FIDELITY PHILLIPS STREET TRUST, N-30D, 1995-01-03

FIDELITY PHILLIPS STREET TRUST
N-30D, 1995-01-03

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FIDELITY

(registered trademark)
CASH RESERVES

ANNUAL REPORT
NOVEMBER 30, 1994
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.

PERFORMANCE 4 How the fund has done over time.

FUND TALK 6 The manager's review of fund
performance, strategy and outlook.

INVESTMENT CHANGES 8 A summary of major shifts in the
fund's investments over the past six
months
and one year.

INVESTMENTS 9 A complete list of the fund's
investments with their market
values.

FINANCIAL STATEMENTS 20 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.

NOTES 24 Notes to the financial statements.

REPORT OF INDEPENDENT
ACCOUNTANTS 26 The auditor's opinion.

THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE
PROSPECTUS. MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED BY, ANY
DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE FEDERAL
RESERVE BOARD OR
ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISK, INCLUDING THE
POSSIBLE LOSS OF
PRINCIPAL. NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A
BANK. FOR MORE
INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES, CALL
1-800-544-8888

FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE

DEAR SHAREHOLDER:
The year so far has been an unsettling time for many investors. For
example, after three years of a nearly perfect environment for stock market
investing, stock prices generally fell from February through June, and bond
prices fell, as well. Although there was a late-summer stock rally,
volatility continued into the fourth quarter and no one can know for sure
what will happen in the months ahead.
We do know, however, that market ups and downs are a normal part of
investing. We have historically seen corrections of 10% or more every two
years. That's why I thought this might be a good time to review three basic
investment principles that have proven helpful to successful investors in
every market cycle.
First, take a long-term approach when investing. If you can afford to leave
your money invested through the inevitable ups and downs of financial
markets, you will greatly reduce your vulnerability to any single decline.
Over time, for example, stock prices have gone up - and have significantly
outperformed other types of investments and stayed ahead of inflation.
Second, you can further manage risk by diversifying your investments. A
stock mutual fund is already diversified, because it invests in many
different companies. You can increase your diversification by investing in
a number of different stock funds, or in different investment categories,
such as bonds. You should also keep money you'll need in the near future in
a more stable investment.
Finally, it makes good sense to follow a regular investment plan, investing
a set amount of money at the same time each month or quarter. That way, you
can avoid getting caught up in the excitement of a rapidly-rising market -
and won't end up buying all your shares at market highs. This strategy
won't assure a profit or protect you from a loss in a declining market, but
it should help you lower the average cost of your purchases. For this to be
effective, you must continue to buy shares in both up and down markets.
If you have questions, please call us at 1-800-544-8888. We would be happy
to send you a Fidelity FundMatch kit, which can help you determine the mix
of investments that is right for you. You might also find it convenient to
set up a regular investment plan using the Fidelity Automatic Account
Builder.SM
We look forward to hearing from you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE

To measure a money market fund's performance, you can look at either total
return or yield. Total return reflects both the change in a fund's share
price over a given period, and reinvestment of
its dividends (or income). Yield measures the income paid by a fund. Since
a money market fund tries to maintain
a $1 share price, yield is an important measure of performance.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1994 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Fidelity Cash Reserves 3.74% 27.17% 81.84%

Consumer Price Index 2.81% 19.06% 42.36%

Average All Taxable
Money Market Fund 3.55% 25.88% 78.37%

CUMULATIVE TOTAL RETURNS reflect actual performance over a specific period
- - in this case, one year, five years, or ten years. For example, if you
invested $1,000 in a fund that had a 5% return over the past year, you
would end up with $1,050. Comparing the fund's performance to the consumer
price index (CPI) helps show how your investment did compared to inflation.
To measure how the fund stacked up against its peers, you can compare its
return to the average all taxable money market fund's total return. This
average currently reflects the performance of 699 money market funds
tracked by IBC/Donoghue's MONEY FUND REPORT.(registered trademark) (The
periods covered by the CPI and IBC/Donoghue numbers are the closest
available match to those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1994 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Fidelity Cash Reserves 3.74% 4.92% 6.16%

Consumer Price Index 2.81% 3.55% 3.59%

Average All Taxable
Money Market Fund 3.55% 4.70% 5.96%

AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had achieved that return
by performing at a constant rate each year.
YIELDS
11/30/93 2/28/94 5/31/94 8/31/94 11/30/94

2.87% 2.87% 3.50% 4.30% 5.06%
Fidelity Cash Reserves

Average All Taxable 2.69% 2.79% 3.51% 4.08% 4.84%
Money Market Fund

2.35% 2.29% 2.35% 2.42% 2.64%
MMDA

Row: 1, Col: 1, Value: 2.87
Row: 1, Col: 2, Value: 2.69
Row: 1, Col: 3, Value: 2.35
Row: 2, Col: 1, Value: 2.87
Row: 2, Col: 2, Value: 2.79
Row: 2, Col: 3, Value: 2.29
Row: 3, Col: 1, Value: 3.5
Row: 3, Col: 2, Value: 3.51
Row: 3, Col: 3, Value: 2.35
Row: 4, Col: 1, Value: 4.3
Row: 4, Col: 2, Value: 4.08
Row: 4, Col: 3, Value: 2.42
Row: 5, Col: 1, Value: 5.06
Row: 5, Col: 2, Value: 4.84
Row: 5, Col: 3, Value: 2.64
Fidelity Cash
Reserves
Average All
Taxable Money
Market Fund
MMDA
5% -
4% -
3% -
2% -
1% -
0%
YIELD refers to the income paid by the fund over a given period. Yields for
money market funds are usually for seven-day periods, expressed as annual
percentage rates. A yield that assumes income earned is reinvested or
compounded is called an effective yield. The chart above shows the fund's
current seven-day yield at quarterly intervals over the past year. This is
compared to similar yields for the average all taxable money market fund
and the average bank money market deposit account (MMDA). Figures for the
average taxable money market fund are from the IBC/Donoghue's MONEY FUND
REPORT.(registered trademark) The MMDA average is supplied by BANK RATE
MONITOR.(Trademark)
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT PAST
RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.

COMPARING
PERFORMANCE
There are some important
differences between a bank
money market deposit account
(MMDA) and a money market
fund. First, the U.S.
government neither insures nor
guarantees a money market
fund. In fact, there is no
assurance that a money fund
will maintain a $1 share price.
Second, a money market
fund returns to its
shareholders income earned
by the fund's investments
after expenses. This is in
contrast to banks, which set
their MMDA rates periodically
based on current interest
rates, competitors' rates, and
internal criteria.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW

An interview with Bob Litterst,
Portfolio Manager of Fidelity
Cash Reserves

Q. BOB, WHAT HAS OCCURRED IN THE SHORT-TERM MARKET DURING THE PAST YEAR?
A. Like other markets, it has gone through major changes. The Federal
Reserve Board increased the federal funds rate - or the rate banks charge
each other for overnight loans - six times, boosting it from 3.00% at the
beginning of the period to 5.50% by the end of November. The Fed decided to
raise interest rates to preempt an increase in inflation. The primary
factor behind those rate hikes was an economy that has been much stronger
than expected, fueled by significant improvements in labor market
conditions, which in turn, have bolstered consumer attitudes, incomes and
spending. In addition, the manufacturing sector has been very strong, and
business investment has continued at a robust pace. Early in the year, the
rate increases were intended to unwind the easy money conditions that had
existed in 1992 and 1993 to boost a faltering economy. By the fall of 1994,
the rate increases engineered by the Fed had pushed policy into a
restrictive zone, designed to slow the economy to a more sustainable growth
path. Yields on short-term investments rose along with the federal funds
rate. For example, yields on six-month Treasury bills climbed to 6.3% on
November 30, 1994 from 3.4% a year earlier.
Q. HOW DID YOU MANAGE THE FUND'S INVESTMENTS IN THE RISING RATE
ENVIRONMENT?
A. In general, I pursued a defensive strategy, gradually shortening the
fund's average maturity from 79 days to around 42 to 43 days. I did not
shorten that maturity more because I periodically attempted to add value to
the fund by purchasing money market securities with longer maturities, out
to six months, that I felt fully reflected the risk of future increases in
market interest rates. This tactic worked well at times, but in retrospect,
the pace and magnitude of the increase in short-term rates rewarded
defensive strategies the most.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on November 30, 1994, was 5.06%, compared to
2.87% yield at the end of November 1993. For the 12 months ended November
30, the fund's total return was 3.74%. That beat the 3.55% average total
return for all taxable money market funds tracked by IBC/Donoghue.
Q. WHAT'S AHEAD FOR THE SHORT-TERM MARKET AND THE FUND?
A. The economy is showing considerable strength on many fronts and momentum
appears to be growing, in spite of the Fed's efforts to cool it down. I
think the Fed will continue to raise rates until economic activity
moderates to a more sustainable pace, say in the area of 2.5% real Gross
Domestic Product. The Fed also may respond to any signs that inflation
pressures are rising. With that in mind, I will continue to manage the fund
in a cautious manner.

FUND FACTS
GOAL: income and share price
stability by investing in high
quality, short-term investments
START DATE: May 10, 1979
SIZE: as of November 30,
1994, more than $14.5 billion
MANAGER: Robert Litterst,
since January 1992;
manager, Capital Reserves
Money Market,
Fidelity VIP: Money Market
Portfolio, and Fidelity Money
Market Trust: Retirement
Money Market, since January
1992; joined Fidelity in 1991
(checkmark)

MONEY MARKETS AND
DERIVATIVES:
The word "derivatives" covers
a wide range of financial
agreements, of varying
degrees of complexity, that
have market values based on
security or market indices. All
"derivative" securities in
Fidelity's money market funds
are designed to have the price
characteristics of typical
money market securities.
During the recent Federal
Reserve Board interest rate
increases, all Fidelity money
market holdings performed as
designed and the funds
maintained a stable share
price of $1.00.
The more complex of these
instruments, such as floating
rate notes with unusual and
complex floating rate
formulas, frequently have too
much price volatility to be
appropriate investments for
money market funds. Many of
them do not offer the degree
of price stability Fidelity
believes is required in order
for its funds to maintain a
stable $1.00 share price.
Therefore, despite their
frequent higher yields at the
time they are sold, Fidelity
money market funds have not
purchased these volatile
securities. While this may
sometimes have caused
Fidelity money market funds
to have lower gross yields
than certain other funds,
Fidelity believes its investors
value prudence as well as
performance.
INVESTMENT CHANGES

MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
11/30/94 5/31/94 11/30/93

0 - 30 56 58 28

31 - 90 28 20 46

91 - 180 16 18 18

181 - 397 0 4 8

WEIGHTED AVERAGE MATURITY
11/30/94 5/31/94 11/30/93

Fidelity Cash Reserves 43 days 48 days 79 days

Average All Taxable
Money Market Fund* 40 days 44 days 61 days

ASSET ALLOCATION
AS OF NOVEMBER 30, 1994 AS OF MAY 31, 1994

Row: 1, Col: 1, Value: 50.0
Row: 1, Col: 2, Value: 37.0
Row: 1, Col: 3, Value: 5.0
Row: 1, Col: 4, Value: 8.0
Row: 1, Col: 1, Value: 44.0
Row: 1, Col: 2, Value: 42.0
Row: 1, Col: 3, Value: 7.0
Row: 1, Col: 4, Value: 7.0
Bank CDs, BAs,
TDs, and notes 50%
Commercial
paper 37%
Government
securities 5%
Other 8%
Bank CDs, BAs,
TDs, and notes 44%
Commercial
paper 42%
Government
securities 7%
Other 7%
* SOURCE: IBC/DONOGHUE'S MONEY FUND REPORT(registered trademark)
INVESTMENTS NOVEMBER 30, 1994

Showing Percentage of Total Value of Investments

BANKERS' ACCEPTANCES - 0.2%
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
NEW YORK BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 0.2%
Bank of Tokyo
3/28/95 5.76% $ 25,000 $ 24,545
CERTIFICATES OF DEPOSIT - 18.1%
DOMESTIC CERTIFICATES OF DEPOSIT - 0.7%
Harris Trust & Savings Bank, Chicago
12/13/94 5.55 50,000 50,000
12/14/94 5.55 50,000 50,000
100,000
NEW YORK BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 13.3%
Bank of Tokyo
12/19/94 4.96 70,000 70,000
Canadian Imperial Bank of Commerce
1/30/95 6.00 50,000 50,000
Fuji Bank, Ltd.
12/2/94 5.06 60,000 60,000
12/6/94 5.27 80,000 80,000
12/12/94 5.28 25,000 25,000
12/15/94 5.15 50,000 50,000
3/1/95 6.06 115,000 115,000
Industrial Bank of Japan, Ltd.
12/7/94 5.25 18,000 18,000
12/14/94 5.00 100,000 100,000
12/16/94 5.56 75,000 75,000
Mitsubishi Bank, Ltd.
12/19/94 4.95 80,000 80,000
12/30/94 5.00 95,000 95,000
National Bank of Canada
3/20/95 5.50 55,000 55,000
Rabobank Nederland, N.V.
4/13/95 5.75 45,000 44,993
Sakura Bank, Ltd.
12/5/94 5.12 75,000 75,000
Sanwa Bank, Ltd.
12/1/94 5.06 25,000 25,000
12/2/94 5.05 23,000 23,000
12/8/94 5.25 10,000 10,000
3/20/95 5.65 20,000 19,983
CERTIFICATES OF DEPOSIT - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
NEW YORK BRANCH, YANKEE DOLLAR, FOREIGN BANKS - CONTINUED
Societe Generale
12/16/94 5.60% $ 50,000 $ 50,000
3/1/95 5.80 35,000 35,000
3/17/95 5.93 125,000 125,000
4/5/95 5.80 70,000 70,000
Sumitomo Bank, Ltd.
12/1/94 5.10 80,000 80,000
12/5/94 5.13 25,000 25,000
12/7/94 5.34 20,000 20,000
12/15/94 5.40 25,000 25,000
12/19/94 5.00 50,000 50,000
2/1/95 6.06 40,000 40,000
4/28/95 5.97 25,000 24,995
Swiss Bank Corp.
12/6/94 5.56 100,000 100,000
3/27/95 5.63 75,000 75,000
3/28/95 5.63 140,000 140,000
1,930,971
LONDON BRANCH, EURODOLLAR, DOMESTIC BANKS - 2.0%
Bankers Trust Co.
4/12/95 5.70 80,000 80,000
4/13/95 5.74 120,000 120,000
Chase Manhattan Bank
2/14/95 5.75 50,000 50,000
Morgan Guaranty Trust Co.
12/5/94 5.27 50,000 49,999
299,999
LONDON BRANCH, EURODOLLAR, FOREIGN BANKS - 2.1%
Mitsubishi Bank, Ltd.
2/14/95 5.80 75,000 74,993
2/17/95 5.32 25,000 24,999
4/28/95 5.90 50,000 50,000
5/2/95 5.98 25,000 24,989
Sumitomo Bank, Ltd.
12/22/94 5.01 80,000 80,000
Toronto-Dominion Bank
12/8/94 4.91 55,000 55,000
309,981
TOTAL CERTIFICATES OF DEPOSIT 2,640,951
COMMERCIAL PAPER - 36.8%
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
AVCO Financial Services, Inc.
12/7/94 5.22% $ 25,000 $ 24,978
A.H. Robins Company, Inc.
1/25/95 5.96 76,000 75,315
American Home Food Products, Inc.
1/24/95 5.96 40,000 39,646
2/7/95 6.00 80,000 79,105
Associates Corp. of North America
12/7/94 5.37 50,000 49,955
2/22/95 5.94 40,000 39,461
BNP U.S. Finance Corp.
1/6/95 5.21 50,000 49,746
B.B.V. Finance (Delaware), Inc.
4/4/95 5.80 25,000 24,513
Bank of Scotland
4/25/95 5.87 25,000 24,426
Bankers Trust Corp.
2/7/95 5.88 30,000 29,671
2/14/95 5.74 200,000 197,646
Bear Stearns Cos., Inc.
12/6/94 4.92 40,000 39,973
12/12/94 5.08 40,000 39,938
12/13/94 5.55 40,000 39,926
2/6/95 5.78 40,000 39,576
CIT Group Holdings, Inc.
12/7/94 4.98 25,000 24,980
12/15/94 5.32 30,000 29,938
12/19/94 5.58 65,000 64,820
1/30/95 6.03 50,000 49,503
2/13/95 5.61 50,000 49,435
Canadian Wheat Board
4/18/95 5.85 30,000 29,346
4/19/95 5.85 100,000 97,803
Commercial Credit Co.
12/6/94 5.39 25,000 24,981
Concord Leasing, Inc. (Guaranteed by Midland Bank, PLC)
12/15/94 5.37 30,000 29,938
12/15/94 5.42 50,000 49,895
Cooper Industries, Inc.
12/5/94 5.39 36,000 35,979
CoreStates Capital Corp. (a)
12/15/94 5.33 25,000 25,000
Corporate Receivables Corp.
2/8/95 5.75 30,000 29,674
Dayton Hudson Corp.
12/12/94 5.27 20,000 19,968
COMMERCIAL PAPER - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
Dresdner Bank, A.G.
12/1/94 5.51% $ 100,000 $ 100,000
Electronic Data Systems Corp.
1/17/95 5.65 16,000 15,883
Ford Motor Credit, PLC
12/12/94 5.21 80,000 79,873
Ford Motor Credit Corp.
12/5/94 5.25 100,000 99,942
1/17/95 5.13 80,000 79,478
2/8/95 5.75 100,000 98,913
General Electric Capital Corp.
12/12/94 5.02 20,000 19,970
12/12/94 5.06 50,000 49,924
12/15/94 5.14 (a) 30,000 30,000
12/20/94 4.85 50,000 49,876
12/21/94 4.85 50,000 49,869
1/26/95 5.27 35,000 34,721
2/10/95 5.24 148,000 146,511
2/10/95 5.57 135,000 133,528
4/11/95 5.74 50,000 48,985
4/12/95 5.74 70,000 68,568
General Electric Capital Services Inc.
4/3/95 5.82 25,000 24,515
4/4/95 5.82 15,000 14,707
4/12/95 5.74 50,000 48,977
General Motors Acceptance Corp.
12/13/94 5.42 50,000 49,910
12/14/94 5.42 20,000 19,961
1/23/95 5.93 90,000 89,222
1/30/95 5.50 80,000 79,280
2/9/95 6.00 75,000 74,137
2/14/95 5.94 25,000 24,695
2/21/95 6.04 60,000 59,187
2/22/95 6.04 75,000 73,971
5/1/95 5.95 50,000 48,788
Generale Bank
2/7/95 5.71 50,000 49,471
3/27/95 5.66 90,000 88,405
Hanson Finance (UK), PLC
2/6/95 5.73 75,000 74,211
2/7/95 5.73 50,000 49,466
2/7/95 5.75 40,000 39,572
2/22/95 5.94 50,000 49,326
Hewlett-Packard Co.
2/27/95 5.20 30,000 29,628
Household Finance Corp.
2/8/95 5.75 35,000 34,620
2/10/95 5.60 50,000 49,458
COMMERCIAL PAPER - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
ITT Corp.
12/5/94 5.58% $ 20,000 $ 19,988
12/6/94 5.59 35,000 34,973
12/19/94 5.43 32,000 31,914
1/23/95 5.91 30,000 29,742
ITT Financial
12/7/94 5.27 113,000 112,901
12/8/94 5.27 13,000 12,987
12/12/94 5.27 36,000 35,942
12/15/94 5.42 60,000 59,874
2/15/95 5.94 25,000 24,691
Merrill Lynch & Co., Inc.
2/16/95 5.55 50,000 49,417
5/15/95 6.19 50,000 48,625
5/16/95 6.19 35,000 34,032
Morgan Stanley Group, Inc.
12/12/94 5.54 110,000 109,814
12/13/94 5.17 50,000 49,915
1/26/95 5.60 70,000 69,399
New Center Asset Trust
12/12/94 5.54 50,000 49,916
2/9/95 5.80 100,000 98,888
Prudential Funding Corp.
12/2/94 5.00 65,000 64,991
Prudential Home Mortgage Co.
12/14/94 5.42 35,000 34,932
Prudential Insurance Co. of America
12/14/94 5.38 13,600 13,574
Santander Finance (Delaware), Inc.
2/14/95 6.08 25,000 24,688
Seagram & Sons, Joseph E. (Inc.)
2/6/95 5.73 28,816 28,513
2/7/95 5.73 42,709 42,253
2/13/95 5.74 50,000 49,419
2/21/95 5.93 20,000 19,734
2/23/95 5.93 25,000 24,659
Sears Roebuck Acceptance Corp.
1/12/95 5.58 30,000 29,807
2/6/95 5.70 40,000 39,582
2/8/95 5.84 25,000 24,724
2/9/95 6.01 55,000 54,365
2/14/95 5.94 30,000 29,634
Sherwood Medical Company
1/23/95 5.96 65,000 64,436
2/21/95 6.04 50,000 49,322
Siemens Corp.
4/25/95 5.86 30,000 29,311
Smith Barney, Inc.
12/13/94 5.15 20,000 19,966
2/6/95 5.73 25,000 24,737
COMMERCIAL PAPER - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
Texaco Inc.
12/14/94 5.32% $ 50,000 $ 49,904
Textron, Inc.
12/8/94 5.34 22,000 21,977
12/9/94 5.34 15,000 14,982
12/14/94 5.42 4,000 3,992
12/15/94 5.67 10,000 9,978
12/15/94 5.68 12,000 11,974
Toronto Dominion Holdings USA, Inc.
3/1/95 5.21 60,000 59,238
5/2/95 5.90 50,000 48,790
Unocal Corp.
12/6/94 5.33 8,000 7,994
12/12/94 5.36 25,000 24,959
Whirlpool Corp.
12/5/94 5.35 15,000 14,991
TOTAL COMMERCIAL PAPER 5,343,127
FEDERAL AGENCIES - 1.8%

FEDERAL NATIONAL MORTGAGE ASSOC. - DISCOUNT NOTES - 1.0%
2/17/95 5.78 30,000 29,629
2/21/95 5.42 21,145 20,889
3/2/95 5.50 50,000 49,319
5/11/95 5.98 40,000 38,961
138,798
INTERNATIONAL BANK OF RECONSTRUCTION AND DEVELOPMENT - DISCOUNT NOTES -
0.8%
12/27/94 3.54 40,000 39,901
12/30/94 3.57 80,000 79,778
119,679
TOTAL FEDERAL AGENCIES 258,477
U.S. TREASURY OBLIGATIONS - 3.1%
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
U.S. TREASURY BILLS - 3.1%
1/12/95 3.52% $ 80,000 $ 79,682
1/12/95 3.55 76,000 75,696
1/12/95 3.59 50,000 49,798
4/6/95 5.11 175,000 171,962
4/6/95 5.15 70,000 68,775
TOTAL U.S. TREASURY OBLIGATIONS 445,913
BANK NOTES - 9.1%

Bank of New York (a)
12/1/94 6.20 30,000 29,995
Bank of New York - Delaware (a)
12/1/94 5.70 50,000 49,982
12/6/94 4.94 70,000 70,000
Boatmen's First National Bank of St. Louis (a)
12/1/94 5.72 75,000 74,990
Comerica Bank-Detroit (a)
12/1/94 6.20 30,000 30,000
12/1/94 6.21 30,000 29,994
First Bank N.A., Minnesota
12/15/94 5.36 (a) 46,000 45,984
12/16/94 5.10 25,000 25,000
First National Bank of Boston
12/19/94 5.40 25,000 25,000
First of America Bank-Michigan, N.A.
12/13/94 5.10 15,000 15,000
Huntington National Bank (a)
12/1/94 5.71 65,000 64,961
12/1/94 6.43 50,000 49,978
Key Bank of New York (a)
12/1/94 5.73 125,000 124,914
NBD Bank, N.A.
4/28/95 5.88 70,000 70,005
Old Kent Bank - Southwest (a)
12/15/94 5.63 25,000 25,000
PNC Bank, Kentucky (Citizens Fidelity) (a)
12/6/94 5.76 85,000 84,915
PNC Bank, N.A.
12/6/94 5.73 (a) 100,000 99,922
12/7/94 5.76 (a) 90,000 89,910
1/20/95 3.69 50,000 49,991
BANK NOTES - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
Society National Bank (a)
12/1/94 5.68% $ 50,000 $ 49,972
12/1/94 5.69 37,000 36,980
12/1/94 6.21 70,000 69,987
Trust Company Bank
1/31/95 3.76 61,000 60,967
1/31/95 3.78 50,000 49,973
TOTAL BANK NOTES 1,323,420
MASTER NOTES (A) - 3.0%

J.P. Morgan Securities
12/1/94 6.11 190,000 190,000
12/1/94 6.13 150,000 150,000
Morgan Stanley Group, Inc.
12/1/94 6.08 25,000 25,000
Norwest Corp.
12/1/94 5.65 78,000 78,000
TOTAL MASTER NOTES 443,000
MEDIUM-TERM NOTES - 9.5%

Abbey National Treasury Service (a) (c)
12/31/94 5.25 435,000 435,000
Beneficial Corp. (a)
12/15/94 5.61 50,000 49,980
12/15/94 5.62 100,000 99,983
Commonwealth Life Insurance Co. (a)
12/1/94 5.19 50,000 50,000
Corporate Asset Funding Co., Inc. (a) (c)
12/15/94 5.25 50,000 49,980
General Motors Acceptance Corp. (a)
2/7/95 5.83 93,000 93,000
Goldman Sachs Group, L.P. (The) (c)
12/1/94 4.89 (a) 27,000 27,000
12/13/94 4.97 35,000 34,966
12/16/94 5.36 (a) 95,000 95,000
3/1/95 5.66 (a) 94,000 94,000
Merrill Lynch & Co., Inc. (a)
12/1/94 5.74 40,000 40,000
Norwest Corp. (a)
3/15/95 5.03 114,000 114,000
MEDIUM-TERM NOTES - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
PHH Corp. (a)
12/1/94 4.99% $ 25,000 $ 24,991
12/1/94 6.17 50,000 50,000
12/21/94 5.62 47,000 46,986
PepsiCo (a)
12/1/94 5.85 60,000 60,000
U.S.L. Capital, Inc. (a)
12/16/94 5.00 15,000 15,009
TOTAL MEDIUM-TERM NOTES 1,379,895
SHORT-TERM NOTES (A) (B) - 4.4%

CSA Funding - A
12/7/94 5.95 22,000 22,000
CSA Funding - B
12/7/94 5.95 22,000 22,000
CSA Funding - C
12/7/94 5.95 6,000 6,000
SMM Trust Company (1994-A)
12/18/94 5.06 395,000 395,000
12/18/94 5.16 22,000 21,994
12/18/94 5.17 15,000 14,995
SMM Trust Company (1994-D)
1/28/95 5.71 71,000 71,000
SMM Trust Company (1994-E)
1/13/95 5.63 66,000 66,000
1/13/95 5.72 19,000 18,994
TOTAL SHORT-TERM NOTES 637,983
TIME DEPOSITS - 5.6%

Banco Bilbao Vizcaya, S.A.
12/19/94 5.56 50,000 50,000
Bank of Nova Scotia
12/16/94 5.56 50,000 50,000
Berliner Handels-und Frankfurter Bank
12/5/94 5.63 100,000 100,000
12/6/94 5.56 75,000 75,000
TIME DEPOSITS - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
Hong Kong & Shanghai Banking Corp.
12/6/94 5.56% $ 200,000 $ 200,000
National City Bank, Kentucky
12/1/94 5.75 50,000 50,000
Sakura Bank, Ltd.
12/12/94 5.75 75,000 75,000
12/16/94 5.38 50,000 50,000
Sumitomo Bank, Ltd.
12/6/94 5.56 120,000 120,000
12/7/94 5.63 40,000 40,000
TOTAL TIME DEPOSITS 810,000
MUNICIPAL SECURITIES (A) - 0.2%

Louisiana Public Facilities Authority
12/5/94 5.13 25,000 25,000
REPURCHASE AGREEMENTS - 8.2%
MATURITY AMOUNT
(000S)
With First Boston Corporation:
At 5.55%, dated 11/16/94 due 12/14/94:
U.S. Government Obligations
(principal amount $470,487)
0% to 15%, 6/1/98 to 6/1/28 $ 451,943 450,000
In a joint trading account
(U.S. Treasury Obligations)
dated 11/30/94, due 12/1/94
At 5.71% 43,358 43,351
At 5.81% 700,113 700,000
TOTAL REPURCHASE AGREEMENTS 1,193,351
TOTAL INVESTMENTS - 100% $ 14,525,662
Total Cost for Income Tax Purposes $ 14,525,662

LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end. The due date on these types of
securities reflects the next interest rate reset date or when applicable,
the final maturity date.
(b) Restricted securities - Investment in securities not registered under
the Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on each holding is as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST (000'S)
CSA Funding-A 10/28/93 $ 22,000
CSA Funding-B 10/28/93 $ 22,000
CSA Funding-C 10/28/93 $ 6,000
SMM Trust
Company:
(1994-A) 3/18/94 $ 395,000(1994-A) 5/12/94 $ 21,985
(1994-A) 6/28/94 $ 14,998
(1994-D) 10/28/94 $ 71,000
(1994-E) 4/13/94 $ 66,000(1994-E) 5/23/94 $ 18,987
(c) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $735,946,000 or 5.1% of net
assets.
INCOME TAX INFORMATION
At November 30, 1994, the fund had a capital loss carryforward of
approximately $2,830,000 of which $1,196,000 and $1,634,000 will expire on
November 30, 2001, and 2002, respectively.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT FOR PER-SHARE AMOUNT) NOVEMBER 30, 1994

1.ASSETS 2. 3.

4.Investment in securities, at value (including 5. $ 14,525,662
repurchase agreements of $1,193,351) - See
accompanying
schedule

6.Cash 7. 3,425

8.Interest receivable 9. 46,479

10. 11.TOTAL ASSETS 12. 14,575,566

13.LIABILITIES 14. 15.

16.Payable for investments purchased $ 40,000 17.

18.Dividends payable 2,884 19.

20.Accrued management fee 2,396 21.

22.Other payables and accrued expenses 1,730 23.

24. 25.TOTAL LIABILITIES 26. 47,010

27.28.NET ASSETS 29. $ 14,528,556

30.Net Assets consist of: 31. 32.

33.Paid in capital 34. $ 14,530,157

35.Accumulated net realized gain (loss) on investments 36. (1,601)

37.38.NET ASSETS, for 14,530,157 shares outstanding 39. $ 14,528,556

40.41.NET ASSET VALUE, offering price and redemption 42. $1.00
price per share ($14,528,556 (divided by) 14,530,157 shares)

</TABLE>

STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS YEAR ENDED NOVEMBER 30, 1994

43.44.INTEREST INCOME 45. $ 530,409

46.EXPENSES 47. 48.

49.Management fee $ 23,686 50.

51.Transfer agent fees 38,363 52.

53.Accounting fees and expenses 750 54.

55.Non-interested trustees' compensation 70 56.

57.Custodian fees and expenses 315 58.

59.Registration fees 459 60.

61.Audit 119 62.

63.Legal 102 64.

65.Miscellaneous 126 66.

67. 68.TOTAL EXPENSES 69. 63,990

70.71.NET INTEREST INCOME 72. 466,419

73.74.NET REALIZED GAIN (LOSS) ON INVESTMENTS 75. (1,634)

76.77.NET INCREASE IN NET ASSETS RESULTING FROM 78. $ 464,785
OPERATIONS

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEARS ENDED NOVEMBER 30,

1994 1993

79.INCREASE (DECREASE) IN NET ASSETS

80.Operations $ 466,419 $ 284,873
Net interest income

81. Net realized gain (loss) (1,634) (1,196)

82. 83.NET INCREASE (DECREASE) IN NET ASSETS 464,785 283,677
RESULTING FROM OPERATIONS

84.Dividends to shareholders from net interest income (466,419) (284,873)

85.Share transactions at net asset value of $1.00 per 26,996,770 17,583,679
share
Proceeds from sales of shares

86. Reinvestment of dividends from net interest income 447,955 276,200

87. Cost of shares redeemed (23,228,474) (17,584,689)

88. Net increase (decrease) in net assets and shares 4,216,251 275,190
resulting from share transactions

89. 90.TOTAL INCREASE (DECREASE) IN NET ASSETS 4,214,617 273,994

91.NET ASSETS 92. 93.

94. Beginning of period 10,313,939 10,039,945

95. End of period $ 14,528,556 $ 10,313,939

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED NOVEMBER 30,

1994 1993 1992 1991 1990

96.SELECTED PER-SHARE DATA

97.Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period

98.Income from Investment .037 .029 .038 .061 .076
Operations
Net interest income

99.Less Distributions (.037) (.029) (.038) (.061) (.076)
From net interest income

100.Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
end of period

101.TOTAL RETURN 3.74% 2.97% 3.90% 6.23% 7.87%

102.RATIOS AND
SUPPLEMENTAL DATA

103.Net assets, end of period $ 14,529 $ 10,314 $ 10,040 $ 10,519 $ 10,921
(in millions)

104.Ratio of expenses to .52% .48% .48% .58% .69%
average
net assets

105.Ratio of net interest 3.76% 2.92% 3.86% 6.03% 7.62%
income to average net
assets

</TABLE>

NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1994

1. SIGNIFICANT ACCOUNTING
POLICIES.
Fidelity Cash Reserves (the fund) is a fund of Fidelity Phillips Street
Trust (the trust) and is authorized to issue an unlimited number of shares.
The trust is registered under the Investment Company Act of 1940, as
amended (the 1940 Act), as an open-end management investment company
organized as a Delaware business trust. The following summarizes the
significant accounting policies of the fund:
SECURITY VALUATION. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost and
thereafter assume a constant amortization to maturity of any discount or
premium.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes all of its taxable income for its fiscal
year. The schedule of investments includes information regarding income
taxes under the caption "Income Tax Information."
INTEREST INCOME. Interest income, which includes amortization of premium
and accretion of original issue discount, is accrued as earned.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The fund's investment
adviser, Fidelity Management & Research Company (FMR), is responsible for
determining that the value of these underlying securities remains at least
equal to the resale price.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of FMR, may transfer uninvested cash balances into one or more
joint trading accounts. These balances are invested in one or more
repurchase agreements that mature in 60 days or less from the date of
purchase, and are collateralized by U.S. Treasury or Federal Agency
obligations.
RESTRICTED SECURITIES. The fund is permitted to invest in privately placed
restricted securities. These securities may be resold in transactions
exempt from registration or to the public if the securities are registered.
Disposal of these securities may involve time-consuming negotiations and
expense, and prompt sale at an acceptable price may be difficult. At the
end of the period, restricted securities (excluding 144A issues) amounted
to $637,983,000 or 4.4% of net assets.
3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
fee that is calculated by multiplying the sum of two components by the
fund's average net assets and adding an income-based fee. One component,
the group fee rate, is the weighted average of a series of rates and is
based on the monthly average net assets of all the mutual funds advised by
FMR. The rates ranged from .1325% to .3700% for the period December 1, 1993
to July 31, 1994 and .1200% to .3700% for the period August 1, 1994 to
November 30, 1994. In the event that these rates were lower than the
contractual rates in effect during those periods, FMR voluntarily
implemented the above rates, as they resulted in the same or a lower
management fee. The other component, the individual fund fee rate, is
0.03%. The income-based fee is added only when the fund's yield exceeds 5%.
At that time the income-based fee would equal 6% of that portion of the
fund's gross income that represents a gross yield of more than 5% per year.
The maximum income-based component is 0.24% (annualized) of average net
assets. For the period, the management fee was equivalent to an annual rate
of .19% of average net assets.
SUB-ADVISER FEE. As the fund's investment sub-adviser, FMR Texas Inc., a
wholly owned subsidiary of FMR, receives a fee from FMR of 50% of the
management fee payable to FMR. The fee is paid prior to any voluntary
expense reimbursements which may be in effect, and after reducing the fee
for any payments by FMR pursuant to the fund's Distribution and Service
Plan.
TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is
the fund's transfer, dividend disbursing and shareholder servicing agent.
FSC receives fees based on the type, size, number of accounts and the
number of transactions made by shareholders. FSC pays for typesetting,
printing and mailing of all shareholder reports, except proxy statements.
ACCOUNTING FEES. FSC maintains the fund's accounting records. The fee is
based on the level of average net assets for the month plus out-of-pocket
expenses.
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees and the Shareholders
of Fidelity Cash Reserves:
We have audited the accompanying statement of assets and liabilities of
Fidelity Cash Reserves, including the schedule of portfolio investments, as
of November 30, 1994, and the related statement 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 five years in the period then ended. These financial statements and
financial highlights are the responsibility of the fund's 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, 1994 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 Fidelity Cash Reserves as of November 30, 1994, the results of its
operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended, and the financial highlights for
each of the five years in the period then ended, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P
Dallas, Texas
December 22, 1994
TO WRITE FIDELITY

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(LETTER_GRAPHIC)(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
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(LETTER_GRAPHIC)(LETTER_GRAPHIC)FOR NON-RETIREMENT
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BUYING SHARES
Fidelity Investments
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OVERNIGHT EXPRESS
Fidelity Investments
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Covington, KY 41015-4399
SELLING SHARES
Fidelity Investments
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Boston, MA 02210-0193
Fidelity Investments
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Dallas, TX 75266-0602
Fidelity Investments
P.O. Box 30281
Salt Lake City, UT 84130-0281
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions
World Trade Center
164 Northern Avenue
Boston, MA 02210
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02210-0193
(LETTER_GRAPHIC)(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
TO VISIT FIDELITY

For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
851 East Hamilton Avenue
Campbell, CA
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Glendale, CA
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Irvine, CA
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Los Angeles, CA
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CONNECTICUT
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MISSOURI
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NEW JERSEY
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Morristown, NJ
501 Route 17, South
Paramus, NJ
505 Millburn Avenue
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NEW YORK
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Garden City, NY
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New York, NY
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New York, NY
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TENNESSEE
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TEXAS
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1155 Dairy Ashford
Houston, TX
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Houston, TX
2701 Drexel Drive
Houston, TX
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Irving, TX
14100 San Pedro
San Antonio, TX
UTAH
215 South State Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
1001 Fourth Avenue
Seattle, WA
WASHINGTON, DC
1775 K Street, N.W.
Washington, DC
WISCONSIN
222 East Wisconsin Avenue
Milwaukee, WI

TO CALL FIDELITY

FOR FUND INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you
to set up your Personal Identification
Number (PIN). The PIN assures that
only you have automated telephone
access to your account information.
Please have your Customer Number
(T-account #) handy when you call --
you'll need it to establish your PIN. If
you would ever like to change your PIN, just choose the "Change your
Personal
Identification Number" option when
you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
544-6666 for assistance.

(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND
QUOTES*
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Just make a selection from this record-ed menu:
PRESS
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1.
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2.
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requested Fidelity fund quotes.
3.
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4.
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Identification Number (PIN).
5.
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6.
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1.
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2.
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3.
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4.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
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MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT IN
A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.

Page 31 = BLANK
Do NOT strip-in this type

INVESTMENT ADVISER
(registered trademark)
Fidelity Management & Research
Company
Boston, MA
SUB-ADVISER
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Fred L. Henning, Jr., Vice President
Robert Litterst, Vice President
Thomas D. Maher, Assistant
Vice President
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Arthur S. Loring, Secretary
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
Phyllis Burke Davis*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Edward H. Malone*
Marvin L. Mann*
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
The Bank of New York
New York, NY
FIDELITY'S TAXABLE
MONEY MARKET FUNDS
Fidelity Cash Reserves
Fidelity Daily Income Trust
Fidelity U.S. Government Reserves
Spartan(registered trademark) Money Market Fund
Spartan U.S. Government
Money Market Fund
Spartan U.S. Treasury
Money Market Fund
THE FIDELITY
TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE

FIDELITY

(registered trademark)
U.S. GOVERNMENT RESERVES

ANNUAL REPORT
NOVEMBER 30, 1994
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.

PERFORMANCE 4 How the fund has done over time.

FUND TALK 6 The manager's review of fund
performance, strategy and outlook.

INVESTMENT CHANGES 8 A summary of major shifts in the
fund's investments over the past six
months
and one year.

INVESTMENTS 9 A complete list of the fund's
investments with their market
values.

FINANCIAL STATEMENTS 12 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.

NOTES 16 Notes to the financial statements.

REPORT OF INDEPENDENT
ACCOUNTANTS 19 The auditor's opinion.

FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE

To measure a money market fund's performance, you can look at either total
return or yield. Total return reflects both the change in a fund's share
price over a given period, and reinvestment of its dividends (or income).
Yield measures the income paid by a fund. Since a money market fund tries
to maintain a $1 share price, yield is an important measure of performance.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1994 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Fidelity U.S. Government Reserves 3.64% 25.63% 77.88%

Consumer Price Index 2.81% 19.06% 42.36%

Average Government
Money Market Fund 3.39% 24.94% 75.12%

CUMULATIVE TOTAL RETURNS reflect actual performance over a specific period
- - in this case, one year, five years, or ten years. For example, if you
invested $1,000 in a fund that had a 5% return over the past year, you
would end up with $1,050. Comparing the fund's performance to the consumer
price index (CPI) helps show how your investment did compared to inflation.
To measure how the fund stacked up against its peers, you can compare its
return to the average government money market fund's total return. This
average currently reflects the performance of 212 government money market
funds tracked by IBC/Donoghue. (The periods covered by the CPI and
IBC/Donoghue numbers are the closest available match to those covered by
the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1994 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Fidelity U.S. Government Reserves 3.64% 4.67% 5.93%

Consumer Price Index 2.81% 3.55% 3.59%

Average Government
Money Market Fund 3.39% 4.55% 5.76%

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
11/30/93 2/28/94 5/31/94 8/31/94 11/30/94

Fidelity U.S. Government 2.89% 2.85% 3.46% 4.10% 5.11%
Reserves

Average Government 2.56% 2.67% 3.35% 3.91% 4.67%
Money Market Fund

2.35% 2.29% 2.35% 2.42% 2.64%
MMDA

</TABLE>

Row: 1, Col: 1, Value: 2.89
Row: 1, Col: 2, Value: 2.56
Row: 1, Col: 3, Value: 2.35
Row: 2, Col: 1, Value: 2.85
Row: 2, Col: 2, Value: 2.67
Row: 2, Col: 3, Value: 2.29
Row: 3, Col: 1, Value: 3.46
Row: 3, Col: 2, Value: 3.35
Row: 3, Col: 3, Value: 2.35
Row: 4, Col: 1, Value: 4.1
Row: 4, Col: 2, Value: 3.91
Row: 4, Col: 3, Value: 2.42
Row: 5, Col: 1, Value: 5.109999999999999
Row: 5, Col: 2, Value: 4.67
Row: 5, Col: 3, Value: 2.64
6% -
5% -
4% -
3% -
2% -
1% -
0%
Fidelity
U.S. Government
Reserves
Average
Government
Money Market Fun
d
MMDA
YIELD refers to the income paid by the fund over a given period. Yields for
money market funds are usually for seven-day periods, expressed as annual
percentage rates. A yield that assumes income earned is reinvested or
compounded is called an effective yield. The chart above shows the fund's
current seven-day yield at quarterly intervals over the past year. You can
compare these yields to the average U.S. Government money market fund and
the average bank money market deposit account (MMDA). Figures for the
average U.S. Government money market are supplied by IBC/Donoghue. The MMDA
average is supplied by BANK RATE MONITOR(Trademark).
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT PAST
RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.
COMPARING
PERFORMANCE
There are some important
differences between a bank
money market deposit account
(MMDA) and a money market
fund. First, the U.S.
government neither insures nor
guarantees a money market
fund. In fact, there is no
assurance that a money
market fund will maintain a $1
share price. Second, a money
market fund returns to its
shareholders income earned
by the fund's investments after
expenses. This is in contrast to
banks, which set their MMDA
rates periodically based on
current interest rates,
competitors' rates, and internal
criteria.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW

An interview with Leland Barron, Portfolio Manager of Fidelity
U.S. Government Reserves
Q. LELAND, WHAT HAPPENED TO SHORT-TERM INTEREST RATES DURING THE PAST YEAR?
A. Interest rates began edging higher in late December 1993 and early
January 1994. After that, they rose dramatically as the Federal Reserve
Board began a series of rate increases. Since early February, the Fed has
raised the federal funds rate six times from 3.00% at the beginning of
February to 5.50% at the end of November. As is often the case during
periods of rising rates, yields on Treasury bills and other money market
instruments rose more than the federal funds rate as investors looked
forward to additional rate increases by the Fed. For example, the yield on
six-month Treasury bills rose from around 3.4% to 6.30% over the past 12
months.
Q. HOW DID YOU POSITION THE FUND TO COPE WITH RISING RATES?
A. I lowered its average maturity from about 60 days in early February to
around 41 days on November 30. I made the change because in a rising rate
environment, a shorter maturity gives the fund the ability to reinvest
fairly quickly in securities that might offer higher yields. Recently, the
fund's average maturity has ranged from 45 to 55 days.
Q. WHY DIDN'T YOU REDUCE THE FUND'S MATURITY EVEN MORE AS RATES CLIMBED
HIGHER?
A. In a rising interest rate environment, the yield curve - or the
difference in yield between short-term and long-term securities - usually
steepens. That's because longer-term yields rise faster than short-term
yields. Often, yields on securities with six-month maturities are
substantially higher than overnight or very short-term alternatives and
will more than adequately compensate the investor for the risk of higher
future rates. Given these conditions, the fund's yield would benefit from
holding longer-term securities as opposed to keeping the average maturity
very short. When yields rose during the summer to reflect concerns that the
Fed would raise rates in June and July, I extended the fund's average
maturity to between 50 and 60 days. The Fed didn't raise rates in either
month, and the fund's longer-term securities performed well.
Q. WHAT OTHER CHANGES DID YOU MAKE IN THE FUND?
A. I increased the fund's investments in variable-rate securities from
around 10% to 20%. These securities have interest rates that are reset
daily, weekly or monthly to adjust to prevailing rates. That makes them
good investments during periods of rising rates.
Q. HOW DID THE FUND PERFORM?
A. Quite well. Its seven-day yield as of November 30, 1994, was 5.11%,
compared to 2.89% at the end of November, 1993, reflecting the generally
higher yields in the short-term market. The fund's total return for the
year ended November 30, 1994, was 3.64%. That compared to a 3.39% average
total return for government money market funds according to IBC/Donoghue.
Q. WHAT'S AHEAD FOR THE SHORT-TERM MARKET AND THE FUND?
A. So far, the Fed has not been successful in its goal of slowing economic
growth to a sustainable non-inflationary annual rate of around 2.5%. So it
seems likely that it will boost short-term rates another full percentage
point or more. But I think yields on six-month securities already are high
enough to reflect the potential for such interest rate hikes. As a result,
I have added some of those relatively long-maturity issues to the fund's
investments. At the same time, I will continue to maintain an average
maturity of around 40 to 50 days so that the fund remains flexible enough
to respond to rate hikes.

FUND FACTS
GOAL: income and stability by
investing in high quality,
short-term securities
START DATE: November 3, 1981
SIZE: as of November 30,
1994, more than $1.1 billion
MANAGER: Leland Barron,
since July 1991; manager,
Spartan U.S. Government
Money Market Fund, since
July 1991, and Spartan U.S.
Treasury Money Market Fund,
since January 1991; joined
Fidelity in 1981
(checkmark)

MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
11/30/94 5/31/94 11/30/93

0 - 30 72 71 35

31 - 90 5 4 41

91 - 180 18 21 15

181 - 397 5 4 9

WEIGHTED AVERAGE MATURITY
11/30/94 5/31/94 11/30/93

Fidelity U.S. Government
Reserves 41 days 39 days 70 days

Average Government
Money Market Fund* 38 days 41 days 59 days

ASSET ALLOCATION
AS OF NOVEMBER 30, 1994 AS OF MAY 31, 1994

Row: 1, Col: 1, Value: 52.0
Row: 1, Col: 2, Value: 3.0
Row: 1, Col: 3, Value: 44.0
Row: 1, Col: 4, Value: 2.0
Row: 1, Col: 1, Value: 40.0
Row: 1, Col: 2, Value: 2.0
Row: 1, Col: 3, Value: 59.0
Row: 1, Col: 4, Value: 0.0
Federal agency
issues 52%
U.S. Treasury
obligations 3%
Repurchase
agreements 44%
Other 1%
Federal agency
issues 40%
U.S. Treasury
obligations 1%
Repurchase
agreements 59%
Other -
* SOURCE: IBC/DONOGHUE'S MONEY FUND REPORT(registered trademark)
INVESTMENTS NOVEMBER 30, 1994

Showing Percentage of Total Value of Investments

FEDERAL AGENCIES - 52.2%
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
FEDERAL FARM CREDIT BANK - DISCOUNT NOTES - 2.5%
5/1/95 5.87% $ 15,000 $ 14,997
5/1/95 5.88 14,000 13,996
28,993
FEDERAL HOME LOAN BANK - DISCOUNT NOTES - 8.5%
12/1/94 5.58 32,000 31,989
12/1/94 6.08 15,000 14,979
12/8/94 4.76 13,000 12,970
2/16/95 5.11 9,000 8,904
4/24/95 5.80 30,000 29,323
98,165
FEDERAL NATIONAL MORTGAGE ASSOC. - AGENCY COUPONS - 13.8%
12/1/94 4.85 59,000 59,000
12/1/94 5.72 61,000 61,000
12/1/94 6.10 40,000 40,000
160,000
FEDERAL NATIONAL MORTGAGE ASSOC. - DISCOUNT NOTES - 21.5%
12/29/94 4.99 43,000 42,837
1/3/95 5.04 16,000 15,928
1/6/95 5.05 16,000 15,921
1/17/95 5.03 14,000 13,910
1/18/95 5.03 12,000 11,922
3/1/95 5.12 19,000 18,763
3/6/95 5.10 15,000 14,803
3/20/95 5.36 16,000 15,747
3/31/95 5.60 16,000 15,709
4/5/95 5.74 16,000 15,690
4/18/95 5.66 24,000 23,494
5/11/95 5.98 16,000 15,585
5/17/95 6.14 30,000 29,171
249,480
STUDENT LOAN MARKETING ASSOC. - AGENCY COUPONS (A) - 5.9%
12/6/94 5.91 30,000 30,000
12/6/94 6.19 15,000 15,023
6/30/95 5.48 23,600 23,600
68,623
TOTAL FEDERAL AGENCIES 605,261
U.S. TREASURY OBLIGATIONS - 2.6%
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
U.S. TREASURY BILLS
8/24/95 5.47% $ 32,000 $ 30,773
MEDIUM-TERM NOTES (A) (B) - 0.8%
EXPORT-IMPORT BANK, U.S. (AS GUARANTOR FOR K.A. LEASING, LTD.)
12/15/94 5.75 9,368 9,368
REPURCHASE AGREEMENTS - 44.4%
MATURITY AMOUNT
(000S)
With Bear Stearns Cos., Inc.:
At 5.55%, dated 11/25/94 due 12/2/94:
U.S. Government Obligations
(principal amount $31,583)
5.879%, 3/1/24 $ 30,032 30,000
At 5.68%, dated 11/30/94 due 12/5/94:
U.S. Government Obligations
(principal amount $104,133)
4.545 to 6.245%, 1/1/18 to 8/1/29 100,079 100,000
With Paine Webber, Inc.:
At 5.125%, dated 10/31/94 due 12/6/94:
U.S. Treasury Obligations
(principal amount $28,405)
4.875% to 8.5%, 8/15/95 to 11/15/21 25,128 25,000
In a joint trading account
(U.S. Treasury Obligations)
dated 11/30/94, due 12/1/94
At 5.81% 359,603 359,545
TOTAL REPURCHASE AGREEMENTS 514,545
TOTAL INVESTMENTS - 100% $ 1,159,947
Total Cost for Income Tax Purposes $ 1,159,947

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNT) NOVEMBER 30, 1994

4.ASSETS 5. 6.

7.Investment in securities, at value (including 8. $ 1,159,947
repurchase agreements of $514,545) - See
accompanying
schedule

9.Interest receivable 10. 2,049

11. 12.TOTAL ASSETS 13. 1,161,996

14.LIABILITIES 15. 16.

17.Payable for reverse repurchase agreement $ 30,573 18.

19.Share transactions in process 1,107 20.

21.Dividends payable 329 22.

23.Accrued management fee 188 24.

25.Other payables and accrued expenses 130 26.

27. 28.TOTAL LIABILITIES 29. 32,327

30.31.NET ASSETS 32. $ 1,129,669

33.Net Assets consist of: 34. 35.

36.Paid in capital 37. $ 1,130,076

38.Accumulated net realized gain (loss) on investments 39. (407)

40.41.NET ASSETS, for 1,130,076 shares outstanding 42. $ 1,129,669

43.44.NET ASSET VALUE, offering price and redemption 45. $1.00
price per share ($1,129,669 (divided by) 1,130,076 shares)

</TABLE>

STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS TWO MONTHS ENDED NOVEMBER 30, 1994

46.47.INTEREST INCOME 48. $ 9,454

49.EXPENSES 50. 51.

52.Management fee $ 361 53.

54.Transfer agent fees 222 55.

56.Accounting fees and expenses 22 57.

58.Non-interested trustees' compensation 1 59.

60.Custodian fees and expenses 11 61.

62.Registration fees 33 63.

64.Audit 5 65.

66.Legal 3 67.

68.Reports to shareholders 7

69.Miscellaneous 4 70.

71. 72.TOTAL EXPENSES 73. 669

74.75.NET INTEREST INCOME 76. 8,785

77.78.NET INCREASE IN NET ASSETS RESULTING FROM 79. $ 8,785
OPERATIONS

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C> <C>
AMOUNTS IN THOUSANDS TWO MONTHS YEARS ENDED
ENDED SEPTEMBER 30,
NOVEMBER 30,

1994 1994 1993

80.INCREASE (DECREASE) IN NET
ASSETS

81.Operations $ 8,785 $ 35,202 $ 29,285
Net interest income

82. Net realized gain (loss) - (31) 20

83. 84.NET INCREASE (DECREASE) IN 8,785 35,171 29,305
NET ASSETS RESULTING FROM
OPERATIONS

85.Dividends to shareholders from (8,785) (35,202) (29,285)
net interest income

86.Share transactions at net asset 275,603 1,705,793 1,179,994
value of $1.00 per share
Proceeds from sales of shares

87. Reinvestment of dividends from 8,212 33,487 27,738
net interest income

88. Cost of shares redeemed (214,138) (1,722,647) (1,456,797)

89. Net increase (decrease) in net 69,677 16,633 (249,065)
assets and shares resulting from
share
transactions

90. 91.TOTAL INCREASE (DECREASE) 69,677 16,602 (249,045)
IN NET
ASSETS

92.NET ASSETS 93. 94. 95.

96. Beginning of period 1,059,992 1,043,390 1,292,435

97. End of period $ 1,129,669 $ 1,059,992 $ 1,043,390

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
TWO MONTHS YEARS ENDED SEPTEMBER 30,
ENDED
NOVEMBER 30
,

1994 1994 1993 1992 1991 1990

98.SELECTED PER-SHARE
DATA

99.Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period

100.Income from .008 .033 .025 .039 .061 .076
Investment Operations
Net interest income

101.Less Distributions (.008) (.033) (.025) (.039) (.061) (.076)
From net interest
income

102.Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
end of period

103.TOTAL RETURN B 0.78% 3.32 2.57 3.95 6.29 7.86
% % % % %

104.RATIOS AND SUPPLEMENTAL DATA

105.Net assets, end of $ 1,130 $ 1,060 $ 1,043 $ 1,292 $ 1,436 $ 1,581
period (in millions)

106.Ratio of expenses .36%A .51 .73 .73 .72 .74
to average net assets % % % % %

107.Ratio of net interest 4.77%A 3.27 2.57 3.88 6.13 7.66
income to average % % % % %
net assets

</TABLE>

A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1994

1. SIGNIFICANT ACCOUNTING
POLICIES.
Fidelity U.S. Government Reserves (the fund) is a fund of Fidelity Charles
Street Trust (the trust) and is authorized to issue an unlimited number of
shares. The trust is registered under the Investment Company Act of 1940,
as amended (the 1940 Act), as an open-end management investment company. At
a special meeting of the shareholders of the fund held on September 21,
1994, shareholders approved an Agreement and Plan of Conversion and
Termination (the Plan of Conversion), providing for the conversion of the
fund from a separate series of Fidelity Charles Street Trust, a
Massachusetts business trust, to a separate series of Fidelity Phillips
Street Trust, a Delaware business trust, effective January 13, 1995. The
individual investment objective, policies and limitations of the successor
fund will remain the same. On March 17, 1994, the Trustees approved a
change in the fiscal year end of the fund from September 30 to November 30.
Accordingly, the financial statements of the fund are presented for the two
month period ended November 30, 1994. The following summarizes the
significant accounting policies of the fund:
SECURITY VALUATION. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost and
thereafter assume a constant amortization to maturity of any discount or
premium.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes all of its taxable income for its fiscal
year. The schedule of investments includes information regarding income
taxes under the caption "Income Tax Information."
INTEREST INCOME. Interest income, which includes amortization of premium
and accretion of original issue discount, is accrued as earned.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The fund's investment
adviser, Fidelity Management & Research Company (FMR), is responsible for
determining that the value of these underlying securities remains at least
equal to the resale price.
REVERSE REPURCHASE AGREEMENTS. At all times that a reverse repurchase
agreement is outstanding, the fund identifies cash and liquid securities as
segregated in its custodian records with a value at least equal to its
obligation under the agreement. On November 30, 1994 the fund had a reverse
repurchase agreement amounting to $30,560,000 at 5.4% outstanding. The
agreement, which matured December 1, 1994 was collateralized by $32,000,000
of U.S. Treasury Bills due 8/24/95.
2. OPERATING POLICIES -
CONTINUED
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of FMR, may transfer uninvested cash balances into one or more
joint trading accounts. These balances are invested in one or more
repurchase agreements that mature in 60 days or less from the date of
purchase, and are collateralized by U.S. Treasury or Federal Agency
obligations.
3. JOINT TRADING ACCOUNT.
At the end of the period, the fund had 20% or more of its total investments
in repurchase agreements through a joint trading account. These repurchase
agreements were with entities whose creditworthiness has been reviewed and
found satisfactory by FMR. The repurchase agreements were dated 11/30/94
and due 12/1/94. The maturity values of the joint trading account
investments were $359,603,000 at 5.81%. The investments in repurchase
agreements through the joint trading account are summarized as follows:
SUMMARY OF JOINT TRADING ACCOUNT
AT 5.81%
Number of Dealers or Banks 4
Maximum Amount With One Dealer or Bank 42.8%
Aggregate Principal Amount of Agreements $ 3,500,854,000
Aggregate Maturity Amount of Agreements $ 3,501,419,000
Aggregate Market Value of Collateral $ 3,591,978,000
Coupon Rates of Collateral 0%-13.50 %
Maturity Dates of Collateral 12/21/94-6/1/28

4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
fee that is calculated by multiplying the sum of two components by the
fund's average net assets and adding an income-based fee. One component,
the group fee rate, is the weighted average of a series of rates and is
based on the monthly average net assets of all the mutual funds advised by
FMR. The rates ranged from .1200% to .3700% for the period October 1, 1994
to November 30, 1994. The other component, the individual fund fee rate, is
0.03%. The income-based fee is added only when the fund's yield exceeds 5%.
At that time the income-based fee would equal 6% of that portion of the
fund's gross income that represents a gross yield of more than 5% per year.
The maximum income-based component is 0.24% (annualized) of average net
assets. For the period, the management fee was equivalent to an annual rate
of .20% of average net assets.
SUB-ADVISER FEE. As the fund's investment sub-adviser, FMR Texas Inc., a
wholly owned subsidiary of FMR, receives a fee from FMR of 50% of the
management fee payable to FMR. The fee is paid prior to any voluntary
expense reimbursements which may be in effect, and after reducing the fee
for any payments by FMR pursuant to the fund's Distribution and Service
Plan.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is
the fund's transfer, dividend disbursing and shareholder servicing agent.
FSC receives fees based on the type, size, number of accounts and the
number of transactions made by shareholders. FSC pays for typesetting,
printing and mailing of all shareholder reports, except proxy statements.
ACCOUNTING FEES. FSC maintains the fund's accounting records. The fee is
based on the level of average net assets for the month plus out-of-pocket
expenses.
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees and Shareholders of Fidelity U. S. Government Reserves:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Fidelity U. S. Government Reserves at November 30, 1994, the results of its
operations for the two months then ended, the changes in its net assets for
the two months then ended and the years ended September 30, 1994 and
September 30, 1993, and its financial highlights for the periods indicated,
in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Trust's management;
our responsibility is to express an opinion on these financial statements
based on our audits. We conducted our audits of these financial statements
in accordance with generally accepted auditing standards which require that
we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities owned at November 30,
1994 by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Dallas, Texas
December 22, 1994
TO WRITE FIDELITY

INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
(registered trademark)
SUB-ADVISER
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Leland Barron, Vice President
Fred L. Henning, Jr., Vice President
Thomas D. Maher, Assistant
Vice President
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Arthur S. Loring, Secretary
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
Phyllis Burke Davis*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Edward H. Malone*
Marvin L. Mann*
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
Morgan Guaranty Trust Co. of New York
New York, NY
FIDELITY'S TAXABLE
MONEY MARKET FUNDS
Fidelity Cash Reserves
Fidelity Daily Income Trust
Fidelity U.S. Government Reserves
Spartan(registered trademark) Money Market Fund
Spartan U.S. Government
Money Market Fund
Spartan U.S. Treasury
Money Market Fund
THE FIDELITY
TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE