UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

 

FORM            N-CSR

 

| Investment Company Act file number | 811-21340 |
|------------------------------------|-----------|

 

DWS RREEF Real Estate Fund II, Inc.

(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: | 12/31 |
|--------------------------|-------|

 

| Date of reporting period: | 12/31/08 |
|---------------------------|----------|

 

 

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

 

----

|  

DECEMBER 31,                    2008
Annual Report                    to Stockholders                                        |
|--------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                 |
|  

**DWS                    RREEF                    Real Estate Fund II, Inc.**

Ticker Symbol:                    SRO

  |
|                                                                                                                                      |

**Contents**

| **4**Performance Summary

**6**Portfolio Management Review

**13**Portfolio Summary

**15**Investment Portfolio

**18**Financial Statements

**21**Financial Highlights

**23**Notes to Financial Statements

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

**33**Tax Information

**34**Dividend Reinvestment and Cash Purchase Plan

**37**Investment Management Agreement Approval

**42**Board Members and Officers

**46**Additional Information |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Investments in funds        involve risk. The fund involves additional risk due to its narrow focus. There are special        risks associated with an investment in real estate, including credit risk, interest        rate fluctuations and the impact of varied economic conditions. Closed-end funds, unlike        open-end funds, are not continuously offered. There is a one-time public offering and once        issued, shares of closed-end funds are traded in the open market through a stock exchange.        Shares of closed-end funds frequently trade at a discount to net asset value. The price of        the fund's shares is determined by a number of factors, several of which are beyond the        control of the fund. Therefore, the fund cannot predict whether its shares will trade at,        below or above net asset value.**

This report is sent to the        stockholders ofDWSRREEF Real Estate Fund II, Inc. for their information.        It is not a prospectus, circular, or representation intended for use in the purchase        or sale of shares of the fund or of any securities mentioned in the report.

*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        SummaryDecember 31, 2008**

**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 sold, shares may be worth more or less than their        original cost. Current performance may be lower or higher than the performance data quoted.        Please visit www.dws-investments.com for the Fund's most recent month-end        performance.**

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

| **Average                    Annual Return**as of                    12/31/08 |
|-------------------------------------------------------------------------------|
|                                                                          | **1-Year** | **3-Year** | **5-Year** | **Life of                    Fund*** |
| Based on Net Asset Value(a)                                                   | -91.23% | -55.96% | -33.81% | -30.81% |
| Based on Market Value(a)                                                      | -93.45% | -58.86% | -38.59% | -36.18% |
| NAREIT Equity REIT Index(b)                                                   | -37.73% | -10.83% | .91% | 3.31% |
| Lipper Closed-End Real Estate Funds                Category(c)                | -59.23% | -26.61% | -11.76% | -8.39% |

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

| **Net Asset                    Value and Market Price** |
|---------------------------------------------------------|
|                                                    | **As of                    12/31/08** | **As of                    12/31/07** |
| Net Asset Value                                         | $                    .90 | $                    14.16 |
| Market Price                                            | $                    .66 | $                    12.90 |

*Prices and Net Asset        Value fluctuate and are not guaranteed.*

| **Distribution Information for Common                    Shareholders** |
|-------------------------------------------------------------------------|
| Twelve Months as of 12/31/08:
Income                    Dividends       | $                    .72 |
| Capital Gain                    Distributions                           | $                    1.13 |
| Return of                    Capital                                    | $                    .66 |

| **Lipper                    Rankings — Closed-End Real Estate Funds Category**as of 12/31/08 |
|--------------------------------------------------------------------------------------------------------------|
| **Period**                                                                                                   | **Rank** |   | **Number of                    Funds Tracked** | **Percentile Ranking (%)** |
| 1-Year                                                                                                       | 29 | of | 29 | 97 |
| 3-Year                                                                                                       | 22 | of | 22 | 96 |
| 5-Year                                                                                                       | 14 | of | 14 | 94 |

**Source: Lipper Inc. Rankings are historical and do not        guarantee future results. Rankings are based on net asset value total return with        distributions reinvested.**

**Portfolio Management        Review**

**DWS RREEF Real Estate Fund II,        Inc.: A Team Approach to Investing**

Deutsche Investment Management        Americas Inc. ("DIMA" or the "Investment Manager"), which is part of Deutsche Asset        Management, is the investment manager for DWS RREEF Real Estate Fund II, Inc. 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. RREEF        America, L.L.C. ("RREEF" or the "Investment Advisor"), an indirect, wholly owned subsidiary        of Deutsch Bank AG, is the investment advisor for the fund.

Deutsche Asset Management is a        global asset management organization that offers a wide range of investing expertise        and resources. 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 an international commercial and        investment banking institution that is engaged in a wide range of financial services,        including investment management, mutual funds, retail, private and commercial banking,        investment banking and insurance.

**Portfolio Management        Team**

*John F. Robertson,        CFA*

Managing Director of        Deutsche Asset Management and of RREEF and Co-Manager of the fund.

• Joined RREEF in        1997 and Deutsche Asset Management in 2002.

• Prior to that,        Assistant Vice President of Lincoln Investment Management responsible for REIT        research.

• Over 15 years of        investment industry experience.

• BA, Wabash College;        MBA, Indiana University.

*Jerry W. Ehlinger,        CFA*

Managing Director of        Deutsche Asset Management and of RREEF and Co-Manager of the fund.

• Joined RREEF and        Deutsche Asset Management in 2004.

• Prior to that,        Senior Vice President at Heitman Real Estate Investment Management from        2000-2004.

• Prior to that,        Senior Research Associate at Morgan Stanley Asset Management from 1996-2000.

• Over 10 years of        investment industry experience.

• BA, University of        Wisconsin-Whitewater, MS, University of Wisconsin-Madison.

*John        W. Vojticek*

Managing Director of        Deutsche Asset Management and of RREEF and Co-Manager of the fund.

• Joined RREEF and        Deutsche Asset Management in 2004.

• Prior to that,        Principal at KG Redding and Associates, March 2004-September 2004.

• Prior to that,        Managing Director of RREEF from 1996-March 2004, Deutsche Asset Management from 2002-March        2004.

• Over 10 years of        investment industry experience.

• BS, University of        Southern California.

*Asad        Kazim*

Director of Deutsche Asset        Management, Vice President of RREEF and Co-Manager of the fund.

• Joined RREEF and        Deutsche Asset Management in 2002 and the fund in 2005.

• Prior to that,        Financial Analyst at Clarion CRA Securities from 2000-2002.

• Over 5 years of        investment industry experience.

• BS, The College of        New Jersey.

In the following        interview, Portfolio Managers John F. Robertson, Jerry W. Ehlinger, John W. Vojticek and        Asad Kazim discuss the market environment, performance results and positioning of DWS RREEF        Real Estate Fund II, Inc. during its most recent annual period ended December 31,        2008.

*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: How did DWS RREEF        Real Estate Fund II, Inc. perform during its most recent annual period?**

**A:**After holding up reasonably well amid increasing market volatility in        the first nine months of 2008, US REITs were hit by unprecedented and intense volatility in        October and November of 2008 arising from investor fears related to the worldwide credit        crunch. For the 12-month period ended December 31, 2008, DWS RREEF Real Estate Fund        II, Inc. declined 91.23% based on net asset value (NAV). The fund's NAV return        underperformed the -37.73% return of the NAREIT Equity REIT Index.1        Based on market price, the fund posted a -93.45% return. The fund had a closing value of        $0.66 per share based on market price ($0.90 per share based on net asset value) as of        December 31, 2008. The fund underperformed its benchmark and peer group by a wide        margin mainly because of the fund's large leverage position, which badly hurt performance        when investors began selling real estate assets indiscriminately during the early part        of the fourth quarter as the worldwide credit crunch intensified. (Past performance is        no guarantee of future results. Please see pages 4 and        5 for more complete performance information.) Over the same        period, the Dow Jones Industrial Average, Standard & Poor's 500®        (S&P 500) Index and the Nasdaq Composite Index returned -33.84%, -37.00% and -40.89%,        respectively.2

**Q: What factors        influenced the performance of REITs during the period?**

**A:**In the first half of 2008, volatility within the real estate        securities market (and financial markets in general) was severe at times, but REITs        nevertheless recorded several of their largest-ever single-day gains, as real estate        investors responded positively to actions taken by the US Federal Reserve Board        (the Fed) to restore liquidity to the markets and bolster the faltering US economy.        However, in May and June of 2008, higher commodity and food prices began to take their        toll on US consumer spending, and the retail REIT sector was hit especially hard. In        the third quarter, as concern about a possible economic recession pulled down commodity        prices and eased inflation concerns, REITs significantly outperformed the broader stock        market.

In October 2008, the outperformance        of the REIT sector ended abruptly. Volatility had been on the rise for the real estate        securities market throughout the year, but at the start of the fourth quarter it suddenly        skyrocketed. Investors had been worrying for some time about how much more expensive it        would be for REIT companies to roll over debt that was coming due in the next 12 to 18        months. However, in October and November of 2008, with more and more bad news arising        regarding failing US financial firms and a general drying up of liquidity and credit        nationwide, concern over whether it would even be possible for US REITs to refinance        short-term debt sparked massive declines in REIT prices. Other factors that contributed to        REIT market volatility during the fourth quarter included large hedge fund transactions and        forced selling by closed-end funds. In December 2008, the REIT market rebounded slightly        from recent lows as investors regained some certainty in light of the completion of the        presidential election, and an increase in the number of commercial real estate        transactions.

**Q:        What contributed to and detracted from the fund's performance over the        period?**

**A:**During the annual period ended December 31, 2008, and especially        during the fourth quarter of 2008, the portfolio was severely impacted by the extreme        negative tone of the market as investors began to punish the many REITs that would be        required to refinance debt over the next two years. Leveraged investment vehicles of almost        any type were hit hard during 2008. This held true for closed-end real estate funds,        exacerbating the concerns already surrounding the underlying real estate securities. Also,        dividend cuts by REIT firms, although in many cases simply a way for companies        to retain cash in this difficult credit environment, were viewed negatively by many        investors.

In a declining market, the        self-storage sector performed better than other sectors. Consequently, the fund's        performance versus the benchmark was hurt by not holding the common stock of Public        Storage, Inc. during the period. In addition, the fund's overweight position in Duke Realty        Corp.* subtracted from returns as the company's shares declined based on a weak balance        sheet.3 The fund's direct investment in the resort firm, Canyon Ranch, was also        a significant detractor as the market for direct real estate investment dried up during the        year due to the credit crunch. One small positive in a very difficult environment was the        fund's avoidance of ProLogis, a well-known REIT firm in the industrial sector. ProLogis was        badly hurt by the darkening global economic outlook, short-term debt coming due and        investor perception that its development pipeline had lost value. The fund's positions in        several health care REITs contributed to performance relative to the benchmark as investors        viewed the sector as defensive.

Most significantly, the fund's        performance was negatively affected by the leverage position it maintained throughout the        year. As of December 31, 2008, the fund's outstanding leverage, in the form of        auction-rate preferred shares, represented approximately 39.7% of the fund's total assets.        Over time and in up markets, leverage will benefit the yield and total return of a        portfolio. Of course, the opposite is true in down markets. The calendar year 2008 was        the worst performance year in the history of the REIT asset class. As expected, the        fund's leverage position exacerbated this poor performance. The fund's underperformance        versus its benchmark was due mainly to the fund being significantly leveraged during a        drastically negative market. (In contrast, the benchmark is not leveraged.) Similarly,        the fund's underperformance relative to its peer group was principally due to the fund        being more highly leveraged than other similar funds during 2008. The fund's leverage, as a        percentage of total assets, increased as REIT prices plunged in the early part of the        fourth quarter. In addition, to meet various asset coverage requirements, we began        redeeming preferred shares and reducing the fund's leverage in late November 2008, which        also detracted from potential upside when the market rallied late in the year. The extreme        volatility during 2008, particularly in the fourth quarter, caused additional stress        on fund performance.

Lastly, the        extreme downward volatility in the REIT market during the fourth quarter caused the fund to        sell portfolio assets at an inopportune time in order to meet various leverage asset        coverage requirements.

**Q: Describe the        performance of the various REIT sectors.**

**A:**Among REIT sectors, industrial stocks were the worst- performing        sector by a wide margin, hurt badly by the significant economic slowdown that emerged over        the course of last year. Prices of industrial REITs were propped up in the first half of        2008 because investors believed that some industrial companies' international development        pipelines would boost revenue. However, as the credit crunch hit home in the fourth        quarter, investors began to discount these development pipelines, and to judge harshly the        industrial REITs that would need to roll over debt in the midst of a worldwide shortage of        credit. Hotels as a sector also posted negative returns for the year, based on worries that        a faltering US economy would negatively affect vacation-related and business travel.        Regional malls also disappointed, as second-tier malls faced steeply declining sales and in        some cases an inability to roll over debt.

In contrast, the        self-storage and apartment sectors performed reasonably well. Self-storage has profited        from homeowner dislocations stemming from the home loan/mortgage crisis. The Federal        National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation        (Freddie Mac), despite their well-publicized troubles, have been providing loans and        other forms of liquidity to the apartment sector with the rest of the debt market        largely frozen, though there are concerns about the availability of this liquidity going        forward.

**Q: What is your view        concerning the prospects for the REIT market going forward?**

**A:**We believe that volatility in the REIT market will persist well into        2009. If and when private real estate market write-downs come to the attention of        investors, additional volatility could ensue. Though some REITs have shown an ability to        refinance debt coming due, rolling over debt will continue to be expensive to nearly        impossible for some companies because so many fewer financing options exist. Dividend cuts        by REIT firms could also prompt additional volatility, though such actions may be prudent        in the long run if they help to shore up balance sheets.

A major uncertainty for the REIT        market over the coming year — as well as for investment markets in general — is        the question of when credit flows will normalize. We have seen some signs of an increase in        lending, but nowhere near what is required for normal business operations. Many REITs are        attractively priced at present, but not all of them have the wherewithal (in terms of        holding high-quality assets, and possessing a healthy balance sheet, able management and        sufficient access to credit) to succeed in such a tremendously difficult economic        environment. Over the coming months we will continue to search for high-quality REITs with        experienced management teams that we believe are well positioned to succeed over the        long term.

**Portfolio        Summary**

| **Asset                    Allocation**(As a % of Investment                    Portfolio excluding Securities Lending Collateral) | **12/31/08** | **12/31/07** |
|------------------------------------------------------------------------------------------------------------------------------------|--------------|--------------|
|                                                                                                                               |         |         |
| Preferred                    Stocks                                                                                                | 52%          | 13%          |
| Common                    Stocks                                                                                                   | 38%          | 84%          |
| Cash                    Equivalents                                                                                                | 10%          | 3%           |
|                                                                                                                               | 100%         | 100%         |

| **Sector                    Diversification**(As a % of Common and Preferred Stocks) | **12/31/08** | **12/31/07** |
|-------------------------------------------------------------------------------------------------------------------------|--------------|--------------|
|                                                                                                                    |         |         |
| Hotels                                                                                                                  | 24%          | 17%          |
| Health                    Care                                                                                          | 20%          | 8%           |
| Office                                                                                                                  | 19%          | 17%          |
| Shopping                    Centers                                                                                     | 12%          | 11%          |
| Diversified                                                                                                             | 10%          | 7%           |
| Apartments                                                                                                              | 8%           | 12%          |
| Industrials                                                                                                             | 3%           | 6%           |
| Regional                    Malls                                                                                       | 2%           | 16%          |
| Storage                                                                                                                 | 2%           | 4%           |
| Specialty                    Services                                                                                   | —      | 2%           |
|                                                                                                                    | 100%         | 100%         |

*Asset allocation and        sector diversification are subject to change.*

| **Ten Largest                    Equity Holdings at December 31, 2008**(140.6% of Net Assets applicable                    to common shareholders) |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **1. SL Green Realty Corp.**Acquires, owns, repositions and manages office                properties in Manhattan                                                      | **24.1%** |
| **2. Sunstone Hotel Investors, Inc.**Lodging real estate investment trust                                                                                              | **23.6%** |
| **3. Cogdell Spencer, Inc.**Owner of specialty office properties for the                medical profession                                                             | **20.2%** |
| **4. LTC Properties, Inc.**Investor in health care through mortgage                origination and acqusition of properties                                       | **14.5%** |
| **5. Associated Estates Realty Corp.**Operates as a self-administrated and self-managed                real estate investment trust                               | **13.2%** |
| **6. Cedar Shopping Centers, Inc.**Manager of shopping centers                                                                                                         | **12.2%** |
| **7. Hatteras Financial Corp.**A mortgage real estate investment trust                                                                                                 | **10.0%** |
| **8. Host Hotels & Resorts, Inc.**Owns and holds controlling interest in full-service                hotels                                                        | **8.1%** |
| **9. Digital Realty Trust, Inc.**Owns, acquires, repositions and manages                technology-related real estate                                                 | **7.4%** |
| **10. Capstead Mortgage Corp.**An investor in real estate related                assets                                                                                | **7.3%** |

*Portfolio holdings are subject to change.*

*For more complete        details about the Fund's investment portfolio, see page 15. 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 Additional        Information 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. The 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 December 31, 2008**

(Ratios are shown as a        percentage of Net Assets)

|                                                                         | **Shares**     | **Value                    ($)** |
|------------------------------------------------------------------------------|----------------|----------------------------------|
|                                                                         |           |
| **Common Stocks                    87.0%**                                   |
| **Real Estate                    Investment Trusts ("REITs") 87.0%**         |
| **Apartments                    1.9%**                                       |
| Camden                    Property Trust                                     | 20,997         | **658,046**                      |
| **Diversified                    17.4%**                                     |
| Capstead                    Mortgage Corp.                                   | 231,700        | 2,495,409                        |
| Hatteras                    Financial Corp. 144A                             | 128,650        | 3,422,090                        |
|                                                                         | **5,917,499**  |
| **Health Care                    26.2%**                                     |
| Cogdell                    Spencer, Inc.                                     | 735,732        | 6,886,452                        |
| Senior Housing                    Properties Trust                           | 113,982        | 2,042,557                        |
|                                                                         | **8,929,009**  |
| **Hotels                    12.5%**                                          |
| Canyon Ranch                    Holdings LLC (Units) (a)                     | 864,000        | 1,814,400                        |
| Hospitality                    Properties Trust                              | 165,250        | 2,457,267                        |
|                                                                         | **4,271,667**  |
| **Industrials                    6.2%**                                      |
| DCT Industrial                    Trust, Inc.                                | 421,350        | **2,132,031**                    |
| **Office                    7.3%**                                           |
| HRPT                    Properties Trust                                     | 739,254        | **2,491,286**                    |
| **Regional                    Malls 4.3%**                                   |
| CBL &                    Associates Properties, Inc.                     | 223,377        | **1,451,951**                    |
| **Shopping                    Centers 7.6%**                                 |
| Inland Real                    Estate Corp.                                  | 102,800        | 1,334,344                        |
| Ramco-Gershenson Properties Trust                                            | 202,300        | 1,250,214                        |
|                                                                         | **2,584,558**  |
| **Storage                    3.6%**                                          |
| Extra Space                    Storage, Inc.                                 | 118,679        | **1,224,767**                    |
| **Total                    Common Stocks** (Cost $64,099,308)                | **29,660,814** |
|                                                                         |
| **Preferred Stocks                    120.7%**                               |
| **Real Estate                    Investment Trusts 120.7%**                  |
| **Apartments                    15.4%**                                      |
| Apartment                    Investment & Management Co., 8.0%, Series T | 53,200         | 747,460                          |
| Associated                    Estates Realty Corp., 8.7%, Series II          | 276,250        | 4,516,687                        |
|                                                                         | **5,264,147**  |
| **Diversified                    3.1%**                                      |
| NorthStar                    Realty Finance Corp., 8.25%, Series B           | 125,100        | **1,042,083**                    |
| **Health Care                    14.5%**                                     |
| LTC                    Properties, Inc., 8.0%, Series F                      | 235,350        | **4,942,350**                    |
| **Hotels                    38.1%**                                          |
| Eagle                    Hospitality Properties Trust, Inc., 8.25%, Series A | 348,200        | 34,820                           |
| FelCor Lodging                    Trust, Inc., 8.0%, Series C                | 43,100         | 280,150                          |
| Host Hotels                    & Resorts, Inc., 8.875%, Series E         | 159,700        | 2,746,840                        |
| Strategic                    Hotels & Resorts, Inc., 8.5%, Series A      | 317,900        | 1,366,970                        |
| Strategic                    Hotels & Resorts, Inc., 8.25%, Series B     | 106,950        | 465,233                          |
| Sunstone Hotel                    Investors, Inc., 8.0%, Series A            | 625,550        | 8,038,317                        |
| W2007 Grace                    Acquisition I, Inc., 9.0 %, Series C          | 379,800        | 37,980                           |
|                                                                         | **12,970,310** |
| **Office                    31.5%**                                          |
| Digital Realty                    Trust, Inc., 8.5%, Series A                | 157,500        | 2,529,844                        |
| SL Green                    Realty Corp., 7.625%, Series C                   | 558,800        | 8,208,772                        |
|                                                                         | **10,738,616** |
| **Shopping                    Centers 18.1%**                                |
| Cedar Shopping                    Centers, Inc., 8.875%, Series A            | 298,800        | 4,147,344                        |
| Saul Centers,                    Inc., 9.0%, Series B                        | 156,900        | 2,039,700                        |
|                                                                         | **6,187,044**  |
| **Total                    Preferred Stocks** (Cost $92,016,910)             | **41,144,550** |
|                                                                         |
| **Cash Equivalents                    22.8%**                                |
| Cash                    Management QP Trust, 1.42% (b) (Cost $7,757,335)     | 7,757,335      | **7,757,335**                    |

|                                                                        | **% of Net                    Assets** | **Value                    ($)** |
|-----------------------------------------------------------------------------|----------------------------------------|----------------------------------|
|                                                                        |                                   |
| **Total                    Investment Portfolio** (Cost $163,873,553)+ | 230.5                                  | **78,562,699**                   |
| **Other                    Assets and Liabilities, Net**                    | (33.7)                                 | **(11,477,450)**                 |
| **Preferred                    Stock, at Liquidation Value**                | (96.8)                                 | **(33,000,000)**                 |
| **Net Assets                    applicable to Common Shareholders**         | 100.0                                  | **34,085,249**                   |

| **Schedule of                    Restricted Securities** | **Acquisition Date**            | **Acquisition Cost ($)** | **Value                    ($)** | **Value as                    % of Net Assets** |
|---------------------------------------------------------------|---------------------------------|--------------------------|----------------------------------|-------------------------------------------------|
| Canyon Ranch Holdings LLC                                     | January                    2005 | 21,600,000               | 1,814,400                        | 5.3                                             |

*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.*

*At December 31, 2008,        open interest rate swap contracts were as follows:*

| **Effective/                    Expiration Dates** | **Notional                    Amount ($)** | **Cash                    Flows Paid by the Fund** | **Cash                    Flows Received by the Fund** | **Unrealized Depreciation ($)** |
|----------------------------------------------------|-------------------------------------------------|----------------------------------------------------|--------------------------------------------------------|---------------------------------|
| 1/29/2008                    1/29/2018             | 87,500,0001                                     | Fixed                    — 4.275%            | USD —                    Floating LIBOR BBA      | **(12,929,062)**                |
| Counterparties:1*UBS Securities LLC*               |

*BBA: British Bankers'        Association*

*LIBOR: Represents the        London InterBank Offered Rate*

***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 December 31, 2008 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**       | **Other                    Financial Instruments++** |
|-----------------------------------------|-------------------------------------|------------------------------------------------------|
| Level 1                                 | $                    65,496,074     | $                    —                         |
| Level 2                                 | 11,179,425                          | (12,929,062)                                         |
| Level 3                                 | 1,887,200                           | —                                              |
| **Total**                               | **$                    78,562,699** | **$                    (12,929,062)**                |

*The following is a        reconciliation of the Fund's Level 3 investments for which significant unobservable inputs        were used in determining value at December 31, 2008:*

|                                                            | **Investments in Securities**      |
|-----------------------------------------------------------------|------------------------------------|
| **Balance as                    of January 1, 2008**            | $                    38,575,756    |
| Total realized gain (loss)                                      | (2,064,616)                        |
| Change in unrealized appreciation                (depreciation) | (27,752,221)                       |
| Net purchases (sales)                                           | (3,449,629)                        |
| Net transfers in (out) of Level 3                               | (3,422,090)                        |
| **Balance as                    of December 31, 2008**          | **$                    1,887,200** |

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

**Financial        Statements**

| **Statement                    of Assets and Liabilities**as of                    December 31, 2008                                                                                                              |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Assets**                                                                                                                                                                                                        |
| Investments:
Investments in                    securities, at value (cost $156,116,218)                                                                                                                      | $                    70,805,364 |
| Investment in                    Cash Management QP Trust (cost $7,757,335)                                                                                                                                  | 7,757,335 |
| Total investments, at value                (cost $163,873,553)                                                                                                                                               | 78,562,699 |
| Receivable for investments sold                                                                                                                                                                                   | 2,636,967 |
| Dividends receivable                                                                                                                                                                                              | 1,490,746 |
| Interest receivable                                                                                                                                                                                               | 62,669 |
| Prepaid credit facility arrangement fee                                                                                                                                                                           | 300,981 |
| Other assets                                                                                                                                                                                                      | 25,916 |
| Total assets                                                                                                                                                                                                      | 83,079,978 |
| **Liabilities**                                                                                                                                                                                                   |
| Cash overdraft                                                                                                                                                                                                    | 2,636,796 |
| Unrealized depreciation on swap                contracts                                                                                                                                                          | 12,929,062 |
| Distributions payable                                                                                                                                                                                             | 8,486 |
| Accrued investment management fee                                                                                                                                                                                 | 61,896 |
| Other accrued expenses and payables                                                                                                                                                                               | 358,489 |
| Total liabilities                                                                                                                                                                                                 | 15,994,729 |
| Preferred Shares ($25,000 net asset and liquidation                value per share applicable to an aggregate of 1,320 shares issued and                outstanding)                                              | 33,000,000 |
| **Net assets                    applicable to common shareholders, at value**                                                                                                                                     | **$                    34,085,249** |
| **Net Assets                    Applicable to Common Shareholders Consist of**                                                                                                                                    |
| Undistributed net investment income                                                                                                                                                                               | 518,156 |
| Net unrealized appreciation (depreciation)                    on:
Investments                                                                                                                                     | (85,310,854) |
| Interest rate                    swap contracts                                                                                                                                                                   | (12,929,062) |
| Accumulated net realized gain (loss)                                                                                                                                                                              | (373,931,331) |
| Cost of 1,484,532 shares held in                treasury                                                                                                                                                          | (25,844,311) |
| Paid-in capital                                                                                                                                                                                                   | 531,582,651 |
| **Net assets                    applicable to common shareholders, at value**                                                                                                                                     | **$                    34,085,249** |
| **Net Asset                    Value**                                                                                                                                                                            |
| **Net Asset Value** per common share                ($34,085,249 ÷ 37,904,857 shares of common stock outstanding,                $.01 par value, 240,000,000 common shares authorized) | **$                    0.90** |

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

| **Statement                    of Operations**for the year ended                    December 31, 2008                    |
|--------------------------------------------------------------------------------------------------------------------------|
| **Investment                    Income**                                                                                 |
| Dividends                                                                                                                | $                    39,538,362 |
| Interest                                                                                                                 | 45,432 |
| Interest — Cash Management                QP Trust                                                            | 590,155 |
| Securities lending income, including income from                Daily Assets Fund Institutional, net of borrower rebates | 779,177 |
| Total Income                                                                                                             | 40,953,126 |
| Expenses:Management fee                                                                                                  | 6,195,044 |
| Administration fee                                                                                                       | 27,419 |
| Services to shareholders                                                                                                 | 17,098 |
| Custodian and accounting fees                                                                                            | 109,431 |
| Professional fees                                                                                                        | 194,211 |
| Directors' fees and expenses                                                                                             | 16,994 |
| Reports to shareholders                                                                                                  | 163,529 |
| Stock exchange listing fee                                                                                               | 14,742 |
| Auction service fee                                                                                                      | 735,260 |
| Interest                                                                                                                 | 312,331 |
| Other                                                                                                                    | 52,949 |
| Total expenses before expense reductions                                                                                 | 7,839,008 |
| Expense reductions                                                                                                       | (1,753,097) |
| Total expenses after expense reductions                                                                                  | 6,085,911 |
| **Net                    investment income**                                                                             | **34,867,215** |
| **Realized                    and Unrealized Gain (Loss)**                                                               |
| Net realized gain (loss) from:Investments                                                                                | (361,900,974) |
| Interest rate swap contracts                                                                                             | (26,604,055) |
| Capital gains dividends received                                                                                         | 11,389,172 |
| Foreign currency                                                                                                         | (45) |
| * *                                                                                                                 | (377,115,902) |
| Changes in net unrealized appreciation                (depreciation):Investments                                         | (37,739,234) |
| Interest rate swap contracts                                                                                             | (13,074,721) |
| * *                                                                                                                 | (50,813,955) |
| Net gain (loss)                                                                                                          | (427,929,857) |
| Net increase (decrease) in net assets resulting                from operations                                           | (393,062,642) |
| Distributions to Preferred Shareholders                                                                                  | (14,646,994) |
| **Net                    increase (decrease) in net assets, applicable to common                    shareholders**       | **$                    (407,709,636)** |

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

| **Statement                    of Changes in Net Assets**                                                                                                                            |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                 | **Years                    Ended December 31,** |
| **Increase                    (Decrease) in Net Assets**                                                                                                                             | **2008** | **2007** |
| Operations:Net investment income                                                                                                                                                     | $                    34,867,215 | $                    34,558,029 |
| Net realized gain (loss)                                                                                                                                                             | (377,115,902) | 85,167,658 |
| Change in net unrealized appreciation                (depreciation)                                                                                                                  | (50,813,955) | (351,278,664) |
| Net increase (decrease) in net assets resulting                from operations                                                                                                       | (393,062,642) | (231,552,977) |
| Distributions to Preferred Shareholders                                                                                                                                              | (14,646,994) | (18,746,939) |
| **Net                    increase (decrease) in net assets, applicable to common                    shareholders**                                                                   | (407,709,636) | (250,299,916) |
| Distributions to common shareholders                from:Net investment income                                                                                                       | (27,189,410) | (55,669,425) |
| Net realized gains                                                                                                                                                                   | (42,784,235) | (9,097,166) |
| Return of capital                                                                                                                                                                    | (25,091,735) | — |
| Total distributions to common                shareholders                                                                                                                            | (95,065,380) | (64,766,591) |
| Fund share transactions:Cost of shares repurchased                                                                                                                                   | — | (11,241,298) |
| Net increase (decrease) in net assets from Fund                share transactions                                                                                                    | — | (11,241,298) |
| **Increase                    (decrease) in net assets**                                                                                                                             | (502,775,016) | (326,307,805) |
| Net assets at beginning of period applicable to                common shareholders                                                                                                   | 536,860,265 | 863,168,070 |
| Net assets at end of period applicable to common                shareholders (including undistributed net investment income of $518,156 and                $1,361,476, respectively) | **$                    34,085,249** | **$                    536,860,265** |
| **Other                    Information**                                                                                                                                             |
| Common shares outstanding at beginning of                period                                                                                                                      | 37,904,857 | 38,502,967 |
| Shares repurchased                                                                                                                                                                   | — | (598,110) |
| Common shares outstanding at end of                period                                                                                                                            | 37,904,857 | 37,904,857 |

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

**Financial        Highlights**

| **Years Ended                    December 31,**                                                                                             | **2008**                       | **2007**                       | **2006**                       | **2005**                       | **2004**                       |
|---------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------|--------------------------------|--------------------------------|--------------------------------|--------------------------------|
| **Selected                    Per Share Data Applicable to Common Shareholders**                                                            |
| **Net asset                    value, beginning of period**                                                                                 | **$                    14.16** | **$                    22.42** | **$                    18.39** | **$                    19.31** | **$                    15.45** |
| *Income                    (loss) from investment operations:*

Net investment                    incomea                                   | .92                            | .90                            | .92                            | .81                            | .77                            |
| Net realized                    and unrealized gain (loss)                                                                                  | (11.28)                        | (7.00)                         | 6.02                           | .71                            | 4.59                           |
| **Total from                    investment operations**                                                                                     | (10.36)                        | (6.10)                         | 6.94                           | 1.52                           | 5.36                           |
| Distributions                    to Preferred Shareholders (common share equivalent)                                                        | (.39)                          | (.49)                          | (.44)                          | (.29)                          | (.14)                          |
| **Net                    increase (decrease) in net assets resulting from operations applicable to                    common shareholders** | (10.75)                        | (6.59)                         | 6.50                           | 1.23                           | 5.22                           |
| *Less                    distributions from:*

Net investment                    income                                                     | (.72)                          | (1.46)                         | (1.26)                         | (.71)                          | (1.20)                         |
| Net realized                    gains                                                                                                       | (1.13)                         | (.24)                          | (1.23)                         | (1.49)                         | (.16)                          |
| Return of                    capital                                                                                                        | (.66)                          | —                        | —                        | —                        | —                        |
| **Total                    distributions to common shareholders**                                                                           | (2.51)                         | (1.70)                         | (2.49)                         | (2.20)                         | (1.36)                         |
| NAV accretion resulting from repurchases of shares                at valuea                                                                 | —                        | .03                            | .02                            | .05                            | —                        |
| **Net asset                    value, end of period**                                                                                       | **$                    .90**   | **$                    14.16** | **$                    22.42** | **$                    18.39** | **$                    19.31** |
| **Market                    price, end of period**                                                                                          | **$                    .66**   | **$                    12.90** | **$                    19.32** | **$                    15.35** | **$                    16.84** |
| **Total                    Return**                                                                                                         |
| Based on net asset                value (%)b,c                                                                                         | (91.23)                        | (29.88)                        | 39.01                          | 8.84                           | 36.66                          |
| Based on market price                 (%)b,c                                                                                           | (93.45)                        | (25.87)                        | 43.51                          | 4.17                           | 20.35                          |

| **Years Ended                    December 31,**(continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | **2008** | **2007** | **2006** | **2005** | **2004** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|----------|----------|----------|----------|
| **Ratios to                    Average Net Assets and Supplemental Data**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Common share information at                period end:Net assets, end of period                ($ millions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 34       | 537      | 863      | 714      | 761      |
| Ratios based on net assets of                    common shares:
Expenses                    before expense reductions (%)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 1.90     | 1.43     | 1.41     | 1.45     | 1.54     |
| Expenses after                    expense reductions (%)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 1.48     | 1.07     | 1.05     | 1.08     | 1.16     |
| Net investment                    income (%)d                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 8.47     | 4.47     | 4.47     | 4.29     | 4.68     |
| Common and Preferred Share information at                    period end:Ratios based on net assets of common and                    Preferred Shares:
Expenses                    before expense reductions (%)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 1.08     | .99      | .98      | .98      | 1.00     |
| Expenses after                    expense reductions (%)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | .84      | .74      | .73      | .73      | .75      |
| Net investment                    income (%)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 4.78     | 3.07     | 3.10     | 2.91     | 3.03     |
| Portfolio turnover rate (%)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 37       | 30       | 19       | 21       | 43       |
| Preferred Share information at                    period end:
Aggregate                    amount outstanding ($ millions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 33       | 350      | 350      | 350      | 350      |
| Asset coverage                    per share ($)*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 50,822   | 63,347   | 86,655   | 75,972   | 79,324   |
| Liquidation                    value per share ($)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 25,000   | 25,000   | 25,000   | 25,000   | 25,000   |
| a*Based on average common shares outstanding                during the period.*b*Total return would have been lower had certain                expenses not been reduced.*c*Total return based on net asset value reflects                changes in the Fund's net asset value during the period. Total return based on                market value reflects changes in market value. Each figure includes reinvestments                of distributions. These figures will differ depending upon the level of any                discount from or premium to net asset value at which the Fund's shares trade during                the period.*d*Net investment income ratios for the years ended                December 31, 2008, 2007, 2006, 2005 and 2004 do not reflect distributions to                Preferred Shareholders. Ratios reflecting such payments are 4.91%, 2.05%, 2.34%,                2.74% and 3.85%, respectively.***Asset coverage per share equals net assets of                common shares plus the liquidation value of the Preferred Shares divided by the                total number of Preferred Shares outstanding at the end of the period.* |

**Notes to Financial        Statements**

**A. Significant Accounting        Policies**

DWS RREEF Real Estate Fund II, Inc.        (the ``Fund'') is registered under the Investment Company Act of 1940, as amended (the        ``1940 Act''), as a closed-end, diversified management investment company organized as a        Maryland corporation. The Fund is authorized to issue 250,000,000 shares, of which        240,000,000 shares are classified as Common Shares, $0.01 par value per share, and        10,000,000 shares are classified as Preferred Shares, $.01 par value per share.

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.

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        Directors.

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 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.

**Swap Agreements.** The Fund may enter        into interest rate swap transactions to reduce the interest rate risk inherent in the        Fund's underlying investments and issued preferred shares. The use of interest rate swaps        is a highly specialized activity that involves investment techniques and risks different        from those associated with ordinary portfolio security transactions. In an interest rate        swap, the Fund agrees to pay to the other party to the interest rate swap (which is known        as the "counterparty") a fixed rate payment in exchange for the counterparty agreeing to        pay to the Fund a variable rate payment, or the Fund agrees to receive from the        counterparty a fixed rate payment in exchange for the counterparty agreeing to receive from        the Fund a variable rate payment, the accruals for which would begin at a specified date in        the future (the "effective date").The payment obligations are based on the notional amount        of the swap. Certain risks may arise when entering into swap transactions including        counterparty default, liquidity or unfavorable changes in interest rates. The Fund        generally intends, but is not obligated, to terminate its interest rate swaps before the        effective date. Payments received or made at the end of the measurement period when the        swap is terminated are recorded as realized gain or loss in the Statement of Operations.        The value of the swap is adjusted daily based upon a price supplied by a board approved        pricing vendor and the change in value is recorded as unrealized appreciation or        depreciation.

**Repurchase        Agreements.** The Fund may enter into repurchase agreements with certain banks and        broker/dealers whereby the Fund, through its custodian or sub-custodian bank, receives        delivery of the underlying securities, the amount of which at the time of purchase and each        subsequent business day is required to be maintained at such a level that the value is        equal to at least the principal amount of the repurchase price plus accrued interest. The        custodian bank holds the collateral in a separate account until the agreement matures. If        the value of the securities falls below the principal amount of the repurchase agreement        plus accrued interest, the financial institution deposits additional collateral by the        following business day. If the financial institution either fails to deposit the required        additional collateral or fails to repurchase the securities as agreed, the Fund has the        right to sell the securities and recover any resulting loss from the financial institution.        If the financial institution enters into bankruptcy, the Fund's claims on the collateral        may be subject to legal proceedings.

**Securities        Lending.** 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.

**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 December 31, 2008, the Fund had a        net tax basis capital loss carryforward of approximately $197,783,000, which may be applied        against any realized net taxable capital gains of each succeeding year until fully utilized        or until December 31, 2016, the expiration date, whichever occurs first.

In addition, from November 1, 2008        through December 31, 2008, the Fund incurred approximately $172,675,000 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 year ending December 31,        2009.

The Fund has reviewed the tax        positions for the open tax years as of December 31, 2008 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 years remain subject to examination by the Internal Revenue        Service.

**Distribution of        Income and Gains.** Distributions from net investment income of the Fund are        usually declared and distributed to shareholders quarterly. 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 gains        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 certain securities sold at a loss. As a result, net        investment income 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.

The Fund had a        level distribution during the year. The Fund estimates that at times it will distribute        more than its income, therefore, a portion of the distributions may be a return of        capital.

At December 31, 2008, the Fund's        components of distributable earnings (accumulated losses) on a tax basis were as        follows:

| Capital loss carryforwards                                           | $                    (197,783,000) |
|----------------------------------------------------------------------|------------------------------------|
| Unrealized appreciation (depreciation) on                investments | $                    (88,784,557)  |

In addition, the tax character of        distributions paid to common and Preferred Shareholders by the Fund is summarized as        follows:

|                                                                  | **Years                    Ended December 31,** |
|-----------------------------------------------------------------------|-------------------------------------------------|
|                                                                  | **2008**                                        | **2007** |
| Distributions from ordinary income*                (common)           | $                    27,189,410                 | $                    40,642,719 |
| Distributions from ordinary income*                (Preferred)        | $                    5,691,330                  | $                    11,764,191 |
| Distributions from long-term capital gains                (common)    | $                    42,784,235                 | $                    24,123,872 |
| Distributions from long-term capital gains                (Preferred) | $                    8,955,664                  | $                    6,982,748 |
| Distributions from return on capital                (common)          | $                    25,091,735                 | $                    — |

**Preferred        Shares.** As of December 31, 2008, the Fund had 264 shares of Series A, 264 shares        of Series B, 264 shares of Series C, 264 shares of Series D and 264 shares of Series E        preferred shares ("Preferred Shares") outstanding, each at a liquidation value of $25,000        per share. During the year ended December 31, 2008, the Fund redeemed a total of 12,680        Preferred Shares (2,536 shares of each of Series A, B, C, D and E Preferred Shares) at        their liquidation preference of $25,000 per share, aggregating to $317,000,000 in order to        ensure compliance with the Fund's asset coverage requirements. The Fund redeemed the        Preferred Shares with the proceeds from sales of portfolio assets, resulting in a reduction        of the Fund's overall leverage. Common shareholders may experience capital gains, and the        Fund may have incurred brokerage expenses as the result of such sales.

The Preferred Shares are senior to,        and have certain class-specific preferences over, the Fund's common shares. The dividend        rate on each series of Preferred Shares is set through a "Dutch" auction process, and the        dividends are generally paid every seven days. In the auction process, holders of the        Preferred Shares indicate the dividend rate at which they would be willing to hold or sell        their Preferred Shares. An auction fails if there are more Preferred Shares offered for        sale than there are buyers. If an auction fails, the Preferred Shares' dividend rate        adjusts to a "maximum rate," which, based on current Preferred Share ratings (AAA as of        December 31, 2008), is the greater of (i) 125% of the applicable AA Composite Commercial        Paper Rate and (ii) 2.5% plus the applicable AA Composite Commercial Paper Rate. In        addition, existing Preferred Shareholders that submit sell orders in a failed auction may        not be able to sell any or all of the shares for which they have submitted sell orders.        Preferred Shareholders may sell their shares at the next scheduled auction, subject to the        same risk that the subsequent auction will not attract sufficient demand for a successful        auction to occur. Broker-dealers may also try to facilitate secondary trading in the        Preferred Shares, although such secondary trading may be limited and may only be available        for shareholders willing to sell at a discount.

During the year        ended December 31, 2008, the dividend rates ranged from 2.600% to 5.650% for Series A,        2.590% to 5.650% for Series B, 2.600% to 5.700% for Series C, 2.570% to 5.650% for Series D        and 2.550% to 5.600% for Series E. The 1940 Act requires that the Preferred Shareholders of        the Fund, voting as a separate class, have the right to: a) elect at least two directors at        all times, and b) elect a majority of the directors at any time when dividends on the        Preferred Shares are unpaid for two full years. Unless otherwise required by law or under        the terms of the Fund's Articles Supplementary, each preferred share is entitled to one        vote and Preferred Shareholders will vote together with common shareholders as a single        class and have the same voting rights. Dividends on the Preferred Shares are cumulative.        The Fund is subject to certain limitations and restrictions while the Preferred Shares are        outstanding. Under its Articles Supplementary, the Fund is required to maintain asset        coverage of at least 200% with respect to the Preferred Shares as of the last business day        of each month in which any Preferred Shares are outstanding.

Since February 2008, the Fund, like        many other closed-end funds throughout the industry, has experienced failed auctions on its        auction rate Preferred Shares. Auctions have failed because there were not enough bids to        cover the shares for sale, indicating a lack of liquidity in the market. While repeated        auction fails have affected the liquidity for the auction rate Preferred Shares, a failed        auction does not represent a default or loss of capital of the Fund's auction rate        Preferred Shares and the auction rate Preferred Shareholders have continued to receive        dividends at the previously defined "maximum rate". As of December 31, 2008, the Preferred        Shares of the Fund continue to be triple-A rated by its respective rating agencies.        Prolonged auction failures may increase the cost of leverage to the Fund.

**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.

**Real Estate        Investment Trusts.** The Fund recharacterizes distributions received from a Real        Estate Investment Trust ("REIT") investment based on information provided by the REIT into        the following categories: ordinary income, long-term and short-term capital gains, and        return of capital. If information is not available timely from a REIT, the        recharacterization will be estimated and a recharacterization will be made in the following        year when such information becomes available. Distributions received from REITs in excess        of income are recorded as either a reduction of cost of investments or realized gains. The        Fund distinguishes between dividends on a tax basis and a financial reporting basis and        only distributions in excess of tax basis earnings and profits are reported in the        financial statements as a return of capital for tax reporting purposes.

**Other.** Investment transactions are        accounted for on the 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 net of foreign withholding taxes. Realized gains and        losses from investment transactions are recorded on an identified cost basis.

**B. Purchases and Sales of        Securities**

During the year ended December 31,        2008, purchases and sales of investment securities (excluding short-term investments)        aggregated $277,978,888 and $647,336,066, respectively.

**C. Related Parties**

**Management        Agreement.** Under the Investment Management Agreement with Deutsche Investment        Management Americas Inc. ("DIMA" or the "Investment Manager"), an indirect, wholly owned        subsidiary of Deutsche Bank AG, the Investment Manager is responsible for managing the        Fund's affairs and supervising all aspects of the Fund's operations, subject at all times        to the general supervision of the Fund's Board of Directors (the "Board").

Pursuant to the Investment        Management Agreement, the Investment Manager has delegated the day to day management of the        Fund's investment portfolio to RREEF America, L.L.C. (the "Investment Advisor"), also an        indirect, wholly owned subsidiary of Deutsche Bank AG and an affiliate of DB Real Estate,        the real estate investment management group of Deutsche Asset Management. Subject to the        general supervision of the Board and the Investment Manager, the Investment Advisor is        responsible for managing the investment operations of the Fund and the composition of the        Fund's holdings of securities and other investments. The Investment Manager, not the Fund,        compensates the Investment Advisor for its services. The Investment Management Fee payable        under the Investment Management Agreement is equal to an annual rate of 0.85% of the Fund's        average daily total managed assets, computed and accrued daily and payable monthly. Total        managed assets equal the net asset value of the common shares plus the liquidation        preference of any Preferred Shares plus the principal amount of any borrowings used for        leverage.

In addition, for the period January        1, 2008 through August 29, 2008, the Investment Manager has contractually agreed to waive a        portion of its Investment Management Fee in the amount of 0.25% of the Fund's average daily        total managed assets. Effective August 30, 2008 such waiver will decline by 0.05% in each        year, with all waivers expiring August 29, 2012. Accordingly, for the year ended        December 31, 2008, the Investment Manager did not impose a portion of its Investment        Management Fee pursuant to the Investment Management Agreement aggregating $1,745,009 and        the amount imposed aggregated $4,450,035, which was equivalent to an annual effective rate        of 0.61% of the Fund's average daily total managed assets.

**Service Provider Fees.** DWS Investments        Service Company ("DISC"), an affiliate of the Investment Manager and Investment 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 December 31, 2008, the amount charged to the        Fund by DISC aggregated $16,656, of which $4,496 is unpaid.

DWS Investments Fund Accounting        Corporation ("DIFA"), an affiliate of the Investment Manager and the Investment Advisor, is        responsible for determining the daily net asset value per share and maintaining the        portfolio and general accounting records of the Fund. Pursuant to a sub-accounting        agreement between DIFA and State Street Bank and Trust Company ("SSB"), DIFA has delegated        certain fund accounting functions to SSB. DIFA compensates SSB for the accounting service        fee it receives from the Fund. The amount charged to the Fund for the year ended        December 31, 2008 by DIFA aggregated $90,888, of which $5,045 is unpaid.

Deutsche Bank Trust Company Americas        ("DBTCA"), an affiliate of the Investment Manager and the Investment Advisor, is the        auction agent with respect to the Preferred Shares. The auction agent will pay each broker        dealer a service charge from funds provided by the Fund ("Auction Service Fee"). The        Auction Service Fee charged to the Fund for the year ended December 31, 2008 aggregated        $735,260, of which $788 is unpaid.

In addition, DBTCA, as auction        agent, is paid an administration fee. The amount charged to the Fund for the year ended        December 31, 2008 aggregated $27,419, all of which was paid.

**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 December 31, 2008, the amount charged to the Fund by DIMA included in the Statement        of Operations under "reports to shareholders" aggregated $14,067, of which $7,079 is        unpaid.

**Directors' Fees        and Expenses.** The Fund paid each Director 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 Directors, 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 year ended December 31, 2008, the Fund paid its allocated portion of        the retirement benefit of $2,829 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 Investment Manager. 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        Investment Manager a management fee for the affiliated funds' investments 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 December 31, 2008, the Fund's custodian fee was reduced by $3,454 and        $1,805, respectively, for custodian and transfer agent credits earned.

**E. Common Share        Repurchases**

The Fund is authorized to effect        periodic repurchases of its common shares in the open market from time to time when the        Fund's common shares trade at a discount to their net asset value. During the year ended        December 31, 2007 the Fund purchased 598,110 shares of common stock on the open market at a        total cost of $11,241,298 ($18.92 average per share). The average discount of the        purchases, comparing the purchase price to the net asset value at the time of purchase was        10.1%. These shares are held in treasury.

**F. Real Estate Concentration        Risk**

The Fund concentrates its        investments in real estate securities, including REITs. A fund with a concentrated        portfolio is vulnerable to the risks of the industry in which it invests and is subject to        greater risks and market fluctuations than funds investing in a broader range of        industries. Real estate securities are susceptible to the risks associated with direct        ownership of real estate such as declines in property values; increases in property taxes,        operating expenses, interest rates or competition; zoning changes; and losses from casualty        and condemnation.

**G. Line of Credit**

Until August 25, 2008, the Fund        shared in a $490 million revolving credit facility with other affiliated funds (the        "Participants") provided by a syndication of banks. The Fund was able to borrow for        temporary or emergency purposes. 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 was able to borrow up        to a maximum of 20 percent of its net assets under the agreement (see Note        H).

**H. Secured        Credit Facility**

The Fund entered into a secured        credit facility with two commercial banks effective August 26, 2008. The secured credit        facility had an initial term of 364 days and initially allowed the Fund to borrow in an        aggregate amount up to $275,000,000 ($33,000,000 effective January 14, 2009). A commitment        fee was charged to the Fund and is included with "interest expense" on the Statement of        Operations. An arrangement fee incurred by the Fund in connection with this facility was        deferred and has been amortized on a straight line basis over the term if the        facility.

As a condition to its participation        in the new secured credit facility, the Fund's participation in the above mentioned $490        million line of credit was terminated.

Effective February 5, 2009, the        secured credit facility was terminated. The facility was originally needed to facilitate        the redemption of the Fund's Preferred Shares. In the fourth quarter of 2008, using cash on        hand, the Fund redeemed a total of 12,680 of its Preferred Shares (2,536 shares of each of        its Series A, B, C, D and E Preferred Shares) at their liquidation preference of $25,000        per share, aggregating to $317,000,000. See Note A, Significant Accounting Policies        — Preferred Shares.

**I. Subsequent        Event**

The Fund's Board of Directors has        authorized an additional partial redemption of the Fund's outstanding Preferred Shares,        which redemption will be funded with cash on hand. The Fund intends to redeem a total of        400 Preferred Shares (80 shares of each of its Series A , B, C, D and E Preferred Shares)        at their liquidation preference of $25,000 per share, aggregating to $10,000,000 of its        currently outstanding $33,000,000 of Preferred Shares. These additional Preferred Shares        are scheduled to be redeemed in early March 2009.

**Report of Independent        Registered Public Accounting Firm**

**To the Board of        Directors and Shareholders ofDWSRREEF Real Estate FundII, Inc.:**

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 ofDWSRREEF Real Estate Fund II, Inc. (the        "Fund") at December 31, 2008, 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 December 31, 2008 by correspondence with the custodian        and brokers, provide a reasonable basis for our opinion.

| Boston,                    Massachusetts                    February 27, 2009 | PricewaterhouseCoopers                    LLP |
|-------------------------------------------------------------------------------|-----------------------------------------------|

**Tax Information(Unaudited)**

The Fund reported long-term capital        gain distributions of $1.13 per share to common shareholders and $9 million to preferred        shareholders during the year ended December 31, 2008, of which approximately 100%        represents 15% rate gains and 0% represents 25% rate gains.

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)        294-4366.

**Dividend Reinvestment and        Cash Purchase Plan**

The Board of Directors of the Fund        has established a Dividend Reinvestment and Cash Purchase Plan (the "Plan") for        shareholders who have not elected in writing to receive dividends and distributions in        cash. (each a "Participant"). A Plan Agent (currently, Computershare Inc.) has been        appointed by the Fund's Board of Directors to act as agent for each Participant.

A summary of the Plan is set forth        below. Shareholders may obtain a copy of the entire Dividend Reinvestment and Cash        Purchase Plan by visiting the Fund's Web site at www.dws-investments.com or by calling        (800) 294-4366.

Whenever the Fund declares an income        dividend or a capital gains distribution payable in shares of common stock or cash at the        option of the shareholders, each Participant is deemed to have elected to take such        dividend or distribution entirely in additional shares of common stock of the Fund. If the        market price per share of the Fund's common stock on the valuation date equals or exceeds        the net asset value per share on the valuation date, the number of additional shares of        common stock to be issued by the Fund and credited to the Participant's account shall be        determined by dividing the dollar amount of the dividend or capital gains distribution        payable on the Participant's shares by the greater of the following amounts per share of        the Fund's common stock on the valuation date: (a) the net asset value, or (b) 95% of the        market price. If the market price per share of the common stock on the valuation date is        less than the net asset value per share on the valuation date, the Plan Agent shall apply        the dollar amount of the dividend or capital gains distribution on such Participant's        shares (less such Participant's pro rata share of brokerage commissions incurred with        respect to the Plan Agent's open-market purchases in connection with the reinvestment of        such dividend and distribution) to the purchase on the open market of shares of the common        stock for the Participant's account. Should the Fund declare an income dividend or capital        gains distribution payable only in cash, the amount of such dividend or distribution on        each Participant's shares (less such Participant's pro rata share of brokerage commissions        incurred with respect to open-market purchases in connection with the reinvestment of such        dividend or distribution) shall be applied to the purchase on the open market of shares of        common stock for the Participant's account. Each Participant, semiannually, also has the        option of sending additional funds, in any amount from $100 to $3,000, for the purchase on        the open market of shares of common stock for such Participant's account. Voluntary        payments will be invested by the Plan Agent on or shortly after the 15th of February and        August, and in no event more than 45 days after such dates, except where temporary        curtailment or suspension of purchases is necessary to comply with applicable provisions of        federal securities law. Optional cash payments received from a Participant on or prior to        the fifth day preceding the 15th of February or August will be applied by the Plan Agent to        the purchase of additional shares of common stock as of that investment date. Funds        received after the fifth day preceding the 15th of February or August and prior to the 30th        day preceding the next investment date will be returned to the Participant. No interest        will be paid on optional cash payments held until investment. Consequently, Participants        are strongly urged to make their optional cash payments shortly before the 15th of February        or August. Optional cash payments should be made in US dollars and be sent by first-class        mail, postage prepaid, to DWS Investments Service Company (the "Transfer Agent")        at the following address:

DWS RREEF Real        Estate Fund II, Inc.        Dividend Reinvestment and Cash Purchase Plan        210 West 10th Street, Kansas City, MO 64105        (800) 294-4366

Participants may withdraw their        entire voluntary cash payment by written notice received by the Plan Agent not less than 48        hours before such payment is to be invested.

Investment of voluntary cash        payments and other open-market purchases may be made on any securities exchange where the        shares of common stock are traded, in the OTC market or in negotiated        transactions.

A statement reflecting the amount of        cash received by the Transfer Agent will be issued on receipt of each cash deposit. The        statements are the record of the costs of shares and should be retained for tax        purposes.

The reinvestment of dividends and        capital gains distributions does not relieve the Participant of any tax that may be payable        on such dividends and distributions. The Transfer Agent will report to each Participant the        taxable amount of dividends and distributions credited to his or her account.

The service fees for handling        capital gains distributions or income dividends will be paid by the Fund. Participants will        be charged a $1.00 service fee for each optional cash investment and a pro rata share of        brokerage commissions on all open market purchases.

Participants may terminate their        accounts under the Plan by notifying the Transfer Agent in writing. Such termination will        be effective immediately if such Participant's notice is received by the Transfer Agent not        less than 10 days prior to any dividend or distribution record date; otherwise, such        termination will be effective as soon as practicable upon completion of        the reinvestment of capital gains distributions or income dividends. The Plan may be        terminated by the Fund upon notice in writing mailed to Participants at least 30 days prior        to any record date for the payment of any dividend or distribution by the Fund. The terms        and conditions of the Plan may be amended or supplemented by the Fund at any time or times,        but, except when necessary or appropriate to comply with applicable law or the rules or        policies of the Securities and Exchange Commission, any securities exchange on which shares        of the Fund's common stock are listed, or any other regulatory authority and with certain        other limited exceptions, only by mailing to Participants appropriate written notice at        least 30 days prior to the effective date thereof.

If a Participant        elects, by notice to the Plan Agent in writing in advance of such termination, to have        the Plan Agent sell part or all of such Participant's shares and remit the proceeds to such        Participant, the Plan Agent is authorized to deduct a fee of 5% of the gross proceeds, to a        maximum of $3.50, plus brokerage commissions for this transaction and any transfer        taxes.

All correspondence and inquiries        concerning the Plan, and requests for additional information about the Plan, should be        directed to the Transfer Agent at P.O. Box 219066, Kansas City, Missouri 64105 or (800)        294-4366.

**Investment Management        Agreement Approval**

The Board of Directors, including        the Independent Directors, approved the renewal of your Fund's investment management        agreement (the "Agreement") with Deutsche Investment Management Americas Inc. ("DIMA") and        sub-advisory agreement (the "Sub-Advisory Agreement," and together with the Agreement, the        "Agreements") between DIMA and RREEF America LLC ("RREEF"), an affiliate of DIMA, in        September 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 Directors are independent of DIMA and its        affiliates.

• The        Directors meet frequently to discuss fund matters. Each year, the Directors 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 Equity 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        Directors regularly meet privately with their independent counsel (and, as needed, other        advisors) to discuss contract review and other matters. In addition, the Directors 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        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 Directors as a group. The Independent        Directors 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 and RREEF are        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 and RREEF'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 and RREEF provide portfolio management and 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 and RREEF to attract and retain high-quality personnel, and the organizational depth        and stability of DIMA and RREEF. 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 each of the one- and three-year periods ended December 31, 2007, the        Fund's performance was in the 4th quartile 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 the one- and        three-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 observed that the Fund had experienced improved        relative performance during the first six months of 2008. The Board recognized that DIMA        has made significant changes in its investment personnel and processes in recent years in        an effort to improve long-term performance.

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 and RREEF        historically have been and continue to be satisfactory.

**Fees and        Expenses.** The Board considered the Fund's investment management fee schedule,        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 were lower than the median (1st quartile) of the        applicable Lipper peer group (based on Lipper data provided as of December 31, 2007). With        respect to the sub-advisory fee paid to RREEF, the Board noted that the fee is paid by DIMA        out of its fee and not directly by the Fund. The Board noted that the Fund's total (net)        operating expenses were expected to be lower than the median (1st quartile) of the        applicable Lipper expense universe (based on Lipper data provided as of December 31, 2007).        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 limitation agreed to by DIMA helped to ensure that the Fund's        total (net) operating expenses would be competitive relative to the applicable Lipper        universe. 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.

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 and        RREEF.

**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.

**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 Directors) 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 Directors and their counsel present. It is possible that individual Directors        may have weighed these factors differently in reaching their individual decisions to        approve the continuation of the Agreements.

**Board Members and        Officers**

The following table presents certain        information regarding the Board Members and Officers of the Corporation as of December 31,        2008. 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. 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 |
| 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 |
| 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 |
| 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) |

**Additional        Information**

| **Automated                    Information Line**                    | **DWS                    Investments Closed-End Fund Info Line**

**(800)                    349-4281**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|----------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Web                    Site**                                      | **www.dws-investments.com**
Obtain quarterly fact sheets, financial                    reports, press releases and webcasts when available.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| **Written                    Correspondence**                        | **Deutsche                    Investment Management Americas Inc.**
345 Park AvenueNew York, NY 10154                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| **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. |
| **Legal                    Counsel**                                 | **Ropes &                    Gray LLP**
One International PlaceBoston, MA 02110                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **Dividend                    Reinvestment Plan Agent**              | **Computershare Inc.**
P.O. Box 43078Providence, RI 02940-3078                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **Shareholder Service Agent**                                        | **DWS                    Investments Service Company**
P.O. Box 219066Kansas City, MO 64121-9066
**(800)                    294-4366**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| **Custodian                    and Transfer Agent**                  | **State                    Street Bank and Trust Company**
225 Franklin StreetBoston, MA 02110                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **Independent Registered Public Accounting                    Firm** | **PricewaterhouseCoopers LLP**
125 High StreetBoston, MA 02110                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **AMEX                    Symbol**                                   | SRO                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

| **CUSIP                    Numbers** | Common Shares | 23338X 102 |
|--------------------------------------|---------------|------------|
|                                 | Series A      | 81119R207  |
|                                 | Series B      | 81119R306  |
|                                 | Series C      | 81119R405  |
|                                 | Series D      | 81119R504  |
|                                 | Series E      | 81119R603  |

**Notes**

**Notes**

**Notes**

**Notes**

**Notes**

**Notes**

----

 

| **ITEM 2.** | **CODE OF ETHICS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|-------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|        | As of the end of the period, December 31, 2008,DWS RREEF Real Estate Fund II, Inc.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 RREEF REAL ESTATE FUND II, INC.**

**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 YearEndedDecember 31, | Audit Fees Billed to Fund | Audit-RelatedFees Billed to Fund | Tax Fees Billed to Fund | AllOther Fees Billed to Fund |
|------------------------------|---------------------------|----------------------------------|-------------------------|------------------------------|
| 2008                         | $63,800                   | $0                               | $0                      | $10,000                      |
| 2007                         | $61,800                   | $0                               | $0                      | $10,000                      |

 

 

**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 YearDecember 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 |
|-------------------------|------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------|
| 2008                    | $0                                                                                                   | $19,000                                                                                     | $0                                                                                               |
| 2007                    | $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 YearEndedDecember 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) |
|------------------------------|-----------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------|--------------------------|
| 2008                         | $10,000                                 | $19,000                                                                                                                                                                                                                      | $0                                                                                                                                   | $29,000                  |
| 2007                         | $10,000                                 | $25,000                                                                                                                                                                                                                      | $600,000                                                                                                                             | $635,000                 |

 

 

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**                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|        | The registrant has a separately-designated standing                            audit committee established in accordance with Section 3(a)(58)(A) of                            the Securities Exchange Act of 1934, as amended. The registrant's audit                            committee consists of William McClayton (Chairman), Keith R. Fox,                            Kenneth C. Froewiss, Henry P. Becton, Jr., John W. Ballantine and                            William N. Searcy. |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| **ITEM 6.** | **SCHEDULE OF INVESTMENTS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|        | Not Applicable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| **ITEM 7.** | **DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES                            FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES**                                                                                                                                                                                                                                                                                                                                                                |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |

 

Proxy Voting and Guidelines

|   | **I.** | **INTRODUCTION** |
|--------|--------|------------------|

 

AM            has adopted and implemented the following policies and procedures, which it believes            are reasonably designed to ensure that proxies are voted in the best economic interest            of clients, in accordance with its fiduciary duties and local regulation. These Proxy            Voting Policies, Procedures and Guidelines shall apply to all accounts managed by US            domiciled advisers and to all US client accounts managed by non US regional offices.            Non US regional offices are required to maintain

 

procedures and to vote proxies as may be required by law on behalf of            their non US clients. In addition, AM’s proxy policies reflect the fiduciary            standards and responsibilities for ERISA accounts.

The            attached guidelines represent a set of global recommendations that were determined by            the Global Proxy Voting Sub-Committee (“the GPVSC”). These guidelines were            developed to provide AM with a comprehensive list of recommendations that represent how            AM will generally vote proxies for its clients. The recommendations derived from the            application of these guidelines are not intended to influence the various AM legal            entities either directly or indirectly by parent or affiliated companies. In addition,            the organizational structures and documents of the various AM legal entities allows,            where necessary or appropriate, the execution by individual AM subsidiaries of the            proxy voting rights independently of any DB parent or affiliated company. This applies            in particular to non U.S. fund management companies. The individuals that make proxy            voting decisions are also free to act independently, subject to the normal and            customary supervision by the management/boards of these AM legal entities.

|   | **II.** | **AM’S PROXY VOTING                            RESPONSIBILITIES** |
|--------|---------|-------------------------------------------------------------------------|

Proxy votes are the property of AM’s advisory clients.1            As such, AM’s authority and responsibility to vote such proxies depend upon its            contractual relationships with its clients. AM has delegated responsibility for            effecting its advisory clients’ proxy votes to Institutional Shareholder Services            (“ISS”), an independent third-party proxy voting specialist. ISS votes            AM’s advisory clients’ proxies in accordance with AM’s proxy            guidelines or AM’s specific instructions. Where a client has given specific            instructions as to how a proxy should be voted, AM will notify ISS to carry out those            instructions. Where no specific instruction exists, AM will follow the procedures in            voting the proxies set forth in this document. Certain Taft-Hartley clients may direct            AM to have ISS vote their proxies in accordance with Taft Hartley voting            Guidelines

Clients may in certain instances contract with their custodial agent and            notify AM that they wish to engage in securities lending transactions. In such cases,            it is the responsibility of the custodian to deduct the number of shares that are on            loan so that they do not get voted twice.

|   | **III.** | **POLICIES** |
|--------|----------|--------------|

|   | ***1.*** | ***Proxy voting activities are conducted in the best                            economic interest of clients*** |
|--------|----------|-----------------------------------------------------------------------------------------------------------------|

AM            has adopted the following policies and procedures to ensure that proxies are voted in            accordance with the best economic interest of its clients, as determined by AM in good            faith after appropriate review.

|   | ***2.*** | ***The Global Proxy Voting                            Sub-Committee*** |
|--------|----------|------------------------------------------------------------------------|

The            Global Proxy Voting Sub-Committee (the “GPVSC”) is an internal working            group established by the applicable AM’s Investment Risk Oversight Committee            pursuant to a written charter. The GPVSC is responsible for overseeing AM’s proxy            voting activities, including:

_________________________

1 purposes of these Policies and            Procedures, “clients” refers to persons or entities: for which AM serves as            investment adviser or sub-adviser; for which AM votes proxies; and that have an            economic or beneficial ownership interest in the portfolio securities of issuers            soliciting such proxies.

 

| (i) | adopting, monitoring and updating guidelines, attached                            as Exhibit A (the “Guidelines”), that provide how AM will                            generally vote proxies pertaining to a comprehensive list of common                            proxy voting matters; |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii) | voting proxies where (A) the issues are not covered by                            specific client instruction or the Guidelines; (B) the Guidelines                            specify that the issues are to be determined on a case-by-case basis;                            or (C) where an exception to the Guidelines may be in the best economic                            interest of AM’s clients; and |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iii) | monitoring the Proxy Vendor Oversight’s proxy                            voting activities (see below). |
|-------|---------------------------------------------------------------------------------------------------------------|

AM’s Proxy Vendor Oversight, a function of AM’s Operations            Group, is responsible for coordinating with ISS to administer AM’s proxy voting            process and for voting proxies in accordance with any specific client instructions or,            if there are none, the Guidelines, and overseeing ISS’ proxy responsibilities in            this regard.

|   | ***3.*** | ***Availability of Proxy Voting Policies and                            Procedures and proxy voting record*** |
|--------|----------|---------------------------------------------------------------------------------------------------------------|

Copies of these Policies and Procedures, as they may be updated from            time to time, are made available to clients as required by law and otherwise at            AM’s discretion. Clients may also obtain information on how their proxies were            voted by AM as required by law and otherwise at AM’s discretion; however, AM must            not selectively disclose its investment company clients’ proxy voting records.            The Proxy Vendor Oversight will make proxy voting reports available to advisory clients            upon request. The investment companies’ proxy voting records will be disclosed to            shareholders by means of publicly-available annual filings of each company’s            proxy voting record for 12-month periods ended June 30 (see “Recordkeeping”            below), if so required by relevant law.

|   | **IV.** | **PROCEDURES** |
|--------|---------|----------------|

The            key aspects of AM’s proxy voting process are as follows:

|   | ***1.*** | ***The GPVSC’s Proxy Voting                            Guidelines*** |
|--------|----------|----------------------------------------------------------------------------|

The            Guidelines set forth the GPVSC’s standard voting positions on a comprehensive            list of common proxy voting matters. The GPVSC has developed, and continues to update            the Guidelines based on consideration of current corporate governance principles,            industry standards, client feedback, and the impact of the matter on issuers and the            value of the investments.

The            GPVSC will review the Guidelines as necessary to support the best economic interests of            AM’s clients and, in any event, at least annually. The GPVSC will make changes to            the Guidelines, whether as a result of the annual review or otherwise, taking solely            into account the best economic interests of clients. Before changing the Guidelines,            the GPVSC will thoroughly review and evaluate the proposed change and the reasons            therefore, and the GPVSC Chair will ask GPVSC members whether anyone outside of the AM            organization (but within Deutsche Bank and its affiliates) or any entity that            identifies itself as a AM advisory client has requested or attempted to influence the            proposed change and whether any member has a conflict of interest with respect to the            proposed change. If any such matter is reported to the GPVSC Chair, the Chair will            promptly notify the Conflicts of Interest Management Sub-Committee (see below) and will            defer the approval, if possible. Lastly, the GPVSC will fully document its rationale            for approving any change to the Guidelines.

 

The            Guidelines may reflect a voting position that differs from the actual practices of the            public company(ies) within the Deutsche Bank organization or of the investment            companies for which AM or an affiliate serves as investment adviser or sponsor.            Investment companies, particularly closed-end investment companies, are different from            traditional operating companies. These differences may call for differences in voting            positions on the same matter. Further, the manner in which AM votes investment company            proxies may differ from proposals for which a AM-advised or sponsored investment            company solicits proxies from its shareholders. As reflected in the Guidelines, proxies            solicited by closed-end (and open-end) investment companies are generally voted in            accordance with the pre-determined guidelines of ISS. See Section IV.3.B.

Funds (“Underlying Funds”) in which Topiary Fund Management            Fund of Funds (each, a “Fund”) invest, may from time to time seek to revise            their investment terms (i.e. liquidity, fees, etc.) or investment structure. In such            event, the Underlying Funds may require approval/consent from its investors to effect            the relevant changes. Topiary Fund Management has adopted Proxy Voting Procedures which            outline the process for these approvals.

|   | ***2.*** | ***Specific proxy voting decisions made by the                            GPVSC*** |
|--------|----------|------------------------------------------------------------------------------------|

The            Proxy Vendor Oversight will refer to the GPVSC all proxy proposals (i) that are not            covered by specific client instructions or the Guidelines; or (ii) that, according to            the Guidelines, should be evaluated and voted on a case-by-case basis.

Additionally, if, the Proxy Vendor Oversight, the GPVSC Chair or any            member of the GPVSC, a portfolio manager, a research analyst or a sub-adviser believes            that voting a particular proxy in accordance with the Guidelines may not be in the best            economic interests of clients, that individual may bring the matter to the attention of            the GPVSC Chair and/or the Proxy Vendor Oversight.2

If            the Proxy Vendor Oversight refers a proxy proposal to the GPVSC or the GPVSC determines            that voting a particular proxy in accordance with the Guidelines is not in the best            economic interests of clients, the GPVSC will evaluate and vote the proxy, subject to            the procedures below regarding conflicts.

The            GPVSC endeavors to hold meetings to decide how to vote particular proxies sufficiently            before the voting deadline so that the procedures below regarding conflicts can be            completed before the GPVSC’s voting determination.

|   | ***3.*** | ***Certain proxy votes may not be                            cast*** |
|--------|----------|----------------------------------------------------------------------|

In            some cases, the GPVSC may determine that it is in the best economic interests of its            clients not to vote certain proxies. If the conditions below are met with regard to a            proxy proposal, AM will abstain from voting:

| **•** | Neither the Guidelines nor specific client instructions                            cover an issue; |
|------------|----------------------------------------------------------------------------------------------------|

| **•** | ISS does not make a recommendation on the                            issue; |
|------------|-----------------------------------------------------------------------------|

| **•** | The GPVSC cannot convene on the proxy proposal at issue                            to make a determination as to what would be in the client’s best                            interest. (This could happen, for example, if the Conflicts of Interest                            Management Sub-committee found that there was a material conflict or if                            despite all best efforts being made, the GPVSC quorum requirement could                            not be met). |
|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

_________________________

2 Proxy Vendor Oversight            generally monitors upcoming proxy solicitations for heightened attention from the press            or the industry and for novel or unusual proposals or circumstances, which may prompt            the Proxy Vendor Oversight to bring the solicitation to the attention of the GPVSC            Chair. AM portfolio managers, AM research analysts and sub-advisers also may bring a            particular proxy vote to the attention of the GPVSC Chair, as a result of their ongoing            monitoring of portfolio securities held by advisory clients and/or their review of the            periodic proxy voting record reports that the GPVSC Chair distributes to AM portfolio            managers and AM research analysts.

 

In            addition, it is AM’s policy not to vote proxies of issuers subject to laws of            those jurisdictions that impose restrictions upon selling shares after proxies are            voted, in order to preserve liquidity. In other cases, it may not be possible to vote            certain proxies, despite good faith efforts to do so. For example, some jurisdictions            do not provide adequate notice to shareholders so that proxies may be voted on a timely            basis. Voting rights on securities that have been loaned to third-parties transfer to            those third-parties, with loan termination often being the only way to attempt to vote            proxies on the loaned securities. Lastly, the GPVSC may determine that the costs to the            client(s) associated with voting a particular proxy or group of proxies outweighs the            economic benefits expected from voting the proxy or group of proxies.

The            Proxy Vendor Oversight will coordinate with the GPVSC Chair regarding any specific            proxies and any categories of proxies that will not or cannot be voted. The reasons for            not voting any proxy shall be documented.

|   | ***4.*** | ***Conflict of Interest Procedures*** |
|--------|----------|---------------------------------------|

|   | A. | Procedures to Address Conflicts of Interest and                            Improper Influence |
|--------|----|-----------------------------------------------------------------------------------------------|

*Overriding Principle*. In the limited            circumstances where the GPVSC votes proxies,3 the GPVSC will vote those            proxies in accordance with what it, in good faith, determines to be the best economic            interests of AM’s clients.4

*Independence of the GPVSC*. As a matter of            Compliance policy, the GPVSC and the Proxy Vendor Oversight are structured to be            independent from other parts of Deutsche Bank. Members of the GPVSC and the employee            responsible for Proxy Vendor Oversight are employees of AM. As such, they may not be            subject to the supervision or control of any employees of Deutsche Bank Corporate and            Investment Banking division (“CIB”). Their compensation cannot be based            upon their contribution to any business activity outside of AM without prior approval            of Legal and Compliance. They can have no contact with employees of Deutsche Bank            outside of the Private Client and Asset Management division (“PCAM”)            regarding specific clients, business matters or initiatives without the prior approval            of Legal and Compliance. They furthermore may not discuss proxy votes with any person            outside of AM (and within AM only on a need to know basis).

*Conflict Review Procedures*. There will be a            committee (the “Conflicts of Interest Management Sub-Committee”)            established within AM that will monitor for potential material conflicts of interest in            connection with proxy proposals that are to be evaluated by the GPVSC. Promptly upon a            determination that a vote shall be presented to the GPVSC, the GPVSC Chair shall notify            the Conflicts of Interest Management Sub-Committee. The Conflicts of Interest            Management Sub-Committee shall promptly collect and review any information deemed            reasonably appropriate to evaluate, in its reasonable judgment, if AM or any person            participating in the proxy voting process has, or has the appearance of, a material            conflict of interest. For the purposes of this policy, a conflict of interest shall be            considered “material” to the extent that a reasonable person could expect            the conflict to influence, or appear to influence, the GPVSC’s decision on the            particular vote at issue. GPVSC should provide the Conflicts of Interest Management            Sub-Committee a reasonable amount of time (no less than 24 hours) to perform all            necessary and appropriate reviews. To the extent that a conflicts review can not be            sufficiently completed by the Conflicts of Interest Management Sub-Committee the            proxies will be voted in accordance with the standard guidelines.

_________________________

3 mentioned above, the GPVSC            votes proxies (i) where neither a specific client instruction nor a Guideline directs            how the proxy should be voted, (ii) where the Guidelines specify that an issue is to be            determined on a case by case basis or (iii) where voting in accordance with the            Guidelines may not be in the best economic interests of clients.

| 4  | The Proxy Vendor Oversight, who serves as the non-voting                            secretary of the GPVSC, may receive routine calls from proxy solicitors                            and other parties interested in a particular proxy vote. Any contact                            that attempts to exert improper pressure or influence shall be reported                            to the Conflicts of Interest Management Sub-Committee. |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

The            information considered by the Conflicts of Interest Management Sub-Committee may            include without limitation information regarding (i) AM client relationships; (ii) any            relevant personal conflict known by the Conflicts of Interest Management Sub-Committee            or brought to the attention of that sub-committee; (iii) and any communications with            members of the GPVSC (or anyone participating or providing information to the GPVSC)            and any person outside of the AM organization (but within Deutsche Bank and its            affiliates) or any entity that identifies itself as a AM advisory client regarding the            vote at issue. In the context of any determination, the Conflicts of Interest            Management Sub-Committee may consult with, and shall be entitled to rely upon, all            applicable outside experts, including legal counsel.

Upon completion of the investigation, the Conflicts of Interest            Management Sub-Committee will document its findings and conclusions. If the Conflicts            of Interest Management Sub-Committee determines that (i) AM has a material conflict of            interest that would prevent it from deciding how to vote the proxies concerned without            further client consent or (ii) certain individuals should be recused from participating            in the proxy vote at issue, the Conflicts of Interest Management Sub-Committee will so            inform the GPVSC chair.

If            notified that AM has a material conflict of interest as described above, the GPVSC            chair will obtain instructions as to how the proxies should be voted either from (i) if            time permits, the effected clients, or (ii) in accordance with the standard guidelines.            If notified that certain individuals should be recused from the proxy vote at issue,            the GPVSC Chair shall do so in accordance with the procedures set forth            below.

Note: Any AM employee who becomes aware of a potential, material            conflict of interest in respect of any proxy vote to be made on behalf of clients shall            notify Compliance. Compliance shall call a meeting of the conflict review committee to            evaluate such conflict and determine a recommended course of action.

*Procedures to be followed by the GPVSC*. At            the beginning of any discussion regarding how to vote any proxy, the GPVSC Chair (or            his or her delegate) will inquire as to whether any GPVSC member (whether voting or ex            officio) or any person participating in the proxy voting process has a personal            conflict of interest or has actual knowledge of an actual or apparent conflict that has            not been reported to the Conflicts of Interest Management Sub-Committee.

The            GPVSC Chair also will inquire of these same parties whether they have actual knowledge            regarding whether any director, officer or employee outside of the AM organization (but            within Deutsche Bank and its affiliates) or any entity that identifies itself as a AM            advisory client, has: (i) requested that AM, the Proxy Vendor Oversight (or any member            thereof) or a GPVSC member vote a particular proxy in a certain manner; (ii) attempted            to influence AM, the Proxy Vendor Oversight (or any member thereof), a GPVSC member or            any other person in connection with proxy voting activities; or (iii) otherwise            communicated with a GPVSC member or any other person participating or providing            information to the GPVSC regarding the particular proxy vote at issue, and which            incident has not yet been reported to the Conflicts of Interest Management Sub-            Committee.

If            any such incidents are reported to the GPVSC Chair, the Chair will promptly notify the            Conflicts of Interest Management Sub-Committee and, if possible, will delay the vote            until the Conflicts of Interest Management Sub-Committee can complete the conflicts            report. If a delay is not possible, the Conflicts of Interest Management Sub-Committee            will instruct the GPVSC whether anyone should be recused from the proxy voting process,            or whether AM should vote the proxy in accordance with the standard guidelines, seek            instructions as to how to vote the proxy at issue from ISS or, if time permits, the            effected clients. These inquiries and discussions will be properly reflected in the            GPVSC’s minutes.

 

*Duty to Report*. Any AM employee, including            any GPVSC member (whether voting or ex officio), that is aware of any actual or            apparent conflict of interest relevant to, or any attempt by any person outside of the            AM organization (but within Deutsche Bank and its affiliates) or any entity that            identifies itself as a AM advisory client to influence, how AM votes its proxies has a            duty to disclose the existence of the situation to the GPVSC Chair (or his or her            designee) and the details of the matter to the Conflicts of Interest Management            Sub-Committee. In the case of any person participating in the deliberations on a            specific vote, such disclosure should be made before engaging in any activities or            participating in any discussion pertaining to that vote.

*Recusal of Members*. The GPVSC will recuse            from participating in a specific proxy vote any GPVSC members (whether voting or ex            officio) and/or any other person who (i) are personally involved in a material conflict            of interest; or (ii) who, as determined by the Conflicts of Interest Management            Sub-Committee, have actual knowledge of a circumstance or fact that could effect their            independent judgment, in respect of such vote. The GPVSC will also exclude from            consideration the views of any person (whether requested or volunteered) if the GPVSC            or any member thereof knows, or if the Conflicts of Interest Management Sub-Committee            has determined, that such other person has a material conflict of interest with respect            to the particular proxy, or has attempted to influence the vote in any manner            prohibited by these policies.

If,            after excluding all relevant GPVSC voting members pursuant to the paragraph above,            there are three or more GPVSC voting members remaining, those remaining GPVSC members            will determine how to vote the proxy in accordance with these Policies and Procedures.            If there are fewer than three GPVSC voting members remaining, the GPVSC Chair will vote            the proxy in accordance with the standard guidelines, will obtain instructions as to            how to have the proxy voted from, if time permits, the effected clients and otherwise            from ISS.

|   | B. | Investment Companies and Affiliated Public                            Companies |
|--------|----|---------------------------------------------------------------------------------|

*Investment Companies*. As reflected in the            Guidelines, all proxies solicited by open-end and closed-end investment companies are            voted in accordance with the pre-determined guidelines of ISS, unless the investment            company client directs AM to vote differently on a specific proxy or specific            categories of proxies. However, regarding investment companies for which AM or an            affiliate serves as investment adviser or principal underwriter, such proxies are voted            in the same proportion as the vote of all other shareholders (i.e.,            “mirror” or “echo” voting). Master fund proxies solicited from            feeder funds are voted in accordance with applicable provisions of Section 12 of the            Investment Company Act of 1940.

Subject to participation agreements with certain Exchange Traded Funds            ("ETF") issuers that have received exemptive orders from the U.S. Securities and            Exchange Commission allowing investing DWS funds to exceed the limits set forth in            Section 12(d)(1)(A) and (B) of the Investment Company Act of 1940, DeAM will echo vote            proxies for ETFs in which Deutsche Bank holds more than 25% of outstanding voting            shares globally when required to do so by participation agreements and SEC            orders.

*Affiliated Public Companies*. For proxies            solicited by non-investment company issuers of or within the Deutsche Bank            organization, e.g., Deutsche bank itself, these proxies will be voted in the same            proportion as the vote of other shareholders (i.e., “mirror” or            “echo” voting).

Note: With respect to the QP Trust (not registered under the Investment            Company Act of 1940), the Fund is not required to engage in echo voting and the            investment adviser will use these Guidelines, and may determine, with respect to the QP            Trust, to vote contrary to the positions in the Guidelines, consistent with the            Fund’s best interest.

 

|   | C. | Other Procedures That Limit Conflicts of                            Interest |
|--------|----|------------------------------------------------------------------------------|

AM            and other entities in the Deutsche Bank organization have adopted a number of policies,            procedures and internal controls that are designed to avoid various conflicts of            interest, including those that may arise in connection with proxy voting,            including:

| **•** | *Deutsche Bank Americas Restricted Activities                            Policy*. This policy provides for, among other                            things, independence of AM employees from CIB, and information barriers                            between AM and other affiliates. Specifically, no AM employee may be                            subject to the supervision or control of any employee of CIB. No AM                            employee shall have his or her compensation based upon his or her                            contribution to any business activity within the Bank outside of the                            business of AM, without the prior approval of Legal or Compliance.                            Further, no employee of CIB shall have any input into the compensation                            of a AM employee without the prior approval of Legal or Compliance.                            Under the information barriers section of this policy, as a general                            rule, AM employees who are associated with the investment process                            should have no contact with employees of Deutsche Bank or its                            affiliates, outside of PCAM, regarding specific clients, business                            matters, or initiatives. Further, under no circumstances should proxy                            votes be discussed with any Deutsche Bank employee outside of AM (and                            should only be discussed on a need-to-know basis within AM). |
|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Other relevant internal policies include the Deutsche Bank Americas Code            of Professional Conduct, the Deutsche Asset Management Information Sharing Procedures,            the Deutsche Asset Management Code of Ethics, the Sarbanes-Oxley Senior Officer Code of            Ethics, and the Deutsche Bank Group Code of Conduct. The GPVSC expects that these            policies, procedures and internal controls will greatly reduce the chance that the            GPVSC (or, its members) would be involved in, aware of or influenced by, an actual or            apparent conflict of interest.

|   | **V.** | **RECORDKEEPING** |
|--------|--------|-------------------|

At            a minimum, the following types of records must be properly maintained and readily            accessible in order to evidence compliance with this policy.

| **•** | AM will maintain a record of each vote cast by AM that                            includes among other things, company name, meeting date, proposals                            presented, vote cast and shares voted. |
|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **•** | The Proxy Vendor Oversight maintains records for each of                            the proxy ballots it votes. Specifically, the records include, but are                            not limited to: |
|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | – | The proxy statement (and any additional solicitation                            materials) and relevant portions of annual statements. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------|

|   | – | Any additional information considered in the voting                            process that may be obtained from an issuing company, its agents or                            proxy research firms. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | – | Analyst worksheets created for stock option plan and                            share increase analyses. |
|--------|---------|----------------------------------------------------------------------------------------------------------|

|   | – | Proxy Edge print-screen of actual vote                            election. |
|--------|---------|-----------------------------------------------------------------------------|

| **•** | AM will retain these Policies and Procedures and the                            Guidelines; will maintain records of client requests for proxy voting                            information; and will retain any documents the Proxy Vendor Oversight                            or the GPVSC prepared that were material to making a voting decision or                            that memorialized the basis for a proxy voting decision. |
|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **•** | The GPVSC also will create and maintain appropriate                            records documenting its compliance with these Policies and Procedures,                            including records of its deliberations and decisions regarding                            conflicts of interest and their resolution. |
|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **•** | With respect to AM’s investment company clients,                            ISS will create and maintain records of each company’s proxy                            voting record for 12-month periods ended June 30. AM will compile the                            following information for each matter relating to a portfolio security                            considered*at any shareholder meeting held                            during the period covered*by the report and                            with respect to which the company was entitled to vote: |
|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | – | The name of the issuer of the portfolio                            security; |
|--------|---------|------------------------------------------------------------------------------|

 

|   | – | The exchange ticker symbol of the portfolio security (if                            symbol is available through reasonably practicable means); |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------|

|   | – | The Council on Uniform Securities Identification                            Procedures number for the portfolio security (if the number is                            available through reasonably practicable means); |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | – | The shareholder meeting date; |
|--------|---------|-------------------------------|

|   | – | A brief identification of the matter voted                            on; |
|--------|---------|---------------------------------------------------------------------------|

|   | – | Whether the matter was proposed by the issuer or by a                            security holder; |
|--------|---------|---------------------------------------------------------------------------------------------------|

|   | – | Whether the company cast its vote on the                            matter; |
|--------|---------|-----------------------------------------------------------------------------|

|   | – | How the company cast its vote (e.g., for or against                            proposal, or abstain; for or withhold regarding election of directors);                            and |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | – | Whether the company cast its vote for or against                            management. |
|--------|---------|-----------------------------------------------------------------------------------------|

Note: This list is intended to provide            guidance only in terms of the records that must be maintained in accordance with this            policy. In addition, please note that records must be maintained in accordance with the            applicable AM Records Management Policy.

With respect to electronically stored records, “properly            maintained” is defined as complete, authentic (unalterable) usable and backed-up.            At a minimum, records should be retained for a period of not less than six years (or            longer, if necessary to comply with applicable regulatory requirements), the first            three years in an appropriate AM office.

|   | **VI.** | **THE GPVSC’S OVERSIGHT ROLE** |
|--------|---------|--------------------------------------|

In            addition to adopting the Guidelines and making proxy voting decisions on matters            referred to it as set forth above, the GPVSC will monitor the proxy voting process by            reviewing summary proxy information presented by ISS. The GPVSC will use this review            process to determine, among other things, whether any changes should be made to the            Guidelines. This review will take place at least quarterly and will be documented in            the GPVSC’s minutes.

 

**Attachment A – Global Proxy Voting Guidelines**

 

 

**Deutsche Asset Management**

**Global Proxy Voting Guidelines**

 

As            Amended October 2008

 

 

**Table of contents**

 

| I | Board Of Directors And Executives |
|---|-----------------------------------|

|   | A | Election Of Directors |
|--------|---|-----------------------|

|   | B | Classified Boards Of Directors |
|--------|---|--------------------------------|

|   | C | Board And Committee Independence |
|--------|---|----------------------------------|

|   | D | Liability And Indemnification Of Directors |
|--------|---|--------------------------------------------|

|   | E | Qualifications Of Directors |
|--------|---|-----------------------------|

|   | F | Removal Of Directors And Filling Of Vacancies |
|--------|---|-----------------------------------------------|

|   | G | Proposals To Fix The Size Of The Board |
|--------|---|----------------------------------------|

 

|   | H | Proposals to Restrict Chief Executive Officer’s                            Service on Multiple Boards |
|--------|---|-------------------------------------------------------------------------------------------------------------|

             

|   | I | Proposals to Restrict Supervisory Board Members Service                            on Multiple Boards |
|--------|---|-------------------------------------------------------------------------------------------------------|

             

|   | J | Proposals to Establish Audit Committees |
|--------|---|-----------------------------------------|

| II | Capital Structure |
|----|-------------------|

|   | A | Authorization Of Additional Shares |
|--------|---|------------------------------------|

|   | B | Authorization Of “Blank Check” Preferred                            Stock |
|--------|---|---------------------------------------------------------------------------------------|

|   | C | Stock Splits/Reverse Stock Splits |
|--------|---|-----------------------------------|

|   | D | Dual Class/Supervoting Stock |
|--------|---|------------------------------|

|   | E | Large Block Issuance |
|--------|---|----------------------|

|   | F | Recapitalization Into A Single Class Of Stock |
|--------|---|-----------------------------------------------|

|   | G | Share Repurchases |
|--------|---|-------------------|

|   | H | Reductions In Par Value |
|--------|---|-------------------------|

| III | Corporate Governance Issues |
|-----|-----------------------------|

|   | A | Confidential Voting |
|--------|---|---------------------|

|   | B | Cumulative Voting |
|--------|---|-------------------|

|   | C | Supermajority Voting Requirements |
|--------|---|-----------------------------------|

|   | D | Shareholder Right To Vote |
|--------|---|---------------------------|

| IV | Compensation |
|----|--------------|

|   | A | Establishment of a Remuneration Committee |
|--------|---|-------------------------------------------|

|   | B | Executive And Director Stock Option Plans |
|--------|---|-------------------------------------------|

 

|   | C | Employee Stock Option/Purchase Plans |
|--------|---|--------------------------------------|

|   | D | Golden Parachutes |
|--------|---|-------------------|

|   | E | Proposals To Limit Benefits Or Executive                            Compensation |
|--------|---|----------------------------------------------------------------------------------|

|   | F | Option Expensing |
|--------|---|------------------|

|   | G | Management board election and motion |
|--------|---|--------------------------------------|

|   | H | Remuneration (variable pay) |
|--------|---|-----------------------------|

|   | I | Long-term incentive plans |
|--------|---|---------------------------|

|   | J | Shareholder Proposals Concerning “Pay For Superior                            Performance” |
|--------|---|--------------------------------------------------------------------------------------------------------|

|   | K | Executive Compensation Advisory |
|--------|---|---------------------------------|

| V | Anti-Takeover Related Issues |
|---|------------------------------|

|   | A | Shareholder Rights Plans (“Poison                            Pills”) |
|--------|---|----------------------------------------------------------------------------------|

|   | B | Reincorporation |
|--------|---|-----------------|

|   | C | Fair-Price Proposals |
|--------|---|----------------------|

|   | D | Exemption From State Takeover Laws |
|--------|---|------------------------------------|

|   | E | Non-Financial Effects Of Takeover Bids |
|--------|---|----------------------------------------|

| VI | Mergers & Acquisitions |
|----|----------------------------|

| VII | Social & Political Issues |
|-----|-------------------------------|

|   | A | Labor & Human Rights |
|--------|---|--------------------------|

|   | B | Diversity & Equality |
|--------|---|--------------------------|

|   | C | Health & Safety |
|--------|---|---------------------|

|   | D | Government/Military |
|--------|---|---------------------|

|   | E | Tobacco |
|--------|---|---------|

| VIII | Environmental Issues |
|------|----------------------|

| IX | Miscellaneous Items |
|----|---------------------|

|   | A | Ratification Of Auditors |
|--------|---|--------------------------|

|   | B | Limitation Of Non-Audit Services Provided By Independent                            Auditor |
|--------|---|---------------------------------------------------------------------------------------------|

|   | C | Audit Firm Rotation |
|--------|---|---------------------|

|   | D | Transaction Of Other Business |
|--------|---|-------------------------------|

|   | E | Motions To Adjourn The Meeting |
|--------|---|--------------------------------|

|   | F | Bundled Proposals |
|--------|---|-------------------|

|   | G | Change Of Company Name |
|--------|---|------------------------|

|   | H | Proposals Related To The Annual Meeting |
|--------|---|-----------------------------------------|

 

|   | I | Reimbursement Of Expenses Incurred From Candidate                            Nomination |
|--------|---|-----------------------------------------------------------------------------------------|

|   | J | Investment Company Proxies |
|--------|---|----------------------------|

|   | K | International Proxy Voting |
|--------|---|----------------------------|

 

These Guidelines may reflect a voting position that differs from the            actual practices of the public company (ies) within the Deutsche Bank organization or            of the investment companies for which AM or an affiliate serves as investment adviser            or sponsor.

 

NOTE: Because of the unique structure and regulatory scheme applicable            to closed-end investment companies, the voting guidelines (particularly those related            to governance issues) generally will be inapplicable to holdings of closed-end            investment companies. As a result, determinations on the appropriate voting            recommendation for closed-end investment company shares will be made on a case-by-case            basis.

|   | **I.** | **Board of Directors and Executives** |
|--------|--------|---------------------------------------|

|   | ***A.*** | ***Election of Directors*** |
|--------|----------|-----------------------------|

Routine: AM Policy is to vote “for” the uncontested election            of directors. Votes for a director in an uncontested election will be withheld in cases            where a director has shown an inability to perform his/her duties in the best interests            of the shareholders.

Proxy contest: In a proxy contest involving election of directors, a            case-by-case voting decision will be made based upon analysis of the issues involved            and the merits of the incumbent and dissident slates of directors. AM will incorporate            the decisions of a third party proxy research vendor, currently, Institutional            Shareholder Services (“ISS”) subject to review by the Proxy Voting            Sub-Committee (GPVSC) as set forth in the AM’s Proxy Voting Policies and            Procedures.

Rationale: The large majority of corporate directors fulfill their            fiduciary obligation and in most cases support for management’s nominees is            warranted. As the issues relevant to a contested election differ in each instance,            those cases must be addressed as they arise.

|   | ***B.*** | ***Classified Boards of Directors*** |
|--------|----------|--------------------------------------|

AM            policy is to vote against proposals to classify the board and for proposals to repeal            classified boards and elect directors annually.

Rationale: Directors should be held accountable on an annual basis. By            entrenching the incumbent board, a classified board may be used as an anti-takeover            device to the detriment of the shareholders in a hostile take-over            situation.

|   | ***C.*** | ***Board and Committee                            Independence*** |
|--------|----------|-------------------------------------------------------------------|

AM            policy is to vote:

| 1. | “For” proposals that require that a certain                            percentage (majority up to 66 2/3%) of members of a board of directors                            be comprised of independent or unaffiliated directors. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

| 2. | “For” proposals that require all members of                            a company's compensation, audit, nominating, or other similar                            committees be comprised of independent or unaffiliated                            directors. |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3. | “Against” shareholder proposals to require                            the addition of special interest, or constituency, representatives to                            boards of directors. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4. | “For” separation of the Chairman and CEO                            positions. |
|----|--------------------------------------------------------------------------------------------|

| 5. | “Against” proposals that require a company                            to appoint a Chairman who is an independent director. |
|----|-----------------------------------------------------------------------------------------------------------------------------------------|

Rationale: Board independence is a cornerstone of effective governance            and accountability. A board that is sufficiently independent from management assures            that shareholders' interests are adequately represented. However, the Chairman of the            board must have sufficient involvement in and experience with the operations of the            company to perform the functions required of that position and lead the            company.

 

No            director qualifies as 'independent' unless the board of directors affirmatively            determines that the director has no material relationship with the listed company            (either directly or as a partner, shareholder or officer of an organization that has a            relationship with the company).

Whether a director is in fact not "independent" will depend on the laws            and regulations of the primary market for the security and the exchanges, if any, on            which the security trades.

|   | ***D.*** | ***Liability and Indemnification of                            Directors*** |
|--------|----------|-----------------------------------------------------------------------------|

AM            policy is to vote “for” management proposals to limit directors' liability            and to broaden the indemnification of directors, unless broader indemnification or            limitations on directors' liability would effect shareholders' interests in pending            litigation.

Rationale: While shareholders want directors and officers to be            responsible for their actions, it is not in the best interests of the shareholders for            them to be to risk averse. If the risk of personal liability is too great, companies            may not be able to find capable directors willing to serve. We support expanding            coverage only for actions taken in good faith and not for serious violations of            fiduciary obligation or negligence.

|   | ***E.*** | ***Qualifications of Directors*** |
|--------|----------|-----------------------------------|

AM            policy is to follow management’s recommended vote on either management or            shareholder proposals that set retirement ages for directors or require specific levels            of stock ownership by directors.

Rationale: As a general rule, the board of directors, and not the            shareholders, is most qualified to establish qualification policies.

|   | ***F.*** | ***Removal of Directors and Filling of                            Vacancies*** |
|--------|----------|--------------------------------------------------------------------------------|

AM            policy is to vote “against” proposals that include provisions that            directors may be removed only for cause or proposals that include provisions that only            continuing directors may fill board vacancies.

 

Rationale: Differing state statutes permit removal of directors with or            without cause. Removal of directors for cause usually requires proof of self-dealing,            fraud or misappropriation of corporate assets, limiting shareholders' ability to remove            directors except under extreme circumstances. Removal without cause requires no such            showing.

Allowing only incumbent directors to fill vacancies can serve as an            anti-takeover device, precluding shareholders from filling the board until the next            regular election.

|   | ***G.*** | ***Proposals to Fix the Size of the                            Board*** |
|--------|----------|-------------------------------------------------------------------------|

AM            policy is to vote:

| 1. | “For” proposals to fix the size of the board                            unless: (a) no specific reason for the proposed change is given; or (b)                            the proposal is part of a package of takeover defenses. |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2. | “Against” proposals allowing management to                            fix the size of the board without shareholder approval. |
|----|-------------------------------------------------------------------------------------------------------------------------------------------|

Rationale: Absent danger of anti-takeover use, companies should be            granted a reasonable amount of flexibility in fixing the size of its board.

|   | ***H.*** | ***Proposals to Restrict Chief Executive                            Officer’s Service on Multiple Boards*** |
|--------|----------|-------------------------------------------------------------------------------------------------------------------|

AM            policy is to vote “For” proposals to restrict a Chief Executive Officer            from serving on more than three outside boards of directors.

Rationale: Chief Executive Officer must have sufficient time to ensure            that shareholders’ interests are represented adequately.

 

Note: A            director’s service on multiple closed-end fund boards within a fund complex are            treated as service on a single Board for the purpose of the proxy voting            guidelines.

|   | ***I.*** | ***Proposals to Restrict Supervisory Board Members                            Service on Multiple Boards*****(For FFT                            Securities)** |
|--------|----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

AM            policy is to vote “for” proposals to restrict a Supervisory Board Member            from serving on more than five supervisory boards.

 

Rationale: We consider a strong, independent and knowledgeable            supervisory board as important counter-balance to executive management to ensure that            the interests of shareholders are fully reflected by the company.

 

Full            information should be disclosed in the annual reports and accounts to allow all            shareholders to judge the success of the supervisory board controlling their            company.

Supervisory Board Member must have sufficient time to ensure that            shareholders’ interests are represented adequately.

 

Note: A            director’s service on multiple closed-end fund boards within a fund complex are            treated as service on a single Board for the purpose of the proxy voting            guidelines.

 

|   | ***J.*** | ***Proposals to Establish Audit                            Committees*****(For FFT and U.S.                            Securities)** |
|--------|----------|--------------------------------------------------------------------------------------------------------------------------------------|

AM            policy is to vote “for” proposals that require the establishment of audit            committees.

 

Rationale: The audit committee should deal with accounting and risk            management related questions, verifies the independence of the auditor with due regard            to possible conflicts of interest. It also should determine the procedure of the audit            process.

|   | **II.** | **Capital Structure** |
|--------|---------|-----------------------|

|   | ***A.*** | ***Authorization of Additional Shares (For U.S.                            Securities)*** |
|--------|----------|-------------------------------------------------------------------------------------------|

AM            policy is to vote “for” proposals to increase the authorization of existing            classes of stock that do not exceed a 3:1 ratio of shares authorized to shares            outstanding for a large cap company, and do not exceed a 4:1 ratio of shares authorized            to shares outstanding for a small-midcap company (companies having a market            capitalization under one billion U.S. dollars.).

Rationale: While companies need an adequate number of shares in order to            carry on business, increases requested for general financial flexibility must be            limited to protect shareholders from their potential use as an anti-takeover device.            Requested increases for specifically designated, reasonable business purposes (stock            split, merger, etc.) will be considered in light of those purposes and the number of            shares required.

|   | ***B.*** | ***Authorization of “Blank Check”                            Preferred Stock (For U.S. Securities)*** |
|--------|----------|-------------------------------------------------------------------------------------------------------------------|

AM            policy is to vote:

| 1. | “Against” proposals to create blank check                            preferred stock or to increase the number of authorized shares of blank                            check preferred stock unless the company expressly states that the                            stock will not be used for anti-takeover purposes and will not be                            issued without shareholder approval. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2. | “For” proposals mandating shareholder                            approval of blank check stock placement. |
|----|-----------------------------------------------------------------------------------------------------------------------|

Rationale: Shareholders should be permitted to monitor the issuance of            classes of preferred stock in which the board of directors is given unfettered            discretion to set voting, dividend, conversion and other rights for the shares            issued.

|   | ***C.*** | ***Stock Splits/Reverse Stock                            Splits*** |
|--------|----------|--------------------------------------------------------------------|

AM            policy is to vote “for” stock splits if a legitimate business purpose is            set forth and the split is in the shareholders' best interests. A vote is cast            “for” a reverse stock split only if the number of shares authorized is            reduced in the same proportion as the reverse split or if the effective increase in            authorized shares (relative to outstanding shares) complies with the proxy guidelines            for common stock increases (see, Section II.A, above.)

Rationale: Generally, stock splits do not detrimentally effect            shareholders. Reverse stock splits, however, may have the same result as an increase in            authorized shares and should be analyzed accordingly.

 

|   | ***D.*** | ***Dual Class/Supervoting Stock*** |
|--------|----------|------------------------------------|

AM            policy is to vote “against” proposals to create or authorize additional            shares of super-voting stock or stock with unequal voting rights.

Rationale: The “one share, one vote” principal ensures that            no shareholder maintains a voting interest exceeding their equity interest in the            company.

|   | ***E.*** | ***Large Block Issuance (For U.S.                            Securities)*** |
|--------|----------|-----------------------------------------------------------------------------|

AM            policy is to address large block issuances of stock on a case-by-case basis,            incorporating the recommendation of an independent third party proxy research firm            (currently ISS) subject to review by the GPVSC as set forth in AM’s Proxy            Policies and Procedures.

Additionally, AM supports proposals requiring shareholder approval of            large block issuances.

Rationale: Stock issuances must be reviewed in light of the business            circumstances leading to the request and the potential impact on shareholder            value.

|   | ***F.*** | ***Recapitalization into a Single Class of                            Stock*** |
|--------|----------|--------------------------------------------------------------------------------|

AM            policy is to vote “for” recapitalization plans to provide for a single            class of common stock, provided the terms are fair, with no class of stock being unduly            disadvantaged.

Rationale: Consolidation of multiple classes of stock is a business            decision that may be left to the board and/management if there is no adverse effect on            shareholders.

|   | ***G.*** | ***Share Repurchases*** |
|--------|----------|-------------------------|

AM            policy is to vote “for” share repurchase plans provided all shareholders            are able to participate on equal terms.

Rationale: Buybacks are generally considered beneficial to shareholders            because they tend to increase returns to the remaining shareholders.

|   | ***H.*** | ***Reductions in Par Value*** |
|--------|----------|-------------------------------|

AM            policy is to vote “for” proposals to reduce par value, provided a            legitimate business purpose is stated (e.g., the reduction of corporate tax            responsibility.)

Rationale: Usually, adjustments to par value are a routine financial            decision with no substantial impact on shareholders.

|   | **III.** | **Corporate Governance Issues** |
|--------|----------|---------------------------------|

|   | ***A.*** | ***Confidential Voting*** |
|--------|----------|---------------------------|

AM            policy is to vote “for” proposals to provide for confidential voting and            independent tabulation of voting results and to vote “against” proposals to            repeal such provisions.

 

Rationale: Confidential voting protects the privacy rights of all            shareholders. This is particularly important for employee-shareholders or shareholders            with business or other affiliations with the company, who may be vulnerable to coercion            or retaliation when opposing management. Confidential voting does not interfere with            the ability of corporations to communicate with all shareholders, nor does it prohibit            shareholders from making their views known directly to management.

|   | ***B.*** | ***Cumulative Voting (For U.S.                            Securities)*** |
|--------|----------|--------------------------------------------------------------------------|

AM            policy is to vote “against” shareholder proposals requesting cumulative            voting and “for”management proposals to eliminate it. The protections            afforded shareholders by cumulative voting are not necessary when a company has a            history of good performance and does not have a concentrated ownership interest.            Accordingly, a vote is cast “against” cumulative voting and            “for” proposals to eliminate it if:

| a) | The company has a five year return on investment greater                            than the relevant industry index, |
|----|-----------------------------------------------------------------------------------------------------------------------|

| b) | All directors and executive officers as a group                            beneficially own less than 10% of the outstanding stock,*and* |
|----|------------------------------------------------------------------------------------------------------------------------------------------|

| c) | No shareholder (or voting block) beneficially owns 15%                            or more of the company. |
|----|-----------------------------------------------------------------------------------------------------------|

Thus, failure of any one of the three criteria results in a vote for            cumulative voting in accordance with the general policy.

Rationale: Cumulative voting is a tool that should be used to ensure            that holders of a significant number of shares may have board representation; however,            the presence of other safeguards may make their use unnecessary.

|   | ***C.*** | ***Supermajority Voting                            Requirements*** |
|--------|----------|--------------------------------------------------------------------|

AM            policy is to vote “against” management proposals to require a supermajority            vote to amend the charter or bylaws and to vote “for” shareholder proposals            to modify or rescind existing supermajority requirements.

*Exception made when company holds a controlling position and seeks to            lower threshold to maintain control and/or make changes to corporate            by-laws.

Rationale: Supermajority voting provisions violate the democratic            principle that a simple majority should carry the vote. Setting supermajority            requirements may make it difficult or impossible for shareholders to remove egregious            by-law or charter provisions. Occasionally, a company with a significant insider held            position might attempt to lower a supermajority threshold to make it easier for            management to approve provisions that may be detrimental to shareholders. In that case,            it may not be in the shareholders interests to lower the supermajority            provision.

|   | ***D.*** | ***Shareholder Right to Vote*** |
|--------|----------|---------------------------------|

AM            policy is to vote “against” proposals that restrict the right of            shareholders to call special meetings, amend the bylaws, or act by written consent.            Policy is to vote “for” proposals that remove such restrictions.

Rationale: Any reasonable means whereby shareholders can make their            views known to management or effect the governance process should be            supported.

 

|   | **IV.** | **Compensation** |
|--------|---------|------------------|

Annual Incentive Plans or Bonus Plans are often submitted to            shareholders for approval. These plans typically award cash to executives based on            company performance. Deutsche Bank believes that the responsibility for executive            compensation decisions rest with the board of directors and/or the compensation            committee, and its policy is not to second-guess the board’s award of cash            compensation amounts to executives unless a particular award or series of awards is            deemed excessive. If stock options are awarded as part of these bonus or incentive            plans, the provisions must meet Deutsche Bank’s criteria regarding stock option            plans, or similar stock-based incentive compensation schemes, as set forth            below.

|   | ***A.*** | ***Establishment of a Remuneration                            Committee*****(For FFT                            Securities)** |
|--------|----------|-------------------------------------------------------------------------------------------------------------------------------|

AM            policy is to vote “for” proposals that require the establishment of a            remuneration committee.

 

Rationale: Corporations should disclose in each annual report or proxy            statement their policies on remuneration. Essential details regarding executive            remuneration including share options, long-term incentive plans and bonuses, should be            disclosed in the annual report, so that investors can judge whether corporate pay            policies and practices meet the standard.

 

The            remuneration committee shall not comprise any board members and should be sensitive to            the wider scene on executive pay. It should ensure that performance-based elements of            executive pay are designed to align the interests of shareholders.

|   | ***B.*** | ***Executive and Director Stock Option                            Plans*** |
|--------|----------|----------------------------------------------------------------------------|

AM            policy is to vote “for” stock option plans that meet the following            criteria:

| (1) | The resulting dilution of existing shares is less than                            (a) 15 percent of outstanding shares for large capital corporations or                            (b) 20 percent of outstanding shares for small-mid capital companies                            (companies having a market capitalization under one billion U.S.                            dollars.) |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | The transfer of equity resulting from granting options                            at less than FMV is no greater than 3% of the over-all market                            capitalization of large capital corporations, or 5% of market cap for                            small-mid capital companies. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | The plan does not contain express repricing provisions                            and, in the absence of an express statement that options will not be                            repriced; the company does not have a history of repricing                            options. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | The plan does not grant options on super-voting                            stock. |
|-----|-----------------------------------------------------------------------------------|

AM            will support performance-based option proposals as long as a) they do not mandate that            all options granted by the company must be performance based, and b) only certain            high-level executives are subject to receive the performance based options.

AM            will support proposals to eliminate the payment of outside director            pensions.

 

Rationale: Determining the cost to the company and to shareholders of            stock-based incentive plans raises significant issues not encountered with cash-based            compensation plans. These include the potential dilution of existing shareholders'            voting power, the transfer of equity out of the company resulting from the grant and            execution of options at less than FMV and the authority to reprice or replace            underwater options. Our stock option plan analysis model seeks to allow reasonable            levels of flexibility for a company yet still protect shareholders from the negative            impact of excessive stock compensation. Acknowledging that small mid-capital            corporations often rely more heavily on stock option plans as their main source of            executive compensation and may not be able to compete with their large capital            competitors with cash compensation, we provide slightly more flexibility for those            companies.

|   | ***C.*** | ***Employee Stock Option/Purchase                            Plans*** |
|--------|----------|-----------------------------------------------------------------------|

AM            policy is to vote for employee stock purchase plans (ESPP's) when the plan complies            with Internal Revenue Code 423, allowing non-management employees to purchase stock at            85% of FMV.

AM            policy is to vote “for” employee stock option plans (ESOPs) provided they            meet the standards for stock option plans in general. However, when computing dilution            and transfer of equity, ESOPs are considered independently from executive and director            option plans.

Rationale: ESOPs and ESPP’s encourage rank-and-file employees to            acquire an ownership stake in the companies they work for and have been shown to            promote employee loyalty and improve productivity.

|   | ***D.*** | ***Golden Parachutes*** |
|--------|----------|-------------------------|

AM            policy is to vote “for” proposals to require shareholder approval of golden            parachutes and for proposals that would limit golden parachutes to no more than three            times base compensation. Policy is to vote “against” more restrictive            shareholder proposals to limit golden parachutes.

Rationale: In setting a reasonable limitation, AM considers that an            effective parachute should be less attractive than continued employment and that the            IRS has opined that amounts greater than three times annual salary, are            excessive.

|   | ***E.*** | ***Proposals to Limit Benefits or Executive                            Compensation*** |
|--------|----------|----------------------------------------------------------------------------------------|

AM            policy is to vote “against”

| 1. | Proposals to limit benefits, pensions or compensation                            and |
|----|--------------------------------------------------------------------------------------|

| 2. | Proposals that request or require disclosure of                            executive compensation greater than the disclosure required by                            Securities and Exchange Commission (SEC) regulations. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Rationale: Levels of compensation and benefits are generally considered            to be day-to-day operations of the company, and are best left unrestricted by arbitrary            limitations proposed by shareholders.

|   | ***F.*** | ***Option Expensing*** |
|--------|----------|------------------------|

AM            policy is to support proposals requesting companies to expense stock            options.

 

Rationale: Although companies can choose to expense options voluntarily,            the Financial Accounting Standards Board (FASB) does not yet require it, instead            allowing companies to disclose the theoretical value of options as a footnote. Because            the expensing of stock options lowers earnings, most companies elect not to do so.            Given the fact that options have become an integral component of compensation and their            exercise results in a transfer of shareholder value, AM agrees that their value should            not be ignored and treated as “no cost” compensation. The expensing of            stock options would promote more modest and appropriate use of stock options in            executive compensation plans and present a more accurate picture of company operational            earnings.

|   | ***G.*** | ***Management board election and                            motion*****(For FFT                            Securities)** |
|--------|----------|--------------------------------------------------------------------------------------------------------------------------|

 

AM            policy is to vote “against”:

 

| • | the election of board members with positions on either                            remuneration or audit committees; |
|--------|---------------------------------------------------------------------------------------------------------------------|

| • | the election of supervisory board members with too many                            supervisory board mandates; |
|--------|----------------------------------------------------------------------------------------------------------------|

| • | “*automatic*                            ” election of former board members into the supervisory                            board. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|

 

Rationale: Management as an entity, and each of its members, are            responsible for all actions of the company, and are - subject to applicable laws and            regulations - accountable to the shareholders as a whole for their actions.

 

Sufficient information should be disclosed in the annual company report            and account to allow shareholders to judge the success of the company.

 

|   | ***H.*** | ***Remuneration (variable pay):***(For FFT Securities) |
|--------|----------|--------------------------------------------------------|

 

**Executive remuneration for Management Board**

 

AM            policy is to vote “for” remuneration for Management Board that is            transparent and linked to results.

 

Rationale: Executive compensation should motivate management and align            the interests of management with the shareholders. The focus should be on criteria that            prevent excessive remuneration; but enable the company to hire and retain first-class            professionals.

 

Shareholder interests are normally best served when management is            remunerated to optimise long-term returns. Criteria should include suitable            measurements like return on capital employed or economic value added.

             

Interests should generally also be correctly aligned when management own            shares in the company – even more so if these shares represent a substantial            portion of their own wealth.

             

Its            disclosure shall differentiate between fixed pay, variable (performance related) pay            and long-term incentives, including stock option plans with valuation ranges as well as            pension and any other significant arrangements.

 

**Executive remuneration for Supervisory Board**

 

AM            policy is to vote “for” remuneration for Supervisory Board that is at least            50% in fixed form.

 

Rationale: It would normally be preferable if performance linked            compensation were not based on dividend payments, but linked to suitable result based            parameters. Consulting and procurement services should also be published in the company            report.

 

|   | ***I.*** | ***Long-term incentive plans*****(For FFT Securities)** |
|--------|----------|---------------------------------------------------------|

 

AM            policy is to vote “for” long-term incentive plans for members of a            management board that reward for above average company performance.

 

Rationale: Incentive plans will normally be supported if            they:

 

| • | directly align the interests of members of management                            boards with those of shareholders; |
|--------|---------------------------------------------------------------------------------------------------------------------|

| • | establish challenging performance criteria to reward                            only above average performance; |
|--------|-----------------------------------------------------------------------------------------------------------------|

| • | measure performance by total shareholder return in                            relation to the market or a range of comparable companies; |
|--------|------------------------------------------------------------------------------------------------------------------------------------------|

| • | are long-term in nature and encourage long-term                            ownership of the shares once exercised through minimum holding                            periods; |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | do not allow a repricing of the exercise price in stock                            option plans. |
|--------|--------------------------------------------------------------------------------------------------|

|   | ***J.*** | ***Shareholder Proposals Concerning “Pay for                            Superior Performance”*** |
|--------|----------|--------------------------------------------------------------------------------------------------------------|

AM            policy is to address pay for superior performance proposals on a case-by-case basis,            incorporating the recommendation of an independent third party proxy research firm            (currently ISS) subject to review by the GPVSC as set forth in AM’s Proxy            Policies and Procedures.

Rationale: While AM agrees that compensation issues are better left to            the discretion of management, they appreciate the need to monitor for excessive            compensation practices on a case by case basis. If, after a review of the ISS metrics,            AM is comfortable with ISS’s applying this calculation and will vote according to            their recommendation.

|   | ***K.*** | ***Executive Compensation Advisory*** |
|--------|----------|---------------------------------------|

AM            policy is to follow management’s recommended vote on shareholder proposals to            propose an advisory resolution seeking to ratify the compensation of the            company’s named executive officers (NEOs) on an annual basis.

Rationale: AM believes that controls exist within senior management and            corporate compensation committees, ensuring fair compensation to executives. This might            allow shareholders to require approval for all levels of management’s            compensation.

 

|   | **V.** | **Anti-Takeover Related Issues** |
|--------|--------|----------------------------------|

|   | ***A.*** | ***Shareholder Rights Plans (“Poison                            Pills”)*** |
|--------|----------|----------------------------------------------------------------------------------------|

AM            policy is to vote “for” proposals to require shareholder ratification of            poison pills or that request boards to redeem poison pills, and to vote            “against” the adoption of poison pills if they are submitted for            shareholder ratification.

Rationale: Poison pills are the most prevalent form of corporate            takeover defenses and can be (and usually are) adopted without shareholder review or            consent. The potential cost of poison pills to shareholders during an attempted            takeover outweighs the benefits.

|   | ***B.*** | ***Reincorporation*** |
|--------|----------|-----------------------|

AM            policy is to examine reincorporation proposals on a case-by-case basis. The voting            decision is based on: (1) differences in state law between the existing state of            incorporation and the proposed state of incorporation; and (2) differences between the            existing and the proposed charter/bylaws/articles of incorporation and their effect on            shareholder rights. If changes resulting from the proposed reincorporation violate the            corporate governance principles set forth in these guidelines, the reincorporation will            be deemed contrary to shareholder’s interests and a vote cast            “against.”

Rationale: Reincorporations can be properly analyzed only by looking at            the advantages and disadvantages to their shareholders. Care must be taken that            anti-takeover protection is not the sole or primary result of a proposed            change.

|   | ***C.*** | ***Fair-Price Proposals*** |
|--------|----------|----------------------------|

AM            policy is to vote “for” management fair-price proposals, provided that: (1)            the proposal applies only to two-tier offers; (2) the proposal sets an objective            fair-price test based on the highest price that the acquirer has paid for a company's            shares; (3) the supermajority requirement for bids that fail the fair-price test is no            higher than two-thirds of the outstanding shares; (4) the proposal contains no other            anti-takeover provisions or provisions that restrict shareholders rights.

A            vote is cast for shareholder proposals that would modify or repeal existing fair-price            requirements that do not meet these standards.

Rationale: While fair price provisions may be used as anti-takeover            devices, if adequate provisions are included, they provide some protection to            shareholders who have some say in their application and the ability to reject those            protections if desired.

|   | ***D.*** | ***Exemption from state takeover                            laws*** |
|--------|----------|---------------------------------------------------------------------|

AM            policy is to vote “for” shareholder proposals to opt out of state takeover            laws and to vote “against” management proposals requesting to opt out of            state takeover laws.

Rationale: Control share statutes, enacted at the state level, may harm            long-term share value by entrenching management. They also unfairly deny certain shares            their inherent voting rights.

 

|   | ***E.*** | ***Non-financial Effects of Takeover                            Bids*** |
|--------|----------|-------------------------------------------------------------------------|

Policy is to vote “against” shareholder proposals to require            consideration of non-financial effects of merger or acquisition proposals.

Rationale: Non-financial effects may often be subjective and are            secondary to AM’s stated purpose of acting in its client’s best economic            interest.

|   | **VI.** | **Mergers & Acquisitions** |
|--------|---------|--------------------------------|

Evaluation of mergers, acquisitions and other special corporate            transactions (i.e., takeovers, spin-offs, sales of assets, reorganizations,            restructurings and recapitalizations) are performed on a case-by-case basis            incorporating information from an independent proxy research source (currently ISS.)            Additional resources including portfolio management and research analysts may be            considered as set forth in AM’s Policies and Procedures.

|   | **VII.** | **Social, Environmental & Political                            Issues** |
|--------|----------|-----------------------------------------------------------------------------|

 

Social and environmental issues are becoming increasingly important to            corporate success. We incorporate social and environmental considerations into both our            investment decisions and our proxy voting decisions – particularly if the            financial performance of the company could be impacted.

With increasing frequency, shareholder proposals are submitted relating            to social and political responsibility issues. Almost universally, the company            management will recommend a vote “against” these proposals. These types of            proposals cover an extremely wide range of issues. Many of the issues tend to be            controversial and are subject to more than one reasonable, yet opposing, theory of            support. More so than with other types of proxy proposals, social and political            responsibility issues may not have a connection to the economic and corporate            governance principles effecting shareholders’ interests. AM’s policy            regarding social and political responsibility issues, as with any other issue, is            designed to protect our client shareholders’ economic interests.

Occasionally, a distinction is made between a shareholder proposal            requesting direct action on behalf of the board and a request for a report on (or            disclosure of) some information. In order to avoid unduly burdening any company with            reporting requirements, AM’s policy is to vote against shareholder proposals that            demand additional disclosure or reporting than is required by the Securities and            Exchange Commission unless it appears there is a legitimate issue and the company has            not adequately addressed shareholders' concerns.

|   | ***A.*** | ***Labor & Human Rights*** |
|--------|----------|--------------------------------|

AM            policy is to vote “against” adopting global codes of conduct or workplace            standards exceeding those mandated by law.

Rationale: Additional requirements beyond those mandated by law are            deemed unnecessary and potentially burdensome to companies

 

|   | ***B.*** | ***Diversity & Equality*** |
|--------|----------|--------------------------------|

| 1. | AM policy is to vote “against” shareholder                            proposals to force equal employment opportunity, affirmative action or                            board diversity. |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Rationale: Compliance with State and Federal legislation along with            information made available through filings with the EEOC provides sufficient assurance            that companies act responsibly and make information public.

| 2. | AM policy is also to vote “against”                            proposals to adopt the Mac Bride Principles. The Mac Bride Principles                            promote fair employment, specifically regarding religious                            discrimination. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Rationale: Compliance with the Fair Employment Act of 1989 makes            adoption of the Mac Bride Principles redundant. Their adoption could potentially lead            to charges of reverse discrimination.

|   | ***C.*** | ***Health & Safety*** |
|--------|----------|---------------------------|

| 1. | AM policy is to vote “against” adopting a                            pharmaceutical price restraint policy or reporting pricing policy                            changes. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Rationale: Pricing is an integral part of business for pharmaceutical            companies and should not be dictated by shareholders (particularly pursuant to an            arbitrary formula.) Disclosing pricing policies may also jeopardize a company’s            competitive position in the marketplace.

| 2. | AM policy is to vote “against” shareholder                            proposals to control the use or labeling of and reporting on                            genetically engineered products. |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Rationale: Additional requirements beyond those mandated by law are            deemed unnecessary and potentially burdensome to companies.

|   | ***D.*** | ***Government/Military*** |
|--------|----------|---------------------------|

| 1. | AM policy is to vote against shareholder proposals                            regarding the production or sale of military arms or nuclear or                            space-based weapons, including proposals seeking to dictate a company's                            interaction with a particular foreign country or agency. |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Rationale: Generally, management is in a better position to determine            what products or industries a company can and should participate in. Regulation of the            production or distribution of military supplies is, or should be, a matter of            government policy.

| 2. | AM policy is to vote “against” shareholder                            proposals regarding political contributions and donations. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------|

Rationale: The Board of Directors and Management, not shareholders,            should evaluate and determine the recipients of any contributions made by the            company.

| 3. | AM policy is to vote “against” shareholder                            proposals regarding charitable contributions and donations. |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------|

Rationale: The Board of Directors and Management, not shareholders,            should evaluate and determine the recipients of any contributions made by the            company.

 

|   | ***E.*** | ***Tobacco*** |
|--------|----------|---------------|

| 1. | AM policy is to vote “against” shareholder                            proposals requesting additional standards or reporting requirements for                            tobacco companies as well as “against” requesting companies                            to report on the intentional manipulation of nicotine                            content. |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Rationale: Where a tobacco company’s actions meet the requirements            of legal and industry standards, imposing additional burdens may detrimentally effect a            company's ability to compete. The disclosure of nicotine content information could            affect the company's rights in any pending or future litigation.

| 2. | Shareholder requests to spin-off or restructure tobacco                            businesses will be opposed. |
|----|----------------------------------------------------------------------------------------------------------------|

Rationale: These decisions are more appropriately left to the Board and            management, and not to shareholder mandate.

|   | **VIII.** | **Environmental Issues** |
|--------|-----------|--------------------------|

AM            policy is to follow management's recommended vote on CERES Principles or other similar            environmental mandates (e.g., those relating to Greenhouse gas emissions or the use of            nuclear power).

Rationale: Environmental issues are extensively regulated by outside            agencies and compliance with additional requirements often involves significant cost to            companies.

|   | **IX.** | **Miscellaneous Items** |
|--------|---------|-------------------------|

|   | ***A.*** | ***Ratification of Auditors*** |
|--------|----------|--------------------------------|

AM            policy is to vote “for” a) the management recommended selection of auditors            and b) proposals to require shareholder approval of auditors.

Rationale: Absent evidence that auditors have not performed their duties            adequately, support for management’s nomination is warranted.

|   | ***B.*** | ***Limitation of non-audit services provided by                            independent auditor*** |
|--------|----------|---------------------------------------------------------------------------------------------------|

AM            policy is to support proposals limiting non-audit fees to 50% of the aggregate annual            fees earned by the firm retained as a company's independent auditor.

Rationale: In the wake of financial reporting problems and alleged audit            failures at a number of companies, AM supports the general principle that companies            should retain separate firms for audit and consulting services to avoid potential            conflicts of interest. However, given the protections afforded by the recently enacted            Sarbanes-Oxley Act of 2002 (which requires Audit Committee pre-approval for non-audit            services and prohibits auditors from providing specific types of services), and the            fact that some non-audit services are legitimate audit-related services, complete            separation of audit and consulting fees may not be warranted. A reasonable limitation            is appropriate to help ensure auditor independence and it is reasonable to expect that            audit fees exceed non-audit fees.

 

|   | ***C.*** | ***Audit firm rotation*** |
|--------|----------|---------------------------|

AM            policy is to support proposals seeking audit firm rotation unless the rotation period            sought is less than five years.

Rationale: While the Sarbanes-Oxley Act mandates that the lead audit            partner be switched every five years, AM believes that rotation of the actual audit            firm would provide an even stronger system of checks and balances on the audit            function.

|   | ***D.*** | ***Transaction of Other Business*** |
|--------|----------|-------------------------------------|

AM            policy is to vote against “transaction of other business”            proposals.

Rationale: This is a routine item to allow shareholders to raise other            issues and discuss them at the meeting. As the nature of these issues may not be            disclosed prior to the meeting, we recommend a vote against these proposals. This            protects shareholders voting by proxy (and not physically present at a meeting) from            having action taken at the meeting that they did not receive proper notification of or            sufficient opportunity to consider.

|   | ***E.*** | ***Motions to Adjourn the Meeting*** |
|--------|----------|--------------------------------------|

AM            Policy is to vote against proposals to adjourn the meeting.

Rationale: Management may seek authority to adjourn the meeting if a            favorable outcome is not secured. Shareholders should already have had enough            information to make a decision. Once votes have been cast, there is no justification            for management to continue spending time and money to press shareholders for            support.

|   | ***F.*** | ***Bundled Proposals*** |
|--------|----------|-------------------------|

AM            policy is to vote against bundled proposals if any bundled issue would require a vote            against it if proposed individually.

Rationale: Shareholders should not be forced to “take the good            with the bad” in cases where the proposals could reasonably have been submitted            separately.

|   | ***G.*** | ***Change of Company Name*** |
|--------|----------|------------------------------|

AM            policy is to support management on proposals to change the company name.

Rationale: This is generally considered a business decision for a            company.

|   | ***H.*** | ***Proposals Related to the Annual                            Meeting*** |
|--------|----------|--------------------------------------------------------------------------|

AM            Policy is to vote in favor of management for proposals related to the conduct of the            annual meeting (meeting time, place, etc.)

Rationale: These are considered routine administrative            proposals.

 

|   | ***I.*** | ***Reimbursement of Expenses Incurred from Candidate                            Nomination*** |
|--------|----------|-----------------------------------------------------------------------------------------------|

AM            policy is to follow management’s recommended vote on shareholder proposals            related to the amending of company bylaws to provide for the reimbursement of            reasonable expenses incurred in connection with nominating one or more candidates in a            contested election of directors to the corporation’s board of            directors.

Rationale: Corporations should not be liable for costs associated with            shareholder proposals for directors.

|   | ***J.*** | ***Investment Company Proxies*** |
|--------|----------|----------------------------------|

Proxies solicited by investment companies are voted in accordance with            the recommendations of an independent third party, currently ISS. However, regarding            investment companies for which AM or an affiliate serves as investment adviser or            principal underwriter, such proxies are voted in the same proportion as the vote of all            other shareholders. Proxies solicited by master funds from feeder funds will be voted            in accordance with applicable provisions of Section 12 of the Investment Company Act of            1940.

Investment companies, particularly closed-end investment companies, are            different from traditional operating companies. These differences may call for            differences in voting positions on the same matter. For example, AM could vote            “for” staggered boards of closed-end investment companies, although AM            generally votes “against” staggered boards for operating companies.            Further, the manner in which AM votes investment company proxies may differ from            proposals for which a AM-advised investment company solicits proxies from its            shareholders. As reflected in the Guidelines, proxies solicited by closed-end (and            open-end) investment companies are voted in accordance with the pre-determined            guidelines of an independent third-party.

Subject to participation agreements with certain Exchange Traded Funds            ("ETF") issuers that have received exemptive orders from the U.S. Securities and            Exchange Commission allowing investing DWS funds to exceed the limits set forth in            Section 12(d)(1)(A) and (B) of the Investment Company Act of 1940, DeAM will echo vote            proxies for ETFs in which Deutsche Bank holds more than 25% of outstanding voting            shares globally when required to do so by participation agreements and SEC            orders.

Note: With respect to the QP Trust (not registered under the Investment            Company Act of 1940), the Fund is not required to engage in echo voting and the            investment adviser will use these Guidelines, and may determine, with respect to the QP            Trust, to vote contrary to the positions in the Guidelines, consistent with the            Fund’s best interest.

|   | ***K.*** | ***International Proxy Voting*** |
|--------|----------|----------------------------------|

 

The            above guidelines pertain to issuers organized in the United States, Canada and Germany.            Proxies solicited by other issuers are voted in accordance with international            guidelines or the recommendation of ISS and in accordance with applicable law and            regulation.

 

 

 

IMPORTANT: The information contained herein is the property of Deutsche            Bank Group and may not be copied, used or disclosed in whole or in part, stored in a            retrieval system or transmitted in any form or by any means (electronic, mechanical,            reprographic, recording or otherwise) without the prior written permission of Deutsche            Bank Group.

 

 

|        |                                                                                            |
|-------------|-------------------------------------------------------------------------------------------------|
|        |                                                                                            |
| **ITEM 8.** | **PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT                            INVESTMENT COMPANIES** |
|        |                                                                                            |
|        |                                                                                            |

 

 

**Portfolio Manager Team Disclosure**

 

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

 

The            following individuals handle the day-to-day management of the Fund.

 

John F.            Robertson, CFA

Managing Director of Deutsche Asset Management and of RREEF and            Co-Manager of the Fund.

|   | **•** | Joined RREEF in 1997, Deutsche Asset Management 2002 and                            the Fund in 2003. |
|--------|------------|-------------------------------------------------------------------------------------------------------|

|   | **•** | Prior to that, Assistant Vice President of Lincoln                            Investment Management responsible for REIT research. |
|--------|------------|------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | Over 15 years of investment industry                            experience. |
|--------|------------|-----------------------------------------------------------------------------|

|   | **•** | BA, Wabash College; MBA, Indiana University. |
|--------|------------|----------------------------------------------|

 

Jerry            W. Ehlinger, CFA

Managing Director of Deutsche Asset Management and of RREEF and            Co-Manager of the Fund.

|   | **•** | Joined RREEF and Deutsche Asset Management in 2004 and                            the Fund in 2005. |
|--------|------------|-----------------------------------------------------------------------------------------------------|

|   | **•** | Prior to that, Senior Vice President at Heitman Real                            Estate Investment Management from 2000-2004. |
|--------|------------|------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | Prior to that, Senior Research Associate at Morgan                            Stanley Asset Management from 1996-2000. |
|--------|------------|------------------------------------------------------------------------------------------------------------------------|

|   | **•** | Over 10 years of investment industry                            experience. |
|--------|------------|-----------------------------------------------------------------------------|

|   | **•** | BA, University of Wisconsin-Whitewater, MS, University                            of Wisconsin-Madison. |
|--------|------------|---------------------------------------------------------------------------------------------------------|

 

John W.            Vojticek

Managing Director of Deutsche Asset Management and of RREEF and            Co-Manager of the Fund.

|   | **•** | Joined RREEF and Deutsche Asset Management in 2004 and                            the Fund in 2004. |
|--------|------------|-----------------------------------------------------------------------------------------------------|

|   | **•** | Prior to that, Principal at KG Redding and Associates,                            March 2004–September 2004. |
|--------|------------|--------------------------------------------------------------------------------------------------------------------|

|   | **•** | Prior to that, Managing Director of RREEF from                            1996–March 2004 and Deutsche Asset Management from                            2002–March 2004. |
|--------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | Over 10 years of investment industry                            experience. |
|--------|------------|-----------------------------------------------------------------------------|

|   | **•** | BS, University of Southern California. |
|--------|------------|----------------------------------------|

 

 

 

Asad            Kazim

Director of Deutsche Asset Management. Vice President of RREEF and            Co-Manager of the Fund.

|   | **•** | Joined RREEF and Deutsche Asset Management in 2002 and                            the Fund in 2005. |
|--------|------------|-----------------------------------------------------------------------------------------------------|

 

|   | **•** | Prior to that, Financial Analyst at Clarion CRA                            Securities from 2000-2002. |
|--------|------------|-------------------------------------------------------------------------------------------------------|

|   | **•** | Over 5 years of investment industry                            experience. |
|--------|------------|----------------------------------------------------------------------------|

|   | **•** | BS, The College of New Jersey. |
|--------|------------|--------------------------------|

 

**Compensation of Portfolio Managers**

 

Portfolio managers are eligible for total compensation comprised of base            salary and discretionary incentive compensation.

 

**Base            Salary**– Base salary generally represents a smaller            percentage of portfolio managers’ total compensation than discretionary incentive            compensation. Base salary is linked to job function, responsibilities and financial            services industry peer comparison through the use of extensive market data            surveys.

 

**Discretionary Incentive****Compensation            –**Generally,discretionary            incentive compensation comprises a greater proportion of total compensation as a            portfolio manager’s seniority and compensation levels increase. Discretionary            incentive compensation is determined based on an analysis of a number of factors,            including among other things, the performance of Deutsche Bank, the performance of the            Asset Management division, and the employee’s individual contribution. In            evaluating individual contribution, management will consider a combination of            quantitative and qualitative factors. A portion of the portfolio manager’s            discretionary incentive compensation may be delivered in long-term equity programs            (usually in the form of Deutsche Bank equity) (the “Equity Plan”). Top            performing portfolio managers may earn discretionary incentive compensation that is a            multiple of their base salary.

 

|   | **•** | The quantitative analysis of a portfolio manager’s                            individual performance is based on, among other factors, performance of                            all of the accounts managed by the portfolio manager (which includes                            the fund and any other accounts managed by the portfolio manager) over                            a one-, three-, and five-year period relative to the appropriate                            Morningstar and Lipper peer group universes and/or benchmark index(es)                            with respect to each account. Additionally, the portfolio                            manager’s retail/institutional asset mix is weighted, as                            appropriate for evaluation purposes. Generally the benchmark index used                            is a benchmark index set forth in the fund's prospectus to which the                            fund's performance is compared. Additional or different appropriate                            peer group or benchmark indices may also be used. Primary weight is                            given to pre-tax portfolio performance over three-year and five-year                            time periods (adjusted as appropriate if the portfolio manager has                            served for less than five years) with lesser consideration given to                            portfolio performance over a one-year period. The increase or decrease                            in a fund’s assets due to the purchase or sale of fund shares is                            not considered a material factor. |
|--------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|   | **•** | The qualitative analysis of a portfolio manager’s                            individual performance is based on, among other things, the results of                            an annual management and internal peer review process, and management's                            assessment of overall portfolio manager contributions to investor                            relations, the investment process and overall performance (distinct                            from fund and other account performance). Other factors, including                            contributions made to the investment team, as well as adherence to                            Compliance Policies and Procedures, Risk Management procedures, the                            firm’s Code of Ethics and “living the values” of the                            Advisor are also factors. |
|--------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

             

The            quantitative analysis of a portfolio manager’s performance is given more weight            in determining discretionary incentive compensation than the qualitative            portion.

 

Certain            portfolio managers may also participate in the Equity Plan. The amount of equity            awarded under the long-term equity programs is generally based on the            individual’s total compensation package and may comprise from 0% to 30% of the            total compensation award. As discretionary incentive compensation increases, the            percentage of compensation awarded in Deutsche Bank equity also increases. Portfolio            managers may receive a portion of their equity compensation in the form of shares in            the proprietary mutual funds that they manage or support.

**Fund Ownership of Portfolio Managers**

 

The            following table shows the dollar range of shares owned beneficially and of record by            each member of the Fund’s portfolio management team in the Fund as well as in all            DWS Funds as a group (i.e. those funds advised by Deutsche

 

Asset            Management or its affiliates), including investments by their immediate family members            sharing the same household and amounts invested through retirement and deferred            compensation plans. This information is provided as of the Fund’s most recent            fiscal year end.

 

 

| **Name of****Portfolio Manager**             | **Dollar Range of**

**Fund Shares Owned** | **Dollar Range of All DWS Fund Shares                            Owned** |
|----------------------------------------------|--------------------------------------------|--------------------------------------------------------------------------|
| Jerry W.                            Ehlinger | -                                          | $50,001-$100,000                                                         |
| John F.                            Robertson | -                                          | $500,001-$1,000,000                                                      |
| Asad Kazim                                   | -                                          | $10,001-$50,000                                                          |
| John W.                            Vojticek  | -                                          | $10,001-$50,000                                                          |

 

**Conflicts of Interest**

In            addition to managing the assets of the Fund, the Fund’s portfolio managers may            have responsibility for managing other client accounts of the Advisor or its            affiliates. The tables below show, for each portfolio manager, the number and asset            size of (1) SEC registered investment companies (or series thereof) other than the            Fund, (2) pooled investment vehicles that are not registered investment companies and            (3) other accounts (e.g., accounts managed for individuals or organizations) managed by            each portfolio manager. Total assets attributed to each portfolio manager in the tables            below include total assets of each account managed by them, although the manager may            only manage a portion of such account’s assets. The tables also show the number            of performance based fee accounts, as well as the total assets of the accounts for            which the advisory fee is based on the performance of the account. This information is            provided as of the Fund’s most recent fiscal year end.

 

 

**Other SEC Registered Investment Companies Managed:**

 

 

| **Name of Portfolio Manager** | **Number of Registered Investment                            Companies** | **Total Assets of Registered Investment                            Companies** | **Number of Investment Company Accounts with                            Performance Based Fee** | **Total Assets of Performance- Based Fee                            Accounts** |
|-------------------------------|--------------------------------------------------------------------------|--------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------|
| Jerry W. Ehlinger             | 7                                                                        | $1,461,768,936                                                                 | -                                                                                               | -                                                                              |
| John F. Robertson             | 12                                                                       | $3,911,041,205                                                                 | -                                                                                               | -                                                                              |
| Asad Kazim                    | 7                                                                        | $1,461,768,936                                                                 | -                                                                                               | -                                                                              |
| John W. Vojticek              | 11                                                                       | $3,851,738,974                                                                 | -                                                                                               | -                                                                              |

 

**Other Pooled Investment Vehicles Managed:**

 

 

| **Name of Portfolio Manager** | **Number of Pooled Investment Vehicles** | **Total Assets of Pooled Investment                            Vehicles** | **Number of Pooled Investment Vehicle Accounts with                            Performance-Based Fee** | **Total Assets of Performance- Based Fee                            Accounts** |
|-------------------------------|------------------------------------------|---------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------|
| Jerry W. Ehlinger             | 5                                        | $292,440,500                                                              | 2                                                                                                      | $30,002,911                                                                    |
| John F. Robertson             | 19                                       | $1,083,077,360                                                            | 2                                                                                                      | $30,002,911                                                                    |

 

 

 

| Asad Kazim       | 5 | $292,440,500 | 2 | $30,002,911 |
|------------------|---|--------------|---|-------------|
| John W. Vojticek | 9 | $513,674,648 | 2 | $30,002,911 |

 

 

 

 

 

**Other Accounts Managed:**

 

 

| **Name of Portfolio Manager** | **Number of Other Accounts** | **Total Assets of Other Accounts** | **Number of Other Accounts with Performance- Based                            Fee** | **Total Assets of Performance- Based Fee                            Accounts** |
|-------------------------------|------------------------------|------------------------------------|-------------------------------------------------------------------------------------|--------------------------------------------------------------------------------|
| Jerry W. Ehlinger             | 30                           | $1,711,840,540                     | 3                                                                                   | $271,162,496                                                                   |
| John F. Robertson             | 52                           | $3,062,970,622                     | 5                                                                                   | $364,248,429                                                                   |
| Asad Kazim                    | 30                           | $1,536,792,614                     | 3                                                                                   | $271,162,496                                                                   |
| John W. Vojticek              | 44                           | $2,433,349,053                     | 5                                                                                   | $364,248,429                                                                   |

 

In            addition to the accounts above, an investment professional may manage accounts in a            personal capacity that may include holdings that are similar to, or the same as, those            of the Funds. The Advisor has in place a Code of Ethics that is designed to address            conflicts of interest and that, among other things, imposes restrictions on the ability            of portfolio managers and other “access persons” to invest in securities            that may be recommended or traded in the Funds and other client accounts.

 

Real, potential or apparent conflicts of interest may arise when a            portfolio manager has day-to-day portfolio management responsibilities with respect to            more than one fund or account, including the following:

             

|   | **•** | Certain investments may be appropriate for the Fund and                            also for other clients advised by the Advisor, including other client                            accounts managed by the Fund’s portfolio management team.                            Investment decisions for the Fund and other clients are made with a                            view to achieving their respective investment objectives and after                            consideration of such factors as their current holdings, availability                            of cash for investment and the size of their investments generally. A                            particular security may be bought or sold for only one client or in                            different amounts and at different times for more than one but less                            than all clients. Likewise, because clients of the Advisor may have                            differing investment strategies, a particular security may be bought                            for one or more clients when one or more other clients are selling the                            security. The investment results achieved for the Fund may differ from                            the results achieved for other clients of the Advisor. In addition,                            purchases or sales of the same security may be made for two or more                            clients on the same day. In such event, such transactions will be                            allocated among the clients in a manner believed by the Advisor to be                            most equitable to each client, generally utilizing a pro rata                            allocation methodology. In some cases, the allocation procedure could                            potentially have an adverse effect or positive effect on the price or                            amount of the securities purchased or sold by the Fund. Purchase and                            sale orders for the Fund may be combined with those of other clients of                            the Advisor in the interest of achieving the most favorable net results                            to the Fund and the other clients. |
|--------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|   | **•** | To the extent that a portfolio manager has                            responsibilities for managing multiple client accounts, a portfolio                            manager will need to divide time and attention among relevant accounts.                            The Advisor attempts to minimize these conflicts by aligning its                            portfolio management teams by investment strategy and by employing                            similar investment models across multiple client accounts. |
|--------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

             

|   | **•** | In some cases, an apparent conflict may arise where the                            Advisor has an incentive, such as a performance-based fee, in managing                            one account and not with respect to other accounts it manages. The                            Advisor will not determine allocations based on whether it receives a                            performance-based fee from the client. Additionally, the Advisor has in                            place supervisory oversight processes to periodically monitor                            performance deviations for accounts with like strategies. |
|--------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | The Advisor and its affiliates and the investment team                            of the Funds may manage other mutual funds and separate accounts on a                            long-short basis. The simultaneous management of long and short                            portfolios creates potential conflicts of interest including the risk                            that short sale activity could adversely affect the market value of the                            long positions(and vice versa), the risk arising from sequential orders                            in long and short positions, and the risks associated with receiving                            opposing orders at the same time. The Advisor has adopted procedures                            that it believes are reasonably designed to mitigate these potential                            conflicts of interest. Included in these procedures are specific                            guidelines developed to ensure fair and equitable treatment for all                            clients whose accounts are managed by each Fund’s portfolio                            management team. The Advisor and the portfolio management team have                            established monitoring procedures, a protocol for supervisory reviews,                            as well as compliance oversight to ensure that potential conflicts of                            interest relating to this type of activity are properly                            addressed. |
|--------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

The Advisor is owned by Deutsche Bank AG, a multi-national financial            services company. Therefore, the Advisor is affiliated with a variety of entities that            provide, and/or engage in commercial banking, insurance, brokerage, investment banking,            financial advisory, broker-dealer activities (including sales and trading), hedge            funds, real estate and private equity investing, in addition to the provision of            investment management services to institutional and individual investors. Since            Deutsche Bank AG, its affiliates, directors, officers and employees (the            “Firm”) are engaged in businesses and have interests other than managing            asset management accounts, such other activities involve real, potential or apparent            conflicts of interest. These interests and activities include potential advisory,            transactional and financial activities and other interests in securities and companies            that may be directly or indirectly purchased or sold by the Firm for its clients’            advisory accounts. These are considerations of which advisory clients should be aware            and which may cause conflicts that could be to the disadvantage of the Advisor’s            advisory clients. The Advisor has instituted business and compliance policies,            procedures and disclosures that are designed to identify, monitor and mitigate            conflicts of interest and, as appropriate, to report them to the Fund’s            Board.

 

 

| **ITEM 9.** | **PURCHASES OF EQUITY SECURITIES BY CLOSED-END                            MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS** |
|-------------|-------------------------------------------------------------------------------------------------------------------------------------|
|        |                                                                                                                                |
|        |                                                                                                                                |

 

|                           | (a)                              | (b)                          | (c)                                                                                                           | (d)                                                                                                       |
|--------------------------------|----------------------------------|------------------------------|---------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------|
|  

Period                 | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of

Shares Purchased as Part of Publicly                            Announced

Plans or Programs | Maximum Number of Shares that May Yet Be Purchased Under                            the Plans or Programs |
|                           |                             |                         |                                                                                                          |                                                                                                      |
| January 1 through January 31   | 0                                | $0                           | n/a                                                                                                           | n/a                                                                                                       |
| February 1 through February 28 | 0                                | $0                           | n/a                                                                                                           | n/a                                                                                                       |

 

 

 

| March 1 through March 31         | 0      | $0     | n/a    | n/a    |
|----------------------------------|--------|--------|--------|--------|
| April 1 through April 30         | 0      | $0     | n/a    | n/a    |
| May 1 through May 31             | 0      | $0     | n/a    | n/a    |
| June 1 through June 30           | 0      | $0     | n/a    | n/a    |
| July 1 through July 31           | 0      | $0     | n/a    | n/a    |
| August 1 through August 31       | 0      | $0     | n/a    | n/a    |
| September 1 through September 30 | 0      | $0     | n/a    | n/a    |
| October 1 through October 31     | 0      | $0     | n/a    | n/a    |
| November 1 through November 30   | 0      | $0     | n/a    | n/a    |
| December 1 through December 31   | 0      | $0     | n/a    | n/a    |
|                             |   |   |   |   |
| Total                            | 0      | $0     | n/a    | n/a    |

 

| **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 RREEF Real Estate Fund II, Inc. |
|-------------|-------------------------------------|

 

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

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

President

 

| Date: | March 2, 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 RREEF Real Estate Fund II, Inc. |
|-------------|-------------------------------------|

 

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

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

President

 

| Date: | March 2, 2009 |
|-------|---------------|

 

 

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

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

Chief Financial Officer and Treasurer

 

Date:                                        March            2, 2009