and have approved
the use of this SAI.

The Funds' prospectus and this SAI omit certain information contained in the
Registration Statement which the Funds have filed with the SEC under the
Securities Act of 1933 and reference is hereby made to the Registration
Statement for further information with respect to each Fund and the securities
offered hereby. This Registration Statement and its amendments are available for
inspection by the public at the SEC in Washington, D.C.



                             RATINGS OF INVESTMENTS

BOND AND COMMERCIAL PAPER RATINGS

Set forth below are descriptions of ratings which represent opinions as to the
quality of the securities. It should be emphasized, however, that ratings are
relative and subjective and are not absolute standards of quality.

MOODY'S INVESTORS SERVICE, INC.'S -- CORPORATE BOND RATINGS

Aaa: Bonds which are rated Aaa are judged to be of the highest quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt-edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.

Aa: Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuations of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risk appear somewhat larger than in Aaa securities.

A: Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper -medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.

Baa: Bonds which are rated Baa are considered as medium grade obligations,
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present, but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

Ba: Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safe-guarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.

B: Bonds which are rated B are considered speculative and generally lack
characteristics of the desirable investment. Assurance of interest and principal
payments or of maintenance of other terms of the contract over any long period
of time may be small.

Caa: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.

Ca: Bonds which are rated Ca represent obligations which are highly speculative.
Such issues are often in default or have other marked shortcomings.

C: Bonds which are rated C are the lowest rated class of bonds, typically are in
default and can be regarded as having extremely poor prospects of ever attaining
any real investment standing.

Note: Moody's appends numerical modifiers 1, 2 and 3 to each generic rating
classification from Aa through Caa in its corporate bond rating system. The
modifier 1 indicates that the issue ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.

MOODY'S INVESTORS SERVICE, INC.'S -- SHORT-TERM RATINGS

Moody's short-term debt ratings are opinions of the ability of issuers to honor
short-term financial obligations. Ratings may be assigned to issuers, short-term
programs or to individual short-term debt instruments. Such obligations
generally have an original maturity not exceeding thirteen months, unless
explicitly noted.

Issuers rated Prime-1 or P-1 (or supporting institutions) have a superior
ability for repayment of short-term debt obligations. Prime-1 or P-1 repayment
ability will often be evidenced by many of the following characteristics:

Leading market positions in well established industries.

High rates of return on funds employed.

Conservative capitalization structure with moderate reliance on debt and ample
asset protection.

Broad margins in earnings coverage of fixed financial charges and high internal
cash generation.

Well established access to a range of financial markets and assured sources of
alternate liquidity.

Issuers rated Prime-2 or P-2 (or supporting institutions) have a strong ability
for repayment of short term debt obligations. This will normally be evidenced by
many of the characteristics cited above but to a lesser degree. Earnings trends
and coverage ratios, while sound, may be more subject to variation.
Capitalization characteristics, while still appropriate, may be more affected by
external conditions. Ample alternate liquidity is maintained.

MOODY'S INVESTORS SERVICE, INC.'S -- MUNICIPAL SHORT-TERM RATINGS

MIG. Moody's short-term debt ratings are opinions of the ability of issuers to
honor short-term financial obligations. Ratings may be assigned to issuers,
short-term programs or to individual short-term debt instruments. Such
obligations generally have an original maturity not exceeding thirteen months,
unless explicitly noted.

Moody's: The highest ratings for state and municipal short-term obligations are
"MIG 1," "MIG 2," and "MIG 3" (or "VMIG 1," "VMIG 2" and "VMIG 3" in the case of
an issue having a variable rate demand feature). Notes rated "MIG 1" or "VMIG 1"
are judged to be of the "best quality". Notes rated "MIG 2" or "VMIG 2" are of
"high quality," with margins or protection "ample although not as large as in
the preceding group". Notes rated "MIG 3" or "VMIG 3" are of "favorable
quality," with all security elements accounted for but lacking the strength of
the preceding grades.

STANDARD & POOR'S RATINGS SERVICES -- CORPORATE BOND RATINGS

INVESTMENT GRADE

AAA: Debt rated AAA has the highest rating assigned by S&P's to a debt
obligation. Capacity to pay interest and repay principal is extremely strong.

AA: Debt rated AA has a very strong capacity to pay interest and repay principal
and differs from the higher rated issues only in small degree.

A: Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than bonds in higher rated categories.

BBB: Debt rated BBB has an adequate capacity to pay interest and repay
principal. Whereas it normally exhibits adequate protection parameters, adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity to pay interest and repay principal for debt in this category
than in higher rated categories.

SPECULATIVE GRADE

Debt rated BB, B, CCC, CC, and C has significant speculative characteristics
with respect to capacity to pay interest and repay principal. BB indicates the
least degree of speculation and C the highest. While such debt will likely have
some quality and protective characteristics, these may be outweighed by large
uncertainties or major exposures to adverse conditions.

BB: Debt rated BB has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments.

The BB rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BBB- rating.

B: Debt rated B has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial, or economic conditions will likely impair capacity or willingness to
pay interest and repay principal.

The B rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BB or BB- rating.

CCC: Debt rated CCC has a current vulnerability to default, and is dependent
upon favorable business, financial, and economic conditions to meet timely
payment of interest and repayment of principal. In the event of adverse
business, financial, or economic conditions, it is not likely to have the
capacity to pay interest and repay principal.

The CCC rating category is also used for debt subordinated to senior debt that
is assigned an actual or implied B or B- rating.

CC: Debt rated CC has a current high vulnerability to default, and is dependent
upon favorable business, financial, and economic conditions to meet timely
payment of interest and repayment of principal.

The rating CC is also applied to debt subordinated to senior debt which is
assigned an actual or implied CCC debt rating.

C: The rating C is typically applied to debt subordinated to senior debt which
is assigned an actual or implied CCC- debt rating. The C rating may be used to
cover a situation where a bankruptcy petition has been filed, but debt service
payments are continued.

C1: The Rating C1 is reserved for income bonds on which no interest is being
paid.

D: Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes that
such payments will be made during such grace period. The D rating also will be
used upon the filing of a bankruptcy petition if debt service payments are
jeopardized.

Plus (+) or Minus (-): The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.

R: Debt rated "R" is under regulatory supervision owing to its financial
condition. During the pendency of the regulatory supervision, the regulators may
have the power to favor one class of obligations over others or pay some
obligations and not others.

N.R.: Bonds may lack a S&P's rating because no public rating has been requested,
because there is insufficient information on which to base a rating, or because
S&P's does not rate a particular type of obligation as a matter of policy.

STANDARD & POOR'S RATINGS SERVICES -- SHORT-TERM RATINGS

S&P's commercial paper rating is a current assessment of the likelihood of
timely payment of debt considered short-term in the relevant market.

A-1: This highest category indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong safety
characteristics are denoted with a plus (+) sign designation.

A-2: Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated A-1.

A-3: Issues carrying this designation have adequate capacity for timely payment.
However, adverse economic conditions or changing circumstances are more likely
to lead to a weakened capacity of the issuer to meet its financial commitments.

FITCH INVESTORS SERVICE, INC. -- BOND RATINGS


INVESTMENT GRADE

AAA: Bonds considered to be investment grade and of the highest credit quality.
The obligor has an exceptionally strong ability to pay interest and repay
principal, which is unlikely to be affected by reasonably foreseeable events.

AA: Bonds considered to be investment grade and of very high credit quality. The
obligor's ability to pay interest and repay principal is very strong, although
not quite as strong as bonds rated AAA. Bonds rated in the AAA and AA categories
are not significantly vulnerable to foreseeable events.

A: Bonds considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.

BBB: Bonds considered to be investment grade and of good credit quality. The
obligor's ability to pay interest and repay principal is considered to be
adequate. Adverse changes in economic conditions and circumstances, however, are
more likely to have adverse impact on these bonds, and therefore, impair timely
payment. The likelihood that the ratings of these bonds will fall below
investment grade is higher than for bonds with higher ratings.

SPECULATIVE GRADE

BB: Bonds are considered speculative. The obligor's ability to pay interest and
repay principal may be affected over time by adverse economic changes. However,
business or financial alternatives may be available which could assist the
obligor in satisfying its debt service requirements.

B: Bonds are considered highly speculative. While bonds in this class are
currently meeting debt service requirements, the probability of continued timely
payment of principal and interest reflects the obligor's limited margin of
safety and the need for reasonable business and economic activity throughout the
life of the issue.

CCC: Bonds have certain identifiable characteristics which, if not remedied, may
lead to default. The ability to meet obligations requires an advantageous
business and economic environment.

CC: Bonds are minimally protected. Default in payment of interest and/or
principal seems probable over time.

C: Bonds are in imminent default in payment of interest or principal.

DDD, DD, and D: Bonds are in default of interest and/or principal payments. Such
bonds are extremely speculative and should be valued on the basis of their
ultimate recovery value in liquidation or reorganization of the obligor. DDD
represents the highest potential for recovery on these bonds, and D represents
the lowest potential for recovery.

Plus (+) or Minus (-): The ratings from AA to CC may be appended by the addition
of a plus or minus sign to denote the relative status within the rating
category.

NR: Indicates that Fitch Rating does not publicly rate the specific issue.

FITCH INVESTORS SERVICE, INC. -- SHORT-TERM RATINGS

Fitch's short-term ratings apply to debt obligations that are payable on demand
or have original maturities of generally up to three years, including commercial
paper, certificates of deposit, medium-term notes, and municipal and investment
notes.

F-1+: Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest capacity for timely payment.

F-1: Very Strong Credit Quality. Issues assigned this rating reflect a capacity
for timely payment only slightly less than issues rated F-1+.

F-2: Good Credit Quality. Issues assigned this rating have a satisfactory
capacity for timely payment, but the margin of safety is not as great as the
F-1+ and F-1 categories.

F-3: Fair Credit Quality. Issues assigned this rating have characteristics
suggesting that the capacity for timely payment is adequate; however, near-term
adverse changes could cause these securities to be rated below investment grade.

B: Speculative. Minimal capacity for timely payment of financial commitments,
plus vulnerability to near-term adverse changes in financial and economic
conditions.

C: High default risk. Default is a real possibility. Capacity for meeting
financial commitments is solely reliant upon a sustained, favorable business and
economic environment.

D: Default. Denotes actual or imminent payment default.


<PAGE>







                     DWS Strategic High Yield Tax-Free Fund
                (formerly known as DWS High Yield Tax Free Fund)
                         A series of DWS Municipal Trust



                         DWS Managed Municipal Bond Fund
                         A series of DWS Municipal Trust


                                       and



                       DWS Intermediate Tax/AMT Free Fund
                         A series of DWS Tax Free Trust










                       STATEMENT OF ADDITIONAL INFORMATION


                                     Class S


                                 October 1, 2008


This combined Statement of Additional Information ("SAI") is not a prospectus
and should be read in conjunction with the combined prospectus of the DWS
Strategic High Yield Tax-Free Fund and DWS Managed Municipal Bond Fund (each a
"Fund"), each a series of DWS Municipal Trust (a "Trust"), and DWS Intermediate
Tax/AMT Free Fund (a "Fund" and collectively with DWS Strategic High Yield
Tax-Free Fund and DWS Managed Municipal Bond Fund, the "Funds"), a series of DWS
Tax Free Trust (a "Trust" and collectively with DWS Municipal Trust, the
"Trusts"), dated October 1, 2008 as amended from time to time, a copy of which
may be obtained without charge by contacting DWS Investments Distributors, Inc.,
222 South Riverside Plaza, Chicago, Illinois 60606, 1-800-621-1148, or from the
firm from which this SAI was obtained. The prospectus is also available along
with other materials on the Securities and Exchange Commission's Internet
website (http://www.sec.gov).

Portions of the Annual Reports to Shareholders of each Fund, dated May 31, 2008,
are incorporated by reference, as specified herein. A copy of each Fund's Annual
Report to Shareholders may be obtained without charge by calling 1-800-728-3337.

This SAI is incorporated by reference into the combined prospectus.





                                TABLE OF CONTENTS
                                                                            Page
                                                                            ----

INVESTMENT RESTRICTIONS........................................................1

INVESTMENT POLICIES AND TECHNIQUES.............................................3
   Portfolio Holdings ........................................................18

MANAGEMENT OF THE FUNDS.......................................................19
   Investment Advisor.........................................................19
   Compensation of Portfolio Managers.........................................22

FUND SERVICE PROVIDERS........................................................29
   Administrator..............................................................29
   Underwriter................................................................30
   Custodian..................................................................31
   Transfer Agent and Shareholder Service Agent...............................31
   Independent Registered Public Accounting Firm and Reports to Shareholders..31
   Legal Counsel..............................................................32

PORTFOLIO TRANSACTIONS........................................................32

PURCHASE AND REDEMPTION OF SHARES.............................................35

DIVIDENDS

TAXES.........................................................................56

NET ASSET VALUE...............................................................63

TRUSTEES AND OFFICERS.........................................................64

TRUST ORGANIZATION............................................................75

PROXY VOTING GUIDELINES.......................................................77

FINANCIAL STATEMENTS..........................................................79

ADDITIONAL INFORMATION........................................................79

RATINGS OF INVESTMENTS........................................................80

                             INVESTMENT RESTRICTIONS

Except as otherwise indicated, each Fund's investment objective and policies are
not fundamental and may be changed without a vote of shareholders. There can be
no assurance that a Fund's objective will be met.

Each Fund has elected to be classified as a diversified series of an open-end
investment company. A diversified fund may not, with respect to 75% of total
assets, invest more than 5% of total assets in the securities of a single issuer
or invest in more than 10% of the outstanding voting securities of such issuer
(with certain exceptions).

If a percentage restriction on investment or utilization of assets as set forth
under "Investment Restrictions" and "Other Investment Policies" is adhered to at
the time an investment is made, a later change in percentage resulting from
changes in the value or the total cost of a Fund's assets will not be considered
a violation of the restriction.


Unless specified to the contrary, the following fundamental policies may not be
changed without the approval of a majority of the outstanding voting securities
of a Fund which, under the Investment Company Act of 1940, as amended (the "1940
Act"), and the rules thereunder and as used in this SAI, means the lesser of (1)
67% or more of the voting securities present at a meeting, if the holders of
more than 50% of the outstanding voting securities of a Fund are present or
represented by proxy, or (2) more than 50% of the outstanding voting securities
of a Fund.


As a matter of fundamental policy, each Fund may not:

(1)      borrow money, except as permitted under the Investment Company Act of
         1940, as amended, and as interpreted or modified by regulatory
         authority having jurisdiction, from time to time;

(2)      issue senior securities, except as permitted under the Investment
         Company Act of 1940, as amended, and as interpreted or modified by
         regulatory authority having jurisdiction, from time to time;

(3)      concentrate its investments in a particular industry, as that term is
         used in the Investment Company Act of 1940, as amended, and as
         interpreted or modified by regulatory authority having jurisdiction,
         from time to time;

(4)      engage in the business of underwriting securities issued by others,
         except to the extent that the Fund may be deemed to be an underwriter
         in connection with the disposition of portfolio securities;

(5)      purchase or sell real estate, which term does not include securities of
         companies which deal in real estate or mortgages or investments secured
         by real estate or interests therein, except that the Fund reserves
         freedom of action to hold and to sell real estate acquired as a result
         of the Fund's ownership of securities;

(6)      purchase or sell commodities, except as permitted by the 1940 Act, as
         amended, and as interpreted or modified by the regulatory authority
         having jurisdiction, from time to time;

(7)      make loans except as permitted under the Investment Company Act of
         1940, as amended, and as interpreted or modified by regulatory
         authority having jurisdiction, from time to time;

Additionally, as a matter of fundamental policy, each Fund will:

(8)      under normal circumstances, have at least 80% of its net assets (plus
         the amount of any borrowings for investment purposes in the case of the
         DWS Managed Municipal Bond Fund and the DWS Intermediate Tax/AMT Free
         Fund) invested in securities of municipalities across the United States
         and in other securities whose income is free from regular federal
         income tax.

With respect to fundamental policy (8) above, DWS Managed Municipal Bond Fund
considers any investments in municipal securities that pay interest subject to
the Alternative Minimum Tax ("AMT") as part of the 80% of the Fund's net assets
that must be invested in municipal securities.

Other Investment Policies

The Board of Trustees has voluntarily adopted certain non-fundamental policies
and restrictions which are observed in the conduct of each Fund's affairs. These
represent intentions of the Trustees based upon current circumstances. They
differ from fundamental investment policies in that they may be changed or
amended by action of the Trustees without requiring prior notice to or approval
of the shareholders.

As a matter of non-fundamental policy, each Fund may not:

(1)      borrow money in an amount greater than 5% of its total assets, except
         for temporary or emergency purposes;

(2)      purchase securities on margin or make short sales, except (i) short
         sales against the box, (ii) in connection with arbitrage transactions,
         (iii) for margin deposits in connection with futures contracts, options
         or other permitted investments, (iv) that transactions in futures
         contracts and options shall not be deemed to constitute selling
         securities short, and (v) that a Fund may obtain such short-term
         credits as may be necessary for the clearance of securities
         transactions;

(3)      purchase options, unless the aggregate premiums paid on all such
         options held by a Fund at any time do not exceed 20% of its total
         assets; or sell put options, if as a result, the aggregate value of the
         obligations underlying such put options would exceed 50% of its total
         assets;

(4)      enter into futures contracts or purchase options thereon unless
         immediately after the purchase, the value of the aggregate initial
         margin with respect to such futures contracts entered into on behalf of
         a Fund and the premiums paid for such options on futures contracts does
         not exceed 5% of the fair market value of a Fund's total assets;
         provided that in the case of an option that is in-the-money at the time
         of purchase, the in-the-money amount may be excluded in computing the
         5% limit;

(5)      purchase warrants if as a result, such securities, taken at the lower
         of cost or market value, would represent more than 5% of the value of a
         Fund's total assets (for this purpose, warrants acquired in units or
         attached to securities will be deemed to have no value); and

(6)      lend portfolio securities in an amount greater than 5% of its total
         assets.


The foregoing non-fundamental policies are in addition to policies otherwise
stated in the prospectus or this SAI.

The DWS Strategic High Yield Tax-Free Fund will invest at least 50% of its total
assets in municipal bonds rated, at the time of purchase, within the four
highest quality rating categories of Moody's Investors Service, Inc. ("Moody's)
(Aaa, Aa, A or Baa), Standard & Poor's Ratings Services ("S&P") or Fitch
Investors Service, Inc. ("Fitch") (AAA, AA, A or BBB), or their equivalents as
determined at the time of purchase by Deutsche Investment Management Americas
Inc. ("DIMA" or the "Advisor"). The Fund may invest, however, up to 50% of its
total assets in bonds rated below Baa by Moody's or below BBB by S&P or Fitch,
or unrated securities considered to be of equivalent quality. If a security's
credit quality is downgraded, the Advisor will decide what to do with the
security, based on its assessment of what would benefit shareholders most.


Normally, the DWS Managed Municipal Bond Fund invests at least 65% of its net
assets in securities rated, or issued by an issuer rated at the time of
purchase, within the three highest quality rating categories of Moody's (Aaa, Aa
or A), S&P or Fitch (AAA, AA or A) or their equivalents, or if unrated, judged
by the Advisor to be of comparable quality at the time of purchase. The Fund may
invest up to 10% of its assets in debt securities rated lower than Baa by
Moody's, BBB by S&P or Fitch or of equivalent quality as determined by the
Advisor, but will not purchase bonds rated below B by Moody's, S&P or Fitch, or
their equivalent.

Normally, the DWS Intermediate Tax/AMT Free Fund invests at least 65% of its net
assets in municipal bonds which are rated, at the time of purchase within the
three highest quality rating categories of Moody's (Aaa, Aa or A), S&P or Fitch
(AAA, AA or A) or their equivalents, or if unrated, judged by the Advisor to be
of comparable quality at the time of purchase. The Fund will not invest in any
debt security rated lower than Baa by Moody's, BBB by S&P or Fitch or of
equivalent quality as determined by the Advisor.


For temporary defensive purposes or if an unusual disparity between after-tax
income on taxable and municipal securities makes it advisable, up to 100% of the
DWS Strategic High Yield Tax-Free Fund's assets (20% of assets in the case of
DWS Managed Municipal Bond Fund and DWS Intermediate Tax/AMT Free Fund) may be
held in cash or invested in short-term taxable investments, including US
Government obligations and money market instruments.


Although there is no current intention to do so, each Fund may invest more than
25% of its total assets in industrial development or other private activity
bonds, subject to a Fund's fundamental investment policies. Because these bonds
are frequently subject to regular federal income tax and AMT, investment in
these types of bonds is also subject to a Fund's limitation on investing in
municipal securities whose investment income is subject to these taxes.

                       INVESTMENT POLICIES AND TECHNIQUES

General Investment Objectives and Policies


Descriptions in this SAI of a particular investment practice or technique in
which a Fund may engage are meant to describe the spectrum of investments that
the Advisor in its discretion might, but is not required to, use in managing
each Fund's portfolio assets. The Advisor, may in its discretion at any time
employ such practice, technique or instrument for one or more Funds but not for
all funds advised by it. Furthermore, it is possible that certain types of
financial instruments or investment techniques described herein may not be
available, permissible, economically feasible or effective for their intended
purposes in all markets. Certain practices, techniques or instruments may not be
principal activities of the Funds, but, to the extent employed, could from time
to time have a material impact on a Fund's performance.


It is possible that certain investment practices and techniques described below
may not be permissible for a Fund based on its investment restrictions, as
described herein, and in the Funds' applicable prospectus.

Advance Refunded Bonds. Each Fund may purchase Municipal Securities that are
subsequently refunded by the issuance and delivery of a new issue of bonds prior
to the date on which the outstanding issue of bonds can be redeemed or paid. The
proceeds from the new issue of bonds are typically placed in an escrow fund
consisting of US Government obligations that are used to pay the interest,
principal and call premium on the issue being refunded. Each Fund may also
purchase Municipal Securities that have been refunded prior to purchase by a
Fund.


High Yield/High Risk Bonds. The DWS Strategic High Yield Tax-Free Fund and the
DWS Managed Municipal Bond Fund may also purchase debt securities which are
rated below investment-grade (commonly referred to as "junk bonds"), that is,
rated below Baa by Moody's or below BBB by S&P, and unrated securities judged to
be of equivalent quality as determined by the Advisor. These securities usually
entail greater risk (including the possibility of default or bankruptcy of the
issuers of such securities), generally involve greater volatility of price and
risk to principal and income, and may be less liquid, than securities in the
higher rating categories. The lower the ratings of such debt securities, the
more their risks render them like equity securities. Securities rated D may be
in default with respect to payment of principal or interest. See "Ratings of
Investments" for a more complete description of the ratings assigned by ratings
organizations and their respective characteristics.


Issuers of such high yield securities often are highly leveraged and may not
have available to them more traditional methods of financing. Therefore, the
risk associated with acquiring the securities of such issuers generally is
greater than is the case with higher rated securities. For example, during an
economic downturn or a sustained period of rising interest rates, highly
leveraged issuers of high yield securities may experience financial stress.
During such periods, such issuers may not have sufficient revenues to meet their
interest payment obligations. The issuer's ability to service its debt
obligations may also be adversely affected by specific corporate developments,
or the issuer's inability to meet specific projected business forecasts, or the
unavailability of additional financing. The risk of loss from default by the
issuer is significantly greater for the holders of high yield securities because
such securities are generally unsecured and are often subordinated to other
creditors of the issuer. Prices and yields of high yield securities will
fluctuate over time and, during periods of economic uncertainty, volatility of
high yield securities may adversely affect a Fund's net asset value. In
addition, investments in high yield zero coupon or pay-in-kind bonds, rather
than income-bearing high yield securities, may be more speculative and may be
subject to greater fluctuations in value due to changes in interest rates.

A Fund may have difficulty disposing of certain high-yield securities because
they may have a thin trading market. Because not all dealers maintain markets in
all high yield securities, a Fund anticipates that such securities could be sold
only to a limited number of dealers or institutional investors. The lack of a
liquid secondary market may have an adverse effect on the market price and a
Fund's ability to dispose of particular issues and may also make it more
difficult for a Fund to obtain accurate market quotations for purposes of
valuing a Fund's assets. Market quotations generally are available on many high
yield issues only from a limited number of dealers and may not necessarily
represent firm bids of such dealers or prices for actual sales. Adverse
publicity and investor perceptions may decrease the values and liquidity of high
yield securities. These securities may also involve special registration
responsibilities, liabilities and costs, and liquidity and valuation
difficulties.

Credit quality in the high-yield securities market can change suddenly and
unexpectedly, and even recently-issued credit ratings may not fully reflect the
actual risks posed by a particular high yield security. For these reasons, it is
generally the policy of the Advisor not to rely exclusively on ratings issued by
established credit rating agencies, but to supplement such ratings with its own
independent and on-going review of credit quality. The achievement of a Fund's
investment objective by investment in such securities may be more dependent on
the Advisor's credit analysis than is the case for higher quality bonds. Should
the rating of a portfolio security be downgraded, the Advisor will determine
whether it is in the best interests of a Fund to retain or dispose of such
security.

Prices for high-yield securities may be affected by legislative and regulatory
developments. Also, Congress has from time to time considered legislation which
would restrict or eliminate the corporate tax deduction for interest payments in
these securities and regulate corporate restructurings. Such legislation may
significantly depress the prices of outstanding securities of this type.

A portion of the high-yield securities acquired by a Fund may be purchased upon
issuance, which may involve special risks because the securities so acquired are
new issues. In such instances a Fund may be a substantial purchaser of the issue
and therefore have the opportunity to participate in structuring the terms of
the offering. Although this may enable a Fund to seek to protect itself against
certain of such risks, the considerations discussed herein would nevertheless
remain applicable.


Asset Segregation

Certain investment transactions expose a Fund to an obligation to make future
payments to third parties. Examples of these types of transactions, include, but
are not limited to, reverse repurchase agreements, short sales, dollar rolls,
when-issued, delayed-delivery or forward commitment transactions and certain
derivatives such as swaps, futures, forwards, and options. To the extent that a
Fund engages in such transactions, a Fund will (to the extent required by
applicable law) either (1) segregate cash or liquid assets in the prescribed
amount or (2) otherwise "cover" its future obligations under the transaction,
such as by holding an offsetting investment. If a Fund segregates sufficient
cash or other liquid assets or otherwise "covers" its obligations under such
transactions, a Fund will not consider the transactions to be borrowings for
purposes of its investment restrictions or "senior securities" under the 1940
Act, and therefore, such transactions will not be subject to the 300% asset
coverage requirement under the 1940 Act otherwise applicable to borrowings by a
Fund.

In some cases (e.g., with respect to futures and forwards that are contractually
required to "cash-settle"), a Fund will segregate cash or other liquid assets
with respect to the amount of the daily net (marked-to-market) obligation
arising from the transaction, rather than the notional amount of the underlying
contract. By segregating assets in an amount equal to the net obligation rather
than the notional amount, a Fund will have the ability to employ leverage to a
greater extent than if it set aside cash or other liquid assets equal to the
notional amount of the contract, which may increase the risk associated with
such transactions.

A Fund may utilize methods of segregating assets or otherwise "covering"
transactions that are currently or in the future permitted under the 1940 Act,
the rules and regulation thereunder, or orders issued by the Securities and
Exchange Commission ("SEC") thereunder. For these purposes, interpretations and
guidance provided by the SEC staff may be taken into account when deemed
appropriate by a Fund. Assets used as segregation or cover cannot be sold while
the position in the corresponding transaction is open, unless they are replaced
with other appropriate assets. As a result, the commitment of a large portion of
a Fund's assets for segregation and cover purposes could impede portfolio
management or the Fund's ability to meet redemption requests or other current
obligations.

Segregating assets or otherwise "covering" for these purposes does not
necessarily limit the percentage of the assets of the Fund that may be at risk
with respect to certain derivative transactions.


Illiquid Securities and Restricted Securities. A Fund may purchase securities
that are subject to legal or contractual restrictions on resale ("restricted
securities"). Generally speaking, restricted securities may be sold (i) to
qualified institutional buyers; (ii) in a privately negotiated transaction to a
limited number of purchasers; (iii) in limited quantities after they have been
held for a specified period of time and other conditions are met pursuant to an
exemption from registration; or (iv) in a public offering for which a
registration statement is in effect under the Securities Act of 1933, as amended
(the "1933 Act"). Issuers of restricted securities may not be subject to the
disclosure and other investor protection requirements that would be applicable
if their securities were publicly traded.

Restricted securities are often illiquid, but they may also be liquid. For
example, restricted securities that are eligible for resale under Rule 144A are
often deemed to be liquid.

Each Fund's Board has approved guidelines for use by the Advisor in determining
whether a security is liquid or illiquid. Among the factors the Advisor may
consider in reaching liquidity decisions relating to Rule 144A securities are:
(1) the frequency of trades and quotes for the security; (2) the number of
dealers wishing to purchase or sell the security and the number of other
potential purchasers; (3) dealer undertakings to make a market in the security;
and (4) the nature of the security and the nature of the market for the security
(i.e., the time needed to dispose of the security, the method of soliciting
offers, and the mechanics of the transfer). Issuers of restricted securities may
not be subject to the disclosure and other investor protection requirements that
would be applicable if their securities were publicly traded. Where a
registration statement is required for the resale of restricted securities, a
fund may be required to bear all or part of the registration expenses. A fund
may be deemed to be an "underwriter" for purposes of the Securities Act of 1933,
as amended when selling restricted securities to the public and, in such event,
a fund may be liable to purchasers of such securities if the registration
statement prepared by the issuer is materially inaccurate or misleading.

A Fund may also purchase securities that are not subject to legal or contractual
restrictions on resale, but that are deemed illiquid. Such securities may be
illiquid, for example, because there is a limited trading market for them.

A Fund may be unable to sell a restricted or illiquid security. In addition, it
may be more difficult to determine a market value for restricted or illiquid
securities. Moreover, if adverse market conditions were to develop during the
period between a Fund's decision to sell a restricted or illiquid security and
the point at which a Fund is permitted or able to sell such security, a Fund
might obtain a price less favorable than the price that prevailed when it
decided to sell.


Impact of Large Redemptions and Purchases of Fund Shares. From time to time,
shareholders of a Fund (which may include affiliated and/or non-affiliated
registered investment companies that invest in a Fund) may make relatively large
redemptions or purchases of Fund shares. These transactions may cause a Fund to
have to sell securities or invest additional cash, as the case may be. While it
is impossible to predict the overall impact of these transactions over time,
there could be adverse effects on a Fund's performance to the extent that a Fund
may be required to sell securities or invest cash at times when it would not
otherwise do so. These transactions could also accelerate the realization of
taxable income if sales of securities resulted in capital gains or other income
and could also increase transaction costs, which may impact a Fund's expense
ratio.

Impact of Sub-Prime Mortgage Market. A Fund may invest in mortgage-backed,
asset-backed and other fixed-income securities whose value and liquidity may be
adversely affected by the critical downturn in the sub-prime mortgage lending
market in the US. Sub-prime loans, which have higher interest rates, are made to
borrowers with low credit ratings or other factors that increase the risk of
default. Concerns about widespread defaults on sub-prime loans have also created
heightened volatility and turmoil in the general credit markets. As a result, a
Fund's investments in certain fixed-income securities may decline in value,
their market value may be more difficult to determine, and a Fund may have more
difficulty disposing of them.

Industrial Development and Pollution Control Bonds. Industrial Development and
Pollution Control Bonds (which are types of private activity bonds), although
nominally issued by municipal authorities, are generally not secured by the
taxing power of the municipality, but are secured by the revenues of the
authority derived from payments by the industrial user. Under federal tax
legislation, certain types of Industrial Development Bonds and Pollution Control
Bonds may no longer be issued on a tax-exempt basis, although previously-issued
bonds of these types and certain refundings of such bonds are not affected. For
the purposes of the Funds' investment limitation regarding concentration of
investments in any one industry, industrial development or other private
activity bonds ultimately payable by companies within the same industry will be
considered as if they were issued by issuers in the same industry.

Interfund Borrowing and Lending Program. The Funds have received exemptive
relief from the SEC, which permits the Funds to participate in an interfund
lending program among certain investment companies advised by the Advisor. The
interfund lending program allows the participating funds to borrow money from
and loan money to each other for temporary or emergency purposes. The program is
subject to a number of conditions designed to ensure fair and equitable
treatment of all participating funds, including the following: (1) no fund may
borrow money through the program unless it receives a more favorable interest
rate than a rate approximating the lowest interest rate at which bank loans
would be available to any of the participating funds under a loan agreement; and
(2) no fund may lend money through the program unless it receives a more
favorable return than that available from an investment in repurchase agreements
and, to the extent applicable, money market cash swap arrangements. In addition,
a fund may participate in the program only if and to the extent that such
participation is consistent with a fund's investment objectives and policies
(for instance, money market funds would normally participate only as lenders and
tax exempt funds only as borrowers). Interfund loans and borrowings may extend
overnight, but could have a maximum duration of seven days. Loans may be called
on one day's notice. A fund may have to borrow from a bank at a higher interest
rate if an interfund loan is called or not renewed. Any delay in repayment to a
lending fund could result in a lost investment opportunity or additional costs.
The program is subject to the oversight and periodic review of the Boards of the
participating funds. To the extent the Funds are actually engaged in borrowing
through the interfund lending program, the Funds, as a matter of non-fundamental
policy, may not borrow for other than temporary or emergency purposes (and not
for leveraging), except that the Funds may engage in reverse repurchase
agreements and dollar rolls for any purpose.


Investment-Grade Bonds. A Fund may purchase "investment-grade" bonds, which are
those rated Aaa, Aa, A or Baa by Moody's or AAA, AA, A or BBB by S&P or, if
unrated, judged to be of equivalent quality as determined by the Advisor.
Moody's considers bonds it rates Baa to have speculative elements as well as
investment-grade characteristics. To the extent that a Fund invests in
higher-grade securities, a Fund will not be able to avail itself of
opportunities for higher income which may be available at lower grades.

Inverse Floaters. A Fund may invest in inverse floaters. Inverse floaters are
debt instruments typically with a weekly floating rate of interest that bears an
inverse relationship to changes in short-term market interest rates. Investments
in this type of instrument involve special risks as compared to investments in,
for example, a fixed rate municipal security. The debt instrument in which a
Fund invests may be a tender option bond trust (the "trust") which can be
established by a Fund, a financial institution or a broker, consisting of
underlying municipal obligations. Other investors in the trust usually consist
of money market fund investors normally receiving weekly floating interest rate
payments who have put options with the financial institutions. A Fund may enter
into shortfall and forbearance agreements by which a Fund agrees to reimburse
the trust, in certain circumstances, for the difference between the liquidation
value of the fixed rate municipal security held by the trust and the liquidation
value of the floating rate notes. A Fund could lose money and its NAV could
decline as a result of investments in inverse floaters if movements in interest
rates are incorrectly anticipated. Moreover, the markets for inverse floaters
may be less developed and may have less liquidity than the markets for more
traditional municipal securities. A Fund's investments in inverse floaters will
not be considered borrowing within the meaning of the 1940 Act or for purposes
of a Fund's investment restrictions on borrowing.

Investment of Uninvested Cash Balances. A Fund may have cash balances that have
not been invested in portfolio securities ("Uninvested Cash"). Uninvested Cash
may result from a variety of sources, including dividends or interest received
from portfolio securities, unsettled securities transactions, reserves held for
investment strategy purposes, scheduled maturity of investments, liquidation of
investment securities to meet anticipated redemptions and dividend payments, and
new cash received from investors. Uninvested Cash may be invested directly in
money market instruments or other short-term debt obligations. Pursuant to an
Exemptive Order issued by the SEC, a Fund may use Uninvested Cash to purchase
shares of affiliated funds including money market funds, short-term bond funds
and Cash Management QP Trust, or one or more future entities for which the
Advisor acts as trustee or investment advisor that operate as cash management
investment vehicles and that are excluded from the definition of investment
company pursuant to section 3(c)(1) or 3(c)(7) of the 1940 Act (collectively,
the "Central Funds") in excess of the limitations of Section 12(d)(1) of the
1940 Act. Investment by the Fund in shares of the Central Funds will be in
accordance with a Fund's investment policies and restrictions as set forth in
its registration statement.

Certain of the Central Funds comply with Rule 2a-7 under the 1940 Act. The other
Central Funds are or will be short-term bond funds that invest in fixed-income
securities and maintain a dollar weighted average maturity of three years or
less. Each of the Central Funds will be managed specifically to maintain a
highly liquid portfolio, and access to them will enhance the Funds' ability to
manage Uninvested Cash.

A Fund will invest Uninvested Cash in Central Funds only to the extent that a
Fund's aggregate investment in the Central Funds does not exceed 25% of its
total assets. Purchase and sales of shares of Central Funds are made at net
asset value.

Letters of Credit. Municipal obligations, including certificates of
participation, commercial paper and other short-term obligations, may be backed
by an irrevocable letter of credit of a bank which assumes the obligation for
payment of principal and interest in the event of default by the issuer. Only
banks which, in the opinion of the Advisor, are of investment quality comparable
to other permitted investments of a Fund may be used for letter of credit-backed
investments.

Municipal Securities. Municipal obligations are issued by or on behalf of
states, territories and possessions of the United States and their political
subdivisions, agencies and instrumentalities and the District of Columbia to
obtain funds for various public purposes. The interest on these obligations is
generally exempt from regular federal income tax in the hands of most investors.
The two principal classifications of municipal obligations are "notes" and
"bonds."

Municipal notes are generally used to provide for short-term capital needs and
generally have maturities of one year or less. Municipal notes include: Tax
Anticipation Notes, Revenue Anticipation Notes, Bond Anticipation Notes, and
Construction Loan Notes. Tax Anticipation Notes are sold to finance working
capital needs of municipalities. They are generally payable from specific tax
revenues expected to be received at a future date. Revenue Anticipation Notes
are issued in expectation of receipt of other types of revenue. Tax Anticipation
Notes and Revenue Anticipation Notes are issued in anticipation of various
seasonal revenue such as income, sales, use and business taxes. Bond
Anticipation Notes are sold to provide interim financing, and Construction Loan
Notes are sold to provide construction financing. These notes are issued in
anticipation of long-term financing in the market. In most cases, these monies
provide for the repayment of the notes. After the projects are successfully
completed and accepted, many projects receive permanent financing through the
Federal Housing Administration under "Fannie Mae" (the Federal National Mortgage
Association) or "Ginnie Mae" (the Government National Mortgage Association).
There are, of course, a number of other types of notes issued for different
purposes and secured differently than those described above.

Municipal bonds, which meet longer-term capital needs and generally have
maturities of more than one year when issued, have two principal
classifications: "general obligation" bonds and "revenue" bonds. Issuers of
general obligation bonds include states, counties, cities, towns and regional
districts. The proceeds of these obligations are used to fund a wide range of
public projects including the construction or improvement of schools, highways
and roads, water and sewer systems and a variety of other public purposes. The
basic security behind general obligation bonds is the issuer's pledge of its
full faith, credit, and taxing power for the payment of principal and interest.
The taxes that can be levied for the payment of debt service may be limited or
unlimited as to rate, amount or special assessments.

The principal security for a revenue bond is generally the net revenues derived
from a particular facility or group of facilities or, in some cases, from the
proceeds of a special excise or other specific revenue source. Revenue bonds
have been issued to fund a wide variety of capital projects including: electric,
gas, water and sewer systems; highways, bridges and tunnels; port and airport
facilities; colleges and universities; and hospitals. Although the principal
security behind these bonds varies widely, many provide additional security in
the form of a debt service reserve fund whose monies may also be used to make
principal and interest payments on the issuer's obligations. Housing finance
authorities have a wide range of security including partially or fully insured,
rent-subsidized and/or collateralized mortgages, and/or the net revenues from
housing or other public projects. In addition to a debt service reserve fund,
some authorities provide further security in the form of a state's ability
(without obligation) to make up deficiencies in the debt reserve fund. Lease
rental bonds issued by a state or local authority for capital projects are
secured by annual lease rental payments from the state or locality to the
authority sufficient to cover debt service on the authority's obligations.

Some issues of municipal bonds are payable from United States Treasury bonds and
notes or agency obligations held in escrow by a trustee, frequently a commercial
bank. The interest and principal on these US Government securities are
sufficient to pay all interest and principal requirements of the municipal
securities when due. Some escrowed Treasury securities are used to retire
municipal bonds at their earliest call date, while others are used to retire
municipal bonds at their maturity.

Securities purchased for a Fund may include variable/floating rate instruments,
variable mode instruments, put bonds, and other obligations which have a
specified maturity date but also are payable before maturity after notice by the
holder ("demand obligations"). Demand obligations are considered for a Fund's
purposes to mature at the demand date.

There are, in addition, a variety of hybrid and special types of municipal
obligations as well as numerous differences in the security of municipal
obligations both within and between the two principal classifications (i.e.,
notes and bonds) discussed above.

An entire issue of municipal securities may be purchased by one or a small
number of institutional investors such as a Fund. Thus, such an issue may not be
said to be publicly offered. Unlike the equity securities of operating companies
or mutual funds which must be registered under the 1933 Act prior to offer and
sale unless an exemption from such registration is available, municipal
securities, whether publicly or privately offered, may nevertheless be readily
marketable. A secondary market exists for municipal securities which have been
publicly offered as well as securities which have not been publicly offered
initially but which may nevertheless be readily marketable. Municipal securities
purchased for a Fund are subject to the limitations on holdings of securities
which are not readily marketable based on whether it may be sold in a reasonable
time consistent with the customs of the municipal markets (usually seven days)
at a price (or interest rate) which accurately reflects its recorded value. A
Fund believes that the quality standards applicable to their investments enhance
marketability. In addition, stand-by commitments, participation interests and
demand obligations also enhance marketability.

Provisions of the federal bankruptcy statutes relating to the adjustment of
debts of political subdivisions and authorities of states of the United States
provide that, in certain circumstances, such subdivisions or authorities may be
authorized to initiate bankruptcy proceedings without prior notice to or consent
of creditors, which proceedings could result in material and adverse
modification or alteration of the rights of holders of obligations issued by
such subdivisions or authorities.

Litigation challenging the validity under state constitutions of present systems
of financing public education has been initiated or adjudicated in a number of
states, and legislation has been introduced to effect changes in public school
finances in some states. In other instances there has been litigation
challenging the issuance of pollution control revenue bonds or the validity of
their issuance under state or federal law which litigation could ultimately
affect the validity of those Municipal Securities or the tax-free nature of the
interest thereon.


In some cases, municipalities may issue bonds relying on proceeds from
litigation settlements. These bonds may be further secured by debt service
reserve funds established at the time the bonds were issued. Bonds that are
supported in whole or in part by expected litigation proceeds are subject to the
risk that part or all of the expected proceeds may not be received. For example,
a damage award could be overturned or reduced by a court, or the terms of a
settlement or damages award may allow for reduced or discontinued payments if
certain conditions are met. As a result, bonds that rely on proceeds from
litigation proceeds are subject to an increased risk of nonpayment or default.


For the purpose of the Funds' investment restrictions, the identification of the
"issuer" of municipal obligations which are not general obligation bonds is made
by the Advisor on the basis of the characteristics of the obligation as
described above, the most significant of which is the source of funds for the
payment of principal and interest on such obligations.

Municipal Lease Obligations and Participation Interests. Participation interests
represent undivided interests in municipal leases, installment purchase
contracts, conditional sales contracts or other instruments. These are typically
issued by a trust or other entity which has received an assignment of the
payments to be made by the state or political subdivision under such leases or
contracts. They may be variable rate or fixed rate.

Each Fund may purchase from banks participation interests in all or part of
specific holdings of municipal obligations, provided the participation interest
is fully insured. Each participation is backed by an irrevocable letter of
credit or guarantee of the selling bank that the Advisor has determined meets
the prescribed quality standards of each Fund. Therefore, either the credit of
the issuer of the municipal obligation or the selling bank, or both, will meet
the quality standards of the particular Fund. A Fund has the right to sell the
participation back to the bank after seven days' notice for the full principal
amount of a Fund's interest in the municipal obligation plus accrued interest,
but only (i) as required to provide liquidity to a Fund, (ii) to maintain a high
quality investment portfolio or (iii) upon a default under the terms of the
municipal obligation. The selling bank will receive a fee from a Fund in
connection with the arrangement. A Fund will not purchase participation
interests unless in the opinion of bond counsel, counsel for the issuers of such
participations or counsel selected by the Advisor, the interest from such
participations is exempt from regular federal income tax and state income tax
for a Fund.

A municipal lease obligation may take the form of a lease, installment purchase
contract or conditional sales contract which is issued by a state or local
government and authorities to acquire land, equipment and facilities. Income
from such obligations is generally exempt from state and local taxes in the
state of issuance. Municipal lease obligations frequently involve special risks
not normally associated with general obligations or revenue bonds. Leases and
installment purchase or conditional sale contracts (which normally provide for
title in the leased asset to pass eventually to the governmental issuer) have
evolved as a means for governmental issuers to acquire property and equipment
without meeting the constitutional and statutory requirements for the issuance
of debt. The debt issuance limitations are deemed to be inapplicable because of
the inclusion in many leases or contracts of "non-appropriation" clauses that
relieve the governmental issuer of any obligation to make future payments under
the lease or contract unless money is appropriated for such purpose by the
appropriate legislative body on a yearly or other periodic basis. In addition,
such leases or contracts may be subject to the temporary abatement of payments
in the event the issuer is prevented from maintaining occupancy of the leased
premises or utilizing the leased equipment. Although the obligations may be
secured by the leased equipment or facilities, the disposition of the property
in the event of nonappropriation or foreclosure might prove difficult, time
consuming and costly, and result in a delay in recovery or the failure to fully
recover a Fund's original investment.

Certain municipal lease obligations and participation interests may be deemed
illiquid for the purpose of a Fund's limitation on investments in illiquid
securities. Other municipal lease obligations and participation interests
acquired by a Fund may be determined by the Advisor to be liquid securities for
the purpose of such limitation. In determining the liquidity of municipal lease
obligations and participation interests, the Advisor will consider a variety of
factors including: (1) the willingness of dealers to bid for the security; (2)
the number of dealers willing to purchase or sell the obligation and the number
of other potential buyers; (3) the frequency of trades or quotes for the
obligation; and (4) the nature of the marketplace trades. In addition, the
Advisor will consider factors unique to particular lease obligations and
participation interests affecting the marketability thereof. These include the
general creditworthiness of the issuer, the importance to the issuer of the
property covered by the lease and the likelihood that the marketability of the
obligation will be maintained throughout the time the obligation is held by a
Fund.

A Fund may purchase participation interests in municipal lease obligations held
by a commercial bank or other financial institution. Such participations provide
a Fund with the right to a pro rata undivided interest in the underlying
municipal lease obligations. In addition, such participations generally provide
a Fund with the right to demand payment, on not more than seven days' notice, of
all or any part of such fund's participation interest in the underlying
municipal lease obligation, plus accrued interest.

Participation Interests. A Fund may purchase from financial institutions
participation interests in securities in which a fund may invest. A
participation interest gives a Fund an undivided interest in the security in the
proportion that the Fund's participation interest bears to the principal amount
of the security. These instruments may have fixed, floating or variable interest
rates. If the participation interest is unrated, or has been given a rating
below that which is permissible for purchase by a Fund, the participation
interest will be backed by an irrevocable letter of credit or guarantee of a
bank, or the payment obligation will be collateralized by US Government
securities, or, in the case of unrated participation interest, determined by the
Advisor to be of comparable quality to those instruments in which a Fund may
invest. For certain participation interests, a Fund will have the right to
demand payment, on not more than seven days' notice, for all or any part of a
Fund's participation interests in the security, plus accrued interest. As to
these instruments, a Fund generally intends to exercise its right to demand
payment only upon a default under the terms of the security.

Repurchase Agreements. A Fund may invest in repurchase agreements, subject to
its investment guidelines. In a repurchase agreement, a Fund acquires ownership
of a security and simultaneously commits to resell that security to the seller,
typically a bank or broker/dealer.

A repurchase agreement provides a means for a Fund to earn income on funds for
periods as short as overnight. It is an arrangement under which the purchaser
(i.e., a Fund) acquires a security ("Obligation") and the seller agrees, at the
time of sale, to repurchase the Obligation at a specified time and price.
Securities subject to a repurchase agreement are held in a segregated account
and, as described in more detail below, the value of the account is kept at
least equal to the repurchase price on a daily basis. The repurchase price may
be higher than the purchase price, the difference being income to a Fund, or the
purchase and repurchase prices may be the same, with interest at a stated rate
due to a Fund together with the repurchase price upon repurchase. In either
case, income to a Fund is unrelated to the interest rate on the Obligation
itself. Obligations will be held by the custodian or in the Federal Reserve Book
Entry System.

It is not clear whether a court would consider the Obligation purchased by a
Fund subject to a repurchase agreement as being owned by a Fund or as being
collateral for a loan by a Fund to the seller. In the event of the commencement
of bankruptcy or insolvency proceedings with respect to the seller of the
Obligation before repurchase of the Obligation under a repurchase agreement, a
Fund may encounter delay and incur costs before being able to sell the security.
Delays may involve loss of interest or decline in price of the Obligation. If
the court characterizes the transaction as a loan and a Fund has not perfected a
security interest in the Obligation, a Fund may be required to return the
Obligation to the seller's estate and be treated as an unsecured creditor of the
seller. As an unsecured creditor, a Fund would be at risk of losing some or all
of the principal and income involved in the transaction. As with any unsecured
debt obligation purchased for a Fund, the Advisor seeks to reduce the risk of
loss through repurchase agreements by analyzing the creditworthiness of the
obligor, in this case the seller of the Obligation. Apart from the risk of
bankruptcy or insolvency proceedings, there is also the risk that the seller may
fail to repurchase the Obligation, in which case the Fund may incur a loss if
the proceeds to a Fund of the sale to a third party are less than the repurchase
price. However, if the market value (including interest) of the Obligation
subject to the repurchase agreement becomes less than the repurchase price
(including interest), a Fund will direct the seller of the Obligation to deliver
additional securities so that the market value (including interest) of all
securities subject to the repurchase agreement will equal or exceed the
repurchase price.


Reverse Repurchase Agreements. A Fund may enter into "reverse repurchase
agreements," which are repurchase agreements in which the Fund, as the seller of
the securities, agrees to repurchase such securities at an agreed time and
price. The Fund will enter into reverse repurchase agreements only when the
Advisor believes that the interest income to be earned from the investment of
the proceeds of the transaction will be greater than the interest expense of the
transaction. Such transactions may increase fluctuations in the market value of
Fund assets and its yield and may be viewed as a form of leverage.


Securities Backed by Guarantees. The Fund may invest in securities backed by
guarantees from banks, insurance companies and other financial institutions. A
money market fund's ability to maintain a stable share price may depend upon
such guarantees, which are not supported by federal deposit insurance.
Consequently, changes in the credit quality of these institutions could have an
adverse impact on securities they have guaranteed or backed, which could cause
losses to a Fund and affect its share price.


Stand-by Commitments. A stand-by commitment is a right acquired by a Fund, when
it purchases a municipal obligation from a broker, dealer or other financial
institution ("seller"), to sell up to the same principal amount of such
securities back to the seller, at a Fund's option, at a specified price.
Stand-by commitments are also known as "puts." The investment policies of the
DWS Strategic High Yield Tax-Free Fund and the DWS Managed Municipal Bond Fund
permit the acquisition of stand-by commitments solely to facilitate portfolio
liquidity. The exercise by a Fund of a stand-by commitment is subject to the
ability and willingness of the other party to fulfill its contractual
commitment.


Stand-by commitments acquired by a Fund will have the following features: (1)
they will be in writing and will be physically held by the Fund's custodian; (2)
the Fund's right to exercise them will be unconditional and unqualified; (3)
they will be entered into only with sellers which in the Advisor's opinion
present a minimal risk of default; (4) although stand-by commitments will not be
transferable, municipal obligations purchased subject to such commitments may be
sold to a third party at any time, even though the commitment is outstanding;
and (5) their exercise price will be (i) a Fund's acquisition cost (excluding
any accrued interest which a Fund paid on their acquisition), less any amortized
market premium or plus any amortized original issue discount during the period
the Fund owned the securities, plus (ii) all interest accrued on the securities
since the last interest payment date.

The Funds expect that stand-by commitments generally will be available without
the payment of any direct or indirect consideration. However, if necessary or
advisable, a Fund will pay for stand-by commitments, either separately in cash
or by paying a higher price for portfolio securities which are acquired subject
to the commitments.

It is difficult to evaluate the likelihood of use or the potential benefit of a
stand-by commitment. Therefore, it is expected that the Advisor will determine
that stand-by commitments ordinarily have a "fair value" of zero, regardless of
whether any direct or indirect consideration was paid. However, if the market
price of the security subject to the stand-by commitment is less than the
exercise price of the stand-by commitment, such security will ordinarily be
valued at such exercise price. Where a Fund has paid for a stand-by commitment,
its cost will be reflected as unrealized depreciation for the period during
which the commitment is held.

The Advisor understands that the Internal Revenue Service (the "Service") has
issued a favorable revenue ruling to the effect that, under specified
circumstances, a registered investment company will be the owner of tax-exempt
municipal obligations acquired subject to a put option. The Service has also
issued private letter rulings to certain taxpayers (which do not serve as
precedent for other taxpayers) to the effect that tax-exempt interest received
by a regulated investment company with respect to such obligations will be
tax-exempt in the hands of the company and may be distributed to its
shareholders as exempt-interest dividends. The Service has subsequently
announced that it will not ordinarily issue advance ruling letters as to the
identity of the true owner of property in cases involving the sale of securities
or participation interests therein if the purchaser has the right to cause the
security, or the participation interest therein, to be purchased by either the
seller or a third party. A Fund intends to take the position that it owns any
municipal obligations acquired subject to a Stand-by Commitment and that
tax-exempt interest earned with respect to such municipal obligations will be
tax-exempt in its hands. There is no assurance that the Service will agree with
such position in any particular case.

Strategic Transactions and Derivatives. A Fund may, but is not required to,
utilize various other investment strategies as described below for a variety of
purposes, such as hedging various market risks, managing the effective maturity
or duration of the Fund's portfolio, or enhancing potential gain. These
strategies may be executed through the use of derivative contracts.


In the course of pursuing these investment strategies, the Funds may purchase
and sell exchange-listed and over the counter put and call options on
securities, fixed-income indices and other financial instruments, purchase and
sell futures contracts and options thereon, and enter into various transactions
such as swaps, caps, floors or collars (collectively, all the above are called
"Strategic Transactions"). In addition, Strategic Transactions may also include
new techniques, instruments or strategies that are permitted as regulatory
changes occur. Strategic Transactions may be used without limit (except to the
extent that 80% of each Fund's net assets are required to be invested in
tax-exempt municipal securities, and as limited by each Fund's other investment
restrictions and subject to certain limits imposed by the 1940 Act) to attempt
to protect against possible changes in the market value of securities held in or
to be purchased for a Fund's portfolio resulting from securities markets
fluctuations, to protect the Fund's unrealized gains in the value of its
portfolio securities, to facilitate the sale of such securities for investment
purposes, to manage the effective maturity or duration of a Fund's portfolio, or
to establish a position in the derivatives markets as a temporary substitute for
purchasing or selling particular securities. Some Strategic Transactions may
also be used to enhance potential gain although no more than 5% of each Fund's
assets will be committed to Strategic Transactions entered into for non-hedging
purposes. Any or all of these investment techniques may be used at any time and
in any combination, and there is no particular strategy that dictates the use of
one technique rather than another, as use of any Strategic Transaction is a
function of numerous variables including market conditions. The ability of the
Funds to utilize these Strategic Transactions successfully will depend on the
Advisor's ability to predict pertinent market movements, which cannot be
assured. The Funds will comply with applicable regulatory requirements when
implementing these strategies, techniques and instruments. Strategic
Transactions will not be used to alter fundamental investment purposes and
characteristics of the Funds.


Strategic Transactions, including derivative contracts, have risks associated
with them including possible default by the other party to the transaction,
illiquidity and, to the extent the Advisor's view as to certain market movements
is incorrect, the risk that the use of such Strategic Transactions could result
in losses greater than if they had not been used. Use of put and call options
may result in losses to a Fund, force the sale or purchase of portfolio
securities at inopportune times or for prices higher than (in the case of put
options) or lower than (in the case of call options) current market values,
limit the amount of appreciation a Fund can realize on its investments or cause
a Fund to hold a security it might otherwise sell. The use of options and
futures transactions entails certain other risks. In particular, the variable
degree of correlation between price movements of futures contracts and price
movements in the related portfolio position of a Fund creates the possibility
that losses on the hedging instrument may be greater than gains in the value of
that Fund's position. In addition, futures and options markets may not be liquid
in all circumstances and certain over-the-counter options may have no markets.
As a result, in certain markets, a Fund might not be able to close out a
transaction without incurring substantial losses, if at all. Although the use of
futures and options transactions for hedging should tend to minimize the risk of
loss due to a decline in the value of the hedged position, at the same time they
tend to limit any potential gain which might result from an increase in value of
such position. Finally, the daily variation margin requirements for futures
contracts would create a greater ongoing potential financial risk than would
purchase of options, where the exposure is limited to the cost of the initial
premium.. Losses resulting from the use of Strategic Transactions would reduce
net asset value, and possibly income, and such losses can be greater than if the
Strategic Transactions had not been utilized.


General Characteristics of Options. Put options and call options typically have
similar structural characteristics and operational mechanics regardless of the
underlying instrument on which they are purchased or sold. Thus, the following
general discussion relates to each of the particular types of options discussed
in greater detail below. In addition, many Strategic Transactions involving
options require segregation of Fund assets in special accounts, as described
above under "Asset Segregation."


A put option gives the purchaser of the option, upon payment of a premium, the
right to sell, and the writer the obligation to buy, the underlying security,
commodity, index, currency or other instrument at the exercise price. For
instance, a Fund's purchase of a put option on a security might be designed to
protect its holdings in the underlying instrument (or, in some cases, a similar
instrument) against a substantial decline in the market value by giving a Fund
the right to sell such instrument at the option exercise price. A call option,
upon payment of a premium, gives the purchaser of the option the right to buy,
and the seller the obligation to sell, the underlying instrument at the exercise
price. A Fund's purchase of a call option on a security, financial future,
index, currency or other instrument might be intended to protect a Fund against
an increase in the price of the underlying instrument that it intends to
purchase in the future by fixing the price at which it may purchase such
instrument. An American style put or call option may be exercised at any time
during the option period while a European style put or call option may be
exercised only upon expiration or during a fixed period prior thereto. Each Fund
is authorized to purchase and sell exchange listed options and over-the-counter
options ("OTC options"). Exchange listed options are issued by a regulated
intermediary such as the Options Clearing Corporation ("OCC"), which guarantees
the performance of the obligations of the parties to such options. The
discussion below uses the OCC as an example, but is also applicable to other
financial intermediaries.

With certain exceptions, OCC issued and exchange listed options generally settle
by physical delivery of the underlying security or currency, although in the
future cash settlement may become available. Index options and Eurodollar
instruments are cash settled for the net amount, if any, by which the option is
"in-the-money" (i.e., where the value of the underlying instrument exceeds, in
the case of a call option, or is less than, in the case of a put option, the
exercise price of the option) at the time the option is exercised. Frequently,
rather than taking or making delivery of the underlying instrument through the
process of exercising the option, listed options are closed by entering into
offsetting purchase or sale transactions that do not result in ownership of the
new option.

A Fund's ability to close out its position as a purchaser or seller of an OCC or
exchange listed put or call option is dependent, in part, upon the liquidity of
the option market. Among the possible reasons for the absence of a liquid option
market on an exchange are: (i) insufficient trading interest in certain options;
(ii) restrictions on transactions imposed by an exchange; (iii) trading halts,
suspensions or other restrictions imposed with respect to particular classes or
series of options or underlying securities including reaching daily price
limits; (iv) interruption of the normal operations of the OCC or an exchange;
(v) inadequacy of the facilities of an exchange or OCC to handle current trading
volume; or (vi) a decision by one or more exchanges to discontinue the trading
of options (or a particular class or series of options), in which event the
relevant market for that option on that exchange would cease to exist, although
outstanding options on that exchange would generally continue to be exercisable
in accordance with their terms.

The hours of trading for listed options may not coincide with the hours during
which the underlying financial instruments are traded. To the extent that the
option markets close before the markets for the underlying financial
instruments, significant price and rate movements can take place in the
underlying markets that cannot be reflected in the option markets.


OTC options are purchased from or sold to securities dealers, financial
institutions or other parties ("Counterparties") through direct bilateral
agreement with the Counterparty. In contrast to exchange listed options, which
generally have standardized terms and performance mechanics, all the terms of an
OTC option, including such terms as method of settlement, term, exercise price,
premium, guarantees and security, are set by negotiation of the parties. A Fund
expects generally to enter into OTC options that have cash settlement
provisions, although it is not required to do so.


Unless the parties provide for it, there is no central clearing or guaranty
function in an OTC option. As a result, if the Counterparty fails to make or
take delivery of the security, currency or other instrument underlying an OTC
option it has entered into with a Fund or fails to make a cash settlement
payment due in accordance with the terms of that option, a Fund will lose any
premium it paid for the option as well as any anticipated benefit of the
transaction. Accordingly, the Advisor must assess the creditworthiness of each
such Counterparty or any guarantor or credit enhancement of the Counterparty's
credit to determine the likelihood that the terms of the OTC option will be
satisfied. A Fund will engage in OTC option transactions only with US government
securities dealers recognized by the Federal Reserve Bank of New York as
"primary dealers," or broker-dealers, domestic or foreign banks or other
financial institutions which have received (or the guarantors of the obligation
of which have received) a short-term credit rating of A-1 from S&P or P-1 from
Moody's or an equivalent rating from any other nationally recognized statistical
rating organization ("NRSRO") or, in the case of OTC currency transactions, are
determined to be of equivalent credit quality by the Advisor. The staff of the
SEC currently takes the position that OTC options purchased by a Fund, and
portfolio securities "covering" the amount of a Fund's obligation pursuant to an
OTC option sold by it (the cost of the sell-back plus the in-the-money amount,
if any) are illiquid, and are subject to a Fund's limitation on investing no
more than 15% of its net assets in illiquid securities.

If a Fund sells a call option, the premium that it receives may serve as a
partial hedge, to the extent of the option premium, against a decrease in the
value of the underlying securities or instruments in its portfolio or will
increase a Fund's income. The sale of put options can also provide income.


A Fund may purchase and sell call options on, among other things, securities
including US Treasury and agency securities, municipal obligations,
mortgage-backed securities and Eurodollar instruments that are traded on US and
foreign securities exchanges and in the over-the-counter markets, and on
securities indices and futures contracts. Even though a Fund will receive the
option premium to help protect it against loss, a call sold by a Fund exposes a
Fund during the term of the option to possible loss of opportunity to realize
appreciation in the market price of the underlying security or instrument and
may require a Fund to hold a security or instrument which it might otherwise
have sold.


A Fund may purchase and sell put options on, among other things, securities
including US Treasury and agency securities, mortgage-backed securities,
municipal obligations and Eurodollar instruments (whether or not it holds the
above securities in its portfolio) and on securities indices and futures
contracts other than futures on individual corporate debt and individual equity
securities. A Fund will not sell put options if, as a result, more than 50% of
such Fund's assets would be required to be segregated to cover its potential
obligations under such put options other than those with respect to futures and
options thereon. In selling put options, there is a risk that a Fund may be
required to buy the underlying security at a disadvantageous price above the
market price.

General Characteristics of Futures. A Fund may enter into futures contracts or
purchase or sell put and call options on such futures as a hedge against
anticipated interest rate or fixed-income market changes and for duration
management, risk management and return enhancement purposes. Futures are
generally bought and sold on the commodities exchanges where they are listed
with payment of initial and variation margin as described below. The sale of a
futures contract creates a firm obligation by the seller, to deliver to the
buyer the specific type of financial instrument called for in the contract at a
specific future time for a specified price (or, with respect to certain
instruments, such as index futures and Eurodollar instruments, the net cash
amount) and a firm obligation by the buyer to deliver the specified price.
Options on futures contracts are similar to options on securities except that an
option on a futures contract gives the purchaser the right in return for the
premium paid to assume a position in a futures contract and obligates the seller
to deliver such position.


Each Fund has claimed exclusion from the definition of the term "commodity pool
operator" under the regulations of the Commodity Futures Trading Commission.
Therefore, a Fund is not subject to commodity pool operator registration and
regulation under the Commodity Exchange Act. Futures and options on futures may
be entered into for bona fide hedging, risk management (including duration
management) or other portfolio and return enhancement management purposes to the
extent consistent with the exclusion from commodity pool operator registration.
Typically, maintaining a futures contract or selling an option thereon requires
a fund to deposit with a financial intermediary as security for its obligations
an amount of cash or other specified assets (initial margin) which initially is
typically 1% to 10% of the face amount of the contract (but may be higher in
some circumstances). Additional cash or assets (variation margin) may be
required to be deposited thereafter on a daily basis as the marked to market
value of the contract fluctuates. The purchase of an option on financial futures
involves payment of a premium for the option without any further obligation on
the part of a Fund. If a Fund exercises an option on a futures contract it will
be obligated to post initial margin (and potential subsequent variation margin)
for the resulting futures position just as it would for any position. Futures
contracts and options thereon are generally settled by entering into an
offsetting transaction but there can be no assurance that the position can be
offset prior to settlement at an advantageous price, nor that delivery will
occur.

A Fund will not enter into a futures contract or related option (except for
closing transactions) if, immediately thereafter, the sum of the amount of its
initial margin and premiums on open futures contracts and options thereon would
exceed 5% of a Fund's total assets (taken at current value); however, in the
case of an option that is in-the-money at the time of the purchase, the
in-the-money amount may be excluded in calculating the 5% limitation. The
segregation requirements with respect to futures contracts and options thereon
are described above under "Asset Segregation."


Swaps, Caps, Floors and Collars. Among the Strategic Transactions into which a
Fund may enter are interest rate, index and other swaps and the purchase or sale
of related caps, floors and collars. A Fund expects to enter into these
transactions primarily to preserve a return or spread on a particular investment
or portion of its portfolio, as a duration management technique, to protect
against any increase in the price of securities that a Fund anticipates
purchasing at a later date or to enhance returns. A Fund will not sell interest
rate caps or floors where it does not own securities or other instruments
providing the income stream a Fund may be obligated to pay. Interest rate swaps
involve the exchange by a Fund with another party of their respective
commitments to pay or receive interest, e.g., an exchange of floating rate
payments for fixed rate payments with respect to a notional amount of principal.
An index swap is an agreement to swap cash flows on a notional amount based on
changes in the values of the reference indices. The purchase of a cap entitles
the purchaser to receive payments on a notional principal amount from the party
selling such cap to the extent that a specified index exceeds a predetermined
interest rate or amount. The purchase of a floor entitles the purchaser to
receive payments on a notional principal amount from the party selling such
floor to the extent that a specified index falls below a predetermined interest
rate or amount. A collar is a combination of a cap and a floor that preserves a
certain return within a predetermined range of interest rates or values.

A Fund will usually enter into swaps on a net basis, i.e., the two payment
streams are netted out in a cash settlement on the payment date or dates
specified in the instrument, with a Fund receiving or paying, as the case may
be, only the net amount of the two payments. A Fund will not enter into any
swap, cap, floor or collar transaction unless, at the time of entering into such
transaction, the unsecured long-term debt of the Counterparty, combined with any
credit enhancements, is rated at least A by S&P or Moody's or has an equivalent
rating from an NRSRO or is determined to be of equivalent credit quality by the
Advisor. If there is a default by the Counterparty, a Fund may have contractual
remedies pursuant to the agreements related to the transaction. The swap market
has grown substantially in recent years with a large number of banks and
investment banking firms acting both as principals and as agents utilizing
standardized swap documentation. As a result, the swap market has become
relatively liquid. Caps, floors and collars are more recent innovations for
which standardized documentation has not yet been fully developed and,
accordingly, they are less liquid than swaps.




Tax Exempt Custodial Receipts. DWS Managed Municipal Bond Fund may purchase
tax-exempt custodial receipts (the "Receipts") which evidence ownership in an
underlying bond that is deposited with a custodian for safekeeping. Holders of
the Receipts receive all payments of principal and interest when paid on the
bonds. Receipts can be purchased in an offering or from a Counterparty
(typically an investment bank). To the extent that any Receipt is illiquid, it
is subject to the Fund's limit on illiquid securities.

Tax Exempt Pass-Through Securities. DWS Strategic High Yield Tax-Free Fund may
purchase tax exempt pass-through certificates. These represent an interest in a
pool or group of fixed-rate long-term debt obligations issued by or on behalf of
primarily not-for-profit institutions, the interest on which is exempt from
federal income taxation, including alternative minimum taxation. Such fixed-rate
long-term debt obligations may be private activity bonds issued by states,
municipalities or public authorities to provide funds, usually through a loan or
lease arrangement, to a non-profit corporation for the purpose of financing or
refinancing the construction or improvement of a facility to be used by the
non-profit corporation. Distributions on tax exempt pass-through certificates
may be adversely affected by defaults in or prepayment of the underlying debt
obligations. Certain tax exempt pass-through certificates are issued in several
classes with different levels of yields and credit protection. The Fund may
invest in lower classes of tax exempt pass-through certificates that have less
credit protection. Tax exempt pass-through certificates have limited liquidity
and certain transfer restrictions may apply. There currently is no trading
market for tax exempt pass-through certificates and there can be no assurance
that such a market will develop.


Third Party Puts. A Fund may purchase long-term fixed rate bonds that have been
coupled with an option granted by a third party financial institution allowing a
Fund at specified intervals to tender (or "put") the bonds to the institution
and receive the face value thereof (plus accrued interest). These third party
puts are available in several different forms, may be represented by custodial
receipts or trust certificates and may be combined with other features such as
interest rate swaps. That Fund receives a short-term rate of interest (which is
periodically reset), and the interest rate differential between that rate and
the fixed rate on the bond is retained by the financial institution. The
financial institution granting the option does not provide credit enhancement,
and in the event that there is a default in the payment of principal or
interest, or downgrading of a bond to below investment grade, or a loss of the
bond's tax-exempt status, the put option will terminate automatically, the risk
to that Fund will be that of holding such a long-term bond and the weighted
average maturity of a Fund's portfolio would be adversely affected.

These bonds coupled with puts may present the same tax issues as are associated
with Stand-By Commitments. As with any Stand-By Commitments acquired by a Fund,
the Fund intends to take the position that it is the owner of any municipal
obligation acquired subject to a third-party put, and that tax-exempt interest
earned with respect to such municipal obligations will be tax-exempt in its
hands. There is no assurance that the Service will agree with such position in
any particular case. Additionally, the federal income tax treatment of certain
other aspects of these investments, including the treatment of tender fees and
swap payments, in relation to various regulated investment company tax
provisions is unclear. However, the Advisor seeks to manage a Fund's portfolio
in a manner designed to minimize any adverse impact from these investments.

US Government Securities. There are two broad categories of US
Government-related debt instruments: (a) direct obligations of the US Treasury,
and (b) securities issued or guaranteed by US Government agencies.

Examples of direct obligations of the US Treasury are Treasury Bills, Notes,
Bonds and other debt securities issued by the US Treasury. These instruments are
backed by the "full faith and credit" of the United States. They differ
primarily in interest rates, the length of maturities and the dates of issuance.
Treasury bills have original maturities of one year or less. Treasury notes have
original maturities of one to ten years and Treasury bonds generally have
original maturities of greater than ten years.

Some agency securities are backed by the full faith and credit of the United
States (such as Maritime Administration Title XI Ship Financing Bonds and Agency
for International Development Housing Guarantee Program Bonds) and others are
backed only by the rights of the issuer to borrow from the US Treasury (such as
Federal Home Loan Bank Bonds and Federal National Mortgage Association Bonds),
while still others, such as the securities of the Federal Farm Credit Bank, are
supported only by the credit of the issuer. With respect to securities supported
only by the credit of the issuing agency or by an additional line of credit with
the US Treasury, there is no guarantee that the US Government will provide
support to such agencies and such securities may involve risk of loss of
principal and interest.

US Government securities may include "zero coupon" securities that have been
stripped by the US Government of their unmatured interest coupons and
collateralized obligations issued or guaranteed by a US Government agency or
instrumentality.

Interest rates on US Government obligations may be fixed or variable. Interest
rates on variable rate obligations are adjusted at regular intervals, at least
annually, according to a formula reflecting then-current specified standard
rates, such as 91-day US Treasury bill rates. These adjustments generally tend
to reduce fluctuations in the market value of the securities.

The government guarantee of the US Government securities in a Fund's portfolio
does not guarantee the net asset value of the shares of that Fund. There are
market risks inherent in all investments in securities and the value of an
investment in a Fund will fluctuate over time. Normally, the value of
investments in US Government securities varies inversely with changes in
interest rates. For example, as interest rates rise the value of investments in
US Government securities will tend to decline, and as interest rates fall the
value of a Fund's investments will tend to increase. In addition, the potential
for appreciation in the event of a decline in interest rates may be limited or
negated by increased principal prepayments with respect to certain
Mortgage-Backed Securities, such as GNMA Certificates. Prepayments of high
interest rate Mortgage-Backed Securities during times of declining interest
rates will tend to lower the return of a Fund and may even result in losses to a
Fund if some securities were acquired at a premium. Moreover, during periods of
rising interest rates, prepayments of Mortgage-Backed Securities may decline,
resulting in the extension of a Fund's average portfolio maturity. As a result,
a Fund's portfolio may experience greater volatility during periods of rising
interest rates than under normal market conditions.

When-Issued Securities. A Fund may from time to time purchase equity and debt
securities on a "when-issued," "delayed delivery" or "forward delivery" basis.
The price of such securities, which may be expressed in yield terms, is fixed at
the time the commitment to purchase is made, but delivery and payment for the
securities takes place at a later date. During the period between purchase and
settlement, no payment is made by a Fund to the issuer and no interest accrues
to a Fund. When a Fund purchases such securities, it immediately assumes the
risks of ownership, including the risk of price fluctuation. Failure to deliver
a security purchased on this basis may result in a loss or missed opportunity to
make an alternative investment.


To the extent that assets of a Fund are held in cash pending the settlement of a
purchase of securities, a Fund would earn no income. While such securities may
be sold prior to the settlement date, the Funds intend to purchase them with the
purpose of actually acquiring them unless a sale appears desirable for
investment reasons. At the time a Fund makes the commitment to purchase a
security on this basis, it will record the transaction and reflect the value of
the security in determining its net asset value. The market value of the
securities may be more or less than the purchase price.


Master/feeder Fund Structure. The Board of Trustees has the discretion to retain
the current distribution arrangement for a Fund while investing in a master fund
in a master/feeder fund structure as described below.

A master/feeder fund structure is one in which a fund (a "feeder fund"), instead
of investing directly in a portfolio of securities, invests most or all of its
investment assets in a separate registered investment company (the "master
fund") with substantially the same investment objective and policies as the
feeder fund. Such a structure permits the pooling of assets of two or more
feeder funds, preserving separate identities or distribution channels at the
feeder fund level. Based on the premise that certain of the expenses of
operating an investment portfolio are relatively fixed, a larger investment
portfolio may eventually achieve a lower ratio of operating expenses to average
net assets. An existing investment company is able to convert to a feeder fund
by selling all of its investments, which involves brokerage and other
transaction costs and realization of a taxable gain or loss, or by contributing
its assets to the master fund and avoiding transaction costs and, if proper
procedures are followed, the realization of taxable gain or loss.


Portfolio Holdings

In addition to the public disclosure of Fund portfolio holdings through required
SEC quarterly filings, a Fund may make its portfolio holdings information
publicly available on the DWS Funds' Web site as described in each Fund's
prospectus. Each Fund does not disseminate non-public information about
portfolio holdings except in accordance with policies and procedures adopted by
each Fund.

Each Fund's procedures permit non-public portfolio holdings information to be
shared with Deutsche Asset Management and its affiliates (collectively "DeAM"),
subadvisors, if any, custodians, independent registered public accounting firms,
attorneys, officers and trustees and each of their respective affiliates and
advisers who require access to this information to fulfill their duties to each
Fund and are subject to the duties of confidentiality, including the duty not to
trade on non-public information, imposed by law or contract, or by each Fund's
procedures. This non-public information may also be disclosed, subject to the
requirements described below, to certain third parties, such as securities
lending agents, financial printers, proxy voting firms, mutual fund analysts and
rating and tracking agencies, or to shareholders in connection with in-kind
redemptions (collectively, "Authorized Third Parties").


Prior to any disclosure of each Fund's non-public portfolio holdings information
to Authorized Third Parties, a person authorized by each Fund's Trustees must
make a good faith determination in light of the facts then known that a Fund has
a legitimate business purpose for providing the information, that the disclosure
is in the best interest of each Fund, and that the recipient assents or
otherwise has a duty to keep the information confidential and to not trade based
on the information received while the information remains non-public. No
compensation is received by each Fund or DeAM for disclosing non-public holdings
information. Periodic reports regarding these procedures will be provided to
each Fund's Trustees.

Portfolio holdings information distributed by the trading desks of DeAM or a
subadvisor for the purpose of facilitating efficient trading of such securities
and receipt of relevant research is not subject to the foregoing requirements.
Non-public portfolio holding information does not include portfolio
characteristics (other than holdings or subsets of holdings) about each Fund and
information derived therefrom, including, but not limited to, how each Fund's
investments are divided among various sectors, industries, countries, value and
growth stocks, bonds, currencies and cash, types of bonds, bond maturities,
duration, bond coupons and bond credit quality ratings so long as each Fund's
holdings could not be derived from such information.


Registered investment companies that are subadvised by DeAM may be subject to
different portfolio holdings disclosure policies, and neither DeAM nor a Fund's
Trustees exercise control over such policies. In addition, separate account
clients of DeAM have access to their portfolio holdings and are not subject to a
fund's portfolio holdings disclosure policy. The portfolio holdings of some of
the funds subadvised by DeAM and some of the separate accounts managed by DeAM
may substantially overlap with the portfolio holdings of a fund.


DeAM also manages certain unregistered commingled trusts and creates model
portfolios, the portfolio holdings of which may substantially overlap with the
portfolio holdings of a fund. To the extent that investors in these commingled
trusts or recipients of model portfolio holdings information may receive
portfolio holdings information of their trust or of a model portfolio on a
different basis from that on which fund portfolio holdings information is made
public, DeAM has implemented procedures reasonably designed to encourage such
investors and recipients to keep such information confidential, and to prevent
those investors from trading on the basis of non-public holdings information.

There is no assurance that a fund's policies and procedures with respect to the
disclosure of portfolio holdings information will protect a fund from the
potential misuse of portfolio holdings information by those in possession of
that information.

                             MANAGEMENT OF THE FUNDS

Investment Advisor

DIMA, which is part of DeAM, is the investment advisor for each Fund, with
headquarters at 345 Park Avenue, New York, New York. Under the supervision of
the Board of Trustees of the Funds, DIMA makes the Funds' investment decisions,
buys and sells securities for the Funds and conducts research that leads to
these purchase and sale decisions. The Advisor manages each Fund's daily
investment and business affairs subject to the policies established by each
Trust's Board of Trustees. The Fund's Advisor is also responsible for selecting
brokers and dealers and for negotiating brokerage commissions and dealer
charges. The Advisor's duties are described in more detail below. DIMA, together
with its predecessors, has more than 80 years of experience managing mutual
funds and provides a full range of investment advisory services to institutional
and retail clients.


DeAM is the marketing name in the US for the asset management activities of
Deutsche Bank AG, DIMA, Deutsche Bank Trust Company Americas and DWS Trust
Company. DeAM is a global asset management organization that offers a wide range
of investing expertise and resources, including hundreds of portfolio managers
and analysts and an office network that reaches the world's major investment
centers. This well-resourced global investment platform brings together a wide
variety of experience and investment insight, across industries, regions, asset
classes and investing styles. DIMA is an indirect, wholly-owned subsidiary of
Deutsche Bank AG. Deutsche Bank AG is a major global banking institution that is
engaged in a wide range of financial services, including investment management,
mutual fund, retail, private and commercial banking, investment banking and
insurance. DWS Investments is part of Deutsche Bank's Asset Management division
and, within the US, represents the retail asset management activities of
Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Investment
Management Americas Inc. and DWS Trust Company.


The Trustees have overall responsibility for the management of each Fund under
Massachusetts law.

The Advisor provides investment counsel for many individuals and institutions,
including insurance companies, industrial corporations, and financial and
banking organizations, as well as providing investment advice to open- and
closed-end SEC registered funds.

In certain cases, the investments for a Fund are managed by the same individuals
who manage one or more other mutual funds advised by the Advisor that have
similar names, objectives and investment styles. You should be aware that a Fund
is likely to differ from these other mutual funds in size, cash flow pattern and
tax matters. Accordingly, the holdings and performance of a Fund can be expected
to vary from those of the other mutual funds.

Certain investments may be appropriate for a Fund and also for other clients
advised by the Advisor. Investment decisions for a Fund and other clients are
made with a view to achieving their respective investment objectives and after
consideration of such factors as their current holdings, availability of cash
for investment and the size of their investments generally. Frequently, a
particular security may be bought or sold for only one client or in different
amounts and at different times for more than one but less than all clients.
Likewise, a particular security may be bought for one or more clients when one
or more other clients are selling the security. In addition, purchases or sales
of the same security may be made for two or more clients on the same day. In
such event, such transactions will be allocated among the clients in a manner
believed by the Advisor to be equitable to each. In some cases, this procedure
could have an adverse effect on the price or amount of the securities purchased
or sold by a Fund. Purchase and sale orders for a Fund may be combined with
those of other clients of the Advisor in the interest of achieving the most
favorable net results to a Fund.

Each Fund is managed by a team of investment professionals who each play an
important role in a Fund's management process. Team members work together to
develop investment strategies and select securities for a Fund's portfolio. This
team works for the Advisor or its affiliates and is supported by a large staff
of economists, research analysts, traders and other investment specialists. The
Advisor or its affiliates believe(s) its team approach benefits Fund investors
by bringing together many disciplines and leveraging its extensive resources.
Team members with primary responsibility for management of the Funds, as well as
team members who have other ongoing management responsibilities for each Fund,
are identified in each Fund's prospectus, as of the date of the Fund's
prospectus. Composition of the team may change over time, and Fund shareholders
and investors will be notified of changes affecting individuals with primary
Fund management responsibility.


In 2006, each Board and each Fund's shareholders approved an amended and
restated investment management agreement (the "Investment Management
Agreements") for its respective Fund. Pursuant to the Investment Management
Agreements, the Advisor provides continuing investment management of the assets
of each Fund. In addition to the investment management of the assets of each
Fund, the Advisor determines the investments to be made for each Fund, including
what portion of its assets remain uninvested in cash or cash equivalents, and
with whom the orders for investments are placed, consistent with a Fund's
policies as stated in its Prospectuses and SAI, or as adopted by a Fund's Board.
The Advisor will also monitor, to the extent not monitored by a Fund's
administrator or other agent, a Fund's compliance with its investment and tax
guidelines and other compliance policies.




The Advisor provides assistance to a Fund's Board in valuing the securities and
other instruments held by a Fund, to the extent reasonably required by valuation
policies and procedures that may be adopted by a Fund.


Pursuant to the Investment Management Agreements, (unless otherwise provided in
the agreement or as determined by a Fund's Board and to the extent permitted by
applicable law), the Advisor pays the compensation and expenses of all the Board
members, officers, and executive employees of a Fund, including a Fund's share
of payroll taxes, who are affiliated persons of the Advisor.

The Investment Management Agreements provides that a Fund is generally
responsible for expenses that include: fees payable to the Advisor; outside
legal, accounting or auditing expenses, including with respect to expenses
related to negotiation, acquisition or distribution of portfolio investments;
maintenance of books and records that are maintained by a Fund, a Fund's
custodian, or other agents of a Fund; taxes and governmental fees; fees and
expenses of the Fund's accounting agent, custodian, sub-custodians,
depositories, transfer agents, dividend reimbursing agents and registrars;
payment for portfolio pricing or valuation services to pricing agents,
accountants, bankers and other specialists, if any; brokerage commissions or
other costs of acquiring or disposing of any portfolio securities or other
instruments of the Fund; and litigation expenses and other extraordinary
expenses not incurred in the ordinary course of the Fund's business.

The Investment Management Agreements allow the Advisor to delegate any of its
duties under the Investment Management Agreements to a subadvisor, subject to a
majority vote of the Board of a Fund, including a majority of the Board who are
not interested persons of a Fund, and, if required by applicable law, subject to
a majority vote of a Fund's shareholders.

The Investment Management Agreements provide that the Advisor shall not be
liable for any error of judgment or mistake of law or for any loss suffered by a
Fund in connection with matters to which the Investment Management Agreements
relate, except a loss resulting from willful malfeasance, bad faith or gross
negligence on the part of the Advisor in the performance of its duties or from
reckless disregard by the Advisor of its obligations and duties under the
Investment Management Agreements. The Investment Management Agreements may be
terminated at any time, without payment of penalty, by either party or by vote
of a majority of the outstanding voting securities of a Fund on 60 days' written
notice.


For all services provided under the Investment Management Agreements, each Fund
pays the Advisor a fee, computed daily and paid monthly, at the annual rate as a
percentage of net assets shown below:

                                  Fund                 Management Fee Rate
                                  ----                 -------------------


DWS Strategic High Yield Tax-Free Fund*               0.565% to $300 million
                                                     0.515% next $200 million
                                                     0.490% next $500 million
                                                        0.470% thereafter


DWS Intermediate Tax/AMT Free Fund                            0.315%

DWS Managed Municipal Bond Fund                       0.365% to $250 million
                                                     0.345% next $750 million
                                                     0.325% next $1.5 billion
                                                     0.315% next $2.5 billion
                                                     0.295% next $2.5 billion
                                                     0.275% next $2.5 billion
                                                     0.255% next $2.5 billion
                                                        0.235% thereafter


*         Prior to October 1, 2007, DWS Strategic High Yield Tax-Free Fund paid
          the Advisor a fee computed daily and paid monthly, at an annual rate
          as a percentage of net assets, at 0.565% to $300 million, 0.515% next
          $200 million and 0.490% thereafter.


The advisory fees paid by each Fund for its last three fiscal years ended May 31
are shown in the table below:


<TABLE>
<CAPTION>
Fund                                                      2008              2007*             2006*
----                                                      ----              -----             -----
<S>                                                     <C>               <C>               <C>
DWS Strategic High Yield Tax-Free Fund                  $5,337,875        $4,649,149        $5,145,687
DWS Managed Municipal Bond Fund                        $12,333,086       $13,116,652       $17,556,013
DWS Intermediate Tax/AMT Free Fund                      $1,987,353        $2,105,572        $3,062,216
</TABLE>

*        Amounts reflect payments to the Advisor under a Fund's prior Investment
         Management Agreement.

Through September 30, 2009, the Advisor has contractually agreed to waive all or
a portion of its management fee and reimburse or pay operating expenses of DWS
Strategic High Yield Tax-Free Fund to the extent necessary to maintain the
fund's total operating annual expenses at 0.66% for Class S shares.

In 2006, the Board and shareholders approved a new subadvisor approval policy
for each Fund (the "Subadvisor Approval Policy"). The Subadvisor Approval Policy
permits the Advisor, subject to the approval of the Board, including a majority
of its independent board members, to appoint and replace subadvisors and to
amend sub-advisory contracts without obtaining shareholder approval. Under the
Subadvisor Approval Policy, the Board, including its independent board members,
will continue to evaluate and approve all new sub-advisory contracts between the
Advisor and any subadvisor, as well as all changes to any existing sub-advisory
contract. A Fund cannot implement the Subadvisor Approval Policy without the SEC
either adopting revisions to current rules (as it proposed to do in October
2003) or granting a Fund exemptive relief from existing rules. A Fund and the
Advisor would be subject to certain conditions imposed by the SEC (and certain
conditions that may be imposed in the future within either exemptive relief or a
rule) to ensure that the interests of a Fund and its shareholders are adequately
protected whenever the Advisor acts under the Subadvisor Approval Policy,
including any shareholder notice requirements.


Compensation of Portfolio Managers


Portfolio managers are eligible for total compensation comprised of base salary
and discretionary incentive compensation.

Base Salary - Base salary generally represents a smaller percentage of portfolio
managers' total compensation than discretionary incentive compensation. Base
salary is linked to job function, responsibilities and financial services
industry peer comparison through the use of extensive market data surveys.

Discretionary Incentive Compensation - Generally, discretionary incentive
compensation comprises a greater proportion of total compensation as a portfolio
manager's seniority and compensation levels increase. Discretionary incentive
compensation is determined based on an analysis of a number of factors,
including among other things, the performance of Deutsche Bank, the performance
of the Asset Management division, and the employee's individual contribution. In
evaluating individual contribution, management will consider a combination of
quantitative and qualitative factors. A portion of the portfolio manager's
discretionary incentive compensation may be delivered in long-term equity
programs (usually in the form of Deutsche Bank equity) (the "Equity Plan"). Top
performing portfolio managers may earn discretionary incentive compensation that
is a multiple of their base salary.

o        The quantitative analysis of a portfolio manager's individual
         performance is based on, among other factors, performance of all of the
         accounts managed by the portfolio manager (which includes the fund and
         any other accounts managed by the portfolio manager) over a one-,
         three-, and five-year period relative to the appropriate Morningstar
         and Lipper peer group universes and/or benchmark index(es) with respect
         to each account. Additionally, the portfolio manager's
         retail/institutional asset mix is weighted, as appropriate for
         evaluation purposes. Generally the benchmark index used is a benchmark
         index set forth in the fund's prospectus to which the fund's
         performance is compared. Additional or different appropriate peer group
         or benchmark indices may also be used. Primary weight is given to
         pre-tax portfolio performance over three-year and five-year time
         periods (adjusted as appropriate if the portfolio manager has served
         for less than five years) with lesser consideration given to portfolio
         performance over a one-year period. The increase or decrease in a
         fund's assets due to the purchase or sale of fund shares is not
         considered a material factor.

o        The qualitative analysis of a portfolio manager's individual
         performance is based on, among other things, the results of an annual
         management and internal peer review process, and management's
         assessment of overall portfolio manager contributions to investor
         relations, the investment process and overall performance (distinct
         from fund and other account performance). Other factors, including
         contributions made to the investment team, as well as adherence to
         Compliance Policies and Procedures, Risk Management procedures, the
         firm's Code of Ethics and "living the values" of the Advisor are also
         factors.

The quantitative analysis of a portfolio manager's performance is given more
weight in determining discretionary incentive compensation than the qualitative
portion.

Certain portfolio managers may also participate in the Equity Plan. The amount
of equity awarded under the long-term equity programs is generally based on the
individual's total compensation package and may comprise from 0% to 30% of the
total compensation award. As discretionary incentive compensation increases, the
percentage of compensation awarded in Deutsche Bank equity also increases.
Portfolio managers may receive a portion of their equity compensation in the
form of shares in the proprietary mutual funds that they manage or support.




Fund Ownership of Portfolio Managers


The following table shows the dollar range of shares owned beneficially and of
record by each member of each Fund's portfolio management team in each Fund as
well as in all DWS Funds as a group (i.e., those funds advised by Deutsche Asset
Management or its affiliates), including investments by their immediate family
members sharing the same household and amounts invested through retirement and
deferred compensation plans. This information is provided as of the Fund's most
recent fiscal year end.

DWS Intermediate Tax/AMT Free Fund

<TABLE>
<CAPTION>
                                                 Dollar Range of                    Dollar Range of All DWS
Name of Portfolio Manager                       Fund Shares Owned                      Fund Shares Owned
-------------------------                       -----------------                      -----------------
<S>                                                     <C>                                    <C>
Ashton Goodfield                                        $0                           $500,001 - $1,000,000
Philip Condon                                   $10,001 - $50,000                       Over $1,000,000
Shelly Deitert                                          $0                            $100,001 - $500,000


DWS Managed Municipal Bond Fund

                                                 Dollar Range of                    Dollar Range of All DWS
Name of Portfolio Manager                       Fund Shares Owned                      Fund Shares Owned
-------------------------                       -----------------                      -----------------


Ashton Goodfield                                        $0                           $500,001 - $1,000,000
Eleanor R. Lynch                                   $1 - $10,000                       $100,001 - $500,000
Matthew Caggiano                                        $0                            $100,001 - $500,000
Philip Condon                                   $10,001 - $50,000                       Over $1,000,000


DWS Strategic High Yield Tax-Free Fund

                                                 Dollar Range of                    Dollar Range of All DWS
Name of Portfolio Manager                       Fund Shares Owned                      Fund Shares Owned
-------------------------                       -----------------                      -----------------


Philip Condon                                   $10,001 - $50,000                       Over $1,000,000
Rebecca Flinn                                           $0                           $500,001 - $1,000,000


Conflicts of Interest


In addition to managing the assets of each Fund, each Fund's portfolio managers
may have responsibility for managing other client accounts of the Advisor or its
affiliates. The tables below show, for each portfolio manager, the number and
asset size of (1) SEC registered investment companies (or series thereof) other
than the Fund, (2) pooled investment vehicles that are not registered investment
companies and (3) other accounts (e.g., accounts managed for individuals or
organizations) managed by each portfolio manager. Total assets attributed to
each portfolio manager in the tables below include total assets of each account
managed by them, although the manager may only manage a portion of such
account's assets. The tables also show the number of performance based fee
accounts, as well as the total assets of the accounts for which the advisory fee
is based on the performance of the account. This information is provided as of
the Fund's most recent fiscal year end.


DWS Intermediate Tax/AMT Free Fund

Other SEC Registered Investment Companies Managed:


                                                                                 Number of
                                       Number of        Total Assets of         Investment          Total Assets of
                                      Registered          Registered         Company Accounts        Performance-
                                      Investment          Investment         with Performance-         Based Fee
Name of Portfolio Manager              Companies           Companies             Based Fee             Accounts
-------------------------              ---------           ---------             ---------             --------

Ashton Goodfield                            3         $4,438,821,224                 0                    $0
Philip Condon                               8         $7,571,247,326                 0                    $0
Shelly Deitert                              1         $1,721,781,645                 0                    $0

Other Pooled Investment Vehicles Managed:

                                                                              Number of Pooled
                                                                                 Investment
                                      Number of                               Vehicle Accounts      Total Assets of
                                       Pooled          Total Assets of              with             Performance-
                                     Investment       Pooled Investment         Performance-           Based Fee
Name of Portfolio Manager             Vehicles             Vehicles              Based Fee             Accounts
-------------------------             --------             --------              ---------             --------

Ashton Goodfield                            1              $9,959,046                0                    $0
Philip Condon                               1              $9,959,046                0                    $0
Shelly Deitert                              0                      $0                0                    $0

Other Accounts Managed:

                                                                                 Number of
                                                                               Other Accounts       Total Assets of
                                      Number of                                     with             Performance-
                                        Other          Total Assets of          Performance-           Based Fee
Name of Portfolio Manager             Accounts          Other Accounts           Based Fee             Accounts
-------------------------             --------          --------------           ---------             --------

Ashton Goodfield                          0                   $0                     0                    $0
Philip Condon                             0                   $0                     0                    $0
Shelly Deitert                            0                   $0                     0                    $0

DWS Managed Municipal Bond Fund

Other SEC Registered Investment Companies Managed:

                                                                                 Number of
                                      Number of         Total Assets of         Investment          Total Assets of
                                      Registered          Registered         Company Accounts        Performance-
                                      Investment          Investment         with Performance-         Based Fee
Name of Portfolio Manager             Companies            Companies             Based Fee             Accounts
-------------------------             ---------            ---------             ---------             --------

Ashton Goodfield                          3             $1,432,304,730               0                    $0
Eleanor R. Lynch                          2             $1,263,119,583               0                    $0
Matthew Caggiano                          2             $1,181,403,709               0                    $0
Philip Condon                             8             $4,564,730,832               0                    $0

Other Pooled Investment Vehicles Managed:

                                                                              Number of Pooled
                                                                                 Investment
                                      Number of                               Vehicle Accounts      Total Assets of
                                       Pooled          Total Assets of              with             Performance-
                                     Investment       Pooled Investment         Performance-           Based Fee
Name of Portfolio Manager             Vehicles             Vehicles              Based Fee             Accounts
-------------------------             --------             --------              ---------             --------

Ashton Goodfield                          1                $9,959,046                0                    $0
Eleanor R. Lynch                          0                        $0                0                    $0
Matthew Caggiano                          1                $9,959,046                0                    $0
Philip Condon                             1                $9,959,046                0                    $0

Other Accounts Managed:

                                                                                 Number of
                                                                               Other Accounts       Total Assets of
                                      Number of                                     with             Performance-
                                        Other          Total Assets of          Performance-           Based Fee
Name of Portfolio Manager             Accounts          Other Accounts           Based Fee             Accounts
-------------------------             --------          --------------           ---------             --------

Ashton Goodfield                            0                       $0               0                    $0
Eleanor R. Lynch                            0                       $0               0                    $0
Matthew Caggiano                           15           $1,484,216,865               0                    $0
Philip Condon                               0                       $0               0                    $0

DWS Strategic High Yield Tax-Free Fund

Other SEC Registered Investment Companies Managed:

                                                                                 Number of
                                       Number of        Total Assets of         Investment          Total Assets of
                                      Registered          Registered         Company Accounts        Performance-
                                      Investment          Investment         with Performance-         Based Fee
Name of Portfolio Manager              Companies           Companies             Based Fee             Accounts
-------------------------              ---------           ---------             ---------             --------

Philip Condon                              8             $6,996,782,216              0                    $0
Rebecca Flinn                              2             $3,103,517,768              0                    $0

Other Pooled Investment Vehicles Managed:

                                                                              Number of Pooled
                                                                                 Investment
                                      Number of                               Vehicle Accounts      Total Assets of
                                       Pooled          Total Assets of              with             Performance-
                                     Investment       Pooled Investment         Performance-           Based Fee
Name of Portfolio Manager             Vehicles             Vehicles              Based Fee             Accounts
-------------------------             --------             --------              ---------             --------

Philip Condon                             1                 $9,959,046               0                    $0
Rebecca Flinn                             0                         $0               0                    $0

Other Accounts Managed:

                                                                                 Number of
                                                                               Other Accounts       Total Assets of
                                      Number of                                     with             Performance-
                                        Other          Total Assets of          Performance-           Based Fee
Name of Portfolio Manager             Accounts          Other Accounts           Based Fee             Accounts
-------------------------             --------          --------------           ---------             --------

Philip Condon                             0                   $0                     0                    $0
Rebecca Flinn                             0                   $0                     0                    $0
</TABLE>


In addition to the accounts above, an investment professional may manage
accounts in a personal capacity that may include holdings that are similar to,
or the same as, those of the Funds. The Advisor has in place a Code of Ethics
that is designed to address conflicts of interest and that, among other things,
imposes restrictions on the ability of portfolio managers and other "access
persons" to invest in securities that may be recommended or traded in the Funds
and other client accounts.

Real, potential or apparent conflicts of interest may arise when a portfolio
manager has day-to-day portfolio management responsibilities with respect to
more than one fund or account, including the following:


o        Certain investments may be appropriate for each Fund and also for other
         clients advised by the Advisor, including other client accounts managed
         by each Fund's portfolio management team. Investment decisions for each
         Fund and other clients are made with a view to achieving their
         respective investment objectives and after consideration of such
         factors as their current holdings, availability of cash for investment
         and the size of their investments generally. A particular security may
         be bought or sold for only one client or in different amounts and at
         different times for more than one but less than all clients. Likewise,
         because clients of the Advisor may have differing investment
         strategies, a particular security may be bought for one or more clients
         when one or more other clients are selling the security. The investment
         results achieved for each Fund may differ from the results achieved for
         other clients of the Advisor. In addition, purchases or sales of the
         same security may be made for two or more clients on the same day. In
         such event, such transactions will be allocated among the clients in a
         manner believed by the Advisor to be most equitable to each client,
         generally utilizing a pro rata allocation methodology. In some cases,
         the allocation procedure could potentially have an adverse effect or
         positive effect on the price or amount of the securities purchased or
         sold by each Fund. Purchase and sale orders for each Fund may be
         combined with those of other clients of the Advisor in the interest of
         achieving the most favorable net results to each Fund and the other
         clients.

o        To the extent that a portfolio manager has responsibilities for
         managing multiple client accounts, a portfolio manager will need to
         divide time and attention among relevant accounts. The Advisor attempts
         to minimize these conflicts by aligning its portfolio management teams
         by investment strategy and by employing similar investment models
         across multiple client accounts.

o        In some cases, an apparent conflict may arise where the Advisor has an
         incentive, such as a performance-based fee, in managing one account and
         not with respect to other accounts it manages. The Advisor will not
         determine allocations based on whether it receives a performance-based
         fee from the client. Additionally, the Advisor has in place supervisory
         oversight processes to periodically monitor performance deviations for
         accounts with like strategies.

o        The Advisor and its affiliates and the investment team of each Fund may
         manage other mutual funds and separate accounts on a long-short basis.
         The simultaneous management of long and short portfolios creates
         potential conflicts of interest including the risk that short sale
         activity could adversely affect the market value of the long positions
         (and vice versa), the risk arising from sequential orders in long and
         short positions, and the risks associated with receiving opposing
         orders at the same time. The Advisor has adopted procedures that it
         believes are reasonably designed to mitigate these potential conflicts
         of interest. Included in these procedures are specific guidelines
         developed to ensure fair and equitable treatment for all clients whose
         accounts are managed by each Fund's portfolio management team. The
         Advisor and the portfolio management team have established monitoring
         procedures, a protocol for supervisory reviews, as well as compliance
         oversight to ensure that potential conflicts of interest relating to
         this type of activity are properly addressed.

The Advisor is owned by Deutsche Bank AG, a multi-national financial services
company. Therefore, the Advisor is affiliated with a variety of entities that
provide, and/or engage in commercial banking, insurance, brokerage, investment
banking, financial advisory, broker-dealer activities (including sales and
trading), hedge funds, real estate and private equity investing, in addition to
the provision of investment management services to institutional and individual
investors. Since Deutsche Bank AG, its affiliates, directors, officers and
employees (the "Firm") are engaged in businesses and have interests other than
managing asset management accounts, such other activities involve real,
potential or apparent conflicts of interest. These interests and activities
include potential advisory, transactional and financial activities and other
interests in securities and companies that may be directly or indirectly
purchased or sold by the Firm for its clients' advisory accounts. These are
considerations of which advisory clients should be aware and which may cause
conflicts that could be to the disadvantage of the Advisor's advisory clients.
The Advisor has instituted business and compliance policies, procedures and
disclosures that are designed to identify, monitor and mitigate conflicts of
interest and, as appropriate, to report them to a Fund's Board.




Codes of Ethics. The Funds, the Advisor and the Funds' principal underwriter
have each adopted codes of ethics under Rule 17j-1 under the 1940 Act. Board
members, officers of the Trusts and employees of the Advisor and principal
underwriter are permitted to make personal securities transactions, including
transactions in securities that may be purchased or held by the Funds, subject
to requirements and restrictions set forth in the applicable Code of Ethics. The
Advisor's Code of Ethics contains provisions and requirements designed to
identify and address certain conflicts of interest between personal investment
activities and the interests of the Funds. Among other things, the Advisor's
Code of Ethics prohibits certain types of transactions absent prior approval,
imposes time periods during which personal transactions may not be made in
certain securities, and requires the submission of duplicate broker
confirmations and quarterly reporting of securities transactions. Additional
restrictions apply to portfolio managers, traders, research analysts and others
involved in the investment advisory process. Exceptions to these and other
provisions of the Advisor's Code of Ethics may be granted in particular
circumstances after review by appropriate personnel.


Regulatory Matters and Legal Proceedings

On December 21, 2006, DeAM settled proceedings with the SEC and the New York
Attorney General on behalf of Deutsche Asset Management, Inc. ("DAMI") and DIMA,
the investment advisors to many of the DWS Investments funds, regarding
allegations of improper trading of fund shares at DeAM and at the legacy Scudder
and Kemper organizations prior to their acquisition by DeAM in April 2002. These
regulators alleged that although the prospectuses for certain funds in the
regulators' view indicated that the funds did not permit market timing, DAMI and
DIMA breached their fiduciary duty to those funds in that their efforts to limit
trading activity in the funds were not effective at certain times. The
regulators also alleged that DAMI and DIMA breached their fiduciary duty to
certain funds by entering into certain market timing arrangements with
investors. These trading arrangements originated in businesses that existed
prior to the currently constituted DeAM organization, which came together as a
result of various mergers of the legacy Scudder, Kemper and Deutsche fund
groups, and all of the arrangements were terminated prior to the start of the
regulatory investigations that began in the summer of 2003. No current DeAM
employee approved these trading arrangements. Under the terms of the
settlements, DAMI and DIMA neither admitted nor denied any wrongdoing.

The terms of the SEC settlement, which identified improper trading in the legacy
Deutsche and Kemper mutual funds only, provide for payment of disgorgement in
the amount of $17.2 million. The terms of the settlement with the New York
Attorney General provide for payment of disgorgement in the amount of $102.3
million, which is inclusive of the amount payable under the SEC settlement, plus
a civil penalty in the amount of $20 million. The total amount payable by DeAM,
approximately $122.3 million, will be distributed to shareholders of the
affected funds in accordance with a distribution plan to be developed by a
distribution consultant. The funds' investment advisors do not believe these
amounts will have a material adverse financial impact on them or materially
affect their ability to perform under their investment management agreements
with the DWS funds. The above-described amounts are not material to Deutsche
Bank, and have already been reserved.

Among the terms of the settled orders, DeAM is subject to certain undertakings
regarding the conduct of its business in the future, including formation of a
Code of Ethics Oversight Committee to oversee all matters relating to issues
arising under the advisors' Code of Ethics; establishment of an Internal
Compliance Controls Committee having overall compliance oversight responsibility
of the advisors; engagement of an Independent Compliance Consultant to conduct a
comprehensive review of the advisors' supervisory compliance and other policies
and procedures designed to prevent and detect breaches of fiduciary duty,
breaches of the Code of Ethics and federal securities law violations by the
advisors and their employees; and commencing in 2008, the advisors shall undergo
a compliance review by an independent third party.

In addition, DeAM is subject to certain further undertakings relating to the
governance of the mutual funds, including that at least 75% of the members of
the Boards of Trustees/Directors overseeing the DWS Funds continue to be
independent of DeAM; the Chairmen of the DWS Funds' Boards of Trustees/Directors
continue to be independent of DeAM; DeAM maintain existing management fee
reductions for certain funds for a period of five years and not increase
management fees for these certain funds during this period; the funds retain a
senior officer (or independent consultants, as applicable) responsible for
assisting in the review of fee arrangements and monitoring compliance by the
funds and the investment advisors with securities laws, fiduciary duties, codes
of ethics and other compliance policies, the expense of which shall be borne by
DeAM; and periodic account statements, fund prospectuses and the mutual funds'
web site contain additional disclosure and/or tools that assist investors in
understanding the fees and costs associated with an investment in the funds and
the impact of fees and expenses on fund returns.

DeAM has also settled proceedings with the Illinois Secretary of State regarding
market timing matters. The terms of the Illinois settlement provide for investor
education contributions totaling approximately $4 million and a payment in the
amount of $2 million to the Securities Audit and Enforcement Fund.

On September 28, 2006, the SEC and the National Association of Securities
Dealers ("NASD") (now known as the Financial Industry Regulatory Authority, or
"FINRA") announced final agreements in which DIMA, Deutsche Asset Management,
Inc. ("DAMI") and DWS Scudder Distributors, Inc. (now known as DWS Investments
Distributors, Inc. ("DIDI")) settled administrative proceedings regarding
disclosure of brokerage allocation practices in connection with sales of the DWS
Funds' shares during 2001-2003. The agreements with the SEC and NASD are
reflected in orders which state, among other things, that DIMA and DAMI failed
to disclose potential conflicts of interest to the funds' Boards and to
shareholders relating to DIDI's use of certain funds' brokerage commissions to
reduce revenue sharing costs to broker-dealer firms with whom it had
arrangements to market and distribute DWS Fund shares. These directed brokerage
practices were discontinued in October 2003.

Under the terms of the settlements, in which DIMA, DAMI and DIDI neither
admitted nor denied any of the regulators' findings, DIMA, DAMI and DIDI agreed
to pay disgorgement, prejudgment interest and civil penalties in the total
amount of $19.3 million. The portion of the settlements distributed to the funds
was approximately $17.8 million and was paid to the funds as prescribed by the
settlement orders based upon the amount of brokerage commissions from each fund
used to satisfy revenue sharing agreements with broker-dealers who sold fund
shares.

As part of the settlements, DIMA, DAMI and DIDI also agreed to implement certain
measures and undertakings relating to revenue sharing payments including making
additional disclosures in the funds' Prospectuses or Statements of Additional
Information, adopting or modifying relevant policies and procedures and
providing regular reporting to the fund Boards.

Additional information announced by DeAM regarding the terms of the settlements
is available at www.dws-investments.com/regulatory_settlements.

The matters alleged in the regulatory settlements described above also serve as
the general basis of a number of private class action lawsuits involving the DWS
funds. These lawsuits name as defendants various persons, including certain DWS
funds, the funds' investment advisors and their affiliates, and certain
individuals, including in some cases fund Trustees/Directors, officers, and
other parties. Each DWS fund's investment advisor has agreed to indemnify the
applicable DWS funds in connection with these lawsuits, or other lawsuits or
regulatory actions that may be filed making similar allegations.

Based on currently available information, the funds' investment advisors believe
the likelihood that the pending lawsuits will have a material adverse financial
impact on a DWS fund is remote and such actions are not likely to materially
affect their ability to perform under their investment management agreements
with the DWS funds.




                             FUND SERVICE PROVIDERS


Administrator

Each Fund entered into an administrative services agreement with the Advisor
(the "Administrative Services Agreement"), pursuant to which the Advisor
provides administrative services to the Fund including, among others, providing
the Fund with personnel, preparing and making required filings on behalf of the
Fund, maintaining books and records for the Fund, and monitoring the valuation
of Fund securities. The services provided by the Advisor are described in more
detail below. For all services provided under the Administrative Services
Agreement, the Fund pays the Advisor a fee, computed daily and paid monthly, of
0.100% of the Fund's average daily net assets. For the fiscal year ended May 31,
2007, the Advisor received an administrative fee of $892,683 from DWS Strategic
High Yield Tax-Free Fund, $4,005,286 from DWS Managed Municipal Bond Fund, and
$668,436 from DWS Intermediate Tax/AMT Free Fund. For the fiscal year ended May
31, 2008, the Advisor received an administrative fee of $1,035,200 of which
$98,347 was unpaid by the DWS Strategic High Yield Tax-Free Fund, $3,756,535 of
which $311,146 is unpaid by the DWS Managed Municipal Bond Fund, and $630,906 of
which $55,575 is unpaid by the DWS Intermediate Tax/AMT Free Fund.

Under the Administrative Services Agreement, the Advisor, acting as the
Administrator, is obligated on a continuous basis to provide such administrative
services as the Board of a Fund reasonably deems necessary for the proper
administration of a Fund. The Advisor provides a Fund with personnel; arranges
for the preparation and filing of a Fund's tax returns; prepares and submits
reports and meeting materials to the Board and the shareholders; prepares and
files updates to a Fund's prospectus and statement of additional information as
well as other reports required to be filed by the SEC; maintains a Fund's
records; provides a Fund with office space, equipment and services; supervises,
negotiates the contracts of and monitors the performance of third parties
contractors; oversees the tabulation of proxies; monitors the valuation of
portfolio securities and monitors compliance with Board-approved valuation
procedures; assists in establishing the accounting and tax policies of the Fund;
assists in the resolution of accounting issues that may arise with respect to a
Fund; establishes and monitors a Fund's operating expense budgets; reviews and
processes a Fund's bills; assists in determining the amount of dividends and
distributions available to be paid by a Fund, prepares and arranges dividend
notifications and provides information to agents to effect payments thereof;
provides to the Board periodic and special reports; provides assistance with
investor and public relations matters; and monitors the registration of shares
under applicable federal and state law. The Advisor also performs certain fund
accounting services under the Administrative Services Agreement. The
Administrative Services Agreement provides that the Advisor will not be liable
under the Administrative Services Agreement except for willful misfeasance, bad
faith or negligence in the performance of its duties or from the reckless
disregard by it of its duties and obligations thereunder.


Pursuant to an agreement between the Administrator and State Street Bank and
Trust Company ("SSB"), the Administrator has delegated certain administrative
functions to SSB. The costs and expenses of such delegation are borne by the
Administrator, not by the Fund.

Pursuant to DeAM procedures approved by the Boards on behalf of the DWS funds,
proof of claim forms are routinely filed on behalf of the DWS funds by a third
party service provider, with certain limited exceptions. The Boards of the DWS
funds receive periodic reports regarding the implementation of these procedures.


Principal Underwriter

Each Trust, on behalf of the Funds, has an underwriting agreement with DWS
Investments Distributors, Inc., 222 South Riverside Plaza, Chicago, Illinois
60606 ("DIDI" or the "Distributor"), a Massachusetts corporation, which is a
subsidiary of the Advisor, a Delaware corporation. The underwriting agreement
will remain in effect from year to year only if its continuance is approved
annually by a majority of the members of the Board of Trustees who are not
parties to such agreement or interested persons of any such party and either by
vote of a majority of the Board of Trustees or a majority of the outstanding
voting securities of each Fund.

Under its underwriting  agreement,  each Fund is responsible for: the payment of
all fees and expenses in connection with the preparation and filing with the SEC
of its registration  statement and prospectus and any amendments and supplements
thereto;  the registration  and  qualification of shares for sale in the various
states, including registering each Fund as a broker or dealer in various states,
as  required;  the  fees  and  expenses  of  preparing,   printing  and  mailing
prospectuses  annually to existing shareholders (see below for expenses relating
to prospectuses paid by the Distributor);  notices, proxy statements, reports or
other communications to shareholders of a Fund; the cost of printing and mailing
confirmations  of purchases  of shares and any  prospectuses  accompanying  such
confirmations;  any issuance taxes and/or any initial  transfer taxes; a portion
of shareholder  toll-free  telephone charges and expenses of shareholder service
representatives;  the cost of wiring funds for share  purchases and  redemptions
(unless paid by the  shareholder  who  initiates the  transaction);  the cost of
printing and postage of business reply  envelopes;  and a portion of the cost of
computer terminals used by both the Funds and the Distributor.


The Distributor will pay for printing and distributing prospectuses or reports
prepared for its use in connection with the offering of each Fund's shares to
the public and preparing, printing and mailing any other literature or
advertising in connection with the offering of shares of each Fund to the
public. The Distributor will pay all fees and expenses in connection with its
qualification and registration as a broker or dealer under federal and state
laws, a portion of the cost of toll-free telephone service and expenses of
shareholder service representatives, a portion of the cost of computer
terminals, and expenses of any activity which is primarily intended to result in
the sale of shares issued by each Fund, unless a Rule 12b-1 Plan is in effect
which provides that a Fund shall bear some or all of such expenses.

Although this Class of the Funds does not currently have a 12b-1 Plan, and the
Trustees have no current intention of adopting one for this Class, each Fund
will also pay those fees and expenses permitted to be paid or assumed by the
Trust pursuant to a 12b-1 Plan, if any, adopted by the Trust, notwithstanding
any other provision to the contrary in the underwriting agreement.

The Distributor currently offers shares of each Fund on a continuous basis to
investors in all states in which shares of each Fund may from time to time be
registered or where permitted by applicable law. The underwriting agreement
provides that the Distributor accepts orders for shares at net asset value as no
sales commission or load is charged to the investor. the Distributor has made no
firm commitment to acquire shares of each Fund.


Custodian

State Street Bank and Trust Company, (the "Custodian") 225 Franklin Street,
Boston, MA 02110 serves as the Custodian to the Funds. The Custodian's fee may
be reduced by certain earnings credits in favor of each Fund. Custodian fees of
$177, $271 and $428 were not imposed on DWS Strategic High Yield Tax-Free Fund,
DWS Managed Municipal Bond Fund and DWS Intermediate Tax/AMT Free Fund,
respectively, after these credits were applied for the fiscal year ended May 31,
2007. Custodian fees of $2,901, $4,939 and $1,484 were not imposed on DWS
Strategic High Yield Tax-Free Fund, DWS Managed Municipal Bond Fund and DWS
Intermediate Tax/AMT Free Fund, respectively, after these credits were applied
for the fiscal year ended May 31, 2008.Transfer Agent and Shareholder Service
Agent.

Transfer Agent and Shareholder Service Agent

DWS Investments Service Company ("DISC" or the "Transfer Agent"), 210 W. 10th
Street, Kansas City, Missouri 64105-1614, an affiliate of the Advisor, is the
transfer agent, dividend-paying agent and shareholder service agent for all
classes of each Fund.

The Transfer Agent receives an annual service fee for each account of a Fund,
based on the type of account. For open retail accounts, the fee is a flat fee
ranging from $20.00 to $27.50 per account, for open wholesale money funds the
fee is $32.50 per account, while for certain retirement accounts serviced on the
recordkeeping system of ADP, Inc., the fee is a flat fee up to $3.60 per account
(as of 2007, indexed to inflation) plus an asset based fee of up to 0.25% of
average net assets. 1/12th of the annual service charge for each account is
charged and payable to the Transfer Agent each month. A fee is charged for any
account which at any time during the month had a share balance in a Fund.
Smaller fees are also charged for closed accounts for which information must be
retained on the Transfer Agent's system for up to 18 months after closing for
tax reporting purposes.

Certain out-of-pocket expenses incurred by the Transfer Agent, including
expenses of printing and mailing routine fund disclosure documents, costs of
record retention and transaction processing costs are reimbursed by a Fund or
are paid directly by a Fund. Certain additional out-of-pocket expenses,
including costs of computer hardware and software, third party record-keeping
and processing of proxy statements, may only be reimbursed by a Fund with the
prior approval of a Fund's Board.

For the year ended May 31, 2008, the amount charged to DWS Strategic High Yield
Tax-Free Fund by DISC aggregated $696,135 of which $668,547 was waived and
$8,608 was unpaid as of May 31, 2008. For the year ended May 31, 2008, the
amount charged to DWS Managed Municipal Bond Fund by DISC aggregated $1,650,144
of which $803,402 was waived and $555,350 was unpaid as of May 31, 2008. For the
year ended May 31, 2008, the amount charged to DWS Intermediate Tax/AMT Free
Fund by DISC aggregated $225,977 of which $40,102 was waived and $103,900 was
unpaid as of May 31, 2008.

Pursuant to a sub-transfer agency agreement between DISC and DST Systems, Inc.
("DST"), DISC has delegated certain transfer agent, dividend paying agent and
shareholder servicing agent functions to DST. The costs and expenses of such
delegation are borne by DISC, not by the Funds.

Each Fund, or the Advisor (including any affiliate of the Advisor), or both, may
pay unaffiliated third parties for providing recordkeeping and other
administrative services with respect to beneficial owners of Fund shares whose
interests are generally held in an omnibus account.

Independent Registered Public Accounting Firm and Reports to Shareholders

The financial highlights of each Fund included in the Fund's prospectus and the
financial statements incorporated by reference into this SAI have been so
included or incorporated by reference in reliance on the report of
PricewaterhouseCoopers LLP, independent registered public accounting firm, given
on the authority of said Firm as experts in auditing and accounting.
PricewaterhouseCoopers LLP audits the financial statements of the Funds and
provides other audit and related services. Shareholders will receive annual
audited financial statements and semi-annual unaudited financial statements.

Legal Counsel

Ropes and Gray LLP, One International Place, Boston, MA 02110 acts as counsel
for each Fund and serves as co-counsel to the Independent Trustees of the Funds.

Vedder Price P.C., 222 North LaSalle Street, Chicago, Illinois 60601, serves as
co-counsel to the Independent Trustees of the Funds.




                             PORTFOLIO TRANSACTIONS

The Advisor is generally responsible for placing the orders for the purchase and
sale of portfolio securities, including the allocation of brokerage. With
respect to those funds for which a sub-investment advisor manages the fund's
investments, references in this section to the "Advisor" should be read to mean
the Sub-Advisor, except as noted below.


The policy of the Advisor in placing orders for the purchase and sale of
securities for the Funds is to seek best execution, taking into account such
factors, among others, as price; commission (where applicable); the
broker-dealer's ability to ensure that securities will be delivered on
settlement date; the willingness of the broker-dealer to commit its capital and
purchase a thinly traded security for its own inventory; whether the
broker-dealer specializes in block orders or large program trades; the
broker-dealer's knowledge of the market and the security; the broker-dealer's
ability to maintain confidentiality; the broker-dealer's ability to provide
access to new issues; the broker-dealer's ability to provide support when
placing a difficult trade; the financial condition of the broker-dealer; and
whether the broker-dealer has the infrastructure and operational capabilities to
execute and settle the trade. The Advisor seeks to evaluate the overall
reasonableness of brokerage commissions with commissions charged on comparable
transactions and compares the brokerage commissions (if any) paid by the Funds
to reported commissions paid by others. The Advisor routinely reviews commission
rates, execution and settlement services performed and makes internal and
external comparisons.

Commission rates on transactions in equity securities on US securities exchanges
are subject to negotiation. Commission rates on transactions in equity
securities on foreign securities exchanges are generally fixed. Purchases and
sales of fixed-income securities and certain over-the-counter securities are
effected on a net basis, without the payment of brokerage commissions.
Transactions in fixed income and certain over-the-counter securities are
generally placed by the Advisor with the principal market makers for these
securities unless the Advisor reasonably believes more favorable results are
available elsewhere. Transactions with dealers serving as market makers reflect
the spread between the bid and asked prices. Purchases of underwritten issues
will include an underwriting fee paid to the underwriter. Money market
instruments are normally purchased in principal transactions directly from the
issuer or from an underwriter or market maker.


It is likely that the broker-dealers selected based on the considerations
described in this section will include firms that also sell shares of the Funds
to their customers. However, the Advisor does not consider sales of shares of
the Funds as a factor in the selection of broker-dealers to execute portfolio
transactions for the Funds and, accordingly, has implemented policies and
procedures reasonably designed to prevent its traders from considering sales of
shares of the Funds as a factor in the selection of broker-dealers to execute
portfolio transactions for the Funds.


The Advisor is permitted by Section 28(e) of the Securities Exchange Act of
1934, as amended ("1934 Act"), when placing portfolio transactions for a Fund,
to cause the Fund to pay brokerage commissions in excess of that which another
broker-dealer might charge for executing the same transaction in order to obtain
research and brokerage services if the Advisor determines that such commissions
are reasonable in relation to the overall services provided. The Advisor may
from time to time, in reliance on Section 28(e) of the 1934 Act, execute
portfolio transactions with broker-dealers that provide research and brokerage
services to the Advisor. Consistent with the Advisor's policy regarding best
execution, where more than one broker is believed to be capable of providing
best execution for a particular trade, the Advisor may take into consideration
the receipt of research and brokerage services in selecting the broker-dealer to
execute the trade. Although certain research and brokerage services from
broker-dealers may be useful to a Fund and to the Advisor, it is the opinion of
the Advisor that such information only supplements its own research effort since
the information must still be analyzed, weighed and reviewed by the Advisor's
staff. To the extent that research and brokerage services of value are received
by the Advisor, the Advisor may avoid expenses that it might otherwise incur.
Research and brokerage services received from a broker-dealer may be useful to
the Advisor and its affiliates in providing investment management services to
all or some of its clients, which includes a Fund. Services received from
broker-dealers that executed securities transactions for a Portfolio will not
necessarily be used by the Advisor specifically to service such Fund.

Research and brokerage services provided by broker-dealers may include, but are
not limited to, information on the economy, industries, groups of securities,
individual companies, statistical information, accounting and tax law
interpretations, political developments, legal developments affecting portfolio
securities, technical market action, pricing and appraisal services, credit
analysis, risk measurement analysis, performance analysis and measurement and
analysis of corporate responsibility issues. Research and brokerage services are
typically received in the form of written or electronic reports, access to
specialized financial publications, telephone contacts and personal meetings
with security analysts, but may also be provided in the form of access to
various computer software and meetings arranged with corporate and industry
representatives.


The Advisor may also select broker-dealers and obtain from them research and
brokerage services that are used in connection with executing trades provided
that such services are consistent with interpretations under Section 28(e) of
the 1934 Act. Typically, these services take the form of computer software
and/or electronic communication services used by the Advisor to facilitate
trading activity with those broker-dealers.

Research and brokerage services may include products obtained from third parties
if the Advisor determines that such product or service constitutes brokerage and
research as defined in Section 28(e) and interpretations thereunder. Currently,
it is the Advisor's policy that Sub-Advisors may not execute portfolio
transactions on behalf of the Funds to obtain third party research and brokerage
services. The Advisor may, in the future, change this policy. Regardless,
certain Sub-Advisors may, as matter of internal policy, limit or preclude third
party research and brokerage services.


The Advisor may use brokerage commissions to obtain certain brokerage products
or services that have a mixed use (i.e., it also serves a function that does not
relate to the investment decision-making process). In those circumstances, the
Advisor will make a good faith judgment to evaluate the various benefits and
uses to which it intends to put the mixed use product or service and will pay
for that portion of the mixed use product or service that it reasonably believes
does not constitute research and brokerage services with its own resources.


DIMA will monitor regulatory developments and market practice in the use of
client commissions to obtain research and brokerage services and may adjust its
portfolio transactions policies in response thereto.

Investment decisions for each Fund and for other investment accounts managed by
the Advisor are made independently of each other in light of differing
conditions. However, the same investment decision may be made for two or more of
such accounts. In such cases, simultaneous transactions are inevitable. To the
extent permitted by law, the Advisor may aggregate the securities to be sold or
purchased for a Fund with those to be sold or purchased for other accounts in
executing transactions. Purchases or sales are then averaged as to price and
commission and allocated as to amount in a manner deemed equitable to each
account. While in some cases this practice could have a detrimental effect on
the price paid or received by, or on the size of the position obtained or
disposed of for, the Fund, in other cases it is believed that the ability to
engage in volume transactions will be beneficial to the Fund.

DIMA and its affiliates and the Funds' management team manage other mutual funds
and separate accounts, some of which use short sales of securities as a part of
its investment strategy. The simultaneous management of long and short
portfolios creates potential conflicts of interest including the risk that short
sale activity could adversely affect the market value of the long positions (and
vice versa), the risk arising from sequential orders in long and short
positions, and the risks associated with receiving opposing orders at the same
time.

DIMA has adopted procedures that it believes are reasonably designed to mitigate
these potential conflicts of interest. Incorporated in the procedures are
specific guidelines developed to ensure fair and equitable treatment for all
clients. DIMA and the investment team have established monitoring procedures and
a protocol for supervisory reviews, as well as compliance oversight to ensure
that potential conflicts of interest relating to this type of activity are
properly addressed.

Deutsche Bank AG or one of its affiliates (or in the case of a Sub-Advisor, the
Sub-Advisor or one of its affiliates) may act as a broker for the Funds and
receive brokerage commissions or other transaction-related compensation from the
Funds in the purchase and sale of securities, options or futures contracts when,
in the judgment of the Advisor, and in accordance with procedures approved by
the Funds' Boards, the affiliated broker will be able to obtain a price and
execution at least as favorable as those obtained from other qualified brokers
and if, in the transaction, the affiliated broker charges the Funds a rate
consistent with that charged to comparable unaffiliated customers in similar
transactions.

The following shows total brokerage commissions paid for the past three fiscal
years:


DWS Strategic High Yield Tax-Free Fund: For the fiscal years ended May 31, 2008,
2007 and 2006, the Fund paid $3,253, $0 and $0 in commissions, respectively.

DWS Managed Municipal Bond Fund: For the fiscal years ended May 31, 2008, 2007
and 2006, the Fund paid $22,010, $0 and $2,448 in commissions, respectively.

DWS Intermediate Tax/AMT Free Fund: For the fiscal years ended May 31, 2008,
2007 and 2006, the Fund paid $0, $0 and $0 in commissions, respectively.

The Funds did not pay any affiliated brokerage commissions for the fiscal year
ended May 31, 2008.

Each Fund is required to identify any securities of its "regular brokers or
dealers" (as such term is defined in the 1940 Act) that the Funds have acquired
during the most recent fiscal year. As of May 31, 2008, the Funds did not hold
any securities of their regular broker dealers.


Portfolio Turnover

Portfolio turnover rate is defined by the SEC as the ratio of the lesser of
sales or purchases to the monthly average value of such securities owned during
the year, excluding all securities whose remaining maturities at the time of
acquisition were one year or less.

Higher levels of activity by a Fund result in higher transaction costs and may
also result in taxes on realized capital gains to be borne by the Fund's
shareholders. Purchases and sales are made whenever necessary, in the Advisor's
discretion, to meet a Fund's objective.

Portfolio turnover rates for the two most recent fiscal years are as follows:


                                                        2008         2007
                                                        ----         ----

DWS Strategic High Yield Tax-Free Fund                  70%          57%
DWS Managed Municipal Bond Fund                         55%          19%
DWS Intermediate Tax/AMT Free Fund                      59%          45%


                        PURCHASE AND REDEMPTION OF SHARES

General Information

Policies and procedures affecting transactions in Fund shares can be changed at
any time without notice, subject to applicable law. Transactions may be
contingent upon proper completion of application forms and other documents by
shareholders and their receipt by the Fund's agents. Transaction delays in
processing (and changing account features) due to circumstances within or beyond
the control of the Fund and its agents may occur. Shareholders (or their
financial service firms) are responsible for all losses and fees resulting from
bad checks, cancelled orders or the failure to consummate transactions effected
pursuant to instructions reasonably believed to be genuine.

A distribution will be reinvested in shares of the same Fund and class if the
distribution check is returned as undeliverable.

Information regarding tax-deferred retirement plans is not applicable to the
Funds.


Orders will be confirmed at a price based on the net asset value of the Fund
next determined after receipt in good order by DIDI of the order accompanied by
payment. Orders received by dealers or other financial services firms prior to
the determination of net asset value and received in good order by DIDI prior to
the determination of net asset value will be confirmed at a price based on the
net asset value next determined after receipt by DIDI ("trade date").

Additional Minimum Balance Policies. For fiduciary accounts such as IRAs, and
custodial accounts such as Uniform Gifts to Minor Act and Uniform Transfers to
Minor Act accounts, the minimum balance is $1,000 for Class S. A shareholder may
open an account with at least $1,000 ($500 for fiduciary/custodial accounts), if
an automatic investment plan (AIP) of $50/month is established. DWS Investments
group retirement plans and certain other accounts have similar or lower minimum
share balance requirements.

Shareholders with a combined household account balance in any of the DWS Funds
of $100,000 or more, as well as group retirement and certain other accounts,
will not be subject to an automatic redemption.

Fiduciary (e.g., IRA or Roth IRA) and custodial accounts (e.g., UGMA or UTMA)
with balances below $1,000 are subject to automatic redemption following 60
days' written notice to applicable shareholders.


Reductions in value that result solely from market activity will not trigger an
involuntary redemption. Shareholders with a combined household account balance
in any of the DWS Funds of $100,000 or more, as well as group retirement and
certain other accounts, will not be subject to a fee or automatic redemption.

Fiduciary (e.g., IRA or Roth IRA) and custodial accounts (e.g., UGMA or UTMA)
with balances below $100 are subject to automatic redemption following 60 days'
written notice to applicable shareholders.

Certificates. Share certificates will not be issued. Share certificates now in a
shareholder's possession may be sent to the Transfer Agent for cancellation and
book-entry credit to such shareholder's account. Certain telephone and other
procedures require book-entry holdings. Shareholders with outstanding
certificates bear the risk of loss.


Use of Financial Services Firms. Investment dealers and other firms provide
varying arrangements for their clients to purchase and redeem a Fund's shares,
including higher minimum investments, and may assess transaction or other fees.
Firms may arrange with their clients for other investment or administrative
services. Such firms may independently establish and charge additional amounts
to their clients for such services. Firms also may hold a Fund's shares in
nominee or street name as agent for and on behalf of their customers. In such
instances, a Fund's transfer agent, DWS Investments Service Company (the
"Transfer Agent") will have no information with respect to or control over the
accounts of specific shareholders. Such shareholders may obtain access to their
accounts and information about their accounts only from their firm. Certain of
these firms may receive compensation from a Fund through the Shareholder Service
Agent for record-keeping and other expenses relating to these nominee accounts.
In addition, certain privileges with respect to the purchase and redemption of
shares or the reinvestment of dividends may not be available through such firms.
Some firms may participate in a program allowing them access to their clients'
accounts for servicing including, without limitation, transfers of registration
and dividend payee changes; and may perform functions such as generation of
confirmation statements and disbursement of cash dividends. Such firms,
including affiliates of DIDI, may receive compensation from a Fund through the
Shareholder Service Agent for these services.

Each Fund has authorized one or more financial service institutions, including
certain members of FINRA other than the Distributor ("financial institutions"),
to accept purchase and redemption orders for the Fund's shares. Such financial
institutions may also designate other parties, including plan administrator
intermediaries, to accept purchase and redemption orders on a Fund's behalf.
Orders for purchases or redemptions will be deemed to have been received by a
Fund when such financial institutions or, if applicable, their authorized
designees accept the orders. Subject to the terms of the contract between a Fund
and the financial institution, ordinarily orders will be priced at a Fund's net
asset value next computed after acceptance by such financial institution or its
authorized designees and accepted by a Fund. Further, if purchases or
redemptions of a Fund's shares are arranged and settlement is made at an
investor's election through any other authorized financial institution, that
financial institution may, at its discretion, charge a fee for that service. The
Board of Trustees and the Distributor, also a Fund's principal underwriter, each
has the right to limit the amount of purchases by, and to refuse to sell to, any
person. The Trustees and the Distributor may suspend or terminate the offering
of shares of a Fund at any time for any reason.

DIDI has adopted an Incentive Plan (the "Plan") covering wholesalers that are
regional vice presidents ("DWS Investments Wholesalers"). Generally, DWS
Investments Wholesalers market shares of the DWS funds to financial advisors,
who in turn may recommend that investors purchase shares of a DWS fund. The Plan
is an incentive program that combines a monthly incentive component with a
quarterly strategic bonus component. Under the Plan, DWS Investments Wholesalers
will receive a monetary monthly incentive based on the amount of sales generated
from their marketing of the funds, and that incentive will differ depending on
the product category of the fund. Each fund is assigned to one of three product
categories -- "Strategic," "Tactical" or "all other funds" -- taking into
consideration, among other things, the following criteria, where applicable:

o        The Fund's consistency with DWS Investments' branding and long-term
         strategy;
o        The Fund's competitive performance;
o        The Fund's Morningstar rating;
o        The length of time the Fund's Portfolio Managers have managed the
         Fund/Strategy;
o        Market size for the fund category;
o        The Fund's size, including sales and redemptions of the Fund's shares.

This information and other factors are presented to a committee comprised of
representatives from various groups within DWS Investments, who review on a
quarterly basis the funds assigned to each product category described above, and
make any changes to those assignments at that time. No one factor, whether
positive or negative, determines a fund's placement in a given category; all
these factors together are considered, and the designation of funds in the
Strategic and Tactical categories represents management's judgment based on the
above criteria. In addition, management may consider a fund's profile over the
course of several review periods before making a change to its category
assignment. These category assignments will be posted quarterly to the DWS
funds' Web site at www.dws-investments.com, approximately one month after the
end of each quarter. DWS Investments Wholesalers receive the highest
compensation for Strategic funds, less for Tactical funds and the lowest for all
other funds. The level of compensation among these categories may differ
significantly.





The prospect of receiving, or the receipt of, additional compensation by a DWS
Investments Wholesaler under the Plan may provide an incentive to favor
marketing the Strategic or Tactical funds over all other funds. The Plan,
however, will not change the price that investors pay for shares of a fund. The
DWS Investments Compliance Department monitors DWS Investments Wholesaler sales
and other activity in an effort to detect unusual activity in the context of the
compensation structure under the Plan. However, investors may wish to take the
Plan and the product category of the fund into account when considering
purchasing a fund or evaluating any recommendations relating to fund shares.


Telephone and Electronic Transaction Procedures. Shareholders have various
telephone, Internet, wire and other electronic privileges available. Each Fund
or its agents will not be liable for any losses, expenses or costs arising out
of fraudulent or unauthorized instructions pursuant to these privileges if that
Fund or its agents reasonably believe, based upon reasonable verification
procedures, that the instructions were genuine. Verification procedures include
recording instructions, requiring certain identifying information before acting
upon instructions and sending written confirmations. During periods when it is
difficult to contact the Shareholder Service Agent, it may be difficult to use
telephone, wire and other privileges.


QuickBuy and QuickSell. QuickBuy and QuickSell permits the transfer of money via
the Automated Clearing House System (minimum $50 and maximum $250,000) from or
to a shareholder's bank, savings and loan, or credit union account in connection
with the purchase or redemption of Fund shares. Shares purchased by check or
through QuickBuy and QuickSell or Direct Deposit may not be redeemed under this
privilege until such Shares have been owned for at least 10 calendar days.
QuickBuy and QuickSell cannot be used with passbook savings accounts or for
certain tax-deferred plans.

Dividend Payment Option. Investors may have dividends and distributions
automatically deposited to their predesignated bank account through DWS
Investments' Dividend Payment Option request form. Shareholders whose
predesignated checking account of record is with a member bank of Automated
Clearing House Network (ACH) can have income and capital gain distributions
automatically deposited to their personal bank account usually within three
business days after a Fund pays its distribution. A Dividend Payment Option
request form can be obtained by visiting our Web site at:
www.dws-investments.com or calling 1-800-728-3337. Confirmation Statements will
be mailed to shareholders as notification that distributions have been
deposited.


Purchases

Each Fund reserves the right to withdraw all or any part of the offering made by
its prospectus and to reject purchase orders for any reason. Also, from time to
time, a Fund may temporarily suspend the offering of any class of its shares to
new investors. During the period of such suspension, persons who are already
shareholders of such class of such Fund may be permitted to continue to purchase
additional shares of such class and to have dividends reinvested.

To help the government fight the funding of terrorism and money laundering
activities, federal law requires all financial institutions to obtain, verify
and record information that identifies each person who opens an account. For
more information, please see "Policies You Should Know About" in the fund
prospectus.


Eligible Class S Investors

A.        The following investors may purchase Class S shares of DWS Funds
          either (i) directly from DWS Investments Distributors, Inc. ("DIDI"),
          the Fund's principal underwriter; or (ii) through an intermediary
          relationship with a financial services firm established with respect
          to the DWS Funds as of December 31, 2004.


          1.      Existing shareholders of Class S shares of any DWS Fund as of
                  December 31, 2004, and household members residing at the same
                  address.

          2.      Shareholders of Class S of any DWS Fund who became Class S
                  shareholders in connection with the consolidation of Class
                  AARP and Class S on July 17, 2006 and household members
                  residing at the same address.

          3.      Shareholders who have owned Class S shares continuously since
                  December 31, 2004 and household members residing at the same
                  address may open new accounts for Class S shares of any DWS
                  Fund.

          4.      Any participant who has owned Class S shares of any DWS Fund
                  through an employee sponsored retirement, employee stock,
                  bonus, pension or profit sharing plan continuously since
                  December 31, 2004 may open a new individual account for Class
                  S shares of any DWS Fund.

          5.      Any participant who owns Class S shares of any DWS Fund
                  through a retirement, employee stock, bonus, pension or profit
                  sharing plan may complete a direct rollover to an IRA account
                  that will hold Class S shares. This applies to individuals who
                  begin their retirement plan investments with a DWS Fund at any
                  time, including after December 31, 2004.

          6.      Officers, Fund Trustees and Directors, and full-time employees
                  and their family members, of the Advisor and its affiliates.


          7.      Class S shares are available to any accounts managed by the
                  Advisor, any advisory products offered by the Advisor or DIDI
                  and to DWS Allocation Series or other fund of funds managed by
                  the Advisor or its affiliates.


          8.      Shareholders of Class S of DWS Emerging Markets Equity Fund
                  who became shareholders of the fund in connection with the
                  fund's acquisition of Scudder New Asia Fund, Inc. on April 17,
                  2006.

          9.      Shareholders of Class S of any DWS Fund who became Class S
                  shareholders in connection with the consolidation of Class M
                  and Class S on August 18, 2006 and household members residing
                  at the same address.

          10.     Shareholders of Class S of any DWS Fund who became Class S
                  shareholders in connection with the renaming or conversion of
                  Investment Class to Class S on October 23, 2006.

B. The following additional investors may purchase Class S shares of DWS Funds.

          1.      Broker-dealers, banks and registered investment advisors
                  ("RIAs") may purchase Class S shares in connection with a
                  comprehensive or "wrap" fee program or other fee based
                  program.

          2.      Any group retirement, employee stock, bonus, pension or
                  profit-sharing plans.

         3.       Persons who purchase shares as part of an investment only
                  placement in a 529 College Savings Plan.

          4.      Persons who purchase shares through a Health Savings Account
                  or a Voluntary Employees' Benefit Association ("VEBA") Trust.


DIDI may, at its discretion, require appropriate documentation that shows an
investor is eligible to purchase Class S shares.


Clients having a regular investment counsel account with the Advisor or its
affiliates and members of their immediate families, officers and employees of
the Advisor or of any affiliated organization and members of their immediate
families, members of the FINRA and banks may, if they prefer, subscribe
initially for at least $2,500 for Class S through DeAM Investor Services, Inc.
by letter or telephone.


Automatic Investment Plan. A shareholder may purchase shares of the Fund through
an automatic investment program. With the Direct Deposit Purchase Plan ("Direct
Deposit"), investments are made automatically (minimum $1,000 and maximum
$250,000 for initial investments and a minimum of $50 and maximum $250,000 for
subsequent investments) from the shareholder's account at a bank, savings and
loan or credit union into the shareholder's Fund account. Termination by a
shareholder will become effective within thirty days after the Shareholder
Service Agent has received the request. The Fund may immediately terminate a
shareholder's Plan in the event that any item is unpaid by the shareholder's
financial institution.

Minimum Subsequent Investment Policies. For current shareholders there is a $50
minimum investment requirement for subsequent investments in each fund. There is
no minimum subsequent investment requirement for investments on behalf of
participants in certain fee-based and wrap programs offered through financial
intermediaries approved by the Advisor.

Payroll Investment Plans. A shareholder may purchase shares through Payroll
Direct Deposit or Government Direct Deposit. Under these programs, all or a
portion of a shareholder's net pay or government check is invested each payment
period. A shareholder may terminate participation in these programs by giving
written notice to the shareholder's employer or government agency, as
appropriate. (A reasonable time to act is required.) A Fund is not responsible
for the efficiency of the employer or government agency making the payment or
any financial institutions transmitting payments.

Expedited Purchase Procedures for Existing Shareholders. Shareholders of other
DWS funds who have submitted an account application and have certified a tax
identification number, clients having a regular investment counsel account with
the Advisor or its affiliates and members of their immediate families, officers
and employees of the Advisor or of any affiliated organization and their
immediate families, members of FINRA, and banks may open an account by wire by
calling (800) 728-3337 for instructions. The investor must send a duly completed
and signed application to the Fund promptly. A subsequent purchase order may be
placed by established shareholders (except by DWS Investments Individual
Retirement Account (IRA), DWS Simplified Profit Sharing and Money Purchase
Pension Plans, DWS Investments 401(k) and DWS Investments 403(b) Plan holders),
members of FINRA, and banks.


Revenue Sharing


In light of recent regulatory developments, the Advisor, the Distributor and
their affiliates have undertaken to furnish certain additional information below
regarding the level of payments made by them to selected affiliated and
unaffiliated brokers, dealers, participating insurance companies or other
financial intermediaries ("financial advisors") in connection with the sale
and/or distribution of Fund shares or the retention and/or servicing of
investors and Fund shares ("revenue sharing").

The Advisor, the Distributor and/or their affiliates may pay additional
compensation, out of their own assets and not as an additional charge to each
Fund, to financial advisors in connection with the sale and/or distribution of
Fund shares or the retention and/or servicing of Fund investors and Fund shares.
Such revenue sharing payments are in addition to any distribution or service
fees payable under any Rule 12b-1 or service plan of any fund, any record
keeping/sub-transfer agency/networking fees payable by each Fund (generally
through the Distributor or an affiliate) and/or the Distributor to certain
financial advisors for performing such services and any sales charges,
commissions, non-cash compensation arrangements expressly permitted under
applicable rules of FINRA or other concessions described in the fee table or
elsewhere in the Prospectuses or the SAI as payable to all financial advisors.
For example, the Advisor, the Distributor and/or their affiliates may compensate
financial advisors for providing each Fund with "shelf space" or access to a
third party platform or fund offering list, or other marketing programs
including, without limitation, inclusion of each Fund on preferred or
recommended sales lists, mutual fund "supermarket" platforms and other formal
sales programs; granting the Distributor access to the financial advisor's sales
force; granting the Distributor access to the financial advisor's conferences
and meetings; assistance in training and educating the financial advisor's
personnel; and, obtaining other forms of marketing support. The level of revenue
sharing payments made to financial advisors may be a fixed fee or based upon one
or more of the following factors: gross sales, current assets and/or number of
accounts of each Fund attributable to the financial advisor, the particular fund
or fund type or other measures as agreed to by the Advisor, the Distributor
and/or their affiliates and the financial advisors or any combination thereof.
The amount of these payments is determined at the discretion of the Advisor, the
Distributor and/or their affiliates from time to time, may be substantial, and
may be different for different financial advisors based on, for example, the
nature of the services provided by the financial advisor.

The Advisor, the Distributor and/or their affiliates currently make revenue
sharing payments from their own assets in connection with the sale and/or
distribution of DWS Fund shares, or the retention and/or servicing of investors,
to financial advisors in amounts that generally range from .01% up to .50% of
assets of the Fund serviced and maintained by the financial advisor, .05% to
..25% of sales of the Fund attributable to the financial advisor, a flat fee of
$13,350 up to $500,000, or any combination thereof. These amounts are annual
figures typically paid on a quarterly basis and are subject to change at the
discretion of the Advisor, the Distributor and/or their affiliates. Receipt of,
or the prospect of receiving, this additional compensation, may influence your
financial advisor's recommendation of this Fund or of any particular share class
of the Fund. You should review your financial advisor's compensation disclosure
and/or talk to your financial advisor to obtain more information on how this
compensation may have influenced your financial advisor's recommendation of this
Fund.

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

As of the date hereof, each Fund has been advised that the Advisor, the
Distributor and their affiliates expect that the following firms will receive
revenue sharing payments at different points during the coming year as described
above:

Channel: Broker-Dealers and Financial Advisors
AIG Advisors Group
Ameriprise
Cadaret, Grant & Co. Inc.
Capital Analyst, Incorporated
Citigroup Global Markets, Inc. (dba Smith Barney)
Commonwealth Equity Services, LLP (dba Commonwealth Financial Network)
Deutsche Bank Group
Ensemble Financial Services
First Clearing/Wachovia Securities
Fiserv Trust Company
HD Vest Investment Securities, Inc.
ING Group
John Hancock Distributors LLC
LPL Financial
M.L. Stern & Co.
Meridien Financial Group
Merrill Lynch, Pierce, Fenner & Smith Inc.
Morgan Stanley
Oppenheimer & Co., Inc.
Raymond James & Associates
Raymond James Financial Services
RBC Dain Rauscher, Inc
Securities America, Inc.
UBS Financial Services
Wachovia Securities
Wells Fargo Investments, LLC

Channel: Cash Product Platform
Allegheny Investments LTD
Bank of New York (Hare & Co.)
Bear, Stearns Securities Corp.
Brown Brothers Harriman
Brown Investment Advisory & Trust Company
Cadaret Grant & Co.
Chicago Mercantile Exchange
D.A. Davidson & Company
Deutsche Bank Group
Emmett A. Larkin Company
Fiduciary Trust Co. - International
First Southwest Company
Huntleigh Securities
Lincoln Investment Planning
LPL Financial
Mellon Financial Markets LLC
Penson Financial Services
Pershing Choice Platform
ProFunds Distributors, Inc.
Ridge Clearing & Outsourcing Solutions
Robert W. Baird & Co.
Romano Brothers and Company
SAMCO Capital Markets
Smith Moore & Company
Sungard Institutional Brokerage Inc.
US Bancorp
UBSFinancial Services
William Blair & Company

Channel: Third Party Insurance Platforms
Allstate Life Insurance Company of New York
Ameritas Life Insurance Group
Annuity Investors Life Insurance Company
Columbus Life Insurance Company
Commonwealth Annuity and Life Insurance Company
Companion Life Insurance Company
Connecticut General Life Insurance Company
Farmers New World Life Insurance Company
Fidelity Security Life Insurance Company
First Allmerica Financial Life Insurance Company
First Great West Life and Annuity Company
Genworth Life Insurance Company of New York
Genworth Life and Annuity Insurance Company
Great West Life and Annuity Insurance Company
Hartford Life Insurance Company
Integrity Life Insurance Company
John Hancock Life Insurance companies
Kemper Investors Life Insurance Company
Lincoln Benefit Life Insurance Company
Lincoln Life & Annuity Company of New York
Lincoln National Life Insurance Company
Massachusetts Mutual Life Insurance Group
MetLife Group
Minnesota Life Insurance Company
National Life Insurance Company
National Integrity Life Insurance Company
Nationwide Group
New York Life Insurance and Annuity Corporation
Phoenix Life Insurance Company
Protective Life Insurance
Provident Mutual Life Insurance
Prudential Insurance Company of America
Sun Life Group
Symetra Life Insurance Company
Transamerica Life Insurance Company
Union Central Life Insurance Company
United of Omaha Life Insurance Company
United Investors Life Insurance Company
Western Southern Life Assurance Company

Any additions, modifications or deletions to the financial advisors identified
above that have occurred since the date hereof are not reflected.

The Advisor, the Distributor or their affiliates may enter into additional
revenue sharing arrangements or change or discontinue existing arrangements with
financial advisors at any time without notice.

The prospect of receiving, or the receipt of additional compensation or
promotional incentives described above by financial advisors may provide such
financial advisors and/or their salespersons with an incentive to favor sales of
shares of the DWS funds or a particular DWS fund over sales of shares of mutual
funds (or non-mutual fund investments) with respect to which the financial
advisor does not receive additional compensation or promotional incentives, or
receives lower levels of additional compensation or promotional incentives.
Similarly, financial advisors may receive different compensation or incentives
that may influence their recommendation of any particular share class of the
Fund or of other funds. These payment arrangements, however, will not change the
price that an investor pays for Fund shares or the amount that the Fund receives
to invest on behalf of an investor and will not increase Fund expenses. You may
wish to take such payment arrangements into account when considering and
evaluating any recommendations relating to Fund shares and you should discuss
this matter with your financial advisor and review your financial advisor's
disclosures.

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




Redemptions

Each Fund imposes a redemption fee of 2% of the total redemption amount
(calculated at net asset value) on all Fund shares redeemed or exchanged within
15 days of buying them (either by purchase or exchange). The redemption fee is
paid directly to the Funds, and is designed to encourage long-term investment
and to offset transaction and other costs associated with short-term or
excessive trading. For purposes of determining whether the redemption fee
applies, shares held the longest time will be treated as being redeemed first
and shares held the shortest time will be treated as being redeemed last. The
redemption fee is applicable to Fund shares purchased either directly or through
a financial intermediary, such as a broker-dealer. Transactions through
financial intermediaries typically are placed with the Funds on an omnibus basis
and include both purchase and sale transactions placed on behalf of multiple
investors. These purchase and sale transactions are generally netted against one
another and placed on an aggregate basis; consequently the identities of the
individuals on whose behalf the transactions are placed generally are not known
to the Funds. For this reason, the Funds have undertaken to notify financial
intermediaries of their obligation to assess the redemption fee on customer
accounts and to collect and remit the proceeds to the Funds. However, due to
operational requirements, the intermediaries' methods for tracking and
calculating the fee may be inadequate or differ in some respects from the
Funds'.


Each Fund may suspend or postpone redemptions as permitted pursuant to Section
22(e) of the 1940 Act. Generally, those circumstances are when: 1) the New York
Stock Exchange is closed other than customary weekend or holiday closings; 2)
trading on the New York Stock Exchange is restricted; 3) an emergency exists
which makes the disposal of securities owned by a fund or the fair determination
of the value of a fund's net assets not reasonably practicable; or 4) the SEC,
by order, permits the suspension of the right of redemption. Redemption payments
by wire may also be delayed in the event of a nonroutine closure of the Federal
Reserve wire payment system.

A request for repurchase (confirmed redemption) may be communicated by a
shareholder through a financial services firm to DIDI, which firms must promptly
submit orders to be effective.


Redemption requests must be unconditional. Redemption requests (and a stock
power for certificated shares) must be duly endorsed by the account holder. As
specified in the prospectus, signatures may need to be guaranteed by a
commercial bank, trust company, savings and loan association, federal savings
bank, member firm of a national securities exchange or other financial
institution permitted by SEC rule. Additional documentation may be required,
particularly from institutional and fiduciary account holders, such as
corporations, custodians (e.g., under the Uniform Transfers to Minors Act),
executors, administrators, trustees or guardians.

If the proceeds of the redemption (prior to the imposition of any contingent
deferred sales charge) are $100,000 or less and the proceeds are payable to the
shareholder of record at the address of record, normally a telephone request or
a written request by any one account holder without a signature guarantee is
sufficient for redemptions by individual or joint account holders, and trust,
executor and guardian account holders, provided the trustee, executor or
guardian is named in the account registration. Other institutional account
holders may exercise this special privilege of redeeming shares by telephone
request or written request without signature guarantee subject to the same
conditions as individual account holders, provided that this privilege has been
pre-authorized by the institutional account holder by written instruction to the
Shareholder Service Agent with signatures guaranteed. This privilege may not be
used to redeem shares held in certificated form and may not be used if the
shareholder's account has had an address change within 15 days of the redemption
request.

Wires. Delivery of the proceeds of a wire redemption of $250,000 or more may be
delayed by a Fund for up to seven days if a Fund or the Shareholder Service
Agent deems it appropriate under then-current market conditions. The ability to
send wires is limited by the business hours and holidays of the firms involved.
A Fund is not responsible for the efficiency of the federal wire system or the
account holder's financial services firm or bank. The account holder is
responsible for any charges imposed by the account holder's firm or bank. To
change the designated account to receive wire redemption proceeds, send a
written request to that Fund's Shareholder Service Agent with signatures
guaranteed as described above or contact the firm through which Fund shares were
purchased.

Automatic Withdrawal Plan. The owner of $5,000 or more of a class of a Fund's
shares at the offering price (net asset value plus, in the case of Class A
shares, the initial sales charge) may provide for the payment from the owner's
account of any requested dollar amount to be paid to the owner or a designated
payee monthly, quarterly, semiannually or annually. The $5,000 minimum is not
applicable to IRAs. The minimum periodic payment is $50. The maximum annual rate
at which shares, subject to CDSC may be redeemed is 12% of the net asset value
of the account. Shares are redeemed so that the payee should receive payment
approximately the first of the month. Investors using this Plan must reinvest
Fund distributions.

The purchase of Class A shares while participating in a systematic withdrawal
plan will ordinarily be disadvantageous to the investor because the investor
will be paying a sales charge on the purchase of shares at the same time that
the investor is redeeming shares upon which a sales charge may have already been
paid. Therefore, the Fund will not knowingly permit additional investments of
less than $2,000 if the investor is at the same time making systematic
withdrawals.

In-kind Redemptions. A Fund reserves the right to honor any request for
redemption or repurchase by making payment in whole or in part in readily
marketable securities. These securities will be chosen by a Fund and valued as
they are for purposes of computing a Fund's net asset value. A shareholder may
incur transaction expenses in converting these securities to cash.


Checkwriting. For DWS Intermediate Tax/AMT Free Fund: the Checkwriting Privilege
is not offered to new investors. The Checkwriting Privilege is available for
shareholders who previously elected this privilege prior to August 19, 2002.
Checks may be used to pay any person, provided that each check is for at least
$100 and not more than $5 million. By using the checks, the shareholder will
receive daily dividend credit on his or her shares until the check has cleared
the banking system. Investors who purchased shares by check may write checks
against those shares only after they have been on a Fund's book for seven
business days. Shareholders who use this service may also use other redemption
procedures. No shareholder may write checks against certificated shares. A Fund
pays the bank charges for this service. However, each Fund will review the cost
of operation periodically and reserve the right to determine if direct charges
to the persons who avail themselves of this service would be appropriate. Each
Fund, DISC and State Street Bank and Trust Company reserve the right at any time
to suspend or terminate the Checkwriting procedure.


Exchanges

Shareholders may request a taxable exchange of their shares for shares of the
corresponding class of other DWS Funds without imposition of a sales charge,
subject to the provisions below.


Shares of money market funds that were acquired by purchase (not including
shares acquired by dividend reinvestment) are subject to the applicable sales
charge on exchange. Certain series of DWS Target Fund are available on exchange
only during the offering period for such series as described in the applicable
prospectus. Tax Free Money Fund -- Investment Class, NY Tax-Free Money Fund --
Investment Class, Money Market Fund -- Investment Class, Cash Management Fund
Institutional, Cash Reserves Fund Institutional, Cash Reserve Fund, Inc. Prime
Series, Tax-Exempt California Money Market Fund, Cash Account Trust and
Investors Cash Trust are available on exchange but only through a financial
services firm having a services agreement with DIDI. All exchanges among money
funds must meet applicable investor eligibility and investment requirements.
Exchanges may only be made for funds that are available for sale in the
shareholder's state of residence. Currently, Tax-Exempt California Money Market
Fund is available for sale only in California.

Shareholders must obtain prospectus(es) of the fund they are exchanging into
from dealers, other firms or DIDI.


Automatic Exchange Plan. The owner of $1,000 or more of any class of shares of a
DWS Fund may authorize the automatic exchange of a specified amount ($50
minimum) of such shares for shares of the same class of another such DWS Fund.
Exchanges will be made automatically until the shareholder or that Fund
terminates the privilege. Exchanges are subject to the terms and conditions
described above.

                                    DIVIDENDS


Each Fund intends to declare daily and distribute monthly substantially all of
its net investment income resulting from investment activity, and, normally, to
make distributions of net realized capital gains (short-term and long-term) will
normally be made in November or December or otherwise as needed to avoid
federal excise tax. Each Fund also intends to distribute all or substantially
all of its investment company taxable income (computed without regard to the
dividends-paid deduction) and all or substantially all of its net capital gains
(that is, the excess of net realized long-term capital gains over net realized
short-term capital losses, including capital loss carryforwards, if any) as
"capital gain dividends" to prevent application of a federal income tax. See
"Taxes" below for more information.





Any dividends or capital gains distributions declared in October, November or
December with a record date in such a month and paid during the following
January will be treated by shareholders for federal income tax purposes as if
received on December 31 of the calendar year declared.

Dividends paid by the Fund with respect to each class of its shares will be
calculated in the same manner, at the same time and on the same day.

The level of income dividends per share (as a percentage of net asset value)
will be lower for Class B and Class C Shares than for Class A Shares primarily
as a result of the distribution services fee applicable to Class B and Class C
Shares. Distributions of capital gains, if any, will be paid in the same amount
for each class.

Income and capital gain dividends, if any, of a Fund will be credited to
shareholder accounts in full and fractional shares of the same class of that
Fund at net asset value on the reinvestment date, except that, upon written
request to the Shareholder Service Agent, a shareholder may select one of the
following options:

1.       To receive income and short-term capital gain dividends in cash and
         long-term capital gain dividends in shares of the same class at net
         asset value; or

2.       To receive income and capital gain dividends in cash.

Dividends will be reinvested in shares of the same class of a Fund unless
shareholders indicate in writing that they wish to receive them in cash (as
previously described) or in shares of other DWS Funds with multiple classes of
shares or DWS Funds as provided in the prospectus. To use this privilege of
investing dividends of a Fund in shares of another DWS Fund, shareholders must
maintain a minimum account value of $1,000 in the Fund distributing the
dividends. A Fund will reinvest dividend checks (and future dividends) in shares
of that same Fund and class if checks are returned as undeliverable. Dividends
and other distributions of a Fund in the aggregate amount of $10 or less are
automatically reinvested in shares of that Fund and class unless the shareholder
requests in writing that a check be issued for that particular distribution.

If a shareholder has elected to reinvest any dividends and/or other
distributions, such distributions will be made in shares of that Fund and
confirmations will be mailed to each shareholder. If a shareholder has chosen to
receive cash, a check will be sent. Distributions of investment company taxable
income and net realized capital gains are taxable, whether made in shares of the
Fund or another DWS Fund or cash.

Each distribution is accompanied by a brief explanation of the form and
character of the distribution. The characterization of distributions on such
correspondence may differ from the characterization for federal tax purposes. In
January of each year each Fund issues to each shareholder a statement of the
federal income tax status of all distributions in the prior calendar year.

Each Fund may at any time vary its foregoing distribution practices and,
therefore, reserves the right from time to time to either distribute or retain
for reinvestment such of its net investment income and its net short-term and
long-term capital gains as its Board determines appropriate under the
then-current circumstances. In particular, and without limiting the foregoing, a
Fund may make additional distributions of net investment income or capital gain
net income in order to satisfy the minimum distribution requirements contained
in the Code.

                                      TAXES

The following is intended to be a general summary of certain federal income tax
consequences of investing in the Funds. It is not intended as a complete
discussion of all such consequences, nor does it purport to deal with all
categories of investors. Investors are therefore advised to consult with their
tax advisors before making an investment in a Fund. The summary is based on the
laws in effect on the date of this SAI and existing judicial and administrative
interpretations thereof, all of which are subject to change, possibly with
retroactive effect.

Taxation of the Fund. Each Fund intends to elect to be treated and to qualify
each year as a regulated investment company under Subchapter M of the Code. In
order to qualify for the special tax treatment accorded regulated investment
companies and their shareholders, each Fund must, among other things:

(a)      derive at least 90% of its gross income for each taxable year from (i)
         dividends, interest, payments with respect to certain securities loans,
         and gains from the sale or other disposition of stock, securities or
         foreign currencies, or other income (including but not limited to gains
         from options, futures, or forward contracts) derived with respect to
         its business of investing in such stock, securities, or currencies and
         (ii) net income derived from interests in "qualified publicly traded
         partnerships" (as defined below);

(b)      diversify its holdings so that, at the end of each quarter of each
         Fund's taxable year, (i) at least 50% of the market value of the Fund's
         total assets is represented by cash and cash items, US Government
         securities, securities of other regulated investment companies, and
         other securities limited in respect of any one issuer to a value not
         greater than 5% of the value of the Fund's total assets and not more
         than 10% of the outstanding voting securities of such issuer, and (ii)
         not more than 25% of the value of the Fund's total assets is invested
         (x) in the securities (other than those of the US Government or other
         regulated investment companies) of any one issuer or of two or more
         issuers which the Fund controls and which are engaged in the same,
         similar, or related trades or businesses, or (y) in the securities of
         one or more qualified publicly traded partnerships (as defined below);
         and

(c)      distribute with respect to each taxable year at least 90% of the sum of
         (i) its investment company taxable income (as that term is defined in
         the Code without regard to the deduction for dividends paid generally
         taxable ordinary income and the excess, if any, of net short-term
         capital gains over net long-term capital losses) and (ii) the excess,
         if any, of its interest income excludable from gross income under
         section 103(a) over its deduction disallowed under section 265 and
         171(a)(2), for such year.

In general, for purposes of the 90% gross income requirement described in
paragraph (a) above, income derived from a partnership will be treated as
qualifying income only to the extent such income is attributable to items of
income of the partnership which would be qualifying income if realized by the
Funds. However, 100% of the net income derived from an interest in a "qualified
publicly traded partnership" (defined as a partnership (x) interests in which
are traded on an established securities market or readily tradable on a
secondary market or the substantial equivalent thereof and (y) that derives at
least 90% of its income from the passive income sources defined in Code section
7704(d), and (z) that derives less than 90% of its income from qualifying income
described in paragraph (a)(i) above) will be treated as qualifying income. In
addition, although in general the passive loss rules of the Code do not apply to
regulated investment companies, such rules do apply to a regulated investment
company with respect to items attributable to an interest in a qualified
publicly traded partnership. Also, for purposes of paragraph (b) above, the term
"outstanding voting securities of such issuer" will include the equity
securities of a qualified publicly traded partnership.

If the Funds qualify as a regulated investment companies that are accorded
special tax treatment, the Funds will not be subject to federal income tax on
income distributed in a timely manner to its shareholders in the form of
dividends (including Capital Gain Dividends as defined below).

If for any taxable year a Fund does not qualify for the special federal income
tax treatment afforded regulated investment companies, all of its taxable income
will be subject to federal income tax at regular corporate rates (without any
deduction for distributions to its shareholders), and all distributions from
earnings and profits, including any distributions of net tax-exempt income and
net long-term capital gains, will be taxable to shareholders as ordinary income.
Such distributions may be eligible (i) to be treated as qualified dividend
income in the case of shareholders taxed as individuals and (ii) for the
dividends received deduction in the case of corporate shareholders. In addition,
such Fund could be required to recognize unrealized gains, pay substantial taxes
and interest and make substantial distributions before requalifying as a
regulated investment company that is accorded special tax treatment.

As described in "Dividends" above, each Fund intends to distribute at least
annually to shareholders substantially all of its investment company taxable
income (computed without regard to the dividends-paid deduction) and the excess,
if any, of its interest income excludable from gross income under section 103(a)
over its deductions disallowed under sections 265 and 171(a)(2), and may
distribute its net capital gain. Any investment company taxable income retained
by the Funds will be subject to tax at the Fund level at regular corporate
rates. Each Fund may also retain for investment its net capital gain. If the
Funds retain any net capital gain, they will be subject to tax at regular
corporate rates on the amount retained, but may designate the retained amount as
undistributed capital gains, in a notice to their shareholders who (i) will be
required to include in income for federal income tax purposes, as long-term
capital gain, their shares of such undistributed amount against their federal
income tax liabilities, if any, and to claim refunds on a properly-filed US tax
return to the extent the credit exceeds such liabilities. For federal income tax
purposes, the tax basis of shares owned by a shareholder of the Funds will be
increased by an amount equal under current law to the difference between the
amount of undistributed capital gains included in the shareholder's gross income
and the tax deemed paid by the shareholder under clause (ii) of the preceding
sentence.

In determining its net capital gain for Capital Gain Dividend purposes, a
regulated investment company generally must treat any net capital loss or any
net long-term capital loss incurred after October 31 as if it had been incurred
in the succeeding year. Treasury regulations permit a regulated investment
company, in determining its taxable income, to elect to treat all or part of any
net capital loss, any net long-term capital loss or any foreign currency loss
incurred after October 31 as if it had been incurred in the succeeding year.

Each Fund is subject to a 4% nondeductible excise tax on amounts that have been
retained rather than distributed, as required, under a prescribed formula. The
formula requires payment to shareholders during a calendar year of distributions
representing at least 98% of a Funds' taxable ordinary income for the calendar
year and at least 98% of the excess of its capital gains over capital losses
realized during the one-year period ending October 31 (in most cases) of such
year as well as amounts that were neither distributed nor taxed to the Funds
during the prior calendar year. For these purposes, each Fund will be treated as
having distributed any amount on which it has been subject to corporate income
tax in the taxable year ending within the calendar year. A dividend paid to
shareholders in January of a year generally is deemed to have been paid by the
Funds on December 31 of the preceding year, if the dividend was declared and
payable to shareholders of record on a date in October, November or December of
that preceding year. Although the Funds' distribution policies should enable
them to avoid excise tax liability, as discussed in "Dividends" above, the Funds
may retain (and be subject to fund-level income and/or excise tax on) a portion
of its capital gain or other income if it appears to be in the interest of the
Funds.

Exempt-Interest Dividends. Each Fund will be qualified to pay tax-exempt
interest dividends to its shareholders only if, at the end of each quarter of a
Fund's taxable year, at least 50% of the total value of a Fund's assets consists
of securities the interest on which is exempt from federal income tax under Code
section 103(a). The Funds intend to satisfy this requirement. Distributions that
each Fund properly designates as exempt-interest dividends are treated as
interest excludable from shareholders' gross income for federal income tax
purposes but may result in liability for federal individual and corporate
alternative minimum tax purposes. For example, if the Funds invests in "private
activity bonds," certain shareholders may become subject to alternative minimum
tax on the part of the Fund's distributions derived from interest on such bonds.
Note that the Intermediate Tax/AMT Free Fund does not intend to invest in
securities whose income is subject to AMT.

Part or all of the interest on indebtedness, if any, incurred or continued by a
shareholder to purchase or carry shares of a Fund paying exempt-interest
dividends is not deductible. The portion of interest that is not deductible is
equal to the total interest paid or accrued on the indebtedness, multiplied by
the percentage of a Fund's total distributions (not including distributions from
net long-term capital gains) paid to the shareholder that are exempt-interest
dividends. Under rules used by the Internal Revenue Service to determine when
borrowed Funds are considered used for the purpose of purchasing or carrying
particular assets, the purchase of shares may be considered to have been made
with borrowed funds even though such Funds are not directly traceable to the
purchase of shares.

In general, exempt-interest dividends, if any, attributable to interest received
on certain private activity obligations and certain industrial development bonds
will not be tax-exempt to any shareholder who are "substantial users" of the
facilities financed by such obligations or bonds or who are "related persons" of
such substantial users.

The Funds, which are qualified to pay exempt-interest dividends, will inform
investors within 60 days of a Fund's fiscal year-end of the percentage of its
income distributions designated as tax-exempt. The percentage is applied
uniformly to all distributions made during the year. The percentage of income
designated as tax-exempt for any particular distribution may be substantially
different from the percentage of a Fund's income that was tax-exempt during the
period covered by the distribution.

A shareholder who receives Social Security or railroad retirement benefits
should consult his or her tax adviser to determine what effect, if any, an
investment in the Funds may have on the federal taxation of such benefits.
Tax-exempt dividends are included in income for purposes of determining the
amount of benefits that are taxable.

The exemption from federal income tax for exempt-interest dividends does not
necessarily result in exemption for such dividends under the income or other tax
laws of any state or local authority. You are advised to consult with your tax
advisor about state and local tax matters.

Taxable Distributions. As discussed above, the Funds are qualified to pay
exempt-interest dividends to its shareholders. Distributions that the Funds
properly designate as exempt-interest dividends are treated as interest
excludable from shareholders' gross income for federal income tax purposes but
may result in liability for federal alternative minimum tax purposes.

For federal income tax purposes, distributions of investment income, other than
exempt-interest dividends, are generally taxable as ordinary income. Taxes on
distributions of capital gains are determined by how long a Fund owned the
investments that generated them, rather than how long a shareholder has owned
his or her shares. Distributions of net capital gains (that is, the excess of
net long-term capital gains over net short-term capital losses) from the sale of
investments that a Fund owned for more than one year and that are properly
designated by the Fund as capital gain dividends ("Capital Gain Dividends") will
be taxable as long-term capital gains. Distributions of gains from the sale of
investments that a Fund owned for one year or less will be taxable as ordinary
income. If shares of a Fund are sold at a loss after being held for six months
or less, the loss will be disallowed to the extent of any exempt-interest
dividends received on those shares. For the taxable years beginning before
January 1, 2011, distributions of investment income designated by a Fund as
derived from "qualified dividend income" are taxed at the rates applicable to
long-term capital gain, provided holding period and other requirements are met
at both the shareholder and Fund level. Because the Funds invest primarily in
tax-exempt-bonds, the Funds do not expect a significant portion of distributions
to be derived from qualified dividend income.

Long-term capital gain rates applicable to individuals have been temporarily
reduced -- in general, to 15% with lower rates applying to taxpayers in the 10%
and 15% rate brackets -- for taxable years beginning before January 1, 2011.

To the extent that the Fund makes distributions of income received by the Fund
in lieu of tax-exempt interest with respect to securities on loan, such
distributions will not constitute exempt-interest dividends to shareholders.
Similarly, to the extent that the Fund makes distributions of income received by
the Fund in lieu of tax-exempt interest with respect to securities on loan, such
distributions will not constitute exempt-interest dividends to shareholders.

A portion of the interest paid or accrued on certain high yield discount
obligations owned by a Fund may not (and interest paid on debt obligations, if
any, that are considered for tax purposes to be payable in the equity of the
issuer or a related party will not) be deductible to the issuer. This may affect
the cash flow of the issuer. If a portion of the interest paid or accrued on
certain high yield discount obligations is not deductible, that portion will be
treated as a dividend for purposes of the corporate dividends received
deduction. In such cases, if the issuer of the high yield discount obligations
is a domestic corporation, dividend payments by a Fund may be eligible for the
dividends received deduction to the extent of the deemed dividend portion of
such accrued interest.

If the Fund makes a distribution to a shareholder in excess of the Fund's
current and accumulated earnings and profits in any taxable year, the excess
distribution will be treated as a return of capital to the extent of such
shareholder's tax basis in its shares, and thereafter as capital gain. A return
of capital is not taxable, but it reduces a shareholder's tax basis in its
shares, thus reducing any loss or increasing any gain on a subsequent taxable
disposition by the shareholder of its shares.

Special tax rules apply to investments through defined contribution plans and
other tax-qualified plans. Shareholders should consult their tax advisors to
determine the suitability of shares of a Fund as an investment through such
plans and the precise effect of an investment on their particular tax situation.

All distributions by a Fund result in a reduction in the net asset value of that
Fund's shares. Should a distribution reduce the net asset value below a
shareholder's cost basis, such distribution may nevertheless be taxable to the
shareholder as ordinary income or capital gain as described above, even though,
from an investment standpoint, it may constitute a partial return of capital.
Such distributions are likely to occur in respect of shares purchased at a time
when a Fund's net asset value reflects gains that are either unrealized, or
realized but not distributed. Such realized gains may be required to be
distributed even when a Fund's net asset value also reflects unrealized losses.

Distributions are taxable to shareholders even if they are paid from income or
gains earned by a Fund before a shareholder's investment (and thus might have
been reflected in the price the shareholder paid). Distributions are taxable
whether shareholders receive them in cash or reinvest them in additional shares
through the reinvestment privilege. A shareholder whose distributions are
reinvested in shares will be treated as having received a dividend equal to the
fair market value of the new shares issued to the shareholder.

In the event that a Fund makes a distribution to a shareholder in excess of the
Fund's current and accumulated earnings and profits in any taxable year, the
excess distribution will be treated as a return of capital to the extent of such
shareholder's tax basis in its shares, and thereafter as capital gain. A return
of capital is not taxable, but it reduces a shareholder's tax basis in its
shares, thus reducing any loss or increasing any gain on a subsequent taxable
disposition by the shareholder of its shares.

Original Issue Discount, Payment-in-Kind Securities, Market Discount and
Acquisition Discount. Some debt obligations with a fixed maturity date of more
than one year from the date of issuance (and all zero-coupon debt obligations
with a fixed maturity date of more than one year from the date of issuance) that
are acquired by a Fund will be treated as debt obligations that are issued
originally at a discount. Generally, the amount of the original issue discount
("OID") is treated as interest income and is included in taxable income (and
required to be distributed) over the term of the debt security, even though
payment of that amount is not received until a later time, usually when the debt
security matures. In addition, payment-in-kind securities will give rise to
income which is required to be distributed and is taxable even though a Fund
holding the security receives no interest payment in cash on the security during
the year. Interest paid on debt obligations owned by a Fund that are considered
for tax purposes to be payable in the equity of the issuer or a related party
will not be deductible to the issuer, possibly affecting the cash flow of the
issuer.

Some debt obligations with a fixed maturity date of more than one year from the
date of issuance that are acquired by a Fund in the secondary market may be
treated as having market discount. Generally, any gain recognized on the
disposition of, and any partial payment of principal on, a debt security having
market discount is treated as ordinary income to the extent the gain, or
principal payment, does not exceed the "accrued market discount" on such debt
security. Market discount generally accrues in equal daily installments.

Some debt obligations with a fixed maturity date of one year or less from the
date of issuance that are acquired by the Fund may be treated as having
acquisition discount or OID. Generally, the Funds will be required to include
the acquisition discount or OID in income over the term of the debt security,
even though payment of that amount is not received until a later time, usually
when the debt security matures. The Funds may make one or more of the elections
applicable to debt obligations having acquisition discount or OID, which could
affect the character and timing of recognition of income.

If a Fund holds the foregoing kinds of securities, it may be required to pay out
as an income distribution each year an amount which is greater than the total
amount of cash interest the Fund actually received. Such distributions may be
made from the cash assets of the Fund or by liquidation of portfolio securities,
if necessary. A Fund may realize gains or losses from such liquidations. In the
event a Fund realizes net capital gains from such transactions, its shareholders
may receive a larger capital gain distribution than they would in the absence of
such transactions.

Higher-Risk Securities. A Fund may invest in debt obligations that are in the
lowest rating categories or are unrated, including debt obligations of issuers
not currently paying interest or who are in default. Investments in debt
obligations that are at risk of or in default present special tax issues for the
Fund. Tax rules are not entirely clear about issues such as whether the Fund
should recognize market discount on a debt obligation and, if so, the amount of
market discount a Fund should recognize, when a Fund may cease to accrue
interest, original issue discount or market discount, when and to what extent
deductions may be taken for bad debts or worthless securities and how payments
received on obligations in default should be allocated between principal and
income. These and other related issues will be addressed by a Fund when, as and
if it invests in such securities, in order to seek to ensure that it distributes
sufficient income to preserve its status as a regulated investment company and
does not become subject to US federal income or excise tax.

Hedging and Related Transactions. A Fund's transactions in options, futures
contracts, hedging transactions, forward contracts, swap agreements, straddles
and foreign currencies will be subject to special tax rules (including
mark-to-market, constructive sale, straddle, wash sale, short sale and other
rules), the effect of which may be to accelerate the Fund's income, defer
losses, cause adjustments in the holding periods of portfolio securities,
convert capital gains into ordinary income and convert short-term capital losses
into long-term capital losses. These rules could therefore affect the amount,
timing and character of distributions to investors. Each Fund will monitor its
transactions, will determine whether to make certain applicable tax elections
and will make appropriate entries in its books and records.

Certain of each Fund's hedging activities (including transactions, if any, in
foreign currencies or foreign currency-denominated instruments) are likely to
produce a difference between its book income and its taxable income. If a Fund's
book income exceeds its taxable income, the distribution (if any) of such excess
will be treated as (i) a dividend to the extent of the Fund's remaining earnings
and profits (including earnings and profits arising from tax-exempt income),
(ii) thereafter as a return of capital to the extent of the recipient's basis in
the shares, and (iii) thereafter as gain from the sale or exchange of a capital
asset. If a Fund's book income is less than its taxable income and net
tax-exempt income (that is, the excess, if any, of the Fund's interest income
excludable from gross income under section 103(a) over its deductions disallowed
under sections 265 and 171(a)(2)), the Fund could be required to make
distributions exceeding book income to qualify as a regulated investment company
that is accorded special tax treatment.

Backup Withholding. Under the backup withholding provisions of the Code,
redemption proceeds as well as taxable distributions may be subject to federal
income tax withholding for certain shareholders, including those who fail to
furnish a Fund with their taxpayer identification numbers and certifications as
to their tax status, who have under-reported dividend or interest income, or who
fail to certify to the Funds that they are not subject to such withholding. The
backup withholding rules may also apply to distributions that are properly
designated as exempt-interest dividends. The backup withholding tax rate is 28%
for amounts paid through 2010. This rate will expire and the backup withholding
rate will be 31% for amounts paid after December 31, 2010, unless Congress
enacts tax legislation providing otherwise.

Sale or Redemption of Shares. The sale, exchange or redemption of a Fund's
shares may give rise to a gain or loss. In general, any gain or loss realized
upon a taxable disposition of shares will be treated as long-term capital gain
or loss if the shares have been held for more than 12 months. Otherwise, the
gain or loss on the taxable disposition of a Fund's shares will be treated as
short-term capital gain or loss. However, any loss realized upon a taxable
disposition of shares held for six months or less will be treated as long-term,
rather than short-term, to the extent of any long-term capital gain
distributions received (or deemed received) by the shareholder with respect to
the shares. All or a portion of any loss realized upon a taxable disposition of
a Fund's shares will be disallowed if other substantially identical shares of
the Fund are purchased within 30 days before or after the disposition. In such a
case, the basis of the newly purchased shares will be adjusted to reflect the
disallowed loss.

Tax Shelter Reporting Regulations. Under Treasury regulations, if a shareholder
recognizes a loss with respect to a Fund's shares of $2 million or more for an
individual shareholder or $10 million or more for a corporate shareholder, the
shareholder must file with the IRS a disclosure statement on Form 8886. Direct
shareholders of portfolio securities are in many cases excepted from this
reporting requirement, but under current guidance, shareholders of a regulated
investment company are not excepted. Future guidance may extend the current
exception from this reporting requirement to shareholders of most or all
regulated investment companies. The fact that a loss is reportable under these
regulations does not affect the legal determination of whether the taxpayer's
treatment of the loss is proper. Shareholders should consult their tax advisors
to determine the applicability of these regulations in light of their individual
circumstances.

Non-U.S. Shareholders. Distributions properly designated Capital Gain Dividends
paid to non-U.S. investors and exempt-interest dividends generally will not be
subject to withholding of U.S. federal income tax. However, exempt-interest
dividends may be subject to backup withholding (as discussed above). In general,
dividends (other than Capital Gain Dividends) and exempt-interest dividends paid
by a Fund to a shareholder that is not a "U.S. person" within the meaning of the
Code (such shareholder, a "foreign person") are subject to withholding of U.S.
federal income tax at a rate of 30% (or lower applicable treaty rate) even if
they are funded by income or gains (such as portfolio interest, short-term
capital gains, or foreign-source dividend and interest income) that, if paid to
a foreign person directly, would not be subject to withholding. However,
effective for taxable years of a Fund beginning before January 1, 2008, a Fund
will not be required to withhold any amounts (i) with respect to distributions
(other than distributions to a foreign person (w) that has not provided a
satisfactory statement that the beneficial owner is not a U.S. person, (x) to
the extent that the dividend is attributable to certain interest on an
obligation if the foreign person is the issuer or is a 10% shareholder of the
issuer, (y) that is within certain foreign countries that have inadequate
information exchange with the United States, or (z) to the extent the dividend
is attributable to interest paid by a person that is a related person of the
foreign person and the foreign person is a controlled foreign corporation) from
U.S. source interest income that, in general, would not be subject to U.S.
federal income tax if earned directly by an individual foreign person, to the
extent such distributions are properly designated by the Fund, and (ii) with
respect to distributions (other than (a) distributions to an individual foreign
person who is present in the United States for a period or periods aggregating
183 days or more during the year of the distribution) and (b) distributions
subject to special rules regarding the disposition of U.S. real property
interests of net short-term capital gains in excess of net long-term capital
losses, to the extent such distributions are properly designated by the Fund.
Depending on the circumstances, a Fund may make such designations with respect
to all, some or none of its potentially eligible dividends and/or treat such
dividends, in whole or in part, as ineligible for this exemption from
withholding. Pending legislation proposes to extend the exemption from
withholding for interest-related and short-term capital gain distributions for
up to two years, i.e. for taxable years beginning before January 1, 2010. At the
time of this filing, it is unclear whether the legislation will be enacted and,
if enacted, what the term of the extension will be (e.g., for one year or two
years).

In order to qualify for this exemption from withholding, a foreign person will
need to comply with applicable certification requirements relating to its non-US
status (including, in general, furnishing an IRS Form W-8BEN or substitute
Form). In the case of shares held through an intermediary, the intermediary may
withhold even if a Fund makes a designation with respect to a payment. Foreign
persons should contact their intermediaries with regarding the application of
these rules to their accounts.

A beneficial holder of shares who is a foreign person is not, in general,
subject to U.S. federal income tax on gains (and is not allowed a deduction for
losses) realized on the sale of shares of a Fund or on Capital Gain Dividends or
exempt-interest dividends unless (i) such gain or dividend is effectively
connected with the conduct of a trade or of a trade or business carried on by
such holder within the United States or (ii) in the case of an individual
holder, the holder is present in the United States for a period or periods
aggregating 183 days or more during the year of the sale or the receipt of the
Capital Gain Dividend and certain other conditions are met.

In order for a foreign investor to qualify for exemption from the backup
withholding tax rates under income tax treaties, the foreign investor must
comply with special certification and filing requirements. Foreign investors in
the Funds should consult their tax advisers in this regard. Backup withholding
is not an additional tax. Any amounts withheld may be credited against the
shareholder's U.S. federal income tax liability, provided the appropriate
information is furnished to the IRS.

If a shareholder is eligible for the benefits of a tax treaty, any effectively
connected income or gain will generally be subject to U.S. federal income tax on
a net basis only if it is also attributable to a permanent establishment
maintained by the shareholder in the United States.

A beneficial holder of shares who is a foreign person may be subject to state
and local tax and to the U.S. federal estate tax in addition to the federal tax
on income referred to above.

General Considerations. The federal income tax discussion set forth above is for
general information only. Prospective investors should consult their tax
advisers regarding the specific federal tax consequences of purchasing, holding,
and disposing of shares of the Funds, as well as the effects of state, local and
foreign tax law and any proposed tax law changes.




Tax-Equivalent Yield

Tax-equivalent yield is the net annualized taxable yield needed to produce a
specified tax-exempt yield at a given tax rate based on a specified 30-day (or
one month) period assuming semiannual compounding of income. Tax-equivalent
yield is calculated by dividing that portion of a Fund's yield (as computed in
the yield description above) which is tax-exempt by one minus a stated income
tax rate and adding the product to that portion, if any, of the yield of the
Fund that is not tax-exempt.


Tax-Exempt Versus Taxable Yield. You may want to determine which investment --
tax-exempt or taxable -- will provide you with a higher after-tax return. To
determine the taxable equivalent yield, simply divide the yield from the
tax-exempt investment by the sum of 1 minus your marginal tax rate. The tables
below are provided for your convenience in making this calculation for selected
tax-exempt yields and taxable income levels. These yields are presented for
purposes of illustration only and are not representative of any yield that a
Fund may generate. The tables are based upon current law as to the 2008 tax
rates schedules.


<TABLE>
<CAPTION>
     FEDERAL


     Tax Equivalent Yields
     DWS 2008


            Taxable         Effective     Effective Federal  Federal Tax             Taxable
          Income Single     State Rate         Rate            Bracket             Income Joint
          -------------     ----------         ----            -------             ------------
                <S>              <C>            <C>               <C>            <C>
          $0 - $7,550            0.00%         10.00%        10.00%             $0 - $15,100
        $7,551 - $30,650         0.00%         15.00%        15.00%          $15,101 - $61,300
       $30,651 - $74,200         0.00%         25.00%        25.00%          $61,301 - $123,700
       $74,201 - $154,800        0.00%         28.00%        28.00%         $123,701 - $188,450
      $154,801 - $336,550        0.00%         33.00%        33.00%         $188,451 - $336,550
         over $336,551           0.00%         35.00%        35.00%            over $336,551


                                                     If your combined federal
and state effective tax rate in 2007 is:
                       10.00%     15.00%     25.00%     28.00%     33.00%      35.00%
     To match these
     tax-free yields:
                             Your taxable investment would have to earn the following yield:

          2.00%         2.22%      2.35%      2.67%      2.78%      2.99%       3.08%
          3.00%         3.33%      3.53%      4.00%      4.17%      4.48%       4.62%
          4.00%         4.44%      4.71%      5.33%      5.56%      5.97%       6.15%
          5.00%         5.56%      5.88%      6.67%      6.94%      7.46%       7.69%
          6.00%         6.67%      7.06%      8.00%      8.33%      8.96%       9.23%
          7.00%         7.78%      8.24%      9.33%      9.72%     10.45%      10.77%
          8.00%         8.89%      9.41%     10.67%     11.11%     11.94%      12.31%
          9.00%        10.00%     10.59%     12.00%     12.50%     13.43%      13.85%
</TABLE>

Please note:
    1)   This chart does not take into consideration any state, local or city
         tax rates.
    2)   The effective federal tax rates are calculated using the highest
         marginal tax rate within the applicable tax bracket.
    3)   Taxable income amounts represent taxable income as defined in the
         Internal Revenue Code.


                                 NET ASSET VALUE

The net asset value of shares of each Fund is computed as of the close of
regular trading on the New York Stock Exchange (the "Exchange") on each day the
Exchange is open for trading (the "Value Time"). The Exchange is scheduled to be
closed on the following holidays: New Year's Day, Dr. Martin Luther King, Jr.
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas, and on the preceding Friday or subsequent Monday
when one of these holidays falls on a Saturday or Sunday, respectively. Net
asset value per share is determined separately for each class of shares by
dividing the value of the total assets of the Fund attributable to the shares of
that class, less all liabilities attributable to that class, by the total number
of shares of that class outstanding. The per share net asset value may be lower
for certain classes of the Fund because of higher expenses borne by these
classes.

An equity security is valued at its most recent sale price on the security's
primary exchange or OTC market as of the Value Time. Lacking any sales, the
security is valued at the calculated mean between the most recent bid quotation
and the most recent asked quotation (the "Calculated Mean") on such exchange or
OTC market as of the Value Time. If it is not possible to determine the
Calculated Mean, the security is valued at the most recent bid quotation on such
exchange or OTC market as of the Value Time. In the case of certain foreign
exchanges or OTC markets, the closing price reported by the exchange or OTC
market (which may sometimes be referred to as the "official close" or the
"official closing price" or other similar term) will be considered the most
recent sale price.

Debt securities are valued as follows. Money market instruments purchased with
an original or remaining maturity of 60 days or less, maturing at par, are
valued at amortized cost. Other money market instruments are valued based on
information obtained from an approved pricing agent or, if such information is
not readily available, by using matrix pricing techniques (formula driven
calculations based primarily on current market yields). Bank loans are valued at
prices supplied by an approved pricing agent (which are intended to reflect the
mean between the bid and asked prices), if available, and otherwise at the mean
of the most recent bid and asked quotations or evaluated prices, as applicable,
based on quotations or evaluated prices obtained from one or more
broker-dealers. Privately placed debt securities, other than Rule 144A debt
securities, initially are valued at cost and thereafter based on all relevant
factors including type of security, size of holding and restrictions on
disposition. Municipal debt securities are valued at prices supplied by an
approved pricing agent (which are intended to reflect the mean between the bid
and asked prices), if available, and otherwise at the mean of the most recent
bid and asked quotations or evaluated price obtained from a broker-dealer. Other
debt securities are valued at prices supplied by an approved pricing agent, if
available, and otherwise at the most recent bid quotation or evaluated price, as
applicable, obtained from one or more broker-dealers. If it is not possible to
value a particular debt security pursuant to the above methods, the security is
valued on the basis of factors including (but not limited to) maturity, coupon,
creditworthiness, currency denomination, and the movement of the market in which
the security is normally traded.


An exchange-traded option contract on securities, currencies and other financial
instruments is valued at its most recent sale price on the relevant exchange.
Lacking any sales, the option contract is valued at the Calculated Mean. If it
is not possible to determine the Calculated Mean, the option contract is valued
at the most recent bid quotation in the case of a purchased option contract or
the most recent asked quotation in the case of a written option contract, in
each case as of the Value Time. An option contract on securities, currencies and
other financial instruments traded in the OTC market is valued on the Value Date
at the evaluated price provided by the broker-dealer with which it was traded.
Futures contracts (and options thereon) are valued at the most recent settlement
price, if available, on the exchange on which they are traded most extensively.
With the exception of stock index futures contracts which trade on the Chicago
Mercantile Exchange, closing settlement times are prior to the close of trading
on the New York Stock Exchange. For stock index futures contracts which trade on
the Chicago Mercantile Exchange, closing settlement prices are normally
available at approximately 4:20 PM Eastern time. If no settlement price is
available, the last traded price on such exchange will be used.

If market quotations for a portfolio asset are not readily available or the
value of a portfolio asset as determined in accordance with Board approved
procedures does not represent the fair market value of the portfolio asset, the
value of the portfolio asset is taken to be an amount which, in the opinion of a
Fund's Pricing Committee (or, in some cases, the Board's Valuation Committee),
represents fair market value. The value of other portfolio holdings owned by a
Fund is determined in a manner which is intended to fairly reflect the fair
market value of the asset on the valuation date, based on valuation procedures
adopted by a Fund's Board and overseen primarily by a Fund's Pricing Committee.


                              TRUSTEES AND OFFICERS


The following table presents certain information regarding the Board Members of
each Trust. Each Board Member's year of birth is set forth in parentheses after
his or her name. Unless otherwise noted, (i) each Board Member has engaged in
the principal occupation(s) noted in the table for at least the most recent five
years, although not necessarily in the same capacity, and (ii) the address of
each Board Member that is not an "interested person" (as defined in the 1940
Act) of each Trust or the Advisor (each, an "Independent Board Member") is c/o
Dawn-Marie Driscoll, PO Box 100176, Cape Coral, FL 33904. The term of office for
each Board Member is until the election and qualification of a successor, or
until such Board Member sooner dies, resigns, is removed or as otherwise
provided in the governing documents of each Trust. Because the Funds do not hold
an annual meeting of shareholders, each Board Member will hold office for an
indeterminate period. The Board Members may also serve in similar capacities
with other funds in the DWS fund complex.

Independent Board Members

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth, Position                                                                   Number of Funds
 with the Trusts and Length of    Business Experience and                                        in DWS Fund
 Time Served(1)                   Directorships During the Past 5 Years                          Complex Overseen
--------------------------------------------------------------------------------------------------------------------
<S>                                       <C>                                                           <C>
Dawn-Marie Driscoll (1946)        President, Driscoll Associates (consulting firm); Executive           133
Chairperson since 2004,(2) and    Fellow, Center for Business Ethics, Bentley College;
Board Member since 1987           formerly: Partner, Palmer & Dodge (1988-1990); Vice President
                                  of Corporate Affairs and General Counsel, Filene's
                                  (1978-1988); Directorships: Trustee of 8 open-end mutual
                                  funds managed by Sun Capital Advisers, Inc. (since 2007);
                                  Director of ICI Mutual Insurance Company (since 2007);
                                  Advisory Board, Center for Business Ethics, Bentley College;
                                  Trustee, Southwest Florida Community Foundation (charitable
                                  organization); former Directorships: Investment Company
                                  Institute (audit, executive, nominating committees) and
                                  Independent Directors Council (governance, executive
                                  committees)
--------------------------------------------------------------------------------------------------------------------
Paul K. Freeman                   Consultant, World Bank/Inter-American Development Bank;               133
(1950)                            formerly: Project Leader, International Institute for Applied
Vice Chairperson since 2008, and  Systems Analysis (1998-2001); Chief Executive Officer, The
Board Member since 1993           Eric Group, Inc. (environmental insurance) (1986-1998)
--------------------------------------------------------------------------------------------------------------------
John W. Ballantine (1946)         Retired; formerly: Executive Vice President and Chief Risk            133
Board Member since 1999           Management Officer, First Chicago NBD Corporation/The First
                                  National Bank of Chicago (1996-1998); Executive Vice
                                  President and Head of International Banking (1995-1996);
                                  Directorships: Healthways Inc. (provider of disease and care
                                  management services); Portland General Electric (utility
                                  company); Stockwell Capital Investments PLC (private equity);
                                  former Directorships: First Oak Brook Bancshares, Inc. and
                                  Oak Brook Bank
--------------------------------------------------------------------------------------------------------------------
 Henry P. Becton, Jr. (1943)      Vice Chair, WGBH Educational Foundation; Directorships:               133
 Board Member since               Association of Public Television Stations; Becton Dickinson
 1990                             and Company(3) (medical technology company); Belo
                                  Corporation(3) (media company); Boston Museum of Science;
                                  Public Radio International; former Directorships: American
                                  Public Television; Concord Academy; New England Aquarium;
                                  Mass. Corporation for Educational Telecommunications;
                                  Committee for Economic Development; Public Broadcasting
                                  Service
--------------------------------------------------------------------------------------------------------------------
Keith R. Fox (1954)               Managing General Partner, Exeter Capital Partners (a series           133
Board Member since                of private equity funds); Directorships: Progressive Holding
1996                              Corporation (kitchen goods importer and distributor); Natural
                                  History, Inc. (magazine publisher); Box Top Media Inc.
                                  (advertising); The Kennel Shop (retailer)
--------------------------------------------------------------------------------------------------------------------
Kenneth C. Froewiss               Clinical Professor of Finance, NYU Stern School of Business           133
(1945)                            (1997-present); Member, Finance Committee, Association for
Board Member since                Asian Studies (2002-present); Director, Mitsui Sumitomo
2001                              Insurance Group (US) (2004-present); prior thereto, Managing
                                  Director, J.P. Morgan (investment banking firm) (until 1996)
--------------------------------------------------------------------------------------------------------------------
Richard J. Herring                Jacob Safra Professor of International Banking and Professor,         133
(1946)                            Finance Department, The Wharton School, University of
Board Member since                Pennsylvania (since July 1972); Co-Director, Wharton
1990                              Financial Institutions Center (since July 2000); Director,
                                  Japan Equity Fund, Inc. (since September 2007), Thai Capital
                                  Fund, Inc. (since September 2007), Singapore Fund, Inc.
                                  (since September 2007); formerly: Vice Dean and Director,
                                  Wharton Undergraduate Division (July 1995-June 2000);
                                  Director, Lauder Institute of International Management
                                  Studies (July 2000-June 2006)
--------------------------------------------------------------------------------------------------------------------
William McClayton (1944)          Managing Director, Diamond Management & Technology                    133
Board Member since 2004           Consultants, Inc. (global management consulting firm)
                                  (2001-present); Directorship: Board of Managers, YMCA of
                                  Metropolitan Chicago; formerly: Senior Partner, Arthur
                                  Andersen LLP (accounting) (1966-2001); Trustee, Ravinia
                                  Festival
--------------------------------------------------------------------------------------------------------------------
Rebecca W. Rimel                  President and Chief Executive Officer, The Pew Charitable             133
(1951)                            Trusts (charitable organization) (1994 to present); Trustee,
Board Member since                Thomas Jefferson Foundation (charitable organization) (1994
1995                              to present); Trustee, Executive Committee, Philadelphia
                                  Chamber of Commerce (2001 to 2007); Trustee, Pro Publica
                                  (2007-present) (charitable organization); formerly: Executive
                                  Vice President, The Glenmede Trust Company (investment trust
                                  and wealth management) (1983 to 2004); Board Member, Investor
                                  Education (charitable organization) (2004-2005); Director,
                                  Viasys Health Care(3) (January 2007-June 2007)
--------------------------------------------------------------------------------------------------------------------
William N. Searcy, Jr.            Private investor since October 2003; Trustee of 8 open-end            133
(1946)                            mutual funds managed by Sun Capital Advisers, Inc. (since
Board Member since                October 1998); formerly: Pension & Savings Trust Officer,
1993                              Sprint Corporation(3) (telecommunications) (November
                                  1989-September 2003)
--------------------------------------------------------------------------------------------------------------------
Jean Gleason Stromberg            Retired; formerly: Consultant (1997-2001); Director, US               133
(1943)                            Government Accountability Office (1996-1997); Partner,
Board Member since                Fulbright & Jaworski, L.L.P. (law firm) (1978-1996);
1997                              Directorships: The William and Flora Hewlett Foundation;
                                  Service Source, Inc.; former Directorships: Mutual Fund
                                  Directors Forum (2002-2004), American Bar Retirement
                                  Association (funding vehicle for retirement plans) (1987-1990
                                  and 1994-1996)
--------------------------------------------------------------------------------------------------------------------
Robert H. Wadsworth (1940)        President, Robert H. Wadsworth & Associates, Inc. (consulting
Board Member since 1999           firm) (1983 to present); Director, The Phoenix Boys Choir             136
                                  Association
--------------------------------------------------------------------------------------------------------------------

Interested Board Member

--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth, Position                                                                   Number of Funds
 with the Trusts and Length of    Business Experience and                                        in DWS Fund
 Time Served(1)                   Directorships During the Past 5 Years                          Complex Overseen
--------------------------------------------------------------------------------------------------------------------
 Axel Schwarzer(4)                Managing Director(5), Deutsche Asset Management; Head of              133
 (1958)                           Deutsche Asset Management Americas; CEO of DWS Investments;
 Board Member since               formerly: board member of DWS Investments, Germany
 2006                             (1999-2005); Head of Sales and Product Management for the
                                  Retail and Private Banking Division of Deutsche Bank in
                                  Germany (1997-1999); various strategic and operational
                                  positions for Deutsche Bank Germany Retail and Private
                                  Banking Division in the field of investment funds, tax driven
                                  instruments and asset management for corporates (1989-1996)
--------------------------------------------------------------------------------------------------------------------

Officers(6)

--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth, Position
 with the Trusts and Length of    Business Experience and
 Time Served(7)                   Directorships During the Past 5 Years
--------------------------------------------------------------------------------------------------------------------
 Michael G. Clark(8) (1965)       Managing Director(5), Deutsche Asset Management (2006-present); President of
 President, 2006-present          DWS family of funds; Director, ICI Mutual Insurance Company (since
                                  October 2007); formerly: Director of Fund Board Relations (2004-2006) and
                                  Director of Product Development (2000-2004), Merrill Lynch Investment Managers;
                                  Senior Vice President Operations, Merrill Lynch Asset Management (1999-2000)
--------------------------------------------------------------------------------------------------------------------
 John Millette(9) (1962)          Director(5), Deutsche Asset Management
 Vice President and Secretary,
 1999-present
--------------------------------------------------------------------------------------------------------------------
 Paul H. Schubert(8) (1963)       Managing Director(5), Deutsche Asset Management (since July 2004); formerly:
 Chief Financial Officer,         Executive Director, Head of Mutual Fund Services and Treasurer for UBS Family
 2004-present                     of Funds (1998-2004); Vice President and Director of Mutual Fund Finance at UBS
 Treasurer, 2005-present          Global Asset Management (1994-1998)
--------------------------------------------------------------------------------------------------------------------
 Patricia DeFilippis(10) (1963)   Vice President, Deutsche Asset Management (since June 2005); formerly: Counsel,
 Assistant Secretary,             New York Life Investment Management LLC (2003-2005); legal associate, Lord,
 2005-present                     Abbett & Co. LLC (1998-2003)
--------------------------------------------------------------------------------------------------------------------
 Elisa D. Metzger(10)  (1962)     Director(5), Deutsche Asset Management (since September 2005); formerly:
 Assistant Secretary,             Counsel, Morrison and Foerster LLP (1999-2005)
 2005-present
--------------------------------------------------------------------------------------------------------------------
 Caroline Pearson(9) (1962)       Managing Director(5), Deutsche Asset Management
 Assistant Secretary,
 1997-present
--------------------------------------------------------------------------------------------------------------------
 Paul Antosca(9)                  Director(5), Deutsche Asset Management (since 2006); formerly: Vice President,
 (1957)                           The Manufacturers Life Insurance Company (U.S.A.) (1990-2006)
 Assistant Treasurer,
 2007-present
--------------------------------------------------------------------------------------------------------------------
 Jack Clark (9)                   Director(5), Deutsche Asset Management (since 2007); formerly: Vice President,
 (1967)                           State Street Corporation (2002-2007)
 Assistant Treasurer,
 2007-present
--------------------------------------------------------------------------------------------------------------------
 Kathleen Sullivan D'Eramo(9)     Director(5), Deutsche Asset Management
 (1957)
 Assistant Treasurer,
 2003-present
--------------------------------------------------------------------------------------------------------------------
 Diane Kenneally(9)               Director(5), Deutsche Asset Management
 (1966)
 Assistant Treasurer,
 2007-present
--------------------------------------------------------------------------------------------------------------------
 Jason Vazquez(10) (1972)         Vice President, Deutsche Asset Management (since 2006); formerly: AML
 Anti-Money Laundering            Operations Manager for Bear Stearns (2004-2006); Supervising Compliance
 Compliance Officer,              Principal and Operations Manager for AXA Financial (1999-2004)
 2007-present
--------------------------------------------------------------------------------------------------------------------
 Robert Kloby(10) (1962)          Managing Director(5), Deutsche Asset Management (2004-present); formerly: Chief
 Chief Compliance Officer,        Compliance Officer/Chief Risk Officer, Robeco USA (2000-2004); Vice President,
 2006-present                     The Prudential Insurance Company of America (1988-2000); E.F. Hutton and
                                  Company (1984-1988)
--------------------------------------------------------------------------------------------------------------------
 J. Christopher Jackson(10)       Director(5), Deutsche Asset Management (2006-present); formerly: Director,
 (1951)                           Senior Vice President, General Counsel, and Assistant Secretary, Hansberger
 Chief Legal Officer,             Global Investors, Inc. (1996-2006); Director, National Society of Compliance
 2006-present                     Professionals (2002-2005) (2006-2009)
--------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)      The length of time served represents the year in which the Board Member
         joined the board of one or more DWS funds currently overseen by the
         Board.

(2)      Represents the year in which Ms. Driscoll was first appointed
         Chairperson of certain DWS funds.

(3)      A publicly held company with securities registered pursuant to Section
         12 of the Securities Exchange Act of 1934.

(4)      The mailing address of Axel Schwarzer is c/o Deutsche Investment
         Management Americas Inc., 345 Park Avenue, New York, New York 10154.
         Mr. Schwarzer is an interested Board Member by virtue of his positions
         with Deutsche Asset Management. As an interested person, Mr. Schwarzer
         receives no compensation from the Funds.

(5)      Executive title, not a board directorship.

(6)      As a result of their respective positions held with the Advisor, these
         individuals are considered "interested persons" of the Advisor within
         the meaning of the 1940 Act. Interested persons receive no compensation
         from the Funds.

(7)      The length of time served represents the year in which the officer was
         first elected in such capacity for one or more DWS funds.

(8)      Address:  345 Park Avenue, New York, New York 10154.

(9)      Address: One Beacon Street, Boston, Massachusetts 02108.

(10)     Address:  280 Park Avenue, New York, New York 10017.

Certain officers hold similar positions for other investment companies for which
DIMA or an affiliate serves as the Advisor.

Officer's Role with Principal Underwriter:  DWS Investments Distributors, Inc.

 Paul H. Schubert:                         Vice President
 Caroline Pearson:                         Secretary

Board Members' Responsibilities. The officers of each Trust manage its
day-to-day operations under the direction of the Board. The primary
responsibility of the Board is to represent the interests of the Funds and to
provide oversight of the management of the Funds.

Board Committees. The Board has established the following standing committees:
Audit Committee, Nominating and Governance Committee, Contract Committee, Equity
Oversight Committee, Fixed-Income and Quant Oversight Committee, Marketing and
Shareholder Services Committee, and Operations Committee. For each committee,
the Board has adopted a written charter setting forth each committee's
responsibilities. Each committee was reconstituted effective April 1, 2008.

Audit Committee: The Audit Committee, which consists entirely of Independent
Board Members, assists the Board in fulfilling its responsibility for oversight
of (1) the integrity of the financial statements, (2) the Funds' accounting and
financial reporting policies and procedures, (3) the Funds' compliance with
legal and regulatory requirements related to accounting and financial reporting
and (4) the qualifications, independence and performance of the independent
registered public accounting firm for the Funds. It also approves and recommends
to the Board the appointment, retention or termination of the independent
registered public accounting firm for the Funds, reviews the scope of audit and
internal controls, considers and reports to the Board on matters relating to the
Funds' accounting and financial reporting practices, and performs such other
tasks as the full Board deems necessary or appropriate. The Audit Committee
receives annual representations from the independent registered public
accounting firm as to its independence. The members of the Audit Committee are
William McClayton (Chair), Kenneth C. Froewiss (Vice Chair), John W. Ballantine,
Henry P. Becton, Jr., Keith R. Fox and William N. Searcy, Jr. During the
calendar year 2007, the Audit Committee of the Funds' Board held nine (9)
meetings.

Nominating and Governance Committee: The Nominating and Governance Committee,
which consists entirely of Independent Board Members, recommends individuals for
membership on the Board, nominates officers, Board and committee chairs, vice
chairs and committee members, and oversees the operations of the Board. The
Nominating and Governance Committee also reviews recommendations by shareholders
for candidates for Board positions. Shareholders may recommend candidates for
Board positions by forwarding their correspondence by US mail or courier service
to Dawn-Marie Driscoll, P.O. Box 100176, Cape Coral, FL 33904. The members of
the Nominating and Governance Committee are Henry P. Becton, Jr. (Chair),
Rebecca W. Rimel (Vice Chair), Paul K. Freeman and William McClayton. During the
calendar year 2007, the Nominating/Corporate Governance Committee of the Funds'
Board performed similar functions and held three (3) meetings.

Contract Committee: The Contract Committee, which consists entirely of
Independent Board Members, reviews at least annually, (a) the Funds' financial
arrangements with DIMA and its affiliates, and (b) the Funds' expense ratios.
The members of the Contract Committee are Robert H. Wadsworth (Chair), Keith R.
Fox (Vice Chair), Henry P. Becton, Jr., Richard J. Herring, William McClayton
and Jean Gleason Stromberg.

Equity Oversight Committee: The Equity Oversight Committee reviews the
investment operations of those funds that primarily invest in equity securities
(except for those funds managed by a quantitative investment team). The members
of the Equity Oversight Committee are John W. Ballantine (Chair), William
McClayton (Vice Chair), Henry P. Becton, Jr., Keith R. Fox, Richard J. Herring
and Rebecca W. Rimel. During the calendar year 2007, the Equity Oversight
Committee of the Funds' Board performed similar functions and held six (6)
meetings.

Fixed-Income and Quant Oversight Committee: The Fixed-Income and Quant Oversight
Committee reviews the investment operations of those funds that primarily invest
in fixed-income securities or are managed by a quantitative investment team. The
members of the Fixed-Income and Quant Oversight Committee are William N. Searcy,
Jr. (Chair), Jean Gleason Stromberg (Vice Chair), Dawn-Marie Driscoll, Paul K.
Freeman, Kenneth C. Froewiss and Robert H. Wadsworth. During the calendar year
2007, the Fixed-Income Oversight Committee of the Funds' Board performed similar
functions and held six (6) meetings.

Marketing and Shareholder Services Committee: The Marketing and Shareholder
Services Committee reviews the Funds' marketing program, sales practices and
literature and shareholder services. The members of the Marketing and
Shareholder Services Committee are Richard J. Herring (Chair), Dawn-Marie
Driscoll (Vice Chair), Paul K. Freeman, Rebecca W. Rimel, Jean Gleason Stromberg
and Robert H. Wadsworth. During the calendar year 2007, the
Marketing/Distribution/Shareholder Service Committee of the Funds' Board
performed similar functions and held seven (7) meetings.

The Operations Committee: The Operations Committee reviews the administrative
operations, legal affairs and general compliance matters of the Funds. The
Operations Committee reviews administrative matters related to the operations of
the Funds, policies and procedures relating to portfolio transactions, custody
arrangements, fidelity bond and insurance arrangements, valuation of Fund assets
and securities and such other tasks as the full Board deems necessary or
appropriate. The Operations Committee also oversees the valuation of the Funds'
securities and other assets and determines, as needed, the fair value of Fund
securities or other assets under certain circumstances as described in the
Funds' Valuation Procedures. The Operations Committee has appointed a Valuation
Sub-Committee, which may make determinations of fair value required when the
Operations Committee is not in session. The members of the Operations Committee
are Paul K. Freeman (Chair), Dawn-Marie Driscoll (Vice Chair), John W.
Ballantine, Kenneth C. Froewiss, Rebecca W. Rimel and William N. Searcy, Jr. The
members of the Valuation Sub-Committee are Kenneth C. Froewiss (Chair), John W.
Ballantine, Dawn-Marie Driscoll (Alternate), Paul K. Freeman (Alternate),
Rebecca W. Rimel (Alternate) and William N. Searcy, Jr. (Alternate). During the
calendar year 2007, the Expenses/Operations Committee and Valuation Committee
performed similar functions and each held nine (9) meetings and six (6)
meetings, respectively.

Ad Hoc Committees. In addition to the standing committees described above, from
time to time the Board may also form ad hoc committees to consider specific
issues.

Remuneration. Each Independent Board Member receives compensation from the Funds
for his or her services, which includes retainer fees and specified amounts for
various committee services and for the Board Chairperson. No additional
compensation is paid to any Independent Board Member for travel time to
meetings, attendance at directors' educational seminars or conferences, service
on industry or association committees, participation as speakers at directors'
conferences or service on special fund industry director task forces or
subcommittees. Independent Board Members do not receive any employee benefits
such as pension or retirement benefits or health insurance from the Funds or any
fund in the DWS fund complex.

Board Members who are officers, directors, employees or stockholders of Deutsche
Asset Management or its affiliates receive no direct compensation from the
Funds, although they are compensated as employees of Deutsche Asset Management,
or its affiliates, and as a result may be deemed to participate in fees paid by
the Funds. The following tables show compensation from the Funds and aggregate
compensation from all of the funds in the DWS fund complex received by each
Independent Board Member during the calendar year 2007. Mr. Schwarzer is an
interested person of the Funds and received no compensation from the Funds or
any fund in the DWS fund complex during the relevant periods.




<TABLE>
<CAPTION>

                                    Aggregate             Aggregate             Aggregate              Total
                                Compensation from     Compensation from     Compensation from       Compensation
                               DWS Strategic High        DWS Managed         DWS Intermediate      from Fund and
                                 Yield Tax-Free        Municipal Bond          Tax/AMT Free           DWS Fund
  Name of Board Member                Fund                  Fund                  Fund               Complex(1)
  --------------------                ----                  ----                  ----               ----------
<S>                                      <C>                   <C>                   <C>                <C>
  John W. Ballantine                     $0                    $0                  $0                 $215,000
  Henry P. Becton, Jr.(2)            $2,201                $9,165              $1,512                 $200,000
  Dawn-Marie Driscoll(2)((3))        $2,766               $11,505              $1,898                 $253,000
  Keith R. Fox((2))                  $2,219                $9,233              $1,523                 $203,000
  Paul K. Freeman(4)                   $0                    $0                    $0                 $265,000
  Kenneth C. Froewiss(2)             $2,186                $9,097              $1,501                 $200,000
  Richard J. Herring(2)              $2,129                $8,867              $1,463                 $195,000
  William McClayton(5)                 $0                    $0                    $0                 $205,000
  Rebecca W. Rimel(2)                $2,074                $8,639              $1,426                 $194,000
  William N. Searcy, Jr.(2)          $2,186                $9,097              $1,501                 $200,000
  Jean Gleason Stromberg((2))        $2,063                $8,595              $1,418                 $189,000
  Robert H. Wadsworth                  $0                    $0                    $0                 $245,250

(1)      The DWS fund complex is composed of 138 funds as of December 31, 2007.

(2)      Aggregate compensation includes amounts paid to the Board Members for
         special meetings of ad hoc committees of the Board in connection with
         the consolidation of the DWS fund boards and various funds, meetings
         for considering fund expense simplification initiatives, and
         consideration of issues specific to the Funds' direct shareholders
         (i.e., those shareholders who did not purchase shares through financial
         intermediaries). Such amounts totaled $1,000 for Mr. Becton, $1,000 for
         Ms. Driscoll, $1,000 for Mr. Fox, $1,000 for Mr. Froewiss, $1,000 for
         Dr. Herring, $5,000 for Ms. Rimel, $1,000 for Mr. Searcy and $1,000 for
         Ms. Stromberg. These meeting fees were borne by the Advisor.

(3)      Includes $50,000 in annual retainer fees received by Ms. Driscoll as
         Chairperson of certain DWS funds.

(4)      Includes $25,000 paid to Dr. Freeman for numerous special meetings of
         an ad hoc committee in connection with board consolidation initiatives
         and $50,000 in annual retainer fees received by Dr. Freeman as
         Chairperson of certain DWS funds.

(5)      Does not include $15,000 to be paid to Mr. McClayton in calendar year
         2008 for numerous special meetings of an ad hoc committee of the former
         Chicago Board in connection with board consolidation initiatives.

Dr. Freeman, prior to his service as Independent Board Member, served as a board
member of certain funds in the Deutsche Bank complex ("DB Funds"). In connection
with his resignation and the resignation of certain other board members of the
DB Funds on July 30, 2002 (the "Effective Date"), which was part of a
restructuring of the boards overseeing the DB Funds, Deutsche Asset Management,
Inc. ("DAMI") agreed to recommend, and, if necessary obtain, directors and
officers ("D&O") liability insurance coverage for the prior board members,
including Dr. Freeman, that is at least as equivalent in scope and amount to the
D&O coverage provided to the prior board members for the six-year period
following the Effective Date. In the event that D&O insurance coverage is not
available in the commercial marketplace on commercially reasonable terms from a
conventional third party insurer, DeAM reserved the right to provide
substantially equivalent protection in the form of an indemnity or financial
guarantee from an affiliate of DeAM. The D&O policy in effect prior to the
Effective Date provided aggregate coverage of $25,000,000, subject to a $250,000
per claim deductible.

Board Member Ownership in the Funds

The following table shows the dollar range of equity securities beneficially
owned by each Board Member in the Funds and DWS fund complex as of June 30,
2008.





                                                                                                       Aggregate Dollar
                                     Dollar Range of       Dollar Range of       Dollar Range of      Range of Ownership
                                        Beneficial            Beneficial            Beneficial           in all Funds
                                     Ownership in DWS      Ownership in DWS      Ownership in DWS     Overseen by Board
                                      Strategic High      Managed Municipal        Intermediate       Member in the DWS
                                      Yield Tax-Free            Bond               Tax/AMT Free             Fund
Board Member                               Fund                  Fund                  Fund               Complex(1)
------------                               ----                  ----                  ----               ----------

Independent Board Member:
-------------------------

John W. Ballantine                         None                  None                  None             Over $100,000
Henry P. Becton, Jr.                    $1-$10,000            $1-$10,000            $1-$10,000          Over $100,000
Dawn-Marie Driscoll                   $10,001-$50,000       $10,001-$50,000       $10,001-$50,000       Over $100,000
Keith R. Fox                               None                  None                  None             Over $100,000
Paul K. Freeman                            None                  None                  None             Over $100,000
Kenneth C. Froewiss                        None                  None                  None             Over $100,000
Richard J. Herring                     Over $100,000             None                  None             Over $100,000
William McClayton                          None                  None                  None             Over $100,000
Rebecca W. Rimel                           None                  None                  None             Over $100,000
William N. Searcy, Jr.                     None                  None                  None             Over $100,000
Jean Gleason Stromberg                $10,001-$50,000       $10,001-$50,000            None             Over $100,000
Robert H. Wadsworth                        None                  None                  None             Over $100,000

Interested Board Member:
------------------------

Axel Schwarzer                             None                  None                  None             Over $100,000




(1)      Securities beneficially owned as defined under the 1934 Act include
         direct and/or indirect ownership of securities where the Board Member's
         economic interest is tied to the securities, employment ownership and
         securities when the Board Member can exert voting power, and when the
         Board Member has authority to sell the securities. The dollar ranges
         are: None, $1-$10,000, $10,001-$50,000, $50,001-$100,000 and over
         $100,000.


Ownership in Securities of the Advisor and Related Companies


As reported to the Funds, the information in the following table reflects
ownership by the Independent Board Members and their immediate family members of
certain securities as of December 31, 2007. Immediate family members can be a
spouse, children residing in the same household including step and adoptive
children, and any dependents. The securities represent ownership in the Advisor
or principal underwriter of the Funds and any persons (other than a registered
investment company) directly or indirectly controlling, controlled by, or under
common control with the Advisor or principal underwriter of the Funds (including
Deutsche Bank AG).



                                   Owner and                                        Value of        Percent of Class
Independent                    Relationship to                     Title of     Securities on an    on an Aggregate
Board Member                     Board Member        Company        Class       Aggregate Basis          Basis
------------                     ------------        -------        -----       ---------------          -----


John W. Ballantine                                     None
Henry P. Becton, Jr.                                   None
Dawn-Marie Driscoll                                    None
Keith R. Fox                                           None
Paul K. Freeman                                        None
Kenneth C. Froewiss                                    None
Richard J. Herring                                     None
William McClayton                                      None
Rebecca W. Rimel                                       None
William N. Searcy, Jr.                                 None
Jean Gleason Stromberg                                 None
Robert H. Wadsworth                                    None


Securities Beneficially Owned


As of September 8, 2008, the Board Members and officers of each Trust owned, as
a group, less than 1% of the outstanding shares of each Fund.

To the best of each Fund's knowledge, as of September 8, 2008, no person owned
of record or beneficially 5% or more of any class of the Fund's outstanding
shares, except as noted below.

DWS Strategic High Yield Tax-Free Fund

Name and Address of Investor Ownership                          Shares                      % of Total Shares
--------------------------------------                          ------                      -----------------

CHARLES SCHWAB & CO INC                                      4,297,681.53                   15.02% of Class A
SPECIAL CUSTODY ACCOUNT FOR THE EXCLUSIVE BENEFIT
OF CUSTOMERS
ATTN MUTUAL FUNDS
SAN FRANCISCO CA  94104-4151

MLPF&S FOR THE SOLE BENEFIT OF                               1,615,932.64                   5.65% of Class A
ITS CUSTOMERS
ATTN FUND ADMINISTRATION 9E540
JACKSONVILLE FL  32246-6484

MLPF&S FOR THE SOLE BENEFIT OF                                297,981.62                    15.86% of Class B
ITS CUSTOMERS
ATTN FUND ADMINISTRATION 9E541
JACKSONVILLE FL  32246-6484

CITIGROUP GLOBAL MARKETS INC                                  125,039.92                    6.65% of Class B
XXXXXXXXXX
ATTN PETER BOOTH 7TH FL
NEW YORK NY  10001-2402

MLPF&S FOR THE SOLE BENEFIT OF                               1,565,031.51                   20.31% of Class C
ITS CUSTOMERS
ATTN FUND ADMINISTRATION 9E542
JACKSONVILLE FL  32246-6484

RAYMOND JAMES & ASSOC INC                                     324,262.33              35.72% of Institutional Class
FBO REINHOLD A PREIK TTEE
U/A DTD APR 15 2008
REINHOLD A PREIK LIVING TRUST
AMELIA ISLAND FL  32034-6443

PERSHING LLC                                                  310,313.49              34.18% of Institutional Class
JERSEY CITY NJ  07303-2052

SEI PRIVATE TR CO                                              81,900.08              9.02% of Institutional Class
FBO DAY PITNEY LLP ID 801
ONE FREEDOM VALLEY DRIVE
OAKS PA  19456

LPL FINANCIAL                                                  54,037.46              5.95% of Institutional Class
FBO CUSTOMER ACCOUNTS
ATTN MUTUAL FUND OPERATIONS
SAN DIEGO CA  92150-9046

CHARLES SCHWAB & CO INC                                      3,980,534.59                   6.36% of Class S
REINVEST ACCOUNT
ATTN MUTUAL FUND DEPT
SAN FRANCISCO CA  94104-4151


DWS Managed Municipal Bond Fund

Name and Address of Investor Ownership                          Shares                      % of Total Shares
--------------------------------------                          ------                      -----------------

MLPF&S FOR THE SOLE BENEFIT OF                                105,266.74                    8.89% of Class B
ITS CUSTOMERS
ATTN FUND ADMINISTRATION (97D81)
JACKSONVILLE FL  32246-6484

MLPF&S FOR THE SOLE BENEFIT OF                                420,355.03                    10.22% of Class C
ITS CUSTOMERS
ATTN FUND ADMINISTRATION (97D83)
JACKSONVILLE FL  32246-6484

CITIGROUP GLOBAL MARKETS INC                                  305,302.55                    7.42% of Class C
XXXXXXXXXX
ATTN PETER BOOTH 7TH FL
NEW YORK NY  10001-2402

MORGAN STANLEY & CO.                                          208,355.62                    5.07% of Class C
HARBORSIDE FINANCIAL CENTER
PLAZA II 3RD FLOOR
JERSEY CITY NJ  07311

LPL FINANCIAL                                                 271,411.81              44.03% of Institutional Class
FBO CUSTOMER ACCOUNTS
ATTN MUTUAL FUND OPERATIONS
SAN DIEGO CA  92150-9046

KNOTFLOAT & CO                                                 69,549.00              11.28% of Institutional Class
BOSTON MA  02206-5496

PERSHING LLC                                                   32,675.83               5.3% of Institutional Class
JERSEY CITY NJ  07303-2052


DWS Intermediate Tax/AMT Free Fund

Name and Address of Investor Ownership                          Shares                      % of Total Shares
--------------------------------------                          ------                      -----------------

MLPF&S FOR THE SOLE BENEFIT OF                               5,426,521.66                   46.25% of Class A
ITS CUSTOMERS
ATTN FUND ADMINISTRATION 97FL6
JACKSONVILLE FL  32246-6484

MORGAN STANLEY & CO.                                         1,132,657.65                   9.65% of Class A
HARBORSIDE FINANCIAL CENTER
PLAZA II 3RD FLOOR
JERSEY CITY NJ  07311

CHARLES SCHWAB & CO INC                                       668,710.91                     5.7% of Class A
SPECIAL CUSTODY ACCOUNT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMERS
ATTN MUTUAL FUNDS
SAN FRANCISCO CA  94104-4151

MLPF&S FOR THE SOLE BENEFIT OF                                 73,050.92                    27.36% of Class B
ITS CUSTOMERS
ATTN FUND ADMINISTRATION 97FL7
JACKSONVILLE FL  32246-6484

CITIGROUP GLOBAL MARKETS INC                                   25,365.66                     9.5% of Class B
XXXXXXXXXX
ATTN PETER BOOTH 7TH FL
NEW YORK NY  10001-2402

MORGAN STANLEY & CO.                                           16,175.92                    6.06% of Class B
HARBORSIDE FINANCIAL CENTER
PLAZA II 3RD FLOOR
JERSEY CITY NJ  07311

MLPF&S FOR THE SOLE BENEFIT OF                                486,699.88                    47.56% of Class C
ITS CUSTOMERS
ATTN FUND ADMINISTRATION #97JS9
JACKSONVILLE FL  32246-6484

MORGAN STANLEY & CO.                                           71,345.07                    6.97% of Class C
HARBORSIDE FINANCIAL CENTER
PLAZA II 3RD FLOOR
JERSEY CITY NJ  07311

NATIONAL FINANCIAL SERVICES CORP                             6,378,319.26             47.45% of Institutional Class
FOR THE EXCLUSIVE BENEFIT OF OUR
NEW YORK NY  10281-1003

CHARLES SCHWAB & CO INC                                      2,623,833.07             19.52% of Institutional Class
SPECIAL CUSTODY ACCOUNT
MUTUAL FUNDS DEPARTMENT
SAN FRANCISCO CA  94104-4151

CHARLES SCHWAB & CO INC                                      4,622,922.88                   12.74% of Class S
ATTN MUTUAL FUNDS DEPT
SAN FRANCISCO CA  94104-4151
</TABLE>




Agreement to Indemnify Independent Trustees for Certain Expenses


In connection with litigation or regulatory action related to possible improper
market timing or other improper trading activity or possible improper marketing
and sales activity in certain DWS Funds (the "Affected Funds"), DIMA has agreed
to indemnify and hold harmless the Affected Funds ("Fund Indemnification
Agreement") against any and all loss, damage, liability and expense, arising
from market timing or marketing and sales matters alleged in any enforcement
actions brought by governmental authorities involving or potentially affecting
the Affected Funds or DIMA ("Enforcement Actions") or that are the basis for
private actions brought by shareholders of the Affected Funds against the
Affected Funds, their directors and officers, DIMA and/or certain other parties
("Private Litigation"), or any proceedings or actions that may be threatened or
commenced in the future by any person (including governmental authorities),
arising from or similar to the matters alleged in the Enforcement Actions or
Private Litigation. In recognition of its undertaking to indemnify the Affected
Funds and in light of the rebuttable presumption generally afforded to
independent directors/trustees of investment companies that they have not
engaged in disabling conduct, DIMA has also agreed, subject to applicable law
and regulation, to indemnify certain (or, with respect to certain Affected
Funds, all) of the Independent Trustees of the Affected Funds, against certain
liabilities the Independent Trustees may incur from the matters alleged in any
Enforcement Actions or Private Litigation or arising from or similar to the
matters alleged in the Enforcement Actions or Private Litigation, and advance
expenses that may be incurred by the Independent Trustees in connection with any
Enforcement Actions or Private Litigation. DIMA is not, however, required to
provide indemnification and advancement of expenses: (1) with respect to any
proceeding or action which the Affected Funds' Board determines that the
Independent Trustees ultimately would not be entitled to indemnification or (2)
for any liability of the Independent Trustees to the Funds or their shareholders
to which the Independent Trustee would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the
Independent Trustee's duties as a director or trustee of the Affected Funds as
determined in a final adjudication in such action or proceeding. The estimated
amount of any expenses that may be advanced to the Independent Trustees or
indemnity that may be payable under the indemnity agreements is currently
unknown. These agreements by DIMA will survive the termination of the investment
management agreements between DIMA and the Affected Funds.

                               TRUST ORGANIZATION


Organizational Description


DWS Municipal Trust is a Massachusetts business trust established under a
Declaration of Trust dated September 24, 1976 as amended and restated as of June
2, 2008, as amended. The Trustees of DWS Municipal Trust have established and
designated two series of the Trust: DWS Strategic High Yield Tax-Free Fund and
DWS Managed Municipal Bond Fund, both open ended, diversified investment
companies. Effective October 1, 2002, Scudder Managed Municipal Bonds changed
its name to Scudder Managed Municipal Bond Fund. On February 6, 2006, the Trust
and its series: Scudder High Yield Tax-Free Fund and Scudder Managed Municipal
Bond Fund were renamed DWS Municipal Trust, DWS High Yield Tax Free Fund and DWS
Managed Municipal Bond Fund, respectively. On or about April 1, 2008, DWS High
Yield Tax-Free Fund was renamed DWS Strategic High Yield Tax-Free Fund. The
Trust's authorized capital consists of an unlimited number of shares of
beneficial interest, par value $0.01 per share. DWS Intermediate Tax/AMT Free
Fund is a series of DWS Tax Free Trust, a Massachusetts business trust
established under a Declaration of Trust dated December 28, 1982, as amended and
restated as of June 2, 2008. The name and investment objectives of the Fund were
changed effective November 1, 1990. Effective October 1, 2003, Scudder Medium
Term Tax-Free Fund changed its name to Scudder Intermediate Tax/AMT Free Fund.
On February 6, 2006, the Trust and its series: Scudder Intermediate Tax/AMT Free
Fund were renamed DWS Tax Free Trust and DWS Intermediate Tax/AMT Free Fund,
respectively. The Fund's authorized capital consists of an unlimited number of
shares of beneficial interest, $.01 par value.


Currently, Class A, Class B, Class C, Class S and Institutional Class shares are
offered.


Each Trust is a Massachusetts business trust organized under the laws of
Massachusetts and is governed by an Amended and Restated Declaration of Trust
that was approved by shareholders in the second quarter of 2006, as may be
further amended from time to time (each a "Declaration of Trust"). All shares
issued and outstanding are fully paid and non-assessable (except as set forth
below), transferable, have no pre-emptive or conversion rights (except as may be
determined by the Board of Trustees) and are redeemable as described in the SAI
and a Fund's prospectus. Each share has equal rights with each other share of
the same class of the Fund as to voting, dividends, exchanges, conversion
features and liquidation. Shareholders are entitled to one vote for each full
share held and fractional votes for fractional shares held.

A Fund generally is not required to hold meetings of its shareholders. Under the
Declaration of Trust of DWS Municipal Trust, however, shareholder meetings will
be held in connection with the following matters to the extent and as provided
in a Declaration of Trust and as required by applicable law: (a) the election or
removal of trustees if a meeting is called for such purpose; (b) the termination
of a Trust or a Fund; (c) an amendment of a Declaration of Trust; and (d) such
additional matters as may be required by law, a Declaration of Trust, the
By-laws of a Fund, or any registration of a Fund with the SEC, or as the
Trustees may determine to be necessary or desirable. Shareholders also vote upon
changes in fundamental policies or restrictions.


Under the Declaration of Trust of DWS Tax Free Trust, however, shareholder
meetings will be held in connection with the following matters to the extent and
as provided in the Declaration of Trust and as required by applicable law: (a)
the election or removal of trustees if a meeting is called for such purpose; (b)
the termination of the Trust or a Fund; (c) an amendment of the Declaration of
Trust; (d) to the same extent as stockholders of Massachusetts business
corporation as to whether or not a court action, proceeding or claims should or
should not be brought or maintained derivatively or as a class action on behalf
of the Trust or the Shareholders; (e) a merger, consolidation or sale of assets;
(f) the adoption of an investment advisory or management contract; (g) the
incorporation of the Trust or any series; (h) any plan adopted pursuant to Rule
12b-1 (or any successor rule) under the 1940 Act; and (i) such additional
matters as may be required by law, the Declaration of Trust, the By-laws of a
Fund, or any registration of a Fund with the SEC, or as the Trustees may
determine to be necessary or desirable. Shareholders also vote upon changes in
fundamental policies or restrictions.


Each Declaration of Trust provides that shareholder meeting quorum requirements
shall be established in a Trust's By-laws. The By-laws currently in effect
provide that the presence in person or by proxy of the holders of thirty percent
of the shares entitled to vote at a meeting (or of an individual series or class
if required to vote separately) shall constitute a quorum for the transaction of
business at meetings of shareholders of the Trust.

On any matter submitted to a vote of shareholders, all shares of a Trust
entitled to vote shall, except as otherwise provided in a Trust's By-Laws, be
voted in the aggregate as a single class without regard to series or classes of
shares, except (a) when required by applicable law or when the Trustees shall
have determined that the matter affects one or more series or classes of shares
materially differently, shares shall be voted by individual series or class; and
(b) when the Trustees have determined that the matter affects only the interests
of one or more series or classes, only shareholders of such series or classes
shall be entitled to vote thereon.

Each Declaration of Trust provides that the Board of Trustees may, in its
discretion, establish minimum investment amounts for shareholder accounts,
impose fees on accounts that do not exceed a minimum investment amount and
involuntarily redeem shares in any such account in payment of such fees. The
Board of Trustees, in its sole discretion, also may cause the Trust to redeem
all of the shares of the Trust or one or more series or classes held by any
shareholder for any reason, to the extent permissible by the 1940 Act, including
(a) if the shareholder owns shares having an aggregate net asset value of less
than a specified minimum amount, (b) if a particular shareholder's ownership of
shares would disqualify a series from being a regulated investment company, (c)
upon a shareholder's failure to provide sufficient identification to permit a
Trust to verify the shareholder's identity, (d) upon a shareholder's failure to
pay for shares or meet or maintain the qualifications for ownership of a
particular class or series of shares, (e) if the Board of Trustees determines
(or pursuant to policies established by the Board it is determined) that share
ownership by a particular shareholder is not in the best interests of remaining
shareholders, (f) when a Fund is requested or compelled to do so by governmental
authority or applicable law and (g) upon a shareholder's failure to comply with
a request for information with respect to the direct or indirect ownership of
shares of a Trust. A Declaration of Trust also authorizes the Board of Trustees
to terminate a Fund or any class without shareholder approval, and the Trust may
suspend the right of shareholders to require a Trust to redeem shares to the
extent permissible under the 1940 Act.

Upon the termination of a Trust or any series, after paying or adequately
providing for the payment of all liabilities which may include the establishment
of a liquidating trust or similar vehicle, and upon receipt of such releases,
indemnities and refunding agreements as they deem necessary for their
protection, the Trustees may distribute the remaining Trust property or property
of the series, in cash or in kind or partly each, to the shareholders of a Trust
or the series involved, ratably according to the number of shares of a Trust or
such series held by the several shareholders of a Trust or such series on the
date of termination, except to the extent otherwise required or permitted by the
preferences and special or relative rights and privileges of any classes of
shares of a series involved, provided that any distribution to the shareholders
of a particular class of shares shall be made to such shareholders pro rata in
proportion to the number of shares of such class held by each of them. The
composition of any such distribution (e.g., cash, securities or other assets)
shall be determined by a Trust in its sole discretion, and may be different
among shareholders (including differences among shareholders in the same series
or class).

Under Massachusetts law, shareholders of a Massachusetts business trust could,
under certain circumstances, be held personally liable for obligations of a
Fund. A Declaration of Trust, however, disclaims shareholder liability for acts
or obligations of the Fund and requires that notice of such disclaimer be given
in each agreement, obligation, or instrument entered into or executed by a Fund
or a Fund's trustees. Moreover, a Declaration of Trust provides for
indemnification out of Fund property for all losses and expenses of any
shareholder held personally liable for the obligations of a Fund and a Fund may
be covered by insurance which the Trustees consider adequate to cover
foreseeable tort claims. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is considered by the Advisor remote and
not material, since it is limited to circumstances in which a disclaimer is
inoperative and the Fund itself is unable to meet its obligations.


                             PROXY VOTING GUIDELINES

Each Fund has delegated proxy voting responsibilities to its investment advisor,
subject to each Board's general oversight. Each Fund has delegated proxy voting
to the Advisor with the direction that proxies should be voted consistent with
each Fund's best economic interests. The Advisor has adopted its own Proxy
Voting Policies and Procedures ("Policies"), and Proxy Voting Guidelines
("Guidelines") for this purpose. The Policies address, among other things,
conflicts of interest that may arise between the interests of each Fund, and the
interests of the Advisor and its affiliates, including each Fund's principal
underwriter. The Guidelines set forth the Advisor's general position on various
proposals, such as:

o        Shareholder Rights -- The Advisor generally votes against proposals
         that restrict shareholder rights.

o        Corporate Governance -- The Advisor generally votes for confidential
         and cumulative voting and against supermajority voting requirements for
         charter and bylaw amendments. The Advisor generally votes for proposals
         to restrict a chief executive officer from serving on more than three
         outside board of directors. The Advisor generally votes against
         proposals that require a company to appoint a Chairman who is an
         independent director.

o        Anti-Takeover Matters -- The Advisor generally votes for proposals that
         require shareholder ratification of poison pills or that request boards
         to redeem poison pills, and votes against the adoption of poison pills
         if they are submitted for shareholder ratification. The Advisor
         generally votes for fair price proposals.

o        Compensation Matters -- The Advisor generally votes for executive cash
         compensation proposals, unless they are unreasonably excessive. The
         Advisor generally votes against stock option plans that do not meet the
         Advisor's criteria.

o        Routine Matters -- The Advisor generally votes for the ratification of
         auditors, procedural matters related to the annual meeting and changes
         in company name, and against bundled proposals and adjournment.


The general provisions described above do not apply to investment companies. The
Advisor generally votes proxies solicited by investment companies in accordance
with the recommendations of an independent third party, except for proxies
solicited by or with respect to investment companies for which the Advisor or an
affiliate serves as investment advisor or principal underwriter ("affiliated
investment companies"). The Advisor votes affiliated investment company proxies
in the same proportion as the vote of the investment company's other
shareholders (sometimes called "mirror" or "echo" voting). Master fund proxies
solicited from feeder funds are voted in accordance with applicable requirements
of the 1940 Act.


Although the Guidelines set forth the Advisor's general voting positions on
various proposals, the Advisor may, consistent with each Fund's best interests,
determine under some circumstances to vote contrary to those positions.

The Guidelines on a particular issue may or may not reflect the view of
individual members of each Board or of a majority of each Board. In addition,
the Guidelines may reflect a voting position that differs from the actual
practices of the public companies within the Deutsche Bank organization or of
the investment companies for which the Advisor or an affiliate serves as
investment advisor or sponsor.

The Advisor may consider the views of a portfolio company's management in
deciding how to vote a proxy or in establishing general voting positions for the
Guidelines, but management's views are not determinative.

As mentioned above, the Policies describe the way in which the Advisor resolves
conflicts of interest. To resolve conflicts, the advisor, under normal
circumstances, votes proxies in accordance with its Guidelines. If the Advisor
departs from the Guidelines with respect to a particular proxy or if the
Guidelines do not specifically address a certain proxy proposal, a proxy voting
committee established by the advisor will vote the proxy. Before voting any such
proxy, however, the Advisor's conflicts review committee will conduct an
investigation to determine whether any potential conflicts of interest exist in
connection with the particular proxy proposal. If the conflicts review committee
determines that the Advisor has a material conflict of interest, or certain
individuals on the proxy voting committee should be recused from participating
in a particular proxy vote, it will inform the proxy voting committee. If
notified that the Advisor has a material conflict, or fewer than three voting
members are eligible to participate in the proxy vote, typically the Advisor
will engage an independent third party to vote the proxy or follow the proxy
voting recommendations of an independent third party.

Under certain circumstances, the Advisor may not be able to vote proxies or the
Advisor may find that the expected economic costs from voting outweigh the
benefits associated with voting. For example, the Advisor may not vote proxies
on certain foreign securities due to local restrictions or customs. The Advisor
generally does not vote proxies on securities subject to share blocking
restrictions.


You may obtain information about how a fund voted proxies related to its
portfolio securities during the 12-month period ended June 30 by visiting the
Securities and Exchange Commission's Web site at www.sec.gov or by visiting our
Web site at: www.dws-investments.com (click on "proxy voting" at the bottom of
the page).


                              FINANCIAL STATEMENTS


The financial statements, including the investment portfolio, of DWS Strategic
High Yield Tax-Free Fund, DWS Managed Municipal Bond Fund and DWS Intermediate
Tax/AMT Free Fund, together with the Report of Independent Registered Public
Accounting Firm, Financial Highlights and notes to financial statements in the
Annual Report to the Shareholders of each Fund, each dated May 31, 2008, are
incorporated herein by reference and are hereby deemed to be a part of this
combined SAI.


                             ADDITIONAL INFORMATION


The CUSIP number of DWS Strategic High Yield Tax-Free Fund, Class S is
23337W501.


The CUSIP number of DWS Managed Municipal Bond Fund, Class S is 23337W865.

The CUSIP number of DWS Intermediate Tax/AMT Free Fund, Class S is 23337X509.

Each Fund has a fiscal year end of May 31.


This SAI contains the information of DWS Strategic High Yield Tax-Free Fund, DWS
Managed Municipal Bond Fund and DWS Intermediate Tax/AMT Free Fund. Each Fund,
through its combined prospectus, offers only its own share classes, yet it is
possible that one Fund might become liable for a misstatement regarding the
other Fund. The Trustees of each Fund have considered this, and have approved
the use of this SAI.

The Funds' prospectus and this SAI omit certain information contained in the
Registration Statement which the Funds have filed with the SEC under the
Securities Act of 1933 and reference is hereby made to the Registration
Statement for further information with respect to each Fund and the securities
offered hereby. This Registration Statement and its amendments are available for
inspection by the public at the SEC in Washington, D.C.



                             RATINGS OF INVESTMENTS

BOND AND COMMERCIAL PAPER RATINGS

Set forth below are descriptions of ratings which represent opinions as to the
quality of the securities. It should be emphasized, however, that ratings are
relative and subjective and are not absolute standards of quality.

MOODY'S INVESTORS SERVICE, INC.'S - CORPORATE BOND RATINGS

Aaa: Bonds which are rated Aaa are judged to be of the highest quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt-edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.

Aa: Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuations of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risk appear somewhat larger than in Aaa securities.

A: Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper -medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.

Baa: Bonds which are rated Baa are considered as medium grade obligations,
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present, but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

Ba: Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safe-guarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.

B: Bonds which are rated B are considered speculative and generally lack
characteristics of the desirable investment. Assurance of interest and principal
payments or of maintenance of other terms of the contract over any long period
of time may be small.

Caa: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.

Ca: Bonds which are rated Ca represent obligations which are highly speculative.
Such issues are often in default or have other marked shortcomings.

C: Bonds which are rated C are the lowest rated class of bonds, typically are in
default and can be regarded as having extremely poor prospects of ever attaining
any real investment standing.

Note: Moody's appends numerical modifiers 1, 2 and 3 to each generic rating
classification from Aa through Caa in its corporate bond rating system. The
modifier 1 indicates that the issue ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.

MOODY'S INVESTORS SERVICE, INC.'S -- SHORT-TERM RATINGS

Moody's short-term debt ratings are opinions of the ability of issuers to honor
short-term financial obligations. Ratings may be assigned to issuers, short-term
programs or to individual short-term debt instruments. Such obligations
generally have an original maturity not exceeding thirteen months, unless
explicitly noted.

Issuers rated Prime-1 or P-1 (or supporting institutions) have a superior
ability for repayment of short-term debt obligations. Prime-1 or P-1 repayment
ability will often be evidenced by many of the following characteristics:

Leading market positions in well established industries.

High rates of return on funds employed.

Conservative capitalization structure with moderate reliance on debt and ample
asset protection.

Broad margins in earnings coverage of fixed financial charges and high internal
cash generation.

Well established access to a range of financial markets and assured sources of
alternate liquidity.

Issuers rated Prime-2 or P-2 (or supporting institutions) have a strong ability
for repayment of short term debt obligations. This will normally be evidenced by
many of the characteristics cited above but to a lesser degree. Earnings trends
and coverage ratios, while sound, may be more subject to variation.
Capitalization characteristics, while still appropriate, may be more affected by
external conditions. Ample alternate liquidity is maintained.

MOODY'S INVESTORS SERVICE, INC.'S -- MUNICIPAL SHORT-TERM RATINGS

MIG. Moody's short-term debt ratings are opinions of the ability of issuers to
honor short-term financial obligations. Ratings may be assigned to issuers,
short-term programs or to individual short-term debt instruments. Such
obligations generally have an original maturity not exceeding thirteen months,
unless explicitly noted.

Moody's: The highest ratings for state and municipal short-term obligations are
"MIG 1," "MIG 2," and "MIG 3" (or "VMIG 1," "VMIG 2" and "VMIG 3" in the case of
an issue having a variable rate demand feature). Notes rated "MIG 1" or "VMIG 1"
are judged to be of the "best quality". Notes rated "MIG 2" or "VMIG 2" are of
"high quality," with margins or protection "ample although not as large as in
the preceding group". Notes rated "MIG 3" or "VMIG 3" are of "favorable
quality," with all security elements accounted for but lacking the strength of
the preceding grades.

STANDARD & POOR'S RATINGS SERVICES -- CORPORATE BOND RATINGS

INVESTMENT GRADE

AAA: Debt rated AAA has the highest rating assigned by S&P's to a debt
obligation. Capacity to pay interest and repay principal is extremely strong.

AA: Debt rated AA has a very strong capacity to pay interest and repay principal
and differs from the higher rated issues only in small degree.

A: Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than bonds in higher rated categories.

BBB: Debt rated BBB has an adequate capacity to pay interest and repay
principal. Whereas it normally exhibits adequate protection parameters, adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity to pay interest and repay principal for debt in this category
than in higher rated categories.

SPECULATIVE GRADE

Debt rated BB, B, CCC, CC, and C has significant speculative characteristics
with respect to capacity to pay interest and repay principal. BB indicates the
least degree of speculation and C the highest. While such debt will likely have
some quality and protective characteristics, these may be outweighed by large
uncertainties or major exposures to adverse conditions.

BB: Debt rated BB has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments.

The BB rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BBB- rating.

B: Debt rated B has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial, or economic conditions will likely impair capacity or willingness to
pay interest and repay principal.

The B rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BB or BB- rating.

CCC: Debt rated CCC has a current vulnerability to default, and is dependent
upon favorable business, financial, and economic conditions to meet timely
payment of interest and repayment of principal. In the event of adverse
business, financial, or economic conditions, it is not likely to have the
capacity to pay interest and repay principal.

The CCC rating category is also used for debt subordinated to senior debt that
is assigned an actual or implied B or B- rating.

CC: Debt rated CC has a current high vulnerability to default, and is dependent
upon favorable business, financial, and economic conditions to meet timely
payment of interest and repayment of principal.

The rating CC is also applied to debt subordinated to senior debt which is
assigned an actual or implied CCC debt rating.

C: The rating C is typically applied to debt subordinated to senior debt which
is assigned an actual or implied CCC- debt rating. The C rating may be used to
cover a situation where a bankruptcy petition has been filed, but debt service
payments are continued.

C1: The Rating C1 is reserved for income bonds on which no interest is being
paid.

D: Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes that
such payments will be made during such grace period. The D rating also will be
used upon the filing of a bankruptcy petition if debt service payments are
jeopardized.

Plus (+) or Minus (-): The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.

R: Debt rated "R" is under regulatory supervision owing to its financial
condition. During the pendency of the regulatory supervision, the regulators may
have the power to favor one class of obligations over others or pay some
obligations and not others.

N.R.: Bonds may lack a S&P's rating because no public rating has been requested,
because there is insufficient information on which to base a rating, or because
S&P's does not rate a particular type of obligation as a matter of policy.

STANDARD & POOR'S RATINGS SERVICES -- SHORT-TERM RATINGS

S&P's commercial paper rating is a current assessment of the likelihood of
timely payment of debt considered short-term in the relevant market.

A-1: This highest category indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong safety
characteristics are denoted with a plus (+) sign designation.

A-2: Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated A-1.

A-3: Issues carrying this designation have adequate capacity for timely payment.
However, adverse economic conditions or changing circumstances are more likely
to lead to a weakened capacity of the issuer to meet its financial commitments.

FITCH INVESTORS SERVICE, INC. -- BOND RATINGS


INVESTMENT GRADE

AAA: Bonds considered to be investment grade and of the highest credit quality.
The obligor has an exceptionally strong ability to pay interest and repay
principal, which is unlikely to be affected by reasonably foreseeable events.

AA: Bonds considered to be investment grade and of very high credit quality. The
obligor's ability to pay interest and repay principal is very strong, although
not quite as strong as bonds rated AAA. Bonds rated in the AAA and AA categories
are not significantly vulnerable to foreseeable events.

A: Bonds considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.

BBB: Bonds considered to be investment grade and of good credit quality. The
obligor's ability to pay interest and repay principal is considered to be
adequate. Adverse changes in economic conditions and circumstances, however, are
more likely to have adverse impact on these bonds, and therefore, impair timely
payment. The likelihood that the ratings of these bonds will fall below
investment grade is higher than for bonds with higher ratings.

SPECULATIVE GRADE

BB: Bonds are considered speculative. The obligor's ability to pay interest and
repay principal may be affected over time by adverse economic changes. However,
business or financial alternatives may be available which could assist the
obligor in satisfying its debt service requirements.

B: Bonds are considered highly speculative. While bonds in this class are
currently meeting debt service requirements, the probability of continued timely
payment of principal and interest reflects the obligor's limited margin of
safety and the need for reasonable business and economic activity throughout the
life of the issue.

CCC: Bonds have certain identifiable characteristics which, if not remedied, may
lead to default. The ability to meet obligations requires an advantageous
business and economic environment.

CC: Bonds are minimally protected. Default in payment of interest and/or
principal seems probable over time.

C: Bonds are in imminent default in payment of interest or principal.

DDD, DD, and D: Bonds are in default of interest and/or principal payments. Such
bonds are extremely speculative and should be valued on the basis of their
ultimate recovery value in liquidation or reorganization of the obligor. DDD
represents the highest potential for recovery on these bonds, and D represents
the lowest potential for recovery.

Plus (+) or Minus (-): The ratings from AA to CC may be appended by the addition
of a plus or minus sign to denote the relative status within the rating
category.

NR: Indicates that Fitch Rating does not publicly rate the specific issue.

FITCH INVESTORS SERVICE, INC. -- SHORT-TERM RATINGS

Fitch's short-term ratings apply to debt obligations that are payable on demand
or have original maturities of generally up to three years, including commercial
paper, certificates of deposit, medium-term notes, and municipal and investment
notes.

F-1+: Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest capacity for timely payment.

F-1: Very Strong Credit Quality. Issues assigned this rating reflect a capacity
for timely payment only slightly less than issues rated F-1+.

F-2: Good Credit Quality. Issues assigned this rating have a satisfactory
capacity for timely payment, but the margin of safety is not as great as the
F-1+ and F-1 categories.

F-3: Fair Credit Quality. Issues assigned this rating have characteristics
suggesting that the capacity for timely payment is adequate; however, near-term
adverse changes could cause these securities to be rated below investment grade.

B: Speculative. Minimal capacity for timely payment of financial commitments,
plus vulnerability to near-term adverse changes in financial and economic
conditions.

C: High default risk. Default is a real possibility. Capacity for meeting
financial commitments is solely reliant upon a sustained, favorable business and
economic environment.

D: Default. Denotes actual or imminent payment default.

<PAGE>



                            PART C. OTHER INFORMATION

<TABLE>
<CAPTION>
   Item 23.       Exhibits
   --------       --------

<S>                 <C>           <C>       <C>
                    (a)           (1)       Amended and Restated Declaration of Trust, dated June 2, 2008, is filed
                                            herein.

                    (b)           (1)       By-laws of the Registrant, dated as of April 1, 2008, is filed herein..

                    (c)                     Inapplicable.

                    (d)           (1)       Amended and Restated Investment Management Agreement between the Registrant
                                            and Deutsche Investment Management Americas Inc., dated June 1, 2006, is
                                            incorporated by reference to Post-Effective Amendment No. 49 to the
                                            Registration Statement.

                    (e)           (1)       Underwriting and Distribution Services Agreement between the Registrant and
                                            Scudder Distributors, Inc., dated April 5, 2002, is incorporated by
                                            reference to Post-Effective Amendment No. 40 to the Registration Statement.

                                  (2)       Underwriting Agreement between the Registrant and Scudder Distributors,
                                            Inc., dated September 30, 2002, is incorporated by reference to
                                            Post-Effective Amendment No. 39 to the Registration Statement.

                    (f)                     Inapplicable.

                    (g)           (1)       Master Custodian Agreement between the Registrant and State Street Bank and Trust
                                            Company, dated March 22, 2007, in incorporated by reference to Post-Effective
                                            Amendment No. 50 to the Registration Statement.

                                  (2)       Subcustodian Agreement between State Street Bank and Morgan Guaranty Trust
                                            Company of New York, dated November 25, 1985, is incorporated by reference
                                            to Post-Effective Amendment No. 27 to the Registration Statement.

                                  (3)       Subcustodian Agreement between Irving Trust Company and State Street Bank,
                                            dated November 30, 1987, is incorporated by reference to Post-Effective
                                            Amendment No. 27 to the Registration Statement.

                                  (4)       Subcustodian Agreement between Chemical Bank and State Street Bank dated May
                                            31, 1988, is incorporated by reference to Post-Effective Amendment No. 27 to
                                            the Registration Statement.

                                       1
<PAGE>

                                  (5)       Subcustodian Agreement between Security Pacific Bank and Trust Company (New
                                            York) and State Street Bank, dated February 18, 1988, is incorporated by
                                            reference to Post-Effective Amendment No. 27 to the Registration Statement.

                                  (6)       Subcustodian Agreement between Bankers Trust Company and State Street Bank,
                                            dated August 15, 1989, filed May 1, 1990 is incorporated by reference to
                                            Post-Effective Amendment No. 27 to the Registration Statement.

                    (h)           (1)       Shareholder Services Agreement between the Registrant and Kemper
                                            Distributors, Inc., dated December 29, 2000, is incorporated by reference to
                                            Post-Effective No. 37 to the Registration Statement.

                                  (2)       Shareholder Services Agreement between the Registrant and Scudder
                                            Distributors, Inc., dated April 5, 2002, is incorporated by reference to
                                            Post-Effective Amendment No. 40 to the Registration Statement.

                                  (3)       Letter of Indemnity to the Scudder Funds dated October 13, 2004 is
                                            incorporated by reference to Post-Effective Amendment No. 48 to the
                                            Registration Statement.

                                  (4)       Indemnification for service as an Independent Trustee of a Liquidating Fund
                                            dated October 13, 2004 is incorporated by reference to Post-Effective
                                            Amendment No. 48 to the Registration Statement.

                                  (5)       Letter of Indemnity to the Independent Trustees dated October 13, 2004 is
                                            incorporated by reference to Post-Effective Amendment No. 48 to the
                                            Registration Statement.

                                  (6)       Amended Administrative Services Agreement between the Registrant and
                                            Deutsche Investment Management Americas Inc., dated June 1, 2006 and Revised
                                            as of October 1, 2007, is filed herein.

                                  (7)       Agency Agreement between the Registrant and DWS Scudder Investments Service
                                            Company, dated April 1, 2007, is incorporated by reference to Post-Effective
                                            Amendment No. 50 to the Registration Statement.

                                  (8)       Form of Mutual Fund Rule 22c-2 Information Sharing Agreement between DWS
                                            Scudder Distributors, Inc. and certain financial intermediaries is filed
                                            herein.

                                  (9)       Form of Expense Limitation Agreement is filed herein.

                    (i)                     Opinion and Consent of Legal Counsel, in incorporated by reference to
                                            Post-Effective Amendment No. 39 to the Registration Statement.

                    (j)                     Consent of Independent Registered Public Accounting Firm, is filed herein.

                    (k)                     Inapplicable.

                    (l)                     Inapplicable.



                                       2
<PAGE>

                    (m)           (1)       Rule 12b-1 Plans for Scudder Medium Term Tax Free Fund's Class A, Class B
                                            and Class C Shares, dated December 29, 2000, is incorporated by reference to
                                            Post-Effective Amendment No. 37 to the Registration Statement.

                    (n)           (1)       Amended and Restated Multi-Distribution System Plan with respect to the
                                            Registrant pursuant to Rule 18f-3, dated August 9, 2004 is incorporated by
                                            reference to Post-Effective Amendment No. 46 to the Registration Statement.

                    (p)           (1)       Code of Ethics of Scudder Tax Free Trust is incorporated by reference to
                                            Post-Effective Amendment No. 34 to the Registration Statement.

                                  (2)       Amended Code of Ethics of Scudder Medium Term Tax Free Fund is incorporated
                                            by reference to Post-Effective Amendment No. 38 to the Registration
                                            Statement.

                                  (3)       Code of Ethics for Deutsche Asset Management -- U.S., dated January 1, 2008,
                                            is filed herein.

                                  (4)       Consolidated Fund Code of Ethics (All Funds) is incorporated by reference to
                                            Post-Effective Amendment No. 48 to the Registration Statement.
</TABLE>

Item 24.          Persons Controlled by or under Common Control with Fund
--------          -------------------------------------------------------

                  None

Item 25.          Indemnification
--------          ---------------

                  Article IV of the  Registrant's  Agreement and  Declaration of
                  Trust (Exhibit (a)(9) hereto,  which is incorporated herein by
                  reference)   provides  in  effect  that  the  Registrant  will
                  indemnify   its   officers   and   trustees    under   certain
                  circumstances.  However,  in accordance with Section 17(h) and
                  17(i) of the Investment Company Act of 1940 and its own terms,
                  said Article of the  Agreement and  Declaration  of Trust does
                  not protect any person against any liability to the Registrant
                  or its  shareholders  to which such Trustee would otherwise be
                  subject by reason of  willful  misfeasance,  bad faith,  gross
                  negligence,  or reckless  disregard of the duties  involved in
                  the conduct of his or her office.

                  The Registrant has purchased  insurance  policies insuring its
                  officers and trustees against certain  liabilities  which such
                  officers   and   trustees  may  incur  while  acting  in  such
                  capacities and providing  reimbursement  to the Registrant for
                  sums  which  it may be  permitted  or  required  to pay to its
                  officers and trustees by way of  indemnification  against such
                  liabilities, subject to certain deductibles.

                  On  April  5,   2002,   Zurich   Scudder   Investments,   Inc.
                  ("Scudder"),  the  investment  adviser,  now known as Deutsche
                  Investment  Management Americas Inc., was acquired by Deutsche
                  Bank  AG,  not   including   certain  U.K.   Operations   (the
                  "Transaction"). In connection with the Trustees' evaluation of
                  the Transaction, Deutsche Bank agreed to indemnify, defend and
                  hold  harmless  Registrant  and  the  trustees  who  were  not
                  "interested  persons" of Scudder,  Deutsche Bank or Registrant
                  (the "Independent Trustees") for and against any liability and
                  claims and  expenses  based upon or arising  from,  whether in
                  whole  or in part,  or  directly  or  indirectly,  any  untrue
                  statement or alleged untrue  statement of a material fact made
                  to the  Independent  Trustees by Deutsche  Bank in  connection
                  with   the   Independent   Trustees'   consideration   of  the
                  Transaction, or any omission or alleged omission of a material
                  fact necessary in order to make  statements  made, in light of
                  the circumstances under which they were made, not misleading.

                  Deutsche  Investment   Management  Americas  Inc.  (hereafter,
                  "DIMA"),  the  investment  advisor,  has  agreed,  subject  to
                  applicable law and regulation,  to indemnify and hold harmless


                                       3
<PAGE>

                  the  Registrant  against  any  loss,  damage,   liability  and
                  expense,  including,  without limitation,  the advancement and
                  payment,  as  incurred,  of  reasonable  fees and  expenses of
                  counsel  (including  counsel to the  Registrant and counsel to
                  the Independent Trustees) and consultants, whether retained by
                  the  Registrant  or  the  Independent   Trustees,   and  other
                  customary  costs and expenses  incurred by the  Registrant  in
                  connection with any litigation or regulatory action related to
                  possible  improper  market  timing or other  improper  trading
                  activity or possible improper  marketing and sales activity in
                  the Registrant ("Private Litigation and Enforcement Actions").
                  In the event that this  indemnification  is unavailable to the
                  Registrant for any reason,  then DIMA has agreed to contribute
                  to the amount paid or payable by the Registrant as a result of
                  any loss,  damage,  liability or expense in such proportion as
                  is  appropriate  to reflect the relative fault of DIMA and the
                  Registrant  with respect to the matters which resulted in such
                  loss,  damage,  liability  or  expense,  as well as any  other
                  relevant equitable considerations;  provided, that if no final
                  determination  is made in such action or  proceeding as to the
                  relative fault of DIMA and the Registrant, then DIMA shall pay
                  the entire amount of such loss, damage, liability or expense.

                  In recognition of its undertaking to indemnify the Registrant,
                  and in light of the rebuttable  presumption generally afforded
                  to non-interested  board members of an investment company that
                  they have not  engaged  in  disabling  conduct,  DIMA has also
                  agreed, subject to applicable law and regulation, to indemnify
                  and hold harmless each of the Independent Trustees against any
                  and all loss, damage, liability and expense, including without
                  limitation  the   advancement   and  payment  as  incurred  of
                  reasonable fees and expenses of counsel and  consultants,  and
                  other customary costs and expenses incurred by the Independent
                  Trustees,  arising  from the  matters  alleged in any  Private
                  Litigation and Enforcement  Actions or matters arising from or
                  similar  in  subject  matter  to the  matters  alleged  in the
                  Private  Litigation  and  Enforcement  Actions  (collectively,
                  "Covered Matters"), including without limitation:

                  1.       all reasonable  legal and other expenses  incurred by
                           the  Independent  Trustees  in  connection  with  the
                           Private Litigation and Enforcement  Actions,  and any
                           actions  that may be  threatened  or commenced in the
                           future  by any  person  (including  any  governmental
                           authority),  arising  from or similar to the  matters
                           alleged in the  Private  Litigation  and  Enforcement
                           Actions,   including  without   limitation   expenses
                           related to the defense  of,  service as a witness in,
                           or monitoring of such proceedings or actions;

                  2.       all  liabilities  and  reasonable   legal  and  other
                           expenses  incurred  by  any  Independent  Trustee  in
                           connection  with  any  judgment  resulting  from,  or
                           settlement of, any such proceeding, action or matter;

                  3.       any  loss or  reasonable  legal  and  other  expenses
                           incurred  by any  Independent  Trustee as a result of
                           the denial of, or dispute about,  any insurance claim
                           under,   or  actual  or   purported   rescission   or
                           termination  of, any policy of insurance  arranged by
                           DIMA (or by a representative  of DIMA acting as such,
                           acting as a  representative  of the  Registrant or of
                           the Independent Trustees or acting otherwise) for the
                           benefit  of the  Independent  Trustee,  to the extent
                           that such denial,  dispute or  rescission is based in
                           whole or in part upon any  alleged  misrepresentation
                           made in the  application for such policy or any other
                           alleged  improper conduct on the part of DIMA, any of
                           its corporate affiliates,  or any of their directors,
                           officers or employees;

                  4.       any  loss or  reasonable  legal  and  other  expenses
                           incurred by any Independent  Trustee,  whether or not
                           such loss or expense is  incurred  with  respect to a
                           Covered Matter,  which is otherwise covered under the
                           terms of any specified  policy of insurance,  but for
                           which  the  Independent  Trustee  is unable to obtain
                           advancement of expenses or indemnification under that
                           policy of insurance,  due to the exhaustion of policy
                           limits  which  is due in  whole or in part to DIMA or
                           any affiliate thereof having received  advancement of
                           expenses or indemnification  under that policy for or
                           with respect to any Covered  Matter;  provided,  that
                           the total  amount that DIMA will be  obligated to pay
                           under this  provision  for all loss or expense  shall
                           not  exceed  the  amount  that  DIMA  and  any of its
                           affiliates


                                       4
<PAGE>

                           actually  receive  under that policy of insurance for
                           or with respect to any and all Covered Matters; and

                  5.       all  liabilities  and  reasonable   legal  and  other
                           expenses  incurred  by  any  Independent  Trustee  in
                           connection  with any  proceeding or action to enforce
                           his or her rights  under the  agreement,  unless DIMA
                           prevails  on the  merits  of any  such  dispute  in a
                           final, nonappealable court order.

                  DIMA is not  required  to pay  costs or  expenses  or  provide
                  indemnification to or for any individual  Independent  Trustee
                  (i) with respect to any particular  proceeding or action as to
                  which the Board of the  Registrant  has  determined  that such
                  Independent  Trustee  ultimately  would  not  be  entitled  to
                  indemnification   with  respect  thereto,   or  (ii)  for  any
                  liability of the Independent  Trustee to the Registrant or its
                  shareholders to which such Independent Trustee would otherwise
                  be subject by reason of willful misfeasance,  bad faith, gross
                  negligence, or reckless disregard of the Independent Trustee's
                  duties as a Trustee of the Registrant as determined in a final
                  adjudication in such proceeding or action. In addition, to the
                  extent  that  DIMA  has  paid  costs  or  expenses  under  the
                  agreement to any individual  Independent  Trustee with respect
                  to a  particular  proceeding  or action,  and there is a final
                  adjudication  in such  proceeding or action of the Independent
                  Trustee's  liability to the Registrant or its  shareholders by
                  reason of willful misfeasance, bad faith, gross negligence, or
                  reckless  disregard of the Independent  Trustee's  duties as a
                  Trustee  of  the  Registrant,  such  Independent  Trustee  has
                  undertaken to repay such costs or expenses to DIMA.

Item 26.          Business and Other Connections of Investment Advisor
--------          ----------------------------------------------------

         During the last two fiscal  years,  no  director or officer of Deutsche
Investment  Management Americas Inc., the investment advisor, has engaged in any
other business, profession, vocation or employment of a substantial nature other
than that of the business of  investment  management  and,  through  affiliates,
investment banking.

Item 27.          Principal Underwriters
--------          ----------------------

         (a)

DWS  Investments  Distributors,  Inc.  acts  as  principal  underwriter  of  the
Registrant's  shares and acts as principal  underwriter for registered  open-end
management  investment  companies  other funds  managed by  Deutsche  Investment
Management Americas Inc.

         (b)

Information on the officers and directors of DWS Investments Distributors, Inc.,
principal  underwriter  for the  Registrant,  is set forth below.  The principal
business address is 222 South Riverside Plaza, Chicago, Illinois 60606.

<TABLE>
<CAPTION>
                      (1)                             (2)                                  (3)
          DWS Investments
          Distributors, Inc.
          Name and Principal             Positions and Offices with               Positions and
          Business Address               DWS Investments Distributors, Inc.       Offices with Registrant
          ----------------               ----------------------------------       -----------------------
<S>                   <C>               <C>                                       <C>

         Philipp Hensler                Director, Chairman of the Board and       None
         345 Park Avenue                CEO
         New York, NY 10154

         Michael Colon                  Director and Chief Operating Officer      None
         345 Park Avenue
         New York, NY 10154



                                       5
<PAGE>

                      (1)                             (2)                                  (3)
          DWS Investments
          Distributors, Inc.
          Name and Principal             Positions and Offices with               Positions and
          Business Address               DWS Investments Distributors, Inc.       Offices with Registrant
          ----------------               ----------------------------------       -----------------------
         Thomas Winnick                 Director and President                    None
         345 Park Avenue
         New York, NY 10154

         Cliff Goldstein                Chief Financial Officer and Treasurer     None
         100 Plaza One
         Jersey City, NJ 07311

         Robert Froehlich               Vice President                            None
         222 South Riverside Plaza
         Chicago, IL 60606

         Paul Schubert                  Vice President                            Chief Financial Officer
         345 Park Avenue                                                          and Treasurer
         New York, NY 10154

         Mark Perrelli                  Vice President                            None
         345 Park Avenue
         New York, NY 10154

         Donna White                    Chief Compliance Officer                  None
         280 Park Avenue
         New York, NY 10017

         Jason Vazquez                  Vice President and AML Compliance         Anti-Money Laundering
         280 Park Avenue                Officer                                   Compliance Officer
         New York, NY 10017

         Caroline Pearson               Secretary                                 Assistant Secretary
         One Beacon Street
         Boston, MA 02108

         Philip J. Collora              Assistant Secretary                       None
         222 South Riverside Plaza
         Chicago, IL 60606

         Anjie LaRocca                  Assistant Secretary                       None
         280 Park Avenue
         New York, NY 10017
</TABLE>

         (c)      Not applicable

Item 28.          Location of Accounts and Records
--------          --------------------------------

                  Certain  accounts,  books and other  documents  required to be
                  maintained  by  Section  31(a) of the  1940 Act and the  Rules
                  promulgated  thereunder are maintained by Deutsche  Investment
                  Management Americas Inc., One Beacon Street, Boston, MA 02108.
                  Records relating to the duties of the  Registrant's  custodian
                  are  maintained  by  State  Street  Bank  and  Trust  Company,
                  Heritage Drive, North Quincy, Massachusetts.  Records relating
                  to  the  duties  of  the   Registrant's   transfer  agent  are
                  maintained



                                       6
<PAGE>

                  by DWS  Investments  Service  Company,  210 West 10th  Street,
                  Kansas City, Missouri 64105 and by the sub-transfer agent, DST
                  Systems,  Inc.,  333 West 11th Street,  Kansas City,  Missouri
                  64105.

Item 29.          Management Services
--------          -------------------

                  Inapplicable.

Item 30.          Undertakings
--------          ------------

                  Inapplicable.




                                       7
<PAGE>



                                   SIGNATURES
                                   ----------


         Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this amendment
to its Registration Statement to be signed on its behalf by the undersigned,
thereto duly authorized, in the City of New York and the State of New York on
the 22nd day of September 2008.


                                              DWS TAX FREE TRUST

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

         Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to its Registration Statement has been signed below by
the following persons in the capacities and on the dates indicated:

<TABLE>
<CAPTION>
SIGNATURE                                  TITLE                                        DATE
---------                                  -----                                        ----
<S>                                               <C>                                      <C>
/s/ Michael G. Clark
-------------------------------------
Michael G. Clark *                         President                                    September 22, 2008

/s/ Paul H. Schubert
-------------------------------------
Paul H. Schubert                           Chief Financial Officer and Treasurer        September 22, 2008

/s/John W. Ballantine
-------------------------------------
John W. Ballantine*                        Trustee                                      September 22, 2008

/s/Henry P. Becton, Jr.
-------------------------------------
Henry P. Becton, Jr.*                      Trustee                                      September 22, 2008

/s/Dawn-Marie Driscoll
-------------------------------------
Dawn-Marie Driscoll*                       Chairperson and Trustee                      September 22, 2008

/s/Keith R. Fox
-------------------------------------
Keith R. Fox*                              Trustee                                      September 22, 2008

/s/Paul K. Freeman
-------------------------------------
Paul K. Freeman*                           Vice Chairperson and Trustee                 September 22, 2008

/s/Kenneth C. Froewiss
-------------------------------------
Kenneth C. Froewiss*                       Trustee                                      September 22, 2008

/s/Richard J. Herring
-------------------------------------
Richard J. Herring*                        Trustee                                      September 22, 2008

/s/William McClayton
-------------------------------------
William McClayton*                         Trustee                                      September 22, 2008

/s/Rebecca W. Rimel
-------------------------------------
Rebecca W. Rimel*                          Trustee                                      September 22, 2008

/s/William N. Searcy, Jr.
-------------------------------------
William N. Searcy, Jr.*                    Trustee                                      September 22, 2008


<PAGE>
SIGNATURE                                  TITLE                                        DATE
---------                                  -----                                        ----

/s/Jean Gleason Stromberg
-------------------------------------
Jean Gleason Stromberg*                    Trustee                                      September 22, 2008

/s/Robert H. Wadsworth
-------------------------------------
Robert H. Wadsworth*                       Trustee                                      September 22, 2008

/s/Axel Schwarzer
-------------------------------------
Axel Schwarzer*                            Trustee                                      September 22, 2008
</TABLE>

*By:     /s/Caroline Pearson
         ------------------------------
         Caroline Pearson**
         Assistant Secretary


** Attorney-in-fact pursuant to the powers of attorney as filed herein.







                                       2
<PAGE>

<TABLE>
<S>     <C>    <C>    <C>    <C>    <C>    <C>
Cash Account Trust                     DWS Institutional Funds             DWS Strategic Government
Cash Management Portfolio              DWS International Fund, Inc.                Securities Fund
Cash Reserve Fund, Inc.                DWS Investment Trust                DWS Strategic Income Fund
DWS Advisor Funds                      DWS Investments VIT Funds           DWS Strategic Municipal Income
DWS Balanced Fund                      DWS Investors Funds, Inc.                   Trust
DWS Blue Chip Fund                     DWS Money Funds                     DWS Target Date Series
DWS Communications Fund, Inc.          DWS Money Market Trust              DWS Target Fund
DWS Dreman Value Income                DWS Multi-Market Income Trust       DWS Tax Free Trust
        Edge Fund, Inc.                DWS Municipal Income Trust          DWS Technology Fund
DWS Equity 500 Index Portfolio         DWS Municipal Trust                 DWS Value Builder Fund, Inc.
DWS Equity Partners Fund, Inc.         DWS Mutual Funds, Inc.              DWS Value Equity Trust
DWS Equity Trust                       DWS Portfolio Trust                 DWS Value Series, Inc.
DWS Global/International Fund,         DWS RREEF Real Esate Fund,          DWS Variable Series I
        Inc.                                   Inc.                        DWS Variable Series II
DWS Global Commodities Stock           DWS RREEF Real Estate Fund II,      Investors Cash Trust
        Fund, Inc.                             Inc.                        Tax-Exempt California Money
DWS Global High Income Fund, Inc.      DWS RREEF World Real Estate &               Market Fund
DWS High Income Series                         Tactical Fund, Inc.         The Central Europe & Russia
DWS High Income Trust                  DWS Securities Trust                        Fund, Inc.
DWS Income Trust                       DWS State Tax Free Trust            The European Equity Fund, Inc.
                                       DWS State Tax-Free Income           The New Germany Fund, Inc.
                                               Series
                                       DWS Strategic Income Trust
</TABLE>


                                 (each a "Fund")

                                Power of Attorney

KNOW ALL PERSONS BY THESE PRESENTS, that the following person, whose signature
appears below, does hereby constitute and appoint John Millette, Thomas Connors
and Caroline Pearson, and each of them, severally, with full powers of
substitution, his true and lawful attorney and agent to execute in his name,
place and stead (in such capacity) any and all amendments to enable the Fund to
comply with the Securities Act of 1933, as amended (the "1933 Act") and the
Investment Company Act of 1940, as amended (the "1940 Act"), and any rules,
regulations or requirements of the Securities and Exchange Commission in respect
thereof, in connection with the Fund's Registration Statement pursuant to the
1933 Act and the 1940 Act, together with any and all pre- and post-effective
amendments thereto, including specifically, but without limiting the generality
of the foregoing, the power and authority to sign in the name and on behalf of
the undersigned as President of the Fund such Registration Statement and any and
all such pre- and post-effective amendments filed with the Securities and
Exchange Commission under the 1933 Act and the 1940 Act, and any other
instruments or documents related thereto, and the undersigned does hereby ratify
and confirm all that said attorney-in-fact and agent, or their substitute or
substitutes, shall lawfully do or cause to be done by virtue hereof.

SIGNATURE                     TITLE                         DATE
---------                     -----                         ----
                              President                     September 25, 2008
/s/Michael G. Clark
--------------------
Michael G. Clark



<PAGE>

                                 DWS FUNDS BOARD
                                 ---------------

                     CERTIFICATE OF THE ASSISTANT SECRETARY

          I, Caroline Pearson, do hereby certify as follows:

1.       That I am the duly elected Assistant Secretary of the Funds listed on
         the attached Appendix A, (each a "Fund," and each Fund's underlying
         portfolios, if applicable, a "Series");

2.       I further certify that the following is a complete and correct copy of
         resolutions adopted by the members of the Board of Directors/Trustees
         of the Funds at meetings duly called, convened and held on September
         19, 2008, at which a quorum was present and acting throughout, and that
         such resolutions have not been amended and are in full force and
         effect:


                  WHEREAS, the President of the Fund, Michael Clark, desires to
                  execute a Power of Attorney and thereby delegate legal
                  authority to the below-designated individuals to sign
                  Registration Statements, including any amendments, on his
                  behalf:

                  NOW THEREFORE BE IT:

                  RESOLVED, that the following individuals be, and they hereby
                  are, and each of them hereby is, given a Power of Attorney in
                  substantially the form presented to this meeting, with such
                  changes as the officers, with the advice of counsel, shall
                  recommend, to sign the Fund's Registration Statements,
                  including any amendments:

                  Thomas Connors
                  John Millette
                  Caroline Pearson; and

                  FURTHER RESOLVED, that any Registration Statement signed
                  pursuant to such Power of Attorney shall comply with Rule 483
                  (b) of the Securities Act of 1933 as amended, including, but
                  not limited to the inclusion of: (1) a copy of the authorizing
                  Power of Attorney; and (2) a certified copy of the resolutions
                  of the Board authorizing such delegation as Exhibits thereto.

IN WITNESS WHEREOF, I hereunto set my hand this twenty-fourth day of September,
2008.


                                                 /s/Caroline Pearson
                                                 -------------------
                                                 Caroline Pearson
                                                 Assistant Secretary


<PAGE>

                                   APPENDIX A

CASH ACCOUNT TRUST, and its series:
Government & Agency Securities Portfolio
Money Market Portfolio
Tax-Exempt Portfolio

CASH MANAGEMENT PORTFOLIO

CASH RESERVE FUND, INC., and its series:
Prime Series

DWS ADVISOR FUNDS, and its series:
DWS Core Fixed Income Fund
DWS High Income Plus Fund
DWS International Select Equity Fund
DWS Lifecycle Long Range Fund
DWS Micro Cap Fund
DWS Mid Cap Growth Fund
DWS RREEF Real Estate Securities Fund
DWS RREEF Global Real Estate Securities Fund
DWS Short Duration Fund
DWS Short Duration Plus Fund
DWS Short-Term Municipal Bond Fund
DWS Small Cap Growth Fund
NY Tax Free Money Fund
Tax Free Money Fund Investment

DWS BALANCED FUND

DWS BLUE CHIP FUND

DWS COMMUNICATIONS FUND, INC.

DWS DREMAN VALUE INCOME EDGE FUND, INC.

DWS EQUITY 500 INDEX PORTFOLIO

DWS EQUITY PARTNERS FUND, INC.

DWS EQUITY TRUST, and its series:
DWS Alternative Asset Allocation Plus Fund
DWS Core Plus Allocation Fund
DWS Disciplined Long/Short Growth Fund
DWS Disciplined Long/Short Value Fund
DWS Disciplined Market Neutral Fund

DWS GLOBAL COMMODITIES STOCK FUND, INC.

DWS GLOBAL/INTERNATIONAL FUND, INC., and its series:
DWS Emerging Markets Fixed Income Fund
DWS Global Bond Fund
DWS Global Opportunities Fund
DWS Global Thematic Fund
DWS RREEF Global Infrastructure Fund

DWS GLOBAL HIGH INCOME FUND, INC.

DWS HIGH INCOME SERIES
DWS High Income Fund


<PAGE>

DWS HIGH INCOME TRUST

DWS INCOME TRUST, and its series:
DWS GNMA Fund

DWS INSTITUTIONAL FUNDS, and its series:
Cash Management Fund Institutional
Cash Reserves Fund Institutional
Daily Assets Fund Institutional
DWS Commodity Securities Fund
DWS EAFE Equity Index Fund
DWS Equity 500 Index Fund
DWS Inflation Protected Plus Fund
DWS U.S. Bond Index Fund

DWS INTERNATIONAL FUND, INC. , and its series:
DWS Emerging Markets Equity Fund
DWS Europe Equity Fund
DWS International Fund
DWS International Value Opportunities Fund
DWS Latin America Equity Fund

DWS INVESTMENT TRUST, and its series:
DWS Capital Growth Fund
DWS Growth & Income Fund
DWS Large Company Growth Fund
DWS S&P 500 Index Fund
DWS Small Cap Core Fund

DWS INVESTMENTS VIT TRUST, and its series:
DWS Equity 500 Index VIP
DWS Small Cap Index VIP

DWS INVESTORS FUNDS, INC., and its series:
DWS Japan Equity Fund

DWS MONEY FUNDS, and its series:
DWS Money Market Prime Series

DWS MONEY MARKET TRUST, and its series
DWS Money Market Series

DWS MULTI-MARKET INCOME TRUST

DWS MUNICIPAL INCOME TRUST

DWS MUNICIPAL TRUST, and its series:
DWS Strategic High Yield Tax-Free Fund
DWS Managed Municipal Bond Fund

DWS MUTUAL FUNDS, INC., and its series:
DWS Gold & Precious Metals Fund

DWS PORTFOLIO TRUST, and its series:
DWS Core Plus Income Fund
DWS Floating Rate Plus Fund

DWS RREEF REAL ESTATE FUND, INC.


<PAGE>

DWS RREEF REAL ESTATE FUND II, INC.

DWS RREEF WORLD REAL ESTATE & TACTICAL STRATEGIES FUND, INC.

DWS SECURITIES TRUST, and its series:
DWS Climate Change Fund
DWS Health Care Fund

DWS STATE TAX-FREE INCOME SERIES, and its series:
DWS California Tax-Free Income Fund
DWS New York Tax-Free Income Fund

DWS STATE TAX FREE TRUST, and its series:
DWS Massachusetts Tax-Free Fund

DWS STRATEGIC GOVERNMENT SECURITIES FUND

DWS STRATEGIC INCOME TRUST

DWS STRATEGIC INCOME FUND

DWS STRATEGIC MUNICIPAL INCOME TRUST

DWS TARGET DATE SERIES, and its series:
DWS LifeCompass Retirement Fund
DWS LifeCompass 2015 Fund
DWS LifeCompass 2020 Fund
DWS LifeCompass 2030 Fund
DWS LifeCompass 2040 Fund

DWS TARGET FUND, and its series:
DWS Target 2010 Fund
DWS Target 2011 Fund
DWS Target 2012 Fund
DWS Target 2013 Fund
DWS Target 2014 Fund
DWS LifeCompass Income Fund
DWS LifeCompass Protect Fund

DWS TAX FREE TRUST, and its series
DWS Intermediate Tax/AMT Free Fund

DWS TECHNOLOGY FUND

DWS VALUE BUILDER FUND, INC.


DWS VALUE EQUITY TRUST, and its series:
DWS Enhanced S&P 500 Index Fund
DWS Equity Income Fund

DWS VALUE SERIES, INC. and its series:
DWS Dreman Concentrated Value Fund
DWS Dreman High Return Equity Fund
DWS Dreman Mid Cap Value Fund
DWS Dreman Small Cap Value Fund
DWS Large Cap Value Fund


<PAGE>

DWS VARIABLE SERIES I, and its series
DWS Bond VIP
DWS Capital Growth VIP
DWS Global Opportunities VIP
DWS Growth & Income VIP
DWS Health Care VIP
DWS International VIP

DWS VARIABLE SERIES II, and its series
DWS Balanced VIP
DWS Blue Chip VIP
DWS Conservative Allocation VIP
DWS Core Fixed Income VIP
DWS Davis Venture Value VIP
DWS Dreman High Return Equity VIP
DWS Dreman Small Mid Cap Value VIP
DWS Global Thematic VIP
DWS Government & Agency Securities VIP
DWS Growth Allocation VIP
DWS High Income VIP
DWS International Select Equity VIP
DWS Janus Growth & Income VIP
DWS Large Cap Value VIP
DWS Mid Cap Growth VIP
DWS Moderate Allocation VIP
DWS Money Market VIP
DWS Small Cap Growth VIP
DWS Strategic Income VIP
DWS Technology VIP
DWS Turner Mid Cap Growth VIP

INVESTORS CASH TRUST, and its series:
Treasury Portfolio

TAX-EXEMPT CALIFORNIA MONEY MARKET FUND
<PAGE>

                               DWS TAX FREE TRUST

                                Power of Attorney

KNOW ALL PERSONS BY THESE PRESENTS, that the following persons, whose signatures
appear below, do hereby constitute and appoint Thomas Connors, John Millette and
Caroline  Pearson,  and each of them,  severally,  or if more than one  acts,  a
majority of them,  their true and lawful  attorney and agent to execute in their
name,  place and stead (in such  capacity) any and all  amendments to enable DWS
TAX FREE  TRUST (the  "Fund")  to comply  with the  Securities  Act of 1933,  as
amended (the "1933 Act") and the Investment Company Act of 1940, as amended (the
"1940 Act"),  and any rules,  regulations or  requirements of the Securities and
Exchange   Commission  in  respect  thereof,   in  connection  with  the  Fund's
Registration  Statement on Form N-1A  pursuant to the 1933 Act and the 1940 Act,
together with any and all pre- and post-effective amendments thereto,  including
specifically,  but without  limiting the generality of the foregoing,  the power
and authority to sign in the name and on behalf of the  undersigned as a trustee
of the  Fund  such  Registration  Statement  and  any  and  all  such  pre-  and
post-effective  amendments  filed with the  Securities  and Exchange  Commission
under the 1933 Act and the 1940  Act,  and any other  instruments  or  documents
related  thereto,  and the  undersigned  does hereby ratify and confirm all that
said  attorney-in-fact  and  agent,  or  either of them or their  substitute  or
substitutes, shall lawfully do or cause to be done by virtue hereof.

<TABLE>
<CAPTION>
---------------------------------------------------------- ----------------------------- -----------------------------------
SIGNATURES                                                 TITLE                         DATE
---------------------------------------------------------- ----------------------------- -----------------------------------
<S>                                                        <C>                                     <C>
/s/John W. Ballantine
-----------------------------
John W. Ballantine                                         Trustee                       April 1, 2008
---------------------------------------------------------- ----------------------------- -----------------------------------

/s/Henry P. Becton, Jr.
-----------------------------
Henry P. Becton, Jr.                                       Trustee                       April 1, 2008
---------------------------------------------------------- ----------------------------- -----------------------------------

/s/Dawn-Marie Driscoll
-----------------------------
Dawn-Marie Driscoll                                        Trustee                       April 1, 2008
---------------------------------------------------------- ----------------------------- -----------------------------------

/s/Keith R. Fox
-----------------------------
Keith R. Fox                                               Trustee                       April 1, 2008
---------------------------------------------------------- ----------------------------- -----------------------------------

/s/Paul K. Freeman
-----------------------------
Paul K. Freeman                                            Trustee                       April 1, 2008
---------------------------------------------------------- ----------------------------- -----------------------------------

/s/Kenneth C. Froewiss
-----------------------------
Kenneth C. Froewiss                                        Trustee                       April 1, 2008
---------------------------------------------------------- ----------------------------- -----------------------------------

/s/Richard J. Herring
-----------------------------
Richard J. Herring                                         Trustee                       April 1, 2008
---------------------------------------------------------- ----------------------------- -----------------------------------

/s/William McClayton
-----------------------------
William McClayton                                          Trustee                       April 1, 2008
---------------------------------------------------------- ----------------------------- -----------------------------------

/s/Rebecca W. Rimel
-----------------------------
Rebecca W. Rimel                                           Trustee                       April 1, 2008
---------------------------------------------------------- ----------------------------- -----------------------------------

/s/William N. Searcy, Jr.
-----------------------------
William N. Searcy, Jr.                                     Trustee                       April 1, 2008
---------------------------------------------------------- ----------------------------- -----------------------------------

/s/Jean Gleason Stromberg
-----------------------------
Jean Gleason Stromberg                                     Trustee                       April 1, 2008
---------------------------------------------------------- ----------------------------- -----------------------------------

/s/Robert H. Wadsworth
-----------------------------
Robert H. Wadsworth                                        Trustee                       April 1, 2008
---------------------------------------------------------- ----------------------------- -----------------------------------

/s/Axel Schwarzer
-----------------------------
Axel Schwarzer                                             Trustee                       April 1, 2008
---------------------------------------------------------- ----------------------------- -----------------------------------
</TABLE>

<PAGE>




                                                                File No. 2-81105
                                                              File No. 811-03632


                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549



                                    EXHIBITS

                                       TO

                                    FORM N-1A

                         POST-EFFECTIVE AMENDMENT NO. 51

                            TO REGISTRATION STATEMENT

                                      UNDER

                           THE SECURITIES ACT OF 1933

                                       AND

                                AMENDMENT NO. 51

                            TO REGISTRATION STATEMENT

                                      UNDER

                       THE INVESTMENT COMPANY ACT OF 1940



                               DWS TAX FREE TRUST



                                       8
<PAGE>

                               DWS TAX FREE TRUST


                                  EXHIBIT INDEX
                                     (a)(1)
                                     (b)(1)
                                     (h)(6)
                                     (h)(8)
                                     (h)(9)
                                       (j)
                                     (p)(3)