<PAGE>
DELAWARE(SM)
INVESTMENTS
-----------
Delaware Tax-Free Money Fund
Money Market
2001 SEMI-ANNUAL REPORT
(Money Market Artwork)
<PAGE>
TABLE OF CONTENTS
-----------------
Letter to Shareholders 1
Financial Statements
Statement of Net Assets 4
Statement of Operations 6
Statement of Changes in
Net Assets 7
Financial Highlights 8
Notes to Financial Statements 9
A TRADITION OF SOUND INVESTING SINCE 1929
-----------------------------------------
A Commitment To Our Investors
Experienced
[ ] Our seasoned investment professionals average 11 years' experience.
[ ] We began managing investments in 1929 and opened our first mutual fund in
1938. Over the past 70 years, we have weathered a full range of economic and
market environments.
Disciplined
[ ] We follow strict investment policies and clear buy/sell guidelines.
[ ] We strive to balance risk and reward in order to provide sound investment
alternatives within any given asset class.
Consistent
[ ] We clearly articulate our investment policies and follow them consistently.
[ ] Our commitment to consistency has earned us the confidence of
discriminating institutional and individual investors to manage more than
$44 billion in assets as of September 30, 2000.
Comprehensive
[ ] We offer more than 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
o International equity (single-state and national funds)
o Balanced o International fixed-income
[ ] 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
December 4, 2000
Recap of Events -- Throughout most of the Fund's six-month period ended October
31, 2000, rising interest rates and inflation worries contributed to extreme
volatility in the U.S. stock markets. Money market funds, however, generally
benefited from the turbulent market conditions, as many investors, concerned
with market volatility, began seeking a higher degree of safety and liquidity of
their principal.
Turmoil first struck the markets in mid-April and May 2000 as investors began to
question some companies' sky-high valuations, especially those companies without
any posted earnings or prospect of earnings in the near future. The Federal
Reserve Board, meanwhile, continued its effort to slow down the U.S. economy by
increasing interest rates, with the last rate hike coming on May 16th.
During periods of market uncertainty, investors, looking to protect their
principal, often seek higher-quality, less volatile investments, such as money
market funds. During the past six months, money market funds began capturing
higher yields compared to U.S. government bonds, which also can draw the
attention of investors for similar reasons. As of October 31, 2000, 30-year U.S.
Treasuries were yielding 5.78%* (Source: Bloomberg), while according to Lipper
Inc., the average money market fund had a 7-day SEC yield of 5.94% for the same
period. Tax-exempt funds, by nature, invest in high-grade, lower yielding money
market securities compared to their taxable counterparts. It is for this reason
that the average 7-day SEC yield of tax-exempt money market funds tracked by
Lipper Inc. was +3.76% as of October 31, 2000, while Delaware Tax-Free Money
Fund returned a 7-day yield of +3.23% for the same period. Unlike longer-term
bond funds, money market funds strive to keep their net asset values at $1 per
share. We believe money market funds offer investors less risk of losing
principal compared to equity investments, especially during periods of market
volatility.
Total Return
For The Period Ended October 31, 2000 Six Months
--------------------------------------------------------------------------------
Delaware Tax-Free Money Fund Class
A Shares (Est. 9/17/81) +1.67%
Consultant Class Shares (Est. 3/15/88)+ +1.67%
--------------------------------------------------------------------------------
U.S. Consumer Price Index +1.48%
--------------------------------------------------------------------------------
Lipper Tax-Exempt Money Market Funds Average (135 funds) +1.85%
--------------------------------------------------------------------------------
All performance shown above assumes reinvestment of dividends. The U.S.
Consumer Price Index is calculated by the U.S. Department of Labor and
represents the change in the price of goods and services for all urban
consumers. Money market funds strive to maintain a net asset value of $1 a
share. However, there is no guarantee this goal will be met. Returns and yields
fluctuate with market conditions. Past performance is not a guarantee of future
results.
* Unlike money market funds, U.S. Treasuries are guaranteed as to the payment of
principal and interest by the U.S. government.
+ Total return for Consultant Class shares for the periods prior to March 15,
1988 is based on the performance of Class A shares.
1
<PAGE>
Delaware Tax-Free Money Fund delivered a total return of +1.67% (Class A shares
with dividends reinvested) for the six-month period ended October 31, 2000. The
Fund's return surpassed the current U.S. rate of inflation as shown on page 1,
and was exempt from federal income taxes.*
We have strategically allocated the Fund's assets at both ends of the relatively
short maturity spectrum of tax-free money market securities rather than across
the full range. The full spectrum ranges from zero to 397 days. However, the
Fund's average maturity is always maintained at 90 days or less. When the yield
curve steepens, we choose investments with six months to one-year maturities to
take advantage of the additional yield available. We balance these longer
positions with very short-term investments -- those with maturities of one day
to seven days. This helps protect principal and maintain liquidity.
Delaware Tax-Free Money Fund continues to seek a high level of current income,
exempt from federal income tax, while preserving principal and maintaining
liquidity. Although Delaware Tax-Free Money Fund is not designed for long-term
investors, it has the potential to be a safer haven than some other investments
and can be a valuable part of your diversified portfolio. For your longer-term
needs, Delaware Investments offers a wide spectrum of both tax-advantaged and
taxable investments, including equity and fixed-income mutual funds.
Market Outlook -- While there is evidence that the economy may be slowing to
what is expected to be a more sustainable rate of growth, the Fed won't say it
is satisfied with its tightening efforts to thwart inflation. However, we
believe the Fed is finished with its tightening cycle and may reduce interest
rates next year. In this environment, we believe that money market funds, such
as Delaware Tax-Free Money Fund, will remain an attractive short-term investment
for investors seeking liquidity or stability of their principal.
As always, we thank you for remaining committed to 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 Family of Funds Delaware Investments Family of Funds
* A portion of the income from tax-exempt funds may be subject to the
alternative minimum tax (AMT).
(Money Market Artwork)
2
<PAGE>
FUND BASICS
-----------
Fund Objective
The Fund seeks to provide a high level of current income exempt from federal
income tax, while preserving principal and maintaining liquidity.
Total Fund Assets
As of October 31, 2000
$25.61 million
Number of Holdings
26
Fund Start Date
September 17, 1981
Your Fund Manager
Michael P. Buckley graduated cum laude from the University of Massachusetts with
a bachelor's degree in Environmental Design and received a master's degree in
Urban Planning from the University of Oregon. Prior to joining Delaware, he was
a Vice President and Municipal Credit Analyst for T. Rowe Price Associates, Inc.
Previously he served as an Assistant Director for the Government Finance
Research Center of the Government Finance Officers Association. He managed the
Center's financial advisory business. Mr. Buckley is a member of the National
Federation of Municipal Analysts and past Treasurer of the Municipal Bond Club
of Baltimore.
Nasdaq Symbol
Class A DTFXX
CUSIP Number
Consultant Class 245911201
<PAGE>
--------------------------------------------------------------------------------
Potential Benefits of Delaware Tax-Free Money Fund
Delaware Tax-Free Money Fund invests primarily in short-term municipal money
market securities issued by states, U.S. territories and possessions, and the
District of Columbia, as well as their political subdivisions and other
entities. The Fund offers several potentially compelling advantages:
o Relative safety - Your investment is managed to preserve principal, which can
be especially beneficial during volatile markets (although it is always
possible to lose principal, even in a money market fund);
o Checkwriting privileges - You have the ability to write checks against your
account;*
o Current income - The Fund strives to offer stability of your principal and
also a yield above the inflation rate;
o Convenient access to other funds in the Delaware Investments Family of Funds -
Investing in other Delaware Investments mutual funds can be as easy as making
a toll-free call.**
Whether you wish to preserve capital for a specific financial goal or balance
the risks of stock funds and bond funds in a long-term portfolio, you may be
well-served by Delaware Tax-Free Money Fund. Investors should be aware that
money market funds are not FDIC insured or bank guaranteed. Although the Fund
seeks to preserve the value of your investment at $1 per share, it is possible
to lose money by investing in the Fund.
We encourage you to consider your Delaware Tax-Free Money Fund investment in the
context of your entire portfolio. Talk to your financial adviser about how
Delaware Investments' wide spectrum of equity and fixed-income mutual funds may
complement your investment in Delaware Tax-Free Money Fund, helping you build
wealth and protect your portfolio from the long-term impact of inflation. Find
out how we can help shape your future today.
* For investors of Class A shares only.
** When exchanging money from Delaware Tax-Free Money Fund to another fund, you
may incur a sales charge.
For a prospectus for any Delaware Investments mutual fund, contact your
financial adviser or call Delaware Investments at 1.800.523.1918. The prospectus
contains complete information, including fees and expenses. Please read it
carefully before you invest. The Fund's exchange offer is subject to termination
and its terms are subject to change.
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Average Annual Total Return
For The Period Ended October 31, 2000 One Year 5 Years 10 Years Lifetime
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Delaware Tax-Free Money Fund
Class A Shares (Est. 9/17/81) +3.09% +2.74% +2.72% +3.87%
Consultant Class Shares (Est. 3/15/88)+ +3.09% +2.74% +2.72% +3.84%
------------------------------------------------------------------------------------------------
U.S. Consumer Price Index +3.36% +2.49% +2.68% +3.32%
------------------------------------------------------------------------------------------------
Lipper Tax-Exempt Money Market Funds Average +3.41% +3.04% +2.99% +4.13%
------------------------------------------------------------------------------------------------
</TABLE>
All performance shown above assumes reinvestment of dividends. The U.S. Consumer
Price Index is calculated by the U.S. Department of Labor and represents the
change in the price of goods and services for all urban consumers. Money Market
funds strive to maintain a net asset value of $1 a share. However, there is no
guarantee this goal will be met. Returns and yields fluctuate with market
conditions. Past performance is not a guarantee of future results.
+ Total return for Consultant Class shares for the periods prior to March 15,
1988 is based on the performance of Class A shares.
3
<PAGE>
Statement of Net Assets
DELAWARE TAX-FREE MONEY FUND
----------------------------
Principal Market
October 31, 2000 (Unaudited) Amount Value
--------------------------------------------------------------------------------
*Variable Rate Demand Notes - 66.48%
Bell County, Texas Health Facilities
Development Revenue (Southern
Healthcare System) 4.50% 12/1/19
(LOC, Bank One Texas) ........................... $1,300,000 $1,300,000
Chester County, Pennsylvania Health & Higher
Education Facilities Authority Revenue
(Simpson Meadows Project)
4.45% 10/1/30 (LOC, Allied Irish Bank) .......... 1,000,000 1,000,000
District of Columbia - George Washington
University - Series B 4.35% 9/15/29
(MBIA) (SPA, Bank of America) ................... 1,300,000 1,300,000
Erie County, Pennsylvania Hospital Authority
Revenue (Hamot Health Foundation)
4.60% 5/15/20 (AMBAC) (SPA,
National City Bank of Pennsylvania) ............. 100,000 100,000
Frederick County, Maryland Retirement
Community Revenue
(Buckingham's Choice Inc.) 4.35% 1/1/27
(LOC, LaSalle National Bank) .................... 1,300,000 1,300,000
Golden Valley, Minnesota Industrial
Development Revenue
(Unicare Homes Project) 4.35% 9/1/14
(LOC, Bank of America) .......................... 700,000 700,000
Illinois Development Finance Authority -
Pollution Control Revenue - Series D
(Illinois Power Co) 4.60% 3/1/17
(LOC, Morgan Guaranty Trust) (AMT) .............. 600,000 600,000
Maryland State Health & Higher
Educational Facilities Authority
(Greater Baltimore Medical Center)
4.35% 7/1/25
(SPA, AllFirst Bank of Maryland) ................ 900,000 900,000
Mesa, Arizona Industrial Development
Authority (Discovery Health) - Series B
4.40% 1/1/29 (MBIA)
(SPA, Chase Manhattan Bank) ..................... 1,200,000 1,200,000
Montgomery County, Pennsylvania Higher
Education & Health Authority
(Philadelphia Geriatric Center) Series B
4.55% 12/1/33 (LOC, Allied Irish Bank) .......... 1,100,000 1,100,000
Montgomery County, Pennsylvania Industrial
Development Authority (Quaker Chemical
Corporation Project) 4.55% 12/1/14
(LOC, ABN Amro Bank) ............................ 1,040,000 1,040,000
Montgomery County, Maryland Housing
Opportunities Community Multifamily
Housing Revenue (Falkland Apartments)
4.45% 8/1/15
(LOC, Connecticut Group Life) ................... 1,300,000 1,300,000
<PAGE>
Principal Market
Amount Value
--------------------------------------------------------------------------------
*Variable Rate Demand Notes (continued)
New Hampshire State Business Finance
Authority Revenue (Foundation for
Seacoast Health) Series A 4.40% 6/1/28
(LOC, Fleet Bank) .............................. $1,130,000 $ 1,130,000
Philadelphia, Pennsylvania Hospitals &
Higher Education Authority -
Temple East Inc. - Series B
4.55% 6/1/14
(LOC, First Union National Bank) ............... 1,300,000 1,300,000
Philadelphia, Pennsylvania Hospitals &
Higher Education Facilities Authority -
Philadelphia School -
Series A-3 4.55% 3/1/19
(LOC, First Union National Bank) ............... 500,000 500,000
Pittsburgh, Pennsylvania Urban
Redevelopment Authority
(Wood Street Commons Project)
4.75% 12/1/16 (AMT)
(LOC, Pittsburgh National Bank) ................ 1,255,000 1,255,000
Sweetwater County, Wyoming Pollution
Control - Pacificorp Project -
Series 88-A 4.30% 1/1/14
(LOC, Union Bank of Switzerland) ............... 1,000,000 1,000,000
----------
Total Variable Rate
Demand Notes ................................... 17,025,000
----------
**Put Bonds - 5.08%
Oklahoma State Water Resources Board
Loan Program Revenue 4.30% 3/1/01
(SPA, Bayerische LandesBank) ................... 1,300,000 1,300,000
----------
Total Put Bonds .................................. 1,300,000
----------
Municipal Bonds - 13.66%
Adams County, Illinois School District
7.00% 2/1/01 ................................... 700,000 704,375
Hudson, Texas Independent School District
7.25% 2/15/01 .................................. 160,000 161,080
+Illinois State Sales Tax Revenue - Series N
6.40% 6/15/03-01 ............................... 600,000 619,079
+Spokane, Washington General Obligation
6.125% 1/1/11-01 ............................... 1,000,000 1,003,008
Washington State Public Power Supply
System (Nuclear Project 2) - Series A
6.30% 7/1/01 (FSA) ............................. 1,000,000 1,012,219
----------
Total Municipal Bonds ............................ 3,499,761
----------
4
<PAGE>
Statement of Net Assets (continued)
Principal Market
Delaware Tax-Free Money Fund Amount Value
--------------------------------------------------------------------------------
Commercial Paper - 13.67%
Chesapeake, Virginia Industrial Development
Authority Revenue (Virginia Electric &
Power Co.) 4.35% 1/2/01
(LOC, Chase Manhattan) .......................... $1,300,000 $ 1,300,000
Delaware County, Pennsylvania Industrial
Development Authority Pollution Control
Revenue (Philadelphia Electric Company)
Series A (FGIC) 4.10% 11/1/00 ................... 1,200,000 1,200,000
District of Columbia - National Academy
of Sciences - Series B (AMBAC)
(SPA, Nationsbank) 4.20% 12/12/00 ............... 1,000,000 1,000,000
----------
Total Commercial Paper ............................. 3,500,000
----------
Total Market Value of Securities -
98.89% (cost $ 25,324,761)++ .................... 25,324,761
Receivables and Other Assets Net
of Liabilities - 1.11% .......................... 284,595
----------
Net Assets Applicable to 25,609,356
Shares Outstanding - 100.00% .................... $25,609,356
----------
Net Asset Value - Tax-Free Money Fund
A Class
($24,477,606 / 24,477,606 Shares) ............... $1.00
-----
Net Asset Value - Tax-Free Money Fund
Consultant Class
($1,131,750 / 1,131,750 Shares) ................. $1.00
-----
-------------------
*The Maturity date shown is the longer of the next interest reset date or the
date in which the principal amount can be recovered through demand.
**Put Bonds - Securities are variable rate and the maturity date shown is the
same as the put date.
+For Pre-Refunded Bonds the stated maturity is followed by the year in which
each bond is pre-refunded.
++Also the cost for federal income tax purposes.
Summary of Abbreviations:
AMBAC - Insured by the American Municipal Bond Assurance Indemnity Corporation
AMT - Alternative Minimum Tax
FGIC - Insured by the Financial Guaranty Insurance Company
FSA - Insured by Financial Security Assurance
LOC - Letter of Credit
MBIA - Insured by the Municipal Bond Insurance Association
SPA - Standby Purchase Agreement
See accompanying notes
5
<PAGE>
Statement of Operations
Six Months Ended October 31, 2000 (Unaudited) Delaware Tax-Free Money Fund
--------------------------------------------------------------------------------
Investment Income:
Interest .................................................. $578,271
--------
Expenses:
Management fees ........................................... $65,010
Dividend disbursing and transfer agent fees and expenses .. 19,624
Registration fees ......................................... 14,129
Reports and statements to shareholders .................... 13,146
Professional fees ......................................... 9,556
Accounting and administration ............................. 5,390
Trustees' fees ............................................ 3,800
Custodian fees ............................................ 1,274
Taxes (other than taxes on income) ........................ 55
Other ..................................................... 3,709
-------
135,693
Less expenses paid indirectly ............................. (1,084)
--------
Total expenses ............................................ 134,609
Net Investment Income ..................................... 443,662
--------
Net Increase in Net Assets Resulting from Operations ...... $443,662
========
See accompanying notes
6
<PAGE>
Statement of Changes in Net Assets
Delaware Tax-Free Money Fund
--------------------------------------------------------------------------------
Six Months Year
Ended Ended
10/31/00 4/30/00
(Unaudited)
Increase in Net Assets from Operations:
Net investment income ............................. $ 443,662 $ 794,908
------------------------
Dividends to Shareholders from:
Net investment income:
A Class ........................................ (425,461) (737,851)
Consultant Class ............................... (18,201) (57,057)
------------------------
(443,662) (794,908)
------------------------
Capital Share Transactions:
Proceeds from shares sold:
A Class ........................................ 11,370,455 32,721,208
Consultant Class ............................... 918,816 7,546,096
Net asset value of shares issued upon reinvestment
of dividends from net investment income:
A Class ........................................ 404,169 698,214
Consultant Class ............................... 18,083 55,939
------------------------
12,711,523 41,021,457
------------------------
Cost of shares repurchased:
A Class ........................................ (14,038,926) (34,813,638)
Consultant Class ............................... (991,272) (7,788,449)
-------------------------
(15,030,198) (42,602,087)
-------------------------
Decrease in net assets derived from capital share
transactions ...................................... (2,318,675) (1,580,630)
-------------------------
Net Decrease In Net Assets ........................ (2,318,675) (1,580,630)
Net Assets:
Beginning of period ............................... 27,928,031 29,508,661
-------------------------
End of period ..................................... $25,609,356 $27,928,031
=========================
See accompanying notes
7
<PAGE>
Financial Highlights
Selected data for each share of the Fund outstanding
throughout each period were as follows:
<TABLE>
<CAPTION>
Delaware Tax-Free Money Fund A Class
------------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Ended
10/31/00 4/30/00 4/30/99 4/30/98 4/30/97 4/30/96
(Unaudited)(1)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
Income from investment operations:
Net investment income 0.017 0.026 0.024 0.028 0.028 0.029
---------------------------------------------------------------------
Total from investment operations 0.017 0.026 0.024 0.028 0.028 0.029
---------------------------------------------------------------------
Less dividends:
Dividends from net investment income (0.017) (0.026) (0.024) (0.028) (0.028) (0.029)
---------------------------------------------------------------------
Total dividends (0.017) (0.026) (0.024) (0.028) (0.028) (0.029)
---------------------------------------------------------------------
Net asset value, end of period $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
---------------------------------------------------------------------
Total return 1.67% 2.61% 2.40% 2.78% 2.79% 2.97%
Ratios and supplemental data:
Net assets, end of period (000 omitted) $24,478 $26,742 $28,136 $30,264 $32,659 $35,479
Ratio of expenses to average net assets 0.99% 0.99% 1.02% 0.91% 0.82% 0.90%
Ratio of net investment income to average net assets 3.28% 2.59% 2.37% 2.75% 2.75% 2.95%
</TABLE>
<TABLE>
<CAPTION>
Delaware Tax-Free Money Fund Consultant Class
------------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Ended
10/31/00 4/30/00 4/30/99 4/30/98 4/30/97 4/30/96
(Unaudited)(1)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
Income from investment operations:
Net investment income 0.017 0.026 0.024 0.028 0.028 0.029
---------------------------------------------------------------------
Total from investment operations 0.017 0.026 0.024 0.028 0.028 0.029
---------------------------------------------------------------------
Less dividends:
Dividends from net investment income (0.017) (0.026) (0.024) (0.028) (0.028) (0.029)
---------------------------------------------------------------------
Total dividends (0.017) (0.026) (0.024) (0.028) (0.028) (0.029)
---------------------------------------------------------------------
Net asset value, end of period $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
---------------------------------------------------------------------
Total return 1.67% 2.61% 2.40% 2.78% 2.79% 2.97%
Ratios and supplemental data:
Net assets, end of period (000 omitted) $1,132 $1,186 $1,373 $4,573 $1,529 $1,452
Ratio of expenses to average net assets 0.99% 0.99% 1.02% 0.91% 0.82% 0.90%
Ratio of net investment income to average net assets 3.28% 2.59% 2.37% 2.75% 2.75% 2.95%
</TABLE>
------------------
(1) Ratios have been annualized and total return has not been annualized.
See accompanying notes
8
<PAGE>
Notes to Financial Statements
October 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Delaware Group Tax-Free Money Fund (the "Fund") is registered as a diversified
open-end investment company under the Investment Company Act of 1940, as
amended. The Fund is organized as a Delaware business trust and offers two
classes of shares, the Delaware Tax-Free Money Fund Class A and the Delaware
Tax-Free Money Consultant Class. Neither class has a sales charge. The Fund's
objective is to seek a higher level of current income, exempt from federal
income tax, while preserving principal and maintaining liquidity. Though there
is no guarantee that this goal will be met, the Fund strives to maintain a
stable net asset value of $1.00 per share.
1. Significant Accounting Policies
The following accounting policies are in accordance with accounting principles
generally accepted in the United States and are consistently followed by the
Fund:
Security Valuation - Securities are valued at amortized cost which approximates
market value.
Federal Income Taxes - The Fund intends to continue to qualify as a regulated
investment company and make the requisite distributions to shareholders.
Accordingly, no provision for federal income taxes has been made in the
financial statements.
Class Accounting - Investment income and common expenses are allocated to the
various classes of the Fund on the basis of daily net assets of each class.
Distribution expenses relating to a specific class are charged directly to that
class.
Use of Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States 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. Discounts and premiums on
securities purchased are amortized to interest income over the lives of the
respective securities. The Fund declares dividends daily from net investment
income and pays such dividends monthly. Realized gains, if any, will be
distributed annually.
Certain expenses of the Fund are paid through commission arrangements with
brokers. These transactions are done subject to best execution. The amount of
these expenses was approximately $310 for the six-month period ended October 31,
2000. In addition, the Fund receives earnings credits from its custodian when
positive cash balances are maintained, which are used to offset custody fees.
These credits were $774 for the six-month period ended October 31, 2000. The
expenses paid under the above arrangements are included in their respective
expense caption on the Statement of Operations with the corresponding expense
offset shown as "Expenses paid indirectly."
<PAGE>
2. Investment Management and Other Transactions with Affiliates
In accordance with the terms of the Investment Management Agreement, the Fund
pays Delaware Management Company "(DMC)", the investment manager of the Fund, an
annual fee which is calculated daily at the following rates: 0.45% on the first
$500 million of average daily net assets, 0.40% on the next $500 million, 0.35%
on the next $1.5 billion and 0.30% on the average daily net assets in excess of
$2.5 billion. On October 31, 2000, the Fund had a liability for investment
management fees and other expenses payable to DMC of $2,536.
The Fund has engaged Delaware Service Company, Inc. ("DSC"), an affiliate of
DMC, to provide dividend disbursing, transfer agent, accounting and
administrative services. The Fund pays DSC a monthly fee based on the number of
shareholder accounts, shareholder transactions and average net assets, subject
to certain minimums. On October 31, 2000, the Fund had a liability for such fees
and other expenses payable to DSC of $6,437.
Pursuant to the Distribution Agreement, the Consultant Class may pay Delaware
Distributors, L.P. (DDLP), the Distributor and an affiliate of DMC, an annual
fee not to exceed 0.30% of the average daily net assets of the Fund. Effective
June 1, 1990, 12b-1 Plan payments to DDLP were suspended but may be reinstated
in the future.
3. Capital Shares
Transactions in capital shares were as follows:
Six Months
Ended Year Ended
10/31/00 4/30/00
(Unaudited)
Shares sold:
A Class 11,370,455 32,721,208
Consultant Class 918,816 7,546,096
Shares issued upon reinvestment
of dividends from net investment income:
A Class 404,169 698,214
Consultant Class 18,083 55,939
---------- ----------
12,711,523 41,021,457
---------- ----------
Shares repurchased:
A Class (14,038,926) (34,813,638)
Consultant Class (991,272) (7,788,449)
---------- ----------
(15,030,198) (42,602,087)
---------- ----------
Net decrease (2,318,675) (1,580,630)
---------- ----------
4. Market and Credit Risk
The Fund concentrates its investments in securities issued by municipalities.
The value of these investments may be adversely affected by legislation within
the states, regional or local economic conditions, and differing levels of
supply and demand for municipal bonds. Many municipalities insure repayment of
their obligations. Although bond insurance reduces the risk of loss due to
default by an issuer, such bonds remain subject to the risk that market values
may fluctuate for other reasons and there is no assurance that the insurance
company will meet its obligations.
9
<PAGE>
DELAWARE
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 Tax-Free Money Fund
shareholders, but it may be used with prospective investors when preceded or
accompanied by a current prospectus for Delaware Tax-Free Money 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 the 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 the Fund will fluctuate so that shares, when redeemed, may be
worth more or less than their original cost. Money market funds strive to
maintain a net asset value of $1 a share. However, there is no guarantee this
goal will be met. Yields fluctuate with market conditions. The Fund is neither
insured nor guaranteed by the U.S. government.
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BOARD OF TRUSTEES Charles E. Peck Investment Manager
Retired Delaware Management Company
Wayne A. Stork Fredericksburg, VA Philadelphia, PA
Chairman
Delaware Investments Family of Funds Janet L. Yeomans International Affiliate
Philadelphia, PA Vice President and Treasurer Delaware International Advisers Ltd.
3M Corporation London, England
Walter P. Babich St. Paul, MN
Board Chairman National Distributor
Citadel Constructors, Inc. Delaware Distributors, L.P.
King of Prussia, PA AFFILIATED OFFICERS Philadelphia, PA
David K. Downes Charles E. Haldeman, Jr. Shareholder Servicing, Dividend
President and Chief Executive Officer President and Chief Executive Officer Disbursing and Transfer Agent
Delaware Investments Family of Funds Delaware Management Holdings, Inc. Delaware Service Company, Inc.
Philadelphia, PA Philadelphia, PA Philadelphia, PA
John H. Durham Richard J. Flannery 2005 Market Street
Private Investor Executive Vice President Philadelphia, PA 19103-3682
Horsham, PA and General Counsel
Delaware Investments Family of Funds
Anthony D. Knerr Philadelphia, PA
Consultant, Anthony Knerr & Associates
New York, NY Bruce D. Barton
President and Chief Executive Officer
Ann R. Leven Delaware Distributors, L.P.
Former Treasurer, National Gallery of Art Philadelphia, PA
Washington, DC
Thomas F. Madison
President and Chief Executive Officer
MLM Partners, Inc.
Minneapolis, MN
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(4091) Printed in the USA
SA-006 [10/00] PP 12/00 (J6559)
