UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

 

FORM            N-CSR

 

| Investment Company Act file number | 811-42 |
|------------------------------------|--------|

 

DWS Portfolio Trust

(Exact Name of Registrant as Specified in Charter)

 

345            Park Avenue

New York, NY 10154-0004

(Address of principal executive offices)                        (Zip code)

 

Registrant’s Telephone Number, including Area Code:(212) 454-7190

 

Paul            Schubert

345            Park Avenue

New York, NY 10154-0004

(Name            and Address of Agent for Service)

 

| Date of fiscal year end: | 1/31 |
|--------------------------|------|

 

| Date of reporting period: | 1/31/09 |
|---------------------------|---------|

 

 

**ITEM            1.**           **REPORT TO STOCKHOLDERS**

 

----

|  

JANUARY 31,                    2009
Annual Report                    to Shareholders |
|----------------------------------------------------------------------------------------------|
|                                                                                         |
|  

**DWS Core                    Plus Income Fund**                                     |
|                                                                                              |

**Contents**

| **4**Performance Summary

**11**Information About Your Fund's Expenses

**13**Portfolio Management Review

**18**Portfolio Summary

**20**Investment Portfolio

**30**Financial Statements

**34**Financial Highlights

**39**Notes to Financial Statements

**51**Report of Independent Registered Public Accounting                    Firm

**52**Tax Information

**53**Investment Management Agreement Approval

**58**Summary of Management Fee Evaluation by Independent                    Fee Consultant

**63**Summary of Administrative Fee Evaluation by Independent                    Fee Consultant

**64**Board Members and Officers

**68**Account Management Resources |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**This report must be        preceded or accompanied by a prospectus. To obtain a prospectus for any of our funds, refer        to the Account Management Resources information provided in the back of this booklet. We        advise you to consider the fund's objectives, risks, charges and expenses carefully before        investing. The prospectus contains this and other important information about the fund.        Please read the prospectus carefully before you invest.**

Investments in mutual funds        involve risk. Some funds have more risk than others. The fund invests in individual bonds        whose yields and market values fluctuate so that your investment may be worth more or less        than its original cost. Bond investments are subject to interest rate risk such that when        interest rates rise, the prices of the bonds, and thus the value of the fund, can decline        and the investor can lose principal value. In the current market environment, mortgage        backed securities are experiencing increased volatility. Derivatives may be more volatile        and less liquid than traditional securities, and the fund could suffer losses on its        derivatives positions. Additionally, investing in foreign securities presents certain        risks, such as currency fluctuation, political and economic changes and market risks.        Please read this fund's prospectus for specific details regarding its investments and        risk profile.

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

*NOT FDIC/NCUA INSURED NO        BANK GUARANTEE MAY LOSE VALUE NOT A DEPOSIT NOT INSURED BY ANY FEDERAL GOVERNMENT        AGENCY*

**Performance        SummaryJanuary 31, 2009**

**Classes A, B, C and        Institutional Class**

**All performance shown        is historical, assumes reinvestment of all dividend and capital gain distributions, and        does not guarantee future results. Investment return and principal value fluctuate with        changing market conditions so that, when redeemed, shares may be worth more or less than        their original cost. Current performance may be lower or higher than the performance        quoted. Please visit www.dws-investments.com for the Fund's most recent month-end        performance.**

**The maximum sales        charge for Class A shares is 4.5%. For Class B shares, the maximum contingent deferred        sales charge (CDSC) is 4%within the first year        after purchase, declining to 0% after six years. Class C shares have no front-end sales        charge but redemptions within one year of purchase may be subject to a CDSC of 1%.        Unadjusted returns do not reflect sales charges and would have been lower if they        had.Institutional Class shares are not subject to        sales charges.**

**The total annual fund        operating expense ratios, gross of any fee waivers or expense reimbursements, as stated in        the fee table of the prospectus dated May 1, 2008 are 1.02%, 1.88%, 1.81% and 0.63%        for Class A, Class B, Class C and Institutional Class shares, respectively. Please see the        Information About Your Fund's Expenses, the Financial Highlights and Notes to the Financial        Statements (Note C, Related Parties) sections of this report for gross and net expense        related disclosure for the period ended January 31, 2009.**

**To discourage        short-term trading, the Fund imposes a 2% redemption fee on shareholders redeeming shares        held less than 15 days, which has the effect of lowering total return.**

Returns and rankings        during all periods shown for Class A, B and C shares reflect a fee waiver and/or expense        reimbursement. Without this waiver/reimbursement, returns and rankings would have been        lower.

Performance figures do not        reflect the deduction of taxes that a shareholder would pay on fund distributions or        the redemptions of fund shares. Returns and rankings may differ by share class.

Returns shown for Class A,        B and C shares for the period prior to their inception on June 25, 2001 are derived        from the historical performance of Class S shares of DWS Core Plus Income Fund during such        period and have been adjusted to reflect higher total annual operating expenses of each        specific class. Any difference in expenses will affect performance.

| **Average                    Annual Total Returns**(Unadjusted for                    Sales Charge) as of 1/31/09 |
|-------------------------------------------------------------------------------------------------------------------|
| **DWS Core                    Plus Income Fund**                                                                  | **1-Year** | **3-Year** | **5-Year** | **10-Year** |
| **Class                    A**                                                                                    | **-19.04%** | **-4.00%** | **-1.14%** | **1.90%** |
| **Class                    B**                                                                                    | **-19.65%** | **-4.76%** | **-1.95%** | **1.10%** |
| **Class                    C**                                                                                    | **-19.67%** | **-4.75%** | **-1.94%** | **1.15%** |
| Barclays Capital US Aggregate                Index+                                                               | 2.59% | 5.19% | 4.30% | 5.46% |

*Sources: Lipper Inc.        and Deutsche Investment Management Americas Inc.*

| **Average                    Annual Total Returns**as of                    1/31/09 |
|-------------------------------------------------------------------------------------|
| **DWS Core                    Plus Income Fund**                                    | **1-Year** | **3-Year** | **5-Year** | **Life of                    Class*** |
| **Institutional Class**                                                             | **-18.88%** | **-3.75%** | **-.85%** | **1.50%** |
| Barclays Capital US Aggregate                Index+                                 | 2.59% | 5.19% | 4.30% | 5.44% |

*Sources: Lipper Inc. and        Deutsche Investment Management Americas Inc.*

| **Net Asset                    Value and Distribution Information**                                               |
|-------------------------------------------------------------------------------------------------------------------|
|                                                                                                              | **Class                    A** | **Class                    B** | **Class                    C** | **Institutional Class** |
| **Net Asset                    Value:**
1/31/09                                                                   | $                    9.62 | $                    9.63 | $                    9.62 | $                    9.59 |
| 1/31/08                                                                                                           | $                    12.61 | $                    12.62 | $                    12.61 | $                    12.58 |
| **Distribution                    Information:**
Twelve Months as of 1/31/09:
Income                    Dividends | $                    .61 | $                    .53 | $                    .53 | $                    .66 |
| Capital Gain                    Distributions                                                                     | $                    .03 | $                    .03 | $                    .03 | $                    .03 |
| January Income Dividend                                                                                           | $                    .0512 | $                    .0450 | $                    .0450 | $                    .0542 |
| SEC 30-day Yield++ as of                1/31/09                                                                   | 5.41% | 4.90% | 4.90% | 5.94% |
| Current Annualized Distribution                Rate++ as of 1/31/09                                               | 6.39% | 5.61% | 5.61% | 6.78% |

| **Class A                    Lipper Rankings — Corporate Debt Funds A-Rated Category**as of 1/31/09 |
|---------------------------------------------------------------------------------------------------------------------|
| **Period**                                                                                                          | **Rank** |   | **Number of                    Funds Tracked** | **Percentile                    Ranking (%)** |
| 1-Year                                                                                                              | 163 | of | 169 | 96 |
| 3-Year                                                                                                              | 152 | of | 159 | 95 |
| 5-Year                                                                                                              | 134 | of | 144 | 93 |

**Source: Lipper Inc.        Rankings are historical and do not guarantee future results. Rankings are based on total        return unadjusted for sales charges with distributions reinvested. If sales charges had        been included, rankings might have been less favorable. Rankings are for Class A        shares; other share classes may vary.**

| **Growth of an                    Assumed $10,000 Investment**(Adjusted for Maximum Sales Charge)             |
|-----------------------------------------------------------------------------------------------------------------------------------|
| **[]DWS Core Plus Income Fund — Class                    A**

**[]Barclays Capital US Aggregate                    Index+** |
|                                                                                                                                   |
| Yearly                    periods ended January 31                                                                                |

**The        Fund's growth of an assumed $10,000 investment is adjusted for the maximum sales charge of        4.50%. This results in a net initial investment of $9,550.**

| **Comparative                    Results**(Adjusted for Maximum Sales                    Charge) as of 1/31/09 |
|----------------------------------------------------------------------------------------------------------------|
| **DWS Core                    Plus Income Fund**                                                               | **1-Year** | **3-Year** | **5-Year** | **10-Year** |
| **Class                    A**                                                                                 | Growth of $10,000 | $7,731 | $8,448 | $9,019 | $11,523 |
| Average annual total return                                                                                    | -22.69% | -5.47% | -2.04% | 1.43% |
| **Class                    B**                                                                                 | Growth of $10,000 | $7,806 | $8,488 | $8,986 | $11,156 |
| Average annual total return                                                                                    | -21.94% | -5.32% | -2.12% | 1.10% |
| **Class                    C**                                                                                 | Growth of $10,000 | $8,033 | $8,641 | $9,067 | $11,213 |
| Average annual total return                                                                                    | -19.67% | -4.75% | -1.94% | 1.15% |
| Barclays Capital US Aggregate                Index+                                                       | Growth of $10,000 | $10,259 | $11,641 | $12,342 | $17,023 |
| Average annual total return                                                                                    | 2.59% | 5.19% | 4.30% | 5.46% |

*The growth of $10,000 is        cumulative.*

| **Growth of an                    Assumed $1,000,000 Investment**                                                                             |
|-----------------------------------------------------------------------------------------------------------------------------------------------|
| **[]DWS Core Plus Income Fund — Institutional                    Class**

**[]Barclays Capital US Aggregate                    Index+** |
|                                                                                                                                               |
| Yearly                    periods ended January 31                                                                                            |

| **Comparative                    Results**as of 1/31/09  |
|----------------------------------------------------------|
| **DWS Core                    Plus Income Fund**         | **1-Year** | **3-Year** | **5-Year** | **Life of                    Class*** |
| **Institutional Class**                                  | Growth of $1,000,000 | $811,200 | $891,600 | $958,100 | $1,119,600 |
| Average annual total return                              | -18.88% | -3.75% | -.85% | 1.50% |
| Barclays Capital US Aggregate                Index+ | Growth of $1,000,000 | $1,025,900 | $1,164,100 | $1,234,200 | $1,494,600 |
| Average annual total return                              | 2.59% | 5.19% | 4.30% | 5.44% |

*The        growth of $1,000,000 is cumulative.*

*The minimum initial        investment for Institutional Class shares is $1,000,000.*

**Class        S**

Class S shares are        generally not available to new investors except under certain circumstances. (Please refer        to the Fund's Statement of Additional Information.)

**All performance shown        is historical, assumes reinvestment of all dividend and capital gain distributions, and        does not guarantee future results. Investment return and principal value fluctuate with        changing market conditions so that, when redeemed, shares may be worth more or less than        their original cost. Current performance may be lower or higher than the performance        quoted. Please visit www.dws-investments.com for the Fund's most recent month-end        performance.**

**The total annual fund        operating expense ratio, gross of any fee waivers or expense reimbursements, as stated in        the fee table of the prospectus dated May 1, 2008 is 0.79% for Class S shares. Please        see the Information About Your Fund's Expenses, the Financial Highlights and Notes to the        Financial Statements (Note C, Related Parties) sections of this report for gross and net        expense related disclosure for the period ended January 31, 2009.**

**To discourage        short-term trading, the Fund imposes a 2% redemption fee on shareholders redeeming shares        held less than 15 days, which has the effect of lowering total return.**

Returns and rankings        during all periods shown reflect a fee waiver and/or expense reimbursement. Without this        waiver/reimbursement, returns and rankings would have been lower.

Performance figures do not        reflect the deduction of taxes that a shareholder would pay on fund distributions or the        redemptions of fund shares. Returns and rankings may differ by share class.

| **Average                    Annual Total Returns**as of                    1/31/09 |
|-------------------------------------------------------------------------------------|
| **DWS Core                    Plus Income Fund**                                    | **1-Year** | **3-Year** | **5-Year** | **10-Year** |
| **Class                    S**                                                      | **-18.92%** | **-3.80%** | **-.94%** | **2.13%** |
| Barclays Capital US Aggregate                Index+                                 | 2.59% | 5.19% | 4.30% | 5.46% |

*Sources: Lipper Inc.        and Deutsche Investment Management Americas Inc.*

| **Net Asset                    Value and Distribution Information**                                               |
|-------------------------------------------------------------------------------------------------------------------|
|                                                                                                              | **Class                    S** |
| **Net Asset                    Value:**
1/31/09                                                                   | $                    9.62 |
| 1/31/08                                                                                                           | $                    12.61 |
| **Distribution                    Information:**
Twelve Months as of 1/31/09:
Income                    Dividends | $                    .64 |
| Capital Gain                    Distributions                                                                     | $                    .03 |
| January Income Dividend                                                                                           | $                    .0533 |
| SEC 30-day Yield++ as of                1/31/09                                                                   | 5.92% |
| Current Annualized Distribution                Rate++ as of 1/31/09                                               | 6.65% |

| **Class S                    Lipper Rankings — Corporate Debt Funds A-Rated Category**as of 1/31/09 |
|---------------------------------------------------------------------------------------------------------------------|
| **Period**                                                                                                          | **Rank** |   | **Number of                    Funds Tracked** | **Percentile                    Ranking (%)** |
| 1-Year                                                                                                              | 162 | of | 169 | 96 |
| 3-Year                                                                                                              | 151 | of | 159 | 95 |
| 5-Year                                                                                                              | 131 | of | 144 | 91 |
| 10-Year                                                                                                             | 63 | of | 69 | 90 |

**Source: Lipper Inc.        Rankings are historical and do not guarantee future results. Rankings are based on total        return with distributions reinvested. Rankings are for Class S shares; other share classes        may vary.**

| **Growth of an                    Assumed $10,000 Investment**                                                                    |
|-----------------------------------------------------------------------------------------------------------------------------------|
| **[]DWS Core Plus Income Fund — Class                    S**

**[]Barclays Capital US Aggregate                    Index+** |
|                                                                                                                                   |
| Yearly                    periods ended January 31                                                                                |

| **Comparative                    Results**as of 1/31/09  |
|----------------------------------------------------------|
| **DWS Core                    Plus Income Fund**         | **1-Year** | **3-Year** | **5-Year** | **10-Year** |
| **Class                    S**                           | Growth of $10,000 | $8,108 | $8,902 | $9,541 | $12,341 |
| Average annual total return                              | -18.92% | -3.80% | -.94% | 2.13% |
| Barclays Capital US Aggregate                Index+ | Growth of $10,000 | $10,259 | $11,641 | $12,342 | $17,023 |
| Average annual total return                              | 2.59% | 5.19% | 4.30% | 5.46% |

*The        growth of $10,000 is cumulative.*

**Information About Your        Fund's Expenses**

As an investor of the Fund, you        incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include        management fees, distribution and service (12b-1) fees and other Fund expenses. Examples of        transaction costs include sales charges (loads), redemption fees and account maintenance        fees, which are not shown in this section. The following tables are intended to help you        understand your ongoing expenses (in dollars) of investing in the Fund and to help you        compare these expenses with the ongoing expenses of investing in other mutual funds. In the        most recent six-month period, Class A, B, C and S shares limited these expenses; had they        not done so, expenses would have been higher. The example in the table is based on an        investment of $1,000 invested at the beginning of the six-month period and held for the        entire period (August 1, 2008 to January 31, 2009).

The tables illustrate your Fund's        expenses in two ways:

•**Actual Fund Return.** This helps you estimate the actual dollar        amount of ongoing expenses (but not transaction costs) paid on a $1,000 investment in the        Fund using the Fund's actual return during the period. To estimate the expenses you paid        over the period, simply divide your account value by $1,000 (for example, an $8,600 account        value divided by $1,000 = 8.6), then multiply the result by the number in the "Expenses        Paid per $1,000" line under the share class you hold.

•**Hypothetical 5% Fund Return.** This helps you to compare your        Fund's ongoing expenses (but not transaction costs) with those of other mutual funds using        the Fund's actual expense ratio and a hypothetical rate of return of 5% per year before        expenses. Examples using a 5% hypothetical fund return may be found in the shareholder        reports of other mutual funds. The hypothetical account values and expenses may not be used        to estimate the actual ending account balance or expenses you paid for the        period.

Please note that the expenses shown        in these tables are meant to highlight your ongoing expenses only and do not reflect any        transaction costs. The "Expenses Paid per $1,000" line of the tables is useful in comparing        ongoing expenses only and will not help you determine the relative total expense of owning        different funds. An account maintenance fee of $6.25 per quarter for Class S shares may        apply for certain accounts whose balances do not meet the applicable minimum initial        investment. This fee is not included in these tables. If it was, the estimate of expenses        paid for Class S shares during the period would be higher, and account value during the        period would be lower, by this amount.

| **Expenses and                    Value of a $1,000 Investment**for the six                    months ended January 31, 2009 |
|------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Actual Fund                    Return**                                                                                                                  | **Class                    A** | **Class                    B** | **Class                    C** | **Class                    S** | **Institutional Class** |
| Beginning Account Value 8/1/08                                                                                                                             | $                    1,000.00 | $                    1,000.00 | $                    1,000.00 | $                    1,000.00 | $                    1,000.00 |
| Ending Account Value 1/31/09                                                                                                                               | $                    848.30 | $                    845.20 | $                    845.00 | $                    848.60 | $                    849.30 |
| Expenses Paid per $1,000*                                                                                                                             | $                    4.60 | $                    8.07 | $                    8.07 | $                    3.44 | $                    3.16 |
| **Hypothetical                    5% Fund Return**                                                                                                         | **Class                    A** | **Class                    B** | **Class                    C** | **Class                    S** | **Institutional Class** |
| Beginning Account Value 8/1/08                                                                                                                             | $                    1,000.00 | $                    1,000.00 | $                    1,000.00 | $                    1,000.00 | $                    1,000.00 |
| Ending Account Value 1/31/09                                                                                                                               | $                    1,020.16 | $                    1,016.39 | $                    1,016.39 | $                    1,021.42 | $                    1,021.72 |
| Expenses Paid per $1,000*                                                                                                                             | $                    5.03 | $                    8.82 | $                    8.82 | $                    3.76 | $                    3.46 |

| **Annualized                    Expense Ratios** | **Class                    A** | **Class                    B** | **Class                    C** | **Class                    S** | **Institutional Class** |
|--------------------------------------------------|--------------------------------|--------------------------------|--------------------------------|--------------------------------|-------------------------|
| DWS Core Plus Income Fund                        | .99%                           | 1.74%                          | 1.74%                          | .74%                           | .68%                    |

For more information, please refer        to the Fund's prospectuses.

**Portfolio Management        Review**

**DWS Core Plus Income Fund: A Team        Approach to Investing**

Deutsche Investment Management        Americas Inc. ("DIMA" or the "Advisor"), which is part of Deutsche Asset Management, is the        investment advisor for DWS Core Plus Income Fund. DIMA and its predecessors have more than        80 years of experience managing mutual funds and DIMA provides a full range of investment        advisory services to institutional and retail clients.

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.

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

**Portfolio Management        Team**

*Kenneth R. Bowling,        CFA*

Managing Director of        Deutche Asset Management and Portfolio Manager of the fund.

• Joined Deutsche        Asset Management in 2007 after 14 years of experience at INVESCO where he was most recently        director of US fixed Income.

• Head of        Institutional Fixed Income Investments, Americas: Louisville.

• BS and MEng from        University of Louisville.

*Jamie Guenther,        CFA*

Managing Director of        Deutche Asset Management and Portfolio Manager of the fund.

• Joined Deutsche        Asset Management in 2007 after 25 years of experience, most recently as head of Credit        Research and CDO/CSO Credit for INVESCO. Prior to that he was head of financial institution        investment research at Duff & Phelps Investment Research. Before that he was a global        security analyst for Alexander & Alexander. He began his career in 1982 at Touche Ross        Financial Consulting.

• Head of        Institutional Credit: Louisville.

• BBA from Western        Michigan University.

*John        Brennan*

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

• Joined Deutsche        Asset Management in March 2007 after 14 years of experience at INVESCO and Freddie Mac.        Prior to joining was head of Structured Securities sector team for INVESCO and before that        was senior fixed income portfolio manager at Freddie Mac specializing in MBS, CMBS,        collateralized mortgage obligations, ARMS, mortgage derivatives, US Treasuries and agency        debt.

• Portfolio and        Sector Manager for Institutional Fixed Income: Louisville.

• BS from University        of Maryland; MBA from William & Mary.

*Bruce        Harley, CFA, CEBS*

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

• Joined Deutsche        Asset Management in March 2007 after 18 years of experience at INVESCO where he was head of        Governments and Derivatives, responsible for positioning for US duration and term        structure; Government and futures trading.

• Portfolio and        Sector Manager for Institutional Fixed Income: Louisville.

• BS in Economics        from University of Louisville.

*J. Richard Robben,        CFA*

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

• Joined Deutsche        Asset Management in March 2007 after 11 years of experience at INVESCO Institutional, most        recently as senior portfolio manager for LIBOR-related strategies and head of portfolio        construction group for North American Fixed Income.

• Portfolio Manager        for Institutional Fixed Income: Louisville.

• BA from Bellarmine        University.

*David Vignolo,        CFA*

Vice President of Deutsche        Asset Management and Portfolio Manager of the fund.

• Joined Deutsche        Asset Management in March 2007 after 20 years of experience that included head of corporate        bond trading and portfolio manager for INVESCO and Conning Asset Management Co., and        corporate bond trader and portfolio manager for ANB Investment Management Co.

• Portfolio and        Sector Manager for Institutional Fixed Income: Louisville.

• BS from Indiana        University; MBA from Case Western Reserve University.

*J. Kevin Horsley, CFA,        CPA*

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

• Joined Deutsche        Asset Management in March 2007 after 13 years of experience, of which 11 were at INVESCO as        senior analyst for a variety of credit sectors. He also has experience in the structured        securities market (asset-backed and commercial mortgage-backed securities), and in research        coverage of foreign exchange markets, corporate finance, market planning in the telecom        sector, and in public accounting.

• Credit Analyst for        Institutional Fixed Income: Louisville.

• BA from        Transylvania University; MBA from Owen Graduate School of Management, Vanderbilt        University.

*Stephen Willer,        CFA*

Vice President of Deutsche        Asset Management and Portfolio Manager of the fund.

• Joined Deutsche        Asset Management in March 2007 after 13 years of experience, 11 of which were at AMVESCAP,        INVESCO Institutional, where he was CDO portfolio manager responsible for structuring,        pricing and managing corporate credit CSOs, developing CDS based trading strategies and        vehicles, and Alpha decisions for CDS index trading. He started his career as a financial        analyst at Providian Capital Management.

• Portfolio Manager        for Institutional Fixed Income: Louisville.

• BS in        Finance/Economics from the University of Richmond.

In the following interview, the        portfolio management team discusses DWS Core Plus Income Fund's performance for the period        and the market environment for bonds.

*The views expressed in        the following discussion reflect those of the portfolio management team only through the        end of the period of the report as stated on the cover. The management team's views are        subject to change at any time based on market and other conditions and should not be        construed as a recommendation. Past performance is no guarantee of future results. Current        and future portfolio holdings are subject to risk.*

**Q: Can you describe the        market environment over the 12 months ended January 31, 2009?**

**A:**Entering the period, banks were pulling back financing from the        markets as they were forced to come to terms with losses related to the subprime mortgage        crisis. As the year progressed, ongoing fallout from the collapse in housing and mortgages        led to the failure, forced merger or government bailout of a number of leading global        financial institutions in both the US and Europe. The result was a tightening of the        credit crunch that caused global economic growth to pull back sharply late in the        period. As the fourth quarter of 2008 began, the US government announced a massive        $700 billion rescue plan for the financial sector, but significant uncertainty surrounded        its ultimate execution and impact.

Given this backdrop, investors' risk        tolerance approached zero and liquidity all but evaporated. What ensued was a frantic        "flight to quality" into the safe haven of US Treasuries and underperformance for all        other segments of the bond market. Emerging-market and high-yield corporate bonds        underperformed the broader bond market by a wide margin for the year. As investor risk        aversion peaked in October and November of 2008, even AAA-rated mortgage-backed issues        experienced a collapse in demand.1

**Q: How did the fund        perform over the 12 months ended January 31, 2009?**

**A:**For the annual period ended January 31, 2009, the total return of the        fund's Class A shares was -19.04%. (Returns are unadjusted for sales charges. If sales        charges had been included, returns would have been lower. Past performance is no guarantee        of future results. Please see pages 4 through        10 for the performance of other share classes and for more        complete performance information.) The Barclays Capital US Aggregate Index delivered a        2.59% return.2 The average return of the Lipper Corporate Debt Funds A-Rated        category was -7.02% for the 12-month period.3

**Q: How        was the fund positioned and how did this influence performance?**

**A:**The fund's focus on fixed-income sectors that trade at a yield spread        to Treasuries detracted from performance for the period, as the unprecedented flight to        quality boosted Treasuries at the expense of other sectors.4 In particular the        fund's exposure to high-yield corporate and emerging-market bonds hurt returns, as both        sectors experienced double digit percentage declines. Within the domestic portion of the        portfolio, our holdings of commercial mortgage backed securities (CMBS) and non-agency        residential mortgage backed securities suffered from historically poor performance,        especially late in the year. The CMBS sector declined more than 20% over the year, with        much of the damage occurring in the wake of September's turmoil.

Late in the fiscal year, a new        portfolio management team replaced the previous sub-advisor. The new team took steps to        raise the quality profile of the fund. These included dramatically reducing the fund's        exposure to CMBS and non-agency residential mortgage backed securities. We also trimmed        exposure to corporate bonds, and virtually eliminated the fund's high-yield corporate        position. In the same vein, we sharply reduced the fund's exposure to emerging-market        bonds. In contrast, exposure to US Treasury and Agency securities was increased. At the end        of the period, the fund's largest allocation was a position of approximately 47% of        investments in mortgage backed securities, the great majority of which are agency-backed        residential MBS, followed by 25% in US Treasury and Agency securities and 17% in        investment grade corporate bonds.

**Q:        What is your assessment of the current fixed-income environment?**

**A:**The fund's current positioning reflects a strong bias toward higher        quality and greater liquidity given the uncertain backdrop. In order for the fixed-income        markets to stabilize, market participants will need more clarity on how the remainder of        the government bailout of the financial sector will proceed. In the meantime, we favor        securities carrying the backing of the US government, which may be implied, as in the case        of Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage        Corporation (Freddie Mac) securities.5

While we are very focused on        maintaining quality and liquidity, yield spreads are currently at all-time highs in many        sectors. Going forward, we will look for opportunities to add very liquid corporate bonds        and to selectively buy some asset-backed and mortgage-backed bonds that underperformed        during the fourth quarter of 2008.

**Portfolio        Summary**

| **Asset                    Allocation**(As a % of Investment                    Portfolio excluding Securities Lending Collateral) | **1/31/09** | **1/31/08** |
|------------------------------------------------------------------------------------------------------------------------------------|-------------|-------------|
|                                                                                                                               |        |        |
| Mortgage-Backed Securities                    Pass-Throughs                                                                        | 33%         | 10%         |
| Government                    & Agency Obligations                                                                             | 26%         | 14%         |
| Corporate                    Bonds                                                                                                 | 17%         | 24%         |
| Commercial and                    Non-Agency Mortgage-Backed Securities                                                            | 8%          | 32%         |
| Collateralized                    Mortgage Obligations                                                                             | 8%          | 11%         |
| Municipal                    Bonds and Notes                                                                                       | 4%          | 2%          |
| Cash                    Equivalents                                                                                                | 4%          | 3%          |
| Asset                    Backed                                                                                                    | —     | 2%          |
| Preferred                    Securities                                                                                            | —     | 2%          |
|                                                                                                                               | 100%        | 100%        |

| **Quality**(Excludes Securities Lending                    Collateral) | **1/31/09** | **1/31/08** |
|------------------------------------------------------------------------|-------------|-------------|
|                                                                   |        |        |
| US Government                    and Agencies                          | 65%         | 35%         |
| AAA*                                                                   | 10%         | 35%         |
| AA                                                                     | 4%          | 2%          |
| A                                                                      | 6%          | 9%          |
| BBB                                                                    | 10%         | 12%         |
| BB                                                                     | 2%          | 4%          |
| B                                                                      | 1%          | 3%          |
| Not                    Rated                                           | 2%          | —     |
|                                                                   | 100%        | 100%        |

*Asset allocation and        quality are subject to change.*

*The quality ratings        represent the lower of Moody's Investors Service, Inc. ("Moody's") or Standard & Poor's        Corporation ("S&P") credit ratings. The ratings of Moody's and S&P represent their        opinions as to the quality of the securities they rate. Ratings are relative and subjective        and are not absolute standards of quality. The Fund's credit quality does not remove market        risk.*

| **Effective                    Maturity**(Excludes Cash Equivalents                    and Securities Lending Collateral) | **1/31/09** | **1/31/08** |
|---------------------------------------------------------------------------------------------------------------------------|-------------|-------------|
|                                                                                                                      |        |        |
| Less than 1                    year                                                                                       | —     | 4%          |
| 1-4.99                    years                                                                                           | 60%         | 51%         |
| 5-9.99                    years                                                                                           | 25%         | 33%         |
| Greater than                    10 years                                                                                  | 15%         | 12%         |
|                                                                                                                      | 100%        | 100%        |

*Weighted average effective maturity: 6.3 years and 6.6        years, respectively.*

*Effective maturity is        subject to change.*

*For more complete        details about the Fund's investment portfolio, see page 20. A        quarterly Fact Sheet is available upon request. A complete list of the Fund's        portfolio holdings is posted as of the month end on www.dws-investments.com on or about the        15th day of the following month. More frequent posting of portfolio holdings information        may be made from time to time on www.dws-investments.com. Please see the Account Management        Resources section for contact information.*

Following the Fund's fiscal first        and third quarter-end, a complete portfolio holdings listing is filed with the SEC on Form        N-Q. This form will be available on the SEC's Web site at www.sec.gov, and it also may be        reviewed and copied 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.

**Investment        Portfolioas of January 31, 2009**

|                                                                                                                                                      | **Principal                    Amount ($)(a)** | **Value                    ($)** |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------|----------------------------------|
|                                                                                                                                                      |                                           |
| **Corporate Bonds                    18.2%**                                                                                                              |
| **Consumer                    Discretionary 3.0%**                                                                                                        |
| British Sky                    Broadcasting Group PLC, 144A, 9.5%, 11/15/2018                                                                             | 1,555,000                                      | 1,569,919                        |
| Comcast Cable                    Holdings LLC:                                                                                                            |                                           |                             |
| 9.875%,                    6/15/2022                                                                                                                      | 475,000                                        | 546,363                          |
| 10.125%,                    4/15/2022                                                                                                                     | 675,000                                        | 789,243                          |
| Historic TW,                    Inc., 9.125%, 1/15/2013                                                                                                   | 1,405,000                                      | 1,496,307                        |
| Omnicom Group,                    Inc., Convertible, Zero Coupon, 7/31/2032                                                                               | 1,075,000                                      | 1,030,656                        |
| TCI                    Communications, Inc., 8.75%, 8/1/2015                                                                                              | 402,000                                        | 432,463                          |
| Time Warner                    Cable, Inc.:                                                                                                               |                                           |                             |
| 6.2%,                    7/1/2013                                                                                                                         | 1,425,000                                      | 1,402,756                        |
| 6.55%,                    5/1/2037                                                                                                                        | 1,040,000                                      | 991,402                          |
| 6.75%,                    7/1/2018                                                                                                                        | 1,300,000                                      | 1,269,563                        |
| Time Warner,                    Inc., 7.625%, 4/15/2031                                                                                                   | 610,000                                        | 587,655                          |
| Viacom,                    Inc.:                                                                                                                          |                                           |                             |
| 5.75%,                    4/30/2011                                                                                                                       | 1,598,000                                      | 1,528,393                        |
| 6.75%,                    10/5/2037                                                                                                                       | 570,000                                        | 417,374                          |
|                                                                                                                                                      | **12,062,094**                                 |
| **Consumer                    Staples 2.5%**                                                                                                              |
| Anheuser-Busch                    InBev Worldwide, Inc., 144A, 7.75%, 1/15/2019                                                                      | 4,000,000                                      | 4,057,700                        |
| CVS Caremark                    Corp.:                                                                                                                    |                                           |                             |
| 6.25%,                    6/1/2027                                                                                                                        | 1,027,000                                      | 965,138                          |
| 6.302%,                    6/1/2037                                                                                                                       | 3,289,000                                      | 1,792,505                        |
| Delhaize                    America, Inc., 9.0%, 4/15/2031                                                                                                | 1,090,000                                      | 1,248,362                        |
| Walgreen Co.,                    5.25%, 1/15/2019                                                                                                         | 2,200,000                                      | 2,201,604                        |
|                                                                                                                                                      | **10,265,309**                                 |
| **Energy                    1.3%**                                                                                                                        |
| Enbridge                    Energy Partners LP, 8.05%, 10/1/2037                                                                                          | 177,000                                        | 99,036                           |
| Enterprise                    Products Operating LLP, Series B, 5.6%, 10/15/2014                                                                     | 1,270,000                                      | 1,183,338                        |
| Hess Corp.,                    7.3%, 8/15/2031                                                                                                            | 1,215,000                                      | 1,060,993                        |
| TransCanada                    PipeLines Ltd.:                                                                                                            |                                           |                             |
| 5.85%,                    3/15/2036                                                                                                                       | 270,000                                        | 216,341                          |
| 6.5%,                    8/15/2018                                                                                                                        | 1,220,000                                      | 1,237,774                        |
| XTO Energy,                    Inc., 6.75%, 8/1/2037                                                                                                      | 1,390,000                                      | 1,263,528                        |
|                                                                                                                                                      | **5,061,010**                                  |
| **Financials                    6.5%**                                                                                                                    |
| AES El                    Salvador Trust, 144A, 6.75%, 2/1/2016                                                                                           | 1,700,000                                      | 1,072,734                        |
| American                    General Finance Corp., Series J, 5.625%, 8/17/2011                                                                       | 5,335,000                                      | 2,744,495                        |
| American                    International Group, Inc., 144A, 8.175%, 5/15/2058                                                                       | 510,000                                        | 189,306                          |
| Citigroup,                    Inc., 6.5%, 8/19/2013                                                                                                       | 1,210,000                                      | 1,156,166                        |
| ESI Tractebel                    Acquisition Corp., Series B, 7.99%, 12/30/2011                                                                      | 303,000                                        | 294,516                          |
| FBL Financial                    Group, Inc., 5.875%, 3/15/2017                                                                                           | 1,145,000                                      | 776,218                          |
| Glen Meadow                    Pass-Through Trust, 144A, 6.505%, 2/12/2067                                                                                | 905,000                                        | 395,169                          |
| HBOS PLC,                    144A, 6.75%, 5/21/2018                                                                                                       | 515,000                                        | 454,946                          |
| KazMunaiGaz                    Finance Sub BV, Series 1, REG S, 8.375%, 7/2/2013                                                                     | 210,000                                        | 168,000                          |
| Merrill Lynch                    & Co., Inc.:                                                                                                         |                                           |                             |
| 6.875%,                    4/25/2018                                                                                                                      | 940,000                                        | 904,953                          |
| 7.75%,                    5/14/2038                                                                                                                       | 1,070,000                                      | 1,014,079                        |
| Metropolitan                    Life Global Funding I, 144A, 5.125%, 4/10/2013                                                                            | 1,590,000                                      | 1,521,778                        |
| Morgan                    Stanley, Series F, 6.0%, 4/28/2015                                                                                              | 2,540,000                                      | 2,301,951                        |
| National                    Australia Bank Ltd., 144A, 5.35%, 6/12/2013                                                                                   | 1,290,000                                      | 1,222,607                        |
| National Rural                    Utilities Cooperative Finance Corp., 10.375%, 11/1/2018                                                            | 1,815,000                                      | 2,192,643                        |
| Pennsylvania                    Mutual Life Insurance Co., 144A, 6.65%, 6/15/2034                                                                    | 1,848,000                                      | 1,555,931                        |
| Red Arrow                    International Leasing PLC, "A", 8.375%, 6/30/2012 RUB                                                                        | 8,669,952                                      | 113,993                          |
| The Goldman                    Sachs Group, Inc., 5.95%, 1/15/2027                                                                                        | 3,270,000                                      | 2,441,277                        |
| Transatlantic                    Holdings, Inc., 5.75%, 12/14/2015                                                                                        | 479,000                                        | 287,481                          |
| UDR, Inc.,                    Series E, (REIT), 3.9%, 3/15/2010                                                                                           | 770,000                                        | 678,423                          |
| US Bancorp.,                    0.704%*, 12/11/2035                                                                                                       | 680,000                                        | 613,700                          |
| Verizon                    Wireless Capital LLC, 144A, 5.55%, 2/1/2014                                                                                    | 3,300,000                                      | 3,278,979                        |
| Wells Fargo                    & Co., 5.25%, 10/23/2012                                                                                               | 630,000                                        | 634,442                          |
|                                                                                                                                                      | **26,013,787**                                 |
| **Health Care                    0.4%**                                                                                                                   |
| Quest                    Diagnostics, Inc., 6.95%, 7/1/2037                                                                                               | 1,310,000                                      | 1,089,824                        |
| Schering-Plough Corp., 6.55%,                    9/15/2037                                                                                                | 625,000                                        | 651,671                          |
|                                                                                                                                                      | **1,741,495**                                  |
| **Information                    Technology 0.9%**                                                                                                        |
| Broadridge                    Financial Solutions, Inc., 6.125%, 6/1/2017                                                                                 | 358,000                                        | 251,103                          |
| Tyco                    Electronics Group SA, 6.0%, 10/1/2012                                                                                             | 2,185,000                                      | 2,022,947                        |
| Xerox Corp.,                    6.35%, 5/15/2018                                                                                                          | 1,475,000                                      | 1,220,563                        |
|                                                                                                                                                      | **3,494,613**                                  |
| **Materials                    0.0%**                                                                                                                     |
| Pliant Corp.,                    11.85%, 6/15/2009 (PIK)                                                                                                  | 5                                              | **3**                            |
| **Telecommunication Services                    1.7%**                                                                                                    |
| AT&T,                    Inc., 6.55%, 2/15/2039                                                                                                       | 3,000,000                                      | 2,988,960                        |
| Telecom Italia                    Capital SA:                                                                                                             |                                           |                             |
| 6.2%,                    7/18/2011                                                                                                                        | 320,000                                        | 309,056                          |
| 7.721%,                    6/4/2038                                                                                                                       | 965,000                                        | 900,919                          |
| Verizon                    Communications, Inc.:                                                                                                          |                                           |                             |
| 5.25%,                    4/15/2013                                                                                                                       | 1,100,000                                      | 1,120,125                        |
| 8.75%,                    11/1/2018                                                                                                                       | 1,245,000                                      | 1,450,126                        |
|                                                                                                                                                      | **6,769,186**                                  |
| **Utilities                    1.9%**                                                                                                                     |
| Baltimore Gas                    & Electric Co., 6.35%, 10/1/2036                                                                                     | 440,000                                        | 333,161                          |
| Dominion                    Resources, Inc.:                                                                                                              |                                           |                             |
| Series 06-B,                    6.3%, 9/30/2066                                                                                                           | 1,075,000                                      | 569,750                          |
| 7.5%,                    6/30/2066                                                                                                                        | 3,055,000                                      | 1,771,900                        |
| Duke Energy                    Carolinas LLC, 5.75%, 11/15/2013                                                                                           | 1,700,000                                      | 1,819,612                        |
| Energy East                    Corp., 6.75%, 6/15/2012                                                                                                    | 1,505,000                                      | 1,493,192                        |
| Energy Future                    Competitive Holdings Co., 7.48%, 1/1/2017                                                                                | 1,070,747                                      | 629,107                          |
| Integrys                    Energy Group, Inc., 6.11%, 12/1/2066                                                                                          | 1,810,000                                      | 905,000                          |
| Majapahit                    Holding BV, REG S, 7.75%, 10/17/2016                                                                                         | 300,000                                        | 188,730                          |
| PNM Resources,                    Inc., 9.25%, 5/15/2015                                                                                                  | 288,000                                        | 259,200                          |
|                                                                                                                                                      | **7,969,652**                                  |
| **Total                    Corporate Bonds** (Cost $84,659,510)                                                                                           | **73,377,149**                                 |
|                                                                                                                                                      |
| **Asset-Backed                    0.5%**                                                                                                                  |
| **Home Equity                    Loans**                                                                                                                  |
| Countrywide                    Asset-Backed Certificates, "A6", Series 2006-S6, 5.657%,                    3/25/2034                                 | 3,120,000                                      | 1,261,468                        |
| Renaissance                    Home Equity Loan Trust, "AF3", Series 2005-2, 4.499%, 8/25/2035                                                       | 710,360                                        | 639,424                          |
| **Total                    Asset-Backed** (Cost $3,830,360)                                                                                               | **1,900,892**                                  |
|                                                                                                                                                      |
| **Commercial and                    Non-Agency Mortgage-Backed Securities 8.7%**                                                                          |
| Adjustable                    Rate Mortgage Trust, "1A4", Series 2006-2, 5.749%*, 5/25/2036                                                               | 3,190,000                                      | 1,325,457                        |
| Banc of                    America Commercial Mortgage, Inc.:                                                                                             |                                           |                             |
| "H", Series                    2007-3, 144A, 5.658%*, 6/10/2049                                                                                           | 1,875,000                                      | 133,761                          |
| "ASB", Series                    2008-1, 6.173%, 2/10/2051                                                                                                | 1,500,000                                      | 1,110,699                        |
| Bear Stearns                    Commercial Mortgage Securities, "AAB", Series 2007-PW16, 5.712%*,                    6/11/2040                            | 3,725,000                                      | 2,725,360                        |
| Citigroup                    Mortgage Loan Trust, Inc., "1A1", Series 2006-AR1, 4.9%*,                    10/25/2035                                 | 1,249,120                                      | 846,860                          |
| Countrywide                    Alternative Loan Trust:                                                                                                    |                                           |                             |
| "1A1", Series                    2004-J1, 6.0%, 2/25/2034                                                                                                 | 180,517                                        | 149,942                          |
| "7A1", Series                    2004-J2, 6.0%, 12/25/2033                                                                                                | 613,605                                        | 509,676                          |
| CS First                    Boston Mortgage Securities Corp., "10A3", Series 2005-10, 6.0%,                    11/25/2035                            | 577,895                                        | 439,472                          |
| First Horizon                    Mortgage Pass-Through Trust, "1A1", Series 2007-AR1, 5.828%*,                    5/25/2037                          | 2,722,371                                      | 1,618,745                        |
| GMAC Mortgage                    Corp. Loan Trust:                                                                                                        |                                           |                             |
| "4A1", Series                    2005-AR6, 5.467%*, 11/19/2035                                                                                            | 2,702,495                                      | 1,903,702                        |
| Greenwich                    Capital Commercial Funding Corp., "AJ", Series 2007-GG9, 5.505%,                    3/10/2039                           | 302,000                                        | 78,043                           |
| GSR Mortgage                    Loan Trust, "2A4", Series 2006-AR1, 5.18%*, 1/25/2036                                                                     | 5,145,000                                      | 2,102,304                        |
| IndyMac Inda                    Mortgage Loan Trust, "1A1", Series 2007-AR3, 5.918%*, 7/25/2037                                                      | 4,734,942                                      | 2,793,663                        |
| IndyMac Index                    Mortgage Loan Trust, "3A1", Series 2006-AR33, 5.766%*,                    1/25/2037                                 | 1,307,810                                      | 939,299                          |
| JPMorgan Chase                    Commercial Mortgage Securities Corp.:                                                                                   |                                           |                             |
| "ASB", Series                    2007-CB19, 5.73%*, 2/12/2049                                                                                             | 3,090,000                                      | 2,286,882                        |
| "F", Series                    2007-LD11, 5.819%*, 6/15/2049                                                                                              | 1,660,000                                      | 218,899                          |
| "H", Series                    2007-LD11, 144A, 5.819%*, 6/15/2049                                                                                        | 2,910,000                                      | 211,181                          |
| "J", Series                    2007-LD11, 144A, 5.819%*, 6/15/2049                                                                                        | 1,000,000                                      | 58,386                           |
| "K", Series                    2007-LD11, 144A, 5.819%*, 6/15/2049                                                                                        | 2,380,000                                      | 122,850                          |
| "ASB", Series                    2007-LD12, 5.833%, 2/15/2051                                                                                             | 3,700,000                                      | 2,746,329                        |
| MASTR                    Alternative Loans Trust, "5A1", Series 2005-2, 6.5%, 12/25/2034                                                                  | 637,443                                        | 377,088                          |
| Merrill Lynch                    Mortgage Investors Trust, "A2", Series 2005-A5, 4.566%,                    6/25/2035                                | 465,000                                        | 264,787                          |
| Merrill Lynch                    Mortgage Trust, "ASB", Series 2007-C1, 5.829%*, 6/12/2050                                                                | 1,810,000                                      | 1,315,645                        |
| Merrill                    Lynch/Countrywide Commercial Mortgage Trust, "ASB", Series 2007-5, 5.362%,                    8/12/2048                        | 3,075,000                                      | 2,218,754                        |
| Morgan Stanley                    Capital I, "AAB", Series 2007-IQ14, 5.654%, 4/15/2049                                                                   | 3,465,000                                      | 2,514,963                        |
| Structured                    Adjustable Rate Mortgage Loan Trust, "1A4", Series 2005-22, 5.25%*,                    12/25/2035                           | 3,410,000                                      | 1,372,588                        |
| Wachovia Bank                    Commercial Mortgage Trust, "ABP", Series 2007-C32, 5.741%*,                    6/15/2049                            | 2,245,000                                      | 1,643,327                        |
| Washington                    Mutual Mortgage Pass-Through Certificates Trust, "3A3", Series 2007-HY3,                    5.839%*, 3/25/2037              | 2,748,367                                      | 1,528,178                        |
| Wells Fargo                    Mortgage Backed Securities Trust, "2A5", Series 2006-AR1, 5.548%*,                    3/25/2036                            | 3,340,000                                      | 1,617,429                        |
| **Total                    Commercial and Non-Agency Mortgage-Backed Securities**                    (Cost $63,797,645)                              | **35,174,269**                                 |
|                                                                                                                                                      |
| **Collateralized                    Mortgage Obligations 8.7%**                                                                                           |
| Fannie Mae                    Whole Loan, "1A1", Series 2004-W15, 6.0%, 8/25/2044                                                                    | 1,946,087                                      | 1,980,712                        |
| Federal Home                    Loan Mortgage Corp.:                                                                                                      |                                           |                             |
| "QM", Series                    2628, 4.5%, 11/15/2031                                                                                                    | 2,351,694                                      | 2,333,791                        |
| "OG", Series                    2889, 5.0%, 5/15/2033                                                                                                     | 7,102,000                                      | 7,149,126                        |
| "PG", Series                    2734, 5.0%, 7/15/2032                                                                                                     | 6,738,000                                      | 6,796,183                        |
| "QE", Series                    2991, 5.0%, 8/15/2034                                                                                                     | 5,609,000                                      | 5,623,843                        |
| "UE", Series                    2911, 5.0%, 6/15/2033                                                                                                     | 3,585,000                                      | 3,602,763                        |
| "VA", Series                    3451, 5.0%, 4/15/2019                                                                                                     | 2,554,770                                      | 2,615,502                        |
| "QB", Series                    3242, 5.5%, 1/15/2034                                                                                                     | 1,515,000                                      | 1,551,511                        |
| Federal                    National Mortgage Association:                                                                                                 |                                           |                             |
| "PG", Series                    2002-3, 5.5%, 2/25/2017                                                                                                   | 3,132,804                                      | 3,228,274                        |
| "ZQ", Series                    G92-9, 7.0%, 12/25/2021                                                                                                   | 111,437                                        | 111,433                          |
| **Total                    Collateralized Mortgage Obligations** (Cost $34,115,917)                                                                       | **34,993,138**                                 |
|                                                                                                                                                      |
| **Mortgage-Backed                    Securities Pass-Throughs 36.0%**                                                                                     |
| Federal Home                    Loan Mortgage Corp.:                                                                                                      |                                           |                             |
| 5.296%*,                    6/1/2035                                                                                                                      | 2,348,764                                      | 2,419,871                        |
| 5.378%*,                    9/1/2038                                                                                                                      | 2,398,902                                      | 2,453,737                        |
| 6.5%,                    12/1/2036                                                                                                                        | 3,515,807                                      | 3,647,787                        |
| 7.0%,                    1/1/2038                                                                                                                         | 1,136,421                                      | 1,189,691                        |
| Federal                    National Mortgage Association:                                                                                                 |                                           |                             |
| 4.5%, with                    various maturities from 11/1/2028 until 7/1/2034 (b)                                                                   | 25,500,846                                     | 25,669,250                       |
| 5.0%, with                    various maturities from 8/1/2020 until 12/1/2034 (b)                                                                   | 21,229,731                                     | 21,592,535                       |
| 5.458%*,                    1/1/2038                                                                                                                      | 1,960,583                                      | 2,013,264                        |
| 5.5%, with                    various maturities from 12/1/2024 until 7/1/2037                                                                       | 34,602,445                                     | 35,469,045                       |
| 6.0%,                    9/1/2036                                                                                                                         | 2,796,789                                      | 2,885,937                        |
| 6.5%, with                    various maturities from 9/1/2016 until 9/1/2038                                                                        | 43,448,174                                     | 45,426,770                       |
| 7.0%,                    4/1/2038                                                                                                                         | 1,837,486                                      | 1,934,169                        |
| 8.0%,                    9/1/2015                                                                                                                         | 378,150                                        | 400,713                          |
| **Total                    Mortgage-Backed Securities Pass-Throughs** (Cost $143,007,662)                                                                 | **145,102,769**                                |
|                                                                                                                                                      |
| **Government &                    Agency Obligations 28.9%**                                                                                          |
| **Sovereign                    Bonds 1.8%**                                                                                                               |
| Aries                    Vermogensverwaltungs GmbH, Series B, REG S, 7.75%, 10/25/2009                    EUR                                   | 250,000                                        | 332,360                          |
| Government of                    Ukraine, REG S, 6.75%, 11/14/2017                                                                                        | 990,000                                        | 431,412                          |
| Mexican                    Bonds:                                                                                                                         |                                           |                             |
| Series A,                    6.05%, 1/11/2040                                                                                                             | 250,000                                        | 213,125                          |
| Series M-10,                    7.25%, 12/15/2016 MXN                                                                                                     | 2,600,000                                      | 175,948                          |
| Series M-20,                    10.0%, 12/5/2024 MXN                                                                                                      | 2,100,000                                      | 173,292                          |
| Series M-30,                    10.0%, 11/20/2036 MXN                                                                                                     | 4,800,000                                      | 406,223                          |
| Nota do                    Tesouro Nacional, 10.0%, 1/1/2017 BRL                                                                                          | 2,390,000                                      | 877,995                          |
| Republic of                    Argentina, GDP Linked Note,                    12/15/2035                                                                  | 1,540,000                                      | 39,250                           |
| Republic of                    Egypt:                                                                                                                     |                                           |                             |
| REG S, 8.75%,                    7/18/2012 EGP                                                                                                            | 100,000                                        | 15,450                           |
| 9.1%,                    9/20/2012 EGP                                                                                                                    | 850,000                                        | 150,699                          |
| Republic of El                    Salvador:                                                                                                               |                                           |                             |
| REG S, 7.65%,                    6/15/2035                                                                                                                | 270,000                                        | 205,200                          |
| REG S, 8.25%,                    4/10/2032                                                                                                                | 150,000                                        | 117,750                          |
| Republic of                    Georgia, 7.5%, 4/15/2013                                                                                                   | 500,000                                        | 311,750                          |
| Republic of                    Ghana, REG S, 8.5%, 10/4/2017                                                                                              | 230,000                                        | 141,340                          |
| Republic of                    Indonesia, REG S, 8.5%, 10/12/2035                                                                                         | 220,000                                        | 162,641                          |
| Republic of                    Panama:                                                                                                                    |                                           |                             |
| 6.7%,                    1/26/2036                                                                                                                        | 630,000                                        | 570,150                          |
| 7.125%,                    1/29/2026                                                                                                                      | 330,000                                        | 319,275                          |
| 7.25%,                    3/15/2015                                                                                                                       | 300,000                                        | 311,250                          |
| 8.875%,                    9/30/2027                                                                                                                      | 100,000                                        | 109,000                          |
| Republic of                    Philippines:                                                                                                               |                                           |                             |
| 7.75%,                    1/14/2031                                                                                                                       | 100,000                                        | 97,000                           |
| 8.25%,                    1/15/2014                                                                                                                       | 355,000                                        | 374,525                          |
| 9.0%,                    2/15/2013                                                                                                                        | 600,000                                        | 651,000                          |
| Republic of                    Serbia, REG S, Step-up Coupon, 3.75% to 11/1/2009, 6.75% to                    11/1/2024                         | 270,000                                        | 189,000                          |
| Republic of                    Turkey, Series CPI, 10.0%, 2/15/2012 TRY                                                                                   | 515,281                                        | 287,391                          |
| Russian                    Federation, REG S, 7.5%, 3/31/2030                                                                                             | 50,000                                         | 46,245                           |
| State of                    Qatar, REG S, 9.75%, 6/15/2030                                                                                                | 410,000                                        | 504,300                          |
|                                                                                                                                                      | **7,213,571**                                  |
| **US                    Government Agency 6.3%**                                                                                                          |
| Citigroup,                    Inc., FDIC Guaranteed,                                                                                                      |                                           |                             |
| 2.125%,                    4/30/2012                                                                                                                      | 15,000,000                                     | 14,856,540                       |
| Federal                    National Mortgage Association,                    6.625%, 11/15/2030                                                           | 2,715,000                                      | 3,480,356                        |
| John Deere                    Capital Corp., Series D, FDIC Guaranteed, 2.875%, 6/19/2012                                                                 | 7,000,000                                      | 7,099,218                        |
|                                                                                                                                                      | **25,436,114**                                 |
| **US Treasury                    Obligations 20.8%**                                                                                                      |
| US Treasury                    Bills:                                                                                                                     |                                           |                             |
| 0.2%**,                    6/18/2009 (c)                                                                                                                  | 172,000                                        | 171,826                          |
| 0.24%**,                    7/9/2009 (c)                                                                                                                  | 766,000                                        | 764,964                          |
| US Treasury                    Bond, 8.125%, 8/15/2019 (d)                                                                                                | 16,840,000                                     | 23,644,404                       |
| US Treasury                    Inflation-Indexed Note,                    1.375%, 7/15/2018                                                               | 11,828,520                                     | 11,384,951                       |
| US Treasury                    Notes:                                                                                                                     |                                           |                             |
| 2.75%,                    10/31/2013 (d)                                                                                                                  | 37,000,000                                     | 38,656,342                       |
| 3.5%,                    2/15/2018                                                                                                                        | 1,560,000                                      | 1,643,850                        |
| 3.75%,                    11/15/2018                                                                                                                      | 7,000,000                                      | 7,538,160                        |
|                                                                                                                                                      | **83,804,497**                                 |
| **Total                    Government & Agency Obligations** (Cost $119,065,881)                                                                      | **116,454,182**                                |
|                                                                                                                                                      |
| **Loan Participations                    and Assignments 0.0%**                                                                                           |
| **Sovereign                    Loans**                                                                                                                    |
| Export-Import                    Bank of Ukraine, 7.65%, 9/7/2011                                                                                         | 120,000                                        | 49,650                           |
| Gazprombank,                    7.25%, 2/22/2010 RUB                                                                                                      | 2,400,000                                      | 54,839                           |
| Russian                    Agricultural Bank, REG S, 7.75%, 5/29/2018                                                                           | 255,000                                        | 165,390                          |
| **Total Loan                    Participations and Assignments** (Cost $471,854)                                                                          | **269,879**                                    |
|                                                                                                                                                      |
| **Municipal Bonds and                    Notes 4.4%**                                                                                                     |
| Alameda, CA,                    Corridor Transportation Authority Revenue, Series C, 6.6%, 10/1/2029                    (e)                          | 1,540,000                                      | 1,385,969                        |
| Detroit, MI,                    Capital Improvement, Series A-1, 4.96%, 4/1/2020 (e)                                                                 | 3,325,000                                      | 2,455,114                        |
| Jicarilla, NM,                    Sales & Special Tax Revenue, Apache Nation Revenue, 144A, 5.2%,                    12/1/2013                   | 3,555,000                                      | 3,606,157                        |
| La Quinta, CA,                    Redevelopment Agency Tax Allocation, Redevelopment Project Area No. 1,                    6.24%, 9/1/2023 (e) | 915,000                                        | 852,002                          |
| McLennan                    County, TX, General Obligation, Junior College, 5.0%, 8/15/2032                    (e)                                   | 985,000                                        | 963,635                          |
| Oklahoma,                    University Revenues, Health Science Center, Series B, 6.634%,                    7/1/2024                               | 2,365,000                                      | 2,375,713                        |
| Palm Beach                    County, FL, Public Improvement Revenue, 5.0%, 5/1/2038                                                                      | 1,430,000                                      | 1,348,247                        |
| Port Authority                    of New York & New Jersey, One Hundred Fiftieth Series:                                                    |                                           |                             |
| 4.5%,                    9/15/2015                                                                                                                        | 885,000                                        | 905,780                          |
| 4.875%,                    9/15/2017                                                                                                                      | 315,000                                        | 319,523                          |
| Virgin                    Islands, Port Authority Marine Revenue, Series B, 5.08%, 9/1/2013                    (e)                                        | 3,600,000                                      | 3,599,676                        |
| **Total                    Municipal Bonds and Notes** (Cost $18,596,707)                                                                                 | **17,811,816**                                 |
|                                                                                                                                                      |
| **Preferred Securities                    0.1%**                                                                                                          |
| **Financials**                                                                                                                                            |
| Dresdner                    Funding Trust I, 144A, 8.151%, 6/30/2031                                                                                      | 790,000                                        | 179,810                          |
| Royal Bank of                    Scotland Group PLC, Series U, 7.64%, 9/29/2017 (f)                                                                       | 2,100,000                                      | 325,437                          |
| **Total                    Preferred Securities** (Cost $3,114,873)                                                                                       | **505,247**                                    |

|                                                                                      | **Shares**  | **Value                    ($)** |
|-------------------------------------------------------------------------------------------|-------------|----------------------------------|
|                                                                                      |        |
| **Preferred Stocks                    0.1%**                                              |
| **Financials**                                                                            |
| Ford Motor                    Credit Co., LLC, 7.375%                                     | 3,500       | 35,000                           |
| XL Capital                    Ltd., Series C, 144A, 6.102%                                | 27,200      | 277,892                          |
| **Total                    Preferred Stocks** (Cost $735,900)                             | **312,892** |
|                                                                                      |
| **Securities Lending                    Collateral 12.8%**                                |
| Daily Assets                    Fund Institutional, 1.25% (g) (h) (Cost $51,765,000) | 51,765,000  | **51,765,000**                   |
| * *                                                                                  |
| **Cash Equivalents                    4.2%**                                              |
| Cash                    Management QP Trust, 1.12% (g) (Cost $16,854,324)                 | 16,854,324  | **16,854,324**                   |

|                                                                        | **% of Net                    Assets** | **Value                    ($)** |
|-----------------------------------------------------------------------------|----------------------------------------|----------------------------------|
|                                                                        |                                   |
| **Total                    Investment Portfolio** (Cost $540,015,633)+ | 122.6                                  | **494,521,557**                  |
| **Other Assets                    and Liabilities, Net**                    | (22.6)                                 | **(91,233,652)**                 |
| **Net                    Assets**                                           | 100.0                                  | **403,287,905**                  |

| **Insurance                    Coverage** | **As a % of                    Total Investment Portfolio** |
|-------------------------------------------|-------------------------------------------------------------|
| Ambac Financial Group                     | 0.7                                                         |
| Financial Security Assurance, Inc.        | 0.9                                                         |
| MBIA Corp.                                | 0.3                                                         |

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

*FDIC: Federal Deposit        Insurance Corp.*

*GDP: Gross Domestic        Product*

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

*REG S: Securities sold        under Regulation S may not be offered, sold or delivered within the United States or to, or        for the account or benefit of, US persons, except pursuant to an exemption from, or in a        transaction not subject to, the registration requirements of the Securities Act of        1933.*

*REIT: Real Estate        Investment Trust*

*Included in the        portfolio are investments in mortgage or asset-backed securities which are interests in        separate pools of mortgages or assets. Effective maturities of these investments may be        shorter than stated maturities due to prepayments. Some separate investments in the Federal        National Mortgage Association issues which have similar coupon rates have been aggregated        for presentation purposes in this investment portfolio.*

*At        January 31, 2009, open futures contracts sold were as follows:*

| **Futures**                                              | **Expiration                    Date** | **Contracts** | **Aggregated                    Face Value ($)** | **Value ($)** | **Unrealized                    Appreciation/                    (Depreciation) ($)** |
|----------------------------------------------------------|----------------------------------------|---------------|-------------------------------------------------------|--------------------|---------------------------------------------------------------------------------------|
| 10 Year US Treasury Note                                 | 3/20/2009                              | 100           | 12,460,447                                            | 12,267,188         | 193,259                                                                               |
| British Pound Currency                                   | 3/16/2009                              | 45            | 4,011,888                                             | 4,062,093          | (50,205)                                                                              |
| Euro Currency                                            | 3/16/2009                              | 20            | 3,310,574                                             | 3,196,000          | 114,574                                                                               |
| **Total net                    unrealized appreciation** | **257,628**                            |

*As of January 31, 2009,        the Fund had the following open forward foreign currency exchange contracts:*

| **Contracts                    to Deliver**          |       | **In                    Exchange For** |   | **Settlement                    Date** | **Unrealized                    Appreciation ($)** |
|------------------------------------------------------|------------|----------------------------------------|--------|----------------------------------------|----------------------------------------------------|
| EUR                                                  | 250,000    | * *                               | USD    | 322,175                                | * *                                           | 5/15/2009 | 2,420 |
| MXN                                                  | 10,000,000 | * *                               | USD    | 701,607                                | * *                                           | 5/15/2009 | 19,448 |
| RUB                                                  | 6,500,000  | * *                               | USD    | 175,395                                | * *                                           | 5/15/2009 | 9,722 |
| **Total                    unrealized appreciation** | **31,590** |

| **Contracts                    to Deliver**          |         | **In                    Exchange For** |   | **Settlement                    Date** | **Unrealized                    Depreciation ($)** |
|------------------------------------------------------|--------------|----------------------------------------|--------|----------------------------------------|----------------------------------------------------|
| BRL                                                  | 2,200,000    | * *                               | USD    | 889,104                                | * *                                           | 5/15/2009 | (31,032) |
| TRY                                                  | 488,688      | * *                               | USD    | 283,166                                | * *                                           | 5/15/2009 | (4,838) |
| **Total                    unrealized depreciation** | **(35,870)** |

| **Currency                    Abbreviations**                                                                         |
|-----------------------------------------------------------------------------------------------------------------------|
| BRL Brazilian RealEGP Egyptian PoundEUR EuroMXN Mexican PesoRUB Russian RubleTRY Turkish LiraUSD United States Dollar |

***Fair Value        Measurements***

*Financial Accounting        Standards Board Statement of Financial Accounting Standards No. 157, "Fair Value        Measurements," establishes a three-tier hierarchy for measuring fair value and requires        additional disclosure about the classification of fair value measurements.*

*Various inputs are used        in determining the value of the Fund's investments. These inputs are summarized in three        broad levels. Level 1 includes quoted prices in active markets for identical securities.        Level 2 includes other significant observable inputs (including quoted prices for similar        securities, interest rates, prepayment speeds and credit risk). Level 3 includes        significant unobservable inputs (including the Fund's own assumptions in determining the        fair value of investments). The inputs or methodology used for valuing securities are not        necessarily an indication of the risk associated with investing in those        securities.*

*The        following is a summary of the inputs used as of January 31, 2009 in valuing the Fund's        investments. For information on the Fund's policy regarding the valuation of investments,        please refer to the Security Valuation section of Note A in the accompanying Notes to the        Financial Statements.*

| **Valuation                    Inputs**                            | **Investments in Securities at                    Value** | **Net                    Unrealized Depreciation on Other Financial                    Instruments++** |
|--------------------------------------------------------------------|-----------------------------------------------------------|--------------------------------------------------------------------------------------------------------|
| Level 1 — Quoted Prices                                      | $                    51,800,000                           | $                    257,628                                                                           |
| Level 2 — Other Significant Observable                Inputs | 442,094,875                                               | (4,280)                                                                                                |
| Level 3 — Significant Unobservable                Inputs     | 626,682                                                   | —                                                                                                |
| **Total**                                                          | **$                    494,521,557**                      | **$                    253,348**                                                                       |

*The following is a        reconciliation of the Fund's Level 3 investments for which significant unobservable inputs        were used in determining value at January 31, 2009:*

|                                                            | **Investments in Securities at                    Value** |
|-----------------------------------------------------------------|-----------------------------------------------------------|
| **Balance as of February 1, 2008**                              | $                    7,763,300                            |
| Total realized gains or losses                                  | (2,842,226)                                               |
| Change in unrealized appreciation                (depreciation) | (334,770)                                                 |
| Net purchases (sales)                                           | (3,905,148)                                               |
| Amortization premium/discount                                   | 365                                                       |
| Net transfers in (out) of Level 3                               | (54,839)                                                  |
| **Balance as                    of January 31, 2009**           | **$                    626,682**                          |

*The accompanying notes        are an integral part of the financial statements.*

**Financial        Statements**

| **Statement of                    Assets and Liabilities**as of January                    31, 2009                                                        |
|------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Assets**                                                                                                                                                 |
| Investments:
Investments in                    securities, at value (cost $471,396,309) including $49,269,612 of                    securities loaned | $                    425,902,233 |
| Investment in                    Daily Assets Fund Institutional (cost $51,765,000)*                                                                  | 51,765,000 |
| Investment in                    Cash Management QP Trust (cost $16,854,324)                                                                          | 16,854,324 |
| Total investments, at value                (cost $540,015,633)                                                                                        | 494,521,557 |
| Foreign currency, at value (cost                $158,080)                                                                                                  | 161,091 |
| Receivable for investments sold                                                                                                                            | 4,153,784 |
| Receivable for when-issued and delayed delivery                secruities sold                                                                             | 20,472,031 |
| Receivable for Fund shares sold                                                                                                                            | 280,930 |
| Interest receivable                                                                                                                                        | 3,953,263 |
| Foreign taxes recoverable                                                                                                                                  | 16,384 |
| Unrealized appreciation on forward foreign currency                exchange contracts                                                                      | 31,590 |
| Due from Advisor                                                                                                                                           | 42,161 |
| Other assets                                                                                                                                               | 25,071 |
| Total assets                                                                                                                                               | 523,657,862 |
| **Liabilities**                                                                                                                                            |
| Cash overdraft                                                                                                                                             | 156,084 |
| Payable for investments purchased                                                                                                                          | 6,261,891 |
| Payable for when-issued and delayed delivery                securities purchased                                                                           | 60,947,274 |
| Payable for Fund shares redeemed                                                                                                                           | 461,586 |
| Payable upon return of securities loaned                                                                                                                   | 51,765,000 |
| Unrealized depreciation on forward foreign currency                exchange contracts                                                                      | 35,870 |
| Net payable on closed forward currency exchange                contracts                                                                                   | 26,407 |
| Payable for variation margin on open futures                contracts                                                                                      | 50,825 |
| Accrued management fee                                                                                                                                     | 157,028 |
| Other accrued expenses and payables                                                                                                                        | 507,992 |
| Total liabilities                                                                                                                                          | 120,369,957 |
| **Net assets,                    at value**                                                                                                                | **$                    403,287,905** |

*The accompanying notes        are an integral part of the financial statements.*

| **Statement of                    Assets and Liabilities**as of January                    31, 2009 (continued)                                                                                                                                                        |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Net Assets                    Consist of**                                                                                                                                                                                                                           |
| Undistributed net investment income                                                                                                                                                                                                                                    | 2,495,888 |
| Net unrealized appreciation (depreciation)                    on:
Investments                                                                                                                                                                                          | (45,494,076) |
| Futures                                                                                                                                                                                                                                                                | 257,628 |
| Foreign                    currency                                                                                                                                                                                                                                    | (4,549) |
| Accumulated net realized gain (loss)                                                                                                                                                                                                                                   | (120,433,034) |
| Paid-in capital                                                                                                                                                                                                                                                        | 566,466,048 |
| **Net assets,                    at value**                                                                                                                                                                                                                            | **$                    403,287,905** |
| **Net Asset                    Value**                                                                                                                                                                                                                                 |
| **Class                    A**
**Net Asset Value**and redemption price(a) per share                    ($118,042,987 ÷ 12,268,541 outstanding shares of beneficial interest,                    $.01 par value, unlimited number of shares authorized)          | **$                    9.62** |
| Maximum offering price per share                (100 ÷ 95.50 of $9.62)                                                                                                                                                                                | **$                    10.07** |
| **Class                    B**
**Net Asset Value**offering and redemption price(a) per                    share ($2,598,437 ÷ 269,783 outstanding shares of beneficial                    interest, $.01 par value, unlimited number of shares authorized) | **$                    9.63** |
| **Class                    C**
**Net Asset Value**offering and redemption price(a) per                    share ($7,962,563 ÷ 827,314 outstanding shares of beneficial                    interest, $.01 par value, unlimited number of shares authorized) | **$                    9.62** |
| **Class                    S**
**Net Asset Value**offering and redemption price(a) per                    share ($264,089,182 ÷ 27,453,470 outstanding shares of beneficial                    interest, $.01 par value, unlimited number of shares authorized) | **$                    9.62** |
| **Institutional Class**
**Net Asset Value**offering and redemption price(a) per                    share ($10,594,736 ÷ 1,105,000 outstanding shares of beneficial                    interest, $.01 par value, unlimited number of shares authorized)     | **$                    9.59** |

*The accompanying notes        are an integral part of the financial statements.*

| **Statement of                    Operations**for the year ended                    January 31, 2009                     |
|--------------------------------------------------------------------------------------------------------------------------|
| **Investment                    Income**                                                                                 |
| Income:Interest (net of foreign taxes withheld of                $4,183)                                                 | $                    34,108,214 |
| Dividends                                                                                                                | 113,161 |
| Interest — Cash Management                QP Trust                                                            | 297,255 |
| Securities lending income, including income from                Daily Assets Fund Institutional, net of borrower rebates | 245,874 |
| Total Income                                                                                                             | 34,764,504 |
| Expenses:Management fee                                                                                                  | 2,470,261 |
| Administration fee                                                                                                       | 550,635 |
| Distribution and service fees                                                                                            | 557,025 |
| Services to shareholders                                                                                                 | 895,304 |
| Custodian fee                                                                                                            | 49,380 |
| Professional fees                                                                                                        | 160,485 |
| Trustees' fees and expenses                                                                                              | 20,965 |
| Reports to shareholders                                                                                                  | 115,256 |
| Registration fees                                                                                                        | 93,761 |
| Other                                                                                                                    | 57,712 |
| Total expenses before expense reductions                                                                                 | 4,970,784 |
| Expense reductions                                                                                                       | (298,848) |
| Total expenses after expense reductions                                                                                  | 4,671,936 |
| **Net                    investment income**                                                                             | **30,092,568** |
| **Realized and                    Unrealized Gain (Loss)**                                                               |
| Net realized gain (loss) from:Investments (including foreign taxes of                $1,809)                             | (98,347,326) |
| Futures                                                                                                                  | (302,355) |
| Foreign currency                                                                                                         | 510,034 |
| * *                                                                                                                 | (98,139,647) |
| Change in net unrealized appreciation                (depreciation) on:Investments                                       | (42,216,374) |
| Futures                                                                                                                  | 257,628 |
| Foreign currency                                                                                                         | (73,164) |
| * *                                                                                                                 | (42,031,910) |
| **Net gain                    (loss)**                                                                                   | **(140,171,557)** |
| **Net increase                    (decrease) in net assets resulting from operations**                                   | **$                    (110,078,989)** |

*The        accompanying notes are an integral part of the financial statements.*

| **Statement of                    Changes in Net Assets**                                                                                            |
|------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                 | **Years                    Ended January 31,** |
| **Increase                    (Decrease) in Net Assets**                                                                                             | **2009** | **2008** |
| Operations:Net investment income                                                                                                                     | $                    30,092,568 | $                    31,875,870 |
| Net realized gain (loss)                                                                                                                             | (98,139,647) | (691,932) |
| Change in net unrealized appreciation                (depreciation)                                                                                  | (42,031,910) | 1,435,394 |
| Net increase (decrease) in net assets resulting                from operations                                                                       | (110,078,989) | 32,619,332 |
| Distributions to shareholders from:Net investment income:
Class                    A                                                                 | (8,619,563) | (9,413,082) |
| Class                    B                                                                                                                           | (203,732) | (333,582) |
| Class                    C                                                                                                                           | (476,628) | (488,525) |
| Class                    S                                                                                                                           | (19,946,900) | (21,034,744) |
| Institutional                    Class                                                                                                               | (864,805) | (1,071,474) |
| Net realized gains:
Class                    A                                                                                                       | (390,435) | — |
| Class                    B                                                                                                                           | (9,537) | — |
| Class                    C                                                                                                                           | (25,730) | — |
| Class                    S                                                                                                                           | (884,067) | — |
| Institutional                    Class                                                                                                               | (35,679) | — |
| Total distributions                                                                                                                                  | (31,457,076) | (32,341,407) |
| Fund share transactions:Proceeds from shares sold                                                                                                    | 47,325,182 | 105,815,859 |
| Reinvestment of distributions                                                                                                                        | 25,306,847 | 25,867,635 |
| Cost of shares redeemed                                                                                                                              | (177,892,952) | (161,851,637) |
| Redemption fees                                                                                                                                      | 3,717 | 13,494 |
| Net increase (decrease) in net assets from Fund                share transactions                                                                    | (105,257,206) | (30,154,649) |
| **Increase                    (decrease) in net assets**                                                                                             | (246,793,271) | (29,876,724) |
| Net assets at beginning of period                                                                                                                    | 650,081,176 | 679,957,900 |
| Net assets at end of period (including                undistributed net investment income of $2,495,888 and $2,102,577,                respectively) | **$                    403,287,905** | **$                    650,081,176** |

*The        accompanying notes are an integral part of the financial statements.*

**Financial        Highlights**

| **Class A**

**Years Ended                    January 31,**                                                                                                                                                                                                                      | **2009**                       | **2008**                       | **2007**                       | **2006**                       | **2005**                       |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------|--------------------------------|--------------------------------|--------------------------------|--------------------------------|
| **Selected Per                    Share Data**                                                                                                                                                                                                                                   |
| **Net asset                    value, beginning of period**                                                                                                                                                                                                                 | **$                    12.61** | **$                    12.60** | **$                    12.68** | **$                    13.04** | **$                    12.97** |
| *Income                    (loss) from investment operations:*

Net investment                    incomea                                                                                                                                                                        | .61                            | .58                            | .56                            | .49                            | .50                            |
| Net realized                    and unrealized gain (loss)                                                                                                                                                                                                                  | (2.96)                         | .02                            | (.04)                          | (.26)                          | .12                            |
| **Total from                    investment operations**                                                                                                                                                                                                                          | (2.35)                         | .60                            | .52                            | .23                            | .62                            |
| *Less                    distributions from:*

Net investment                    income                                                                                                                                                                                          | (.61)                          | (.59)                          | (.60)                          | (.59)                          | (.55)                          |
| Net realized                    gains on investment transactions                                                                                                                                                                                                                 | (.03)                          | —                        | —                        | —                        | —                        |
| **Total                    distributions**                                                                                                                                                                                                                                       | (.64)                          | (.59)                          | (.60)                          | (.59)                          | (.55)                          |
| Redemption fees                                                                                                                                                                                                                                                                  | .00*                           | .00*                           | .00*                           | .00*                           | —                        |
| **Net asset                    value, end of period**                                                                                                                                                                                                                            | **$                    9.62**  | **$                    12.61** | **$                    12.60** | **$                    12.68** | **$                    13.04** |
| Total Return (%)b                                                                                                                                                                                                                                                                | (19.04)c                       | 4.87                           | 4.20                           | 1.78                           | 4.90                           |
| **Ratios to                    Average Net Assets and Supplemental Data**                                                                                                                                                                                                        |
| Net assets, end of period                ($ millions)                                                                                                                                                                                                                       | 118                            | 193                            | 212                            | 240                            | 263                            |
| Ratio of expenses before expense                reductions (%)                                                                                                                                                                                                              | 1.04                           | 1.02                           | 1.06                           | 1.02                           | 1.01                           |
| Ratio of expenses after expense                reductions (%)                                                                                                                                                                                                               | 1.00                           | 1.02                           | 1.06                           | 1.02                           | 1.01                           |
| Ratio of net investment income (%)                                                                                                                                                                                                                                          | 5.31                           | 4.58                           | 4.44                           | 3.82                           | 3.87                           |
| Portfolio turnover rate (%)                                                                                                                                                                                                                                                 | 203                            | 150                            | 151                            | 196                            | 190                            |
| a*Based on average shares outstanding during the                period.*b*Total return does not reflect the effect of any                sales charges.*c*Total return would have been lower had certain                expenses not been reduced.***Amount is less than $.005.* |

| **Class B**

**Years Ended                    January 31,**                                                                                                                                                                                                                      | **2009**                       | **2008**                       | **2007**                       | **2006**                       | **2005**                       |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------|--------------------------------|--------------------------------|--------------------------------|--------------------------------|
| **Selected Per                    Share Data**                                                                                                                                                                                                                                   |
| **Net asset                    value, beginning of period**                                                                                                                                                                                                                 | **$                    12.62** | **$                    12.61** | **$                    12.68** | **$                    13.04** | **$                    12.97** |
| *Income                    (loss) from investment operations:*

Net investment                    incomea                                                                                                                                                                        | .52                            | .48                            | .46                            | .38                            | .39                            |
| Net realized                    and unrealized gain (loss)                                                                                                                                                                                                                       | (2.95)                         | .02                            | (.04)                          | (.27)                          | .12                            |
| **Total from                    investment operations**                                                                                                                                                                                                                          | (2.43)                         | .50                            | .42                            | .11                            | .51                            |
| *Less                    distributions from:*

Net investment                    income                                                                                                                                                                                          | (.53)                          | (.49)                          | (.49)                          | (.47)                          | (.44)                          |
| Net realized                    gains on investment transactions                                                                                                                                                                                                                 | (.03)                          | —                        | —                        | —                        | —                        |
| **Total                    distributions**                                                                                                                                                                                                                                       | (.56)                          | (.49)                          | (.49)                          | (.47)                          | (.44)                          |
| Redemption fees                                                                                                                                                                                                                                                                  | .00*                           | .00*                           | .00*                           | .00*                           | —                        |
| **Net asset                    value, end of period**                                                                                                                                                                                                                            | **$                    9.63**  | **$                    12.62** | **$                    12.61** | **$                    12.68** | **$                    13.04** |
| Total Return (%)b,c                                                                                                                                                                                                                                                              | (19.65)                        | 4.02                           | 3.38                           | .88                            | 3.95                           |
| **Ratios to                    Average Net Assets and Supplemental Data**                                                                                                                                                                                                        |
| Net assets, end of period                ($ millions)                                                                                                                                                                                                                       | 3                              | 7                              | 12                             | 17                             | 29                             |
| Ratio of expenses before expense                reductions (%)                                                                                                                                                                                                              | 1.93                           | 1.88                           | 2.09                           | 2.02                           | 1.93                           |
| Ratio of expenses after expense                reductions (%)                                                                                                                                                                                                               | 1.75                           | 1.79                           | 1.86                           | 1.90                           | 1.88                           |
| Ratio of net investment income (%)                                                                                                                                                                                                                                          | 4.56                           | 3.80                           | 3.64                           | 2.94                           | 3.00                           |
| Portfolio turnover rate (%)                                                                                                                                                                                                                                                 | 203                            | 150                            | 151                            | 196                            | 190                            |
| a*Based on average shares outstanding during the                period.*b*Total return does not reflect the effect of any                sales charges.*c*Total return would have been lower had certain                expenses not been reduced.***Amount is less than $.005.* |

| **Class C**

**Years Ended                    January 31,**                                                                                                                                                                                                                      | **2009**                       | **2008**                       | **2007**                       | **2006**                       | **2005**                       |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------|--------------------------------|--------------------------------|--------------------------------|--------------------------------|
| **Selected Per                    Share Data**                                                                                                                                                                                                                                   |
| **Net asset                    value, beginning of period**                                                                                                                                                                                                                 | **$                    12.61** | **$                    12.60** | **$                    12.67** | **$                    13.03** | **$                    12.97** |
| *Income                    (loss) from investment operations:*

Net investment                    incomea                                                                                                                                                                        | .52                            | .48                            | .46                            | .38                            | .39                            |
| Net realized                    and unrealized gain (loss)                                                                                                                                                                                                                       | (2.95)                         | .02                            | (.04)                          | (.27)                          | .12                            |
| **Total from                    investment operations**                                                                                                                                                                                                                          | (2.43)                         | .50                            | .42                            | .11                            | .51                            |
| *Less                    distributions from:*

Net investment                    income                                                                                                                                                                                          | (.53)                          | (.49)                          | (.49)                          | (.47)                          | (.45)                          |
| Net realized                    gains on investment transactions                                                                                                                                                                                                                 | (.03)                          | —                        | —                        | —                        | —                        |
| **Total                    distributions**                                                                                                                                                                                                                                       | (.56)                          | (.49)                          | (.49)                          | (.47)                          | (.45)                          |
| Redemption fees                                                                                                                                                                                                                                                                  | .00*                           | .00*                           | .00*                           | .00*                           | —                        |
| **Net asset                    value, end of period**                                                                                                                                                                                                                            | **$                    9.62**  | **$                    12.61** | **$                    12.60** | **$                    12.67** | **$                    13.03** |
| Total Return (%)b                                                                                                                                                                                                                                                                | (19.67)c                       | 4.04c                          | 3.39c                          | .89                            | 4.01c                          |
| **Ratios to                    Average Net Assets and Supplemental Data**                                                                                                                                                                                                        |
| Net assets, end of period                ($ millions)                                                                                                                                                                                                                       | 8                              | 13                             | 13                             | 15                             | 16                             |
| Ratio of expenses before expense                reductions (%)                                                                                                                                                                                                              | 1.82                           | 1.81                           | 1.89                           | 1.89                           | 1.88                           |
| Ratio of expenses after expense                reductions (%)                                                                                                                                                                                                               | 1.75                           | 1.79                           | 1.86                           | 1.89                           | 1.86                           |
| Ratio of net investment income (%)                                                                                                                                                                                                                                          | 4.56                           | 3.81                           | 3.64                           | 2.95                           | 3.02                           |
| Portfolio turnover rate (%)                                                                                                                                                                                                                                                 | 203                            | 150                            | 151                            | 196                            | 190                            |
| a*Based on average shares outstanding during the                period.*b*Total return does not reflect the effect of any                sales charges.*c*Total return would have been lower had certain                expenses not been reduced.***Amount is less than $.005.* |

| **Class S**

**Years Ended                    January 31,**                                                                                                                                       | **2009**                       | **2008**                       | **2007**                       | **2006**                       | **2005**                       |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------|--------------------------------|--------------------------------|--------------------------------|--------------------------------|
| **Selected Per                    Share Data**                                                                                                                                                    |
| **Net asset                    value, beginning of period**                                                                                                                                  | **$                    12.61** | **$                    12.60** | **$                    12.68** | **$                    13.04** | **$                    12.97** |
| *Income                    (loss) from investment operations:*

Net investment                    incomea                                                                                         | .64                            | .61                            | .59                            | .52                            | .52                            |
| Net realized                    and unrealized gain (loss)                                                                                                                                        | (2.96)                         | .02                            | (.04)                          | (.27)                          | .12                            |
| **Total from                    investment operations**                                                                                                                                           | (2.32)                         | .63                            | .55                            | .25                            | .64                            |
| *Less                    distributions from:*

Net investment                    income                                                                                                           | (.64)                          | (.62)                          | (.63)                          | (.61)                          | (.57)                          |
| Net realized                    gains on investment transactions                                                                                                                                  | (.03)                          | —                        | —                        | —                        | —                        |
| **Total                    distributions**                                                                                                                                                        | (.67)                          | (.62)                          | (.63)                          | (.61)                          | (.57)                          |
| Redemption fees                                                                                                                                                                                   | .00*                           | .00*                           | .00*                           | .00*                           | —                        |
| **Net asset                    value, end of period**                                                                                                                                             | **$                    9.62**  | **$                    12.61** | **$                    12.60** | **$                    12.68** | **$                    13.04** |
| Total Return (%)                                                                                                                                                                                  | (18.92)b                       | 5.12b                          | 4.45b                          | 1.98                           | 5.10b                          |
| **Ratios to                    Average Net Assets and Supplemental Data**                                                                                                                         |
| Net assets, end of period                ($ millions)                                                                                                                                        | 264                            | 417                            | 442                            | 352                            | 374                            |
| Ratio of expenses before expense                reductions (%)                                                                                                                               | .81                            | .79                            | .85                            | .81                            | .85                            |
| Ratio of expenses after expense                reductions (%)                                                                                                                                | .75                            | .77                            | .82                            | .81                            | .84                            |
| Ratio of net investment income (%)                                                                                                                                                           | 5.56                           | 4.83                           | 4.68                           | 4.03                           | 4.04                           |
| Portfolio turnover rate (%)                                                                                                                                                                  | 203                            | 150                            | 151                            | 196                            | 190                            |
| a*Based on average shares outstanding during the                period.*b*Total returns would have been lower had certain                expenses not been reduced.***Amount is less than $.005.* |

| **Institutional                    Class**

**Years Ended                    January 31,**                | **2009**                       | **2008**                       | **2007**                       | **2006**                       | **2005**                       |
|-----------------------------------------------------------------------------------------------------------|--------------------------------|--------------------------------|--------------------------------|--------------------------------|--------------------------------|
| **Selected Per                    Share Data**                                                            |
| **Net asset                    value, beginning of period**                                          | **$                    12.58** | **$                    12.57** | **$                    12.66** | **$                    13.01** | **$                    12.97** |
| *Income                    (loss) from investment operations:*

Net investment                    incomea | .65                            | .62                            | .59                            | .53                            | .54                            |
| Net realized                    and unrealized gain (loss)                                           | (2.95)                         | .02                            | (.04)                          | (.25)                          | .11                            |
| **Total from                    investment operations**                                                   | (2.30)                         | .64                            | .55                            | .28                            | .65                            |
| *Less                    distributions from:*

Net investment                    income                   | (.66)                          | (.63)                          | (.64)                          | (.63)                          | (.61)                          |
| Net realized                    gains on investment transactions                                          | (.03)                          | —                        | —                        | —                        | —                        |
| **Total                    distributions**                                                                | (.69)                          | (.63)                          | (.64)                          | (.63)                          | (.61)                          |
| Redemption fees                                                                                           | .00*                           | .00*                           | .00*                           | .00*                           | —                        |
| **Net asset                    value, end of period**                                                     | **$                    9.59**  | **$                    12.58** | **$                    12.57** | **$                    12.66** | **$                    13.01** |
| Total Return (%)                                                                                          | (18.88)                        | 5.21                           | 4.46                           | 2.13                           | 5.22                           |
| **Ratios to                    Average Net Assets and Supplemental Data**                                 |
| Net assets, end of period                ($ millions)                                                | 11                             | 21                             | .3                             | .4                             | 9                              |
| Ratio of expenses (%)                                                                                | .65                            | .63                            | .76                            | .68                            | .66                            |
| Ratio of net investment income (%)                                                                   | 5.66                           | 4.96                           | 4.74                           | 4.16                           | 4.22                           |
| Portfolio turnover rate (%)                                                                          | 203                            | 150                            | 151                            | 196                            | 190                            |
| a*Based on average shares outstanding during the                period.***Amount is less than $.005.*     |

**Notes to Financial        Statements**

**A. Significant Accounting        Policies**

DWS Core Plus Income Fund (the        "Fund") is a diversified series of DWS Portfolio Trust (the "Trust") which is registered        under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end        management investment company organized as a Massachusetts business trust.

The Fund offers multiple classes of        shares which provide investors with different purchase options. Class A shares are offered        to investors subject to an initial sales charge. Class B shares are offered to investors        without an initial sales charge but are subject to higher ongoing expenses than Class A        shares and a contingent deferred sales charge payable upon certain redemptions. Class B        shares automatically convert to Class A shares six years after issuance. Class C shares are        offered to investors without an initial sales charge but are subject to higher ongoing        expenses than Class A shares and a contingent deferred sales charge payable upon certain        redemptions within one year of purchase. Class C shares do not automatically convert into        another class. Institutional Class shares are offered to a limited group of investors, are        not subject to initial or contingent deferred sales charges and have lower ongoing expenses        than other classes. Class S shares are not subject to initial or contingent deferred        sales charges and are generally not available to new investors except under certain        circumstances.

Investment income, realized and        unrealized gains and losses, and certain fund-level expenses and expense reductions, if        any, are borne pro rata on the basis of relative net assets by the holders of all classes        of shares, except that each class bears certain expenses unique to that class such as        distribution and service fees, services to shareholders and certain other class-specific        expenses. Differences in class-level expenses may result in payment of different per share        dividends by class. All shares of the Fund have equal rights with respect to voting subject        to class-specific arrangements.

The Fund's financial statements are        prepared in accordance with accounting principles generally accepted in the United States        of America which require the use of management estimates. Actual results could differ from        those estimates. The policies described below are followed consistently by the Fund in the        preparation of its financial statements.

**Security        Valuation.** Investments are stated at value determined as of the close of regular        trading on the New York Stock Exchange on each day the exchange is open for trading. Equity        securities are valued at the most recent sale price or official closing price reported on        the exchange (US or foreign) or over-the-counter market on which the security is traded        most extensively. Securities for which no sales are reported are valued at the calculated        mean between the most recent bid and asked quotations on the relevant market or, if a mean        cannot be determined, at the most recent bid quotation.

Debt securities are        valued by independent pricing services approved by the Trustees of the Fund. If the pricing        services are unable to provide valuations, the securities are valued at the most recent bid        quotation or evaluated price, as applicable, obtained from one or more broker-dealers. Such        services may use various pricing techniques which take into account appropriate factors        such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and        other data, as well as broker quotes.

Money market instruments purchased        with an original or remaining maturity of sixty days or less, maturing at par, are valued        at amortized cost. Investments in open-end investment companies and Cash Management QP        Trust are valued at their net asset value each business day.

Securities and other assets for        which market quotations are not readily available or for which the above valuation        procedures are deemed not to reflect fair value are valued in a manner that is intended to        reflect their fair value as determined in accordance with procedures approved by the        Trustees.

The Fund adopted Financial        Accounting Standards Board ("FASB") Statement of Financial Accounting Standards No. 157,        "Fair Value Measurements," effective at the beginning of the Fund's fiscal year. Disclosure        about the classification of fair value measurements is included at the end of the Fund's        Investment Portfolio.

**New Accounting        Pronouncement.** In March 2008, the FASB issued Statement of Financial Accounting        Standards No. 161 ("FAS 161"), "Disclosures about Derivative Instruments and Hedging        Activities". FAS 161 requires enhanced disclosure about an entity's derivative and        hedging activities including qualitative disclosures about the objectives and strategies        for using derivatives, quantitative disclosures about fair value amounts of gains and        losses on derivative instruments, and disclosures about credit-risk-related contingent        features in derivative agreements. FAS 161 is effective for fiscal years and interim        periods beginning after November 15, 2008. Management is currently reviewing the enhanced        disclosure requirements for the adoption of FAS 161.

**Securities        Lending.** The Fund may lend securities to financial institutions. The Fund        retains beneficial ownership of the securities it has loaned and continues to receive        interest and dividends paid by the issuer of securities and to participate in any changes        in their market value. The Fund requires the borrowers of the securities to maintain        collateral with the Fund consisting of liquid, unencumbered assets having a value at least        equal to the value of the securities loaned. When the collateral falls below specified        amounts, the lending agents will use their best efforts to obtain additional collateral on        the next business day to meet required amounts under the security lending agreement. The        Fund may invest the cash collateral into a joint trading account in an affiliated money        market fund pursuant to Exemptive Orders issued by the SEC. The Fund receives compensation        for lending its securities either in the form of fees or by earning interest on invested        cash collateral net of borrower rebates and fees paid to a lending agent. Either the Fund        or the borrower may terminate the loan. There may be risks of delay and costs in recovery        of securities or even loss of rights in the collateral should the borrower of the        securities fail financially. The Fund is also subject to all investment risks associated        with the reinvestment of any cash collateral received, including, but not limited to,        interest rate, credit and liquidity risk associated with such investments.

**Futures Contracts.** A futures contract        is an agreement between a buyer or seller and an established futures exchange or its        clearinghouse in which the buyer or seller agrees to take or make a delivery of a specific        amount of a financial instrument at a specified price on a specific date (settlement date).        A futures contract may be used for hedging and for risk management or for non-hedging        purposes to seek to enhance potential gains. The Fund may use futures contracts in        circumstances where portfolio management believes they offer an economical means of gaining        exposure to a particular asset class or to keep cash on hand to meet shareholder        redemptions or other needs while maintaining exposure to the market.

Upon entering into a futures        contract, the Fund is required to deposit with a financial intermediary an amount ("initial        margin") equal to a certain percentage of the face value indicated in the futures contract.        Subsequent payments ("variation margin") are made or received by the Fund dependent upon        the daily fluctuations in the value of the underlying security and are recorded for        financial reporting purposes as unrealized gains or losses by the Fund. When entering into        a closing transaction, the Fund will realize a gain or loss equal to the difference between        the value of the futures contract to sell and the futures contract to buy. Futures        contracts are valued at the most recent settlement price.

Certain risks may arise upon        entering into futures contracts, including the risk that an illiquid secondary market will        limit the Fund's ability to close out a futures contract prior to the settlement date and        that a change in the value of a futures contract may not correlate exactly with the changes        in the value of the securities or currencies hedged. When utilizing futures contracts to        hedge, the Fund gives up the opportunity to profit from favorable price movements in the        hedged positions during the term of the contract. Risk of loss may exceed amounts        recognized on the Statement of Assets and Liabilities.

**Foreign Currency        Translations.** The books and records of the Fund are maintained in US dollars.        Investment securities and other assets and liabilities denominated in a foreign currency        are translated into US dollars at the prevailing exchange rates at period end. Purchases        and sales of investment securities, income and expenses are translated into US dollars at        the prevailing exchange rates on the respective dates of the transactions.

Net realized and unrealized gains        and losses on foreign currency transactions represent net gains and losses between trade        and settlement dates on securities transactions, the disposition of forward foreign        currency exchange contracts and foreign currencies, and the difference between the amount        of net investment income accrued and the US dollar amount actually received. That portion        of both realized and unrealized gains and losses on investments that results from        fluctuations in foreign currency exchange rates is not separately disclosed but is included        with net realized and unrealized gain/appreciation and loss/depreciation on        investments.

**Forward Foreign Currency Exchange        Contracts.** A forward foreign currency exchange contract ("forward currency        contract") is a commitment to purchase or sell a foreign currency at the settlement date at        a negotiated rate. The Fund may enter into forward currency contracts in order to hedge its        exposure to changes in foreign currency exchange rates on its foreign currency denominated        portfolio holdings and to facilitate transactions in foreign currency denominated        securities. The Fund may also enter into forward foreign currency exchange contracts for        non-hedging purposes.

Forward currency contracts are        valued at the prevailing forward exchange rate of the underlying currencies and unrealized        gain (loss) is recorded daily. Sales and purchases of forward currency contracts having the        same settlement date and broker are offset and any gain (loss) is realized on the date of        offset; otherwise, gain (loss) is realized on settlement date. Realized and unrealized        gains and losses which represent the difference between the value of a forward currency        contract to buy and a forward currency contract to sell are included in net realized and        unrealized gain (loss) from foreign currency.

Certain risks may arise upon        entering into forward currency contracts from the potential inability of counterparties to        meet the terms of their contracts. Additionally, when utilizing forward currency contracts        to hedge, the Fund gives up the opportunity to profit from favorable exchange rate        movements during the term of the contract.

**Mortgage Dollar        Rolls.** The Fund may enter into mortgage dollar rolls in which the Fund sells to        a bank or broker/dealer (the "counterparty") mortgage-backed securities for delivery in the        current month and simultaneously contracts to repurchase similar, but not identical,        securities on a fixed date. The counterparty receives all principal and interest payments,        including prepayments, made on the security while it is the holder. The Fund receives        compensation as consideration for entering into the commitment to repurchase. The        compensation is paid in the form of a lower price for the security upon its repurchase, or        alternatively, a fee. Mortgage dollar rolls may be renewed with a new sale and repurchase        price and a cash settlement made at each renewal without physical delivery of the        securities subject to the contract.

Certain risks may arise upon        entering into mortgage dollar rolls from the potential inability of counterparties to meet        the terms of their commitments. Additionally, the value of such securities may change        adversely before the Fund is able to repurchase them. There can be no assurance that the        Fund's use of the cash that it receives from a mortgage dollar roll will provide a return        that exceeds its costs.

**When-Issued/Delayed Delivery        Securities.** The Fund may purchase securities with delivery or payment to occur        at a later date beyond the normal settlement period. At the time the Fund enters into a        commitment to purchase a security, the transaction is recorded and the value of the        security is reflected in the net asset value. The price of such security and the date when        the security will be delivered and paid for are fixed at the time the transaction is        negotiated. The value of the security may vary with market fluctuations. No interest        accrues to the Fund until payment takes place. At the time the Fund enters into this type        of transaction it is required to segregate cash or other liquid assets at least equal to        the amount of the commitment.

Certain risks may        arise upon entering into when-issued or delayed delivery securities from the potential        inability of counterparties to meet the terms of their contracts or if the issuer does not        issue the securities due to political, economic, or other factors. Additionally, losses may        arise due to changes in the value of the underlying securities.

**Loan        Participations/Assignments.** The Fund may invest in US dollar-denominated fixed        and floating rate loans ("Loans") arranged through private negotiations between a foreign        sovereign entity and one or more financial institutions ("Lenders"). The Fund invests in        such Loans in the form of participations in Loans ("Participations") or assignments of all        or a portion ofLoans from third parties ("Assignments").        Participations typically result in the Fund having a contractual relationship only with the        Lender, not with the sovereign borrower. The Fund has the right to receive payments of        principal, interest and any fees to which they are entitled from the Lender selling the        Participation and only upon receipt by the Lender of the payments from the borrower. In        connection with purchasing Participations, the Fund generally hasno right to enforce compliance by the borrower with the terms of the        loan agreement relating to the Loan, nor any rights of set-off against the borrower, and        the Fund will not benefit directly from any collateral supporting the Loan in which it has        purchased the Participation. As a result, the Fund assumes the credit risk of both the        borrower and the Lender that is selling the Participation.

**Federal Income        Taxes.** The Fund's policy is to comply with the requirements of the Internal        Revenue Code, as amended, which are applicable to regulated investment companies and to        distribute all of its taxable income to its shareholders.

At January 31, 2009, the Fund had a        net tax basis capital loss carryforward of approximately $31,088,000, which may be applied        against any realized net taxable capital gains of each succeeding year until fully utilized        or until January 31, 2011 ($5,515,000), January 31, 2014 ($752,000), January 31,        2015 ($10,824,000), January 31, 2016 ($1,270,000) and January 31, 2017 ($12,727,000), the        respective expiration dates, whichever occurs first.

During the year ended January 31,        2009, the Fund lost through expiration, approximately $45,353,000 of a prior year capital        loss carryforward.

In addition, from November 1, 2008        through January 31, 2009, the Fund incurred approximately $88,321,000 of net realized        capital losses. As permitted by tax regulations, the Fund intends to elect to defer these        losses and treat them as arising in the fiscal year ending January 31, 2010.

The Fund has        reviewed the tax positions for the open tax years as of January 31, 2009 and has determined        that no provision for income tax is required in the Fund's financial statements. The Fund's        federal tax returns for the prior three fiscal years remain subject to examination by the        Internal Revenue Service.

**Distribution of        Income and Gains.** Net investment income of the Fund is declared and distributed        to shareholders monthly. Net realized gains from investment transactions, in excess of        available capital loss carryforwards, would be taxable to the Fund if not distributed, and,        therefore, will be distributed to shareholders at least annually.

The timing and characterization of        certain income and capital gain distributions are determined annually in accordance with        federal tax regulations which may differ from accounting principles generally accepted in        the United States of America. These differences primarily relate to premium amortization on        debt securities, investments in foreign denominated investments, forward currency        contracts, recognition of certain foreign currency gains (losses) as ordinary income        (loss), and certain securities sold at a loss. As a result, net investment income (loss)        and net realized gain (loss) on investment transactions for a reporting period may differ        significantly from distributions during such period. Accordingly, the Fund may periodically        make reclassifications among certain of its capital accounts without impacting the net        asset value of the Fund.

At January 31, 2009, the Fund's        components of distributable earnings (accumulated losses) on a net tax basis were as        follows:

| Undistributed ordinary income                                            | $                    2,496,446    |
|--------------------------------------------------------------------------|-----------------------------------|
| Capital loss carryforwards                                               | $                    (31,088,000) |
| Net unrealized appreciation (depreciation) on                investments | $                    (46,324,542) |

In addition, the tax character of        distributions paid to shareholders by the Fund is summarized as follows:

|                                               | **Years                    Ended January 31,** |
|----------------------------------------------------|------------------------------------------------|
|                                               | **2009**                                       | **2008** |
| Distributions from ordinary                income* | $                    31,457,076                | $                    32,341,407 |

**Redemption        Fees.** The Fund imposes a redemption fee of 2% of the total redemption amount on        all Fund shares redeemed or exchanged within15days of buying        them, either by purchase or exchange. This fee is assessed and retained by the Fund for the        benefit of the remaining shareholders. The redemption fee is accounted for as an addition        to paid-in capital.

**Expenses.** Expenses of the Trust arising        in connection with a specific fund are allocated to that fund. Other Trust expenses which        cannot be directly attributed to a fund are apportioned among the funds in the        Trust.

**Contingencies.** In the normal course of        business, the Fund may enter into contracts with service providers that contain general        indemnification clauses. The Fund's maximum exposure under these arrangements is unknown as        this would involve future claims that may be made against the Fund that have not yet been        made. However, based on experience, the Fund expects the risk of loss to be        remote.

**Other.**        Investment transactions are accounted for on a trade date plus one basis for daily net        asset value calculations. However, for financial reporting purposes, investment security        transactions are reported on trade date. Interest income is recorded on the accrual basis.        Dividend income is recorded on the ex-dividend date. Realized gains and losses from        investment transactions are recorded on an identified cost basis. All premiums and        discounts are amortized/accreted for financial reporting purposes.

**B. Purchases and Sales of        Securities**

During the year ended January 31,        2009, purchases and sales of investment securities (excluding short-term investments and US        Treasury obligations) aggregated $401,233,249 and $479,033,973, respectively. Purchases and        sales of US Treasury obligations aggregated $686,309,485 and $672,433,432,        respectively.

**C. Related Parties**

**Management        Agreement.** Under the Investment Management Agreement with Deutsche Investment        Management Americas Inc. ("DIMA" or the "Advisor"), an indirect, wholly owned subsidiary of        Deutsche Bank, AG, the Advisor directs the investments of the Fund in accordance with its        investment objectives, policies and restrictions. The Advisor determines the securities,        instruments and other contracts relating to investments to be purchased, sold or entered        into by the Fund or delegates such responsibility to the Fund's subadvisor.

Prior to December 1, 2008, pursuant        to a written contract with the Advisor, Aberdeen Asset Management Investment Services        Limited ("AAMISL") a direct, wholly owned subsidiary of Aberdeen PLC, served as the        subadvisor to the Fund. AAMISL was paid for its services by the Advisor from its fee as        investment manager to the Fund. The Fund's Board approved the termination of AAMISL as the        Fund's subadvisor. Effective December 1, 2008, the Advisor assumed all day-to-day advisory        responsibilities for the Fund that were previously delegated to AAMISL.

Pursuant to the        Investment Management Agreement with the Advisor, the Fund pays a monthly management fee        based on the Fund's average daily net assets accrued daily and payable monthly, at the        following annual rates:

| First $250 million of the Fund's average daily net                assets | .465% |
|--------------------------------------------------------------------------|-------|
| Next $750 million of such net assets                                     | .435% |
| Next $1.5 billion of such net assets                                     | .415% |
| Next $2.5 billion of such net assets                                     | .395% |
| Next $2.5 billion of such net assets                                     | .365% |
| Next $2.5 billion of such net assets                                     | .345% |
| Next $2.5 billion of such net assets                                     | .325% |
| Over $12.5 billion of such net assets                                    | .315% |

For the period from February 1, 2008        through November 30, 2008 (through September 30, 2008 for Institutional Class shares), the        Advisor had contractually agreed to waive all or a portion of its management fee and        reimburse or pay certain operating expenses of the Fund (excluding certain expenses such as        extraordinary expenses, taxes, brokerage and interest) to the extent necessary to maintain        the operating expenses of each class as follows:

| Class A             | 1.01% |
|---------------------|-------|
| Class B             | 1.76% |
| Class C             | 1.76% |
| Class S             | .76%  |
| Institutional Class | .76%  |

Effective December 1, 2008, through        November 30, 2009, the Advisor has contractually agreed to waive all or a portion of its        management fee and reimburse or pay certain operating expenses of the Fund (excluding        certain expenses such as extraordinary expenses, taxes, brokerage and interest) to the        extent necessary to maintain the operating expenses of certain classes as        follows:

| Class A | .95%  |
|---------|-------|
| Class B | 1.70% |
| Class C | 1.70% |
| Class S | .70%  |

Accordingly, for the year ended        January 31, 2009 the fee pursuant to the management agreement was equivalent to an annual        effective rate of 0.45% of the Fund's average daily net assets.

**Administration        Fee.** Pursuant to an Administrative Services Agreement, DIMA provides most        administrative services to the Fund. For all services provided under the Administrative        Services Agreement, the Fund pays the Advisor a fee ("Administration Fee") of 0.10% of the        Fund's average daily net assets, computed and accrued daily and payable monthly. For the        year ended January 31, 2009, the Advisor received an Administration Fee of $550,635, of        which $34,925 is unpaid.

**Service Provider Fees.** DWS Investments        Service Company ("DISC"), an affiliate of the Advisor, is the transfer agent,        dividend-paying agent and shareholder service agent for the Fund. Pursuant to a        sub-transfer agency agreement between DISC and DST Systems, Inc. ("DST"), DISC has        delegated certain transfer agent, dividend-paying agent and shareholder service agent        functions to DST. DISC compensates DST out of the shareholder servicing fee it receives        from the Fund. For the year ended January 31, 2009, the amounts charged to the Fund by DISC        were as follows:

| **Services to                    Shareholders** | **Total                    Aggregated** | **Waived**                       | **Unpaid at                    January 31, 2009** |
|-------------------------------------------------|-----------------------------------------|----------------------------------|---------------------------------------------------|
| Class A                                         | $                    215,106            | $                    61,676      | $                    19,282                       |
| Class B                                         | 13,332                                  | 8,273                            | 2,312                                             |
| Class C                                         | 16,540                                  | 7,349                            | 2,168                                             |
| Class S                                         | 393,046                                 | 215,545                          | —                                           |
| Institutional Class                             | 477                                     | —                          | 109                                               |
|                                            | **$                    638,501**        | **$                    292,843** | **$                    23,871**                   |

**Distribution and        Service Fees.** Under the Fund's Class B and Class C 12b-1 Plans, DWS Investments        Distributors, Inc. ("DIDI"), an affiliate of the Advisor, receives a fee ("Distribution        Fee") of 0.75% of average daily net assets of each of Class B and C shares. In accordance        with the Fund's Underwriting and Distribution Services Agreement, DIDI enters into related        selling group agreements with various firms at various rates for sales of Class B and        C shares. For the year ended January 31, 2009, the Distribution Fee was as        follows:

| **Distribution                    Fee** | **Total                    Aggregated** | **Unpaid at                    January 31, 2009** |
|-----------------------------------------|-----------------------------------------|---------------------------------------------------|
| Class B                                 | $                    34,594             | $                    1,712                        |
| Class C                                 | 78,266                                  | 5,126                                             |
|                                    | **$                    112,860**        | **$                    6,838**                    |

In addition, DIDI provides        information and administrative services for a fee ("Service Fee") to Class A, B and C        shareholders at an annual rate of up to 0.25% of average daily net assets for each such        class. DIDI in turn has various agreements with financial services firms that provide these        services and pays these fees based upon the assets of shareholder accounts the firms        service. For the year ended January 31, 2009, the Service Fee was as follows:

| **Service                    Fee** | **Total                    Aggregated** | **Unpaid at                    January 31, 2009** | **Annual                    Effective Rate** |
|------------------------------------|-----------------------------------------|---------------------------------------------------|---------------------------------------------------|
| Class A                            | $                    407,118            | $                    44,572                       | .25%                                              |
| Class B                            | 11,079                                  | 1,130                                             | .24%                                              |
| Class C                            | 25,968                                  | 3,281                                             | .25%                                              |
|                               | **$                    444,165**        | **$                    48,983**                   |                                              |

**Underwriting Agreement and Contingent Deferred        Sales Charge.** DIDI is the principal underwriter for the Fund. Underwriting        commissions paid in connection with the distribution of Class A shares for the        year ended January 31, 2009 aggregated $3,522.

In addition, DIDI receives any        contingent deferred sales charge ("CDSC") from Class B share redemptions occurring        within six years of purchase and Class C share redemptions occurring within one year of        purchase. There is no such charge upon redemption of any share appreciation or reinvested        dividends. The CDSC is based on declining rates ranging from 4% to 1% for Class B and 1%        for Class C, of the value of the shares redeemed. For the year ended January 31, 2009 the        CDSC for Class B and C shares aggregated $13,088 and $1,595, respectively. A deferred        sales charge of up to 0.85% is assessed on certain redemptions of Class A        shares.

**Typesetting and        Filing Service Fees.** Under an agreement with DIMA, DIMA is compensated for        providing typesetting and certain regulatory filing services to the Fund. For the year        ended January 31, 2009, the amount charged to the Fund by DIMA included in the Statement of        Operations under "reports to shareholders" aggregated $41,203, of which $11,845 is        unpaid.

**Trustees' Fees        and Expenses.** The Fund paid each Trustee not affiliated with the Advisor        retainer fees plus specified amounts for various committee services and for the Board        Chairperson and Vice Chairperson.

In connection with the board        consolidation on April 1, 2008, of the two DWS Funds Boards of Trustees, certain        Independent Board Members retired prior to their normal retirement date, and received a        one-time retirement benefit. DIMA has agreed to reimburse the Funds for the cost of this        benefit. During the period ended January 31, 2009, the Fund paid its allocated portion of        the retirement benefit of $3,367 to the non-continuing Independent Board Members, and the        Fund was reimbursed by DIMA for this payment.

**Cash Management        QP Trust.** Pursuant to an Exemptive Order issued by the SEC, the Fund may invest        in the Cash Management QP Trust (the "QP Trust"), and other affiliated funds managed        by the Advisor. The QP Trust seeks to provide as high a level of current income as is        consistent with the preservation of capital and the maintenance of liquidity. The QP Trust        does not pay the Advisor a management fee for the affiliated fund's investment in the QP        Trust.

**D. Fee        Reductions**

The Fund has entered into an        arrangement with its custodian and transfer agent whereby credits realized as a result of        uninvested cash balances are used to reduce a portion of the Fund's custodian        expenses. During the year ended January 31, 2009, the Fund's custodian fee was reduced by        $1,023 and $1,615, respectively, for custody and transfer agent credits earned.

**E. Line of Credit**

The Fund and other affiliated funds        (the "Participants") share in a $490 million revolving credit facility provided by a        syndication of banks. The Fund may borrow for temporary or emergency purposes, including        the meeting of redemption requests that otherwise might require the untimely disposition of        securities. The Participants are charged an annual commitment fee which is allocated based        on net assets, among each of the Participants. Interest is calculated at the Federal Funds        Rate plus 0.35 percent. The Fund may borrow up to a maximum of 33 percent of its net        assets under the agreement.

**F. Share        Transactions**

The following table summarizes share        and dollar activity in the Fund:

|                                                                                  | **Year Ended                    January 31, 2009** | **Year Ended                    January 31, 2008** |
|---------------------------------------------------------------------------------------|----------------------------------------------------|--------------------------------------------------------------|
|                                                                                  | **Shares**                                         | **Dollars**                                                  | **Shares** | **Dollars** |
| **Shares                    sold**                                                    |
| Class A                                                                               | 1,055,569                                          | $                    12,244,085                              | 1,593,786 | $                    20,051,917 |
| Class B                                                                               | 31,629                                             | 367,919                                                      | 88,909 | 1,121,410 |
| Class C                                                                               | 124,662                                            | 1,406,095                                                    | 183,476 | 2,304,473 |
| Class S                                                                               | 2,495,355                                          | 29,145,425                                                   | 4,196,726 | 52,880,658 |
| Institutional Class                                                                   | 361,826                                            | 4,161,658                                                    | 2,335,708 | 29,457,401 |
| * *                                                                              |                                               | **$                    47,325,182**                          |   | **$                    105,815,859** |
| **Shares                    issued to shareholders in reinvestment of distributions** |
| Class A                                                                               | 635,685                                            | $                    7,081,296                               | 585,581 | $                    7,347,505 |
| Class B                                                                               | 16,445                                             | 184,888                                                      | 23,442 | 294,516 |
| Class C                                                                               | 35,350                                             | 391,752                                                      | 29,999 | 376,419 |
| Class S                                                                               | 1,506,967                                          | 16,748,427                                                   | 1,337,736 | 16,777,721 |
| Institutional Class                                                                   | 81,016                                             | 900,484                                                      | 85,730 | 1,071,474 |
| * *                                                                              |                                               | **$                    25,306,847**                          |   | **$                    25,867,635** |
| **Shares                    redeemed**                                                |
| Class A                                                                               | (4,724,806)                                        | $                    (52,738,770)                            | (3,717,290) | $                    (46,748,942) |
| Class B                                                                               | (335,600)                                          | (3,888,248)                                                  | (530,201) | (6,684,539) |
| Class C                                                                               | (327,465)                                          | (3,697,551)                                                  | (239,262) | (3,008,473) |
| Class S                                                                               | (9,609,497)                                        | (106,341,479)                                                | (7,581,299) | (95,376,020) |
| Institutional Class                                                                   | (986,362)                                          | (11,226,904)                                                 | (800,048) | (10,033,663) |
| * *                                                                              |                                               | **$                    (177,892,952)**                       |   | **$                    (161,851,637)** |
| **Redemption                    fees**                                                |                                               | **$                    3,717**                               |   | **$                    13,494** |
| **Net increase                    (decrease)**                                        |
| Class A                                                                               | (3,033,552)                                        | $                    (33,413,389)                            | (1,537,923) | $                    (19,349,151) |
| Class B                                                                               | (287,526)                                          | (3,335,419)                                                  | (417,850) | (5,268,374) |
| Class C                                                                               | (167,453)                                          | (1,898,744)                                                  | (25,787) | (327,581) |
| Class S                                                                               | (5,607,175)                                        | (60,444,894)                                                 | (2,046,837) | (25,704,755) |
| Institutional Class                                                                   | (543,520)                                          | (6,164,760)                                                  | 1,621,390 | 20,495,212 |
| * *                                                                              |                                               | **$                    (105,257,206)**                       |   | **$                    (30,154,649)** |

**Report of Independent        Registered Public Accounting Firm**

**To the Trustees of DWS        Portfolio Trust and the Shareholders of DWS Core Plus Income Fund:**

In our opinion, the accompanying        statement of assets and liabilities, including the investment portfolio, and the related        statements of operations and of changes in net assets and the financial highlights present        fairly, in all material respects, the financial position of DWS Core Plus Income Fund (the        "Fund") at January 31, 2009, and the results of its operations, the changes in its net        assets and the financial highlights for each of the periods indicated therein, in        conformity with accounting principles generally accepted in the United States of America.        These financial statements and financial highlights (hereafter referred to as "financial        statements") are the responsibility of the Fund's management. Our responsibility is to        express an opinion on these financial statements based on our audits. We conducted our        audits of these financial statements in accordance with the standards of the Public Company        Accounting Oversight Board (United States). Those standards require that we plan and        perform the audit to obtain reasonable assurance about whether the financial statements are        free of material misstatement. An audit includes examining, on a test basis, evidence        supporting the amounts and disclosures in the financial statements, assessing the        accounting principles used and significant estimates made by management, and evaluating the        overall financial statement presentation. We believe that our audits, which included        confirmation of securities at January 31, 2009 by correspondence with the custodian and        brokers, provide a reasonable basis for our opinion.

| Boston,                    Massachusetts                    March 23, 2009 | PricewaterhouseCoopers                    LLP |
|----------------------------------------------------------------------------|-----------------------------------------------|

**Tax        Information**

Please consult a tax advisor if you        have questions about federal or state income tax laws, or on how to prepare your tax        returns. If you have specific questions about your account, please call (800)        621-1048.

**Investment Management        Agreement Approval**

The Board of Trustees, including the        Independent Trustees, approved the renewal of your Fund's investment management        agreement (the "Agreement") with Deutsche Investment Management Americas Inc. ("DIMA"), the        sub-advisory agreement (the "Sub-Advisory Agreement") between DIMA and Aberdeen Asset        Management, Inc. ("AAMI"), and the sub-sub-advisory agreement (the "Sub-Sub-Advisory        Agreement" and, together with the Agreement and Sub-Advisory Agreement, the        "Agreements") between AAMI and Aberdeen Asset Management Investment Services Limited        ("Aberdeen IS") in September 2008. As noted below, in the case of AAMI and Aberdeen        IS, the Board also determined to terminate the Sub-Advisory Agreement and Sub-Sub-Advisory        Agreement as of December 1, 2008.

In terms of the process that the        Board followed prior to approving the Agreements, shareholders should know that:

• At the        present time, all but one of your Fund's Trustees are independent of DIMA and its        affiliates.

• The        Trustees meet frequently to discuss fund matters. Each year, the Trustees dedicate part or        all of several meetings to contract review matters. Over the course of several months, the        Board's Contract Committee, in coordination with the Board's Fixed Income and Quant        Oversight Committee, reviewed comprehensive materials received from DIMA, independent third        parties and independent counsel. These materials included an analysis of the Fund's        performance, fees and expenses, and profitability compiled by the Fund's independent fee        consultant. The Board also received extensive information throughout the year regarding        performance of the Fund.

• The        Trustees regularly meet privately with their independent counsel (and, as needed, other        advisors) to discuss contract review and other matters. In addition, the Trustees were also        advised by the Fund's independent fee consultant in the course of their review of the        Fund's contractual arrangements and considered a comprehensive report prepared by the        independent fee consultant in connection with their deliberations (the "IFC        Report").

• In        connection with reviewing the Agreements, the Board also reviewed the terms of the Fund's        Rule 12b-1 plan, distribution agreement, administrative services agreement, transfer agency        agreement and other material service agreements.

• Based on its evaluation of the        information provided, the Contract Committee presented its findings and recommendations to        the Independent Trustees as a group. The Independent Trustees reviewed the Contract        Committee's findings and recommendations and presented their recommendations to the full        Board.

In connection with the contract        review process, the Contract Committee and the Board considered the factors discussed        below, among others. The Board also considered that DIMA and its predecessors have        managed the Fund since its inception, and the Board believes that a long-term relationship        with a capable, conscientious advisor is in the best interests of the Fund. The Board        considered, generally, that shareholders chose to invest or remain invested in the Fund        knowing that DIMA managed the Fund, and that the Agreement was approved by the Fund's        shareholders at a special meeting held in 2006. DIMA is part of Deutsche Bank, a major        global banking institution that is engaged in a wide range of financial services. The Board        believes that there are significant advantages to being part of a global asset management        business that offers a wide range of investing expertise and resources, including hundreds        of portfolio managers and analysts with research capabilities in many countries throughout        the world.

While shareholders may focus        primarily on fund performance and fees, the Fund's Board considers these and many other        factors, including the quality and integrity of DIMA's, AAMI's and Aberdeen IS's personnel        and such other issues as back-office operations, fund valuations, and compliance policies        and procedures.

**Nature, Quality        and Extent of Services.** The Board considered the terms of the Agreements,        including the scope of advisory services provided under the Agreements. The Board noted        that, under the Agreements, DIMA, AAMI and Aberdeen IS provide portfolio management        services to the Fund and that, pursuant to a separate administrative services        agreement, DIMA provides administrative services to the Fund. The Board considered the        experience and skills of senior management and investment personnel, the resources made        available to such personnel, the ability of DIMA, AAMI and Aberdeen IS to attract and        retain high-quality personnel, and the organizational depth and stability of DIMA, AAMI and        Aberdeen IS. The Board reviewed the Fund's performance over short-term and long-term        periods and compared those returns to various agreed-upon performance measures, including        market indices and a peer universe compiled by the independent fee consultant using        information supplied by Lipper Inc. ("Lipper"). The Board also noted that it has put a        process into place of identifying "Focus Funds" (e.g., funds performing poorly relative to        their benchmark or a peer group compiled by Lipper), and receives more frequent reporting        and information from DIMA regarding such funds, along with DIMA's remedial plans to address        underperformance. The Board believes this process is an effective manner of        identifying and addressing underperforming funds. Based on the information provided, the        Board noted that for the one-, three- and five-year periods ended December 31, 2007, the        Fund's performance (Class A shares) was in the 4th quartile, 3rd quartile and 2nd quartile,        respectively, of the applicable Lipper universe (the 1st quartile being the best performers        and the 4th quartile being the worst performers). The Board also observed that the Fund has        underperformed its benchmark in each of the one-, three- and five-year periods ended        December 31, 2007. The Board also noted the disappointing investment performance of the        Fund in recent periods and continued to discuss with senior management of DIMA the factors        contributing to such underperformance and actions being taken to improve performance. The        Board recognized that DIMA has made significant changes in the Fund's management structure,        including the termination of AAMI and Aberdeen IS as the Fund's sub-advisor and        sub-sub-advisor, respectively, and the introduction of a new portfolio management team        effective December 1, 2008.

On the basis of        this evaluation and the ongoing review of investment results by the Board, the Board        concluded that the nature, quality and extent of services provided by DIMA historically has        been and continues to be satisfactory.

**Fees and        Expenses.** The Board considered the Fund's investment management fee schedule,        sub-advisory and sub-sub-advisory fee schedule, operating expenses, and total expense        ratios, and comparative information provided by Lipper and the independent fee consultant        regarding investment management fee rates paid to other investment advisors by similar        funds (1st quartile being the most favorable and 4th quartile being the least        favorable). With respect to management fees paid to other investment advisors by similar        funds, the Board noted that the contractual fee rates paid by the Fund, which include the        0.10% fee paid to DIMA under the Fund's administrative services agreement, were higher        than the median (3rd quartile) of the applicable Lipper peer group (based on Lipper data        provided as of December 31, 2007). With respect to the sub-advisory and sub-sub-advisory        fees paid to AAMI and Aberdeen IS, the Board noted that the fees are paid by DIMA and AAMI,        respectively, out of their fees and not directly by the Fund. The Board noted that the        Fund's Class A shares' total (net) operating expenses (excluding 12b-1 fees) were expected        to be higher than the median (3rd quartile) of the applicable Lipper expense universe        (based on Lipper data provided as of December 31, 2007, and analyzing Lipper expense        universe Class A expenses less any applicable 12b-1 fees) ("Lipper Universe Expenses"). The        Board also reviewed each other share class's total (net) operating expenses relative to the        Lipper Universe Expenses. The Board considered the Fund's management fee rate as compared        to fees charged by DIMA and certain of its affiliates for comparable mutual funds and        considered differences in fund and fee structures between the DWS Funds. The Board        also considered how the Fund's total (net) operating expenses compared to the total (net)        operating expenses of a more customized peer group selected by Lipper (based on such        factors as asset size). The Board also noted that the expense limitations agreed to by DIMA        helped to ensure that the Fund's total (net) operating expenses would be competitive        relative to the applicable Lipper universe.

On the basis of the        information provided, the Board concluded that management fees were reasonable and        appropriate in light of the nature, quality and extent of services provided by DIMA, AAMI        and Aberdeen IS.

**Profitability.** The Board reviewed        detailed information regarding revenues received by DIMA under the Agreement. The Board        considered the estimated costs and pre-tax profits realized by DIMA from advising the DWS        Funds, as well as estimates of the pre-tax profits attributable to managing the Fund in        particular. The Board also received information regarding the estimated enterprise-wide        profitability of the DWS Investments organization with respect to all fund services in        totality and by fund. The Board reviewed DIMA's methodology in allocating its costs to the        management of the Fund. Based on the information provided, the Board concluded that the        pre-tax profits realized by DIMA in connection with the management of the Fund were not        unreasonable. The Board also reviewed information regarding the profitability of certain        similar investment management firms. The Board noted that while information regarding the        profitability of such firms is limited (and in some cases is not necessarily prepared on a        comparable basis), DIMA and its affiliates' overall profitability with respect to the DWS        Investments fund complex (after taking into account distribution and other services        provided to the funds by DIMA and its affiliates) was lower than the overall profitability        levels of many comparable firms for which such data was available.

**Economies of        Scale.** The Board considered whether there are economies of scale with respect to        the management of the Fund and whether the Fund benefits from any economies of scale. The        Board noted that the Fund's management fee schedule includes fee breakpoints. The Board        concluded that the Fund's fee schedule represents an appropriate sharing between the Fund        and DIMA of such economies of scale as may exist in the management of the Fund at current        asset levels.

**Other Benefits to DIMA and Its        Affiliates.** The Board also considered the character and amount of other        incidental benefits received by DIMA and its affiliates, including any fees received by        DIMA for administrative services provided to the Fund and any fees received by an affiliate        of DIMA for distribution services. The Board also considered benefits to DIMA related to        brokerage and soft-dollar allocations, including allocating brokerage to pay for research        generated by parties other than the executing broker dealers, which pertain primarily to        funds investing in equity securities, along with the incidental public relations benefits        to DIMA related to DWS Funds advertising and cross-selling opportunities among DWS        Investments products and services. The Board concluded that management fees were reasonable        in light of these fallout benefits.

**Compliance.** The Board considered the        significant attention and resources dedicated by DIMA to documenting and enhancing its        compliance processes in recent years. The Board noted in particular (i) the experience and        seniority of DIMA's chief compliance officer; (ii) the large number of compliance personnel        who report to DIMA's chief compliance officer; and (iii) the substantial commitment of        resources by DIMA and its affiliates to compliance matters.

Based on all of the information        considered and the conclusions reached, the Board (including a majority of the Independent        Trustees) determined that the continuation of the Agreements is in the best interests of        the Fund. In making this determination the Board did not give particular weight to any        single factor identified above. The Board considered these factors over the course of        numerous meetings, certain of which were in executive session with only the Independent        Trustees and their counsel present. It is possible that individual Trustees may have        weighed these factors differently in reaching their individual decisions to approve the        continuation of the Agreements.

**Summary of Management Fee        Evaluation by Independent Fee Consultant**

October 24, 2008

Pursuant to an Order entered into by        Deutsche Investment Management Americas and affiliates (collectively, "DeAM") with the        Attorney General of New York, I, Thomas H. Mack, have been appointed the Independent Fee        Consultant for the DWS Funds (formerly the DWS Scudder Funds). My duties include preparing        an annual written evaluation of the management fees DeAM charges the Funds, considering        among other factors the management fees charged by other mutual fund companies for like        services, management fees DeAM charges other clients for like services, DeAM's costs of        supplying services under the management agreements and related profit margins, possible        economies of scale if a Fund grows larger, and the nature and quality of DeAM's services,        including fund performance. This report summarizes my evaluation for 2008, including my        qualifications, the evaluation process for each of the DWS Funds, consideration of certain        complex-level factors, and my conclusions. I served in substantially the same capacity in        2007.

**Qualifications**

For more than 35 years I have served        in various professional capacities within the investment management business. I have held        investment analysis and advisory positions, including securities analyst, portfolio        strategist and director of investment policy with a large investment firm. I have also        performed business management functions, including business development, financial        management and marketing research and analysis.

Since 1991, I have been an        independent consultant within the asset management industry. I have provided services to        over 125 client organizations, including investment managers, mutual fund boards, product        distributors and related organizations. Over the past ten years I have completed a number        of assignments for mutual fund boards, specifically including assisting boards with        management contract renewal.

I hold a Master of Business        Administration degree, with highest honors, from Harvard University and Master of Science        and Bachelor of Science (highest honors) degrees from the University of California at        Berkeley. I am an independent director and audit committee financial expert for two        closed-end mutual funds, serve on the board of directors of a private market research        company, and have served in various leadership and financial oversight capacities with        non-profit organizations.

**Evaluation of        Fees for each DWS Fund**

My work focused primarily on        evaluating, fund-by-fund, the fees charged to each of the 129 Fund portfolios in the DWS        Fund family. For each Fund, I considered each of the key factors mentioned above, as well        as any other relevant information. In doing so I worked closely with the Funds' Independent        Directors in their annual contract renewal process, as well as in their approval of        contracts for several new funds (documented separately).

In evaluating each Fund's fees, I        reviewed comprehensive materials provided by or on behalf of DeAM, including expense        information prepared by Lipper Analytical, comparative performance information,        profitability data, manager histories, and other materials. I also accessed certain        additional information from the Lipper, Strategic Insight, and Morningstar databases and        drew on my industry knowledge and experience.

To facilitate evaluating this        considerable body of information, I prepared for each Fund a document summarizing the key        data elements in each area as well as additional analytics discussed below. This made it        possible to consider each key data element in the context of the others.

In the course of contract renewal,        DeAM agreed to implement a number of fee and expense adjustments requested by the        Independent Directors which will favorably impact future fees and expenses, and my        evaluation includes the effects of these changes.

**Fees and Expenses        Compared with Other Funds**

The competitive fee and expense        evaluation for each fund focused on two primary comparisons:

The Fund's contractual management        fee (the advisory fee plus the administration fee where applicable) compared with those of        a group of typically 12-15 funds in the same Lipper investment category        (e.g. Large Capitalization Growth) having similar distribution arrangements and being        of similar size.

The Fund's total expenses compared        with a broader universe of funds from the same Lipper investment category and having        similar distribution arrangements.

These two comparisons provide a view        of not only the level of the fee compared with funds of similar scale but also the total        expense the Fund bears for all the services it receives, in comparison with the investment        choices available in the Fund's investment category and distribution channel. The principal        figure-of-merit used in these comparisons was the subject Fund's percentile ranking against        peers.

**DeAM's Fees for Similar        Services to Others**

DeAM provided        management fee schedules for all of its US domiciled fund and non-fund investment        management accounts in any of the investment categories where there is a DWS Fund. These        similar products included the other DWS Funds, non-fund pooled accounts, institutional        accounts and sub-advisory accounts. Using this information, I calculated for each Fund        the fee that would be charged to each similar product, at the subject Fund's asset        level.

Evaluating information regarding        non-fund products is difficult because there are varying levels of services required for        different types of accounts, with mutual funds generally requiring considerably more        regulatory and administrative types of service as well as having more frequent cash flows        than other types of accounts. Also, while mutual fund fees for similar fund products can be        expected to be similar, there will be some differences due to different pricing conditions        in different distribution channels (e.g. retail funds versus those used in variable        insurance products), differences in underlying investment processes and other        factors.

**Costs and Profit        Margins**

DeAM provided a detailed        profitability analysis for each Fund. After making some adjustments so that the        presentation would be more comparable to the available industry figures, I reviewed profit        margins from investment management alone, from investment management plus other fund        services (excluding distribution) provided to the Funds by DeAM (principally shareholder        services), and DeAM profits from all sources, including distribution. A later section        comments on overall profitability.

**Economies of        Scale**

Economies of scale — an        expected decline in management cost per dollar of fund assets as fund assets grow —        are very rarely quantified and documented because of inherent difficulties in collecting        and analyzing relevant data. However, in virtually every investment category that I        reviewed, larger funds tend to have lower fees and lower total expenses than smaller funds.        To see how each DWS Fund compares with this industry observation, I reviewed:

The trend in Fund assets over the        last five years and the accompanying trend in total expenses. This shows if the Fund has        grown and, if so, whether total expense (management fees as well as other expenses) have        declined as a percent of assets.

Whether the Fund has break-points in        its management fee schedule, the extent of the fee reduction built into the schedule and        the asset levels where the breaks take effect, and in the case of a sub-advised Fund how        the Fund's break-points compare with those of the sub-advisory fee schedule.

How the Fund's        contractual fee schedule compares with trends in the industry data. To accomplish this, I        constructed a chart showing how actual latest-fiscal-year contractual fees of the Fund and        of other similar funds relate to average fund assets, with the subject Fund's contractual        fee schedule superimposed.

**Quality of Service        — Performance**

The quality-of-service evaluation        focused on investment performance, which is the principal result of the investment        management service. Each Fund's performance was reviewed over the past 1, 3, 5 and 10        years, as applicable, and compared with that of other funds in the same investment category        and with a suitable market index.

In addition, I calculated and        reviewed risk-adjusted returns relative to an index of similar mutual funds' returns and a        suitable market index. The risk-adjusted returns analysis provides a way of determining the        extent to which the Fund's return comparisons are mainly the product of investment        value-added (or lack thereof) or alternatively taking considerably more or less risk than        is typical in its investment category.

I also received and considered the        history of portfolio manager changes for each Fund, as this provided an important context        for evaluating the performance results.

**Complex-Level        Considerations**

While this evaluation was conducted        mainly at the individual fund level, there are some issues relating to the reasonableness        of fees that can alternatively be considered across the whole fund complex:

I reviewed DeAM's profitability        analysis for all DWS Funds, with a view toward determining if the allocation procedures        used were reasonable and how profit levels compared with public data for other investment        managers.

I considered whether DeAM and        affiliates receive any significant ancillary or "fall-out" benefits that should be        considered in interpreting the direct profitability results. These would be situations        where serving as the investment manager of the Funds is beneficial to another part of the        Deutsche Bank organization.

I considered how aggregated DWS Fund        expenses had varied over the years, by asset class and in the context of trends in asset        levels.

I reviewed the        structure of the DeAM organization, trends in staffing levels, and information on        compensation of investment management and other professionals compared with industry        data.

**Findings**

Based on the process and analysis        discussed above, which included reviewing a wide range of information from management and        external data sources and considering among other factors the fees DeAM charges other        clients, the fees charged by other fund managers, DeAM's costs and profits associated with        managing the Funds, economies of scale, possible fall-out benefits, and the nature and        quality of services provided, in my opinion the management fees charged the DWS Funds are        reasonable.

        Thomas H. Mack

**Summary of Administrative        Fee Evaluation by Independent Fee Consultant**

September 29, 2008

Pursuant to an Order entered into by        Deutsche Asset Management (DeAM) with the Attorney General of New York, I, Thomas H. Mack,        have been appointed the Independent Fee Consultant for the DWS Funds and have as part of my        duties evaluated the reasonableness of the proposed management fees to be charged by DeAM        to the DWS Funds, taking onto account a proposal to pass through to the funds certain fund        accounting-related charges in connection with new regulatory requirements. My evaluation        considered the following:

• While        the proposal would alter the services to be provided under the Administration Agreement,        which I consider to be part of fund management under the Order, it is my opinion that the        change in services is slight and that the scope of prospective services under the        combination of the Advisory and Administration Agreements continues to be comparable with        those typically provided to competitive funds under their management agreements.

• While        the proposal would increase fund expenses, according to a pro forma analysis performed by        management, the prospective effect is less than .01% for all but seven of the DeAM Funds'        438 active share classes, and in all cases the effect is less than .03% and overall        expenses would remain reasonable in my opinion.

Based on the foregoing        considerations, in my opinion the fees and expenses for all of the DWS Funds will remain        reasonable if the Directors adopt this proposal.

        Thomas H. Mack

**Board Members and        Officers**

The following table presents certain        information regarding the Board Members and Officers of the Trust as of January 31, 2009.        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 Independent Board Member is c/o Dawn-Marie Driscoll,        PO Box 100176, Cape Coral, FL 33904. Except as otherwise noted below, 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 fund. 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 fund complex. The        Length of Time Served represents the year in which the Board Member joined the board of one        or more DWS funds now overseen by the Board.

| **Independent                    Board Members**                                                                 |
|------------------------------------------------------------------------------------------------------------------|
| **Name, Year                    of Birth, Position with the Fund and Length of Time                    Served1** | **Business                    Experience and Directorships During the                    Past Five Years** | **Number of                    Funds in DWS Fund Complex Overseen** |
| Paul                K. Freeman (1950)Chairperson since 20092Board Member since 1993                              | Consultant, World Bank/Inter-American Development                Bank; Governing Council of the Independent Directors Council (governance, executive                committees); formerly, Project Leader, International Institute for Applied Systems                Analysis (1998-2001); Chief Executive Officer, The Eric Group, Inc. (environmental                insurance) (1986-1998) | 134 |
| John                W. Ballantine (1946)Board Member since 1999                                                  | Retired; formerly, Executive Vice President and                Chief Risk Management Officer, First Chicago NBD Corporation/The First National                Bank of Chicago (1996-1998); Executive Vice President and Head of International                Banking (1995-1996). Directorships: Healthways, Inc. (provider of disease and care                management services); Portland General Electric (utility company); Stockwell                Capital Investments PLC (private equity). Former Directorships: First Oak Brook                Bancshares, Inc. and Oak Brook Bank | 134 |
| Henry P. Becton, Jr. (1943)Board Member since 1990                                                               | Vice                Chair, WGBH Educational Foundation. Directorships: Association of Public Television                Stations; Becton Dickinson and Company3 (medical technology company);                Belo Corporation3 (media company); Boston Museum of Science; Public                Radio International; PRX, The Public Radio Exchange; The PBS Foundation. Former                Directorships: American Public Television; Concord Academy; New England Aquarium;                Mass. Corporation for Educational Telecommunications; Committee for Economic                Development; Public Broadcasting Service | 134 |
| Dawn-Marie Driscoll (1946)Board Member since 1987                                                                | President, Driscoll Associates (consulting firm);                Executive Fellow, Center for Business Ethics, Bentley University; formerly,                Partner, Palmer & Dodge (1988-1990); Vice President of Corporate Affairs and                General Counsel, Filene's (1978-1988). Directorships: Trustee of 20 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                University; Trustee, Southwest Florida Community Foundation (charitable                organization). Former Directorships: Investment Company Institute (audit,                executive, nominating committees) and Independent Directors Council (governance,                executive committees) | 134 |
| Keith R. Fox (1954)Board Member since 1996                                                                       | Managing General Partner, Exeter Capital Partners                (a series of private investment funds). Directorships: Progressive Holding                Corporation (kitchen goods importer and distributor); Box Top Media Inc.                (advertising); The Kennel Shop (retailer) | 134 |
| Kenneth C. Froewiss (1945)Board Member since 2001                                                                | Clinical Professor of Finance, NYU Stern School of                Business (1997-present); Member, Finance Committee, Association for Asian Studies                (2002-present); Director, Mitsui Sumitomo Insurance Group (US) (2004-present);                prior thereto, Managing Director, J.P. Morgan (investment banking firm) (until                1996) | 134 |
| Richard J. Herring (1946)Board Member since 1990                                                                 | Jacob Safra Professor of International Banking and                Professor, Finance Department, The Wharton School, University of Pennsylvania                (since July 1972); Co-Director, Wharton Financial Institutions Center (since July                2000); Director, Japan Equity Fund, Inc. (since September 2007), Thai Capital Fund,                Inc. (since September 2007), Singapore Fund, Inc. (since September 2007). Formerly,                Vice Dean and Director, Wharton Undergraduate Division (July 1995-June 2000);                Director, Lauder Institute of International Management Studies (July 2000-June                2006) | 134 |
| William McClayton (1944)Board Member since 2004                                                                  | Managing Director, Diamond Management &                Technology Consultants, Inc. (global management consulting firm) (2001-present);                Directorship: Board of Managers, YMCA of Metropolitan Chicago; formerly: Senior                Partner, Arthur Andersen LLP (accounting) (1966-2001); Trustee, Ravinia                Festival | 134 |
| Rebecca W. Rimel (1951)Board Member since 1995                                                                   | President and Chief Executive Officer, The Pew                Charitable Trusts (charitable organization) (1994 to present); Trustee, Thomas                Jefferson Foundation (charitable organization) (1994 to present); Trustee,                Executive Committee, Philadelphia Chamber of Commerce (2001-2007); Trustee, Pro                Publica (2007-present) (charitable organization). Formerly, Executive Vice                President, The Glenmede Trust Company (investment trust and wealth management)                (1983-2004); Board Member, Investor Education (charitable organization)                (2004-2005); Director, Viasys Health Care3                (January 2007-June 2007) | 134 |
| William N. Searcy, Jr. (1946)Board Member since 1993                                                             | Private investor since October 2003; Trustee of 20                open-end mutual funds managed by Sun Capital Advisers, Inc. (since October 1998).                Formerly, Pension & Savings Trust Officer, Sprint Corporation3                (telecommunications) (November 1989-September 2003) | 134 |
| Jean                Gleason Stromberg (1943)Board Member since 1997                                              | Retired. Formerly, Consultant (1997-2001);                Director, US Government Accountability Office (1996-1997); Partner, Fulbright &                Jaworski, L.L.P. (law firm) (1978-1996). Directorships: The William and Flora                Hewlett Foundation; Business Leadership Council, Wellesley College. Former                Directorships: Service Source, Inc., Mutual Fund Directors Forum (2002-2004),                American Bar Retirement Association (funding vehicle for retirement plans)                (1987-1990 and 1994-1996) | 134 |
| Robert H. Wadsworth(1940)Board Member since 1999                                                                 | President, Robert H. Wadsworth & Associates,                Inc. (consulting firm) (1983 to present); Director, The Phoenix Boys Choir                Association | 137 |

| **Interested                    Board Member**                                                                   |
|------------------------------------------------------------------------------------------------------------------|
| **Name, Year                    of Birth, Position with the Fund and Length of Time                    Served1** | **Business                    Experience and Directorships During the                    Past Five Years** | **Number of                    Funds in Fund Complex Overseen** |
| Axel                Schwarzer4 (1958)Board Member since 2006                                                     | Managing Director5, Deutsche Asset                Management; Head of Deutsche Asset Management Americas; CEO of DWS Investments;                formerly, board member of DWS Investments, Germany (1999-2005); formerly, Head of                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) | 134 |

| **Officers6**                                                                                                    |
|------------------------------------------------------------------------------------------------------------------|
| **Name, Year                    of Birth, Position with the Fund and Length of Time                    Served7** | **Principal                    Occupation(s) During Past 5 Years and Other Directorships Held** |
| Michael G. Clark8 (1965)President, 2006-present                                                                  | Managing Director5, Deutsche Asset                Management (2006-present); President of DWS family of funds; Director, ICI Mutual                Insurance Company (since October 2007); formerly, Director of Fund Board Relations                (2004-2006) and Director of Product Development (2000-2004), Merrill Lynch                Investment Managers; Senior Vice President Operations, Merrill Lynch Asset                Management (1999-2000) |
| John                Millette9 (1962)Vice President and Secretary,                1999-present                    | Director5, Deutsche Asset                Management |
| Paul                H. Schubert8 (1963)Chief Financial Officer, 2004-presentTreasurer, 2005-present              | Managing Director5, Deutsche Asset                Management (since July 2004); formerly, Executive Director, Head of Mutual Fund                Services and Treasurer for UBS Family of Funds (1998-2004); Vice President and                Director of Mutual Fund Finance at UBS Global Asset Management                (1994-1998) |
| Caroline Pearson9 (1962)Assistant Secretary, 1997-present                                                        | Managing Director5, Deutsche Asset                Management |
| Rita                Rubin10 (1970)Assistant Secretary, 2009-present                                              | Vice                President and Counsel, Deutsche Asset Management (since October 2007); formerly,                Vice President, Morgan Stanley Investment Management (2004-2007); Attorney,                Shearman & Sterling LLP (2004); Vice President and Associate General Counsel,                UBS Global Asset Management (2001-2004) |
| Paul                Antosca9 (1957)Assistant Treasurer, 2007-present                                             | Director5, Deutsche Asset Management                (since 2006); Vice President, The Manufacturers Life Insurance Company (U.S.A.)                (1990-2006) |
| Jack                Clark9 (1967)Assistant Treasurer, 2007-present                                               | Director5, Deutsche Asset Management                (since 2007); formerly, Vice President, State Street Corporation                (2002-2007) |
| Diane Kenneally9 (1966)Assistant Treasurer, 2007-present                                                         | Director5, Deutsche Asset                Management |
| Jason Vazquez10 (1972)Anti-Money Laundering Compliance Officer,                2007-present                      | Vice                President, Deutsche Asset Management (since 2006); formerly, AML Operations Manager                for Bear Stearns (2004-2006), Supervising Compliance Principal and Operations                Manager for AXA Financial (1999-2004) |
| Robert Kloby10 (1962)Chief Compliance Officer, 2006-present                                                      | Managing Director5, Deutsche Asset                Management (2004-present); formerly, Chief Compliance Officer/Chief Risk Officer,                Robeco USA (2000-2004); Vice President, The Prudential Insurance Company of America                (1988-2000); E.F. Hutton and Company (1984-1988) |
| J.                Christopher Jackson10 (1951)Chief Legal Officer, 2006-present                                  | Director5, Deutsche Asset Management                (2006-present); formerly, Director, Senior Vice President, General Counsel and                Assistant Secretary, Hansberger Global Investors, Inc. (1996-2006); Director,                National Society of Compliance Professionals (2002-2005) (2006-2009) |

*The fund's Statement of        Additional Information ("SAI") includes additional information about the Board Members. The        SAI is available, without charge, upon request. If you would like to request a copy of the        SAI, you may do so by calling the following toll-free number:        (800) 621-1048.*

**Account Management        Resources**

|                                          |
|-----------------------------------------------|
| **For More                    Information**   | The automated telephone system allows you to                    access personalized account information and obtain information on other DWS                    funds using either your voice or your telephone keypad. Certain account types                    within Classes A, B, C and S also have the ability to purchase, exchange or                    redeem shares using this system.For more information, contact your financial                    advisor. You may also access our automated telephone system or speak with a DWS                    Investments representative by calling the appropriate number below:
**For                    shareholders of Classes A, B, C and Institutional Class:**
(800) 621-1048
**For                    shareholders of Class S:**
(800) 728-3337 |
| **Web                    Site**               | **www.dws-investments.com**
View your account transactions and balances,                    trade shares, monitor your asset allocation, and change your address, 24 hours                    a day.**Obtain prospectuses and                    applications,**blank forms,                    interactive worksheets, news about DWS funds, subscription to fund updates by                    e-mail, retirement planning information, and more. |
| **Written                    Correspondence** | **DWS                    Investments**
PO Box 219151                    Kansas City, MO 64121-9151 |
| **Proxy                    Voting**           | 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 endedJune 30are available on our Web site —                www.dws-investments.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. |
| **Principal                    Underwriter**  | If you have questions, comments or complaints,                    contact:
**DWS                    Investments Distributors, Inc.**
222 South Riverside Plaza                    Chicago, IL 60606-5808(800) 621-1148 |

|                                 | **Class                    A** | **Class                    B** | **Class                    C** | **Class                    S** | **Institutional Class** |
|--------------------------------------|--------------------------------|--------------------------------|--------------------------------|--------------------------------|-------------------------|
| **Nasdaq                    Symbol** | SZIAX                          | SZIBX                          | SZICX                          | SCSBX                          | SZIIX                   |
| **CUSIP                    Number**  | 23337F 102                     | 23337F 201                     | 23337F 300                     | 23337F 508                     | 23337F 607              |
| **Fund                    Number**   | 463                            | 663                            | 763                            | 2063                           | 1463                    |

**Notes**

**Notes**

**Notes**

**Notes**

----

 

| **ITEM 2.** | **CODE OF ETHICS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|-------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|        | As of the end of the period, January 31, 2009, DWS Core                            Plus Income Fund has a code of ethics, as defined in Item 2 of Form                            N-CSR, that applies to its Principal Executive Officer and Principal                            Financial Officer.

                             

There have been no amendments to, or waivers from, a                            provision of the code of ethics during the period covered by this                            report that would require disclosure under Item 2.

                             

A copy of the code of ethics is filed as an exhibit to                            this Form N-CSR.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| **ITEM 3.** | **AUDIT COMMITTEE FINANCIAL EXPERT**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|        | The Funds’ audit committee is comprised solely of                            trustees who are “independent” (as such term has been                            defined by the Securities and Exchange Commission (“SEC”)                            in regulations implementing Section 407 of the Sarbanes-Oxley Act (the                            “Regulations”)). The Funds’ Board of Trustees has                            determined that there are several “audit committee financial                            experts” (as such term has been defined by the Regulations)                            serving on the Funds’ audit committee including Mr. William                            McClayton, the chair of the Funds’ audit committee. The SEC has                            stated that an audit committee financial expert is not an                            “expert” for any purpose, including for purposes of Section                            11 of the Securities Act of 1933 and the designation or identification                            of a person as an audit committee financial expert pursuant to this                            Item 3 of Form N-CSR does not impose on such person any duties,                            obligations or liability that are greater than the duties, obligations                            and liability imposed on such person as a member of the audit committee                            and board of directors in the absence of such designation or                            identification. |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| **ITEM 4.** | **PRINCIPAL ACCOUNTANT FEES AND SERVICES**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |

 

**DWS CORE PLUS INCOME FUND**

**FORM N-CSR DISCLOSURE RE: AUDIT FEES**

The            following table shows the amount of fees that PricewaterhouseCoopers, LLP            (“PWC”), the Fund’s independent registered public accounting firm,            billed to the Fund during the Fund’s last two fiscal years. The Audit Committee            approved in advance all audit services and non-audit services that PWC provided to the            Fund.

The            Audit Committee has delegated certain pre-approval responsibilities to its Chairman            (or, in his absence, any other member of the Audit Committee).

**Services that the Fund’s Independent Registered Public            Accounting Firm Billed to the Fund**

 

| Fiscal YearEndedJanuary 31, | Audit Fees Billed to Fund | Audit-RelatedFees Billed to Fund | Tax Fees Billed to Fund | AllOther Fees Billed to Fund |
|-----------------------------|---------------------------|----------------------------------|-------------------------|------------------------------|
| 2009                        | $78,525                   | $0                               | $0                      | $0                           |
| 2008                        | $79,500                   | $0                               | $0                      | $0                           |

 

 

**Services that the Fund’s Independent Registered Public            Accounting Firm Billed to the Adviser and Affiliated Fund Service            Providers**

The            following table shows the amount of fees billed by PWC to Deutsche Investment            Management Americas, Inc. (“DeIM” or the “Adviser”), and any            entity controlling, controlled by or under common control with DeIM (“Control            Affiliate”) that provides ongoing services to the Fund (“Affiliated Fund            Service Provider”), for engagements directly related to the Fund’s            operations and financial reporting, during the Fund’s last two fiscal            years.

 

| Fiscal YearJanuary 31, | Audit-RelatedFees Billed to Adviser and Affiliated Fund Service                            Providers | Tax Fees Billed to Adviser and Affiliated Fund                            Service Providers | AllOther Fees Billed to Adviser and Affiliated Fund Service                            Providers |
|------------------------|------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------|
| 2009                   | $0                                                                                                   | $19,000                                                                                     | $0                                                                                               |
| 2008                   | $58,500                                                                                              | $25,000                                                                                     | $0                                                                                               |

 

The            “Audit-Related Fees” were billed for services in connection with the            agreed-upon procedures related to fund mergers and the above “Tax Fees”            were billed in connection with tax consultation and agreed-upon procedures.

**Non-Audit Services**

The            following table shows the amount of fees that PWC billed during the Fund’s last            two fiscal years for non-audit services. The Audit Committee pre-approved all non-audit            services that PWC provided to the Adviser and any Affiliated Fund Service Provider that            related directly to the Fund’s operations and financial reporting. The Audit            Committee requested and received information from PWC about any non-audit services that            PWC rendered during the Fund’s last fiscal year to the Adviser and any Affiliated            Fund Service Provider. The Committee considered this information in evaluating            PWC’s independence.

 

| Fiscal YearEndedJanuary 31, | TotalNon-Audit Fees Billed to Fund

(A) | Total Non-Audit Fees billed to Adviser and Affiliated                            Fund Service Providers (engagements related directly to the operations                            and financial reporting of the Fund)

(B) | Total Non-Audit Fees billed to Adviser and Affiliated                            Fund Service Providers (all other engagements)

(C) | Total of (A), (B)and (C) |
|-----------------------------|-----------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------|--------------------------|
| 2009                        | $0                                      | $19,000                                                                                                                                                                                                                      | $0                                                                                                                                   | $19,000                  |
| 2008                        | $0                                      | $25,000                                                                                                                                                                                                                      | $600,000                                                                                                                             | $625,000                 |

 

 

All            other engagement fees were billed for services provided by PWC for services related to            consulting on an IT project.

 

***

 

PwC            advised the Fund's Audit Committee that PwC has identified two matters that it            determined to be inconsistent with the SEC's auditor independence rules. In the first            instance, an employee of PwC had power of attorney over an account which included DWS            funds. The employee did not perform any audit services for the DWS Funds, but did work            on a non audit project for Deutsche Bank AG. In the second instance, an employee of PwC            served as a nominee shareholder (effectively equivalent to a Trustee) of various            companies/trusts since 2001. Some of these companies held shares of Aberdeen, a sub            advisor to certain DWS Funds, and of certain funds sponsored by subsidiaries of            Deutsche Bank AG. The trustee relationship has ceased. PwC informed the Audit Committee            that these matters could have constituted an investment in an affiliate of an audit            client in violation of the Rule 2-01(c)(1) of Regulation S-X. PwC advised the Audit            Committee that PwC believes its independence had not been impacted as it related to the            audits of the Fund. In reaching this conclusion, PwC noted that during the time of its            audit, the engagement team was not aware of the investment and that PwC does not            believe these situations affected PwC's ability to act objectively and impartially and            to issue a report on financial statements as the funds' independent auditor.

 

 

 

|        |                                                                                                                             |
|-------------|----------------------------------------------------------------------------------------------------------------------------------|
| **ITEM 5.** | **AUDIT COMMITTEE OF LISTED REGISTRANTS**                                                                                        |
|        |                                                                                                                             |
|        | Not Applicable                                                                                                                   |
|        |                                                                                                                             |
| **ITEM 6.** | **SCHEDULE OF INVESTMENTS**                                                                                                      |
|        |                                                                                                                             |
|        | Not Applicable                                                                                                                   |
|        |                                                                                                                             |
| **ITEM 7.** | **DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES                            FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES** |
|        |                                                                                                                             |
|        | Not applicable.                                                                                                                  |
|        |                                                                                                                             |
| **ITEM 8.** | **PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT                            INVESTMENT COMPANIES**                                  |
|        |                                                                                                                             |
|        | Not applicable.                                                                                                                  |

 

| **ITEM 9.** | **PURCHASES OF EQUITY SECURITIES BY CLOSED-END                            MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS** |
|-------------|-------------------------------------------------------------------------------------------------------------------------------------|
|        |                                                                                                                                |
|        | Not Applicable.                                                                                                                     |

 

| **ITEM 10.** | **SUBMISSION OF MATTERS TO A VOTE OF SECURITY                            HOLDERS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|         | The primary function of the Nominating and Governance                            Committee is to identify and recommend individuals for membership on                            the Board and oversee the administration of the Board Governance                            Guidelines. Shareholders may recommend candidates for Board positions                            by forwarding their correspondence by U.S. mail or courier service to                            Chairman of the Board, P.O. Box 100176, Cape Coral, FL                            33910. |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| **ITEM 11.** | **CONTROLS AND PROCEDURES**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|         | (a)                                     The Chief                            Executive and Financial Officers concluded that the Registrant’s                            Disclosure Controls and Procedures are effective based on the                            evaluation of the Disclosure Controls and Procedures as of a date                            within 90 days of the filing date of this report.                                                                                                     |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

 

 

 

|         | (b)                                     There have been                            no changes in the registrant’s internal control over financial                            reporting that occurred during the second fiscal quarter of the period                            covered by this report that has materially affected, or is reasonably                            likely to materially affect, the registrant’s internal controls                            over financial reporting. |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| **ITEM 12.** | **EXHIBITS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|         | (a)(1)     Code of Ethics                            pursuant to Item 2 of Form N-CSR is filed and attached hereto as                            EX-99.CODE ETH.                                                                                                                                                                                                                                                                                                                                                                     |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|         | (a)(2)     Certification                            pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17                            CFR 270.30a-2(a)) is filed and attached hereto as Exhibit                            99.CERT.                                                                                                                                                                                                                                                                                  |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|         | (b)         Certification                            pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17                            CFR 270.30a-2(b)) is furnished and attached hereto as Exhibit                            99.906CERT.                                                                                                                                                                                                                                                      |

 

 

 

----

Form            N-CSR Item F

 

**SIGNATURES**

 

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

 

| Registrant: | DWS Core Plus Income Fund, a series of DWS Portfolio                            Trust |
|-------------|---------------------------------------------------------------------------------------|

 

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

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

President

 

| Date: | March 31, 2009 |
|-------|----------------|

 

 

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

 

| Registrant: | DWS Core Plus Income Fund, a series of DWS Portfolio                            Trust |
|-------------|---------------------------------------------------------------------------------------|

 

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

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

President

 

| Date: | March 31, 2009 |
|-------|----------------|

 

 

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

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

Chief Financial Officer and Treasurer

 

Date:                                        March            31, 2009