July 1, 1997
Tax-Free USA Fund
Tax-Free USA Intermediate Fund
Tax-Free Insured Fund
A Class/B Class/C Class
Supplement to Prospectus dated October 30, 1996
The following replaces information on page 1:
Representatives of Financial Institutions:
Nationwide 800-659-2265
The following replaces information under Summary of
Expenses for Tax-Free USA Intermediate Fund:
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) . . . . . . . . 0.12%* 0.12%* 0.12%**
12b-1 Plan Expenses
(including
service fees). . . . . . 0.15%+ 1.00%+ 1.00%+
Other Operating Expenses . . . 0.33%* 0.33%* 0.33%**
------- ------- ------
Total Operating Expenses
(after voluntary
waivers). . . . . . . . 0.60%* 1.45%* 1.45%**
==== ==== ====
* Beginning July 1, 1997, the Manager has elected
voluntarily to waive that portion, if any, of the annual
management fees payable by the Tax-Free USA Intermediate
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 0.45% (excluding the
12b-1 plan expenses). This waiver and expense limitation
will extend through December 31, 1997. Effective the end
of the Fund's last fiscal year, August 30, 1996 and
through June 30, 1997, commitements of waiver and
reimbursement by the Manager that were different from that
currently in effect for the Fund were in place. The
expense information set forth above has been restated to
reflect the current fees. See information provided below
for a complete history of the commitments of waiver and
reimbursement by the Manager. 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 $33(1) $46 $60 $100 $33 $46 $60 $100
Class B
Shares $15 $46 $79(2) $118(2) $35 $56 $79(2) $118(2)
Class C
Shares $15 $46 $79 $174 $25 $46 $79 $174
</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 following supplements the section of the Prospectus
entitled Buying Class A Shares at Net Asset Value under Classes
of Shares:
Investors in Delaware-Voyageur Unit Investment Trusts may
reinvest monthly dividend checks and/or repayment of invested
capital into Class A Shares of any of the funds in the Delaware
Group at net asset value.
The following supplements the section of the Prospectus
entitled Management of the Funds:
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. Beginning January 1, 1997, the Manager 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 did not exceed 0.35%
(excluding the 12b-1 plan expenses). This waiver and expense
limitation extended through June 30, 1997. Beginning July 1,
1997, the Manager has elected voluntarily to waive that
portion, if any, of the annual management fees payable by the
Tax-Free USA Intermediate 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 0.45% (excluding
the 12b-1 plan expenses). This waiver and expense limitation
will extend through December 31, 1997.
The following revises the portfolio manager information
under Management of the Funds:
Patrick P. Coyne and Mitchell L. Conery, each a Vice
President/Senior Portfolio Manager of Delaware Group Tax-Free
Fund, Inc., have primary responsibility for making day-to-day
investment decisions for each Fund. Mr. Coyne has been manager
of Tax-Free USA Fund and Tax-Free Insured Fund since July 1,
1994 and manager of Tax-Free USA Intermediate Fund since its
inception in 1993. A graduate of Harvard University with an
MBA from the University of Pennsylvania=s Wharton School, Mr.
Coyne joined the Delaware Group's fixed-income department in
1990. Prior to joining the Delaware Group, he was a manager of
Kidder, Peabody & Co. Inc.'s trading desk, and specialized in
trading high grade municipal bonds and municipal futures
contracts. Mr. Coyne is a member of the Municipal Bond Club of
Philadelphia. Mr. Conery joined the Delaware Group in January
1997 at which time he became co-manager of the Tax-Free USA
Fund, Tax-Free Insured Fund and Tax-Free USA Intermediate Fund.
Mr. Conery holds a bachelor's degree from Boston University and
an MBA in Finance from the State University of New York at
Albany. He has served as an investment officer with Travelers
Insurance and as a research analyst with CS First Boston and
MBIA Corporation.
In making investment decisions for the Funds, Mr. Coyne
and Mr. Conery regularly consult with Paul E. Suckow and other
members of Delaware's fixed-income department. Mr. Suckow is
Executive Vice President/Chief Investment Officer, Fixed Income
of Delaware Group Tax-Free Fund, Inc. He is a CFA
charterholder and a graduate of Bradley University with an MBA
from Western Illinois University. Mr. Suckow was a fixed-
income portfolio manager at the Delaware Group from 1981 to
1985. He returned to the Delaware Group in 1993 after eight
years with Oppenheimer Management Corporation where he served
as Executive Vice President and Director of Fixed Income.
