<PAGE>
- --------------------------------------------------------------------------------
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 November 1, 1998 through April 30, 1999.
The Fund had net assets of $612,637,771 and 4,594 active shareholders.
We thank you for your support and look forward to continuing to serve your cash
management needs.
Sincerely,
\s\Steven W. Duff
Steven W. Duff
President
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
DAILY TAX FREE INCOME FUND, INC.
STATEMENT OF NET ASSETS
APRIL 30, 1999
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Value Standard
Amount Yield (Note 1) Moody's & Poor's
------ ----- ------ ------- -------
Variable Rate Demand Instruments - Participations (2.03%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 667,915 The Bank of New York LOC covering four issues
due 11-03-99 through 05-01-01 4.57% to 5.10% $ 667,915 P1 A1+
10,332,364 Chase Manhattan Bank LOC covering six issues
due 11-01-99 through 05-01-13 4.26% to 5.03% 10,332,364 P1 A1+
317,486 The First National Bank of Maryland LOC covering three issues
due 12-15-00 through 09-15-02 4.95% 317,486 P1 A1
1,105,000 PNC Bank, N.A. LOC covering one issue due 07-01-03 6.90% 1,105,000 P1 A1
----------- ------------
12,422,765 Total Variable Rate Demand Instruments - Participations 12,422,765
----------- ------------
<CAPTION>
Variable Rate Demand Instruments - Private Placements (9.26%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 1,253,000 Banc One Arizona LOC covering two issues
due 07-31-04 through 04-01-05 5.03% $ 1,253,000 P1 A1
1,500,000 Banque Nationale de Paris LOC covering one issue
due 12-01-00 4.65% 1,500,000 P1 A1+
882,117 Comerica Bank - Detroit LOC covering four issues
due 02-01-00 through 05-01-05 4.65% 882,117 P1 A1
2,000,000 Creditanstalt-Bankverein LOC covering one issue due 06-01-10 4.65% 2,000,000 P1 A1+
1,500,000 Dresdner Bank AG LOC covering one issue due 12-28-14 4.65% 1,500,000 P1 A1+
5,530,000 The First National Bank of Maryland LOC covering two issues
due 07-01-04 through 12-01-20 3.75% to 5.52% 5,530,000 P1 A1
2,490,835 The Huntington National Bank LOC covering one issue
due 10-01-05 5.27% 2,490,835 P1 A1
1,048,333 Key Bank, N.A. LOC covering one issue due 07-01-15 4.65% 1,048,333 P1 A1
59,071 NationsBank, N.A. LOC covering one issue due 12-01-99 5.03% 59,071 P1 A1
501,000 Norwest Bank, N.A. LOC covering two issues
due 07-01-00 through 07-01-01 4.80% to 5.03% 501,000 P1 A1+
2,246,000 PNC Bank, N.A. LOC covering two issues
due 12-01-00 through 06-30-02 5.03% 2,246,000 P1 A1+
11,449,900 Seattle-First National Bank
LOC Backed by Bank of America NT & SA LOC
covering six issues due 12-15-00 through 11-15-15 5.03% 11,449,900 P1 A1
4,000,000 Societe Generale LOC covering one issue due 11-01-05 4.65% 4,000,000 P1 A1+
11,101,000 Union Bank of California LOC covering three issues
due 12-01-15 4.65% 11,101,000 P1 A1+
1,300,000 Wells Fargo Bank, N.A. LOC covering two issues
due 12-15-04 through 08-01-05 4.72% 1,300,000 P1 A1+
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Value Standard
Amount Yield (Note 1) Moody's & Poor's
------ ----- ------ ------- -------
Variable Rate Demand Instruments - Private Placements (Continued))
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 3,750,000 York Bank and Trust LOC covering one issue due 12-01-14 3.70% $ 3,750,000 P1 A1
6,131,462 Zion's National Bank Liquidity Facility covering one issue due 12-10-15 5.03% 6,131,462 P1 A2
------------ ------------
56,742,718 Total Variable Rate Demand Instruments - Private Placements 56,742,718
------------ ------------
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- -------
Other Tax Exempt Investments (22.53%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 4,000,000 Belknap County, NH TAN (b) 12/29/99 3.25% $ 4,002,593
4,500,000 Berrien County, MI Benton Harbor Area Schools (b) 08/25/99 3.61 4,501,347
4,000,000 Broward County, WI Howard-Suamico School District TAN (b) 08/23/99 3.57 4,004,554
1,040,000 Burleigh County, ND Bismarck Public School District (b) 05/01/00 3.19 1,051,070
9,015,000 Campbell County, WY School District Number 1 TAW - Series 1997 06/25/99 3.75 9,017,515 SP-1+
5,000,000 Cheshire County, NH TAN (b) 12/27/99 3.15 5,005,164
5,300,000 City of Fall River, MA BAN 03/15/00 3.10 5,315,562 MIG-1
5,000,000 City of Philadelphia, PA TRAN 06/30/99 3.59 5,004,708 MIG-1 SP-1+
600,000 City of Chesapeake, VA Public Improvement GO - Series 1998 (b) 08/01/99 3.55 602,238
4,000,000 Erie County, PA TAN (b)
LOC PNC Bank, N.A. 12/30/99 3.06 4,014,085
1,650,000 Grafton, WI School District TRAN (b) 09/30/99 3.21 1,653,277
4,000,000 Gwinnett County, GA School Construction Sales Tax Notes 12/31/99 3.10 4,008,314 MIG-1
4,000,000 Indiana Bond Bank Advanced Funding 01/19/00 2.94 4,014,770 MIG-1 SP-1+
2,500,000 Kenosha, WI Unified School District TRAN 09/28/99 3.38 2,500,000 MIG-1
1,000,000 King County, WA Renton School District No. 43 (b) 06/01/99 3.07 1,000,704
2,500,000 Maple Dale, WI Indian Hill School District TRAN (b) 08/20/99 3.66 2,502,164
4,500,000 Marshalltown, IA
Community School District Bond Anticipation Warrants (b) 06/24/99 3.75 4,501,231
2,500,000 Minnesota Tax and Aid Borrowing Program 02/24/00 2.95 2,500,000 MIG-1
3,910,000 Missouri HEFA (Drury College) 04/29/00 3.13 3,921,988 SP-1+
2,055,000 Missouri HEFA (Kirksville College of Osteopa) 04/29/00 3.13 2,061,301 SP-1+
3,000,000 Municipality of Anchorage, AK GO TAN 01/04/00 2.91 3,015,693 MIG-1 SP-1+
9,800,000 Overland Park, KS - Series 1998 (b) 05/01/99 3.90 9,800,000
16,000,000 State of California RAN - Series 1998-99 06/30/99 2.96 16,024,861 MIG-1 A1+
4,000,000 State of Illinois RAN 08/01/99 3.27 4,011,539 Aa2 AA
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
DAILY TAX FREE INCOME FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
APRIL 30, 1999
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- -------
Other Tax Exempt Investments (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 3,000,000 State of Missouri Development RB (Science City Union Station) (b)
LOC Canadian Imperial Bank of Commerce 12/01/99 2.99% $ 3,018,782
2,000,000 State of Tennessee GO Bonds 05/01/99 5.00 2,000,000 Aaa AAA
10,000,000 State of Texas State TRAN 08/31/99 2.73 10,054,307 MIG-1
1,148,177 Stratford County, NH BAN (b) 04/14/00 3.30 1,152,456
2,740,000 Summitt County, OH BAN 11/18/99 2.96 2,749,053 MIG-1 SP-1+
4,300,000 Sun Praire, WI Area School District TRAN - Series 1998 (b) 08/23/99 3.63 4,300,889
2,000,000 Town of Lexington, SC BAN (Water & Sewer System) 10/15/99 3.06 2,003,453 MIG-1
5,000,000 Weber County, UT TRAN (b) 12/30/99 3.10 5,011,238
3,700,000 Winnebago County, Neenah, WI Joint School TRAN (b) 08/31/99 3.01 3,704,152
------------ ------------
137,758,177 Total Other Tax Exempt Investments 138,029,008
------------ ------------
<CAPTION>
Other Variable Rate Demand Instruments (c) (52.41%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 4,700,000 Alameda County, CA IDRB (Hoover Universal Inc. Project) 06/01/04 4.30% $ 4,700,000 VMIG-1 A2
7,000,000 Angelina & Neches River, TX
Industrial Development Corporation Solid Waste RB
LOC Credit Suisse First Boston 05/01/14 4.40 7,000,000 P1
80,000 Baldwin County, GA IDA RB (William Barnet and Son Project)
LOC Fleet National Bank & Trust 12/01/99 4.37 80,000 A1
4,700,000 Brazos River, TX Harbor Naval District (Badishce Corporation Facility)
LOC Credit Suisse First Boston 12/01/19 3.25 4,700,000 A1+
2,000,000 Carlton, WI Pollution Control RB (Wisconsin Power & Light) 09/01/05 4.30 2,000,000 P1 A1+
3,600,000 Chelan County, WA Public Utilities District #001
(Chelan Hydro Project) - Series A
Insured by MBIA Insurance Corp. 06/01/15 4.00 3,600,000 VMIG-1 A1+
1,500,000 Chester County, PA (Archdiocese of Philadelphia) - Series 1997
LOC First Union National Bank 07/01/27 4.25 1,500,000 VMIG-1
2,100,000 Citrus Park Community Development
LOC Dresdner Bank 11/01/16 3.95 2,100,000 VMIG-1
1,000,000 City of Atlantic Beach, FL (Fleet Landing Project) RB
LOC NationsBank 10/01/24 4.35 1,000,000 VMIG-1
3,000,000 City of Baltimore, MD PCRB
LOC Toronto-Dominion Bank 02/01/00 4.00 3,000,000 A1+
5,300,000 City of Burlington, KS Environmental Improvement
(Kansas City Power & Light Co.) 09/01/15 4.10 5,300,000 VMIG-1 A1
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
<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>
$ 1,135,000 City of Hammond, IN PCRB (Amoco Oil Company Project) 02/01/22 4.20% $ 1,135,000 VMIG-1 A1+
3,000,000 City of Jacksonville, FL (Health Science Center) - Series 1989
LOC NationsBank 07/01/19 4.25 3,000,000 VMIG-1
2,000,000 City of Valdez, AK Marine Terminal (Exxon Pipeline Co.) 10/01/25 4.20 2,000,000 P1 A1+
7,000,000 City of Valdez, AK Marine Terminal TRAN - Series 1994B 05/01/31 4.00 7,000,000 VMIG-1 A1
6,820,000 Clarksville, TN Public Building Authority Pooled Financing RB
LOC NationsBank 06/01/24 4.00 6,820,000 A1+
5,000,000 Colorado HFA (Grant Plaza Project) - Series 1991A
LOC Bankers Trust Company 11/01/09 4.12 5,000,000 VMIG-1
4,900,000 Cuyahoga County, OH HRB (The Cleveland Clinic Foundation)
Insured by AMBAC Indemnity Corp. 01/01/16 4.00 4,900,000 VMIG-1 A1+
14,600,000 DeKalb County, GA Housing Authority
LOC Bank of Montreal 12/01/07 4.00 14,600,000 A1+
700,000 Delaware County, PA IDA Airport Facilities RB (UPS Project) 12/01/15 4.15 700,000 A1+
1,500,000 Delaware County, PA IDA (British Petroleum) - Series 1995 10/01/19 4.30 1,500,000 P1 A1+
1,700,000 Delaware County, PA IDA PCRB (Philadelphia Electric Company)
LOC Toronto-Dominion Bank 08/01/16 4.25 1,700,000 P1 A1+
100,000 Fairfax, VA IDA (Fairfax Hospital System, Inc.) 10/01/25 4.00 100,000 VMIG-1 A1+
2,000,000 Florida HFA MHRB - Series TT
LOC Citibank 12/01/07 3.90 2,000,000 A1+
3,000,000 Florida MHRB (Monterey Meadow Apartments) - Series 1985 YY
LOC Citibank 12/01/07 3.90 3,000,000 A1+
5,000,000 Florida State Municipal Power Agency (Stanton Project)
Insured by MBIA Insurance Corp. 10/01/19 3.85 5,000,000 A1
1,080,000 Floyd County, GA (Georgia Power Company Plant) 09/01/26 4.35 1,080,000 VMIG-1 A1+
2,250,000 Franklin County, OH RB (b)
(The Villas at Saint Therse Project) - Series 1997F
LOC Fifth Third Bank 10/01/22 4.05 2,250,000
2,000,000 Gulf Coast, TX Waste Disposal (Armco Inc. Project) (b)
LOC Chase Manhattan Bank 12/01/08 4.05 2,000,000
720,000 Hillsborough County, FL IDA (ADP Inc. Project) (b) 02/01/01 4.50 720,000
8,250,000 Hillsborough County, FL IDA (Tampa Electric Company Gannon) 05/15/18 4.25 8,250,000 VMIG-1 A1+
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
DAILY TAX FREE INCOME FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
APRIL 30, 1999
(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>
$ 4,700,000 Illinois Charitabulls Development Finance Authority (James Jordan
Boys & Girls Club & Family Life Center Project) - Series 1995
LOC American National Bank & Trust Company
of Chicago/LaSalle National Bank 08/01/30 4.00% $ 4,700,000 A1+
3,000,000 Illinois HEFA (Northwestern Memorial Hospital) 08/15/25 4.30 3,000,000 VMIG-1 A1+
6,000,000 Illinois HFA (Resurrection Health Care System) 05/01/11 4.30 6,000,000 VMIG-1
1,000,000 Illinois Health Facility Authority RB (University of Chicago Hospital)
Insured by MBIA Insurance Corp. 08/01/26 4.30 1,000,000 VMIG-1 A1+
5,000,000 Illinois HFFA RB (St. Lukes Medical Center)
Insured by MBIA Insurance Corp. 11/15/23 4.00 5,000,000 VMIG-1 A1+
6,000,000 Illinois IDFA Chicago Educational Television - Series 1994A
LOC Harris Trust & Savings Bank 11/01/14 4.00 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 4.00 19,400,000 VMIG-1 A1+
1,000,000 Irvine Ranch, CA Water District #s 105,140,240 & 25
LOC Commerzbank 01/01/21 4.20 1,000,000 VMIG-1 A1+
3,000,000 Jackson County, MI EDC (Thrifty Leoni) (b)
LOC First National Bank of Chicago 12/01/14 4.12 3,000,000
2,400,000 Jacksonville, FL HFA (River Garden Project)
LOC First Union National Bank 02/01/18 3.95 2,400,000 A1
1,500,000 Jacksonville, FL (Florida Power & Light) 05/01/29 4.25 1,500,000 VMIG-1 A1+
2,500,000 Kansas State Development Authority
(Village Shalom Obligation Group)
LOC LaSalle National Bank 11/15/28 4.25 2,500,000 A1+
5,000,000 Kentucky EDFA (Pooled Hospital Loan Program) 08/01/18 4.10 5,000,000 A1+
7,200,000 Massachusetts State HEFA RB (Harvard University) 08/01/17 4.00 7,200,000 VMIG-1 A1+
570,000 Mecklenberg County, NC PCFA (Aplix, Inc.) (b)
LOC Wachovia Bank & Trust Co., N.A. 12/01/99 3.95 570,000
2,400,000 Michigan Strategic Fund Limited Obligation RB
(Consumer's Power Company Project)
LOC Canadian Imperial Bank of Commerce 06/15/10 4.30 2,400,000 A1+
5,310,000 Missouri State HEFA (Barnes Hospital)
LOC Morgan Guaranty Trust Company 12/01/15 3.95 5,310,000 VMIG-1 A1+
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
<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>
$ 5,000,000 Monroe County, MI Limited Obligation RB
(Detroit Edison Co.) - Series CC
LOC Barclays Bank PLC 10/01/24 4.30% $ 5,000,000 P1
1,400,000 Monroe County Development Authority
(Georgia Power Co.) - Series 1995 07/01/25 4.30 1,400,000 P1 A1
4,430,000 Montgomery County, MD EDC RB
(Brooke Grove Foundations, Incorporated Facilities) - Series 1995
LOC First National Bank of Maryland 01/01/16 3.65 4,430,000 A1
1,900,000 Montgomery County, TX IDRB
(Houston Area Residential Center Project) - Series 1985
LOC Banque Nationale de Paris 12/01/15 4.10 1,900,000 A1
13,600,000 Montgomery County, TX MHRB Housing Opportunity
(Oakwood-Gainsburg)
Guaranteed by Freddie Mac 11/01/07 4.00 13,600,000 A1+
1,000,000 New Mexico State Highway Commission Adjustable Tender
Subordinate Lien Tax Revenue Highway Bonds - Series 1996
Insured by FSA 06/15/11 4.00 1,000,000 VMIG-1 A1+
3,800,000 Ontario, CA IDA (L.D. Brinkman & Company)
LOC NationsBank 04/01/15 4.30 3,800,000 P1
4,600,000 Orange County, FL Educational Facilities (Rollins College Project)
LOC NationsBank 05/01/25 4.05 4,600,000 VMIG-1
2,000,000 Orange County, FL Health Facilities - Adventist
LOC SunTrust Bank 11/15/14 4.05 2,000,000 VMIG-1 A1+
1,900,000 Orange County, FL Health Facilities (Mayflower Retirement Community)
LOC Rabobank Nederland 03/01/18 4.05 1,900,000 A1+
5,115,000 Orange County, FL HFA MHRB (Post Fountains Project)
Guaranteed by Fannie Mae 06/01/25 4.05 5,115,000 A1+
6,000,000 Orange County, FL HFA RB (Smokewood/SunKey Apartments)
LOC Citibank 12/01/22 3.90 6,000,000 A1+
2,000,000 Palm Beach County, FL RB (Jewish Community Campus Corporation)
Insured by AMBAC Indemnity Corp. 03/01/27 3.95 2,000,000 A1+
2,000,000 Palm Beach County, FL IDRB (Northern Gallery of Art Project)
LOC Northern Trust 05/01/25 3.95 2,000,000 A1+
2,200,000 Pacificorp Project Series 1991 (Utah Pollution Control)
LOC Credit Suisse First Boston 07/01/15 3.90 2,200,000 P1 A1+
8,000,000 Pasco County, FL School Board COPS
Insured by AMBAC Indemnity Corp. 08/01/26 4.00 8,000,000 VMIG-1 A1+
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
DAILY TAX FREE INCOME FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
APRIL 30, 1999
(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>
$ 1,650,000 Penninsula Port Authority of Virginia Coal Terminal RB
(Dominion Terminal Project) - 1987C
LOC National Westminster Bank PLC 07/01/16 4.25% $ 1,650,000 VMIG-1
400,000 Penninsula Port Authority of Virginia Coal Terminal RB
(Dominion Terminal Project) - 1987D
LOC Barclays Bank PLC 07/01/16 4.25 400,000 P1 A1+
1,300,000 Petersburg, VA HRB
LOC First Union National Bank 07/01/17 4.25 1,300,000 A1
1,400,000 Philadelphia, PA HEFA Children's Hospital 03/01/27 4.25 1,400,000 VMIG-1 A1+
900,000 Philadelphia, PA Hospital & Higher Facility HRB (b)
(Friends Hospital) - Series A
LOC PNC Bank, N.A. 03/01/06 4.05 900,000
7,350,000 Phoenix, AZ IDA MHRB Refunding
(Bell Square Apartments Project) - Series 1995
LOC General Electric Capital Corporation 06/01/25 4.10 7,350,000 A1+
3,500,000 Phoenix, AZ IDA MHRB Refunding
(Paradise Lake Apartments Project) - Series 1995
LOC General Electric Capital Corporation 07/01/25 4.10 3,500,000 A1+
4,950,000 Pinellas County, FL Health Facilities (St. Mark's Village Project)
LOC NationsBank 03/01/17 4.00 4,950,000 A1+
2,675,000 Polk County, FL IDRB (Fertilizer Project)
LOC Rabobank Nederland 02/01/00 3.95 2,675,000 P1
1,300,000 Port of Corpus Christi, TX (Reynolds Metals Co. Project)
LOC Westdeutche Landesbank 09/01/14 3.45 1,300,000 P1 A1+
100,000 Portsmouth, VA IDA (Fairwood Homes Project)
LOC NationsBank 11/01/27 3.95 100,000 A1+
2,600,000 Prince George County, MD EDC RB (b)
LOC Fleet National Bank & Trust 09/30/15 5.03 2,600,000
850,000 Richmond, VA Capital Region Airport (Richmond International Airport)
Insured by AMBAC Indemnity Corp. 07/01/25 3.95 850,000 VMIG-1 A1+
155,000 Richmond, VA Union University
LOC NationsBank 12/01/07 4.00 155,000 A1+
1,900,000 Roanoke, VA IDA (Roanoke Memorial Hospital) 07/01/19 4.30 1,900,000 VMIG-1 A1
2,615,000 St. Cloud, MN Commercial Development (Kelly Inn Project) (b)
LOC First Bank of South Dakota 04/01/13 4.05 2,615,000
2,900,000 Salina, KS (Dillards Project) (b)
LOC NationsBank 12/01/14 4.25 2,900,000
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
===============================================================================
<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>
$ 1,600,000 Salt Lake City, UT PCRB (Service Station Holdings Project) 08/01/07 4.30% $ 1,600,000 P1 A1+
1,100,000 Santa Ana, CA Health Facility RB (Multi Model - Town & Country)
LOC Banque Nationale de Paris 10/01/20 4.25 1,100,000 A1
4,500,000 San Antonio, TX IDA (Rivercenter Project) (b)
LOC PNC Bank, N.A. 12/01/12 4.05 4,500,000
2,130,000 Sarpy County, NE PCRB (Allied Signal, Inc. Project) - Series 1995 07/01/13 4.15 2,130,000 A1
2,000,000 Southgate, MI EDC EDRB (Trust Realty Corporation Project)
LOC Bankers Trust Company 10/01/18 4.12 2,000,000 A1
5,100,000 State of Ohio Environmental Improvement (U.S. Steel Corp. USX)
LOC PNC Bank, N.A. 12/01/01 3.35 5,100,000 P1
2,800,000 State of Oregon (Eagle Picher Industries)
LOC ABN AMRO Bank 12/01/04 3.60 2,800,000 P1 A1+
3,000,000 Tampa, FL Health Care Facilities (Lifelink Foundation Inc. Project) (b)
LOC SunTrust Bank 08/01/22 4.05 3,000,000
1,785,000 Terre Haute, IN EDRB (Westminster Village Terre Haute Inc.) (b)
LOC Huntington National Bank 07/01/01 4.50 1,785,000
1,900,000 University of North Florida Capital Improvement
LOC First Union National Bank 11/01/24 4.05 1,900,000 VMIG-1
800,000 Virginia College Building Authority (University of Richmond Project) 11/01/26 3.95 800,000 VMIG-1
2,000,000 Volusia County, FL HFA S.W. (Volusia Hospital)
LOC First Union National Bank 11/15/23 3.95 2,000,000 A1
1,000,000 Wake County, NC Industrial Facilities PCFA
(Carolina Power & Light Co.)
LOC Wachovia Bank 05/01/15 3.95 1,000,000 P1 A1+
6,200,000 Wisconsin HEFA RB (Alverno College Project) - Series 1997
LOC Allied Irish Banks 11/01/17 4.30 6,200,000 VMIG-1
------------ ------------
321,120,000 Total Other Variable Rate Demand Instruments 321,120,000
------------ ------------
<CAPTION>
Put Bonds (d) (4.92%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 3,900,000 California Higher Education Loan Authority
Student Loan Revenue - Series 1991A
LOC National Westminster Bank PLC 07/01/99 3.65% $ 3,900,000 VMIG-1
10,000,000 Connecticut State Special Assessment
Unemployment Compensation Advance RB - Series 1993C
Insured by FGIC 07/01/99 3.60 10,000,000 VMIG-1 A1+
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
DAILY TAX FREE INCOME FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
APRIL 30, 1999
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- -------
Put Bonds (d) (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 9,995,000 DeKalb County, GA MHRB - Series 1985L
LOC Amsouth Bank N.A. 12/01/99 3.00% $ 9,995,000 A1+
2,500,000 Nashville & Davidson County, TN
(Vanderbuilt University) - Series 1985A 01/15/00 3.10 2,500,000 MIG-1 A1+
3,750,000 Plaquemines Luisiana Port & Harbor (Chevron Pipe LineCo.) (b) 09/01/99 3.13 3,755,375
------------ -------------
30,145,000 Total Put Bonds 30,150,375
------------ -------------
<CAPTION>
Tax Exempt Commercial Paper (7.95%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 2,700,000 Alleghany PA IDA (Duquense Light Company)
LOC Canadian Imperial Bank of Commerce 07/08/99 3.15% $ 2,700,000 A1+
8,000,000 Baltimore, MD Metropolitan District BAN - Series 1995
(Kansas City Power and Light Company Project) - Series 1987A 08/09/99 2.80 8,000,000 P1 A1+
3,500,000 County of Trimble, KY (Louisville Gas & Electric Company) 09/15/99 3.00 3,500,000 VMIG-1 A1
5,000,000 Development Authority of Burke County, GA
(Ogelthorpe Power ) - Series 1998A
Insured by AMBAC Indemnity Corp. 06/16/99 2.85 5,000,000 VMIG-1 A1+
3,000,000 Intermountain Power Agency Power Supply Revenue
and Revenue Refunding Bonds - Series 1985F
Insured by AMBAC Indemnity Corp. 07/28/99 3.00 3,000,000 VMIG-1 A1+
4,000,000 Jacksonville, FL (Florida Power & Light) 08/12/99 3.10 4,000,000 P1 A1+
3,000,000 King County, WA 08/26/99 3.15 3,000,000 P1 A1
2,820,000 Maricopa, AZ PCRB (Southern California Edison Company) 07/28/99 3.05 2,820,000 P1 A1
6,300,000 New York City, NY GO Bonds
LOC Commerzbank 05/03/99 3.20 6,300,000 P1 A1+
2,160,000 Rochester, MN (Mayo Foundation) - Series 1998E 08/18/99 3.10 2,160,000 A1+
2,000,000 Shelby County, TN TAN - Series 1998A 05/05/99 3.10 2,000,000 P1 A1+
3,200,000 St. Lucie County, FL (Florida Power & Light) 07/29/99 3.15 3,200,000 VMIG-1 A1+
3,000,000 Utah Highway GO - Series 1997A 08/16/99 3.20 3,000,000 P1 A1+
------------ ------------
48,680,000 Total Tax Exempt Commercial Paper 48,680,000
------------ ------------
Total Investments (99.10%) (Cost $607,144,866+) $ 607,144,866
Cash and Other Assets in Excess of Liabilities (0.90%) 5,492,905
------------
Net Assets (100.00%) $ 612,637,771
============
Net asset value, offering and redemption price per share:
Class A shares, 371,540,215 Shares Outstanding (Note 3) $ 1.00
============
Class B shares, 241,265,452 Shares Outstanding (Note 3) $ 1.00
============
+ Aggregate cost for federal income tax purposes is identical.
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
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.
(d) The maturity date indicated for the put bonds is the next put date.
<TABLE>
<CAPTION>
KEY:
<S> <C> <C> <C> <C> <C>
BAN = Bond Anticipation Note IDA = Industrial Development Authority
COPS = Certificate of Participations IDFA = Industrial Development Finance Authority
EDC = Economic Development Corporation IDRB = Industrial Development Revenue Bond
EDFA = Economic Development Finance Authority LOC = Letter of Credit
EDRB = Economic Development Revenue Bond MHRB = Multifamily Housing Revenue Bond
FGIC = Financial Guaranty Insurance Company PCFA = Pollution Control Finance Authority
FSA = Financial Security Assurance PCRB = Pollution Control Revenue Bond
GO = General Obligation RAN = Revenue Anticipation Note
HEFA = Hospital & Education Finance Authority RB = Revenue Bond
HFA = Housing Finance Authority TAN = Tax Anticipation Note
HFFA = Health Facility Finance Authority TAW = Tax Anticipation Warrant
HRB = Hospital Revenue Bond TRAN = Tax and Revenue Anticipation Note
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
DAILY TAX FREE INCOME FUND, INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1999
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C>
Income:
Interest................................................................................ $ 10,514,720
------------
Expenses: (Note 2)
Investment management fee............................................................... 1,038,843
Administration fee...................................................................... 671,252
Shareholder servicing fee (Class A)..................................................... 487,368
Custodian expenses...................................................................... 50,159
Shareholder servicing and related shareholder expenses.................................. 302,612
Legal, compliance and filing fees....................................................... 71,918
Audit and accounting.................................................................... 114,350
Directors' fees......................................................................... 13,529
Other................................................................................... 27,826
------------
Total expenses........................................................................ 2,777,857
------------
Net investment income...................................................................... 7,736,863
------------
Increase in net assets from operations..................................................... $ 7,736,863
============
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
DAILY TAX FREE INCOME FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
<TABLE>
<CAPTION>
Six Months
Ended Year
April 30, 1999 Ended
(Unaudited) October 31, 1998
--------- ----------------
INCREASE (DECREASE) IN NET ASSETS
<S> <C> <C>
Operations:
Net investment income......................................... $ 7,736,863 $ 17,364,528
Net realized gain (loss) on investments....................... -0- 753
-------------- --------------
Increase in net assets from operations........................ 7,736,863 17,365,281
Dividends to shareholders from net investment income
Class A....................................................... ( 4,480,539)* ( 10,851,302)*
Class B....................................................... ( 3,256,324)* ( 6,513,226)*
Capital share transactions (Note 3)
Class A....................................................... 8,142,371 ( 26,615,514)
Class B....................................................... 10,754,417 57,120,197
-------------- --------------
Total increase (decrease)................................. 18,896,788 30,505,436
Net assets:
Beginning of period........................................... 593,740,983 563,235,547
-------------- --------------
End of period................................................. $ 612,637,771 $ 593,740,983
============== ==============
* Designated as exempt-interest dividends for federal income tax purposes.
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
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, diversified, open-end management
investment company registered under the Investment Company Act of 1940. The Fund
is a short term, tax exempt money market fund. 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. Additionally, the Fund may allocate among its classes
certain expenses to the extent allowable to specific classes, including transfer
agent fees, government registration fees, certain printing and postage costs,
and administrative and legal expenses. Class specific expenses of the Fund were
limited to distribution fees and transfer agent expenses. 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) Use of Estimates -
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of increases and decreases in
net assets from operations during the reporting period. Actual results
could differ from those estimates.
e) 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.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
2. Investment Management Fees and Other Transactions with Affiliates
(Continued).
Pursuant to an Administrative Services Agreement, the Fund pays to the Manager
an annual fee of .21% of the Fund's average daily net assets of $1.25 billion,
plus .20% of such assets in excess of $1.25 billion but not in excess of $1.5
billion, plus .19% of such assets in excess of $1.5 billion.
Pursuant to a Distribution and Service Plan adopted under Securities and
Exchange Commission Rule 12b-1, the Fund and Reich & Tang Distributors, Inc.
(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 "Shareholder servicing
and related shareholder expenses" are fees of $160,332 paid to Reich & Tang
Services, Inc., an affiliate of the Manager as servicing agent for the Fund.
3. Capital Stock.
At April 30, 1999, 20,000,000,000 shares of $.001 par value stock were
authorized and capital paid in amounted to $612,638,554. Transactions in capital
stock, all at $1.00 per share, were as follows:
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
April 30, 1999 October 31, 1998
-------------- ----------------
Class A
<S> <C> <C>
Sold 291,165,671 718,249,277
Issued on reinvestment of dividends....... 3,779,002 9,599,093
Redeemed.................................. ( 286,802,302) ( 754,463,884)
-------------- --------------
Net increase (decrease)................... 8,142,371 ( 26,615,514)
============== ==============
<CAPTION>
Class B
<S> <C> <C>
Sold...................................... 242,648,456 434,799,484
Issued on reinvestment of dividends....... 3,131,449 6,175,752
Redeemed.................................. ( 235,025,488) ( 383,855,039)
-------------- --------------
Net increase (decrease)................... 10,754,417 57,120,197
============== ==============
</TABLE>
4. Sales of Securities.
Accumulated undistributed realized losses at April 30, 1999 amounted to $783.
Such losses may be carried forward to offset capital gains through October 31,
2004.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
DAILY TAX FREE INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
5. Financial Highlights.
Six
Months Year Ended October 31,
Ended ---------------------------------------------------------------
Class A April 30,
- ------- 1999 1998 1997 1996 1995 1994
--------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period.......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income....................... 0.011 0.029 0.031 0.031 0.034 0.023
Less distributions:
Dividends from net investment
income.............................. ( 0.011) ( 0.029) ( 0.031) ( 0.031) ( 0.034) ( 0.023)
-------- -------- -------- -------- -------- --------
Net asset value, end of period................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ========
Total Return.................................. 2.33%* 2.92% 3.08% 3.09% 3.46% 2.35%
Ratios/Supplemental Data
Net assets, end of period (000)............... $371,441 $363,295 $389,897 $448,647 $458,942 $541,106
Ratios to average net assets:
Expenses (Includes expenses paid
indirectly)............................ 0.99%* 0.94% 0.91% 0.90% 0.89% 0.88%
Net investment income....................... 2.30%* 2.89% 3.03% 3.05% 3.41% 2.31%
Expenses paid indirectly.................... 0.00% 0.00% 0.00% 0.01% 0.01% 0.00%
* Annualized
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
<TABLE>
<CAPTION>
5. Financial Highlights. (Continued)
Six
Months Year Ended October 31,
Ended ---------------------------------------------------------------
Class B April 30,
- ------- 1999 1998 1997 1996 1995 1994
--------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period.......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income....................... 0.013 0.032 0.033 0.033 0.037 0.026
Less distributions:
Dividends from net investment
income.................................. ( 0.013) ( 0.032) ( 0.033) ( 0.033) ( 0.037) ( 0.026)
-------- -------- -------- -------- -------- --------
Net asset value, end of period................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ========
Total Return.................................. 2.65%* 3.21% 3.34% 3.35% 3.71% 2.60%
Ratios/Supplemental Data
Net assets, end of period (000)............... $241,197 $230,446 $173,339 $160,986 $166,700 $142,006
Ratios to average net assets:
Expenses (Includes expenses paid
indirectly)............................. 0.68%* 0.67% 0.66% 0.66% 0.64% 0.63%
Net investment income....................... 2.61%* 3.15% 3.29% 3.30% 3.66% 2.56%
Expenses paid indirectly.................... 0.00%* 0.00% 0.00% 0.01% 0.01% 0.00%
* Annualized
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- ------------------------------------------------------
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
801 Pennsylvania
Kansas City, Missouri 64105
Transfer Agent & Dividend
Disbursing Agent
Reich & Tang Services, Inc.
600 Fifth Avenue
New York, NY 10020
DTF499S
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
DAILY
TAX FREE
INCOME
FUND, INC.
Semi-Annual Report
April 30, 1999
(Unaudited)
- --------------------------------------------------------------------------------
<PAGE>
