UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

**FORM N-Q**

**QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED**

**MANAGEMENT INVESTMENT COMPANY**

**_______________________________**

Investment Company Act file number  811-05767

DWS Strategic Municipal Income Trust

(Exact name of registrant as specified in charter)

 

345 Park Avenue

New York, NY  10154

(Address of principal executive offices)             (Zip code)

 

Paul Schubert

345 Park Avenue

New York, NY  10154-0004

(Name and address of agent for service)

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

Date of fiscal year end:  11/30

Date of reporting period: 08/31/08

 

ITEM 1.  SCHEDULE OF INVESTMENTS

 

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

 

 

**DWS Strategic Municipal Income Trust**

 

|   | **Principal****Amount ($)**          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | **Value ($)** |
|--------|--------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------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|        |
|   | **Municipal Bonds and Notes 149.4%** |  
**Alabama 2.8%**

 
Alabama, Sales & Special Tax Revenue, Public School and College Authority, Series C, 5.625%, 7/1/2013 

 

1,000,000

 

1,043,610

Huntsville, AL, Hospital & Healthcare Revenue, Health Care Authority, Series A, Prerefunded, 5.75%, 6/1/2031 

 

1,500,000

 

1,641,495

Sylacauga, AL, Health Care Authority Revenue, Coosa Valley Medical Center, Series A, 6.0%, 8/1/2035 

 

1,000,000

 

886,620

 

**3,571,725**

**Arizona 1.4%**

 
Arizona, Project Revenue, Health Facilities Authority, The New Foundation Project, 8.25%, 3/1/2019 

 

1,725,000

 

**1,736,489**

 

 

 

 

**California 10.2%**

 
California, Morongo Band of Mission Indians, Enterprise Casino Revenue, Series B, 144A, 6.5%, 3/1/2028 

 

1,000,000

 

973,420

California, Special Assessment Revenue, Golden State Tobacco Securitization Corp.:

 
 

Series A-1, 5.0%, 6/1/2033 

 

2,000,000 

 

1,587,560 

 

Series B, Prerefunded, 5.625%, 6/1/2038 

 

1,890,000 

 

2,092,797 

 

Series 2003-A-1, Prerefunded, 6.75%, 6/1/2039 

 

4,500,000 

 

5,204,610 

Sacramento County, CA, Sales & Special Tax Revenue, Bradshaw Road Project, 7.2%, 9/2/2015 

 

870,000

 

879,979

Sacramento, CA, Project Revenue, City Financing Authority, Convention Center Hotel, Series A, Prerefunded, 6.25%, 1/1/2030 

 

1,985,000

 

2,083,496

 

**12,821,862**

**Colorado 3.1%**

 
Colorado, Health Facilities Authority Revenue, Christian Living Communities Project, Series A, 5.75%, 1/1/2037 

 

1,000,000

 

874,890

Colorado, Hospital & Healthcare Revenue, Portercare Adventist Health Project, Prerefunded, 6.5%, 11/15/2031 

 

1,000,000

 

1,131,540

Colorado, Public Energy Authority, Natural Gas Purchased Revenue, 6.25%, 11/15/2028 

 

635,000

 

617,201

Colorado, Transportation/Tolls Revenue, Northwest Parkway Public Highway Authority, Series D, Prerefunded, 7.125%, 6/15/2041 

 

1,145,000

 

1,291,434

 

**3,915,065**

**Connecticut 3.5%**

 
Greenwich, CT, Multi-Family Housing Revenue, 6.35%, 9/1/2027 

 

2,000,000

 

2,033,920

Mashantucket, CT, Mashantucket Western Pequot Tribe, Special Revenue, Series A, 144A, 6.5%, 9/1/2031 

 

705,000

 

678,591

Mashantucket, CT, Sports, Expo & Entertainment Revenue, Mashantucket Western Pequot Tribe:

 
 

Series B, 144A, Zero Coupon, 9/1/2017 

 

2,000,000 

 

1,189,180 

 

Series B, 144A, Zero Coupon, 9/1/2018 

 

1,000,000 

 

531,130 

 

**4,432,821**

**District of Columbia 0.5%**

 
District of Columbia, General Obligation, Series A, 5.0%, 6/1/2018 (a) 

 

660,000

 

**667,537**

**Florida 4.1%**

 
Hillsborough County, FL, Industrial Development Authority Revenue, Health Facilities, University Community Hospital, Series A, 5.625%, 8/15/2029 

 

1,875,000

 

1,794,919

Miami Beach, FL, Health Facilities Authority Hospital Revenue, Mount Sinai Medical Center, 144A, 6.75%, 11/15/2029 

 

1,600,000

 

1,609,024

Orlando, FL, Greater Aviation Authority, Airport Facilities Revenue, Jet Blue Airways Corp., AMT, 6.5%, 11/15/2036 

 

1,000,000

 

689,200

Orlando, FL, Special Assessment Revenue, Conroy Road Interchange Project, Series A, 5.8%, 5/1/2026 

 

1,000,000

 

988,480

 

**5,081,623**

**Georgia 1.9%**

 
Americus-Sumter County, GA, Hospital & Healthcare Revenue, Hospital Authority, South Georgia Methodist, Series A, 6.375%, 5/15/2029 

 

1,250,000

 

1,226,350

Georgia, Main Street Natural Gas, Inc., Gas Project Revenue, Series A, 5.5%, 9/15/2024 

 

1,220,000

 

1,105,161

 

**2,331,511**

**Guam 0.8%**

 
Guam, Government Waterworks Authority, Water & Wastewater System Revenue, 6.0%, 7/1/2025 

 

1,000,000

 

**995,610**

**Illinois 5.7%**

 
Illinois, Finance Authority Revenue, Monarch Landing, Inc. Facility:

 
 

Series A, 7.0%, 12/1/2027 

 

1,000,000 

 

1,000,860 

 

 

 

 

 

Series A, 7.0%, 12/1/2037 

 

1,000,000 

 

970,240 

Illinois, Finance Authority Revenue, Three Crowns Park Plaza, Series A, 5.875%, 2/15/2038 

 

1,000,000

 

885,200

Illinois, Hospital & Healthcare Revenue, ETM, 6.75%, 2/15/2016 

 

2,180,000

 

2,338,508

Illinois, Upper River Valley Development Authority, Solid Waste Disposal Revenue, Waste Recovery Project, AMT, 5.9%, 2/1/2014 

 

1,165,000

 

1,116,757

University Park, IL, Sales & Special Tax Revenue, Governors Gateway Industrial Park, 8.5%, 12/1/2011 

 

795,000

 

797,870

 

**7,109,435**

**Indiana 2.8%**

 
Indiana, Senior Care Revenue, Health Facilities Finance Authority, Franciscan Eldercare Community Services, 5.875%, 5/15/2029 

 

3,000,000

 

2,681,490

Vigo County, IN, Hospital Authority Revenue, Union Hospital, Inc., 144A, 5.7%, 9/1/2037 

 

1,000,000

 

855,360

 

**3,536,850**

**Iowa 2.3%**

 
Cedar Rapids, IA, First Mortgage Revenue, Cottage Grove Place, Series A, 5.875%, 7/1/2028 

 

1,670,000

 

1,421,655

Iowa, Finance Authority Retirement Community Revenue, Edgewater LLC Project, 6.5%, 11/15/2027 

 

1,000,000

 

937,970

Lake City, IA, Senior Care Revenue, Health Care Facility, Opportunity Living Project, 144A, 6.45%, 5/1/2011 

 

525,000

 

527,546

 

**2,887,171**

**Kansas 4.5%**

 
Lenexa, KS, Health Care Facility Revenue, 5.5%, 5/15/2039 

 

2,000,000

 

1,762,800

Manhattan, KS, Senior Care Revenue, Meadowlark Hills Retirement, Series A, Prerefunded, 6.5%, 5/15/2028 

 

300,000

 

313,287

Overland Park, KS, Industrial Development Revenue, Series A, Prerefunded, 7.375%, 1/1/2032 

 

2,000,000

 

2,230,200

Wyandotte County, KS, Unified Government Special Obligation Revenue, Sales Tax, Series B, 5.0%, 12/1/2020 

 

1,400,000

 

1,369,158

 

**5,675,445**

**Kentucky 1.2%**

 
Kentucky, Economic Development Finance Authority, Health System Revenue, Norton Healthcare:

 
 

Series A, Prerefunded, 6.625%, 10/1/2028 

 

790,000 

 

867,231 

 

Series A, 6.625%, 10/1/2028 

 

210,000 

 

219,051 

Kentucky, Economic Development Finance Authority, Louisville Arena Project Revenue, Series A-1, 6.0%, 12/1/2033 (a) 

 

365,000

 

372,796

 

**1,459,078**

**Louisiana 3.2%**

 
Louisiana, Local Government Environmental Facilities, Community Development Authority Revenue, 6.75%, 11/1/2032 

 

1,000,000

 

984,080

Morehouse Parish, LA, Pollution Control Revenue, International Paper Co. Project, Series A, 5.25%, 11/15/2013 

 

3,000,000

 

2,981,550

 

**3,965,630**

**Maryland 5.9%**

 
Anne Arundel County, MD, General Obligation, National Business Park Project, Prerefunded, 144A, 7.375%, 7/1/2028 

 

966,000

 

1,070,222

Anne Arundel County, MD, Revenue Lease, Arundel Mills Project, Prerefunded, 7.1%, 7/1/2029 

 

1,500,000

 

1,592,400

Maryland, Higher Education Revenue, Collegiate Housing Foundation, Series A, Prerefunded, 5.75%, 6/1/2031 

 

1,000,000

 

1,049,120

Maryland, Hospital & Healthcare Revenue, University of Maryland Medical System, Prerefunded, 6.75%, 7/1/2030 

 

1,000,000

 

1,092,560

Maryland, State Economic Development Corp. Revenue, Senior Lien Project, Chesapeake Bay, Series B, 5.25%, 12/1/2031 

 

2,000,000

 

1,554,280

 

 

 

 

Maryland, State Health & Higher Educational Facilities Authority Revenue, Washington County Hospital, 5.75%, 1/1/2033 

 

1,000,000

 

981,930

 

**7,340,512**

**Massachusetts 5.4%**

 
Massachusetts, Hospital & Healthcare Revenue, Health & Educational Facilities Authority, Civic Investments, Series A, Prerefunded, 9.0%, 12/15/2015 

 

1,700,000

 

2,052,971

Massachusetts, Industrial Development Revenue, Development Finance Agency, Series A, 7.1%, 7/1/2032 

 

1,875,000

 

1,891,219

Massachusetts, Project Revenue, Health & Educational Facilities Authority, Jordan Hospital, Series E, 6.75%, 10/1/2033 

 

1,790,000

 

1,779,153

Massachusetts, State Health & Educational Facilities Authority Revenue, Partners Healthcare Systems:

 
 

Series C, Prerefunded, 5.75%, 7/1/2032 

 

965,000 

 

1,062,610 

 

Series C, 5.75%, 7/1/2032 

 

35,000 

 

35,604 

 

**6,821,557**

**Michigan 4.5%**

 
Kalamazoo, MI, Economic Develpoment Corp. Revenue, Heritage Community, 5.375%, 5/15/2027 

 

1,000,000

 

849,080

Kalamazoo, MI, Industrial Development Revenue, Economic Development Corp., Series A, Prerefunded, 7.5%, 5/15/2029 

 

2,000,000

 

2,204,920

Saginaw, MI, Hospital & Healthcare Revenue, Hospital Finance Authority, Covenant Medical Center, Series F, 6.5%, 7/1/2030 

 

1,000,000

 

1,052,030

Tawas City, MI, Hospital Finance Authority, St. Joseph Health Services:

 
 

Series A, ETM, 5.6%, 2/15/2013 

 

230,000 

 

242,606 

 

Series A, ETM, 5.75%, 2/15/2023 

 

1,300,000 

 

1,328,925 

 

**5,677,561**

**Missouri 0.6%**

 
Branson, MO, Regional Airport Transportation Development District, Airport Revenue, Series B, AMT, 6.0%, 7/1/2037 

 

250,000

 

202,113

St. Louis, MO, Special Assessment Revenue, Scullin Redevelopment Area, Series A, 10.0%, 8/1/2010 

 

535,000

 

583,016

 

**785,129**

**Nevada 8.1%**

 
Clark County, NV, School District General Obligation, Series A, 5.0%, 6/15/2022 (a) 

 

7,325,000

 

7,739,375

Henderson, NV, Health Care Facility Revenue, Catholic Healthcare West, Series B, 5.25%, 7/1/2031 

 

2,000,000

 

1,901,600

Las Vegas, NV, Transportation/Tolls Revenue, Las Vegas Monorail Project, 7.375%, 1/1/2030 

 

2,000,000

 

574,880

 

**10,215,855**

**New Hampshire 1.9%**

 
New Hampshire, Higher Education Revenue, Health & Educational Facilities Authority, New Hampshire College Issue, Prerefunded, 7.4%, 1/1/2023 

 

1,000,000

 

1,123,570

New Hampshire, Hospital & Healthcare Revenue, Rivermead at Peterborough Retirement Community, 5.75%, 7/1/2028 

 

1,500,000

 

1,324,500

 

**2,448,070**

**New Jersey 2.5%**

 
New Jersey, Economic Development Authority Revenue, Cigarette Tax, 5.75%, 6/15/2034 

 

290,000

 

270,216

New Jersey, Health Care Facilities Financing Authority Revenue, St. Joseph's Health Care System, 6.625%, 7/1/2038 

 

1,430,000

 

1,370,283

New Jersey, Resource Recovery Revenue, Tobacco Settlement Financing Corp., 5.75%, 6/1/2032 

 

1,330,000

 

1,445,803

 

**3,086,302**

**New Mexico 2.1%**

 
Farmington, NM, Pollution Control Revenue, 5.8%, 4/1/2022 

 

2,750,000

 

**2,633,977**

 

 

 

 

**New York 20.2%**

 
Long Island, NY, Power Authority, Electric System Revenue, Series E, 5.0%, 12/1/2021 (a) 

 

2,900,000

 

2,969,136

Nassau County, NY, Industrial Development Agency, Continuing Care Retirement, Amsterdam at Harborside, Series A, 6.7%, 1/1/2043 

 

1,000,000

 

994,950

Nassau County, NY, Project Revenue, North Shore Healthcare Systems Project, Series B, 5.875%, 11/1/2011 

 

475,000

 

494,542

New York, Core City General Obligation, Series C, 7.0%, 2/1/2010 

 

315,000

 

321,215

New York, Sales & Special Tax Revenue, Metropolitan Transportation Authority, Series A, Prerefunded, 5.125%, 4/1/2019 (a) 

 

1,450,000

 

1,622,419

New York, State General Obligation Lease, Higher Education Revenue, Dormitory Authority, State University, 5.125%, 5/15/2021 (a) 

 

1,515,000

 

1,533,331

New York, Transportation/Tolls Revenue, Triborough Bridge and Tunnel Authority Systems, Series Y, ETM, 6.0%, 1/1/2012 

 

5,000,000

 

5,341,900

New York & New Jersey Port Authority, One Hundred Forty-Seventh, AMT, 5.0%, 10/15/2023 (a) 

 

8,260,000

 

8,223,078

New York City, NY, Industrial Development Agency Revenue, Liberty-7, World Trade Center, Series A, 6.25%, 3/1/2015 

 

2,000,000

 

2,022,180

New York City, NY, Industrial Development Agency, Special Facility Revenue, American Airlines, JFK International Airport, AMT, 8.0%, 8/1/2028 

 

2,000,000

 

1,849,780

 

**25,372,531**

**North Carolina 1.9%**

 
North Carolina, Electric Revenue, Municipal Power Agency:

 
 

Series C, 5.375%, 1/1/2017 

 

1,000,000 

 

1,030,500 

 

Series B, 6.375%, 1/1/2013 

 

1,300,000 

 

1,373,918 

 

**2,404,418**

**North Dakota 0.9%**

 
Grand Forks, ND, Hospital & Healthcare Revenue, Altru Health Care System, Prerefunded, 7.125%, 8/15/2024 

 

1,000,000

 

**1,100,050**

**Ohio 2.3%**

 
Buckeye, OH, Tobacco Settlement Financing Authority, Series A-2, 5.875%, 6/1/2030 

 

3,350,000

 

**2,911,250**

**Pennsylvania 4.2%**

 
Montgomery County, PA, Industrial Development Authority Revenue, Whitemarsh Continuing Care, 6.25%, 2/1/2035 

 

600,000

 

541,464

Montgomery County, PA, Senior Care Revenue, Higher Education & Health Authority, Philadelphia Geriatric Center, Series A, Prerefunded, 7.25%, 12/1/2027 

 

2,000,000

 

2,159,240

Pennsylvania, Hospital & Healthcare Revenue, Economic Development Financing Authority, UPMC Health System, Series A, 6.0%, 1/15/2031 

 

750,000

 

788,917

Philadelphia, Redevelopment Authority Revenue, First Lien Mortgage, Series A, 6.5%, 1/1/2029 

 

603,400

 

604,378

Westmoreland County, PA, Senior Care Revenue, Industrial Development Authority, Health Care Facilities-Redstone, Series B, Prerefunded, 8.125%, 11/15/2030 

 

1,000,000

 

1,130,020

 

**5,224,019**

**Puerto Rico 3.3%**

 
Commonwealth of Puerto Rico, Aqueduct & Sewer Authority Revenue, Series A, 6.0%, 7/1/2038 

 

4,000,000

 

**4,193,440**

**Rhode Island 1.5%**

 
Rhode Island, Special Assessment Revenue, Series A, 6.125%, 6/1/2032 

 

2,000,000

 

**1,883,180**

**South Carolina 8.2%**

 
Hardeeville, SC, Assessment Revenue, Anderson Tract Municipal Improvement District, Series A, 7.75%, 11/1/2039 

 

1,000,000

 

993,430

South Carolina, Jobs Economic Development Authority Revenue, Bon Secours Health System:

 
 

Series A, Prerefunded, 5.625%, 11/15/2030 

 

415,000 

 

462,435 

 

Series B, 5.625%, 11/15/2030 

 

1,585,000 

 

1,594,161 

South Carolina, Jobs Economic Development Authority, Hospital Facilities Revenue, Palmetto Health Alliance:

 
 

 

 

 

 

Series C, Prerefunded, 7.0%, 8/1/2030 

 

1,545,000 

 

1,826,744 

 

Series A, Prerefunded, 7.375%, 12/15/2021 

 

1,000,000 

 

1,129,810 

South Carolina, Transportation Infrastructure Bank Revenue, Series A, Prerefunded, 5.375%, 10/1/2024 (a) 

 

4,150,000

 

4,345,050

 

**10,351,630**

**South Dakota 1.6%**

 
South Dakota, Hospital & Healthcare Revenue, Sioux Valley Hospital, Series E, 5.375%, 11/1/2024 

 

2,000,000

 

**2,033,660**

**Tennessee 2.7%**

 
Clarksville, TN, Natural Gas Acquisition Corp., Gas Revenue:

 
 

5.0%, 12/15/2017 

 

500,000 

 

467,500 

 

5.0%, 12/15/2018 

 

540,000 

 

497,048 

Johnson City, TN, Hospital & Healthcare Revenue, Health & Educational Facilities Board Hospital, Series A, Prerefunded, 7.5%, 7/1/2033 

 

2,000,000

 

2,389,220

 

**3,353,768**

**Texas 16.5%**

 
Abilene, TX, Senior Care Revenue, Health Facilities Development, Sears Methodist Retirement Facilities, Series A, 5.9%, 11/15/2025 

 

2,500,000

 

2,354,325

Austin, TX, Bergstrom Landhost Enterprises, Inc., Airport Hotel Project, Series A, 6.413%, 4/1/2027 * 

 

1,975,000

 

1,412,737

Houston, TX, Higher Education Finance Corp. Revenue, William Marsh Rice University Project, Series A, 2.55% **, 5/15/2048 

 

3,000,000

 

3,000,000

Houston, TX, Transportation/Tolls Revenue, Special Facilities, Continental Airlines, Inc., AMT, Series E, 6.75%, 7/1/2029 

 

2,000,000

 

1,610,400

Tarrant County, TX, Hospital & Healthcare Revenue, Health Facilities Development Corp., Prerefunded, 6.7%, 11/15/2030 

 

1,000,000

 

1,103,330

Texas, Industrial Development Revenue, Waste Disposal Authority, AMT, Series A, 6.1%, 8/1/2024 

 

1,000,000

 

936,640

Texas, Lower Colorado River Authority Revenue:

 
 

Series B, Prerefunded, 6.0%, 5/15/2013 (a) 

 

10,000 

 

10,404 

 

Series B, 6.0%, 5/15/2013 (a) 

 

4,990,000 

 

5,159,161 

Travis County, TX, Health Facilities Development Corp., Retirement Facility Revenue, Querencia Barton Creek Project, 5.65%, 11/15/2035 

 

1,250,000

 

1,069,313

Travis County, TX, Hospital & Healthcare Revenue, Ascension Health Credit, Series A, 6.0%, 11/15/2012 (a) 

 

3,860,000

 

4,050,375

 

**20,706,685**

**Virgin Islands 2.5%**

 
Virgin Islands, Sales & Special Tax Revenue, Public Finance Authority, Series A, 6.375%, 10/1/2019 

 

3,000,000

 

**3,159,030**

**Washington 2.0%**

 
Washington, State Health Care Facilities Authority Revenue, Series C, 5.375%, 8/15/2028 (a) 

 

595,000

 

567,202

Washington, State Health Care Facilities Authority Revenue, Virginia Mason Medical Center, Series A, 6.125%, 8/15/2037 

 

2,000,000

 

1,935,520

 

**2,502,722**

**West Virginia 1.8%**

 
West Virginia, Hospital & Healthcare Revenue, Hospital Finance Authority, Charleston Medical Center:

 
 

Series A, Prerefunded, 6.75%, 9/1/2022 

 

390,000

 

427,963

 

Prerefunded, 6.75%, 9/1/2022

 

1,610,000

 

1,766,717

 

**2,194,680**

**Wisconsin 0.8%**

 
Wisconsin, Hospital & Healthcare Revenue, Health & Education Facilities Authority, Aurora Health Care, Inc., 6.875%, 4/15/2030 

 

1,000,000

 

**1,046,870**

**Total Municipal Bonds and Notes** (Cost $184,516,176)

 

**187,634,748**

 

 

 

 

 
 

**Municipal Inverse Floating Rate Notes (b) 15.3%**

 
 
**California 3.4%**

 
 
San Diego County, CA, Water Authority Revenue, Certificates of Participation, Series 2008-A, 5.0%, 5/1/2027 (a) (c)

 

2,124,844

 

2,199,133

 
San Diego County, CA, Water Authority Revenue, Certificates of Participation, Series 2008-A, 5.0%, 5/1/2028 (a) (c)

 

1,933,492

 

2,001,090

 
 

*Trust:  California, Series 2008-1104, 144A, 13.186%, 5/1/2027, Leverage Factor at*

*purchase date: 4 to 1***

 

 

 

 

 
 
 

**4,200,223**

 
**Illinois 2.3%**

 
 
Aurora, IL, Single Family Mortgage Revenue, Series C, AMT, 5.5%, 6/1/2045 (c)

 

2,920,000

 

**2,923,752**

 
 

*Trust: Aurora, IL, Puttable Floating Option Tax Exempt Receipts, RITES-PA-1499, AMT,*

*144A, 15.64%, 6/1/2045, Leverage Factor at purchase date: 4 to 1*

 

 

 

 

 
**New York 4.6%**

 
 
New York, State Dormitory Authority, State Personal Income Tax Revenue, Series A, 5.0%, 3/15/2023 (c)

 

5,535,000

 

**5,817,638**

 
 

*Trust: New York, State Dormitory Authority Revenues, Secondary Issues, Series 1955-2,*

*144A, 13.929%, 3/15/2023, Leverage Factor at purchase date: 4 to 1*

 

 

 

 

 
**Tennessee 5.0%**

 
 
Nashville & Davidson County, TN, Metropolitan Government, 5.0%, 1/1/2024 (c)

 

5,918,585

 

**6,248,240**

 
 

*Trust: Nashville & Davidson County, TN, Metropolitan Government, Series 2631-1,*

*144A, 13.547%, 1/1/2024, Leverage Factor at purchase date: 4 to 1*

 

 

 

 

 
 
**Total Municipal Inverse Floating Rate Notes** (Cost $19,042,218)

 

**19,189,853**

 
 

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

 

**Value ($)**

 
 
**Total Investment Portfolio** (Cost $203,558,394) †

164.7

 

**206,824,601**

 
**Other Assets and Liabilities, Net**

(9.0)

 

**(11,231,180)**

 
**Preferred Shares, at Redemption Value**

(55.7)

 

**(70,000,000)**

 
 
**Net Assets Applicable to Common Shareholders**

100.0

 

**125,593,421**

 
 

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

 
***

*Partial interest paying security.  The rate shown represents 95% of the original coupon rate.*

 
****

*Variable rate demand notes are securities whose interest rates are reset periodically at market levels. These securities are often payable on demand and are shown at their current rates as of August 31, 2008.*

 
*†*

*The cost for federal income tax purposes was $202,965,716.  At August 31, 2008, net unrealized appreciation for all securities based on tax cost was $3,858,885.  This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $9,918,017 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $6,059,132.*

 
 

 

 
*(a)*

*Bond is insured by one of these companies:*

***Insurance Coverage*****

***As a % of Total***

***Investment Portfolio*****

 
*Ambac Financial Group, Inc.***

*2.1***

 
*Assured Guaranty Corp.***

*0.2***

 
*Financial Guaranty Insurance Company***

*9.9***

 
*Financial Security Assurance, Inc.***

*5.3***

 
*MBIA Corp.***

*2.2***

 
*Radian Asset Assurance, Inc.***

*0.3***

 
 
*(b)*

*Securities represent the underlying municipal obligations of inverse floating rate obligations held by the Fund.*

 

 

 

 

*(c)*

*Security forms part of the below tender option bond trust.  Principal amount and value shown take into account the leverage factor.*

*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.*

*AMT: Subject to alternative minimum tax.*

*ETM: Bonds bearing the description ETM (escrow to maturity) are collateralized usually by US Treasury securities which are held in escrow and used to pay principal and interest on bonds so designated.*

*Prerefunded: Bonds which are prerefunded are collateralized usually by US Treasury securities which are held in escrow and used to pay principal and interest on tax-exempt issues and to retire the bonds in full at the earliest refunding date.*

*RITES: Residual Interest Tax Exempt Security*

 

***Fair Value Measurements***

 

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

 

**Valuation Inputs**

**Investments in**

**Securities**

Level 1 

-   

Level 2 

$               206,824,601  

Level 3 

-   

**Total**

**$               206,824,601**

 

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

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

 

**ITEM 2.**

**CONTROLS AND PROCEDURES**

 

 

 

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

 

 

 

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

 

 

**ITEM 3.**

**EXHIBITS**

 

 

 

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

 

 

 

**SIGNATURES**

 

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

 

Registrant: 

DWS Strategic Municipal Income Trust

 

By:

/s/Michael G. Clark

 

Michael G. Clark

President

 

Date:

October 22, 2008

 

 

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

 

Registrant: 

DWS Strategic Municipal Income Trust

 

By:

/s/Michael G. Clark

 

Michael G. Clark

President

 

Date:

October 22, 2008

 

 

By:

/s/Paul Schubert

 

Paul Schubert

Chief Financial Officer and Treasurer

 

Date:                                        October 22, 2008

 

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