As filed with the Securities and Exchange Commission on October 25, 2007

                                                     1940 Act File No. 811-06071

================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM N-1A


                          REGISTRATION STATEMENT UNDER
                       THE INVESTMENT COMPANY ACT OF 1940                    /X/

                                AMENDMENT NO. 85                             /X/

                             DWS INSTITUTIONAL FUNDS
               (Exact Name of Registrant as Specified in Charter)

                       345 Park Avenue, New York, NY 10154
               (Address of Principal Executive Offices) (Zip Code)

                                 (212) 454-7190
                         (Registrant's Telephone Number)

                                  John Millette
                             Two International Place
                                Boston, MA 02110
                     (Name and address of agent for service)

                                    Copy to:
                             Burton M. Leibert, Esq.
                          Willkie Farr & Gallagher LLP
                               787 Seventh Avenue
                             New York, NY 10019-6099

EXPLANATORY NOTE: This Registration Statement has been filed by DWS
Institutional Funds (the "Registrant") pursuant to Section 8(b) of the
Investment Company Act of 1940, as amended. However, shares of beneficial
interest of Daily Assets Fund Institutional, (the "Fund"), a series of the
Registrant, are not being registered under the Securities Act of 1933 (the "1933
Act") since such shares will be issued by the Registrant solely in private
placement transactions which do not involve any "public offering" within the
meaning of Section 4(2) of the 1933 Act. Shares of the Fund may only be
purchased by "accredited investors," as that term is defined in Rule 501(a) of
Regulation D under the Securities Act. This Registration Statement does not
constitute an offer to sell, or the solicitation of an offer to buy, any shares
of beneficial interest of the Fund.


<PAGE>


                            DO NOT COPY OR CIRCULATE
Prospective
 Investor ------------------------------------       Copy # ------------------


                                                DAILY ASSETS FUND INSTITUTIONAL
                                       CONFIDENTIAL PRIVATE OFFERING MEMORANDUM


                                                                November 1, 2007


                                                 [DWS SCUDDER LOGO APPEARS HERE]



The securities described in this memorandum are offered pursuant to an
exemption from the registration requirements of the Securities Act of 1933, as
amended, and have not been registered with the Securities and Exchange
Commission. Like shares of all mutual funds, these securities have not been
approved or disapproved by the Securities and Exchange Commission, nor has the
Securities and Exchange Commission passed upon the accuracy or adequacy of this
memorandum. Any representation to the contrary is a criminal offense.


NO RESALE OF SHARES MAY BE MADE UNLESS THE SHARES ARE SUBSEQUENTLY REGISTERED
UNDER THE SECURITIES ACT OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
THIS CONFIDENTIAL PRIVATE OFFERING MEMORANDUM HAS BEEN PREPARED ON A
CONFIDENTIAL BASIS SOLELY FOR THE INFORMATION OF THE RECIPIENT AND MAY NOT BE
REPRODUCED, PROVIDED TO OTHERS OR USED FOR ANY OTHER PURPOSE.


NO PERSON HAS BEEN AUTHORIZED TO MAKE REPRESENTATIONS OR GIVE ANY INFORMATION
WITH RESPECT TO THE SHARES, EXCEPT THE INFORMATION CONTAINED HEREIN OR IN THE
TRUST'S REGISTRATION STATEMENT FILED UNDER THE INVESTMENT COMPANY ACT.


                                                 [DWS SCUDDER LOGO APPEARS HERE]




<PAGE>

CONTENTS

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


<TABLE>
<S>      <C>
  3      The Fund's Main Investment
         Strategy
  5      The Main Risks of Investing in
         the Fund
  8      The Fund's Performance
         History
  9      How Much Investors Pay
 10      Who Manages and Oversees
         the Fund
 12      Financial Highlights


</TABLE>
<TABLE>
<S>      <C>
 13      Who Should Consider
         Investing in the Fund
 13      Buying and Selling Fund
         Shares
 14      Policies You Should Know
         About
 23      Understanding Distributions
         and Taxes
 25      Appendix
</TABLE>


<PAGE>


<TABLE>
<S>                                    <C>
--------------------------------------------------------------------------------
                                            fund number       538

    DAILY ASSETS FUND INSTITUTIONAL
--------------------------------------------------------------------------------
</TABLE>



            THE FUND'S MAIN INVESTMENT STRATEGY


            The fund seeks a high level of current income consistent with
            liquidity and the preservation of capital by investing exclusively
            in high quality short-term money market securities.


            The fund's objective is not a fundamental policy. We must notify
            shareholders before we can change it, but we do not require their
            approval to do so.


            While the fund's Advisor gives priority to earning income and
            maintaining the value of the fund's principal at $1.00 per share,
            all money market instruments, including US government obligations,
            can change in value when interest rates change or an issuer's
            creditworthiness changes.


            The fund maintains a dollar-weighted average maturity of 90 days or
            less. The fund is managed in accordance with Rule 2a-7 under the
            Investment Company Act of 1940, as amended.

            The fund follows policies designed to maintain a stable share
            price:


            -  Fund securities are valued in US dollars and have remaining
               maturities of 397 days (about 13 months) or less at the time of
               purchase. The fund may also invest in securities that have
               features that have features that have the effect of reducing
               their maturities to 397 days or less at the time of purchase


            -  The fund buys US government debt obligations, money market
               instruments and other debt obligations that at the time of
               purchase:

               - have received one of the two highest short-term ratings from
                 two nationally recognized statistical rating organizations
                 (NRSROs);

               - have received one of the two highest short-term ratings from
                 one NRSRO (if only one organization rates the security);


                                            Daily Assets Fund Institutional  | 3
<PAGE>


               - are unrated, but are determined to be of comparable quality to
                 one of the two highest short-term ratings by the Advisor; or


               - have no short-term rating, but are rated in one of the top
                 three highest long-term rating categories, or are determined
                 to be of comparable quality by the Advisor.



            Principal investments


            The fund may invest in high quality, short-term, US dollar
            denominated money market instruments paying a fixed, variable or
            floating interest rate. These include:

            -  Debt obligations issued by US and foreign banks, financial
               institutions, corporations or other entities, including
               certificates of deposit, euro-time deposits, commercial paper
               (including asset-backed commercial paper), notes, funding
               agreements and US government securities. Securities that do not
               satisfy the maturity restrictions for a money market fund may be
               specifically structured so that they are eligible investments
               for money market funds. For example, some securities have
               features which have the effect of shortening the security's
               maturity.

            -  US government securities that are issued or guaranteed by the US
               Treasury, or by agencies or instrumentalities of the US
               government.

            -  Repurchase agreements, which are agreements to buy securities at
               one price, with a simultaneous agreement to sell back the
               securities at a future date at an agreed-upon price.

            -  Asset-backed securities, which are generally participations in a
               pool of assets whose payment is derived from the payments
               generated by the underlying assets. Payments on the asset-backed
               security generally consist of interest and/
               or principal.

            Because many of the fund's principal investments are issued or
            credit-enhanced by banks or other financial institutions, under
            normal market conditions the fund will invest more than 25% of its
            total assets in the obligations of banks and other financial
            institutions.

            The fund may invest up to 10% of its total assets in other money
            market mutual funds.


4 | Daily Assets Fund Institutional
<PAGE>


            Working in consultation with the portfolio managers, a credit team
            screens potential securities and develops a list of those that the
            fund may buy. The portfolio managers, looking for attractive yield
            and weighing considerations such as credit quality, economic
            outlooks and possible interest rate movements, then decide which
            securities on this list to buy. The portfolio managers may adjust
            the fund's exposure to interest rate risk, typically seeking to
            take advantage of possible rises in interest rates and to preserve
            yield when interest rates appear likely to fall.



            THE MAIN RISKS OF INVESTING IN THE FUND


            There are several risk factors that could reduce the yield you get
            from the fund or cause the fund's performance to trail that of
            other investments.

            INTEREST RATE RISK. Money market instruments, like all debt
            securities, face the risk that the securities will decline in value
            because of changes in interest rates. Generally, investments
            subject to interest rate risk will decrease in value when interest
            rates rise and increase in value when interest rates decline. To
            minimize such price fluctuations, the fund limits the
            dollar-weighted average maturity of the securities held by the fund
            to 90 days or less. Generally, the price of short-term investments
            fluctuates less than longer-term investments. Income earned on
            floating or variable rate securities may vary as interest rates
            decrease or increase.


            CREDIT RISK. A money market instrument's credit quality depends on
            the issuer's ability to pay interest on the security and repay the
            debt: the lower the credit rating, the greater the risk that the
            security's issuer will default, or fail to meet its payment
            obligations. The credit risk of a security may also depend on the
            credit quality of any bank or financial institution that provides
            credit enhancement for it. To minimize credit risk, the fund only
            buys high quality securities with minimal credit risk. Also, the
            fund only buys securities with remaining maturities of 397 days
            (approximately 13 months) or less. This reduces the risk that the
            issuer's creditworthiness will change, or that the issuer will
            default on the principal and interest payments of the obligation.
            Additionally, some securities issued by US government agencies or
            instrumentalities are supported only by the credit of that agency
            or instrumentality. There is no guarantee that the US government
            will provide support to such agencies or instrumentalities and such



                                            Daily Assets Fund Institutional  | 5
<PAGE>

            securities may involve risk of loss of principal and interest.
            Securities that rely on third party guarantors to raise their
            credit quality could fall in price or go into default if the
            financial condition of the guarantor deteriorates.

            MARKET RISK. Although individual securities may outperform their
            market, the entire market may decline as a result of rising
            interest rates, regulatory developments or deteriorating economic
            conditions.

            SECURITY SELECTION RISK. While the fund invests in short-term
            securities, which by their nature are relatively stable
            investments, the risk remains that the securities in which the fund
            invests will not perform as expected. This could cause the fund's
            returns to lag behind those of similar money market mutual funds.

            REPURCHASE AGREEMENT RISK. A repurchase agreement exposes the fund
            to the risk that the party that sells the securities may default on
            its obligation to repurchase them. In this circumstance, the fund
            can lose money because:

            -  it cannot sell the securities at the agreed-upon time and price;
               or

            -  the securities lose value before they can be sold.

            The fund seeks to reduce this risk by monitoring the
            creditworthiness of the sellers with whom it enters into repurchase
            agreements. The fund also monitors the value of the securities to
            ensure that they are at least equal to the total amount of the
            repurchase obligations, including interest and accrued interest.


            CONCENTRATION RISK. Because the fund will invest more than 25% of
            its net assets in the obligations of banks and other financial
            institutions, it may be vulnerable to setbacks in that industry.
            Banks and other financial institutions are highly dependent on
            short-term interest rates and can be adversely affected by
            downturns in the US and foreign economies or changes in banking
            regulations.



6 | Daily Assets Fund Institutional
<PAGE>

            PREPAYMENT RISK. A bond issuer, such as an issuer of asset-backed
            securities, may retain the right to pay off a high yielding bond
            before it comes due. In that event, the fund may have to reinvest
            the proceeds at lower interest rates. Thus, prepayment may reduce
            the fund's income. It may also create a capital gains tax
            liability, because bond issuers usually pay a premium for the right
            to pay off bonds early.


            FOREIGN INVESTMENT RISK. The fund may invest in money market
            instruments of foreign issuers that are denominated in US dollars.
            Foreign investments involve certain special risks, such as
            unfavorable political and legal developments, limited financial
            information, and economic and financial instability.


            An investment in the fund is not insured or guaranteed by the FDIC
            or any other government agency. Although the fund seeks to preserve
            the value of your investment at $1.00 per share, this share price
            isn't guaranteed and you could lose money by investing in the fund.


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

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

            Keep in mind that there is no assurance that the fund will achieve
            its goal.


            The fund's Statement of Additional Information includes a
            description of the fund's policies and procedures with respect to
            the disclosure of the fund's portfolio holdings.



                                            Daily Assets Fund Institutional  | 7
<PAGE>

THE FUND'S PERFORMANCE HISTORY

While a fund's past performance 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 has varied from year to
year, which may give some idea of risk. The table shows how the fund's returns
over different periods average out. All figures include the effects of the
fund's expenses and assume reinvestment of dividends and distributions. As
always, past performance is no guarantee of future results.


The 7-DAY YIELD, which is often referred to as the "current yield," is the
income generated by the fund over a seven-day period. This amount is then
annualized, which means that we assume the fund generates the same income every
week for a year. The "total return" of the fund is the change in the value of
an investment in the fund over a given period. Average annual returns are
calculated by averaging the year-by-year returns of the fund over a given
period. To learn the current yield, investors may call (800) 730-1313.


Daily Assets Fund Institutional


ANNUAL TOTAL RETURN (%) AS OF 12/31 EACH YEAR -
[GRAPHIC APPEARS HERE]







<TABLE>
<S>     <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>
 5.65    5.59      5.22      6.50      4.31      1.85      1.09      1.40      3.31      5.10
 1997   1998      1999      2000      2001      2002      2003      2004      2005      2006
</TABLE>





<TABLE>
<CAPTION>
               2007 TOTAL RETURN AS OF SEPTEMBER 30: 4.07%
<S>                                         <C>
FOR THE PERIODS INCLUDED IN THE BAR CHART:
BEST QUARTER: 1.67%, Q3 2000                WORST QUARTER: 0.24%, Q3 2003
</TABLE>


AVERAGE ANNUAL TOTAL RETURNS (%) as of 12/31/2006



<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
                                       1 YEAR      5 YEARS      10 YEARS
<S>                                   <C>         <C>          <C>
--------------------------------------------------------------------------------
 Daily Assets Fund Institutional         5.10         2.54         3.99
--------------------------------------------------------------------------------
</TABLE>


8 | Daily Assets Fund Institutional
<PAGE>


HOW MUCH INVESTORS PAY


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


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
FEE TABLE
--------------------------------------------------------------------------------
<S>                                       <C>
 SHAREHOLDER FEES, paid directly from
 your investment                                      None
--------------------------------------------------------------------------------

 ANNUAL OPERATING EXPENSES, deducted
 from fund assets
--------------------------------------------------------------------------------
 Management Fee 1                                     0.20%
--------------------------------------------------------------------------------
 Distribution/Service (12b-1) Fee                     None
--------------------------------------------------------------------------------
 Other Expenses                                       0.01
--------------------------------------------------------------------------------
 TOTAL ANNUAL OPERATING EXPENSES                      0.21
--------------------------------------------------------------------------------
 Less Fee Waiver/Expense
--------------------------------------------------------------------------------
 Reimbursement 2,3                                    0.14
--------------------------------------------------------------------------------
 NET ANNUAL OPERATING EXPENSES 2,3                    0.07
--------------------------------------------------------------------------------
</TABLE>



1  The fee includes a 0.10% fund administration fee.


2  From time to time, the Advisor may voluntarily waive or reimburse certain
   expenses. This voluntary waiver or reimbursement may be terminated at any
   time at the option of the Advisor.


3  Through October 31, 2008, the Advisor has contractually agreed to waive all
   or a portion of its management fee and reimburse or pay certain operating
   expenses (excluding certain expenses such as extraordinary expenses, taxes,
   brokerage, interest, proxy and organizational and offering expenses) to the
   extent necessary to maintain the annual expenses of the fund at 0.07% of
   the fund's average daily net assets.

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




<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
                        1 YEAR      3 YEARS      5 YEARS      10 YEARS
--------------------------------------------------------------------------------
<S>                    <C>         <C>          <C>          <C>
 Daily Assets Fund
 Institutional            $7          $53          $104         $254
--------------------------------------------------------------------------------
</TABLE>




                                            Daily Assets Fund Institutional  | 9
<PAGE>

WHO MANAGES AND OVERSEES THE FUND

           The investment advisor


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

           DWS Scudder is part of Deutsche Asset Management, which 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.


           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.


           Prior to December 31, 2006, Deutsche Asset Management, Inc. ("DAMI")
           was the investment advisor. Effective December 31, 2006, DAMI was
           merged into DIMA. The new investment management agreement with DIMA
           was approved by the Board and is identical in substance to the prior
           investment management agreement with DAMI.



10 | Who Manages and Oversees the Fund
<PAGE>


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


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
FUND NAME                                         FEE PAID
--------------------------------------------------------------------------------
<S>                                             <C>
Daily Assets Fund Institutional                    0.00%*
--------------------------------------------------------------------------------
</TABLE>

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


           A discussion regarding the basis for the Board's approval of the
           fund's investment management agreement with DAMI and the amended and
           restated investment management agreement with DIMA is contained in
           the shareholder report for the semi-annual period ended December 31,
           2006 (see "Shareholder reports" on the back cover).


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


           The portfolio managers


           A group of investment professionals is responsible for the
           day-to-day management of the fund. These investment professionals
           have a broad range of experience managing money market funds.



                                         Who Manages and Oversees the Fund  | 11
<PAGE>

FINANCIAL HIGHLIGHTS


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

Daily Assets Fund Institutional


<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
YEARS ENDED JUNE 30,                         2007          2006          2005          2004          2003
----------------------------------------------------------------------------------------------------------------
<S>                                       <C>           <C>           <C>           <C>           <C>
SELECTED PER SHARE DATA
----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD       $   1.00      $  1.00       $  1.00       $  1.00       $  1.00
----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
  Net investment income                         .053         .042          .022          .010          .015
----------------------------------------------------------------------------------------------------------------
  Net realized and unrealized gain
  (loss) on investment transactions a             -            -             -             -             -
----------------------------------------------------------------------------------------------------------------
  TOTAL FROM INVESTMENT OPERATIONS              .053         .042          .022          .010          .015
----------------------------------------------------------------------------------------------------------------
Less distributions from:
  Net investment income                      ( .053)      ( .042)       ( .022)       ( .010)       ( .015)
----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD             $   1.00      $  1.00       $  1.00       $  1.00       $  1.00
----------------------------------------------------------------------------------------------------------------
Total Return (%)b                              5.44         4.30          2.24          1.02          1.47
----------------------------------------------------------------------------------------------------------------

RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
----------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ millions)        4,915        3,122         2,987         3,895         5,589
----------------------------------------------------------------------------------------------------------------
Ratio of expenses before expense
reductions(%)                                   .21          .13           .13           .14           .13
----------------------------------------------------------------------------------------------------------------
Ratio of expenses after expense
reductions(%)                                   .04          .04           .02           .07           .12
----------------------------------------------------------------------------------------------------------------
Ratio of net investment income(%)              5.31         4.25          2.26          1.03          1.50
----------------------------------------------------------------------------------------------------------------
</TABLE>

a   Less than $.005 per share.

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


12 | Financial Highlights
<PAGE>

WHO SHOULD CONSIDER INVESTING IN THE FUND

           Shares of the fund are being offered for investment only to
           investors who qualify as both:

           -  Accredited investors as defined under Regulation D of the
              Securities Act of 1933, as amended, and

           -  Institutional investors.

           Shares of the fund are not being offered to individuals or to
           entities organized for the purpose of investing on behalf of
           individuals. Investors will be required to represent that they meet
           certain financial requirements and that they are familiar with and
           understand the terms, risks and merits of an investment in the fund.


           You should consider investing in the fund if you are looking for a
           cash management vehicle that offers income approximating money
           market rates and preserves the value of your capital. The fund is
           primarily sold to investors who use the fund to invest cash
           collateral received in connection with securities lending
           transactions.

           You should not consider investing in the fund if you seek capital
           growth. Although it provides a convenient means of diversifying
           short-term investments, the fund by itself does not constitute a
           balanced investment program.


BUYING and SELLING Fund Shares



           Three copies of a Subscription Agreement for use in subscribing to
           purchase shares of the fund accompany delivery of this Memorandum to
           prospective investors. In order to purchase shares of the fund, a
           prospective investor must satisfactorily complete, execute and
           deliver each copy of the Subscription Agreement to Institutional
           Investor Service ("IIS"), 210 West 10th Street, Kansas City, MO
           64105, and the purchase must be accepted by the fund's Placement
           Agent, DWS Scudder Distributors, Inc.


           Our representatives are available to assist you personally Monday
           through Friday, 9:00 a.m. to 6:00 p.m., Eastern time each day the
           New York Stock Exchange is open for business.



                                 Who Should Consider Investing in the Fund  | 13
<PAGE>



           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 the Service Center at (800) 730-1313 by 4:30 p.m. Eastern
           time to notify us in advance of a wire transfer purchase. Inform the
           Service Center of the amount of your purchase and 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 4:30 p.m. Eastern time.



<TABLE>
<S>                <C>
--------------------------------------------------------------------------------
  BANK NAME:        State Street Bank Boston
--------------------------------------------------------------------------------
  ROUTING NO:       011000028
--------------------------------------------------------------------------------
  ATTN:             Deutsche Asset Management Funds
--------------------------------------------------------------------------------
  DDA NO:           00058180
--------------------------------------------------------------------------------
  FBO:              (Account name) (Account number)
--------------------------------------------------------------------------------
  CREDIT:           (fund name, fund number and, if applicable, class
                    name) (see "How to open your fund 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, contact your financial advisor or
           the Service Center at (800) 730-1313 by 4:30 p.m. Eastern time.
           Inform the Service Center of the amount of your redemption and
           receive a trade confirmation number. We must receive your order by
           4:30 p.m. Eastern time to wire to your account the same business
           day.


POLICIES YOU SHOULD KNOW ABOUT

           Along with the instructions 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.


14 | Policies You Should Know About
<PAGE>


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

           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.



           Financial intermediary support payments


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


                                            Policies You Should Know About  | 15
<PAGE>

           advisor's sales force; granting the Distributor access to the
           financial advisor's conferences and meetings; assistance in training
           and educating the financial advisor's personnel; and obtaining other
           forms of marketing support.

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

           The Advisor, the Distributor and/or their affiliates currently make
           revenue sharing payments from their own assets in connection with
           the sale and/or distribution of DWS Fund shares or the retention
           and/or servicing of investors and DWS Fund shares to financial
           advisors in amounts that generally range from .01% up to .50% of
           assets of the fund serviced and maintained by the financial advisor,
           .10% to .25% of sales of the fund attributable to the financial
           advisor, a flat fee of $12,500 up to $500,000, or any combination
           thereof. These amounts are subject to change at the discretion of
           the Advisor, the Distributor and/or their affiliates. Receipt of, or
           the prospect of receiving, this additional compensation may
           influence your financial advisor's recommendation of the fund or of
           any particular share class of the fund. You should review your
           financial advisor's compensation disclosure and/or talk to your
           financial advisor to obtain more information on how this
           compensation may have influenced your financial advisor's
           recommendation of the fund. Additional information regarding these
           revenue sharing payments is included in the fund's Statement of
           Additional Information, which is available to you on request at no
           charge (see the back cover of this prospectus for more information
           on how to request a copy of the Statement of Additional
           Information).

           The Advisor, the Distributor and/or their affiliates may also make
           such revenue sharing payments to financial advisors under the terms
           discussed above in connection with the distribution of both DWS
           funds and non-DWS funds by financial advisors to


16 | Policies You Should Know About
<PAGE>

           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.

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


           Policies about transactions


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

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

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


                                            Policies You Should Know About  | 17
<PAGE>

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

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

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

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

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

           THE FUND ACCEPTS PAYMENT FOR SHARES ONLY IN US DOLLARS by bank or
           Federal Funds wire transfer.

           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

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.

18 | Policies You Should Know About
<PAGE>


           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 other
           circumstances when it could be longer: When you are selling shares
           you bought recently by check (redemption proceeds from such a sale
           are unavailable until the check has cleared) or when unusual
           circumstances prompt the SEC to allow further delays. Certain
           expedited redemption processes may also be delayed when you are
           selling recently purchased shares or in the event of closing of the
           Federal Reserve Bank's wire payment system. In addition, the fund
           reserves the right to suspend or postpone redemptions as permitted
           pursuant to Section 22(e) of the Investment Company Act of 1940.
           Generally, those circumstances are when 1) the New York Stock
           Exchange is closed other than customary weekend or holiday closings;
           2) trading on the New York Stock Exchange is restricted; 3) an
           emergency exists which makes the disposal of securities owned by the
           fund or the fair determination of the value of the fund's net assets
           not reasonably practicable; or 4) the SEC, by order, permits the
           suspension of the right of redemption. Redemption payments by wire
           may also be delayed in the event of a non-routine closure of the
           Federal Reserve wire payment system. For additional rights reserved
           by the fund, please see "Other rights we reserve."


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


           TRANSACTION PROCESSING. If we receive your wire purchase order
           before 4:30 p.m. Eastern time you will receive the dividends
           declared that day. If we receive it after 4:30 p.m. Eastern time,
           you will not receive the dividends declared that day.



                                            Policies You Should Know About  | 19
<PAGE>

           You will not receive the dividends declared on the day you sell your
           shares by wire. You may place orders to buy and sell over the phone
           by calling the Service Center at 1-800-730-1313. If you order shares
           by phone and fail to pay for them by 4:30 p.m. Eastern time, we have
           the right to cancel your order, hold you liable or charge you or
           your account for any losses or fees the fund or its agents have
           incurred.


           SHORT-TERM TRADING. Since money market funds hold short-term
           instruments and are intended to provide liquidity to shareholders,
           the Advisor does not monitor or limit short-term or excessive
           trading activity in the fund and, accordingly, the Board of the fund
           has not approved any policies and procedures designed to limit this
           activity. However, the fund reserves the right to and may reject or
           cancel a purchase or exchange order into the fund for any reason,
           including if, in the opinion of the Advisor, there appears to be a
           pattern of short-term or excessive trading by an investor in another
           Deutsche Asset Management fund or DWS fund.


           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 the fund calculates share price

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


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



           The price at which you buy and sell shares is the NAV.



           IN VALUING SECURITIES, we typically use amortized cost (the method
           used by most money market funds) to account for any premiums or
           discounts above or below the face value of any securities the fund
           buys, and round the per share NAV to the nearest whole cent.

           The fund calculates its share price as of 4:30 p.m. Eastern time.
           The fund seeks to maintain a stable $1.00 share price.


20 | Policies You Should Know About
<PAGE>


           The bond markets or other primary trading markets for the fund may
           close early on the day before or after certain holidays are observed
           (for example, on the day after Thanksgiving and the day before
           Christmas). If the Bond Market Association recommends an early close
           of the bond markets, the fund also may close early. You may call
           (800) 730-1313 for additional information about whether the fund
           will close early before or after a particular holiday. On days of an
           early close:


           -  All orders received prior to the fund close will be processed as
              of the time the fund NAV is next calculated.

           -  Redemption orders received after the fund close will be processed
              as of the time the fund NAV is next calculated.

           -  Purchase orders received after the fund close will be processed
              the next business day.

           Generally, THE FUND IS OPEN every week, Monday through Friday,
           except when the following holidays are celebrated: New Year's Day,
           Martin Luther King, Jr. Day (the third Monday in January),
           Presidents' Day (the third Monday in February), Good Friday,
           Memorial Day (the last Monday in May), Independence Day, Labor Day
           (the first Monday in September), Columbus Day (the second Monday in
           October), Veterans' Day (November 11), Thanksgiving Day (the fourth
           Thursday in November) and Christmas Day. The fund may accept
           purchase or sale orders on days other than the days listed above, if
           the New York Stock Exchange is closed due to unforeseeable
           circumstances but the "Fed wire" is open, the primary trading
           markets for the fund's portfolio instruments are open or management
           believes there is adequate liquidity.


           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
              as federal income tax if we have been notified by the IRS that
              you are subject to backup withholding or if you fail to provide
              us with a correct taxpayer ID number and certain certifications
              or certification that you are exempt from backup withholding


                                            Policies You Should Know About  | 21
<PAGE>


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

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

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

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

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



22 | Policies You Should Know About
<PAGE>

UNDERSTANDING DISTRIBUTIONS AND TAXES

           DISCLAIMER. The Treasury Department has promulgated regulations
           which require the following statements. First, prospective investors
           should consult their own tax advisors with respect to the federal,
           state and local tax aspects of an investment in the fund based on
           their particular circumstances. Second, the statements of tax
           consequences set forth below (i) were written to support the
           marketing of shares in the fund; and (ii) were not intended or
           written to be used, and they cannot be used, by the fund or any
           taxpayer for the purpose of avoiding certain penalties that may be
           imposed with respect to tax deficiencies.

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

           THE FUND'S INCOME DIVIDENDS ARE DECLARED DAILY AND PAID MONTHLY TO
           SHAREHOLDERS. The fund may take into account capital gains and
           losses in its daily dividend declarations. The fund may make
           additional distributions for tax purposes if necessary.

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

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


THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

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

                                     Understanding Distributions and Taxes  | 23
<PAGE>

           YOU CAN CHOOSE HOW TO RECEIVE YOUR DIVIDENDS AND DISTRIBUTIONS. You
           can have them all automatically reinvested in fund shares (at NAV),
           all sent to you by check or wire, have one type reinvested and the
           other sent to you by check or have them invested in another fund.
           Tell us your preference on your application. If you don't indicate a
           preference, your dividends and distributions will all be reinvested.


           Taxable distributions are treated the same for federal income tax
           purposes whether you receive them in cash or reinvest them in
           additional shares. For federal income tax purposes, an exchange is
           treated the same as a sale.

           Because the fund seeks to maintain a stable share price, you are
           unlikely to have capital gains or losses when you sell fund shares.

           Certain shareholders of the fund will be required to include as
           income their allocated share of fund expenses, even though no such
           distribution will be made. Such shareholders will generally be
           allowed a deduction for such expenses to the extent such
           shareholders' itemized deductions (including their allocable share
           of fund expenses) exceeds 2% of their adjusted gross income. For
           more information, see the Statement of Additional Information, under
           "Taxes."

           For federal income tax purposes, distributions of investment income
           are taxable as ordinary income. The fund does not expect to make
           distributions that are eligible for taxation as long-term capital
           gains or as qualified dividend income.

           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.

           The above discussion is applicable to shareholders who are US
           persons. If you are a non-US person, please consult your own tax
           advisor with respect to the US tax consequences to you of an
           investment in the fund.


24 | Understanding Distributions and Taxes
<PAGE>


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


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

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


                                                                  Appendix  | 25
<PAGE>

                        Daily Assets Fund Institutional




<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%        0.07%              4.93%       $ 10,493.00         $   7.17
--------------------------------------------------------------------------------------------------
   2           10.25%        0.21%              9.96%       $ 10,995.61         $  22.56
--------------------------------------------------------------------------------------------------
   3           15.76%        0.21%             15.22%       $ 11,522.30         $  23.64
--------------------------------------------------------------------------------------------------
   4           21.55%        0.21%             20.74%       $ 12,074.22         $  24.78
--------------------------------------------------------------------------------------------------
   5           27.63%        0.21%             26.53%       $ 12,652.58         $  25.96
--------------------------------------------------------------------------------------------------
   6           34.01%        0.21%             32.59%       $ 13,258.64         $  27.21
--------------------------------------------------------------------------------------------------
   7           40.71%        0.21%             38.94%       $ 13,893.73         $  28.51
--------------------------------------------------------------------------------------------------
   8           47.75%        0.21%             45.59%       $ 14,559.23         $  29.88
--------------------------------------------------------------------------------------------------
   9           55.13%        0.21%             52.57%       $ 15,256.62         $  31.31
--------------------------------------------------------------------------------------------------
  10           62.89%        0.21%             59.87%       $ 15,987.41         $  32.81
--------------------------------------------------------------------------------------------------
  TOTAL                                                                         $ 253.83
--------------------------------------------------------------------------------------------------
</TABLE>




26 | Appendix
<PAGE>

TO GET MORE INFORMATION

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

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

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



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





<TABLE>
<S>                          <C>                                  <C>
SEC FILE NUMBER:
DWS Institutional Funds        Daily Assets Fund Institutional    811-6071
</TABLE>








(11/1/07) IDAF-1
[RECYCLE GRAPHIC APPEARS HERE]


<PAGE>


                            DO NOT COPY OR CIRCULATE

Investor  __________________________________________           Copy #_____

                                CONFIDENTIAL STATEMENT OF ADDITIONAL INFORMATION


                                                                NOVEMBER 1, 2007

DWS Institutional Funds


Daily Assets Fund Institutional

DWS  Institutional  Funds (the  "Trust")  is an open-end  management  investment
company that offers investors a selection of investment portfolios,  each having
distinct  investment  objectives and policies.  The Trust was organized on March
26, 1990, as a Massachusetts  business trust under the laws of the  Commonwealth
of Massachusetts.  This Confidential Statement of Additional Information ("SAI")
relates to Daily Assets Fund Institutional (the "Fund"), a series of the Trust.


Shares of the Fund are sold by DWS Scudder Distributors,  Inc. ("DWS-SDI" or the
"Distributor"),  the  Trust's  Distributor  (and the  Fund's  Placement  Agent).
Deutsche  Investment  Management  Americas Inc., serves as the Fund's investment
advisor ("DIMA" or the "Advisor").


THE SECURITIES  DESCRIBED IN THIS SAI ARE OFFERED  PURSUANT TO AN EXEMPTION FROM
THE  REGISTRATION  REQUIREMENTS  OF THE  SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES  ACT"), AND HAVE NOT BEEN REGISTERED WITH OR APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE  COMMISSION OR ANY OTHER REGULATORY  AUTHORITY OF
ANY  JURISDICTION,  NOR HAS THE SECURITIES AND EXCHANGE  COMMISSION OR ANY STATE
SECURITIES  COMMISSION  PASSED UPON THE  ACCURACY  OR ADEQUACY OF THIS SAI.  ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

SHARES OF THE FUND ARE BEING  OFFERED ONLY TO INVESTORS  WHO QUALIFY AS BOTH (1)
ACCREDITED  INVESTORS AS DEFINED UNDER REGULATION D UNDER THE SECURITIES ACT AND
(2)  INSTITUTIONAL  INVESTORS.  SHARES  OF THE FUND  ARE NOT  BEING  OFFERED  TO
INDIVIDUALS  OR TO ENTITIES  ORGANIZED FOR THE PURPOSE OF INVESTING ON BEHALF OF
INDIVIDUALS.  NO RESALE OF SHARES MAY BE MADE UNLESS THE SHARES ARE SUBSEQUENTLY
REGISTERED  UNDER THE SECURITIES ACT OR AN EXEMPTION FROM SUCH  REGISTRATION  IS
AVAILABLE.

THIS SAI HAS BEEN PREPARED ON A CONFIDENTIAL BASIS SOLELY FOR THE INFORMATION OF
THE  RECIPIENT  AND MAY NOT BE  REPRODUCED,  PROVIDED  TO OTHERS OR USED FOR ANY
OTHER PURPOSE.

NO PERSON HAS BEEN AUTHORIZED TO MAKE  REPRESENTATIONS  ON ANY INFORMATION  WITH
RESPECT TO THE SHARES, EXCEPT THE INFORMATION CONTAINED HEREIN OR IN THE TRUST'S
REGISTRATION STATEMENT.

INVESTORS  WILL BE  REQUIRED  TO  REPRESENT  THAT  THEY MEET  CERTAIN  FINANCIAL
REQUIREMENTS AND THAT THEY ARE FAMILIAR WITH AND UNDERSTAND THE TERMS, RISKS AND
MERITS OF AN INVESTMENT IN THE FUND.


The Fund's Confidential Private Offering  Memorandum,  which may be amended from
time to time,  is dated  November 1, 2007.  The  Confidential  Private  Offering
Memorandum   provides  the  basic  information   investors  should  know  before
investing,   and  may  be  obtained  without  charge  by  calling  the  Fund  at
1-800-730-1313.   This  SAI,  which  is  not  a  Confidential  Private  Offering
Memorandum,   is  intended  to  provide  additional  information  regarding  the
activities and operations of the Fund and should be read in conjunction with the
Confidential

<PAGE>

Private Offering Memorandum. Capitalized terms not otherwise defined in this SAI
have the meanings accorded to them in the Fund's  Confidential  Private Offering
Memorandum.

The Fund's audited Annual Report dated June 30, 2007,  which either  accompanies
this SAI or has  previously  been  provided to the  investor to whom this SAI is
being sent, is incorporated herein by reference.

Copies of the Annual Report,  Semi-Annual  Report and information  regarding the
Fund's current  performance may be obtained by writing or telephoning:  Deutsche
Asset  Management  c/o DWS  Scudder,  P.O.  Box 219210,  Kansas  City,  Missouri
64121-9210, 1-800-730-1313.


                               Investment Advisor

                  DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC.


                                  Administrator
                  DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC.

                                 Transfer Agent
                     DWS SCUDDER INVESTMENTS SERVICE COMPANY


                         Distributor and Placement Agent

                         DWS SCUDDER DISTRIBUTORS, INC.
                            222 South Riverside Plaza
                             Chicago, IL 60606-5808


<PAGE>


                               TABLE OF CONTENTS
                                                                            PAGE
                                                                            ----

INVESTMENT OBJECTIVE, POLICIES, RESTRICTIONS AND RISKS.........................1

         Investment Objective..................................................1
         Investment Policies...................................................1
         Additional Risk Factors...............................................4
         Portfolio Holdings Information........................................4
         Investment Restrictions...............................................7
         Additional Investment Limitations.....................................8
         Portfolio Turnover....................................................8

PORTFOLIO TRANSACTIONS.........................................................8

NET ASSET VALUE...............................................................12

PURCHASE AND REDEMPTION INFORMATION...........................................13

DISTRIBUTOR...................................................................17

TRUSTEES AND OFFICERS ........................................................17

MANAGEMENT OF THE FUND........................................................30

         Investment Advisor...................................................30
         Administrator........................................................32
         Code of Ethics.......................................................33

SERVICE PROVIDERS.............................................................33

         Custodian............................................................33
         Transfer Agent.......................................................33
         Independent Registered Public Accounting Firm........................34
         Counsel..............................................................34

ORGANIZATION OF THE TRUST.....................................................34

TAXES.........................................................................36

PROXY VOTING GUIDELINES.......................................................39

FINANCIAL STATEMENTS..........................................................41


                                       i
<PAGE>

             INVESTMENT OBJECTIVE, POLICIES, RESTRICTIONS AND RISKS

Investment Objective

The Fund's  investment  objective is a high level of current  income  consistent
with  liquidity and the  preservation  of capital.  There can, of course,  be no
assurance that the Fund will achieve its investment objective.

Investment Policies


The  following  is a discussion  of the various  investments  of and  techniques
employed by the Fund.  The Fund may engage in certain  practices  not  described
herein.


Quality  and  Maturity  of the  Fund's  Securities.  The Fund  will  maintain  a
dollar-weighted average maturity of 90 days or less. All securities in which the
Fund invests will have, or be deemed to have,  remaining  maturities of 397 days
or less on the date of their purchase and will be denominated in US dollars. The
Advisor,  acting under the supervision of and procedures adopted by the Board of
Trustees of the Trust, will determine that all securities  purchased by the Fund
present minimal credit risks.  The Advisor will cause the Fund to dispose of any
security as soon as  practicable  if the security is no longer of the  requisite
quality,  unless  such  action  would not be in the best  interest  of the Fund.
High-quality,   short-term   instruments  may  result  in  a  lower  yield  than
instruments with a lower quality or longer term.

Obligations  of Banks and Other  Financial  Institutions.  For  purposes  of the
Fund's  investment  policies with respect to bank  obligations,  the assets of a
bank will be deemed to include the assets of its domestic and foreign  branches.
Obligations  of foreign  branches of US banks and  foreign  banks may be general
obligations of the parent bank in addition to the issuing bank or may be limited
by the terms of a  specific  obligation  and by  government  regulation.  If the
Advisor,  acting  under  the  supervision  of the Board of  Trustees,  deems the
instruments  to  present  minimal  credit  risk,  the  Fund  may  invest  in  US
dollar-denominated obligations of foreign banks or foreign branches of US banks,
which may include  banks  located in the United  Kingdom,  Grand Cayman  Island,
Nassau, Japan and Canada. Investments in these obligations may entail risks that
are different  from those of  investments  in  obligations  of US domestic banks
because of  differences  in  political,  regulatory  and  economic  systems  and
conditions.  These risks include  future  political  and economic  developments,
currency  blockage,  the possible  imposition of  withholding  taxes on interest
payments,   differing  reserve   requirements,   reporting  and  record  keeping
requirements and accounting  standards,  possible seizure or  nationalization of
foreign  deposits,  difficulty  or  inability  of pursuing  legal  remedies  and
obtaining  judgments  in foreign  courts,  possible  establishment  of  exchange
controls or the adoption of other foreign  governmental  restrictions that might
affect  adversely  the payment of principal  and  interest on bank  obligations.
Foreign  branches  of US banks and  foreign  banks may also be  subject  to less
stringent reserve requirements and to different accounting,  auditing, reporting
and record keeping  standards than those  applicable to domestic  branches of US
banks.  Obligations of domestic and foreign financial  institutions in which the
Fund may invest  include  (but are not  limited  to)  certificates  of  deposit,
bankers'  acceptances,  bank  time  deposits,  commercial  paper,  and  other US
dollar-denominated  instruments  issued  or  supported  by the  credit  of US or
foreign financial institutions, including banks.

Commercial Paper.  Commercial paper obligations in which the Fund may invest are
short-term,  secured or unsecured  negotiable  promissory notes of US or foreign
corporations  and special  vehicles that at the time of purchase meet the rating
criteria described in the Confidential Private Offering Memorandum.  Investments
in foreign  commercial paper generally  involve risks similar to those described
above relating to obligations of foreign banks or foreign branches of US banks.


Variable  Rate  Master  Demand  Notes.  Variable  rate master  demand  notes are
unsecured  instruments  that  permit  the  indebtedness  thereunder  to vary and
provide for periodic  adjustments  in the interest rate.  Because  variable rate
master  demand notes are direct  lending  arrangements  between the Fund and the
issuer, they are not ordinarily traded.  Although no active secondary market may
exist for these notes,  the Fund will  purchase  only those notes under which it
may demand and receive  payment of  principal  or may resell the note to a third
party.  While the  notes are not  typically  rated by  credit  rating  agencies,
issuers of variable  rate master  demand notes must satisfy the


                                       1
<PAGE>

Advisor, acting under the supervision of the Board of Trustees of the Fund, that
the same criteria as set forth in the Confidential  Private Offering  Memorandum
for  issuers of  commercial  paper are met. In the event an issuer of a variable
rate master demand note defaulted on its payment  obligation,  the Fund might be
unable to dispose of the note  because of the absence of a secondary  market and
could,  for this or other  reasons,  suffer a loss to the extent of the default.
The face  maturities  of  variable  rate notes  subject to a demand  feature may
exceed 397 days in certain  circumstances.  (See  "Quality  and  Maturity of the
Fund's Securities" herein.)


US Government  Obligations.  The Fund may invest in direct obligations issued by
the US Treasury or in obligations  issued or guaranteed by the US Treasury or by
agencies   or   instrumentalities   of  the  US   government   ("US   Government
Obligations").  Certain  short-term  US  Government  Obligations,  such as those
issued by the Government National Mortgage Association  ("GNMA"),  are supported
by the "full faith and credit" of the US  government;  others,  such as those of
the Export-Import  Bank of the United States,  are supported by the right of the
issuer to borrow  from the US  Treasury;  others,  such as those of the  Federal
National  Mortgage  Association are solely the obligations of the issuing entity
but  are  supported  by the  discretionary  authority  of the US  government  to
purchase  the  agency's  obligations;  and  still  others,  such as those of the
Student  Loan  Marketing  Association,  are  supported  by  the  credit  of  the
instrumentality.  No assurance can be given that the US government would provide
financial  support  to US  government-sponsored  instrumentalities  if it is not
obligated to do so by law.

Examples  of the  types  of US  Government  Obligations  that  the Fund may hold
include, but are not limited to, in addition to those described above and direct
US Treasury obligations,  the obligations of the Federal Housing  Administration
("FHA"),  Farmers Home Administration,  Small Business  Administration,  General
Services  Administration,  Central  Bank for  Cooperatives,  Federal Farm Credit
Banks, Federal Farm Credit Banks Funding Corp., Federal Home Loan Banks, Federal
Home Loan Mortgage Corporation,  Federal Intermediate Credit Banks, Federal Land
Banks and Maritime Administration.


Other Debt  Obligations.  The Fund may invest in deposits,  euro-time  deposits,
bonds,  notes and  debentures  and other  debt  obligations  that at the time of
purchase have, or are comparable in priority and security to other securities of
such  issuer  which  have,   outstanding   short-term  obligations  meeting  the
short-term  rating  requirements  described in the Fund's  current  Confidential
Private Offering  Memorandum,  or if there are no such short-term  ratings,  are
determined by the Advisor, acting under the supervision of the Board of Trustees
of the Trust, to be of comparable quality and are rated in the top three highest
long-term  rating  categories by the nationally  recognized  statistical  rating
organizations (NRSROs) rating such security.


Asset-Backed  Securities/Mortgage-Backed Securities. The Fund may also invest in
securities  generally referred to as asset-backed  securities or mortgage-backed
securities,  which directly or indirectly represent a participation interest in,
or are secured by and payable from, a stream of payments generated by particular
assets such as motor vehicle or credit card  receivables or a pool of mortgages.
Asset-backed and  mortgage-backed  securities may provide periodic payments that
consist of interest  and/or  principal  payments.  Consequently,  the life of an
asset-backed  or  mortgage-backed   security  and  its  yield  varies  with  the
prepayment rate and loss experience of the underlying assets.

Repurchase Agreements.  The Fund may engage in repurchase agreement transactions
with  banks and  governmental  securities  dealers  deemed  creditworthy  by the
Advisor.  Under the  terms of a typical  repurchase  agreement,  the Fund  would
acquire  US  Government  Obligations  regardless  of  maturity,  subject  to  an
obligation of the seller to repurchase,  and the Fund to resell,  the obligation
at an agreed  price and time,  thereby  determining  the yield during the Fund's
holding period.  This arrangement  results in a fixed rate of return that is not
subject to market  fluctuations  during the Fund's holding period.  The value of
the  underlying  securities  will be at least  equal at all  times to the  total
amount of the repurchase obligations,  including interest. The Fund bears a risk
of loss in the event that the other party to a repurchase  agreement defaults on
its  obligations  and the Fund is delayed in or prevented  from  exercising  its
rights to  dispose of the  collateralized  securities,  including  the risk of a
possible decline in the value of the underlying  securities during the period in
which  the  Fund  seeks  to  assert  these  rights.   The  Advisor  reviews  the
creditworthiness  of those  banks and  dealers  with which the Fund  enters into
repurchase  agreements  and  monitors  on an  ongoing  basis  the  value  of the
securities  subject to repurchase  agreements to ensure that it is maintained at
the required level.

Reverse  Repurchase  Agreements.  The Fund may  borrow  funds for  temporary  or
emergency purposes, such as meeting larger-than-anticipated redemption requests,
and not for  leverage,  by,  among  other  things,  agreeing  to sell


                                       2
<PAGE>

portfolio securities to financial  institutions such as banks and broker-dealers
and to  repurchase  them  at a  mutually  agreed  date  and  price  (a  "reverse
repurchase  agreement").  At the time the Fund enters into a reverse  repurchase
agreement it  segregates  cash,  US Government  Obligations  or high-grade  debt
obligations  having a value equal to the  repurchase  price,  including  accrued
interest.  Reverse repurchase  agreements involve the risk that the market value
of the  securities  sold by the Fund may decline below the  repurchase  price of
those securities.  Reverse repurchase agreements are considered to be borrowings
by the Fund.

When-Issued   and   Delayed-Delivery   Securities.   To  secure   prices  deemed
advantageous  at a  particular  time,  the Fund  may  purchase  securities  on a
when-issued or delayed-delivery  basis, in which case delivery of the securities
occurs  beyond the normal  settlement  period;  payment  for or  delivery of the
securities  would be made  prior to the  reciprocal  delivery  or payment by the
other  party to the  transaction.  The  Fund  will  enter  into  when-issued  or
delayed-delivery  transactions  for the purpose of acquiring  securities and not
for the purpose of leverage.  When-issued  securities  purchased by the Fund may
include  securities  purchased on a "when,  as, and if issued" basis under which
the issuance of the securities depends on the occurrence of a subsequent event.

Securities  purchased on a when-issued or delayed-delivery  basis may expose the
Fund to risk because the securities may experience  fluctuations  in value prior
to their  actual  delivery.  The Fund does not accrue  income with  respect to a
when-issued  or  delayed-delivery  security  prior to its stated  delivery date.
Purchasing securities on a when-issued or delayed-delivery basis can involve the
additional  risk that the yield  available in the market when the delivery takes
place  may be  higher  than  that  obtained  in  the  transaction  itself.  Upon
purchasing a security on a when-issued or delayed-delivery  basis, the Fund will
segregate  cash  or  liquid  securities  in an  amount  at  least  equal  to the
when-issued or delayed-delivery commitment.


Investment in Other Investment Companies. In accordance with applicable law, the
Fund may  invest  its  assets  in  other  money  market  funds  with  comparable
investment objectives. In general, the Fund may not (1) purchase more than 3% of
any other  money  market  fund's  voting  stock;  (2) invest more than 5% of its
assets in any single  money  market  fund;  and (3) invest  more than 10% of its
assets in other money market funds  (unless  permitted by an exemptive  order of
the SEC or rules under the Investment Company Act of 1940).  Notwithstanding the
investment  policies and restrictions of the Fund, upon approval of the Board of
Trustees,  the Fund may invest all or most of its  investable  assets in another
registered  investment company with substantially the same investment objective,
policies and restrictions as the Fund. See "Master-Feeder Fund Structure."


Illiquid Securities.  The Fund may not invest more than 10% of its net assets in
securities  which  are  illiquid  or  otherwise  not  readily  marketable  (such
securities  may include  securities  which are  subject to legal or  contractual
restrictions  on resale and repurchase  agreements  with  maturities  over seven
days). If a security  becomes illiquid after purchase by the Fund, the Fund will
normally sell the security as soon as is reasonably  practicable unless it would
not be in the best interests of shareholders to do so.


Impact of Large  Redemptions  and  Purchases of Fund Shares.  From time to time,
shareholders  of the Fund (which may include  affiliated  and/or  non-affiliated
registered  investment  companies  that invest in the Fund) may make  relatively
large redemptions or purchases of Fund shares.  These transactions may cause the
Fund to have to sell securities or invest  additional  cash, as the case may be.
While it is impossible to predict the overall impact of these  transactions over
time,  there could be adverse  effects on the Fund's  performance  to the extent
that the Fund may be required to sell securities or invest cash at times when it
would  not  otherwise  do so.  These  transactions  could  also  accelerate  the
realization of taxable  income if sales of securities  resulted in capital gains
and could also increase  transaction  costs, which may impact the Fund's expense
ratio.


Credit  Enhancement.  Certain  of  the  Fund's  acceptable  investments  may  be
credit-enhanced  by a  guaranty,  letter of credit,  or  insurance  from a third
party. Any bankruptcy, receivership, default, or change in the credit quality of
the third party  providing the credit  enhancement  could  adversely  affect the
quality and  marketability of the underlying  security and could cause losses to
the Fund and affect  the  Fund's  share  price.  Subject to the  diversification
limits  contained  in Rule 2a-7 under the  Investment  Company  Act of 1940,  as
amended  ("1940  Act"),  the Fund may have  more  than 25% of its  total  assets
invested in securities  issued or  credit-enhanced  by banks or other  financial
institutions.

                                       3
<PAGE>

Funding  Agreements.  The Fund may  invest in  highly  rated  insurance  company
funding  agreements.  Funding  agreements  are  contracts  issued  by  insurance
companies  that  provide  investors  the  right to  receive a  variable  rate of
interest and the full return of principal at maturity.  Funding  agreements also
include a put  option  that  allows the Fund to  terminate  the  agreement  at a
specified  time to the  insurance  company  prior to  maturity.  The  Fund  will
purchase funding  agreements with  unconditional  puts of 30 or 90 days or less.
Funding agreements generally offer a higher yield than other variable securities
with similar  credit  ratings.  The primary  risk of a funding  agreement is the
credit  quality  of the  insurance  company  that  issues it. The Fund will only
purchase  funding  agreements with  counterparty  ratings of A1+ by S&P or P1 by
Moody's.  Funding agreements are considered `illiquid' securities and will count
towards the 10% maximum limit that may be held by the Fund.

Additional Risk Factors

In addition to the risks discussed above, the Fund's  investments may be subject
to the following risk factors:


It is expected that money used to purchase Fund shares will be comprised of cash
collateral which the Fund's  institutional  investors receive in connection with
their  participation  in the Deutsche Bank's  securities  lending  program.  The
amount of such  collateral is subject to periodic  fluctuation,  and accordingly
the Fund may experience  large purchases and redemptions over a relatively short
time period that may impact the Fund's ability to optimize cash  management.  To
assist the Fund in remaining fully invested,  pursuant to its request,  the Fund
has  received  an  order  from the SEC  granting  the  Fund  and  Deutsche  Bank
permission to jointly enter into  repurchase  agreements  and other  investments
with  non-affiliated  banks,  broker-dealers  or other  issuers  with respect to
amounts to be received on any day. Such investments will be apportioned  between
the Fund and  Deutsche  Bank in such a manner as to maximize the  investment  of
cash by the Fund.


Rating  Services.  The  ratings  of  Nationally  Registered  Statistical  Rating
Organizations  ("NRSROs")  represent  their  opinions  as to the  quality of the
securities that they undertake to rate. It should be emphasized,  however,  that
ratings are relative and subjective  and are not absolute  standards of quality.
Although  these  ratings are an initial  criterion  for  selection  of portfolio
investments,  the Advisor  also makes its own  evaluation  of these  securities,
subject  to review by the Board of  Trustees.  After  purchase  by the Fund,  an
obligation  may cease to be rated or its rating may be reduced below the minimum
required for purchase by the Fund. The Advisor will cause the Fund to dispose of
any  security  as  soon as  practicable  if the  security  is no  longer  of the
requisite  quality,  unless such action would not be in the best interest of the
Fund.  A  description  of the ratings  categories  of NRSROs is set forth in the
Appendix to this SAI.

Portfolio Holdings Information


Public disclosure of Fund portfolio holdings is made through required Securities
and Exchange Commission ("SEC") quarterly filings. The Fund does not disseminate
non-public  information  about  portfolio  holdings  except in  accordance  with
policies and procedures adopted by the Fund.

The Fund's  procedures permit non-public  portfolio  holdings  information to be
shared with Deutsche Asset Management and its affiliates  (collectively "DeAM"),
subadvisors, if any, custodians, independent registered public accounting firms,
attorneys,   officers  and  trustees/directors  and  each  of  their  respective
affiliates and advisers who require access to this  information to fulfill their
duties to the Fund and are subject to the duties of  confidentiality,  including
the duty not to trade on non-public information,  imposed by law or contract, or
by the Fund's  procedures.  This  non-public  information may also be disclosed,
subject to the  requirements  described  below,  to securities  lending  agents,
financial  printers,  proxy voting  firms,  mutual fund  analysts and rating and
tracking  agencies,  or to shareholders  in connection with in-kind  redemptions
(collectively, "Authorized Third Parties").

Prior to any disclosure of the Fund's non-public  portfolio holdings information
to Authorized  Third Parties,  a person  authorized by the Fund's  Trustees must
make a good faith  determination  in light of the facts then known that the Fund
has a  legitimate  business  purpose for  providing  the  information,  that the
disclosure is in the best interest of the Fund,  and that the recipient  assents
or otherwise has a duty to keep the  information


                                       4
<PAGE>

confidential  and to not  trade  based on the  information  received  while  the
information remains non-public.  No compensation is received by the Fund or DeAM
for disclosing non-public holdings information. Periodic reports regarding these
procedures will be provided to the Fund's Trustees.

Portfolio  holdings  information  distributed  by the trading desks of DeAM or a
subadvisor for the purpose of facilitating  efficient trading of such securities
and receipt of relevant  research is not subject to the foregoing  requirements.
Non-public   portfolio   holding   information   does  not   include   portfolio
characteristics  (other than holdings or subsets of holdings) about the Fund and
information  derived there from,  including,  but not limited to, how the Fund's
investments are divided among various sectors, industries,  countries, value and
growth stocks,  bonds,  currencies and cash,  types of bonds,  bond  maturities,
duration,  bond  coupons and bond credit  quality  ratings so long as the Fund's
holdings could not be derived from such information.


Registered  investment  companies  that are subadvised by DeAM may be subject to
different  portfolio  holdings  disclosure  policies,  and neither  DeAM nor the
Fund's  Trustees  exercise  control over such  policies.  In addition,  separate
account  clients of DeAM have  access to their  portfolio  holdings  and are not
subject  to the Fund's  portfolio  holdings  disclosure  policy.  The  portfolio
holdings  of some of the  funds  subadvised  by DeAM  and  some of the  separate
accounts managed by DeAM may substantially  overlap with the portfolio  holdings
of the Fund.

DeAM also  manages  certain  unregistered  commingled  trusts and creates  model
portfolios,  the portfolio holdings of which may substantially  overlap with the
portfolio holdings of the Fund. To the extent that investors in these commingled
trusts  or  recipients  of model  portfolio  holdings  information  may  receive
portfolio  holdings  information  of their  trust or of a model  portfolio  on a
different basis from that on which Fund portfolio  holdings  information is made
public,  DeAM has implemented  procedures  reasonably designed to encourage such
investors and recipients to keep such information  confidential,  and to prevent
those investors from trading on the basis of non-public holdings information.

There is no assurance that the Fund's  policies and  procedures  with respect to
the disclosure of portfolio holdings  information will protect the Fund from the
potential  misuse of portfolio  holdings  information  by those in possession of
that information.


Regulatory Matters and Legal Proceedings

On December 21, 2006,  Deutsche Asset Management  ("DeAM")  settled  proceedings
with the  Securities and Exchange  Commission  ("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 Scudder 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 funds and/or 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.

                                       5
<PAGE>

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")  announced  final  agreements  in  which  Deutsche  Investment
Management Americas Inc. ("DIMA"),  Deutsche Asset Management, Inc. ("DAMI") and
Scudder  Distributors,  Inc. ("DWS-SDI") (now known as DWS Scudder Distributors,
Inc.)  settled  administrative  proceedings  regarding  disclosure  of brokerage
allocation  practices in connection  with sales of the Scudder Funds' (now known
as the DWS Scudder 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  DWS-SDI'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  Scudder Fund shares.  These directed
brokerage practices were discontinued in October 2003.

Under the terms of the  settlements,  in which DIMA,  DAMI and  DWS-SDI  neither
admitted  nor denied any of the  regulators'  findings,  DIMA,  DAMI and DWS-SDI
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 DWS-SDI  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-scudder.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.

                                       6
<PAGE>

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.


Investment Restrictions

Fundamental  Policies.  The following  investment  restrictions are "fundamental
policies"  of the Fund and may not be changed  with  respect to the Fund without
the approval of a "majority of the outstanding  voting  securities" of the Fund.
Under the 1940 Act,  as  amended,  a  "fundamental"  policy  may not be  changed
without the "vote of a majority of the  outstanding  voting  securities"  of the
Fund, which is defined in the 1940 Act, as amended,  as the lesser of (a) 67% or
more of the outstanding  voting  securities of the Fund present at a shareholder
meeting, if the holders of more than 50% of the outstanding voting securities of
the Fund are  present  or  represented  by  proxy,  or (b) more  than 50% of the
outstanding voting securities of the Fund.

The Fund has elected to be treated as a diversified  investment company, as that
term is used in the 1940 Act,  as  amended,  and as  interpreted  or modified by
regulatory authority having jurisdiction, from time to time.

Under investment policies adopted by the Fund, the Fund may not:

1.       Borrow money,  except as permitted under the 1940 Act, as amended,  and
         as interpreted or modified by regulatory authority having jurisdiction,
         from time to time;

2.       Issue any "senior  security"  (as that term is defined in the 1940 Act)
         if such  issuance  is  specifically  prohibited  by the  1940  Act,  as
         amended, or the rules and regulations promulgated thereunder,  provided
         that  collateral  arrangements  with  respect to options  and  futures,
         including  deposits of initial  deposit and variation  margin,  are not
         considered to be the issuance of a senior security for purposes of this
         restriction;


3.       Concentrate  its investments in any particular  industry  (excluding US
         Government  Obligations),  as that  term is used in the  1940  Act,  as
         amended,  and as interpreted or modified by regulatory authority having
         jurisdiction,  from time to time; except that the Fund will invest more
         than 25% of its  total  assets  in the  obligations  of banks and other
         financial institutions;


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  hold,  deal or trade 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; or

7.       Make loans except as permitted  under the 1940 Act, as amended,  and as
         interpreted or modified by regulatory  authority  having  jurisdiction,
         from time to time.

Notwithstanding  the foregoing  policies,  the Fund has no present  intention of
engaging in transactions  involving dollar rolls,  futures and options contracts
or loans of portfolio securities. The Fund will only engage in such transactions
upon approval of the Board of Trustees and appropriate disclosure to investors.

Master/Feeder Fund Structure. The Board of Trustees has the discretion to retain
the current  distribution  arrangement  for the Fund while investing in a master
fund in a master/feeder fund structure as described below.

A master/feeder fund structure is one in which a fund (a "feeder fund"), instead
of investing  directly in a portfolio of securities,  invests most or all of its
investment  assets in a separate  registered  investment  company  (the  "master

                                       7
<PAGE>

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 and  requirements  are met, the  realization of taxable
gain or loss.

Additional Investment Limitations

The Fund may not invest more than 25% of its total assets in the  securities  of
issuers  in  any  single  industry  (excluding  US  Government  Obligations  and
repurchase agreements collateralized by US Government Obligations), except that,
under normal  market  conditions,  more than 25% of the total assets of the Fund
will be invested in obligations of banks and other financial institutions.

As an operating policy, the Fund may not invest more than 5% of its total assets
in the  obligations  of any one issuer  except:  (1) as may be permitted by Rule
2a-7  and  (2)  for  US  Government   Obligations   and  repurchase   agreements
collateralized fully thereby, which may be purchased without limitation.

The  Fund  is  also  authorized  to  borrow  for  temporary   purposes  to  meet
redemptions,  including  entering into reverse  repurchase  transactions,  in an
amount up to 10% of its total assets and to pledge its assets to the same extent
in connection with these borrowings.

At the time of an  investment,  the  Fund's  aggregate  holdings  of  repurchase
agreements  having a  remaining  maturity of more than seven  calendar  days (or
which may not be terminated within seven calendar days upon notice by the Fund),
time deposits having  remaining  maturities of more than seven calendar days and
other  illiquid  securities  will not exceed 10% of the  Fund's net  assets.  If
changes in the liquidity of certain securities cause the Fund to exceed such 10%
limit,  the Fund will take steps to bring the  aggregate  amount of its illiquid
securities back below 10% of its net assets as soon as practicable,  unless such
action would not be in the best interest of the Fund.



Portfolio Turnover

The Fund  may  attempt  to  increase  yield  by  trading  to take  advantage  of
short-term  market  variations,  which  results  in higher  portfolio  turnover.
However, this policy does not result in higher brokerage commissions to the Fund
as the  purchases  and sales of  portfolio  securities  are usually  effected as
principal  transactions.  The Fund's  turnover  rate is not  expected  to have a
material  effect  on its  income  and has  been and is  expected  to be zero for
regulatory reporting purposes.


                             PORTFOLIO TRANSACTIONS


Brokerage Commissions


The Advisor is generally responsible for placing the orders for the purchase and
sale of portfolio securities, including the allocation of brokerage.

The  policy of the  Advisor  in  placing  orders  for the  purchase  and sale of
securities  for the Fund 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-


                                       8
<PAGE>

dealer's  ability  to  provide  support  when  placing a  difficult  trade;  the
financial condition of the broker-dealer;  and whether the broker-dealer has the
infrastructure and operational capabilities to execute and settle the trade. The
Advisor seeks to evaluate the overall  reasonableness  of brokerage  commissions
with commissions  charged on comparable  transactions and compares the brokerage
commissions  (if any) paid by the Fund to reported  commissions  paid by others.
The  Advisor  routinely  reviews  commission  rates,  execution  and  settlement
services performed and makes internal and external comparisons.

Commission rates on transactions in equity securities on 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 Fund
to their  customers.  However,  the Advisor does not consider sales of shares of
the Fund as a factor in the  selection of  broker-dealers  to execute  portfolio
transactions  for the  Fund  and,  accordingly,  has  implemented  policies  and
procedures  reasonably designed to prevent its traders from considering sales of
shares of the Fund as a factor in the  selection  of  broker-dealers  to execute
portfolio transactions for the Fund.

The Advisor is  permitted  by Section  28(e) of the  Securities  Exchange Act of
1934, as amended ("1934 Act"), when placing  portfolio  transactions for a Fund,
to cause the Fund to pay brokerage  commissions  in excess of that which another
broker-dealer might charge for executing the same transaction in order to obtain
research and brokerage  services if the Advisor determines that such commissions
are  reasonable in relation to the overall  services  provided.  The Advisor may
from  time to time,  in  reliance  on  Section  28(e) of the 1934  Act,  execute
portfolio  transactions with  broker-dealers that provide research and brokerage
services to the Advisor.  Consistent  with the Advisor's  policy  regarding best
execution,  where more than one broker is  believed  to be capable of  providing
best execution for a particular  trade, the Advisor may take into  consideration
the receipt of research and brokerage services in selecting the broker-dealer to
execute  the trade.  Although  certain  research  and  brokerage  services  from
broker-dealers may be useful to a Fund and to the Advisor,  it is the opinion of
the Advisor that such information only supplements its own research effort since
the  information  must still be analyzed,  weighed and reviewed by the Advisor's
staff. To the extent that research and brokerage  services of value are received
by the Advisor,  the Advisor may avoid expenses that it might  otherwise  incur.
Research and brokerage  services  received from a broker-dealer may be useful to
the Advisor and its affiliates in providing  investment  management  services to
all or some of its  clients,  which  includes  a Fund.  Services  received  from
broker-dealers  that executed  securities  transactions for 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


                                       9
<PAGE>

thereunder.  Currently,  it is the Advisor's  policy that  Sub-Advisors  may not
execute  portfolio  transactions  on behalf of the Fund 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 the Fund and for other investment  accounts managed by
the  Advisor  are  made  independently  of each  other  in  light  of  differing
conditions. However, the same investment decision may be made for two or more of
such accounts. In such cases,  simultaneous  transactions are inevitable. To the
extent  permitted by law, the Advisor may aggregate the securities to be sold or
purchased  for a Fund with those to be sold or purchased  for other  accounts in
executing  transactions.  Purchases  or sales are then  averaged as to price and
commission  and  allocated  as to amount in a manner  deemed  equitable  to each
account.  While in some cases this practice  could have a detrimental  effect on
the price  paid or  received  by,  or on the size of the  position  obtained  or
disposed of for,  the Fund,  in other  cases it is believed  that the ability to
engage in volume transactions will be beneficial to the Fund.

DIMA and its affiliates and the Fund's management team manage other mutual funds
and separate accounts,  some of which use short sales of securities as a part of
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  may act as a broker for the Fund and
receive brokerage commissions or other transaction-related compensation from the
Fund in the purchase and sale of securities,  options or futures contracts when,
in the judgment of the Advisor,  and in accordance with  procedures  approved by
the Fund's  Boards,  the  affiliated  broker  will be able to obtain a price and
execution at least as favorable as those obtained from other  qualified  brokers
and if,  in the  transaction,  the  affiliated  broker  charges  the Fund a rate
consistent  with that charged to  comparable  unaffiliated  customers in similar
transactions.





                                       10
<PAGE>




                                       11
<PAGE>



Money  market  instruments  are normally  purchased  in  principal  transactions
directly from the issuer or from an underwriter  or market maker.  There usually
are no brokerage  commissions  paid by the Fund for such  purchases.  During the
last  three  fiscal  years the Fund  paid no  portfolio  brokerage  commissions.
Purchases from  underwriters will include a commission or concession paid by the
issuer to the  underwriter,  and purchases from dealers serving as market makers
will include the spread between the bid and asked prices.



                                 NET ASSET VALUE

The Confidential Private Offering Memorandum discusses the time at which the NAV
per share of the Fund is determined for purposes of sales and redemptions.

The valuation of the Fund's  securities is based on their amortized cost,  which
does not take into account  unrealized  capital gains or losses.  Amortized cost
valuation  involves  initially  valuing an instrument at its cost and thereafter
assuming a  constant  amortization  to  maturity  of any  discount  or  premium,
generally  without  regard to the impact of  fluctuating  interest  rates on the
market  value of the  instrument.  Although  this method  provides  certainty in
valuation,  it may  result in periods  during  which  value,  as  determined  by
amortized  cost,  is higher or lower than the price the Fund would receive if it
sold the instrument.

The  Fund's  use of the  amortized  cost  method of valuing  its  securities  is
permitted by a rule adopted by the SEC.  Under this rule, the Fund must maintain
a dollar-weighted  average portfolio maturity of 90 days or less,  purchase only
instruments having remaining maturities of 397 days or less (as determined under
the rule), and invest only in securities  determined by or under the supervision
of the Trust's Board of Trustees to present minimal credit risks.

Pursuant  to the  rule,  the  Trust's  Board of  Trustees  also has  established
procedures  designed to allow investors in the Fund to establish,  to the extent
reasonably possible,  the investors' price per share as computed for the purpose
of sales and redemptions at $1.00. These procedures include review of the Fund's
holdings  by the  Trust's  Board  of  Trustees,  at such  intervals  as it deems
appropriate,  to determine  whether the value of the Fund's assets calculated by
using  available  market  quotations  or market  equivalents  deviates from such
valuation based on amortized cost.

The rule also provides that the extent of any deviation between the value of the
Fund's assets based on available  market  quotations or market  equivalents  and
such valuation  based on amortized cost must be examined by the Trust's Board of
Trustees. In the event the Trust's Board of Trustees determines that a deviation
exists that may result in material dilution or other unfair results to investors
or existing  shareholders,  pursuant to the rule,  the Trust's Board of Trustees
must  cause the Fund to take  such  corrective  action as the Board of  Trustees
regards as necessary and appropriate,  including:  selling portfolio instruments
prior to  maturity  to realize  capital  gains or losses or to  shorten  average
portfolio maturity;  withholding  dividends or paying distributions from capital
or capital  gains;  redeeming  shares in kind;  or valuing the Fund's  assets by
using available market quotations.

                                       12
<PAGE>

                       PURCHASE AND REDEMPTION INFORMATION

The Trust may suspend the right of  redemption  or postpone  the date of payment
for shares of the Fund during any period when: (a) trading in the Fund's primary
markets is restricted by applicable  rules and  regulations  of the SEC; (b) the
Fund's primary  markets are closed for other than customary  weekend and holiday
closings;  (c)  the  SEC  has by  order  permitted  such  suspension;  or (d) an
emergency exists as determined by the SEC.

Under the terms of a Placement Agent Agreement,  DWS Scudder Distributors,  Inc.
("DWS-SDI")  acts as Placement  Agent on a `"best efforts" basis with respect to
the sale of shares of the Fund.  In addition to  DWS-SDI's  duties as  Placement
Agent,  DWS-SDI  may,  in  its  discretion,   perform  additional  functions  in
connection with transactions in the shares of the Fund.

The Fund  reserves  the  right to  redeem  all of its  shares,  if the  Board of
Trustees votes to liquidate the Fund.

Use of Financial  Services  Firms.  Investment  dealers and other firms  provide
varying arrangements for their clients to purchase and redeem the Fund's shares,
including  different minimum  investments,  and may assess  transaction or other
fees.   Firms  may  arrange  with  their   clients  for  other   investment   or
administrative  services.  Such  firms may  independently  establish  and charge
additional  amounts to their clients for such services.  Firms also may hold the
Fund's  shares in  nominee  or  street  name as agent for and on behalf of their
customers. In such instances, the Fund's transfer agent will have no information
with  respect to or control  over the  accounts of specific  shareholders.  Such
shareholders  may obtain access to their  accounts and  information  about their
accounts only from their firm.  Certain of these firms may receive  compensation
from the Fund through the Shareholder Service Agent for record-keeping and other
expenses relating to these nominee  accounts.  In addition,  certain  privileges
with respect to the purchase and  redemption  of shares or the  reinvestment  of
dividends may not be available through such firms. Some firms may participate in
a  program  allowing  them  access to their  clients'  accounts  for  servicing,
including,  without  limitation,  transfers of  registration  and dividend payee
changes, and may perform functions such as generation of confirmation statements
and disbursement of cash dividends. Such firms, including affiliates of DWS-SDI,
may receive compensation from the Fund through the Shareholder Service Agent for
these services.

The Fund has authorized one or more financial  service  institutions,  including
certain   members   of  the  NASD  other   than  the   Distributor   ("financial
institutions"),  to accept purchase and redemption orders for the Fund's shares.
Such financial  institutions  may also designate  other parties,  including plan
administrator  intermediaries,  to accept purchase and redemption  orders on the
Fund's behalf.  Orders for purchases or redemptions  will be deemed to have been
received by the Fund when such financial  institutions or, if applicable,  their
authorized  designees  accept the orders.  Subject to the terms of the  contract
between the Fund and the financial institution, ordinarily orders will be priced
at the Fund's net asset value next computed  after  acceptance by such financial
institution or its authorized  designees and accepted by the Fund.  Further,  if
purchases or  redemptions  of the Fund's  shares are arranged and  settlement is
made  at  an  investor's   election  through  any  other  authorized   financial
institution, that financial institution may, at its discretion, charge a fee for
that  service.  The  Board of  Trustees  and the  Distributor,  also the  Fund's
principal  underwriter,  each has the right to limit the amount of purchases by,
and to refuse to sell to, any  person.  The  Trustees  and the  Distributor  may
suspend  or  terminate  the  offering  of shares of the Fund at any time for any
reason.


DWS-SDI has adopted an Incentive Plan (the "Plan") covering wholesalers that are
regional vice presidents  ("DWS Scudder  Wholesalers").  Generally,  DWS Scudder
Wholesalers  market shares of the DWS funds to your  financial  advisor,  who in
turn may  recommend  that you  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 Scudder Wholesalers will receive
a monetary  monthly  incentive based on the amount of sales generated from their
marketing of the funds,  and that incentive will differ depending on the product
category of the fund. Each fund is assigned to one of four product categories --
"Core,"  "Strategic,"  "Satellite"  or "Non-CSS"  -- taking into  consideration,
among other things, the following criteria, where applicable:

o        The Fund's 3-year performance;
o        The Fund's Morningstar rating;
o        Market size for the fund category;

                                       13
<PAGE>

o        The Fund's size, including sales and redemptions of the Fund's shares;
o        The length of time the Fund's Portfolio Managers have managed the Fund;
         and
o        The Fund's consistency with DWS Scudder's branding.

This  information  and other factors are  presented to a committee  comprised of
representatives  from  various  groups  within  DWS  Scudder,  who  review  on a
quarterly basis the funds assigned to each product category described above, and
make any  changes to those  assignments  at that time.  No one  factor,  whether
positive or negative,  determines a fund's  placement in a given  category;  all
these factors together are considered, and the designation of funds in the Core,
Strategic and Satellite categories represents management's judgment based on the
above criteria.  In addition,  management may consider a fund's profile over the
course  of  several  review  periods  before  making  a change  to its  category
assignment.  These  category  assignments  will be posted  quarterly  to the DWS
funds' Web site at www.dws-scudder.com, approximately one month after the end of
each quarter.  DWS Scudder Wholesalers will receive the highest compensation for
Core and Strategic  funds,  less for Satellite  funds and the lowest for Non-CSS
funds.   The  level  of   compensation   among  these   categories   may  differ
significantly.

In the normal course of business,  DWS Scudder will from time to time  introduce
new funds into the DWS family of funds. As a general rule, all new funds will be
placed in the  Strategic  compensation  category  for a  minimum  period of four
consecutive quarters, and DWS Scudder Wholesalers will be paid at a rate that is
equivalent to that of the Core Fund  category.  After that four quarter  period,
each new fund in the  Strategic  category  will be reviewed by the committee and
either  assigned to one of the four  categories or continued as a Strategic fund
at that time.

The prospect of receiving,  or the receipt of, additional  compensation by a DWS
Scudder  Wholesaler  under the Plan may provide an incentive to favor  marketing
the Core,  Strategic  or  Satellite  funds  over the  Non-CSS  funds.  The Plan,
however,  will not change  the price that you pay for shares of a fund.  The DWS
Scudder  Compliance  Department  monitors DWS Scudder 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.

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 the
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 the  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 the NASD 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  the Fund with "shelf  space" or access to a
third  party  platform  or fund  offering  list,  or  other  marketing  programs
including, without limitation, inclusion of the Fund on preferred or recommended
sales  lists,  mutual  fund  "supermarket"  platforms  and  other  formal  sales
programs;  granting the  Distributor  access to the  financial  advisor's  sales
force;  granting the Distributor access to the financial  advisor's  conferences
and meetings;  assistance  in training and  educating  the  financial  advisor's
personnel; and, obtaining other forms of marketing support. The level of revenue
sharing payments made to financial advisors may be a fixed fee or based upon one
or more of the following factors:  gross sales,  current assets and/or number of
accounts of the Fund attributable to the financial advisor,  the particular fund
or fund type or other  measures  as agreed to by the  Advisor,  the  Distributor
and/or their affiliates and the financial  advisors or any combination  thereof.
The amount of these payments is determined at the discretion of


                                       14
<PAGE>

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,  .10% to
..25% of sales of the Fund attributable to the financial  advisor,  a flat fee of
$12,500 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 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,  the  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

A G Edwards & Sons Inc.
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)
First Clearing/Wachovia Securities
HD Vest Investment Securities, Inc.
ING Group
LaSalle Financial Services, Inc. (dba ABN Amro)
Linsco/Private Ledger Corp.
Marsh Insurance and Investment Company
Merrill Lynch, Pierce, Fenner & Smith Inc.
Morgan Stanley
Oppenheimer & Co., Inc.
Pacific Select Distributors Group
Raymond James & Associates
Raymond James Financial Services
RBC Dain Rauscher, Inc
Securities America, Inc.
UBS Financial Services
Wells Fargo Investments, LLC

Channel: Cash Product Platform

ADP Clearing & Outsourcing
Allegheny Investments LTD
Bank of New York (Hare & Co.)

                                       15
<PAGE>

Bear, Stearns Securities Corp.
Brown Brothers Harriman
Brown Investment Advisory & Trust Company
Cadaret Grant & Co.
Chicago Mercantile Exchange
Citibank NA
D.A. Davidson & Company
Deutsche Bank Securities Inc.
Deutsche Bank Trust Company Americas
Emmett A. Larkin Company
Fiduciary Trust Co. - International
H.C. Denison Co.
Huntleigh Securities
Investors Bank & Trust
JPMorgan Chase
Lincoln Investment Planning
Linsco Private Ledger Financial Services
Mellon Financial Markets LLC
Penson Financial Services
Pershing Choice Platform
ProFunds Distributors, Inc.
Romano Brothers and Company
SAMCO Capital Markets (Fund Services, Inc.)
Smith Moore & Company
State Street Bank & Trust Co.
Sungard Institutional Brokerage Inc.
US Bancorp
UBS Financial Services Inc.
William Blair & Company

Channel: Third Party Insurance Platforms

Acacia National Life Insurance
Allmerica Financial Life Insurance Company
Allstate Life Insurance Company of New York
Ameritas Life Insurance Group
American General Life Insurance Company
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
Genworth Life Insurance Company of New York
Genworth Life and Annuity Insurance Company
Great West Life and Annuity Insurance Company
Hartford Life Insurance Company
ICMG Registered Variable Life
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

                                       16
<PAGE>

Massachusetts Mutual Life Insurance Group
MetLife Group
Minnesota Life Insurance Company
Mutual of America 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 GroupSymetra 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.


                                   DISTRIBUTOR

DWS-SDI  serves as the  placement  agent of the Fund's  shares  pursuant  to the
Placement Agent Agreement. DWS-SDI is a wholly-owned subsidiary of Deutsche Bank
AG. The address for DWS-SDI is 222 South Riverside Plaza, Chicago, IL 60606.


                              TRUSTEES AND OFFICERS

The following table presents certain information  regarding the Board Members of
the Trust.  Each Board Member's year of birth is set forth in parentheses  after
his or her name.  Unless  otherwise  noted, (i) each Board Member has engaged in
the principal occupation(s) noted in the table for at least the most recent five
years,  although not  necessarily in the same capacity,  and (ii) the address of
each Board  Member  that is not an  "interested  person" (as defined in the 1940
Act) of the Trust or the Advisor (each, an "Independent  Board Member"),  is c/o
Dawn-Marie Driscoll, PO Box 100176, Cape Coral, FL 33904. The term of office for
each Board  Member is until the election and  qualification  of a successor,  or
until  such Board  Member  sooner  dies,  resigns,  is  removed or as  otherwise
provided in the governing documents of the Trust. Because the Fund does not hold
an annual  meeting of  shareholders,  each Board  Member will hold office for an
indeterminate  period.  The Board  Members may also serve in similar  capacities
with other funds in the DWS fund complex.


                                       17
<PAGE>

Independent Board Members

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth,
 Position with the Trust                                                                        Number of Funds
 and Length of Time        Business Experience and                                              in DWS Fund
 Served                    Directorships During the Past 5 Years                                Complex Overseen
--------------------------------------------------------------------------------------------------------------------
<S>                               <C>                                                                 <C>

Dawn-Marie Driscoll (1946) President, Driscoll Associates (consulting firm); Executive Fellow,          75
Chairperson since 2006     Center for Business Ethics, Bentley College; formerly, Partner,
Board Member since         Palmer & Dodge (1988-1990); Vice President of Corporate Affairs and
2006                       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)
--------------------------------------------------------------------------------------------------------------------
 Henry P. Becton, Jr.      Vice Chair, WGBH Educational Foundation. Directorships: Association          75
 (1943)                    of Public Television Stations; Becton Dickinson and Company(1)
 Board Member since        (medical technology company); Belo Corporation(1) (media company);
 2006                      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 of               75
Board Member since         private equity funds). Directorships: Progressive Holding
2006                       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                  75
(1945)                     (1997-present); Member, Finance Committee, Association for Asian
Board Member since         Studies (2002-present); Director, Mitsui Sumitomo Insurance Group
2006                       (US) (2004-present); prior thereto, Managing Director, J.P. Morgan
                           (investment banking firm) (until 1996)
--------------------------------------------------------------------------------------------------------------------



                                       18
<PAGE>

--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth,
 Position with the Trust                                                                        Number of Funds
 and Length of Time        Business Experience and                                              in DWS Fund
 Served                    Directorships During the Past 5 Years                                Complex Overseen
--------------------------------------------------------------------------------------------------------------------
Martin J. Gruber           Nomura Professor of Finance, Leonard N. Stern School of Business,            75
(1937)                     New York University (since September 1965); Director, Japan Equity
Board Member since         Fund, Inc. (since January 1992), Thai Capital Fund, Inc. (since
1999                       January 2000), Singapore Fund, Inc. (since January 2000), National
                           Bureau of Economic Research (since January 2006). Formerly,
                           Trustee, TIAA (pension funds) (January 1996-January 2000); Trustee,
                           CREF and CREF Mutual Funds (January 2000-March 2005); Chairman,
                           CREF and CREF Mutual Funds (February 2004-March 2005); and
                           Director, S.G. Cowen Mutual Funds (January 1985-January 2001)
--------------------------------------------------------------------------------------------------------------------
Richard J. Herring         Jacob Safra Professor of International Banking and Professor,                75
(1946)                     Finance Department, The Wharton School, University of Pennsylvania
Board Member since         (since July 1972); Co-Director, Wharton Financial Institutions
1990                       Center (since July 2000). Formerly, Vice Dean and Director, Wharton
                           Undergraduate Division (July 1995-June 2000); Director, Lauder
                           Institute of International Management Studies (July 2000-June 2006)
--------------------------------------------------------------------------------------------------------------------
Graham E. Jones            Senior Vice President, BGK Realty, Inc. (commercial real estate)             75
(1933)                     (since 1995). Formerly, Trustee of various investment companies
Board Member since         managed by Sun Capital Advisors, Inc. (1998-2005), Morgan Stanley
2002                       Asset Management (1985-2001) and Weiss, Peck and Greer (1985-2005)
--------------------------------------------------------------------------------------------------------------------
Rebecca W. Rimel           President and Chief Executive Officer, The Pew Charitable Trusts             75
(1951)                     (charitable foundation) (1994 to present); Trustee, Thomas
Board Member since         Jefferson Foundation (charitable organization) (1994 to present);
2002                       Trustee, Executive Committee, Philadelphia Chamber of Commerce
                           (2001 to present). 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(1) (January 2007-June
                           2007).
--------------------------------------------------------------------------------------------------------------------



                                       19
<PAGE>

--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth,
 Position with the Trust                                                                        Number of Funds
 and Length of Time        Business Experience and                                              in DWS Fund
 Served                    Directorships During the Past 5 Years                                Complex Overseen
--------------------------------------------------------------------------------------------------------------------
Philip Saunders, Jr.       Principal, Philip Saunders Associates (economic and financial                75
(1935)                     consulting) (since November 1988).  Formerly, Director, Financial
Board Member since         Industry Consulting, Wolf & Company (consulting) (1987-1988);
1999                       President, John Hancock Home Mortgage Corporation (1984-1986);
                           Senior Vice President of Treasury and Financial Services, John
                           Hancock Mutual Life Insurance Company, Inc. (1982-1986)
--------------------------------------------------------------------------------------------------------------------
William N. Searcy, Jr.     Private investor since October 2003; Trustee of 8 open-end mutual            75
(1946)                     funds managed by Sun Capital Advisers, Inc. (since October 1998).
Board Member since         Formerly, Pension & Savings Trust Officer, Sprint Corporation(1)
2002                       (telecommunications) (November 1989-September 2003)
--------------------------------------------------------------------------------------------------------------------
Jean Gleason Stromberg     Retired. Formerly, Consultant (1997-2001); Director, US Government           75
(1943)                     Accountability Office (1996-1997); Partner, Fulbright & Jaworski,
Board Member since         L.L.P. (law firm) (1978-1996). Directorships: The William and Flora
2006                       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)
--------------------------------------------------------------------------------------------------------------------
Carl W. Vogt               Retired Senior Partner, Fulbright & Jaworski, L.L.P. (law firm);             73
(1936)                     formerly, President (interim) of Williams College (1999-2000);
Board Member since         formerly, President of certain funds in the Deutsche Asset
2006                       Management family of funds (formerly, Flag Investors family of
                           funds) (registered investment companies) (1999-2000).
                           Directorships: Yellow Corporation (trucking); American Science &
                           Engineering (x-ray detection equipment). Former Directorships: ISI
                           Family of Funds (registered investment companies, 4 funds
                           overseen); National Railroad Passenger Corporation (Amtrak) Waste
                           Management, Inc. (solid waste disposal); formerly, Chairman and
                           Member, National Transportation Safety Board
--------------------------------------------------------------------------------------------------------------------


                                       20
<PAGE>

Interested Board Member


--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth,
 Position with the Trust                                                                        Number of Funds
 and Length of Time        Business Experience and                                              in DWS Fund
 Served                    Directorships During the Past 5 Years                                Complex Overseen
--------------------------------------------------------------------------------------------------------------------
 Axel Schwarzer(2)         Managing Director(4), Deutsche Asset Management; Head of Deutsche            81
 (1958)                    Asset Management Americas; CEO of DWS Scudder; formerly board
 Board Member since        member of DWS Investments, Germany (1999-2005); formerly, Head of
 2006                      Sales and Product Management for the Retail and Private Banking
                           Division of Deutsche Bank in Germany (1997-1999); formerly, 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(3)


-------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth,
 Position with the Trust    Business Experience and
 and Length of Time Served  Directorships During the Past 5 Years
-------------------------------------------------------------------------------------------------------------------
 Michael G. Clark(5)        Managing Director(4), Deutsche Asset Management (2006-present); President of DWS
 (1965)                     family of funds; formerly, Director of Fund Board Relations (2004-2006) and Director
 President, 2006-present    of Product Development (2000-2004), Merrill Lynch Investment Managers; Senior Vice
                            President Operations, Merrill Lynch Asset Management (1999-2000)
-------------------------------------------------------------------------------------------------------------------
 John Millette(6) (1962)    Director(4), Deutsche Asset Management
 Vice President and
 Secretary, 2003-present
-------------------------------------------------------------------------------------------------------------------
 Paul H. Schubert(5)        Managing Director(4), Deutsche Asset Management (since July 2004); formerly,
 (1963)                     Executive Director, Head of Mutual Fund Services and Treasurer for UBS Family of
 Chief Financial Officer,   Funds (1998-2004); Vice President and Director of Mutual Fund Finance at UBS Global
 2004-present               Asset Management (1994-1998)
 Treasurer, 2005-present
-------------------------------------------------------------------------------------------------------------------
 Patricia DeFilippis(5)     Vice President, Deutsche Asset Management (since June 2005); Counsel, New York Life
 (1963)                     Investment Management LLC (2003-2005); legal associate, Lord, Abbett & Co. LLC
 Assistant Secretary,       (1998-2003)
 2005-present
-------------------------------------------------------------------------------------------------------------------
 Elisa D. Metzger(5)        Director(4), Deutsche Asset Management (since September 2005); Counsel, Morrison and
 (1962)                     Foerster LLP (1999-2005)
 Assistant Secretary,
 2005-present
-------------------------------------------------------------------------------------------------------------------
 Caroline Pearson(6)        Managing Director(4), Deutsche Asset Management
 (1962)
 Assistant Secretary,
 2002-present
-------------------------------------------------------------------------------------------------------------------
 Paul Antosca(6)            Director(4), Deutsche Asset Management (since 2006); Vice President, The
 (1957)                     Manufacturers Life Insurance Company (USA.) (1990-2006)
 Assistant Treasurer,
 2007-present
-------------------------------------------------------------------------------------------------------------------



                                       21
<PAGE>

-------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth,
 Position with the Trust    Business Experience and
 and Length of Time Served  Directorships During the Past 5 Years
-------------------------------------------------------------------------------------------------------------------
 Kathleen Sullivan          Director(4), Deutsche Asset Management
 D'Eramo(6) (1957)
 Assistant Treasurer,
 2003-present
-------------------------------------------------------------------------------------------------------------------
 Jason Vazquez(5) (1972)    Vice President, Deutsche Asset Management (since 2006); formerly, AML Operations
 Anti-Money Laundering      Manager for Bear Stearns (2004-2006), Supervising Compliance Principal and
 Compliance Officer,        Operations Manager for AXA Financial (1999-2004)
 2007-present
-------------------------------------------------------------------------------------------------------------------
 Robert Kloby(5) (1962)     Managing Director(4), Deutsche Asset Management (2004-present); formerly, Chief
 Chief Compliance           Compliance Officer/Chief Risk Officer, Robeco USA (2000-2004); Vice President, The
 Officer, 2006-present      Prudential Insurance Company of America (1988-2000); E.F. Hutton and Company
                            (1984-1988)
-------------------------------------------------------------------------------------------------------------------
 J. Christopher Jackson(5)  Director(4), Deutsche Asset Management (2006-present); formerly, Director, Senior
 (1951)                     Vice President, General Counsel, and Assistant Secretary, Hansberger Global
 Chief Legal Officer,       Investors, Inc. (1996-2006); Director, National Society of Compliance Professionals
 2006-present               (2002-2005)(2006-2009)
-------------------------------------------------------------------------------------------------------------------

</TABLE>



                                       22
<PAGE>



(1)      A publicly held company with securities  registered pursuant to Section
         12 of the Securities Exchange Act of 1934.


(2)      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.


(3)      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.

(4)      Executive title, not a board directorship.

(5)      Address: 345 Park Avenue, New York, New York 10154.

                                       23
<PAGE>

(6)      Address: Two International Place, Boston, Massachusetts 02110.


Each Officer also holds  similar  positions for other  investment  companies for
which DIMA or an affiliate serves as the advisor.


Officer's Role with Principal Underwriter: DWS Scudder Distributors, Inc.

 Paul H. Schubert:          Vice President
 Caroline Pearson:          Secretary

Information Concerning Committees and Meetings of Board Members


The  Board of the  Trust met ten (10)  times  during  the  calendar  year  ended
December 31, 2006 and each Board Member attended at least 80% of the meetings of
the Board and meetings of the committees of the Board on which such Board Member
served.


Board  Committees.  Ms.  Driscoll  has served as Chair of the Board of the Funds
since May 2006.

The Board has established the following  standing  committees:  Audit Committee,
Nominating/Corporate Governance Committee, Valuation Committee, Equity Oversight
Committee, Fixed Income Oversight Committee,  Marketing/Distribution/Shareholder
Service Committee,  Legal/Regulatory/Compliance Committee and Expense/Operations
Committee.


The Audit  Committee  assists the Board in  fulfilling  its  responsibility  for
oversight of the quality and integrity of the accounting, auditing and financial
reporting  practices of the Fund.  It also makes  recommendations  regarding the
selection of an  independent  registered  public  accounting  firm for the Fund,
reviews the  independence of such firm,  reviews the scope of audit and internal
controls,  considers and reports to the Board on matters  relating to the Fund's
accounting and financial reporting  practices,  and performs such other tasks as
the full Board deems  necessary or  appropriate.  The Audit  Committee  receives
annual representations from the independent registered public accounting firm as
to its independence.  The members of the Audit Committee are Keith R. Fox (Chair
and Audit Committee Financial Expert), Kenneth C. Froewiss,  Richard J. Herring,
Graham E. Jones,  Philip Saunders,  Jr., William N. Searcy, Jr. and Jean Gleason
Stromberg.  The Audit Committee held eight (8) meetings during the calendar year
2006.

The  Nominating/Corporate  Governance  Committee  (i)  recommends  to the  Board
candidates  to serve as Board  Members and (ii)  oversees  and, as  appropriate,
makes  recommendations  to the Board  regarding  other  Fund  governance-related
matters,  including but not limited to Board compensation practices,  retirement
policies,  self-evaluations  of effectiveness,  review of possible  conflicts of
interest  and  independence  issues  involving  Board  Members,  allocations  of
assignments  and  functions  of  committees  of the Board,  and share  ownership
policies. The members of the Nominating/Corporate Governance Committee are Henry
P.  Becton,  Jr.  (Chair),  Graham E. Jones,  Rebecca W. Rimel and Jean  Gleason
Stromberg.  The  Nominating/Corporate  Governance Committee (previously known as
the  Committee on  Independent  Directors)  held three (3)  meetings  during the
calendar year 2006.

The Valuation  Committee  oversees Fund  valuation  matters,  reviews  valuation
procedures  adopted  by the  Board,  determines  the fair  value  of the  Fund's
securities as needed in accordance  with the valuation  procedures  and performs
such other tasks as the full Board deems necessary or  appropriate.  The members
of the Valuation  Committee  are Keith R. Fox,  Kenneth C.  Froewiss,  Martin J.
Gruber,  Richard J. Herring and Philip  Saunders,  Jr.  (Chair).  The  Valuation
Committee held six (6) meetings during the calendar year 2006.

The Board has established two Investment Oversight  Committees,  one focusing on
Funds  primarily   investing  in  equity   securities  (the  "Equity   Oversight
Committee")  and one  focusing  on Funds  primarily  investing  in fixed  income
securities  (the "Fixed Income  Oversight  Committee").  These  Committees  meet
regularly with Fund portfolio managers and other investment  personnel to review
the relevant  Funds'  investment  strategies  and  investment


                                       24
<PAGE>

performance.  The members of the Equity Oversight Committee are Henry P. Becton,
Jr.,  Martin J. Gruber  (Chair),  Richard J. Herring,  Rebecca W. Rimel,  Philip
Saunders,  Jr.  and Carl W. Vogt.  The  members  of the Fixed  Income  Oversight
Committee are Dawn-Marie Driscoll, Keith R. Fox, Kenneth C. Froewiss,  Graham E.
Jones,  William  N.  Searcy,  Jr.  (Chair)  and  Jean  Gleason  Stromberg.  Each
Investment  Oversight  Committee held six (6) meetings  during the calendar year
2006.

The  Marketing/Distribution/Shareholder   Service  Committee  oversees  (i)  the
quality, costs and types of shareholder services provided to the Funds and their
shareholders,  and (ii) the distribution-related  services provided to the Funds
and their  shareholders.  The members of the  Marketing/Distribution/Shareholder
Service Committee are Martin J. Gruber,  Richard J. Herring (Chair),  Rebecca W.
Rimel,     Jean     Gleason     Stromberg     and    Carl    W.    Vogt.     The
Marketing/Distribution/Shareholder  Service  Committee  held  six  (6)  meetings
during the calendar year 2006.

The  Legal/Regulatory/Compliance  Committee  oversees (i) the significant  legal
affairs of the Fund, including the handling of pending or threatened  litigation
or  regulatory  action  involving  the Fund,  (ii)  general  compliance  matters
relating   to  the  Fund  and  (iii)   proxy   voting.   The   members   of  the
Legal/Regulatory/Compliance  Committee  are  Henry P.  Becton,  Jr.,  Dawn-Marie
Driscoll,  Rebecca W. Rimel,  William N. Searcy, Jr., Jean Gleason Stromberg and
Carl W. Vogt (Chair).  The  Legal/Regulatory/Compliance  Committee  held six (6)
meetings during the calendar year 2006.

The Expense/Operations Committee (i) monitors the Fund's total operating expense
levels,  (ii)  oversees the  provision of  administrative  services to the Fund,
including the Fund's custody,  fund accounting and insurance  arrangements,  and
(iii) reviews the Fund's investment advisers' brokerage practices, including the
implementation  of  related  policies.  The  members  of the  Expense/Operations
Committee are Henry P. Becton, Jr., Dawn-Marie  Driscoll,  Keith R. Fox, Kenneth
C.  Froewiss,  Graham E. Jones  (Chair),  Philip  Saunders,  Jr. and  William N.
Searcy,  Jr. This  committee  held seven (7) meetings  during the calendar  year
2006.

Ad Hoc Committees.  In addition to the standing committees described above, from
time to time the Board also forms ad hoc committees to consider specific issues.
In 2006,  various ad hoc  committees of the Board held an  additional  seven (7)
meetings.

Remuneration.  Each Independent Board Member receives compensation from the Fund
for his or her services, which includes an annual retainer and an attendance fee
for each meeting attended. No additional compensation is paid to any Independent
Board Member for travel time to meetings,  attendance at directors'  educational
seminars  or  conferences,   service  on  industry  or  association  committees,
participation  as speakers at directors'  conferences or service on special fund
industry director task forces or subcommittees. Independent Board Members do not
receive any employee  benefits such as pension or retirement  benefits or health
insurance from the Fund or any fund in the DWS fund complex.

Members of the Board who are officers,  directors,  employees or stockholders of
Deutsche Asset Management or its affiliates receive no direct  compensation from
the  Fund,  although  they  are  compensated  as  employees  of  Deutsche  Asset
Management,  or its affiliates,  and as a result may be deemed to participate in
fees paid by the Fund. The following tables show  compensation from the Fund and
aggregate compensation from all of the funds in the DWS fund complex received by
each Board Member during the calendar year 2006. Mr.  Schwarzer  became a member
of the Board on May 5, 2006, is an interested person of the Fund and received no
compensation  from  the  Fund or any fund in the DWS  fund  complex  during  the
relevant periods.

<TABLE>
<CAPTION>
                                      Aggregate Compensation       Total Compensation from Fund and
Name of Board Member                        from Fund                     DWS Fund Complex(1)
--------------------                        ---------                     -------------------
<S>                                             <C>                                  <C>
Henry P. Becton, Jr.(3)                        $4,155                               $189,000
Dawn-Marie Driscoll(2)(3)(4)                   $5,246                               $251,000



                                       25
<PAGE>
                                      Aggregate Compensation       Total Compensation from Fund and
Name of Board Member                        from Fund                     DWS Fund Complex(1)
--------------------                        ---------                     -------------------

Keith R. Fox(3)(4)                             $4,153                               $195,000
Kenneth C. Froewiss(3)(4)                      $4,408                               $234,988
Martin J. Gruber(3)                           $11,351                               $188,000
Richard J. Herring(3)(4)                      $11,186                               $184,000
Graham E. Jones(3)(4)                         $12,408                               $206,000
Rebecca W. Rimel(3)                           $11,220                               $185,000
Philip Saunders, Jr.(3)(4)                    $12,500                               $207,000
William N. Searcy, Jr.(3)(4)                  $12,408                               $206,000
Jean Gleason Stromberg(3)(4)                   $4,282                               $202,000
Carl W. Vogt(3)(                               $4,155                               $189,000
</TABLE>

(1)      The DWS Fund Complex is composed of 155 funds as of December 31, 2006.

(2)      Includes  $50,000 in annual  retainer  fees in Ms.  Driscoll's  role as
         Chairperson of the Board.

(3)      For each Board Member,  except Mr. Becton,  Mr.  Froewiss and Mr. Vogt,
         total  compensation  for calendar year 2006 includes  compensation  for
         service  on  the  boards  of  34  trusts/corporations  comprised  of 87
         funds/portfolios.  For Messrs.  Becton and Vogt total  compensation for
         calendar year 2006 includes  compensation  for service on the boards of
         32  trusts/corporations  comprised  of  85  funds/portfolios.  For  Mr.
         Froewiss   total   compensation   for  calendar   year  2006   includes
         compensation  for  services  on the  boards  of 37  trusts/corporations
         comprised of 90 funds/portfolios.

(4)      Aggregate  compensation  includes amounts paid to the Board Members for
         special  meetings of ad hoc committees of the board in connection  with
         the  possible  consolidation  of the various DWS Fund boards and 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 $16,000 for Ms. Driscoll, $1,000
         for Mr. Fox, $17,000 for Mr. Froewiss,  $1,000 for Dr. Herring, $16,000
         for Mr.  Jones,  $17,000 for Dr.  Saunders,  $16,000 for Mr. Searcy and
         $16,000  for Ms.  Stromberg.  These  meeting  fees  were  borne  by the
         applicable DWS Funds.





                                       26
<PAGE>



Board Member Ownership in the Fund(1)


The  following  table shows the dollar range of equity  securities  beneficially
owned by each Board  Member in the Fund and DWS Fund  Complex as of December 31,
2006.

<TABLE>
<CAPTION>
                                          Dollar Range of Beneficial           Aggregate Dollar Range of
                                                   Ownership              Ownership in all Funds Overseen by
                                           in DWS Daily Asset Fund                   Board Member
Board Member                                     Institutional                in the DWS Fund Complex(2)
------------                                     -------------                --------------------------

Independent Board Member:
-------------------------
<S>                                                  <C>                                 <C>
Henry P. Becton, Jr.                                 None                           Over $100,000
Dawn-Marie Driscoll                                  None                           Over $100,000
Keith R. Fox                                         None                           Over $100,000
Kenneth C. Froewiss                                  None                           Over $100,000
Martin J. Gruber                                     None                           Over $100,000
Richard J. Herring                                   None                           Over $100,000
Graham E. Jones                                      None                           Over $100,000
Rebecca W. Rimel                                     None                           Over $100,000
Philip Saunders, Jr.                                 None                           Over $100,000
William N. Searcy, Jr.                               None                           Over $100,000
Jean Gleason Stromberg                               None                           Over $100,000
Carl W. Vogt                                         None                           Over $100,000

Interested Board Member:
------------------------

Axel Schwarzer                                       None                           Over $100,000
</TABLE>


(1)      The amount shown  includes  share  equivalents of funds which the Board
         Member  is  deemed  to be  invested  pursuant  to the  Fund's  deferred
         compensation   plan.  The  inclusion   therein  of  any  shares  deemed
         beneficially  owned does not  constitute  an  admission  of  beneficial
         ownership of the shares.

                                       27
<PAGE>

(2)      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,   over
         $100,000.



Ownership in Securities of the Advisor and Related Companies


As  reported  to the Fund,  the  information  in the  following  table  reflects
ownership by the Independent Board Members and their immediate family members of
certain  securities as of December 31, 2006. An immediate family member can be a
spouse,  children  residing in the same  household  including  step and adoptive
children and any dependents.  The securities  represent ownership in the Advisor
or principal  underwriter  of the Fund and any persons  (other than a registered
investment company) directly or indirectly controlling,  controlled by, or under
common control with the Advisor or principal  underwriter of the Fund (including
Deutsche Bank AG).

<TABLE>
<CAPTION>
                                                                                   Value of        Percent of
                                   Owner and                                     Securities on     Class on an
Independent                     Relationship to                     Title of     an Aggregate       Aggregate
Board Member                      Board Member         Company        Class          Basis            Basis
------------                      ------------         -------        -----          -----            -----
<S>                                       <C>           <C>              <C>              <C>            <C>
Henry P. Becton, Jr.                                None
Dawn-Marie Driscoll                                 None
Keith R. Fox                                        None
Kenneth C. Froewiss                                 None
Martin J. Gruber                                    None
Richard J. Herring                                  None
Graham E. Jones                                     None
Rebecca W. Rimel                                    None
Philip Saunders, Jr.                                None
William N. Searcy, Jr.                              None
Jean Gleason Stromberg                              None
Carl W. Vogt                                        None


Securities Beneficially Owned


As of October 3, 2007,  the Board Members and officers of the Trust owned,  as a
group, less than 1% of the outstanding shares of the Fund.

To the best of the Fund's  knowledge,  as of October 3, 2007, no person owned of
record or beneficially 5% or more of any class of the Fund's outstanding shares,
except as noted below.


Name and Address of Investor Ownership                          Shares                      % of Total Shares
--------------------------------------                          ------                      -----------------

DIMA FBO SCUDDER                                              576,706,022.120                    11.07%
FUNDS C/O STATE STREET
BOSTON MA  02111-2901

DIMA FBO UBS                                                  462,393,713.780                     8.88%
ATTN JOSHUA GRAY
BOSTON MA  02110-2602


                                       28
<PAGE>
Name and Address of Investor Ownership                          Shares                      % of Total Shares
--------------------------------------                          ------                      -----------------

DIMA FBO SCUDDER FUNDS C/O BGA
SECURITY LENDING OPERATIONS                                   938,493,808.350                    18.02%
ATTN DENNIS RILEY BGA
BOSTON MA  02110


DIMA FBO SCUDDER FUNDS C/O BBH                                452,690,017.400                     8.69%
ATTN MGR GLOBAL SEC LENDING OPS
BOSTON MA  02109-3604


DIMA FBO SCUDDER FUNDS C/O METWEST                          1,206,585,850.150                    23.17%
ATTN ROB WOMACK/SCOTT PARKER
LOS ANGELES CA  90049-6242


DAMI FBO SCUDDER FUNDS C/O BGA                                599,666,116.940                    11.52%
SECURITIES LENDING OPS
ATTN DENNIS RILEY
BOSTON MA  02110-2736


DAMI FBO SCUDDER FUNDS C/O BBH                                409,703,324.700                     7.87%
ATTN MGR GLOBAL SEC LENDING OPS
BOSTON MA  02109-3604
</TABLE>





                                       29
<PAGE>


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 the DWS funds,  each DWS fund's  investment  advisor has
agreed, subject to applicable law and regulation, to indemnify and hold harmless
the  applicable  DWS funds  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 DWS funds or the  investment  advisor  ("Enforcement
Actions") or that are the basis for private  actions  brought by shareholders of
the DWS funds  against the DWS funds,  their  directors  and  officers,  the DWS
funds' investment  advisor 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  applicable  DWS 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,  each DWS fund's investment advisor has also agreed,  subject
to  applicable  law and  regulation,  to  indemnify  the  applicable  DWS funds'
Independent  Trustees/Directors  against  certain  liabilities  the  Independent
Trustees/Directors 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/Directors   in  connection  with  any
Enforcement Actions or Private Litigation.  The applicable investment advisor is
not, however,  required to provide  indemnification and advancement of expenses:
(1) with  respect  to any  proceeding  or  action  with  respect  to  which  the
applicable  Fund's  Board  determines  that  the  Independent   Trustee/Director
ultimately would not be entitled to  indemnification or (2) for any liability of
the  Independent  Trustee  to the DWS 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/Director's  duties  as a  director  or  trustee  of the DWS  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/Directors  or  indemnity  that  may  be  payable  under  the  indemnity
agreements is currently  unknown.  These  agreements  by each Fund's  investment
advisor will survive the  termination  of the investment  management  agreements
between the applicable investment advisor and the Funds.

                             MANAGEMENT OF THE FUND


Investment Advisor


Effective  January 1, 2007,  the Fund has  retained  the  services  of  Deutsche
Investment  Management  Americas  Inc.  ("DIMA" or the  "Advisor") as investment
advisor.

The  Advisor is an  indirect,  wholly  owned  subsidiary  of  Deutsche  Bank AG.
Deutsche Bank is a banking  company with limited  liability  organized under the
laws of the Federal Republic of Germany.  Deutsche Bank is the parent company of
a  group  consisting  of  banks,  capital  markets  companies,  fund  management
companies,  mortgage banks, a property finance company,  installments  financing
and leasing companies,  insurance companies,  research and consultancy companies
and other domestic and foreign companies.


The  Advisor  or its  affiliates  may have  deposit,  loan and other  commercial
banking  relationships  with the issuers of obligations that may be purchased on
behalf of the Fund,  including  outstanding  loans to such issuers that could be
repaid in whole or in part with the proceeds of securities  so  purchased.  Such
affiliates deal, trade and invest for their own accounts in such obligations and
are among the leading dealers of various types of such obligations.  The Advisor
has  informed the Fund that,  in making its  investment  decisions,  it does not
obtain or use material inside information in its possession or in the possession
of any of its affiliates. In making investment recommendations for the Fund, the
Advisor  will not  inquire  or take  into  consideration  whether  an  issuer of
securities  proposed  for  purchase  or sale by the  Fund is a  customer  of the
Advisor, its parent or its subsidiaries or affiliates. Also, in dealing with its
customers,  the  Advisor,  its parent,  subsidiaries,  and  affiliates  will not
inquire or take into consideration whether securities of such customers are held
by any fund managed by the Advisor or any such affiliate.

                                       30
<PAGE>

The Advisor,  subject to the  supervision and direction of the Board of Trustees
of the  Trust,  manages  the  Fund in  accordance  with  the  Fund's  investment
objective and stated  investment  policies,  makes investment  decisions for the
Fund,  places  orders  to  purchase  and sell  securities  and  other  financial
instruments on behalf of the Fund and employs  professional  investment managers
and securities  analysts who provide research  services to the Fund. The Advisor
may utilize the expertise of any of its worldwide subsidiaries and affiliates to
assist  it in  its  role  as  investment  advisor.  All  orders  for  investment
transactions  on behalf  of the Fund are  placed by the  Advisor  with  brokers,
dealers and other  financial  intermediaries  that it selects,  including  those
affiliated  with the Advisor.  An Advisor  affiliate  will be used in connection
with a  purchase  or sale of an  investment  for the  Fund  only if the  Advisor
believes that the affiliate's  charge for the transaction  does not exceed usual
and  customary  levels.  The Fund will not invest in  obligations  for which the
Advisor or any of its affiliates is the ultimate  obligor or accepting bank. The
Fund may,  however,  invest in the obligations of correspondents or customers of
the Advisor.


The Board and the  shareholders  approved  an amended  and  restated  investment
management  agreement  (the  "Investment  Management  Agreement")  for the Fund.
Pursuant to the Investment Management Agreement, the Advisor provides continuing
investment  management of the assets of the Fund. In addition to the  investment
management of the assets of the Fund, the Advisor  determines the investments to
be made for the Fund,  including what portion of its assets remain uninvested in
cash or cash  equivalents,  and with whom the orders for investments are placed,
consistent with the Fund's policies as stated in its Prospectus and this SAI, or
as adopted by the Fund's Board. The Advisor will also monitor, to the extent not
monitored by the Fund's administrator or other agent, the Fund's compliance with
its investment and tax guidelines and other compliance policies.


The Advisor  provides  assistance to the Fund's Board in valuing the  securities
and other  instruments  held by the Fund, to the extent  reasonably  required by
valuation policies and procedures that may be adopted by the Fund.

Pursuant to the Investment Management  Agreement,  (unless otherwise provided in
the agreement or as  determined by the Fund's Board and to the extent  permitted
by applicable  law), the Advisor pays the  compensation  and expenses of all the
Board  members,  officers,  and executive  employees of the Fund,  including the
Fund's share of payroll taxes, who are affiliated persons of the Advisor.

The  Investment  Management  Agreement  provides  that  the  Fund  is  generally
responsible  for expenses  that  include:  fees payable to the Advisor;  outside
legal,  accounting  or auditing  expenses,  including  with  respect to expenses
related to negotiation,  acquisition or  distribution of portfolio  investments;
maintenance  of books and records that are  maintained  by the Fund,  the Fund's
custodian,  or other agents of the Fund; taxes and  governmental  fees; fees and
expenses   of  the   Fund's   accounting   agent,   custodian,   sub-custodians,
depositories,  transfer  agents,  dividend  reimbursing  agents and  registrars;
payment  for  portfolio  pricing  or  valuation   services  to  pricing  agents,
accountants,  bankers and other specialists,  if any;  brokerage  commissions or
other costs of  acquiring  or disposing  of any  portfolio  securities  or other
instruments  of the  Fund;  and  litigation  expenses  and  other  extraordinary
expenses not incurred in the ordinary course of the Fund's business.

The Investment  Management  Agreement  allows the Advisor to delegate any of its
duties under the  Agreement to a  subadvisor,  subject to a majority vote of the
Board of the Fund,  including  a  majority  of the Board who are not  interested
persons of the Fund, and, if required by applicable  law,  subject to a majority
vote of the Fund's shareholders.

The  Investment  Management  Agreement  provides  that the Advisor  shall not be
liable for any error of judgment  or mistake of law or for any loss  suffered by
the Fund in  connection  with matters to which the agreement  relates,  except a
loss resulting from willful  malfeasance,  bad faith or gross  negligence on the
part of the Advisor in the performance of its duties or from reckless  disregard
by the Advisor of its obligations and duties under the agreement. The Investment
Management  Agreement may be terminated at any time, without payment of penalty,
by either party or by vote of a majority of the outstanding voting securities of
the Fund on 60 days' written notice.

For all services provided under the Investment  Management  Agreement,  the Fund
pays the Advisor a fee,  computed daily and paid monthly,  at the annual rate of
0.10% of the average daily net assets of the Fund.


In addition,  the Board and shareholders  approved a subadvisor  approval policy
for the Fund (the "Subadvisor Approval Policy").  The Subadvisor Approval Policy
permits the Advisor,  subject to the approval of the


                                       31
<PAGE>

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.  The 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  the Fund  exemptive
relief from existing rules. The Fund and the Advisor would be subject to certain
conditions imposed by the SEC (and certain conditions that may be imposed in the
future within either exemptive relief or a rule) to ensure that the interests of
the Fund and its shareholders are adequately protected whenever the Advisor acts
under  the  Subadvisor   Approval  Policy,   including  any  shareholder  notice
requirements.

Until  October 31, 2008 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  operating  expenses at a
ratio no higher than 0.07%,  excluding  certain  expenses such as  extraordinary
expenses, taxes, brokerage, interest and organizational and offering expenses.

Through  December 31, 2006  Deutsche  Asset  Management,  Inc.  ("DAMI") was the
Fund's Advisor. All advisory services paid by the Fund through December 31, 2006
were paid to DAMI.  For the fiscal years ended June 30, 2007,  2006 and 2005 the
applicable advisor earned $3,676,075, $3,348,699 and $2,999,101 respectively, as
compensation for investment  advisory  services provided to the Fund. During the
same  periods,   the  applicable  advisor  waived  and  reimbursed   $3,676,075,
$2,979,709 and $2,964,916, respectively, to the Fund to cover expenses.


The Advisor may not recoup any of its waived investment management fee.

The Advisor may enter into arrangements with affiliates and third-party  service
providers to perform  various  administrative,  back-office  and other  services
relating to client accounts.  Such service providers may be located in the US or
in non-US jurisdictions.

Administrator


The Fund has an  administrative  services  agreement  with  Deutsche  Investment
Management  Americas Inc. ("DIMA") (the  "Administrative  Services  Agreement"),
pursuant to which DIMA 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. For all services provided under the
Administrative Services Agreement,  the Fund pays DIMA a fee, computed daily and
paid monthly, of 0.10% of the Fund's average daily net assets.


Under the Administrative  Services Agreement,  DIMA is obligated on a continuous
basis  to  provide  such  administrative  services  as the  Board  of  the  Fund
reasonably  deems  necessary  for the proper  administration  of the Fund.  DIMA
provides the Fund with personnel; arranges for the preparation and filing of the
Fund's tax returns;  prepares and submits  reports and meeting  materials to the
Board and the shareholders;  prepares and files updates to the Fund's prospectus
and statement of additional  information as well as other reports required to be
filed by the SEC;  maintains the Fund's  records;  provides the Fund with office
space,  equipment  and  services;  supervises,  negotiates  the contracts of and
monitors the performance of third parties  contractors;  oversees the tabulation
of  proxies;  monitors  the  valuation  of  portfolio  securities  and  monitors
compliance with Board-approved valuation procedures; assists in establishing the
accounting and tax policies of the Fund; assists in the resolution of accounting
issues that may arise with  respect to the Fund;  establishes  and  monitors the
Fund's  operating  expense  budgets;  reviews and  processes  the Fund's  bills;
assists in determining the amount of dividends and distributions available to be
paid by the Fund,  prepares and  arranges  dividend  notifications  and provides
information to agents to effect payments thereof; provides to the Board periodic
and special  reports;  provides  assistance  with investor and public  relations
matters;  and monitors the registration of shares under  applicable  federal and
state  law.  DIMA also  performs  certain  fund  accounting  services  under the
Administrative   Services  Agreement.   The  Administrative  Services  Agreement
provides  that  DIMA  will  not be  liable  under  the  Administrative  Services
Agreement  except  for  willful  misfeasance,  bad  faith or  negligence  in the
performance of its duties or from the reckless disregard by it of its duties and
obligations thereunder.

                                       32
<PAGE>

Prior to July 1, 2006,  Investment  Company Capital  Corporation ( "ICCC"),  One
South  Street,  Baltimore,  Maryland,  served as the Fund's  administrator.  The
Administration  and Services  Agreement provided for the Trust to pay ICCC a fee
computed daily and paid monthly at the annual rate of 0.02% of the average daily
net assets of the Fund.


For the fiscal year ended June 30, 2007 DIMA earned $3,676,075 in administrative
fees.  For the fiscal years ended June 30, 2006 and 2005,  ICCC earned  $669,740
and  $599,820,  respectively,  as  compensation  for  administration  and  other
services provided to the Fund.

For the fiscal  years ended June 30, 2007 and 2005,  $2,713,468  and $278,133 of
administration  fees were  waived.  None of  administration  fees were waived in
2006.


Pursuant to an agreement  between  DIMA and State Street Bank and Trust  Company
("SSB"), DIMA has delegated certain  administrative  functions to SSB. The costs
and expenses of such delegation are borne by DIMA, 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.


Code of Ethics

The Board of Trustees of the Fund has adopted a Code of Ethics  pursuant to Rule
17j-1  under the 1940 Act, as amended.  The Fund's Code of Ethics  permits  Fund
personnel  to  invest  in  securities  for  their  own  accounts,  but  requires
compliance with the Code's pre-clearance requirements (with certain exceptions).
In addition,  the Fund's Code of Ethics provides for trading `blackout  periods'
that prohibit  trading by personnel within periods of trading by the Fund in the
same  security.  The Fund's Code of Ethics  also  prohibits  short-term  trading
profits and personal  investment in initial public offerings.  The Code requires
prior approval with respect to purchases of securities in private placements.

The Fund's advisor and its affiliates  (including  the Fund's  Placement  Agent,
DWS-SDI)  have each  adopted a Code of Ethics  pursuant  to Rule 17j-1 under the
1940 Act (`Consolidated  Code'). The Consolidated Code permits access persons to
trade in  securities  that may be  purchased  or held by the Fund for  their own
accounts,  subject  to  compliance  with the  Consolidated  Code's  preclearance
requirements.  In  addition,  the  Consolidated  Code also  provides for trading
`blackout  periods' that prohibit trading by personnel within periods of trading
by the  Fund  in  the  same  security.  The  Consolidated  Code  also  prohibits
short-term  trading profits and personal  investment in initial public offerings
and requires  prior  approval with respect to purchases of securities in private
placements.


                                SERVICE PROVIDERS


Custodian


State Street Bank and Trust Company  ("SSB"),  225 Franklin Street,  Boston,  MA
02110,  serves as custodian for the Trust.  As  custodian,  SSB holds the Fund's
assets.


Transfer Agent


DWS Scudder Investments Service Company ("DWS-SDI"),  222 South Riverside Plaza,
Chicago,  IL  60606-5808,  serves as transfer  agent of the Trust  pursuant to a
transfer agency  agreement.  Under its transfer agency agreement with the Trust,
DWS-SDI maintains the shareholder  account records for the Fund, handles certain
communications  between  shareholders and the Trust and causes to be distributed
any dividends and distributions  payable by the Trust. DWS-SDI may be reimbursed
by the Fund for its out-of-pocket expenses.

                                       33
<PAGE>

The Transfer  Agent receives an annual service fee for each account of the Fund,
based on the type of account.  For open retail  accounts,  the fee is a flat fee
ranging from $20.00 to $27.50 per account,  for open  wholesale  money funds the
fee is $32.50 per account, while for certain retirement accounts serviced on the
recordkeeping system of ADP, Inc., the fee is a flat fee up to $3.46 per account
(as of October  2006,  indexed to  inflation)  plus an asset  based fee of up to
0.25% of  average  net  assets.  1/12th of the  annual  service  charge for each
account is  charged  and  payable to the  Transfer  Agent each  month.  A fee is
charged for any account  which at any time during the month had a share  balance
in the  Fund.  Smaller  fees are also  charged  for  closed  accounts  for which
information  must be retained on the Transfer Agent's system for up to 18 months
after closing for tax reporting purposes.

Certain  out-of-pocket  expenses  incurred  by  the  Transfer  Agent,  including
expenses of printing and mailing  routine fund  disclosure  documents,  costs of
record retention and transaction  processing costs are reimbursed by the Fund or
are paid  directly  by the  Fund.  Certain  additional  out-of-pocket  expenses,
including costs of computer  hardware and software,  third party  record-keeping
and processing of proxy statements,  may only be reimbursed by the Fund with the
prior approval of the Fund's Board.

Effective  April 1, 2007,  DWS-SDI is the Transfer  Agent for all classes of all
DWS funds.


Pursuant to a sub-transfer  agency  agreement  between  DWS-SDI and DST Systems,
Inc.  ("DST"),  DWS-SDI has delegated certain transfer agent and dividend paying
agent  functions to DST. The costs and expenses of such  delegation are borne by
DWS-SDI, not by the Fund.




Independent Registered Public Accounting Firm

PricewaterhouseCoopers  LLP, 125 High Street,  Boston,  Massachusetts 02110, has
been selected as Independent Registered Public Accounting Firm for the Trust.

Counsel

Willkie Farr & Gallagher LLP, 787 Seventh Avenue, New York, New York 10019-6099,
serves as  Counsel  to the Trust and from time to time  provides  certain  legal
services to the Advisor.

Ropes & Gray, One International Place, Boston, Massachusetts 02110-2624,  serves
as counsel to the Independent Trustees to the Trust.


                            ORGANIZATION OF THE TRUST


The Trust is a Massachusetts  business trust organized on March 26, 1990,  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 (the  "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 this SAI
and the Fund's prospectus.  Each share has equal rights with each other share of
the same  class  of the  Fund as to  voting,  dividends,  exchanges,  conversion
features and  liquidation.  Shareholders  are entitled to one vote for each full
share held and fractional votes for fractional shares held.





                                       34
<PAGE>

The Trust offers shares of  beneficial  interest of separate  series,  par value
$0.001 per share.

The Fund generally is not required to hold meetings of its  shareholders.  Under
the  Declaration  of  Trust,  however,  shareholder  meetings  will  be  held in
connection  with the  following  matters to the extent  and as  provided  in the
Declaration  of Trust and as required by  applicable  law:  (a) the  election or
removal of trustees if a meeting is called for such purpose; (b) the termination
of the Trust or the Fund; (c) an amendment of the Declaration of Trust;  and (d)
such  additional  matters  as may be  required  by  law or as the  Trustees  may
determine to be necessary or desirable.
 Shareholders also vote upon changes in fundamental policies or restrictions.

The Declaration of Trust provides that shareholder  meeting quorum  requirements
shall be established  in the Trust's  By-laws.  The By-laws  currently in effect
provide that the presence in person or by proxy of the holders of thirty percent
of the shares entitled to vote at a meeting (or of an individual series or class
if required to vote separately) shall constitute a quorum for the transaction of
business at meetings of shareholders of the Trust.

On any  matter  submitted  to a vote of  shareholders,  all  shares of the Trust
entitled to vote shall,  except as otherwise provided in the Trust's By-Laws, be
voted in the aggregate as a single class without  regard to series or classes of
shares,  except (a) when required by applicable  law or when the Trustees  shall
have  determined that the matter affects one or more series or classes of shares
materially differently, shares shall be voted by individual series or class; and
(b) when the Trustees have determined that the matter affects only the interests
of one or more series or classes,  only  shareholders  of such series or classes
shall be entitled to vote thereon.

The  Declaration  of Trust  provides  that the  Board of  Trustees  may,  in its
discretion,  establish  minimum  investment  amounts for  shareholder  accounts,
impose  fees on  accounts  that do not  exceed a minimum  investment  amount and
involuntarily  redeem  shares in any such  account in payment of such fees.  The
Board of Trustees,  in its sole  discretion,  also may cause the Trust to redeem
all of the  shares of the Trust or one or more  series  or  classes  held by any
shareholder for any reason, to the extent permissible by the 1940 Act, including
(a) if the  shareholder  owns shares having an aggregate net asset value of less
than a specified minimum amount, (b) if a particular  shareholder's ownership of
shares would disqualify a series from being a regulated  investment company, (c)
upon a shareholder's failure to provide sufficient  identification to permit the
Trust to verify the shareholder's  identity, (d) upon a shareholder's failure to
pay for  shares  or meet or  maintain  the  qualifications  for  ownership  of a
particular  class or series of shares,  (e) if the Board of Trustees  determines
(or pursuant to policies  established by the Board it is determined)  that share
ownership by a particular  shareholder is not in the best interests of remaining
shareholders,  (f)  when  the  Fund  is  requested  or  compelled  to  do  so by
governmental authority or applicable law and (g) upon a shareholder's failure to
comply with a request  for  information  with  respect to the direct or indirect
ownership of shares of the Trust.  The  Declaration of Trust also authorizes the
Board of  Trustees  to  terminate  the  Fund or any  class  without  shareholder
approval,  and the Trust may  suspend the right of  shareholders  to require the
Trust to redeem shares to the extent permissible under the 1940 Act.

Upon the  termination  of the Trust or any series,  after  paying or  adequately
providing for the payment of all liabilities which may include the establishment
of a liquidating  trust or similar  vehicle,  and upon receipt of such releases,
indemnities   and  refunding   agreements  as  they  deem  necessary  for  their
protection, the Trustees may distribute the remaining Trust property or property
of the series,  in cash or in kind or partly each,  to the  shareholders  of the
Trust or the series involved,  ratably  according to the number of shares of the
Trust or such  series  held by the  several  shareholders  of the  Trust or such
series on the date of termination,  except to the extent  otherwise  required or
permitted by the  preferences  and special or relative  rights and privileges of
any classes of shares of a series  involved,  provided that any  distribution to
the  shareholders  of a  particular  class  of  shares  shall  be  made  to such
shareholders  pro rata in  proportion to the number of shares of such class held
by  each  of  them.  The  composition  of any  such  distribution  (e.g.,  cash,
securities  or  other  assets)  shall  be  determined  by the  Trust in its sole
discretion, and may be different among shareholders (including differences among
shareholders in the same series or class).

Under Massachusetts law,  shareholders of a Massachusetts  business trust could,
under certain  circumstances,  be held personally  liable for obligations of the
Fund. The Declaration of Trust,  however,  disclaims  shareholder  liability for
acts or obligations  of the Fund and requires that notice of such  disclaimer be
given in each agreement,  obligation,  or instrument entered into or executed by
the Fund or the Fund's trustees. Moreover, the Declaration of Trust provides for
indemnification  out of  Fund  property  for  all  losses  and  expenses  of any
shareholder held personally  liable for the obligations of the Fund and the Fund
may be  covered by  insurance  which the  Trustees  consider  adequate  to cover

                                       35
<PAGE>

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.

                                      TAXES

The  following  is  a  summary  of  certain   material  US  federal  income  tax
considerations  regarding the purchase,  ownership and  disposition of shares in
the Fund. This summary does not address special tax rules  applicable to certain
classes of  investors,  such as  tax-exempt  entities,  insurance  companies and
financial institutions. Each prospective shareholder is urged to consult his own
tax advisor with respect to the specific federal,  state,  local and foreign tax
consequences  of  investing  in the Fund.  The  summary  is based on the laws in
effect on the date of this SAI,  which are  subject  to  change,  possibly  with
retroactive effect.

Taxation of the Fund and Its Investments




The Trust  intends  that the Fund  qualify  as a separate  regulated  investment
company under the Internal  Revenue Code of 1986, as amended (the "Code"),  each
taxable  year.  To  so  qualify,  the  Fund  must  meet  certain  income,  asset
diversification and minimum  distribution  requirements.  For example,  the Fund
must  derive  at  least  90% of its  gross  income  in each  taxable  year  from
dividends,  interest,  payments with respect to securities  loans and gains from
the sale or other  disposition of stock or securities,  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 net income  derived  from  interests  in
"qualified publicly traded partnerships" (i.e.,  partnerships that are traded on
an established  securities market or tradable on a secondary market,  other than
partnerships that derive 90% of their income from interest,  dividends,  capital
gains, and other traditional  permitted mutual fund income).  The Fund must also
diversify its holdings so that, at the end of each quarter of the Fund's taxable
year,  (i) at least 50% of the market value of the Fund's assets is  represented
by cash,  securities  of other  regulated  investment  companies,  United States
government securities and other securities,  with such other securities limited,
in respect of any one  issuer,  to an amount not  greater  than 5% of the Fund's
assets and not greater than 10% of the  outstanding  voting  securities  of such
issuer and (ii) not more than 25% of the value of its assets is  invested in the
securities  (other than United  States  government  securities  or securities of
other  regulated  investment  companies)  of any one  issuer  or any two or more
issuers  each of which  the Fund  holds  20% or more of the  outstanding  voting
securities  and that are  determined to be engaged in the same or similar trades
or  businesses or related  trades or  businesses or in the  securities of one or
more qualified  publicly  traded  partnerships.  Under the minimum  distribution
requirement,  the Fund must  distribute to its  shareholders at least the sum of
(i) 90% of its "investment  company taxable income" (i.e., income other than its
net realized  long-term  capital gain over its net realized  short-term  capital
loss),  plus or minus certain  adjustments,  and (ii) 90% of its net  tax-exempt
income for the taxable year.

As a regulated  investment  company,  the Fund will not be subject to US federal
income tax on its investment company taxable income and net capital gains (i.e.,
the excess of net long-term  capital gains over net short-term  capital losses),
if any, that it distributes to shareholders.  The Fund will be subject to income
tax at regular  corporate  rates on any taxable  income or gain that it does not
distribute.  The  Fund  intends  to  distribute  to its  shareholders,  at least
annually,  substantially  all of its investment  company  taxable income and net
capital gains,  and therefore does not anticipate  incurring  federal income tax
liability.


The Code imposes a 4% nondeductible excise tax on the Fund to the extent it does
not  distribute  by the end of any calendar  year at least the sum of (i) 98% of
its  ordinary  income  for that  year and (ii) 98% of its  capital  gains  (both
long-term and short-term) for the one-year period ending,  as a general rule, on
October 31 of that year. For this purpose,  however,  any ordinary income or net
capital gain  retained by the Fund that is subject to corporate  income


                                       36
<PAGE>

tax will be considered to have been  distributed by year-end.  In addition,  the
minimum  amounts  that must be  distributed  in any year to avoid the excise tax
will  be   increased  or   decreased   to  reflect  any   underdistribution   or
overdistribution,  as the  case  may be,  from  the  previous  year.  The  Trust
anticipates   that  the  Fund  will  pay  such  dividends  and  will  make  such
distributions  as are necessary in order to avoid the application of this excise
tax.


If for any taxable year the Fund does not qualify for the special federal income
tax treatment afforded regulated investment companies, all of its taxable income
will be subject to federal  income tax at regular  corporate  rates (without any
deduction for  distributions  to its  shareholders).  In such event,  the Fund's
distributions,  to the extent  derived  from the Fund's  current or  accumulated
earnings  and  profits,   would   constitute   dividends  that  are  taxable  to
shareholders as dividend income, even though those distributions might otherwise
(at least in part) have been  treated in the  shareholders'  hands as  long-term
capital gains.  However,  such dividends  would be eligible (i) to be treated as
"qualified  dividend  income," in the case of individual and other  noncorporate
shareholders,  potentially  subject to reduced rates of federal income  taxation
for  taxable  years  beginning  before  January  1,  2011  and  (ii) for the 70%
dividends   received  deduction  for  corporations  in  the  case  of  corporate
shareholders.  Moreover,  if the Fund fails to qualify as a regulated investment
company in any year,  it must pay out its  earnings and profits  accumulated  in
that year in order to qualify again as a regulated  investment  company.  If the
Fund failed to qualify as a regulated  investment  company for a period  greater
than two taxable  years,  the Fund may be required to recognize any net built-in
gains with respect to certain of its assets  (i.e.,  the excess of the aggregate
gains,  including  items of income,  over aggregate  losses that would have been
realized with respect to such assets if the Fund had been  liquidated)  in order
to qualify as a regulated investment company in a subsequent year.


Foreign Investments. Income from investments in foreign stocks or securities may
be subject to foreign taxes,  including  withholding  and other taxes imposed by
foreign jurisdictions.  Tax conventions between certain countries and the United
States may reduce or eliminate  such taxes.  It is  impossible  to determine the
effective  rate of foreign tax in advance since the amount of a Fund's assets to
be invested  in various  countries  will vary.  The Fund will not be eligible to
elect to  treat  any  foreign  taxes  it pays as paid by its  shareholders,  who
therefore  will not be  entitled  to  credits  for such  taxes on their  own tax
returns.  Foreign  taxes paid by the Fund will reduce the return from the Fund's
investments.

The Fund may be required to treat amounts as taxable income or gain,  subject to
the distribution  requirements  referred to above,  even though no corresponding
amounts of cash are received  concurrently,  as a result of tax rules applicable
to  debt  obligations   acquired  with  "original  issue  discount,"   including
zero-coupon or deferred  payment bonds and pay-in-kind debt  obligations,  or to
market discount if an election is made with respect to such market discount. The
Fund may  therefore  be  required  to obtain  cash to be used to  satisfy  these
distribution  requirements  by  selling  securities  at times  that it might not
otherwise  be  desirable  to do so or  borrowing  the  necessary  cash,  thereby
incurring interest expenses.

US Shareholders

Dividends  and  Distributions.  While the Fund does not  expect to  realize  net
long-term  capital gains, any such gains realized will be distributed  annually.
Such distributions ("long-term capital gain dividends"), if any, will be taxable
to US  shareholders  as long-term  capital  gains,  regardless  of how long such
shareholder has held Fund shares.

All other  dividends of the Fund (including  dividends from  short-term  capital
gains)  from  its  current  and  accumulated   earnings  and  profits  ("regular
dividends") are generally  subject to tax as ordinary  income.  Distributions in
excess of the Fund's  current and  accumulated  earnings and profits will, as to
each US shareholder, be treated as a tax-free return of capital to the extent of
a  shareholder's  basis  in his  shares  of the  Fund,  and  as a  capital  gain
thereafter (if the shareholder  holds his shares of the Fund as capital assets).
US shareholders receiving  distributions in the form of additional shares should
be treated for US federal income tax purposes as receiving a distribution  in an
amount   equal  to  the  amount  of  money  that  the   shareholders   receiving
distributions will receive,  and should have a cost basis in the shares received
equal to such amount.


Special  tax  rules  apply  to  Fund  shareholders  who  are US  individuals  or
pass-through entities (including trusts,  partnerships,  S corporations,  common
trust funds,  nonpublicly offered regulated investment companies and real estate
mortgage  investment  conduits)  with at  least  one US  individual  holding  an
interest in the  pass-through  entity.  In order to determine the  shareholder's
taxable income, the Fund will determine its current earnings and profits


                                       37
<PAGE>

without  taking into account any expenses  that,  if incurred by an  individual,
would be deductible,  if at all, as miscellaneous  itemized  deductions.  The US
shareholders  will be treated as having  received  or accrued a dividend  in the
amount of their  allocable  share of such expenses and will be treated as having
paid or incurred an expense for  production  of income.  The Fund may,  however,
make an election  under which it will allocate 40% of its aggregate  expenses to
such shareholders.  A shareholder may only deduct this amount to the degree that
it, together with the shareholder's other itemized deductions, exceeds 2% of the
shareholder's adjusted gross income. In addition, the Code further restricts the
ability of an individual  with an adjusted gross income in excess of a specified
amount (for 2007,  the specified  amount  varies  between a high of $156,400 for
married  individuals  filing a joint  return and a low of $78,200  for a married
person filing a separate return) to deduct  miscellaneous  itemized  deductions.
Under such  provision,  such  permitted  deductions  in excess of 2% of adjusted
gross  income  will be  reduced  by the  lesser  of (i) 3% of the  excess of the
individual's  adjusted gross income over the specified amount or (ii) 80% of the
amount of certain itemized deductions  otherwise allowable for the taxable year.
For taxable  years  beginning in 2006 and 2007,  this  limitation  on deductions
which  exceed the 2% adjusted  gross  income  floor will be reduced by 1/3;  for
taxable years beginning in 2008 and 2009, the limitation will be reduced by 2/3;
and solely for taxable years beginning  during the year 2010, this limitation on
deductions will not apply.  Moreover,  miscellaneous itemized deductions are not
deductible by a noncorporate taxpayer in calculating its alternative minimum tax
liability.


Sale of Shares.  Any gain or loss realized by a US shareholder  upon the sale or
other  disposition  of shares of the Fund, if any,  generally  will be a capital
gain  or  loss  which  will be  long-term  or  short-term,  depending  upon  the
shareholder's holding period for the shares.

Non-US Shareholders

Dividends,  Distributions and Sale of Shares. Regular dividends of the Fund paid
to non-US shareholders are generally subject to withholding tax at a 30% rate or
a reduced rate specified by an applicable  income tax treaty. In order to obtain
a reduced rate of withholding,  a non-US shareholder will be required to provide
an IRS Form W-8BEN  certifying its  entitlement to benefits under a treaty.  The
withholding tax does not apply to regular dividends paid to a non-US shareholder
who  provides a Form  W-8ECI,  certifying  that the  dividends  are  effectively
connected with the non-US  shareholder's  conduct of a trade or business  within
the United States.  Instead, the effectively connected dividends will be subject
to regular US income tax as if the non-US  shareholder were a US shareholder.  A
non-US corporation receiving effectively connected dividends may also be subject
to additional  "branch  profits tax" imposed at a rate of 30% (or a lower treaty
rate).

In general,  United States federal withholding tax will not apply to any gain or
income realized by a non-US shareholder in respect of any long-term capital gain
dividends or upon the sale or other disposition of shares of the Fund.


For  taxable  years  beginning  before  January  1,  2008,  properly  designated
dividends are generally exempt from United States federal  withholding tax where
they (i) are paid in respect  of the  Fund's  "qualified  net  interest  income"
(generally,  the Fund's  interest  income  from US sources,  other than  certain
contingent  interest,  interest from obligations of a corporation or partnership
in which the Fund is at least a 10%  shareholder  and bank deposits,  reduced by
expenses  that  allocable  to such  income)  and (ii) are paid in respect of the
Fund's "qualified short-term capital gains" (generally, the excess of the Fund's
net short term capital gain over the Fund's net long-term  capital loss (if any)
for such taxable year).  However,  depending on its circumstances,  the Fund may
designate  all,  some or  none of its  potentially  eligible  dividends  as such
qualified net interest income or as qualified  short-term capital gains,  and/or
treat such dividends, in whole or in part, as ineligible for this exemption from
withholding.  The Fund does not currently anticipate making such designation. In
the case of shares held through an  intermediary,  the intermediary may withhold
even if the fund  designates  the payment as qualified  net  interest  income or
qualified  short-term  capital gain.  Non-US  shareholders  should contact their
intermediaries with respect to the application of these rules to their accounts.
In order to qualify for this exemption from  withholding,  a non-US  shareholder
will need to comply with applicable  certification  requirements relating to its
non-US  status  (including,  in  general,  furnishing  an IRS Form  W-8BEN  or a
substitute Form).


Every non-US shareholder is urged to consult his own tax advisor with respect to
the application of this pending legislation to his own circumstances.

                                       38
<PAGE>


Notices


Every  shareholder of the Fund will receive,  if  appropriate,  various  written
notices  after the close of the  Fund's  prior  taxable  year as to the  federal
income status of his or her dividends and distributions  that were received from
the Fund during the Fund's prior taxable year and, where applicable,  his or her
allocable share of Fund expenses.

If a  shareholder  recognizes  a loss with  respect to the  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  exempted from this  reporting  requirement,  but under current  guidance,
shareholders of a regulated investment company are not exempted. 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.


Backup Withholding


The  Fund  may be  required  to  withhold  US  federal  income  tax  on  taxable
distributions  payable to  shareholders  who fail to provide the Fund with their
correct taxpayer  identification number or to make required  certifications,  or
who have been notified by the Internal  Revenue Service that they are subject to
backup  withholding.  Corporate  shareholders  and  certain  other  shareholders
specified in the Code generally are exempt from such backup withholding.  Backup
withholding  is not an  additional  tax.  Any amounts  withheld  may be credited
against the shareholder's US federal income tax liability.


Other Taxation


The Fund's  shareholders  may be subject to state and local  taxes on their Fund
distributions.  Shareholders  are advised to consult their own tax advisors with
respect to the particular tax consequences to them of an investment in the Fund.

The Fund is designed to provide investors with liquidity and current income. The
Fund is not  intended to  constitute  a balanced  investment  program and is not
designed  for  investors  seeking  capital  gains,  maximum  income  or  maximum
tax-exempt income irrespective of fluctuations in principal.

The  foregoing  is only a summary of  certain  material  US  federal  income tax
consequences  affecting the Fund and its  shareholders.  Current and prospective
shareholders  are advised to consult  their own tax advisors with respect to the
particular tax consequences to them of an investment in the Fund.

                            PROXY VOTING GUIDELINES

The Fund has delegated proxy voting responsibilities to the Advisor,  subject to
the  Board's  general  oversight.  The Fund has  delegated  proxy  voting to the
Advisor with the  direction  that proxies  should be voted  consistent  with the
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 the Fund,  and the interests of
the Advisor and its affiliates,  including the 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 proposals to
         restrict  a chief  executive  officer  from  serving on more than three
         outside  boards of  directors.  The  Advisor  generally  votes  against
         proposals  that  require a company  to  appoint  a  Chairman  who is an
         independent director.

                                       39
<PAGE>

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 the 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 the Board or of a majority of the 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.

A  description  of the Fund's  policies and  procedures  for voting  proxies for
portfolio securities and information about how the Fund voted proxies related to
its portfolio  securities  during the 12-month period ended June 30 is available
on our Web site -- www.dws-scudder.com (click on "proxy voting" at the bottom of
the page) -- or on the SEC's Web site --  www.sec.gov.  To obtain a written copy
of the Fund's policies and procedures without charge, upon request, call us toll
free at (800) 621-1048.

                                       40
<PAGE>

                              FINANCIAL STATEMENTS


The  financial  statements  for the Fund for the year  ended  June 30,  2007 are
incorporated  herein by  reference  to the Annual  Report dated June 30, 2007. A
copy of the Fund's  Annual Report may be obtained  without  charge by contacting
the Fund.





                                       41
<PAGE>


APPENDIX


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 best 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  safeguarded
during  both  good  and bad  times  over the  future.  Uncertainty  of  position
characterizes bonds in this class.

B: Bonds  which are rated B  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  speculative in a
high degree. Such issues are often in default or have other marked shortcomings.

C:  Bonds  which are rated C are the lowest  rated  class of bonds and issues so
rated can be regarded as having  extremely  poor prospects of ever attaining any
real investment standing.

Note:  Moody's applies  numerical  modifiers,  1, 2 and 3 in each generic rating
classification  from Aa  through B in its  corporate  bond  rating  system.  The
modifier 1 indicates  that the  security  ranks in the higher end of its generic
rating category;  the modifier 2 indicates a mid range ranking; and the modifier
3  indicates  that  the  issue  ranks in the  lower  end of its  generic  rating
category.

Moody's Investors Service, Inc.'s Short-Term Debt Ratings

Moody's  short-term debt ratings are opinions of the ability of issuers to repay
punctually  promissory  obligations not having an original maturity in excess of
one year.

                                       42
<PAGE>

Issuers  rated  Prime-1  or P-1 (or  supporting  institutions)  have a  superior
ability for  repayment of senior  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 senior  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.

Standard & Poor's Ratings Group's 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 is regarded as having an adequate  capacity to pay interest
and  repay  principal.   Whereas  it  normally  exhibits   adequate   protection
parameters,  adverse  economic  conditions  or changing  circumstances  are more
likely to lead to 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 is regarded as having predominantly 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  are
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.

                                       43
<PAGE>

CCC: Debt rated CCC has a currently  identifiable  vulnerability to default, and
is dependent upon favorable business, financial, and economic conditions to meet
timely  payment of interest and repayment of principal.  In the event of adverse
business,  financial,  or  economic  conditions,  it is not  likely  to have the
capacity to pay interest and repay principal.

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: The rating CC is typically applied to debt subordinated to senior debt which
is assigned an actual or implied CCC debt rating.

C: The rating C is typically  applied to debt  subordinated to senior debt which
is assigned an actual or implied CCC- debt  rating.  The C rating may be used to
cover a situation where a bankruptcy  petition has been filed,  but debt service
payments are continued.

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.

NY: 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 Group's Commercial Paper Ratings

A: 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.
They are,  however,  more  vulnerable  to the  adverse  effects  of  changes  in
circumstances than obligations carrying the higher designations.

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."  Because  bonds rated in the "AAA" and
"AA"  categories  are  not  significantly   vulnerable  to  foreseeable   future
developments, short-term debt of these issuers is generally rated "F-1+."

                                       44
<PAGE>

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 satisfactory 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.

High Yield 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 and financial  alternatives  can be  identified  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 C may be modified by the addition
of a plus or minus sign to indicate the relative position of a credit within the
rating category.

NR: Indicates that Fitch does not rate the specific issue.

Conditional:  A conditional rating is premised on the successful completion of a
project or the occurrence of a specific event.

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 degree of assurance for timely payment.

F-1:  Very  Strong  Credit  Quality.  Issues  assigned  this  rating  reflect an
assurance  of timely  payment  only  slightly  less in degree than issues  rated
"F-1+."

                                       45
<PAGE>

F-2: Good Credit Quality. Issues assigned this rating have a satisfactory degree
of assurance 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 degree of assurance for timely payment is adequate, however,
near-term  adverse  changes  could  cause  these  securities  to be rated  below
investment grade.

Duff & Phelps Bond Ratings

Investment Grade

AAA:  Highest  credit  quality.  The risk  factors  are  negligible,  being only
slightly more than for risk-free US Treasury debt.

AA+, AA, and AA-: High credit quality.  Protection  factors are strong.  Risk is
modest but may vary slightly from time to time because of economic conditions.

A+, A, and A-:  Protection  factors  are  average but  adequate.  However,  risk
factors are more variable and greater in periods of economic stress.

BBB+,  BBB, and BBB-:  Below  average  protection  factors but still  considered
sufficient  for  prudent  investment.  Considerable  variability  in risk during
economic cycles.

High Yield Grade

BB+, BB, and BB-: Below  investment  grade but deemed likely to meet obligations
when  due.  Present  or  prospective   financial  protection  factors  fluctuate
according to industry  conditions or company fortunes.  Overall quality may move
up or down frequently within this category.

B+, B, and B-: Below  investment grade and possessing risk that obligations will
not  be met  when  due.  Financial  protection  factors  will  fluctuate  widely
according to economic  cycles,  industry  conditions  and/or  company  fortunes.
Potential exists for frequent changes in the rating within this category or into
a higher or lower rating grade.

CCC: Well below investment grade securities.  Considerable uncertainty exists as
to timely  payment of  principal  interest or  preferred  dividends.  Protection
factors   are   narrow   and   risk   can  be   substantial   with   unfavorable
economic/industry conditions, and/or with unfavorable company developments.

Preferred  stocks are rated on the same scale as bonds but the preferred  rating
gives weight to its more junior  position in the capital  structure.  Structured
financings are also rated on this scale.

Duff & Phelps Paper/Certificates of Deposit Ratings

Category 1: Top Grade

Duff 1 plus: Highest certainty of timely payment. Short-term liquidity including
internal operating factors and/or ready access to alternative  sources of funds,
is  outstanding,  and  safety is just below  risk-free  US  Treasury  short-term
obligations.

Duff 1: Very high certainty of timely payment.  Liquidity  factors are excellent
and supported by good Fundamental protection factors. Risk factors are minor.

Duff 1 minus: High certainty of timely payment. Liquidity factors are strong and
supported by good Fundamental protection factors. Risk factors are very small.

                                       46
<PAGE>

Category 2: Good Grade

Duff 2:  Good  certainty  of  timely  payment.  Liquidity  factors  and  company
Fundamentals  are  sound.  Although  ongoing  Funding  needs may  enlarge  total
financing  requirements,  access to capital  markets is good.  Risk  factors are
small.

Category 3: Satisfactory Grade

Duff 3: Satisfactory  liquidity and other protection factors qualify issue as to
investment  grade.  Risk  factors  are  larger and  subject  to more  variation.
Nevertheless timely payment is expected.

No  ratings  are  issued  for  companies  whose  paper  is not  deemed  to be of
investment grade.

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

Bonds which are unrated expose the investor to risks with respect to capacity to
pay interest or repay  principal  which are similar to the risks of  lower-rated
bonds.  A  Fund  is  dependent  on  the   investment   advisor's  or  investment
sub-advisor's judgment, analysis and experience in the evaluation of such bonds.

Investors  should  note  that the  assignment  of a rating to a bond by a rating
service  may not  reflect  the  effect of recent  developments  on the  issuer's
ability to make interest and principal payments.

Note:

1          The  ratings  indicated  herein are  believed  to be the most  recent
ratings available at the date of this SAI for the securities listed. Ratings are
generally given to securities at the time of issuance. While the rating agencies
may from time to time revise such  ratings,  they  undertake no obligation to do
so, and the ratings  indicated do not necessarily  represent ratings which would
be given to these securities on the date of a Fund's fiscal year end.


                                       47
<PAGE>


Investment Advisor
DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC.
345 Park Avenue
New York, NY 10154


Administrator
DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC.
345 Park Avenue
New York, NY 10154

Transfer Agent
DWS SCUDDER INVESTMENTS SERVICE COMPANY
222 South Riverside Plaza
Chicago, IL 60606

Distributor and Placement Agent
DWS SCUDDER DISTRIBUTORS, INC.
222 South Riverside Plaza
Chicago, IL 60606

Custodian
STATE  STREET  BANK  AND TRUST COMPANY
225 Franklin Street
Boston, MA 02110

Independent Registered Public Accounting Firm
PRICEWATERHOUSECOOPERS LLP
125 High Street
Boston, MA 02110

Counsel
WILLKIE FARR & GALLAGHER LLP
787 Seventh Avenue
New York, NY  10019

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

No  person  has  been  authorized  to  give  any  information  or  to  make  any
representations  other than those contained in the Fund's  Confidential  Private
Offering Memorandum or its Confidential  Statement of Additional  Information in
connection  with the offering of the Fund's  shares and, if given or made,  such
other  information  or  representations  must not be relied  on as  having  been
authorized  by the Trust.  Neither  the  Fund's  Confidential  Private  Offering
Memorandum nor its Confidential Statement of Additional Information  constitutes
an offer in any state in which,  or to any  person to whom,  such  offer may not
lawfully be made.
--------------------




                                       48
<PAGE>


                            PART C. OTHER INFORMATION


<TABLE>
<CAPTION>
Item 23           Exhibits:
-------           ---------

<S>                                                                                 <C>
(a)      Amended and Restated Declaration of Trust dated June 27, 2006; (14)
         (i)      Amended and Restated Designation of Series and Classes dated June 27, 2006; (14)
         (ii)     Redesignation of Class of Shares of Beneficial Interest dated October 20, 2006; (16)
         (iii)    Restated Designation of Series and Classes of Shares of Beneficial Interest dated
                  December 20, 2006; (16)

(b)      By-Laws, dated June 27, 2006; (14)

(c)      Incorporated by reference to (a) above;

(d)      Amended and Restated Investment Management Agreement dated July 1, 2006, on behalf of DWS
         Commodity Securities Fund, DWS EAFE Equity Index Fund, DWS U.S. Bond Index Fund; Cash
         Management Fund Institutional, Cash Reserves Fund Institutional, Treasury Money Fund
         Investment, DWS Equity 500 Index Fund, Daily Assets Fund Institutional, DWS Inflation Protected
         Plus Fund; (15)
         (i)      Sub-Advisory Agreement between Deutsche Investment Management Americas Inc. and
                  Northern Trust Investments, N.A., dated April 25, 2003, as revised January 1, 2007; (17)

(e)      Distribution Agreement dated August 19, 2002; (3)
         (i)      Exclusive Placement Agent Agreement dated August 19, 2002; (3)
         (ii)     Amendment to Distribution Agreement dated August 19, 2002; (3)

(f)      Bonus or Profit Sharing Contracts -- Not applicable;

(g)      Amended and Restated Master Custody Contract between Registrant and State Street Bank and Trust
         Company, dated April 1, 2003; (4)
         (i)      Master Custodian Agreement between Registrant, on behalf of DWS Commodity Securities
                  Fund, and Brown Brothers Harriman & Co., dated February 1, 2007; (17)

(h)      Administrative Services Agreement dated June 1, 2006, between the Registrant and DWS Commodity
         Securities Fund, Cash Management Fund Institutional, Cash Reserves Fund Institutional, Treasury
         Money Fund Investment, DWS Equity 500 Index Fund, Daily Assets Fund Institutional, DWS
         Inflation Protected Plus Fund, DWS EAFE Equity Index Fund and DWS U.S. Bond Index Fund; (14)
         (i)      Form of Indemnification Agreements; (7)
         (ii)     Shareholder Services Plan dated June 1, 2006 on behalf of Cash Management Fund
                  Institutional, Cash Reserves Fund Institutional and Treasury Money Fund Investment;
                  (15)
         (iii)    Form of Mutual Fund Rule 22c-2 Information Sharing Agreement between Registrant and
                  DWS Scudder Distributors, Inc.; (16)
         (iv)     Transfer Agency and Service Agreement between Registrant and DWS Scudder Investments
                  Service Company, dated July 1, 2006; (16)

(i)      Opinion of Willkie Farr & Gallagher LLP, counsel to the Registrant, with respect to DWS EAFE(R)
         Equity Index Fund and DWS U.S. Bond Index Fund; (12)
         (i)      Opinion of Bingham McCutchen LLP, Massachusetts counsel to the Registrant, with
                  respect to DWS EAFE(R) Equity Index Fund and DWS U.S. Bond Index Fund; (12)
         (ii)     Opinion of Willkie Farr & Gallagher LLP, counsel to the Registrant, with respect to
                  Scudder Commodities Securities Fund; (8)
         (iii)    Opinion of Bingham McCutchen LLP, Massachusetts counsel to the Registrant, with
                  respect to Scudder Commodities Securities Fund; (8)
         (iv)     Opinion of Willkie Farr & Gallagher LLP, counsel to the Registrant, with respect to
                  Scudder Inflation Protected Plus Fund; (10)
<PAGE>

         (v)      Opinion of Bingham McCutchen LLP, Massachusetts counsel to the Registrant, with
                  respect to Scudder Inflation Protected Plus Fund; (10)
         (vi)     Opinion of Willkie Farr & Gallagher LLP, counsel to the Registrant, with respect to
                  Scudder Cash Management Fund Institutional, Scudder Cash Reserves Fund Institutional,
                  Scudder Treasury Money Fund Institutional and Scudder Equity 500 Index Fund; (6)
         (vii)    Opinion of Bingham McCutchen LLP, Massachusetts counsel to the Registrant, with
                  respect to Scudder Cash Management Fund Institutional, Scudder Cash Reserves Fund
                  Institutional, Scudder Treasury Money Fund Institutional and Scudder Equity 500 Index
                  Fund; (6)

(j)      Consent of independent registered public accounting firm (filed herein);

(k)      Omitted Financial Statements - Not Applicable;

(l)      Investment representation letter of initial shareholder of Equity 500 Index Fund; (2)
         (i)      Investment representation letter of initial shareholder of Daily Assets Fund
                  Institutional; (1)
         (ii)     Purchase Agreement dated February 4, 2005, between Scudder Institutional Funds, on
                  behalf of Scudder Commodities Fund, and Deutsche Investment Management Americas Inc.;
                  (9)
         (iii)    Purchase Agreement dated June 27, 2005, between Scudder Institutional Funds, on behalf
                  of DWS Inflation Protected Plus Fund, and Deutsche Asset Management, Inc.; (10)

(m)      Rule 12b-1 Plan dated June 27, 2006 for DWS Commodity Securities Fund, Class A Shares; (14)
         (i)      Rule 12b-1 Plan dated June 27, 2006 for DWS Commodity Securities Fund, Class B Shares;
                  (14)
         (ii)     Rule 12b-1 Plan dated June 27, 2006 for DWS Commodity Securities Fund, Class C Shares;
                  (14)
         (iii)    Rule 12b-1 Plan dated June 27, 2006, for DWS Inflation Protected Plus Fund, Class A
                  Shares; (15)
         (iv)     Rule 12b-1 Plan dated June 27, 2006, for DWS Inflation Protected Plus Fund, Class B
                  Shares; (15)
         (v)      Rule 12b-1 Plan dated June 27, 2006, for DWS Inflation Protected Plus Fund, Class C
                  Shares; (15)

(n)      Multiple Class Expense Allocation Plan Adopted Pursuant to Rule 18f-3 dated June 27, 2005; (10)
         (i)      Form of Amended and Restated Multi-Distribution System Plan; (16)

(p)      Code of Ethics for Deutsche Bank - Deutsche Asset Management - U.S., dated January 1, 2007; (16)
         (i)      Consolidated Fund Code of Ethics dated March 14, 2006; (15)
         (ii)     The Code of Ethics of Northern Trust Investments, N.A. dated February 1, 2005; (11)

(q)      Power of Attorney dated June 27, 2006; (13)
--------------------

(1)      Incorporated by reference to Post-Effective Amendment No. 21 to the Registration
         Statement as filed with the Commission on September 24, 1996.

(2)      Incorporated by reference to Post-Effective Amendment No. 4 to the Registration
         Statement as filed with the Commission on April 30, 1992.

(3)      Incorporated by reference to Post-Effective Amendment No. 36 to the Registration Statement as
         filed with the Commission on February 24, 2003.

(4)      Incorporated by reference to Post-Effective Amendment No. 39 to the Registration Statement as
         filed with the Commission on April 30, 2003.

(5)      Incorporated by reference to Post-Effective Amendment No. 41 to the Registration Statement as
         filed with the Commission on February 27, 2004.

(6)      Incorporated by reference to Post-Effective Amendment No. 42 to the Registration Statement as
         filed with the Commission on April 29, 2004.


                                       3
<PAGE>

(7)      Incorporated by reference to Post-Effective Amendment No. 43 to the Registration Statement as
         filed with the Commission on November 16, 2004.

(8)      Incorporated by reference to Post-Effective Amendment No. 45 to the Registration Statement as
         filed with the Commission on January 28, 2005.

(9)      Incorporated by reference to Post-Effective Amendment No. 46 to the Registration Statement as
         filed with the Commission on February 4, 2005.

(10)     Incorporated by reference to Post-Effective Amendment No. 54 to the Registration Statement as
         filed with the Commission on July 1, 2005.

(11)     Incorporated by reference to Post-Effective Amendment No. 62 to the Registration Statement as
         filed with the Commission on April 28, 2006.

(12)     Incorporated by reference to Post-Effective Amendment No. 65 to the Registration Statement as
         filed with the Commission on June 13, 2006;

(13)     Incorporated by reference to Post-Effective Amendment No. 66 to the Registration Statement as
         filed with the Commission on June 30, 2006.

(14)     Incorporated by reference to Post-Effective Amendment No. 67 to the Registration Statement as
         filed with the Commission on September 29, 2006.

(15)     Incorporated by reference to Post-Effective Amendment No. 68 to the Registration Statement as
         filed with the Commission on January 26, 2007.

(16)     Incorporated by reference to Post-Effective Amendment No. 69 to the Registration Statement as
         filed with the Commission on April 30, 2007.

(17)     Incorporated by reference to Post-Effective Amendment No. 70 to the Registration Statement as
         filed with the Commission on October 1, 2007.
</TABLE>

Item 24           Persons Controlled by or under Common Control with the
-------           ------------------------------------------------------
                  Registrant:
                  -----------


                  Information  pertaining  to  persons  controlled  by or  under
                  common control with  Registrant is  incorporated  by reference
                  from the Statement of Additional Information contained in Part
                  B of this Registration Statement.


Item 25           Indemnification:
-------           ----------------

                  Article IV of the  Registrant's  Agreement and  Declaration of
                  Trust  (Exhibit (a) 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


                                       4
<PAGE>

                  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
                  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


                                       5
<PAGE>

                           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  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 Scudder  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.

                                       6
<PAGE>

                  (b)

                  Information  on the  officers  and  directors  of DWS  Scudder
                  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 Scudder Distributors, Inc.
          Name and Principal             Positions and Offices with               Positions and
          Business Address               DWS Scudder Distributors, Inc.           Offices with Registrant
          ----------------               ------------------------------           -----------------------
                <S>                              <C>                                     <C>
         Philipp Hensler                Director, Chairman of the Board and CEO   None
         345 Park Avenue
         New York, NY 10154

         Michael Colon                  Director and Chief Operating Officer      None
         345 Park Avenue
         New York, NY 10154

         Thomas Winnick                 Director and President                    None
         345 Park Avenue
         New York, NY 10154

         Cliff Goldstein                Chief Financial Officer and Treasurer     None
         60 Wall Street
         New York, NY 10005

         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
         222 South Riverside Plaza
         Chicago, IL 60606

         Donna White                    Chief Compliance Officer                  None
         345 Park Avenue
         New York, NY 10154

         Jason Vazquez                  Vice President and AML Compliance  AML    Compliance Officer
         345 Park Avenue                Officer
         New York, NY 10154

         Caroline Pearson               Secretary                                 Assistant Secretary
         Two International Place
         Boston, MA 02110

         Philip J. Collora              Assistant Secretary                       None
         222 South Riverside Plaza
         Chicago, IL 60606


                                       7
<PAGE>
                      (1)                             (2)                                  (3)
          DWS Scudder Distributors, Inc.
          Name and Principal             Positions and Offices with               Positions and
          Business Address               DWS Scudder Distributors, Inc.           Offices with Registrant
          ----------------               ------------------------------           -----------------------

         Anjie LaRocca                  Assistant Secretary                       None
         345 Park Avenue
         New York, NY 10154
</TABLE>


         (c)      Not applicable


Item 28           Location of Accounts and Records:
-------           ---------------------------------

DWS Institutional Funds:                            Deutsche Asset Management
(Registrant)                                        345 Park Avenue
                                                    New York, NY 10154

Deutsche Investment Management Americas Inc.:       345 Park Avenue
(Investment Advisor)                                New York, NY 10154

Deutsche Investment Management Americas Inc.:       345 Park Avenue
(Administrator)                                     New York, NY 10154

DWS Scudder Investments Service Company:            222 South Riverside Plaza
(Transfer Agent)                                    Chicago, IL 60606

DWS Scudder Distributors, Inc.:                     222 South Riverside Plaza
(Distributor)                                       Chicago, IL 60606

State Street Bank and Trust Company:                225 Franklin Street
(Custodian)                                         Boston, MA 02110

DST Systems, Inc.:                                  127 West 10th Street
(Sub-Transfer Agent and                             Kansas City, MO 64105
Sub-Dividend Distribution Agent)

Item 29           Management Services:
-------           --------------------

                  Not applicable

Item 30           Undertakings:
-------           -------------

                  Not applicable


                                       8
<PAGE>


                                   SIGNATURES
                                   ----------

         Pursuant to the requirements of the Investment Company Act of 1940, the
Registrant certifies that it meets all of the requirements for effectiveness of
this Registration Statement 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 24th day
of October 2007.

                                       DWS INSTITUTIONAL FUNDS

                                       By:  /s/Michael G. Clark
                                            _____________________
                                            Michael G. Clark
                                            President

<PAGE>

                                                     1940 Act File No. 811-06071




                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    EXHIBITS

                                       TO

                                    FORM N-1A

                                AMENDMENT NO. 85
                            TO REGISTRATION STATEMENT

                                      UNDER

                       THE INVESTMENT COMPANY ACT OF 1940



                             DWS INSTITUTIONAL FUNDS



                                       9
<PAGE>


                             DWS INSTITUTIONAL FUNDS

                                  EXHIBIT INDEX


                                       (j)


                                       10
<PAGE>


                    PROPOSED RESOLUTIONS RELATING TO APPROVAL
                          OF POST-EFFECTIVE AMENDMENTS

          (To be voted on by the Boards of each Investment  Company with June 30
fiscal year end)


RESOLVED,   that the officers of the Investment Companies and Funds be, and they
            hereby are, authorized and directed to (A)(i) cause to be registered
            with  the  Securities  and  Exchange   Commission  (the  "SEC")  and
            qualified  with such state  securities  commissions  as the officers
            shall deem  appropriate,  such number,  or an indefinite  number, of
            shares of  beneficial  interest  of all  Series of the Funds and all
            classes  thereof as they in their sole discretion  shall  determine;
            and (ii)  cause  such  shares  of all  Series  of the  Funds and all
            classes  thereof to be offered  and sold to the public  from time to
            time at a per  share  consideration  equal to each such  Series'  or
            class' reported net asset value per share,  determined in accordance
            with the Declaration of Trust,  By-Laws and policies of the Board of
            Trustees/Directors of the Investment Companies, with such rights and
            preferences  as shall be fixed and  determined  from time to time by
            the  Trustees in  accordance  with the  Declaration  of Trust of the
            Trust and that shares so sold shall be fully paid and nonassessable;
            and  (B)(i)   prepare   and  file  a   registration   statement   or
            post-effective  amendment to the registration statement of the Funds
            on Form N-1A; (ii) execute and file such  registration  statement or
            post-effective   amendment  with  the  SEC  and   applicable   state
            securities  commissions;  and (iii), with the assistance of counsel,
            prepare  and  file  (a) any  amendments  that  may be  necessary  or
            desirable to provide full  disclosure  of all  materials  facts,  to
            assure  compliance with all applicable  laws, rules and regulations,
            and to  obtain  effectiveness  of  such  registration  statement  or
            post-effective  amendment,  and (b) any other  documents  as they in
            their  sole   discretion   shall  deem  necessary  or  desirable  in
            connection  with the continuous  offering of all Series of the Funds
            and all classes thereof of the shares of beneficial  interest to the
            public.



                                       11