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<PAGE> PAGE 2
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<PAGE> PAGE 3
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SIGNATURE GRACE TORRES
TITLE TREASURER
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<PER-SHARE-DIVIDEND> (0.76)
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<SERIES>
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<NAME> PRUDENTIAL NATIONAL MUNICIPALS FUND, INC. (CLASS C)
<S> <C>
<PERIOD-TYPE> YEAR
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</TABLE>
February 24, 1997
To the Board of Directors of
Prudential National Municipal Fund, Inc.
In planning and performing our audit of the financial
statements of Prudential National Municipal Fund, Inc.
(the "Fund") for the year ended December 31, 1996, we
considered its internal control structure, including
procedures for safeguarding securities, in order to
determine our auditing procedures for the purposes of
expressing our opinion on the financial statements and
to comply with the requirements of Form N-SAR, and not
to provide assurance on the internal control structure.
The management of the Fund is responsible for
establishing and maintaining an internal control
structure. In fulfilling this responsibility, estimates
and judgments by management are required to assess the
expected benefits and related costs of internal control
structure policies and procedures. Two of the
objectives of an internal control structure are to
provide management with reasonable, but not absolute,
assurance that assets are appropriately safeguarded
against loss from unauthorized use or disposition and
that transactions are executed in accordance with
management's authorization and recorded properly to
permit preparation of financial statements in conformity
with generally accepted accounting principles.
Because of inherent limitations in any internal control
structure, errors or irregularities may occur and may
not be detected. Also, projection of any evaluation of
the structure to future periods is subject to the risk
that it may become inadequate because of changes in
conditions or that the effectiveness of the design and
operation may deteriorate.
Our consideration of the internal control structure
would not necessarily disclose all matters in the
internal control structure that might be material
weaknesses under standards established by the American
Institute of Certified Public Accountants. A material
weakness is a condition in which the design or operation
of the specific internal control structure elements does
not reduce to a relatively low level the risk that
errors or irregularities in amounts that would be
material in relation to the financial statements being
audited may occur and not be detected within a timely
period by employees in the normal course of performing
their assigned functions. However, we noted no matters
involving the internal control structure, including
procedures for safeguarding securities, that we consider
to be material weaknesses as defined above as of
December 31, 1996.
This report is intended solely for the information and
use of management and the Securities and Exchange
Commission.
PRICE WATERHOUSE LLP
For the fiscal year ended (a) December 31, 1996
File number: 811-2992
SUB-ITEM 77J
Reclassification of Capital Accounts
Prudential National Municipals Fund, Inc. Accounts and
reports for distribution to shareholders in accordance with
Statement of Position 93-2: Determination, Disclosure, and
Financial Statement Presentation of Income, Capital Gain,
and Return of Capital Distributions by Investment Companies.
For the year ended December 31, 1996, the effect of applying
this statement was to increase undistributed net investment
income and increase accumulated realized losses by $172,764.
This was due to the sale of securities purchased with market
discount. Net investment income, net realized gains and net
assets were not affected by this change.
For the fiscal year ended (a) December 31, 1996
File number: 811-2992
SUB-ITEM 77-0
EXHIBITS
Transactions Effected Pursuant to Rule 10f-3
1. Name of Issuer
Met Pier Expo Auth McCormack Place Con Center
2. Date of Purchase
2/28/96
3. Number of Securities Purchased
40,000
4. Dollar Amount of Purchase
$4,295,000
5. Price Per Unit
$107.375
6. Name(s) of Underwriter(s) or Dealer(s)
From whom Purchased
Smith Barney
7. Other Members of the Underwriting Syndicate
EXHIBIT A
UNDERWRITER
Smith Barney Inc.
Artemis Capital Group Inc.
Carmona, Motley & Co., Inc.
Mesirow Financial, Inc.
J.P. Morgan Securities Inc.
M.R. Beal & Company
The Chicago Corporation
Reinoso & Company Inc.
For the fiscal year ended (a) December 31, 1996
File number c 811-2992
SUB-ITEM 77-0
EXHIBITS
Transactions Effected Pursuant to Rule 10f-3
1. Name of Issuer
Puerto Rican Common Hwy & Trans Auth
2. Date of Purchase
3/29/96
3. Number of Securities Purchased
80,000
4. Dollar Amount of Purchase
$7,282,400
5. Price Per Unit
$91.030
6. Name(s) of Underwriter(s) or Dealer(s)
From whom Purchased
Merrill Lynch
7. Other Members of the Underwriting Syndicate
See Exhibit A
EXHIBIT A
UNDERWRITER
Merrill Lynch & Co.
Bear, Stearns & Co. Inc.
Goldman, Sachs & Co.
PaineWebber Incorporated
Citicorp Securities, Inc.
Clark, Melvin Securities Corporation
Lehman Brothers
Morgan Stanley & Co. Incorporated
Oriental Financial Services Corp.
Prudential Securities Incorporated
Smith Barney Inc.
For the fiscal year ended (a) December 31, 1996
File number c 811-2992
SUB-ITEM 77-0
EXHIBITS
Transactions Effected Pursuant to Rule 10f-3
1. Name of Issuer
Metropolitan Trans Auth NY - Transit Rev
2. Date of Purchase
5/10/96
3. Number of Securities Purchased
25,000
4. Dollar Amount of Purchase
$2,464,975
5. Price Per Unit
$98.599
6. Name(s) of Underwriter(s) or Dealer(s)
From whom Purchased
Smith Barney Inc.
7. Other Members of the Underwriting Syndicate
See Exhibit A
EXHIBIT A
UNDERWRITER
Smith Barney Inc.
Dillon Read & Co. Inc.
Bear, Stearns & Co. Inc.
PaineWebber Incorporated
Goldman, Sachs & Co.
J.P. Morgan & Co.
Lehman Brothers
Merrill Lynch & Co.
Morgan Stanley & Co. Incorporated
Prudential Securities Incorporated
Artemis Capital Group, Inc.
Cambridge Partners LLC
Citicorp Securities, Inc.
First Albany Corporation
Greenwich Partners, Inc.
Lebenthal & Co., Inc.
Pryor, McClendon, Counts & Co., Inc.
Samuel A. Ramirez & Co. Inc.
William E. Simon & Sons Municipal Securities
For the period ended (a) 12/31/96
File number (c) 811-2992
SUB-ITEM 77 D
Policies with Respect to Security Investments
On October 30, 1996 the Fund's shareholders approved the
following changes to the Fund's investment policies:
Approval of an amendment of the Fund's fundamental
investment restriction regarding investment in shares of
other investment companies which would allow the Fund to
invest up to 10% of its total assets in shares of other
companies.
Approval of an amendment of the Fund's investment
restriction to permit an increase in the borrowing
capabilities of the Fund which would allow the Fund to borrow
up 33 1/3% of the value of its total assets.
Approval of an amendment of the Fund's investment
restriction to permit the Fund to use futures contracts and
options thereon.
Approval of the elimination of the Fund's investment
restriction relating to the purchase of puts and calls.
Approval of the elimination of the Fund's investment
restriction limiting investment to only those securities
described in the investment objectives and policies section
of the prospectus and statement of additional information.
Approval of an amendment to the Fund's investment
restriction regarding the making of loans.
For the fiscal year ended (a) December 31, 1996
File number: 811-2992
SUB-ITEM 77C
Submission of Matters to a Vote of Security Holders
A Special Meeting of Shareholders was held on October 30, 1996. At
such meeting the shareholders approved the following proposals:
a) Approval of the
election of Edward D. Beach, Eugene C. Dorsey, Delayne D. Gold,
Robert F. Gunia, Harry A. Jacobs, Jr., Donald D. Lennox, Mendel A.
Melzer, Thomas T. Mooney, Thomas H. O'Brien, Richard A. Redeker,
Nancy H. Teeters, and Louis A. Weil as Directors of the Fund each to
hold office until the earlier to occur of (i) the next meeting of
Shareholders at which Directors are elected and until his or her
successor shall have been duly elected and shall have qualified or
(ii) their terms expire in accordance with the Fund's retirement
policy.
b) Approval of an
amendment of the Fund's fundamental investment restriction regarding
investment in shares of other investment companies which would allow
the Fund to invest up to 10% of its total assets in shares of other
companies.
Affirmative
Negative
votes cast votes
cast Abstain
19,832,903
1,251,969
1,321,190
c) Approval of an
amendment of the Fund's investment restriction to permit an increase
in the borrowing capabilities of the Fund which would allow the Fund
to borrow up 33 1/3% of the value of its total assets.
Affirmative
Negative
votes cast votes
cast Abstain
19,066,451
1,978,982
1,360,629
d) Approval of an
amendment of the Fund's investment restriction to permit the Fund to
use futures contracts and options thereon.
Affirmative
Negative
votes cast votes
cast Abstain
18,914,088
2,036,911
1,455,063
e) Approval of the
elimination of the Fund's investment restriction relating to the
purchase of puts and calls.
Affirmative
Negative
votes cast votes
cast Abstain
18,857,883
1,991,110
1,557,069
f) Approval of the
elimination of the Fund's investment restriction limiting investment
to only those securities described in the investment objectives and
policies section of the prospectus and statement of additional
information.
Affirmative
Negative
votes cast votes
cast Abstain
19,652,582
1,404,919
1,348,561
g) Approval of an
amendment to the Fund's investment restriction regarding the making
of loans.
Affirmative
Negative
votes cast votes
cast Abstain
19,140,722
1,832,406
1,432,934
h) Approval of the
selection of independent accountants for the Fund conditioned upon
the right by vote of a majority of such Fund's outstanding voting
shares at any meeting called for the purpose to terminate such
employment forthwith without penalties.
Affirmative
Negative
votes cast votes
cast Abstain
21,052,350 367,446
1,050,374
