UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

**FORM N-Q**

**QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED**

**MANAGEMENT INVESTMENT COMPANY**

**_______________________________**

Investment Company Act file number  811-5385

DWS Value Series, Inc.

(Exact name of registrant as specified in charter)

 

345 Park Avenue

New York, NY  10154

(Address of principal executive offices)             (Zip code)

 

Paul Schubert

345 Park Avenue

New York, NY  10154-0004

(Name and address of agent for service)

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

Date of fiscal year end:  11/30

Date of reporting period: 08/31/08

 

ITEM 1.  SCHEDULE OF INVESTMENTS

 

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

 

 

**DWS Dreman High Return Equity Fund**

 

 

|   | **Shares**              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | **Value ($)** |
|--------|-------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------|
|        |
|   | **Common Stocks 99.7%** |  
**Consumer Discretionary 10.0%**

 
**Hotels Restaurants & Leisure 1.2%**

 
Carnival Corp. (a) 

 

1,792,300 

 

**66,422,638**

**Media 0.1%**

 
Walt Disney Co.  

 

112,400 

 

**3,636,140**

**Multiline Retail 0.7%**

 
Macy's, Inc. (a) 

 

1,892,220 

 

**39,396,020**

**Specialty Retail 8.0%**

 
Borders Group, Inc. (a) (b) 

 

3,309,600 

 

23,167,200 

Lowe's Companies, Inc. (a) 

 

9,179,920 

 

226,193,229 

 

 

 

Staples, Inc. (a) 

 

8,699,000 

 

210,515,800 

 

**459,876,229**

**Consumer Staples 8.1%**

 
**Tobacco**

Altria Group, Inc.  

 

11,534,653 

 

242,573,753 

Imperial Tobacco Group PLC (ADR)  

 

349,106 

 

23,145,728 

Philip Morris International, Inc.  

 

2,251,389 

 

120,899,589 

UST, Inc. (a) 

 

1,438,823 

 

77,106,524 

 

**463,725,594**

**Energy 26.8%**

 
**Oil, Gas & Consumable Fuels**

Anadarko Petroleum Corp.  

 

3,773,024 

 

232,908,772 

Apache Corp.  

 

1,951,555 

 

223,218,861 

Chevron Corp. (a) 

 

2,585,895 

 

223,214,456 

ConocoPhillips  

 

4,532,186 

 

373,950,667 

Devon Energy Corp. (a) 

 

3,088,450 

 

315,176,323 

Occidental Petroleum Corp. (a) 

 

1,139,068 

 

90,396,436 

Valero Energy Corp. (a) 

 

2,045,300 

 

71,094,628 

 

**1,529,960,143**

**Financials 27.2%**

 
**Commercial Banks 11.4%**

 
KeyCorp (a) 

 

11,744,618 

 

141,052,862 

PNC Financial Services Group, Inc. (a) 

 

3,145,966 

 

226,352,254 

US Bancorp. (a) 

 

4,178,210 

 

133,117,771 

Wachovia Corp. (a) 

 

9,357,550 

 

148,691,469 

 

**649,214,356**

**Diversified Financial Services 7.6%**

 
Bank of America Corp. (a) 

 

8,150,284 

 

253,799,844 

CIT Group, Inc. (a) 

 

5,512,005 

 

56,828,772 

Citigroup, Inc. (a) 

 

5,315,200 

 

100,935,648 

JPMorgan Chase & Co.  

 

526,509 

 

20,265,331 

 

**431,829,595**

**Insurance 2.7%**

 
Chubb Corp. (a) 

 

1,777,278 

 

85,327,117 

 

 

 

 

 

Hartford Financial Services Group, Inc. (a) 

 

798,980 

 

50,399,658 

The Travelers Companies, Inc.  

 

487,360 

 

21,521,818 

 

**157,248,593**

**Thrifts & Mortgage Finance 5.5%**

 
Fannie Mae (a) 

 

13,471,298 

 

92,143,678 

Freddie Mac (a) 

 

14,447,868 

 

65,159,885 

Sovereign Bancorp., Inc. (a) 

 

3,721,984 

 

35,954,365 

Washington Mutual, Inc. (a) 

 

29,174,265 

 

118,155,773 

 

**311,413,701**

**Health Care 16.6%**

 
**Biotechnology 0.7%**

 
Amgen, Inc.*  

 

662,290 

 

**41,624,927**

**Health Care Equipment & Supplies 0.1%**

 
Covidien Ltd.  

 

75,643 

 

**4,090,017**

**Health Care Providers & Services 8.0%**

 
Aetna, Inc.  

 

4,375,180 

 

188,745,265 

 

 

 

UnitedHealth Group, Inc.  

 

8,876,830 

 

270,299,474 

 

**459,044,739**

**Pharmaceuticals 7.8%**

 
Eli Lilly & Co.  

 

1,603,380 

 

74,797,677 

Pfizer, Inc. (a) 

 

11,193,513 

 

213,908,033 

Wyeth (a) 

 

3,565,921 

 

154,333,061 

 

**443,038,771**

**Industrials 9.3%**

 
**Aerospace & Defense 3.5%**

 
Northrop Grumman Corp.  

 

1,045,880 

 

72,008,838 

United Technologies Corp.  

 

1,914,980 

 

125,603,538 

 

**197,612,376**

**Air Freight & Logistics 1.2%**

 
FedEx Corp. (a) 

 

867,607 

 

**71,855,212**

**Industrial Conglomerates 4.6%**

 
3M Co.  

 

1,792,576 

 

128,348,441 

General Electric Co. (a) 

 

4,574,420 

 

128,541,202 

Tyco International Ltd.  

 

128,310 

 

5,501,933 

 

**262,391,576**

**Information Technology 0.0%**

 
**Electronic Equipment, Instruments & Components**

Tyco Electronics Ltd.  

 

56,061 

 

**1,844,968**

**Materials 0.4%**

 
**Chemicals 0.0%**

 
Tronox, Inc. "B"  

 

4,368 

 

**2,140**

**Metals & Mining 0.4%**

 
BHP Billiton Ltd. (ADR) (a) 

 

289,400 

 

**20,405,594**

**Telecommunication Services 1.3%**

 
**Diversified Telecommunication Services**

FairPoint Communications, Inc. (a) 

 

59,290 

 

524,717 

Verizon Communications, Inc. (a) 

 

2,019,250 

 

70,916,060 

 

**71,440,777**

**Total Common Stocks** (Cost $6,246,791,957)

 

**5,686,074,106**

 

**Securities Lending Collateral 19.3%**

 
Daily Assets Fund Institutional, 2.65% (c) (d)(Cost $1,097,532,225)

 

 

1,097,532,225

 

**1,097,532,225**

 

**Cash Equivalents 0.0%**

 
Cash Management QP Trust, 2.44% (c)(Cost $942,293)

 

 

942,293

 

**942,293**

 

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

 

**Value ($)**

**Total Investment Portfolio** (Cost $7,345,266,475) †

119.0

 

**6,784,548,624**

**Other Assets and Liabilities, Net**

(19.0)

 

**(1,081,628,519)**

**Net Assets**

100.0

 

**5,702,920,105**

*For information on the Fund's policies regarding the valuation of investments and other significant accounting policies, please refer to the Fund's most recent semi-annual or annual financial statements.*

***

*Non-income producing security.*

 

 

 

*†*

*The cost for federal income tax purposes was $7,356,601,121.  At August 31, 2008, net unrealized depreciation for all securities based on tax cost was $572,052,497.  This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $1,311,687,517 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $1,883,740,014.*

 
*(a)*

*All or a portion of these securities were on loan.  The value of all securities loaned at August 31, 2008 amounted to $1,034,564,913 which is 18.1% of net assets.*

 
*(b)*

*Affiliated issuer.  An Affiliated issuer includes any company in which the Fund has ownership of at least 5% of the outstanding voting securities.  A summary of the Fund’s transactions during the nine months ended August 31, 2008 with companies which are or were affiliates is as follows:*

 
***Affiliate*****

***Value ($) at 11/30/2007*****

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

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

***Realized Gain/Loss ($)*****

***Dividend Income ($)*****

***Shares at 8/31/2008*****

***Value ($) at 8/31/2008*****

*Borders Group, Inc.***

*43,733,709***

*-***

*2,758,544***

*(1,526,513)***

*384,549***

*3,309,600***

*23,167,200***

*(c)*

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

 
*(d)*

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

 
*ADR: American Depositary Receipt*

 
 

***Fair Value Measurements***

 

*The following is a summary of the inputs used as of August 31, 2008 in valuing the Fund's investments. Please see below for information on the Fund’s policy regarding valuation inputs, and their aggregate levels used in the table below:*

 

**Valuation Inputs**

**Investments in**

**Securities**

Level 1 

$      6,784,548,624 

Level 2 

-   

Level 3 

-   

**Total**

**$      6,784,548,624**

 

*The Fund adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, Fair Value Measurements ("FAS* *157"), effective at the beginning of the Fund’s fiscal year. FAS* *157 establishes a three-tier hierarchy to maximize the use of observable market data and minimize the use of unobservable inputs 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, credit risk, etc.).  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.*

 

**ITEM 2.**

**CONTROLS AND PROCEDURES**

 

 

 

(a)          The Chief Executive and Financial Officers concluded that the Registrant’s Disclosure Controls and Procedures are effective based on the evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report.

 

 

 

(b)          There have been no changes in the registrant’s internal control over financial reporting that occurred during the registrant’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal controls over financial reporting.

 

 

 

 

 

**ITEM 3.**

**EXHIBITS**

 

 

 

Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT.

 

 

**SIGNATURES**

 

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

 

Registrant: 

DWS Dreman High Return Equity Fund, a series of DWS Value Series, Inc.

 

By:

/s/Michael G. Clark

 

Michael G. Clark

President

 

Date:

October 22, 2008

 

 

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

 

Registrant: 

DWS Dreman High Return Equity Fund, a series of DWS Value Series, Inc.

 

By:

/s/Michael G. Clark

 

Michael G. Clark

President

 

Date:

October 22, 2008

 

 

By:

/s/Paul Schubert

 

Paul Schubert

Chief Financial Officer and Treasurer

 

Date:                                        October 22, 2008

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