PRUDENTIAL MUNICIPAL SERIES FUND, N-30D, 1994-11-25

PRUDENTIAL MUNICIPAL SERIES FUND
N-30D, 1994-11-25

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ANNUAL REPORT August 31, 1994

Prudential
Municipal
Series Fund

(ICON)

Arizona Series

(LOGO)

<PAGE>

Letter to Shareholders

October 18, 1994

Dear Shareholder:

It has been a most difficult year in the U.S. financial markets. When we
last wrote in February interest rates were starting to rise, ending a
three-year long bull market in bonds. What started as a trickle has
become a torrent. Interest rates have continued to increase this
year, sending bond prices down sharply. Of course, as interest
rates rise, bond prices decline. In this environment of falling
prices and unusual volatility, your Prudential Municipal Series
Fund -- Arizona Series sought to minimize risk while maximizing
your tax-free income.

The Series seeks maximum income exempt from Arizona and federal income
taxes* consistent with preservation of capital. The Series is
comprised of investment grade municipal obligations with an
average credit quality of Aa/AA, as determined by Moody's Investors
Service or Standard & Poor's Rating Group. The Series performed in
line with the Lipper Arizona Municipal Debt Average over the last year,
but because long-term interest rates rose, total returns were disappointing.
As a result, the Series has become more cautious and shortened its
average maturity.

<TABLE>
SERIES PERFORMANCE
As of August 31, 1994
<CAPTION>
30-day Taxable Equivalent Yields
NAV SEC Yield @28% @31% @39.6%
<S> <C> <C> <C> <C> <C>
Class A $11.59 4.5% 6.7% 7.0% 8.0%
Class B $11.58 4.3% 6.4% 6.6% 7.6%
Class C $11.58 N/A N/A N/A N/A
</TABLE>

*Interest on municipal obligations may be subject to the federal
alternative minimum tax. See your Series' prospectus for more details.

-1-

<PAGE>
<TABLE>
TOTAL RETURNS
<CAPTION>
Historical (As of 8/31/94)1 Average Annual (As of 9/30/94)2
1-Yr. 5-Yr. Since Incep.** 1-Yr. 5-Yr. Since Incep.**
<S> <C> <C> <C> <C> <C> <C>
Class A -0.6% N/A +40.5% -5.8% N/A +6.6%
Class B -1.1% +41.5% +126.1% -8.2% +7.0% +8.4%
Class C N/A N/A +0.1% N/A N/A -1.9%
Lipper AZ
Muni Debt Avg.*** -1.2% +44.9% +122.8% N/A N/A N/A
</TABLE>

Source: Lipper Analytical Services, Inc. These figures do not take into
account sales charges.

2 Source: Prudential Mutual Fund Management, Inc. These averages take
into account applicable sales charges. The Series charges a maximum
initial sales charge of 3% for Class A shares. Class B shares are
subject to a declining contingent deferred sales charge of 5%, 4%,
3%, 2%, 1% and 1%, respectively, for the first six years. Class B
shares will automatically convert to Class A shares approximately
seven years after purchase. This conversion feature is expected to
be implemented in February 1995. Class C shares are subject to a
contingent deferred sales charge of 1% during the first year.

**Inception on January 22, 1990 for Class A, September 22, 1984 for
Class B and August 1, 1994 for Class C.

***These are the average returns of 27 Arizona municipal debt funds
for one-year, five-year, and since inception of Class B shares, as
determined by Lipper Analytical Services, Inc.

Note: Without expense subsidies and management fee waivers, the
Series' historical and average annual total returns would have been
lower. The Series' Class B average annual total return since
inception would have been 8.3%.

Once Was Not Enough

In February, the Federal Reserve raised short-term interest rates for
the first time in years, hoping to control inflation. Since then, the
Fed has moved four more times, until the federal funds rate (the overnight
interbank lending rate) now stands at 4.75%, up from 3% at the
start of the year. The Fed also increased the discount rate (the
bank lending rate) to 4% from 3% over the same period.

Interest rates rise when the financial markets fear inflation, the
bond holder's enemy. Inflation is feared because it robs purchasing
power from a bond's fixed-interest rate.

Municipal bond interest rates increased by more than a percentage
point, to 6.46% on August 25 from 5.52% on December 29, 1993, as
measured by the Bond Buyer's Revenue Bond Index, a widely used
yardstick of interest rates in the tax-free market.

Arizona: Economy Growing Rapidly

The Arizona economy is among the fastest growing in the nation.
In Phoenix, population and employment increases have reached levels
not seen since the boom times of the mid-1980s. From 1983 to 1993,
the state's population has grown by nearly 33%. Arizona's
population is the third fastest growing

-2-

<PAGE>

in the nation after Nevada and Colorado, and in employment, the
state is second only to Georgia in growth.

Not surprisingly, state finances are in excellent condition. Fiscal
1994 revenues came in $179 million ahead of already upwardly revised
estimates, so the legislature voted to cut income taxes by $100 million
in its 1995 budget.

The only question mark on the horizon is political. Running for
reelection in November, Governor Symington has pledged to phase out
the state's income tax over a four-year period should he be reelected.
This would reduce revenues by $1.5 billion. The governor argues
that the growing economy, and particularly the stimulus of the tax
cut, would make up for the shortfall, a position subject to some debate.

With new issues down 54% to date this year in Arizona, bonds have
been scarce. We have remained fully invested, anticipating this
drought will continue through the year.

A Tax Reminder

As a result of the federal Revenue Reconciliation Act of 1993, which
affects bonds purchased after April 30, 1993, it is possible that
this year you may have some taxable income from your tax-free municipal
bond fund. The law stipulates that the portion of any gain realized on
the sale or retirement of a tax-free bond purchased at a market discount
to its face value must be taxed as ordinary income.

Following this change in federal tax law, some discount bonds have
been selling at levels so cheap they will produce a higher after-tax
return than other bonds not subject to the provisions of the new law.
We have occasionally taken advantage of this market imbalance because
we have determined that at very low prices these bonds can still provide
you with a higher after-tax return on your investment.

The Outlook

We expect continued volatility in the municipal bond market until the
economy reaches a level of growth that is sustainable without causing
inflation. If the economy continues to surge, the ever vigilant Fed
will move again, lifting short-term rates. If the economy slows
substantially, long term rates should stabilize. Although rates
may keep rising, we believe that most of the increase is now behind us.

In the months ahead, we expect supply -- or the lack of it -- to
become more important in the tax-free municipal bond market. Through
the first eight months of the year, new issue volume is off 42%, according
to Securities Data Co., which tracks this statistic. The pace is
accelerating. In August, new issue volume fell 56%.

-3-

<PAGE>

As always, it is a pleasure to have you as a shareholder in the
Prudential Municipal Series Fund -- Arizona Series, and to take
this opportunity to report our activities to you.

Sincerely,

Lawrence C. McQuade
President

Christian Smith
Portfolio Manager

-4-

<PAGE>

PRUDENTIAL MUNICIPAL SERIES FUND Portfolio of Investments
ARIZONA SERIES August 31, 1994

<TABLE>
<CAPTION>
Moody's Principal
Rating Amount Value
(Unaudited) (000) Description (a) (Note 1)

<C> <C> <S> <C>
LONG-TERM INVESTMENTS--97.6%
Arizona St. Edl. Loan
Mkt. Corp.,
A $ 1,375 7.00%, 3/1/05, Ser.
B.................... $ 1,453,334
Arizona St. Hsg. Fin.
Review Brd.,
Sngl. Fam. Mtge. Rev.,
A-* 10 10.625%, 12/1/02, Ser.
82................... 10,310
Arizona St. Mun. Fin.
Proj.,
Cert. of Part.,
8.75%, 8/1/06, Ser. 15,
Aaa 700 B.I.G.................. 749,014
7.875%, 8/1/14, Ser.
25,
Aaa 2,250 A.M.B.A.C.............. 2,724,412
Arizona St. Trans. Brd.
Hwy. Rev.,
Aaa 2,000(D)@ 7.00%, 7/1/09.......... 2,216,100
Aa 1,500(D) 6.00%, 7/1/10.......... 1,587,765
Arizona St. Univ. Sys.
Rev.,
Aaa 1,000(D) 7.00%, 7/1/10, Ser.
A.................... 1,121,880
Central Arizona Wtr.
Consv. Dist.,
Contract Rev.,
A1 1,500(D) 7.50%, 11/1/05......... 1,716,285
Chandler, Cap. Apprec.
Ref.,
Aaa 2,000 Zero Coupon, 7/1/02,
F.G.I.C.............. 1,318,500
Gen. Oblig.,
Aaa 500 4.375%, 7/1/13,
F.G.I.C.............. 399,390
La Paz Cnty., Unified
Sch. Dist.,
No. 27, Parker Impvt.
Proj.,
Baa 450 9.40%, 7/1/96.......... 483,728
Maricopa Cnty. Hosp.
Dist. No. 1, Facs.
Rev.,
East Valley
Behavioral
Hlth. Fac. Proj.,
Aaa 725(D) 7.80%, 6/1/13,
F.G.I.C.............. 796,804
Maricopa Cnty. Ind.
Dev. Auth.
Hosp. Fac. Rev.,
John C. Lincoln
Hosp.,
Aaa 2,000 7.00%, 12/1/00,
F.S.A................ 2,188,640
Maricopa Cnty. Ind.
Dev. Auth. Hosp. Fac.
Rev.,
Mercy Hlth.,
9.00%, 7/1/99, Ser. D,
Aaa $ 1,000 M.B.I.A.,.............. $ 1,058,760
A1 525(D) 9.25%, 7/1/11, Ser.
D.................... 556,616
A1 475 9.25%, 7/1/11, Ser.
D.................... 500,132
Samaritan Hlth. Svcs.,
Aaa 290(D) 12.00%, 1/1/08......... 341,527
Maricopa Cnty. Sch.
Dist.,
No. 41 Gilbert Proj.,
6.50%, 7/1/08, Ser. E,
Aaa 2,000(D)@ F.G.I.C................ 2,170,720
No. 40 Glendale Elem.
Sch.,
Zero Coupon, 7/1/04,
Aaa 2,810 A.M.B.A.C.............. 1,621,510
No. 11 Peoria Unified
Sch. Dist.,
Zero Coupon, 7/1/04,
Aaa 1,500 M.B.I.A................ 865,575
Zero Coupon, 7/1/04,
Aaa 1,140 F.G.I.C................ 657,837
No. 3 Tempe Elem. Sch.,
Zero Coupon, 7/1/09,
Aaa 1,500 A.M.B.A.C.............. 595,155
Zero Coupon, 7/1/14,
Aaa 1,500 A.M.B.A.C.............. 425,055
Maricopa Cnty. Unified
Sch. Dist.,
No. 80 Chandler,
F.G.I.C.
Aaa 1,330 Zero Coupon, 7/1/09.... 527,704
Aaa 1,000 6.25%, 7/1/11.......... 1,029,360
Navajo Cnty. Unified
Sch. Dist.,
No. 006 Herber
Overgaard,
Aaa 250 7.25%, 7/1/00,
A.M.B.A.C............ 276,285
Aaa 300 7.35%, 7/1/03,
A.M.B.A.C............ 332,679
Nogales Mun. Dev. Auth.
Rev.,
Aaa 500(D)@ 8.00%, 6/1/08,
M.B.I.A.............. 558,990
Peoria Bell Road Impvt.
Dist.,
BBB* 465 7.20%, 1/1/11.......... 486,525
Phoenix Arpt. Rev.,
6.40%, 7/1/12, Ser. D,
Aaa 810 M.B.I.A................ 817,930
</TABLE>

-5- See Notes to Financial Statements.

<PAGE>
PRUDENTIAL MUNICIPAL SERIES FUND
ARIZONA SERIES
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount Value
(Unaudited) (000) Description (a) (Note 1)

<C> <C> <S> <C>
Phoenix Ind. Dev. Auth.
Hosp.,
John C. Lincoln Hosp.,
BBB* $ 500 6.00%, 12/1/10......... $ 467,470
BBB* 500 6.00%, 12/1/14......... 453,245
Phoenix St. & Hwy.
Rev.,
A1 1,480 6.25%, 7/1/06, Ser.
92................... 1,546,126
Zero Coupon, 7/1/12,
Aaa 3,000 F.G.I.C................ 975,420
Pima Cnty. Ind. Dev.
Auth. Hlth. Care,
Carondelet
St. Josephs & Marys
Hosp.,
Aaa 1,000 7.90%, 7/1/05,
B.I.G................ 1,115,350
Aaa 1,000(D) 8.00%, 7/1/13,
B.I.G................ 1,119,170
Pima Cnty. Ind. Dev.
Auth. Rev.,
Tucson Elec. Pwr.
Co.,
Aaa 2,700 7.25%, 7/15/10,
F.S.A................ 2,887,110
Pima Cnty., Unified
Sch. Dist.
No. 16, Catalina
Foothills,
Zero Coupon, 7/1/08,
Aaa 3,000 F.G.I.C................ 1,290,810
Zero Coupon, 7/1/09,
Aaa 3,455 F.G.I.C................ 1,370,840
Puerto Rico Hsg. Fin.
Auth. Rev.,
Multifamily Mtge.,
AA* 835 7.50%, 4/1/22.......... 869,110
Puerto Rico Comnwlth.
Hwy.
Auth. Rev.,
AAA* 490(D) 7.70%, 7/1/03, Ser.
Q.................... 566,763
Puerto Rico, Comnwlth.,
Gen. Oblig.,
8.41%, 7/1/08, Ser. A,
Aaa 1,000(D)(D) M.B.I.A................ 1,012,500
Salt River Proj. Agric.
Impvt. & Pwr. Dist.,
Elec. Sys. Rev.,
Aa 1,500 4.75%, 1/1/17, Ser.
C.................... 1,218,540
Aa 500 5.75%, 1/1/20, Ser.
C.................... 468,960
Santa Cruz Cnty.
Unified Sch. Dist.
No. 1
Nogales, Cruz Cnty.,
Zero Coupon, 1/1/06,
Aaa 770 A.M.B.A.C.............. 397,051
Santa Cruz Cnty.,
Unified Sch. Dist.
No. 1
Nogales, Cruz Cnty.,
Zero Coupon, 7/1/06,
Aaa $ 700 A.M.B.A.C.............. $ 350,560
Scottsdale Ind. Dev.
Auth. Rev., Mem.
Hosp.,
8.50%, 9/1/07, Ser. A,
Aaa 2,100 A.M.B.A.C.............. 2,352,378
Scottsdale, Gen.
Oblig.,
Aa1 500 5.50%, 7/1/09.......... 479,885
Aa1 1,000(D) 6.00%, 7/1/10.......... 1,066,020
Aa1 1,000 4.00%, 7/1/13, Ser.
D.................... 737,640
Tempe Impvt. Dist. Auth. Rev.,
Papago Park Ctr.,
Dist. No. 166,
A1 500 7.10%, 1/1/06.......... 522,910
Tempe, Gen. Oblig.,
Aa 500 5.25%, 7/1/13.......... 451,190
Tolleson Mun. Fin. Corp. Rev.,
Citizen Util. Co.,
AAA* 400 9.20%, 9/1/05.......... 426,812
Tucson Wtr. Rev.,
Aaa 1,000 8.60%, 7/1/00,
E.T.M................ 1,179,540
A1 1,000 5.50%, 7/1/09.......... 947,480
7.00%, 7/1/10, Ser. C,
Aaa 500 M.B.I.A................ 534,925
Univ. Arizona Revs.
Sys.,
A1 1,750 6.25%, 6/1/11, Ser.
B.................... 1,771,438
Virgin Islands Pub. Fin. Auth. Rev.,
Hwy. Trans. Trust Fund,
NR 600 7.25%, 10/1/18, Ser.
A.................... 618,972
Virgin Islands Terr.,
Hugo Ins. Claims Fund
Prog.,
NR 460 7.75%, 10/1/06, Ser.
91................... 502,978
Virgin Islands Wtr. &
Pwr. Auth., Elec.
Sys. Rev.,
NR 500 7.40%, 7/1/11, Ser.
A.................... 522,300
Wtr. Sys. Rev.,
NR 500 8.50%, 1/1/10, Ser.
A.................... 549,280
------------
Total long-term
investments
(cost $55,132,298)..... 58,361,295
------------
</TABLE>

-6- See Notes to Financial Statements.

<PAGE>
PRUDENTIAL MUNICIPAL SERIES FUND
ARIZONA SERIES
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount Value
(Unaudited) (000) Description(a) (Note 1)

<S> <C> <C> <C>
SHORT-TERM INVESTMENTS--1.4%
Goodyear, Gen. Oblig.,
Baa1 $ 100 10.00%, 7/1/95......... $ 104,311
Pinal Cnty. Ind. Dev.
Auth. Hlth. Care,
Ctrl. Rev., F.R.D.D.,
P1 700 3.35%, 9/1/94.......... 700,000
------------
Total short-term
investments
(cost $799,625)........ 804,311
------------
Total Investments--99.0%
(cost $55,931,923; Note
4)................... 59,165,606
Other assets in excess
of
liabilities--1.0%.... 613,223
------------
Net Assets--100%....... $ 59,778,829
------------
------------
</TABLE>

- ------------------
(a) The following abbreviations are used in portfolio descriptions:
A.M.B.A.C.--American Municipal Bond Assurance Corporation.
B.I.G.--Bond Investors Guaranty Insurance Company.
E.T.M.--Escrowed to Maturity.
F.G.I.C.--Financial Guaranty Insurance Company.
F.R.D.D.--Floating Rate (Daily) Demand Note#.
F.S.A.--Financial Security Assurance.
M.B.I.A.--Municipal Bond Insurance Association.
# For purposes of amortized cost valuation, the
maturity date of Floating Rate Demand Notes is
considered to be the later of the next date on
which the security can be redeemed at par or the
next date on which the rate of interest is
adjusted.
* Standard & Poor's rating.
(D) Prerefunded issues are secured by escrowed cash
and/or direct U.S. guaranteed obligations.
(D)(D)Inverse floating rate bond. The coupon is
inversely indexed to a floating interest rate.
The rate shown is the rate at period end.
@ Pledged as initial margin on financial futures
contracts.

NR--Not Rated by Moody's or Standard & Poor's.
The Fund's current Statement of Additional Information contains a description
of Moody's and Standard & Poor's ratings.

-7- See Notes to Financial Statements.

<PAGE>
PRUDENTIAL MUNICIPAL SERIES FUND
ARIZONA SERIES
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
Assets August 31, 1994
---------------
<S> <C>
Investments, at value (cost $55,931,923)................................................. $59,165,606
Cash..................................................................................... 83,991
Interest receivable...................................................................... 737,249
Receivable for Fund shares sold.......................................................... 21,467
Other assets............................................................................. 1,869
---------------
Total assets........................................................................... 60,010,182
---------------
Liabilities
Accrued expenses......................................................................... 66,324
Payable for Fund shares reacquired....................................................... 57,677
Dividends payable........................................................................ 49,717
Management fee payable................................................................... 25,227
Distribution fee payable................................................................. 22,648
Due to broker-variation margin payable................................................... 8,750
Deferred trustee fees.................................................................... 1,010
---------------
Total liabilities...................................................................... 231,353
---------------
Net Assets............................................................................... $59,778,829
---------------
---------------
Net assets were comprised of:
Shares of beneficial interest, at par.................................................. $ 51,601
Paid-in capital in excess of par....................................................... 56,542,821
---------------
56,594,422
Distributions in excess of net realized gains.......................................... (25,526)
Net unrealized appreciation of investments............................................. 3,209,933
---------------
Net assets, August 31, 1994............................................................ $59,778,829
---------------
---------------
Class A:
Net asset value and redemption price per share ($7,674,526 / 662,409 shares of
beneficial interest issued and outstanding).......................................... $11.59
Maximum sales charge (3.0% of offering price).......................................... .36
---------------
Maximum offering price to public....................................................... $11.95
---------------
---------------
Class B:
Net asset value, offering price and redemption price per share ($52,104,103 / 4,497,713
shares of beneficial interest issued and outstanding)................................ $11.58
---------------
---------------
Class C:
Net asset value, offering price and redemption price per share ($199.97 / 17.262 shares
of beneficial interest issued and outstanding)....................................... $11.58
---------------
---------------
</TABLE>

See Notes to Financial Statements.
-8-

<PAGE>
PRUDENTIAL MUNICIPAL SERIES FUND
ARIZONA SERIES
Statement of Operations
<TABLE>
<CAPTION>
Year Ended
Net Investment Income August 31, 1994
---------------
<S> <C>
Income
Interest............................ $ 3,939,686
---------------
Expenses
Management fee...................... 313,334
Distribution fee--Class A........... 7,141
Distribution fee--Class B........... 277,628
Custodian's fees and expenses....... 52,000
Reports to shareholders............. 37,500
Transfer agent's fees and
expenses............................ 33,000
Registration fees................... 20,000
Legal fees.......................... 15,000
Audit fee........................... 10,500
Trustees' fees...................... 3,375
Miscellaneous....................... 7,770
---------------
Total expenses.................... 777,248
---------------
Net investment income................. 3,162,438
---------------
Realized and Unrealized
Gain (Loss) on Investments
Net realized gain (loss) on:
Investment transactions............. 790,344
Financial futures contract
transactions........................ (32,841)
---------------
757,503
---------------
Net change in unrealized
appreciation/depreciation of:
Investments......................... (4,562,693)
Financial futures contracts......... (22,813)
---------------
(4,585,506)
---------------
Net loss on investments............... (3,828,003)
---------------
Net Decrease in Net Assets
Resulting from Operations............. $ (665,565)
---------------
---------------
</TABLE>

See Notes to Financial Statements.

PRUDENTIAL MUNICIPAL SERIES FUND
ARIZONA SERIES
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended August 31,
Increase (Decrease) ---------------------------
in Net Assets 1994 1993
------------ -----------
<S> <C> <C>
Operations
Net investment income... $ 3,162,438 $ 2,979,801
Net realized gain on
investment
transactions.......... 757,503 175,821
Net change in unrealized
appreciation of
investments........... (4,585,506) 3,112,559
------------ -----------
Net increase (decrease)
in net assets
resulting from
operations............ (665,565) 6,268,181
------------ -----------
Dividends and
distributions (Note 1):
Dividends from net
investment income
Class A............... (386,495) (201,649)
Class B............... (2,775,943) (2,778,152)
------------ -----------
(3,162,438) (2,979,801)
------------ -----------
Distributions from net
realized gains
Class A............... (74,328) (21,305)
Class B............... (618,468) (500,545)
------------ -----------
(692,796) (521,850)
------------ -----------
Series share transactions
(Note 5)
Net proceeds from shares
sold.................. 10,037,346 12,302,375
Net asset value of
shares issued in
reinvestment of
dividends and
distributions......... 2,064,510 1,717,602
Cost of shares
reacquired.............. (11,709,424) (6,722,273)
------------ -----------
Net increase in net
assets from Series
share transactions.... 392,432 7,297,704
------------ -----------
Total increase
(decrease).............. (4,128,367) 10,064,234
Net Assets
Beginning of year......... 63,907,196 53,842,962
------------ -----------
End of year............... $ 59,778,829 $63,907,196
------------ -----------
------------ -----------
</TABLE>

See Notes to Financial Statements.
-9-

<PAGE>
PRUDENTIAL MUNICIPAL SERIES FUND
ARIZONA SERIES
Notes to Financial Statements

Prudential Municipal Series Fund (the ``Fund'') is registered under the
Investment Company Act of 1940, as an open-end investment company. The Fund was
organized as a Massachusetts business trust on May 18, 1984 and consists of
seventeen series. The monies of each series are invested in separate,
independently managed portfolios. The Arizona Series (the ``Series'') commenced
investment operations in September, 1984. The Series is diversified and seeks to
achieve its investment objective of obtaining the maximum amount of income
exempt from federal and applicable state income taxes with the minimum of risk
by investing in ``investment grade'' tax-exempt securities whose ratings are
within the four highest ratings categories by a nationally recognized
statistical rating organization or, if not rated, are of comparable quality. The
ability of the issuers of the securities held by the Series to meet their
obligations may be affected by economic or political developments in a specific
state, industry or region.

Note 1. Accounting The following is a summary
Policies of significant accounting poli-
cies followed by the Fund, and the Series, in the
preparation of its financial statements.

Securities Valuations: The Fund values municipal securities (including
commitments to purchase such securities on a ``when-issued'' basis) on the basis
of prices provided by a pricing service which uses information with respect to
transactions in bonds, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities in
determining values. If market quotations are not readily available from such
pricing service, a security is valued at its fair value as determined under
procedures established by the Trustees.

Short-term securities which mature in more than 60 days are valued at current
market quotations. Short-term securities which mature in 60 days or less are
valued at amortized cost.

All securities are valued as of 4:15 P.M., New York time.

Financial Futures Contracts: A financial futures contract is an agreement to
purchase (long) or sell (short) an agreed amount of debt securities at a set
price for delivery on a future date. Upon entering into a financial futures
contract, the Series is required to pledge to the broker an amount of cash
and/or other assets equal to a certain percentage of the contract amount. This
amount is known as the ``initial margin''. Subsequent payments, known as
``variation margin'', are made or received by the Series each day, depending on
the daily fluctuations in the value of the underlying security. Such variation
margin is recorded for financial statement purposes on a daily basis as
unrealized gain or loss. The Series invests in financial futures contracts
solely for the purpose of hedging its existing portfolio securities or
securities the Series intends to purchase against fluctuations in value caused
by changes in prevailing market conditions. Should market conditions move
unexpectedly, the Series may not achieve the anticipated benefits of the
financial futures contracts and may realize a loss. The use of futures
transactions involves the risk of imperfect correlation in movements in the
price of futures contracts, interest rates and the underlying hedged assets.

Securities Transactions and Investment Income: Securities transactions are
recorded on the trade date. Realized gains and losses on sales of securities are
calculated on the identified cost basis. Interest income is recorded on the
accrual basis. The Series amortizes premiums and original issue discount paid on
purchases of portfolio securities as adjustments to interest income.

Federal Income Taxes: For federal income tax purposes, each series in the Fund
is treated as a separate taxpaying entity. It is the intent of the Series to
continue to meet the requirements of the Internal Revenue Code applicable to
regulated investment companies and to distribute all of its net income to
shareholders. For this reason and because substantially all of the Series' gross
income consists of tax-exempt interest, no federal income tax provision is
required.

Dividends and Distributions: The Series declares daily dividends from net
investment income. Payment of dividends is made monthly. Distributions of net
capital gains, if any, are made annually.

Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles.
-10-

<PAGE>

The management fee paid PMF is computed daily and payable monthly, at an
annual rate of .50 of 1% of the average daily net assets of the Series.

The Fund has distribution agreements with Prudential Mutual Fund
Distributors, Inc. (``PMFD''), which acts as the distributor of the Class A
shares of the Fund, and with Prudential Securities Incorporated (``PSI''), which
acts as distributor of the Class B and Class C shares of the Fund (collectively
the ``Distributors''). The Fund compensates the Distributors for distributing
and servicing the Fund's Class A, Class B and Class C shares, pursuant to plans
of distribution (the ``Class A, B and C Plans''), regardless of expenses
actually incurred by them. The distribution fees are accrued daily and payable
monthly.

On July 19, 1994, shareholders of the Fund approved amendments to the Class A
and Class B distribution plans under which the distribution plans became
compensation plans, effective August 1, 1994. Prior thereto, the distribution
plans were reimbursement plans, under which PMFD and PSI were reimbursed for
expenses actually incurred by them up to the amount permitted under the Class A
and Class B Plans, respectively. The Fund is not obligated to pay any prior or
future excess distribution costs (costs incurred by the Distributors in excess
of distribution fees paid by the Fund or contingent deferred sales charges
received by the Distributors). The rate of the distribution fees charged to
Class A and Class B shares of the Fund did not change under the amended plans of
distribution. The Fund began offering Class C shares on August 1, 1994.

Pursuant to the Class A, B and C Plans, the Fund compensates the Distributors
for distribution-related activities at an annual rate of up to .30 of 1%, .50 of
1% and 1%, of the average daily net assets of the Class A, B and C shares,
respectively. Such expenses under the Plans were .10 of 1%, .50 of 1% and .75 of
1% of the average daily net assets of the Class A, B and C shares, respectively,
for the fiscal year ended August 31, 1994.

PMFD has advised the Series that it has received approximately $63,200 in
front-end sales charges resulting from sales of Class A shares during the fiscal
year ended August 31, 1994. From these fees, PMFD paid such sales charges to PSI
and Pruco Securities Corporation, affiliated broker-dealers, which in turn paid
commissions to salespersons and incurred other distribution costs.

PSI has advised the Series that for the fiscal year ended August 31, 1994, it
received approximately $76,800 in contingent deferred sales charges imposed upon
certain redemptions by Class B shareholders.

PMFD is a wholly-owned subsidiary of PMF; PSI, PMF and PIC are indirect,
wholly-owned subsidiaries of The Prudential Insurance Company of America.

Note 4. Portfolio Purchases and sales of port-
Securities folio securities of the Series,
excluding short-term investments, for the year
ended August 31, 1994 were $20,412,123 and $21,899,033, respectively.

The cost basis of investments for federal income tax purposes is
substantially the same as for financial reporting purposes and, accordingly, as
of August 31, 1994, net unrealized appreciation of investments, including
short-term investments, for federal income tax purposes is $3,233,683 (gross
unrealized appreciation--$4,247,842 gross unrealized depreciation--$1,014,159).
At August 31, 1994, the Series sold 35 financial futures contracts on the
Municipal Bond Index expiring in September 1994. The value at disposition of
such contracts is $3,606,406. The value of such contracts on August 31, 1994 was
$3,630,156, thereby resulting in an unrealized loss of $23,750.

-11-

<PAGE>
shares are sold with a contingent deferred sales charge of 1% during the first
year. Class B shares will automatically convert to Class A shares on a quarterly
basis approximately seven years after purchase commencing in or about February
1995.

The Fund has authorized an unlimited number of shares of beneficial interest
of each class at $.01 par value per share. Transactions in shares of beneficial
interest for the fiscal years ended August 31, 1993 and 1994 were as follows:
<TABLE>
<CAPTION>
Class A Shares Amount
- -------------------------------- -------- ------------
<S> <C> <C>
Year ended August 31, 1994:
Shares sold..................... 156,225 $ 1,879,629
Shares issued in reinvestment of
dividends and distributions... 29,257 350,410
Shares reacquired............... (55,416) (665,858)
-------- ------------
Net increase in shares
outstanding................... 130,066 $ 1,564,181
-------- ------------
-------- ------------
Year ended August 31, 1993:
Shares sold..................... 379,867 $ 4,588,716
Shares issued in reinvestment of
dividends and distributions... 10,501 127,266
Shares reacquired............... (38,736) (459,132)
-------- ------------
Net increase in shares
outstanding................... 351,632 $ 4,256,850
-------- ------------
-------- ------------
<CAPTION>
Class B Shares Amount
- -------------------------------- -------- ------------
<S> <C> <C>
Year ended August 31, 1994:
Shares sold..................... 679,458 $ 8,157,517
Shares issued in reinvestment of
dividends and distributions... 142,601 1,714,100
Shares reacquired............... (930,146) (11,043,566)
-------- ------------
Net decrease in shares
outstanding................... (108,087) $ (1,171,949)
-------- ------------
-------- ------------
Year ended August 31, 1993:
Shares sold..................... 639,982 $ 7,713,659
Shares issued in reinvestment of
dividends and distributions... 132,586 1,590,336
Shares reacquired............... (520,539) (6,263,141)
-------- ------------
Net increase in shares
outstanding................... 252,029 $ 3,040,854
-------- ------------
-------- ------------
<CAPTION>
Class C
- --------------------------------
<S> <C> <C>
August 1, 1994* through
August 31, 1994:
Shares sold..................... 17 $ 200
-------- ------------
Net increase in shares
outstanding................... 17 $ 200
-------- ------------
-------- ------------
</TABLE>

- ---------------
* Commencement of offering of Class C shares.

-12-

<PAGE>
PRUDENTIAL MUNICIPAL SERIES FUND
ARIZONA SERIES
Financial Highlights
<TABLE>
<CAPTION>
Class A Class B Class C
----------------------------------------------------- ------------------------------------------------ -----------
January 22, August 1,
1990(D) 1994(D)(D)
Year Ended August 31, through Year Ended August 31, through
--------------------------------------- August 31, ------------------------------------------------ August 31,
1994 1993 1992 1991 1990 1994 1993 1992 1991 1990 1994

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
------------ ------ ------ ------ ----------- -------- ------- ------- ------- ------- -----------
<CAPTION>
PER SHARE
OPERATING
PERFORMANCE:

Net asset value,
beginning
of period... $12.44 $11.88 $11.32 $10.80 $ 10.99@ $ 12.44 $ 11.87 $ 11.32 $ 10.80 $ 10.97 $ 11.60
------ ------ ------ ------ ----------- -------- ------- ------- ------- ------- -----------
Income from
investment
operations

Net
investment
income... .65 .67 .68 .69 .42 .60 .62 .63 .64 .65 .04

Net realized
and unrealized
gain (loss)
on investment
transactions.. (.72) .68 .56 .52 (.19)@ (.73) .69 .55 .52 (.17) (.02)
------ ------ ------ ------ ----------- -------- ------- ------- ------- ------- -----------
Total
from
investment
operations... (.07) 1.35 1.24 1.21 .23@ (.13) 1.31 1.18 1.16 .48 .02
------ ------ ------ ------ ----------- -------- ------- ------- ------- ------- -----------
Less distributions

Dividends
from
net
investment
income... (.65) (.67) (.68) (.69) (.42) (.60) (.62) (.63) (.64) (.65) (.04)

Distributions
from net
realized
gains... (.13) (.12) -- -- -- (.13) (.12) -- -- -- --
------ ------ ------ ------ ----------- -------- ------- ------- ------- ------- -----------
Total
distributions.(.78) (.79) (.68) (.69) (.42) (.73) (.74) (.63) (.64) (.65) (.04)
------ ------ ------ ------ ----------- -------- ------- ------- ------- ------- -----------
Net asset
value,
end of
period... $11.59 $12.44 $11.88 $11.32 $ 10.80 $ 11.58 $ 12.44 $ 11.87 $ 11.32 $ 10.80 $ 11.58
------ ------ ------ ------ ----------- -------- ------- ------- ------- ------- -----------
------ ------ ------ ------ ----------- -------- ------- ------- ------- ------- -----------
TOTAL
RETURN#:... (.59)% 11.79% 11.23% 11.45% 2.01%@ (1.08)% 11.42% 10.68% 11.02% 4.49% 0.10%

RATIOS/SUPPLEMENTAL
DATA:

Net assets,
end of
period
(000)... $7,675 $6,622 $2,146 $1,508 $ 436 $52,104 $57,286 $51,697 $57,209 $59,216 $ 200@@

Average
net
assets
(000)... $7,141 $3,613 $1,758 $ 937 $ 260 $55,526 $53,656 $53,477 $58,973 $60,359 $ 199@@

Ratios to
average net
assets:##

Expenses,
including
distribution
fees... .89% .92% 1.02% 1.02% .96%* 1.29% 1.32% 1.42% 1.41% 1.30% 1.90%*

Expenses,
excluding
distribution
fees... .79% .82% .92% .92% .86%* .79 % .82% .92% .91% .82% 1.14%*

Net
investment
income... 5.40% 5.58% 5.81% 6.13% 6.36%* 5.40 % 5.18% 5.42% 5.77% 5.99% 6.34%*

Portfolio
turnover... 33% 14% 42% 25% 49% 33 % 14% 42% 25% 49% 33%

- ---------------
* Annualized.
(D) Commencement of offering of Class A shares.
(D)(D) Commencement of offering of Class C shares.
# Total return does not consider the effects of sales loads. Total return
is calculated assuming a purchase of shares on the first day and a sale
on the last day of each period reported and includes reinvestment of
dividends and distributions. Total returns for periods of less than a
full year are not annualized.
## Because of the event referred to in (D)(D) and the timing of such, the
ratios for the Class C shares are not necessarily comparable to that of
Class A or B shares and are not necessarily indicative of future ratios.
@ Restated.
@@ Figures are actual and not rounded to the nearest thousand.
</TABLE>

See Notes to Financial Statements.
-13-

<PAGE>
INDEPENDENT AUDITORS' REPORT
The Shareholders and Board of Trustees
Prudential Municipal Series Fund, Arizona Series

We have audited the accompanying statement of assets and liabilities of
Prudential Municipal Series Fund, Arizona Series, including the portfolio of
investments, as of August 31, 1994, the related statements of operations for the
year then ended and of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years in
the period then ended. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of the securities owned as of
August 31, 1994 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Prudential Municipal
Series Fund, Arizona Series, as of August 31, 1994, the results of its
operations, the changes in its net assets, and its financial highlights for the
respective stated periods in conformity with generally accepted accounting
principles.

Deloitte & Touche LLP
New York, New York
October 17, 1994

FEDERAL INCOME TAX INFORMATION

We are required by the Internal Revenue Code to advise you within 60 days of
the Series' fiscal year end (August 31, 1994) as to the federal tax status of
dividends paid by the Series during such fiscal year. Accordingly, we are
advising you that in the fiscal year ended August 31, 1994, dividends paid from
net investment income of $.64 per Class A share, $.58 per Class B share, and
$.04 per Class C share were all federally tax-exempt interest dividends. In
addition, the Series paid to both Class A and B shares a long-term capital gain
distribution of $.115 per share which is taxable as such and a short-term
capital gain distribution of $.018 per share which is taxable as ordinary
income.
In January 1995, you will be advised on IRS Form 1099 DIV or substitute 1099
DIV as to the federal tax status of the distributions received by you in
calendar year 1994.
-14-

<PAGE>
These graphs are furnished to you in accordance with SEC regulations. They
compare a $10,000 investment in Prudential Municipal Series Fund: Arizona Series
(Class A, Class B, and Class C) with a similar investment in the Lehman Brothers
Municipal Bond Index (the Index) by portraying the initial account values at the
commencement of operations of each class and subsequent account values at the
end of each fiscal year (August 31) beginning in 1990 for Class A, in 1984 for
Class B shares and 1994 for Class C shares. For purposes of the graphs and,
unless otherwise indicated, the accompanying tables, it has been assumed that
(a) the maximum sales charge was deducted from the initial $10,000 investment in
Class A shares; (b) the maximum applicable contingent deferred sales charge was
deducted from the value of the investment in Class B shares and Class C shares,
assuming full redemption on August 31, 1994; (c) all recurring fees (including
management fees) were deducted; and (d) all dividends and distributions were
reinvested. Class B shares will automatically convert to Class A shares on a
quarterly basis approximately seven years after purchase. This conversion
feature is expected to be implemented on or about February 1995 and is not
reflected in the graph. The graph and accompanying tables reflect the past
subsidy and/or waiver of expenses and/or management fees. Without fee waivers
and expense subsidies, the value of a $10,000 investment in the Series and the
Series' average annual total return, as shown above, would have been lower.

The Index is a weighted index comprised of 21,000 municipal bonds (general
obligation bonds, revenue bonds, insured bonds and prerefunded bonds) selected
by Lehman Brothers as representative of the long-term investment grade municipal
bond market. The Index is an unmanaged index and includes the reinvestment of
all income, but does not reflect the payment of transaction costs and advisory
fees associated with an investment in the Series. The securities which comprise
the Index may differ substantially from the securities in the Series' portfolio
because the Index, among other things, is not state specific. The Lehman
Brothers Municipal Bond Index is not the only index which may be used to
characterize performance of long-term, investment-grade tax-exempt bond funds
and other indexes may portray different comparative performance.
<PAGE>
<PAGE>
Trustees
Edward D. Beach
Eugene C. Dorsey
Delayne Dedrick Gold
Harry A. Jacobs, Jr.
Lawrence C. McQuade
Thomas T. Mooney
Thomas H. O'Brien
Richard A. Redeker
Nancy H. Teeters

Officers
Lawrence C. McQuade, President
Robert F. Gunia, Vice President
Susan C. Cote, Treasurer
S. Jane Rose, Secretary
Ronald Amblard, Assistant Secretary
Deborah A. Docs, Assistant Secretary

Manager
Prudential Mutual Fund Management, Inc.
One Seaport Plaza
New York, NY 10292

Investment Adviser
The Prudential Investment Corporation
Prudential Plaza
Newark, NJ 07101

Distributors
Prudential Mutual Fund Distributors, Inc.
Prudential Securities Incorporated
One Seaport Plaza
New York, NY 10292

Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171

Transfer Agent
Prudential Mutual Fund Services, Inc.
P.O. Box 15005
New Brunswick, NJ 08906

Independent Accountants
Deloitte & Touche LLP
1633 Broadway
New York, NY 10019

Legal Counsel
Gardner, Carton & Douglas
Quaker Tower
321 North Clark Street
Chicago, IL 60610-4795

Prudential Mutual Funds
One Seaport Plaza
New York, NY 10292
Toll free (800) 225-1852, Collect (908) 417-7555

This report is not authorized for distribution to prospective
investors unless preceded or accompanied by a current prospectus.

74435M101
74435M200 MF 117E
74435M598 Cat. #6426206

ANNUAL REPORT August 31, 1994

Prudential
Municipal
Series Fund

(ICON)

Connecticut
Money Market Series

(LOGO)

<PAGE>

Letter to Shareholders

October 18, 1994

Dear Shareholder:

Short-term interest rates moved steadily higher during the last 12 months,
accelerating in 1994 as the Federal Reserve boosted short-term interest rates
in hopes of preventing inflation from increasing as the economy began to expand
rapidly. As a result, your Prudential Municipal Series Fund Connecticut Money
Market Series - produced higher yields than six months ago.
<TABLE>

SERIES PERFORMANCE
As of August 31, 1994
<CAPTION>
Net Asset Weighted 7-Day Taxable Equivalent Yield Net
Value Avg. Mat. Current Yield @28% @31% @39.6% Asset (Mil.)
<S> <C> <C> <C> <C> <C> <C>
$1.00 77 days 2.22% 3.2% 3.4% 3.9% $54.3
</TABLE>

Past performance is no guarantee of future results
Please note than an investment in the Series is neither insured nor
guaranteed by the U.S. government, and there can be no assurance that the
Series will be able to maintain a stable net asset value of $1.00 per share.

The Connecticut Money Market Series seeks to provide the highest level of
state and federally tax-exempt current income consistent with the preservation
of principal and liquidity. Interest on municipal obligations may be subject
to the federal alternative minimum tax. The Series invests primarily in
high-quality, short-term, tax-exempt obligations issued by the state,
municipalities, and authorities. During the year, the Series' credit quality
remained consistently high, with 90% of its holdings rated in the highest
category as determined by Moody's Investors Service or Standard & Poor's, or
if unrated, deemed to be of comparable quality by the adviser.

In 1994, Rates Rose Rapidly

Short-term taxable interest rates were relatively stable until February, when
the Federal Reserve, concerned that the rapidly expanding economy could ignite
inflation, started to increase the fed funds rate (the overnight interbank
lending rate). If the economy grows too quickly, shortages develop and
consumers and businesses bid up the prices of materials and labor.

-1-
<PAGE>

The Municipal Market Is Different

While the fed funds rate spiked 175 basis points (100 basis points is one
percentage point), the yields of tax-free securities did not rise by a similar
margin. While this rising interest rate activity in the taxable market does
affect the tax-free market, the impact generally lags. The short-term municipal
market is also more influenced by seasonal supply and demand factors than
taxable Treasury bills.

Rising rates in the taxable market can be followed by higher yields in the
tax-free market. Anticipating the Fed would raise interest rates in February,
we maintained a shorter weighted average maturity so that we could take
advantage of higher rates as they became available. Once the Fed moved, we
selectively extended the maturity of the portfolio. Generally, our weighted
average maturity was shorter than that of our peers.

Connecticut's Economy: Restructuring

Although Connecticut is the wealthiest state in the nation, its economy has
been suffering from corporate restructuring. The state lost 15,000 jobs in the
six months ended April, 1994, 50% more than in the previous six months. The
defense industry continues to shrink and insurance companies are shedding
employees, too. Connecticut has been hurt nearly as severely as California by
military cutbacks.

Although its economy is no longer in decline, there is little evidence of
significant growth in Connecticut as it continues to restructure. Most growth
is centered in Fairfield County, where many residents commute to New York City.
In New London, the naval shipyard has been spared significant cuts, while the
Indian-operated casino at Ledyard is the most profitable in the nation. Another
gambling bill for Bridgeport will likely be introduced in the next Legislature,
although lawmakers voted it down in the last session. This time, a new governor
will be in office.

Despite the recession, the state's financial position has improved
substantially since fiscal 1992, when the personal income tax was adopted and
the sales tax reduced. The state has restructured its debt and current revenues
are running ahead of schedule. Three consecutive surpluses have pared the
state's $1.3 billion deficit to $384 million in 1993. The operating surplus in
1994 was $141 million.

-2-

<PAGE>

The Outlook: Rates May Rise Again.

After its August rate increase, the Fed paused to assess its actions. With
the Fed ready to move swiftly should price growth inch up above 3%, we believe
inflation will remain under control. In this environment, we expect short-term
rates to climb moderately higher, which should have a corresponding effect on
the Series' yield.

Once again, it is a pleasure to have you as a shareholder and to report our
activities to you.

Sincerely,

Lawrence C. McQuade
President

Richard S. Lynes
Portfolio Manager
-3-
<PAGE>

PRUDENTIAL MUNICIPAL SERIES FUND Portfolio of Investments
CONNECTICUT MONEY MARKET SERIES August 31, 1994

Moody's Principal
Rating Amount Value
(Unaudited) (000) Description (Note 1)

<C> <C> <S> <C>
SHORT-TERM INVESTMENTS--98.1%
Connecticut St. Arpt.
Rev.,
Bradley Int'l. Airport
7.05%, 10/1/94, Ser. 92,
Aaa $ 2,375 F.G.I.C................. $ 2,384,081
Connecticut St. Dev.
Auth., Conco Proj.
3.00%, 9/1/94, Ser. 85,
P1 1,700 F.R.W.D................. 1,700,000
Ctrl. Rev., Lt. & Pwr.
Co. Proj.,
3.15%, 9/7/94, Ser. 93B,
VMIG1 5,700 F.R.W.D................. 5,700,000
Jewish Cmnty. Ctr.
of New Haven,
2.70%, 9/7/94, Ser. 92,
A-1* 725 F.R.M.D................. 725,000
RK Bradley Assoc. Proj.,
2.85%, 9/7/94, Ser. 85,
A-2* 1,500 F.R.W.D................. 1,500,000
Rand Whitney Container
Bd.,
2.95%, 9/7/94, Ser. 93,
P1 1,000 F.R.W.D................. 1,000,000
SHW Inc. Proj.,
3.30%, 9/7/94, Ser. 90,
NR 3,100 F.R.W.D................. 3,100,000
Connecticut St., Gen.
Oblig.,
Aa 1,000 5.20%, 5/1/95, Ser.
94.................... 1,012,926
Recreation Notes,
3.05%, 9/7/94, Ser. 91B,
VMIG1 1,100 F.R.W.D................. 1,100,000
Aa 1,000 5.25%, 12/15/94, Ser.
91A................... 1,008,361
Connecticut St., Hlth. &
Edl. Facs. Auth. Rev.,
Charlotte-Hungerford,
3.00%, 9/1/94, Ser. B,
VMIG1 900 F.R.W.D................. 900,000
Yale Univ., T.E.C.P.,
VMIG1 $ 1,400 2.85%, 9/8/94, Ser. L... $ 1,400,000
VMIG1 1,500 2.85%, 9/8/94, Ser. N... 1,500,000
Connecticut St. Hsg.
Fin. Auth., Mtg. Fin.
Prog. A.N.N.M.T.,
VMIG1 2,000 2.90%, 11/15/94, Ser.
93H-2................. 2,000,000
Taxable Hsg. Mtg.
Fin.Sub.
3.65%, 5/15/95,
Ser. 92D-2............ 1,000,000
VMIG1 1,000
Connecticut St Res. Rec.
Auth.,
Aaa 500 8.25%, 11/15/94, Ser.
A..................... 504,856
Connecticut St. Spec.
Assmt., Unemployment
Comp.,
3.05%, 9/7/94, Ser. 93B,
VMIG1 1,000 F.R.W.D................. 1,000,000
MIG1 1,750 3.10%, 11/15/94, Ser.
93A................... 1,752,182
Connecticut St. Spec.
Tax Oblig., Trans.
Infrastructure Rev.,
3.20%, 9/7/94, Ser. 90I,
VMIG1 4,100 F.R.W.D................. 4,100,000
East Lyme Ct., Gen.
Oblig.,
4.25%, 8/3/95, Ser. 94,
NR 2,800 B.A.N................... 2,804,951
Fairfield Ct., Gen.
Oblig., Swr. Assmt.
Note
NR 1,750 3.60%, 6/9/95........... 1,751,287
Norwich Ct.,
3.40%, 9/30/94, Ser. 94,
NR 2,650 B.A.N................... 2,650,826
Puerto Rico Comnwlth.,
Gov't. Dev. Bank.,
2.90%, 9/7/94, Ser. 85,
VMIG1 2,700 F.R.W.D.,............... 2,700,000
Puerto Rico Hsg. Fin.
Corp. Rev. Med.,
2.60%, 9/15/94, Ser.
90I,
Aa 2,165 M.T.H.O.T............... 2,165,000
</TABLE>

-4- See Notes to Financial Statements.

<PAGE>

PRUDENTIAL MUNICIPAL SERIES FUND
CONNECTICUT MONEY MARKET SERIES

<TABLE>
<CAPTION>
Moody's Principal
Rating Amount Value
(Unaudited) (000) Description (Note 1)
<C> <C> <S> <C>
Puerto Rico Ind. Med. &
Environ. Facs.,
Ana G. Mendez
Ed. Fndtn.,
2.90%, 9/7/94, Ser. 85,
A-1* $ 200 F.R.W.D................. $ 200,000
Reynolds Metal Co.
Proj., A.N.N.O.T.,
P1 1,900 4.00%, 9/1/95, Ser. 83
A..................... 1,900,000
Schering-Plough Corp.,
2.80%, 12/1/94, Ser.
83A,
AAA* 700 A.N.N.O.T............... 700,000
Puerto Rico Maritime
Shipping Auth.,
P1 2,000 2.65%, 9/6/94,
T.E.C.P............... 2,000,000
Stamford Ct.,
MIG1 3,000 3.07%, 3/22/95,
B.A.N................. 3,000,632
-----------
Total Investments--98.1%
(amortized
cost--$53,260,102**)... 53,260,102
Other assets in excess
of
liabilities--1.9%..... 1,042,071
-----------
Net Assets--100%........ $54,302,173
-----------
-----------
</TABLE>
- ------------------
(a) The following abbreviations are used in portfolio descriptions:
A.N.N.M.T.--Annual Mandatory Tender.
A.N.N.O.T.--Annual Optional Tender.
B.A.N.--Bond Anticipation Note.
F.R.M.D.--Floating Rate (Monthly) Demand Note #.
F.R.W.D.--Floating Rate (Weekly) Demand Note #.
M.T.H.O.T.--Monthly Optional Tender.
T.E.C.P.--Tax Exempt Commercial Paper.
# For purposes of amortized cost valuation, the
maturity date of Floating Rate Demand Notes is
considered to be the later of the next date on
which the security can be redeemed at par, or the
next date on which the rate of interest is
adjusted.
* Standard & Poor's rating.
** The cost of securities for federal income tax
purposes is substantially the same as for financial
reporting purposes.

NR--Not Rated by Moody's or Standard & Poor's.
The Fund's current Statement of Additional Information contains a description
of Moody's and Standard & Poor's ratings.
-5- See Notes to Financial Statements.

<PAGE>

PRUDENTIAL MUNICIPAL SERIES FUND
CONNECTICUT MONEY MARKET SERIES
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
August 31,
Assets 1994
-----------
<S> <C>
Investments, at amortized cost which approximates market value............................. $53,260,102
Cash....................................................................................... 840,182
Receivable for Fund shares sold............................................................ 532,409
Interest receivable........................................................................ 405,991
Receivable for investments sold............................................................ 75,242
Deferred expenses and other assets......................................................... 29,895
-----------
Total assets............................................................................. 55,143,821
-----------
Liabilities
Payable for Fund shares reacquired......................................................... 766,555
Accrued expenses and other liabilities..................................................... 38,118
Dividends payable.......................................................................... 20,600
Distribution fee payable................................................................... 9,510
Due to Manager............................................................................. 5,855
Deferred Trustees' fees.................................................................... 1,010
-----------
Total liabilities........................................................................ 841,648
-----------
Net Assets................................................................................. $54,302,173
-----------
-----------
Net assets were comprised of:
Shares of beneficial interest, at $.01 par value......................................... $ 543,022
Paid-in capital in excess of par......................................................... 53,759,151
-----------
Net assets, August 31, 1994.............................................................. $54,302,173
-----------
-----------
Net asset value, offering price and redemption price per share ($54,302,173 / 54,302,173
shares of beneficial interest issued and outstanding; unlimited number of shares
authorized)............................................................................ $1.00
-----
-----

</TABLE>

See Notes to Financial Statements.
-6-
<PAGE>
<PAGE>
PRUDENTIAL MUNICIPAL SERIES FUND
CONNECTICUT MONEY MARKET SERIES
Statement of Operations
<TABLE>
<CAPTION>
Year Ended
August 31,
Net Investment Income 1994
----------
<S> <C>
Income
Interest........................... $1,536,609
----------
Expenses
Management fee, net of waiver of
$243,395......................... 63,440
Distribution fee................... 75,743
Custodian's fees and expenses...... 60,000
Transfer agent's fees and
expenses......................... 35,000
Reports to shareholders............ 28,400
Legal fees......................... 20,000
Registration fees.................. 13,000
Amortization of organization
expense.......................... 11,750
Audit fee.......................... 10,000
Trustees' fees..................... 3,375
Miscellaneous...................... 7,612
----------
Total expenses................... 328,320
----------
Net investment income................ 1,208,289
----------
Realized Loss on Investments
Net realized loss on investment
transactions....................... (4,743)
----------
Net Increase in Net Assets
Resulting from Operations............ $1,203,546
----------
----------
</TABLE>

PRUDENTIAL MUNICIPAL SERIES FUND
CONNECTICUT MONEY MARKET SERIES
Statement of Changes in Net Assets

<TABLE>
<CAPTION>
Year Ended August 31,
Increase (Decrease) ------------------------------
in Net Assets 1994 1993
------------- -------------
<S> <C> <C>
Operations
Net investment
income............... $ 1,208,289 $ 1,150,867
Net realized gain
(loss) on investment
transactions......... (4,743) 371
------------- -------------
Net increase in net
assets resulting from
operations........... 1,203,546 1,151,238
------------- -------------
Dividends and
distributions to
shareholders........... (1,203,546) (1,151,238)
------------- -------------
Series share transactions
(at $1 per share)
Net proceeds from
shares
subscribed........... 210,712,023 197,325,014
Net asset value of
shares issued to
shareholders in
reinvestment of
dividends and
distributions........ 1,156,043 1,096,823
Cost of shares
reacquired........... (215,359,425) (181,107,990)
------------- -------------
Net increase (decrease)
in net assets from
Series share
transactions......... (3,491,359) 17,313,847
------------- -------------
Total increase
(decrease)............. (3,491,359) 17,313,847
Net Assets
Beginning of year........ 57,793,532 40,479,685
------------- -------------
End of year.............. $ 54,302,173 $ 57,793,532
------------- -------------
------------- -------------
</TABLE>

See Notes to Financial Statements. See Notes to Financial Statements.
-7-
<PAGE>
<PAGE>

PRUDENTIAL MUNICIPAL SERIES FUND
CONNECTICUT MONEY MARKET SERIES

Notes to Financial Statements
Prudential Municipal Series Fund (the ``Fund'') is registered under the
Investment Company Act of 1940, as an open-end investment company. The Fund was
organized as a Massachusetts business trust on May 18, 1984 and consists of
seventeen series. The monies of each series are invested in separate,
independently managed portfolios. The Connecticut Money Market Series (the
``Series'') commenced investment operations on August 5, 1991. The Series is
non-diversified and seeks to provide the highest level of income that is exempt
from Connecticut State, local and federal income taxes with the minimum of risk
by investing in ``investment grade'' tax-exempt securities having a maturity of
thirteen months or less and whose ratings are within the two highest ratings
categories by a nationally recognized statistical rating organization, or if not
rated, are of comparable quality. The ability of the issuers of the securities
held by the Series to meet their obligations may be affected by economic
developments in a specific state, industry or region.

Note 1. Accounting The following is a summary
Policies of significant accounting poli-
cies followed by the Fund, and the Series, in the
preparation of its financial statements.
Securities Valuations: Portfolio securities of the Series are valued at
amortized cost, which approximates market value. The amortized cost method of
valuation involves valuing a security at its cost on the date of purchase and
thereafter assuming a constant amortization to maturity of any discount or
premium.
All securities are valued as of 4:30 p.m., New York time.
Securities Transactions and Investment Income: Securities transactions are
recorded on the trade date. Realized gains and losses on sales of investments
are calculated on the identified cost basis. Interest income is recorded on the
accrual basis.
Federal Income Taxes: For federal income tax purposes, each series in the Fund
is treated as a separate taxpaying entity. It is the intent of the Series to
continue to meet the requirements of the Internal Revenue Code applicable to
regulated investment companies and to distribute all of its net income to
shareholders. For this reason and because substantially all of the Series'
gross income consists of tax-exempt interest, no federal income tax provision
is required.
Dividends: The Series declares daily dividends from net investment income.
Payment of dividends is made monthly. Income distributions and capital gain
distributions are determined in accordance with income tax regulations which
may differ from generally accepted accounting principles.
Deferred Organization Expenses: The Series incurred approximately $52,600 in
organization and initial registration expenses. Such amount has been deferred
and is being amortized over a period of 60 months ending July 1996.

Note 3. Other Prudential Mutual Fund Ser-
Transactions vices, Inc. (``PMFS''), a
with Affiliates wholly-owned subsidary of
PMF, serves as the Fund's transfer agent. During
the year ended August 31, 1994, the Series incurred fees of approximately
$29,000 for the services of PMFS. As of August 31, 1994, approximately $2,700 of
such fees were due to PMFS. Transfer agent fees and expenses in the Statement of
Operations also include certain out-of-pocket expenses paid to non-affiliates.
-9-
<PAGE>
<PAGE>

PRUDENTIAL MUNICIPAL SERIES FUND
CONNECTICUT MONEY MARKET SERIES
Financial Highlights

<TABLE>
<CAPTION>
August 5,
1991*
Year ended August 31, through
------------------------------------ August 31,
1994 1993 1992 1991
<S> <C> <C> <C> <C>
------------ ------- ------- ----------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period............................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net investment income and realized gains(D)........................ .020 .022 .034 .003
Dividends and distributions to shareholders........................ (.020) (.022) (.034) (.003)
------------ ------- ------- ----------
Net asset value, end of period..................................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ ------- ------- ----------
------------ ------- ------- ----------
TOTAL RETURN#:..................................................... 2.02% 2.20% 3.42% .30%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000).................................... $ 54,302 $57,794 $40,480 $ 10,904
Average net assets (000)........................................... $ 60,594 $53,152 $33,964 $ 6,730
Ratios to average net assets(D):
Expenses, including distribution fee............................. .542% .387% .125% .125%**
Expenses, excluding distribution fee............................. .417% .262% .00% .00%**
Net investment income............................................ 1.99% 2.17% 3.20% 4.42%**
</TABLE>

- ---------------
* Commencement of investment operations.
** Annualized.
(D) Net of management fee waiver and/or expense subsidy.
# Total returns for periods of less than a full year are not annualized.

See Notes to Financial Statements.
-10-
<PAGE>
<PAGE>
INDEPENDENT AUDITORS' REPORT

The Shareholders and Board of Trustees
Prudential Municipal Series Fund, Connecticut Money Market Series
We have audited the accompanying statement of assets and liabilities of
Prudential Municipal Series Fund, Connecticut Money Market Series, including the
portfolio of investments, as of August 31, 1994, the related statements of
operations for the year then ended and of changes in net assets for each of the
two years in the period then ended, and the financial highlights for each of the
three years in the period then ended and for the period August 5, 1991
(commencement of investment operations) through August 31, 1991. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatment. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of the securities owned as of
August 31, 1994 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Prudential Municipal
Series Fund, Connecticut Money Market Series, as of August 31, 1994, the results
of its operations, the changes in net assets, and its financial highlights for
the respective stated periods in conformity with generally accepted accounting
principles.

Deloitte & Touche LLP
New York, New York
October 17, 1994

FEDERAL INCOME TAX INFORMATION

Trustees
Edward D. Beach
Eugene C. Dorsey
Delayne Dedrick Gold
Harry A. Jacobs, Jr.
Lawrence C. McQuade
Thomas T. Mooney
Thomas H. O'Brien
Richard A. Redeker
Nancy Hays Teeters

Officers
Lawrence C. McQuade, President
Robert F. Gunia, Vice President
Susan C. Cote, Treasurer
S. Jane Rose, Secretary
Ronald Amblard, Assistant Secretary
Deborah A. Docs, Assistant Secretary

Manager
Prudential Mutual Fund Management, Inc.
One Seaport Plaza
New York, NY 10292

Investment Adviser
The Prudential Investment Corporation
Prudential Plaza
Newark, NJ 07101

Distributor
Prudential Mutual Fund Distributors, Inc.
One Seaport Plaza
New York, NY 10292

Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171

Transfer Agent
Prudential Mutual Fund Services, Inc.
P.O. Box 15005
New Brunswick, NJ 08906

Independent Accountants
Deloitte & Touche LLP
1633 Broadway
New York, NY 10019

Legal Counsel
Gardner, Carton & Douglas
Quaker Tower
321 North Clark Street
Chicago, IL 60610-4795

Prudential Mutual Funds
One Seaport Plaza
New York, NY 10292
Toll free (800) 225-1852, Collect (908) 417-7555

This report is not authorized for distribution to prospective investors
unless preceded or accompanied by a current prospectus.

MF 154E
74435M648 (LOGO) Cat. #4445050

ANNUAL REPORT August 31, 1994

Prudential
Municipal
Series Fund

(ICON)

Florida Series

(LOGO)

<PAGE>

Letter to Shareholders

October 18, 1994

Dear Shareholder:

It has been a most difficult year in the U.S. financial markets. When we
last wrote in February interest rates were starting to rise, ending a
three-year long bull market in bonds. What started as a trickle has become a
torrent. Interest rates have continued to increase this year, sending bond
prices down sharply. Of course, as interest rates rise, bond prices decline.
In this environment of falling prices and unusual volatility, your Prudential
Municipal Series Fund -- Florida Series sought to minimize risk while
maximizing your tax-free income.

The Series seeks maximum income exempt from federal income taxes* consistent
with preservation of capital. The Series invests in investment grade bonds.
The Series performed in line with the Lipper Florida Municipal Debt Average
over the last year, but because long-term interest rates rose, total returns
were disappointing. As a result, the Series has become more cautious and
shortened its average maturity.

<TABLE>

SERIES PERFORMANCE
As of August 31, 1994
<CAPTION>
30-day Taxable Equivalent Yields
NAV SEC Yield @28% @31% @39.6%

Class A $9.91 5.7% 7.9% 8.3% 9.5%
Class B $9.91 N/A N/A N/A N/A
Class C $9.91 5.2% 7.3% 7.6% 8.7%
</TABLE>

*Interest on municipal obligations may be subject to the federal
alternative minimum tax. See your Series' prospectus for more details.

-1-

<PAGE>
<TABLE>
TOTAL RETURNS
<CAPTION>

Historical (As of 8/31/94)1 Average Annual (As of 9/30/94)2

1-Yr. 5-Yr. Since Incep.** 1-Yr. 5-Yr. Since Incep.**

Class A -1.7% N/A +34.3% -7.7% N/A +6.6%

Class B N/A N/A -0.1% N/A N/A N/A

Class C -2.4% N/A +0.7% -6.5% N/A -1.2%

Lipper FL

Muni Debt Avg.*** -2.1% +48.1% +81.9%

</TABLE>

1 Source: Lipper Analytical Services, Inc. These figures do not take into
account sales charges.

2 Source: Prudential Mutual Fund Management, Inc. These averages take into
account applicable sales charges. The Series charges a maximum initial sales
charge of 3% for Class A shares. Class B shares are subject to a declining
contingent deferred sales charge of 5%, 4%, 3%, 2%, 1% and 1%, respectively,
for the first six years. Class B shares will automatically convert to Class A
shares approximately seven years after purchase. This conversion feature is
expected to be implemented in February 1995. Class C shares are sold subject
to a contingent deferred sales charge of 1% during the first year.

**Inception on January 22, 1990 for Class A, and August 1, 1994 for Class B
and July 26, 1993 for Class C.

***These are the average returns of 57 Florida municipal debt funds for
one-year, five-year, and since inception of Class A shares, as determined by
Lipper Analytical Services, Inc.

Once Was Not Enough

When we wrote to you in February, the Federal Reserve raised short-term
interest rates for the first time in years, hoping to control inflation. Since
then, the Fed has moved four more times, until the federal funds rate (the
overnight interbank lending rate) now stands at 4.75%, up from 3% at the start
of the year. The Fed also increased the discount rate (at which it lends banks
money) to 4% from 3% over the same period.

Interest rates rise when the financial markets fear inflation, the bond
holder's enemy. Inflation is feared because it robs purchasing power from a
bond's fixed-interest rate.

Municipal bond interest rates increased by nearly a percentage point, to
6.46% on August 25 from 5.52% on December 29, 1993, as measured by the Bond
Buyer's Revenue Bond Index, a widely used yardstick of interest rates in the
tax-free market.

Florida: Growing Rapidly

Florida's economic growth is among the strongest in the nation, largely as
a result of its growing tourism, trade, agriculture and financial industries.
Construction this year could reach a five-year high, easily leading the
nation.

Still, there are some concerns with the state. Its financial position is
highly vulnerable to economic fluctuations because 70% of its general fund
revenues are derived from sales taxes. In an improving economy, these revenues

-2-

<PAGE>
have been exceeding projections. But the state has a large proportion of
elderly residents on fixed incomes, who comprise an even larger portion of
voters, so it is very difficult to increase property taxes. At the same time,
the government will need to provide in the next five years for a school
enrollment climbing 18% and the state will also need an additional 30,000
prison beds.

One particular strain in recent months has been the Cuban refugee situation.
Over the summer, President Clinton declined Governor Chiles' request for
assistance. Depending on developments, the state could be faced with additional
financial and economic burdens unless it gets direct federal assistance.

A Tax Reminder

As a result of the federal Revenue Reconciliation Act of 1993, which affects
bonds purchased after April 30, 1993, it is possible that this year you may
have some taxable income from your tax-free municipal bond fund. The law
stipulates that the portion of any gain realized on the sale or retirement of a
tax-free bond purchased at a market discount to its face value must be taxed as
ordinary income.

As a result of this change in federal tax law, some discount bonds have been
selling at levels so cheap they will produce a higher after-tax return than
other bonds not subject to the provisions of the new law. We have occasionally
taken advantage of this market imbalance because we have determined that at
very low prices these bonds can still provide you with a higher after-tax
return on your investment.

The Outlook

We expect volatility in the municipal bond market until the economy reaches
a level of growth that is sustainable without causing inflation. If the
economy continues to surge, the ever vigilant Fed will move once again,
boosting short-term rates. If the economy slows substantially, long term rates
should stabilize. Although rates may keep rising, we believe that most of the
increase is now behind us.

In the months ahead, we expect supply - or the lack of it - to become more
important in the tax-free municipal bond market. Through the first eight months
of the year, new issue volume is off 42%, according to Securities Data Co.,
which tracks this statistic. The pace is accelerating. In August, new issue
volume fell 56%.

-3-

<PAGE>
As always, it is a pleasure to have you as a shareholder in the Prudential
Municipal Series Fund -- Florida Series, and to take this opportunity to
report our activities to you.

Sincerely,
Lawrence C. McQuade
President

Marie Conti
Portfolio Manager

-4-

<PAGE>

PRUDENTIAL MUNICIPAL SERIES FUND Portfolio of Investments
FLORIDA SERIES August 31, 1994
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount Value
(Unaudited) (000) Description (Note 1)

<C> <C> <S> <C>
LONG-TERM INVESTMENTS--97.8%
Alachua Cnty. Hlth. Facs. Auth.
Rev., Santa Fe Healthcare
Facs. Proj.,
Baa $ 1,750 7.60%, 11/15/13...... $ 1,815,520
Alachua Cnty. Ind. Dev. Rev.,
HB Fuller Co. Proj.,
NR 3,000 7.75%, 11/1/16....... 3,152,910
Brevard Cnty. Edl. Facs. Auth.,
Florida Inst. of Techn.,
BBB+* 1,500 6.875%, 11/1/22...... 1,533,345
Wuesthoff Mem. Hosp.,
6.625%, 4/1/13, Ser.
Aaa 1,000 A, M.B.I.A......... 1,041,280
Broward Cnty. Edl. Facs. Auth.
Rev., Nova Univ. Dorm. Proj.,
7.50%, 4/1/17, Ser.
BBB* 1,500(D) A.................. 1,717,890
Broward Cnty. Res. Rec. Rev.,
Ltd. Partnership So. Proj.,
A 2,730 7.95%, 12/1/08....... 2,993,882
Broward Cnty., Wtr. & Swr. Rev.,
5.125%, 10/1/15,
Aaa 1,750 A.M.B.A.C.......... 1,530,200
Citrus Cnty. Poll.
Ctrl. Rev.,
Pwr. Crystal Proj.,
6.35%, 2/1/22, Ser.
Aaa 2,300 B, M.B.I.A......... 2,325,093
City of Atlantis,
Wtr. & Swr. Rev.,
BBB* 1,750 6.50%, 9/1/22........ 1,732,167
City of Cocoa,
Wtr. & Swr. Rev.,
5.125%, 10/1/13,
Ser. B,
Aaa 1,000 A.M.B.A.C.......... 888,300
City of Deerfield
Beach,
Wtr. & Swr. Rev.,
6.125%, 10/1/06,
Aaa 550 F.G.I.C............ 575,559
Clay Cnty. Hsg. Fin. Auth. Rev.,
Sngl. Fam. Mtge.,
7.45%, 9/1/23, Ser.
Aaa $ 375 A, G.N.M.A......... $ 386,396
Clay Cnty. Utils.
Sys. Rev.,
5.00%, 11/1/23,
Aaa 3,500 F.G.I.C............ 2,915,955
Coral Springs Impvt.
Dist., Wtr. & Swr.
Rev.,
6.00%, 6/1/10,
Aaa 1,000 M.B.I.A............ 1,012,610
Dade Cnty. Hlth.
Facs. Auth.
Rev., Baptist Hosp.
of
Miami Proj.,
6.75%, 5/1/08, Ser.
Aaa 500 A, M.B.I.A......... 544,345
No. Shore Med. Ctr. Proj.,
Aaa 750 6.50%, 8/15/15, A.M.B.A.C.775,493
Dade Cnty. Hsg. Fin. Auth. Rev.,
Sngl. Fam. Mtge. G.N.M.A.,
7.75%, 9/1/22, Ser.
Aaa 980 C.................. 1,024,443
7.25%, 9/1/23, Ser.
Aaa 360(D)(D) B.................. 367,999
Dade Cnty. Pub. Facs. Rev.,
Jackson Mem. Hosp. M.B.I.A.,
4.875%, 6/1/15, Ser.
Aaa 2,000 A.................. 1,676,380
Aaa 2,000 5.25%, 6/1/23........ 1,731,940
Dade Cnty. Pub. Impvt. Rev.,
J & K Seaport,
6.50%, 10/1/26,
Aaa 5,500 A.M.B.A.C. 5,666,705
Dade Cnty. Sch. Brd. Ctfs. of
Part.,
6.00%, 5/1/14, Ser.
Aaa 2,725 A, M.B.I.A......... 2,686,087
Dade Cnty. Sch. Dist., M.B.I.A.,
Aaa 1,235 5.00%, 8/1/11........ 1,093,988
Aaa 1,500 5.00%, 8/1/13........ 1,314,675
5.00%, 8/1/14, Ser.
Aaa 2,000 1994............... 1,727,520
Dade Cnty. Wtr. & Swr. Sys. Rev.,
5.00%, 10/1/13,
Aaa 4,500 F.G.I.C............ 3,927,645
</TABLE>

-5- See Notes to Financial Statements.
<PAGE>
<PAGE>
PRUDENTIAL MUNICIPAL SERIES FUND
FLORIDA SERIES
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount Value
(Unaudited) (000) Description (Note 1)

<C> <C> <S> <C>
Duval Cnty. Hsg. Fin. Auth. Rev.,
Sngl. Fam. Mtge.,
8.375%, 12/1/14,
AAA* $ 685 G.N.M.A............ $ 704,139
Enterprise Cmnty. Dev. Dist.,
Osceola Co., Spl. Assmnt.,
6.00%, 5/1/10,
Aaa 2,320 M.B.I.A............ 2,330,626
Escambia Cnty. Hlth. Facs. Auth.
Rev., Baptist Hosp. Inc.,
8.70%, 10/1/14, Ser.
BBB+* 1,830 A.................. 2,033,789
Escambia Cnty. Hsg. Fin. Auth.
Rev., Sngl. Fam. Mtge.,
7.40%, 10/1/23, Ser.
Aaa 845(D)(D) A, G.N.M.A......... 878,040
Escambia Cnty. Poll. Ctrl., Rev.,
Champion Int'l. Corp. Proj.,
Baa1 1,500 6.90%, 8/1/22........ 1,499,850
Florida St. Brd. of
Ed.
Cap. Outlay, Pub.
Ed.,
Aa 1,400 5.125%, 6/1/18....... 1,207,808
7.25%, 6/1/23, Ser.
Aaa 255(D) A.................. 287,586
7.25%, 6/1/23, Ser.
Aa 245 A.................. 269,828
Florida St. Broward Cnty.,
Expwy. Auth.,
Aa 2,100@ 9.875%, 7/1/09....... 2,873,808
Florida St. Dept. of
Trans.,
7.20%, 7/1/11, Ser.
Aaa 1,000(D)/(D)(D) A, A.M.B.A.C..... 1,134,580
Florida St. Div. Bond Fin. Dept.,
Gen. Svcs. Rev.,
6.75%, 7/1/13,
Aaa 1,500 A.M.B.A.C.......... 1,583,445
Gen. Svcs. Rev., Dept. of
Natural Res. Preservation,
6.25%, 7/1/09, Ser.
Aaa 1,650 A, M.B.I.A......... 1,689,122
Florida St. Gen.
Oblig., Ref. Dade
Cnty. Rd.,
Aa 1,500 5.125%, 7/1/13....... 1,345,155
Florida St. Mun. Pwr. Agcy. Rev.,
4.50%, 10/1/27,
Aaa $ 4,365 A.M.B.A.C. $3,263,405
Gainesville Gtd. Entitlement Rev.,
5.50%, 8/1/10,
Aaa 2,635 A.M.B.A.C.......... 2,524,383
Hillsborough Cnty.
Ind. Dev.
Rev., Univ. Cmnty.
Hosp. Proj.,
5.75%, 8/15/10,
Aaa 1,000 M.B.I.A............ 980,540
Hillsborough Cnty.
Solid
Waste & Res. Rec.,
5.70%, 10/1/08,
Aaa 2,000 M.B.I.A............ 1,973,240
Jacksonville Cap. Impvt. Rev.,
Gator Bowl Proj.,
6.00%, 10/1/25,
Aaa 1,625 A.M.B.A.C. 1,593,491
Jacksonville Elec. Auth. Rev.,
Bulk Pwr. Supply Scherer,
Aaa 1,000(D)/(D)(D) 6.75%, 10/1/21... 1,104,090
Elec. Sys. 3-B,
Aa1 1,000 5.20%, 10/1/13....... 895,110
St. Johns Rvr. Pwr.
Park,
Zero Coupon,
Aa1 3,000 10/1/10............ 1,153,860
St. Johns Rvr.,
5.40%, 10/1/10, Ser.
Aa1 1,000 8.................. 934,660
Jacksonville Excise Tax Rev.,
6.25%, 10/1/05,
Aaa 1,000 A.M.B.A.C. 1,058,970
Jacksonville Hlth. Facs. Auth.
Hosp. Rev.,
Baptist Med. Ctr. Proj.,
7.30%, 6/1/19, Ser.
Aaa 450 A, M.B.I.A......... 492,133
Daughters Of Charity,
5.00%, 11/15/15, Ser.
Aa 1,000 A.................. 841,210
Nat'l. Ben. Assoc.,
Baa1 1,825 7.00%, 12/1/22....... 1,840,622
St. Lukes Hosp. Assoc. Proj.,
AA+* 1,000 7.125%, 11/15/20..... 1,062,570
</TABLE>

-6- See Notes to Financial Statements.
<PAGE>
<PAGE>
PRUDENTIAL MUNICIPAL SERIES FUND
FLORIDA SERIES
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount Value
(Unaudited) (000) Description (Note 1)

<C> <C> <S> <C>
Jacksonville Wtr. & Swr. Dev.
Rev., Suburban Utils.,
A2 $ 1,000 6.75%, 6/1/22........ $ 1,063,730
Kissimmee Util. Auth.
Elec.
Sys. Rev.,
F.G.I.C.,
Aaa 2,500 5.375%, 10/1/12...... 2,315,850
5.30%, 10/1/17, Ser.
Aaa 2,000 A.................. 1,780,480
Lake Cnty. Res. Rec.
Ind. Dev. Rev.,
5.95%, 10/1/13, Ser.
Baa 1,035 A.................. 943,703
Lee Cnty. Trans. Facs. Rev.,
6.75%, 10/1/11,
Aaa 1,000 A.M.B.A.C. 1,057,590
Leon Cnty. Hsg. Fin. Auth. Rev.,
Sngl. Fam. Mtge.,
7.30%, 4/1/21, Ser.
Aaa 485 A, G.N.M.A......... 499,574
Martin Cnty.,
4.50%, 2/1/09,
Aaa 1,575 A.M.B.A.C.......... 1,339,569
Miami Hlth. Facs. Auth. Hosp.
Rev., Mercy Hosp.,
A 1,000 8.125%, 8/1/11....... 1,097,440
North Port Util.
Rev.,
6.25%, 10/1/17,
Aaa 2,500 F.G.I.C............ 2,522,150
Okaloosa Cnty. Cap. Impvt. Rev.,
Zero Coupon, 12/1/06,
Aaa 450 M.B.I.A............ 229,298
Orange Cnty. Hsg.
Fin. Auth.,
Mtge. Rev.,
7.375%, 9/1/24, Ser.
AAA* 420 A, G.N.M.A......... 431,382
MultiFam. Ashley Point Apts.,
BBB+* 1,200 6.85%, 10/1/16....... 1,175,856
BBB+* 855 7.10%, 10/1/24....... 852,281
Orlando & Orange Cnty. Expwy.
Auth. Rev.,
Aaa 1,000(D)/(D)(D) 7.125%, 7/1/06... 1,066,230
5.25%, 7/1/14,
Aaa 1,000 A.M.B.A.C.......... 895,460
Aaa 1,000(D)/(D)(D) 7.25%, 7/1/14.... 1,069,320
Orlando Utils. Comn.,
Wtr. & Elec. Rev.,
Aa1 $ 1,500 5.125%, 10/1/19...... $ 1,284,195
Aa1 2,515 5.00%, 10/1/23....... 2,072,662
Palm Beach Cnty. Arpt. Sys. Rev.,
7.75%, 10/1/10,
Aaa 1,000 M.B.I.A............ 1,138,370
Polk Cnty. Sch. Brd.,
Ctfs. of Part.,
4.875%, 1/1/18,
Aaa 1,000 F.S.A.............. 824,790
Puerto Rico Gen.
Oblig.,
8.393%, 7/1/20,
Aaa 3,000** F.S.A.............. 2,812,500
Puerto Rico Elec. Pwr. Auth. Rev.,
Baa1 1,000 6.20%, 7/1/04........ 1,061,000
Puerto Rico Hsg. Fin. Corp. Rev.,
Sngl. Fam. Mtge. Rev.,
Baa 2,000 5.125%, 12/1/05...... 1,875,240
Baa 1,000 5.25%, 12/1/06....... 934,660
Puerto Rico Hwy. Auth. Rev.,
Baa1 2,000 5.00%, 7/1/02........ 1,955,520
Baa1 2,000 5.50%, 7/1/19........ 1,795,620
5.25%, 7/1/20, Ser
Baa 1,250 W.................. 1,077,812
7.75%, 7/1/16, Ser.
Baa1 500(D) Q.................. 579,585
Puerto Rico Pub. Bldgs. Auth.,
Pub. Ed. & Hlth. Facs.,
7.875%, 7/1/16, Ser.
Aaa 1,000(D)/** H.................. 1,106,940
Puerto Rico Tel. Auth. Rev.,
7.381%, 1/16/15, Ser. I,
Aaa 2,250 M.B.I.A............ 1,954,687
Reedy Creek Impvt. Dist. Utils.
Rev., M.B.I.A.,
5.00%, 10/1/19, Ser.
Aaa 2,500 1.................. 2,109,400
Sanford Wtr. & Swr. Rev.,
4.50%, 10/1/21,
Aaa 3,955 A.M.B.A.C. 3,035,383
</TABLE>

-7- See Notes to Financial Statements.
<PAGE>
<PAGE>
PRUDENTIAL MUNICIPAL SERIES FUND
FLORIDA SERIES
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount Value
(Unaudited) (000) Description (Note 1)

<C> <C> <S> <C>
St. Petersburg Hlth. Facs. Auth.
Rev., Allegheny Hlth. Prog.,
7.00%, 12/1/15,
Aaa $ 1,000 M.B.I.A............ $ 1,080,200
Tampa Allegheny Hlth.
Sys.
Rev., St. Joseph
Hosp.,
6.70%, 12/1/07,
Aaa 2,535 M.B.I.A............ 2,736,127
Tampa Gtd. Entitlement Rev.,
7.05%, 10/1/07,
Aaa 2,000 A.M.B.A.C. 2,191,480
Venice Cap. Impvt.
Rev.,
Venice Hosp. Proj.,
A 2,000 5.75%, 12/1/24....... 1,764,140
Vero Beach Wtr. & Swr. Rev.,
5.00%, 12/1/21,
Aaa 2,245 F.G.I.C............ 1,879,671
Virgin Islands Pub. Fin. Auth.
Rev.,
Hwy. Trans. Trust Fund,
BBB* 260 7.65%, 10/1/99....... 273,546
Ref. Matching Loan
Notes,
7.25%, 10/1/18, Ser.
NR 900 A.................. 928,458
Virgin Islands
Territory, Hugo
Ins. Claims Fund
Proj.,
7.75%, 10/1/06, Ser.
NR 1,405 91................. 1,536,269
Volusia Cnty. Edl.
Fac.
Auth. Rev.,
AAA* 1,000 6.625%, 10/15/22..... 1,029,980
Volusia Cnty. Hlth.
Facs. Auth. Rev.,
BBB+* 2,000(D) 8.25%, 6/1/20........ 2,349,020
------------
Total long-term
investments
(cost
$144,835,817)...... 143,441,555
------------
SHORT-TERM INVESTMENTS--0.6%
Palm Beach Cnty. Wtr. & Swr. Rev.,
3.25%, 9/1/94,
VMIG1 $ 700 F.R.D.D............ $ 700,000
Pinellas Cnty. Hlth. Facs. Auth.
Rev.,
Pooled Hosp. Loan Prog.,
3.25%, 9/1/94,
VMIG1 200 F.R.D.D............ 200,000
------------
Total short-term
investments
(cost $900,000).... 900,000
------------
Total Investments--98.4%
(cost $145,735,817; Note
5) 144,341,555
Other assets in
excess of
liabilities--1.6%... 2,273,823
------------
Net Assets--100%..... $146,615,378
------------
------------
</TABLE>

- ---------------

(a) The following abbreviations are used in portfolio
descriptions:
A.M.B.A.C.--American Municipal Bond Assurance
Corporation.
F.G.I.C.--Financial Guaranty Insurance Company.
F.R.D.D.--Floating Rate (Daily) Demand Note.#
F.S.A.--Financial Security Assurance.
G.N.M.A.--Government National Mortgage
Association.
M.B.I.A.--Municipal Bond Insurance Association.
# For purposes of amortized cost valuation, the
maturity date of Floating Rate Demand Notes is
considered to be the later of the next date on
which the security can be redeemed at par or the
next date on which the rate of interest is
adjusted.
(D) Prerefunded issues are secured by escrowed cash
and/or direct U.S. guaranteed obligations.
(D)(D) Indicates a when-issued security.
@ Pledged as initial margin on financial futures
contracts.
* Standard & Poor's rating.
** Inverse floating rate bond. The coupon is
inversely indexed to a floating interest rate. The
rate shown is the rate at period end.
N.R.--Not Rated by Moody's or Standard & Poor's.

The Fund's current Statement of Additional Information contains a description of
Moody's and Standard & Poor's ratings.
-8- See Notes to Financial Statements.
<PAGE>
<PAGE>
PRUDENTIAL MUNICIPAL SERIES FUND
FLORIDA SERIES
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
Assets August 31, 1994
---------------
<S> <C>
Investments, at value (cost $145,735,817)............................................... $ 144,341,555
Cash.................................................................................... 29,767
Interest receivable..................................................................... 2,556,815
Receivable for investments sold......................................................... 2,028,494
Receivable for Fund shares sold......................................................... 485,625
Due from Manager........................................................................ 78,650
Prepaid expenses and other assets....................................................... 12,863
---------------
Total assets.......................................................................... 149,533,769
---------------
Liabilities
Payable for investments purchased....................................................... 1,486,125
Payable for Fund shares reacquired...................................................... 1,225,143
Dividends payable....................................................................... 137,968
Accrued expenses and other liabilities.................................................. 28,373
Due to broker-variation margin payable.................................................. 21,094
Due to Distributors..................................................................... 18,678
Deferred trustees' fees................................................................. 1,010
---------------
Total liabilities..................................................................... 2,918,391
---------------
Net Assets.............................................................................. $ 146,615,378
---------------
---------------
Net assets were comprised of:
Shares of beneficial interest, at par................................................. $ 147,916
Paid-in capital in excess of par...................................................... 148,439,262
---------------
148,587,178
Accumulated net realized loss on investments.......................................... (663,319)
Net unrealized depreciation on investments............................................ (1,308,481)
---------------
Net assets, August 31, 1994........................................................... $ 146,615,378
---------------
---------------
Class A:
Net asset value and redemption price per share ($134,848,886 / 13,604,715 shares of
beneficial interest issued and outstanding)......................................... $ 9.91
Maximum sales charge (3.0% of offering price)......................................... 0.31
---------------
Maximum offering price to public...................................................... $10.22
---------------
---------------
Class B:
Net asset value, offering price and redemption price per share ($581,525 / 58,698
shares of
beneficial interest issued and outstanding)......................................... $ 9.91
---------------
---------------
Class C:
Net asset value, offering price and redemption price per share ($11,184,967 /
1,128,212 shares of
beneficial interest issued and outstanding)......................................... $ 9.91
---------------
---------------
</TABLE>

See Notes to Financial Statements.
-9-

<PAGE>
PRUDENTIAL MUNICIPAL SERIES FUND
FLORIDA SERIES
Statement of Operations
<TABLE>
<CAPTION>
Year Ended
August 31,
Net Investment Income 1994
------------
<S> <C>
Income
Interest........................... $ 9,161,364
------------
Expenses
Management fee, net waiver of
$467,337........................... 311,558
Distribution fee--Class A, net
waiver of $134,896............... 11,593
Distribution fee--Class B.......... 47
Distribution fee--Class C.......... 69,602
Custodian's fees and expenses...... 85,000
Transfer agent's fees and
expenses........................... 53,000
Reports to shareholders............ 49,500
Registration fees.................. 30,000
Legal fees......................... 20,000
Audit fee.......................... 10,500
Amortization of deferred
organization expense............. 7,273
Trustees' fees..................... 3,375
Miscellaneous...................... 11,459
------------
Total expenses................... 662,907
Less: expense subsidy (Note 4)....... (270,113)
------------
Net expenses..................... 392,794
------------
Net investment income................ 8,768,570
------------
Realized and Unrealized Gain (Loss)
on Investments
Net realized gain (loss) on:
Investment transactions............ (694,251)
Financial futures contract
transactions....................... 685,575
------------
(8,676)
------------
Net change in unrealized
appreciation/depreciation on:
Investments........................ (12,025,930)
Financial futures contracts........ 155,094
------------
(11,870,836)
------------
Net loss on investments.............. (11,879,512)
------------
Net Decrease in Net Assets Resulting
from Operations...................... $ (3,110,942)
------------
------------
</TABLE>

PRUDENTIAL MUNICIPAL SERIES FUND
FLORIDA SERIES
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended August 31,
Increase (Decrease) -----------------------------
in Net Assets 1994 1993
------------- -------------
<S> <C> <C>
Operations
Net investment
income................. $ 8,768,570 $ 7,354,295
Net realized gain
(loss) on investment
transactions......... (8,676) 2,571,909
Net change in
unrealized
appreciation/depreciation
of investments....... (11,870,836) 6,419,976
------------- -------------
Net increase (decrease)
in net assets
resulting from
operations........... (3,110,942) 16,346,180
------------- -------------
Dividends and distributions (Note 1):
Dividends to
shareholders from
investment income
Class A................ (8,305,093) (7,348,931)
Class B................ (582) --
Class C................ (462,895) (5,364)
------------- -------------
(8,768,570) (7,354,295)
------------- -------------
Distributions to
shareholders from net
realized gains
Class A................ (2,821,851) (1,396,748)
Class B................ -- --
Class C................ (142,331) --
------------- -------------
(2,964,182) (1,396,748)
------------- -------------
Series share transactions (Note 6)
Net proceeds from
shares sold.......... 35,379,732 52,329,243
Net asset value of
shares issued in
reinvestment of
dividends and
distributions........ 5,323,495 3,739,870
Cost of shares
reacquired............. (31,275,509) (15,967,441)
------------- -------------
Net increase in net
assets from Series
share transactions... 9,427,718 40,101,672
------------- -------------
Total increase
(decrease)............. (5,415,976) 47,696,809
Net Assets
Beginning of year........ 152,031,354 104,334,545
------------- -------------
End of year.............. $ 146,615,378 $ 152,031,354
------------- -------------
------------- -------------
</TABLE>

See Notes to Financial Statements. See Notes to Financial Statements.
-10-

<PAGE>
PRUDENTIAL MUNICIPAL SERIES FUND
FLORIDA SERIES
Notes to Financial Statements

Prudential Municipal Series Fund, (the ``Fund'') is registered under the
Investment Company Act of 1940, as an open-end investment company. The Fund was
organized as a Massachusetts business trust on May 18, 1984 and consists of
seventeen series. The monies of each series are invested in separate,
independently managed portfolios. The Florida Series (the ``Series'') commenced
investment operations on December 28, 1990. The Series is non-diversified and
seeks to achieve its investment objective of providing the maximum amount of
income that is exempt from federal income taxes with the minimum of risk, and
investing in securities which will enable its shares to be exempt from the
Florida intangibles tax by investing in ``investment grade'' tax-exempt
securities whose ratings are within the four highest ratings categories by a
nationally recognized statistical rating organization or, if not rated, are of
comparable quality. The ability of the issuers of the securities held by the
Series to meet their obligations may be affected by economic developments in a
specific state, industry or region.

Note 1. Accounting The following is a summary
Policies of significant accounting poli-
cies followed by the Fund, and the Series, in the
preparation of its financial statements.

Short-term securities which mature in more than 60 days are valued at current
market quotations. Short-term securities which mature in 60 days or less are
valued at amortized cost.

All securities are valued as of 4:15 P.M., New York time.

Financial Futures Contracts: A financial futures contract is an agreement to
purchase (long) or sell (short) an agreed amount of debt securities at a set
price for delivery on a future date. Upon entering into a financial futures
contract, the Series is required to pledge to the broker an amount of cash
and/or other assets equal to a certain percentage of the contract amount. This
amount is known as the ``initial margin''. Subsequent payments, known as
``variation margin'', are made or received by the Series each day, depending on
the daily fluctuations in the value of the underlying security. Such variation
margin is recorded for financial statement purposes on a daily basis as
unrealized gain or loss. The Series invests in financial futures contracts
solely for the purpose of hedging its existing portfolio securities or
securities the Series intends to purchase against fluctuations in value caused
by changes in prevailing market interest rates. Should interest rates move
unexpectedly, the Series may not achieve the anticipated benefits of the
financial futures contracts and may realize a loss. The use of futures
transactions involves the risk of imperfect correlation in movements in the
price of futures contracts, interest rates and the underlying hedged assets.

Net investment income (other than distribution fees) and unrealized and
realized gains or losses are allocated daily to each class of shares based upon
the relative proportion of net assets of each class at the beginning of the day.
Federal Income Taxes: For federal income tax purposes, each series in the Fund
is treated as a separate taxpaying entity. It is the intent of the Series to
meet the requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its net income to shareholders.
For this reason and because substantially all of the Series' gross income
consists of tax-exempt interest, no federal income tax provision is required.

Dividends and Distributions: The Series declares daily dividends from net
investment income. Payment of dividends is made monthly. Distributions of net
capital gains, if any, are made annually.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles.
-11-

<PAGE>
Deferred Organization Expenses: The Series incurred approximately $32,000 in
organization and initial registration expenses. Such amount has been deferred
and is being amortized over a period of 60 months ending December, 1995.

The management fee paid PMF is computed daily and payable monthly, at an
annual rate of .50 of 1% of the average daily net assets of the Series. During
the year ended August 31, 1994, PMF waived 60% of its management fee, which
amounted to $467,337 ($.03 per share for Class A and C shares; .30% of average
net assets). The Series is not required to reimburse PMF for such waiver.

The Fund has distribution agreements with Prudential Mutual Fund
Distributors, Inc. (``PMFD''), which acts as the distributor of the Class A
shares of the Fund, and with Prudential Securities Incorporated (``PSI''), which
acts as distributor of the Class B and Class C shares of the Fund (collectively
the ``Distributors''). The Fund compensates the Distributors for distributing
and servicing the Fund's Class A, Class B and Class C shares, pursuant to plans
of distribution, (the ``Class A, B and C Plans'') regardless of expenses
actually incurred by them. The distribution fees are accrued daily and payable
monthly.

On July 19, 1994, shareholders of the Fund approved amendments to the Class A
distribution plan under which the distribution plan became a compensation plan,
effective August 1, 1994. Prior thereto, the distribution plan was a
reimbursement plan, under which PMFD was reimbursed for expenses actually
incurred by them up to the amount permitted under the Class A Plan. The Fund is
not obligated to pay any prior or future excess distribution costs (costs
incurred by the Distributor in excess of distribution fees paid by the Fund).
The rate of the distribution fees charged to Class A shares of the Fund did not
change under the amended plan of distribution.

Pursuant to the Class A, B and C Plans, the Fund compensates the Distributors
for distribution-related activities at an annual rate of up to .30 of 1%, .50 of
1% and .75 of 1%, of the average daily net assets of the Class A, B and C
shares, respectively. With respect to the Class A Plan, PMFD voluntarily agreed
to waive its distribution fee, currently limited to .10 of 1% of average net
assets for the period September 1, 1993 through July 31, 1994. Effective August
1, 1994, PMFD eliminated its waiver. The amount of distribution fees waived by
PMFD was $134,896 ($.01 per share for Class A shares; .10% of average net
assets) for the fiscal year ended August 31, 1994. Expenses under the Class B
and C Plans were .50 of 1% and .75 of 1% of the average daily net assets,
respectively, for the fiscal year ended August 31, 1994.

PMFD has advised the Series that it has received approximately $880,300 in
front-end sales charges resulting from sales of Class A shares during the fiscal
year ended August 31, 1994. From these fees, PMFD paid such sales charges to PSI
and Pruco Securities Corporation, affiliated broker-dealers, which in turn paid
commissions to salespersons and incurred other distribution costs.

PMFD is a wholly-owned subsidiary of PMF; PSI, PMF and PIC are indirect,
wholly-owned subsidiaries of The Prudential Insurance Company of America.

Note 3. Other Prudential Mutual Fund Ser-
Transactions vices, Inc. (``PMFS''), a
with Affiliates wholly owned subsidiary of
PMF, serves as the Fund's transfer agent. During
the year ended August 31, 1994, the Series incurred fees of approximately
$44,600 for the services of PMFS. As of August 31, 1994, approximately $3,700 of
such fees were due to PMFS. Transfer agent fees and expenses in the Statement of
Operations include certain out-of-pocket expenses paid to non-affiliates.

Note 4. Expense PMF voluntarily subsidized all
Subsidy operating expenses (except
management and distribution fees) of the Class A,
Class B and Class C shares of the Series until further notice. For the year
ended August 31, 1994, PMF subsidized $270,113 ($.02 per share for Class A and C
shares; .17% of average net assets) of the Series' expenses. The Series is not
required to reimburse PMF for such subsidy.

Note 5. Portfolio Purchases and sales of port-
Securities folio securities, excluding
short-term investments, for the year ended August
31, 1994 were $126,882,962 and $111,569,126, respectively.

The cost basis of investments for federal income tax purposes as of August
31, 1994 was $145,737,067 and,
-12-

<PAGE>
accordingly, net unrealized depreciation $1,395,512 (gross unrealized
appreciation--$3,604,800; gross unrealized depreciation--$5,000,312).

The Series will elect to treat net capital losses of approximately $573,400
incurred in the ten month period ended August 31, 1994 as having been incurred
in the following fiscal year.

At August 31, 1994 the Series sold 75 financial futures contracts on the
Municipal Bond Index expiring in September 1994. The value at disposition of
such contracts was $6,948,281. The value of such contracts on August 31, 1994
was $6,862,500, thereby resulting in an unrealized gain of $85,781.

Note 6. Capital The Series currently offers
Class A, Class B and Class C shares. Class A
shares are sold with a front-end sales charge of up to 3.0%. Class B shares are
sold with a contingent deferred sales charge which declines from 5% to zero
depending on the period of time the shares are held. Class C shares, which prior
to August 1, 1994 were known as D shares, are sold with a contingent deferred
sales charge of 1% during the first year. Class B shares will automatically
convert to Class A shares on a quarterly basis approximately seven years after
purchase commencing in February 1995. Offering of Class B shares commenced on
August 1, 1994.

The Fund has authorized an unlimited number of shares of beneficial interest
at $.01 par value per share. Transactions in shares of beneficial interest for
the years ended August 31, 1994 and 1993 were as follows:

<TABLE>
<CAPTION>
Class A Shares Amount
- ------------------------------ ---------- ------------
<S> <C> <C>
Year ended August 31, 1994:
Shares sold................... 2,274,149 $ 24,062,897
Shares issued in reinvestment
of dividends and
distributions............... 475,125 4,935,129
Shares reacquired............. (2,838,050) (29,205,030)
---------- ------------
Net increase in shares
outstanding................. (88,776) $ (207,004)
---------- ------------
---------- ------------
Year ended August 31, 1993:
Shares sold................... 4,710,788 $ 49,235,380
Shares issued in reinvestment
of dividends and
distributions............... 358,775 3,737,322
Shares reacquired............. (1,530,543) (15,961,401)
---------- ------------
Net increase in shares
outstanding................. 3,539,020 $ 37,011,301
---------- ------------
---------- ------------
<CAPTION>
Class B Shares Amount
- ------------------------------ ---------- ------------
<S> <C> <C>
August 1, 1994* through
August 31, 1994:
Shares sold................... 58,689 $ 579,300
Shares issued in reinvestment
of dividends................ 24 235
Shares reacquired............. (15) (150)
---------- ------------
Net increase in shares
outstanding................. 58,698 $ 579,385
---------- ------------
---------- ------------
</TABLE>

- ------------------
* Commencement of offering of Class B shares.

<TABLE>
<CAPTION>
<S> <C> <C>
Class C
- ------------------------------
Year ended August 31, 1994:
Shares sold................... 1,004,802 $ 10,737,535
Shares issued in reinvestment
of dividends and
distributions............... 37,628 388,131
Shares reacquired............. (202,212) (2,070,329)
---------- ------------
Net increase in shares
outstanding................. 840,218 $ 9,055,337
---------- ------------
---------- ------------
July 26, 1993* through
August 31, 1993:
Shares sold................... 288,326 $ 3,093,863
Shares issued in reinvestment
of dividends................ 235 2,548
Shares reacquired............. (567) (6,040)
---------- ------------
Net increase in shares
outstanding................. 287,994 $ 3,090,371
---------- ------------
---------- ------------
</TABLE>

- ------------------
* Commencement of offering of Class C shares.
-13-

<PAGE>
PRUDENTIAL MUNICIPAL SERIES FUND
FLORIDA SERIES
Financial Highlights
<TABLE>
<CAPTION>
Class A Class B Class C
------------------------------------------------------- ----------- --------------------------
December 28, August 1, July 26,
1990* 1994(D)(D)(D) Year 1993(D)(D)
Years Ended August 31, Through through Ended Through
-------------------------------------- August 31, August 31, August 31, August 31,
1994 1993 1992 1991 1994 1994 1993
---------- ---------- ---------- ------------- ----------- ----------- -----------

PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning
of period............... $ 10.87 $ 10.27 $ 9.76 $ 9.55 $ 9.95 $ 10.87 $ 10.58
---------- ---------- ---------- ------------- ----------- ----------- -----------
Income from investment
operations

Net investment
income(D)............... .59 .57 .65 .44 .04 .48 .03

Net realized and
unrealized gain (loss)
on investment
transactions............ (.76) .73 .51 .21 (.04) (.76) .29
---------- ---------- ---------- ------------- ----------- ----------- -----------
Total from investment
operations............ (.17) 1.30 1.16 .65 -- (.28) .32
---------- ---------- ---------- ------------- ----------- ----------- -----------
Less distributions

Dividends from net
investment income....... (.59) (.57) (.65) (.44) (.04) (.48) (.03)

Distributions from net
realized gains.......... (.20) (.13) -- -- -- (.20) --
---------- ---------- ---------- ------------- ----------- ----------- -----------
Total distributions..... (.79) (.70) (.65) (.44) (.04) (.68) (.03)
---------- ---------- ---------- ------------- ----------- ----------- -----------
Net asset value, end of
period.................. $ 9.91 $ 10.87 $ 10.27 $ 9.76 $ 9.91 $ 9.91 $ 10.87
---------- ---------- ---------- ------------- ----------- ----------- -----------
---------- ---------- ---------- ------------- ----------- ----------- -----------
TOTAL RETURN#:............ (1.69)% 13.78% 12.26% 6.90% (0.05)% (2.40)% 3.14%
RATIOS/SUPPLEMENTAL DATA:

Net assets, end of period
(000)................... $134,849 $148,900 $104,335 $63,929 $582 $11,185 $3,132

Average net assets
(000)................... $146,489 $123,820 $ 82,893 $41,528 $118 $ 9,280 $1,038

Ratios to average net
assets(D):
Expenses, including
distribution fees..... .20% .20% 0.09% 0 .70%** .95% .95%**

Expenses, excluding
distribution fees..... .20% .20% 0.09% 0 .20%** .20% .20%**

Net investment income... 5.67% 5.94% 6.41% 6.68%** 6.21%** 4.99% 5.19%**

Portfolio turnover........ 75% 68% 56% 39% 75% 75% 68%

- ---------------
* Commencement of investment operations.
** Annualized.
(D) Net of expense subsidy and fee waiver.
(D)(D) Commencement of offering of Class C shares. Prior to
August 1, 1994, Class C shares were called Class
D shares.
(D)(D)(D) Commencement of offering of Class B shares.
# Total return does not consider the effects of sales loads. Total
return is calculated assuming a purchase of shares on the first
day and a sale on the last day of each period reported and
includes reinvestment of dividends and distributions. Total
returns for periods of less than a full year are not annualized.
</TABLE>
See Notes to Financial Statements.
-14-
<PAGE>
<PAGE>
INDEPENDENT AUDITORS' REPORT

The Shareholders and Board of Trustees
Prudential Municipal Series Fund, Florida Series

We have audited the accompanying statement of assets and liabilities of
Prudential Municipal Series Fund, Florida Series, including the portfolio of
investments, as of August 31, 1994, the related statements of operations for the
year then ended and of changes in net assets for each of the two years in the
period then ended and the financial highlights for each of the three years in
the period then ended and for the period December 28, 1990 (commencement of
investment operations) through August 31, 1991. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of the securities owned as of
August 31, 1994 by correspondence with the custodian and brokers; where replies
were not received from brokers, we performed other auditing procedures. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Prudential Municipal
Series Fund, Florida Series, as of August 31, 1994, the results of its
operations, the changes in its net assets, and its financial highlights for the
respective stated periods in conformity with generally accepted accounting
principles.

Deloitte & Touche LLP
New York, New York
October 17, 1994

FEDERAL INCOME TAX INFORMATION

We are required by the Internal Revenue Code to advise you within 60 days of
the Series' fiscal year end (August 31, 1994) at to the federal tax status of
dividends paid by the Series during such fiscal year. Accordingly, we are
advising you that in the fiscal year ended August 31, 1994, dividends paid from
net investment income of $.59 per Class A share, $.04 per Class B share and $.48
per Class C share were all federally tax-exempt interest dividends. In addition,
the Series paid to both A and C shares a long-term capital gain distribution of
$.044 per share which is taxable as such and a short-term capital gain
distribution of $.155 which is taxable as ordinary income.

In January 1995, you will be advised on IRS Form 1099 DIV or substitute 1099
DIV as to the federal tax status of the distributions received by you in
calendar year 1994.
-15-

<PAGE>
These graphs are furnished to you in accordance with SEC regulations. They
compare a $10,000 investment in Prudential Municipal Series Fund: Florida Series
(Class A, Class B, and Class C) with a similar investment in the Lehman Brothers
Municipal Bond Index (the Index) by portraying the initial account values at the
commencement of operations of each class and subsequent account values at the
end of each fiscal year (August 31) beginning in 1990 for Class A, in 1994 for
Class B shares and 1993 for Class C shares. For purposes of the graphs and,
unless otherwise indicated, the accompanying tables, it has been assumed that
(a) the maximum sales charge was deducted from the initial $10,000 investment in
Class A shares; (b) the maximum applicable contingent deferred sales charge was
deducted from the value of the investment in Class B shares and Class C shares,
assuming full redemption on August 31, 1994; (c) all recurring fees (including
management fees) were deducted; and (d) all dividends and distributions were
reinvested. Class B shares will automatically convert to Class A shares on a
quarterly basis approximately seven years after purchase. This conversion
feature is expected to be implemented on or about February 1995 and is not
reflected in the graph. The graph and accompanying tables reflect the past
subsidy and/or waiver of expenses and/or management fees. Without fee waivers
and expense subsidies, the value of a $10,000 investment in the Series and the
Series' average annual total return, as shown above, would have been lower.

<PAGE)