<PAGE>
1
- -------------------------------------------------------------------------------
DAILY TAX FREE 600 FIFTH AVENUE NEW YORK, NY 10020
INCOME FUND, INC. 212-830-5200
===============================================================================
Dear Shareholder:
We are pleased to present the semi-annual report of Daily Tax Free Income Fund,
Inc. for the period ended April 30, 1995.
The Fund had net assets of $599,753,511 and 5,542 active shareholders as of
April 30, 1995. The Federal Reserve, during the last fiscal year, has raised the
Federal Funds rate from 3.00% to 6.00%. Rates on tax exempt investments have
risen accordingly.
Thank you for the support and look forward to continuing to serve your cash
management needs.
Sincerely,
/s/ Steven W. Duff
Steven Duff
President
- -------------------------------------------------------------------------------
<PAGE>
2
- -------------------------------------------------------------------------------
DAILY TAX FREE INCOME FUND, INC.
STATEMENT OF NET ASSETS
APRIL 30, 1995
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
----------------
Face Value Standard
Amount Yield (Note 1) Moody's & Poor's
------ ----- -------- ------- ------
Variable Rate Demand Instruments -
Private Placements (c) (21.14%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 340,000 The Bank of California, N.A. LOC covering two issues
due 12-15-95 through 06-30-96 5.85% to 7.00% $ 340,000 P1 A1+
13,020,132 Banc One Arizona LOC covering nine issues
due 12-01-95 through 01-01-11 5.85% 13,020,132 P1 A1
13,386,000 Bank of Tokyo, Ltd. LOC covering four issues
due 12-01-09 through 12-01-15 5.40% to 5.85% 13,386,000 P1 A1+
482,499 Central Trust Company LOC Backed by Bank of New York
covering two issues due 01-01-99 5.40% 482,499 P1 A1
2,369,213 Comerica Bank - Detroit LOC covering four issues
due 02-01-00 through 05-01-05 5.40% 2,369,213 P1 A1
1,500,000 Credit Suisse covering one issue due 12-01-00 5.40% 1,500,000 P1 A1+
6,000,000 Creditanstalt-Bankverein LOC covering two issues
due 11-01-05 through 06-01-10 5.40% 6,000,000 P1 A1+
2,500,000 Dresdner Bank AG LOC covering two issues
due 12-28-14 through 08-15-15 5.40% 2,500,000 P1 A1+
4,300,760 First Capital Bank LOC Backed by Daiwa Bank Ltd.
covering one issue due 12-01-10 5.40% 4,300,760 P1 A1
4,650,000 The First National Bank of Maryland LOC covering two issues
due 07-01-04 through 09-01-17 5.50% to 5.85% 4,650,000 P1 A1
7,337,211 The Huntington National Bank LOC covering five issues
due 05-15-95 through 10-01-05 5.40% to 6.12% 7,337,211 P1 A1
1,315,000 Key Bank, N.A. LOC covering one issue due 07-01-15 5.40% 1,315,000 P1 A1
699,055 Nations Bank, N.A. LOC covering one issue due 12-01-99 5.85% 699,055 P1 A1
580,000 National Westminster Bank PLC
LOC covering one issue due 12-15-95 5.40% 580,000 P1 A1+
4,721,000 Northeastern Bank of Pennsylvania LOC covering two issues
due 12-01-00 through 06-30-02 5.85% 4,721,000 P1 A1+
5,465,000 Norwest Bank, N.A. LOC covering five issues
due 12-01-95 through 12-01-15 5.58% to 5.85% 5,465,000 P1 A1+
30,354,400 Seattle-First National Bank
LOC Backed by Bank of America NT & SA LOC,
covering sixteen issues due 11-15-95 through 11-15-15 5.85% 30,354,400 P1 A1
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
3
- -------------------------------------------------------------------------------
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
----------------
Face Value Standard
Amount Yield (Note 1) Moody's & Poor's
------ ----- -------- ------- ------
Variable Rate Demand Instruments -
Private Placements (c) (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 2,000,000 Societe Generale LOC covering one issue due 12-01-95 5.40% $ 2,000,000 P1 A1+
1,910,000 State Street Bank & Trust Company
LOC covering one issue due 01-01-02 5.40% 1,910,000 P1 A1+
3,125,000 Union Bank LOC covering one issue due 12-01-14 5.85% 3,125,000 P1 A1+
2,100,000 Wells Fargo Bank, N.A. LOC covering two issues
due 12-15-04 through 08-01-05 5.49% 2,100,000 P1 A1+
4,000,000 York Bank and Trust covering one issue due 12-01-14 (b) 4.62% 4,000,000
14,604,017 Zion's National Bank Liquidity Facility covering one issue
due 12-10-15 5.85% 14,604,017
----------- -----------
126,759,287 Total Variable Rate Demand Instruments - Private Placements 126,759,287
----------- -----------
<CAPTION>
Variable Rate Demand Instruments -
Participations (c) (10.66%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 859,765 The Bank of California, N.A. LOC covering one issue
due 12-31-09 5.22% $ 859,765 P1 A1+
3,792,281 The Bank of New York LOC covering eight issues
due 10-01-98 through 05-01-01 5.31% to 5.50% 3,792,281 P1 A1+
34,759,794 Chemical Bank LOC covering twenty-five issues
due 06-01-95 through 05-01-13 4.95% to 5.85% 34,759,794 P1 A1+
2,582,488 The First National Bank of Maryland
LOC covering ten issues
due 09-30-95 through 09-15-02 5.40% 2,582,488 P1 A1
302,750 LaSalle National LOC covering one issue 07-01-00 5.40% 302,750 P1 A1+
9,360,250 PNC, N.A. LOC covering three issues
due 07-29-97 through 10-15-13 5.76% to 6.90% 9,360,250 P1
2,250,000 The Sumitomo Bank of California
LOC Backed by Sumitomo Bank, Ltd.
LOC covering one issue due 05-01-96 5.85% 2,250,000 P1 A1+
10,000,000 Wells Fargo Bank, N.A.
LOC covering one issue due 11-01-09 5.85% 10,000,000 P1 A1+
----------
63,907,328 Total Variable Rate Demand Instruments - Participations 63,907,328
---------- ----------
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
4
- -------------------------------------------------------------------------------
DAILY TAX FREE INCOME FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
APRIL 30, 1995
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- ------
Tax Exempt Commercial Paper (7.28%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 6,300,000 Burke County, Georgia (Oglethorpe Power Co.)
LOC Credit Suisse 05/18/95 4.15% $ 6,300,000 P1 A1+
4,900,000 City of Burlington, Kansas
Customized Purchase PCRB
(Kansas City Power and Light Company Project)
Series 1987 B
LOC Deutsche Bank 05/18/95 4.15 4,900,000 P1 A1+
12,500,000 Houston Water & Sewer 05/11/95 4.25 12,500,000 P1 A1
4,500,000 Maricopa County, AZ Pollution Control Corp.
(Southern California Edison) 05/04/95 4.25 4,500,000 P1 A1
15,490,000 NC Eastern Municipal Power Agency - Series 88B
LOC Morgan Guaranty\Union Bank of Switzerland 05/17/95 4.15 15,490,000 A1+
----------- ----------
43,690,000 Total Tax Exempt Commercial Paper 43,690,000
----------- ----------
<CAPTION>
Other Tax Exempt Investments (24.01%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 23,900,000 California State RAN - Series A 06/28/95 3.95% $ 23,933,074 MIG-1 SP-1+
10,000,000 DeKalb County, Georgia TAN 12/29/95 4.18 10,047,899 MIG-1 SP-1+
4,800,000 Georgia State GO, Series - B 07/01/95 5.22 4,783,743 Aaa AA+
10,800,000 Kenosha Wisconsin USD TRAN (b) 08/25/95 4.34 10,819,801
8,500,000 Longwood CSD NY (b) 06/23/95 3.65 8,506,542
12,000,000 Maine TAN 06/30/95 3.65 12,015,211 MIG-1 SP-1+
25,000,000 Michigan State GO Note 09/29/95 4.02 25,090,377 MIG-1 SP-1+
30,000,000 New Jersey TRAN Series A 06/15/95 3.93 30,033,797 MIG-1 SP-1+
5,000,000 Racine, WI USD TRAN 08/23/95 4.20 5,012,138 SP-1+
7,750,000 Rhode Island State TAN 06/30/95 4.03 7,751,849 MIG-1 SP-1+
6,000,000 State of Idaho TAN Series 1994 (b) 06/29/95 4.01 6,003,869 MIG-1 SP-1+
---------- ----------
143,750,000 Total Other Tax Exempt Investments 143,998,300
----------- -----------
<CAPTION>
Other Variable Rate Demand Instruments (c) (25.81%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 2,900,000 Arlington, TX (Dallas/Ft. Worth Suburban Newspaper)
LOC Sanwa Bank, Ltd. 10/01/20 5.20% $ 2,900,000 A1+
2,800,000 Baldwin County, GA (William Barnet and Son Project)
LOC Norstar Bank of Upstate New York 12/01/99 5.20 2,800,000 A1
3,100,000 Broward County, Florida Housing Finance Authority
Multifamily Housing Revenue
(Sanctuary Apartments Project)
LOC Pittsburgh National Bank 02/01/09 4.75 3,100,000 VMIG-1
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
5
- -------------------------------------------------------------------------------
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- -------- ------- ------
Other Variable Rate Demand Instruments (c)(Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 1,000,000 City of Atlantic Beach, Florida (Fleet Landing)
LOC Barnett Bank 10/01/24 5.40% $ 1,000,000 VMIG-1
5,000,000 Clarksville, TN Public Building Auth.
Pooled Financial RB
LOC Nationsbank 06/01/24 4.70 5,000,000 A1
6,400,000 Clayton, MO IDRB (Bailey Court Project)
LOC Bankers Trust Company 01/01/09 4.82 6,400,000 VMIG-1
5,000,000 Colorado HFA (Grant Plaza Project)
LOC Bankers Trust Company 11/01/09 4.82 5,000,000 VMIG-1
4,200,000 Dade County, Florida Power & Light 06/01/21 4.90 4,200,000 VMIG-1 A1
3,600,000 Dade County, Florida
Mortgage RB 1985 Series 6
(Gables Point Apartment Project)
Fannie Mae (Unconditional Guaranty) 05/15/05 4.50 3,600,000 A1+
4,700,000 DeKalb County, GA HFA
LOC Bank of Montreal 12/01/07 4.60 4,700,000 A1+
1,590,000 Gulf Breeze, FL - Series 85B
FGIC Insured 12/01/15 4.70 1,590,000 VMIG-1 A1+
8,000,000 Housing Opportunitiy Commission
of Montgomery County
LOC General Electric Capital Corporation 11/01/07 4.65 8,000,000 A1+
6,000,000 Illinois Development Finance Authority
Chicago Educational Television
LOC Harris Trust 11/01/14 4.55 6,000,000 VMIG-1
19,400,000 Illinois Museum of Contemporary Art 1994
LOC Northern Trust\Harris Trust
\LaSalle National\National Bank of Detroit 02/01/29 4.50 19,400,000 A1+
5,000,000 Jackson County, MI EDC (Thrifty Leoni)
LOC First Chicago Bank 12/01/14 4.90 5,000,000 P1 A1
1,600,000 Jacksonville, Florida
Health Facility Authority Revenue
Baptist Health Property Project
LOC Barnett Bank 06/01/20 5.35 1,600,000 A1
3,975,000 Maryland State Ind. Fin. Authority Eco. Dev.
(The Barre School Facility)
LOC Nations Bank 07/01/14 4.70 3,975,000 A1
1,770,000 Mecklenberg County, NC (Aplix, Inc.)
LOC Wachovia Bank & Trust Co., N.A. 12/01/99 4.65 1,770,000 P1 A1+
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
6
- -------------------------------------------------------------------------------
DAILY TAX FREE INCOME FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
APRIL 30, 1995
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- -------- ------- ------
Other Variable Rate Demand Instruments (c)(Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 5,910,000 Missouri State HEFA (Barnes Hospital)
LOC Morgan Guaranty Trust Company 12/01/15 4.70% $ 5,910,000 P1 A1+
5,900,000 Missouri State HEFA - Washington University 09/01/10 4.70 5,900,000 VMIG-1 A1+
2,000,000 Montgomery County, TX
(Houston Area Res. Center Proj.) - Series 85
LOC Morgan Guaranty Trust Company 12/01/15 4.70 2,000,000 A1+
1,700,000 Orange County, FL (Health Facility)
LOC Banque Paribas 11/15/14 4.70 1,700,000 VMIG-1 A1
7,140,000 Orange County, FL (Mayflower Project)
LOC Banque Paribas 03/01/18 4.75 7,140,000 A1
2,600,000 Oyster Point, VA Development Corp. - Series 91
LOC Perpetual Savings 11/01/11 5.05 2,600,000 A1+
2,500,000 Pierce County, Atlas Foundry
LOC Seattle First National Bank 05/01/95 5.85 2,500,000 Aa1
5,400,000 Pinellas Co., Florida HFA - Series 1987
(St. Mark Village Project)
LOC Nations Bank 03/01/17 4.70 5,400,000 A1
2,800,000 Prince Georges County, MD EDC RB
LOC Fleet National Bank 09/30/15 5.85 2,800,000
3,170,000 St. Cloud, Minnesota Commercial Development
Refunding RB (Kelly Inn Project) (b)
LOC First Bank of South Dakota 04/01/13 4.75 3,170,000
5,300,000 San Antonio, TX IDA (Rivercenter Project)
LOC PNC Bank, N.A. 12/01/12 4.75 5,300,000 Aa3
2,900,000 Salina, KS (Dillards Project) (b)
LOC Boatmens National Bank of St. Louis 12/01/14 5.07 2,900,000
2,000,000 Southgate, MI EDC Economic Development RB
(Trust Realty Corp. Proj.)
LOC Bankers Trust Company 10/01/18 4.82 2,000,000 Aa2
5,100,000 State of Ohio Environmental Improvement
(U.S. Steel Corp. USX)
LOC PNC Bank, N.A. 12/01/01 4.30 5,100,000 P1
5,000,000 State of Kansas Department of Transportation Highway
RB - Series 1994B 09/01/14 4.50 5,000,000 VMIG-1 A1+
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
7
- -------------------------------------------------------------------------------
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- -------- ------- ------
Other Variable Rate Demand Instruments (b)(Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 2,350,000 Terre Haute, IN EDRB
(Westminster Village Terre Haute Inc.)
LOC Huntington National Bank 07/01/01 5.20% $ 2,350,000 P1 A1
7,000,000 City of Valdez Alaska Marine Terminal TRAN 1994B
(Arco Transportation) 05/01/31 4.75 7,000,000 P1 A1
----------- -----------
154,805,000 Total Other Variable Rate Demand Instruments 154,805,000
----------- -----------
<CAPTION>
Put Bonds (10.08%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 1,200,000 Connecticut State HFA Housing Mortgage Finance Bond
Series G-1 05/15/95 3.55% $ 1,200,000 VMIG-1 A1+
12,340,000 California Pollution Control Finance Authority PCRB
(Chevron Chemical Company Project) 11/15/95 4.10 12,294,748 Aa2 AA
2,120,000 California Pollution Control Finance Authority PCRB
(Chevron Chemical Company Project) 11/15/95 4.10 2,112,226 Aa2 AA
9,860,000 DeKalb County, GA Multi-Family Housing - Series 85L
LOC Amsouth Bank N.A. 12/01/95 4.50 9,860,000 A1+
11,995,000 Fulton County, GA - Series 85B
LOC Amsouth Bank N.A. 08/01/95 4.00 11,995,000 A1+
4,000,000 Joliet Illinois Gas Supply Revenue
Peoples Gas, Light & Core 10/01/95 4.20 4,000,000 VMIG-1
19,000,000 State of Connecticut Special Assessment 93C 07/01/95 3.85 19,000,000 VMIG-1 A1+
---------- -----------
60,515,000 Total Put Bonds 60,461,974
---------- -----------
<CAPTION>
Revenue Bonds (1.82%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 8,395,000 Intermountain Power 1985
LOC AMBAC Insured 07/01/95 4.13% $ 8,677,192 Aaa AAA
2,205,000 Warren County Ohio HRB (b)
(Warren General Hospital)
Escrowed in U.S. Treasury Securities 06/01/95 3.91 2,261,306
---------- ------------
10,600,000 Total Revenue Bonds 10,938,498
---------- ------------
Total Investments (100.80%)(Cost $604,560,387+) 604,560,387
Liabilities in Excess of Cash & Other Assets (-.80%) ( 4,806,876)
------------
Net Assets (100.00%) $599,753,511
============
Class A Shares, 461,160,894 Shares Outstanding (Note 3) $ 1.00
============
Class B Shares, 138,730,463 Shares Outstanding (Note 3) $ 1.00
============
+ Aggregate cost for federal income tax purpose is $604,488,480.
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
8
- -------------------------------------------------------------------------------
DAILY TAX FREE INCOME FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
APRIL 30, 1995
(UNAUDITED)
===============================================================================
FOOTNOTES:
(a) The ratings noted for variable rate demand instruments are those of the
bank whose letter of credit secures such instruments or the guarantor of
the bond. P1 and A1+ are the highest ratings assigned for tax exempt
commercial paper.
(b) Securities that are not rated which the Fund's Board of Directors has
determined to be of comparable quality to the rated securities in which the
Fund invests.
(c) Securities payable on demand at par including accrued interest (usually
with seven days notice) and unconditionally secured as to principal and
interest by a bank letter of credit. The interest rates are adjustable and
are based on bank prime rates or other interest rate adjustment indices.
The rate shown is the rate in effect at the date of this statement.
<TABLE>
<CAPTION>
KEY:
<S> <C> <C> <C> <C> <C>
BAN = Bond Anticipation Note RAN = Revenue Anticipation Note
CI = Certificate of Indebtedness RAW = Revenue Anticipation Warrant
CLN = Construction Loan Note RB = Revenue Bond
FAN = Fund Anticipation Note RN = Revenue Note
GAN = Grant Anticipation Note TAN = Tax Anticipation Note
HRB = Hospital Revenue Bond TLN = Tax Loan Note
IDRB = Industrial Development Revenue Bond TRAN = Tax and Revenue Anticipation Note
PCRB = Pollution Control Revenue Bond
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
9
- -------------------------------------------------------------------------------
DAILY TAX FREE INCOME FUND, INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1995
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C>
Income:
Interest................................................................................ $13,972,309
----------
Expenses: (Note 2)
Investment management fee............................................................... 1,064,983
Administration Fee...................................................................... 655,374
Distribution fee (Class A).............................................................. 634,466
Custodian, shareholder servicing and related shareholder expenses....................... 201,673
Legal, compliance and filing fees....................................................... 46,132
Audit and accounting.................................................................... 80,889
Directors' fees......................................................................... 14,422
Other................................................................................... 658
---------
Total expenses........................................................................ 2,698,597
---------
Net investment income....................................................................... 11,273,712
REALIZED GAIN (LOSS) ON INVESTMENTS......................................................... 100,906
----------
Increase in net assets from operations...................................................... $ 11,374,618
==========
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
10
- -------------------------------------------------------------------------------
DAILY TAX FREE INCOME FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Six Months
Ended Year
April 30, 1995 Ended
(Unaudited) October 31, 1994
--------- ----------------
INCREASE (DECREASE) IN NET ASSETS
<S> <C> <C>
Operations:
Net investment income......................................... $ 11,273,712 $ 17,996,573
Net realized gain (loss) on investments...................... 100,906 ( 21,649)
-------------- --------------
Increase in net assets from operations........................ 11,374,618 17,974,924
Dividends to shareholders from net investment income
Class A....................................................... ( 8,587,810)* ( 14,184,451)*
Class B....................................................... ( 2,685,902)* ( 3,812,122)*
Capital share transactions (Note 3)
Class A....................................................... ( 80,161,388) ( 65,374,023)
Class B....................................................... ( 3,298,196) 4,763,164
-------------- --------------
Total increase (decrease)................................. ( 83,358,678) ( 60,632,508)
Net assets:
Beginning of period.......................................... 683,112,189 743,744,697
--------------- --------------
End of period................................................. $599,753,511 $683,112,189
=============== ==============
* Designated as exempt-interest dividends for federal income tax purposes.
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
11
- -------------------------------------------------------------------------------
DAILY TAX FREE INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
===============================================================================
1. Summary of Accounting Policies.
Daily Tax Free Income Fund, Inc. is a no-load, non-diversified, open-end
management investment company registered under the Investment Company Act of
1940. The Fund has two classes of stock authorized, Class A and Class B. The
Class A shares are subject to a service fee pursuant to the Distribution and
Service Plan. The Class B shares are not subject to a service fee. In all other
respects, the Class A and Class B shares represent the same interest in the
income and assets of the Fund. Distribution of Class B shares commenced November
23, 1992. The Fund's financial statements are prepared in accordance with
generally accepted accounting principles for investment companies as follows:
a) Valuation of Securities -
Investments are valued at amortized cost. Under this valuation method, a
portfolio instrument is valued at cost and any discount or premium is
amortized on a constant basis to the maturity of the instrument. The
maturity of variable rate demand instruments is deemed to be the longer of
the period required before the Fund is entitled to receive payment of the
principal amount or the period remaining until the next interest rate
adjustment.
b) Federal Income Taxes -
It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its tax exempt and taxable income to its shareholders. Therefore, no
provision for federal income tax is required.
c) Dividends and Distributions -
Dividends from investment income (excluding capital gains and losses, if
any, and amortization of market discount) are declared daily and paid
monthly. Distributions of net capital gains, if any, realized on sales of
investments are made after the close of the Fund's fiscal year, as declared
by the Fund's Board of Directors.
d) General -
Securities transactions are recorded on a trade date basis. Interest income
is accrued as earned. Realized gains and losses from securities
transactions are recorded on the identified cost basis.
2. Investment Management Fees and Other Transactions with Affiliates.
Under the Investment Management Contract, the Fund pays an investment management
fee to Reich & Tang Asset Management L.P. (Manager), at the annual rate of .325%
of the Fund's average daily net assets not in excess of $750 million plus .30%
of such assets in excess of $750 million. The Manager is required to reimburse
the Fund for its expenses (exclusive of interest, taxes, brokerage, and
extraordinary expenses) to the extent that such expenses, including the
investment management and the shareholder servicing and administration fees, for
any fiscal year exceed the lesser of (i) 1 1/2% of the Fund's average net assets
or (ii) the limits on investment company expenses prescribed by any state in
which the Fund's shares are qualified for sale. No such reimbursement was
required for the period ended April 30, 1995.
Pursuant to an Administrative Services Agreement, the Fund pays to the Manager
an annual fee of .20% of the Fund's average daily net assets of $1.25 billion,
plus .19% of such assets in excess of $1.25 billion but not in excess of $1.5
billion, plus .18% of such assets in excess of $1.5 billion.
- -------------------------------------------------------------------------------
<PAGE>
12
- -------------------------------------------------------------------------------
DAILY TAX FREE INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
===============================================================================
2. Investment Management Fees and Other Transactions with Affiliates
(Continued).
Pursuant to a Distribution and Service Plan adopted under Securities and
Exchange Commission Rule 12b-1, the Fund and Reich & Tang Distributors L.P. (the
Distributor) entered into a Distribution Agreement and a Shareholder Servicing
Agreement, only with respect to the Class A shares of the Fund. For its services
under the Shareholder Servicing Agreement, the Distributor receives from the
Fund with respect only to the Class A shares, a fee equal to .25% of the Fund's
average daily net assets.
Fees are paid to Directors who are unaffiliated with the Manager on the basis of
$6,000 per annum plus $750 per meeting attended.
Included in the Statement of Operations under the caption "Custodian,
shareholder servicing and related shareholder expenses" are fees of $29,416 paid
to Fundtech Services L.P., an affiliate of the Manager as servicing agent for
the Fund.
3. Capital Stock.
At April 30, 1995, 20,000,000,000 shares of $.001 par value stock were
authorized and capital paid in amounted to $599,891,357. Transactions in capital
stock, all at $1.00 per share, were as follows:
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
April 30, 1995 October 31, 1994
-------------- ----------------
Class A
<S> <C> <C>
Sold...................................... 1,155,091,661 3,355,486,993
Issued on reinvestment of dividends....... 6,815,508 11,739,693
Redeemed.................................. ( 1,242,068,557) ( 3,432,600,709)
-------------- --------------
Net increase (decrease)................... ( 80,161,388) ( 65,374,023)
============== ==============
Class B
Sold...................................... 591,832,715 1,260,699,566
Issued on reinvestment of dividends....... 2,464,504 3,514,388
Redeemed.................................. ( 597,595,415) ( 1,259,450,790)
-------------- --------------
Net increase (decrease)................... ( 3,298,196) 4,763,164
============== ==============
</TABLE>
4. Sales of Securities.
Accumulated undistributed realized losses at April 30, 1995 amounted to
$137,846. At April 30, 1995 the Fund had tax basis capital losses of $262,748.
Such losses expire October 31, 1995.
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<PAGE>
13
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===============================================================================
5. Selected Financial Information.
<TABLE>
<CAPTION>
Six Months
Ended Year Ended October 31,
------------------------------------------------------------
April 30, 1995 1994 1993 1992 1991 1990
------------------ ---------------- ---------------- ------ ------ ------
Class A Class B Class A Class B Class A Class B
-------- -------- ------- ------- ------- -------
Per Share Operating Performance:
(for a share outstanding throughout the period)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- ------- ------- ------- ------- ------ ------ ------
Income from investment operations:
Net investment income....................... 0.017 0.018 0.023 0.026 0.022 0.023 0.029 0.045 0.054
Less distributions:
Dividends from net investment income 0.017 0.018 0.023 0.026 0.022 0.023 0.029 0.045 0.054
-------- -------- ------- ------- ------- ------- ------ ------ ------
Net asset value, end of period.............. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
======== ======== ======= ======= ======= ======= ====== ====== ======
Total Return................................ 3.45% 3.70% 2.35% 2.60% 2.24% 2.49%* 2.98% 4.64% 5.57%
Ratios/Supplemental Data
Net assets, end of period (000)............. $461,022 $138,731 $541,106 $142,006 $606,497 $137,248 $666,484 $678,486 $703,529
Ratios to average net assets:
Expenses............................... 0.88%* 0.63%* 0.88% 0.63% 0.90% 0.65%* 0.82% 0.79% 0.79%
Net investment income.................. 3.38%* 3.63%* 2.31% 2.56% 2.22% 2.45%* 2.94% 4.53% 5.44%
* Annualized
</TABLE>
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<PAGE>
14
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DAILY
TAX FREE
INCOME
FUND, INC.
Semi-Annual Report
April 30, 1995
(Unaudited)
- -------------------------------------------------------------------------------
This report is submitted for the general information of the shareholders of the
Fund. It is not authorized for distribution to prospective investors in the Fund
unless preceded or accompanied by an effective prospectus, which includes
information regarding the Fund's objectives and policies, experience of its
management, marketability of shares, and other information.
- -------------------------------------------------------------------------------
Daily Tax Free Income Fund, Inc.
600 Fifth Avenue
New York, New York 10020
Manager
Reich & Tang Asset Management L.P.
600 Fifth Avenue
New York, New York 10020
Custodian
Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, Missouri 64105
Transfer Agent &
Dividend Disbursing Agent
Supervised Service Company
811 Main Street
Kansas City, Missouri 64105
- -------------------------------------------------------------------------------
DAILY
TAX FREE
INCOME
FUND, INC.
Semi-Annual Report
April 30, 1995
(Unaudited)