FIDELITY MUNICIPAL TRUST, N-30D, 1999-02-17

FIDELITY MUNICIPAL TRUST
N-30D, 1999-02-17

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SPARTAN(REGISTERED TRADEMARK)
PENNSYLVANIA
MUNICIPAL
FUNDS

ANNUAL REPORT
DECEMBER 31, 1998

(FIDELITY_LOGO_GRAPHIC)(registered trademark)

CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.

SPARTAN PENNSYLVANIA
MUNICIPAL INCOME FUND

PERFORMANCE 4 How the fund has done over
time.

FUND TALK 7 The managers' review of fund
performance, strategy and
outlook.

INVESTMENT CHANGES 10 A summary of major shifts in
the fund's investments over
the past six months.

INVESTMENTS 11 A complete list of the fund's
investments.

FINANCIAL STATEMENTS 18 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.

SPARTAN PENNSYLVANIA
MUNICIPAL MONEY MARKET FUND

PERFORMANCE 22 How the fund has done over
time.

FUND TALK 24 The manager's review of fund
performance, strategy and
outlook.

INVESTMENT CHANGES 26 A summary of major shifts in
the fund's investments over
the past six months and one
year.

INVESTMENTS 27 A complete list of the fund's
investments.

FINANCIAL STATEMENTS 33 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.

NOTES 37 Notes to the financial
statements.

REPORT OF INDEPENDENT 41 The auditors' opinion.
ACCOUNTANTS

DISTRIBUTIONS 42

PROXY VOTING RESULTS 43

OF SPECIAL NOTE 45

Third party marks appearing herein are the property of their
respective owners.

All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.

This report is printed on recycled paper using soy-based inks.

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 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.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND
EXPENSES, CALL 1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY
BEFORE YOU INVEST OR SEND MONEY.

PRESIDENT'S MESSAGE

(PHOTO_OF_EDWARD_C_JOHNSON_3D)

DEAR SHAREHOLDER:
Resurgent stock market performance in the fourth quarter helped the
Dow Jones Industrial Average post a double-digit return for the fourth
year in a row - a first in the Dow's 100-plus year history. Three
interest-rate cuts made late in the year by the Federal Reserve Board
helped spark the equity rally. Meanwhile, while the majority of bonds
posted positive performance, most bond returns for 1998 trailed their
gains from 1997.

While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.

The longer your investment time frame, the less likely it is that you
will be affected by short-term market volatility. A 10-year investment
horizon appropriate for saving for a college education, for example,
enables you to weather market cycles in a long-term fund, which may
have a higher risk potential, but also has a higher potential rate of
return.

An intermediate-length fund could make sense if your investment
horizon is two to four years, while a short-term bond fund could be
the right choice if you need your money in one or two years.

If your time horizon is less than a year, you might want to consider
moving some of your bond investment into a money market fund. These
funds seek income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that an investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although money market funds seek to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in these types of funds.

Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.

If you have questions, please call us at 1-800-544-8888, or visit our
web site at www.fidelity.com. We are available 24 hours a day, seven
days a week to provide you the information you need to make the
investments that are right for you.

Best regards,

Edward C. Johnson 3d

SPARTAN PENNSYLVANIA MUNICIPAL INCOME FUND

PERFORMANCE: THE BOTTOM LINE

There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value). You can also look at the fund's income, as
measured by the fund's yield, to measure performance. If Fidelity had
not reimbursed certain fund expenses, the past 10 years total returns
would have been lower.

CUMULATIVE TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1998 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS

SPARTAN PA MUNICIPAL INCOME 5.77% 32.92% 117.36%

LB Pennsylvania Municipal Bond 6.17% 34.25% n/a

Pennsylvania Municipal Debt 5.04% 29.59% 110.39%
Funds Average

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be
$1,050. You can compare the fund's returns to the performance of the
Lehman Brothers Pennsylvania Municipal Bond Index - a market
value-weighted index of Pennsylvania investment-grade municipal bonds
with maturities of one year or more. To measure how the fund's
performance stacked up against its peers, you can compare it to the
Pennsylvania municipal debt funds average, which reflects the
performance of mutual funds with similar objectives tracked by Lipper
Inc. The past one year average represents a peer group of 61 mutual
funds. These benchmarks include reinvested dividends and capital
gains, if any, and exclude the effect of sales charges.

AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1998 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS

SPARTAN PA MUNICIPAL INCOME 5.77% 5.86% 8.07%

LB Pennsylvania Municipal Bond 6.17% 6.07% n/a

Pennsylvania Municipal Debt 5.04% 5.32% 7.71%
Funds Average

AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year. (Note: Lipper calculates average annual total
returns by annualizing each fund's total return, then taking the
arithmetic average. This may produce a different figure than that
obtained by averaging the cumulative total returns and annualizing the
result.)

$10,000 OVER 10 YEARS
Spartan PA Muni Income LB Municipal Bond
00402 LB015
1988/12/31 10000.00 10000.00
1989/01/31 10140.81 10206.80
1989/02/28 10053.69 10090.34
1989/03/31 10051.18 10066.22
1989/04/30 10311.01 10305.20
1989/05/31 10498.02 10519.24
1989/06/30 10662.97 10662.09
1989/07/31 10765.68 10807.20
1989/08/31 10664.18 10701.40
1989/09/30 10629.26 10669.51
1989/10/31 10775.88 10799.99
1989/11/30 10903.26 10988.99
1989/12/31 10980.42 11078.88
1990/01/31 10919.78 11026.48
1990/02/28 11016.50 11124.62
1990/03/31 11018.30 11127.95
1990/04/30 10856.47 11047.39
1990/05/31 11127.48 11288.55
1990/06/30 11228.67 11387.78
1990/07/31 11375.30 11555.18
1990/08/31 11210.53 11387.40
1990/09/30 11267.18 11393.89
1990/10/31 11429.79 11600.57
1990/11/30 11675.06 11833.86
1990/12/31 11770.88 11885.34
1991/01/31 11923.99 12044.84
1991/02/28 11992.82 12149.63
1991/03/31 12019.10 12154.00
1991/04/30 12207.83 12315.65
1991/05/31 12353.42 12425.14
1991/06/30 12291.99 12412.84
1991/07/31 12475.46 12564.02
1991/08/31 12646.77 12729.49
1991/09/30 12793.78 12895.23
1991/10/31 12904.30 13011.29
1991/11/30 12939.00 13047.59
1991/12/31 13241.41 13327.59
1992/01/31 13277.13 13357.98
1992/02/29 13284.28 13362.25
1992/03/31 13283.29 13367.20
1992/04/30 13422.55 13486.16
1992/05/31 13590.12 13644.90
1992/06/30 13809.30 13873.86
1992/07/31 14243.73 14289.80
1992/08/31 14095.30 14150.47
1992/09/30 14170.76 14243.01
1992/10/31 13952.95 14103.01
1992/11/30 14285.52 14355.59
1992/12/31 14448.21 14502.16
1993/01/31 14638.55 14670.82
1993/02/28 15212.51 15201.46
1993/03/31 15039.19 15040.79
1993/04/30 15185.64 15192.55
1993/05/31 15278.52 15277.93
1993/06/30 15537.21 15532.92
1993/07/31 15518.17 15553.27
1993/08/31 15907.61 15877.08
1993/09/30 16141.47 16057.92
1993/10/31 16149.56 16088.92
1993/11/30 16011.63 15947.17
1993/12/31 16352.50 16283.82
1994/01/31 16565.65 16469.78
1994/02/28 16163.41 16043.21
1994/03/31 15452.21 15389.93
1994/04/30 15532.65 15520.44
1994/05/31 15707.50 15655.00
1994/06/30 15681.61 15559.35
1994/07/31 15934.40 15844.55
1994/08/31 15988.88 15899.37
1994/09/30 15762.15 15665.97
1994/10/31 15490.91 15387.74
1994/11/30 15122.46 15109.53
1994/12/31 15529.04 15442.09
1995/01/31 16004.78 15883.43
1995/02/28 16488.98 16345.32
1995/03/31 16721.99 16533.13
1995/04/30 16771.67 16552.64
1995/05/31 17219.74 17080.83
1995/06/30 17051.36 16932.23
1995/07/31 17200.67 17092.74
1995/08/31 17382.55 17309.48
1995/09/30 17578.09 17419.05
1995/10/31 17793.14 17672.32
1995/11/30 18072.59 17965.51
1995/12/31 18236.70 18138.15
1996/01/31 18416.54 18275.10
1996/02/29 18282.63 18151.74
1996/03/31 18031.41 17919.76
1996/04/30 17949.58 17869.05
1996/05/31 17921.94 17861.90
1996/06/30 18100.65 18056.42
1996/07/31 18264.76 18220.73
1996/08/31 18271.67 18216.36
1996/09/30 18488.27 18471.39
1996/10/31 18689.64 18680.30
1996/11/30 19032.84 19022.15
1996/12/31 18969.10 18942.25
1997/01/31 18994.34 18978.06
1997/02/28 19156.06 19152.27
1997/03/31 18905.90 18896.97
1997/04/30 19037.04 19055.14
1997/05/31 19281.24 19341.73
1997/06/30 19467.81 19547.72
1997/07/31 20008.92 20089.19
1997/08/31 19807.95 19900.96
1997/09/30 20033.36 20137.18
1997/10/31 20130.96 20266.66
1997/11/30 20226.30 20385.83
1997/12/31 20550.90 20683.26
1998/01/31 20762.92 20896.71
1998/02/28 20742.16 20902.98
1998/03/31 20724.08 20921.38
1998/04/30 20627.59 20827.02
1998/05/31 20919.80 21156.71
1998/06/30 21055.00 21240.07
1998/07/31 21056.94 21293.38
1998/08/31 21390.38 21622.36
1998/09/30 21683.73 21891.78
1998/10/31 21665.60 21891.34
1998/11/30 21704.35 21968.18
1998/12/31 21735.73 22023.54
IMATRL PRASUN SHR__CHT 19981231 19990113 121937 R00000000000123

$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Spartan Pennsylvania Municipal Income Fund on December 31,
1988. As the chart shows, by December 31, 1998, the value of the
investment would have grown to $21,736 - a 117.36% increase on the
initial investment. For comparison, look at how the Lehman Brothers
Municipal Bond Index - a market value-weighted index of
investment-grade municipal bonds with maturities of one year or more -
did over the same period. With dividends and capital gains, if any,
reinvested, the same $10,000 would have grown to $22,024 - a 120.24%
increase.

UNDERSTANDING
PERFORMANCE

How a fund did yesterday is
no guarantee of how it will
do tomorrow. Bond prices,
for example, generally
move in the opposite
direction of interest rates. In
turn, the share price, return
and yield of a fund that
invests in bonds will vary.
That means if you sell your
shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)

TOTAL RETURN COMPONENTS

YEARS ENDED DECEMBER 31,

1998 1997 1996 1995 1994

Dividend returns 4.55% 4.99% 5.01% 6.52% 5.73%

Capital returns 1.22% 3.35% -0.99% 10.92% -10.77%

Total returns 5.77% 8.34% 4.02% 17.44% -5.04%

TOTAL RETURN COMPONENTS include both dividend returns and capital
returns. A dividend return reflects the actual dividends paid by the
fund. A capital return reflects both the amount paid by the fund to
shareholders as capital gain distributions and changes in the fund's
share price. Both returns assume the dividends or capital gains, if
any, paid by the fund are reinvested.

DIVIDENDS AND YIELD
PERIODS ENDED DECEMBER 31, 1998 PAST 1 MONTH PAST 6 MONTHS PAST 1 YEAR

Dividends per share 4.08(cents) 24.26(cents) 48.27(cents)

Annualized dividend rate 4.39% 4.41% 4.45%

30-day annualized yield 3.91% - -

30-day annualized 6.29% - -
tax-equivalent yield

DIVIDENDS per share show the income paid by the fund for a set period.
If you annualize this number, based on an average share price of
$10.95 over the past one month, $10.91 over the past six months and
$10.85 over the past one year, you can compare the fund's income over
these three periods. The 30-day annualized YIELD is a standard formula
for all funds based on the yields of the bonds in the fund, averaged
over the past 30 days. This figure shows you the yield characteristics
of the fund's investments at the end of the period. It also helps you
compare funds from different companies on an equal basis. The
tax-equivalent yield shows what you would have to earn on a taxable
investment to equal the fund's tax-free yield, if you're in the 37.79%
combined effective 1998 federal and state tax bracket, but does not
reflect the payment of the federal alternative minimum tax, if
applicable.

SPARTAN PENNSYLVANIA MUNICIPAL INCOME FUND

FUND TALK: THE MANAGER'S OVERVIEW

MARKET RECAP

Thanks to volatile and
unpredictable equity markets
worldwide, new money flowed
steadily into bond funds throughout
1998. Bond performance, however,
varied widely from sector to sector.
For the 12-month period ending
December 31, 1998, the Lehman
Brothers Municipal Bond Index -
a popular measure of the
municipal bond market -
returned 6.48%. In contrast, the
Lehman Brothers Aggregate Bond
Index - a widely followed
measure of taxable-bond
performance - returned 8.69%
during the period. In fact, according
to research conducted by
Morningstar, Inc. - a leading
provider of investment information
and analysis - munis lagged the
majority of bond investments over
the course of the year, trailing
Treasuries, long-term corporate
bonds and international bonds,
among others. While Treasuries in
particular reaped the benefits of
equity investors' flight to safety,
municipal bond returns in general
were somewhat tempered by
record-high issuance that was met
with only subdued demand.
Fortunately, the outlook for
municipal bonds improved during
the fourth quarter. Towards the end
of the 12-month period, municipals
were priced quite attractively
compared to their U.S. Treasury
counterparts and were yielding
about the same as 30-year
Treasuries. Also, municipal bonds
- - along with the majority of
fixed-income issues - were
bolstered by three recent
interest-rate cuts by the Federal
Reserve Board, which dropped
the fed funds rate to 4.75%.

(photograph of Christine Thompson)

An interview with Christine Thompson, Portfolio Manager of Spartan
Pennsylvania Municipal Income Fund

Q. HOW DID THE FUND PERFORM, CHRISTINE?

A. For the 12-month period that ended December 31, 1998, the fund had
a total return of 5.77%. To get a sense of how the fund did relative
to its competitors, the Pennsylvania municipal debt funds average
returned 5.04% during the same one-year period, according to Lipper
Inc. Additionally, the Lehman Brothers Pennsylvania Municipal Bond
Index - which tracks the types of securities in which the fund invests
- - returned 6.17% for the same 12-month period.

Q. WHAT HELPED THE FUND BEAT ITS PEERS?

A. One of the main factors for the fund's stronger performance had to
do with Fidelity's credit research, which kept the fund out of
poor-performing bonds issued by Allegheny Health Education and
Research Foundation (AHERF), a large system of hospitals with
operations in Pittsburgh and Philadelphia. The Philadelphia area has
struggled with too many hospital beds and is a highly competitive
hospital environment. AHERF's Philadelphia hospitals came under
pressure as medical insurers reduced reimbursements. It ultimately
declared bankruptcy and AHERF's bonds suffered extensive losses in
response.

Q. GIVEN THAT THEY FACE INCREASING COMPETITIVE AND COST-CUTTING
PRESSURES, HOW DO YOU CHOOSE PENNSYLVANIA-BASED HEALTH CARE
ORGANIZATIONS - WHICH MADE UP ONE OF THE FUND'S LARGEST SECTOR
CONCENTRATIONS THROUGHOUT MOST OF THE PERIOD?

A. There are a number of things I like to see. The first is a health
care organization's ability to deal effectively with costs. Government
and insurance reimbursements are continually under pressure and health
care organizations must find a way to improve efficiencies in order to
remain viable. I also look for organizations that are competitive in
their service area and offer state-of-the-art services. Because of my
emphasis on high-quality investments, roughly half of the fund's
hospital bonds are insured.

Q. WHAT ARE INSURED BONDS AND WHY ARE THEY ATTRACTIVE?

A. In the past decade, a growing portion of new municipal-bond
issuance has been insured, with a record-setting 58% of all new
issuance becoming insured nationwide in 1998. Municipal-bond
insurance, which is underwritten by private insurers, guarantees the
timely payment of a bond's interest and principal. In an environment
where lower-quality securities were priced expensively, insured bonds
were attractive largely because of that guarantee. Another factor that
makes them currently attractive is that an investor doesn't really
have to give up much yield for buying insured, rather than
lower-quality bonds. Shareholders should remember, however, that
municipal bond insurance doesn't immunize a bond from price changes.
Insured bonds, like all bonds, will rise and fall in value in response
to changes in interest rates, supply, demand and other factors.

Q. WHAT OTHER INVESTMENTS MADE A POSITIVE CONTRIBUTION TO THE FUND'S
PERFORMANCE DURING THE PERIOD?

A. The fund's emphasis on bonds with intermediate maturities of
between five and 15 years was a strategy that generally was a plus for
performance during the past year. Based on Fidelity's quantitative
analysis, intermediate-maturity bonds offered the most attractive
value for their given interest-rate sensitivity - the magnitude with
which their prices go up and down as interest rates fluctuate.

Q. WERE THERE ANY DISAPPOINTMENTS?

A. No individual security proved to be particularly disappointing,
although I would point to the fund's relatively low stake in bonds
rated Baa as a disappointment. In the face of falling interest rates,
investors increasingly sought out Baa-rated bonds because they offered
the combination of yield in excess of higher-quality bonds, and
investment-grade credit quality. Growing demand coupled with weaker
supply helped Baa-rated securities outpace their higher-rated
counterparts during much of the year. However, I chose to keep the
fund's stake in Baa-rated bonds relatively light because I didn't
think that they offered enough additional yield, especially given my
concerns that they potentially could lag their higher-rated
counterparts if the U.S. economy were to slow.

Q. CHRISTINE, WHAT'S YOUR OUTLOOK FOR THE MUNICIPAL MARKET?

A. From historical measures, municipals were priced quite attractively
compared to their U.S. Treasury counterparts at the end of the period.
One indication of munis' cheap prices was their yields, which were
roughly 100% of Treasury yields; historically, municipals yield
between 65% and 85% of Treasuries. If municipal bond yields - which
move in the opposite direction of their prices - move back to their
historical relationship with Treasuries because of more favorable
supply and demand conditions, they are likely to perform relatively
well.

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.

CHRISTINE THOMPSON ON
PENNSYLVANIA'S ECONOMY AND
FISCAL SITUATION:

"Pennsylvania's economy hasn't
grown as much as the nation as a
whole over the past year, which is
mainly attributable to job losses
stemming from mergers and
acquisitions among some of the
state's leading employers in the
health care, banking,
transportation and utility
industries. Those actions have
kept the state's employment
growth rate below the national
level and housing demand is
slower than the nation as a whole.
That said, the state's economy is
one of the most industrially
diversified in the U.S, with
employment gains in growing
industries such as tourism,
software manufacturing,
biotechnology and business
services. In addition, the state's
budget also is in good condition,
and it is expected to end the 1998
fiscal year with a surplus of more
than $500 million."

(solid bullet) General obligation bonds
(GOs) made up the fund's largest
sector concentration at 34.9% of
investments at the end of the
period. GOs are backed by the full
faith and credit - which includes
the taxing power - of the
municipal issuer, be it a city,
county, state or other municipality.
A GO is repaid with general
revenue and borrowings, in
contrast to revenue generated
from a facility, such as a tunnel
system.

FUND FACTS

GOAL: to provide high current
income exempt from federal
and Pennsylvania personal
income taxes by investing
normally in investment-grade
municipal securities

FUND NUMBER: 402

TRADING SYMBOL: FPXTX

START DATE: August 6, 1986
SIZE: as of December 31,
1998, more than $269
million

MANAGER: Christine
Thompson, since 1998;
manager, various Fidelity and
Spartan municipal income
funds; joined Fidelity in
1985
(checkmark)

SPARTAN PENNSYLVANIA MUNICIPAL INCOME FUND

INVESTMENT CHANGES

<TABLE>
<CAPTION>
<S> <C> <C>
TOP FIVE SECTORS AS OF
DECEMBER 31, 1998

% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE SECTORS 6 MONTHS AGO

General Obligations 34.9 31.5

Health Care 16.2 14.7

Water & Sewer 12.1 13.5

Escrowed/Pre-Refunded 7.8 11.0

Education 6.7 6.8

AVERAGE YEARS TO MATURITY AS
OF DECEMBER 31, 1998

6 MONTHS AGO

Years 11.1 11.5

</TABLE>

AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY
DOLLAR AMOUNT.

DURATION AS OF DECEMBER 31,
1998

6 MONTHS AGO

Years 6.5 6.5

DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH
A FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER
FACTORS ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE.
ACCORDINGLY, A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS
EXAMPLE.

QUALITY DIVERSIFICATION
(MOODY'S RATINGS)

AS OF DECEMBER 31, 1998 AS OF JUNE 30, 1998
Aaa 66.0%
Aa, A 21.3%
Baa 8.4%
Not Rated 0.9%
Short-term
investments 3.4%
Aaa 66.4%
Aa, A 22.8%
Baa 8.0%
Not Rated 1.0%
Short-term
investments 1.8%
Row: 1, Col: 1, Value: 66.0
Row: 1, Col: 2, Value: 21.3
Row: 1, Col: 3, Value: 8.4
Row: 1, Col: 4, Value: 0.9
Row: 1, Col: 5, Value: 3.4
Row: 1, Col: 1, Value: 66.40000000000001
Row: 1, Col: 2, Value: 22.8
Row: 1, Col: 3, Value: 8.0
Row: 1, Col: 4, Value: 1.0
Row: 1, Col: 5, Value: 1.8
WHERE MOODY'S RATINGS ARE NOT AVAILABLE, WE HAVE USED S&P RATINGS.
AMOUNTS SHOWN ARE AS A PERCENTAGE OF THE FUND'S INVESTMENTS.

SPARTAN PENNSYLVANIA MUNICIPAL INCOME FUND

INVESTMENTS DECEMBER 31, 1998

Showing Percentage of Total Value of Investment in Securities

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
MUNICIPAL BONDS - 96.6%

MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)

PENNSYLVANIA - 95.8%

Abington School District Aaa $ 4,000,000 $ 4,001,480
Rfdg. 5.125% 5/15/26 (FGIC
Insured)

Allegheny County Arpt. Rev.
Rfdg. (Pittsburgh Int'l.
Arpt.) Series A:

5.75% 1/1/08 (MBIA Insured) Aaa 1,000,000 1,099,610
(d)

5.75% 1/1/14 (MBIA Insured) Aaa 3,000,000 3,271,380
(d)

Allegheny County Higher Ed. Aaa 400,000 472,884
Bldg. Auth. Univ. Rev.
(Duquesne Univ. Proj.) 6.5%
3/1/10 (AMBAC Insured)

Allegheny County Hosp. Dev.
Auth. Rev. Rfdg.:

(Univ. of Pittsburgh Health Aaa 2,845,000 3,079,257
Ctr.) Series A, 5.55% 4/1/12
(MBIA Insured)

(UPMC Health Sys.) Series A:

4.625% 8/1/13 (MBIA Insured) Aaa 3,885,000 3,793,431

4.625% 8/1/14 (MBIA Insured) Aaa 4,060,000 3,929,877

Allegheny County Ind. Dev. - 2,325,000 2,510,140
Auth. Rev. (YMCA Pittsburgh
Proj.) Series A, 8.75% 3/1/10

Allegheny County Residential Aaa 1,080,000 1,125,835
Fin. Auth. Mtg. Rev. (Single
Family) Series M, 7.95%
6/1/23, LOC Govt. Nat'l.
Mtg. Assoc. (d)

Allegheny County San. Auth. Aaa 2,260,000 1,181,890
Swr. Rev. 0% 12/1/12 (FGIC
Insured) (Escrowed to
Maturity) (e)

Bethlehem Area School Aaa 3,500,000 3,527,230
District Rfdg. 5% 9/1/15
(FGIC Insured)

Central Bucks School District Aa3 1,215,000 1,297,243
5.25% 5/15/05

Chester County Health & Ed. Aaa 600,000 632,244
Facilities Auth. Health Sys.
Rev. (Jefferson Health Sys.)
Series B, 5% 5/15/08 (AMBAC
Insured)

Delaware County Auth. Hosp.
Rev. (Crozer-Chester Med.
Ctr.):

6% 12/15/09 Baa1 1,500,000 1,591,965

6% 12/15/20 Baa1 2,700,000 2,816,235

Delaware County Gen. Oblig. Aa3 2,200,000 2,296,360
Rfdg. 5.3% 11/15/01

Delaware County Ind. Dev. Baa1 1,300,000 1,394,224
Auth. Rev. Rfdg. (Resource
Recovery Facility) Series A,
6.1% 7/1/13

Harrisburg Auth. Rev. (Pooled Aaa 3,000,000 3,169,740
Bond Prog.) Series I,
5.625% 4/1/15 (MBIA Insured)

Keystone Oaks School District Aaa 5,900,000 6,386,101
5.829% 9/1/16 (AMBAC
Insured) (Pre-Refunded to
9/4/02 @ 102) (e)

MUNICIPAL BONDS - CONTINUED

MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)

PENNSYLVANIA - CONTINUED

Lehigh County Gen. Purp. Aaa $ 1,000,000 $ 991,360
Auth. Rev. (Lehigh Valley
Health Network) Series A, 5%
7/1/18 (MBIA Insured)

Meadville Gen. Oblig. Rfdg. Aaa 3,210,000 3,573,565
Series B, 6% 10/1/05 (AMBAC
Insured)

Montgomery County Higher Ed.
& Health Auth. Rev. Rfdg.
(Healthcare-Holy Redeemer
Health) Series A:

5.5% 10/1/05 (AMBAC Insured) Aaa 2,240,000 2,417,274

5.5% 10/1/08 (AMBAC Insured) Aaa 1,000,000 1,089,910

Northumberland County Auth. Aaa 1,000,000 592,260
Commonwealth Lease Rev.
(Cap. Appreciation)
(Correctional Facility) 0%
10/15/10 (MBIA Insured)
(Escrowed to Maturity) (e)

Pennsbury School District:

Rfdg. 6% 8/15/05 (FGIC Aaa 1,605,000 1,783,765
Insured)

6.8% 8/15/14 (FGIC Insured) Aaa 1,025,000 1,173,389
(Pre-Refunded to 8/15/04 @
100) (e)

Pennsylvania Convention Ctr.
Auth. Rev. Rfdg. Series A:

6.6% 9/1/09 (MBIA Insured) Aaa 9,150,000 10,387,355

6.7% 9/1/14 (MBIA Insured) Aaa 3,965,000 4,518,792

6.75% 9/1/19 (MBIA Insured) Aaa 2,670,000 3,036,538

Pennsylvania Gen. Oblig.:

(Cap. Appreciation) 2nd Aaa 1,770,000 1,238,593
Series, 0% 7/1/07 (AMBAC
Insured)

1st Series, 6.125% 9/15/03 Aa3 2,000,000 2,161,860

2nd Series:

5% 10/15/09 Aa3 4,000,000 4,244,840

5.6% 7/1/02 Aa3 1,000,000 1,059,920

6.25% 7/1/10 Aa3 2,000,000 2,338,160

6.25% 7/1/11 Aa3 1,200,000 1,406,232

3rd Series, 6.1% 11/15/04 Aaa 1,000,000 1,115,700
(FGIC Insured) (b)

Pennsylvania Higher Edl.
Facilities Auth. College &
Univ. Rev. Rfdg.:

(RIDC Reg'l. AA- 1,000,000 1,101,970
Growth/Carnegie-Mellon
Univ.) 6% 11/1/05

MUNICIPAL BONDS - CONTINUED

MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)

PENNSYLVANIA - CONTINUED

Pennsylvania Higher Edl.
Facilities Auth. College &
Univ. Rev. Rfdg.: - continued

(Univ. of Pennsylvania):

Series A:

5.9% 9/1/15 Aa2 $ 1,200,000 $ 1,289,796

6.5% 9/1/02 Aa2 2,750,000 3,005,750

6.5% 9/1/04 Aa2 2,650,000 2,993,043

7% 9/1/01 Aa2 2,000,000 2,167,820

Series B:

6.5% 9/1/02 Aa2 1,950,000 2,131,350

6.5% 9/1/04 Aa2 2,100,000 2,371,845

7% 9/1/05 Aa2 2,000,000 2,348,620

Pennsylvania Higher Edl. A1 4,000,000 4,208,960
Facilities Auth. Health
Svcs. Rev. Rfdg. (Univ. of
Pennsylvania) Series A,
5.35% 1/1/08

Pennsylvania Hsg. Fin. Agcy.
Rev.:

(Single Family Mtg.):

Series 51, 5.65% 4/1/20 (d) Aa2 2,320,000 2,374,404

Series 52 B, 5.55% 10/1/12 (d) Aa 1,570,000 1,617,461

Series 53 A, 5.4% 10/1/27 (d) Aa 1,000,000 1,025,620

Rfdg. (Single Family Mtg.) Aa2 1,765,000 1,812,337
Series 54 A, 5.375% 10/1/28
(d)

6.1% 10/1/13 (d) Aa 5,000,000 5,214,000

Pennsylvania Ind. Dev. Auth.
Rev. (Econ. Dev.):

5.8% 1/1/08 (AMBAC Insured) Aaa 2,000,000 2,222,300

5.8% 7/1/09 (AMBAC Insured) Aaa 1,295,000 1,446,670

7% 7/1/06 (AMBAC Insured) Aaa 1,000,000 1,179,120

7% 1/1/07 (AMBAC Insured) Aaa 1,500,000 1,778,340

7% 7/1/07 (AMBAC Insured) Aaa 2,650,000 3,167,572

Pennsylvania Tpk. Commission Aaa 3,000,000 3,201,150
Tpk. Rev. Series L, 6.25%
6/1/11 (AMBAC Insured)

Philadelphia Arpt. Rev. Rfdg. Aaa 3,000,000 3,368,670
(Philadelphia Arpt. Sys.)
Series A, 6% 6/15/08 (FGIC
Insured) (d)

Philadelphia Gas Works Rev. Baa1 5,905,000 6,495,323
Rfdg. 14th Series A, 6.375%
7/1/26

Philadelphia Gen. Oblig.:

Rfdg. Series A, 5.125% Aaa 8,000,000 8,375,680
5/15/03 (FGIC Insured)

6.25% 5/15/10 (MBIA Insured) Aaa 3,200,000 3,628,288

MUNICIPAL BONDS - CONTINUED

MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)

PENNSYLVANIA - CONTINUED

Philadelphia Hosp. & Higher
Ed. Facilities Auth. Hosp.
Rev. Rfdg. (Philadelphia
Hosp.):

6.05% 7/1/04 (Escrowed to Baa3 $ 2,500,000 $ 2,750,200
Maturity) (e)

6.15% 7/1/05 (Escrowed to Baa3 2,100,000 2,342,991
Maturity) (e)

6.25% 7/1/06 (Escrowed to Baa3 2,600,000 2,948,244
Maturity) (e)

Philadelphia Hosp. & Higher
Ed. Facilities Auth. Rev.
(Jefferson Health Sys.)
Series A:

5% 5/15/09 A1 1,500,000 1,550,790

5.5% 5/15/08 A1 1,000,000 1,080,730

Philadelphia Ind. Dev. Arpt. Aaa 3,000,000 2,982,900
Rev. (Philadelphia Arpt.
Sys. Proj.) Series A, 5%
7/1/15 (FGIC Insured) (d)

Philadelphia Muni. Auth. Rev. Aaa 1,000,000 567,000
(Cap. Appreciation) (Muni.
Svcs. Bldg. Lease) 0%
3/15/11 (FSA Insured)

Philadelphia School District:

Rfdg. Series A, 5% 4/1/06 Aaa 5,505,000 5,791,205
(AMBAC Insured)

Series A, 5.25% 7/1/02 (MBIA Aaa 2,500,000 2,620,625
Insured)

Philadelphia Wtr. & Swr. Rev. Aaa 5,300,000 3,485,916
(Cap. Appreciation) 14th
Series, 0% 10/1/08 (MBIA
Insured)

Philadelphia Wtr. & Wastewtr.
Rev.:

Rfdg.:

5.5% 6/15/15 (FSA Insured) Aaa 3,000,000 3,107,970

5.75% 6/15/13 (MBIA Insured) Aaa 4,400,000 4,722,696

6.75% 8/1/04 (MBIA Insured) Aaa 2,085,000 2,373,856

6.75% 8/1/05 (MBIA Insured) Aaa 3,110,000 3,589,997

Pittsburgh Gen. Oblig. Rfdg.:

Series A, 5.5% 9/1/14 (AMBAC Aaa 5,310,000 5,751,580
Insured)

Series D:

5% 9/1/10 (FGIC Insured) Aaa 2,000,000 2,079,760

5% 9/1/20 (FGIC Insured) Aaa 2,285,000 2,240,488

Pittsburgh School District
(Cap. Appreciation) Series C:

0% 8/1/07 (AMBAC Insured) Aaa 2,610,000 1,810,870

0% 8/1/08 (AMBAC Insured) Aaa 2,000,000 1,323,640

Pittsburgh Wtr. & Swr. Auth.
Wtr. & Swr. Sys. Rev. Rfdg.:

(Cap. Appreciation) Series A, Aaa 3,300,000 2,623,467
0% 9/1/04 (FGIC Insured)
(Escrowed to Maturity) (e)

MUNICIPAL BONDS - CONTINUED

MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)

PENNSYLVANIA - CONTINUED

Pittsburgh Wtr. & Swr. Auth.
Wtr. & Swr. Sys. Rev. Rfdg.:
- - continued

Series A:

4.75% 9/1/16 (FGIC Insured) Aaa $ 3,000,000 $ 2,895,150

6.5% 9/1/13 (FGIC Insured) Aaa 10,000,000 11,912,997

6.5% 9/1/14 (FGIC Insured) Aaa 1,000,000 1,089,550
(Pre-Refunded to 9/1/01 @
102) (e)

Scranton-Lackawanna Health & Aaa 3,375,000 3,605,243
Welfare Auth. Rev. Rfdg.
(Cmnty. Med. Ctr. Proj.)
5.5% 7/1/12 (MBIA Insured)

Southeastern Pennsylvania
Trans. Auth. Spl. Rev.:

Series A:

6.5% 3/1/03 (FGIC Insured) Aaa 2,520,000 2,767,691

6.5% 3/1/04 (FGIC Insured) Aaa 1,485,000 1,659,502

5.35% 3/1/09 (FGIC Insured) Aaa 4,000,000 4,310,040

Wilkens Area Ind. Dev. Auth. Aaa 1,500,000 1,509,195
Rev. Rfdg. (Fairview
Extended Care) Series B,
4.55% 1/1/21 (MBIA Insured),
LOC BankBoston NA

Wyoming Ind. Dev. Auth. Poll. Aa2 5,000,000 5,464,350
Cont. Rev. Rfdg. (Proctor &
Gamble Paper Proj.) 5.55%
5/1/10

York County Solid Waste & Aaa 5,000,000 5,345,500
Refuse Auth. Solid Waste
Sys. Rev. Rfdg. 5.25%
12/1/05 (FGIC Insured)

255,536,871

PUERTO RICO - 0.8%

Puerto Rico Commonwealth Gen. Baa1 1,000,000 1,019,560
Oblig. (Pub. Impt.) 5.375%
7/1/25

Puerto Rico Commonwealth Baa 1,000,000 1,047,240
Urban Renewal & Hsg. Corp.
Rfdg. 7.875% 10/1/04

2,066,800

TOTAL MUNICIPAL BONDS 257,603,671
(Cost $242,725,931)

</TABLE>

MUNICIPAL NOTES - 3.4%

PRINCIPAL AMOUNT VALUE (NOTE 1)

PENNSYLVANIA - 3.4%

Allegheny County Ind. Dev. $ 900,000 $ 900,000
Auth. Rev. Rfdg. (Longwood
at Oakmont, Inc. Proj.)
Series 1997 A, 4%, LOC
Dresdner Bank AG, VRDN (c)

Lehigh County Gen. Purp. 200,000 200,000
Auth. Rev. (Lehigh Valley
Hosp.) Series A, 4.05%
(AMBAC Insured) (BPA Chase
Manhattan Bank), VRDN (c)

Philadelphia Auth. Ind. Dev. 1,700,000 1,700,000
Rev. (Fox Chase Cancer Ctr.
Proj.) Series 1997, 4.1%,
LOC Morgan Guaranty Trust
Co., NY, VRDN (c)

Philadelphia Hosp. & Higher 5,500,000 5,500,000
Ed. Facilities Auth. Hosp.
Rev. (Children's Hosp.
Proj.) Series 1996 A, 4.1%
(BPA Morgan Guaranty Trust
Co., NY), VRDN (c)

Schuylkill County Ind. Dev. 700,000 700,000
Auth. Resource Recovery Rev.
Rfdg. (Northeastern Pwr.
Co. Proj.) Series 1997 B,
4.2%, LOC Cr. Local De
France, VRDN (c)(d)

York Gen. Auth. Pooled Fing. 200,000 200,000
Rev. Series 1996, 3.85%,
LOC First Union Nat'l. Bank
of North Carolina, VRDN (c)

TOTAL MUNICIPAL NOTES 9,200,000
(Cost $9,200,000)

TOTAL INVESTMENT IN $ 266,803,671
SECURITIES - 100%
(Cost $251,925,931)

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FUTURES CONTRACTS

EXPIRATION DATE UNDERLYING FACE AMOUNT UNREALIZED GAIN/(LOSS)

PURCHASED

40 U.S. Treasury Bond Contracts Mar. 1999 $ 5,111,250 $ (61,490)

</TABLE>

THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL
INVESTMENTS IN SECURITIES - 1.9%

SECURITY TYPE ABBREVIATION
VRDN - VARIABLE RATE DEMAND NOTE

LEGEND
(a) Standard & Poor's credit ratings are used in the absence of a
rating by Moody's Investors Service, Inc.

(b) Security or a portion of the security was pledged to cover margin
requirements for futures contracts. At the period end, the value of
securities pledged amounted to $323,553.

(d) Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.

(e) Security collateralized by an amount sufficient to pay interest
and principal.

OTHER INFORMATION

The composition of long-term debt holdings as a percentage of total
value of investments in securities, is as follows (ratings are
unaudited):

MOODY'S RATINGS S&P RATINGS

Aaa, Aa, A 86.9% AAA, AA, A 85.5%

Baa 8.4% BBB 7.5%

Ba 0.0% BB 0.0%

B 0.0% B 0.0%

Caa 0.0% CCC 0.0%

Ca, C 0.0% CC, C 0.0%

D 0.0%

The percentage not rated by Moody's or S&P amounted to 0.9%.

The distribution of municipal securities by revenue source, as a
percentage of total value of investments in securities, is as follows:

General Obligations 34.9%

Health Care 16.2

Water & Sewer 12.1

Escrowed/Pre-Refunded 7.8

Education 6.7

Transportation 5.2

Housing 5.0

Others (individually less 12.1
than 5%)

TOTAL 100.0%

INCOME TAX INFORMATION

At December 31, 1998, the aggregate cost of investment securities for
income tax purposes was $251,925,931. Net unrealized appreciation
aggregated $14,877,740, of which $15,070,247 related to appreciated
investment securities and $192,507 related to depreciated investment
securities.

The fund hereby designates approximately $2,374,000 as a capital gain
dividend for the purpose of the dividend paid deduction.

SPARTAN PENNSYLVANIA MUNICIPAL INCOME FUND

FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998

ASSETS

Investment in securities, at $ 266,803,671
value (cost $251,925,931) -
See accompanying schedule

Cash 97,760

Receivable for fund shares 40,500
sold

Interest receivable 3,995,894

Redemption fees receivable 210

TOTAL ASSETS 270,938,035

LIABILITIES

Payable for fund shares $ 561,731
redeemed

Distributions payable 758,837

Accrued management fee 126,160

Payable for daily variation 5,000
on futures contracts

Other payables and accrued 2,647
expenses

TOTAL LIABILITIES 1,454,375

NET ASSETS $ 269,483,660

Net Assets consist of:

Paid in capital $ 254,878,367

Accumulated undistributed net (210,957)
realized gain (loss) on
investments

Net unrealized appreciation 14,816,250
(depreciation) on investments

NET ASSETS, for 24,879,353 $ 269,483,660
shares outstanding

NET ASSET VALUE, offering $10.83
price and redemption price
per share ($269,483,660
(divided by) 24,879,353
shares)

STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998

INTEREST INCOME $ 13,281,353

EXPENSES

Management fee $ 1,461,213

Non-interested trustees' 223
compensation

Total expenses before 1,461,436
reductions

Expense reductions (2,847) 1,458,589

NET INTEREST INCOME 11,822,764

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

Investment securities 2,778,430

Futures contracts 45,716 2,824,146

Change in net unrealized
appreciation (depreciation)
on:

Investment securities 210,156

Futures contracts (56,499) 153,657

NET GAIN (LOSS) 2,977,803

NET INCREASE (DECREASE) IN $ 14,800,567
NET ASSETS RESULTING FROM
OPERATIONS

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STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
1998 1997

INCREASE (DECREASE) IN NET
ASSETS

Operations Net interest income $ 11,822,764 $ 12,459,195

Net realized gain (loss) 2,824,146 2,246,336

Change in net unrealized 153,657 6,488,138
appreciation (depreciation)

NET INCREASE (DECREASE) IN 14,800,567 21,193,669
NET ASSETS RESULTING FROM
OPERATIONS

Distributions to shareholders (11,822,764) (12,459,195)
From net interest income

From net realized gain (2,636,886) (730,281)

TOTAL DISTRIBUTIONS (14,459,650) (13,189,476)

Share transactions Net 28,187,316 20,868,787
proceeds from sales of shares

Reinvestment of distributions 10,944,008 9,945,954

Cost of shares redeemed (34,694,043) (45,110,114)

NET INCREASE (DECREASE) IN 4,437,281 (14,295,373)
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS

Redemption fees 12,418 7,194

TOTAL INCREASE (DECREASE) 4,790,616 (6,283,986)
IN NET ASSETS

NET ASSETS

Beginning of period 264,693,044 270,977,030

End of period $ 269,483,660 $ 264,693,044

OTHER INFORMATION
Shares

Sold 2,596,010 1,976,440

Issued in reinvestment of 1,009,039 939,747
distributions

Redeemed (3,205,514) (4,279,810)

Net increase (decrease) 399,535 (1,363,623)

</TABLE>

<TABLE>
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FINANCIAL HIGHLIGHTS
YEARS ENDED DECEMBER 31,

1998 1997 1996 1995 1994

SELECTED PER-SHARE DATA

Net asset value, beginning $ 10.810 $ 10.490 $ 10.670 $ 9.620 $ 11.130
of period

Income from Investment .483 .501 .520 .590 .652
Operations Net interest
income

Net realized and unrealized .126 .350 (.109) 1.049 (1.201)
gain (loss)

Total from investment .609 .851 .411 1.639 (.549)
operations

Less Distributions

From net interest income (.483) (.501) (.520) (.590) (.652)

From net realized gain (.107) (.030) (.071) - (.310)

Total distributions (.590) (.531) (.591) (.590) (.962)

Redemption fees added to paid .001 .000 .000 .001 .001
in capital

Net asset value, end of period $ 10.830 $ 10.810 $ 10.490 $ 10.670 $ 9.620

TOTAL RETURN A, B 5.77% 8.34% 4.02% 17.44% (5.04)%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period $ 269,484 $ 264,693 $ 270,977 $ 288,425 $ 241,729
(000 omitted)

Ratio of expenses to average .55% .55% .55% .55% .55%
net assets

Ratio of expenses to average .55% .55% .53% C .55% .55%
net assets after expense
reductions

Ratio of net interest income 4.45% 4.74% 4.98% 5.73% 6.33%
to average net assets

Portfolio turnover rate 25% 26% 53% 49% 26%

</TABLE>

A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.

B TOTAL RETURNS DO NOT INCLUDE THE FORMER ACCOUNT CLOSEOUT FEE.

C FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.

SPARTAN PENNSYLVANIA MUNICIPAL MONEY MARKET FUND

PERFORMANCE: THE BOTTOM LINE

To measure a money market fund's performance, you can look at either
total return or yield. Total return reflects the change in the value
of an investment, assuming reinvestment of the fund's dividend income,
but does not include the $5 account closeout fee on an average-sized
account. Yield measures the income paid by a fund. Since a money
market fund tries to maintain a $1 share price, yield is an important
measure of performance. If Fidelity had not reimbursed certain fund
expenses, the past 10 years total returns would have been lower.

CUMULATIVE TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1998 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS

SPARTAN PA MUNICIPAL MONEY 3.15% 16.94% 45.04%
MARKET

All Tax-Free Money Market 2.95% 15.74% 40.84%
Funds Average

AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1998 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS

SPARTAN PA MUNICIPAL MONEY 3.15% 3.18% 3.79%
MARKET

All Tax-Free Money Market 2.95% 2.98% 3.51%
Funds Average

AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year.

<TABLE>
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YIELDS
12/28/98 9/28/98 6/29/98 3/30/98 12/29/97

Spartan PA Muni Money Market 3.19% 3.45% 3.23% 3.26% 3.64%

All Tax-Free Money Market 2.98% 3.23% 3.05% 3.05% 3.38%
Funds Average

Spartan Pennsylvania 5.13% 5.55% 5.19% 5.24% 5.85%
Municipal Money Market -
Tax-equivalent

Portion of fund's income 2.51% 1.62% 2.44% 0% 0%
subject to state taxes

</TABLE>

Row: 1, Col: 1, Value: 3.19
Row: 1, Col: 2, Value: 2.98
Row: 2, Col: 1, Value: 3.45
Row: 2, Col: 2, Value: 3.23
Row: 3, Col: 1, Value: 3.23
Row: 3, Col: 2, Value: 3.05
Row: 4, Col: 1, Value: 3.26
Row: 4, Col: 2, Value: 3.05
Row: 5, Col: 1, Value: 3.64
Row: 5, Col: 2, Value: 3.38
5% -
4% -
3% -
2% -
1% -
0%
Spartan Pennsylvania
Municipal Money
Market
All Tax-Free Money
Market Funds Average

YIELD refers to the income paid by the fund over a given period.
Yields for money market funds are usually for seven-day periods,
expressed as annual percentage rates. A yield that assumes income
earned is reinvested or compounded is called an effective yield. The
chart above shows the fund's current seven-day yield at quarterly
intervals over the past year. You can compare these yields to the all
tax-free money market funds average as tracked by IBC Financial Data,
Inc. Or you can look at the fund's tax-equivalent yield, which is
based on a combined effective 1998 federal and state income tax rate
of 37.79%. A portion of the fund's income may be subject to the
federal alternative minimum tax.

A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT
PAST RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.

COMPARING
PERFORMANCE

Yields on tax-free investments
are usually lower than yields
on taxable investments.
However, a straight
comparison between the two
may be misleading because it
ignores the way taxes reduce
taxable returns. Tax-equivalent
yield - the yield you'd have to
earn on a similar taxable
investment to match the tax-free
yield - makes the comparison
more meaningful. Keep in
mind that the U.S. government
neither insures nor guarantees
a money market fund. In fact,
there is no assurance that a
money fund will maintain a $1
share price.
(checkmark)

SPARTAN PENNSYLVANIA MUNICIPAL MONEY MARKET FUND

FUND TALK: THE MANAGER'S OVERVIEW

(photograph of Diane McLaughlin)

An interview with Diane McLaughlin, Portfolio Manager of Spartan
Pennsylvania Municipal Money Market Fund

Q. DIANE, WHAT WAS THE INVESTMENT ENVIRONMENT LIKE IN 1998?

A. The U.S. economy was very strong in 1998. Growth in real GDP -
gross domestic product adjusted for inflation - approached 4% over the
course of the year. Employment was also quite robust, with the
unemployment rate averaging only 4.5% in 1998. Economic conditions
like these are usually accompanied by inflation. Wages have started to
creep upward as employers have increased wages to attract or retain
workers. But consumers didn't have to pay higher prices as the CPI
(consumer price index) hovered at a tame rate of 1.6% for the year.
The strength of the economy beat expectations; most market observers
felt global economic and financial crises would hurt growth in the
U.S. much more than they did. While the manufacturing sector
experienced a downturn - with exports from the U.S. suffering from
increased competition - this weakness was more than offset by solid
domestic demand. Robust consumer activity in the holiday shopping
season sustained growth through the end of the year.

Q. HOW DID THIS BACKDROP AFFECT FEDERAL RESERVE BOARD MONETARY POLICY?

A. Despite this economic strength, the expectation of an eventual
slowdown prompted the Fed to lower the rate banks charge each other
for overnight loans - known as the fed funds target rate - by 0.25
percentage points in late September. The Fed followed with a second
rate cut in October, responding to financial instability in the
markets, the near-collapse of a highly leveraged hedge fund and
increased aversion to risk by investors in the market. The Fed
implemented an additional cut in November, citing the presence of
downside risks in global financial markets.

Q. WHAT WAS YOUR STRATEGY DURING THIS PERIOD?

A. The fund's maturity at the beginning of the year stood at 34 days.
It rolled down to the low 20-day range in the third quarter, largely
due to technicals, or supply factors in the municipal money market.
Specifically, there was not a lot of fixed-rate, longer-term issuance.
When supplies of fixed-rate paper declined, new issues of one-year
notes came to market at higher prices. As a result, the fund was
focused on short-term, variable-rate paper, which was more abundant
and attractively priced. Amid expectations of further aggressive Fed
rate cuts, I added fixed-rate securities to lock in higher rates.
These purchases brought the fund's average maturity to 43 days in
September. The maturity has since rolled down to 38 days at the end of
the period.

Q. HOW DID THE FUND PERFORM?

A. The fund's seven-day yield on December 31, 1998, was 3.26%,
compared to 3.66% 12 months ago. The latest yield was the equivalent
of a 5.24% taxable yield for Pennsylvania investors in the 37.79%
combined state and federal tax bracket. Through December 31, 1998, the
fund's 12-month total return was 3.15%, compared to 2.95% for the all
tax-free money market funds average, according to IBC Financial Data,
Inc.

Q. WHAT'S YOUR OUTLOOK FOR THE BEGINNING OF 1999?

A. In the minutes from its Open Market Committee meeting in November,
the Fed indicated that its decision to implement the latest
interest-rate cut was a tough one given continued economic strength in
the U.S. At the same meeting, the Fed shifted from a bias toward
lowering rates to a neutral stance. The Fed might reverse course and
increase rates if continued strength in the economy finally is
reflected in higher prices. On the other hand, there is still a risk
that outside factors might threaten U.S. economic growth and encourage
the Fed to ease credit by lowering rates once again. Given the
uncertainty about the future course of interest rates, I'll seek to
maintain a flexible, neutral positioning with the fund's maturity.

FUND FACTS

GOAL: to seek high current
income exempt from federal
and Pennsylvania state
income tax by investing in
high-quality, short-term
municipal money market
securities, while maintaining
a $1.00 share price

FUND NUMBER: 401

TRADING SYMBOL: FPTXX

START DATE: August 6, 1986
SIZE: as of December 31,
1998, more than $216
million

MANAGER: Diane McLaughlin,
since 1997; manager,
various Fidelity and Spartan
municipal money market
funds; joined Fidelity in
1992
(checkmark)

SPARTAN PENNSYLVANIA MUNICIPAL MONEY MARKET FUND

INVESTMENT CHANGES

<TABLE>
<CAPTION>
<S> <C> <C> <C>
MATURITY DIVERSIFICATION

DAYS % OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS 6/30/98 % OF FUND'S INVESTMENTS
12/31/98 12/31/97

0 - 30 79 78 80

31 - 90 6 15 3

91 - 180 6 4 10

181 - 397 9 3 7

WEIGHTED AVERAGE MATURITY

12/31/98 6/30/98 12/31/97

Spartan Pennsylvania 38 DAYS 30 Days 35 Days
Municipal Money Money Market
Fund

All Tax-Free Money Market 46 DAYS 41 Days 48 Days
Funds Average *

ASSET ALLOCATION (% OF FUND'S
INVESTMENTS)

</TABLE>

AS OF DECEMBER 31, 1998 AS OF JUNE 30, 1998
Row: 1, Col: 1, Value: 71.0
Row: 1, Col: 2, Value: 16.0
Row: 1, Col: 3, Value: 3.0
Row: 1, Col: 4, Value: 3.0
Row: 1, Col: 5, Value: 7.0
Row: 1, Col: 1, Value: 77.0
Row: 1, Col: 2, Value: 15.0
Row: 1, Col: 3, Value: 5.0
Row: 1, Col: 4, Value: 3.0
Row: 1, Col: 5, Value: 0.0
Variable rate demand
notes (VRDNs) 71%
Commercial paper
(including CP mode) 16%
Tender bonds 3%
Municipal notes 3%
Other 7%
Variable rate demand
notes (VRDNs) 77%
Commercial paper
(including CP mode) 15%
Tender bonds 5%
Municipal notes 3%
Other 0%

*SOURCE: IBC'S MONEY FUND REPORT(registered trademark)

SPARTAN PENNSYLVANIA MUNICIPAL MONEY MARKET FUND

INVESTMENTS DECEMBER 31, 1998

Showing Percentage of Total Value of Investment in Securities

<TABLE>
<CAPTION>
<S> <C> <C> <C>
MUNICIPAL SECURITIES - 100.0%

PRINCIPAL AMOUNT VALUE (NOTE 1)

PENNSYLVANIA - 96.0%

Allegheny County Ind. Dev.
Auth. Rev.:

(Doren, Inc. Proj.) Series $ 2,300,000 $ 2,300,000
1997 C, 3.95%, LOC Nat'l.
City Bank (PA), VRDN (a)(d)

(R.I. Lampus Co. Proj.) 2,560,000 2,560,000
Series 1997 A, 3.95%, LOC
Nat'l. City Bank (PA), VRDN
(a)(d)

(Union Elec. Steel Co. Proj.) 3,120,000 3,120,000
Series 1996 A, 4.05%, LOC
PNC Bank NA, VRDN (a)(d)

Beaver County Ind. Dev. Auth.
Poll. Cont. Rev. Bonds:

(Duquesne Lt. Co. Mansfield 930,000 930,000
Proj.) Series 1990 C, 3.15%
3/9/99, LOC Barclays Bank
PLC, CP mode

(Duquesne Lt. Co. Proj.) 3,000,000 3,000,000
Series 1994, 3.3% 1/13/99,
LOC UBS AG, CP mode

Berks County Ind. Dev. Auth.
Manufacturing Facilities Rev.:

(Bachman Co. Proj.) Series 2,225,000 2,225,000
1994, 4.25%, LOC First Union
Nat'l. Bank of North
Carolina, VRDN (a)(d)

(Construction Fastener Proj.) 970,000 970,000
Series 1996 B, 4.25%, LOC
First Union Nat'l. Bank of
North Carolina, VRDN (a)(d)

(Grafika Commercial Printing, 1,410,000 1,410,000
Inc.) Series 1995, 4.2%,
LOC First Union Nat'l. Bank
of North Carolina, VRDN
(a)(d)

(RAM Industries, Inc.) Series 3,250,000 3,250,000
1996, 4.2%, LOC First Union
Nat'l. Bank of North
Carolina, VRDN (a)(d)

Berks County Ind. Dev. Auth.
Rev.:

(Continental Assurance Co. 2,300,000 2,300,000
Proj.) Series 82, 3.45%
(Continental Casualty Co.
Guaranteed), VRDN (a)

Bonds (Citizens Utils.) 4,200,000 4,200,000
Series 1996, 3.1% 3/8/99, CP
mode (d)

Boyertown Area School 2,300,000 2,301,643
District TRAN Series 1998,
4% 6/30/99

Bucks County Ind. Dev. Auth.
Rev.:

(Associates Proj.) Series 1,840,000 1,840,000
1993, 4.25%, LOC First Union
Nat'l. Bank of North
Carolina, VRDN (a)(d)

(Double H Plastics, Inc. 1,950,000 1,950,000
Proj.) Series 1993, 4.25%,
LOC First Union Nat'l. Bank
of North Carolina, VRDN
(a)(d)

Butler County Ind. Dev. Auth. 1,200,000 1,200,000
Rev. (Armco, Inc. Proj.)
Series 1996 A, 4.05%, LOC
Chase Manhattan Bank, VRDN
(a)(d)

Carbon County Ind. Dev. Auth.
Resource Recovery Rev. Bonds
(Panther Creek Partners
Proj.):

Series 1990 B:

3% 4/12/99, LOC Nat'l. 2,200,000 2,200,000
Westminster Bank PLC, CP
mode (d)

3% 4/7/99, LOC Nat'l. 2,200,000 2,200,000
Westminster Bank PLC, CP
mode (d)

MUNICIPAL SECURITIES -
CONTINUED

PRINCIPAL AMOUNT VALUE (NOTE 1)

PENNSYLVANIA - CONTINUED

Carbon County Ind. Dev. Auth.
Resource Recovery Rev. Bonds
(Panther Creek Partners
Proj.): - continued

Series 1990 B:

3.15% 3/9/99, LOC Nat'l. $ 1,000,000 $ 1,000,000
Westminster Bank PLC, CP
mode (d)

Series 1991 A:

3% 4/7/99, LOC Nat'l. 2,100,000 2,100,000
Westminster Bank PLC, CP
mode (d)

3% 4/8/99, LOC Nat'l. 4,000,000 4,000,000
Westminster Bank PLC, CP
mode (d)

Series 1992 A, 3.15% 3/9/99, 2,100,000 2,100,000
LOC Nat'l. Westminster Bank
PLC, CP mode (d)

Chester County Ind. Dev. 3,500,000 3,500,000
Auth. Rfdg. Rev. Bonds (Gen.
Motors Corp. Proj.) Series
1996, 3.85%, VRDN (a)

Coatesville Area School 1,200,000 1,200,849
District TRAN 4.05% 6/30/99

Cumberland County Ind. Dev. 2,100,000 2,100,000
Auth. Rev. (Lane
Enterprises, Inc. Proj.)
4.2%, LOC First Union Nat'l.
Bank of North Carolina, VRDN
(a)(d)

Dauphin County Gen. Auth. 3,600,000 3,600,000
Rev. (School District Pooled
Fing. Prog.) 4.15% (AMBAC
Insured) (BPA Commerzbank
AG), VRDN (a)

Delaware County Gen. Oblig. 2,080,000 2,086,323
Bonds Series 1999, 3.5%
10/1/99 (f)

Delaware County Ind. Dev.
Auth. Bonds (Philadelphia
Elec.):

Series 1988 A, 3.45% 2/10/99 3,100,000 3,100,000
(FGIC Insured), CP mode

Series 1988 C, 3.4% 1/8/99 2,100,000 2,100,000
(FGIC Insured), CP mode

Downingtown Area School 1,000,000 1,000,663
District TRAN 4.04% 6/30/99

Doylestown Hosp. Auth. Hosp. 10,098,000 10,098,000
Rev. Participating VRDN
Series BTP 63, 4.09%
(Liquidity Facility
Automatic Data Processing,
Inc.) (a)(e)

Erie County Ind. Dev. Auth. 1,000,000 1,000,000
Rev. (Carlisle Corp. Proj.)
Series 1993, 4.1%, LOC
SunTrust Bank of Atlanta,
VRDN (a)(d)

Lancaster Higher Ed. Auth. 1,435,000 1,435,000
College Rev. (Franklin &
Marshall College) 3.87% (BPA
Chase Manhattan Bank), VRDN
(a)

Lehigh County Ind. Dev. Auth.
Poll. Cont. Rev. (Allegheny
Elec. Coop., Inc. Proj.):

Series 1984 A, 3.4%, LOC 500,000 500,000
Rabobank Nederland Coop.
Central, VRDN (a)

MUNICIPAL SECURITIES -
CONTINUED

PRINCIPAL AMOUNT VALUE (NOTE 1)

PENNSYLVANIA - CONTINUED

Lehigh County Ind. Dev. Auth.
Poll. Cont. Rev. (Allegheny
Elec. Coop., Inc. Proj.): -
continued

Series 1984 B, 3.4%, LOC $ 900,000 $ 900,000
Rabobank Nederland Coop.
Central, VRDN (a)

Montgomery County Ind. Dev.
Auth. Rev.:

(H.P. Cadwallader, Inc. 930,000 930,000
Proj.) Series 1995, 4.25%,
LOC First Union Nat'l. Bank
of North Carolina, VRDN
(a)(d)

(RJI Ltd. Partnership Proj.) 1,465,000 1,465,000
Series 1992, 4.2%, LOC First
Union Nat'l. Bank of North
Carolina, VRDN (a)(d)

(Sirius Dev. Assoc. Proj.) 1,600,000 1,600,000
4.05%, LOC PNC Bank NA, VRDN
(a)(d)

North Pennsylvania Wtr. Auth. 10,000,000 10,000,000
Wtr. Rev. Participating VRDN
Series SGA 30, 4.15%
(Liquidity Facility Societe
Generale, France) (a)(e)

Northampton County Ind. Dev.
Auth. Rev.:

(Bedford Park Proj.):

Series 1996 A, 3.9%, LOC 1,765,000 1,765,000
Harris Trust & Savings Bank,
VRDN (a)(d)

Series 1996 B, 3.9%, LOC 950,000 950,000
Harris Trust & Savings Bank,
VRDN (a)(d)

(Binney & Smith, Inc. Proj.) 2,350,000 2,350,000
Series 1997 A, 4.2%, LOC
First Nat'l. Bank of
Chicago, VRDN (a)(d)

(Victoria Vogue Proj.) 4.2%, 2,330,000 2,330,000
LOC PNC Bank NA, VRDN (a)(d)

Bonds (Citizens Utils. Co. 1,100,000 1,100,000
Proj.) Series 1991, 3.3%
1/12/99, CP mode (d)

Northhampton Ind. Dev. Auth. 2,000,000 2,000,000
(Ultra-Poly Corp./Portland
Ind. Park Proj.) 4.2%, LOC
PNC Bank NA, VRDN (a)(d)

Northumberland County Ind.
Dev. Auth. Rev. (Foster
Wheeler Mount Carmel, Inc.):

Series 1987 B, 4.05%, LOC UBS 2,340,000 2,340,000
AG, VRDN (a)(d)

4.05%, LOC UBS AG, VRDN (a)(d) 15,340,000 15,339,999

Pennsylvania Econ. Dev. Fing.
Auth. Econ. Dev. Rev.:

(Dodge-Regupol, Inc. Proj.) 1,200,000 1,200,000
Series D4, 4.05%, LOC PNC
Bank NA, VRDN (a)(d)

(Esschem, Inc.) Series 1991 500,000 500,000
D10, 4.05%, LOC PNC Bank NA,
VRDN (a)(d)

(McDowell Manufacturing Co.) 1,000,000 1,000,000
Series 1996 F4, 4.05%, LOC
PNC Bank NA, VRDN (a)(d)

(Pappafava Proj. ) Series 150,000 150,000
1989 D7, 4.05%, LOC PNC Bank
NA, VRDN (a)(d)

MUNICIPAL SECURITIES -
CONTINUED

PRINCIPAL AMOUNT VALUE (NOTE 1)

PENNSYLVANIA - CONTINUED

Pennsylvania Econ. Dev. Fing.
Auth. Econ. Dev. Rev.: -
continued

(Payne Printery Proj.) Series $ 225,000 $ 225,000
1989 B8, 4.05%, LOC PNC Bank
NA, VRDN (a)(d)

(Port Erie Plastics) Series 450,000 450,000
1989 D9, 4.05%, LOC PNC Bank
NA, VRDN (a)(d)

(Respironics, Inc. Proj.) 600,000 600,000
Series 1989 F, 4.05%, LOC
PNC Bank NA, VRDN (a)(d)

(Sun Star, Inc. Proj.) Series 800,000 800,000
1994 A5, 4.05%, LOC PNC Bank
NA, VRDN (a)(d)

Series 1996 A1, 4.05%, LOC 575,000 575,000
PNC Bank NA, VRDN (a)(d)

Series 1996 A2, 4.05%, LOC 1,900,000 1,900,000
PNC Bank NA, VRDN (a)(d)

Series 1996 A3, 4.05%, LOC 900,000 900,000
PNC Bank NA, VRDN (a)(d)

Series 1996 A7, 4.05%, LOC 725,000 725,000
PNC Bank NA, VRDN (a)(d)

Series 1996 A8, 4.05%, LOC 700,000 700,000
PNC Bank NA, VRDN (a)(d)

Pennsylvania Econ. Dev. Fing.
Auth. Ind. Dev. Rev.:

(ASK Foods, Inc.) Series A1, 335,000 335,000
4.05%, LOC PNC Bank NA, VRDN
(a)(d)

(Babcock & Wilcox Co. Proj.) 4,800,000 4,800,000
Series 1989 A2, 4.05%, LOC
PNC Bank NA, VRDN (a)(d)

(Suntory Wtr. Group, Inc.) 4,900,000 4,900,000
Series 1992 D, 3.9%, LOC
Wachovia Bank NA, VRDN (a)(d)

Pennsylvania Gen. Oblig.:

Bonds 1st Series, 6% 9/15/99 1,750,000 1,784,988

Bonds 2nd Series, 5% 11/15/99 2,100,000 2,134,743

Participating VRDN:

4.12% (Liquidity Facility 7,100,000 7,100,000
Citibank, New York NA) (a)(e)

Series PA 274, 3.85% 4,000,000 4,000,000
(Liquidity Facility Merrill
Lynch & Co.) (a)(e)

Pennsylvania Higher Ed.
Assistance Agcy. Student Ln.
Rev.:

Series 1994, 4.05%, LOC 1,200,000 1,200,000
Student Ln. Marketing
Assoc., VRDN (a)(d)

4.05%, LOC Student Ln. 1,000,000 1,000,000
Marketing Assoc., VRDN (a)(d)

Pennsylvania Higher Edl.
Facilities Auth. Council of
Independent Colleges & Univ.
Fin. Prog. Rev. Bonds:

(Rosemont College) Series 2,800,000 2,800,000
1997 B4, 2.95%, tender
11/1/99, LOC PNC Bank NA

(Kings College) Series B6, 3,000,000 3,000,000
2.95%, tender 11/1/99, LOC
PNC Bank NA

MUNICIPAL SECURITIES -
CONTINUED

PRINCIPAL AMOUNT VALUE (NOTE 1)

PENNSYLVANIA - CONTINUED

Philadelphia Arpt. Rev. $ 2,000,000 $ 2,000,000
Participating VRDN Series SG
118, 3.9% (Liquidity
Facility Societe Generale,
France) (a)(d)(e)

Philadelphia Hosp. & Higher 1,300,000 1,300,000
Ed. Facilities Auth. Hosp.
Rev. (Children's Hosp.
Proj.) Series 1996 A, 4.1%
(BPA Morgan Guaranty Trust
Co., NY), VRDN (a)

Philadelphia Ind. Dev. Auth. 2,100,000 2,100,000
Rev. Participating VRDN
Series PT 221, 3.9%
(Liquidity Facility
Bayerische Hypo-und
Vereinsbank AG) (a)(d)(e)

Philadelphia School District 3,230,000 3,230,000
Participating VRDN Series PA
151, 3.85% (Liquidity
Facility Merrill Lynch &
Co.) (a)(e)

Philadelphia Wtr. & Wastewtr. 3,250,000 3,250,000
Rev. Participating VRDN
Series 1997 Q, 3.85%
(Liquidity Facility Caisse
des Depots et Consignations)
(a)(e)

Pittsburgh Gen. Oblig. 1,500,000 1,500,000
Participating VRDN Series SG
71, 3.85% (Liquidity
Facility Societe Generale,
France) (a)(e)

Red Lion Area School District 2,500,000 2,501,768
TRAN Series 1998, 4.05%
6/30/99

Schuylkill County Ind. Dev.
Auth. Rev.:

(Craftex Mills, Inc. Proj.) 3,800,000 3,800,000
Series 1996, 4.2%, LOC First
Union Nat'l. Bank of North
Carolina, VRDN (a)(d)

(Metal Sales Manufacturing 1,050,000 1,050,000
Corp.) Series 1995, 3.9%,
LOC Star Bank NA, VRDN (a)(d)

(Prime Packaging, Inc. Proj.) 1,785,000 1,785,000
Series 1995, 4.2%, LOC
First Union Nat'l. Bank of
North Carolina, VRDN (a)(d)

Venango Ind. Dev. Auth.
Resouce Recovery Rev. Bonds
(Scrubgrass Proj.):

Series 1990 A, 3.15% 3/9/99, 1,900,000 1,900,000
LOC Nat'l. Westminster Bank
PLC, CP mode (d)

Series 1990 B:

3% 4/9/99, LOC Nat'l. 1,400,000 1,400,000
Westminster Bank PLC, CP
mode (d)

3.4% 1/13/99, LOC Nat'l. 1,500,000 1,500,000
Westminster Bank PLC, CP
mode (d)

Series 1993, 3% 4/9/99, LOC 2,000,000 2,000,000
Nat'l. Westminster Bank PLC,
CP mode (d)

MUNICIPAL SECURITIES -
CONTINUED

PRINCIPAL AMOUNT VALUE (NOTE 1)

PENNSYLVANIA - CONTINUED

Westmoreland County Ind. Dev. $ 11,500,000 $ 11,500,000
Auth. Rev. (Nat'l. Waste &
Energy Corp.) Series 1993,
4.15%, LOC Fleet Bank NA,
VRDN (a)(d)

York Gen. Auth. Pooled Fing. 2,500,000 2,500,000
Rev. (City of Reading Proj.)
Series 1996 A, 4.05% (AMBAC
Insured), VRDN (a)

208,043,976

OTHER - 4.0%

Municipal Central Cash Fund 8,693,181 8,693,181
(b)(c)

TOTAL INVESTMENT IN $ 216,737,157
SECURITIES - 100%

Total Cost for Income Tax Purposes $ 216,737,246

</TABLE>

SECURITY TYPE ABBREVIATIONS
TRAN - TAX AND REVENUE
ANTICIPATION NOTE

VRDN - VARIABLE RATE DEMAND NOTE

LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.

(b) Information in this report regarding holdings by state and
security types does not reflect the holdings of the Municipal Central
Cash Fund. A listing of the Municipal Central Cash Fund's holdings as
of its most recent fiscal period end is available upon request.

(d) Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.

(e) Provides evidence of ownership in one or more underlying municipal
bonds.

(f) Security purchased on a delayed delivery or when-issued basis (see
Note 2 of Notes to Financial Statements).

INCOME TAX INFORMATION

At December 31, 1998, the fund had a capital loss carryforward of
approximately $53,000 of which $17,000, $10,000 and $26,000 will
expire on December 31, 2002, 2003 and 2004, respectively.

SPARTAN PENNSYLVANIA MUNICIPAL MONEY MARKET FUND

FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998

ASSETS

Investment in securities, at $ 216,737,157
value - See accompanying
schedule

Cash 875

Receivable for fund shares 1,207,538
sold

Interest receivable 1,178,276

TOTAL ASSETS 219,123,846

LIABILITIES

Payable for investments $ 2,090,165
purchased on a delayed
delivery basis

Payable for fund shares 441,235
redeemed

Distributions payable 14,031

Accrued management fee 88,849

Other payables and accrued 2,977
expenses

TOTAL LIABILITIES 2,637,257

NET ASSETS $ 216,486,589

Net Assets consist of:

Paid in capital $ 216,540,606

Accumulated net realized gain (54,017)
(loss) on investments

NET ASSETS, for 216,538,459 $ 216,486,589
shares outstanding

NET ASSET VALUE, offering $1.00
price and redemption price
per share ($216,486,589
(divided by) 216,538,459
shares)

STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998

INTEREST INCOME $ 7,835,232

EXPENSES

Management fee $ 1,088,367

Non-interested trustees' 843
compensation

Total expenses before 1,089,210
reductions

Expense reductions (7,349) 1,081,861

NET INTEREST INCOME 6,753,371

NET REALIZED GAIN (LOSS) ON 6,043
INVESTMENTS

NET INCREASE IN NET ASSETS $ 6,759,414
RESULTING FROM OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31, 1998 YEAR ENDED DECEMBER 31, 1997

INCREASE (DECREASE) IN NET
ASSETS

Operations Net interest income $ 6,753,371 $ 7,562,382

Net realized gain (loss) 6,043 4,847

NET INCREASE (DECREASE) IN 6,759,414 7,567,229
NET ASSETS RESULTING FROM
OPERATIONS

Distributions to shareholders (6,753,371) (7,562,382)
from net interest income

Share transactions at net 150,634,446 169,686,586
asset value of $1.00 per
share Proceeds from sales of
shares

Reinvestment of 6,502,673 7,292,005
distributions from net
interest income

Cost of shares redeemed (170,125,710) (189,900,683)

NET INCREASE (DECREASE) IN (12,988,591) (12,922,092)
NET ASSETS AND SHARES
RESULTING FROM SHARE
TRANSACTIONS

TOTAL INCREASE (DECREASE) (12,982,548) (12,917,245)
IN NET ASSETS

NET ASSETS

Beginning of period 229,469,137 242,386,382

End of period $ 216,486,589 $ 229,469,137

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
YEARS ENDED DECEMBER 31,

1998 1997 1996 1995 1994

SELECTED PER-SHARE DATA

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

Income from Investment .031 .033 .032 .035 .026
Operations Net interest
income

Less Distributions

From net interest income (.031) (.033) (.032) (.035) (.026)

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

TOTAL RETURN A, B 3.15% 3.36% 3.21% 3.56% 2.61%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period $ 216,487 $ 229,469 $ 242,386 $ 241,643 $ 257,608
(000 omitted)

Ratio of expenses to average .50% .50% .50% .50% .50%
net assets

Ratio of expenses to average .50% .50% .48% C .50% .50%
net assets after expense
reductions

Ratio of net interest income 3.10% 3.31% 3.17% 3.50% 2.58%
to average net assets

</TABLE>

A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.

B TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE.

C FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.

NOTES TO FINANCIAL STATEMENTS
For the period ended December 31, 1998

1. SIGNIFICANT ACCOUNTING POLICIES.

Spartan Pennsylvania Municipal Income Fund (the income fund) is a fund
of Fidelity Municipal Trust. Spartan Pennsylvania Municipal Money
Market Fund (the money market fund) is a fund of Fidelity Municipal
Trust II. Each trust is registered under the Investment Company Act of
1940, as amended (the 1940 Act), as an open-end management investment
company. Fidelity Municipal Trust and Fidelity Municipal Trust II (the
trusts) are organized as a Massachusetts business trust and a Delaware
business trust, respectively. Each fund is authorized to issue an
unlimited number of shares. The financial statements have been
prepared in conformity with generally accepted accounting principles
which require management to make certain estimates and assumptions at
the date of the financial statements. The following summarizes the
significant accounting policies of the income fund and the money
market fund:

SECURITY VALUATION.

INCOME FUND. Securities are valued based upon a computerized matrix
system and/or appraisals by a pricing service, both of which consider
market transactions and dealer-supplied valuations. Securities for
which quotations are not readily available are valued 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 with remaining maturities of sixty days or less
for which quotations are not readily available are valued at amortized
cost or original cost plus accrued interest, both of which approximate
current value.

MONEY MARKET FUND. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost
and thereafter assume a constant amortization to maturity of any
discount or premium.

INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, 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."

INTEREST INCOME. Interest income, which includes amortization of
premium and accretion of original issue discount, is accrued as
earned. For the money market fund, accretion of discount represents
unrealized gain until realized at the time of a security disposition
or maturity.

EXPENSES. Most expenses of each trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.

DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income. Distributions to shareholders from
realized capital gains on investments, if any, 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.

1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED

DISTRIBUTIONS TO SHAREHOLDERS -
CONTINUED

These differences, which may result in distribution reclassifications,
are primarily due to differing treatments for futures transactions,
market discount and losses deferred due to futures. The income fund
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 interest income and
realized and unrealized gain (loss). Accumulated undistributed net
realized gain (loss) on investments may include temporary book and tax
basis differences that will reverse in a subsequent period. Any
taxable gain remaining at fiscal year end is distributed in the
following year.

SHORT-TERM TRADING (REDEMPTION) FEES. Shares held in the income fund
less than 180 days are subject to a short-term trading fee equal to
..50% of the proceeds of the redeemed shares. The fee, which is
retained by the fund, is accounted for as an addition to paid in
capital.

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.

MUNICIPAL CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the Securities and Exchange Commission (the SEC), the funds may invest
in the Municipal Central Cash Fund (the Cash Fund) managed by Fidelity
Investments Money Management, Inc., an affiliate of Fidelity
Management & Research Company (FMR). The Cash Fund is an open-end
money market fund available only to investment companies and other
accounts managed by FMR and its affiliates. The Cash Fund seeks
preservation of capital, liquidity, and current income by investing in
high-quality, short-term municipal securities of various states and
municipalities. Income distributions from the Cash Fund are declared
daily and paid monthly from net interest income. Income distributions
earned by the funds are recorded as interest income in the
accompanying financial statements.

WHEN-ISSUED SECURITIES. Each fund may purchase or sell securities on a
when-issued basis. Payment and delivery may take place a month or
more after the date of the transaction. The price of the underlying
securities is fixed at the time the transaction is negotiated. The
market values of the securities purchased on a when-issued or forward
commitment basis are identified as such in each applicable fund's
schedule of investments. Each fund may receive compensation for
interest forgone in the purchase of a when-issued security. Losses may
arise due to changes in the market value of the underlying securities,
if the counterparty does not perform under the contract, or if the
issuer does not issue the securities due to political, economic, or
other factors.

2. OPERATING POLICIES -
CONTINUED

FUTURES CONTRACTS. The income fund may use futures contracts to manage
its exposure to the bond market and to fluctuations in interest rates.
Buying futures tends to increase the fund's exposure to the underlying
instrument, while selling futures tends to decrease the fund's
exposure to the underlying instrument or hedge other fund investments.
Futures contracts involve, to varying degrees, risk of loss in excess
of the futures variation margin reflected in the Statement of Assets
and Liabilities. The underlying face amount at value of any open
futures contracts at period end is shown in the schedule of
investments under the caption "Futures Contracts." This amount
reflects each contract's exposure to the underlying instrument at
period end. Losses may arise from changes in the value of the
underlying instruments or if the counterparties do not perform under
the contracts' terms. Gains (losses) are realized upon the expiration
or closing of the futures contracts. Futures contracts are valued at
the settlement price established each day by the board of trade or
exchange on which they are traded.

3. PURCHASES AND SALES OF INVESTMENTS.
INCOME FUND. Purchases and sales of securities, other than short-term
securities, aggregated $63,964,986 and $65,869,610, respectively.

The market value of futures contracts opened and closed during the
period amounted to $30,183,945 and $31,293,190, respectively.

4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.

MANAGEMENT FEE. As each fund's investment adviser, FMR pays all
expenses, except the compensation of the non-interested Trustees and
certain exceptions such as interest, taxes, brokerage commissions and
extraordinary expenses. FMR receives a fee that is computed daily at
an annual rate of .55% and .50% of average net assets for the income
and money market funds, respectively.

At a Special Meeting of the Shareholders of the income fund held on
December 16, 1998, shareholders approved an amended management
contract (Amended Contract). Under the Amended Contract, which will
become effective on or about January 1, 1999, FMR will receive a
monthly fee that is calculated on the basis of a group fee rate plus
an individual fund fee rate applied to the average net assets of the
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 will range from .1100% to .3700%. The annual
individual fund fee rate is 0.25%. Under the Amended Contract, the
management fee is no longer all-inclusive. The fund will be
responsible for paying all other expenses unless they are borne by FMR
under a voluntary expense limit.

FMR also bears the cost of providing shareholder services to the money
market fund. To offset the cost of providing these services, FMR or
its affiliates collected certain transaction fees from the money
market fund's shareholders which amounted to $4,874 for the period.

4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED

SUB-ADVISER FEE. As the money market fund's investment sub-adviser,
Fidelity Investments Money Management, Inc., a wholly owned subsidiary
of FMR, receives a fee from FMR of 50% of the management fee payable
to FMR. The fee is paid prior to any voluntary expense reimbursements
which may be in effect.

5. EXPENSE REDUCTIONS.

FMR has entered into arrangements on behalf of certain funds with the
funds' custodian and transfer agent whereby credits realized as a
result of uninvested cash balances were used to reduce a portion of
each applicable fund's expenses. During the period, the income and
money market funds' expenses were reduced by $2,847 and $7,349,
respectively under these arrangements.

Effective January 1, 1999, after the end of the period, FMR
voluntarily agreed to reimburse the income fund's operating expenses
(excluding interest, taxes, brokerage commissions and extraordinary
expenses) above an annual rate of 0.53% of the fund's average net
assets through December 31, 2000.

REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Municipal Trust and Fidelity Municipal
Trust II and the Shareholders of Spartan Pennsylvania Municipal Income
Fund and Spartan Pennsylvania Municipal Money Market Fund:
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Spartan Pennsylvania Municipal Income Fund (a fund of Fidelity
Municipal Trust) and Spartan Pennsylvania Municipal Money Market Fund
(a fund of Fidelity Municipal Trust II) at December 31, 1998, and the
results of their operations, the changes in their net assets and the
financial highlights for the periods indicated, in conformity with
generally accepted accounting principles. These financial statements
and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the funds' management; our
responsibility is to express an opinion on these financial statements
based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits, which included confirmation
of securities at December 31, 1998 by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion
expressed above.

/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
February 5, 1999

DISTRIBUTIONS

The Board of Trustees of Spartan Pennsylvania Municipal Income Fund
voted to pay on February 8, 1999 to shareholders of record at the
opening of business on February 5, 1999, a distribution of $.016 per
share derived from capital gains realized from sales of portfolio
securities.

During fiscal year ended 1998, 100% of the income and money market
funds' income dividends were free from federal income tax, and 8.86%
and 62.02%, respectively, of the funds' income dividends were subject
to the federal alternative minimum tax.

Spartan Pennsylvania Municipal Income Fund hereby designates 100% of
the long-term capital gain dividends distributed during the fiscal
year as 20%-rate capital gain dividends.

PROXY VOTING RESULTS

A special meeting of Spartan Pennsylvania Municipal income Fund's
shareholders was held on December 16, 1998. The results of votes taken
among shareholders on proposals before them are reported below. Each
vote reported represents one dollar of net asset value held on the
record date for the meeting.

PROPOSAL 1

To elect as Trustees the following twelve nominees.

# OF % OF
VOTES CAST VOTES CAST
RALPH F. COX
Affirmative 941,676,281.56 96.946

Withheld 29,667,606.92 3.054

TOTAL 971,343,888.48 100.000

PHYLLIS BURKE DAVIS
Affirmative 941,015,539.45 96.878

Withheld 30,328,349.03 3.122

TOTAL 971,343,888.48 100.000

ROBERT M. GATES
Affirmative 940,616,433.83 96.837

Withheld 30,727,454.65 3.163

TOTAL 971,343,888.48 100.000

EDWARD C. JOHNSON 3D
Affirmative 940,665,834.51 96.842

Withheld 30,678,053.97 3.158

TOTAL 971,343,888.48 100.000

E. BRADLEY JONES
Affirmative 937,879,239.66 96.555

Withheld 33,464,648.82 3.445

TOTAL 971,343,888.48 100.000

DONALD J. KIRK
Affirmative 941,794,381.77 96.958

Withheld 29,549,506.71 3.042

TOTAL 971,343,888.48 100.000

# OF % OF
VOTES CAST VOTES CAST
PETER S. LYNCH
Affirmative 941,809,883.91 96.959

Withheld 29,534,004.57 3.041

TOTAL 971,343,888.48 100.000

WILLIAM O. MCCOY
Affirmative 941,735,873.46 96.952

Withheld 29,608,015.02 3.048

TOTAL 971,343,888.48 100.000

GERALD C. MCDONOUGH
Affirmative 939,119,647.40 96.683

Withheld 32,224,241.08 3.317

TOTAL 971,343,888.48 100.000

MARVIN L. MANN
Affirmative 942,029,292.87 96.982

Withheld 29,314,595.61 3.018

TOTAL 971,343,888.48 100.000

ROBERT C. POZEN
Affirmative 941,499,581.49 96.928

Withheld 29,844,306.99 3.072

TOTAL 971,343,888.48 100.000

THOMAS R. WILLIAMS
Affirmative 939,450,603.85 96.717

Withheld 31,893,284.63 3.283

TOTAL 971,343,888.48 100.000

PROPOSAL 2

To ratify the selection of PricewaterhouseCoopers LLP as independent
accountants of the fund.

# OF % OF
VOTES CAST VOTES CAST
Affirmative 158,999,629.18 96.207

Against 2,533,160.12 1.532

Abstain 3,735,984.66 2.261

TOTAL 165,268,773.96 100.000

PROPOSAL 3

To authorize the Trustees to adopt an Amended and Restated Declaration
of Trust.

# OF % OF
VOTES CAST VOTES CAST
Affirmative 838,802,769.40 88.254

Against 59,832,161.19 6.295

Abstain 51,803,661.60 5.451

TOTAL 950,438,592.19 100.000

Broker Non-Votes 20,905,296.29

PROPOSAL 4

To adopt a new fundamental investment policy for the fund permitting
the fund to invest all of its assets in another open-end investment
company managed by FMR or an affiliate with substantially the same
investment objective and policies.

# OF % OF
VOTES CAST VOTES CAST
Affirmative 142,387,107.40 86.666

Against 13,501,029.55 8.218

Abstain 8,405,474.71 5.116

TOTAL 164,293,611.66 100.000

Broker Non-Votes 975,162.30

PROPOSAL 5

To approve an amended management contract for the fund.

# OF % OF
VOTES CAST VOTES CAST
Affirmative 144,394,861.30 87.370

Against 10,600,808.17 6.414

Abstain 10,273,104.49 6.216

TOTAL 165,268,773.96 100.000

PROPOSAL 6

To replace the fund's fundamental 80% investment policy with a
non-fundamental policy.

# OF % OF
VOTES CAST VOTES CAST
Affirmative 137,652,843.82 83.785

Against 16,432,944.59 10.002

Abstain 10,207,823.25 6.213

TOTAL 164,293,611.66 100.000

Broker Non-Votes 975,162.30

PROPOSAL 7

To eliminate the fund's fundamental investment policy regarding
investment in below investment-grade debt securities.

# OF % OF
VOTES CAST VOTES CAST
Affirmative 135,287,492.92 82.345

Against 19,490,809.32 11.863

Abstain 9,515,309.42 5.792

TOTAL 164,293,611.66 100.000

Broker Non-Votes 975,162.30

OF SPECIAL NOTE

INTRODUCING FIDELITY'S NEW, REORGANIZED PROSPECTUS

Recently, the SEC issued new disclosure requirements for all mutual
fund prospectuses. While Fidelity could have complied by simply
following the new requirements, we saw a different opportunity. We saw
the chance to create a brand new prospectus: one that is better
organized, easier to use and more informative than ever.

The new format of the Fidelity mutual fund prospectus puts the
information you need to make informed investment decisions right at
your fingertips. In the opening pages, you will find the SEC-mandated
summary that highlights the fund's investment objectives, strategies
and risks. There's also an easy-to-read performance chart and fee
table right up front.

Inside, you will find additional features we've introduced to make the
fund prospectus a more useful tool. In our new Shareholder Information
section, for example, we have provided practical, beneficial
information - from how to buy or sell shares, key contact information,
investment services, ways to set up your account and more - all in one
convenient location.

We invite you to spend a moment and review our new prospectus. It is
designed to help make your investment decision easier, no matter which
of the Fidelity funds you invest in.

MANAGING YOUR INVESTMENTS

Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a
day.

BY PHONE

Fidelity TouchTone Xpress(registered trademark) provides a single
toll-free number to access account balances, positions, quotes and
trading. It's easy to navigate the service, and on your first call,
the system will help you create a personal identification number (PIN)
for security.

(PHONE_GRAPHIC)TOUCHTONE XPRESS
1-800-544-5555

PRESS
1 For mutual fund and brokerage trading.

2 For quotes.*

3 For account balances and holdings.

4 To review orders and mutual
fund activity.

5 To change your PIN.

*0 To speak to a Fidelity representative.

BY PC

Fidelity's Web site on the Internet provides a wide range of
information, including daily financial news, fund performance,
interactive planning tools and news about Fidelity products and
services.

(COMPUTER_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM

If you are not currently on the Internet, call EarthLink Sprint at
1-800-288-2967, and be sure to ask for registration number SMD004 to
receive a special Fidelity package that includes 30 days of free
Internet access. EarthLink is North America's #1 independent Internet
access provider.

(COMPUTER_GRAPHIC)
FIDELITY ON-LINE XPRESS+(registered trademark)

Fidelity On-line Xpress+ software for Windows combines comprehensive
portfolio management capabilities, securities trading and access to
research and analysis tools . . . all on your desktop. Call Fidelity
at 1-800-544-7272 or visit our Web site for more information on how to
manage your investments via your PC.

* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD
AND RETURN WILL VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE
WILL ALSO VARY. THIS MEANS THAT YOU MAY HAVE A GAIN OR LOSS WHEN YOU
SELL YOUR SHARES. THERE IS NO ASSURANCE THAT MONEY MARKET FUNDS WILL
BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN INVESTMENT IN A MONEY
MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT. TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE,
REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS, AND THE EFFECTS OF ANY
SALES CHARGES.

TO WRITE FIDELITY

If more than one address is listed, please locate the address that is
closest to you. We'll give your correspondence immediate attention and
send you written confirmation upon completion of your request.

(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002

(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS

BUYING SHARES

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003

OVERNIGHT EXPRESS
Fidelity Investments
2300 Litton Lane - KH1A
Hebron, KY 41048

SELLING SHARES

Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602

OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75039-5517

GENERAL CORRESPONDENCE

Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500

(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS

BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003

SELLING SHARES

Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602

OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75039-5517

GENERAL CORRESPONDENCE

Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500

INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA

SUB-ADVISER, MONEY MARKET FUND
Fidelity Investments Money
Management Inc.
Merrimack, NH

OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Fred L. Henning Jr., Vice President
Dwight D. Churchill, Vice President - INCOME FUND
Boyce I. Greer, Vice President -
MONEY MARKET FUND
Christine J. Thompson, Vice President -
INCOME FUND
Diane M. McLaughlin, Vice President - MONEY MARKET FUND
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
Matthew N. Karstetter, Deputy Treasurer
Stanley N. Griffith, Assistant Vice President
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Thomas J. Simpson, Assistant Treasurer

BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *

ADVISORY BOARD
J. Gary Burkhead

* INDEPENDENT TRUSTEES

PFR-ANN-0299 70456
1.540037.101

GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA

TRANSFER AND SHAREHOLDER
SERVICING AGENTS
UMB Bank, n.a.
Kansas City, MO

Fidelity Service Company, Inc.
Boston, MA

CUSTODIAN
UMB Bank, n.a.
Kansas City, MO

THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-7777
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
TouchTone Xpress (registered trademark) 1-800-544-5555
AUTOMATED LINE FOR QUICKEST SERVICE

(fidelity_logo_graphic)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com

SPARTAN(REGISTERED TRADEMARK)
OHIO MUNICIPAL INCOME
FUND

AND

FIDELITY (REGISTERED TRADEMARK)
OHIO MUNICIPAL MONEY MARKET
FUND
(Fidelity Logo)(registered trademark)

ANNUAL REPORT
DECEMBER 31, 1998

CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.

SPARTAN OHIO MUNICIPAL INCOME
FUND

PERFORMANCE 4 How the fund has done over
time.

FUND TALK 7 The manager's review of fund
performance, strategy and
outlook.

INVESTMENT CHANGES 10 A summary of major shifts in
the fund's investments over
the past six months.

INVESTMENTS 11 A complete list of the fund's
investments with their
market values.

FINANCIAL STATEMENTS 21 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.

FIDELITY OHIO MUNICIPAL MONEY
MARKET FUND

PERFORMANCE 25 How the fund has done over
time.

FUND TALK 27 The manager's review of fund
performance, strategy and
outlook.

INVESTMENT CHANGES 29 A summary of major shifts in
the fund's investments over
the past six months and one
year.

INVESTMENTS 30 A complete list of the fund's
investments.

FINANCIAL STATEMENTS 38 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.

NOTES 42 Notes to the financial
statements.

REPORT OF INDEPENDENT 46 The auditor's opinion.
ACCOUNTANTS

DISTRIBUTIONS 47

PROXY VOTING RESULTS 48

OF SPECIAL NOTE 51

Third party marks appearing herein are the property of their
respective owners.

All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.

(recycle logo)This report is printed on recycled paper using soy-based
inks.

MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY 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.

FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND
EXPENSES, CALL 1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY
BEFORE YOU INVEST OR SEND MONEY.

PRESIDENT'S MESSAGE

(PHOTO_OF_EDWARD_C_JOHNSON_3D)

DEAR SHAREHOLDER:

Resurgent stock market performance in the fourth quarter helped the
Dow Jones Industrial Average post a double-digit return for the fourth
year in a row - a first in the Dow's 100-plus year history. Three
interest-rate cuts made late in the year by the Federal Reserve Board
helped spark the equity rally. Meanwhile, while the majority of bonds
posted positive performance, most bond returns for 1998 trailed their
gains from 1997.

While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.

An intermediate-length fund could make sense if your investment
horizon is two to four years, while a short-term bond fund could be
the right choice if you need your money in one or two years.

Best regards,
Edward C. Johnson 3d

SPARTAN OHIO MUNICIPAL INCOME FUND

PERFORMANCE: THE BOTTOM LINE

There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value). You can also look at the fund's income, as
reflected in its yield, to measure performance. If Fidelity had not
reimbursed certain fund expenses, the total returns and dividends
would have been lower.

CUMULATIVE TOTAL RETURNS

PERIODS ENDED DECEMBER 31, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1998

SPARTAN OH MUNICIPAL INCOME 5.79% 31.81% 112.43%

LB Ohio 4 Plus Year Enhanced 6.31% 34.87% n/a
Municipal Bond

Ohio Municipal Debt Funds 5.39% 29.74% 105.57%
Average

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be
$1,050. You can compare the fund's returns to the performance of the
Lehman Brothers Ohio 4 Plus Year Enhanced Municipal Bond Index - a
market value-weighted index of Ohio investment-grade municipal bonds
with maturities of four years or more. To measure how the fund's
performance stacked up against its peers, you can compare it to the
Ohio municipal debt funds average, which reflects the performance of
mutual funds with similar objectives tracked by Lipper Inc. The past
one year average represents a peer group of 52 mutual funds. These
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effect of sales charges.

AVERAGE ANNUAL TOTAL RETURNS

PERIODS ENDED DECEMBER 31, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1998

SPARTAN OH MUNICIPAL INCOME 5.79% 5.68% 7.83%

LB Ohio 4 Plus Year Enhanced 6.31% 6.17% n/a
Municipal Bond

Ohio Municipal Debt Funds 5.39% 5.34% 7.47%
Average

AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year. (Note: Lipper calculates average annual total
returns by annualizing each funds total return, then taking the
arithmetic average. This may produce a different figure than that
obtained by averaging cumulative total returns and annualizing the
result.)

$10,000 OVER 10 YEARS
Spartan OH Muni Income LB Municipal Bond
00088 LB015
1988/12/31 10000.00 10000.00
1989/01/31 10144.08 10206.80
1989/02/28 10058.38 10090.34
1989/03/31 10059.34 10066.22
1989/04/30 10331.07 10305.20
1989/05/31 10555.77 10519.24
1989/06/30 10693.46 10662.09
1989/07/31 10781.85 10807.20
1989/08/31 10670.77 10701.40
1989/09/30 10620.29 10669.51
1989/10/31 10757.32 10799.99
1989/11/30 10912.51 10988.99
1989/12/31 10998.57 11078.88
1990/01/31 10895.37 11026.48
1990/02/28 11018.61 11124.62
1990/03/31 11031.14 11127.95
1990/04/30 10863.45 11047.39
1990/05/31 11144.89 11288.55
1990/06/30 11259.93 11387.78
1990/07/31 11429.20 11555.18
1990/08/31 11249.44 11387.40
1990/09/30 11335.37 11393.89
1990/10/31 11497.00 11600.57
1990/11/30 11767.02 11833.86
1990/12/31 11823.37 11885.34
1991/01/31 11954.47 12044.84
1991/02/28 12029.80 12149.63
1991/03/31 12051.85 12154.00
1991/04/30 12239.85 12315.65
1991/05/31 12340.02 12425.14
1991/06/30 12295.61 12412.84
1991/07/31 12464.96 12564.02
1991/08/31 12589.63 12729.49
1991/09/30 12738.57 12895.23
1991/10/31 12853.32 13011.29
1991/11/30 12875.67 13047.59
1991/12/31 13176.66 13327.59
1992/01/31 13200.09 13357.98
1992/02/29 13208.63 13362.25
1992/03/31 13198.89 13367.20
1992/04/30 13305.09 13486.16
1992/05/31 13485.25 13644.90
1992/06/30 13723.13 13873.86
1992/07/31 14119.43 14289.80
1992/08/31 13961.91 14150.47
1992/09/30 14044.84 14243.01
1992/10/31 13789.23 14103.01
1992/11/30 14156.65 14355.59
1992/12/31 14318.21 14502.16
1993/01/31 14505.29 14670.82
1993/02/28 15022.00 15201.46
1993/03/31 14846.53 15040.79
1993/04/30 14982.74 15192.55
1993/05/31 15058.17 15277.93
1993/06/30 15308.63 15532.92
1993/07/31 15331.34 15553.27
1993/08/31 15688.22 15877.08
1993/09/30 15875.91 16057.92
1993/10/31 15886.35 16088.92
1993/11/30 15751.25 15947.17
1993/12/31 16116.40 16283.82
1994/01/31 16312.29 16469.78
1994/02/28 15879.25 16043.21
1994/03/31 15207.37 15389.93
1994/04/30 15323.30 15520.44
1994/05/31 15427.38 15655.00
1994/06/30 15403.82 15559.35
1994/07/31 15647.31 15844.55
1994/08/31 15696.93 15899.37
1994/09/30 15505.72 15665.97
1994/10/31 15204.12 15387.74
1994/11/30 14870.20 15109.53
1994/12/31 15222.47 15442.09
1995/01/31 15679.26 15883.43
1995/02/28 16114.50 16345.32
1995/03/31 16281.09 16533.13
1995/04/30 16314.87 16552.64
1995/05/31 16794.34 17080.83
1995/06/30 16648.96 16932.23
1995/07/31 16740.87 17092.74
1995/08/31 16936.52 17309.48
1995/09/30 17070.07 17419.05
1995/10/31 17297.22 17672.32
1995/11/30 17566.47 17965.51
1995/12/31 17717.96 18138.15
1996/01/31 17852.99 18275.10
1996/02/29 17736.00 18151.74
1996/03/31 17484.33 17919.76
1996/04/30 17416.06 17869.05
1996/05/31 17396.01 17861.90
1996/06/30 17575.68 18056.42
1996/07/31 17727.46 18220.73
1996/08/31 17724.59 18216.36
1996/09/30 18004.02 18471.39
1996/10/31 18222.69 18680.30
1996/11/30 18566.71 19022.15
1996/12/31 18467.27 18942.25
1997/01/31 18511.59 18978.06
1997/02/28 18662.00 19152.27
1997/03/31 18397.19 18896.97
1997/04/30 18522.23 19055.14
1997/05/31 18781.15 19341.73
1997/06/30 18988.83 19547.72
1997/07/31 19515.89 20089.19
1997/08/31 19311.00 19900.96
1997/09/30 19538.15 20137.18
1997/10/31 19666.56 20266.66
1997/11/30 19759.33 20385.83
1997/12/31 20080.66 20683.26
1998/01/31 20279.20 20896.71
1998/02/28 20238.71 20902.98
1998/03/31 20248.99 20921.38
1998/04/30 20135.46 20827.02
1998/05/31 20441.70 21156.71
1998/06/30 20484.61 21240.07
1998/07/31 20529.94 21293.38
1998/08/31 20873.70 21622.36
1998/09/30 21163.88 21891.78
1998/10/31 21119.81 21891.34
1998/11/30 21197.79 21968.18
1998/12/31 21243.17 22023.54
IMATRL PRASUN SHR__CHT 19981231 19990113 123449 R00000000000123

$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Spartan Ohio Municipal Income Fund on December 31, 1988.
As the chart shows, by December 31, 1998, the value of the investment
would have grown to $21,243 a 112.43% increase on the initial
investment. For comparison, look at how the Lehman Brothers Municipal
Bond Index - a market value-weighted index of investment-grade
municipal bonds with maturities of one year or more - did over the
same period. With dividends reinvested, the same $10,000 would have
grown to $22,024 - a 120.24% increase.

(checkmark)UNDERSTANDING
PERFORMANCE

How a fund did yesterday
is no guarantee of how it
will do tomorrow. Bond
prices, for example,
generally move in the
opposite direction of interest
rates. In turn, the share price,
return and yield of a fund that
invests in bonds will vary.
That means if you sell your
shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.

TOTAL RETURN COMPONENTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
YEARS ENDED DECEMBER 31,

1998 1997 1996 1995 1994

Dividend returns 4.69% 5.08% 4.98% 6.22% 5.37%

Capital returns 1.10% 3.66% -0.75% 10.17% -10.92%

Total returns 5.79% 8.74% 4.23% 16.39% -5.55%

</TABLE>

DIVIDENDS AND YIELD

PERIODS ENDED DECEMBER 31, PAST 1 MONTH PAST 6 MONTHS PAST 1 YEAR
1998

Dividends per share 4.54(cents) 26.96(cents) 53.79(cents)

Annualized dividend rate 4.51% 4.53% 4.58%

30-day annualized yield 3.98% - -

30-day annualized 6.67% - -
tax-equivalent yield

DIVIDENDS per share show the income paid by the fund for a set period.
If you annualize this number, based on an average share price of
$11.86 over the past one month, $11.80 over the past six months and
$11.75 over the past one year, you can compare the fund's income over
these three periods. The 30-day annualized YIELD is a standard formula
for all funds based on the yields of the bonds in the fund, averaged
over the past 30 days. This figure shows you the yield characteristics
of the fund's investments at the end of the period. It also helps you
compare funds from different companies on an equal basis. The
tax-equivalent yield shows what you would have to earn on a taxable
investment to equal the fund's tax-free yield, if you're in the 40.35%
combined effective 1999 federal and state tax bracket, but does not
reflect payment of the federal alternative minimum tax, if applicable.

SPARTAN OHIO MUNICIPAL INCOME FUND

FUND TALK: THE MANAGER'S OVERVIEW

MARKET RECAP

Thanks to volatile and unpredictable
equity markets worldwide, new
money flowed steadily into bond
funds throughout 1998. Bond
performance, however, varied widely
from sector to sector. For the 12-month
period ending December 31, 1998, the
Lehman Brothers Municipal Bond
Index - a popular measure of the
municipal bond market - returned
6.48%. In contrast, the Lehman
Brothers Aggregate Bond Index - a
widely followed measure of
taxable-bond performance -
returned 8.69% during the period.
In fact, according to research
conducted by Morningstar, Inc. - a
leading provider of investment
information and analysis - munis
lagged the majority of bond
investments over the course of the
year, trailing Treasuries, long-term
corporate bonds and international
bonds, among others. While
Treasuries in particular reaped the
benefits of equity investors' flight to
safety, municipal bond returns in
general were somewhat tempered by
record-high issuance that was met
with only subdued demand.
Fortunately, the outlook for municipal
bonds improved during the fourth
quarter. Towards the end of the
12-month period, municipals were
priced quite attractively compared to
their U.S. Treasury counterparts and
were yielding about the same as
30-year Treasuries. Also, municipal
bonds - along with the majority of
fixed-income issues - were
bolstered by three recent
interest-rate cuts by the Federal
Reserve Board, which dropped the
fed funds rate to 4.75%.

(photograph of George Fischer)

An interview with George Fischer, Portfolio Manager of Spartan Ohio
Municipal Income Fund

Q. HOW DID THE FUND PERFORM, GEORGE?

A. For the 12-month period that ended December 31, 1998, the fund had
a total return of 5.79%. To get a sense of how the fund did relative
to its competitors, the Ohio municipal debt funds average returned
5.39% for the same one-year period, according to Lipper Inc.
Additionally, the Lehman Brothers Ohio 4 Plus Year Enhanced Municipal
Bond Index - which tracks the types of securities in which the fund
invests - returned 6.31% for the same 12-month period.

Q. WHAT FACTORS HELPED THE FUND OUTPACE ITS PEERS?

A. The fund benefited both from what it owned and, in at least one
case, what it didn't own. First, the fund's holdings in some bonds
issued by the Ohio Turnpike Authority performed very well when they
were advance refunded. Issuers undertake advance refundings in order
to cut their debt costs by retiring older bonds with higher interest
rates and replacing them with new municipal bonds issued at lower,
prevailing interest rates. The proceeds from the sale of the new bonds
are used to purchase U.S. Treasury securities that eventually back the
old bonds. An advance refunding results in higher prices for the
original bonds because they assume the higher credit rating of the
U.S. Treasuries that back them. In addition, the fund avoided bonds
issued by a financially troubled large hospital system, which
performed quite poorly.

Q. WERE THERE OTHER STRATEGIES THAT HELPED THE FUND'S PERFORMANCE?

A. The fund's relatively large stake in intermediate-term bonds with
maturities of between five and 15 years performed well. I emphasized
intermediate-maturity bonds because I felt they offered the best
combination of reward - or income - for the risk. Of course,
longer-term bonds generally carry more risk than shorter-term
securities because they are more sensitive to changes in interest
rates; their prices usually fall more when interest rates rise, and
vice versa. In my view, investors were paid an appropriate amount of
added income for each additional year of maturity up to about 15
years. However, I didn't feel that the extra income for each
successive year offered by longer-term bonds was adequate given the
level of risk inherent in longer-term bonds.

Q. WERE THERE ANY DISAPPOINTMENTS OVER THE PAST 12 MONTHS?

A. Bonds that were sensitive to prepayments - such as student loan
bonds and housing bonds - generally lagged other sectors of the
municipal market as interest rates fell and more consumers refinanced
or paid off their loans. When early payment occurs, the securities
backed by such loans are redeemed by their issuers prior to maturity,
potentially forcing bondholders to reinvest the proceeds at lower
interest rates. The threat of inopportune issuer redemptions caused
investors to keep pressure on student loan and housing bond prices
throughout much of the period.

Q. GEORGE, WHAT'S YOUR OUTLOOK FOR THE MUNICIPAL MARKET?

A. Municipal bonds are priced relatively cheaply right now, which
could bode well for their prospects. Economic turmoil overseas,
combined with falling interest rates, significantly boosted U.S.
Treasury prices - considered a safe haven among global investors in
times of uncertainty. But because their appeal is mostly from domestic
investors, municipals didn't rally as much as Treasuries, even though
they too benefited from falling rates. That's why municipals were as
cheap relative to Treasuries at the end of the period as they have
been in nearly a decade. The yield on a high-quality, long-term
municipal bond was about 100% of the yield of a U.S. Treasury bond.
Using history as a guide, we know that such municipals typically yield
about 85% of Treasuries. Since bond yields and bond prices move in the
opposite direction, municipals should gain ground on their Treasury
counterparts if that yield ratio moves closer to the historical 85%
average.

(checkmark)FUND FACTS

GOAL: high current income for
Ohio residents by normally
investing in investment-grade
municipal securities whose
interest is free from federal
income and Ohio personal
income tax

FUND NUMBER: 088

TRADING SYMBOL: FOHFX

START DATE: November 15,
1985

SIZE: as of December 31,
1998, more than $396
million

MANAGER: George Fischer,
since 1997; manager, various
Fidelity and Spartan municipal
income funds; joined Fidelity
in 1989

GEORGE FISCHER ON OHIO'S
ECONOMY:

"Like any state, Ohio has its share of
economic strengths and
weaknesses. In the plus column,
home construction, home sales and
retail spending all have been quite
strong and the state's
unemployment rate is low. In
addition, Ohio is ranked very high
on a national level in terms of
industrial diversity. That said, the
state does face some future
challenges. Manufacturing has
slowed as the world economy
weakened, and exports are down
from a year ago. Furthermore, if the
U.S. economy weakens, Ohio's
automobile industry could face
slower sales. For those reasons, I
expect that Ohio will continue to
grow, but will likely lag the
national rate of growth."

(solid bullet) At the end of the period, 5.5% of
the fund's investments were in bonds
issued by Puerto Rico. As a territory
of the United States, Puerto Rico
can issue municipal debt that is free
from federal and state income taxes.
Because the supply of Ohio
municipals was limited, the manager
bought higher-yielding Puerto Rico
bonds.

SPARTAN OHIO MUNICIPAL INCOME FUND

INVESTMENT CHANGES

<TABLE>
<CAPTION>
<S> <C> <C>
TOP FIVE SECTORS AS OF
DECEMBER 31, 1998

% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE SECTORS 6 MONTHS AGO

General Obligations 33.7 35.3

Water & Sewer 14.0 12.3

Escrowed/Pre-Refunded 9.6 6.4

Electric Utilities 9.1 7.8

Education 7.6 9.8

AVERAGE YEARS TO MATURITY AS
OF DECEMBER 31, 1998

6 MONTHS AGO

Years 12.6 12.2

</TABLE>

AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY
DOLLAR AMOUNT.

DURATION AS OF DECEMBER 31,
1998

6 MONTHS AGO

Years 7.0 7.0

QUALITY DIVERSIFICATION
(MOODY'S RATINGS)

AS OF DECEMBER 31, 1998

Aaa 61.6%
Aa, A 27.4%
Baa 6.8%
Not Rated 2.4%
Short-term
investments 1.8%

Row: 1, Col: 1, Value: 61.6
Row: 1, Col: 2, Value: 27.4
Row: 1, Col: 3, Value: 6.8
Row: 1, Col: 4, Value: 2.4
Row: 1, Col: 5, Value: 1.8

AS OF JUNE 30, 1998

Aaa 58.2%
Aa, A 30.5%
Baa 6.7%
Not Rated 2.5%
Short-term
investments 2.1%

Row: 1, Col: 1, Value: 58.2
Row: 1, Col: 2, Value: 30.5
Row: 1, Col: 3, Value: 6.7
Row: 1, Col: 4, Value: 2.5
Row: 1, Col: 5, Value: 2.1

WHERE MOODY'S RATINGS ARE NOT AVAILABLE, WE HAVE USED S&P RATINGS.
AMOUNTS SHOWN ARE AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
SPARTAN OHIO MUNICIPAL INCOME FUND

INVESTMENTS DECEMBER 31, 1998
Showing Percentage of Total Value of Investment in Securities

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
MUNICIPAL BONDS - 98.2%

MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)

OHIO - 92.7%

Adams County Valley Local
School District Impt.:

6.65% 12/1/03 (MBIA Insured) Aaa $ 1,000,000 $ 1,122,240

6.65% 12/1/04 (MBIA Insured) Aaa 1,000,000 1,140,190

6.65% 12/1/05 (MBIA Insured) Aaa 1,000,000 1,154,560

Akron Gen. Oblig. (Parking A2 160,000 193,424
Facilities) 8.75% 11/1/03

Akron Summit County Pub. Aaa 5,000,000 5,024,550
Library Series A, 5% 12/1/15
(FGIC Insured)

Akron Wtrwks. Rev. Rfdg. Aaa 2,000,000 2,030,340
4.875% 3/1/12 (MBIA Insured)

Alliance Wtrwks. Rev. (Cap. Aaa 765,000 551,642
Appreciation) 0% 10/15/06
(FGIC Insured) (Escrowed to
Maturity) (e)

Bedford Hosp. Impt. Rev. - 695,000 740,731
Rfdg. (Bedford Cmnty. Hosp.)
8.5% 5/15/09 (Pre-Refunded
to 5/15/00 @ 102) (e)

Buckeye Local School District
Rfdg. (Cap. Appreciation):

0% 12/1/06 (AMBAC Insured) Aaa 375,000 269,539

0% 12/1/07 (AMBAC Insured) Aaa 760,000 521,702

Buckeye Valley Local School Aaa 2,500,000 3,085,500
District Delaware County
Series A, 6.85% 12/1/15
(MBIA Insured)

Butler County Sales Tax 5% Aaa 2,000,000 2,006,780
12/15/19 (AMBAC Insured)

Butler County Trans. Impt. Aaa 1,000,000 1,050,710
District Series A, 5% 4/1/06
(FSA Insured)

Cincinnati Student Ln.
Funding Corp. Student Ln.
Rev.:

Rfdg. Series A:

5.75% 8/1/02 (d) A 3,475,000 3,607,363

7.25% 2/1/08 (d) A 4,000,000 4,161,520

Series A, 5.5% 12/1/01 (d) A1 5,180,000 5,302,248

Cleveland Arpt. Sys. Rev.
Series A:

5.5% 1/1/08 (FSA Insured) (d) Aaa 1,500,000 1,618,335

6% 1/1/10 (FGIC Insured) (d) Aaa 2,620,000 2,839,818

Cleveland Gen. Oblig. Rfdg.:

5.375% 9/1/11 (AMBAC Insured) Aaa 1,960,000 2,076,326

5.5% 9/1/16 (AMBAC Insured) Aaa 2,000,000 2,098,200

MUNICIPAL BONDS - CONTINUED

MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)

OHIO - CONTINUED

Cleveland Pub. Pwr. Sys. Rev.:

(Cap. Appreciation) Series A:

0% 11/15/08 (MBIA Insured) Aaa $ 5,480,000 $ 3,575,097

0% 11/15/10 (MBIA Insured) Aaa 2,685,000 1,564,227

0% 11/15/11 (MBIA Insured) Aaa 2,685,000 1,475,971

Rfdg. Series 1:

5% 11/15/20 (MBIA Insured) Aaa 1,145,000 1,137,466

5.125% 11/15/18 (MBIA Insured) Aaa 2,000,000 2,010,460

5.25% 11/15/14 (MBIA Insured) Aaa 1,000,000 1,043,620
(b)

Cleveland Wtrwks. Rev.:

Rfdg. & Impt. Series I, 5% Aaa 9,520,000 9,481,629
1/1/23 (FSA Insured)

Rfdg.:

Series F 92B: 6.125% 1/1/03 Aaa 1,000,000 1,079,080
(AMBAC Insured)

6.25% 1/1/05 (AMBAC Insured) Aaa 1,000,000 1,078,740

Series I, 5% 1/1/28 (FSA Aaa 4,100,000 4,045,347
Insured)

Series 92 A:

6.25% 1/1/15 (AMBAC Insured) Aaa 125,000 134,585

6.25% 1/1/15 (AMBAC Insured) Aaa 2,875,000 3,131,996
(Pre-Refunded to 1/1/02 @
102) (e)

Series H:

5.75% 1/1/16 (MBIA Insured) Aaa 45,000 48,773

5.75% 1/1/16 (MBIA Insured) Aaa 2,455,000 2,751,834
(Pre-Refunded to 1/1/06 @
102) (e)

Columbus Gen. Oblig.:

(Swr. Impt. #26) Series E, Aaa 2,000,000 2,147,400
6.5% 9/15/01

(Various Purp.) Series 1, 6% Aaa 1,000,000 1,116,870
5/15/10 (Pre-Refunded to
5/15/04 @ 102) (e)

(Wtrwks. Enlargement #44) 6% Aaa 1,250,000 1,379,775
5/1/12 (Pre-Refunded to
5/1/03 @ 102) (e)

Series 1, 5.25% 9/15/11 Aaa 2,000,000 2,098,540

Cuyahoga County Gen. Oblig.:

Rfdg. (Cap. Appreciation)
Series A:

0% 10/1/08 (MBIA Insured) Aaa 4,000,000 2,638,440

0% 10/1/09 (MBIA Insured) Aaa 4,200,000 2,613,156

0% 10/1/11 (MBIA Insured) Aaa 2,400,000 1,336,776

0% 10/1/12 (MBIA Insured) Aaa 1,505,000 789,990

0% 10/1/13 (MBIA Insured) Aaa 1,500,000 740,550

5.5% 11/15/05 Aa2 2,400,000 2,618,472

MUNICIPAL BONDS - CONTINUED

MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)

OHIO - CONTINUED

Delaware City School District:

(Cap. Appreciation) 0% Aaa $ 1,000,000 $ 619,610
12/1/09 (FGIC Insured)

5.5% 12/1/08 (FGIC Insured) Aaa 1,400,000 1,511,538

Dublin City School District:

(Various Purp.) 6.2% 12/1/19 Aaa 1,400,000 1,550,318
(AMBAC Insured)
(Pre-Refunded to 12/1/02 @
102) (e)

Rfdg. (Cap. Appreciation) 0% Aaa 1,930,000 1,525,260
12/1/04 (AMBAC Insured)

Fairfield City School District:

7.1% 12/1/07 (FGIC Insured) Aaa 1,120,000 1,339,643

7.45% 12/1/14 (FGIC Insured) Aaa 1,000,000 1,301,640

Franklin County Convention Aaa 2,000,000 1,991,340
Facilities Auth. Tax & Lease
Rev. 5% 12/1/27 (MBIA
Insured)

Franklin County Gen. Oblig.:

5.5% 12/1/15 Aaa 1,225,000 1,292,216

5.5% 12/1/16 Aaa 1,290,000 1,355,984

Franklin County Gen. Oblig.
Rev. (Online Computer
Library Ctr., Inc. Proj.):

6% 4/15/13 - 3,500,000 3,640,840

7.2% 7/15/06 - 1,000,000 1,070,410

Franklin County Hosp. Rev. Baa3 5,000,000 4,882,750
(Ohio Health Corp.) Series
A, 5.6% 12/1/28

Gallia County Hosp. Aaa 3,000,000 3,051,840
Facilities Rev. (Holzer
Med. Ctr. Proj.) 5.125%
10/1/13 (AMBAC Insured)

Gateway Economic Dev. Corp. - 3,000,000 3,151,410
Greater Cleveland Stadium
Rev. 6.5% 9/15/14 (d)

Greater Cleveland Reg'l. Aaa 1,800,000 1,907,226
Trans. Auth. 5.65% 12/1/16
(FGIC Insured)

Greene County Gen. Oblig. Aaa 2,650,000 2,661,978
Rev. Rfdg. (Fairview
Extended) Series B, 4.5%
1/1/11 (MBIA Insured), LOC
BankBoston NA

Greene County Swr. Sys. Rev. Aaa 775,000 476,617
(Cap. Appreciation) 0%
12/1/09 (AMBAC Insured)

Greene County Wtr. Sys. Rev. Aaa 2,500,000 2,812,825
Series A, 6% 12/1/16 (FGIC
Insured)

Hamilton County Gen. Oblig.:

5.25% 12/1/15 Aa2 1,795,000 1,854,307

5.25% 12/1/16 Aa2 1,900,000 1,955,233

5.25% 12/1/17 Aa2 2,005,000 2,063,285

MUNICIPAL BONDS - CONTINUED

MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)

OHIO - CONTINUED

Hamilton County Health Care
Sys. Rev. (Sisters of
Charity Health Care) Series A:

6.25% 5/15/08 (AMBAC Insured) Aaa $ 4,220,000 $ 4,667,236
(Pre-Refunded to 5/15/03 @
101) (e)

6.25% 5/15/14 (AMBAC Insured) Aaa 1,000,000 1,105,980
(Pre-Refunded to 5/15/03 @
101) (e)

Hamilton County Health Sys. Baa1 5,000,000 5,390,700
Rev. Rfdg. (Providence Hosp.
/ Franciscan Sisters Poor
Health Sys.) 6.875% 7/1/15

Hamilton County Swr. Sys.
Rev. Rfdg.:

(Metro. Swr. District) Series Aaa 1,000,000 1,088,860
A, 5.45% 12/1/09 (FGIC
Insured)

Series A, 6% 12/1/05 (FGIC Aaa 4,500,000 5,015,115
Insured)

Hamilton Elec. Sys. Mtg. Rev.
Rfdg. Series A:

6% 10/15/09 (FGIC Insured) Aaa 2,920,000 3,152,490

6% 10/15/12 (FGIC Insured) Aaa 2,000,000 2,156,320

Hilliard School District
Series A:

5% 12/1/09 (FGIC Insured) Aaa 1,000,000 1,044,760

6% 12/1/05 (FGIC Insured) Aaa 1,415,000 1,578,786

Lakewood Gen. Oblig. Series A:

6.6% 12/1/08 Aa3 1,525,000 1,817,053

6.6% 12/1/11 Aa3 1,630,000 1,976,261

Lakota Local School District
Rfdg. (Cap. Appreciation):

0% 12/1/00 A1 625,000 584,088

0% 12/1/01 A1 590,000 529,077

0% 12/1/02 A1 555,000 477,522

0% 12/1/03 A1 260,000 214,097

0% 12/1/04 A1 730,000 575,240

0% 12/1/05 A1 690,000 518,086

0% 12/1/06 A1 650,000 464,672

0% 12/1/07 A1 610,000 416,185

0% 12/1/99 A1 445,000 431,125

Lima Swr. Sys. Rev. Rfdg. Aaa 5,000,000 5,497,200
6.3% 12/1/12 (AMBAC Insured)

Lowellville San. Swr. Sys. A- 1,000,000 1,075,360
Rev. (Browning-Ferris
Industries, Inc.) 7.25%
6/1/06 (d)

Lucas County Hosp. Rev. Rfdg. Aaa 4,000,000 4,406,720
(Promedica Healthcare Oblig.
Group) 6% 11/15/04 (MBIA
Insured)

MUNICIPAL BONDS - CONTINUED

MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)

OHIO - CONTINUED

Marion County Hosp. Impt.
Rev. Rfdg. (Cmnty. Hosp.):

5.7% 5/15/02 BBB+ $ 1,500,000 $ 1,561,125

5.8% 5/15/03 BBB+ 1,825,000 1,920,721

6.1% 5/15/06 BBB+ 1,000,000 1,081,690

6.375% 5/15/11 BBB+ 1,500,000 1,642,605

Mason City School District:

6.05% 12/1/09 (FGIC Insured) Aaa 1,225,000 1,401,547

6.15% 12/1/10 (FGIC Insured) Aaa 1,420,000 1,643,636

Mentor Exempted Village
School District Rfdg. (Cap.
Appreciation):

0% 12/1/00 (MBIA Insured) Aaa 755,000 706,899

0% 12/1/01 (MBIA Insured) Aaa 795,000 714,944

0% 12/1/03 (MBIA Insured) Aaa 840,000 694,369

Middleburg Heights Hosp. Rev. A2 2,000,000 2,214,060
(Southwest Gen. Hosp.) 7.2%
8/15/19 (Pre-Refunded to
8/15/01 @ 102) (e)

Montgomery County Solid Waste Aaa 1,940,000 2,159,686
Rev. Rfdg. 6% 11/1/05 (MBIA
Insured)

Newark Gen. Oblig. (Wtr. Sys. Aaa 455,000 312,335
Impt.) 0% 12/1/07 (AMBAC
Insured)

North Canton School District Aaa 2,000,000 2,240,860
Impt. 5.9% 12/1/14 (AMBAC
Insured) (Pre-Refunded to
12/1/04 @ 102) (e)

Northeast Reg'l. Swr. Aaa 1,000,000 1,117,380
Wastewtr. Rev. Rfdg. 6.25%
11/15/04 (AMBAC Insured)

Ohio Air Quality Dev. Auth.
Poll. Cont. Rev.:

(Columbus & Southern Pwr. Co. Aaa 3,000,000 3,281,220
Proj.) Series A, 6.375%
12/1/20 (FGIC Insured)

Rfdg.:

(Dayton Pwr. & Lt. Co. Proj.) A1 4,000,000 4,317,640
6.1% 9/1/30

(Ohio Pwr. Co. Proj.) Series Baa1 3,250,000 3,366,188
B, 7.4% 8/1/09

Ohio Bldg. Auth. Facilities:

(Administration Bldg. Fund) Aa3 1,000,000 1,039,990
Series A, 4.875% 10/1/10

(Adult Correctional Aaa 1,930,000 2,147,376
Facilities) Series A, 6%
4/1/06 (AMBAC Insured)

(Ohio Ctr. Arts) Series A, Aa3 2,000,000 2,193,940
5.45% 10/1/07

(W. Green Bldg. A) 4.75% A2 4,620,000 4,594,082
4/1/14

Rfdg. (State Correctional
Facilities) Series A:

5.25% 10/1/09 Aa3 3,000,000 3,247,140

MUNICIPAL BONDS - CONTINUED

MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)

OHIO - CONTINUED

Ohio Bldg. Auth. Facilities:
- - continued

Rfdg. (State Correctional
Facilities) Series A:

5.7% 10/1/04 Aa3 $ 1,125,000 $ 1,226,700

5.75% 10/1/05 Aa3 3,080,000 3,391,480

6.5% 10/1/03 Aa3 2,750,000 2,996,675

Ohio Cap. Corp. for Hsg. AAA 1,000,000 1,044,510
Multi-family Rev. Rfdg.
Series A, 7.5% 1/1/24

Ohio Expositions Commission - 955,000 1,020,284
Ctfs. of Prtn. (Agricenter
Facilities) 8.25% 10/1/06
(Pre-Refunded to 4/1/00 @
101) (e)

Ohio Gen. Oblig.:

(Infrastructure Impt.):

0% 8/1/09 Aa1 2,290,000 1,457,791

0% 8/1/10 Aa1 2,000,000 1,206,280

0% 8/1/14 Aa1 1,375,000 665,363

5.75% 8/1/04 Aa1 1,000,000 1,094,200

6.15% 8/1/10 (Pre-Refunded to Aa1 3,530,000 4,007,962
8/1/05 @ 102) (e)

6.5% 9/1/01 Aa1 1,000,000 1,071,900

6.5% 8/1/04 Aa1 5,670,000 6,415,548

6.65% 8/1/05 Aa1 3,000,000 3,468,330

6.65% 9/1/09 Aa1 1,000,000 1,183,800

Rfdg. (Infrastructure Impt.) Aa1 2,350,000 2,512,949
Series R, 5.45% 9/1/03

Ohio Higher Edl. Facilities
Rev.:

(Case Western Reserve Univ.
Proj.):

Series B, 6.5% 10/1/20 Aa3 2,250,000 2,671,155

Series C, 5.125% 10/1/17 Aa3 2,985,000 3,021,656

6% 10/1/22 Aa3 650,000 683,664

(Denison Univ. Proj.) 5.3% A1 3,775,000 3,823,094
11/1/21

Rfdg. (Case Western Reserve
Univ. Proj.):

6% 10/1/14 Aa3 1,500,000 1,702,365

6.125% 10/1/15 Aa3 2,000,000 2,297,300

6.25% 10/1/16 Aa3 2,500,000 2,906,550

Series II, 5.9% 12/1/06 Aaa 1,000,000 1,066,240
(AMBAC Insured)

Ohio Hsg. Fin. Agcy. Mtg.
Rev. (Residential Proj.):

Series A 1, 5.3% 9/1/26 (d) AAA 1,390,000 1,425,167

Series B 2, 5.375% 9/1/19 (d) AAA 3,905,000 3,988,567

Series C, 4.9% 9/1/26 (d) AAA 1,475,000 1,498,202

Ohio Poll. Cont. Rev. Aa2 3,100,000 3,741,917
(Standard Oil Co.) 6.75%
12/1/15

MUNICIPAL BONDS - CONTINUED

MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)

OHIO - CONTINUED

Ohio Pub. Facilities
Commission Higher Ed. Cap.
Facilities:

(Mental Health Cap.) Series Aaa $ 2,600,000 $ 2,674,880
II B, 5.125% 6/1/11 (FSA
Insured)

Series II A, 6.3% 5/1/03 Aaa 2,000,000 2,155,840
(AMBAC Insured)
(Pre-Refunded to 5/1/01 @
102) (e)

Ohio Tpk. Commission Tpk. Rev.:

Rfdg. Series A, 5.5% 2/15/21 Aaa 5,000,000 5,431,300
(FGIC Insured)

Series A:

5.5% 2/15/26 (MBIA Insured) Aaa 5,000,000 5,518,900
(Pre-Refunded to 2/15/06 @
102) (e)

5.6% 2/15/12 (MBIA Insured) Aaa 2,840,000 3,064,161

5.7% 2/15/13 (MBIA Insured) Aaa 2,660,000 2,896,181

5.7% 2/15/17 (MBIA Insured) Aaa 2,000,000 2,232,060
(Pre-Refunded to 2/15/06 @
102) (e)

6% 2/15/04 (FSA Insured) Aaa 5,140,000 5,613,959

6% 2/15/05 (FSA Insured) Aaa 2,000,000 2,205,440

6% 2/15/06 (FSA Insured) Aaa 2,200,000 2,444,046

6% 2/15/07 (FSA Insured) Aaa 3,100,000 3,473,798

Ohio Wtr. Dev. Auth. Poll.
Cont. Rev.:

(Wtr. Cont. Ln. Fund):

State Match Series:

6.5% 12/1/04 (MBIA Insured) Aaa 1,000,000 1,131,240

6.5% 12/1/05 (MBIA Insured) Aaa 2,735,000 3,129,688

Wtr. Quality Series: 5.25% Aaa 2,325,000 2,476,613
6/1/05 (MBIA Insured)

5.125% 6/1/19 (MBIA Insured) Aaa 4,000,000 4,039,800

Ohio Wtr. Dev. Auth. Rev.:

(Fresh Wtr.):

6.25% 12/1/02 (AMBAC Insured) Aaa 1,915,000 2,085,052

6.25% 12/1/03 (AMBAC Insured) Aaa 2,025,000 2,234,770

(Pure Wtr.) Series I, 6% Aaa 1,685,000 1,894,934
12/1/16 (AMBAC Insured)
(Escrowed to Maturity) (e)

Rfdg. & Impt. (Pure Wtr.) Aaa 2,500,000 2,598,800
5.5% 12/1/18 (AMBAC Insured)

Rfdg. (Safe Wtr.) 6% 6/1/07 Aaa 2,000,000 2,248,580
(AMBAC Insured)

Ohio Wtr. Dev. Auth. Solid Aa3 6,350,000 6,944,551
Waste Disp. Rev. (North Star
BHP Steel / Cargill) 6.3%
9/1/20 (d)

MUNICIPAL BONDS - CONTINUED

MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)

OHIO - CONTINUED

Ottawa County Gen. Oblig. Aaa $ 500,000 $ 526,010
(San. Swr.) 7.5% 10/1/14
(AMBAC Insured)

Ottawa County San. Sew Sys. Aaa 1,445,000 1,041,094
Rev. Rfdg. (Cap.
Appreciation)(Danbury Proj.)
0% 10/1/06 (AMBAC Insured)

Pickerington Local School Aaa 1,000,000 1,122,610
District Construction &
Impt. 5.8% 12/1/09 (FGIC
Insured)

Portage County Hosp. Rev. Aaa 1,080,000 1,200,258
(Robinson Memorial Hosp.
Proj.) 6.5% 11/15/03 (MBIA
Insured)

Scioto County Marine Term. Baa1 3,000,000 3,042,480
Facilities Rev. Rfdg.
(Norfolk Southern Corp.
Proj.) 5.3% 8/15/13

South-Western City School Aaa 1,000,000 1,089,780
District Rfdg. (Franklin &
Pickway Counties) Series A,
6.2% 12/1/06 (AMBAC Insured)

Springboro Cmnty. City School Aaa 915,000 657,674
District Rfdg. (Cap.
Appreciation) 0% 12/1/06
(AMBAC Insured)

Stark County Rfdg. 5.6% Aaa 1,150,000 1,234,226
11/15/08 (AMBAC Insured)

Toledo Gen. Oblig.:

5.5% 12/1/08 (FGIC Insured) Aaa 1,000,000 1,098,040

5.5% 12/1/09 (FGIC Insured) Aaa 1,000,000 1,093,360

6.1% 12/1/14 (AMBAC Insured) Aaa 1,750,000 1,917,423

7.625% 12/1/04 (AMBAC Insured) Aaa 1,000,000 1,188,190

Warren County Gen. Oblig.:

Swr. Impt. (P&G Co./Lower Aa2 1,455,000 1,524,316
Miami) 5.5% 12/1/16

6.1% 12/1/12 Aa2 500,000 580,240

6.65% 12/1/11 Aa2 500,000 599,885

Westlake City School District Aa3 1,060,000 1,200,376
Series A, 6.15% 12/1/05

Wyoming City School District Aaa 1,680,000 1,661,285
Series B, 5% 12/1/23 (FGIC
Insured)

369,294,637

PUERTO RICO - 5.5%

Puerto Rico Commonwealth
Infrastructure Fing. Auth.
Spl. Tax Rev. Series A:

5% 7/1/28 (AMBAC Insured) Aaa 7,810,000 7,826,401

5.5% 7/1/08 (AMBAC Insured) Aaa 5,000,000 5,526,850

MUNICIPAL BONDS - CONTINUED

MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)

PUERTO RICO - CONTINUED

Puerto Rico Commonwealth Pub. Baa1 $ 4,000,000 $ 4,278,120
Impt. Rev. 5.25% 7/1/09

Puerto Rico Elec. Pwr. Auth. Aaa 4,000,000 4,008,840
Pwr. Rev. 5% 7/1/28 (MBIA
Insured)

21,640,211

TOTAL MUNICIPAL BONDS 390,934,848
(Cost $369,339,255)

MUNICIPAL NOTES - 1.8%

OHIO - 1.8%

Cuyahoga County Hosp. Rev. 900,000 900,000
(Cleveland Clinic
Foundation) Series 1997 D,
4.1%, VRDN (c)

Ohio Air Quality Dev. Auth.
Poll. Cont. Rev. (Cincinnati
Gas & Elec. Proj.):

Series 1985 B, 4.15%, LOC 400,000 400,000
Morgan Guaranty Trust Co.,
NY, VRDN (c)

Series B, 4%, LOC Canadian 4,900,000 4,900,000
Imperial Bank of Commerce,
VRDN (c)

Ohio Solid Waste Rev. 4.2%, 1,100,000 1,100,000
VRDN (c)(d)

TOTAL MUNICIPAL NOTES 7,300,000
(Cost $7,300,000)

TOTAL INVESTMENT IN $ 398,234,848
SECURITIES - 100%
(Cost $376,639,255)
</TABLE>

SECURITY TYPE ABBREVIATION

VRDN VARIABLE RATE DEMAND NOTE

LEGEND

(a) Standard & Poor's credit ratings are used in the absence of a
rating by Moody's Investors Service, Inc.

(b) Security purchased on a delayed delivery or when-issued basis (see
Note 2 of Notes to Financial Statements).

(d) Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.

(e) Security collateralized by an amount sufficient to pay interest
and principal.

OTHER INFORMATION

The composition of long-term debt holdings as a percentage of total
value of investments in securities, is as follows (ratings are
unaudited):

MOODY'S RATINGS S&P RATINGS

Aaa, Aa, A 86.6% AAA, AA, A 80.2%

Baa 5.2% BBB 3.7%

Ba 0.0% BB 0.0%

B 0.0% B 0.0%

Caa 0.0% CCC 0.0%

Ca, C 0.0% CC, C 0.0%

D 0.0%

The percentage not rated by Moody's or S&P amounted to 2.4%

The distribution of municipal securities by revenue source, as a
percentage of total value of investments in securities, is as follows:

General Obligations 33.7%

Water & Sewer 14.0

Escrowed/Pre-Refunded 9.6

Electric Utilities 9.1

Education 7.6

Transportation 7.4

Health Care 7.2

Others (individually less 11.4
than 5%)

TOTAL 100.0%

INCOME TAX INFORMATION

At December 31, 1998, the aggregate cost of investment securities for
income tax purposes was $376,639,255. Net unrealized appreciation
aggregated $21,595,593, of which $21,738,421 related to appreciated
investment securities and $142,828 related to depreciated investment
securities.

The fund hereby designates approximately $3,870,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
During the fiscal year ended December 31, 1998, 100% of the fund's
income dividends was free from federal income tax, and 11.68% of the
fund's income dividends was subject to the federal alternative minimum
tax (unaudited).

SPARTAN OHIO MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998

ASSETS

Investment in securities, at $ 398,234,848
value (cost $376,639,255) -
See accompanying schedule

Cash 51,274

Receivable for fund shares 879,330
sold

Interest receivable 4,892,875

TOTAL ASSETS 404,058,327

LIABILITIES

Payable for investments $ 4,968,745
purchased Regular delivery

Delayed delivery 1,051,824

Payable for fund shares 385,681
redeemed

Distributions payable 1,268,181

Accrued management fee 133,493

Other payables and accrued 84,666
expenses

TOTAL LIABILITIES 7,892,590

NET ASSETS $ 396,165,737

Net Assets consist of:

Paid in capital $ 374,211,639

Accumulated undistributed net 358,505
realized gain (loss) on
investments

Net unrealized appreciation 21,595,593
(depreciation) on investments

NET ASSETS, for 33,757,548 $ 396,165,737
shares outstanding

NET ASSET VALUE, offering $11.74
price and redemption price
per share ($396,165,737
(divided by) 33,757,548
shares)

STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998

INTEREST INCOME $ 20,022,153

EXPENSES

Management fee $ 1,501,901

Transfer agent fees 404,088

Accounting fees and expenses 166,327

Non-interested trustees' 1,012
compensation

Custodian fees and expenses 21,490

Registration fees 11,679

Audit 32,765

Legal 15,458

Interest 781

Reports to shareholders 10,211

Miscellaneous 1,293

Total expenses before 2,167,005
reductions

Expense reductions (27,735) 2,139,270

NET INTEREST INCOME 17,882,883

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

Investment securities 4,412,243

Futures contracts 473,303 4,885,546

Change in net unrealized
appreciation (depreciation)
on:

Investment securities (923,486)

Futures contracts 17,426 (906,060)

NET GAIN (LOSS) 3,979,486

NET INCREASE (DECREASE) IN $ 21,862,369
NET ASSETS RESULTING FROM
OPERATIONS

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1998 YEAR ENDED DECEMBER 31, 1997

INCREASE (DECREASE) IN NET
ASSETS

Operations Net interest income $ 17,882,883 $ 18,300,385

Net realized gain (loss) 4,885,546 3,344,711

Change in net unrealized (906,060) 10,248,077
appreciation (depreciation)

NET INCREASE (DECREASE) IN 21,862,369 31,893,173
NET ASSETS RESULTING FROM
OPERATIONS

Distributions to shareholders (17,882,883) (18,300,385)
From net interest income

From net realized gain (3,506,383) (3,475,777)

In excess of net realized - (592,404)
gain

TOTAL DISTRIBUTIONS (21,389,266) (22,368,566)

Share transactions Net 66,919,917 56,972,543
proceeds from sales of shares

Reinvestment of distributions 15,535,211 16,711,470

Cost of shares redeemed (75,669,488) (75,927,932)

NET INCREASE (DECREASE) IN 6,785,640 (2,243,919)
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) 7,258,743 7,280,688
IN NET ASSETS

NET ASSETS

Beginning of period 388,906,994 381,626,306

End of period $ 396,165,737 $ 388,906,994

OTHER INFORMATION
Shares

Sold 5,687,666 4,952,639

Issued in reinvestment of 1,322,589 1,451,189
distributions

Redeemed (6,432,601) (6,606,322)

Net increase (decrease) 577,654 (202,494)

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED DECEMBER 31,

1998 1997 1996 1995 1994

SELECTED PER-SHARE DATA

Net asset value, beginning $ 11.720 $ 11.430 $ 11.590 $ 10.520 $ 12.020
of period

Income from Investment .538 .554 .560 .618 .657
Operations Net interest
income

Net realized and unrealized .125 .413 (.090) 1.070 (1.310)
gain (loss)

Total from investment .663 .967 .470 1.688 (.653)
operations

Less Distributions

From net interest income (.538) (.554) (.560) (.618) (.657)

From net realized gain (.105) (.105) (.070) - (.190)

In excess of net realized - (.018) - - -
gain

Total distributions (.643) (.677) (.630) (.618) (.847)

Net asset value, end of period $ 11.740 $ 11.720 $ 11.430 $ 11.590 $ 10.520

TOTAL RETURN A 5.79% 8.74% 4.23% 16.39% (5.55)%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period $ 396,166 $ 388,907 $ 381,626 $ 404,443 $ 350,267
(000 omitted)

Ratio of expenses to average .55% B .56% B .59% .58% .57%
net assets

Ratio of net interest income 4.58% 4.83% 4.93% 5.52% 5.88%
to average net assets

Portfolio turnover rate 19% 15% 43% 48% 22%

</TABLE>

A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO
FINANCIAL STATEMENTS).

B FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).

FIDELITY OHIO MUNICIPAL MONEY MARKET FUND

PERFORMANCE: THE BOTTOM LINE

To evaluate a money market fund's historical performance, you can look
at either total return or yield. Total return reflects the change in
the value of an investment, assuming reinvestment of the fund's
dividend income and capital gains (the profits earned upon the sale of
securities that have grown in value). Yield measures the income paid
by a fund. Since a money market fund tries to maintain a $1 share
price, yield is an important measure of performance. If Fidelity had
not reimbursed certain fund expenses, the life of fund total returns
would have been lower.

CUMULATIVE TOTAL RETURNS

PERIODS ENDED DECEMBER 31, 1998 PAST 1 YEAR PAST 5 YEARS LIFE OF FUND

FIDELITY OH MUNICIPAL MONEY 3.09% 16.42% 38.13%
MARKET

Ohio Tax-Free Money Market 3.04% 16.17% n/a
Funds Average

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year, five years or since
the fund started on August 29, 1989. For example, if you had invested
$1,000 in a fund that had a 5% return over the past year, the value of
your investment would be $1,050. To measure how the fund's performance
stacked up against its peers, you can compare it to the Ohio tax-free
money market funds average, which reflects the performance of Ohio
tax-free money market funds with similar objectives tracked by IBC
Financial Data, Inc. The past one year average represents a peer group
of 12 mutual funds.

AVERAGE ANNUAL TOTAL RETURNS

PERIODS ENDED DECEMBER 31, 1998 PAST 1 YEAR PAST 5 YEARS LIFE OF FUND

FIDELITY OH MUNICIPAL MONEY 3.09% 3.09% 3.52%
MARKET

Ohio Tax-Free Money Market 3.04% 3.06% n/a
Funds Average

AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year.

YIELDS

<TABLE>
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<S> <C> <C> <C> <C> <C>
12/28/98 9/28/98 6/29/98 3/30/98 12/29/97

Fidelity Ohio Municipal 3.18% 3.37% 3.08% 3.25% 3.50%
Money Market Fund

Ohio Tax-Free Money Market 3.02% 3.26% 3.05% 3.07% 3.40%
Funds Average

Ohio Municipal Money Market 5.33% 5.65% 5.16% 5.45% 5.87%
Tax-equivalent

</TABLE>

Row: 1, Col: 1, Value: 3.18
Row: 1, Col: 2, Value: 3.02
Row: 2, Col: 1, Value: 3.37
Row: 2, Col: 2, Value: 3.26
Row: 3, Col: 1, Value: 3.08
Row: 3, Col: 2, Value: 3.05
Row: 4, Col: 1, Value: 3.25
Row: 4, Col: 2, Value: 3.07
Row: 5, Col: 1, Value: 3.5
Row: 5, Col: 2, Value: 3.4

Ohio Municipal
Money Market
Fund

Ohio Tax-Free
Money Market
Funds Average
5% -
4% -
3% -
2% -
1% -
0%

YIELD refers to the income paid by the fund over a given period.
Yields for money market funds are usually for seven-day periods,
expressed as annual percentage rates. A yield that assumes income
earned is reinvested or compounded is called an effective yield. The
chart above shows the fund's current seven-day yield at quarterly
intervals over the past year. You can compare these yields to the Ohio
tax-free money market funds average as tracked by IBC Financial Data,
Inc. Or you can look at the fund's tax-equivalent yield, which is
based on a combined effective 1999 federal and state income tax rate
of 40.35%. A portion of the fund's income may be subject to the
federal alternative minimum tax.

A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT
PAST RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.

(checkmark)COMPARING
PERFORMANCE

Yields on tax-free investments
are usually lower than yields
on taxable investments.
However, a straight
comparison between the two
may be misleading because it
ignores the way taxes reduce
taxable returns. Tax-equivalent
yield - the yield you'd have to
earn on a similar taxable
investment to match the tax-free
yield - makes the comparison
more meaningful. Keep in
mind that the U.S. government
neither insures nor guarantees
a money market fund. And
there is no assurance that a
money fund will maintain a $1
share price.

FIDELITY OHIO MUNICIPAL MONEY MARKET FUND

FUND TALK: THE MANAGER'S OVERVIEW

(photograph of Scott Orr)

An interview with Scott Orr, Portfolio Manager of Fidelity Ohio
Municipal Money Market Fund

Q. SCOTT, WHAT WAS THE INVESTMENT ENVIRONMENT LIKE OVER THE PAST 12
MONTHS?

A. It was a very interesting period, marked by volatility in global
markets from the summer of 1998 through the end of the year. During
this time, the Federal Reserve Board lowered the rate banks charge
each other for overnight loans - known as the fed funds rate - three
times. Each move consisted of an "easing" of 0.25 percentage points,
and the fed funds rate fell from 5.50% to 4.75%. These significant
moves were unanticipated early in the summer given the investment
climate of the first seven months of the reporting period. During that
span, market sentiment reflected an expectation of a fed "tightening,"
or raising of short-term interest rates. Although inflation had been
generally non-existent, signs such as a very low unemployment rate and
sustained economic growth pointed to the potential for the build-up of
inflationary pressures. International problems, especially in Asia,
helped dampen economic growth enough to keep the Fed on the sidelines
- - leaving interest rates unchanged - through the second quarter of
1998. However, the problems in global markets intensified starting in
August.

Q. WHAT HAPPENED IN AUGUST TO CHANGE THE BACKDROP?

A. Russia defaulted on some of its outstanding debt and the value of
its currency, the ruble, plummeted, sparking concerns that currency
devaluations would take place in other emerging-market countries, such
as those in Latin America. Global stock markets went into a freefall,
and investors worldwide flocked to U.S. Treasuries in pursuit of a
haven safe enough to withstand this turmoil. Further problems arose in
early fall when rumors of the potential collapse of certain hedge
funds hit the market. Market sentiment quickly swung to an
anticipation of Fed rate cuts. The board followed through with 0.25
percentage point decreases at the end of September, in a surprise move
on October 15 between meetings of its Open Market Committee, and again
on November 17. These moves were an attempt to bring stability back to
world markets, and appear to have succeeded.

Q. WHAT STRATEGY DID YOU PURSUE WITH THE FUND WHILE THIS TRANSPIRED?

A. Given the uncertainty of the markets, I maintained a neutral stance
relative to its competitors with the fund's average maturity,
recognizing that the interest-rate picture was changing in the late
summer and early fall. At the same time, I opportunistically purchased
one-year, fixed-rate notes when I felt that they offered attractive
yields given the outlook for interest rates. Earlier on, that meant
buying one-year notes that I felt fairly compensated the fund for what
looked like an eventual rate hike. Later, after the turmoil hit the
market, I purchased one-year notes that I felt were appealing in a
falling interest-rate environment. The fund started the period with an
average maturity of 62 days, and that rolled down to the mid-30-day
range in mid-summer before extending out again to the mid 50s in
August and September. The fund's maturity - which ended the period at
66 days - was slightly longer than the average of its competitors at
the end of the period, but reflected a flexible position generally in
line with that of other funds.

Q. HOW DID THE FUND PERFORM?

A. The fund's seven-day yield on December 31, 1998, was 3.22%,
compared to 3.51% 12 months ago. The more recent seven-day yield was
the equivalent of a 5.40% taxable rate of return for Ohio investors in
the 40.35% combined state and federal income tax bracket. Through
December 31, 1998, the fund's 12-month total return was 3.09%,
compared to 3.04% for the Ohio tax-free money market funds average,
according to IBC Financial Data, Inc.

Q. WHAT'S YOUR OUTLOOK?

A. At the end of the period, the Fed appeared content with its
interest-rate stance, adopting a "wait and see" attitude in order to
determine what effect its moves would have on the economy. The Fed
probably won't need to lower rates further, but appears ready to do so
if the U.S. economy slows or a global credit crunch starts to develop.
On the other hand, the Fed may become wary if the economy continues to
thrive and inflationary pressures arise, and remains ready to switch
gears and raise interest rates in response to these kinds of events.
If we see continued economic expansion, the market may begin to
anticipate that the Fed's next move will be a tightening, but I'm not
ready to jump on that bandwagon yet. Rather, I expect rates to remain
unchanged for at least six months unless we see compelling economic
news one way or the other.

(checkmark)FUND FACTS

GOAL: high current tax-free
income while maintaining a
stable $1.00 share price by
investing in high-quality,
short-term municipal money
market securities whose
interest is free from federal
income tax and Ohio
personal income tax

FUND NUMBER: 419

TRADING SYMBOL: FOMXX

START DATE: August 29, 1989
SIZE: as of December 31,
1998, more than $400
million

MANAGER: Scott Orr, since
1996; manager, various
Fidelity and Spartan money
market funds: joined Fidelity
in 1989

FIDELITY OHIO MUNICIPAL MONEY MARKET FUND

INVESTMENT CHANGES

<TABLE>
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<S> <C> <C> <C>
MATURITY DIVERSIFICATION

DAYS % OF FUND'S INVESTMENTS % OF FUND INVESTMENTS 6/30/98 % OF FUND INVESTMENTS 12/31/97
12/31/98

0 - 30 69 80 65

31 - 90 7 10 7

91 - 180 8 6 18

181 - 397 16 4 10

WEIGHTED AVERAGE MATURITY

12/31/98 6/30/98 12/31/97

Fidelity Ohio Municipal Money 66 DAYS 33 Days 62 Days
Market Fund

Ohio Tax-Free Money Market 59 DAYS 50 Days 61 Days
Funds Average *

ASSET ALLOCATION (% OF FUND'S
INVESTMENTS)

</TABLE>

AS OF 12/31/98
Row: 1, Col: 1, Value: 63.0
Row: 1, Col: 2, Value: 8.0
Row: 1, Col: 3, Value: 2.0
Row: 1, Col: 4, Value: 25.0
Row: 1, Col: 5, Value: 2.0
Variable rate demand
notes (VRDNs) 63%
Commercial paper
(including CP mode) 8%
Tender bonds 2%
Municipal notes 25%
Other 2%

AS OF 6/30/98
Row: 1, Col: 1, Value: 75.0
Row: 1, Col: 2, Value: 4.0
Row: 1, Col: 3, Value: 3.0
Row: 1, Col: 4, Value: 18.0
Row: 1, Col: 5, Value: 0.0
Variable rate demand
notes (VRDNs) 75%
Commercial paper
(including CP mode) 4%
Tender bonds 3%
Municipal notes 18%
Other 0%

*SOURCE: IBC'S MONEY FUND REPORT(registered trademark)

FIDELITY OHIO MUNICIPAL MONEY MARKET FUND

INVESTMENTS DECEMBER 31, 1998

Showing Percentage of Total Value of Investment in Securities

<TABLE>
<CAPTION>
<S> <C> <C> <C>
MUNICIPAL SECURITIES - 100.0%

PRINCIPAL AMOUNT VALUE (NOTE 1)

OHIO - 99.8%

Akron Spl. Assessment TAN $ 1,915,000 $ 1,915,000
(Street Impt.) Series 1998,
3.12% 12/17/99

Allen County Gen. Oblig. BAN:

3.5% 1/5/00 3,865,000 3,878,025

3.5% 11/23/99 4,720,000 4,730,202

American Muni. Pwr., Inc. BAN 3,800,000 3,800,000
(Cleveland Pub. Pwr. Proj.)
3.85% 9/3/99

Ashland County BAN (Jail 2,400,000 2,404,902
Construction) Series 1998 B,
3.32% 12/17/99

Ashland Gen. Oblig. BAN 3.95% 1,750,000 1,752,250
7/15/99

Ashtabula County Ind. Dev. 2,325,000 2,325,000
Rev. (Plasticolors, Inc.
Proj.) Series 1996 A, 4.2%,
LOC Key Bank, NA, VRDN (a)(d)

Athens Gen. Oblig. BAN 3.25% 3,900,000 3,906,203
12/21/99

Bedford Heights Ind. Dev. 1,000,000 1,000,000
(Olympic Steel) Series 1989,
4.05%, LOC Nat'l. City Bank,
VRDN (a)(d)

Blue Ash Gen. Oblig. BAN 2,500,000 2,501,228
4.05% 5/6/99

Bowling Green Gen. Oblig. BAN 2,310,000 2,313,982
Series 1995, 3.9% 9/9/99

Brooklyn Gen. Oblig. BAN 4% 4,025,000 4,034,848
9/2/99

Cambridge Hosp. Facilities 7,560,000 7,560,000
Rev. Bonds (Southeastern
Reg'l. Med. Ctr.) 3.7%,
tender 1/4/99, LOC Nat'l.
City Bank

Canton Gen. Oblig. BAN Series 1,400,000 1,400,000
1998, 3.5% 7/15/99

Cincinnati Student Ln. Fund
Corp. Student Ln. Rev.:

Series 1998 A 1, 4.05% (BPA 17,400,000 17,400,000
Bank of America Nat'l. Trust
& Savings Assoc.), VRDN
(a)(d)

Series 1998 A 2, 4.05% (BPA 23,000,000 22,999,998
Bank of America Nat'l. Trust
& Savings Assoc.), VRDN
(a)(d)

Clermont County Ind. Dev. 4,535,000 4,535,000
Rev. (American Micro
Products Proj.) 4%, LOC Star
Bank NA, VRDN (a)(d)

Cleveland Parking Facilities 2,340,000 2,340,000
Rev. Rfdg. Participating
VRDN Series 1996, 3.9%
(Liquidity Facility Merrill
Lynch & Co.) (a)(e)

Cleveland Wtrwks. Rev. 8,000,000 8,000,000
Participating VRDN Series
58, 4.1% (Liquidity Facility
Morgan Stanley, Dean Witter
& Co.) (a)(e)

Cuyahoga County Ind. Dev. 5,700,000 5,700,000
Rev. (The Great Lakes
Brewing Co.) 4.2%, LOC
Huntington Nat'l. Bank,
Columbus, VRDN (a)(d)

Dayton Gen. Oblig. BAN Series 3,500,000 3,502,771
1998, 3.65% 6/15/99

Euclid Gen. Oblig. BAN Series 2,115,000 2,118,450
1998, 3.22% 12/30/99

Fairfield County Gen. Oblig.
BAN:

3.8% 8/27/99 1,000,000 1,001,131

4.45% 7/27/99 1,175,000 1,179,818

MUNICIPAL SECURITIES -
CONTINUED

PRINCIPAL AMOUNT VALUE (NOTE 1)

OHIO - CONTINUED

Franklin County Ind. Dev. $ 800,000 $ 800,000
Rev. (Inland Products, Inc.)
4.05%, LOC PNC Bank NA, VRDN
(a)(d)

Franklin County Multi-family 2,500,000 2,500,000
Rev. (Colonial Courts)
4.25%, LOC Fed. Home Ln.
Bank Indianapolis, VRDN
(a)(d)

Geauga County Gen. Oblig. BAN 3,200,000 3,206,658
3.375% 12/16/99

Greene County BAN:

(Juvenile Justice Ctr.) 3.75% 3,800,000 3,801,542
3/2/99

Gen. Oblig. 3.9% 9/9/99 3,800,000 3,807,809

Hamilton County Ind. Dev. 1,975,000 1,975,000
Rev. (Metro Containers, Inc.
Proj.) 3.9%, LOC Bank One,
NA, VRDN (a)(d)

Hamilton County Sales Tax 3,710,000 3,710,000
Participating VRDN Series
15, 4.15% (Liquidity
Facility Morgan Stanley,
Dean Witter & Co.) (a)(e)

Holmes County Ind. Dev. Rev. 1,000,000 1,000,000
(Poultry Processing, Inc.)
Series 1990, 4.15%, LOC
RaboBank Nederland Coop.
Central, VRDN (a)(d)

Independence Gen. Oblig. BAN 3,000,000 3,000,522
3.75% 5/13/99

Lake County Ind. Dev. Rev.:

(American Bus. Co.) 4.2%, LOC 1,350,000 1,350,000
Huntington Nat'l. Bank,
Columbus, VRDN (a)(d)

(Norshar Co. Proj.) 3.9%, LOC 3,430,000 3,430,000
Bank One, NA, VRDN (a)(d)

Lebanon Ind. Park BAN:

(Telecommunications Sys.) 1,200,000 1,202,011
3.91% 9/2/99

3.95% 5/27/99 1,000,000 1,000,000

4.07% 5/27/99 3,100,000 3,103,233

Licking Valley Gen. Oblig. 2,800,000 2,805,154
BAN (School Bldg.
Construction) 3.75% 4/15/99

Lucas County Multi-family Rev.:

(Beacon Place/Cubbon Proj.) 3,725,000 3,725,000
3.87%, LOC Star Bank NA,
VRDN (a)

(Lakewoods Proj.) 4.2%, LOC 4,000,000 4,000,000
Key Bank, NA, VRDN (a)(d)

Medina County Ind. Dev. Rev.:

(Firdex, Inc.) Series 1997, 1,080,000 1,080,000
4.2%, LOC Key Bank, NA, VRDN
(a)(d)

(North American Roto 265,000 265,000
Engravers, Inc. Proj.)
Series 1988, 4.15%, LOC Bank
One, NA, VRDN (a)(d)

(Rembond Proj.) Series 1996, 2,855,000 2,855,000
3.9%, LOC Bank One, NA, VRDN
(a)(d)

Mentor Gen. Oblig. BAN 4% 2,225,000 2,228,556
7/22/99

Middletown Ind. Dev. Rev. 1,800,000 1,800,000
(Pilot Chemical Proj.) 3.9%,
LOC Bank One, NA, VRDN (a)(d)

MUNICIPAL SECURITIES -
CONTINUED

PRINCIPAL AMOUNT VALUE (NOTE 1)

OHIO - CONTINUED

Montgomery County Health Care $ 3,655,000 $ 3,655,000
Rev. (Eastway Corp. &
Property Resource) 4.2%, LOC
Huntington Nat'l. Bank,
Columbus, VRDN (a)(d)

Montgomery County
Multi-family Hsg. Rev.:

(Pedcor Investments - Lyons 3,000,000 3,000,000
Gate) 3.9%, LOC Fed. Home
Ln. Bank, Cincinnati, VRDN
(a)(d)

(Timber Creek Village Apts.) 3,700,000 3,700,000
Series 1998, 3.87%, LOC Key
Bank, NA, VRDN (a)(d)

Ohio Air Quality Dev. Auth.
Poll. Cont. Rev.:

(Cincinnati Gas & Elec. Proj.):

Series 1985-A, 4.15%, LOC 1,100,000 1,100,000
Union Bank of Switzerland,
VRDN (a)

Series B, 4%, LOC Canadian 500,000 500,000
Imperial Bank of Commerce,
VRDN (a)

Bonds:

(Cleveland Elec. Proj.) 2,000,000 2,000,000
Series 1988 B, 3.4% 2/17/99
(FGIC Insured), CP mode

(Duquesne Lt. Co. Proj.)
Series 1988:

3.3% 1/22/99, LOC Toronto 3,800,000 3,800,000
Dominion Bank, CP mode (d)

3.4% 1/29/99, LOC Toronto 2,000,000 2,000,000
Dominion Bank, CP mode (d)

Ohio Bldg. Auth. Facilities 4,010,000 4,065,918
(Correctional Facilities)
Series A, 5% 10/1/99

Ohio Hsg. Fin. Agcy. Mtg.
Rev. Participating VRDN:

Series 1998 B, 4.15% 14,695,000 14,695,000
(Liquidity Facility Bank of
America Nat'l. Trust &
Savings Assoc.) (a)(d)(e)

Series FR 15, 4.1% (Liquidity 15,000,000 15,000,000
Facility Bank of New York
NA) (a)(d)(e)

Series PA 93, 3.95% 4,685,000 4,685,000
(Liquidity Facility Merrill
Lynch & Co.) (a)(d)(e)

Series PT 228, 4.13% 6,400,000 6,400,000
(Liquidity Facility CS First
Boston, Inc.) (a)(d)(e)

Series PT 241, 4.13% 4,000,000 4,000,000
(Liquidity Facility
Bayerische Hypo-und
Vereinsbank AG) (a)(d)(e)

3.95% (Liquidity Facility 3,180,000 3,180,000
Banco Santander SA) (a)(d)(e)

4.1% (Liquidity Facility Bank 6,255,000 6,255,000
of New York NA) (a)(d)(e)

Ohio Hsg. Fin. Agcy.
Multi-family Hsg. Rev.:

(Hunter's Glen Apt. Proj.) 2,000,000 2,000,000
Series 1996, 4%, LOC PNC
Bank NA, VRDN (a)(d)

(Pedcor Invt. Willowlakes 3,200,000 3,200,000
Apt. Proj.) Series A, 3.9%,
LOC Bank One, NA, VRDN (a)(d)

MUNICIPAL SECURITIES -
CONTINUED

PRINCIPAL AMOUNT VALUE (NOTE 1)

OHIO - CONTINUED

Ohio Hsg. Fin. Agcy.
Multi-family Hsg. Rev.: -
continued

(Pedcor Invt. Willowlake
Apts. Proj.):

Series B, 4%, LOC Fed. Home $ 500,000 $ 500,000
Ln. Bank Indianapolis, VRDN
(a)(d)

Series C, 4%, LOC Fed. Home 625,000 625,000
Ln. Bank Indianapolis, VRDN
(a)(d)

Series D, 4%, LOC Fed. Home 625,000 625,000
Ln. Bank Indianapolis, VRDN
(a)(d)

Ohio Hsg. Fin. Agcy. Single
Family Mtg. Rev.
Participating VRDN:

Series 96 5, 4.1% (Liquidity 4,600,000 4,600,000
Facility Bank of New York
NA) (a)(d)(e)

Series 96 6, 4.1% (Liquidity 7,450,000 7,450,000
Facility Bank of New York
NA) (a)(d)(e)

4.1% (Liquidity Facility Bank 3,800,000 3,800,000
of New York NA) (a)(d)(e)

Ohio Ind. Dev. Rev.:

(Aerolite Extrusion) Series 165,000 165,000
1991 IA, 4.15%, LOC Nat'l.
City Bank, VRDN (a)(d)

(Anomatic Corp.) Series 1989 165,000 165,000
I, 4.15%, LOC Nat'l. City
Bank, VRDN (a)(d)

(Arthur Corp.) Series 1989 105,000 105,000
III A, 4.15%, LOC Nat'l.
City Bank, VRDN (a)(d)

(Burnham Corp. Proj.) Series 90,000 90,000
1988 II, 4.15%, LOC PNC Bank
NA, VRDN (a)(d)

(Carpenter/ Clapp & Haney 240,000 240,000
Tool Co.) Series 1987 P,
4.15%, LOC Bank One, NA,
VRDN (a)(d)

(CCE, Inc.) Series 1989 I, 715,000 715,000
4.15%, LOC Nat'l. City Bank,
VRDN (a)(d)

(Die Matic, Inc.) Series 1987 130,000 130,000
O, 4.15%, LOC Bank One, NA,
VRDN (a)(d)

(Dramex Int'l., Inc.):

Series 1988 I, 4.15%, LOC 1,000,000 1,000,000
Bank One, NA, VRDN (a)(d)

Series 1988 II, 4.15%, LOC 200,000 200,000
PNC Bank NA, VRDN (a)(d)

(Gary W. James) Series 1986 190,000 190,000
B, 4.15%, LOC Nat'l. City
Bank, Cleveland, VRDN (a)(d)

(Hydro Tube Corp.) 4.15%, LOC 80,000 80,000
Nat'l. City Bank, VRDN (a)(d)

(K&S Realty) Series 1989 I, 230,000 230,000
4.15%, LOC Nat'l. City Bank,
VRDN (a)(d)

(K&S Realty/Starr 205,000 205,000
Fabricating, Inc.) Series
1989 III, 4.15%, LOC Nat'l.
City Bank, VRDN (a)(d)

MUNICIPAL SECURITIES -
CONTINUED

PRINCIPAL AMOUNT VALUE (NOTE 1)

OHIO - CONTINUED

Ohio Ind. Dev. Rev.: -
continued

(Kaufmans Bakery) Series 1987 $ 500,000 $ 500,000
K, 4.15%, LOC Bank One, NA,
VRDN (a)(d)

(Midwest Acoust-A-Fiber, 375,000 375,000
Inc.) Series 1989 I, 4.15%,
LOC Nat'l. City Bank, VRDN
(a)(d)

(Morrow Macke Realty) Series 400,000 400,000
1988 C, 4.15%, LOC Bank One,
NA, VRDN (a)(d)

(Plasticos Co.) Series 1989 395,000 395,000
III A, 4.15%, LOC Nat'l.
City Bank, VRDN (a)(d)

(Prentke Romich) Series 1989 50,000 50,000
III, 4.15%, LOC Nat'l. City
Bank, VRDN (a)(d)

(Samuel and Annie Sherman) 150,000 150,000
Series 1989 III A, 4.15%,
LOC Nat'l. City Bank, VRDN
(a)(d)

(SBD Properties Co.) Series 155,000 155,000
1986 L, 4.15%, LOC Nat'l.
City Bank, Cleveland, VRDN
(a)(d)

(Southwest Fin. Svcs.) Series 60,000 60,000
1986 J, 4.15%, LOC Nat'l.
City Bank, Cleveland, VRDN
(a)(d)

(Standby Screw) Series 1991 650,000 650,000
IA, 4.15%, LOC Nat'l. City
Bank, VRDN (a)(d)

(Steubenville Area) Series 300,000 300,000
1988 II, 4.15%, LOC PNC Bank
NA, VRDN (a)(d)

(United Steel Svc.) Series 405,000 405,000
1988 J, 4.15%, LOC Bank One,
NA, VRDN (a)(d)

(VRE, Inc.) Series 1988 F, 130,000 130,000
4.15%, LOC Bank One, NA,
VRDN (a)(d)

(Walker-Williams Lumber Co.) 770,000 770,000
Series 1989 III A, 4.15%,
LOC Nat'l. City Bank, VRDN
(a)(d)

(Wooster Iron Metal Co.) 145,000 145,000
Series 1988 R, 4.15%, LOC
Bank One, NA, VRDN (a)(d)

Ohio Pub. Facilities 2,300,000 2,326,857
Commission Higher Ed. Cap.
Facilities Series II B, 4.5%
11/1/99

Ohio Solid Waste Rev. 4.2%, 6,300,000 6,300,000
VRDN (a)(d)

Ohio Tpk. Commission Tpk. 3,800,000 3,800,000
Rev. Participating VRDN
4.15% (Liquidity Facility
Societe Generale, France)
(a)(e)

Ohio Wtr. Dev. Auth. Poll.
Cont. Rev. Bonds:

(Cleveland Elec. Proj.)
Series 1988 A:

3.2% 3/12/99 (FGIC Insured), 4,350,000 4,350,000
CP mode

3.3% 1/13/99 (FGIC Insured), 1,000,000 1,000,000
CP mode

3.4% 2/17/99 (FGIC Insured), 4,000,000 4,000,000
CP mode

MUNICIPAL SECURITIES -
CONTINUED

PRINCIPAL AMOUNT VALUE (NOTE 1)

OHIO - CONTINUED

Ohio Wtr. Dev. Auth. Poll.
Cont. Rev. Bonds: - continued

(Duquesne Lt. Co. Proj.):

3.15% 1/29/99, LOC Toronto $ 3,800,000 $ 3,800,000
Dominion Bank, CP mode (d)

3.2% 1/29/99, LOC Toronto 1,000,000 1,000,000
Dominion Bank, CP mode (d)

3.3% 3/12/99, LOC Toronto 6,500,000 6,500,000
Dominion Bank, CP mode (d)

3.4% 1/29/99, LOC Toronto 1,500,000 1,500,000
Dominion Bank, CP mode (d)

3.4% 3/1/99, LOC Toronto 1,000,000 1,000,000
Dominion Bank, CP mode (d)

Ohio Wtr. Dev. Auth. Rev. 4,830,000 4,830,000
Participating VRDN 3.9%
(Liquidity Facility Merrill
Lynch & Co.) (a)(e)

Ohio Wtr. Dev. Auth. Solid 3,900,000 3,900,000
Waste Disp. Rev. (American
Steel & Wire Corp.) 3.95%,
LOC Bank of America Nat'l.
Trust & Savings Assoc., VRDN
(a)(d)

Orange City School District 2,000,000 2,004,176
BAN 3.46% 8/18/99

Oregon City Gen. Oblig. BAN 2,950,000 2,951,634
Series 1998 1, 4% 5/5/99

Pickerington BAN:

(San. Swr. Sys. Impt.) 3.8% 3,000,000 3,002,205
2/12/99

Gen. Oblig. 4.05% 6/25/99 2,075,000 2,078,064

Pickerington Local School 3,000,000 3,000,571
District Construction &
Impt. BAN 4.04% 1/22/99

Richland County Ind. Dev. Rev.:

(Carton Svc., Inc. Proj.) 1,430,000 1,430,000
Series 1996, 3.95%, LOC
Nat'l. City Bank, VRDN (a)(d)

(Sabin Robbins Paper Co.) 3,000,000 3,000,000
Series 1997, 4.1%, LOC Fifth
Third Bank, Cincinnati, VRDN
(a)(d)

Sandusky Gen. Oblig. BAN 2,100,000 2,106,086
3.875% 9/16/99

Shaker Heights City School 3,000,000 2,999,433
District BAN 3.625% 3/19/99

South Euclid-Lyndhurst City 1,300,000 1,300,323
School District BAN 3.98%
2/11/99

Springdale BAN (Street Impt.) 2,000,000 2,003,003
3.75% 9/17/99

Stark County Ind. Dev. Rev.:

(H-P Products, Inc. Proj.) 3,200,000 3,200,000
4.2%, LOC Key Bank, NA, VRDN
(a)(d)

(Kidd Dev. Proj.) 3.9%, LOC 3,700,000 3,700,000
Bank One, NA, VRDN (a)(d)

(Liquid Cont. Corp. Proj.) 305,000 305,000
Series 1987, 4.15%, LOC Bank
One, NA, VRDN (a)(d)

Summit County Civic 4,000,000 4,000,000
Facilities Rev. (YMCA of
Akron) 4.05%, LOC Key Bank,
NA, VRDN (a)

MUNICIPAL SECURITIES -
CONTINUED

PRINCIPAL AMOUNT VALUE (NOTE 1)

OHIO - CONTINUED

Summit County Ind. Dev. Rev.:

(Commercial Alloys Corp.) $ 4,250,000 $ 4,250,000
3.9%, LOC Star Bank NA, VRDN
(a)(d)

(Hampshire Properties) 4.15%, 1,000,000 1,000,000
LOC Key Bank, NA, VRDN (a)(d)

(Kaiser Dev. Proj.) 3.9%, LOC 825,000 825,000
Bank One, NA, VRDN (a)(d)

(Keltec, Inc. Proj.) Series 315,000 315,000
1987, 4.15%, LOC Bank One,
NA, VRDN (a)(d)

(Kuchar Proj.) Series 1987, 845,000 845,000
4.15%, LOC Bank One, NA,
VRDN (a)(d)

(Mannix County Proj.) Series 1,735,000 1,735,000
1987, 4.15%, LOC Bank One,
NA, VRDN (a)(d)

(SGS Tool Co. Proj.) 4.2%, 4,000,000 4,000,000
LOC Nat'l. City Bank, VRDN
(a)(d)

(Summit Plastic Co. Proj.) 2,895,000 2,895,000
3.95%, LOC Nat'l. City Bank,
VRDN (a)(d)

(Triumph Hldgs. Proj.) 3.95%, 1,770,000 1,770,000
LOC Nat'l. City Bank, VRDN
(a)(d)

Bonds:

(Kuchar Proj.) 3.85%, tender 380,000 380,000
4/1/99, LOC Bank One, NA (d)

(SGS Tool Co. Proj.) 3.7%, 650,000 650,000
tender 4/1/99, LOC Bank One,
NA (d)

Sycamore Ohio Cmnty. School 4,000,000 4,022,267
District BAN 4.2% 6/29/99

Toledo Gen. Oblig. BAN Series 4,145,000 4,148,549
1998-2, 3.5% 5/19/99

Toledo-Lucas County Port 3,500,000 3,500,000
Auth. Rev. (P & G Industries
Proj.) 4.2%, LOC Nat'l. City
Bank, VRDN (a)(d)

Trumbull County Ind. Dev. 1,600,000 1,600,000
Rev. (McDonald Steel Corp.)
Series 1990, 4.05%, LOC PNC
Bank NA, VRDN (a)(d)

Union County Gen. Oblig. BAN 1,850,000 1,852,113
4.01% 6/17/99

Univ. of Cincinnati BAN 3.26% 4,500,000 4,509,716
12/21/99

Van Wert County Ind. Dev. 2,580,000 2,580,000
Rev. (Toledo Molding & Die,
Inc.) Series 1994, 3.9%, LOC
Bank One, NA, VRDN (a)(d)

Walnut Hills High School 3,000,000 3,000,000
Alumni Foundation Series
1998, 4.15%, LOC Fifth Third
Bank, Cincinnati, VRDN (a)

Wood County Ind. Dev. Rev. 1,385,000 1,385,000
(TL Industries & AMPP, Inc.
Proj.) 3.95%, LOC Nat'l.
City Bank, VRDN (a)(d)

400,430,208

MUNICIPAL SECURITIES -
CONTINUED

SHARES VALUE (NOTE 1)

OTHER - 0.2%

Municipal Central Cash Fund 931,000 $ 931,000
(b)(c)

TOTAL INVESTMENT IN $ 401,361,208
SECURITIES - 100%

</TABLE>

Total Cost for Income Tax Purposes $ 401,360,153

SECURITY TYPE ABBREVIATION

BAN - BOND ANTICIPATION NOTE
CP - COMMERCIAL PAPER
TAN - TAX ANTICIPATION NOTE
VRDN - VARIABLE RATE DEMAND NOTE

LEGEND

(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.

(c) At the period end, the seven-day yield of the Municipal Central
Cash Fund was 3.75%. The yield refers to the income earned by
investing in the fund over the seven-day period, expressed as an
annual percentage.
(d) Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.

(e) Provides evidence of ownership in one or more underlying municipal
bonds.

INCOME TAX INFORMATION

At December 31, 1998, the fund had a capital loss carryforward of
approximately $57,000 of which $1,000, $50,000 and $6,000 will expire
on December 31, 2003, 2004 and 2005, respectively.

During the fiscal year ended December 31, 1998, 100% of the fund's
income dividends was free from federal income tax, and 51.36% of the
fund's income dividends was subject to the federal alternative minimum
tax (unaudited).

FIDELITY OHIO MUNICIPAL MONEY MARKET FUND

FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998

ASSETS

Investment in securities, at $ 401,361,208
value - See accompanying
schedule

Cash 878

Receivable for fund shares 4,803,355
sold

Interest receivable 2,908,810

Other receivables 2,039

TOTAL ASSETS 409,076,290

LIABILITIES

Payable for investments $ 3,878,040
purchased

Payable for fund shares 4,211,704
redeemed

Distributions payable 31,311

Accrued management fee 126,851

Other payables and accrued 91,793
expenses

TOTAL LIABILITIES 8,339,699

NET ASSETS $ 400,736,591

Net Assets consist of:

Paid in capital $ 400,792,152

Accumulated net realized gain (56,674)
(loss) on investments

Unrealized gain from 1,113
accretion of discount

NET ASSETS, for 400,792,152 $ 400,736,591
shares outstanding

NET ASSET VALUE, offering $1.00
price and redemption price
per share ($400,736,591
(divided by) 400,792,152
shares)

STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998

INTEREST INCOME $ 13,565,833

EXPENSES

Management fee $ 1,438,770

Transfer agent fees 546,770

Accounting fees and expenses 78,676

Non-interested trustees' 1,370
compensation

Custodian fees and expenses 23,617

Registration fees 33,578

Audit 27,925

Legal 10,845

Miscellaneous 1,361

Total expenses before 2,162,912
reductions

Expense reductions (28,418) 2,134,494

NET INTEREST INCOME 11,431,339

REALIZED AND UNREALIZED GAIN 28,157
(LOSS)
Net realized gain (loss) on
investment securities

Increase (decrease) in net 1,113
unrealized gain from
accretion of discount

NET GAIN (LOSS) 29,270

NET INCREASE IN NET ASSETS $ 11,460,609
RESULTING FROM OPERATIONS

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1998 YEAR ENDED DECEMBER 31, 1997

INCREASE (DECREASE) IN NET
ASSETS

Operations Net interest income $ 11,431,339 $ 10,777,849

Net realized gain (loss) 28,157 (5,450)

Increase (decrease) in net 1,113 -
unrealized gain from
accretion of discount

NET INCREASE (DECREASE) IN 11,460,609 10,772,399
NET ASSETS RESULTING FROM
OPERATIONS

Distributions to shareholders (11,431,339) (10,777,849)
from net interest income

Share transactions at net 810,566,785 629,370,990
asset value of $1.00 per
share Proceeds from sales of
shares

Reinvestment of 11,050,236 10,472,319
distributions from net
interest income

Cost of shares redeemed (785,381,253) (602,959,226)

NET INCREASE (DECREASE) IN 36,235,768 36,884,083
NET ASSETS AND SHARES
RESULTING FROM SHARE
TRANSACTIONS

TOTAL INCREASE (DECREASE) 36,265,038 36,878,633
IN NET ASSETS

NET ASSETS

Beginning of period 364,471,553 327,592,920

End of period $ 400,736,591 $ 364,471,553

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED DECEMBER 31,

1998 1997 1996 1995 1994

SELECTED PER-SHARE DATA

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

Income from Investment .030 .032 .030 .034 .025
Operations Net interest
income

Less Distributions

From net interest income (.030) (.032) (.030) (.034) (.025)

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

TOTAL RETURN A 3.09% 3.29% 3.08% 3.48% 2.50%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period $ 400,737 $ 364,472 $ 327,593 $ 296,220 $ 301,691
(000 omitted)

Ratio of expenses to average .58% .59% .60% .61% .57%
net assets

Ratio of expenses to average .57% B .59% .59% B .61% .57%
net assets after expense
reductions

Ratio of net interest income 3.05% 3.24% 3.03% 3.42% 2.48%
to average net assets

</TABLE>

A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO
FINANCIAL STATEMENTS).

B FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES
(SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).

NOTES TO FINANCIAL STATEMENTS
For the period ended December 31, 1998

1. SIGNIFICANT ACCOUNTING POLICIES.

Spartan Ohio Municipal Income Fund (the income fund) is a fund of
Fidelity Municipal Trust. Fidelity Ohio Municipal Money Market Fund
(the money market fund) is a fund of Fidelity Municipal Trust II. Each
trust is registered under the Investment Company Act of 1940 (the 1940
Act), as amended, as an open-end management investment company.
Fidelity Municipal Trust and Fidelity Municipal Trust II (the trusts)
are organized as a Massachusetts business trust and a Delaware
business trust, respectively. Each fund is authorized to issue an
unlimited number of shares. The financial statements have been
prepared in conformity with generally accepted accounting principles
which require management to make certain estimates and assumptions at
the date of the financial statements. The following summarizes the
significant accounting policies of the income fund and the money
market fund:

SECURITY VALUATION.

EXPENSES. Most expenses of each trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.

1. SIGNIFICANT ACCOUNTING

POLICIES - CONTINUED

DISTRIBUTIONS TO SHAREHOLDERS -

CONTINUED

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 futures transactions, and losses deferred due to
futures. The income fund also utilized earnings and profits
distributed to shareholders on redemption of shares as a part of the
dividends paid deduction for income tax purposes.

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.

MUNICIPAL CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the Securities and Exchange Commission, the funds may invest in the
Municipal Central Cash Fund (the Cash Fund) managed by Fidelity
Investments Money Management, Inc., an affiliate of Fidelity
Management & Research Company (FMR). The Cash Fund is an open-end
money market fund available only to investment companies and other
accounts managed by FMR and its affiliates. The Cash Fund seeks
preservation of capital, liquidity, and current income by investing in
high-quality, short-term municipal securities of various states and
municipalities. Income distributions from the Cash Fund are declared
daily and paid monthly from net interest income. Income distributions
earned by the funds are recorded as interest income in the
accompanying financial statements.

DELAYED DELIVERY TRANSACTIONS. Each fund may purchase or sell
securities on a delayed delivery basis. Payment and delivery may take
place a month or more after the date of the transaction. The price of
the underlying securities and the date when the securities will be
delivered and paid for are fixed at the time the transaction is
negotiated. The market values of the securities purchased or sold on a
delayed delivery basis are identified as such in each applicable
fund's schedule of investments. Each fund may receive compensation for
interest forgone in the purchase of a delayed delivery security. With
respect to purchase commitments, each fund identifies securities as
segregated in its records with a value at least equal to the amount of
the commitment. Losses may arise due to changes in the market value of
the underlying securities or if the counterparty does not perform
under the contract.

2. OPERATING POLICIES -

CONTINUED

3. PURCHASES AND SALES OF INVESTMENTS.

INCOME FUND. Purchases and sales of securities, other than short-term
securities, aggregated $81,047,993 and $71,156,502, respectively.
The market value of futures contracts opened and closed during the
period amounted to $54,756,836 and $63,197,565, respectively.

4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.

MANAGEMENT FEE. As each fund's investment adviser, FMR receives a
monthly 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 0.1100% to 0.3700% for the
period. The annual individual fund fee rate is 0.25%. 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. For the period,
the management fees were equivalent to annual rates of 0.38% of
average net assets for the income and money market funds.

TRANSFER AGENT AND ACCOUNTING FEES. UMB Bank, n.a. (UMB) is the
custodian and transfer and shareholder servicing agent for the funds.
UMB has entered into a sub-contract with Fidelity Service Company,
Inc. (FSC), an affiliate of FMR, under which FSC performs the
activities associated with the funds' transfer and shareholder
servicing agent and accounting functions. The funds pays 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. The accounting fee is
based on the level of average net assets for the month plus
out-of-pocket expenses.

4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES -

CONTINUED

TRANSFER AGENT AND ACCOUNTING

FEES - CONTINUED

For the period, the transfer agent fees were equivalent to an annual
rate of 0.10% and 0.15% of average net assets for the income fund and
the money market fund, respectively.

5. BANK BORROWINGS.

The income fund is permitted to have bank borrowings for temporary or
emergency purposes to fund shareholder redemptions. The income fund
has established borrowing arrangements with certain banks. Under the
most restrictive arrangement, the income fund must pledge to the bank
securities having a market value in excess of 220% of the total bank
borrowings. The interest rate on the borrowings is the bank's base
rate, as revised from time to time. The maximum loan and the average
daily loan balance during the period for which the loan was
outstanding amounted to $4,127,000. The weighted average interest rate
was 6.81%.

6. EXPENSE REDUCTIONS.

FMR voluntarily agreed to reimburse the income fund's operating
expenses (excluding interest, taxes, brokerage commissions and
extraordinary expenses) above an annual rate of 0.55% of average net
assets. For the period, the reimbursement reduced the expenses by
$17,115.

In addition, each fund has entered into arrangements with its
custodian and transfer agent whereby credits realized as a result of
uninvested cash balances were used to reduce a portion of the fund's
expenses. During the period, the custodian and transfer agent fees
were reduced by $4,562 and $6,058, respectively for the income fund,
and $23,938 and $4,480, respectively for the money market fund, under
these arrangements.

REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Municipal Trust and Fidelity Municipal
Trust II and the shareholders of Spartan Ohio Municipal Income Fund
and Fidelity Ohio Municipal Money Market Fund:

In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Spartan Ohio Municipal Income Fund (a fund of Fidelity Municipal
Trust) and Fidelity Ohio Municipal Money Market Fund (a fund of
Fidelity Municipal Trust II) at December 31, 1998, and the results of
their operations, the changes in their net assets and the financial
highlights for the periods indicated, in conformity with generally
accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements")
are the responsibility of the funds' management; our responsibility is
to express an opinion on these financial statements based on our
audits. We conducted our audits of these financial statements in
accordance with generally accepted auditing standards which require
that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits, which included confirmation
of securities at December 31, 1998 by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion
expressed above.

/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
February 5, 1999

DISTRIBUTIONS

The Board of Trustees of Spartan Ohio Municipal Income Fund voted to
pay on February 8, 1999 to shareholders of record at the opening of
business on February 5, 1999, a distribution of $.02 per share derived
from capital gains realized from sales of portfolio securities.

The Spartan Ohio Municipal Income Fund hereby designates 100% of the
long-term capital gain dividends distributed during the fiscal year as
20%-rate capital gain dividends.

PROXY VOTING RESULTS

A special meeting of the income fund's shareholders was held on
December 16, 1998. The results of votes taken among shareholders on
proposals before them are reported below. Each vote reported
represents one dollar of net asset value held on the record date for
the meeting.

PROPOSAL 1

To elect as Trustees the following twelve nominees.

# OF % OF
VOTES CAST VOTES CAST
RALPH F. COX
Affirmative 941,676,281.56 96.946

Withheld 29,667,606.92 3.054

TOTAL 971,343,888.48 100.000

PHYLLIS BURKE DAVIS
Affirmative 941,015,539.45 96.878

Withheld 30,328,349.03 3.122

TOTAL 971,343,888.48 100.000

ROBERT M. GATES
Affirmative 940,616,433.83 96.837

Withheld 30,727,454.65 3.163

TOTAL 971,343,888.48 100.000

EDWARD C. JOHNSON 3D
Affirmative 940,665,834.51 96.842

Withheld 30,678,053.97 3.158

TOTAL 971,343,888.48 100.000

E. BRADLEY JONES
Affirmative 937,879,239.66 96.555

Withheld 33,464,648.82 3.445

TOTAL 971,343,888.48 100.000

DONALD J. KIRK
Affirmative 941,794,381.77 96.958

Withheld 29,549,506.71 3.042

TOTAL 971,343,888.48 100.000

# OF % OF
VOTES CAST VOTES CAST
PETER S. LYNCH
Affirmative 941,809,883.91 96.959

Withheld 29,534,004.57 3.041

TOTAL 971,343,888.48 100.000

WILLIAM O. MCCOY
Affirmative 941,735,873.46 96.952

Withheld 29,608,015.02 3.048

TOTAL 971,343,888.48 100.000

GERALD C. MCDONOUGH
Affirmative 939,119,647.40 96.683

Withheld 32,224,241.08 3.317

TOTAL 971,343,888.48 100.000

MARVIN L. MANN
Affirmative 942,029,292.87 96.982

Withheld 29,314,595.61 3.018

TOTAL 971,343,888.48 100.000

ROBERT C. POZEN
Affirmative 941,499,581.49 96.928

Withheld 29,844,306.99 3.072

TOTAL 971,343,888.48 100.000

THOMAS R. WILLIAMS
Affirmative 939,450,603.85 96.717

Withheld 31,893,284.63 3.283

TOTAL 971,343,888.48 100.000

PROPOSAL 2

To ratify the selection of PricewaterhouseCoopers LLP as independent
accountants of the fund.

# OF % OF
VOTES CAST VOTES CAST
Affirmative 251,117,817.74 94.944

Against 3,732,157.46 1.411

Abstain 9,640,825.88 3.645

TOTAL 264,490,801.08 100.000

PROPOSAL 3

To authorize the Trustees to adopt an Amended and Restated Declaration
of Trust.

# OF % OF
VOTES CAST VOTES CAST
Affirmative 838,802,769.40 88.254

Against 59,832,161.19 6.295

Abstain 51,803,661.60 5.451

TOTAL 950,438,592.19 100.000

Broker Non-Votes 20,905,296.29

PROPOSAL 4

# OF % OF
VOTES CAST VOTES CAST
Affirmative 214,380,071.95 82.321

Against 29,032,657.38 11.148

Abstain 17,008,152.25 6.531

TOTAL 260,420,881.58 100.000

Broker Non-Votes 4,069,919.50

PROPOSAL 5

To approve an amended management contract for the fund.

# OF % OF
VOTES CAST VOTES CAST
Affirmative 226,918,612.55 85.829

Against 17,660,134.59 6.680

Abstain 19,804,934.47 7.491

TOTAL 264,383,681.61 100.000

Broker Non-Votes 107,119.47

PROPOSAL 7

To replace the fund's fundamental 80% investment policy with a
non-fundamental policy.

# OF % OF
VOTES CAST VOTES CAST
Affirmative 207,288,623.51 79.598

Against 33,257,685.62 12.770

Abstain 19,874,572.45 7.632

TOTAL 260,420,881.58 100.000

Broker Non-Votes 4,069,919.50

PROPOSAL 8

To eliminate the fund's fundamental investment policy regarding
investment in below investment-grade debt securities.

# OF % OF
VOTES CAST VOTES CAST
Affirmative 202,251,119.96 77.663

Against 40,590,258.39 15.587

Abstain 17,579,503.23 6.750

TOTAL 260,420,881.58 100.000

Broker Non-Votes 4,069,919.50

PROPOSAL 9

To eliminate the fund's fundamental 20% investment policy.

# OF % OF
VOTES CAST VOTES CAST
Affirmative 205,062,121.62 78.743

Against 33,472,028.00 12.853

Abstain 21,886,731.96 8.404

TOTAL 260,420,881.58 100.000

Broker Non-Votes 4,069,919.50

OF SPECIAL NOTE

INTRODUCING FIDELITY'S NEW, REORGANIZED PROSPECTUS

We invite you to spend a moment and review our new prospectus. It is
designed to help make your investment decision easier, no matter which
of the Fidelity funds you invest in.

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Hebron, KY 41048

SELLING SHARES

Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602

OVERNIGHT EXPRESS

Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75309-5517

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Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500

(LETTER_GRAPHIC)
FOR RETIREMENT
ACCOUNTS

BUYING SHARES

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003

SELLING SHARES

Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602

OVERNIGHT EXPRESS

Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75309-5517

GENERAL CORRESPONDENCE

Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500

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For directions and hours,
please call 1-800-544-9797.

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595 North Barker Road
Brookfield, WI

INVESTMENT ADVISER

Fidelity Management & Research Company
Boston, MA

INVESTMENT SUB-ADVISER,
MONEY MARKET FUND

Fidelity Investments Money
Management, Inc.
Merrimack, NH

OFFICERS

Edward C. Johnson 3d, President

Robert C. Pozen, Senior Vice President

Fred L. Henning, Jr., Vice President

Dwight D. Churchill, Vice President -

INCOME FUND

George A. Fischer, Vice President -

INCOME FUND

Boyce I. Greer, Vice President -

MONEY MARKET FUND

Scott A. Orr, Vice President -

MONEY MARKET FUND

Eric D. Roiter, Secretary

Richard A. Silver, Treasurer

Matthew N. Karstetter, Deputy Treasurer

Stanley N. Griffith, Assistant Vice President

John H. Costello, Assistant Treasurer

Leonard M. Rush, Assistant Treasurer

Thomas J. Simpson, Assistant Treasurer

BOARD OF TRUSTEES

Ralph F. Cox *

Phyllis Burke Davis *

Robert M. Gates *

Edward C. Johnson 3d

E. Bradley Jones *

Donald J. Kirk *

Peter S. Lynch

Marvin L. Mann *

William O. McCoy *

Gerald C. McDonough *

Robert C. Pozen

Thomas R. Williams *

* INDEPENDENT TRUSTEES

OFF-ANN-0299 70454
1.540019.101

ADVISORY BOARD

J. Gary Burkhead

GENERAL DISTRIBUTOR

Fidelity Distributors Corporation

Boston, MA

TRANSFER AND SHAREHOLDER

SERVICING AGENTS

UMB Bank, n.a.

Kansas City, MO

Fidelity Service Company, Inc.

Boston, MA

CUSTODIAN

UMB Bank, n.a

Kansas City, MO

THE FIDELITY TELEPHONE CONNECTION

MUTUAL FUND 24-HOUR SERVICE

Exchanges/Redemptions 1-800-544-7777

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Product Information 1-800-544-8888

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for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)

TouchTone Xpress (registered trademark)(AUTOMATED GRAPHIC)
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(AUTOMATED GRAPHIC) AUTOMATED LINES FOR QUICKEST SERVICE

(Fidelity Logo Graphic)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com

SPARTAN(REGISTERED TRADEMARK)
MICHIGAN MUNICIPAL INCOME
FUND
AND
FIDELITY
MICHIGAN MUNICIPAL MONEY
MARKET FUND

ANNUAL REPORT
DECEMBER 31, 1998

(FIDELITY_LOGO_GRAPHIC)(registered trademark)

CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.

SPARTAN MICHIGAN MUNICIPAL
INCOME FUND

PERFORMANCE 4 How the fund has done over
time.

FUND TALK 7 The manager's review of fund
performance, strategy and
outlook.

INVESTMENT CHANGES 10 A summary of major shifts in
the fund's investments over
the past six months.

INVESTMENTS 11 A complete list of the fund's
investments with their
market values.

FINANCIAL STATEMENTS 19 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.

FIDELITY MICHIGAN MUNICIPAL
MONEY MARKET FUND

PERFORMANCE 23 How the fund has done over
time.

FUND TALK 25 The manager's review of fund
performance, strategy and
outlook.

INVESTMENT CHANGES 27 A summary of major shifts in
the fund's investments over
the past six months and one
year.

INVESTMENTS 28 A complete list of the fund's
investments.

FINANCIAL STATEMENTS 34 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.

NOTES 38 Notes to the financial
statements.

REPORT OF INDEPENDENT 42 The auditors' opinion.
ACCOUNTANTS

PROXY VOTING RESULTS 43

OF SPECIAL NOTE 46

Third party marks appearing herein are the property of their
respective owners.

All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.

This report is printed on recycled paper using soy-based inks.

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 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.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND
EXPENSES, CALL 1-800-544-8888
FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND
MONEY.

PRESIDENT'S MESSAGE

(PHOTO_OF_EDWARD_C_JOHNSON_3D)

DEAR SHAREHOLDER:

While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.

An intermediate-length fund could make sense if your investment
horizon is two to four years, while a short-term bond fund could be
the right choice if you need your money in one or two years.

Best regards,

Edward C. Johnson 3d

SPARTAN MICHIGAN MUNICIPAL INCOME FUND

PERFORMANCE: THE BOTTOM LINE

There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value). You can also look at the fund's income, as
reflected in the fund's yield, to measure performance. If Fidelity had
not reimbursed certain fund expenses, the total returns and dividends
would have been lower.

CUMULATIVE TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1998 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS

SPARTAN MI MUNICIPAL INCOME 5.71% 27.19% 105.90%

LB Michigan Municipal Bond 6.49% 36.85% n/a

Michigan Municipal Debt Funds 5.23% 28.96% 107.77%
Average

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be
$1,050. You can compare the fund's returns to the performance of the
Lehman Brothers Michigan Municipal Bond Index - a market
value-weighted index of Michigan investment-grade municipal bonds with
maturities of one year or more. To measure how the fund's performance
stacked up against its peers, you can compare it to the Michigan
municipal debt funds average, which reflects the performance of mutual
funds with similar objectives tracked by Lipper Inc. The past one year
average represents a peer group of 52 mutual funds. These benchmarks
include reinvested dividends and capital gains, if any, and exclude
the effect of sales charges.

AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1998 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS

SPARTAN MI MUNICIPAL INCOME 5.71% 4.93% 7.49%

LB Michigan Municipal Bond 6.49% 6.48% n/a

Michigan Municipal Debt Funds 5.23% 5.22% 7.58%
Average

AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year. (Note: Lipper calculates average annual total
returns by annualizing each fund's total return, then taking an
arithmetic average. This may produce a different figure than that
obtained by averaging the cumulative total returns and annualizing the
result.)

$10,000 OVER 10 YEARS
Spartan MI Muni Income LB Municipal Bond
00081 LB015
1988/12/31 10000.00 10000.00
1989/01/31 10143.00 10206.80
1989/02/28 10081.07 10090.34
1989/03/31 10084.82 10066.22
1989/04/30 10380.14 10305.20
1989/05/31 10592.49 10519.24
1989/06/30 10729.03 10662.09
1989/07/31 10827.78 10807.20
1989/08/31 10742.98 10701.40
1989/09/30 10718.07 10669.51
1989/10/31 10826.28 10799.99
1989/11/30 10976.34 10988.99
1989/12/31 11021.49 11078.88
1990/01/31 10953.51 11026.48
1990/02/28 11046.87 11124.62
1990/03/31 11042.36 11127.95
1990/04/30 10851.79 11047.39
1990/05/31 11109.18 11288.55
1990/06/30 11204.29 11387.78
1990/07/31 11361.55 11555.18
1990/08/31 11189.65 11387.40
1990/09/30 11245.41 11393.89
1990/10/31 11351.96 11600.57
1990/11/30 11574.24 11833.86
1990/12/31 11588.94 11885.34
1991/01/31 11699.06 12044.84
1991/02/28 11786.52 12149.63
1991/03/31 11809.88 12154.00
1991/04/30 12005.97 12315.65
1991/05/31 12061.14 12425.14
1991/06/30 12043.33 12412.84
1991/07/31 12233.33 12564.02
1991/08/31 12380.33 12729.49
1991/09/30 12516.23 12895.23
1991/10/31 12652.44 13011.29
1991/11/30 12699.01 13047.59
1991/12/31 12983.92 13327.59
1992/01/31 13030.93 13357.98
1992/02/29 13052.69 13362.25
1992/03/31 13067.50 13367.20
1992/04/30 13183.31 13486.16
1992/05/31 13326.16 13644.90
1992/06/30 13560.11 13873.86
1992/07/31 14055.19 14289.80
1992/08/31 13856.74 14150.47
1992/09/30 13950.82 14243.01
1992/10/31 13715.08 14103.01
1992/11/30 14050.56 14355.59
1992/12/31 14222.10 14502.16
1993/01/31 14430.55 14670.82
1993/02/28 15010.58 15201.46
1993/03/31 14839.26 15040.79
1993/04/30 14997.67 15192.55
1993/05/31 15097.62 15277.93
1993/06/30 15356.85 15532.92
1993/07/31 15345.52 15553.27
1993/08/31 15709.25 15877.08
1993/09/30 15908.00 16057.92
1993/10/31 15932.19 16088.92
1993/11/30 15828.24 15947.17
1993/12/31 16189.18 16283.82
1994/01/31 16409.05 16469.78
1994/02/28 15935.20 16043.21
1994/03/31 15214.86 15389.93
1994/04/30 15290.43 15520.44
1994/05/31 15368.69 15655.00
1994/06/30 15323.55 15559.35
1994/07/31 15593.60 15844.55
1994/08/31 15632.22 15899.37
1994/09/30 15421.06 15665.97
1994/10/31 15101.24 15387.74
1994/11/30 14625.84 15109.53
1994/12/31 14974.21 15442.09
1995/01/31 15424.68 15883.43
1995/02/28 15869.25 16345.32
1995/03/31 15737.21 16533.13
1995/04/30 15767.69 16552.64
1995/05/31 16276.05 17080.83
1995/06/30 16087.07 16932.23
1995/07/31 16189.81 17092.74
1995/08/31 16408.72 17309.48
1995/09/30 16535.69 17419.05
1995/10/31 16783.03 17672.32
1995/11/30 17104.20 17965.51
1995/12/31 17282.20 18138.15
1996/01/31 17402.40 18275.10
1996/02/29 17262.35 18151.74
1996/03/31 17006.09 17919.76
1996/04/30 16942.92 17869.05
1996/05/31 16926.84 17861.90
1996/06/30 17122.32 18056.42
1996/07/31 17273.90 18220.73
1996/08/31 17240.88 18216.36
1996/09/30 17437.26 18471.39
1996/10/31 17621.34 18680.30
1996/11/30 17944.45 19022.15
1996/12/31 17865.97 18942.25
1997/01/31 17878.98 18978.06
1997/02/28 18058.21 19152.27
1997/03/31 17799.83 18896.97
1997/04/30 17938.22 19055.14
1997/05/31 18191.92 19341.73
1997/06/30 18394.44 19547.72
1997/07/31 18907.14 20089.19
1997/08/31 18706.19 19900.96
1997/09/30 18959.80 20137.18
1997/10/31 19069.42 20266.66
1997/11/30 19193.83 20385.83
1997/12/31 19477.55 20683.26
1998/01/31 19658.36 20896.71
1998/02/28 19662.64 20902.98
1998/03/31 19676.10 20921.38
1998/04/30 19602.04 20827.02
1998/05/31 19870.42 21156.71
1998/06/30 19948.53 21240.07
1998/07/31 19995.22 21293.38
1998/08/31 20300.24 21622.36
1998/09/30 20551.50 21891.78
1998/10/31 20493.97 21891.34
1998/11/30 20573.16 21968.18
1998/12/31 20590.27 22023.54
IMATRL PRASUN SHR__CHT 19981231 19990111 110606 R00000000000123

$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Spartan Michigan Municipal Income Fund on December 31,
1988. As the chart shows, by December 31, 1998, the value of the
investment would have grown to $20,590 - a 105.90% increase on the
initial investment. For comparison, look at how the Lehman Brothers
Municipal Bond Index - a market value-weighted index of
investment-grade municipal bonds with maturities of one year or more -
did over the same period. With dividends and capital gains, if any,
reinvested, the same $10,000 would have grown to $22,024 - a 120.24%
increase.

UNDERSTANDING
PERFORMANCE

How a fund did yesterday is
no guarantee of how it will do
tomorrow. Bond prices, for
example, generally move in
the opposite direction of
interest rates. In turn, the
share price, return and yield
of a fund that invests in bonds
will vary. That means if you
sell your shares during a
market downturn, you might
lose money. But if you can ride
out the market's ups and
downs, you may have a gain.
(checkmark)

TOTAL RETURN COMPONENTS
YEARS ENDED DECEMBER 31,

1998 1997 1996 1995 1994

Dividend returns 4.91% 5.27% 5.63% 6.15% 5.40%

Capital returns 0.80% 3.75% -2.25% 9.26% -12.90%

Total returns 5.71% 9.02% 3.38% 15.41% -7.50%

DIVIDENDS AND YIELD
PERIODS ENDED DECEMBER 31, 1998 PAST 1 MONTH PAST 6 MONTHS PAST 1 YEAR

Dividends per share 4.68(cents) 27.87(cents) 55.69(cents)

Annualized dividend rate 4.69% 4.72% 4.77%

30-day annualized yield 4.08% - -

30-day annualized 6.67% - -
tax-equivalent yield

DIVIDENDS per share show the income paid by the fund for a set period
and do not reflect any tax reclassifications. If you annualize this
number, based on an average share price of $11.76 over the past one
month, $11.72 over the past six months and $11.68 over the past one
year, you can compare the fund's income over these three periods. The
30-day annualized YIELD is a standard formula for all bond funds based
on the yields of the bonds in the fund, averaged over the past 30
days. This figure shows you the yield characteristics of the fund's
investments at the end of the period. It also helps you compare funds
from different companies on an equal basis. The tax-equivalent yield
shows what you would have to earn on a taxable investment to equal the
fund's tax-free yield, if you're in the 38.82% combined effective 1999
federal and state income tax bracket, but does not reflect the payment
of the federal alternative minimum tax, if applicable.

SPARTAN MICHIGAN MUNICIPAL INCOME FUND

FUND TALK: THE MANAGER'S OVERVIEW

MARKET RECAP

(photograph of Norm Lind)

An interview with Norm Lind, Portfolio Manager of Spartan Michigan
Municipal Income Fund

Q. HOW DID THE FUND PERFORM, NORM?

A. For the 12-month period that ended December 31, 1998, the fund had
a total return of 5.71%. To get a sense of how the fund did relative
to its competitors, the Michigan municipal debt funds average returned
5.23% for the same 12-month period, according to Lipper Inc.
Additionally, the Lehman Brothers Michigan Municipal Bond Index -
which tracks the types of securities in which the fund invests -
returned 6.49% for the same one-year period.

Q. WHAT HELPED THE FUND BEAT ITS COMPETITORS DURING THE YEAR?

A. I think it comes down to two factors. First, the fund had a
relatively large weighting in bonds rated Baa by Moody's Investors
Service. Baa-rated securities were in low supply and high demand
throughout the year, which generally helped them outperform their
higher-quality counterparts.

Q. WHAT WAS THE SECOND FACTOR THAT HELPED THE FUND'S PERFORMANCE?

A. The fund had a relatively large weighting in non-callable bonds,
which can't be redeemed by their issuers before maturity. When an
issuer "calls" a bond, it's like refinancing the mortgage on your
house. When interest rates fall, you save by paying off the old loan
with money borrowed at lower interest rates. While refinancing is good
for homeowners and municipal issuers, it can be troublesome for
bondholders. When a bond is called, or retired, it potentially leaves
bondholders to reinvest the proceeds, most often at lower interest
rates. Because rates were falling, there was relatively strong demand
for non-callable securities given their protection against inopportune
calls, and they performed quite well as a result.

Q. WERE THERE ANY DISAPPOINTMENTS?

A. Yes, there was one. Because of my focus on non-callable bonds, I
missed out on some of the appreciation that occurred in bonds that
could be called through pre-refundings. A pre-refunding involves
retiring some older municipal bonds, backing them with U.S. Treasury
bonds, and then issuing new bonds at lower prevailing interest rates.
When the original bond becomes backed by the Treasury, it assumes the
higher credit rating of that Treasury, and generally its price
appreciates as a result. The Michigan market had its share of bonds
that appreciated because of pre-refundings, although the fund didn't
really participate in that activity.

Q. WITH ALL THE COMPETITIVE AND COST-CUTTING PRESSURES FACING HEALTH
CARE ORGANIZATIONS, HOW DO YOU APPROACH CHOOSING INVESTMENTS IN THAT
SECTOR - WHICH MADE UP THE FUND'S LARGEST SECTOR CONCENTRATION AT THE
END OF THE PERIOD?

A. I take a cautious, but opportunistic, approach. The Michigan health
care environment recently has been marked by a lot of consolidation as
hospitals have merged, acquired other hospitals or have been acquired
themselves. Against that backdrop, it has become increasingly more
difficult to separate the potential survivors from those that will be
out of business at some point down the road. With the help of
Fidelity's research team, I try to identify those organizations that I
believe will emerge as survivors and that will benefit from further
industry consolidation. One factor I analyze is a hospital's service
region and whether it is in a period of growth or one of contraction.
Obviously, regions with stronger economic and population growth are
more attractive than those that are experiencing a slowdown. I also
look for organizations that may have a specific niche - such as heart
surgery or orthopedics - that would be attractive to a potential
acquirer.

Q. WHAT'S AHEAD FOR THE MUNICIPAL MARKET AND THE FUND?

A. After lagging Treasuries during most of 1998, municipals may be in
for a fairly strong period of performance in 1999 as they play
catch-up to the U.S. Treasury market. That said, the direction of
interest rates will be the primary determinant of municipal
performance, and it's anybody's guess where they will be six months or
a year from now. As far as the fund is concerned, I'll continue to
emphasize bonds that I think offer good value given their yields and
their risk. I'm comfortable sticking with a fairly large weighting in
high-quality bonds for the time being, because I feel that
lower-quality securities currently do not offer enough additional
yield to adequately compensate for their added risk.

NORM LIND ON THE ROLE OF
MUNICIPAL BOND INSURANCE:

"The role of municipal bond
insurance has grown dramatically
during the past decade as the
number of municipal bonds with
insurance has mushroomed.
Throughout 1998, for example,
roughly half of all municipal bonds
issued in Michigan were insured.
Municipal bond insurance,
underwritten by private insurers,
guarantees the timely payment of
interest and principal should the
issuer default on the underlying
debt. Insurance can be purchased
either by the issuer or an investor.
Because they generally enjoy the
highest credit rating (Aaa, AAA or
other, depending on the insurer),
insured bonds tend to be more
popular than uninsured bonds
among many types of investors.

"There are a couple of
characteristics that investors should
understand about insured bonds.
They tend to offer lower yields
than similarly rated uninsured
bonds because the cost of
insurance is passed on to the
investor. Second, insurance
doesn't protect a bond from
suffering price losses. Like all
bonds, insured bond prices fluctuate
in response to supply, demand,
interest rate movements and
other factors."

FUND FACTS

GOAL: high current income for
Michigan residents by normally
investing in investment-grade
municipal securities whose
interest is free from federal
income tax and Michigan
personal income tax

FUND NUMBER: 081

TRADING SYMBOL: FMHTX

START DATE: November 12,
1985

SIZE: as of December 31,
1998, more than $479
million

MANAGER: Norm Lind, since
1998; manager, various
Fidelity and Spartan municipal
income funds; joined Fidelity
in 1986
(checkmark)

SPARTAN MICHIGAN MUNICIPAL INCOME FUND

INVESTMENT CHANGES

<TABLE>
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TOP FIVE SECTORS AS OF
DECEMBER 31, 1998

% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE SECTORS 6 MONTHS AGO

Health Care 29.5 30.1

General Obligations 15.8 17.4

Electric Utilities 10.1 9.3

Special Tax 8.8 8.8

Escrowed/Pre-Refunded 7.8 7.0

AVERAGE YEARS TO MATURITY AS
OF DECEMBER 31, 1998

6 MONTHS AGO

Years 13.8 14.8

</TABLE>

AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY
DOLLAR AMOUNT.

DURATION AS OF DECEMBER 31,
1998

6 MONTHS AGO

Years 6.8 6.7

QUALITY DIVERSIFICATION
(MOODY'S RATINGS)

AS OF DECEMBER 31, 1998 AS OF JUNE 30, 1998
Aaa 43.2%
Aa, A 44.0%
Baa 7.5%
Not Rated 1.5%
Short-term
investments 3.8%
Aaa 43.4%
Aa, A 47.3%
Baa 7.2%
Not Rated 1.6%
Short-term
investments 0.5%
Row: 1, Col: 1, Value: 43.2
Row: 1, Col: 2, Value: 44.0
Row: 1, Col: 3, Value: 7.5
Row: 1, Col: 4, Value: 1.5
Row: 1, Col: 5, Value: 3.8
Row: 1, Col: 1, Value: 43.4
Row: 1, Col: 2, Value: 47.0
Row: 1, Col: 3, Value: 7.0
Row: 1, Col: 4, Value: 1.6
Row: 1, Col: 5, Value: 1.0

WHERE MOODY'S RATINGS ARE NOT AVAILABLE, WE HAVE USED S&P RATINGS.
AMOUNTS SHOWN ARE AS A PERCENTAGE OF THE FUND'S INVESTMENTS.

SPARTAN MICHIGAN MUNICIPAL INCOME FUND

INVESTMENTS DECEMBER 31, 1998

Showing Percentage of Total Value of Investment in Securities

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MUNICIPAL BONDS - 96.2%

MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)

MICHIGAN - 95.6%

Anchor Bay School District Aaa $ 2,720,000 $ 2,821,157
5.5% 5/1/18 (MBIA Insured)

Central Michigan Univ. Rev. Aaa 1,750,000 1,928,325
5.5% 10/1/17 (FGIC Insured)
(Pre-Refunded to 4/1/07 @
101) (f)

Clarkston Cmnty. Schools Aaa 2,600,000 2,843,152
5.55% 5/1/10 (FGIC Insured)
(Pre-Refunded to 5/1/05 @
101) (f)

Clintondale Cmnty. Schools Aa2 2,205,000 2,322,218
Rfdg. 5.5% 5/1/15

Comstock Pub. Schools (Cap. Aaa 1,300,000 1,006,148
Appreciation) 0% 5/1/05 (FSA
Insured)

Davison Cmnty. School Aaa 1,000,000 1,028,060
District 5.375% 5/1/16 (FGIC
Insured)

Dearborn Swr. Disp. Sys. Rev. Aaa 1,625,000 1,669,363
Series A, 5.1% 4/1/12 (MBIA
Insured)

Detroit Local Dev. Fin. Auth. A2 3,000,000 3,061,590
Rfdg. Sr. Series A, 5.375%
5/1/18

Detroit Convention Facilities A 12,700,000 12,920,853
Rev. Rfdg. (Cobo Hall
Expansion Proj.) 5.25%
9/30/12

Detroit Gen. Oblig.:

Rfdg. (Distributable State
Aid):

5.2% 5/1/07 (AMBAC Insured) Aaa 4,000,000 4,261,600

5.25% 5/1/09 (AMBAC Insured) Aaa 4,500,000 4,804,740

Series A, 5% 4/1/05 (MBIA Aaa 1,765,000 1,850,302
Insured)

Detroit Swr. Disp. Rev.:

(Wtr. Supply Sys. Proj.) Aaa 1,885,000 2,088,203
Series A, 6% 7/1/05 (MBIA
Insured)

Rfdg. Series B, 6.25% 7/1/07 Aaa 1,130,000 1,286,460
(MBIA Insured)

Detroit Wtr. Supply Sys. Rev.
Rfdg.:

6.2% 7/1/04 (FGIC Insured) Aaa 3,795,000 4,134,159

6.5% 7/1/15 (FGIC Insured) Aaa 6,000,000 7,183,500

Eastern Michigan Univ. Rev. Aaa 1,000,000 1,065,740
Rfdg. 5.9% 6/1/02 (AMBAC
Insured)

Ferndale School District Aaa 1,300,000 1,473,940
Rfdg. 6% 5/1/09 (FGIC
Insured)

Flint Hosp. Bldg. Auth. Rev. Baa1 5,570,000 5,818,144
(Hurley Med. Ctr.) 6.5%
7/1/20 (Pre-Refunded to
7/1/00 @ 100) (f)

Grand Rapids San. Swr. Sys.
Rev. Rfdg. Series A:

5.375% 1/1/09 (FGIC Insured) Aaa 1,000,000 1,082,740

5.375% 1/1/10 (FGIC Insured) Aaa 1,000,000 1,084,780

MUNICIPAL BONDS - CONTINUED

MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)

MICHIGAN - CONTINUED

Greater Detroit Resource
Recovery Auth. Rev. Rfdg.:

Series A, 6.25% 12/13/05 Aaa $ 4,000,000 $ 4,517,240
(AMBAC Insured)

Series B, 6.25% 12/13/05 Aaa 2,000,000 2,258,620
(AMBAC Insured)

Hastings School District Aaa 1,000,000 1,046,140
5.625% 5/1/18 (FGIC Insured)

Holly Area School District:

6.625% 5/1/03 (FGIC Insured) Aaa 1,225,000 1,356,957

6.625% 5/1/06 (FGIC Insured) Aaa 1,150,000 1,327,342

Howell Pub. Schools Rfdg. Aaa 1,130,000 681,413
(Cap. Appreciation) 0%
5/1/10 (AMBAC Insured)

Huron Valley School District Aaa 5,830,000 3,321,934
Rfdg. (Cap. Appreciation) 0%
5/1/11 (FGIC Insured)

Imlay City Cmnty. School Aaa 1,375,000 1,014,791
District Rfdg. (Cap.
Appreciation) 0% 5/1/06
(FGIC Insured)

Kent County Rfdg. (Refuse Aa2 2,000,000 2,090,260
Disp. Sys.) Series A, 5%
11/1/10

Kent Hosp. Fin. Auth. Hosp. Aa3 3,685,000 4,594,163
Facilities Rev. (Butterworth
Hosp.) Series A, 7.25%
1/15/13

Kent Hosp. Fin. Auth. Rev.
Rfdg. (Spectrum Health
Proj.) Series A:

5.375% 1/15/10 Aa3 2,200,000 2,345,310

5.375% 1/15/11 Aa3 2,420,000 2,560,578

5.375% 1/15/12 Aa3 2,505,000 2,622,935

Lakeshore Pub. Schools Aaa 1,000,000 1,165,160
(Berrien County) 6.8% 5/1/06
(MBIA Insured)

Lansing Bldg. Auth. Rev. 0% Aaa 3,000,000 1,601,610
6/1/12 (AMBAC Insured)

Lowell Area Schools (Cap. Aaa 11,375,000 4,307,258
Appreciation) 0% 5/1/15
(FGIC Insured) (Pre-Refunded
to 5/1/05 @ 49.0888) (c)(f)

Marquette City Hosp. Fin. Aaa 2,750,000 3,003,220
Auth. Rev. (Marquette Gen.
Hosp.) Series P, 5.875%
4/1/11 (FSA Insured)

Michigan Bldg. Auth. Rev.:

(Cap. Appreciation) Series I:

0% 10/1/01 (Escrowed to Aaa 1,000,000 898,020
Maturity) (f)

0% 10/1/02 (Escrowed to Aaa 2,000,000 1,725,540
Maturity) (f)

0% 10/1/04 (Escrowed to Aaa 6,820,000 5,425,515
Maturity) (f)

(Facilities Prog.):

Series I, 5.3% 10/1/10 (AMBAC Aaa 1,300,000 1,394,081
Insured)

Series II, 5.5% 10/15/09 Aa2 5,000,000 5,454,850

MUNICIPAL BONDS - CONTINUED

MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)

MICHIGAN - CONTINUED

Michigan Bldg. Auth. Rev.: -
continued

Rfdg. Series I:

6% 10/1/00 Aa2 $ 1,375,000 $ 1,432,324

6.25% 10/1/20 Aa2 1,500,000 1,593,705

Series II, 6.75% 10/1/11 Aa2 1,000,000 1,087,650

Michigan Comprehensive Trans. Aa3 1,275,000 1,366,724
Rev. Rfdg. Series B, 5.75%
5/15/04

Michigan Gen. Oblig. (College Aa1 1,045,000 951,055
Savings) 0% 8/1/01

Michigan Hosp. Fin. Auth. Rev.:

(Daughters of Charity Health Aa2 1,000,000 1,106,970
Sys.) 7% 11/1/21
(Pre-Refunded to 11/1/01 @
102) (f)

(Mercy Health Svcs., Inc.):

Series Q:

5.375% 8/15/26 (AMBAC Insured) Aaa 2,000,000 2,044,860

6% 8/15/08 (AMBAC Insured) Aaa 1,130,000 1,260,233

6% 8/15/10 (AMBAC Insured) Aaa 1,265,000 1,399,507

Series R, 5.25% 8/15/10 Aaa 2,195,000 2,315,769
(AMBAC Insured)

(Presbyterian Villages):

6.4% 1/1/15 - 1,000,000 1,067,950

6.5% 1/1/25 - 1,225,000 1,307,871

(St. John Hosp. & Med. Ctr.)
Series A:

6% 5/15/08 (AMBAC Insured) Aaa 1,615,000 1,822,576

6% 5/15/09 (AMBAC Insured) Aaa 1,710,000 1,936,455

Rfdg.:

(Bay Med. Ctr.) Series A, A3 3,000,000 3,233,280
8.25% 7/1/12

(Botsford Hosp.) Series A, 5% Aaa 2,410,000 2,527,030
2/15/05 (MBIA Insured)

(Crittenton Hosp.) Series A, A1 6,520,000 6,573,268
5.25% 3/1/14

(Daughters of Charity Health Aa2 3,125,000 3,373,094
Sys.) 5.5% 11/1/05

(Detroit Med. Ctr. Oblig.
Group):

Series A:

6.375% 8/15/09 A3 1,000,000 1,077,890

6.5% 8/15/18 A3 9,000,000 9,700,380

Series B, 5.5% 8/15/23 A3 3,400,000 3,359,370

(Genesys Reg'l. Hosp.) Series
A:

5.5% 10/1/18 Baa2 3,000,000 3,015,330

5.5% 10/1/27 Baa2 8,500,000 8,511,135

MUNICIPAL BONDS - CONTINUED

MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)

MICHIGAN - CONTINUED

Michigan Hosp. Fin. Auth.
Rev.: - continued

Rfdg.:

(Henry Ford Health Sys.) Aa3 $ 13,100,000 $ 13,150,038
Series A, 5.25% 11/15/25

(McLaren Health Care Corp.) A1 5,000,000 4,856,400
Series A, 5% 6/1/19

(McLaren Oblig. Group) Series A1 9,250,000 9,413,633
A, 5.375% 10/15/13

(Mercy Health Svcs., Inc.) Aa3 1,250,000 1,385,025
Series T, 6% 8/15/06

(Pontiac Osteopathic Hosp.) Baa1 3,000,000 3,116,790
Series A, 6% 2/1/24

(Sisters of Mercy Health Aaa 9,950,000 10,696,947
Corp.) 5.375% 8/15/14 (MBIA
Insured)

(St. John Health Sys.) Series Aaa 3,000,000 2,923,890
A, 5% 5/15/28 (AMBAC Insured)

Michigan Hsg. Dev. Auth.
Rental Hsg. Rev. Series B:

5.8% 4/1/19 AA- 4,650,000 4,824,329

7.55% 4/1/23 AA- 4,750,000 4,983,510

Michigan Hsg. Dev. Auth.
Single Family Mtg. Rev.:

Series A:

5.15% 12/1/26 (AMBAC Insured) Aaa 2,380,000 2,416,152
(e)

6.8% 12/1/16 AA+ 6,550,000 6,866,234

Series C:

5.95% 12/1/14 AA+ 2,500,000 2,618,600

6% 12/1/16 AA+ 2,500,000 2,621,950

Michigan Job Dev. Auth. Poll. A2 8,825,000 8,993,469
Cont. Rev. (Gen. Motors
Corp.) 5.55% 4/1/09

Michigan Muni. Bond Auth. Rev.:

(Local Govt.) 7.5% 11/1/09 Aaa 65,000 67,082
(AMBAC Insured)

(Revolving Fund) 5.1% 10/1/11 Aa1 4,000,000 4,187,720

Rfdg.:

(Cap. Appreciation) Series A:

0% 12/1/04 (FGIC Insured) Aaa 2,000,000 1,578,740

0% 12/1/05 (FGIC Insured) Aaa 1,855,000 1,397,557

0% 12/1/06 (FGIC Insured) Aaa 5,000,000 3,574,400

0% 12/1/07 (FGIC Insured) Aaa 1,000,000 682,270

4.75% 12/1/09 (FGIC Insured) Aaa 6,000,000 6,059,640

(State Revolving Fund) Series Aa1 2,490,000 2,710,838
A, 6% 10/1/03

MUNICIPAL BONDS - CONTINUED

MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)

MICHIGAN - CONTINUED

Michigan Pub. Pwr. Agcy. Rev.
Rfdg. (Belle River Proj.)
Series A:

5.25% 1/1/18 A1 $ 10,000,000 $ 10,053,700

5.7% 1/1/03 A1 2,000,000 2,132,460

Michigan South Central Pwr.
Agcy. Supply Sys. Rev. Rfdg.:

5% 11/1/09 (AMBAC Insured) Aaa 1,675,000 1,678,869

5.9% 11/1/06 (MBIA Insured) Aaa 4,510,000 5,020,126

Michigan Strategic Fund Ltd.
Oblig. Rev. Rfdg.:

(Detroit Edison Co. Proj.)
Series BB:

6.5% 2/15/16 (FGIC Insured) Aaa 1,250,000 1,352,188

7% 7/15/08 (MBIA Insured) Aaa 2,000,000 2,421,100

7% 5/1/21 (AMBAC Insured) Aaa 8,500,000 10,894,875

(Envir. Research Institute):

6.25% 8/15/06 (Pre-Refunded - 2,660,000 2,905,624
to 8/15/02 @ 101) (f)

6.375% 8/15/12 (Pre-Refunded - 1,770,000 1,940,840
to 8/15/02 @ 101) (f)

(Ford Motor Co. Proj.) Series A1 8,250,000 9,684,180
A, 7.1% 2/1/06

Michigan Strategic Fund Rev.
Rfdg. (Detroit Edison Co.
Proj.):

Series A, 5.55% 9/1/29 (MBIA Aaa 3,000,000 3,045,150
Insured) (b)(e)

Series AA, 6.4% 9/1/25 (MBIA Aaa 5,000,000 5,593,350
Insured)(e)

Michigan Trunk Line:

Rfdg. Series A, 5.5% 11/1/16 Aa3 7,000,000 7,564,410

Series A:

5.5% 10/1/21 Aa3 9,750,000 10,179,975

5.75% 10/1/04 Aa3 4,145,000 4,465,616

Michigan Underground Storage Aaa 5,000,000 5,565,500
Fin. Assurance Auth. Rev.
Rfdg. Series I, 6% 5/1/06
(AMBAC Insured)

Mona Shores School District Aaa 2,220,000 2,673,857
6.75% 5/1/10 (FGIC Insured)

Monroe County Poll. Cont. Aaa 5,000,000 5,307,850
Rev. (Detroit Edison Proj.)
Series CC, 7.5% 12/1/19
(AMBAC Insured) (e)

Okemos Pub. School District
Rfdg. (Cap. Appreciation):

0% 5/1/12 (MBIA Insured) Aaa 2,500,000 1,343,400

0% 5/1/13 (MBIA Insured) Aaa 1,700,000 859,792

MUNICIPAL BONDS - CONTINUED

MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)

MICHIGAN - CONTINUED

Pinckney Cmnty. Schools Aaa $ 3,075,000 $ 3,230,072
Livingston & Washtenaw
Counties 5.5% 5/1/14 (FGIC
Insured)

Port Huron Area School Aa2 1,975,000 1,333,362
District (Cap. Appreciation)
(School Bldg. Site) 0% 5/1/08

Rochester Cmnty. School Aaa 1,000,000 1,101,190
District Rfdg. 5.625% 5/1/11
(FGIC Insured)

Romulus Cmnty. Schools (Cap. Aaa 3,610,000 2,664,288
Appreciation) 0% 5/1/06
(FSA Insured)

Royal Oak City School Aaa 3,000,000 2,321,880
District (School Bldg. &
Site) 0% 5/1/05 (AMBAC
Insured)

Royal Oak Hosp. Fin. Auth.
Rev.:

(William Beaumont Hosp.) 5.5% Aa3 4,000,000 4,185,520
1/1/14

Rfdg. (William Beaumont Aa3 5,910,000 4,430,727
Hosp.) Series K, 0% 11/15/05

St. Clair Shores Econ. Dev. A2 1,700,000 1,795,744
Corp. Rev. (Bon Secours
Health Sys.) Series B, 7.5%
9/1/15

St. John's Pub. Schools 6.5% Aaa 1,400,000 1,623,342
5/1/07 (FGIC Insured)

Univ. of Michigan Rev. Rfdg.:

(Univ. Hosp. Proj.) Series A:

5.25% 12/1/10 Aa2 1,685,000 1,785,932

5.75% 12/1/12 Aa2 9,000,000 9,559,440

Series A, 6.25% 8/15/15 Aa2 3,145,000 3,435,409
(Pre-Refunded to 8/15/02 @
101) (f)

Walled Lake Consolidated Aaa 3,550,000 3,768,467
School District Rfdg. 5.3%
5/1/09 (MBIA Insured)

Wayne Charter County Arpt.
Rev.:

(Detroit Metro Arpt.):

Series A, 5% 12/1/28 (MBIA Aaa 8,400,000 8,135,568
Insured) (e)

Series B, 6.875% 12/1/11 Aaa 1,500,000 1,632,075
(MBIA Insured) (e)

Series C, 5.25% 12/1/13 (MBIA Aaa 2,000,000 2,078,340
Insured)

5.25% 12/1/12 (MBIA Insured) Aaa 2,500,000 2,604,775
(e)

Wayne County Series A, 8% Baa2 2,250,000 2,571,705
3/1/17 (Pre-Refunded to
3/1/02 @ 102) (f)

West Ottawa Pub. School
District:

(Cap. Appreciation) (School Aaa 4,110,000 3,040,989
Bldg. & Site) 0% 5/1/06
(MBIA Insured) (Pre-Refunded
to 5/1/05 @ 95.9187) (f)

Rfdg. 5.25% 5/1/10 (FGIC Aaa 3,875,000 4,072,470
Insured)

MUNICIPAL BONDS - CONTINUED

MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)

MICHIGAN - CONTINUED

Western Michigan Univ. Rev.:

Rfdg. 5.125% 11/15/22 (FGIC Aaa $ 2,365,000 $ 2,374,436
Insured)

5.6% 7/15/17 (FGIC Insured) Aaa 2,500,000 2,597,800
(d)

Western Townships Util. Auth. BBB+ 9,950,000 10,149,000
Swr. Disp. Sys. 8.2% 1/1/18

456,813,144

PUERTO RICO - 0.6%

Puerto Rico Commonwealth Baa 2,800,000 2,932,272
Urban Renewal & Hsg. Corp.
Rfdg. 7.875% 10/1/04

TOTAL MUNICIPAL BONDS 459,745,416
(Cost $429,160,250)

</TABLE>

MUNICIPAL NOTES - 3.8%

MICHIGAN - 3.8%

Michigan Hsg. Dev. Auth. Ltd. 1,100,000 1,100,000
Oblig. Rev. (Pine Ridge
Apts.) 4%, LOC Wachovia Bank
NA, VRDN (d)

Michigan Muni. Bond Auth. 3,000,000 3,021,960
Rev. RAN Series 98 D, 4.25%
8/27/99

Michigan Strategic Fund Rev. 5,900,000 5,900,000
Rfdg. (Dow Chemical Co.
Proj.) Series 1994, 4.1%,
VRDN (d)

Midland County Econ. Dev. 4,800,000 4,800,000
Rev. (Dow Chemical Co.
Proj.) Series 1993 A, 4.15%,
VRDN (d)(e)

Univ. of Michigan Rev.:

(Hosp. Proj.) Series A, 4.1%, 2,150,000 2,150,000
VRDN (d)

Series 1992 A, 4.1%, VRDN (d) 950,000 950,000

TOTAL MUNICIPAL NOTES 17,921,960
(Cost $17,915,167)

TOTAL INVESTMENT IN $ 477,667,376
SECURITIES - 100%
(Cost $447,075,417)

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FUTURES CONTRACTS

EXPIRATION DATE UNDERLYING FACE AMOUNT UNREALIZED GAIN/(LOSS)

PURCHASED

65 Bond Buyer Municipal Bond Mar. 1999 $ 8,125,000 $ (53,828)
Index Contracts

THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL
INVESTMENTS IN SECURITIES - 1.7%

</TABLE>

SECURITY TYPE ABBREVIATION
RAN - REVENUE ANTICIPATION NOTE

VRDN - VARIABLE RATE DEMAND NOTE

LEGEND
(a) Standard & Poor's credit ratings are used in the absence of a
rating by Moody's Investors Service, Inc.

(b) Security purchased on a delayed delivery or when-issued basis (see
Note 2 of Notes to Financial Statements).

(c) Security or a portion of the security was pledged to cover margin
requirements for futures contracts. At the period end, the value of
securities pledged amounted to $297,248.

(d) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.

(e) Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.

(f) Security collateralized by an amount sufficient to pay interest
and principal.

OTHER INFORMATION

The composition of long-term debt holdings as a percentage of total
value of investments in securities, is as follows (ratings are
unaudited):

MOODY'S RATINGS S&P RATINGS

Aaa, Aa, A 79.9% AAA, AA, A 83.3%

Baa 5.4% BBB 6.3%

Ba 0.0% BB 0.0%

B 0.0% B 0.0%

Caa 0.0% CCC 0.0%

Ca, C 0.0% CC, C 0.0%

D 0.0%

The percentage not rated by Moody's or S&P amounted to 1.5%.

The distribution of municipal securities by revenue source, as a
percentage of total value of investments in securities, is as follows:

Health Care 29.5%

General Obligations 15.8

Electric Utilities 10.1

Special Tax 8.8

Escrowed/Pre-Refunded 7.8

Industrial Development 6.8

Water & Sewer 6.0

Housing 5.3

Others (individually less 9.9
than 5%)

TOTAL 100.0%

INCOME TAX INFORMATION

At December 31, 1998, the aggregate cost of investment securities for
income tax purposes was $447,075,417. Net unrealized appreciation
aggregated $30,591,959, of which $30,600,228 related to appreciated
investment securities and $8,269 related to depreciated investment
securities.

At December 31, 1998, the fund had a capital loss carryforward of
approximately $12,527,000 all of which will expire on December 31,
2006.

At December 31, 1998 the fund was required to defer approximately
$1,880,000 of losses on futures contracts and options.

During the fiscal year ended December 31, 1998, 100% of the fund's
income dividends was free from federal income tax, and 3.37% of the
fund's income dividends was subject to the federal alternative minimum
tax (unaudited).

The Board of Trustees of Spartan Michigan Municipal Income Fund voted
to pay on January 4, 1999 to shareholders of record at the opening of
business on December 31, 1998, a distribution of $.003 per share
derived from capital gains realized from sales of portfolio securities
(unaudited).

SPARTAN MICHIGAN MUNICIPAL INCOME FUND

FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998

ASSETS

Investment in securities, at $ 477,667,376
value (cost $447,075,417) -
See accompanying schedule

Cash 3,439

Receivable for fund shares 109,597
sold

Interest receivable 6,234,664

TOTAL ASSETS 484,015,076

LIABILITIES

Payable for investment $ 3,000,000
purchased on a delayed
delivery basis

Payable for fund shares 270,150
redeemed

Distributions payable 548,900

Accrued management fee 153,900

Payable for daily variation 4,063
on futures contracts

Other payables and accrued 102,615
expenses

TOTAL LIABILITIES 4,079,628

NET ASSETS $ 479,935,448

Net Assets consist of:

Paid in capital $ 463,867,361

Accumulated undistributed net (14,470,044)
realized gain (loss) on
investments

Net unrealized appreciation 30,538,131
(depreciation) on investments

NET ASSETS, for 40,938,890 $ 479,935,448
shares outstanding

NET ASSET VALUE, offering $11.72
price and redemption price
per share ($479,935,448
(divided by) 40,938,890
shares)

STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998

INTEREST INCOME $ 24,746,637

EXPENSES

Management fee $ 1,788,097

Transfer agent fees 494,880

Accounting fees and expenses 195,895

Non-interested trustees' 1,904
compensation

Custodian fees and expenses 24,625

Registration fees 9,279

Audit 36,197

Legal 19,066

Reports to shareholders 12,960

Miscellaneous 1,437

Total expenses before 2,584,340
reductions

Expense reductions (31,536) 2,552,804

NET INTEREST INCOME 22,193,833

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

Investment securities 4,741,540

Futures contracts (128,658) 4,612,882

Change in net unrealized
appreciation (depreciation)
on:

Investment securities (983,380)

Futures contracts (50,005) (1,033,385)

NET GAIN (LOSS) 3,579,497

NET INCREASE (DECREASE) IN $ 25,773,330
NET ASSETS RESULTING FROM
OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31, 1998 YEAR ENDED DECEMBER 31, 1997

INCREASE (DECREASE) IN NET
ASSETS

Operations Net interest income $ 22,193,833 $ 22,697,837

Net realized gain (loss) 4,612,882 (12,201,451)

Change in net unrealized (1,033,385) 28,643,131
appreciation (depreciation)

NET INCREASE (DECREASE) IN 25,773,330 39,139,517
NET ASSETS RESULTING FROM
OPERATIONS

Distributions to shareholders (22,193,833) (22,697,837)
From net interest income

In excess of net interest (122,449) -
income

In excess of net realized - (3,518,403)
gain

TOTAL DISTRIBUTIONS (22,316,282) (26,216,240)

Share transactions Net 79,777,925 65,013,819
proceeds from sales of shares

Reinvestment of distributions 16,665,701 19,654,457

Cost of shares redeemed (77,897,152) (95,388,865)

NET INCREASE (DECREASE) IN 18,546,474 (10,720,589)
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) 22,003,522 2,202,688
IN NET ASSETS

NET ASSETS

Beginning of period 457,931,926 455,729,238

End of period $ 479,935,448 $ 457,931,926

OTHER INFORMATION
Shares

Sold 6,827,560 5,699,700

Issued in reinvestment of 1,427,061 1,717,007
distributions

Redeemed (6,674,899) (8,380,550)

Net increase (decrease) 1,579,722 (963,843)

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
YEARS ENDED DECEMBER 31,

1998 1997 1996 1995 1994

SELECTED PER-SHARE DATA

Net asset value, beginning $ 11.630 $ 11.300 $ 11.560 $ 10.580 $ 12.340
of period

Income from Investment .557 .571 .630 C .611 .687
Operations Net interest
income

Net realized and unrealized .093 .420 (.258) .980 (1.590)
gain (loss)

Total from investment .650 .991 .372 1.591 (.903)
operations

Less Distributions

From net interest income (.557) (.571) (.630) (.611) (.687)

In excess of net interest (.003) - (.002) - -
income

From net realized gain - - - - (.080)

In excess of net realized - (.090) - - (.090)
gain

Total distributions (.560) (.661) (.632) (.611) (.857)

Net asset value, end of period $ 11.720 $ 11.630 $ 11.300 $ 11.560 $ 10.580

TOTAL RETURN A 5.71% 9.02% 3.38% 15.41% (7.50)%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period $ 479,935 $ 457,932 $ 455,729 $ 491,874 $ 433,694
(000 omitted)

Ratio of expenses to average .55% B .56% B .59% .59% .57%
net assets

Ratio of net interest income 4.77% 5.08% 5.52% 5.49% 6.04%
to average net assets

Portfolio turnover rate 24% 16% 29% 29% 18%

</TABLE>

A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).

B FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).

C NET INTEREST INCOME PER SHARE REFLECTS A PAYMENT OF APPROXIMATELY
$0.049 RECEIVED FROM AN ISSUER THAT WAS IN BANKRUPTCY.

PERFORMANCE: THE BOTTOM LINE

FIDELITY MICHIGAN MUNICIPAL MONEY MARKET FUND

To evaluate a money market fund's historical performance, you can look
at either total return or yield. Total return reflects the change in
the value of an investment, assuming reinvestment of the fund's
dividend income. Yield measures the income paid by a fund. Since a
money market fund tries to maintain a $1 share price, yield is an
important measure of performance. If Fidelity had not reimbursed
certain fund expenses, the life of fund total returns would have been
lower.

CUMULATIVE TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1998 PAST 1 YEAR PAST 5 YEARS LIFE OF FUND

FIDELITY MI MUNICIPAL MONEY 3.00% 15.92% 33.96%
MARKET

All Tax-Free Money Market 2.95% 15.74% n/a
Funds Average

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year, five years or since
the fund started on January 12, 1990. For example, if you had invested
$1,000 in a fund that had a 5% return over the past year, the value of
your investment would be $1,050. To measure how the fund's performance
stacked up against its peers, you can compare it to the all tax-free
money market funds average, which reflects the performance of tax-free
money market funds with similar objectives tracked by IBC Financial
Data, Inc. The past one year average represents a peer group of 437
money market funds.

AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1998 PAST 1 YEAR PAST 5 YEARS LIFE OF FUND

FIDELITY MI MUNICIPAL MONEY 3.00% 3.00% 3.31%
MARKET

All Tax-Free Money Market 2.95% 2.98% n/a
Funds Average

AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year.

YIELDS
12/28/98 9/28/98 6/29/98 3/30/98 12/29/97

Fidelity Michigan Municipal 3.11% 3.29% 3.05% 3.08% 3.45%
Money Market Fund

All Tax-Free Money Market 2.98% 3.23% 3.05% 3.05% 3.38%
Funds Average

Fidelity Michigan Municipal 5.08% 5.38% 4.99% 5.03% 5.64%
Money Market Fund
Tax-Equivalent

YIELD refers to the income paid by the fund over a given period.
Yields for money market funds are usually for seven-day periods,
expressed as annual percentage rates. A yield that assumes income
earned is reinvested or compounded is called an effective yield. The
chart above shows the fund's current seven-day yield at quarterly
intervals over the past year. You can compare these yields to the all
tax-free money market funds average as tracked by IBC Financial Data,
Inc. Or you can look at the fund's tax-equivalent yield, which is
based on a combined effective 1999 federal and state income tax rate
of 38.82%. A portion of the fund's income may be subject to the
federal alternative minimum tax.

A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT
PAST RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.

COMPARING
PERFORMANCE

Yields on tax-free investments
are usually lower than yields
on taxable investments.
However, a straight
comparison between the two
may be misleading because it
ignores the way taxes reduce
taxable returns. Tax-equivalent
yield - the yield you'd have to
earn on a similar taxable
investment to match the tax-free
yield - makes the comparison
more meaningful. Keep in mind
that the U.S. government
neither insures nor guarantees
a money market fund. In fact,
there is no assurance that a
money fund will maintain a $1
share price.
(checkmark)

FIDELITY MICHIGAN MUNICIPAL MONEY MARKET FUND

FUND TALK: THE MANAGER'S OVERVIEW

(photograph of Diane McLaughlin)

An interview with Diane McLaughlin, Portfolio Manager of Fidelity
Michigan Municipal Money Market Fund

Q. DIANE, WHAT WAS THE INVESTMENT ENVIRONMENT LIKE IN 1998?

A. The U.S. economy was very strong in 1998. Growth in real GDP -
gross domestic product adjusted for inflation - approached 4% over the
course of the year. Employment was also quite robust, with the
unemployment rate averaging only 4.5% in 1998. Economic conditions
like these are usually accompanied by inflation. Wages have started to
creep upward as employers have increased wages to attract or retain
workers. But consumers didn't have to pay higher prices as the CPI
(consumer price index) hovered at a tame rate of 1.6% for the year.
The strength of the economy beat expectations; most market observers
felt global economic and financial crises would hurt growth in the
U.S. much more than they did. While the manufacturing sector
experienced a downturn - with exports from the U.S. suffering from
increased competition - that weakness was more than offset by solid
domestic demand. Robust consumer activity in the holiday shopping
season sustained growth through the end of the year.

Q. HOW DID THIS BACKDROP AFFECT FEDERAL RESERVE BOARD MONETARY POLICY?

Q. WHAT WAS YOUR STRATEGY DURING THIS PERIOD?

A. The fund's maturity at the beginning of the year stood at 40 days.
It rolled down to 17 days in the summer, largely due to technicals, or
supply factors in the municipal money market. Specifically, there was
not a lot of fixed-rate, longer-term issuance. When supplies of
fixed-rate paper declined, new issues of one-year notes came to market
at higher prices. As a result, the fund was focused on short-term,
variable-rate paper, which was more abundant and attractively priced.
Amid expectations of further aggressive Fed rate cuts, I added
fixed-rate securities to lock in higher rates. These purchases brought
the fund's average maturity to 46 days in September. The maturity has
since rolled down to 30 days at the end of the period.

Q. HOW DID THE FUND PERFORM?

A. The fund's seven-day yield on December 31, 1998, was 3.19%,
compared to 3.46% 12 months ago. The latest yield was the equivalent
of a 5.21% taxable yield for Michigan investors in the 38.82% combined
state and federal tax bracket. Through December 31, 1998, the fund's
12-month total return was 3.00%, compared to 2.95% for the all
tax-free money market funds average, according to IBC Financial Data,
Inc.

Q. WHAT'S YOUR OUTLOOK FOR THE BEGINNING OF 1999?

A. In the minutes from its Open Market Committee meeting in November,
the Fed indicated that its decision to implement the latest
interest-rate cut was a tough one given continued economic strength in
the U.S. At the same meeting, the Fed shifted from a bias toward
lowering interest rates to a neutral stance. The Fed might reverse
course and increase rates if continued strength in the economy is
finally reflected in higher prices. On the other hand, there is still
a risk that outside factors might threaten U.S. economic growth and
encourage the Fed to ease credit by lowering rates once again. Given
the uncertainty about the future course of interest rates, I'll seek
to maintain a flexible, neutral positioning with the fund's maturity.

FUND FACTS

GOAL: high current tax-free
income while maintaining a
stable $1 share price by
investing in high-quality,
short-term municipal money
market securities

FUND NUMBER: 420

TRADING SYMBOL: FMIXX

START DATE: January 12, 1990
SIZE: as of December 31,
1998, more than $357 million

MANAGER: Diane McLaughlin,
since 1997; manager, various
Fidelity and Spartan
municipal money market
funds; joined Fidelity in 1992
(checkmark)

FIDELITY MICHIGAN MUNICIPAL MONEY MARKET FUND

INVESTMENT CHANGES

<TABLE>
<CAPTION>
<S> <C> <C> <C>
MATURITY DIVERSIFICATION

DAYS % OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS 6/30/98 % OF FUND'S INVESTMENTS
12/31/98 12/31/97

0 - 30 82 78 77

31 - 90 2 13 8

91 - 180 10 6 4

181 - 397 6 3 11

WEIGHTED AVERAGE MATURITY

12/31/98 6/30/98 12/31/97

Fidelity Michigan Municipal 30 DAYS 27 Days 40 Days
Money Market Fund

All Tax-Free Money Market 46 DAYS 41 Days 48 Days
Funds Average *

ASSET ALLOCATION (% OF FUND'S
INVESTMENTS)

</TABLE>

AS OF DECEMBER 31, 1998 AS OF JUNE 30, 1998
Row: 1, Col: 1, Value: 81.0
Row: 1, Col: 2, Value: 9.0
Row: 1, Col: 3, Value: 0.0
Row: 1, Col: 4, Value: 9.0
Row: 1, Col: 5, Value: 1.0
Row: 1, Col: 1, Value: 76.0
Row: 1, Col: 2, Value: 14.0
Row: 1, Col: 3, Value: 3.0
Row: 1, Col: 4, Value: 5.0
Row: 1, Col: 5, Value: 2.0
Variable rate demand
notes (VRDNs) 81%
Commercial paper
(including CP mode) 9%
Tender bonds 0%
Municipal
notes 9%
Other 1%
Variable rate demand
notes (VRDNs) 76%
Commercial paper
(including CP mode) 14%
Tender bonds 3%
Municipal
notes 5%
Other 2%

*SOURCE: IBC'S MONEY FUND REPORT(registered trademark)

FIDELITY MICHIGAN MUNICIPAL MONEY MARKET FUND

INVESTMENTS DECEMBER 31, 1998

Showing Percentage of Total Value of Investment in Securities

<TABLE>
<CAPTION>
<S> <C> <C> <C>
MUNICIPAL SECURITIES - 100.0%

PRINCIPAL AMOUNT VALUE (NOTE 1)

MICHIGAN - 99.1%

Cornell Econ. Dev. Corp. Ind. $ 1,300,000 $ 1,300,000
Dev. Rev. Rfdg. Bonds Series
1990, 3.25% 1/13/99, LOC CS
First Boston, Inc., CP mode

Delta County Econ. Dev. Corp.
Envir. Impt. Rev.:

(Escanaba Paper) Series 85 D, 400,000 400,000
4.1%, LOC CS First Boston,
Inc., VRDN (a)

(Mead-Escanaba Paper) Series 2,300,000 2,300,000
E, 4.1%, LOC Bank of Nova
Scotia, VRDN (a)

Detroit School District 2,570,000 2,570,000
Participating VRDN Series
PT-1115, 4.1% (Liquidity
Facility Merrill Lynch &
Co.) (a)(e)

Detroit Swr. Disp. Rev. 6,855,000 6,855,000
Series 1998 B, 4.05% (MBIA
Insured) (BPA Morgan
Guaranty Trust Co., NY),
VRDN (a)

Detroit Wtr. Supply Sys. Rev.
Participating VRDN:

Series SG 64, 3.9% (Liquidity 3,500,000 3,500,000
Facility Societe Generale,
France) (a)(e)

Series SGB 6, 3.96% 7,570,000 7,570,000
(Liquidity Facility Societe
Generale, France) (a)(e)

Flint Econ. Dev. Corp. Ltd. 700,000 700,000
Oblig. Rev. (Genessee County
Real Estate Proj.) 3.8%, LOC
NBD Bank NA, Detroit, VRDN
(a)(d)

Genesee County Econ Dev. 3,000,000 3,000,000
Corp. (Creative Foam Corp.
Proj.) Series 1994, 3.8%,
LOC NBD Bank NA, Detroit,
VRDN (a)(d)

Georgetown Charter Township 1,000,000 1,000,000
Ind. Dev. Rev. (J&F Steel
Corp. Proj.) Series 1989,
4%, LOC Societe Generale,
France, VRDN (a)(d)

Jackson Cnty. Econ. Dev. 2,000,000 2,000,000
Corp. Rev. (SPX Corp. Proj.)
3.35%, LOC NBD Bank NA,
Detroit, VRDN (a)

Kalamazoo City School 3,250,000 3,257,763
District RAN Series C, 3.75%
9/16/99, LOC First of
America Bank NA

Lenawee School District TAN 2,500,000 2,502,144
3.5% 4/1/99

Livingtson Gen. Oblig. TAN 2,900,000 2,901,047
3.9% 4/1/99

Livonia Economic Dev. Corp. 1,600,000 1,600,000
(Ajluni Proj.) 3.8%, LOC NBD
Bank NA, Detroit, VRDN (a)(d)

Michigan Higher Ed. 920,000 920,000
Facilities Auth. Rev.
(Davenport College of Bus.)
Series 1997, 3.85%, LOC Old
Kent Bank, Michigan, VRDN (a)

Michigan Higher Ed. Student
Ln. Auth. Rev.:

Rfdg.:

Series XII B, 3.95% (AMBAC 5,500,000 5,500,000
Insured) (BPA Kredietbank
NV), VRDN (a)(d)

Series XII F, 3.95% (AMBAC 6,700,000 6,700,000
Insured) (BPA Kredietbank
NV), VRDN (a)(d)

MUNICIPAL SECURITIES -
CONTINUED

PRINCIPAL AMOUNT VALUE (NOTE 1)

MICHIGAN - CONTINUED

Michigan Higher Ed. Student
Ln. Auth. Rev.: - continued

Series XII D, 3.95% (AMBAC $ 1,300,000 $ 1,300,000
Insured) (BPA Kredietbank
NV), VRDN (a)(d)

Michigan Hosp. Fin. Auth. Rev.:

(Hosp. Equip. Ln. Prog.)
Series A:

4.1%, LOC First of America 9,680,000 9,680,000
Bank NA, VRDN (a)

4.1%, LOC First of America 2,600,000 2,600,000
Bank NA, VRDN (a)

(St. Mary's Hosp. of Livonia) 2,600,000 2,600,000
Series 1996 A, 3.95%, LOC
Comerica Bank, Detroit, VRDN
(a)

Participating VRDN Series 3,700,000 3,700,000
1997 X, 4.2% (Liquidity
Facility First Union Nat'l.
Bank of North Carolina)
(a)(e)

Michigan Hsg. Dev. Auth. Ltd. 3,500,000 3,500,000
Oblig. Rev. (Shoal Creek
Apt. Proj.) 4%, LOC Wachovia
Bank NA, VRDN (a)

Michigan Hsg. Dev. Auth.
Multi-family Hsg. Rev.:

(Canton Club East Apts.) 4,000,000 4,000,000
Series 1998 A, 3.9%, LOC Key
Bank, NA, VRDN (a)(d)

Bonds Series 1988 A:

3.05% 4/8/99, LOC Landesbank 2,500,000 2,500,000
Hessen-Thuringen, CP mode
(d)

3.35% 1/7/99, LOC Landesbank 1,500,000 1,500,000
Hessen-Thuringen, CP mode
(d)

Michigan Hsg. Dev. Auth.
Rental Hsg. Rev.
Participating VRDN:

Series 1997 N, 3.95% 3,220,000 3,220,000
(Liquidity Facility Caisse
des Depots et Consignations)
(a)(d)(e)

Series PT 38, 3.95% 4,710,000 4,710,000
(Liquidity Facility
Commerzbank AG) (a)(d)(e)

Michigan Hsg. Dev. Auth.
Single Family Mtg. Rev.
Participating VRDN:

Series PT 58, 3.95% 7,245,000 7,245,000
(Liquidity Facility CS First
Boston, Inc.) (a)(d)(e)

3.95% (Liquidity Facility CS 2,120,000 2,120,000
First Boston, Inc.) (a)(d)(e)

Michigan Muni. Bond Auth. 16,700,000 16,775,140
Rev. RAN Series 98 D, 4.25%
8/27/99

Michigan Strategic Fund Ind.
Dev. Rev.:

(Althaus Family Investors II) 2,300,000 2,300,000
Series 1997, 4.2%, LOC
Huntington Nat'l. Bank,
Columbus, VRDN (a)

(C-TEC, Inc. Proj.) 4.1%, LOC 1,500,000 1,500,000
SunTrust Bank of Atlanta,
VRDN (a)(d)

MUNICIPAL SECURITIES -
CONTINUED

PRINCIPAL AMOUNT VALUE (NOTE 1)

MICHIGAN - CONTINUED

Michigan Strategic Fund Ltd.
Oblig. Rev.:

(B & G Realty Proj.) 3.75%, $ 1,700,000 $ 1,700,000
LOC Bank One, Wisconsin,
VRDN (a)(d)

(Hi-Tech Mold & Engineering) 700,000 700,000
3.8%, LOC NBD Bank NA,
Detroit, VRDN (a)(d)

(Ultimate Hydroforming, Inc. 400,000 400,000
Proj.) 3.8%, LOC NBD Bank
NA, Detroit, VRDN (a)(d)

(Unified-Boring Co., Inc. 1,600,000 1,600,000
Proj.) Series 1992, 3.8%,
LOC NBD Bank NA, Detroit,
VRDN (a)(d)

Michigan Strategic Fund Rev.:

(BC & C Proj.) 4%, LOC 1,750,000 1,750,000
Comerica Bank, Detroit, VRDN
(a)(d)

(Bosal Ind. Proj.) Series 3,000,000 3,000,000
1998, 4.15%, LOC Bank of
New York NA, VRDN (a)(d)

(Consumers Pwr. Co. Proj.) 5,100,000 5,100,000
Series 1988 A, 4.05%, LOC
Union Bank of Switzerland,
VRDN (a)

(Conti Properties LLC Proj.) 3,800,000 3,800,000
Series 1997, 4%, LOC
Comerica Bank, Detroit, VRDN
(a)(d)

(Cyberplast Inds. Ltd.) 3.9%, 2,000,000 2,000,000
LOC NBD Bank NA, Detroit,
VRDN (a)(d)

(Detroit Edison Co. Proj.) 5,900,000 5,900,000
Series 1995 CC, 4.1%, LOC
Barclays Bank PLC, VRDN (a)

(Doss Ind. Dev. Co.) 3.8%, 3,600,000 3,600,000
LOC NBD Bank NA, Detroit,
VRDN (a)(d)

(Envir. Quality Co. Proj.) 2,100,000 2,100,000
Series 1995, 4.15%, LOC
Comerica Bank, Detroit, VRDN
(a)(d)

(Future Fence Co. Proj.) 4%, 3,500,000 3,500,000
LOC Comerica Bank, Detroit,
VRDN (a)(d)

(Gen. Motors Corp. Proj.) 18,525,000 18,525,000
3.75%, VRDN (a)

(Gen. Motors) Series 1988 A, 11,730,000 11,730,000
4.1%, VRDN (a)

(Grandview Plaza Riverview 3,200,000 3,200,000
Assoc. One Ltd. Partnership)
3.95%, LOC First of America
Bank NA, VRDN (a)(d)

(John H. Dekker & Sons Proj.) 2,500,000 2,500,000
Series 1998, 3.95%, LOC
Michigan Nat'l. Bank,
Detroit, VRDN (a)(d)

(Mans Proj.) Series 1998, 4%, 3,200,000 3,200,000
LOC Comerica Bank, Detroit,
VRDN (a)(d)

(Nat'l. Rubber Michigan, 2,400,000 2,400,000
Inc.) Series 1995, 4.2%,
LOC Nat'l. Bank of Canada,
VRDN (a)(d)

(NFS Int'l Proj.) Series 1997 1,000,000 1,000,000
B, 4%, LOC First of America
Bank NA, VRDN (a)

(PBL Enterprises, Inc. Proj.) 3,500,000 3,500,000
Series 1997, 4%, LOC
Comerica Bank, Detroit, VRDN
(a)(d)

MUNICIPAL SECURITIES -
CONTINUED

PRINCIPAL AMOUNT VALUE (NOTE 1)

MICHIGAN - CONTINUED

Michigan Strategic Fund Rev.:
- - continued

(TEI Investments, LLC Proj.) $ 1,000,000 $ 1,000,000
4%, LOC Comerica Bank,
Detroit, VRDN (a)(d)

(The Spiratex Co. Proj.) 2,200,000 2,200,000
Series 1994, 3.8%, LOC NBD
Bank NA, Detroit, VRDN (a)(d)

(Trilan LLC Proj.) 4.2%, LOC 5,000,000 5,000,000
NBD Bank NA, Detroit, VRDN
(a)(d)

(United Waste Sys. Proj.) 4,300,000 4,300,000
Series 1995, 4.05%, LOC Bank
of America Nat'l. Trust &
Savings Assoc., VRDN (a)(d)

(Vent-Rite Valve Corp. Proj.) 1,845,000 1,845,000
4.2%, LOC Fleet Nat'l. Bank,
VRDN (a)(d)

Bonds (Dow Chemical Co. Proj.):

Series 1986:

3% 4/8/99, CP mode 700,000 700,000

3.35% 3/5/99, CP mode 1,500,000 1,500,000

Series 1988:

3% 4/12/99, CP mode (d) 1,000,000 1,000,000

3% 4/7/99, CP mode (d) 4,200,000 4,200,000

3% 4/7/99, CP mode (d) 8,200,000 8,200,000

3% 4/8/99, CP mode (d) 4,000,000 4,000,000

3% 4/9/99, CP mode (d) 2,600,000 2,600,000

3.25% 2/12/99, CP mode (d) 3,250,000 3,250,000

Participating VRDN Series 2,495,000 2,495,000
PT-244, 4.1% (Liquidity
Facility Banque Nationale de
Paris) (a)(e)

Michigan Strategic Fund Solid
Waste Disp. Rev.:

(Grayling Gen. Station Proj.) 11,200,000 11,200,000
Series 1990, 4.15%, LOC
Barclays Bank PLC, VRDN
(a)(d)

(Great Lakes Recovery) 4.2%, 2,400,000 2,400,000
LOC NBD Bank NA, Detroit,
VRDN (a)(d)

Michigan Trunk Line
Participating VRDN:

Series SG 44, 3.9% (Liquidity 5,830,000 5,830,000
Facility Societe Generale,
France) (a)(e)

Series SG 87, 3.9% (Liquidity 6,415,000 6,415,000
Facility Societe Generale,
France) (a)(e)

Mona Shores School District 8,175,000 8,175,000
Participating VRDN Series SG
26, 3.9% (Liquidity Facility
Societe Generale, France)
(a)(e)

Monroe School District TAN 4,000,000 4,003,104
3.95% 4/1/99

Monroe County Poll. Cont.
Rev. Participating VRDN:

Series 1997, 3.95% (Liquidity 3,405,000 3,405,000
Facility Caisse des Depots
et Consignations) (a)(d)(e)

3.95% (Liquidity Facility 4,000,000 4,000,000
Merrill Lynch & Co.)
(a)(d)(e)

MUNICIPAL SECURITIES -
CONTINUED

PRINCIPAL AMOUNT VALUE (NOTE 1)

MICHIGAN - CONTINUED

Oakland County Economic Dev. $ 2,600,000 $ 2,600,000
Crop. (Oakland Univ.
Foundation Proj.) 4%, LOC
Comerica Bank, Detroit, VRDN
(a)

Sterling Heights Econ. Dev. 5,000,000 5,000,000
Corp. Ltd. Oblig. Rev.
(Cherrywood Ctr. Assoc.
Proj.) 3.9%, LOC Comerica
Bank, Detroit, VRDN (a)(d)

Tolfree Memorial Hosp. Corp.
Rev.:

Series 1996 B, 3.8%, LOC 3,200,000 3,200,000
First of America Bank NA,
VRDN (a)

Series 1997 D, 3.8%, LOC 6,100,000 6,100,000
First of America Bank NA,
VRDN (a)

Univ. of Michigan Regents 2,000,000 2,000,000
3.1% 1/20/99, CP

Univ. of Michigan Rev.:

(Hosp. Proj.) Series A, 4.1%, 300,000 300,000
VRDN (a)

Series 1992 A, 4.1%, VRDN (a) 600,000 600,000

Waterford School District RAN 2,500,000 2,502,111
3.9% 5/25/99

Wayne Charter County Arpt.
Rev.:

Participating VRDN:

Series PT 1061, 4.2% 7,800,000 7,800,000
(Liquidity Facility Morgan
Stanley, Dean Witter & Co.)
(a)(d)(e)

3.95% (Liquidity Facility 7,070,000 7,070,000
Merrill Lynch & Co.)
(a)(d)(e)

Rfdg. (Detroit Metro. Wayne
Co.):

Series A, 4.15%, LOC 20,175,000 20,174,999
Bayerische Landesbank
Girozentrale, VRDN (a)(d)

Series B, 3.95%, LOC 1,175,000 1,175,000
Bayerische Landesbank
Girozentrale, VRDN (a)(d)

Wayne-Westland Cmnty. Schools 3,500,000 3,500,000
Participating VRDN Series
67, 4.15% (Liquidity
Facility Morgan Stanley,
Dean Witter & Co.) (a)(e)

354,771,308

OTHER - 0.9%

Municipal Central Cash Fund 3,373,543 3,373,543
(b)(c)

TOTAL INVESTMENT IN $ 358,144,851
SECURITIES - 100%

Total Cost for Income Tax Purposes $ 358,144,851

</TABLE>

SECURITY TYPE ABBREVIATION

CP - COMMERCIAL PAPER

RAN - REVENUE ANTICIPATION NOTE

TAN - TAX ANTICIPATION NOTE

VRDN - VARIABLE RATE DEMAND NOTE

LEGEND

(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.

(d) Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.

(e) Provides evidence of ownership in one or more underlying municipal
bonds.

INCOME TAX INFORMATION

At December 31, 1998, the fund had a capital loss carryforward of
approximately $112,000 of which $2,000, $10,000, $39,000, $5,000,
$39,000, $11,000 and $6,000 will expire on December 31, 1999, 2001,
2002, 2003, 2004, 2005 and 2006, respectively.

During the fiscal year ended December 31, 1998, 100% of the fund's
income dividends was free from federal income tax, and 53.97% of the
fund's income dividends was subject to the federal alternative minimum
tax (unaudited).

FIDELITY MICHIGAN MUNICIPAL MONEY MARKET FUND

FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998

ASSETS

Investment in securities, at $ 358,144,851
value - See accompanying
schedule

Receivable for fund shares 6,343,108
sold

Interest receivable 1,765,959

TOTAL ASSETS 366,253,918

LIABILITIES

Payable to custodian bank $ 359

Payable for investments 5,191,690
purchased

Payable for fund shares 3,462,009
redeemed

Distributions payable 41,721

Accrued management fee 110,939

Other payables and accrued 93,500
expenses

TOTAL LIABILITIES 8,900,218

NET ASSETS $ 357,353,700

Net Assets consist of:

Paid in capital $ 357,465,333

Accumulated net realized gain (111,633)
(loss) on investments

NET ASSETS, for 357,466,888 $ 357,353,700
shares outstanding

NET ASSET VALUE, offering $1.00
price and redemption price
per share ($357,353,700
(divided by) 357,466,888
shares)

STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998

INTEREST INCOME $ 11,234,425

EXPENSES

Management fee $ 1,211,365

Transfer agent fees 507,077

Accounting fees and expenses 64,380

Non-interested trustees' 480
compensation

Custodian fees and expenses 17,810

Registration fees 41,822

Audit 27,826

Legal 9,156

Total expenses before 1,879,916
reductions

Expense reductions (4,932) 1,874,984

NET INTEREST INCOME 9,359,441

NET REALIZED GAIN (LOSS) ON (5,424)
INVESTMENTS

NET INCREASE IN NET ASSETS $ 9,354,017
RESULTING FROM OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31, 1998 YEAR ENDED DECEMBER 31, 1997

INCREASE (DECREASE) IN NET
ASSETS

Operations Net interest income $ 9,359,441 $ 8,383,085

Net realized gain (loss) (5,424) (10,978)

NET INCREASE (DECREASE) IN 9,354,017 8,372,107
NET ASSETS RESULTING FROM
OPERATIONS

Distributions to shareholders (9,359,441) (8,383,085)
from net interest income

Share transactions at net 853,454,247 611,337,739
asset value of $1.00 per
share Proceeds from sales of
shares

Reinvestment of 9,020,140 8,021,475
distributions from net
interest income

Cost of shares redeemed (793,055,319) (591,999,838)

NET INCREASE (DECREASE) IN 69,419,068 27,359,376
NET ASSETS AND SHARES
RESULTING FROM SHARE
TRANSACTIONS

TOTAL INCREASE (DECREASE) 69,413,644 27,348,398
IN NET ASSETS

NET ASSETS

Beginning of period 287,940,056 260,591,658

End of period $ 357,353,700 $ 287,940,056

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
YEARS ENDED DECEMBER 31,

1998 1997 1996 1995 1994

SELECTED PER-SHARE DATA

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

Income from Investment .030 .031 .030 .033 .024
Operations Net interest
income

Less Distributions

From net interest income (.030) (.031) (.030) (.033) (.024)

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

TOTAL RETURN A 3.00% 3.18% 3.00% 3.38% 2.44%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period $ 357,354 $ 287,940 $ 260,592 $ 231,259 $ 221,735
(000 omitted)

Ratio of expenses to average .60% .61% .62% .63% .61%
net assets

Ratio of expenses to average .59% B .61% .61% B .63% .61%
net assets after expense
reductions

Ratio of net interest income 2.97% 3.14% 2.96% 3.32% 2.45%
to average net assets

</TABLE>

A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).

B FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).

NOTES TO FINANCIAL STATEMENTS
For the period ended December 31, 1998

1. SIGNIFICANT ACCOUNTING POLICIES.

Spartan Michigan Municipal Income Fund (the income fund) is a fund of
Fidelity Municipal Trust. Fidelity Michigan Municipal Money Market
Fund (the money market fund) is a fund of Fidelity Municipal Trust II.
Each trust is registered under the Investment Company Act of 1940 (the
1940 Act), as amended, as an open-end management investment company.
Fidelity Municipal Trust and Fidelity Municipal Trust II (the trusts)
are organized as a Massachusetts business trust and a Delaware
business trust, respectively. Each fund is authorized to issue an
unlimited number of shares. The financial statements have been
prepared in conformity with generally accepted accounting principles
which require management to make certain estimates and assumptions at
the date of the financial statements. The following summarizes the
significant accounting policies of the income fund and the money
market fund:

SECURITY VALUATION.

EXPENSES. Most expenses of each trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.

1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED

DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED

differing treatments for futures transactions, market discount, and
losses deferred due to futures and excise tax regulations.

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.

2. OPERATING POLICIES -
CONTINUED

FUTURES CONTRACTS - CONTINUED

reflected in the Statement of Assets and Liabilities. The underlying
face amount at value of any open futures contracts at period end is
shown in the schedule of investments under the caption "Futures
Contracts." This amount reflects each contract's exposure to the
underlying instrument at period end. Losses may arise from changes in
the value of the underlying instruments or if the counterparties do
not perform under the contracts' terms. Gains (losses) are realized
upon the expiration or closing of the futures contracts. Futures
contracts are valued at the settlement price established each day by
the board of trade or exchange on which they are traded.

3. PURCHASES AND SALES OF INVESTMENTS.

INCOME FUND. Purchases and sales of securities, other than short-term
securities, aggregated $119,493,241 and $107,502,140, respectively.
The market value of futures contracts opened and closed during the
period amounted to $52,079,897 and $45,270,829, respectively.

4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.

TRANSFER AGENT AND ACCOUNTING FEES. UMB Bank, n.a. (UMB) is the
custodian and transfer and shareholder servicing agent for the funds.
UMB has entered into a sub-contract with Fidelity Service Company,
Inc. (FSC), an affiliate of FMR, under which FSC performs the
activities associated with the funds' transfer and shareholder
servicing agent and accounting functions. The funds pay 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. The accounting fee is
based on the level of average net assets for the month plus
out-of-pocket expenses.

4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED

TRANSFER AGENT AND ACCOUNTING FEES - CONTINUED

For the period, the transfer agent fees were equivalent to an annual
rate of 0.11% and 0.16% of average net assets for the income fund and
the money market fund, respectively.

5. EXPENSE REDUCTIONS.

In addition, each fund has entered into arrangements with its
custodian and transfer agent whereby credits realized as a result of
uninvested cash balances were used to reduce a portion of the fund's
expenses. During the period, the custodian and transfer agent fees
were reduced by $4,211 and $1,581, respectively for the income fund,
and $2,996 and $1,936, respectively for the money market fund, under
these arrangements.

REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Municipal Trust and Fidelity Municipal
Trust II and the shareholders of Spartan Michigan Municipal Income
Fund and Fidelity Michigan Municipal Money Market Fund:

In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Spartan Michigan Municipal Income Fund (a fund of Fidelity Municipal
Trust) and Fidelity Michigan Municipal Money Market Fund (a fund of
Fidelity Municipal Trust II) at December 31, 1998, and the results of
their operations, the changes in their net assets and the financial
highlights for the periods indicated, in conformity with generally
accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements")
are the responsibility of the funds' management; our responsibility is
to express an opinion on these financial statements based on our
audits. We conducted our audits of these financial statements in
accordance with generally accepted auditing standards which require
that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits, which included confirmation
of securities at December 31, 1998 by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion
expressed above.

/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
February 5, 1999

PROXY VOTING RESULTS

PROPOSAL 1

To elect as Trustees the following twelve nominees.

# OF % OF
VOTES CAST VOTES CAST
RALPH F. COX
Affirmative 941,676,281.56 96.946

Withheld 29,667,606.92 3.054

TOTAL 971,343,888.48 100.000

PHYLLIS BURKE DAVIS
Affirmative 941,015,539.45 96.878

Withheld 30,328,349.03 3.122

TOTAL 971,343,888.48 100.000

ROBERT M. GATES
Affirmative 940,616,433.83 96.837

Withheld 30,727,454.65 3.163

TOTAL 971,343,888.48 100.000

EDWARD C. JOHNSON 3D
Affirmative 940,665,834.51 96.842

Withheld 30,678,053.97 3.158

TOTAL 971,343,888.48 100.000

E. BRADLEY JONES
Affirmative 937,879,239.66 96.555

Withheld 33,464,648.82 3.445

TOTAL 971,343,888.48 100.000

DONALD J. KIRK
Affirmative 941,794,381.77 96.958

Withheld 29,549,506.71 3.042

TOTAL 971,343,888.48 100.000

# OF % OF
VOTES CAST VOTES CAST
PETER S. LYNCH
Affirmative 941,809,883.91 96.959

Withheld 29,534,004.57 3.041

TOTAL 971,343,888.48 100.000

WILLIAM O. MCCOY
Affirmative 941,735,873.46 96.952

Withheld 29,608,015.02 3.048

TOTAL 971,343,888.48 100.000

GERALD C. MCDONOUGH
Affirmative 939,119,647.40 96.683

Withheld 32,224,241.08 3.317

TOTAL 971,343,888.48 100.000

MARVIN L. MANN
Affirmative 942,029,292.87 96.982

Withheld 29,314,595.61 3.018

TOTAL 971,343,888.48 100.000

ROBERT C. POZEN
Affirmative 941,499,581.49 96.928

Withheld 29,844,306.99 3.072

TOTAL 971,343,888.48 100.000

THOMAS R. WILLIAMS
Affirmative 939,450,603.85 96.717

Withheld 31,893,284.63 3.283

TOTAL 971,343,888.48 100.000

PROPOSAL 2

To ratify the selection of PricewaterhouseCoopers LLP as independent
accountants of the fund.

# OF % OF
VOTES CAST VOTES CAST
Affirmative 317,293,362.56 96.474

Against 1,689,729.28 .513

Abstain 9,908,421.81 3.013

TOTAL 328,891,513.65 100.000

PROPOSAL 3

To authorize the Trustees to adopt an Amended and Restated Declaration
of Trust.

# OF % OF
VOTES CAST VOTES CAST
Affirmative 838,802,769.40 88.254

Against 59,832,161.19 6.295

Abstain 51,803,661.60 5.451

TOTAL 950,438,592.19 100.000

Broker Non-Votes 20,905,296.29

PROPOSAL 4

# OF % OF
VOTES CAST VOTES CAST
Affirmative 273,838,625.72 84.268

Against 34,113,688.43 10.498

Abstain 17,008,283.98 5.234

TOTAL 324,960,598.13 100.000

Broker Non-Votes 3,930,915.52

PROPOSAL 5

To approve an amended management contract for the fund.

# OF % OF
VOTES CAST VOTES CAST
Affirmative 287,855,742.72 87.523

Against 23,632,939.98 7.186

Abstain 17,402,830.95 5.291

TOTAL 328,891,513.65 100.000

PROPOSAL 7

To replace the fund's fundamental 80% investment policy with a
non-fundamental policy.

# OF % OF
VOTES CAST VOTES CAST
Affirmative 270,243,108.27 83.162

Against 35,132,504.73 10.811

Abstain 19,584,985.13 6.027

TOTAL 324,960,598.13 100.000

Broker Non-Votes 3,930,915.52

PROPOSAL 8

To eliminate the fund's fundamental investment policy regarding
investment in below investment-grade debt securities.

# OF % OF
VOTES CAST VOTES CAST
Affirmative 267,140,014.12 82.207

Against 39,519,697.03 12.161

Abstain 18,300,886.98 5.632

TOTAL 324,960,598.13 100.000

Broker Non-Votes 3,930,915.52

PROPOSAL 9

To eliminate the fund's fundamental 20% investment policy.

# OF % OF
VOTES CAST VOTES CAST
Affirmative 270,106,945.05 83.120

Against 34,772,091.45 10.700

Abstain 20,081,561.63 6.180

TOTAL 324,960,598.13 100.000

Broker Non-Votes 3,930,915.52

OF SPECIAL NOTE

INTRODUCING FIDELITY'S NEW, REORGANIZED PROSPECTUS

We invite you to spend a moment and review our new prospectus. It is
designed to help make your investment decision easier, no matter which
of the Fidelity funds you invest in.

MANAGING YOUR INVESTMENTS

BY PHONE

(PHONE_GRAPHIC)TOUCHTONE XPRESS
1-800-544-5555

PRESS
1 For mutual fund and brokerage trading.

2 For quotes.*

3 For account balances and holdings.

4 To review orders and mutual
fund activity.

5 To change your PIN.

*0 To speak to a Fidelity representative.

BY PC

Fidelity's Web site on the Internet provides a wide range of
information, including daily financial news, fund performance,
interactive planning tools and news about Fidelity products and
services.

(COMPUTER_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM

(COMPUTER_GRAPHIC)
FIDELITY ON-LINE XPRESS+(registered trademark)

INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA

INVESTMENT SUB-ADVISER,
MONEY MARKET FUND
Fidelity Investment Money
Management, Inc., (FIMM)
Merrimack, NH

OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Fred L. Henning, Jr., Vice President
Dwight D. Churchill, Vice President,
INCOME FUND
Boyce I. Greer, Vice President,
MONEY MARKET FUND
Norman U. Lind, Vice President,
INCOME FUND
Diane M. McLaughlin, Vice President,
MONEY MARKET FUND
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
Matthew N. Karstetter, Deputy Treasurer
Stanley N. Griffith, Assistant Vice President
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Thomas J. Simpson, Assistant Treasurer

* INDEPENDENT TRUSTEES

MIR-ANN-0299 70464
1.540080.101

ADVISORY BOARD
J. Gary Burkhead

GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA

TRANSFER AND SHAREHOLDER
SERVICING AGENTS
UMB Bank, n.a.
Kansas City, MO
and
Fidelity Service Company, Inc.
Boston, MA

CUSTODIAN
UMB Bank, n.a
Kansas City, MO

(fidelity_logo_graphic)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com

SPARTAN(REGISTERED TRADEMARK)
MINNESOTA MUNICIPAL INCOME
FUND

ANNUAL REPORT
DECEMBER 31, 1998

(FIDELITY_LOGO_GRAPHIC)(registered trademark)

CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.

PERFORMANCE 4 How the fund has done over
time.

FUND TALK 7 The manager's review of fund
performance, strategy and
outlook.

INVESTMENT CHANGES 10 A summary of major shifts in
the fund's investments over
the past six months.

INVESTMENTS 11 A complete list of the fund's
investments with their
market values.

FINANCIAL STATEMENTS 19 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.

NOTES 23 Notes to the financial
statements.

REPORT OF INDEPENDENT 26 The auditors' opinion.
ACCOUNTANTS

PROXY VOTING RESULTS 27

OF SPECIAL NOTE 30

Third party marks appearing herein are the property of their
respective owners.

All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.

This report is printed on recycled paper using soy-based inks.

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

PRESIDENT'S MESSAGE

(PHOTO_OF_EDWARD_C_JOHNSON_3D)

DEAR SHAREHOLDER:

While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.

An intermediate-length fund could make sense if your investment
horizon is two to four years, while a short-term bond fund could be
the right choice if you need your money in one or two years.

Best regards,

Edward C. Johnson 3d

PERFORMANCE: THE BOTTOM LINE

There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits the fund earns when it sells securities
that have grown in value). You can also look at the fund's income, as
reflected in the fund's yield, to measure performance. If Fidelity had
not reimbursed certain fund expenses, the total returns and dividends
would have been lower.

CUMULATIVE TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1998 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS

SPARTAN MN MUNICIPAL INCOME 5.51% 29.95% 99.81%

LB Minnesota Enhanced 6.16% 33.04% n/a
Municipal Bond

Minnesota Municipal Debt 5.55% 29.26% 103.22%
Funds Average

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be
$1,050. You can compare the fund's returns to the performance of the
Lehman Brothers Minnesota Enhanced Municipal Bond Index - a market
value-weighted index of Minnesota investment-grade municipal bonds
with maturities of one year or more. To measure how the fund's
performance stacked up against its peers, you can compare it to the
Minnesota municipal debt funds average, which reflects the performance
of mutual funds with similar objectives tracked by Lipper Inc. The
past one year average represents a peer group of 47 mutual funds.
These benchmarks include reinvested dividends and capital gains, if
any, and exclude the effect of sales charges.

AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1998 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS

SPARTAN MN MUNICIPAL INCOME 5.51% 5.38% 7.17%

LB Minnesota Enhanced 6.16% 5.88% n/a
Municipal Bond

Minnesota Municipal Debt 5.55% 5.26% 7.35%
Funds Average

AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year. (Lipper calculates average annual total
returns by annualizing each fund's total return, then taking the
arithmetic average. This may produce a different figure than that
obtained by averaging the cumulative total returns and annualizing the
result.)

$10,000 OVER 10 YEARS
Spartan MN Muni Income LB Municipal Bond
00082 LB015
1988/12/31 10000.00 10000.00
1989/01/31 10136.35 10206.80
1989/02/28 10068.76 10090.34
1989/03/31 10079.64 10066.22
1989/04/30 10336.73 10305.20
1989/05/31 10475.55 10519.24
1989/06/30 10594.26 10662.09
1989/07/31 10673.53 10807.20
1989/08/31 10600.89 10701.40
1989/09/30 10550.20 10669.51
1989/10/31 10699.17 10799.99
1989/11/30 10851.02 10988.99
1989/12/31 10923.64 11078.88
1990/01/31 10848.14 11026.48
1990/02/28 10971.21 11124.62
1990/03/31 10982.36 11127.95
1990/04/30 10841.54 11047.39
1990/05/31 11062.25 11288.55
1990/06/30 11166.96 11387.78
1990/07/31 11358.05 11555.18
1990/08/31 11172.69 11387.40
1990/09/30 11269.29 11393.89
1990/10/31 11408.76 11600.57
1990/11/30 11658.81 11833.86
1990/12/31 11712.27 11885.34
1991/01/31 11810.97 12044.84
1991/02/28 11888.25 12149.63
1991/03/31 11908.46 12154.00
1991/04/30 12052.45 12315.65
1991/05/31 12173.40 12425.14
1991/06/30 12124.70 12412.84
1991/07/31 12282.21 12564.02
1991/08/31 12405.50 12729.49
1991/09/30 12494.73 12895.23
1991/10/31 12537.50 13011.29
1991/11/30 12510.50 13047.59
1991/12/31 12707.65 13327.59
1992/01/31 12763.21 13357.98
1992/02/29 12816.53 13362.25
1992/03/31 12836.86 13367.20
1992/04/30 12927.61 13486.16
1992/05/31 13069.61 13644.90
1992/06/30 13245.94 13873.86
1992/07/31 13571.85 14289.80
1992/08/31 13432.91 14150.47
1992/09/30 13464.70 14243.01
1992/10/31 13213.25 14103.01
1992/11/30 13518.81 14355.59
1992/12/31 13676.87 14502.16
1993/01/31 13885.45 14670.82
1993/02/28 14314.07 15201.46
1993/03/31 14180.48 15040.79
1993/04/30 14313.45 15192.55
1993/05/31 14410.94 15277.93
1993/06/30 14646.66 15532.92
1993/07/31 14665.10 15553.27
1993/08/31 14971.88 15877.08
1993/09/30 15186.01 16057.92
1993/10/31 15205.31 16088.92
1993/11/30 15077.71 15947.17
1993/12/31 15375.81 16283.82
1994/01/31 15554.33 16469.78
1994/02/28 15147.92 16043.21
1994/03/31 14490.35 15389.93
1994/04/30 14573.85 15520.44
1994/05/31 14674.48 15655.00
1994/06/30 14621.67 15559.35
1994/07/31 14889.55 15844.55
1994/08/31 14922.33 15899.37
1994/09/30 14728.97 15665.97
1994/10/31 14409.65 15387.74
1994/11/30 14089.92 15109.53
1994/12/31 14451.81 15442.09
1995/01/31 14872.59 15883.43
1995/02/28 15299.63 16345.32
1995/03/31 15463.23 16533.13
1995/04/30 15478.12 16552.64
1995/05/31 15903.94 17080.83
1995/06/30 15773.81 16932.23
1995/07/31 15835.69 17092.74
1995/08/31 16015.17 17309.48
1995/09/30 16133.66 17419.05
1995/10/31 16358.53 17672.32
1995/11/30 16610.76 17965.51
1995/12/31 16763.80 18138.15
1996/01/31 16869.16 18275.10
1996/02/29 16786.86 18151.74
1996/03/31 16571.67 17919.76
1996/04/30 16505.31 17869.05
1996/05/31 16502.13 17861.90
1996/06/30 16650.55 18056.42
1996/07/31 16800.71 18220.73
1996/08/31 16779.25 18216.36
1996/09/30 16959.81 18471.39
1996/10/31 17174.20 18680.30
1996/11/30 17481.73 19022.15
1996/12/31 17397.23 18942.25
1997/01/31 17423.87 18978.06
1997/02/28 17571.44 19152.27
1997/03/31 17359.10 18896.97
1997/04/30 17482.16 19055.14
1997/05/31 17720.65 19341.73
1997/06/30 17924.65 19547.72
1997/07/31 18409.03 20089.19
1997/08/31 18239.59 19900.96
1997/09/30 18445.11 20137.18
1997/10/31 18554.53 20266.66
1997/11/30 18678.15 20385.83
1997/12/31 18936.69 20683.26
1998/01/31 19095.27 20896.71
1998/02/28 19080.07 20902.98
1998/03/31 19106.23 20921.38
1998/04/30 19028.83 20827.02
1998/05/31 19292.72 21156.71
1998/06/30 19350.52 21240.07
1998/07/31 19376.53 21293.38
1998/08/31 19678.24 21622.36
1998/09/30 19892.22 21891.78
1998/10/31 19882.20 21891.34
1998/11/30 19938.94 21968.18
1998/12/31 19980.83 22023.54
IMATRL PRASUN SHR__CHT 19981231 19990111 125433 R00000000000123

$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Spartan Minnesota Municipal Income Fund on December 31,
1988. As the chart shows, by December 31, 1998, the value of the
investment would have grown to $19,981 - a 99.81% increase on the
initial investment. For comparison, look at how the Lehman Brothers
Municipal Bond Index - a market value-weighted index of
investment-grade municipal bonds with maturities of one year or more -
did over the same period. With dividends and capital gains, if any,
reinvested, the same $10,000 would have grown to $22,024 - a 120.24%
increase.

UNDERSTANDING
PERFORMANCE

How a fund did yesterday
is no guarantee of how it
will do tomorrow. Bond prices,
for example, generally move in
the opposite direction of interest
rates. In turn, the share price,
return and yield of a fund that
invests in bonds will vary. That
means if you sell your shares
during a market downturn, you
might lose money. But if you
can ride out the market's ups
and downs, you may have a
gain.
(checkmark)

TOTAL RETURN COMPONENTS
YEARS ENDED DECEMBER 31,

1998 1997 1996 1995 1994

Dividend returns 4.80% 5.29% 5.22% 6.40% 5.42%

Capital returns 0.71% 3.56% -1.44% 9.60% -11.43%

Total returns 5.51% 8.85% 3.78% 16.00% -6.01%

DIVIDENDS AND YIELD
PERIODS ENDED DECEMBER 31, 1998 PAST 1 MONTH PAST 6 MONTHS PAST 1 YEAR

Dividends per share 4.40(cents) 26.58(cents) 53.08(cents)

Annualized dividend rate 4.53% 4.63% 4.68%

30-day annualized yield 3.95% - -

30-day annualized 6.75% - -
tax-equivalent yield

DIVIDENDS per share show the income paid by the fund for a set period
and do not reflect any tax reclassifications. If you annualize this
number, based on an average share price of $11.44 over the past one
month, $11.39 over the past six months and $11.35 over the past one
year, you can compare the fund's income over these three periods. The
30-day annualized YIELD is a standard formula for all bond funds based
on the yields of the bonds in the fund, averaged over the past 30
days. This figure shows you the yield characteristics of the fund's
investments at the end of the period. It also helps you compare funds
from different companies on an equal basis. The tax-equivalent yield
shows what you would have to earn on a taxable investment to equal the
fund's tax-free yield, if you're in the 41.44% combined effective 1999
federal and state income tax bracket, but does not reflect the payment
of the alternative minimum tax, if applicable.

FUND TALK: THE MANAGER'S OVERVIEW

MARKET RECAP

(photograph of Christine Thompson)

An interview with Christine Thompson, Portfolio Manager of Spartan
Minnesota Municipal Income Fund

Q. HOW DID THE FUND PERFORM, CHRISTINE?

A. For the 12-month period that ended December 31, 1998, the fund had
a total return of 5.51%. To get a sense of how the fund did relative
to its competitors, the Minnesota municipal debt funds average
returned 5.55% during the same one-year period, according to Lipper
Inc. Additionally, the Lehman Brothers Minnesota Enhanced Municipal
Bond Index - which tracks the types of securities in which the fund
invests - returned 6.16% for the same 12-month period.

Q. WHAT FACTORS CONTRIBUTED TO THE FUND'S PERFORMANCE?

A. While there weren't any disappointments in terms of individual
securities, the fund took a cautious approach toward Baa-rated
securities during the past year. Faced with falling interest rates,
investors increasingly sought out Baa-rated bonds because they offered
a good combination of more yield than higher-quality bonds, and
investment-grade credit quality. Growing demand coupled with weaker
supply helped Baa-rated securities outpace their higher-rated
counterparts during much of the year. I kept the fund's stake in
Baa-rated bonds relatively light because I didn't think that they
offered enough additional yield over high-quality bonds, given my
concerns that lower-quality bonds potentially could lag their
higher-rated counterparts if the U.S. economy were to slow.

Q. WHAT WERE SOME POSITIVES FOR THE FUND'S PERFORMANCE?

A. The fund's relatively large investments in intermediate bonds -
those with maturities of between eight and 15 years - was a plus.
That's because intermediate-term interest rates fell more in
percentage terms than long-term rates, so intermediate-maturity bonds
posted better performance as a result. I chose to focus on
intermediate-maturity bonds based on Fidelity's quantitative analysis,
which indicated that they offered the most attractive value given
their interest-rate sensitivity - the magnitude with which their
prices go up and down as interest rates fluctuate.

Q. WHY DID HEALTH CARE BONDS MAKE UP THE FUND'S SECOND-LARGEST SECTOR
CONCENTRATION AT THE END OF THE PERIOD?

A. Actually, the Minnesota health care industry already has
experienced much of the competitive shake-out that is currently
gripping most of the nation. Where stand-alone hospitals once
dominated the state's health care scene, managed care is now the norm,
with hospitals forming affiliations with employer groups and physician
networks. The Minneapolis/St. Paul market has probably developed
further than most regional markets, making a lot of the necessary
adjustments and emerging with stronger, competitive health care
systems as a result. Fidelity's research efforts have been focused on
finding hospitals that are skilled in managing in this environment.

Q. WHAT ARE INSURED BONDS AND WHY ARE THEY ATTRACTIVE?

A. In the past decade, a growing portion of new municipal-bond
issuance has been insured, with a record-setting 58% of all new
issuance becoming insured in 1998. Municipal bond insurance, which is
underwritten by private insurers, guarantees the timely payment of a
bond's interest and principal. In an environment where lower-quality
securities are priced expensively, insured bonds are attractive
largely because of that guarantee. Another factor that makes them
attractive is that an investor doesn't really have to give up much
yield for buying insured bonds as opposed to lower-quality bonds.
Shareholders should remember, however, that municipal bond insurance
doesn't immunize a bond from price fluctuations. Insured bonds, like
all bonds, will rise and fall in value in response to changes in
interest rates, supply, demand and other factors.

Q. CHRISTINE, WHAT'S YOUR OUTLOOK FOR THE MUNICIPAL MARKET?

A. From historical measures, municipals were priced quite attractively
compared to their U.S. Treasury counterparts at the end of the period.
One indication of munis' cheap prices was their yields, which were
almost 100% of Treasury yields at the end of the period. Historically,
municipals yield between 65% and 80% of Treasuries. If municipal bond
yields - which move in the opposite direction of their prices - move
back to their historical relationship with Treasuries because of more
favorable supply and demand conditions, then municipals are likely to
perform relatively well.

CHRISTINE THOMPSON ON
MINNESOTA'S ECONOMY:

"Minnesota's economy appears to
be in fairly good shape. Except for
a brief period during the strike
against Northwest Airlines, the state
created jobs at a pace in line with
the nation as a whole and
unemployment fell to just around 2%.
In addition, the state's
construction industry also is
strong, thanks to increased office
construction in the
Minneapolis/St. Paul area and
continued steady levels of housing
construction. That said, the state
currently is showing some signs
of weakness related to its exports.
Minnesota is more dependent on
trade with Asia than any other
Midwestern state, and problems in
other parts of the world are hurting
some of the state's major
employers."

(solid bullet) As of December 31, 1998, the
fund had 3.2% of investments in
bonds issued by Puerto Rico. As
a territory of the United States,
Puerto Rico issues bonds that are
free from federal taxes and state
income taxes.

FUND FACTS

GOAL: high current tax-free
income for Minnesota residents
by normally investing in
investment-grade municipal
securities whose interest is
free from federal income tax
and Minnesota personal income
tax

FUND NUMBER: 082

TRADING SYMBOL: FIMIX

START DATE: November 21,
1985
SIZE: as of December 31,
1998, more than $312
million

MANAGER: Christine
Thompson, since 1998;
manager, various Fidelity and
Spartan municipal income
funds; joined Fidelity in 1985
(checkmark)

INVESTMENT CHANGES

<TABLE>
<CAPTION>
<S> <C> <C>
TOP FIVE SECTORS AS OF
DECEMBER 31, 1998

% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE SECTORS 6 MONTHS AGO

General Obligations 33.2 31.2

Health Care 21.1 21.0

Electric Utilities 15.1 13.8

Education 11.6 12.4

Housing 5.3 9.2

AVERAGE YEARS TO MATURITY AS
OF DECEMBER 31, 1998

6 MONTHS AGO

Years 13.0 14.0

</TABLE>

AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY
DOLLAR AMOUNT.

DURATION AS OF DECEMBER 31,
1998

6 MONTHS AGO

Years 6.4 6.4

QUALITY DIVERSIFICATION
(MOODY'S RATINGS)

AS OF DECEMBER 31, 1998 AS OF JUNE 30, 1998
Aaa 50.6%
Aa, A 42.7%
Baa 5.4%
Short-term
investments 1.3%
Aaa 46.2%
Aa, A 47.3%
Baa 4.8%
Short-term
investments 1.7%
Row: 1, Col: 1, Value: 50.3
Row: 1, Col: 2, Value: 42.7
Row: 1, Col: 3, Value: 5.4
Row: 1, Col: 4, Value: 1.6
Row: 1, Col: 1, Value: 46.0
Row: 1, Col: 2, Value: 47.3
Row: 1, Col: 3, Value: 4.8
Row: 1, Col: 4, Value: 1.9

WHERE MOODY'S RATINGS ARE NOT AVAILABLE, WE HAVE USED S&P RATINGS.
AMOUNTS SHOWN ARE AS A PERCENTAGE OF THE FUND'S INVESTMENTS.

INVESTMENTS DECEMBER 31, 1998

Showing Percentage of Total Value of Investment in Securities

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
MUNICIPAL BONDS - 98.7%

MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)

MINNESOTA - 95.5%

Albany Independent School Aa1 $ 1,000,000 $ 1,080,140
District #745 (School
District Cr. Enhance Prog.)
Series A, 6% 2/1/16

Bloomington Gen. Oblig. Rfdg. Aa1 3,200,000 3,379,328
6.5% 12/1/00

Chanhassen Gen. Oblig. Impt.
(Cap. Appreciation) Series D:

0% 2/1/03 (AMBAC Insured) Aaa 1,730,000 1,484,496

0% 2/1/04 (AMBAC Insured) Aaa 1,700,000 1,397,655

Chisago Lakes Independent Aaa 2,000,000 1,986,340
School District #2144
(School Bldg.) 5% 2/1/23
(MBIA Insured)

Cloquet Poll. Cont. Rev. A- 4,345,000 4,603,310
Rfdg. (Potlach Corp. Proj.)
5.9% 10/1/26

Dakota County Hsg. & Redev. AAA 175,000 180,626
Auth. Interest For South
Saint Paul Rev. Rfdg.
(Single Family) Series A,
8.1% 9/1/12, LOC Govt.
Nat'l. Mtg. Assoc.

Elk River Independent School Aa1 1,600,000 1,677,616
District # 728 Series A,
5.15% 2/1/11

Hastings Independent School Aa1 5,000,000 4,932,900
District #200 (School
District Cr. Enhance Prog.)
Series A, 5% 2/1/22

Hennepin County Lease Rev. AA 5,000,000 5,423,550
Ctfs. of Prtn. Series A,
6.8% 5/15/17 (Pre-Refunded
to 11/15/01 @ 100) (d)

Lakeville Independent School
District:

(Cap. Appreciation) (School Aaa 1,330,000 853,035
District Cr. Enhance Prog.)
Series B, 0% 2/1/09 (FSA
Insured)

Rfdg. (Cap. Appreciation)
(School District Cr. Enhance
Prog.):

0% 2/1/04 Aa1 3,040,000 2,491,888

0% 2/1/05 Aa1 2,810,000 2,210,009

Maple Grove Gen. Oblig. Impt. Aa2 1,120,000 1,151,259
Series A, 5.2% 2/1/17

Minneapolis & Saint Paul Hsg.
& Redev. Auth. Health Care
Sys. Rev.:

(Health One Oblig. Group) Aaa 2,750,000 2,943,903
Series A, 7.4% 8/15/11 (MBIA
Insured)

Rfdg. (Healthspan Corp.) Aaa 4,500,000 4,414,635
Series A, 4.75% 11/15/18
(AMBAC Insured)

MUNICIPAL BONDS - CONTINUED

MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)

MINNESOTA - CONTINUED

Minneapolis & Saint Paul Hsg. AAA $ 1,845,000 $ 1,952,785
Fin. Board Rev. (Single
Family Mtg. Phase IX) 7.25%
8/1/21 (c)

Minneapolis & Saint Paul
Metro. Arpts. Commission:

Series A, 5% 1/1/19 (AMBAC Aaa 4,700,000 4,717,766
Insured)

Series 7, 7.8% 1/1/15 (c) Aaa 3,000,000 3,060,000

Minneapolis Cmnty. Dev. Agcy.
Tax Increment Rev. (Cap.
Appreciation):

0% 9/1/07 (MBIA Insured) Aaa 2,860,000 2,000,942

0% 9/1/08 (MBIA Insured) Aaa 4,600,000 3,053,664

Minneapolis Gen. Oblig.:

(Cap. Appreciation):

Series A:

0% 12/1/11 Aaa 2,830,000 1,590,205

0% 12/1/12 Aaa 2,000,000 1,060,260

Series B:

0% 12/1/02 Aaa 790,000 682,584

0% 12/1/03 Aaa 1,000,000 827,830

0% 12/1/06 Aaa 3,355,000 2,426,470

0% 12/1/07 Aaa 1,000,000 691,260

0% 12/1/08 Aaa 2,685,000 1,775,671

Rfdg.:

(Sales Tax):

5.6% 10/1/00 Aaa 1,000,000 1,037,410

6.15% 10/1/05 Aaa 2,000,000 2,171,360

6.25% 4/1/07 Aaa 2,000,000 2,161,460

(Sports Arena Proj.):

6% 4/1/06 Aaa 1,055,000 1,188,574

6% 10/1/06 Aaa 1,000,000 1,134,190

Series B, 5.1% 9/1/08 Aaa 2,000,000 2,112,820

Minneapolis Health Care
Facilities Rev. (Children's
Hosp. & Clinics) Series A:

4.5% 8/15/01 (FSA Insured) Aaa 1,275,000 1,300,411

4.5% 8/15/02 (FSA Insured) Aaa 1,360,000 1,392,232

Minneapolis Hosp. Rev. Rfdg. Aaa 3,000,000 3,250,020
(Fairview Hosp. &
Healthcare) Series A, 6.5%
1/1/11 (MBIA Insured)

MUNICIPAL BONDS - CONTINUED

MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)

MINNESOTA - CONTINUED

Minneapolis Spl. School
District #1 Ctfs. of Prtn.:

(School District Cr. Enhance Aa1 $ 2,575,000 $ 2,617,874
Prog.) Series B, 5% 2/1/13

Series A, 5.8% 2/1/10 (MBIA Aaa 2,000,000 2,186,300
Insured)

Minnesota Gen. Oblig.:

(Duluth Arpt.) Series B, Aaa 1,000,000 1,096,690
6.25% 8/1/14 (c)

Rfdg.:

4.875% 8/1/01 Aaa 2,250,000 2,319,750

5.3% 8/1/10 Aaa 1,450,000 1,508,319

5.2% 5/1/07 Aaa 5,000,000 5,357,800

5.6% 10/1/04 (Escrowed to Aaa 1,000,000 1,086,560
Maturity) (d)

5.8% 8/1/03 Aaa 1,000,000 1,084,070

6% 8/1/05 Aaa 10,255,000 11,485,600

6% 5/1/06 Aaa 2,000,000 2,250,360

6% 11/1/06 Aaa 1,500,000 1,698,840

Minnesota Higher Ed.
Facilities Auth. Rev.:

(Carleton College): Series 3 Aa3 2,000,000 2,150,500
L1, 5.75% 11/1/12

Series 4 N:

5% 11/1/18 Aa3 2,000,000 2,007,280

5.25% 11/1/04 Aa3 870,000 925,289

5.25% 11/1/05 Aa3 945,000 1,008,428

(MacAlester College) Series 4
C:

5.2% 3/1/08 Aa3 1,070,000 1,119,584

5.5% 3/1/12 Aa3 815,000 854,625

(Saint Johns Univ.) Series 4 A3 3,500,000 3,543,960
L, 5.4% 10/1/22

(Saint Thomas Univ.):

Series 3 C, 6.25% 9/1/16 A2 2,310,000 2,398,358

Series 4 M, 5.35% 4/1/17 A2 1,000,000 1,016,650

Rfdg.:

(Hamline Univ.) Series 4 I, Baa1 1,000,000 1,064,810
6% 10/1/12

(MacAlester College) Series 3 Aa3 2,175,000 2,344,759
J, 6.4% 3/1/22 (Pre-Refunded
to 3/1/02 @ 100) (d)

(Saint Thomas Univ.):

Series 3 R1:

5% 10/1/01 A2 1,000,000 1,026,400

5.6% 10/1/15 A2 1,000,000 1,035,460

Series 3 R2:

5.45% 9/1/07 A2 650,000 683,170

5.6% 9/1/14 A2 4,275,000 4,437,493

MUNICIPAL BONDS - CONTINUED

MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)

MINNESOTA - CONTINUED

Minnesota Hsg. Fin. Agcy.:

(Single Family Mtg.):

Series A:

6.95% 7/1/16 Aa2 $ 740,000 $ 783,793

8% 7/1/29 (c) Aa2 385,000 393,143

Series B, 5.8% 7/1/25 (c) Aa2 7,000,000 7,185,220

Series E, 6.85% 1/1/24 (c) Aa2 1,000,000 1,060,150

Series H, 6.5% 1/1/26 (c) Aa2 1,690,000 1,778,708

Hsg. Dev. Rev. Series A:

6.95% 2/1/14 Aa2 1,000,000 1,060,370

6.95% 8/1/17 Aa2 1,000,000 1,065,210

7.05% 8/1/27 Aa2 1,250,000 1,330,613

Minnesota Pub. Facilities
Auth. Wtr. Poll. Cont. Rev.:

Rfdg. Series A:

5% 3/1/06 Aaa 1,000,000 1,060,370

5% 3/1/09 Aaa 1,610,000 1,706,198

5% 3/1/16 Aaa 1,000,000 1,010,700

6% 3/1/07 Aaa 3,000,000 3,398,820

Series A:

6.1% 3/1/02 Aaa 1,855,000 1,983,385

6.35% 3/1/01 Aaa 1,000,000 1,055,350

7% 3/1/04 Aaa 1,495,000 1,715,004

Northern Muni. Pwr. Agcy.
Elec. Sys. Rev. Rfdg.:

Series B:

4.75% 1/1/20 (AMBAC Insured) Aaa 3,500,000 3,409,315

5.5% 1/1/18 (AMBAC Insured) Aaa 4,500,000 4,682,655

5.25% 1/1/13 (FSA Insured) Aaa 1,500,000 1,587,180

Northfield College Facilities
Rev. Rfdg. (St. Olaf
College Proj.):

6.3% 10/1/12 A3 1,455,000 1,570,236

6.4% 10/1/21 A3 1,690,000 1,826,552

Rochester Health Care
Facilities Rev.:

(Mayo Foundation):

Series A:

5.375% 11/15/18 AA+ 2,500,000 2,594,800

5.5% 11/15/27 AA+ 5,750,000 6,026,633

Series H, 6.026% 11/15/15 AA+ 13,000,000 13,947,172

MUNICIPAL BONDS - CONTINUED

MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)

MINNESOTA - CONTINUED

Rochester Health Care
Facilities Rev.: - continued

Rfdg. (Mayo Foundation/Mayo
Med. Ctr.) Series I:

5.875% 11/15/08 AA+ $ 1,000,000 $ 1,122,450

5.9% 11/15/09 AA+ 1,000,000 1,125,230

5.9% 11/15/10 AA+ 2,250,000 2,529,653

Rosemont Independent School Aaa 2,000,000 1,021,840
District #196 (Cap.
Appreciation) (School
District Cr. Enhance Prog.)
Series B, 0% 6/1/13 (FSA
Insured)

Saint Cloud Hosp. Facilities
Rev. Rfdg. (Saint Cloud
Hosp.):

Series A, 5.5% 7/1/05 (AMBAC Aaa 995,000 1,078,282
Insured)

Series B, 5% 7/1/20 (AMBAC Aaa 1,000,000 999,490
Insured)

Saint Cloud Independent Aaa 1,000,000 1,067,570
School District #742 Series
A, 6.1% 2/1/10 (FGIC Insured)

Saint Louis County (Jail Aaa 1,420,000 1,448,301
Rev.) Series A, 4.75%
12/1/08 (AMBAC Insured)

Saint Louis Park Health Care
Facilities Rev.:

(Healthsystem Obligated) Aaa 2,750,000 2,778,215
Series A, 5.2% 7/1/23 (AMBAC
Insured)

Series B, 5.1% 7/1/13 (AMBAC Aaa 3,600,000 3,670,452
Insured)

Saint Paul Gen. Oblig. (Block Aa2 2,000,000 1,925,020
39 Proj.) 4.75% 2/1/25

Saint Paul Hsg. & Redev. BBB+ 2,600,000 2,532,322
Auth. Healthcare Facilities
Rev. (Regions Hosp. Proj.)
5.3% 5/15/28

Saint Paul Hsg. & Redev.
Auth. Hosp. Rev.:

(Healtheast Proj.) Series B, Baa3 3,410,000 3,644,097
6.625% 11/1/17

Rfdg. (Healtheast Proj.)
Series A:

5.5% 11/1/09 Baa3 1,580,000 1,627,985

6.625% 11/1/17 Baa3 3,895,000 4,162,392

Saint Paul Independent School
District #625:

(School District Cr. Enhance
Prog.):

Series A, 4.75% 2/1/16 Aa1 1,000,000 984,910

Series B, 5.8% 2/1/12 Aa1 1,200,000 1,293,720

Series C:

6.125% 2/1/03 Aa3 1,225,000 1,327,471

6.125% 2/1/04 Aa3 1,300,000 1,437,150

6.125% 2/1/05 Aa3 1,350,000 1,506,128

Saint Paul Port Auth. Energy Aaa 1,000,000 1,056,990
Park Tax Increment Rev.
Rfdg. 5% 2/1/08 (FSA Insured)

MUNICIPAL BONDS - CONTINUED

MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)

MINNESOTA - CONTINUED

Seaway Port Auth. Duluth Ind. Aa3 $ 2,750,000 $ 2,983,998
Dev. Dock & Wharf Rev. Rfdg.
(Cargill, Inc. Proj.) Series
B, 6.8% 5/1/12 (e)

Shakopee Independent School Aa1 1,575,000 1,605,933
District #720 4.5% 2/1/09

Southern Minnesota Muni. Pwr.
Agcy. Pwr. Supply Sys. Rev.:

(Cap. Appreciation) Series B, Aaa 2,500,000 2,323,975
0% 1/1/01 (MBIA Insured)

Rfdg. Series A, 5% 1/1/12 A2 6,500,000 6,518,525

Series A, 5% 1/1/08 (AMBAC Aaa 4,000,000 4,226,320
Insured)

Stillwater Independent School Aa1 2,110,000 2,144,055
District #834 Rfdg. 5%
2/1/15

Univ. of Minnesota Gen. Aa2 9,000,000 9,330,840
Oblig. Rfdg. 4.8% 8/15/03

Washington County Hsg. & Baa3 2,500,000 2,435,150
Redev. Auth. Hosp.
Facilities Rev. (Healtheast
Proj.) 5.375% 11/15/18

West Saint Paul Independent
School District #197 (Cap.
Appreciation) (School
District Cr. Enhance Prog.):

0% 2/1/02 (MBIA Insured) Aaa 1,550,000 1,386,708

0% 2/1/03 (MBIA Insured) Aaa 1,180,000 1,012,546

Western Minnesota Muni. Pwr.
Agcy. Pwr. Supply Rev.:

Rfdg. Series A:

5.375% 1/1/08 (AMBAC Insured) Aaa 4,000,000 4,331,760

6.25% 1/1/04 (AMBAC Insured) Aaa 2,600,000 2,877,368

6.25% 1/1/05 (AMBAC Insured) Aaa 3,000,000 3,360,870

Series A:

5.4% 1/1/09 (AMBAC Insured) Aaa 6,825,000 7,379,668

6.375% 1/1/16 (Escrowed to Aaa 1,940,000 2,203,995
Maturity) (d)

Series B, 6% 1/1/04 (AMBAC Aaa 1,000,000 1,095,440
Insured)

293,895,929

PUERTO RICO - 3.2%

Puerto Rico Commonwealth Aaa 3,000,000 3,243,690
Infrastructure Fing. Auth.
Spl. Tax Rev. Rfdg. Series
A, 5.25% 7/1/10 (AMBAC
Insured)

Puerto Rico Commonwealth Rev. Baa1 1,000,000 1,061,400
Rfdg. Series A, 6% 7/1/14

Puerto Rico Elec. Pwr. Auth. Aaa 1,500,000 1,572,060
Pwr. Rev. Rfdg. 5.25% 7/1/14
(MBIA Insured)

MUNICIPAL BONDS - CONTINUED

MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)

PUERTO RICO - CONTINUED

Puerto Rico Ind. Med. & Aa3 $ 1,250,000 $ 1,366,875
Envir. Poll. Cont.
Facilities Fing. Auth. Rev.
(Motorola, Inc. Proj.)
Series A, 6.75% 1/1/14

Puerto Rico Pub. Fin. Corp. Aaa 2,375,000 2,520,445
Commonwealth Appropriation
Series A, 5% 6/1/09 (AMBAC
Insured)

9,764,470

TOTAL MUNICIPAL BONDS 303,660,399
(Cost $285,954,776)

MUNICIPAL NOTES - 1.3%

MINNESOTA - 1.3%

Cohasset Rev. Rfdg.
(Minnesota Pwr. & Lt. Co.
Proj.):

Series 1997 A, 4%, LOC 1,700,000 1,700,000
ABN-AMRO Bank NV, VRDN (b)

Series 1997 B, 4%, LOC 700,000 700,000
ABN-AMRO Bank NV, VRDN (b)

Series 1997 C, 4%, LOC 650,000 650,000
ABN-AMRO Bank NV, VRDN (b)

Duluth Econ. Dev. Auth. 1,000,000 1,000,000
Health Care Facilities Rev.
Rfdg. (Miller-Dwan Med. Ctr.
Proj. #97) 4%, LOC Cr. Local
De France, VRDN (b)

TOTAL MUNICIPAL NOTES 4,050,000
(Cost $4,050,000)

TOTAL INVESTMENT IN $ 307,710,399
SECURITIES - 100%
(Cost $290,004,776)
</TABLE>

SECURITY TYPE ABBREVIATION
VRDN VARIABLE RATE DEMAND NOTE
LEGEND
(a) Standard & Poor's credit ratings are used in the absence of a
rating by Moody's Investors Service, Inc.

(b) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.

(d) Security collateralized by an amount sufficient to pay interest
and principal.

(e) Restricted securities - Investment in securities not registered
under the Securities Act of 1933 (see Note 2 of Notes to Financial
Statements).

SECURITY ACQUISTION DATE ACQUISITION COST

Seaway Port Auth. Duluth Ind. 5/20/92 $ 2,750,000
Dev. Dock & Wharf Rev. Rfdg.
(Cargill, Inc. Proj.) Series
B, 6.8% 5/1/12

OTHER INFORMATION

The composition of long-term debt holdings as a percentage of total
value of investments in securities, is as follows (ratings are
unaudited):

MOODY'S RATINGS S&P RATINGS

Aaa, Aa, A 80.4% AAA, AA, A 77.1%

Baa 4.6% BBB 4.7%

Ba 0.0% BB 0.0%

B 0.0% B 0.0%

Caa 0.0% CCC 0.0%

Ca, C 0.0% CC, C 0.0%

D 0.0%

The distribution of municipal securities by revenue source, as a
percentage of total value of investments in securities, is as follows:

General Obligations 33.2%

Health Care 21.1

Electric Utilities 15.1

Education 11.6

Housing 5.3

Others (individually less 13.7
than 5%)

TOTAL 100.0%

INCOME TAX INFORMATION

At December 31, 1998, the aggregate cost of investment securities for
income tax purposes was $290,004,776. Net unrealized appreciation
aggregated $17,705,623, of which $17,782,052 related to appreciated
investment securities and $76,429 related to depreciated investment
securities.

At December 31, 1998, the fund had a capital loss carryforward of
approximately $2,863,000 all of which will expire on December 31,
2003.

During fiscal year ended 1998, 100% of the fund's income dividends was
free from federal income tax, and 8.34% of the fund's income dividends
was subject to the federal alternative minimum tax (unaudited).

FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998

ASSETS

Investment in securities, at $ 307,710,399
value (cost $290,004,776) -
See accompanying schedule

Receivable for fund shares 308,364
sold

Interest receivable 4,640,845

TOTAL ASSETS 312,659,608

LIABILITIES

Payable to custodian bank $ 79,928

Payable for fund shares 110,045
redeemed

Distributions payable 307,347

Accrued management fee 53,107

Other payables and accrued 73,128
expenses

TOTAL LIABILITIES 623,555

NET ASSETS $ 312,036,053

Net Assets consist of:

Paid in capital $ 297,657,600

Accumulated undistributed net (3,327,170)
realized gain (loss) on
investments

Net unrealized appreciation 17,705,623
(depreciation) on investments

NET ASSETS, for 27,338,919 $ 312,036,053
shares outstanding

NET ASSET VALUE, offering $11.41
price and redemption price
per share ($312,036,053
(divided by) 27,338,919
shares)

STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998

INTEREST INCOME $ 15,830,021

EXPENSES

Management fee $ 1,164,692

Transfer agent fees 331,653

Accounting fees and expenses 128,658

Non-interested trustees' 797
compensation

Custodian fees and expenses 16,406

Registration fees 75,388

Audit 29,606

Legal 17,524

Reports to shareholders 8,516

Miscellaneous 956

Total expenses before 1,774,196
reductions

Expense reductions (121,461) 1,652,735

NET INTEREST INCOME 14,177,286

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

Investment securities 2,640,768

Futures contracts 34,479 2,675,247

Change in net unrealized
appreciation (depreciation)
on:

Investment securities (348,961)

Futures contracts 1,497 (347,464)

NET GAIN (LOSS) 2,327,783

NET INCREASE (DECREASE) IN $ 16,505,069
NET ASSETS RESULTING FROM
OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31, 1998 YEAR ENDED DECEMBER 31, 1997

INCREASE (DECREASE) IN NET
ASSETS

Operations Net interest income $ 14,177,286 $ 14,541,833

Net realized gain (loss) 2,675,247 2,813,547

Change in net unrealized (347,464) 7,400,124
appreciation (depreciation)

NET INCREASE (DECREASE) IN 16,505,069 24,755,504
NET ASSETS RESULTING FROM
OPERATIONS

Distributions to shareholders (14,177,286) (14,541,833)
from net interest income

Share transactions Net 53,743,312 43,447,779
proceeds from sales of shares

Reinvestment of 10,626,668 11,025,722
distributions from net
interest income

Cost of shares redeemed (51,269,062) (62,511,464)

NET INCREASE (DECREASE) IN 13,100,918 (8,037,963)
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) 15,428,701 2,175,708
IN NET ASSETS

NET ASSETS

Beginning of period 296,607,352 294,431,644

End of period $ 312,036,053 $ 296,607,352

OTHER INFORMATION
Shares

Sold 4,731,591 3,940,646

Issued in reinvestment of 935,606 998,311
distributions

Redeemed (4,515,295) (5,674,237)

Net increase (decrease) 1,151,902 (735,280)

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
YEARS ENDED DECEMBER 31,

1998 1997 1996 1995 1994

SELECTED PER-SHARE DATA

Net asset value, beginning $ 11.330 $ 10.940 $ 11.100 $ 10.130 $ 11.520
of period

Income from Investment .531 .551 .562 .613 .633
Operations Net interest
income

Net realized and unrealized .080 .390 (.160) .972 (1.310)
gain (loss)

Total from investment .611 .941 .402 1.585 (.677)
operations

Less Distributions

From net interest income (.531) (.551) (.562) (.613) (.633)

From net realized gain - - - - (.060)

In excess of net realized - - - (.002) (.020)
gain

Total distributions (.531) (.551) (.562) (.615) (.713)

Net asset value, end of period $ 11.410 $ 11.330 $ 10.940 $ 11.100 $ 10.130

TOTAL RETURN A 5.51% 8.85% 3.78% 16.00% (6.01)%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period $ 312,036 $ 296,607 $ 294,432 $ 315,167 $ 276,934
(000 omitted)

Ratio of expenses to average .55% B .56% B .60% .57% .59%
net assets

Ratio of net interest income 4.68% 5.00% 5.15% 5.69% 5.97%
to average net assets

Portfolio turnover rate 17% 18% 17% 49% 26%

</TABLE>

A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).

NOTES TO FINANCIAL STATEMENTS
For the period ended December 31, 1998

1. SIGNIFICANT ACCOUNTING POLICIES.

Spartan Minnesota Municipal Income Fund (the fund) is a fund of
Fidelity Municipal Trust (the trust) and is authorized to issue an
unlimited number of shares. The trust is registered under the
Investment Company Act of 1940, as amended (the 1940 Act), as an
open-end management investment company organized as a Massachusetts
business trust. The financial statements have been prepared in
conformity with generally accepted accounting principles which require
management to make certain estimates and assumptions at the date of
the financial statements. The following summarizes the significant
accounting policies of the fund:

SECURITY VALUATION. Securities are valued based upon a computerized
matrix system and/or appraisals by a pricing service, both of which
consider market transactions and dealer-supplied valuations.
Securities (including restricted securities) for which quotations are
not readily available are valued 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 with
remaining maturities of sixty days or less for which quotations are
not readily available are valued at amortized cost or original cost
plus accrued interest, both of which approximate current value.

INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."

INTEREST INCOME. Interest income, which includes amortization of
premium and accretion of original issue discount, is accrued as
earned.

EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.

DISTRIBUTIONS TO SHAREHOLDERS. Distributions are declared daily and
paid monthly from net interest income. Distributions from realized
gains, if any, 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 market discount, capital loss carryforwards and losses
deferred due to wash sales and futures. The fund also utilized
earnings and profits distributed to shareholders on redemption of
shares as a part of the dividends paid deduction for income tax
purposes.

1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED

DISTRIBUTIONS TO SHAREHOLDERS -
CONTINUED

and tax basis differences that will reverse in a subsequent period.
Any taxable 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.

WHEN-ISSUED SECURITIES. The fund may purchase or sell securities on a
when-issued basis. Payment and delivery may take place a month or more
after the date of the transaction. The price of the underlying
securities is fixed at the time the transaction is negotiated. The
fund may receive compensation for interest forgone in the purchase of
a when-issued security. Losses may arise due to changes in the market
value of the underlying securities, if the counterparty does not
perform under the contract, or if the issuer does not issue the
securities due to political, economic, or other factors.

FUTURES CONTRACTS. The fund may use futures contracts to manage its
exposure to the bond market and to fluctuations in interest rates.
Buying futures tends to increase the fund's exposure to the underlying
instrument, while selling futures tends to decrease the fund's
exposure to the underlying instrument or hedge other fund investments.
Losses may arise from changes in the value of the underlying
instruments or if the counterparties do not perform under the
contracts' terms. Gains (losses) are realized upon the expiration or
closing of the futures contracts. Futures contracts are valued at the
settlement price established each day by the board of trade or
exchange on which they are traded.

RESTRICTED SECURITIES. The fund is permitted to invest in securities
that are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from
registration or to the public if the securities are registered.
Disposal of these securities may involve time-consuming negotiations
and expense, and prompt sale at an acceptable price may be difficult.
At the end of the period, restricted securities (excluding 144A
issues) amounted to $2,983,998 or 1.0% of net assets.

3. PURCHASES AND SALES OF INVESTMENTS.

Purchases and sales of securities, other than short-term securities,
aggregated $62,722,363 and $49,870,022, respectively.

The market value of futures contracts opened and closed during the
period amounted to $16,611,120 and $18,672,729, respectively.

4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.

MANAGEMENT FEE. As the fund's investment adviser, Fidelity Management
& Research Company (FMR) receives a monthly fee that is calculated on
the basis of a group fee rate plus a fixed individual fund fee rate
applied to the average net

4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED

MANAGEMENT FEE - CONTINUED

assets of the 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 .1100% to
..3700% for the period. The annual individual fund fee rate is .25%. 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. For the
period, the management fee was equivalent to an annual rate of .38% of
average net assets.

TRANSFER AGENT AND ACCOUNTING FEES. UMB Bank, n.a. (UMB) is the
custodian and transfer and shareholder servicing agent for the fund.
UMB has entered into a sub-contract with Fidelity Service Company,
Inc. (FSC), an affiliate of FMR, under which FSC performs the
activities associated with the fund's transfer and shareholder
servicing agent and accounting functions. The fund pays 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. The accounting fee is
based on the level of average net assets for the month plus
out-of-pocket expenses.

For the period, the transfer agent fees were equivalent to an annual
rate of .11% of average net assets.

5. EXPENSE REDUCTIONS.

FMR voluntarily agreed to reimburse the fund's operating expenses
(excluding interest, taxes, brokerage commissions and extraordinary
expenses) above an annual rate of .55% of average net assets. For the
period, the reimbursement reduced the expenses by $107,598.

In addition, the fund has entered into arrangements with its custodian
and transfer agent whereby credits realized as a result of uninvested
cash balances were used to reduce a portion of the fund's expenses.
During the period, the fund's custodian and transfer agent fees were
reduced by $6,937 and $6,926, respectively, under these arrangements.

REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Municipal Trust and the Shareholders of
Spartan Minnesota Municipal Income Fund:

In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Spartan Minnesota Municipal Income Fund (a fund of Fidelity Municipal
Trust) at December 31, 1998, and the results of its operations, the
changes in its net assets and the financial highlights for the periods
indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the
responsibility of the fund's management; our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe
that our audits, which included confirmation of securities at December
31, 1998
by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.

/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
February 5, 1999

PROXY VOTING RESULTS

A special meeting of the fund's shareholders was held on December 16,
1998. The results of votes taken among shareholders on proposals
before them are reported below. Each vote reported represents one
dollar of net asset value held on the record date for the meeting.

PROPOSAL 1

To elect as Trustees the following twelve nominees.

# OF % OF
VOTES CAST VOTES CAST
RALPH F. COX
Affirmative 941,676,281.56 96.946

Withheld 29,667,606.92 3.054

TOTAL 971,343,888.48 100.000

PHYLLIS BURKE DAVIS
Affirmative 941,015,539.45 96.878

Withheld 30,328,349.03 3.122

TOTAL 971,343,888.48 100.000

ROBERT M. GATES
Affirmative 940,616,433.83 96.837

Withheld 30,727,454.65 3.163

TOTAL 971,343,888.48 100.000

EDWARD C. JOHNSON 3D
Affirmative 940,665,834.51 96.842

Withheld 30,678,053.97 3.158

TOTAL 971,343,888.48 100.000

E. BRADLEY JONES
Affirmative 937,879,239.66 96.555

Withheld 33,464,648.82 3.445

TOTAL 971,343,888.48 100.000

DONALD J. KIRK
Affirmative 941,794,381.77 96.958

Withheld 29,549,506.71 3.042

TOTAL 971,343,888.48 100.000

# OF % OF
VOTES CAST VOTES CAST
PETER S. LYNCH
Affirmative 941,809,883.91 96.959

Withheld 29,534,004.57 3.041

TOTAL 971,343,888.48 100.000

WILLIAM O. MCCOY
Affirmative 941,735,873.46 96.952

Withheld 29,608,015.02 3.048

TOTAL 971,343,888.48 100.000

GERALD C. MCDONOUGH
Affirmative 939,119,647.40 96.683

Withheld 32,224,241.08 3.317

TOTAL 971,343,888.48 100.000

MARVIN L. MANN
Affirmative 942,029,292.87 96.982

Withheld 29,314,595.61 3.018

TOTAL 971,343,888.48 100.000

ROBERT C. POZEN
Affirmative 941,499,581.49 96.928

Withheld 29,844,306.99 3.072

TOTAL 971,343,888.48 100.000

THOMAS R. WILLIAMS
Affirmative 939,450,603.85 96.717

Withheld 31,893,284.63 3.283

TOTAL 971,343,888.48 100.000

PROPOSAL 2

To ratify the selection of PricewaterhouseCoopers LLP as independent
accountants of the fund.

# OF % OF
VOTES CAST VOTES CAST
Affirmative 203,958,505.02 95.893

Against 1,523,295.17 .717

Abstain 7,210,999.60 3.390

TOTAL 212,692,799.79 100.000

PROPOSAL 3

To authorize the Trustees to adopt an Amended and Restated Declaration
of Trust.

# OF % OF
VOTES CAST VOTES CAST
Affirmative 838,802,769.40 88.254

Against 59,832,161.19 6.295

Abstain 51,803,661.60 5.451

TOTAL 950,438,592.19 100.000

Broker Non-Votes 20,905,296.29

PROPOSAL 4

# OF % OF
VOTES CAST VOTES CAST
Affirmative 168,343,887.87 83.897

Against 18,273,372.48 9.106

Abstain 14,039,121.00 6.997

TOTAL 200,656,381.35 100.000

Broker Non-Votes 12,036,418.44

PROPOSAL 5

To approve an amended management contract for the fund.

# OF % OF
VOTES CAST VOTES CAST
Affirmative 187,894,724.38 88.341

Against 11,705,904.92 5.504

Abstain 13,092,170.49 6.155

TOTAL 212,692,799.79 100.000

PROPOSAL 7

To replace the fund's fundamental 80% investment policy with a
non-fundamental policy.

# OF % OF
VOTES CAST VOTES CAST
Affirmative 162,710,942.49 81.089

Against 20,543,513.78 10.238

Abstain 17,401,925.08 8.673

TOTAL 200,656,381.35 100.000

Broker Non-Votes 12,036,418.44

PROPOSAL 8

To eliminate the fund's fundamental investment policy regarding
investment in below investment-grade debt securities.

# OF % OF
VOTES CAST VOTES CAST
Affirmative 161,550,228.32 80.511

Against 25,049,550.71 12.484

Abstain 14,056,602.32 7.005

TOTAL 200,656,381.35 100.000

Broker Non-Votes 12,036,418.44

PROPOSAL 9

To eliminate the fund's fundamental 20% investment policy.

# OF % OF
VOTES CAST VOTES CAST
Affirmative 161,464,783.55 80.468

Against 21,374,925.47 10.653

Abstain 17,816,672.33 8.879

TOTAL 200,656,381.35 100.000

Broker Non-Votes 12,036,418.44

OF SPECIAL NOTE

INTRODUCING FIDELITY'S NEW, REORGANIZED PROSPECTUS

We invite you to spend a moment and review our new prospectus. It is
designed to help make your investment decision easier, no matter which
of the Fidelity funds you invest in.

MANAGING YOUR INVESTMENTS

BY PHONE

(PHONE_GRAPHIC)TOUCHTONE XPRESS
1-800-544-5555

PRESS
1 For mutual fund and brokerage trading.

2 For quotes.*

3 For account balances and holdings.

4 To review orders and mutual
fund activity.

5 To change your PIN.

*0 To speak to a Fidelity representative.

BY PC
Fidelity's Web site on the Internet provides a wide range of
information, including daily financial news, fund performance,
interactive planning tools and news about Fidelity products and
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(COMPUTER_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM

(COMPUTER_GRAPHIC)
FIDELITY ON-LINE XPRESS+(registered trademark)

INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA

OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Fred L. Henning, Jr., Vice President
Dwight D. Churchill, Vice President
Christine J. Thompson, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
Matthew N. Karstetter, Deputy Treasurer
Stanley N. Griffith, Assistant Vice President
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Thomas J. Simpson, Assistant Treasurer

ADVISORY BOARD
J. Gary Burkhead

GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA

TRANSFER AND SHAREHOLDER
SERVICING AGENTS
UMB Bank, n.a.
Kansas City, MO

Fidelity Service Company, Inc.
Boston, MA

* INDEPENDENT TRUSTEES

MNF-ANN-0299 70458
1.539899.101

CUSTODIAN
UMB Bank, n.a.
Kansas City, MO

FIDELITY'S MUNICIPAL BOND FUNDS
Spartan(registered trademark) Arizona Municipal Income
Spartan California Municipal Income
Spartan Connecticut Municipal Income
Spartan Florida Municipal Income
Spartan Intermediate Municipal Income
Spartan Maryland Municipal Income
Spartan Massachusetts Municipal Income
Spartan Michigan Municipal Income
Spartan Minnesota Municipal Income
Spartan Municipal Income
Spartan New Jersey Municipal Income
Spartan New York Municipal Income
Spartan Ohio Municipal Income
Spartan Pennsylvania Municipal Income
Spartan Short-Intermediate
Municipal Income

(fidelity_logo_graphic)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com