DELAWARE GROUP INCOME FUNDS, N-30D, 2000-03-23

DELAWARE GROUP INCOME FUNDS
N-30D, 2000-03-23

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<PAGE>

DELAWARE(SM)
INVESTMENTS
- -----------

Delaware Corporate Bond Fund

Delaware Extended Duration Bond Fund

Current Income

[Current income artwork]

2000 SEMI-ANNUAL REPORT

<PAGE>

A TRADITION OF SOUND INVESTING SINCE 1929
- -----------------------------------------

TABLE OF CONTENTS
- -----------------

Letter to Shareholders 1

Portfolio
Management Review 3

Performance Summary

Delaware Corporate
Bond Fund 5

Delaware Extended
Duration Bond Fund 6

Financial Statements

Statements
of Net Assets 7

Statements
of Operations 11

Statements of Changes
in Net Assets 12

Financial Highlights 13

Notes to
Financial Statements 21

A Commitment To Our Investors

Experienced

o Our seasoned investment professionals average more than 15 years' experience.

o For over 70 years, we have managed money in a variety of investment styles
that have weathered a full range of economic and market environments. We
opened our first mutual fund in 1938.

Disciplined

o We follow strict investment policies and clear buy/sell guidelines.

o We strive to balance risk and reward in order to provide relatively
conservative investment alternatives within any given asset class.

Consistent

o We believe consistent processes are the best way to seek consistent investment
performance.

o Our commitment to style consistency has earned us the confidence of
discriminating institutional and individual investors to manage approximately
$47 billion in assets as of December 31, 1999. Comprehensive

o We offer over 70 mutual funds in these asset classes.

o Large-cap equity o High-yield bonds

o Mid-cap equity o Investment grade bonds

o Small-cap equity o Municipal bonds (24 single-state funds)

o International equity o International fixed-income

o Balanced

o Our funds are available through financial advisers who can offer you
individualized attention and valuable investment advice.

Funds are not FDIC insured and are not guaranteed. It is possible to lose the
principal amount invested.

(C)Delaware Distributors, L.P.

<PAGE>

Dear Shareholder

February 18, 2000

"THOUGH BONDS MAY REMAIN IN THE SHADOW OF STOCKS AS LONG AS ECONOMIC GROWTH
CONTINUES IN 2000, WE STILL BELIEVE THEY HAVE A ROLE IN A WELL-BALANCED
PORTFOLIO."

Recap of Events - Economic activity in the United States continues to move along
ahead of expectations. A stronger economy and rising concerns that inflation may
increase pushed U.S. bond prices lower and yields significantly higher.

Long-term U.S. Treasury yields increased from 6.12% on July 31, 1999 to 6.65% on
January 31, 2000. The corporate bond sector faced similar circumstances: the
yield on 10-year A2-rated industrial bonds, a measure of corporate borrowing
costs, rose to 7.64% as of January 31, 2000 from just 6.61% on July 31, 1999
(Source: Bloomberg). This presented a challenge to many investors seeking to
strike a balance between income and capital appreciation.

Strong economic activity, however, eventually heightened inflationary concerns.
The Federal Reserve responded by raising interest rates on June 30, August 24,
November 16, 1999 and February 2, 2000. As of this writing, the Federal funds
target rate on overnight loans between banks stands at 5.75%, the lending rate's
highest level in more than four years. The Federal Reserve's actions have been
directed at slowing the economy and pre-empting inflation before it takes root.

<TABLE>
<CAPTION>
Average Total Returns
For Periods Ended 1/31/00 Six Months Lifetime*
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Delaware Corporate Bond Fund Class A +1.11% +0.55%
- ------------------------------------------------------------------------------------------------------------
Delaware Extended Duration Bond Fund
Class A +0.42% -1.65%
- ------------------------------------------------------------------------------------------------------------
Lipper Corporate Debt BBB Fund Average -0.72% (144 funds) -1.52% (130 funds)

Lehman Brothers Corporate Bond Index +0.53% -0.31%
- ------------------------------------------------------------------------------------------------------------
</TABLE>

All performance shown above is at net asset value without the effect of sales
charges and assumes reinvestment of distributions. Performance information for
all other Fund classes can be found on page 5. The Lipper Corporate Debt BBB
Fund Average is an index of all active corporate bond funds with similar credit
ratings and investment objectives. The Lehman Brothers Corporate Bond Index is
an index of corporate bonds. You cannot invest directly in an index. Past
performance does not guarantee future results.

* September 15, 1998 (commencement of operations)

1
<PAGE>

Delaware Corporate Bond Fund provided a total return of +1.11% (Class A shares
at net asset value with distributions reinvested) for the six-month period ended
January 31, 2000. Delaware Extended Duration Bond Fund provided a total return
of +0.42% (Class A shares at net asset value with distributions reinvested) for
the six-month period ended January 31, 2000. Although these returns were only
slightly positive, these two Funds faired better than their peer group, the
Lipper Corporate Debt BBB Fund Average.

Market Outlook - Though bonds may remain in the shadow of stocks as long as
economic growth continues in 2000, we still believe they have a role in a
well-balanced portfolio. Both Delaware Corporate Bond Fund and Delaware Extended
Duration Bond Fund can be an attractive component for investors who wish to
maintain a well-diversified portfolio.

On the pages that follow, Gary A. Reed, your Fund's portfolio manager, explains
these Funds' positioning during the six-month period ended January 31, 2000 and
provides an outlook for the second half of fiscal 2000. Thank you for your
continued confidence in Delaware Investments.

Sincerely,

/s/ Wayne A. Stork /s/ David K. Downes
- ------------------ -------------------
Wayne A. Stork David K. Downes
Chairman, President and Chief Executive Officer,
Delaware Investments Delaware Investments
Family of Funds Family of Funds

[Current income artwork]

<PAGE>

PORTFOLIO MANAGEMENT REVIEW
- ---------------------------

Gary A. Reed
Senior Portfolio Manager
February 18, 2000

The Fund's Results

When selecting bonds for the Funds' portfolios, our careful selection process
typically leads us to bonds that exhibit the following characteristics:

o Quality: We focus on investment grade bonds--that is, bonds rated BBB or
higher. Compared to lower rated bonds, these bonds tend to involve less risk
that an issuer won't be able to pay interest or principal.

o Liquidity: We purchase bonds that can easily be bought and sold. This is a key
component of our selection process.

o Positive Outlook: For each bond we consider, we extensively research the
issuing company as well as the short- and long-term outlook for its respective
industry. We look for companies that exhibit quality management, strong
balance sheets, operating cash flows and plans for future growth.

o Relative Value: We look for bonds that are inexpensively priced and issued by
good companies, which in our opinion should provide attractive total return
over time.

Utilizing these investment parameters, Delaware Corporate Bond Fund provided a
total return of +1.11% (Class A shares at net asset value with distributions
reinvested) for the six-month period ended January 31, 2000. Delaware Extended
Duration Bond Fund provided a total return of +0.42% (Class A shares at net
asset value with distributions reinvested) for the same period. Although these
returns were only slightly positive, these two Funds outpaced their peer group,
the Lipper Corporate Debt BBB Funds Average.

Portfolio Highlights

As the Federal Reserve began tightening credit the last six months, U.S.
Treasury securities and corporate bonds came under pressure as interest rates
increased. Throughout the last six months, we incrementally reduced our exposure
to bank, finance and brokerage firm debt since these businesses tend to come
under pressure as interest rates increase. Instead, we looked for opportunity in
sectors such as Cable, Media & Publishing, Telecommunications and Industrial
Machinery.

Corporate bonds, the mainstay of both the Delaware Corporate Bond and Delaware
Extended Duration Bond Funds, performed well in this environment compared to
most other fixed-income securities. Corporate spreads, the yield difference
between these issues and comparable maturity Treasury debt, narrowed during the
last six months and improved performance as we neared the end of the first half
of fiscal 2000.

3
<PAGE>

[Current income artwork]

Delaware Corporate Bond Fund

Cash and Other Assets 1.5%

Mortgage-Backed Securities 4.0%

U.S. Treasury Obligations 4.8%

CMOs 2.1%

[GRAPHIC OMITTED]

Corporate Bonds 87.6%

Delaware Extended Duration Bond Fund

U.S. Treasury Obligations 15.4%

Mortgage-Backed Securities 6.1%

CMOs 0.5%

[GRAPHIC OMITTED]

Cash and Other Assets 3.2%

Corporate Bonds 74.8%

The average duration of Delaware Corporate Bond Fund will generally
be between 4 and 7 years, suitable for more conservative investors who desire
less exposure to fluctuations in principal. Duration measures a bond's
sensitivity to interest rates, which indicates the approximate percentage of
change in a bond or bond fund's price given a 1% change in interest rates. As of
January 31, 2000, Delaware Corporate Bond Fund's duration was 4.5 years, which
reflects our more conservative outlook.

Delaware Extended Duration Bond Fund will typically have an average duration
between 8 and 11 years. This makes the Fund suitable for investors with a long
time horizon or greater tolerance for risk. At the end of this six-month period,
this Fund had a duration of 8.5 years, and similarly to Delaware Corporate Bond
Fund, reflected our cautious view of the bond markets.

As interest rates rose the last six months, longer duration corporate bonds,
such as those held in the Delaware Extended Duration Bond Fund, underperformed
comparable bonds with shorter maturities. We feel the outlook for the long end
of the market, however, is improving. We believe the Federal Reserve's policies
will forestall inflation and ultimately improve the outlook for the market.

Outlook

Assuming moderate increases in interest rates and a gradually slowing economy,
we believe long-term U.S. Treasury bonds, and subsequently corporate debt,
should do well in the second half of fiscal 2000. After slightly reducing our
exposure to corporate bonds, we expect to add to our portfolios later in 2000,
when securities are more cheaply priced.

For both Delaware Corporate Bond Fund and Delaware Extended Duration Bond Fund,
we are cautiously optimistic that the coming year will provide a favorable
environment. We intend to keep a watchful eye on changes in consumer and
producer prices to gauge their potential effects on markets, monetary policy and
Fund performance for the second half of fiscal 2000.

<PAGE>

FUND BASICS
- -----------

Fund Objectives

To provide high total return and, as a secondary objective, high current income
by investing primarily in corporate bonds rated BBB or higher.

Assets Under Management

$60.3 million

Number of Holdings

Fund Start Date

September, 15, 1998

Your Fund Manager

Gary A. Reed hold a bachelor's degree from the University of Chicago and a
master's degree in Economics from Columbia University. Before coming to Delaware
in 1989, Mr. Reed served as Vice President and Manager of the Fixed Income
Department at Irving Trust Company.

NASDAQ Symbols

Class A DGCAX
Class B DGCBX
Class C DGCCX

<PAGE>

DELAWARE CORPORATE BOND FUND PERFORMANCE
- ----------------------------------------

Average Annual Returns

Through January 31, 2000 Lifetime One Year
- --------------------------------------------------------------------------------
Class A (Est. 9/15/98)
Excluding Sales Charge +0.55% -3.34%
Including Sales Charge -2.88% -7.87%
- --------------------------------------------------------------------------------
Class B (Est. 9/15/98)
Excluding Sales Charge -0.12% -4.06%
Including Sales Charge -2.85% -7.69%
- --------------------------------------------------------------------------------
Class C (Est. 9/15/98)
Excluding Sales Charge -0.11% -4.06%
Including Sales Charge -0.11% -4.96%
- --------------------------------------------------------------------------------

Returns reflect reinvestment of distributions and any applicable sales charges
as noted below. Returns and share values will fluctuate so that shares, when
redeemed, may be worth more or less than the original cost. Class B and C
results excluding sales charge assume that either the investment was not
redeemed or contingent sales charges did not apply. Past performance is not a
guarantee of future results.

Class A shares have a 4.75% maximum front-end sales charge and a 12b-1 fee.

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

Class C shares have a 1% annual distribution and service fee. If redeemed within
12 months, a 1% contingent deferred sales charge applies.

An expense limitation was in effect for all classes of Delaware Corporate Bond
Fund during the period. Performance would have been lower if the expense
limitation was not in effect.

The average annual total return for the lifetime and one-year periods ended
January 31, 2000 for Delaware Corporate Bond Fund's Institutional Class were
+0.79% and -3.09% respectively.

Institutional Class shares are available without sales or asset-based
distribution charges only to certain eligible institutional accounts.

NASDAQ Symbol Institutional Class: DGCIX

<PAGE>

FUND BASICS
- -----------

Fund Objectives

To provide high total return and, as a secondary objective, high current income
by investing primarily in corporate bonds rated BBB or higher.

Assets Under Management

$66.8 million

Number of Holdings

Fund Start Date

September, 15, 1998

Your Fund Manager

Gary A. Reed

NASDAQ Symbols

Class A DEEAX
Class B DEEBX
Class C DEECX

<PAGE>

DELAWARE EXTENDED
DURATION BOND FUND PERFORMANCE
- ------------------------------

Average Annual Returns

Through January 31, 2000 Lifetime One Year
- --------------------------------------------------------------------------------
Class A (Est. 9/15/98)
Excluding Sales Charge -1.65% -6.45%
Including Sales Charge -5.01% -10.83%
- --------------------------------------------------------------------------------
Class B (Est. 9/15/98)
Excluding Sales Charge -2.36% -7.16%
Including Sales Charge -5.03% -10.66%
- --------------------------------------------------------------------------------
Class C (Est. 9/15/98)
Excluding Sales Charge -2.26% -7.16%
Including Sales Charge -2.26% -8.03%
- --------------------------------------------------------------------------------

Class A shares have a 4.75% maximum front-end sales charge and a 12b-1 fee.

Class C shares have a 1% annual distribution and service fee. If redeemed within
12 months, a 1% contingent deferred sales charge applies.

An expense limitation was in effect for all classes of Delaware Extended
Duration Bond Fund during the period. Performance would have been lower if the
expense limitation was not in effect.

The average annual total return for the lifetime and one-year periods ended
January 31, 2000 for Delaware Extended Duration Bond Fund were -1.44% and -6.23%
respectively.

Institutional Class shares are available without sales or asset-based
distribution charges only to certain eligible institutional accounts.

NASDAQ Symbol Institutional Class: DEEIX

<PAGE>

Statement of Net Assets

DELAWARE CORPORATE BOND FUND
- ----------------------------
Principal Market
January 31, 2000 (Unaudited) Amount Value
- --------------------------------------------------------------------------------
Agency Mortgage-Backed Securities - 3.98%
Federal National Mortgage Association
5.375% 3/15/02 ................................ $ 600,000 $ 581,369
6.00% 5/15/08 ................................. 1,500,000 1,380,117
6.25% 5/15/29 ................................. 500,000 435,744
----------
Total Agency Mortgage-Backed
Securities (cost $2,428,944) .................. 2,397,230
==========
Commercial Mortgage-Backed Securities - 2.12%
Government National Mortgage Association
6.85% 12/20/25 ................................ 1,000,000 935,929
Mortgage Capital Funding
7.224% 9/20/06 ................................ 355,000 339,330
----------
Total Commercial Mortgage-Backed
Securities (cost $1,367,239) .................. 1,275,259
==========
Corporate Bonds - 87.56%
Automobile & Automotive Parts - 7.26%
Daimler Chrysler 6.90% 9/1/04 .................... 1,000,000 978,750
Federal Mogul 7.50% 1/15/09 ...................... 500,000 437,841
Lear 8.11% 5/15/09 ............................... 500,000 466,350
Meritor Auto 6.80% 2/15/09 ....................... 655,000 591,455
TRW 6.625% 6/1/04 ................................ 2,000,000 1,901,455
----------
4,375,851
----------
Banking - 9.23%
Banco Sud Americano 7.60% 3/15/07 ................ 500,000 448,726
Bank One 6.40% 8/1/02 ............................ 2,225,000 2,168,763
Capital One Bank 6.15% 6/1/01 .................... 1,000,000 980,655
Compass Bank 8.10% 8/15/09 ....................... 1,000,000 1,001,919
Nationsbank 6.50% 8/15/03 ........................ 1,000,000 965,235
----------
5,565,298
----------
Cable, Media & Publishing - 5.43%
News America Holdings 7.75% 12/1/45 .............. 900,000 824,083
Viacom 7.625% 1/15/16 ............................ 2,500,000 2,449,163
----------
3,273,246
----------
Chemicals - 1.64%
Equistar Chemicals 8.75% 2/15/09 ................. 1,000,000 986,250
----------
986,250
----------
Computers & Technology - 2.08%
Seagate Technology 7.45% 3/1/37 .................. 880,000 757,888
Sun Microsystems 7.35% 8/15/04 ................... 500,000 494,884
----------
1,252,772
----------
Consumer Products - 3.33%
Tommy Hilfiger 6.85% 6/1/08 ...................... 2,300,000 2,008,025
----------
2,008,025
----------
Electronics & Electrical Equipment - 3.66%
Israel Electric 7.75% 3/1/09 ..................... 2,000,000 1,934,300
Protection One 8.125% 1/15/09 .................... 550,000 275,000
----------
2,209,300
----------
Energy - 1.93%
PSEG Energy 10.00% 10/1/09 ....................... 625,000 635,645
RBF Finance 11.00% 3/15/06 ....................... 500,000 525,000
----------
1,160,645
----------

<PAGE>

Principal Market
Amount Value
- --------------------------------------------------------------------------------
Corporate Bonds (continued)
Environmental Services - 1.55%
Ras Laffan Liq Natural Gas
8.294% 3/15/14 .............................. $ 1,000,000 $ 932,738
----------
932,738
----------
Finance - 19.92%
AT&T Capital 6.75% 12/1/00 ..................... 500,000 499,461
Commercial Credit 6.50% 8/1/04 ................. 1,250,000 1,198,915
Fairfax Financial Holdings 7.375% 3/15/06 ...... 600,000 535,902
Ford Motor Credit 7.38% 10/28/09 ............... 750,000 732,884
General Electric Capital 8.85% 3/1/07 .......... 1,000,000 1,079,250
Goldman Sachs Group 6.65% 5/15/09 .............. 500,000 460,269
Heller Financial 6.00% 3/19/04 ................. 1,000,000 940,739
JP Morgan 6.00% 1/15/09 ........................ 2,000,000 1,765,175
Meditrust 7.82% 9/10/26 ........................ 650,000 537,875
Morgan Stanley Dean Witter
5.625% 1/20/04 .............................. 1,000,000 936,361
Pemex Finance 9.69% 8/15/09 .................... 1,360,000 1,378,700
Popular 6.625% 1/15/04 ......................... 1,000,000 946,416
Principal Financial Global 7.95% 8/15/04 ....... 1,000,000 992,910
----------
12,004,857
----------
Healthcare & Pharmaceuticals - 1.02%
Tenet Healthcare 8.00% 1/15/05 ................. 500,000 475,768
United Health Care 6.60% 12/1/03 ............... 145,000 136,403
----------
612,171
----------
Industrial Machinery - 4.89%
Lockheed Martin 8.20% 12/1/09 .................. 2,000,000 1,970,596
Rohm & Haas 6.95% 7/15/04 ...................... 1,000,000 977,250
----------
2,947,846
----------
Leisure, Lodging & Entertainment - 4.12%
HMH Properties 8.45% 12/1/08 ................... 625,000 564,063
Park Place Entertainment 7.95% 8/1/03 .......... 1,000,000 980,000
Residential Reinsurance 9.77% 6/1/00 ........... 500,000 500,000
Starwood Hotels & Resorts
6.75% 11/15/05 .............................. 500,000 438,978
----------
2,483,041
----------
Metals & Mining - 0.82%
AK Steel 7.875% 2/15/09 ........................ 550,000 495,688
----------
495,688
----------
Miscellaneous - 5.86%
Osprey Trust 8.31% 1/15/03 ..................... 850,000 844,278
Republic of Korea 8.875% 4/15/08 ............... 1,200,000 1,251,045
Republic of South Africa 9.125% 5/19/09 ........ 775,000 788,563
Service International 6.00% 12/15/05 ........... 1,000,000 650,000
----------
3,533,886
----------
Packaging & Containers - 0.98%
Owens-Illinois 8.10% 5/15/07 ................... 625,000 592,102
----------
592,102
----------

7
<PAGE>

Statement of Net Assets (continued)

Principal Market
Delaware Corporate Bond Fund Amount Value
- --------------------------------------------------------------------------------
Corporate Bonds (continued)
Retail - 6.45%
K Mart 7.95% 2/1/23 ................................ $ 550,000 $ 464,198
Safeway 7.00% 9/15/02 .............................. 1,000,000 984,496
Saks 8.25% 11/15/08 ................................ 2,500,000 2,438,807
-----------
3,887,501
-----------
Telecommunications - 4.77%
AT & T 6.50% 3/15/29 ............................... 1,500,000 1,273,765
Cox Communications 6.15% 8/1/03 .................... 250,000 238,760
Global Crossing 9.625% 5/15/08 ..................... 750,000 733,125
MCI Worldcom 7.55% 4/1/04 .......................... 630,000 632,346
-----------
2,877,996
-----------
Transportation & Shipping - 2.62%
Atlas Air Lines 8.77% 1/2/11 ....................... 598,119 571,792
Stagecoach Holdings 8.625% 11/15/09 ................ 1,000,000 1,004,684
-----------
1,576,476
-----------
Total Corporate Bonds
(cost $55,838,383) .............................. 52,775,689
===========

U.S. Treasury Obligations - 4.77%
U.S. Treasury Note
5.00% 4/30/01 ................................... 250,000 245,677
5.50% 8/31/01* .................................. 2,675,000 2,632,233
-----------
Total U.S. Treasury Obligations
(cost $2,888,318) ............................... 2,877,910
-----------

Total Market Value of Securities - 98.43%
(cost $62,522,884) .............................. $59,326,088
Receivables and Other Assets
Net of Liabilities - 1.57% ...................... 946,872
-----------
Net Assets Applicable to 11,685,605
shares outstanding - 100.0% ..................... $60,272,960
===========
Net Asset Value - Delaware Corporate Bond Fund
A Class ($2,107,483 / 408,587 shares) ........... $5.16
-----
Net Asset Value - Delaware Corporate Bond Fund
B Class ($1,998,912 / 387,554 shares) ........... $5.16
-----
Net Asset Value - Delaware Corporate Bond Fund
C Class ($376,283 / 72,957 shares) .............. $5.16
-----
Net Asset Value - Delaware Corporate Bond Fund
Institutional Class ($55,790,282 / 10,816,507
shares) $5.16
-----

<PAGE>

Components of Net Assets at January 31, 2000:
Shares of Beneficial Interest
(unlimited authorization, no par) ........................ $65,485,427
Accumulated net realized loss on investments
and futures contracts .................................... (2,140,357)
Net unrealized depreciation of investments
and futures contracts .................................... (3,072,110)
-----------
Total net assets ............................................ $60,272,960
===========

Net asset value and offering price per share
Delaware Corporate Bond Fund
Net asset value A Class (A) ................................. $5.16
-----
Sales charge (4.75% of offering price
or 5.04% of amount invested
per share) (B) ........................................... 0.26
-----
Offering price .............................................. $5.42
-----
- ----------------------

(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon redemption or purchase of shares.
(B) See in the current prospectus for purchases of $100,000 or more.

*Fully or partially pledged collateral for financial futures contracts.

See accompanying notes

<PAGE>

Statement of Net Assets (continued)

DELAWARE EXTENDED DURATION BOND FUND
- ------------------------------------
Principal Market
January 31, 2000 (Unaudited) Amount Value
- --------------------------------------------------------------------------------
Agency Mortgage-Backed Securities - 6.09%
Federal National Mortgage Association
5.375% 3/15/02* ....................... $1,500,000 $1,453,421
6.25% 5/15/29 ......................... 3,000,000 2,614,463
----------
Total Agency Mortgage-Backed
Securities (cost $4,096,920) .......... 4,067,884
==========

Collateralized Mortgage-Backed
Securities (CMBS) - 0.51%
Mortgage Capital Funding
7.224% 9/20/06 ........................ 360,000 344,109
----------
Total Collateralized Mortgage-Backed
Securities (cost $369,591) ............ 344,109
==========
Corporate Bonds - 74.79%
Automobile & Automotive Parts - 7.92%
Federal Mogul 7.50% 1/15/09 .............. 500,000 437,841
Ford Motor 6.625% 10/1/28 ................ 1,000,000 857,978
General Motors 6.75% 5/1/28 .............. 1,250,000 1,094,542
Lear 8.11% 5/15/09 ....................... 500,000 466,351
Meritor Auto 6.80% 2/15/09 ............... 570,000 514,702
TRW 7.75% 6/1/29 ......................... 2,000,000 1,913,059
----------
5,284,473
----------
Banking - 2.17%
Banco Sud Americano 7.60% 3/15/07 ........ 500,000 448,726
Compass Bank 8.10% 8/15/09 ............... 1,000,000 1,001,919
----------
1,450,645
----------
Building & Materials - 1.48%
Masco 7.75% 8/1/29 ....................... 1,000,000 988,568
----------
988,568
----------
Cable, Media & Publishing - 5.39%
News America Holdings
7.75% 12/1/45 ......................... 1,681,000 1,539,204
Viacom 7.625% 1/15/16 .................... 2,100,000 2,057,297
----------
3,596,501
----------
Chemicals - 1.48%
Equistar Chemicals 8.75% 2/15/09 ......... 1,000,000 986,250
----------
986,250
----------
Computers & Technology - 1.06%
Seagate Technology 7.45% 3/1/37 .......... 820,000 706,214
----------
706,214
----------
Consumer Products - 5.13%
Penzoil-Quaker State 7.375% 4/1/29 ....... 2,000,000 1,692,995
Tommy Hilfiger 6.85% 6/1/08 .............. 1,985,000 1,733,013
----------
3,426,008
----------
Electronics & Electrical Equipment - 3.06%
Israel Electric 7.75% 12/15/27 ........... 2,000,000 1,820,927
Protection One 8.125% 1/15/09 ............ 450,000 225,000
----------
2,045,927
----------
Energy - 5.16%
Conoco 6.95% 4/15/29 ..................... 1,500,000 1,350,647
PSEG Energy 10.00% 10/1/09 ............... 625,000 635,645
Ras Laffan Liq Natural Gas
8.294% 3/15/14 ........................ 1,000,000 932,738

<PAGE>

Principal Market
Amount Value
- --------------------------------------------------------------------------------
Corporate Bonds (continued)
Energy (continued)
RBF Finance 11.00% 3/15/06 ............. $ 500,000 $ 525,000
----------
3,444,030
----------
Finance - 8.40%
Fairfax Financial 7.375% 3/15/06 ....... 650,000 580,560
Fairfax Financial 7.375% 4/15/18 ....... 1,000,000 781,730
Fidelity Investments 7.57% 6/15/29 ..... 1,000,000 962,377
Florida Windstorm 7.125% 2/25/19 ....... 500,000 457,536
Goldman Sachs Group 6.65% 5/15/09 ...... 500,000 460,269
Keycorp Capital III 7.75% 7/15/29 ...... 1,000,000 933,503
KN Capital Trust III 7.625% 4/15/28 .... 1,000,000 892,713
Meditrust 7.82% 9/10/26 ................ 650,000 537,875
----------
5,606,563
----------
Healthcare & Pharmaceuticals - 0.71%
Tenet Healthcare 8.00% 1/15/05 ......... 500,000 475,768
----------
475,768
----------
Industrial Machinery - 5.77%
Lockheed Martin 8.50% 12/1/29 .......... 2,000,000 2,006,090
Osprey Trust 8.31% 1/15/03 ............. 850,000 844,279
Rohm & Haas 7.85% 7/15/29 .............. 1,000,000 1,001,075
----------
3,851,444
----------
Leisure, Lodging & Entertainment - 1.45%
HMH Properties 8.45% 12/1/08 ........... 625,000 564,063
ITT 7.38% 11/15/15 ..................... 500,000 405,205
----------
969,268
----------
Metals & Mining - 0.61%
AK Steel 7.88% 2/15/09 ................. 450,000 405,563
----------
405,563
----------
Miscellaneous - 6.10%
Mexican United States 9.875% 2/1/10 .... 1,000,000 986,250
Republic of Columbia 9.75% 4/23/09 ..... 700,000 624,750
Republic of Korea 8.875% 4/15/08 ....... 1,000,000 1,042,538
Republic of South Africa 9.125% 5/19/09 725,000 737,688
Service International 6.00% 12/15/05 ... 1,050,000 682,500
----------
4,073,726
----------
Packaging & Containers - 0.89%
Owens-Illinois 8.10% 5/15/07 ........... 625,000 592,102
----------
592,102
----------
Retail - 8.38%
Federated Department Stores
7.00% 2/15/28 ....................... 1,000,000 884,797
Food Lion 8.05% 4/15/27 ................ 1,500,000 1,406,043
K Mart 7.95% 2/1/23 .................... 450,000 379,799
May Department Stores 6.70% 9/15/28 .... 1,000,000 873,627
SAKS 8.25% 11/15/08 .................... 2,100,000 2,048,597
----------
5,592,863
----------
Telecommunications - 4.54%
AT&T 6.50% 3/15/29 ..................... 1,500,000 1,273,765
Global Crossing 9.63% 5/15/08 .......... 750,000 733,125
Liberty Media 8.50% 7/15/29 ............ 1,000,000 1,021,822
----------
3,028,712
----------

9
<PAGE>

Statement of Net Assets (continued)

Principal Market
Delaware Extended Duration Bond Fund Amount Value
- --------------------------------------------------------------------------------
Corporate Bonds (continued)
Transportation & Shipping - 5.09%
Atlas Air Lines 8.77% 1/2/11 ...................... $598,119 $ 571,792
CSX 6.80% 12/1/28 ................................. 1,000,000 859,544
Stagecoach 8.625% 11/15/09 ........................ 1,000,000 1,004,684
US Air 8.36% 7/20/20 .............................. 1,000,000 964,500
-----------
3,400,520
-----------
Total Corporate Bonds
(cost $53,230,863) ............................. 49,925,145
===========
U.S. Treasury Obligations - 15.44%
U.S. Treasury Note
5.50% 5/15/09 .................................. 6,025,000 5,522,614
6.375% 8/15/27 ................................. 2,025,000 1,967,439
5.25% 2/15/29 .................................. 1,000,000 832,040
U.S. Treasury Strip
0.00% 2/15/27 .................................. 7,000,000 1,264,562
0.00% 2/15/27 .................................. 1,500,000 271,688
0.00% 5/15/27 .................................. 2,500,000 445,782
-----------
Total U.S. Treasury Obligations
(cost $10,837,085) ............................. 10,304,125
===========

Repurchase Agreements - 2.18%
With Chase Manhattan 5.68% 2/1/00
(dated 1/31/00, collateralized by
$326,000 U.S. Treasury Notes 8.00%
due 5/15/01, market value $337,919
and $166,000 U.S. Treasury Notes
5.25% due 5/31/01, market
value $164,613) ................................ 491,000 491,000
With J.P. Morgan Securities 5.68%
2/1/00 (dated 1/31/00, collateralized
by $344,000 U.S. Treasury Notes
5.50% due 3/31/03, market value
$340,186 and $154,000 U.S. Treasury
Notes 5.75% due 4/30/03, market
value $152,394) ................................ 483,000 483,000
With PaineWebber 5.68% 2/1/00
(dated 1/31/00, collateralized by
$121,000 U.S. Treasury Notes
7.50% due 11/15/01, market
value $124,313 and $102,000
U.S. Treasury Notes 6.625% due
4/30/02, market value $103,411
and $121,000 U.S. Treasury Notes
4.25% due 11/15/03, market value
$112,827 and $143,000 U.S. Treasury
Notes 7.875% due 11/15/04, market
value $152,007) ................................ 483,000 483,000
-----------
Total Repurchase Agreements
(cost $1,457,000) .............................. $ 1,457,000
-----------

<PAGE>

Market
Value
- --------------------------------------------------------------------------------
Total Market Value of Securities - 99.01%
(cost of $69,991,459) ............................... $66,098,263
Receivables and Other Assets
Net of Liabilities - 0.99% .......................... 658,778
-----------
Net Assets Applicable to 13,383,756 shares
outstanding - 100.0% ................................ $66,757,041
===========

Net asset value - Delaware Extended Duration Bond Fund
A Class ($1,689,037 / 338,633 Shares) ............... $4.99
-----
Net asset value - Delaware Extended Duration Bond Fund
B Class ($365,077 / 73,192 Shares) .................. $4.99
-----
Net asset value - Delaware Extended Duration Bond Fund
C Class ($157,875 / 31,651 Shares) .................. $4.99
-----
Net asset value - Delaware Extended Duration Bond Fund
Institutional Class ($64,545,052 / 12,940,280 Shares) $4.99
-----

Components of Net Assets at January 31, 2000:
Shares of Beneficial Interest
(unlimited authorization, no par) ................... $73,421,489
Accumulated net realized loss on investments
and futures contracts ............................... (2,702,501)
Net unrealized depreciation of investments
and futures contracts ............................... (3,961,947)
-----------
Total net assets ....................................... $66,757,041
===========

Net asset value and offering per share -
Delaware Extended Duration Bond Fund
Net asset value A Class (A) ............................ $4.99
-----
Sales charge (4.75% of offering price or 5.01% of
the amount invested per share) (B) .................. 0.25
-----
Offering price ......................................... $5.24
=====
- --------------

(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon redemption or purchase of shares.
(B) See the current prospectus for purchases of $100,000 or more.
* Fully or partially pledged collateral for financial futures contracts

See accompanying notes

<PAGE>

Statements of Operations
<TABLE>
<CAPTION>
Delaware
Delaware Extended
Corporate Duration
Six Months Ended January 31, 2000 (Unaudited) Bond Fund Bond Fund
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Investment Income:
Interest ............................................................. $2,269,823 $ 2,313,897
---------- -----------
2,269,823 2,313,897

Expenses:
Management fees ...................................................... 149,514 160,975
Registration fees .................................................... 71,670 73,342
Dividend disbursing and transfer agent fees and expenses ............. 41,965 29,650
Accounting and administration ........................................ 15,800 11,525
Reports and statements to shareholders ............................... 11,500 10,600
Professional fees .................................................... 5,075 5,298
Distribution expense ................................................. 12,559 3,795
Taxes (other than taxes on income) ................................... 1,400 520
Custodian fees ....................................................... 7,500 729
Trustees' fees ....................................................... 300 50
Other ................................................................ 960 1,673
---------- -----------
318,243 298,157

Less expenses absorbed by Delaware Management Company ................ (139,745) (131,858)
Less expenses paid indirectly ........................................ (690) (907)
---------- -----------
Total expenses ....................................................... 177,808 165,392

Net Investment Income ................................................ 2,092,015 2,148,505
---------- -----------

Net Realized and Unrealized Loss on Investments and Futures Contracts:
Net realized loss on investments ..................................... (464,151) (838,300)
Net change in unrealized appreciation / depreciation of investments
and futures contracts ............................................. (925,354) (922,455)
---------- -----------

Net Realized and Unrealized Loss on Investments and Futures Contracts (1,389,505) (1,760,755)
---------- -----------

Net Increase in Net Assets Resulting from Operations ................. $ 702,510 $ 387,750
========== ===========
</TABLE>
See accompanying notes

<PAGE>

Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Delaware Delaware
Delaware Delaware Extended Extended
Corporate Corporate Duration Duration
Bond Fund Bond Fund Bond Fund Bond Fund
- ------------------------------------------------------------------------------------------------------------------
Six Months Period Six Months Period
Ended 9/15/98* Ended 9/15/98*
1/31/2000 through 1/31/2000 through
(Unaudited) 7/31/1999 (Unaudited) 7/31/1999
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets from Operations:
Net investment income ................................ $ 2,092,015 $ 2,110,727 $ 2,148,505 $ 2,001,417
Net realized loss on investments ..................... (464,151) (1,652,452) (838,300) (1,849,437)
Net change in unrealized appreciation / depreciation
of investments and futures contracts .............. (925,354) (2,146,756) (922,455) (3,039,492)
----------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations .................................... 702,510 (1,688,481) 387,750 (2,887,512)
----------------------------------------------------------

Distributions to Shareholders from:
Net investment income:
A Class ........................................... (63,537) (45,318) (50,487) (31,630)
B Class ........................................... (51,856) (20,299) (9,002) (1,275)
C Class ........................................... (9,510) (7,907) (3,821) (1,261)
Institutional Class ............................... (1,967,132) (2,037,203) (2,085,185) (1,967,251)

Net realized gain on investments:
A Class ........................................... 0 (649) 0 (403)
B Class ........................................... 0 (26) 0 (3)
C Class ........................................... 0 (37) 0 (13)
Institutional Class ............................... 0 (23,022) 0 (14,355)
----------------------------------------------------------
(2,092,035) (2,134,461) (2,148,495) (2,016,191)
----------------------------------------------------------
Capital Share Transactions:
Proceeds from shares sold:
A Class ........................................... 940,660 1,919,685 926,217 1,303,923
B Class ........................................... 1,200,810 1,413,525 252,815 172,849
C Class ........................................... 248,408 446,292 140,921 62,451
Institutional Class ............................... 11,498,489 70,556,107 21,924,413 70,284,574

Netasset value of shares issued upon reinvestment
of distributions from net investment income and
net realized gain on investments:
A Class ........................................... 51,071 39,760 40,180 29,500
B Class ........................................... 30,954 9,222 8,045 1,068
C Class ........................................... 6,150 6,038 2,374 469
Institutional Class ............................... 1,766,877 1,788,078 1,861,703 1,718,312
----------------------------------------------------------
15,743,419 76,178,707 25,156,668 73,573,146
----------------------------------------------------------
Cost of shares repurchased:
A Class ........................................... (218,869) (508,014) (272,688) (220,356)
B Class ........................................... (427,062) (132,179) (1,574) (54,753)
C Class ........................................... (172,284) (130,682) (39,653) (187)
Institutional Class ............................... (11,379,858) (13,467,751) (13,170,564) (11,548,550)
----------------------------------------------------------
(12,198,073) (14,238,626) (13,484,479) (11,823,846)
----------------------------------------------------------
Increase in net assets derived from capital share
transactions ....................................... 3,545,3466 1,940,081 11,672,189 61,749,300
----------------------------------------------------------
Net Increase In Net Assets ........................... 2,155,821 58,117,139 9,911,444 56,845,597
----------------------------------------------------------

Net Assets:
Beginning of period .................................. 58,117,139 - 56,845,597 -
----------------------------------------------------------
End of period ........................................ $ 60,272,960 $ 58,117,139 $ 66,757,041 $ 56,845,597
==========================================================

</TABLE>

* Date of commencement of operations.

See accompanying notes

<PAGE>

Financial Highlights

<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding Delaware Corporate
throughout each period was as follows: Bond Fund A Class
- -----------------------------------------------------------------------------------------
Six Months 9/15/98(1)
Ended to
1/31/00(3) 7/31/99
(Unaudited)

<S> <C> <C>
Net asset value, beginning of period ........................ $5.280 $5.500

Income (loss) from investment operations:
Net investment income .................................... 0.177 0.201
Net realized and unrealized loss on investments and
futures contracts ....................................... (0.120) (0.216)
------------------
Total from investment operations ............................ 0.057 (0.015)
------------------

Less dividends and distributions:
Dividends from net investment income ..................... (0.177) (0.201)
Distributions from net realized gain on investments ...... - (0.004)
------------------
Total dividends and distributions ........................ (0.177) (0.205)
------------------

Net asset value, end of period .............................. $5.160 $5.280
==================

Total return(2) ............................................. 1.11% (0.34%)

Ratios and supplemental data:
Net assets, end of period (000 omitted) .................. $2,107 $1,377
Ratio of expenses to average net assets .................. 0.80% 0.80%
Ratio of expenses to average net assets prior to
expense limitation and fees paid indirectly ............. 1.26% 1.26%
Ratio of net investment income to average net assets ..... 6.75% 5.75%
Ratio of net investment income to average net assets
prior to expense limitation and fees paid indirectly .... 6.29% 5.29%
Portfolio turnover ....................................... 72% 175%
</TABLE>
- ----------------------

(1) Date of commencement of operations; ratios and portfolio turnover have been
annualized and total return has not been annualized.

(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.

(3) Ratios have been annualized and total return has not been annualized.

See accompanying notes

<PAGE>

Financial Highlights (continued)

<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding Delaware Corporate
throughout each period was as follows: Bond Fund B Class
- ----------------------------------------------------------------------------------------------------------------
Six Months 9/15/98(1)
Ended to
1/31/00(3) 7/31/99
(Unaudited)

<S> <C> <C>
Net asset value, beginning of period ................................................. $5.280 $5.500

Income (loss) from investment operations:
Net investment income ............................................................. 0.157 0.171
Net realized and unrealized loss on investments and futures contracts ............. (0.120) (0.216)
------------------
Total from investment operations .................................................. 0.037 (0.045)
------------------

Less dividends and distributions:
Dividends from net investment income .............................................. (0.157) (0.171)
Distributions from net realized gain on investments ............................... - (0.004)
------------------
Total dividends and distributions ................................................. (0.157) (0.175)
------------------

Net asset value, end of period ....................................................... $5.160 $5.280
==================

Total return(2)....................................................................... 0.73% (0.88%)

Ratios and supplemental data:
Net assets, end of period (000 omitted) ........................................... $1,999 $1,236
Ratio of expenses to average net assets ........................................... 1.55% 1.55%
Ratio of expenses to average net assets prior to expense limitation
and fees paid indirectly ....................................................... 2.01% 2.01%
Ratio of net investment income to average net assets .............................. 6.00% 5.00%
Ratio of net investment income to average net assets prior to expense limitation
and fees paid indirectly ....................................................... 5.54% 4.54%
Portfolio turnover ................................................................ 72% 175%
</TABLE>
- ----------------------

(1) Date of commencement of operations; ratios and portfolio turnover have been
annualized and total return has not been annualized.

(3) Ratios have been annualized and total return has not been annualized.

See accompanying notes

<PAGE>

Financial Highlights (continued)

<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding Delaware Corporate
throughout each period was as follows: Bond Fund C Class
- ---------------------------------------------------------------------------------------------------------------
Six Months 9/15/98(1)
Ended to
1/31/00(3) 7/31/99
(Unaudited)

<S> <C> <C>
Net asset value, beginning of period ................................................ $5.280 $5.500

Income (loss) from investment operations:
Net investment income ............................................................ 0.158 0.171
Net realized and unrealized loss on investments and futures contracts ............ (0.120) (0.216)
------------------
Total from investment operations ................................................. 0.038 (0.045)
------------------

Less dividends and distributions:
Dividends from net investment income ............................................. (0.158) (0.171)
Distributions from net realized gain on investments .............................. - (0.004)
------------------
Total dividends and distributions ................................................ (0.158) (0.175)
------------------

Net asset value, end of period ...................................................... $5.160 $5.280
==================

Total return(2) ..................................................................... 0.73% (0.88%)

Ratios and supplemental data:
Net assets, end of period (000 omitted) .......................................... $376 $303
Ratio of expenses to average net assets .......................................... 1.55% 1.55%
Ratio of expenses to average net assets prior to expense limitation
and fees paid indirectly ....................................................... 2.01% 2.01%
Ratio of net investment income to average net assets ............................. 6.00% 5.00%
Ratio of net investment income to average net assets prior to expense limitation
and fees paid indirectly ....................................................... 5.54% 4.54%
Portfolio turnover ............................................................... 72% 175%
</TABLE>
- ----------------------

(1) Date of commencement of operations; ratios and portfolio turnover have been
annualized and total return has not been annualized.

(3) Ratios have been annualized and total return has not been annualized.

See accompanying notes

15
<PAGE>

Financial Highlights (continued)

<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding Delaware Corporate Bond
throughout each period was as follows: Fund Institutional Class
====================================================================================================================
Six Months 9/15/98(1)
Ended to
1/31/00(3) 7/31/99
(Unaudited)

<S> <C> <C>
Net asset value, beginning of period .................................................... $5.280 $5.500

Income (loss) from investment operations:
Net investment income ................................................................ 0.184 0.212
Net realized and unrealized loss on investments and futures contracts ................ (0.120) (0.216)
------------------
Total from investment operations ..................................................... 0.064 (0.004)
------------------

Less dividends and distributions:
Dividends from net investment income ................................................. (0.184) (0.212)
Distributions from net realized gain on investments .................................. - (0.004)
Total dividends and distributions .................................................... (0.184) (0.216)
------------------

Net asset value, end of period .......................................................... $5.160 $5.280
==================

Total return(2) ......................................................................... 1.24% (0.14%)

Ratios and supplemental data:
Net assets, end of period (000 omitted) .............................................. $55,790 $55,201
Ratio of expenses to average net assets .............................................. 0.55% 0.55%
Ratio of expenses to average net assets prior to expense limitation
and fees paid indirectly .......................................................... 1.01% 1.01%
Ratio of net investment income to average net assets 7.00% 6.00%
Ratio of net investment income to average net assets prior to expense limitation
and fees paid indirectly .......................................................... 6.54% 5.54%
Portfolio turnover ................................................................... 72% 175%
</TABLE>
- ----------------------

(1) Date of commencement of operations; ratios and portfolio turnover have been
annualized and total return has not been annualized.

(3) Ratios have been annualized and total return has not been annualized.

See accompanying notes

<PAGE>

Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding Delaware Extended Duration
throughout each period was as follows: Bond Fund A Class
- ----------------------------------------------------------------------------------------------------------------
Six Months 9/15/98(1)
Ended to
1/31/00(3) 7/31/99
(Unaudited)
<S> <C> <C>
Net asset value, beginning of period .................................................. $ 5.150 $ 5.500

Income (loss) from investment operations:
Net investment income .............................................................. 0.180 0.206
Net realized and unrealized loss on investments and futures contracts .............. (0.160) (0.347)
-------------------
Total from investment operations ................................................... 0.020 (0.141)
-------------------
Less dividends and distributions:
Dividends from net investment income ............................................... (0.180) (0.206)
Distributions from net realized gain on investments ................................ - (0.003)
-------------------
Total dividends and distributions .................................................. (0.180) (0.209)
-------------------

Net asset value, end of period ........................................................ $ 4.990 $ 5.150
===================

Total return(2) ....................................................................... 0.42% (2.68%)

Ratios and supplemental data:
Net assets, end of period (000 omitted) ............................................ $ 1,689 $ 1,042
Ratio of expenses to average net assets ............................................ 0.80% 0.80%
Ratio of expenses to average net assets prior to expense limitation
and fees paid indirectly ......................................................... 1.24% 1.27%
Ratio of net investment income to average net assets ............................... 7.06% 5.88%
Ratio of net investment income to average net assets prior to expense limitation
and fees paid indirectly ......................................................... 6.62% 5.41%
Portfolio turnover ................................................................. 82% 201%
</TABLE>
- ----------------------
(1) Date of commencement of operations; ratios and portfolio turnover have been
annualized and total return has not been annualized.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(3) Ratios have been annualized and total return has not been annualized.

See accompanying notes

17
<PAGE>

Financial Highlights (continued)

<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding Delaware Extended Duration
throughout each period was as follows: Bond Fund B Class
- ----------------------------------------------------------------------------------------------------------------
Six Months 9/15/98(1)
Ended to
1/31/00(3) 7/31/99
(Unaudited)
<S> <C> <C>
Net asset value, beginning of period .................................................. $ 5.150 $ 5.500

Income (loss) from investment operations:
Net investment income .............................................................. 0.161 0.172
Net realized and unrealized loss on investments and futures contracts .............. (0.160) (0.347)
-------------------
Total from investment operations ................................................... 0.001 (0.175)
-------------------

Less dividends and distributions:
Dividends from net investment income ............................................... (0.161) (0.172)
Distributions from net realized gain on investments ................................ - (0.003)
-------------------
Total dividends and distributions .................................................. (0.161) (0.175)
-------------------

Net asset value, end of period ........................................................ $ 4.990 $ 5.150
===================

Total return(2) ....................................................................... 0.04% (3.28%)

Ratios and supplemental data:
Net assets, end of period (000 omitted) ............................................ $ 365 $ 114
Ratio of expenses to average net assets ............................................ 1.55% 1.55%
Ratio of expenses to average net assets prior to expense limitation
and fees paid indirectly ......................................................... 1.99% 2.02%
Ratio of net investment income to average net assets ............................... 6.31% 5.13%
Ratio of net investment income to average net assets prior to expense limitation
and fees paid indirectly ......................................................... 5.87% 4.66%
Portfolio turnover ................................................................. 82% 201%
</TABLE>
- ----------------------
(1) Date of commencement of operations; ratios and portfolio turnover have been
annualized and total return has not been annualized.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(3) Ratios have been annualized and total return has not been annualized.

See accompanying notes

<PAGE>

Financial Highlights (continued)

<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding Delaware Extended Duration
throughout each period was as follows: Bond Fund C Class
- ----------------------------------------------------------------------------------------------------------------
Six Months 9/15/98(1)
Ended to
1/31/00(3) 7/31/99
(Unaudited)
<S> <C> <C>
Net asset value, beginning of period .................................................. $5.150 $5.500

Income (loss) from investment operations:
Net investment income .............................................................. 0.161 0.180
Net realized and unrealized loss on investments and futures contracts .............. (0.160) (0.347)
-------------------
Total from investment operations ................................................... 0.001 (0.167)
-------------------

Less dividends and distributions:
Dividends from net investment income ............................................... (0.161) (0.180)
Distributions from net realized gain on investments ................................ - (0.003)
-------------------
Total dividends and distributions .................................................. (0.161) (0.183)
-------------------

Net asset value, end of period ........................................................ $4.990 $5.150
===================

Total return(2) ....................................................................... 0.04% (3.15%)

Ratios and supplemental data:
Net assets, end of period (000 omitted) ............................................ $158 $58
Ratio of expenses to average net assets ............................................ 1.55% 1.55%
Ratio of expenses to average net assets prior to expense limitation
and fees paid indirectly ......................................................... 1.99% 2.02%
Ratio of net investment income to average net assets ............................... 6.31% 5.13%
Ratio of net investment income to average net assets prior to expense limitation
and fees paid indirectly ......................................................... 5.87% 4.66%
Portfolio turnover ................................................................. 82% 201%
</TABLE>
- ----------------------
(1) Date of commencement of operations; ratios and portfolio turnover have been
annualized and total return has not been annualized.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(3) Ratios have been annualized and total return has not been annualized.

See accompanying notes

<PAGE>

Financial Highlights (continued)

<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding Delaware Extended Duration
throughout each period was as follows: Bond Fund Institutional Class
- ----------------------------------------------------------------------------------------------------------------
Six Months 9/15/98(1)
Ended to
1/31/00(3) 7/31/99
(Unaudited)
<S> <C> <C>
Net asset value, beginning of period .................................................. $ 5.150 $ 5.500

Income (loss) from investment operations:
Net investment income .............................................................. 0.187 0.215
Net realized and unrealized loss on investments and futures contracts .............. (0.160) (0.347)
-------------------
Total from investment operations ................................................... 0.027 (0.132)
-------------------

Less dividends and distributions:
Dividends from net investment income ............................................... (0.187) (0.215)
Distributions from net realized gain on investments ................................ - (0.003)
-------------------
Total dividends and distributions .................................................. (0.187) (0.218)
-------------------

Net asset value, end of period ........................................................ $ 5.364 $ 5.150
===================

Total return(2)........................................................................ 0.55% (2.52%)

Ratios and supplemental data:
Net assets, end of period (000 omitted) ............................................ $64,545 $55,631
Ratio of expenses to average net assets ............................................ 0.55% 0.55%
Ratio of expenses to average net assets prior to expense limitation
and fees paid indirectly ......................................................... 0.99% 1.02%
Ratio of net investment income to average net assets ............................... 7.31% 6.13%
Ratio of net investment income to average net assets prior to expense limitation
and fees paid indirectly ......................................................... 6.87% 5.66%
Portfolio turnover ................................................................. 82% 201%
</TABLE>
- ----------------------
(1) Date of commencement of operations; ratios and portfolio turnover have been
annualized and total return has not been annualized.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(3) Ratios have been annualized and total return has not been annualized.

See accompanying notes

<PAGE>

Notes to Financial Statements

January 31, 2000 (Unaudited)
- --------------------------------------------------------------------------------
Delaware Group Income Funds (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 Delaware Business Trust and offers five
series: the Delaware Corporate Bond Fund, the Delaware Delchester Fund, the
Delaware Extended Duration Bond Fund, the Delaware High-Yield Opportunities Fund
and the Delaware Strategic Income Fund. These financial statements and related
notes pertain to the Delaware Corporate Bond Fund and Delaware Extended Duration
Bond Fund (each referred to as a "Fund" or collectively as the "Funds"). Each
Fund offers four classes of shares. The A Class carries a front-end sales charge
of 4.75%. The B Class carries a back-end deferred sales charge. The C Class
carries a level load deferred sales charge and the Institutional Class has no
sales charge.

The investment objective of the Funds is to seek to provide investors with high
total return and, as a secondary objective, high current income by investing
primarily in corporate bonds rated BBB or higher.

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

Security Valuation - All equity securities are valued at the last quoted sales
price as of the close of the New York Stock Exchange (NYSE) on the valuation
date. If on a particular day an equity security does not trade, then the mean
between the bid and asked prices will be use. Long-term debt securities are
valued by an independent pricing service and 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.
Other securities and assets for which market quotations are not readily
available are valued at fair value as determined in good faith by or under the
direction of the Fund's Board of Trustees.

Federal Income Taxes - Each Fund intends to qualify as a regulated investment
company and make the requisite distributions to shareholders. Accordingly, no
provision for federal income taxes has been made in the financial statements.
Income and capital gain distributions are determined in accordance with federal
income tax regulations which may differ from generally accepted accounting
principles.

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

Repurchase Agreements - Each Fund may invest in a pooled cash account along with
other members of the Delaware Investments Family of Funds. The aggregate 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 each
Fund's custodian bank until the maturity of the respective repurchase
agreements. Each repurchase agreement is at least 102% 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.

<PAGE>

Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

Other - Expenses common to all funds within the Delaware Investments Family 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.
Interest income is recorded on the accrual basis. Original issue discounts are
accreted to interest income over the lives of the respective securities. The
Funds declare dividends daily from net investment income and pay such dividends
monthly and declare and pay distributions form net realized gain on investments,
if any, annually.

Certain expenses of the Funds are paid through "soft dollar" arrangements with
brokers. These transactions are done subject to best price and execution. The
amounts of these expenses were approximately $690 for the Delaware Corporate
Bond Fund and $678 for the Delaware Extended Duration Bond Fund for the six
months ended January 31, 2000. In addition, the Funds receive earnings credits
from its custodian when positive balances are maintained, which are used to
offset custody fees. These credits were $229 for the Delaware Extended Duration
Bond Fund for the six months ended January 31, 2000. The expenses paid under the
above arrangements are included in their respective expense captions on the
Statements of Operations with the corresponding offset shown as "Expenses paid
indirectly".

2. Investment Management and Other Transactions with Affiliates

In accordance with the terms of the Investment Management Agreement, the Funds
pay Delaware Management Company (DMC), the Investment Manager, an annual fee
based on its average daily net assets at the following rates:

Delaware Delaware
Corporate Bond Extended Duration
Fund Bond Fund
On the first $500 million 0.500% On the first $500 million 0.550%
On the next $500 million 0.475% On the next $500 million 0.500%
On the next $1.5 billion 0.450% On the next $1.5 billion 0.450%
In excess of $2.5 billion 0.425% In excess of $2.5 billion 0.425%

At January 31, 2000 the liability for Investment Management Fees and other
expenses payable to DMC were as follows:

Delaware Delaware
Corporate Bond Extended Duration
Fund Bond Fund
$26,787 $30,691

21
<PAGE>

Notes to Financial Statements (continued)

January 31, 2000 (Unaudited)
- --------------------------------------------------------------------------------
2. Investment Management and Other Transactions with Affiliates
(continued)

DMC has elected to waive that portion of the management fee and reimburse each
Fund to the extent that annual operating expenses, exclusive of taxes, interest,
brokerage commissions, distribution and extraordinary expenses, exceed 0.55% of
average daily net assets for each Fund through September 30, 2000.

The Funds have engaged Delaware Service Company, Inc. (DSC), an affiliate of
DMC, to provide dividend disbursing, transfer agent and accounting services. The
Funds pay DSC a monthly fee based on the number of shareholder accounts,
shareholder transactions and average net assets, subject to certain minimums. At
January 31, 2000, the Funds had payables for such fees and other expenses
payable to DSC as follows:

Delaware Delaware
Corporate Bond Extended Duration
Fund Bond Fund
$4,211 $4,792

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 0.25% of the average daily net assets of the A Class and 1.00% of the
average daily net assets of the B and C Class for each Fund. No distribution
expenses are paid by the Institutional Class. At January 31, 2000, the Funds had
payables for distribution fees and other expenses payable to DDLP as follows:

Delaware Delaware
Corporate Bond Extended Duration
Fund Bond Fund
$5,951 $4,143

For the six months ended January 31, 2000, DDLP earned $1,464 for commissions on
the sales of the Fund A Class shares for the Delaware Corporate Bond Fund and
$934 for commissions on the sale of Fund A Class shares for the Delaware
Extended Duration Bond Fund.

Certain officers of DMC, DSC and DDLP are officers, trustees and/or employees of
the Funds. These officers, trustees and employees are paid no compensation by
the Funds.

3. Investments

For the six months ended January 31, 2000, the Funds made purchases and sales of
investment securities other than U.S. government securities and temporary cash
investments for each Fund as follows:

Delaware Delaware
Corporate Extended Duration
Bond Fund Bond Fund
Purchases ................... $20,147,785 $31,651,460
Sales ....................... $13,486,970 $29,926,277

<PAGE>

At January 31, 2000, the aggregate cost of securities and unrealized
appreciation (depreciation) for federal income tax purposes for each Fund were
as follows:

Delaware Delaware
Corporate Extended Duration
Bond Fund Bond Fund

Cost of investments $62,522,884 $69,991,459
=========== ===========
Aggregate unrealized
appreciation $212,805 $343,961
Aggregate unrealized
depreciation (3,409,601) (4,237,157)
----------- -----------
Net unrealized depreciation ($3,196,796) ($3,893,196)
=========== ===========

4. Capital Shares

Transactions in capital shares were as follows:
Delaware Corporate Bond Fund
Six Months
Ended 9/15/98*
1/31/00 to
(Unaudited) 7/31/99
Shares sold:
A Class ........................................ 180,113 344,744
B Class ........................................ 229,726 256,938
C Class ........................................ 47,663 79,951
Institutional Class ............................ 2,206,370 12,583,775

Shares issued upon reinvestment of distributions from net investment income and
net realized gain on investments:
A Class ........................................ 9,822 7,270
B Class ........................................ 5,956 1,718
C Class ........................................ 1,183 1,106
Institutional Class ............................ 339,631 327,043
--------- ----------
3,020,464 13,602,545
--------- ----------

Shares repurchased:
A Class ........................................ (42,236) (91,126)
B Class ........................................ (82,244) (24,540)
C Class ........................................ (33,267) (23,679)
Institutional Class ............................ (2,187,795) (2,452,517)
---------- ----------
(2,345,542) (2,591,862)
---------- ----------
Net increase ...................................... 674,922 11,010,683
========== ==========

* Date of commencement of operations.

<PAGE>

Notes to Financial Statements (continued)

January 31, 2000 (Unaudited)
- --------------------------------------------------------------------------------
4. Capital Shares (continued)

Delaware Extended Duration
Bond Fund
Six Months
Ended 9/15/98*
1/31/00 to
(Unaudited) 7/31/99
Shares sold:
A Class ....................................... 182,932 236,728
B Class ....................................... 49,825 31,768
C Class ....................................... 27,825 11,269
Institutional Class ........................... 4,369,628 12,605,679

Shares issued upon reinvestment of
distributions from net investment
income and net realized gain on
investments:

A Class ....................................... 7,988 5,456
B Class ....................................... 1,602 203
C Class ....................................... 475 86
Institutional Class ........................... 369,915 318,397
--------- ----------
5,010,190 13,209,586
--------- ----------

Shares repurchased:
A Class ....................................... (54,599) (39,872)
B Class ....................................... (305) (9,901)
C Class ....................................... (7,968) (36)
Institutional Class ........................... (2,598,153) (2,125,186)
---------- ----------
(2,661,025) (2,174,995)
---------- ----------
Net increase 2,349,165 11,034,591
========== ==========

* Date of commencement of operations.

5. Futures Contracts

The Funds invest in financial futures contracts for the purpose of hedging their
existing portfolio securities against fluctuations in fair value caused by
changes in prevailing market rates. Upon entering into a futures contract, the
Funds deposit cash or pledge U.S. government securities to a broker, equal to
the minimum "initial margin" requirements of the exchange on which the contract
is traded. Subsequent payments are received from or paid to the broker each day,
based on the daily fluctuation in the market value of the contract. These
receipts or payments are known as "variation margin" and are recorded daily by
the Funds as unrealized gains or losses until the contracts are closed. When the
contracts are closed, the Funds record a realized gain or loss equal to the
difference between the value of the contract at the time it was opened and the
value at the time it was closed. Risk may arise upon entering into futures
contracts from potential imperfect correlation between the futures contracts and
the underlying securities and from the possibility of an illiquid secondary
market for these instruments.

<PAGE>

Financial futures contracts open at January 31, 2000 were as follows:

Delaware Corporate Bond Fund

Notional Expiration Unrealized
Contracts to receive Cost Amount Date Gain

42 U.S. 10 Year Treasury March
note contracts $(4,105,500) 2000 $124,686

Delaware Extended Duration Bond Fund

Notional Expiration Unrealized
Contracts to deliver Cost Amount Date Gain

40 U.S. 20 Year Treasury March
note contracts $3,757,500 2000 $(68,751)

6. Market and Credit Risk
Each Fund may invest in high-yield fixed income securities which carry ratings
of BB or lower by S&P and/or Ba 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 more
susceptible to adverse economic and competitive industry conditions than
investment grade securities.

Each Fund may invest in securities whose value is derived from an underlying
pool of mortgages or consumer loans. Prepayment of these loans may shorten the
stated maturity of the respective obligation and may result in a loss of
premium, if any has been paid.

Each Fund may invest up to 15% of its total assets in illiquid securities which
may 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 Funds' ability
to dispose of such securities in a timely manner and at a fair price when it is
necessary to liquidate such securities.

<PAGE>

DELAWARE INVESTMENTS FAMILY OF FUNDS
- ------------------------------------

Complete information on any fund offered by Delaware Investments can be found in
each fund's current prospectus. Prospectuses for all funds offered by Delaware
Investments are available from your financial adviser. Please read the
prospectus carefully before you invest or send money.

Growth of Capital
o Select Growth Fund
o Trend Fund
o Growth Opportunities Fund*
o Small Cap Value Fund
o U.S. Growth Fund
o Growth Stock Fund
o Tax-Efficient Equity Fund
o Social Awareness Fund

Total Return
o Blue Chip Fund
o Devon Fund
o Growth and Income Fund
o Decatur Equity
Income Fund
o REIT Fund
o Balanced Fund

International and Global
o Emerging Markets Fund
o New Pacific Fund
o Overseas Equity Fund
o International Equity Fund
o Global Equity Fund
o Global Bond Fund

Current Income
o Delchester Fund
o High-Yield
Opportunities Fund
o Strategic Income Fund
o Corporate Bond Fund
o Extended Duration
Bond Fund
o American Government
Bond Fund
o U.S. Government
Securities Fund
o Limited-Term
Government Fund

Tax-Exempt Income
o National High-Yield
Municipal Bond Fund
o Tax-Free USA Fund
o Tax-Free Insured Fund
o Tax-Free USA
Intermediate Fund
o State Tax-Free Funds**

Stability of Principal
o Cash Reserve
o Tax-Free Money Fund

Asset Allocation
o Foundation Funds
Growth Portfolio
Balanced Portfolio
Income Portfolio

* Formerly known as DelCap Fund.

** Available for the following states: Arizona, California, Colorado, Florida,
Idaho, Iowa, Kansas, Minnesota, Missouri, Montana, North Dakota, New Jersey,
New Mexico, New York, Ohio, Oregon, Pennsylvania and Wisconsin. Insured and
intermediate bond funds are available in selected states.

(C)Delaware Distributors, L.P.

<PAGE>

DELAWARE(SM)
INVESTMENTS
- ---------------------
Philadelphia o London

For Shareholders
1.800.523.1918

For Securities Dealers
1.800.362.7500

For Financial Institutions
Representatives Only
1.800.659.2265

www.delawareinvestments.com

This semi-annual report is for the information of Delaware Corporate Bond Fund
and Delaware Extended Duration Bond Fund shareholders, but it may be used with
prospective investors when preceded or accompanied by a current prospectus for
Delaware Corporate Bond Fund and Delaware Extended Duration Bond Fund and the
Delaware Investments Performance Update for the most recently completed calendar
quarter. The prospectus sets forth details about charges, expenses, investment
objectives and operating policies of each Fund. You should read the prospectus
carefully before you invest. The figures in this report represent past results
which are not a guarantee of future results. The return and principal value of
an investment in each Fund will fluctuate so that shares, when redeemed, may be
worth more or less than their original cost.

BOARD OF TRUSTEES

Wayne A. Stork
Chairman
Delaware Investments Family of Funds
Philadelphia, PA

Walter P. Babich
Board Chairman
Citadel Constructors, Inc.
King of Prussia, PA

David K. Downes
President and Chief Executive Officer
Delaware Investments Family of Funds
Philadelphia, PA

John H. Durham
Private Investor
Horsham, PA

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

Ann R. Leven
Former Treasurer, National Gallery of Art
Washington, DC

Thomas F. Madison
President and Chief Executive Officer
MLM Partners, Inc.
Minneapolis, MN

Charles E. Peck
Retired
Fredericksburg, VA

Jan L. Yeomans
Vice President and Treasurer
3M Corporation
St. Paul, Minnesota

<PAGE>

AFFILIATED OFFICERS

Charles E. Haldeman, Jr.
President and Chief Executive Officer
Delaware Management Holdings, Inc.
Philadelphia, PA

Richard J. Flannery
Executive Vice President and
General Counsel
Delaware Investments Family of Funds
Philadelphia, PA

Bruce D. Barton
President and Chief Executive Officer
Delaware Distributors, L.P.
Philadelphia, PA

Investment Manager
Delaware Management Company
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

(2784) Printed in the USA
SA-460 [01/00]PP 03/00 (J5629)