January 1, 1997
Delaware Group Tax-Free Fund, Inc.
Tax-Free USA Intermediate Fund
Supplement to Prospectus dated October 30, 1996
The following replaces information under Summary of Expenses
for Tax-Free USA Intermediate Fund (the "Fund") that appears on
pages 5 and 6:
Tax-Free
Annual Operating Expenses USA Intermediate Fund
(as a percentage of Class A Class B Class C
average daily net assets) Shares Shares Shares
Management Fees
(after voluntary
waivers) . . . . . . . . 0.00%* 0.00%** 0.00%**
12b-1 Plan Expenses
(including
service fees). . . . . . 0.15%+ 1.00%+ 1.00%+
Other Operating Expenses
(after expense
limitations) . . . . . 0.35%* 0.35%* 0.35%**
------- ------- ------
Total Operating Expenses
(after voluntary
waivers and
expense
limitations) . . . . . 0.50%* 1.35%* 1.35%**
==== ==== ====
* Beginning January 1, 1997, the Manager has elected
voluntarily to waive that portion, if any, of the annual
management fees payable by the Fund and to pay certain of
the Fund's expenses to the extent necessary to ensure that
the Total Operating Expenses of the Fund do not exceed 0.35%
(excluding the 12b-1 plan expenses). This waiver and
expense limitation will extend through June 30, 1997. From
the commencement of the Fund's operations through June 30,
1993, the Manager voluntarily waived that portion, if any,
of the annual management fees payable by the Fund and
reimbursed the Fund's expenses to the extent necessary to
ensure that the Total Operating Expenses of the Fund,
including the 12b-1 expenses, did not exceed 0.25%. This
waiver and expense limitation was extended to June 30, 1994,
but modified, effective May 2, 1994 through December 31,
1996, to provide that annual operating expenses would not
exceed 0.10% (excluding 12b-1 fees). Because 12b-1 Plan
fees have been set at 0.15% by Delaware Group Tax-Free Fund,
Inc.'s Board of Directors for the Tax-Free USA Intermediate
Fund A Class, the amount of the voluntary waiver with
respect to such Class, as modified, was equivalent to the
waiver operative through May 1, 1994. If the voluntary
expense waivers were not in effect, the Total Operating
Expenses of Tax-Free USA Intermediate Fund A Class and Tax-
Free USA Intermediate Fund B Class, as a percentage of
average daily net assets, would have been 0.95% and 1.80%,
respectively, reflecting Management Fees of 0.47% for the
fiscal year ended August 31, 1996.
** Other Operating Expenses for Tax-Free USA Intermediate Fund
C Class are based upon the actual expenses incurred by Class
A Shares and Class B Shares for the fiscal year ended August
31, 1996 and the voluntary waiver of fees by the Manager.
If the voluntary expense waivers described in the previous
note were not in effect, it is estimated that Total
Operating Expenses of Tax-Free USA Intermediate Fund C Class
would be 1.80%, reflecting Management Fees of 0.47%.
+ Class A Shares, Class B Shares and Class C Shares are
subject to separate 12b-1 Plans. Long-term shareholders of
the Classes may pay more than the economic equivalent of the
maximum front-end sales charges permitted by rules of the
National Association of Securities Dealers, Inc. See
Distribution (12b-1) and Service under Management of the
Funds in the Prospectus.
The following example illustrates the expenses that an
investor would pay on a $1,000 investment over various time
periods, assuming (1) a 5% annual rate of return, (2) redemption
and no redemption at the end of each time period and (3) for
Class B Shares and Class C Shares, payment of a CDSC at the time
of redemption, if applicable. The following example assumes the
voluntary waiver of the management fee by the Manager as
discussed above.
Tax-Free USA Intermediate Fund
<TABLE>
<CAPTION>
Assuming Redemption Assuming No Redemption
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
Class A
Shares $35(1) $46 $57 $91 $35 $46 $57 $91
Class B
Shares $34 $53 $74(2) $107(2) $14 $43 $74(2) $107(2)
Class C
Shares $24 $43 $74 $162 $14 $43 $74 $162
</TABLE>
(1) Generally, the Fund does not assess a redemption charge upon
redemption of Class A Shares. Under certain circumstances,
however, a Limited CDSC, which has not been reflected in
this calculation, may be imposed on certain redemptions
within 12 months of purchase. See Contingent Deferred Sales
Charge for Certain Purchases of Class A Shares Made at Net
Asset Value under Redemption and Exchange in the Prospectus.
(2) At the end of approximately five years after purchase, Tax-
Free USA Intermediate Fund B Class shares will be
automatically converted into Tax-Free USA Intermediate Fund
A Class shares. The example above assumes conversion of
Class B Shares at the end of the fifth year. However, the
conversion may occur as late as three months after the fifth
anniversary of purchase, during which time the higher 12b-1
Plan fees payable by Class B Shares will continue to be
assessed. Information for the sixth through tenth years
reflects expenses of the Class A Shares. See Automatic
Conversion of Class B Shares under Classes of Shares in the
Prospectus for a description of the automatic conversion
feature.
The purpose of the above tables is to assist the investor in
understanding the various costs and expenses that an investor in
any of the Classes will bear directly or indirectly.
