FIDELITY DESTINY PORTFOLIOS, N-30D, 1996-11-15

FIDELITY DESTINY PORTFOLIOS
N-30D, 1996-11-15

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FIDELITY
DESTINY
PORTFOLIOS:
DESTINY I
DESTINY II
Annual Report
Annual Report
September 30, 1996
September 30, 1995
Printed on recycled paper
6i

FIDELITY
DESTINY
PORTFOLIOS:
DESTINY I
DESTINY II
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, PRESIDENT
J. Gary Burkhead, SENIOR VICE PRESIDENT
George A. Vanderheiden, VICE PRESIDENT
Arthur S. Loring, SECRETARY
Kenneth A. Rathgeber, TREASURER
Robert H. Morrison, MANAGER, SECURITY TRANSACTIONS
John H. Costello, ASSISTANT TREASURER
Leonard M. Rush, ASSISTANT TREASURER
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox
Phyllis Burke Davis
Richard J. Flynn
Edward C. Johnson 3d
E. Bradley Jones
Donald J. Kirk
Edward H. Malone
Marvin L. Mann
Gerald C. McDonough
Thomas R. Williams
ADVISORY BOARD
William O. McCoy
GENERAL DISTRIBUTION AGENT
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
State Street Bank and Trust Company
Boston, MA
DES-ANN-1196
20964
6i
CONTENTS

<TABLE>
<CAPTION>
<S> <C> <C>
FUND TALK A-3 The manager's review of the funds' performance,
strategy and outlook.

PERFORMANCE A-6 How the funds have done over time.

INVESTMENT CHANGES A-8 A summary of major shifts in the funds'
investments
over the past six months.

DESTINY I

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

FINANCIAL STATEMENTS A-14 Statements of assets and liabilities, operations,
and
changes in net assets, as well as financial
highlights.

DESTINY II

INVESTMENTS A-1 A complete list of the fund's investments
8 with their market values.

FINANCIAL STATEMENTS A-23 Statements of assets and liabilities, operations,
and
changes in net assets, as well as financial
highlights.

NOTES A-27 Notes to the financial statements.

REPORT OF INDEPENDENT ACCOUNTANTS A-3 The auditors' opinion.
0

DISTRIBUTIONS A-3
1

</TABLE>

THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE
FUNDS. THIS REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE
INVESTORS IN THE FUNDS UNLESS PRECEDED OR ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY BANK OR DEPOSITORY
INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, FEDERAL RESERVE BOARD OR
ANY OTHER AGENCY, AND
ARE SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL
AMOUNT INVESTED.
NEITHER THE FUNDS NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FUND TALK: THE MANAGER'S OVERVIEW

MARKET RECAP
The U.S. stock market rebounded from a brief
mid-summer downturn, posting strong gains for the
year ended September 30, 1996. The Standard &
Poor's 500 Index returned 20.33% during the period
- - above its long-term average of about 12%. The
stock market spent much of the past year breaking
price and trading volume records as strong corporate
earnings reports, large cash inflows into mutual funds
and widespread optimism propelled share prices
higher. Further, the period was peppered with several
high-profile merger announcements, especially in the
media, telecommunications and technology sectors.
In March, better-than-expected employment figures
spooked the bond market, pushing long-term interest
rates over 7%. While continued confusion over the
direction of interest rates created a volatile backdrop
in the summer months, stocks rallied late in the period
when the Federal Reserve Board left short-term
interest rates unchanged and it appeared inflation
would not be an issue for the remainder of 1996.
Smaller-company stocks posted strong gains at the
beginning of 1996, but trended downward in the
spring and summer because they tend to be more
affected by the higher borrowing costs brought on by
higher rates. When interest rate fears subsided
toward the end of the period, these stocks again
posted strong price gains. The broad market posted
more consistent gains in late summer, while
larger-company stocks took the lead in the spring and
climbed to new highs in September.

An Interview with
George A.
Vanderheiden,
Portfolio Manager of
Fidelity Destiny
Portfolios
Q. HOW DID THE FUNDS PERFORM, GEORGE?
A. Over the past year, Destiny I and II returned 16.04% and 15.43%,
respectively. The growth funds average tracked by Lipper Analytical
Services, Inc., returned 15.89%, and the Standard & Poor's 500 Index
returned 20.33%.
Q. WHAT MADE THE FUNDS KEEP PACE WITH THEIR PEERS, BUT TRAIL THE INDEX?
A. I am disappointed that the Destiny Funds didn't do better during the
past year. The problem wasn't so much with the stock selection, but with
the portion of the funds invested in bonds. Over the past year the S&P 500
was up 20.33%, while the total return on long-term Treasury bonds was 2.4%.
The Treasury bonds were purchased as a hedge against the slowing corporate
earnings pattern that I saw occurring. In the past, the bond market has
outperformed the stock market when corporate earnings have slowed. Instead,
the economy strengthened in the first half of the year, inflation
expectations went up and bond prices went down.
Q. WHAT IS YOUR THINKING ON BONDS NOW?
A. I believe earnings will probably be down next year. And since the stock
market is already selling at historically high valuations, I think bonds
offer good value in a slowing economy. Current long bond yields of 6.8% are
over three times the current level of stock market dividend yields of 2.1%.
Looking at stock market history, the only other time I have found this
ratio to be higher in recent times was prior to the October 1987 drop in
stock prices, when the bond yield was 9% and the stock dividend yield was
2.7%.
Q. IF YOU CONSIDER STOCK MARKET VALUATIONS HIGH, WHAT STRATEGIES ARE YOU
USING TO MINIMIZE RISK IN YOUR EQUITY SELECTIONS?
A. I am pursuing two strategies - growth at a reasonable price and vulture
investing. I have always felt the most prudent way to buy growth stocks is
to get as much total return, meaning stock appreciation plus dividend
yield, for as small a price as possible. A common way to determine the
value of a growth stock is to look at its price-to-earnings ratio, or how
many times earnings the market thinks that stock is worth. To give an
example, both Philip Morris and Coca-Cola are growth stocks that have grown
their earnings-per-share at an 18% growth rate over the past 10 years. But
I bought Philip Morris and not Coca-Cola during the period because I
thought Philip Morris was a growth stock at a reasonable price, while I
didn't think Coca-Cola was reasonably priced. Let me explain by pointing
out what the market was paying for each stock's total return at the end of
the period covered by this report. Coke was at about $51 and the consensus
estimate for its earnings-per-share was $1.40 for 1996, thereby producing a
price-to-earnings ratio of 36 times. Philip Morris was at approximately $90
with a consensus earnings-per-share estimate of $7.70 for 1996, thereby
producing a price-to-earnings ratio of 12 times. Litigation concerns were
obviously dragging down Philip Morris' ratio, but litigation worries have
been around for 15 years and this was the biggest gap between Philip
Morris' price-to-earnings ratio and Coke's. This is why I invested in
Philip Morris and not Coca-Cola.
Q. WHAT DO YOU MEAN BY VULTURE INVESTING?
A. Occasionally bad things happen to good stocks. Quality growth stocks may
stumble temporarily due to new product introductions, too much inventory or
manufacturing problems that cause a disappointment in quarterly earnings.
If these are truly temporary occurrences, then these are wonderful
opportunities to buy a stock when its price is down. In January 1996, Intel
stock had dropped to $50 from $75 months before as concerns developed over
their receivables with Packard Bell. At that time, I took advantage of the
concerns and added significantly to the position. Nine months later the
stock had doubled, and I sold some shares to take advantage of the
situation. Buying a stock with good long-term fundamentals after it has
suffered a big decline not only mitigates risk but enhances the ultimate
upside gain. The only drawback is that often you must be patient.
Q. WHAT HAVE BEEN THE SUCCESSES OVER THE PAST YEAR?
A. Among the successes, the big sector weighting in financial stocks
helped, particularly the holdings in Fannie Mae - the Federal National
Mortgage Association - Freddie Mac - the Federal Home Loan Mortgage
Corporation - and Allstate. Also, certain stocks within the technology
sector contributed strong returns, including Compaq Computer, Intel and
IBM. Finally, the energy sector was a good contributor with such stocks as
Royal Dutch, British Petroleum, Louisiana Land, and Tosco providing strong
performance.
Q. AND THE DISAPPOINTMENTS?
A. My biggest disappointment was that, during the period, I didn't have a
heavier representation in quality blue chips such as General Electric and
Microsoft, and not investing in other blue chips that performed well over
the period, such as Coca-Cola, Merck and Johnson & Johnson. I was put off
by the valuations of these stocks being at the upper end of the historical
range, but to my surprise they went to even higher valuations. Other
disappointments were owning the regional Bell operating companies, or Baby
Bells, which underperformed the market due to deregulation concerns.
Finally, most foreign markets underperformed the U.S. market over the past
year and some investments there, including Vodafone, underperformed.
Q. WHAT'S YOUR OUTLOOK?
A. The bull market that started in October 1990 is moving into its seventh
year and penetrated the 6000 level in October. My feeling is to be cautious
short-term and optimistic long-term. I don't know if the next 1000 points
will be up or down, but I do feel that the next 5000 points will be up. My
caution near-term is due to the slowing earnings environment, the high
levels of optimism and bullishness, and the post-presidential election year
that historically has been a difficult period for stocks. Factors that feed
my longer-term optimism are the benign inflation environment, the growing
spread of capitalism throughout the world, and the aging of the baby
boomers, which has positive implications for savings and the financial
markets. In spite of being cautious near-term, I continue to aggressively
use all the resources of Fidelity to identify and select the best ideas for
the Destiny Funds.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.

FUND FACTS
GOAL: seeks capital growth
START DATE: Destiny I: July 10, 1970; Destiny
II: December 30, 1985
SIZE: As of September 30, 1996, Destiny I:
more than $4.5 billion; Destiny II: more than
$2.5 billion
MANAGER: George Vanderheiden, Destiny I
since 1980, Destiny II since 1985; joined
Fidelity in 1971
(checkmark)
GEORGE VANDERHEIDEN ON THE FUND'S
TECHNOLOGY INVESTMENTS:
"By late June, the funds' investments in
technology totaled a little over 8% of the
combined portfolios, historically a low
weighting for the funds. However, the sharp
correction in July, together with signs of
improvement in the industry, led me to raise
technology investments to over 12% by
September 30.
"Two groups of technology stocks were
attractive to me. First, I purchased
semiconductor stocks - such as Micron
Technology, Texas Instruments and National
Semiconductor - because most of them had
suffered almost a 50% decline in price over
the past year. Furthermore, it appeared that
fundamentals, or business prospects, would
be improving for the industry. The stocks had
seen sharp price drops previously because
orders had turned down for the industry.
Customers had over-inventoried
semiconductors in 1995 and spent some time
liquidating these inventories. By this summer,
the inventory phase was running itself out, and
it appeared that orders would start increasing
in the fall. Consequently, by late summer the
stocks started up.
"The second group I purchased was the
semiconductor capital equipment stocks.
These stocks declined by 60% to 70% from
their peaks a year ago to their lows this
summer. These companies - such as Applied
Materials, Teradyne and Novellus Systems -
make the equipment that enables
semiconductor manufacturers to make the
chips. The semiconductor industry brought on
too much capacity in 1995 and early 1996
and, consequently, began to cut back on orders
for equipment. It appears this order decline
will last into 1997, but the capital equipment
stocks should anticipate the upturn by nine to
12 months, as they did the downturn, and turn
up sooner."
FIDELITY DESTINY PORTFOLIOS: DESTINY I

PERFORMANCE: THE BOTTOM LINE

$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19960930 19961011 155209 S00000000000001
Destiny I SP Standard & Poor 500
00006 SP001
1986/09/30 10000.00 10000.00
1986/10/31 10487.80 10577.00
1986/11/30 10656.01 10834.02
1986/12/31 10454.16 10557.75
1987/01/31 11841.88 11979.88
1987/02/28 12632.46 12453.09
1987/03/31 12775.44 12812.98
1987/04/30 12767.03 12698.95
1987/05/31 12859.55 12809.43
1987/06/30 13397.81 13456.30
1987/07/31 14205.21 14138.54
1987/08/31 14959.30 14665.91
1987/09/30 14605.24 14344.72
1987/10/31 10897.38 11254.87
1987/11/30 9963.03 10327.47
1987/12/31 11070.61 11113.39
1988/01/31 11473.95 11581.26
1988/02/29 12280.63 12120.95
1988/03/31 11994.05 11746.41
1988/04/30 12259.40 11876.80
1988/05/31 12312.47 11980.13
1988/06/30 13204.07 12530.01
1988/07/31 13076.69 12482.40
1988/08/31 12516.83 12058.00
1988/09/30 13007.90 12571.67
1988/10/31 13182.50 12921.16
1988/11/30 12876.95 12736.39
1988/12/31 13226.70 12959.27
1989/01/31 14347.42 13907.89
1989/02/28 14025.63 13561.59
1989/03/31 14347.42 13877.57
1989/04/30 15002.10 14597.82
1989/05/31 15923.09 15189.03
1989/06/30 15568.01 15102.45
1989/07/31 16611.05 16466.20
1989/08/31 17060.73 16788.94
1989/09/30 17199.72 16720.11
1989/10/31 16620.61 16332.20
1989/11/30 16701.68 16665.38
1989/12/31 16604.94 17065.35
1990/01/31 15611.58 15920.26
1990/02/28 15942.70 16125.63
1990/03/31 16286.08 16552.96
1990/04/30 15758.75 16139.14
1990/05/31 17500.18 17712.70
1990/06/30 17463.39 17592.26
1990/07/31 16972.84 17535.96
1990/08/31 15234.78 15950.71
1990/09/30 14208.00 15173.91
1990/10/31 14105.33 15108.66
1990/11/30 15311.79 16084.68
1990/12/31 16081.87 16533.45
1991/01/31 17814.55 17254.30
1991/02/28 19046.68 18487.99
1991/03/31 19495.90 18935.40
1991/04/30 19739.76 18980.84
1991/05/31 20920.55 19800.81
1991/06/30 19547.24 18893.94
1991/07/31 20843.54 19774.39
1991/08/31 21550.70 20243.05
1991/09/30 21187.26 19904.99
1991/10/31 21093.03 20171.71
1991/11/30 19800.80 19358.79
1991/12/31 22341.09 21573.44
1992/01/31 22582.54 21172.17
1992/02/29 23406.30 21447.41
1992/03/31 22880.80 21029.19
1992/04/30 23704.56 21647.45
1992/05/31 23903.40 21753.52
1992/06/30 23491.52 21429.39
1992/07/31 24443.11 22305.85
1992/08/31 23795.08 21848.58
1992/09/30 24034.79 22106.40
1992/10/31 23890.96 22183.77
1992/11/30 25041.56 22940.24
1992/12/31 25726.28 23222.40
1993/01/31 26520.72 23417.47
1993/02/28 26605.23 23735.95
1993/03/31 27923.66 24236.77
1993/04/30 28092.69 23650.24
1993/05/31 28887.13 24284.07
1993/06/30 29106.87 24354.50
1993/07/31 29478.74 24257.08
1993/08/31 30494.29 25176.42
1993/09/30 30494.29 24982.56
1993/10/31 31615.67 25499.70
1993/11/30 31416.72 25257.45
1993/12/31 32522.91 25563.07
1994/01/31 34593.08 26432.21
1994/02/28 34070.70 25715.90
1994/03/31 32464.87 24594.69
1994/04/30 33432.24 24909.50
1994/05/31 33683.76 25318.02
1994/06/30 32735.74 24697.72
1994/07/31 33819.19 25507.81
1994/08/31 35347.63 26553.63
1994/09/30 34244.83 25903.07
1994/10/31 34999.38 26485.88
1994/11/30 33799.84 25521.27
1994/12/31 33963.46 25899.75
1995/01/31 34288.92 26571.33
1995/02/28 35451.25 27606.81
1995/03/31 36450.86 28421.49
1995/04/30 37822.42 29258.50
1995/05/31 39589.17 30427.97
1995/06/30 40937.48 31134.81
1995/07/31 42402.02 32167.24
1995/08/31 42773.97 32247.98
1995/09/30 43657.35 33608.84
1995/10/31 44006.05 33488.86
1995/11/30 45261.37 34959.02
1995/12/31 46513.04 35632.33
1996/01/31 47381.75 36845.26
1996/02/29 47208.01 37186.81
1996/03/31 47083.91 37544.92
1996/04/30 47977.43 38098.33
1996/05/31 49019.88 39080.89
1996/06/30 49367.36 39229.79
1996/07/31 47853.33 37496.61
1996/08/31 48250.45 38287.42
1996/09/30 50658.01 40442.23
IMATRL PRASUN SHR__CHT 19960930 19961011 155212 R00000000000123

Destiny I
S&P 500
$50,658
$40,442
$
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was invested
in Destiny I Fund on September 30, 1986. As the chart shows, by September
30, 1996, the value of the investment would have grown to $50,658 - a
406.58% increase on the initial investment. For comparison look at how a
$10,000 investment in the S&P 500 (with dividends reinvested) did over the
same period. It would have grown to $40,442 - a 304.42% increase.
CUMULATIVE TOTAL RETURNS
PERIOD ENDED SEPTEMBER 30, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Destiny I Fund 16.04% 139.10% 406.58%

S&P 500(registered trademark) 20.33% 103.18% 304.42%

AVERAGE ANNUAL TOTAL RETURNS
PERIOD ENDED SEPTEMBER 30, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Destiny I Fund 16.04% 19.05% 17.62%

$50/month 15-Year Plan -44.54% 14.75% 16.08%

The charts above show Destiny I Fund's total returns which include changes
in share price and reinvestment of dividends and capital gains. The fund's
cumulative total returns and average annual total returns do not include
the effects of the separate sales charges and custodian fees assessed
through Fidelity Systematic Investment Plans (the Plans); the figures
provided for a "$50/month 15 year plan" illustrate the fund's performance
adjusted to reflect fees and sales charges assessed by the Plans. The
illustration assumes an initial investment at the beginning of each period
shown. Because the illustrations assume lump sum investments, they do not
reflect what investors would have earned had they made regular monthly
investments over the period. As shares of the funds may be acquired only
through the Plans, investors should consult the Plans' prospectus for more
complete information on the impact of the separate charges and fees
applicable to each Plan. The rate (%) of deductions decreases
proportionately as Plan sizes increase. Figures for the S&P 500, an
unmanaged index of common stock prices, include reinvestment of dividends.
The S&P 500 figure for one year is published by S&P. The S&P 500 is a
registered trademark of Standard & Poor's Corporation.
All performance numbers are historical; the fund's share price and return
will vary and you may have a gain or loss when you sell your shares.
The Destiny Funds seek capital growth primarily from equity securities.
FIDELITY DESTINY PORTFOLIOS: DESTINY II

PERFORMANCE: THE BOTTOM LINE

$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19960930 19961011 155614 S00000000000001
Destiny II SP Standard & Poor 500
00306 SP001
1986/09/30 10000.00 10000.00
1986/10/31 10602.17 10577.00
1986/11/30 10811.91 10834.02
1986/12/31 10778.08 10557.75
1987/01/31 12090.66 11979.88
1987/02/28 13369.42 12453.09
1987/03/31 13497.97 12812.98
1987/04/30 13518.27 12698.95
1987/05/31 13612.99 12809.43
1987/06/30 14194.86 13456.30
1987/07/31 15020.30 14138.54
1987/08/31 15792.45 14665.91
1987/09/30 15350.90 14344.72
1987/10/31 11207.78 11254.87
1987/11/30 10287.90 10327.47
1987/12/31 11538.90 11113.39
1988/01/31 11880.34 11581.26
1988/02/29 12927.92 12120.95
1988/03/31 12850.32 11746.41
1988/04/30 13183.99 11876.80
1988/05/31 13052.08 11980.13
1988/06/30 14161.73 12530.01
1988/07/31 14084.14 12482.40
1988/08/31 13587.51 12058.00
1988/09/30 14138.46 12571.67
1988/10/31 14169.49 12921.16
1988/11/30 13727.18 12736.39
1988/12/31 14172.01 12959.27
1989/01/31 15357.68 13907.89
1989/02/28 15053.25 13561.59
1989/03/31 15245.52 13877.57
1989/04/30 16126.77 14597.82
1989/05/31 17144.21 15189.03
1989/06/30 16535.35 15102.45
1989/07/31 17528.75 16466.20
1989/08/31 18088.84 16788.94
1989/09/30 18190.47 16720.11
1989/10/31 17597.67 16332.20
1989/11/30 17767.04 16665.38
1989/12/31 17915.37 17065.35
1990/01/31 16750.29 15920.26
1990/02/28 17063.96 16125.63
1990/03/31 17485.19 16552.96
1990/04/30 16947.46 16139.14
1990/05/31 18883.28 17712.70
1990/06/30 18919.13 17592.26
1990/07/31 18246.97 17535.96
1990/08/31 16272.70 15950.71
1990/09/30 15058.19 15173.91
1990/10/31 14948.61 15108.66
1990/11/30 16482.73 16084.68
1990/12/31 17463.46 16533.45
1991/01/31 19424.30 17254.30
1991/02/28 20943.26 18487.99
1991/03/31 21606.08 18935.40
1991/04/30 22029.55 18980.84
1991/05/31 23281.54 19800.81
1991/06/30 21633.70 18893.94
1991/07/31 23152.66 19774.39
1991/08/31 24062.43 20243.05
1991/09/30 23651.53 19904.99
1991/10/31 23551.32 20171.71
1991/11/30 22028.00 19358.79
1991/12/31 24697.57 21573.44
1992/01/31 25173.34 21172.17
1992/02/29 26230.60 21447.41
1992/03/31 25427.08 21029.19
1992/04/30 26283.46 21647.45
1992/05/31 26685.22 21753.52
1992/06/30 26093.15 21429.39
1992/07/31 27139.84 22305.85
1992/08/31 26352.45 21848.58
1992/09/30 26433.78 22106.40
1992/10/31 26422.16 22183.77
1992/11/30 27746.76 22940.24
1992/12/31 28521.61 23222.40
1993/01/31 29506.37 23417.47
1993/02/28 29579.32 23735.95
1993/03/31 30819.38 24236.77
1993/04/30 30819.38 23650.24
1993/05/31 31889.25 24284.07
1993/06/30 32168.87 24354.50
1993/07/31 32472.81 24257.08
1993/08/31 33665.31 25176.42
1993/09/30 33753.87 24982.56
1993/10/31 35019.01 25499.70
1993/11/30 34879.84 25257.45
1993/12/31 36167.16 25563.07
1994/01/31 38445.09 26432.21
1994/02/28 37978.85 25715.90
1994/03/31 36127.20 24594.69
1994/04/30 37206.22 24909.50
1994/05/31 37472.64 25318.02
1994/06/30 36366.98 24697.72
1994/07/31 37552.57 25507.81
1994/08/31 39271.01 26553.63
1994/09/30 38032.13 25903.07
1994/10/31 38858.05 26485.88
1994/11/30 37619.18 25521.27
1994/12/31 37786.64 25899.75
1995/01/31 38182.47 26571.33
1995/02/28 39430.86 27606.81
1995/03/31 40496.56 28421.49
1995/04/30 41973.32 29258.50
1995/05/31 43861.13 30427.97
1995/06/30 45337.88 31134.81
1995/07/31 46890.76 32167.24
1995/08/31 47301.81 32247.98
1995/09/30 48291.39 33608.84
1995/10/31 48687.22 33488.86
1995/11/30 50011.73 34959.02
1995/12/31 51374.86 35632.33
1996/01/31 52335.14 36845.26
1996/02/29 52111.08 37186.81
1996/03/31 51935.03 37544.92
1996/04/30 52895.30 38098.33
1996/05/31 53999.62 39080.89
1996/06/30 54351.73 39229.79
1996/07/31 52767.27 37496.61
1996/08/31 53199.39 38287.42
1996/09/30 55744.13 40442.23
IMATRL PRASUN SHR__CHT 19960930 19961011 155617 R00000000000123

Destiny II
S&P 500
$55,744
$40,442
$
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was invested
in Destiny II Fund on September 30, 1986. As the chart shows, by September
30, 1996, the value of your investment would have grown to $55,744 - a
457.44% increase on your initial investment. For comparison look at how a
$10,000 investment in the S&P 500 (with dividends reinvested) did over the
same period. It would have grown to $40,442 - a 304.42% increase.
CUMULATIVE TOTAL RETURNS
PERIOD ENDED SEPTEMBER 30, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Destiny II Fund 15.43% 135.69% 457.44%

S&P 500(registered trademark) 20.33% 103.18% 304.42%

AVERAGE ANNUAL TOTAL RETURNS
PERIOD ENDED SEPTEMBER 30, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Destiny II Fund 15.43% 18.70% 18.75%

$50/month 15-Year Plan -44.82% 14.42% 17.19%

The charts above show Destiny II Fund's total returns which include changes
in share price and reinvestment of dividends and capital gains. The fund's
cumulative total returns and average annual total returns do not include
the effects of the separate sales charges and custodian fees assessed
through Fidelity Systematic Investment Plans (the Plans); the figures
provided for a "$50/month 15 year plan" illustrate the fund's performance
adjusted to reflect fees and sales charges assessed by the Plans. The
illustration assumes an initial investment at the beginning of each period
shown. Because the illustrations assume lump sum investments, they do not
reflect what investors would have earned had they made regular monthly
investments over the period. As shares of the funds may be acquired only
through the Plans, investors should consult the Plans' prospectus for more
complete information on the impact of the separate charges and fees
applicable to each Plan. The rate (%) of deductions decreases
proportionately as Plan sizes increase. Figures for the S&P 500, an
unmanaged index of common stock prices, include reinvestment of dividends.
The S&P 500 figure for one year is published by S&P. The S&P 500 is a
registered trademark of Standard & Poor's Corporation.
All performance numbers are historical; the fund's share price and return
will vary and you may have a gain or loss when you sell your shares.
The Destiny Funds seek capital growth primarily from equity securities.
INVESTMENT CHANGES

TOP TEN EQUITY HOLDINGS - DESTINY I
AS OF SEPTEMBER 30, 1996 AS OF MARCH 31, 1996

Federal National Mortgage Association Federal National Mortgage Association

Philip Morris Companies, Inc. Philip Morris Companies, Inc.

Compaq Computer Corp. General Motors Corp.

General Motors Corp. Fleet Financial Group, Inc.

Fleet Financial Group, Inc. Compaq Computer Corp.

Royal Dutch Petroleum Co. ADR Royal Dutch Petroleum Co. ADR

Columbia/HCA Healthcare Corp. Vodafone Group PLC sponsored ADR

International Business Machines Corp. Federal Home Loan Mortgage Corporation

Federal Home Loan Mortgage Corporation Columbia/HCA Healthcare Corp.

du Pont (E.I.) de Nemours & Co. du Pont (E.I.) de Nemours & Co.

TOP TEN EQUITY HOLDINGS - DESTINY II
AS OF SEPTEMBER 30, 1996 AS OF MARCH 31, 1996

Federal National Mortgage Association Federal National Mortgage Association

Philip Morris Companies, Inc. Philip Morris Companies, Inc.

Compaq Computer Corp. General Motors Corp.

General Motors Corp. Fleet Financial Group, Inc.

Fleet Financial Group, Inc. Compaq Computer Corp.

Royal Dutch Petroleum Co. ADR Royal Dutch Petroleum Co. ADR

Columbia/HCA Healthcare Corp. Vodafone Group PLC sponsored ADR

International Business Machines Corp. Federal Home Loan Mortgage Corporation

Federal Home Loan Mortgage Corporation Columbia/HCA Healthcare Corp.

du Pont (E.I.) de Nemours & Co. du Pont (E.I.) de Nemours & Co.

TOP FIVE MARKET SECTORS - DESTINY I
AS OF SEPTEMBER 30, 1996 AS OF MARCH 31, 1996

Finance 17.9% Finance 17.4%

Technology 13.0% Technology 9.7%

Energy 7.7% Durables 8.5%

Nondurables 7.3% Energy 7.8%

Durables 7.0% Nondurables 7.5%

TOP FIVE MARKET SECTORS - DESTINY II
AS OF SEPTEMBER 30, 1996 AS OF MARCH 31, 1996

Finance 16.5% Finance 16.6%

Technology 12.3% Technology 9.1%

Energy 7.4% Durables 8.4%

Nondurables 7.1% Energy 7.5%

Durables 6.7% Nondurables 7.4%

FIDELITY DESTINY PORTFOLIOS: DESTINY I

INVESTMENTS/SEPTEMBER 30, 1996
(Showing Percentage of Total Value of Investment in Securities)

COMMON STOCKS - 80.6%
VALUE
SHARES (NOTE 1)
AEROSPACE & DEFENSE - 0.6%
AEROSPACE & DEFENSE - 0.1%
Boeing Co. 48,600 $ 4,592,700
DEFENSE ELECTRONICS - 0.5%
Raytheon Co. 402,100 22,366,813
TOTAL AEROSPACE & DEFENSE 26,959,513
BASIC INDUSTRIES - 5.5%
CHEMICALS & PLASTICS - 3.1%
Air Products & Chemicals, Inc. 108,300 6,308,475
du Pont (E.I.) de Nemours & Co. 1,077,700 95,107,025
Raychem Corp. 283,800 21,285,000
Rohm & Haas Co. 17,300 1,133,150
Union Carbide Corp. 430,700 19,650,688
143,484,338
METALS & MINING - 0.4%
Broken Hill Proprietary Co. Ltd. (The) 128,056 1,641,869
Reynolds Metals Co. 320,500 16,385,563
18,027,432
PACKAGING & CONTAINERS - 0.7%
Owens-Illinois, Inc. (a) 1,587,400 27,779,500
Tupperware Corp. 99,100 4,855,900
32,635,400
PAPER & FOREST PRODUCTS - 1.3%
Boise Cascade Corp. 269,100 9,149,400
Champion International Corp. 433,800 19,900,575
Georgia-Pacific Corp. 36,500 2,888,063
International Paper Co. 378,300 16,077,750
Temple-Inland, Inc. 109,700 5,786,675
Willamette Industries, Inc. 50,600 3,314,300
57,116,763
TOTAL BASIC INDUSTRIES 251,263,933
CONSTRUCTION & REAL ESTATE - 0.7%
BUILDING MATERIALS - 0.1%
Tecumseh Products Co. Class A 76,700 4,160,975
CONSTRUCTION - 0.3%
Centex Corp. 219,000 7,144,875
DR Horton, Inc. (a) 228,980 2,232,555
Kaufman & Broad Home Corp. 329,000 4,277,000
Ryland Group, Inc. 4,900 72,888
U.S. Home Corp. (a) 34,300 703,150
14,430,468
ENGINEERING - 0.3%
Fluor Corp. 195,500 12,023,250
TOTAL CONSTRUCTION & REAL ESTATE 30,614,693

VALUE
SHARES (NOTE 1)
DURABLES - 7.0%
AUTOS, TIRES, & ACCESSORIES - 6.4%
Chrysler Corp. 87,400 $ 2,501,825
Cross-Continent Auto Retailers, Inc. 10,900 250,700
Cummins Engine Co., Inc. 278,000 10,946,250
Dana Corp. 306,100 9,259,525
Discount Auto Parts, Inc. (a) 89,800 2,289,900
Federal-Mogul Corp. 334,100 7,057,863
General Motors Corp. 3,474,107 166,757,136
Goodyear Tire & Rubber Co. 102,700 4,737,038
Honda Motor Co. Ltd. 430,000 10,811,296
Magna International, Inc. Class A 888,700 42,805,331
Scania AB:
Class A 136,300 3,688,504
Class B 124,600 3,381,275
Superior Industries International, Inc. 458,300 11,056,488
Volvo AB Class B 718,600 15,438,037
290,981,168
CONSUMER DURABLES - 0.0%
Swedish Match Co. 578,800 1,745,213
CONSUMER ELECTRONICS - 0.4%
Newell Co. 200,900 6,027,000
Whirlpool Corp. 202,700 10,261,688
16,288,688
HOME FURNISHINGS - 0.0%
Haverty Furniture Companies, Inc. 61,500 661,125
TEXTILES & APPAREL - 0.2%
Burlington Industries, Inc. (a) 840,400 8,298,950
TOTAL DURABLES 317,975,144
ENERGY - 7.7%
ENERGY SERVICES - 0.2%
McDermott International, Inc. 443,700 9,650,475
OIL & GAS - 7.5%
Amerada Hess Corp. 208,500 11,024,438
Anadarko Petroleum Corp. 29,600 1,653,900
Apache Corp. 30,000 892,500
Atlantic Richfield Co. 393,300 50,145,750
British Petroleum PLC ADR 425,578 53,197,250
Burlington Resources, Inc. 462,300 20,514,563
Canada Occidental Petroleum Ltd. 492,600 7,939,036
Elf Aquitaine SA sponsored ADR 107,764 4,243,208
Kerr-McGee Corp. 108,700 6,617,113
Louisiana Land & Exploration Co. 463,300 24,381,163
Noble Affiliates, Inc. 55,600 2,349,100
Occidental Petroleum Corp. 337,600 7,891,400
Royal Dutch Petroleum Co. ADR 717,200 111,972,850
Santa Fe Energy Resources, Inc. (a) 316,600 4,511,550
Seagull Energy Corp. (a) 45,900 900,788
COMMON STOCKS - CONTINUED
VALUE
SHARES (NOTE 1)
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Sun Co., Inc. 296,800 $ 6,826,400
Tosco Corp. 274,600 15,068,675
Total SA:
Class B 38,956 3,067,134
sponsored ADR 119,936 4,692,496
Ultramar Corp. 48,600 1,470,150
Union Pacific Resources Group, Inc. 83,800 2,346,400
341,705,864
TOTAL ENERGY 351,356,339
FINANCE - 17.9%
BANKS - 3.5%
Canadian Imperial Bank of Commerce 47,000 1,704,762
Fleet Financial Group, Inc. 3,296,330 146,686,685
NationsBank Corp. 84,500 7,340,938
State Street Boston Corp. 98,000 5,622,750
161,355,135
CREDIT & OTHER FINANCE - 0.1%
Associates First Capital Corp. 15,100 619,100
Transamerica Corp. 36,100 2,522,488
3,141,588
FEDERAL SPONSORED CREDIT - 9.6%
Federal Home Loan Mortgage Corporation 1,091,000 106,781,625
Federal National Mortgage Association 9,283,600 323,765,550
Student Loan Marketing Association 95,800 7,149,075
437,696,250
INSURANCE - 4.1%
AFLAC, Inc. 179,900 6,386,450
Allmerica Financial Corp. 233,300 7,582,250
Allstate Corp. 1,248,690 61,497,983
American International Group, Inc. 454,600 45,800,950
CIGNA Corp. 21,600 2,589,300
Equitable of Iowa Companies 28,100 1,166,150
General Re Corp. 205,400 29,115,450
Loews Corp. 37,000 2,862,875
MGIC Investment Corp. 96,200 6,481,475
Providian Corp. 325,200 13,983,600
Torchmark Corp. 224,700 10,308,113
Travelers/Aetna Property Casualty Corp.
Class A 33,700 926,750
188,701,346
SAVINGS & LOANS - 0.3%
Golden West Financial Corp. 264,750 15,454,781
SECURITIES INDUSTRY - 0.3%
United Asset Management Corp. 475,800 11,240,775
TOTAL FINANCE 817,589,875

VALUE
SHARES (NOTE 1)
HEALTH - 3.4%
DRUGS & PHARMACEUTICALS - 0.7%
Pharmacia & Upjohn, Inc. 249,900 $ 10,308,375
Sandoz AG 7,000 8,403,683
Schering-Plough Corp. 217,300 13,363,950
32,076,008
MEDICAL EQUIPMENT & SUPPLIES - 0.2%
Baxter International, Inc. 74,600 3,487,550
Biomet, Inc. (a) 409,800 6,710,475
10,198,025
MEDICAL FACILITIES MANAGEMENT - 2.5%
Columbia/HCA Healthcare Corp. 1,930,825 109,815,672
Humana, Inc. (a) 229,700 4,651,425
114,467,097
TOTAL HEALTH 156,741,130
HOLDING COMPANIES - 0.3%
U.S. Industries, Inc. (a) 504,200 13,235,250
INDUSTRIAL MACHINERY & EQUIPMENT - 2.0%
ELECTRICAL EQUIPMENT - 0.8%
Emerson Electric Co. 44,900 4,046,613
General Electric Co. 187,700 17,080,700
Omron Corp. 3,000 56,301
Scientific-Atlanta, Inc. 362,900 5,761,038
Sensormatic Electronics Corp. 212,900 3,805,588
Westinghouse Electric Corp. 326,900 6,088,513
36,838,753
INDUSTRIAL MACHINERY & EQUIPMENT - 0.8%
Caterpillar, Inc. 425,800 32,094,675
Deere & Co. 82,800 3,477,600
Dover Corp. 29,600 1,413,400
Kennametal, Inc. 5,600 192,500
PRI Automation, Inc. (a) 11,100 363,525
37,541,700
POLLUTION CONTROL - 0.4%
Browning-Ferris Industries, Inc. 616,700 15,417,500
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 89,797,953
MEDIA & LEISURE - 2.2%
BROADCASTING - 0.0%
Home Shopping Network, Inc. (a) 133,400 1,384,025
ENTERTAINMENT - 0.4%
Cedar Fair LP (depositary unit) 17,800 656,375
Royal Caribbean Cruises Ltd. 632,400 16,837,650
17,494,025
COMMON STOCKS - CONTINUED
VALUE
SHARES (NOTE 1)
MEDIA & LEISURE - CONTINUED
LEISURE DURABLES & TOYS - 1.0%
Brunswick Corp. 162,700 $ 3,904,800
Fleetwood Enterprises, Inc. 674,207 20,731,865
Nintendo Co. Ltd. Ord. 280,600 18,015,445
Outboard Marine Corp. 184,500 2,836,688
45,488,798
LODGING & GAMING - 0.6%
Circus Circus Enterprises, Inc. (a) 664,600 23,510,225
Mirage Resorts, Inc. (a) 45,800 1,173,625
24,683,850
PUBLISHING - 0.0%
Times Mirror Co. Class A 20,200 898,900
RESTAURANTS - 0.2%
Bertucci's, Inc.(a) 122,800 567,950
Brinker International, Inc. (a) 210,700 3,581,900
Darden Restaurants, Inc. 222,300 1,917,338
McDonald's Corp. 89,100 4,221,113
10,288,301
TOTAL MEDIA & LEISURE 100,237,899
NONDURABLES - 7.3%
FOODS - 0.1%
General Mills, Inc. 67,200 4,057,200
HOUSEHOLD PRODUCTS - 0.0%
Premark International, Inc. 106,100 2,002,638
TOBACCO - 7.2%
Philip Morris Companies, Inc. 3,171,700 284,660,075
RJR Nabisco Holdings Corp. 1,375,098 35,752,548
UST, Inc. 253,500 7,509,938
327,922,561
TOTAL NONDURABLES 333,982,399
PRECIOUS METALS - 0.1%
Barrick Gold Corp. 79,100 1,977,573
Santa Fe Pacific Gold Corp. 319,875 3,998,438
5,976,011
RETAIL & WHOLESALE - 6.7%
APPAREL STORES - 0.4%
Melville Corp. 71,000 3,132,875
TJX Companies, Inc. 406,225 14,573,322
17,706,197
GENERAL MERCHANDISE STORES - 2.6%
Dillard Department Stores, Inc. Class A 118,500 3,821,625
Federated Department Stores, Inc. (a) 1,254,973 42,041,596
Price/Costco, Inc. (a) 40,600 832,300

VALUE
SHARES (NOTE 1)
RETAIL & WHOLESALE - CONTINUED
GENERAL MERCHANDISE STORES - CONTINUED
Wal-Mart Stores, Inc. 2,586,400 $ 68,216,300
Woolworth Corp. (a) 155,400 3,205,125
118,116,946
RETAIL & WHOLESALE, MISCELLANEOUS - 3.7%
Best Buy Co., Inc. (a) 143,100 3,255,525
Circuit City Stores, Inc. 1,618,100 58,453,863
Good Guys, Inc. (a) 204,100 1,632,800
Home Depot, Inc. (The) 831,100 47,268,813
Lowe's Companies, Inc. 331,700 13,558,238
Officemax, Inc. (a) 558,150 7,814,100
Office Depot, Inc. (a) 256,700 6,064,538
Rex Stores Corp. (a) 148,900 1,637,900
Tandy Corp. 267,400 10,796,275
Toys "R" Us, Inc. (a) 620,900 18,083,713
168,565,765
TOTAL RETAIL & WHOLESALE 304,388,908
SERVICES - 0.0%
ADVERTISING - 0.0%
Interpublic Group of Companies, Inc. 33,300 1,573,425
SERVICES - 0.0%
Zebra Technologies Corp. Class A (a) 16,600 425,375
TOTAL SERVICES 1,998,800
TECHNOLOGY - 13.0%
COMMUNICATIONS EQUIPMENT - 0.2%
Cisco Systems, Inc. (a) 116,900 7,255,106
COMPUTER SERVICES & SOFTWARE - 1.3%
America Online, Inc. (a) 210,200 7,488,375
Automatic Data Processing, Inc. 288,900 12,603,263
Electronic Data Systems Corp. 146,100 8,966,888
Metromail Corp. (a) 36,300 784,988
Microsoft Corp. (a) 48,700 6,422,313
Oracle Systems Corp.(a) 238,900 10,168,181
Policy Management Systems Corp. (a) 314,500 10,693,000
57,127,008
COMPUTERS & OFFICE EQUIPMENT - 8.1%
Adaptec, Inc. (a) 53,300 3,198,000
Compaq Computer Corp. (a) 2,717,200 174,240,450
Digital Equipment Corp. (a) 44,700 1,598,025
Hewlett-Packard Co. 399,000 19,451,250
International Business Machines Corp. 858,300 106,858,350
Micron Electronics, Inc. (a) 48,800 1,006,500
SCI Systems, Inc. (a) 805,800 45,326,250
COMMON STOCKS - CONTINUED
VALUE
SHARES (NOTE 1)
TECHNOLOGY - CONTINUED
COMPUTERS & OFFICE EQUIPMENT - CONTINUED
Seagate Technology (a) 221,200 $ 12,359,550
Tech Data Corp. (a) 189,000 5,268,375
369,306,750
ELECTRONIC INSTRUMENTS - 0.5%
Applied Materials, Inc. (a) 283,400 7,828,925
Credence Systems Corp. (a) 59,200 932,400
Lam Research Corp. (a) 117,500 3,128,438
Novellus System, Inc. (a) 133,900 5,707,488
Teradyne, Inc. (a) 390,500 6,492,063
24,089,314
ELECTRONICS - 2.9%
AMP, Inc. 140,000 5,425,000
Intel Corp. 247,000 23,573,063
Methode Electronics, Inc. Class A 1,552,700 28,919,038
Microchip Technology, Inc. (a) 48,500 1,812,688
Micron Technology, Inc. 295,500 9,012,750
Molex, Inc. 115,668 3,903,795
National Semiconductor Corp. (a) 112,500 2,264,063
S-3, Inc. (a) 40,600 801,850
Solectron Corp. (a) 751,300 36,813,700
Storage Technology Corp. (a) 119,200 4,514,700
Texas Instruments, Inc. 212,300 11,703,038
Xilinx, Inc. (a) 103,200 3,508,800
132,252,485
TOTAL TECHNOLOGY 590,030,663
TRANSPORTATION - 1.2%
AIR TRANSPORTATION - 0.0%
Southwest Airlines Co. 66,300 1,516,613
RAILROADS - 1.1%
Bombardier, Inc. Class B 230,500 3,283,307
Burlington Northern Santa Fe Corp. 169,900 14,335,313
CSX Corp. 594,100 30,002,050
47,620,670
SHIPPING - 0.1%
Overseas Shipholding Group, Inc. 33,300 549,450
Stolt-Nielsen SA 56,700 885,938
Stolt-Nielsen SA Class B sponsored ADR 169,300 2,645,313
Storli AS Class B (non-vtg.) 19,400 313,303
4,394,004
TRUCKING & FREIGHT - 0.0%
Consolidated Freightways, Inc. 22,500 551,224
TOTAL TRANSPORTATION 54,082,511

VALUE
SHARES (NOTE 1)
UTILITIES - 5.0%
CELLULAR - 2.4%
AirTouch Communications, Inc. (a) 670,800 $ 18,530,850
360 Degrees Communications Co. 26,000 611,000
Vodafone Group PLC sponsored ADR 2,565,300 87,540,863
106,682,713
ELECTRIC UTILITY - 0.0%
American Electric Power Co., Inc. 800 32,500
Duke Power Co. 13,100 610,788
FPL Group, Inc. 13,100 566,575
Wisconsin Energy Corp. 13,100 353,700
1,563,563
TELEPHONE SERVICES - 2.6%
Ameritech Corp. 362,000 19,050,250
Bell Atlantic Corp. 276,100 16,531,488
BellSouth Corp. 590,200 21,837,400
MCI Communications Corp. 175,600 4,499,750
NYNEX Corp. 526,200 22,889,700
SBC Communications, Inc. 683,800 32,907,875
117,716,463
TOTAL UTILITIES 225,962,739
TOTAL COMMON STOCKS
(Cost $2,521,831,280) 3,672,193,760
U.S. TREASURY OBLIGATIONS - 15.8%
PRINCIPAL
AMOUNT
8 1/8%, 8/15/19 $ 570,000,000 637,419,600
stripped principal:
0%, 8/15/19 100,000,000 19,593,000
0%, 8/15/20 342,000,000 62,110,620
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $712,440,822) 719,123,220
REPURCHASE AGREEMENTS - 3.6%
MATURITY VALUE
AMOUNT (NOTE 1)
Investments in repurchase agreements
(U.S. Treasury obligations) in a joint
trading account at 5.72%, dated
9/30/96 due 10/1/96 $162,495,815 $ 162,470,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $3,396,742,102) $ 4,553,786,980
LEGEND
(a) Non-income producing
INCOME TAX INFORMATION
At September 30, 1996, the aggregate cost of investment securities for
income tax purposes was $3,397,020,683. Net unrealized appreciation
aggregated $1,156,766,297, of which $1,213,171,448 related to appreciated
investment securities and $56,405,151 related to depreciated investment
securities.
The fund hereby designates approximately $13,703,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
FIDELITY DESTINY PORTFOLIOS: DESTINY I

FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

SEPTEMBER 30, 1996

ASSETS

Investment in securities, at value (including repurchase agreements of $162,470,000) (cost $ 4,553,786,980

$3,396,742,102) - See accompanying schedule

Cash 741

Receivable for investments sold 829,280

Receivable for fund shares sold 148,583

Dividends receivable 10,020,511

Interest receivable 5,751,600

Other receivables 610,289

TOTAL ASSETS 4,571,147,984

LIABILITIES

Payable for investments purchased $ 1,371,880

Payable for fund shares redeemed 1,967,686

Accrued management fee 2,081,134

Other payables and accrued expenses 245,474

TOTAL LIABILITIES 5,666,174

NET ASSETS $ 4,565,481,810

Net Assets consist of:

Paid in capital $ 2,949,697,264

Undistributed net investment income 75,121,685

Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions 383,657,248

Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign 1,157,005,613

currencies

NET ASSETS, for 223,722,236 shares outstanding $ 4,565,481,810

NET ASSET VALUE, offering price and redemption price $20.41

per share ($4,565,481,810 (divided by) 223,722,236 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED SEPTEMBER 30, 1996

INVESTMENT INCOME $ 74,831,726
Dividends (including $72,240 received from affiliated issuers)

Interest 56,953,048

TOTAL INCOME 131,784,774

EXPENSES

Management fee $ 20,626,260
Basic fee

Performance adjustment 6,251,818

Transfer agent fees 213,333

Accounting fees and expenses 798,587

Non-interested trustees' compensation 12,205

Custodian fees and expenses 123,839

Registration fees 41,019

Audit 86,868

Legal 40,009

Miscellaneous 21,714

Total expenses before reductions 28,215,652

Expense reductions (179,589) 28,036,063

NET INVESTMENT INCOME 103,748,711

REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:

Investment securities (including realized gain (loss) of $3,017,294
on sales of investments in affiliated 423,327,736
issuers)

Foreign currency transactions (38,869) 423,288,867

Change in net unrealized appreciation (depreciation) on:

Investment securities 112,032,703

Assets and liabilities in foreign currencies (4,361) 112,028,342

NET GAIN (LOSS) 535,317,209

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 639,065,920

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

YEAR ENDED YEAR ENDED

SEPTEMBER 30, SEPTEMBER 30,

1996 1995

INCREASE (DECREASE) IN NET ASSETS

Operations $ 103,748,711 $ 83,108,891

Net investment income

Net realized gain (loss) 423,288,867 163,214,586

Change in net unrealized appreciation (depreciation) 112,028,342 634,757,107

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 639,065,920 881,080,584

Distributions to shareholders (92,599,379) (62,951,723)

From net investment income

From net realized gain (174,422,963) (468,451,357)

TOTAL DISTRIBUTIONS (267,022,342) (531,403,080)

Share transactions 140,978,880 137,291,888

Net proceeds from sales of shares

Reinvestment of distributions 251,037,967 502,563,938

Cost of shares redeemed (251,968,059) (209,384,277)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 140,048,788 430,471,549

TOTAL INCREASE (DECREASE) IN NET ASSETS 512,092,366 780,149,053

NET ASSETS

Beginning of period 4,053,389,444 3,273,240,391

End of period (including undistributed net investment income of $75,121,685 and $67,129,385, $ 4,565,481,810 $ 4,053,389,444

respectively)

OTHER INFORMATION

Sold 7,327,796 8,281,603

Issued in reinvestment of distributions 13,702,946 35,292,414

Redeemed (13,089,630) (12,689,491)

Net increase (decrease) 7,941,112 30,884,526

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
YEARS ENDED SEPTEMBER 30, THREE YEARS ENDED JUNE 30,
MONTHS
ENDED
SEPTEMBER
30,

1996 1995 1994 D 1993 1993 1992

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 18.78 $ 17.70 $ 16.86 $ 17.22 $ 16.54 $ 15.23

Income from Investment Operations

Net investment income .45 .41 .30 .04 .26 .31

Net realized and unrealized gain (loss) 2.42 3.54 1.69 .75 3.16 2.55

Total from investment operations 2.87 3.95 1.99 .79 3.42 2.86

Less Distributions

From net investment income (.43) (.34) (.11) (.14) (.30) (.49)

From net realized gain (.81) (2.53) (1.04) (1.01) (2.44) (1.06)

Total distributions (1.24) (2.87) (1.15) (1.15) (2.74) (1.55)

Net asset value, end of period $ 20.41 $ 18.78 $ 17.70 $ 16.86 $ 17.22 $ 16.54

TOTAL RETURN B 16.04% 27.49% 12.30% 4.77% 23.90% 20.18%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (in millions) $ 4,565 $ 4,053 $ 3,273 $ 2,973 $ 2,869 $ 2,373

Ratio of expenses to average net assets .65% .68% .70% .65% A .66% .61%

Ratio of net investment income to average net assets 2.40% 2.35% 1.69% 1.11% A 1.83% 2.00%

Portfolio turnover rate 42% 55% 77% 82% A 75% 75%

Average commission rate C $ .0175

</TABLE>

A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY
TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD
TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN
VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
D EFFECTIVE OCTOBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
FIDELITY DESTINY PORTFOLIOS: DESTINY II

INVESTMENTS/SEPTEMBER 30, 1996
(Showing Percentage of Total Value of Investment in Securities)

COMMON STOCKS - 76.9%
VALUE
SHARES (NOTE 1)
AEROSPACE & DEFENSE - 0.6%
AEROSPACE & DEFENSE - 0.1%
Boeing Co. 26,200 $ 2,475,900
DEFENSE ELECTRONICS - 0.5%
Raytheon Co. 214,700 11,942,688
TOTAL AEROSPACE & DEFENSE 14,418,588
BASIC INDUSTRIES - 5.4%
CHEMICALS & PLASTICS - 3.1%
Air Products & Chemicals, Inc. 57,700 3,361,025
du Pont (E.I.) de Nemours & Co. 586,300 51,740,975
Raychem Corp. 160,700 12,052,500
Rohm & Haas Co. 9,300 609,150
Union Carbide Corp. 233,100 10,635,188
78,398,838
METALS & MINING - 0.4%
Broken Hill Proprietary Co. Ltd. (The) 69,278 888,247
Reynolds Metals Co. 173,400 8,865,075
9,753,322
PACKAGING & CONTAINERS - 0.6%
Owens-Illinois, Inc. (a) 759,900 13,298,250
Tupperware Corp. 54,200 2,655,800
15,954,050
PAPER & FOREST PRODUCTS - 1.3%
Boise Cascade Corp. 146,100 4,967,400
Champion International Corp. 231,300 10,610,888
Georgia-Pacific Corp. 19,700 1,558,763
International Paper Co. 201,800 8,576,500
Temple-Inland, Inc. 58,500 3,085,875
Willamette Industries, Inc. 43,700 2,862,350
31,661,776
TOTAL BASIC INDUSTRIES 135,767,986
CONSTRUCTION & REAL ESTATE - 0.6%
BUILDING MATERIALS - 0.1%
Tecumseh Products Co. Class A 39,900 2,164,575
CONSTRUCTION - 0.3%
Centex Corp. 116,900 3,813,863
DR Horton, Inc. (a) 124,336 1,212,276
Kaufman & Broad Home Corp. 175,200 2,277,600
Ryland Group, Inc. 2,400 35,700
U.S. Home Corp. (a) 18,300 375,150
7,714,589
ENGINEERING - 0.2%
Fluor Corp. 103,300 6,352,950
TOTAL CONSTRUCTION & REAL ESTATE 16,232,114

VALUE
SHARES (NOTE 1)
DURABLES - 6.7%
AUTOS, TIRES, & ACCESSORIES - 6.1%
Chrysler Corp. 47,300 $ 1,353,963
Cross-Continent Auto Retailers, Inc. 6,100 140,300
Cummins Engine Co., Inc. 147,300 5,799,938
Dana Corp. 165,500 5,006,375
Discount Auto Parts, Inc. (a) 48,900 1,246,950
Federal-Mogul Corp. 178,400 3,768,700
General Motors Corp. 1,854,321 89,007,408
Goodyear Tire & Rubber Co. 54,300 2,504,588
Honda Motor Co. Ltd. 235,000 5,908,499
Magna International, Inc. Class A 467,200 22,503,264
Modine Manufacturing Co. 2,300 60,375
Scania AB:
Class A 73,300 1,983,620
Class B 67,000 1,818,182
Superior Industries International, Inc. 233,000 5,621,125
Volvo AB Class B 389,800 8,374,265
155,097,552
CONSUMER DURABLES - 0.0%
Swedish Match Co. 308,900 931,404
CONSUMER ELECTRONICS - 0.4%
Newell Co. 108,900 3,267,000
Whirlpool Corp. 100,400 5,082,750
8,349,750
HOME FURNISHINGS - 0.0%
Haverty Furniture Companies, Inc. 31,100 334,325
TEXTILES & APPAREL - 0.2%
Burlington Industries, Inc. (a) 399,400 3,944,075
TOTAL DURABLES 168,657,106
ENERGY - 7.4%
ENERGY SERVICES - 0.2%
McDermott International, Inc. 233,100 5,069,925
OIL & GAS - 7.2%
Amerada Hess Corp. 116,500 6,159,938
Anadarko Petroleum Corp. 15,800 882,825
Apache Corp. 16,200 481,950
Atlantic Richfield Co. 211,200 26,928,000
British Petroleum PLC ADR 216,472 27,059,000
Burlington Resources, Inc. 232,900 10,334,938
Canada Occidental Petroleum Ltd. 260,600 4,199,985
Elf Aquitaine SA sponsored ADR 57,344 2,257,920
Kerr-McGee Corp. 63,300 3,853,388
Louisiana Land & Exploration Co. 209,900 11,045,988
Noble Affiliates, Inc. 30,000 1,267,500
Occidental Petroleum Corp. 180,000 4,207,500
Royal Dutch Petroleum Co. ADR 406,000 63,386,750
Santa Fe Energy Resources, Inc. (a) 153,500 2,187,375
COMMON STOCKS - CONTINUED
VALUE
SHARES (NOTE 1)
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Seagull Energy Corp. (a) 24,200 $ 474,925
Sun Co., Inc. 159,700 3,673,100
Tosco Corp. 146,100 8,017,238
Total SA:
Class B 20,756 1,634,188
sponsored ADR 63,904 2,500,244
Ultramar Corp. 26,100 789,525
Union Pacific Resources Group, Inc. 42,300 1,184,400
182,526,677
TOTAL ENERGY 187,596,602
FINANCE - 16.5%
BANKS - 3.3%
Canadian Imperial Bank of Commerce 25,200 914,042
Fleet Financial Group, Inc. 1,709,316 76,064,562
NationsBank Corp. 46,800 4,065,750
State Street Boston Corp. 53,000 3,040,875
84,085,229
CREDIT & OTHER FINANCE - 0.1%
Associates First Capital Corp. 8,200 336,200
Transamerica Corp. 20,000 1,397,500
1,733,700
FEDERAL SPONSORED CREDIT - 8.7%
Federal Home Loan Mortgage Corporation 590,000 57,746,250
Federal National Mortgage Association 4,575,600 159,574,050
Student Loan Marketing Association 51,800 3,865,575
221,185,875
INSURANCE - 4.0%
AFLAC, Inc. 95,850 3,402,675
Allmerica Financial Corp. 119,100 3,870,750
Allstate Corp. 673,145 33,152,391
American International Group, Inc. 245,850 24,769,388
CIGNA Corp. 10,900 1,306,638
Equitable of Iowa Companies 14,800 614,200
General Re Corp. 107,200 15,195,600
Loews Corp. 20,300 1,570,713
MGIC Investment Corp. 52,300 3,523,713
Providian Corp. 170,500 7,331,500
Torchmark Corp. 120,000 5,505,000
Travelers/Aetna Property Casualty Corp.
Class A 17,900 492,250
100,734,818
SAVINGS & LOANS - 0.3%
Golden West Financial Corp. 132,400 7,728,850

VALUE
SHARES (NOTE 1)
FINANCE - CONTINUED
SECURITIES INDUSTRY - 0.1%
United Asset Management Corp. 149,800 $ 3,539,025
TOTAL FINANCE 419,007,497
HEALTH - 3.4%
DRUGS & PHARMACEUTICALS - 0.7%
Pharmacia & Upjohn, Inc. 135,300 5,581,125
Sandoz AG 3,800 4,561,999
Schering-Plough Corp. 118,000 7,257,000
17,400,124
MEDICAL EQUIPMENT & SUPPLIES - 0.2%
Baxter International, Inc. 40,000 1,870,000
Biomet, Inc. (a) 221,700 3,630,316
5,500,316
MEDICAL FACILITIES MANAGEMENT - 2.5%
Columbia/HCA Healthcare Corp. 1,046,440 59,516,275
Humana, Inc. (a) 127,400 2,579,850
62,096,125
TOTAL HEALTH 84,996,565
HOLDING COMPANIES - 0.3%
U.S. Industries, Inc. (a) 246,700 6,475,875
INDUSTRIAL MACHINERY & EQUIPMENT - 1.9%
ELECTRICAL EQUIPMENT - 0.7%
Emerson Electric Co. 22,400 2,018,800
General Electric Co. 90,700 8,253,700
Scientific-Atlanta, Inc. 191,800 3,044,825
Sensormatic Electronics Corp. 112,600 2,012,725
Westinghouse Electric Corp. 177,600 3,307,800
18,637,850
INDUSTRIAL MACHINERY & EQUIPMENT - 0.9%
Caterpillar, Inc. 224,800 16,944,300
Deere & Co. 44,600 1,873,200
Dover Corp. 15,700 749,675
Harnischfeger Industries, Inc. 3 113
Kaydon Corp. 49,000 2,107,000
Kennametal, Inc. 3,200 110,000
PRI Automation, Inc. (a) 6,000 196,500
21,980,788
POLLUTION CONTROL - 0.3%
Browning-Ferris Industries, Inc. 329,900 8,247,500
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 48,866,138
COMMON STOCKS - CONTINUED
VALUE
SHARES (NOTE 1)
MEDIA & LEISURE - 2.2%
BROADCASTING - 0.2%
Home Shopping Network, Inc. (a) 74,200 $ 769,825
Telemundo Group, Inc. Class A (a) 100,000 3,425,000
4,194,825
ENTERTAINMENT - 0.4%
Cedar Fair LP (depositary unit) 9,300 342,938
Royal Caribbean Cruises Ltd. 331,900 8,836,838
9,179,776
LEISURE DURABLES & TOYS - 0.9%
Brunswick Corp. 87,000 2,088,000
Fleetwood Enterprises, Inc. 335,141 10,305,586
Nintendo Co. Ltd. Ord. 152,200 9,771,742
Outboard Marine Corp. 93,200 1,432,950
23,598,278
LODGING & GAMING - 0.5%
Circus Circus Enterprises, Inc. (a) 342,700 12,123,013
Mirage Resorts, Inc. (a) 24,800 635,500
12,758,513
PUBLISHING - 0.0%
Times Mirror Co. Class A 10,500 467,250
RESTAURANTS - 0.2%
Bertucci's, Inc. (a) 51,600 238,650
Brinker International, Inc. (a) 103,000 1,751,000
Darden Restaurants, Inc. 112,200 967,725
McDonald's Corp. 46,700 2,212,413
5,169,788
TOTAL MEDIA & LEISURE 55,368,430
NONDURABLES - 7.1%
FOODS - 0.1%
General Mills, Inc. 36,100 2,179,538
HOUSEHOLD PRODUCTS - 0.1%
Premark International, Inc. 57,100 1,077,763
TOBACCO - 6.9%
Philip Morris Companies, Inc. 1,702,900 152,835,275
RJR Nabisco Holdings Corp. 721,354 18,755,204
UST, Inc. 139,000 4,117,875
175,708,354
TOTAL NONDURABLES 178,965,655
PRECIOUS METALS - 0.1%
Barrick Gold Corp. 42,100 1,052,539
Santa Fe Pacific Gold Corp. 168,147 2,101,838
3,154,377

VALUE
SHARES (NOTE 1)
RETAIL & WHOLESALE - 6.4%
APPAREL STORES - 0.4%
Melville Corp. 38,100 $ 1,681,163
TJX Companies, Inc. 216,800 7,777,700
9,458,863
GENERAL MERCHANDISE STORES - 2.5%
Dillard Department Stores, Inc. Class A 64,200 2,070,450
Federated Department Stores, Inc. (a) 648,700 21,731,450
Price/Costco, Inc. (a) 22,000 451,000
Wal-Mart Stores, Inc. 1,383,700 36,495,088
Woolworth Corp. (a) 83,000 1,711,875
62,459,863
GROCERY STORES - 0.0%
Food Lion, Inc. Class B 120,000 1,065,000
RETAIL & WHOLESALE, MISCELLANEOUS - 3.5%
Best Buy Co., Inc. (a) 79,500 1,808,625
Circuit City Stores, Inc. 839,100 30,312,488
Good Guys, Inc. (a) 88,200 705,600
Home Depot, Inc. (The) 445,400 25,332,125
Lowe's Companies, Inc. 179,700 7,345,238
Officemax, Inc. (a) 301,200 4,216,800
Office Depot, Inc. (a) 138,800 3,279,150
Rex Stores Corp. (a) 63,500 698,500
Tandy Corp. 143,700 5,801,888
Toys "R" Us, Inc. (a) 335,800 9,780,175
89,280,589
TOTAL RETAIL & WHOLESALE 162,264,315
SERVICES - 0.0%
ADVERTISING - 0.0%
Interpublic Group of Companies, Inc. 17,400 822,150
SERVICES - 0.0%
Zebra Technologies Corp. Class A (a) 9,200 235,750
TOTAL SERVICES 1,057,900
TECHNOLOGY - 12.3%
COMMUNICATIONS EQUIPMENT - 0.2%
Cisco Systems, Inc. (a) 64,200 3,984,413
COMPUTER SERVICES & SOFTWARE - 1.2%
America Online, Inc. (a) 114,900 4,093,313
Automatic Data Processing, Inc. 153,900 6,713,888
Electronic Data Systems Corp. 79,600 4,885,450
Metromail Corp. (a) 19,600 423,850
Microsoft Corp. (a) 25,700 3,389,188
Oracle Systems Corp. (a) 127,450 5,424,591
Policy Management Systems Corp. (a) 168,500 5,729,000
30,659,280
COMMON STOCKS - CONTINUED
VALUE
SHARES (NOTE 1)
TECHNOLOGY - CONTINUED
COMPUTERS & OFFICE EQUIPMENT - 8.1%
Adaptec, Inc. (a) 29,400 $ 1,764,000
Compaq Computer Corp. (a) 1,534,600 98,406,225
Digital Equipment Corp. (a) 24,200 865,150
Hewlett-Packard Co. 212,700 10,369,125
International Business Machines Corp. 465,100 57,904,950
Micron Electronics, Inc. (a) 27,100 558,938
SCI Systems, Inc. (a) 450,300 25,329,375
Seagate Technology (a) 121,800 6,805,575
Tech Data Corp. (a) 102,300 2,851,613
204,854,951
ELECTRONIC INSTRUMENTS - 0.5%
Applied Materials, Inc. (a) 156,100 4,312,263
Credence Systems Corp. (a) 32,600 513,450
Lam Research Corp. (a) 64,800 1,725,300
Novellus System, Inc. (a) 73,900 3,149,988
Teradyne, Inc. (a) 215,300 3,579,363
13,280,364
ELECTRONICS - 2.3%
AMP, Inc. 77,100 2,987,625
Intel Corp. 139,400 13,303,988
Methode Electronics, Inc. Class A 134,150 2,498,544
Microchip Technology, Inc. (a) 26,800 1,001,650
Micron Technology, Inc. 163,900 4,998,950
Molex, Inc. 54,606 1,842,953
National Semiconductor Corp. (a) 61,800 1,243,725
S-3, Inc. (a) 22,400 442,400
Solectron Corp. (a) 406,498 19,918,402
Storage Technology Corp. (a) 65,500 2,480,813
Texas Instruments, Inc. 116,500 6,422,063
Xilinx, Inc. (a) 56,900 1,934,600
59,075,713
TOTAL TECHNOLOGY 311,854,721
TRANSPORTATION - 1.3%
AIR TRANSPORTATION - 0.0%
Southwest Airlines Co. 35,400 809,775
RAILROADS - 1.2%
Bombardier, Inc. Class B 124,000 1,766,291
Burlington Northern Santa Fe Corp. 117,000 9,871,875
CSX Corp. 381,100 19,245,550
30,883,716

VALUE
SHARES (NOTE 1)
TRANSPORTATION - CONTINUED
SHIPPING - 0.1%
Overseas Shipholding Group, Inc. 17,800 $ 293,700
Stolt-Nielsen SA 30,400 475,000
Stolt-Nielsen SA Class B sponsored ADR 91,600 1,431,250
Storli AS Class B (non-vtg.) 10,500 169,571
2,369,521
TRUCKING & FREIGHT - 0.0%
Consolidated Freightways, Inc. 12,100 296,450
TOTAL TRANSPORTATION 34,359,462
UTILITIES - 4.7%
CELLULAR - 2.2%
AirTouch Communications, Inc. (a) 349,600 9,657,700
360 Degrees Communications Co. 14,400 338,400
Vodafone Group PLC sponsored ADR 1,343,200 45,836,700
55,832,800
ELECTRIC UTILITY - 0.0%
American Electric Power Co., Inc. 400 16,250
Duke Power Co. 7,200 335,700
FPL Group, Inc. 7,200 311,400
Wisconsin Energy Corp. 7,200 194,400
857,750
TELEPHONE SERVICES - 2.5%
Ameritech Corp. 193,100 10,161,888
Bell Atlantic Corp. 147,300 8,819,588
BellSouth Corp. 311,500 11,525,500
MCI Communications Corp. 97,600 2,501,000
NYNEX Corp. 284,700 12,384,450
SBC Communications, Inc. 363,400 17,488,625
62,881,051
TOTAL UTILITIES 119,571,601
TOTAL COMMON STOCKS
(Cost $1,418,570,301) 1,948,614,932
U.S. TREASURY OBLIGATIONS - 15.8%
PRINCIPAL
AMOUNT
8 1/8%, 8/15/19 $ 310,000,000 $ 346,666,800
6 1/4%, 8/15/23 8,500,000 7,680,515 stripped principal:
0%, 8/15/19 70,000,000 13,715,099
0%, 8/15/20 171,000,000 31,055,310
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $396,864,418) 399,117,724
REPURCHASE AGREEMENTS - 7.3%
MATURITY VALUE
AMOUNT (NOTE 1)
Investments in repurchase agreements
(U.S. Treasury obligations) in a joint
trading account at 5.72%, dated
9/30/96 due 10/1/96 184,676,338 184,647,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $2,000,081,719) $ 2,532,379,656
LEGEND
Non-income producing
INCOME TAX INFORMATION
At September 30, 1996, the aggregate cost of investment securities for
income tax purposes was $2,000,294,696. Net unrealized appreciation
aggregated $532,084,960, of which $564,922,374 related to appreciated
investment securities and $32,837,414 related to depreciated investment
securities.
The fund hereby designates approximately $4,867,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
FIDELITY DESTINY PORTFOLIOS: DESTINY II

FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
SEPTEMBER 30, 1996

ASSETS

Investment in securities, at value (including repurchase agreements of $184,647,000) (cost $ 2,532,379,656
$2,000,081,719) - See accompanying schedule

Cash 579

Receivable for investments sold 414,159

Receivable for fund shares sold 451,510

Dividends receivable 5,312,268

Interest receivable 3,177,381

Other receivables 204,179

TOTAL ASSETS 2,541,939,732

LIABILITIES

Payable for investments purchased $ 1,155,435

Payable for fund shares redeemed 772,631

Accrued management fee 1,371,949

Other payables and accrued expenses 232,397

TOTAL LIABILITIES 3,532,412

NET ASSETS $ 2,538,407,320

Net Assets consist of:

Paid in capital $ 1,801,880,298

Undistributed net investment income 41,533,520

Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions 162,698,864

Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign 532,294,638
currencies

NET ASSETS, for 218,597,019 shares outstanding (see Note 3 of Notes to Financial Statements) $ 2,538,407,320

NET ASSET VALUE, offering price and redemption price per share ($2,538,407,320 (divided by) 218,597,019 $11.61
shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED SEPTEMBER 30, 1996

INVESTMENT INCOME $ 38,611,086
Dividends

Interest 33,723,395

TOTAL INCOME 72,334,481

EXPENSES

Management fee $ 13,932,414
Basic fee

Performance adjustment 2,752,964

Transfer agent fees 151,460

Accounting fees and expenses 793,367

Non-interested trustees' compensation 6,830

Custodian fees and expenses 82,733

Registration fees 101,317

Audit 54,285

Legal 19,423

Miscellaneous 12,240

Total expenses before reductions 17,907,033

Expense reductions (99,684) 17,807,349

NET INVESTMENT INCOME 54,527,132

REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:

Investment securities 177,737,255

Foreign currency transactions (19,381) 177,717,874

Change in net unrealized appreciation (depreciation) on:

Investment securities 95,103,257

Assets and liabilities in foreign currencies (1,976) 95,101,281

NET GAIN (LOSS) 272,819,155

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 327,346,287

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

YEAR ENDED YEAR ENDED

SEPTEMBER 30, SEPTEMBER 30,

1996 1995

INCREASE (DECREASE) IN NET ASSETS

Operations $ 54,527,132 $ 39,184,675

Net investment income

Net realized gain (loss) 177,717,874 59,622,513

Change in net unrealized appreciation (depreciation) 95,101,281 320,527,572

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 327,346,287 419,334,760

Distributions to shareholders (43,813,086) (25,869,943)

From net investment income

From net realized gain (61,463,441) (153,114,736)

TOTAL DISTRIBUTIONS (105,276,527) (178,984,679)

Share transactions 291,742,259 261,682,843

Net proceeds from sales of shares

Reinvestment of distributions 103,441,673 177,278,996

Cost of shares redeemed (110,608,517) (84,723,915)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 284,575,415 354,237,924

TOTAL INCREASE (DECREASE) IN NET ASSETS 506,645,175 594,588,005

NET ASSETS

Beginning of period 2,031,762,145 1,437,174,140

End of period (including undistributed net investment income of $41,533,520 and $32,076,535, $ 2,538,407,320 $ 2,031,762,145

respectively)

OTHER INFORMATION

Shares (Adjusted for a 3-for-1 share split paid June 21, 1996 (see Note 3 of Notes to Financial

Statements).)

Sold 26,673,779 28,218,024

Issued in reinvestment of distributions 9,879,858 21,958,578

Redeemed (10,109,951) (9,047,361)

Net increase (decrease) 26,443,686 41,129,241

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
(PER-SHARE DATA HAVE BEEN ADJUSTED FOR A 3-FOR-1 SHARE SPLIT PAID JUNE 21, 1996 (SEE NOTE 3 OF NOTES TO FINANCIAL STATEMENTS).)

YEARS ENDED SEPTEMBER 30, THREE YEARS ENDED JUNE 30,
MONTHS
ENDED
SEPTEMBER
30,

1996 1995 1994 D 1993 1993 1992

SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 10.57 $ 9.52 $ 8.89 $ 8.82 $ 8.23 $ 7.83

Income from Investment Operations

Net investment income .24 .22 .14 .01 .09 .11

Net realized and unrealized gain
(loss) 1.34 1.99 .96 .41 1.61 1.36

Total from investment operations 1.58 2.21 1.10 .42 1.70 1.47

Less Distributions

From net investment income (.22) (.17) (.04) (.05) (.12) (.11)

From net realized gain (.32) (.99) (.43) (.30) (.99) (.96)

Total distributions (.54) (1.16) (.47) (.35) (1.11) (1.07)

Net asset value, end of period $ 11.61 $ 10.57 $ 9.52 $ 8.89 $ 8.82 $ 8.23

TOTAL RETURN B 15.43% 26.98% 12.67% 4.93% 23.28% 20.61%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (in millions) $ 2,538 $ 2,032 $ 1,437 $ 1,143 $ 1,061 $ 479

Ratio of expenses to average net
assets .78% .80% .80% .84% A .84% .88%

Ratio of net investment income to
average net assets 2.38% 2.33% 1.56% .69% A 1.41% 1.60%

Portfolio turnover rate 37% 52% 72% 80% A 81% 113%

Average commission rate C $ .0182

</TABLE>

1. SIGNIFICANT ACCOUNTING POLICIES.
Destiny I and Destiny II (the funds) are funds of Fidelity Destiny
Portfolios (the trust). The trust is registered under the Investment
Company Act of 1940, as amended (the 1940 Act), as an open-end management
investment company organized as a Massachusetts business trust. Each fund
is authorized to issue an unlimited number of shares. Shares of each fund
are offered publicly through Fidelity Systematic Investment Plans: Destiny
I and Destiny II (the Plans), a unit investment trust with two series. The
financial statements have been prepared in conformity with generally
accepted accounting principles which permit management to make certain
estimates and assumptions at the date of the financial statements. The
following summarizes the significant accounting policies of the funds:
SECURITY VALUATION. Securities for which exchange quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Securities for which exchange quotations are not readily
available (and in certain cases debt securities which trade on an exchange)
are valued primarily using dealer-supplied valuations or at their fair
value as determined in good faith under consistently applied procedures
under the general supervision of the Board of Trustees. Short-term
securities maturing within sixty days of their purchase date are valued at
amortized cost or original cost plus accrued interest, both of which
approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the funds are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases and
sales of securities, income receipts, and expense payments are translated
into U.S. dollars at the prevailing exchange rate on the respective dates
of the transactions.
Net realized gains and losses on foreign currency transactions represent
net gains and losses from sales and maturities of forward currency
contracts, disposition of foreign currencies, currency gains and losses
realized between the trade and settlement dates on securities transactions,
and the
difference between the amount of net investment income accrued and the U.S.
dollar amount actually received. The effects of changes in foreign currency
exchange rates on investments in securities are included with the net
realized and unrealized gain or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, each fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
the fiscal year. The schedules of investments include information regarding
income taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as each fund is informed of the
ex-dividend date. Interest income is accrued as earned. Investment income
is recorded net of foreign taxes withheld where recovery of such taxes is
uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for litigation
proceeds, foreign currency transactions, partnerships, non-taxable
dividends and losses deferred due to wash sales. The funds also utilized
earnings and profits distributed to shareholders on redemption of shares as
a part of the dividends paid deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net investment income and realized
and unrealized gain (loss). Undistributed net investment income and
accumulated
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
undistributed net realized gain (loss) on investments and foreign currency
transactions may include temporary book and tax basis differences which
will reverse in a subsequent period. Any taxable income or gain remaining
at fiscal year end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY CONTRACTS. Each fund may use foreign currency
contracts to facilitate transactions in foreign securities and to manage
each fund's currency exposure. Contracts to buy generally are used to
acquire exposure to foreign currencies, while contracts to sell are used to
hedge each fund's investments against currency fluctuations. Also, a
contract to buy or sell can offset a previous contract. Losses may arise
from changes in the value of the foreign currency or if the counterparties
do not perform under the contracts' terms.
The U.S. dollar value of forward foreign currency contracts is determined
using forward currency exchange rates supplied by a quotation service.
Purchases and sales of forward foreign currency contracts having the same
settlement date and broker are offset and any realized gain (loss) is
recognized on the date of offset; otherwise, gain (loss) is recognized on
settlement date.
FUTURES CONTRACTS AND OPTIONS. Each fund may use futures and options
contracts to manage its exposure to the stock and bond markets and to
fluctuations in interest rates and currency values. Buying futures, writing
puts, and buying calls tend to increase the funds' exposure to the
underlying instrument. Selling futures, buying puts, and writing calls tend
to decrease the funds' exposure to the underlying instrument, or hedge
other fund investments. Losses may arise from changes in the value of the
underlying instruments, if there is an illiquid secondary market for the
contracts, or if the counterparties do not perform under the contracts'
terms.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the funds, along with other affiliated
entities of Fidelity Management & Research Company (FMR), may transfer
uninvested cash balances into one or more joint trading accounts. These
balances are invested in one or more repurchase agreements that mature in
60 days or less from the date of purchase, and are collateralized by U.S.
Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
Securities are transferred to an account of each fund, or to the Joint
Trading Account, at a bank custodian. The securities are marked-to-market
daily and maintained at a value at least equal to the principal amount of
the repurchase agreement (including accrued interest). FMR, the funds'
investment adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
3. CAPITAL STOCK.
On January 18, 1996, the Board of Trustees of Destiny II approved a
three-for-one share split payable to shareholders of record on June 21,
1996. Share and per-share amounts in the accompanying financial statements,
including the information contained in the "Financial Highlights," have
been restated to reflect the aforementioned stock split.
4. PURCHASES AND SALES OF INVESTMENTS.
Destiny I: Purchases and sales of securities, other than short-term
securities, aggregated $1,733,625,034 and $1,715,571,792, respectively, of
which U.S. government and government agency obligations aggregated
$336,224,501 and $0, respectively.
Destiny II: Purchases and sales of securities, other than short-term
securities, aggregated $990,729,529 and $789,700,521, respectively, of
which U.S. government and government agency obligations aggregated
$212,223,868 and $0, respectively.
5. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, FMR receives a monthly
basic fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of each fund.
The group fee rate is the weighted average of a series of rates and is
based on the monthly average net assets of all the mutual funds advised by
FMR. The rates ranged from .2500% to .5200% for the period. In the event
that these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted in
the same or a lower management fee. The annual individual fund fee rates
are .17% and .30% for Destiny I and Destiny II, respectively. The basic fee
is subject to a performance adjustment (up to a maximum of (plus/minus)
.24%) based on each fund's investment performance as compared to the
appropriate index over a specified period of time. For the period, the
management fees were equivalent to annual rates of .62% and .73% of average
net assets after the performance adjustment for the Destiny I and Destiny
II funds, respectively.
Fidelity Distributors Corporation, an affiliate of FMR and sponsor of the
Plans, received $811,961 and $3,284,598 as its portion of the Creation and
Sales Charges on sales of Destiny Plans I and Destiny Plans II,
respectively, for the period.
TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is
the funds' transfer, dividend disbursing and shareholder servicing agent.
FSC receives account fees and asset-based fees that vary according to
account size and type of account. FSC pays for typesetting, printing and
mailing of all shareholder reports, except proxy statements.
ACCOUNTING FEES. FSC maintains the funds' accounting records. The fee is
based on the level of average net assets for the month plus out-of-pocket
expenses.
BROKERAGE COMMISSIONS. Each fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms for Destiny I and Destiny II
were $606,770 and $306,880, respectively.
6. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers of each fund who paid
a portion of each fund's expenses. For the period, the funds' expenses were
reduced by $166,064 and $89,494 under this arrangement for Destiny I and
Destiny II, respectively.
In addition, each fund has entered into arrangements with its custodian and
transfer agent whereby interest earned on uninvested cash balances was used
to offset a portion of each fund's expenses. During the period, the
custodian and transfer agent fees were reduced by $6,370 and $7,155 for
Destiny I and $4,474 and $5,716, for Destiny II under these arrangements.
7. TRANSACTIONS WITH AFFILIATED COMPANIES.
An affiliated company is a company in which the fund has ownership of at
least 5% of the voting securities. Transactions during the period with
companies which are or were affiliates are as follows for Destiny I:
PURCHASE SALES DIVIDEND VALUE
AFFILIATE COST COST INCOME

Methode Electronics, Inc. Class A $ - $ 458,957 $ 72,240 $ -
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees and Shareholders of Fidelity Destiny Portfolios: Destiny I
and Destiny II:
We have audited the accompanying statements of assets and liabilities of
Fidelity Destiny Portfolios: Destiny I and Destiny II, including the
schedules of portfolio investments, as of September 30, 1996, and the
related statements of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended
and the financial highlights for each of the three years in the period then
ended, for the three month period ended September 30, 1993, and for each of
the two years in the period ended June 30, 1993. These financial statements
and financial highlights are the responsibility of the funds' management.
Our responsibility is to express an opinion on these financial statements
and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of September 30, 1996 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Destiny Portfolios: Destiny I and Destiny II as of September 30, 1996,
the results of their operations for the year then ended, the changes in
their net assets for each of the two years in the period then ended, and
the financial highlights for each of

the three years in the period then ended, for the three month period ended
September 30,1993, and for each of the two years in the period ended June
30, 1993, in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.

Boston, Massachusetts
November 12, 1996

DISTRIBUTIONS

Totals of 20% and 21% of the dividends distributed during the fiscal year
were derived from interest on U.S. Government securities which are
generally exempt from state income tax for Destiny I and Destiny II,
respectively.
Totals of 43% and 45% of the dividends distributed during the fiscal year
qualify for the dividends-received deductions for corporate shareholders
for Destiny I and Destiny II, respectively.
The fund will notify shareholders in January 1997 of the percentages for
use in preparing 1996 income tax returns.