DELAWARE GROUP DECATUR FUND INC, N-30D, 1997-01-31

DELAWARE GROUP DECATUR FUND INC
N-30D, 1997-01-31

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<PAGE>

DELAWARE GROUP

Decatur Income Fund
Decatur Total Return Fund

(Various photos demonstrating service and guidance, professional management
and goals - insert pictures here)

service and guidance

professional management

goals
for total return
1996
Annual
Report

DELAWARE
GROUP
- -----------
<PAGE>

A Commitment
To Our Investors

(Photo of glasses, pen and keyboard - insert here)

The Delaware Group investing tradition dates back to 1929. We have a long and
distinguished history of helping individuals and institutions - including
some of America's largest pension funds - reach their financial goals.
Headquartered in Philadelphia a block from the nation's oldest stock
exchange, Delaware Group's first mutual fund was established in 1938.
Delaware International Advisers Ltd., our international affiliate, was
established in 1990 and is headquartered in London.
Delaware Group offers a full range of mutual funds. We also manage
annuity investments and closed-end funds and offer retirement plan services
for individuals and businesses.
Delaware manages more than $32 billion in mutual fund assets and
institutional advisory accounts for nearly half-a-million investors. We're
part of a global financial services and investment management business owned
by Lincoln National Corp., whose subsidiaries manage more than $100 billion
in assets.

total return

A TRADITION OF SOUND INVESTING

(Photo of illustration from total return brochure - insert here)

Decatur Fund Objectives

Decatur Income Fund
To achieve the highest possible current income by investing primarily in
common stocks that provide the potential for income and capital appreciation
without undue risk to principal.

Decatur Total Return Fund
To achieve long-term growth by investing primarily in securities that provide
the potential for income and capital appreciation without undue risk to
principal.

commitment

<PAGE>

professional
management

professional management

More Than 68 Years Of Investment Experience
has taught us that disciplined strategies and prudent risk management are a
sound approach to any market environment.

(Various photos demonstrating service and guidance, professional management
and goals - insert here)

goals

Whatever Your Goals,
the years ahead will be shaped by choices you make today. Delaware offers
many options that can be an appropriate part of a sound investment plan.

service and guidance

Delaware Believes That The Guidance of a professional financial adviser is
vital to your long-term success. We are committed to providing you and your
adviser with the highest quality information and service.

<PAGE>

December 11, 1996

(Photo of Wayne A. Stork, Chairman - insert here)

THE DECATUR FUNDS' MANAGEMENT CONSIDERS
CORPORATE DIVIDENDS A PROVERBIAL FRUIT WE
SEEK TO HARVEST FOR SHAREHOLDERS.

Dear Shareholder:

It's been another great year. This time a year ago it seemed unlikely that 1996
could even come close to the U.S. stock market gains of 1995, but despite a
minor setback in July, many stocks again provided robust double-digit returns.
Both Decatur Income Fund and Decatur Total Return Fund provided
superior results relative to the average equity income fund during the fiscal
year ended November 30, 1996 (page 2). Each Fund's share price was also less
volatile than the unmanaged Standard & Poor's 500 Index (page 9).
This past year your Funds benefited from strong performance of
financial, drug, chemical, capital goods and railroad stocks. A positive
economic environment helped, too. Inflation was subdued thanks to the Federal
Reserve Board's effective monetary policy. Consumer spending grew at a
moderate, sustainable pace. For some companies, federal regulatory concerns
dissipated.
Since the fall of 1994, stock prices - as measured by the S&P 500 -
have advanced at a pace that substantially exceeds the market's +10.6%
average annual historical total return since the 1920s, with remarkably lower
than average short-term price declines.
We have also witnessed the largest inflow of personal savings into
mutual funds ever in American history, which has helped fuel demand for many
stocks. On November 30, 1996, the Dow Jones Industrial Average - a benchmark
of 30 large cap stocks - stood at 6521, nearly 2,800 points higher than two
years earlier.
Such rapid growth cannot last forever. Any prudent, long-term
investment strategy recognizes that markets move in cycles. Periods of
expansion can be followed by uncertain times.
Decatur Income Fund will mark its 40th birthday on
March 18, 1997, while Decatur Total Return Fund turned 10 years

1996 annual report
1
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Return
- --------------------------------------------------------------------------------------------------------------------
12 Months Five Years
Ended Nov. 30, 1996 Ended Nov. 30, 1996
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Decatur Income Fund A Class +24.47% +16.56%
Decatur Total Return Fund A Class +24.89% +17.10%
- --------------------------------------------------------------------------------------------------------------------
Lipper Equity Income Fund Average +22.28% (156 funds) +15.43% (58 funds)
Standard & Poor's 500 Index +27.86% +18.17%
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
The Decatur Funds' performance as well as that of the Lipper Equity Income
Fund Average is based on net asset value without the effect of sales charges.
All performance assumes reinvestment of dividends and capital gains.
Performance information for all classes of each Fund can be found on pages 10
and 11.

old this past August. During their lifetimes, each Decatur Fund has adhered to a
consistent, value-oriented investment discipline that we believe can be useful
in periods of market volatility.

The Greek playwright Euripides once said "judge a tree from its
fruit, not from the leaves." Decatur Funds' management considers corporate
dividends a proverbial fruit we seek to harvest for shareholders. We believe
an above-average dividend yield can point the way to bountiful capital
appreciation potential.
This past year, your Funds' portfolio manager - John B. Fields - had
little difficulty finding "value" even though the average dividend yield of
S&P 500 stocks on November 30 was 1.92%, an historic low. In the pages that
follow, he describes his positioning of the Funds as well as his outlook for
1997.
Throughout 1996, the stock market was swayed by conflicting
government economic indicators, changing corporate earnings projections and
the movement of interest rates. Stock prices of large corporations reporting
strong profits did well, and we were fortunate to own shares in many such
companies.
As 1997 unfolds, slower economic growth could translate into slower
corporate earnings growth, and possibly less stock price appreciation. In
such an environment, dividends may take on a greater role in the total return
from stocks. We believe the Decatur Funds' time-tested strategy should serve
you well.
I thank you for being among the nearly 120,000 shareholders who have
made the Decatur discipline a component of their long-term investment
strategies. We appreciate your confidence in Delaware Group's flagship funds.

Sincerely,

/s/ Wayne A. Stork
- ------------------
Wayne A. Stork
Chairman, President and Chief Executive Officer

discipline

1996 annual report
2
<PAGE>
Portfolio Manager's Review

(Photo of John B. Fields - insert here)

At the end of your Fund's fiscal year, the U.S. investment climate was described
by some market professionals as "the best of all possible worlds." This
optimistic view reflected several encouraging developments in fiscal 1996:

* Alan Greenspan's reappointment to a second term as chairman of the Federal
Reserve Board suggested the Fed would continue the effective monetary policy
that has kept annual consumer price inflation at 3% or less in the 1990s.

* Corporate profits continued to grow, although not at the rapid pace of
earlier in the decade. As of this writing, most analysts anticipated further
gains in 1997, as companies benefit from new technology, cost cutting, mergers
or higher overseas demand.

* The endorsement of "divided government" in the November elections suggested a
climate of political stability, fiscal policy restraint and less regulatory
activism.

* Many large U.S. companies remained well-positioned to compete globally, even
though the U.S. dollar rose in value against major world currencies in 1996,
potentially
<TABLE>
<CAPTION>
TOP 10 HOLDINGS
Decatur Income and Decatur Total Return Funds
- -------------------------------------------------------------------------------------------------------------------
(November 30, 1996)
Dividend Investment
Industry Yield Rationale
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SmithKline Beecham plc pharmaceuticals 2.1% New products, earnings growth
duPont de Nemours & Co. chemicals 2.4% Restructuring, higher oil prices
Frontier Corp. telecommunications 3.2% Earnings growth potential
Pitney Bowes Corp. office products 2.3% Updated postal meter products
Pharmacia & Upjohn pharmaceuticals 2.8% Corporate cost-cutting efforts
Baxter International medical equipment 2.6% Merger benefits, new products
McGraw-Hill Cos. publishing 2.9% Moving toward electronic publishing
Union Pacific Corp. railroads 3.0% Merger benefits, positive industry trends
Aon Corp. life insurance 2.4% Business expansion prospects
Ford Motor Co. autos 4.7% Strong global prospects, high yield
S&P 500 INDEX 1.9%
</TABLE>

Holdings are listed in order of size as a percentage of net assets within
Decatur Income Fund. Decatur Total Return Fund has the same top 10 holdings,
but in different percentages. SEC yields can be found on pages 10 and 11.

The Decatur Funds' top 10 holdings had an average yield of 2.7% as of
November 30, 1996, some 90 basis points (0.90%) higher than the S&P 500. This
yield does not include Fund expenses.

1996 annual report
3
<PAGE>
making American products more expensive for foreigners to buy.

Still, 1996 was not an easy year to be an investor. During the
summer, stock prices generally dropped 10% or more. Some companies that did
not meet analysts' earnings expectations saw their stock prices plummet.
Despite a sharp drop in interest rates near the end of fiscal 1996,
government bond prices didn't recover losses incurred between February and
mid-summer, when fear of inflation dominated the bond and stock markets. At
one point, securities analysts believed the Fed would even raise its target
interest rate on loans between banks, hurting corporate earnings by raising
the cost of capital.

We Select Stocks, Not Sectors
Rather than bet which way interest rates or the economic wind will blow,

(chart goes here)

Decatur Income
Superior Yield and Value
Dividend Yield Relative to P/E of Fund
S&P 500/Relative Yield Holdings/P/E Ratio
Nov-91 1.1910 20.88x
Dec-91 1.2104 22.28x
Jan-92 1.1768 22.00x
Feb-92 1.1688 21.83x
Mar-92 1.1646 21.88x
Apr-92 1.1506 21.98x
May-92 1.1471 22.18x
Jun-92 1.1561 21.45x
Jul-92 1.1567 22.75x
Aug-92 1.1629 22.11x
Sep-92 1.1759 21.87x
Oct-92 1.1645 21.64x
Nov-92 1.1616 22.20x
Dec-92 1.1678 22.46x
Jan-93 1.1718 21.48x
Feb-93 1.1736 21.62x
Mar-93 1.1684 21.68x
Apr-93 1.1706 19.89x
May-93 1.1923 20.05x
Jun-93 1.2049 19.66x
Jul-93 1.2021 18.27x
Aug-93 1.2007 18.77x
Sep-93 1.2105 18.54x
Oct-93 1.2105 17.76x
Nov-93 1.2118 17.57x
Dec-93 1.2422 16.87x
Jan-94 1.2420 17.37x
Feb-94 1.2326 17.06x
Mar-94 1.2295 16.89x
Apr-94 1.2058 15.98x
May-94 1.2033 16.33x
Jun-94 1.1937 15.94x
Jul-94 1.2434 15.24x
Aug-94 1.2526 15.68x
Sep-94 1.2428 14.45x
Oct-94 1.2805 14.49x
Nov-94 1.2956 13.65x
Dec-94 1.3141 13.72x
Jan-95 1.3520 13.09x
Feb-95 1.3379 13.72x
Mar-95 1.3902 13.17x
Apr-95 1.4116 13.43x
May-95 1.4317 13.54x
Jun-95 1.4340 13.35x
Jul-95 1.4336 13.83x
Aug-95 1.4054 13.92x
Sep-95 1.4073 14.53x
Oct-95 1.4563 13.71x
Nov-95 1.4426 14.31x
Dec-95 1.4370 14.71x
Jan-96 1.4065 14.56x
Feb-96 1.4224 15.28x
Mar-96 1.4051 15.15x
Apr-96 1.4051 15.14x
May-96 1.4242 15.30x
Jun-96 1.4410 15.24x
Jul-96 1.4315 14.44x
Aug-96 1.4128 15.00x
Sep-96 1.4434 15.60x
Oct-96 1.4240 15.66x
Nov-96 1.4623 16.62x
Dec-96 1.4515 16.17x

S&P 500 P/E = 18.3x as of 11/30/96
<PAGE>

Since the fall of 1994, the average yield of stocks held by the Decatur Funds
has steadily risen relative to the yield of the S&P 500. Also, as of November
30, 1996, stocks in the Funds' portfolios were selling at lower prices
relative to earnings (P/E ratios) than stocks in the Index. This illustrates
that the Funds have main-tained a value focus even as stock prices have risen
sharply. The relative yield of Decatur Total Return Fund was 1.43 as of
November 30, 1996, while the P/E of the Fund's holdings was 16.1x.

Yield shown above does not reflect expenses, which vary with each Fund and
share class. Past performance does not guarantee future results. SEC yields
for each Fund can be found on pages 10 and 11. P/E based on corporate
earnings estimates for 1997 as reported to I/B/E/S by securities analysts.
Relative yield is based on value of 1.0 for the S&P 500 Index. Actual yield
of the Index was 1.92% as of November 30, 1996.

The Decatur Strategy

One common investment mistake is to hold a stock for too long. It's like
climbing a tree to pick the highest hanging fruit when you've already got a
basketful. The farther up you go, the greater the risk you'll lose your
balance and drop what you have.
The Decatur Funds' strict investment strategy helps prevent the Funds'
management team from going out on a limb with any one company. Its sell
discipline can be especially valuable in today's ebullient market environment
because it forces the portfolio manager to make tough decisions.
Decatur Income Fund and Decatur Total Return Fund follow a very clear
buy/sell strategy. To be eligible for purchase or holding by the Funds,
stocks must have a current dividend yield greater than that of the
Standard & Poor's 500 Index.
Decatur's management is most attracted to stocks whose yield is "high"
relative to the S&P 500 but not necessarily the "highest" yield available.
This "high" category of stocks has historically generated the greatest
level of total return by providing above- average dividend income and the
highest degree of capital appreciation as shown to the right.

1996 annual report
Strategy
4
<PAGE>
we focus on individual companies whose dividend yields and capital appreciation
potential make them attractive candidates for Decatur Income Fund and Decatur
Total Return Fund.
In 1996, our dividend-driven investment guidelines led us to a
diverse group of industries. Holdings of several industrial companies such as
GENERAL ELECTRIC and DUPONT outperformed the market.
During the year, we also purchased stocks of many globally oriented
consumer growth companies such as pharmaceutical firms. We believed these
stocks had strong earnings potential and that they were temporarily depressed
as a result of the dollar's climb. In fiscal 1996, the share prices of some
of these holdings, such as PHARMACIA & UPJOHN and FRONTIER CORP., were
volatile amid market uncertainty about these companies' short-term prospects.
The Decatur Funds' stock selection strategy generally does not
include an evaluation of a company's potential to be acquired. However, we've
found that our value orientation sometimes leads us to companies that,
coincidentally, are acquired.
In fiscal 1995, this phenomenon helped the performance of our bank
stocks. This past year the Decatur Funds benefited from having selected three
railroads involved in the freight rail industry's consolidation.
Technology stocks made up about 14% of the S&P 500 as of year's end.
However, we did not have many technology holdings as of the fiscal year's
end. These stocks generally pay minimal dividends and thus do not meet our
strict stock selection criteria.

(Photo of glasses, pen and keyboard - insert here)

Long-Term Returns of Dividend Paying Stocks 1929 to 1996
Source: Case Studies

Income Capital Totals
Lowest 2.9% 7.3% 10.2%
Low 4.0% 6.7% 10.7%
Mid 5.0% 6.9% 11.9%
High 6.0% 7.3% 13.3%
Highest 7.7% 3.3% 11.0%

(chart goes here)

When a stock's yield falls below the average of the S&P 500, we view that as
a sign that the stock has become fairly priced and that future appreciation
potential is no longer attractive relative to possible risks. Sometimes we sell
a stock whose yield is still above that of the S&P 500 average if we find what
seems to be a more attractive candidate for either Fund or when a company's
earnings or business operations have not met our expectations.

The Decatur Funds' investment strategy leads the portfolio manager to select
stocks that fall within the "high" yield category. The top number represents
average annual total return.

1996 annual report
5
<PAGE>
Our Investment Goals
Over the years, the Decatur Funds' focus on dividend income has enabled us
to:

* Provide a rate of return meaningfully greater than inflation

* Generate dividend income that has more than kept pace with inflation

Historically, dividends have been a more reliable component of total
return than capital appreciation, and we are mindful of this when we select
stocks. Dividend income has produced nearly half of the S&P 500's total
return since 1926, according to Ibbotson Associates.
Decatur Income Fund seeks to maintain a higher yield than the S&P 500
through a combination of stock selection and the effective use of a small
complement of high-yield, higher risk bonds. This strategy worked well during
the past year as high-yield bonds outperformed other fixed-income
investments.
High-yield bonds add to the Fund's income potential; however, they
are issued by companies whose ability to pay interest and repay principal is
not as strong as companies with "investment grade" ratings. The strength of
the U.S. economy helped many high-yield bonds outperform Treasuries for most
of 1996.
Our high-yield bonds, 10% of Decatur Income Fund's net assets as of
November 30, are managed by Gerald T. Nichols, a senior Delaware Group
fixed-income portfolio manager. He and his team generally follow a "quality
first" philosophy and focus on bonds rated BB and B, the top two tiers of
high-yield credit ratings.

Our Dividend-Oriented Buy/Sell Discipline at Work

Sweet Success With Monsanto Corp.

Nutrasweet brand sugar substitute, found on restaurant tables across America,
is one of Monsanto Corp.'s more well-known products.
We first selected Monsanto for Decatur Income and Decatur Total Return
Funds' portfolios in early 1993, when the St. Louis-based company's stock had
a yield that was more than one-and-a-half times that of the average yield of
stocks in the S&P 500 Index. (yield= dividends/price).
At the time, investors had turned sour on Monsanto for several reasons: a
patent had expired for
a key product in the company's
G.D. Searle pharmaceutical business and the cost to launch new drugs
was high. Meanwhile, Monsanto's core chemical businesses weren't doing as
well as those of other companies and Monsanto was restructuring, resulting in
a charge against earnings.
To us, however, the increase in Monsanto's dividend yield above the S&P
500 was a signal of value and potential capital appreciation. After Decatur's
management completed a careful fundamental analysis of the company, we
concluded that Monsanto was a well-managed, diversified, global business. We
believed its problems were temporary, and that its dividend was too
attractive to pass up. So we began purchasing shares.

1996 annual report
6
<PAGE>
S & P 500 DIVIDEND INCREASES VS. INFLATION
Periods Ended December 31, 1996
- -------------------------------------------------------------------------------
Cumulative Increase
S&P 500 Dividends U.S. Consumer Price Index
- -------------------------------------------------------------------------------
One Year* +6.9% +3.3%
Five Years +20.9% +18.3%
10 Years +78.1% +43.2%
25 Years +380.5% +298.2%

*Analysts and economists estimate as reported by Bernstein Research and
Bloomberg Business News. Past performance is not a guarantee of future
results. Source of historical data: CDA/Weisenberger and Bernstein Research.

During the year, as the U.S. economy remained healthy, Decatur Income
Fund focused primarily on high-yield bonds rated B to maximize income
potential. We anticipate a greater focus on bonds with BB ratings should the
U.S. economy continue to slow.

The Power of Dividends
In a market that has offered robust capital appreciation for two consecutive
years, some market professionals have asked whether dividends and dividend
growth really matter.
Our answer is an unqualified yes. From a historical perspective,
dividend-paying stocks have been an excellent source of high current income
that has outpaced inflation as measured by the U.S. consumer price index.
This is an important point to consider when comparing dividend-paying stocks
against fixed-income investments.

By the summer of 1995, Monsanto had become one of the five largest
holdings in both Decatur Funds. Gradually, the company's prospects improved.
Monsanto also raised its dividend. In fiscal 1996, we sold our position as
the company's share price more than doubled from our purchase price and its
dividend yield dropped to less than that of the S&P 500 Index.

goals
1996 annual report
<PAGE>
(chart goes here)
<TABLE>
<CAPTION>
Monsanto Stock Price and Yield Relative to the S&P 500 Index

Monsanto Stock Price/Price Per Share Relative Yield
<S> <C> <C>
Dec. '90 $9 1.12
Jan. '91 $ 11 1.08
Feb. '91 $ 11 1.05
Mar. '91 $ 11 1.12
Apr. '91 $12 1.00
May. '91 $13 0.99
Jun. '91 $13 0.91
Jul. '91 $14 0.92
Aug. '91 $14 0.91
Sep. '91 $13 0.97
Oct. '91 $14 0.99
Nov. '91 $12 1.11
Dec. '91 $14 1.07
Jan. '92 $12 1.11
Feb. '92 $13 1.03
Mar. '92 $12 1.11
Apr. '92 $13 1.10
May. '92 $13 1.21
Jun. '92 $11 1.29
Jul. '92 $11 1.33
Aug. '92 $11 1.38
Sep. '92 $10 1.37
Oct. '92 $11 1.33
Nov. '92 $11 1.40
Dec. '92 $11 1.36
Jan. '93 $10 1.45
Feb. '93 $10 1.51
Mar. '93 $10 1.55 YIELD IS HIGH SIGNALS BUY OPPORTUNITY
Apr. '93 $11 1.51
May. '93 $12 1.39
Jun. '93 $12 1.37
Jul. '93 $11 1.37
Aug. '93 $13 1.29
Sep. '93 $13 1.28
Oct. '93 $14 1.21
Nov. '93 $13 1.17
Dec. '93 $15 1.15
Jan. '94 $15 1.10
Feb. '94 $15 1.14
Mar. '94 $16 1.03
Apr. '94 $16 0.99
May. '94 $16 1.02
Jun. '94 $15 1.10
Jul. '94 $15 1.03
Aug. '94 $16 1.08
Sep. '94 $16 1.05
Oct. '94 $15 1.13
Nov. '94 $14 1.15
Dec. '94 $14 1.26
Jan. '95 $15 1.22
Feb. '95 $15 1.17
Mar. '95 $16 1.18
Apr. '95 $16 1.22
May. '95 $16 1.22
Jun. '95 $18 1.15
Jul. '95 $18 1.15
Aug. '95 $18 1.14
Sep. '95 $20 1.15
Oct. '95 $21 1.10
Nov. '95 $23 1.03
Dec. '95 $24 0.96
Jan. '96 $26 0.94
Feb. '96 $27 0.92
Mar. '96 $31 0.83 YIELD IS LOW SIGNALS SELL
</TABLE>
7
<PAGE>
Both interest rates and the principal value of bonds move up and down
with each change in the economic cycle or shift in Federal Reserve Board
policy. However, since the 1920s, the amount of dividends paid to
shareholders of stocks in the S&P 500 has grown an average of +4.7% per year.
Obviously, dividends depend on corporate profits, and there's no
guarantee dividends will rise in the future. We attempt to avoid those
companies we call "value mirages" -- companies we believe are likely to cut
dividends in the future even though their yield might be more than the S&P
500's.

Investment Outlook
We share Federal Reserve Board chairman Alan Greenspan's observation in early
December that the danger of investor complacency can be greatest "when
economic prospects are at their brightest."
In the summer of 1996, as U.S. corporate earnings growth unexpectedly
slowed, we began to see higher levels of market volatility.
During periods of uncertainty, we believe the conservative, total
return-oriented Decatur strategy has the potential to provide greater rewards
to patient, long-term investors. Rather than ask whether and when one should
get "in" or "out" of the market, we believe it makes greater sense for
individuals to have a consistent investment strategy. Such a strategy could
help increase total return potential and reduce risk.
We are pleased to report that while our approach is less "aggressive"
than that of some mutual funds, both Decatur Funds have fully participated in
the market's capital appreciation potential of the past two years.
By selecting established companies which are temporarily
out-of-favor, we attempt to lay a sturdy portfolio foundation one brick at a
time. With the help of dividends as our mortar, we believe the Decatur
approach remains well-positioned to help investors prudently build wealth
over time.

John B. Fields
Vice President and
Senior Portfolio Manager
December 11, 1996

(photo of family on beach here)

Q. With yields at an all-time low, do dividends still matter?
A. Definitely yes. They can point the way to capital appreciation potential,
provide steady income and have historically made up 46% of the S&P 500's
total return.
1996 annual report
8
<PAGE>
Our Time-Tested Strategy
An Investment Discipline Based on Stocks
with High Dividends and Capital Appreciation Potential

Decatur Income Fund
* Dividends paid MONTHLY
* Strives for a yield one percentage point higher than S&P 500 Index
* Uses a small complement of high-yield bonds to provide more income

DECATUR INCOME FUND
PORTFOLIO HIGHLIGHTS
- -------------------------------------------------------------------------
(November 30, 1996)
Decatur Income Fund
- -------------------------------------------------------------------------
Median Market Capitalization $10.6 billion
Number of Stocks 67
Average Price-To-Earnings Ratio** 16.2x
Top Sector -- Banking, Finance, Insurance 18.7%*
High-Yield Bonds 10%*
Beta*** 0.70

Decatur Total Return Fund

* Dividends paid QUARTERLY
* Designed for investors whose primary goal is wealth-building
* 98% invested in stocks, 2% cash

DECATUR TOTAL RETURN FUND
PORTFOLIO HIGHLIGHTS
- -------------------------------------------------------------------------
(November 30, 1996)

Decatur Total Return Fund
- -------------------------------------------------------------------------
Median Market Capitalization $10.7 billion
Number of Stocks 72
Average Price-To-Earnings Ratio** 16.1x
Top Sector -- Banking, Finance, Insurance 20.5%*
Beta*** 0.77

*of total net assets **Based on analysts earnings estimates for 1997 as
reported to I/B/E/S; P/E ratio for the S&P 500 Index stocks was 18.3x. ***A
measure of volatility relative to the S&P 500 Index for the past three years
ended November 30. A number less than 1.0 means a security has fluctuated
less in price than the index. A number more than 1.0 means the security has
fluctuated in price more than the index.

1996 annual report
9
<PAGE>
Fund Performance

Decatur Income Fund's performance has generally kept pace with its equity
income peers during the past 10 years. Fund assets reached a record $1.9
billion during 1996.

Class A 30-Day SEC Yield as of
November 30, 1996, was 2.87%

(chart goes here)

DECATUR INCOME FUND'S 10-YEAR PERFORMANCE
Growth of a $10,000 Investment
Total Return Through November 30, 1996
<TABLE>
<CAPTION>
Decatur Income Fund A Lipper Equity Income Fund Average Standard & Poor's 500 Index
<S> <C> <C> <C>

Dec. '86 $ 9,526 $10,000 $10,000
Nov. '87 $ 9,099 $ 9,272 $ 9,533
Nov. '88 $11,393 $11,265 $11,753
Nov. '89 $13,653 $13,762 $15,371
Nov. '90 $12,009 $12,685 $14,839
Nov. '91 $13,866 $15,229 $17,850
Nov. '92 $15,883 $17,748 $21,142
Nov. '93 $18,400 $20,342 $23,275
Nov. '94 $18,295 $20,137 $23,517
Nov. '95 $23,970 $25,770 $32,198
Nov. '96 $29,835 $31,525 $41,157
</TABLE>
Decatur Total Return Fund marked its 10th anniversary
on August 27, 1996. Your Fund's performance has outpaced its equity income
peers for the past 10 years.

Class A 30-Day SEC Yield as of
November 30, 1996, was 1.84%

(chart goes here)

DECATUR TOTAL RETURN FUND 10-YEAR PERFORMANCE
Growth of a $10,000 Investment
Total Return Through November 30, 1996
<TABLE>
<CAPTION>
Decatur Total Return Fund A Lipper Equity Income Fund Average Standard & Poor's 500 Index
<S> <C> <C> <C>
Dec. '86 $ 9,527 $10,000 $10,000
Nov. '87 $ 8,567 $ 9,272 $ 9,533
Nov. '88 $11,267 $11,265 $11,753
Nov. '89 $13,940 $13,762 $15,371
Nov. '90 $12,987 $12,685 $14,839
Nov. '91 $14,798 $15,229 $17,850
Nov. '92 $16,887 $17,748 $21,142
Nov. '93 $19,375 $20,342 $23,275
Nov. '94 $19,367 $20,137 $23,517
Nov. '95 $26,083 $25,770 $32,198
Nov. '96 $32,577 $31,525 $41,157
</TABLE>

(chart goes here)

Both charts assume $10,000 invested on November 30, 1986, and include the effect
of a 4.75% front-end sales charge and reinvestment of all capital gains and
dividends. Performance of other classes of the Funds varies due to differing
charges and expenses. Lipper Average does not include sales charge. See page 11
for B and C Class yields. Sales charges varied during the periods shown.

1996 annual report
10
<PAGE>
<TABLE>
<CAPTION>
DECATUR INCOME FUND
Average Annual Total Return through November 30, 1996
- -------------------------------------------------------------------------------------------------------------------------
Lifetime Ten Years Five Years One Year
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A (Est.1957) +12.19% +11.55% +15.43% +18.57%
- -------------------------------------------------------------------------------------------------------------------------
Class B (Est.1994)
Excluding sales charge +20.53% +23.43%
Including sales charge +19.46% +19.43%
- -------------------------------------------------------------------------------------------------------------------------
Class C (Est.1995)
Excluding sales charge +23.23% +23.47%
Including sales charge +23.23% +22.47%

DECATUR TOTAL RETURN FUND
Average Annual Total Return through November 30, 1996
- -------------------------------------------------------------------------------------------------------------------------
Lifetime Ten Years Five Years One Year
- -------------------------------------------------------------------------------------------------------------------------
Class A (Est.1986) +13.03% +12.54% +15.97% +18.95%
- -------------------------------------------------------------------------------------------------------------------------
Class B (Est.1994)
Excluding sales charge +22.35% +24.01%
Including sales charge +21.30% +20.01%
- -------------------------------------------------------------------------------------------------------------------------
Class C (Est.1995)
Excluding sales charge +23.90% +24.04%
Including sales charge +23.90% +23.04%
</TABLE>
Return and share value of Decatur Income Fund and Decatur Total Return Fund
fluctuate so that shares, when redeemed, may be worth more or less than their
original cost. Past performance is not a guarantee of future results.
Performance above includes reinvestment of dividends and the effect of sales
charges. Lifetime performance for B and C shares "excluding sales charge"
assumes the investment was not redeemed.

Class A returns for both Funds reflect the effect of a front-end 4.75%
maximum sales charge, and a 12b-1 fee (for Decatur Total Return since
inception; for Decatur Income Fund since May 1, 1994).

Class B shares, initially offered September 6, 1994, do not carry a front-end
sales charge, but are subject to a 1% annual distribution and service fee.
They are subject to a maximum deferred sales charge of 4% if redeemed before
the end of the sixth year.

Class C shares, initially offered on November 29, 1995, have a 1% annual
distribution and service fee and a 1% contingent deferred sales charge if
redeemed within 12 months of purchase.

Thirty-day yield for both Class B and C shares was 2.18% for Decatur Income
Fund and 1.22% for Decatur Total Return Fund, measured according to
Securities and Exchange Commission guidelines as of November 30, 1996.

The average annual total returns for Decatur Total Return Fund's
Institutional Class for the 10-year, five-year and one-year periods ended
November 30, 1996, were, respectively +13.19%, +17.33% and +25.24%. For
Decatur Income Fund Institutional Class, the average annual returns for the
10-year, five-year and one-year periods ended November 30, 1996, were,
respectively, +12.13%, +16.65% and +24.65%. The Institutional Class of both
Funds is available without sales or asset-based distribution charges only to
certain eligible institutional accounts. Decatur Total Return's total return
for periods prior to January 13, 1994, has not been adjusted to eliminate the
effect of the 12b-1 fee that applies to A Class shares. Institutional Class
yields as of November 30, 1996, were 3.28% for Decatur Income Fund and 2.35%
for Decatur Total Return Fund.

1996 annual report
11
<PAGE>
THE DECATUR STRATEGY
Four Decades of Harnessing the Power of Dividends
Total Return Since March 18, 1957
$10,000 Initial Investment/Total Return (Reinvested dividends plus capital
gains)

(chart goes here)
<TABLE>
<CAPTION>

Decatur Income Fund U.S. Consumer Price Index S & P 500 Index
<S> <C> <C> <C>
Mar. '57 Decatur Income Fund first
offered on March 18,1957 $ 9,525 $10,000 $ 10,000
Nov. '57 $ 8,570 $10,258 $ 9,939
Nov. '58 $ 11,360 $10,446 $ 12,990
Nov. '59 $ 12,880 $10,594 $ 14,887
Nov. '60 Dow Jones Industrial Average at 597 $ 12,954 $10,750 $ 14,690
Nov. '61 Berlin Wall Built $ 15,728 $10,822 $ 19,413
Nov. '62 $ 15,419 $10,967 $ 17,527
Nov. '63 Kennedy Assasinated $ 17,583 $11,111 $ 21,273
Nov. '64 $ 21,833 $11,255 $ 25,264
Nov. '65 $ 25,393 $11,448 $ 28,245
Nov. '66 Vietnam War Escalates $ 23,691 $11,857 $ 25,659
Nov. '67 $ 30,941 $12,194 $ 30,959
Nov. '68 $ 41,785 $12,772 $ 36,813
Nov. '69 Firt Man on the Moon $ 35,815 $13,506 $ 32,902
Nov. '70 $ 36,323 $14,265 $ 31,774
Nov. '71 Wage and Price Controls $ 41,792 $14,758 $ 35,351
Nov. '72 $ 48,166 $15,276 $ 45,152
Nov. '73 $ 39,741 $16,564 $ 38,263
Nov. '74 Steepest Market Decline in
Four Decades $ 36,512 $18,575 $ 29,137
Nov. '75 $ 47,454 $19,935 $ 39,689
Nov. '76 $ 63,004 $20,922 $ 46,095

</TABLE>
IT TAKES NEARLY $6 TO BUY WHAT $1 BOUGHT WHEN DWIGHT D. EISENHOWER STARTED
HIS SECOND TERM AS PRESIDENT AND CARS HAD TAILFINS. DURING THAT TIME, $1
INVESTED IN DECATUR INCOME FUND WOULD HAVE GROWN TO MORE THAN $95 AS SHOWN
ABOVE.

1996 annual report
12
<PAGE>

$959,545 WITH DIVIDEND REINVESTMENT
$468,218 = THE POWER OF REINVESTMENT
$468,304 Account Value With Dividends Taken In Cash

(chart goes here)
<TABLE>
<CAPTION>

Decatur Income Fund U.S. Consumer Price Index S & P 500 Index
<S> <C> <C> <C>
Nov. '77 $ 67,070 $22,318 $ 44,751
Nov. '78 $ 68,288 $24,316 $ 47,088
Nov. '79 $ 83,602 $27,386 $ 55,685
Nov. '80 Dow at 993; Interest Rates
at All-Time Highs $108,779 $30,841 $ 77,685
Nov. '81 $116,609 $33,790 $ 73,493
Nov. '82 Start of Great Bull Market of
the '80s $140,934 $35,343 $ 85,428
Nov. '83 $178,098 $36,487 $107,204
Nov. '84 $187,798 $37,956 $110,316
Nov. '85 $237,008 $39,316 $142,238
Nov. '86 Dow Nears 2000 $306,392 $39,822 $181,504
Nov. '87 Sharpest One-Day Decline
in Market History $292,670 $41,627 $172,933
Nov. '88 $366,431 $43,370 $212,987
Nov. '89 $439,125 $45,389 $278,510
Nov. '90 Persian Gulf Crisis;
Worldwide Recession $386,234 $48,237 $268,776
Nov. '91 $445,959 $49,679 $323,397
Nov. '92 $510,828 $51,193 $382,926
Nov. '93 $591,780 $52,563 $421,541
Nov. '94 Fed Begins Raising Short-
Term Interest Rates $588,387 $53,969 $425,869
Nov. '95 $770,897 $55,356 $582,694
Nov. '96 $959,545 $57,251 $744,474
</TABLE>

DECATUR INCOME FUND'S RETURN AND SHARE VALUE FLUCTUATE SO THAT SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COSTS. PAST PERFORMANCE
IS NOT A GUARANTEE OF FUTURE RESULTS.

Performance of other classes of Decatur Income Fund differ from the above due
to differing charges and expenses. See pages 10 and 11 for complete
performance information.

1996 annual report
13

<PAGE>

FINANCIAL STATEMENTS
DELAWARE GROUP DECATUR FUND, INC. -
DECATUR INCOME FUND
STATEMENT OF NET ASSETS/NOVEMBER 30, 1996

- -------------------------------------------------------------------------------
Number Market
of Shares Value
---------------------------------------------------------
COMMON STOCK - 86.45%
Aerospace & Defense - 1.25%
General Dynamics ............................. 326,800 $ 24,101,500
------------
24,101,500
------------
Automobiles & Auto Parts - 5.72%
Dana ......................................... 650,600 20,249,925
FORD MOTOR ................................... 1,208,900 39,591,475
General Motors ............................... 531,100 30,604,638
ITT Industries ............................... 839,800 19,630,325
------------
110,076,363
------------
Banking, Finance & Insurance - 18.65%
American General ............................. 418,200 17,198,475
AmSouth Bancorporation ....................... 270,300 13,481,213
AON .......................................... 673,300 40,987,138
Bank of Boston ............................... 351,700 24,575,038
Chase Manhattan .............................. 317,800 30,032,100
CIGNA ........................................ 172,800 24,429,600
Crestar Financial ............................ 401,400 27,947,475
First Chicago NBD ............................ 554,644 32,585,335
First Union .................................. 225,700 17,237,838
ITT Hartford Group ........................... 442,700 30,269,613
Mellon Bank .................................. 314,400 22,715,400
Mercantile Bancorporation .................... 349,900 18,500,963
Signet Banking ............................... 178,300 5,393,575
St. Paul ..................................... 63,800 3,756,225
Summit Bancorp ............................... 662,100 29,711,738
U.S.Bancorp .................................. 473,700 20,309,888
------------
359,131,614
------------
Buildings & Materials - 0.13%
Masco ........................................ 68,900 2,514,850
------------
2,514,850
------------
Cable, Media & Publishing - 2.21%
MCGRAW-HILL .................................. 933,400 42,469,700
------------
42,469,700
------------
Chemicals - 4.58%
DUPONT (E.I.) DENEMOURS ...................... 485,000 45,711,250
Imperial Chemical Industries ADR ............. 325,700 16,854,975
Rhone-Poulenc ADR ............................ 357,700 11,580,538
Witco ........................................ 462,800 14,057,550
------------
88,204,313
------------
Electronics & Electrical
Equipment - 3.56%
Eaton ........................................ 340,500 23,579,625
<PAGE>
- -------------------------------------------------------------------------------
Number Market
of Shares Value
--------------------------------------------------------
Thomas & Betts ............................... 400,000 $ 18,100,000
Xerox ........................................ 545,500 26,797,688
------------
68,477,313
------------
Energy - 9.05%
British Petroleum ADR ........................ 209,896 29,123,070
Mobil ........................................ 296,560 35,883,760
Occidental Petroleum ......................... 541,400 12,993,600
Texaco ....................................... 378,700 37,538,638
USX-Marathon Group ........................... 1,181,900 27,035,963
Williams ..................................... 565,000 31,710,625
------------
174,285,656
------------
Food, Beverage & Tobacco - 6.24%
Anheuser-Busch ............................... 398,000 16,865,250
Heinz (H.J.) ................................ 761,950 28,858,856
Philip Morris ................................ 321,600 33,165,000
Quaker Oats .................................. 582,000 22,916,250
RJR Nabisco Holdings ......................... 576,440 18,446,080
------------
120,251,436
------------
Healthcare & Pharmaceuticals - 13.25%
American Home Products ....................... 498,500 32,028,625
BAXTER INTERNATIONAL ......................... 1,004,400 42,687,000
Bristol-Myers Squibb ......................... 346,300 39,391,625
PHARMACIA & UPJOHN ........................... 1,112,300 42,962,588
SMITHKLINE BEECHAM ADR UNIT .................. 726,300 50,023,913
Tambrands .................................... 410,000 17,527,500
Warner-Lambert ............................... 427,400 30,559,100
------------
255,180,351
------------
Metals & Mining - 0.56%
Reynolds Metals .............................. 180,700 10,751,650
------------
10,751,650
------------
Paper & Forest Products - 3.11%
Temple-Inland ................................ 329,800 17,726,750
Union Camp ................................... 304,900 14,978,213
Weyerhaeuser ................................. 593,100 27,282,600
------------
59,987,563
------------
Real Estate - 2.37%
Liberty Property Trust ....................... 818,300 19,025,475
Simon DeBartolo Group ........................ 973,400 26,646,825
------------
45,672,300
------------
Retail - 2.72%
May Department Stores ........................ 628,000 30,615,000

- ----------
Top 10 stock holdings, representing 22.61% of net assets, are printed in red.

1996 annual report
14
<PAGE>
DECATUR INCOME FUND (CONTINUED)
STATEMENT OF NET ASSETS (CONTINUED)
- -------------------------------------------------------------------------------
Number Market
of Shares Value
--------------------------------------------------------
COMMON STOCK (CONTINUED)
RETAIL (CONTINUED)

Penney (J.C.) ............................... 406,800 $ 21,865,500
------------
52,480,500
------------
Telecommunications - 5.90%
ALLTEL ....................................... 720,000 22,950,000
BCE .......................................... 495,100 24,816,888
FRONTIER ..................................... 1,698,600 44,588,250
GTE .......................................... 475,400 21,333,575
------------
113,688,713
------------
Transportation & Shipping - 3.41%
Conrail ...................................... 158,000 15,365,500
Norfolk Southern ............................. 89,900 8,091,000
UNION PACIFIC ................................ 724,640 42,210,280
------------
65,666,780
------------
Miscellaneous - 3.74%
Minnesota Mining & Manufacturing ............. 331,100 27,729,625
PITNEY BOWES ................................. 749,400 44,214,600
------------
71,944,225
------------
Total Common Stock (cost $1,402,482,876) ..... 1,664,884,827
-------------

CONVERTIBLE PREFERRED STOCK - 1.72%
Banking, Finance & Insurance - 0.74%
Salomon 7.625% pfd cv series FSA ............. 495,000 14,169,375
-------------
14,169,375
-------------
Metals & Mining - 0.98%
Freeport McMoRan Copper & Gold 7.0% pfd cv ... 620,900 18,937,450
-------------
18,937,450
-------------
Total Convertible Preferred Stock
(cost $30,097,493) ........................ 33,106,825
-------------

Principal
Amount
CORPORATE BONDS - 9.78%
Aerospace & Defense - 0.21%
BE Aerospace sr nts 9.75% 03/01/03 .......... $ 1,960,000 2,031,050
Sequa sr sub nts 9.375% 12/15/03 ............. 2,000,000 2,017,500
-------------
4,048,550
-------------
Automobiles & Auto Parts - 0.34%
*Delco Remy International
sr sub nts 10.625% 08/01/06 ................. 2,000,000 2,095,000
Harvard Industries sr nts 11.125% 08/01/05.... 1,500,000 1,271,250
JPS Automotive Products
sr nts 11.125% 06/15/01 ................... 2,000,000 2,065,000
Speedy Muffler King nts 10.875% 10/01/06 ..... 1,125,000 1,195,313
-------------
6,626,563
Banking, Finance & Insurance - 0.24%
*Aetna Industries sr nts 11.875% 10/01 /06 ...... 2,000,000 2,105,000

<PAGE>
- -------------------------------------------------------------------------------
Principal Market
Amount Value
--------------------------------------------------------
CORPORATE BONDS (CONTINUED)
BANKING, FINANCE & INSURANCE
(CONTINUED)

First Nationwide Holdings
sr sec nts 9.125% 01/15/03 .................. $ 2,500,000 $ 2,531,250
-------------
4,636,250
-------------
Buildings & Materials - 0.22%
American Standard sr nts 10.875% 05/15/99 .... 2,750,000 2,949,375
USG sr nts 8.50% 08/01/05 .................... 1,250,000 1,298,438
-------------
4,247,813
-------------
Cable, Media & Publishing - 1.30%
Adelphia Communications
sr debs 9.875% 03/01/05 ................... 3,000,000 2,722,500
Cablevision Industries
sr sub debs 10.75% 04/01/04 ................ 1,500,000 1,552,500
Cablevision Systems sr nts 9.875%
05/15/06 ................................... 2,000,000 2,015,000
Century Communications
sr sub debs 11.875% 10/15/03 ............... 1,500,000 1,601,250
Comcast sr sub nts 9.125% 10/15/06 ........... 2,000,000 2,035,000
Jones Intercable sr nts 9.625%
03/15/02 ................................... 2,500,000 2,584,375
Lenfest Communications
sr nts 8.375% 11/01/05 .................... 3,000,000 2,895,000
Lenfest Communication
sr nts 10.50% 06/15/06 .................... 800,000 826,000
Muzak LP/Muzak Capital
unsec sr nts 10.00% 10/01/03 ............... 1,500,000 1,516,875
Rogers Cablesystems
sr sec nts 10.00% 12/01/07 ................. 1,350,000 1,414,125
Rogers Cablesystems
sr sub nts 11.00% 12/01/15 ................. 840,000 894,600
Sullivan Graphics sr sub nts 12.75%
08/01/05 ................................... 2,000,000 1,945,000
Telewest Communications
sr debs 9.625% 10/01/06 ................... 3,000,000 3,075,000
-------------
25,077,225
-------------
Chemicals - 0.72%
*Astor sr sub nts 10.50% 10/15/06 ............. 2,500,000 2,550,000
BPC Holding sr nts 12.50% 06/15/06 ........... 2,000,000 2,102,500
Carbide Graphite sr nts 11.50% 09/01/03 ...... 1,818,000 1,990,710
*ISP Holdings sr nts 9.75% 02/15/02 ........... 1,082,000 1,136,100
NL Industries sr sec nts 11.75% 10/15/03 ..... 1,290,000 1,325,475
Scotts sr sub nts 9.875% 08/01/04 ............ 950,000 1,002,250
Sterling Chemicals sr sub nts 11.75% 08/15/06 1,000,000 1,026,250
UCC Investors sr sub nts 11.00% 05/01/03 ..... 2,500,000 2,687,500
-------------
13,820,785
-------------
Computers & Technology - 0.17%
Unisys sr nts 12.00% 04/15/03 ................ 1,500,000 1,575,000
Unisys sr nts 11.75% 10/15/04 ................ 1,700,000 1,780,750
-------------
3,355,750
-------------
Consumer Products - 0.39%
American Safety Razor sr nts 9.875% 08/01/05 . 3,000,000 3,187,500
Calmar sr sub nts 11.50% 08/15/05 ............ 1,000,000 1,035,000
Revlon sr nts 9.50% 06/01/99 ................. 1,500,000 1,550,625
Revlon Worldwide sr sec nts 0.00% 03/15/98 ... 2,000,000 1,725,000
-------------
7,498,125
-------------
1996 annual report
15
<PAGE>
DECATUR INCOME FUND (CONTINUED)
STATEMENT OF NET ASSETS (CONTINUED)
- -------------------------------------------------------------------------------
Principal Market
Amount Value
--------------------------------------------------------
CORPORATE BONDS (CONTINUED)
Electronics & Electrical Equipment
- 0.63%
Advanced Micro Devices
sr nts 11.00% 08/01/03 ..................... $2,000,000 $ 2,167,500
Essex Group sr nts 10.00% 05/01/03 ........... 1,450,000 1,500,750
IMO Industries sr sub nts 11.75% 05/01/06 .... 510,000 488,325
Interlake sr nts 12.00% 11/15/01 ............. 1,500,000 1,612,500
Interlake sr sub debs 12.125% 03/01/02 ....... 1,500,000 1,552,500
Mark IV Industries sub deb 8.75% 04/01/03 .... 1,500,000 1,567,500
*Shop Vac sr nts 10.625% 09/01/03 ............. 3,000,000 3,165,000
-------------
12,054,075
-------------
Energy - 0.55%
California Energy sr sec nts 9.875%06/30/03 .. 1,500,000 1,576,875
Costilla Energy sr nts 10.25% 10/01/06 ....... 1,100,000 1,141,250
Falcon Drilling sr nts 8.875% 03/15/03 ....... 2,500,000 2,500,000
Gulf Canada Resources
sr sub debs 9.25% 01/15/04 ................. 2,500,000 2,662,500
MESA Operating nts 10.63% 07/01/06 ........... 1,000,000 1,080,000
Plains Resources sr sub nts 10.25% 03/15/06 .. 1,500,000 1,591,875
-------------
10,552,500
-------------
Food, Beverage & Tobacco - 0.37%
*Core-Mark International
sr sub nts 11.375% 09/15/03 ................ 1,000,000 1,020,000
Mafco sr sub nts 11.875% 11/15/02 ............ 2,800,000 2,975,000
PMI Acquisition sr sub nts 10.25% 09/01/03 ... 3,000,000 3,060,000
-------------
7,055,000
-------------
Healthcare & Pharmaceuticals - 0.10%
HEALTHSOUTH Rehabilitation
sr sub nts 9.50% 04/01/01 .................. 1,500,000 1,601,250
Paracelsus Healthcare
sr sub nts 10.00% 08/15/06 ................. 455,000 395,850
-------------
1,997,100
-------------
Industrial Machinery - 0.21%
Jordan Industries sr nts 10.38% 08/01/03 ..... 2,000,000 1,945,000
*Spinnaker Industries sr nts 10.75% 10/15/06 .. 2,000,000 2,052,500
-------------
3,997,500
-------------
Leisure, Lodging & Entertainment
- 0.82%
*American Skiing sr sub nts 12.00% 07/15/06 ... 500,000 517,500
Argosy Gaming 1st mtg nts 13.25% 06/01/04 .... 3,000,000 2,820,000
Bally's Grand 1st mtg nts 10.375% 12/15/03 ... 2,000,000 2,245,000
Cinemark USA sr sub nts 9.625% 08/01/08 ...... 5,000,000 5,062,500
*Eldorado Resorts LLC
sr sub nts 10.50% 08/15/06 ................. 2,000,000 2,110,000
Trump-Atlantic City
1st mtg nts 11.25% 05/01/06 ................ 3,250,000 3,055,000
-------------
15,810,000
-------------
Metals & Mining - 0.39%
Armco sr nts 11.375% 10/15/99 ................ 1,250,000 1,312,500

<PAGE>
CORPORATE BONDS (CONTINUED)
METALS & MINING (CONTINUED)
- -------------------------------------------------------------------------------
Principal Market
Amount Value
--------------------------------------------------------

Commonwealth Aluminum
sr sub nts 10.75% 10/01/06 ................. $1,000,000 $1,025,000
G.S. Technologies sr nts 12.25% 10/01/05 ..... 3,000,000 3,142,500
NS Group units 13.50% 07/15/03 ............... 1,000,000 1,000,000
Oregon Steel Mills
1st mtg nts 11.00% 06/15/03 ................ 1,000,000 1,072,500
-------------
7,552,500
-------------
Packaging & Containers - 0.50%
Container Corporation of America
sr nts 11.25% 05/01/04 ..................... 2,000,000 2,165,000
Gaylord Container sr nts 11.50% 05/15/01 ..... 1,500,000 1,597,500
Ivex Packaging sr sub nts 12.50% 12/15/02 .... 1,330,000 1,433,075
Stone Container sr nts 12.625% 07/15/98 ...... 1,000,000 1,066,250
Stone Container 1st mtg nts 10.75% 10/01/02 .. 785,000 819,344
U.S. Can sr sub nts 13.50% 01/15/02 .......... 2,500,000 2,646,875
-------------
9,728,044
-------------
Paper & Forest Products - 0.68%
Doman Industries Limited sr nts
8.75% 03/15/04 ............................. 3,000,000 2,820,000
*Four M sr nts 12.00% 06/01/06 ................ 450,000 464,625
Pacific Lumber sr nts 10.50% 03/01/03 ........ 3,000,000 3,015,000
Repapa New Brunswick
sr sec nts 10.625% 04/15/05 ................ 2,000,000 1,945,000
Repap Wisconsin sr nts 9.25% 02/01/02 ........ 625,000 610,938
Repap Wisconsin sr nts 9.875% 05/01/06 ....... 1,500,000 1,477,500
Riverwood International
sr sub nts 10.875% 04/01/08 ................ 3,000,000 2,730,000
-------------
13,063,063
-------------
Retail - 0.45%
*Cole National Group
sr sub nts 9.875% 12/31/06 ................ 2,500,000 2,537,500
Cort Furniture sr nts 12.00% 09/01/00 ........ 967,000 1,054,030
Fleming Companies sr nts 10.625% 12/15/01 .... 2,000,000 2,020,000
Ralphs Grocery sr nts 10.45% 06/15/04 ........ 3,000,000 3,120,000
-------------
8,731,530
-------------
Telecommunications - 0.14%
Galaxy Telecommunication L.P.
sr sub nts 12.375% 10/01/05 ................ 1,000,000 1,042,500
Paging Network sr sub nts 10.125% 08/01/07 ... 1,000,000 1,005,000
Rogers Cantel Mobile Communications
sr sub nts 11.125% 07/15/02 ................ 550,000 594,000
-------------
2,641,500
-------------
Textiles & Furniture - 0.23%
Clark-Schwebel sr nts 10.50% 04/15/06 ........ 2,000,000 2,125,000
*Lifestyle Furnishings
sr sub nts 10.875% 08/01/06 ................ 2,100,000 2,236,500
-------------
4,361,500
-------------
Transportation & Shipping - 0.28%
*Blue Bird Body sr sub nts 10.75% 11/15/06 .... 1,100,000 1,146,750

1996 annual report
16

<PAGE>
DECATUR INCOME FUND (CONTINUED)
STATEMENT OF NET ASSETS (CONTINUED)
- -------------------------------------------------------------------------------
Principal Market
Amount Value
--------------------------------------------------------
CORPORATE BONDS (CONTINUED)
Teekay Shipping
1st pfd mtg nts 8.32% 02/01/08 ............. $ 1,500,000 $ 1,500,000
Viking Star Shipping
1st pfd mtg nts 9.625% 07/15/03 ............ 2,600,000 2,713,750
-------------
5,360,500
-------------
Utilities - 0.53%
AES sr sub nts 10.25% 07/15/06 ............... 3,000,000 3,225,000
Calpine sr nts 10.50% 05/15/06 ............... 2,000,000 2,100,000
Midland Funding II sr sub debs
11.75% 07/23/05 ............................ 2,000,000 2,230,000
TransTexas Gas sr sec nts 11.50% 06/15/02 .... 2,500,000 2,706,250
-------------
10,261,250
-------------
Miscellaneous - 0.31%
Graphic Controls sr sub nts 12.00% 09/15/05 .. 2,500,000 2,750,000
Knoll sr sub nts 10.875% 03/15/06 ............ 2,000,000 2,185,000
Pierce Leahy sr sub nts 11.125% 07/15/06 ..... 900,000 990,000
-------------
5,925,000
-------------
Total Corporate Bonds (cost $182,951,039) .... 188,402,123
-------------
REPURCHASE AGREEMENTS - 1.77%
With Chase Manhattan 5.60% 12/2/96
(dated 11/29/96, collateralized by
$18,515,000 U.S. Treasury Notes 6.125%
due 8/31/98, market value $18,946,780) ..... 18,515,000 18,515,000
With J.P. Morgan Securities 5.60% 12/2/96
(dated 11/29/96, collateralized by
$15,546,000 U.S. Treasury Notes 6.375%
due 3/31/01, market value $16,017,800) ..... 15,679,000 15,679,000
-------------
Total Repurchase Agreements
(cost $34,194,000) ........................ 34,194,000
-------------

TOTAL MARKET VALUE OF SECURITIES OWNED - 99.72%
(cost $1,649,725,408) ................................... 1,920,587,775
RECEIVABLES AND OTHER ASSETS
NET OF LIABILITIES - 0.28% .............................. 5,296,893
-------------
NET ASSETS APPLICABLE TO 90,330,046 SHARES
($1 PAR VALUE) OUTSTANDING - 100.00% .................... $1,925,884,668
==============
<PAGE>

NET ASSET VALUE - DECATUR INCOME FUND A CLASS
($1,616,314,641 / 75,797,541 SHARES) ...................... $21.32
======
NET ASSET VALUE - DECATUR INCOME FUND B CLASS
($60,689,085 / 2,855,222 SHARES) .......................... $21.26
======
NET ASSET VALUE - DECATUR INCOME FUND C CLASS
($4,833,437 / 226,637 SHARES) ............................. $21.33
======
NET ASSET VALUE - DECATUR INCOME FUND INSTITUTIONAL CLASS
($244,047,505 / 11,450,646 SHARES) ........................ $21.31
======
- ----------
*These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At November 30,
1996, these securities amounted to $23,136,475 or 1.20% of net assets.

Summary of Abbreviations:
cv - convertible
debs - debentures
mtg - mortgage
nts - notes
pfd - preferred
sec - secured
sr - senior
sub - subordinated
unsec - unsecured
- ----------
COMPONENTS OF NET ASSETS AT NOVEMBER 30, 1996:
Common stock, $1 par value, 500,000,000 shares authorized to
the Fund with 350,000,000 shares allocated to Decatur
Income Fund A Class, 50,000,000 shares allocated to Decatur
Income Fund B Class, 50,000,000 shares allocated to Decatur
Income Fund C Class and 50,000,000 shares allocated to
Decatur Income Fund Institutional Class $1,414,705,526
Accumulated undistributed income:
Net investment income ................................... 480,076
Net realized gain on investments. 239,836,699
Net unrealized appreciation of investments 270,862,367
--------------
Total net assets ........................................ $1,925,884,668
==============

See accompanying notes

1996 annual report
17
<PAGE>

DELAWARE GROUP DECATUR FUND, INC. --
DECATUR TOTAL RETURN FUND
STATEMENT OF NET ASSETS/NOVEMBER 30, 1996

<PAGE>
- -------------------------------------------------------------------------------
Number Market
of Shares Value
--------------------------------------------------------
COMMON STOCK (CONTINUED)
ELECTRONICS & ELECTRICAL
EQUIPMENT (CONTINUED)

Xerox ........................................... 238,000 $ 11,691,750
------------
40,458,750
------------
Energy - 10.21%
British Petroleum ADR ........................... 98,228 13,629,135
Mobil ........................................... 135,600 16,407,600
Occidental Petroleum ............................ 310,500 7,452,000
Phillips Petroleum .............................. 114,900 5,184,863
Texaco .......................................... 164,400 16,296,150
USX-Marathon Group .............................. 425,400 9,731,025
Williams ........................................ 191,000 10,719,875
------------
79,420,648
------------
Food,Beverage & Tobacco - 6.78%
Anheuser-Busch .................................. 172,500 7,309,688
Heinz (H.J.) ................................... 350,250 13,265,719
Philip Morris ................................... 138,400 14,272,500
Quaker Oats ..................................... 249,400 9,820,125
RJR Nabisco Holdings ............................ 251,820 8,058,240
------------
52,726,272
------------
Healthcare & Pharmaceuticals
- 14.47%
American Home Products .......................... 164,700 10,581,975
BAXTER INTERNATIONAL ............................ 434,800 18,479,000
Bristol-Myers Squibb ............................ 138,600 15,765,750
Glaxo Wellcome PLC ADR .......................... 257,700 8,471,888
PHARMACIA & UPJOHN .............................. 481,500 18,597,938
SMITHKLINE BEECHAM PLC ADR UNIT ................. 269,600 18,568,700
Tambrands ....................................... 200,000 8,550,000
Warner-Lambert .................................. 189,100 13,520,650
------------
112,535,901
------------
Metals & Mining - 2.06%
Freeport-McMoRan Copper & Gold Class B .......... 360,764 11,364,066
Reynolds Metals ................................. 77,900 4,635,050
------------
15,999,116
------------
Paper & Forest Products - 4.15%
Georgia-Pacific ................................. 91,000 6,620,250
Temple-Inland ................................... 177,600 9,546,000
Union Camp ...................................... 115,600 5,678,850
Weyerhaeuser .................................... 227,600 10,469,600
------------
32,314,700
------------
Retail - 2.74%
May Department Stores ........................... 239,300 11,665,875
Penney (J.C.) .................................. 179,800 9,664,250
------------
21,330,125
------------
1996 annual report
18
<PAGE>
DECATUR TOTAL RETURN FUND (CONTINUED)
STATEMENT OF NET ASSETS (CONTINUED)
- -------------------------------------------------------------------------------
Number Market
of Shares Value
--------------------------------------------------------
COMMON STOCK (CONTINUED)
Telecommunications - 6.19%
ALLTEL .......................................... 305,100 $ 9,725,063
BCE ............................................. 176,900 8,867,113
BellSouth ....................................... 208,900 8,434,338
Frontier ........................................ 667,000 17,508,750
GTE ............................................. 81,200 3,643,850
------------
48,179,114
------------
Transportation & Shipping - 3.87%
Conrail ......................................... 80,600 7,838,350
Norfolk Southern ................................ 39,700 3,573,000
Union Pacific ................................... 320,800 18,686,600
------------
30,097,950
------------
Utilities - 1.12%
PECO Energy ..................................... 343,400 8,756,700
------------
8,756,700
------------
Miscellaneous - 4.03%
Minnesota Mining & Manufacturing ................ 137,000 11,473,750
Pitney Bowes .................................... 336,400 19,847,600
------------
31,321,350
------------
Total Common Stock (cost $628,753,119) .......... 755,970,797
------------

CONVERTIBLE PREFERRED STOCKS - 0.62%
Banking, Finance & Insurance - 0.62%
Salomon 7.625% pfd cv Series FSA ................ 170,000 4,866,250
------------
Total Preferred Stock (cost $4,526,250) ......... 4,866,250
------------

Principal
Amount
REPURCHASE AGREEMENTS - 2.10%
With Chase Manhattan 5.60% 12/2/96
(dated 11/29/96, collateralized by $8,841,000
U.S. Treasury Notes 6.125% due 8/31/98,
market value $9,047,290) ...................... $8,841,000 8,841,000
With J.P. Morgan Securities 5.60% 12/2/96
(dated 11/29/96, collateralized by $7,423,000
U.S. Treasury Notes 6.375% due 3/31/01,
market value $7,648,670) ...................... 7,487,000 7,487,000
------------
Total Repurchase Agreements
(cost $16,328,000) ............................ 16,328,000
------------
<PAGE>
- -------------------------------------------------------------------------------

----------------------------------------------------------
TOTAL MARKET VALUE OF SECURITIES OWNED - 99.90%
(cost $649,607,369) ...................................... $777,165,047
RECEIVABLES AND OTHER ASSETS NET OF
LIABILITIES - 0.10% ...................................... 763,252
------------
NET ASSETS APPLICABLE TO 44,406,529 SHARES
($1 PAR VALUE) OUTSTANDING - 100.00% ..................... $777,928,299
============
NET ASSET VALUE - DECATUR TOTAL RETURN FUND
A CLASS ($670,912,437 / 38,293,331 SHARES) ............... $17.52
======
NET ASSET VALUE - DECATUR TOTAL RETURN FUND
B CLASS ($53,467,292 / 3,061,684 SHARES) ................. $17.46
======
NET ASSET VALUE - DECATUR TOTAL RETURN FUND
C CLASS ($7,590,607 / 435,461 SHARES) .................... $17.43
======
NET ASSET VALUE - DECATUR TOTAL RETURN FUND
INSTITUTIONAL CLASS ($45,957,963 / 2,616,053
SHARES) .................................................. $17.57
======
COMPONENTS OF NET ASSETS AT NOVEMBER 30, 1996:
Common stock, $1 par value, 250,000,000 shares
authorized to the Fund with 100,000,000 shares
allocated to Decatur Total Return Fund A Class,
50,000,000 shares allocated to Decatur Total
Return Fund B Class, 50,000,000 shares
allocated to Decatur Total Return C Class and
50,000,000 allocated to Decatur Total Return
Institutional Class ...................................... $564,605,665
Accumulated undistributed income:
Net investment income .................................... 3,767,296
Net realized gain on investments ......................... 81,997,660
Net unrealized appreciation of investments ............... 127,557,678
------------
Total net assets ........................................... $777,928,299
============
- ----------
Top 10 stock holdings, representing 24.11% of net assets, are printed in red.

See accompanying notes

1996 annual report

19
<PAGE>

DELAWARE GROUP DECATUR FUND, INC.
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1996
- -------------------------------------------------------------------------------
Decatur Decatur
Income Total Return
Fund Fund
---------------------------------------------------
INVESTMENT INCOME:
Dividends .................................. $ 53,922,649 $20,818,504
Interest ................................... 19,132,902 676,670
------------ -----------
73,055,551 21,495,174
------------ -----------
EXPENSES:
Management fees ............................ 8,397,639 3,801,697
Distribution expenses ...................... 2,685,008 2,089,310
Dividend disbursing and transfer agent
fees and expenses ........................ 2,237,720 974,542
Accounting fees and salaries ............... 492,993 185,076
Reports to shareholders .................... 291,800 143,392
Taxes (other than taxes on income) ......... 141,250 33,340
Federal and state registration fees ........ 65,200 45,281
Professional fees .......................... 73,125 44,980
Custodian fees ............................. 17,932 20,279
Directors' fees ............................ 28,792 20,090
Other ...................................... 177,510 76,800
------------ -----------
14,608,969 7,434,787
------------ -----------
NET INVESTMENT INCOME ...................... 58,446,582 14,060,387
------------ -----------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS:
Net realized gain from
security transactions .................... 244,728,187 82,430,019
Net unrealized appreciation of
investments during the period ............ 79,097,926 50,905,768
------------ -----------

<PAGE>
- -------------------------------------------------------------------------------
Decatur Decatur
Income Total Return
Fund Fund
--------------------------------------------------------------------

NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS ............................... 323,826,113 133,335,787
------------ -----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ........................... $382,272,695 $147,396,174
============ ============
NET ASSET VALUE AND OFFERING PRICE
PER SHARE:
Net asset value per share (A) ............... $21.32 $17.52
Sale charges (4.75% of offering price,
or 4.97% of amount invested per share)(B).. 1.06 0.87
------ ------
Offering price .............................. $22.38 $18.39
====== ======
- ----------
(A) Net asset value per share, as illustrated, is the estimated amount
which would be paid upon the redemption or repurchase of shares.
(B) See How to Buy Shares in the current Prospectus, for purchases of
$100,000 or more.

See accompanying notes

1996 annual report
20
<PAGE>

Delaware Group Decatur Fund, Inc.
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
Year Ended 11/30/96
------------------------------
Decatur Decatur
Income Total Return
Fund Fund
------------------------------
OPERATIONS:
Net investment income ........................... $ 58,446,582 $ 14,060,387
Net realized gain from security transactions .... 244,728,187 82,430,019
Net appreciation during the period .............. 79,097,926 50,905,768
-------------- -------------
Net increase in net assets resulting
from operations ............................... 382,272,695 147,396,174
-------------- -------------

DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
A Class ........................................ (52,522,453) (12,795,454)
B Class ........................................ (1,060,507) (433,825)
C Class ........................................ (51,387) (40,493)
Institutional Class ............................ (8,072,706) (486,097)
Net realized gain from security transactions:
A Class ........................................ (96,771,467) (44,125,949)
B Class ........................................ (1,466,813) (1,305,455)
C Class ........................................ (4,214) (14,393)
Institutional Class ............................ (14,913,705) (953,579)
-------------- -------------
(174,863,252) (60,155,245)
-------------- -------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class ........................................ 85,615,510 118,476,946
B Class ........................................ 36,290,471 34,121,733
C Class ........................................ 4,913,360 6,940,880
Institutional Class ............................ 40,544,059 31,044,696
Net asset value of shares issued upon
reinvestment of dividends from net
investment income and realized securities
profits:
A Class ........................................ 131,098,438 54,057,289
B Class ........................................ 2,125,733 1,627,235
C Class ........................................ 44,252 49,360
Institutional Class ............................ 22,540,198 1,439,675
-------------- -------------
323,172,021 247,757,814
-------------- -------------
Cost of shares repurchased:
A Class ........................................ (158,444,608) (111,870,841)
B Class ........................................ (3,349,092) (2,728,706)
C Class ........................................ (549,392) (157,130)
Institutional Class ............................ (56,125,297) (2,925,371)
-------------- -------------
(218,468,389) (117,682,048)
-------------- -------------
Increase in net assets derived from
capital share transactions ..................... 104,703,632 130,075,766
-------------- -------------
NET INCREASE IN NET ASSETS ...................... 312,113,075 217,316,695

NET ASSETS
Beginning of period ............................. 1,613,771,593 560,611,604
-------------- -------------
End of period (including undistributed net
investment income of $480,076 and
$3,767,296, respectively) ...................... $1,925,884,668 $ 777,928,299
============== =============

See accompanying notes
<PAGE>
- --------------------------------------------------------------------------------
Year Ended 11/30/95
------------------------------
Decatur Decatur
Income Total Return
Fund Fund
------------------------------
OPERATIONS:
Net investment income ........................... $ 59,061,657 $ 13,098,131
Net realized gain from security
transactions .................................. 117,113,362 47,547,702
Net appreciation during the period .............. 217,167,735 81,983,460
-------------- ------------
Net increase in net assets resulting
from operations ................................ 393,342,754 142,629,293
-------------- ------------

DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
A Class ........................................ (51,112,035) (12,097,109)
B Class ........................................ (320,672) (114,525)
C Class ........................................ -- --
Institutional Class ............................ (7,925,823) (181,571)
Net realized gain from security transactions:
A Class ........................................ (30,907,169) (13,655,359)
B Class ........................................ (85,820) (70,859)
C Class ........................................ -- --
Institutional Class ............................ (4,868,512) (46,914)
-------------- ------------
(95,220,031) (26,166,337)
-------------- ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class ........................................ 65,059,932 78,281,294
B Class ........................................ 15,750,776 11,806,856
C Class ........................................ 5,030 5,030
Institutional Class ............................ 43,751,896 7,957,834
Net asset value of shares issued upon
reinvestment of dividends from net
investment income and realized
securities profits:
A Class ........................................ 70,989,710 24,347,338
B Class ........................................ 305,545 171,844
C Class ........................................ -- --
Institutional Class ............................ 12,326,277 228,573
-------------- ------------
208,189,166 122,798,769
-------------- ------------
Cost of shares repurchased:
A Class ........................................ (167,065,887) (83,705,933)
B Class ........................................ (1,184,376) (616,336)
C Class ........................................ -- --
Institutional Class ............................ (63,043,722) (291,178)
-------------- ------------
(231,293,985) (84,613,447)
-------------- ------------
Increase (Decrease) in net assets derived
from capital share transactions ................ (23,104,819) 38,185,322
-------------- ------------
NET INCREASE IN NET ASSETS ...................... 275,017,904 154,648,278

NET ASSETS:
Beginning of period ............................. 1,338,753,689 405,963,326
-------------- ------------
End of period (including undistributed net
investment income of $3,740,547 and
$3,462,778, respectively) ...................... $1,613,771,593 $560,611,604
============== ============
See accompanying notes

1996 annual report
21

<PAGE>

DELAWARE GROUP DECATUR FUND, INC.
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1996
- -------------------------------------------------------------------------------

Delaware Group Decatur Fund, Inc. ("the Company"), is registered as a
diversified open-end investment company under the Investment Company Act of
1940, as amended. The Company is organized as a Maryland Corporation and offers
two series, the Decatur Income Fund and the Decatur Total Return Fund (the
"Funds"). Each series offers four classes of shares.

The investment objective of the Decatur Income Fund is to achieve the highest
possible current income by investing primarily in common stocks that provide the
potential for income and capital appreciation without undue risk to principal.

The investment objective of the Decatur Total Return Fund is to achieve
long-term growth by investing primarily in securities that provide the potential
for income and capital appreciation without undue risk to principal.

1. Significant Accounting Policies
The following accounting policies are in accordance with general accounting
principles and are consistently followed by the Funds:

Security Valuation - Securities listed on an exchange are valued at the last
quoted sales price as of 4:00 p.m. EST on the valuation date. Securities not
traded or securities not listed on an exchange are valued at the mean of the
last quoted bid and asked prices. Long-term debt securities are valued by an
independent pricing service when such prices are believed to reflect the fair
value of such securities. Money market instruments having less than 60 days to
maturity are valued at amortized cost which approximates market value.

Federal Income Taxes - Each Fund intends to continue to qualify as a regulated
investment company and make the requisite distributions to shareholders.
Accordingly, no provision for federal income taxes has been made.

Repurchase Agreements - Each Fund may invest in a pooled cash account along with
other members of the Delaware Group of Funds. The aggregated daily balance of
the pooled cash account is invested in repurchase agreements secured by
obligations of the U.S. government. The respective collateral is held by the
Funds' custodian bank until the maturity of the respective repurchase
agreements. Each repurchase agreement is at least 100% collateralized. However,
in the event of default or bankruptcy by the counterparty to the agreement,
realization of the collateral may be subject to legal proceedings.

Class Accounting - Investment income, common expenses and gain(losses) on
investments are allocated to the various classes of the Funds on the basis of
daily net assets of each class. Distribution expenses relating to a specific
class are charged directly to that class.

Other - Expenses common to all funds within the Delaware Group of Funds are
allocated amongst the funds on the basis of average net assets. Security
transactions are recorded on the date the securities are purchased or sold
(trade date). Costs used in calculating realized gains and losses on the sale of
investment securities are those of the specific securities sold. Dividend income
is recorded on the ex-dividend date and interest income is recorded on an
accrual basis. Original issue discounts are accreted to interest income over the
lives of the respective securities. The Decatur Income Fund declares and pays
dividends from net investment income on a monthly basis and the Decatur Total
Return Fund declares and pays dividends from net investment income on a
quarterly basis.
<PAGE>

Certain fund expenses are paid directly by brokers. The amount of those expenses
was less than 0.01 percent of each Fund's average net assets.

Distributions were declared from net realized gain from security transactions in
the amount of $2.68 per share for all classes of the Fund. In addition,
dividends were declared from net investment income in the amount of $0.0567,
$0.045, $0.045 and $0.06 per share for the Decatur Income Fund A Class, Decatur
Income Fund B Class, Decatur Income Fund C Class and Decatur Income Fund
Institutional Class, respectively, payable on December 27, 1996 to shareholders
of record on December 19, 1996. The ex-dividend date was December 20, 1996.

Distributions were declared from net realized gain from security transactions in
the amount of $1.85 per share for all classes of the Fund. In addition,
dividends were declared from net investment income in the amount of $0.115,
$0.06, $0.06, and $0.165 per share for the Decatur Total Return Fund A Class,
Decatur Total Return Fund B Class, Decatur Total Return Fund C Class and Decatur
Total Return Fund Institutional Class, respectively, payable on December 27,
1996 to shareholders of record on December 19, 1996. The ex-dividend date was
December 20, 1996.

2. Investment Management and Distribution Agreements
In accordance with the terms of the Investment Management Agreement, the Funds
pay Delaware Management Company, Inc. (DMC) the Investment Manager of the Fund,
an annual fee which is calculated daily at the following rates less fees paid to
the independent directors; 0.60% on the first $100 million of average daily net
assets, 0.525% on the next $150 million, 0.50% on the next $250 million and
0.475% on the average daily net assets over $500 million for the Decatur Income
Fund, and 0.60% on the first $500 million of average daily net assets of the
Fund, 0.575% on the next $250 million, and 0.55% on the average daily net assets
over $750 million of the Decatur Total Return Fund. At November 30, 1996, the
Funds had a liability for Investment Management fees and other expenses payable
to DMC of $173,675 and $141,529 for the Decatur Income Fund and Decatur Total
Return Fund, respectively.

Pursuant to the Distribution Agreement, the Funds pay Delaware Distributors,
L.P. (DDLP), the Distributor and an affiliate of DMC, an annual fee not to
exceed 0.30% of the average daily net assets of A Class for the Decatur Income
Fund and Decatur Total Return Fund and 1.00% of the average daily net assets of
B Class and C Class for each Fund. At November 30, 1996, the Funds had a
liability for distribution fees and other expenses payable to DDLP of $53,088
and $42,682, respectively, for Decatur Income Fund and Decatur Total Return
Fund. For the year ended November 30, 1996, the Fund paid DDLP $363,561 and
$292,100 for commissions earned on sales of Decatur Income Fund A Class shares
and Decatur Total Return Fund A Class shares, respectively.

The Funds have engaged Delaware Service Company, Inc. (DSC), an affiliate of DMC
to serve as dividend disbursing and transfer agent of the Funds. Effective
August 19, 1996, the Funds also engaged DSC to provide accounting services for
the Funds. Previously, Fund personnel provided this service and the related
costs were recorded in salaries and other expense categories in the statement of
operations. For the year ended November 30, 1996, the Decatur Income Fund and
the Decatur Total Return Fund expensed $2,237,720 and $974,542 for dividend
disbursing and transfer agent services, $135,445 and $36,623 for accounting
services and had liabilities for such fees and other expenses payable to DSC of
$41,066 and $31,326, respectively.

Certain officers of DMC are officers, directors and/or employees of the Fund.
These officers, directors and employees are paid no compensation by the Funds.

1996 annual report
22
<PAGE>

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------------------------------

3. Investments

During the year ended November 30, 1996, the Funds made purchases and sales of
investment securities other than U.S. government securities and temporary cash
investments as follows:

Decatur
Decatur Total
Income Return
Fund Fund
------- --------
Purchases ............................. $1,698,297,546 $628,682,628
Sales. ................................ $1,704,395,163 $546,484,616

Investment securities based on cost for federal income tax purposes at
November 30, 1996, are as follows:

Decatur
Decatur Total
Income Return
Fund Fund
------- --------
Cost of investments ................... $1,650,637,694 $650,284,868
============== ============
Aggregate unrealized appreciation ..... $ 276,198,570 $128,707,491
Aggregate unrealized depreciation ..... (6,248,489) (1,827,312)
-------------- ------------
Net unrealized appreciation ........... $ 269,950,081 $126,880,179
============== ============

4. Capital Stock
Transactions in capital stock shares of the Fund were as follows:

Decatur Income Fund
-------------------------------
Year Year
Ended Ended
11/30/96 11/30/95
------------- -----------
Shares sold:
A Class ................................ 4,444,653 3,832,322
B Class ................................ 1,879,641 904,441
C Class ................................ 251,293 263
Institutional Class .................... 2,114,417 2,480,766

Shares issued upon reinvestment of
dividends from net investment
income and distributions
of realized gain from security
transactions:
A Class ................................ 7,112,272 4,341,150
B Class ................................ 114,679 17,920
C Class ................................ 2,260 --
Institutional Class .................... 1,222,480 754,712
----------- -----------
17,141,695 12,331,574
----------- -----------
Shares repurchased:
A Class ................................ (8,247,706) (9,773,875)
B Class ................................ (172,677) (66,590)
C Class ................................ (27,179) --
Institutional Class .................... (2,978,039) (3,828,087)
----------- -----------
(11,425,601) (13,668,552)
----------- -----------
Net increase (decrease) ............... 5,716,094 (1,336,978)
=========== ===========
<PAGE>
4. Capital Stock (Continued)

Transactions in capital stock shares of the Fund were as follows:
Decatur Total Return Fund
-------------------------------
Year Year
Ended Ended
11/30/96 11/30/95
------------- -----------
Shares sold:
A Class .............................. 7,556,314 5,675,772
B Class .............................. 2,178,072 836,434
C Class .............................. 441,779 322
Institutional Class .................. 1,969,432 628,702

Shares issued upon reinvestment of
dividends from net investment
income and distributions of realized
gain from security transactions:
A Class .............................. 3,674,402 1,934,048
B Class .............................. 110,229 13,126
C Class .............................. 3,217 --
Institutional Class .................. 96,994 17,010
----------- -----------
16,030,439 9,105,414
----------- -----------
Shares repurchased:
A Class .............................. (7,166,570) (6,091,530)
B Class .............................. (174,170) (43,212)
C Class .............................. (9,857) --
Institutional Class .................. (186,654) (20,876)
----------- -----------
(7,537,251) (6,155,618)
----------- -----------
Net increase ......................... 8,493,188 2,949,796
=========== ===========

5. Lines of Credit
Committed lines of credit were $25 million for Decatur Income Fund and $10
million for Decatur Total Return Fund. No amount was outstanding at November 30,
1996 or at any time during the last fiscal period.

6. Concentration of Credit Risk
The Decatur Income Fund may invest in high-yield fixed income securities which
carry ratings of BB or lower by Standard & Poor's and/or Baa or lower by
Moody's. Investments in these higher yielding securities may be accompanied by a
greater degree of credit risk than higher rated securities. Additionally, lower
rated securities may be susceptible to adverse economic and competitive industry
conditions than investment grade securities.

The Decatur Income Fund may invest up to 10% of its net assets in illiquid
securities which include securities with contractual restrictions on resale,
securities exempt from registration under Rule 144A of the Securities Act of
1933, as amended, and other securities which may not be readily marketable. The
relative illiquidity of some of these securities may adversely affect the Fund's
ability to dispose of such securities in a timely manner and at a fair price
when it is necessary to liquidate such securities. These securities have been
denoted in the Statement of Net Assets and are an aggregate of 1.15% of net
assets.
1996 annual report

23
<PAGE>

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------------------------------

7. Financial Highlights
Selected data for each share of the Decatur Income Fund outstanding
throughout each period were as follows:
<TABLE>
<CAPTION>
Decatur Income Fund A Class
--------------------------------------------------------------
Year Ended November 30,
<S> <C> <C> <C> <C> <C>
1996 1995 1994 1993 1992
Net asset value, beginning of period...... $19.07 $15.57 $18.24 $17.20 $15.76
Income (loss) from investment operations:
Net investment income ............. 0.65 0.70 0.67 0.78 0.78
Net realized and unrealized gain
(loss) from security transaction.. 3.63 3.91 (0.73) 1.79 1.47
------ ------ ------ ------ ------
Total from investment operations .. 4.28 4.61 (0.06) 2.57 2.25
------ ------ ------ ------ ------

Less distributions:
Dividends from net investment
income ........................... (0.69) (0.69) (0.86) (0.68) (0.81)
Distributions from net realized
gain on security transactions..... (1.34) (0.42) (1.75) (0.85) none
------ ------ ------ ------ ------
Total distributions ............... (2.03) (1.11) (2.61) (1.53) (0.81)
------ ------ ------ ------ ------
Net asset value, end of period ........ $21.32 $19.07 $15.57 $18.24 $17.20
====== ====== ====== ====== ======
Total return(1) ....................... 24.47% 31.02% (0.57%) 15.85% 14.55%

Ratios/supplemental data:
Net assets, end of period
(000 omitted) ....................$1,616,315 $1,382,693 $1,153,884 $1,512,194 $1,508,206
Ratio of expenses to
average net assets 0.85% 0.87% 0.81% 0.71% 0.72%
Ratio of net investment
income to average net assets ..... 3.40% 4.03% 3.92% 4.34% 4.55%
Portfolio turnover ................ 101% 74% 92% 80% 79%
Average commission rate paid ...... $0.06 N/A N/A N/A N/A
</TABLE>
- ----------
(1) Does not reflect any maximum sales charges that are or were in effect nor
the 1% limited contingent deferred sales charge that would apply in the
event of certain redemptions within 12 months of purchase.

1996 annual report
24
<PAGE>

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------------------------------
7. Financial Highlights (Continued)
Selected data for each share of the Decatur Income Fund outstanding
throughout each period were as follows:
<TABLE>
<CAPTION>

Decatur Income Fund Decatur Income Fund Decatur Income Fund
B Class C Class Institutional Class
-----------------------------------------------------------------------------------------------
Year Year 9/6/94(2) Year 11/29/95(3) Year Year 1/13/94(4)
Ended Ended to Ended to Ended Ended to
11/30/96 11/30/95 11/30/94 11/30/96 11/30/95 11/30/96 11/30/95 11/30/94
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ...................... $19.03 $15.55 $16.59 $19.08 $19.15 $19.06 $15.59 $16.72
Income (loss) from investment
operations:
Net investment income ........ 0.50 0.56 0.15 0.51 0.04 0.69 0.71 0.59
Net realized and unrealized
gain (loss) from
security transactions ...... 3.61 3.89 (1.02) 3.63 (0.06) 3.62 3.92 (1.10)
------ ------ ------ ------ ------ ------ ------ ------
Total from investment operations 4.11 4.45 (0.87) 4.14 (0.02) 4.31 4.63 (0.51)
------ ------ ------ ------ ------ ------ ------ ------
Less distributions:
Dividends from net investment
income ..................... (0.54) (0.55) (0.17) (0.55) (0.05) (0.72) (0.74) (0.62)
Distributions from net
realized gain on security
transactions ............... (1.34) (0.42) none (1.34) none (1.34) (0.42) none
------ ------ ------ ------ ------ ------ ------ ------
Total distributions ........... (1.88) (0.97) (0.17) (1.89) (0.05) (2.06) (1.16) (0.62)
------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of period .... $21.26 $19.03 $15.55 $21.33 $19.08 $21.31 $19.06 $15.59
====== ====== ====== ====== ====== ====== ====== ======

Total return(1) .................. 23.43% 29.85% (5.27%) 23.47% 5 24.65% 31.14% (0.45%)

Ratios/supplemental data:
Net assets, end of period
(000 omitted) .............. $60,689 $19,665 $2,765 $4,833 $5 $244,048 $211,409 $182,105
Ratio of expenses to
average net assets ......... 1.69% 1.74% 1.70% 1.69% 5 0.69% 0.74% 0.70%
Ratio of net investment
income to average net assets 2.56% 3.16% 3.30% 2.56% 5 3.56% 4.16% 4.03%
Portfolio turnover ........... 101% 74% 92% 101% 5 101% 74% 92%
Average commission rate paid . $0.06 N/A N/A $0.06 N/A $0.06 N/A N/A
</TABLE>
- ----------

(1) Does not include the contingent deferred sales charge which varies from 1% -
4% depending upon the holding period for Decatur Income Fund B Class and 1%
for Decatur Income Fund C Class depending upon the holding period.
(2) Date of initial public offering; ratios have been annualized and total
return has not been annualized.
(3) Date of initial public offering.
(4) Date of initial public offering; ratios and total return have been
annualized.
(5) The ratios of expenses and net investment income to average net assets,
portfolio turnover and total return have been omitted as management believes
that such ratios and return for this relatively short period are not
meaningful.
1996 annual report

25
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------------------------------
7. Financial Highlights (Continued)
Selected data for each share of the Decatur Total Return Fund outstanding
throughout each period were as follows:
<TABLE>
<CAPTION>
Decatur Total Return Fund A Class
---------------------------------------------------------------
Year Ended November 30,
1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ................. $15.61 $12.32 $14.38 $13.98 $12.73

Income from investment
of operations:
Net investment income ............... 0.34 0.37 0.37 0.45 0.47
Net realized and unrealized
gain (loss) from security
transactions ....................... 3.21 3.70 (0.34) 1.45 1.30
------ ------ ------ ------ ------
Total from investment operations .... 3.55 4.07 0.03 1.90 1.77
------ ------ ------ ------ ------
Less distributions:
Dividends from net investment
income .......................... (0.35) (0.36) (0.43) (0.45) (0.52)
Distributions from net realized
gain on security transactions ... (1.29) (0.42) (1.66) (1.05) none
------ ------ ------ ------ ------
Total distributions .............. (1.64) (0.78) (2.09) (1.50) (0.52)
------ ------ ------ ------ ------
Net asset value, end of period ........ $17.52 $15.61 $12.32 $14.38 $13.98
====== ====== ====== ====== ======
Total Return(1) ....................... 24.89% 34.68% (0.04%) 14.74% 14.12%

Ratios/supplemental data
Net assets, end of period
(000 omitted) ......................$670,912 $534,342 $402,849 $431,638 $408,986
Ratio of expenses to average
net assets ......................... 1.11% 1.19% 1.26% 1.22% 1.23%
Ratio of net investment income
to average net assets ............. 2.21% 2.72% 2.88% 3.15% 3.44%
Portfolio turnover .................. 87% 81% 74% 119% 98%
Average commission rate paid ........ $0.06 N/A N/A N/A N/A
</TABLE>
- ----------
(1) Does not reflect any maximum sales charges that are or were in effect nor
the 1% limited contingent deferred sales charge that would apply in the
event of certain redemptions within 12 months of purchase.

1996 annual report
26
<PAGE>

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------------------------------

7. Financial Highlights (Continued)
Selected data for each share of the Decatur Total Return Fund outstanding
throughout each period were as follows:
<TABLE>
<CAPTION>

Decatur Total Return Fund Decatur Total Return Fund Decatur Total Return Fund
B Class C Class Institutional Class
----------------------------------------------------------------------------------------------
Year Year 9/6/94(2) Year 11/29/95(3) Year Year Year 7/26/93(4)
Ended Ended to Ended to Ended Ended Ended to
11/30/96 11/30/95 11/30/94 11/30/96 11/30/95 11/30/96 11/30/95 11/30/94 11/30/93
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $15.56 $12.31 $13.11 $15.61 $15.61 $15.65 $12.35 $14.40 $14.10
Income (loss) from investment
of operations:
Net investment income ........... 0.23 0.30 0.12 0.33 none 0.37 0.47 0.43 0.15
Net realized and unrealized
gain (loss) from security
transactions ................... 3.20 3.67 (0.82) 3.10 none 3.23 3.65 (0.37) 0.25
------ ------ ------ ------ ------ ------ ------ ------ ------

Total from investment operations 3.43 3.97 (0.70) 3.43 none 3.60 4.12 0.06 0.40
------ ------ ------ ------ ------ ------ ------ ------ ------

Less distributions:
Dividends from net
investment income ............. (0.24) (0.30) (0.10) (0.32) none (0.39) (0.40) (0.45) (0.10)
Distributions from net realized
gain on security transactions . (1.29) (0.42) none (1.29) none (1.29) (0.42) (1.66) none
------ ------ ------ ------ ------ ------ ------ ------ ------

Total distributions (1.53) (0.72) (0.10) (1.61) none (1.68) (0.82) (2.11) (0.10)
------ ------ ------ ------ ------ ------ ------ ------ ------

Net asset value, end of period ... $17.46 $15.56 $12.31 $17.43 $15.61 $17.57 $15.65 $12.35 $14.40
====== ====== ====== ====== ====== ====== ====== ====== ======

Total return(1) .................. 24.01% 33.79% (5.37%) 24.04% 5 25.24% 35.13% 0.19% 14.89%

Ratios/supplemental data:
Net assets, end of period
(000 omitted) ................. $53,467 $14,745 $1,768 $7,591 $5 $45,958 $11,520 $1,376 $1,181
Ratio of expenses to average
net assets ..................... 1.81% 1.89% 1.96% 1.81% 5 0.81% 0.89% 0.96% 0.92%
Ratio of net investment income
to average net assets .......... 1.53% 2.02% 2.18% 1.53% 5 2.53% 3.02% 3.18% 3.45%
Portfolio turnover .............. 87% 81% 74% 87% 5 87% 81% 74% 119%
Average commission rate paid .... $0.06 N/A N/A $0.06 N/A $0.06 N/A N/A N/A
</TABLE>
- ----------
(1) Does not include the contingent deferred sales charge which varies from 1% -
4% depending upon the holding period for Decatur Total Return Fund B Class
and 1% for Decatur Total Return C Class depending upon the holding period.
(2) Date of initial public offering; ratios have been annualized and total
return has not been annualized.
(3) Date of initial public offering.
(4) Date of initial public offering; ratios and total return have been
annualized.
(5) The ratios of expenses and net investment income to average net assets,
portfolio turnover and total return have been omitted as management believes
that such ratios and return for this relatively short period are not
meaningful.

1996 annual report
27
<PAGE>
DELAWARE GROUP DECATUR FUND, INC.
REPORT OF INDEPENDENT AUDITORS
- -------------------------------------------------------------------------------
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS
DELAWARE GROUP DECATUR FUND, INC. - DECATUR INCOME FUND
DELAWARE GROUP DECATUR FUND, INC. - DECATUR TOTAL RETURN FUND

We have audited the accompanying statements of net assets of Delaware Group
Decatur Fund, Inc. - Decatur Income Fund and Delaware Group Decatur Fund, Inc. -
Decatur Total Return Fund, as of November 30, 1996, and the related statements
of operations for the year then ended, the statements of changes in net assets
for each of the two years in the period then ended, and the financial highlights
for each of the periods indicated therein. These financial statements and
financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
November 30, 1996, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Delaware Group Decatur Fund, Inc. - Decatur Income Fund and Delaware Group
Decatur Fund, Inc. - Decatur Total Return Fund at November 30, 1996, the results
of their operations for the year then ended, the changes in their net assets for
each of the two years in the period then ended, and the financial highlights for
each of the periods indicated therein, in conformity with generally accepted
accounting principles.

Ernst & Young LLP

Philadelphia, Pennsylvania
January 6, 1997

1996 annual report
28

<PAGE>

DELAWARE GROUP OF FUNDS

FOR GROWTH OF CAPITAL
Trend Fund
Enterprise Fund
DelCap Fund
Value Fund
U.S. Growth Fund

FOR TOTAL RETURN
Devon Fund
Decatur Total Return Fund
Decatur Income Fund
Delaware Fund

FOR INTERNATIONAL DIVERSIFICATION
Emerging Markets Fund
New Pacific Fund
World Growth Fund
International Equity Fund
Global Assets Fund
Global Bond Fund

FOR CURRENT INCOME
Delchester Fund
Strategic Income Fund
Corporate Income Fund
Federal Bond Fund
U.S. Government Fund
Limited-Term Government Fund

FOR TAX-FREE CURRENT INCOME
Tax-Free Pennsylvania Fund
Tax-Free USA Fund
Tax-Free Insured Fund
Tax-Free USA Intermediate Fund

MONEY MARKET FUNDS
Delaware Cash Reserve
U.S. Government Money Fund
Tax-Free Money Fund

CLOSED-END INCOME*
Dividend and Income Fund
Global Dividend and Income Fund

* Listed on the New York Stock Exchange

funds

(Photo of computer keyboard - insert here)

<PAGE>
This annual report is for the information of Decatur Fund shareholders, but
it may be used with prospective investors when preceded or accompanied by a
current Prospectus for the Decatur Funds, which sets forth details about
charges, expenses, investment objectives and operating policies of each Fund.
You should read the prospectus carefully before you invest. Summary
investment results are documented in the Fund's current Statement of Additional
Information. The figures in this report represent past results which are not a
guarantee of future results. Return and principal value will fluctuate so that
shares, when redeemed, may be worth more or less than their original cost.

Board of Directors

WAYNE A. STORK
Chairman, President and Chief Executive Officer Delaware Group of Funds
Philadelphia, PA

WALTER P. BABICH
Board Chairman, Citadel Constructors, Inc.
King of Prussia, PA

ANTHONY D. KNERR
Consultant, Anthony Knerr & Associates
New York, NY

ANN R. LEVEN
Treasurer, National Gallery of Art
Washington, DC

W. THACHER LONGSTRETH
City Councilman
Philadelphia, PA

CHARLES E. PECK
Secretary/Treasurer, Enterprise Homes, Inc.
Fredericksburg, VA

Affiliated Officers

GEORGE M. CHAMBERLAIN, JR.
Senior Vice President and Secretary,
Delaware Group of Funds
Philadelphia, PA

DAVID K. DOWNES
Senior Vice President, Chief Financial Officer and Chief Administrative
Officer
Delaware Group of Funds
Philadelphia, PA

BRUCE D. BARTON
President and CEO,
Delaware Distributors, L.P.
Philadelphia, PA

directors & officers

INVESTMENT MANAGER
Delaware Management Company, Inc.
Philadelphia, Pennsylvania

INTERNATIONAL AFFILIATE
Delaware International Advisers Ltd.
London, England

NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
Philadelphia, Pennsylvania

SHAREHOLDER SERVICING,
DIVIDEND DISBURSING
AND TRANSFER AGENT
Delaware Service Company, Inc.
Philadelphia, Pennsylvania

1818 Market Street
Philadelphia, PA 19103-3682
<PAGE>
This report must be preceded or accompanied by a current Decatur Fund prospectus
and the Delaware Group Fund Performance Update for the most recently completed
calendar quarter. For a prospectus of any other Delaware Group fund, contact
your financial adviser or Delaware Group.

(Photo of Globes goes here)

For Shareholders
1.800.523.1918

For Securities Dealers
1.800.362.7500

For Financial Institutions Representatives Only
1.800.659.2265

BE SURE TO CONSULT YOUR FINANCIAL ADVISER WHEN MAKING INVESTMENTS. MUTUAL
FUNDS CAN BE A VALUABLE PART OF YOUR FINANCIAL PLAN; HOWEVER, SHARES OF THE
FUND ARE NOT FDIC OR NCUSIF INSURED, ARE NOT GUARANTEED BY ANY BANK OR ANY
CREDIT UNION, AND INVOLVE INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL. SHARES OF THE FUND ARE NOT BANK OR CREDIT UNION DEPOSITS.

Copy Rights Delaware Distributors, L.P.

DELAWARE
GROUP
- -----------
Philadelphia * London

Printed in the USA on
recycled paper

AR-118[11/96]TKO1/97
D-307