PRUDENTIAL MUNICIPAL SERIES FUND, N-30D, 2000-11-08

PRUDENTIAL MUNICIPAL SERIES FUND
N-30D, 2000-11-08

Previous: NORTHERN EMPIRE BANCSHARES, 10-Q, EX-27, 2000-11-08

Next: PRUDENTIAL MUNICIPAL SERIES FUND, 497, 2000-11-08

<PAGE>

ANNUAL REPORT AUGUST 31, 2000

Prudential
Municipal Series Fund/
Connecticut Money Market Series

Fund Type Money market

Objective The highest level of current income that
is exempt from Connecticut State and
federal income taxes, consistent with liquidity and
the preservation of capital

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

The views expressed in this report and information
about the Fund's portfolio holdings are for the
period covered by this report and are subject to
change thereafter.

(LOGO)

<PAGE>

Build on the Rock

Investment Goals and Style
The Prudential Municipal Series Fund/Connecticut
Money Market Series seeks to provide the highest
level of current income that is exempt from
Connecticut State and federal income taxes,
consistent with liquidity and the preservation of
capital. The Series intends to invest primarily in
a portfolio of short-term tax-exempt debt
securities with maturities of 13 months or less
from the state of Connecticut, its municipalities,
local governments, and other qualifying issuers
(such as Puerto Rico, Guam, and the U.S. Virgin
Islands). There can be no assurance that the
Series will achieve its investment objective.

Money Fund Yield Comparison
(GRAPH)

<PAGE>

www.prudential.com (800) 225-1852
Performance at a Glance

Fund Facts As of 8/31/00
7-Day Net Asset Taxable Equivalent Yield* Weighted Avg. Net Assets
Current Yld. Value (NAV) @31% @36% @39.6% Mat. (WAM) (Millions)
CT Money
Market Series 3.21% $1.00 4.87% 5.25% 5.56% 63 Days $81
iMoneyNet, Inc.
Tax-Free State Specific
Avg. (SB & GP-CT)** 3.31% $1.00 5.02% 5.42% 5.74% 54 Days N/A

Note: Yields will fluctuate from time to time, and
past performance is not indicative of future
results. An investment in the Series is not insured
or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency.
Although the Series seeks to preserve the value of
your investment at $1.00 per share, it is possible
to lose money by investing in the Series.

*Some investors may be subject to the federal
alternative minimum tax and/or state and local
taxes. Taxable equivalent yields reflect federal
and applicable state tax rates.

**iMoneyNet, Inc. reports the 7-Day Current Yield,
NAV, and WAM on Mondays. This is the data of all
funds in the iMoneyNet, Inc. Tax-Free State
Specific Average (Stock Broker (SB) & General
Purpose

(GP)-Connecticut) category as of August 28, 2000.

Weighted Average Maturity Compared to the Average
Money Market Fund
(GRAPH)

1
<PAGE>

(LOGO) October 18, 2000

Dear Shareholder,
Municipal money market yields climbed during much
of our 12-month reporting period ended August 31,
2000. The catalyst for this trend was the Federal
Reserve's repeated increases in short-term interest
rates, which were intended to curb the brisk pace
of U.S. economic growth.

The rising-interest-rate environment benefited the
Prudential Municipal Series Fund/Connecticut Money
Market Series by creating attractive investment
opportunities. The Series maintained a $1 net asset
value per share, and provided a competitive yield.
On August 31, 2000, the Series' seven-day current
yield was 3.21%, compared with 3.31% for the
average Connecticut money market fund as tracked by
iMoneyNet, Inc. The following pages explain how the
Series was positioned in light of developments in
the municipal money market.

Proposed merger
A proposal to merge the Connecticut Money Market
Series with the Prudential Tax-Free Money Fund,
Inc. will be put to a shareholder vote at a special
meeting for shareholders. The meeting is expected
to take place early in 2001.

Sincerely,

John R. Strangfeld, President
Prudential Municipal Series Fund

2
<PAGE>

Prudential Municipal Series Fund Connecticut Money Market Series

Annual Report August 31, 2000

Investment Adviser's Report

Trying to put a lid on inflation
The Federal Reserve (the Fed) raised short-term
interest rates four times during our fiscal year
that began September 1, 1999. The Fed acted because
a rapidly expanding U.S. economy had increased the
risk of rising consumer prices and accelerating
wages. Hiking rates boosted borrowing costs for
businesses and consumers, which the Fed hoped would
slow economic growth to a more sustainable pace and
help check inflationary pressures.

Although we expected the Fed to tighten monetary
policy in the autumn of 1999, we purchased longer-
term Connecticut money market securities in
September 1999 that seemed to offer good value at
that time. Our purchases extended the Series'
weighted average maturity (WAM), which remained
longer than that of the average comparable fund
during September and early October. (WAM is a
measurement tool that determines a portfolio's
sensitivity to changes in the level of interest
rates. It takes into account the maturity level of
each security held in a portfolio.)

In hindsight, the Series would have been better
served had we been able to purchase a sufficient
amount of shorter-term Connecticut money market
securities to shorten the WAM. As these securities
matured, we could have reinvested the money in
higher-yielding Connecticut money market
securities that became available after the Fed
raised short-term rates in
mid-November 1999.

Taking advantage of bargains during tax season
The Fed resumed tightening monetary policy in 2000
as the resilient U.S. economy continued to race
ahead. The next rate hikes occurred in February and
March. During these two months, many Connecticut
municipalities and authorities often issue money
market securities. We took advantage of this supply
because there are periods when few newly issued
Connecticut securities are available. We bought
one-year insured bonds of New Haven,

3
<PAGE>

Prudential Municipal Series Fund Connecticut Money Market Series

Annual Report August 31, 2000

Connecticut, and tax-exempt bonds of Yale New Haven
Hospital that were "prerefunded" or backed by
direct obligations of the U.S. Treasury. In
addition, Connecticut Housing Authority bonds were
purchased during this period, helping to lengthen
the Series' WAM.

We later allowed the WAM to shorten as we prepared
to buy higher-yielding Connecticut money market
securities that became available in the spring of
2000. Yields rose sharply from late April through
mid-May because the Fed was expected to hike rates
when it met in May and because portfolio
managers sold municipal money market securities to
satisfy shareholder redemptions during tax season.
With yields at such attractive levels, we purchased
additional "prerefunded" Connecticut bonds that are
backed by direct obligations of the U.S. Treasury.
We also bought Connecticut housing bonds that can
be sold back to their issuer in one year at a price
equal to 100% of their face value.

As expected, the Fed aggressively raised short-term
interest rates in mid-May. Shortly thereafter, data
began to show that U.S. economic growth was
slowing, which in turn fueled optimism that the Fed
would stop raising rates. Consequently, many
investors were willing to accept lower yields (and
pay higher prices) for municipal money market
securities. Our decision to lock in municipal money
market yields in early May worked well because
yields declined during the remainder of our fiscal
year.

Purchasing municipal asset-backed securities
There were also attractive investment opportunities
among municipal asset-backed securities (MABS).
MABS are highly liquid investments structured to
help satisfy the growing demand for municipal money
market securities. MABS require a higher degree of
analysis than more generic investment alternatives.
As a result, MABS offer a higher return, and have
been selectively added to the Series' holdings.

Prudential Connecticut Money Market Series
Management Team

4
<PAGE>
Prudential Municipal Series Fund Connecticut Money Market Series
Portfolio of Investments as of August 31, 2000
<TABLE>
<CAPTION>
Moody's Principal
Rating Interest Maturity Amount Value
Description (a) (Unaudited) Rate Date (000) (Note 1)
<S> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------
Brazos River Harbor Nav. Dist.
Rev.,
BASF, Corp. Proj.,
Ser. 96, F.R.D.D. P-1 4.45% 9/01/00 $ 3,450 $ 3,450,000
Dow Chemical Co.,
Ser. 93, F.R.D.D., A.M.T. P-1 4.50 9/01/00 1,000 1,000,000
Ser. 97, F.R.D.D., A.M.T. P-1 4.50 9/01/00 600 600,000
Connecticut St. Clean Water Fund
Rev., Ser. 91 NR 6.70 1/01/01 2,010(c) 2,067,566
Connecticut St. Dev. Auth.,
Bradley Airport Hotel,
Ser. 97A F.R.W.D. VMIG1 4.10 9/07/00 800 800,000
Ser. 97B, F.R.W.D. VMIG1 4.10 9/07/00 3,000 3,000,000
Ser. 97C, F.R.W.D. VMIG1 4.10 9/07/00 1,200 1,200,000
Corp. for Independ. Living Proj.,
Ser. 99, F.R.W.D. VMIG1 3.95 9/06/00 2,475 2,475,000
Pierce Baptist Home,
Ser. 99, F.R.W.D. A-1+(d) 3.95 9/06/00 3,125 3,125,000
SHW, Inc., Proj., Ser. 90,
F.R.W.D., A.M.T. N/R 4.15 9/06/00 5,150 5,150,000
Connecticut St. Gen. Oblig.,
Ser. 90C NR 6.90 9/15/00 1,000 1,001,209
Ser. 91A NR 6.60 3/01/01 1,000(c) 1,031,732
Ser. 92D NR 5.80 11/15/00 1,750(c) 1,755,436
Ser. 95A NR 5.00 3/15/01 1,200 1,205,585
Ser. 97B, F.R.W.D. VMIG 4.00 9/07/00 2,700 2,700,000
Connecticut St. Hlth. & Edl. Facs.
Auth. Rev.,
Conn. St. University, S.6.A. 95,
A.M.B.A.C., F.R.D.D. A-1+(d) 3.90 9/01/00 1,000 1,000,000
Convenant Ret., Ser. 1999A,
F.R.W.D. A-1+(d) 3.95 9/07/00 2,640 2,640,000
Gaylord Hosp. Issue, Ser. A,
F.R.W.D. A-1+(d) 4.10 9/06/00 3,000 3,000,000
Hartfort Hosp. Issue,
Ser. B, F.R.W.D. A-1+(d) 4.10 9/06/00 2,000 2,000,000
</TABLE>
See Notes to Financial Statements 5

<PAGE>
Prudential Municipal Series Fund Connecticut Money Market Series
Portfolio of Investments as of August 31, 2000 Cont'd.
<TABLE>
<CAPTION>
Moody's Principal
Rating Interest Maturity Amount Value
Description (a) (Unaudited) Rate Date (000) (Note 1)
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Hotchkiss School Issue,
Ser. A, F.R.W.D. VMIG1 4.00% 9/07/00 $ 2,000 $ 2,000,000
Pomfret School Issue,
Ser. A, F.R.W.D. VMIG1 4.20 9/07/00 900 900,000
Sharon Hosp. Issue,
Ser. A, F.R.W.D. VMIG1 4.10 9/07/00 1,670 1,670,000
Woodbury & Bethlehem School,
B.A.N. VMIG1 5.00 5/15/01 4,000 4,010,730
Yale University, Ser. S, T.E.C.P. VMIG1 4.15 12/11/00 5,000 5,000,000
Yale University, Ser. T, F.R.W.D. VMIG1 3.90 9/07/00 2,500 2,500,000
Connecticut St. Hsg. Fin. Auth.,
Ser. B, F.R.W.D., A.M.T. VMIG1 4.37 9/06/00 2,000 2,000,000
Ser. P, F.R.W.D., A.M.T. VMIG1 4.32 9/06/00 1,000 1,000,000
Connecticut St. Spec. Assmt.,
Unemployment Comp. Rev.,
Ser. 93C, A.N.N.M.T., F.G.I.C. VMIG1 4.35 7/01/01 1,800 1,800,000
Ser. 96A, A.M.B.A.C. NR 5.50 11/15/00 2,500 2,507,443
Ser. 96A, A.M.B.A.C. NR 5.50 5/15/01 1,000 1,009,146
Connecticut St. Special Tax Oblig.
Transp. Infrastructure Rev.,
Ser. 90A, Bond NR 8.00 6/01/01 1,500 1,538,364
Ser. 90A, Bond NR 7.125 6/01/01 500(c) 515,024
Ser. 90I, F.R.W.D. VMIG1 3.95 9/06/00 2,025 2,025,000
Hartford Connecticut, Redev.
Agcy., Multi-family Mtge. Rev.,
Underwood Twrs. Proj.,
Ser. 90, F.R.W.D., F.S.A. A-1+(d) 4.10 9/07/00 600 600,000
New Haven Connecticut,
Ser. 99A, F.G.I.C. NR 4.25 2/01/01 2,025 2,026,604
North Branford, Connecticut,
B.A.N. NR 5.00 2/15/01 2,375 2,379,154
Monroe Connecticut, Ser. A NR 4.75 1/25/01 1,025 1,026,990
Old Saybrook, Connecticut, B.A.N. NR 4.25 9/06/00 1,850 1,850,055
Puerto Rico Commwlth. & Electric
Power Auth., Ser. 98-20,
F.R.W.D., M.B.I.A. VMIG1 3.93 9/07/00 2,400 2,400,000
</TABLE>
6 See Notes to Financial Statements

------------------------------
(a) The following abbreviations are used in portfolio descriptions:
A.M.B.A.C.--American Municipal Bond Assurance Corporation.
A.M.T.--Alternative Minimum Tax.
A.N.N.M.T.--Annual Mandatory Tender.
B.A.N.--Bond Anticipation Note.
F.G.I.C.--Financial Guaranty Insurance Company.
F.R.D.D.--Floating Rate (Daily) Demand Note (b).
F.R.W.D.--Floating Rate (Weekly) Demand Note (b).
F.S.A.--Financial Security Assurance.
M.B.I.A.--Municipal Bond Insurance Association.
T.E.C.P.--Tax Exempt Commercial Paper.
(b) 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.
(c) Prerefunded issues are secured by escrowed cash and/or direct U.S.
guaranteed obligations.
(d) Standard & Poor's rating.
(e) 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.
See Notes to Financial Statements 7

<PAGE>
Prudential Municipal Series Fund Connecticut Money Market Series
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
August 31, 2000
<S> <C> <C>
----------------------------------------------------------------------------------------
ASSETS
Investments, at amortized cost which approximates market value $81,045,038
Cash 34,469
Interest receivable 636,125
Receivable for Series shares sold 327,941
Other assets 1,620
---------------
Total assets 82,045,193
---------------
LIABILITIES
Payable for Series shares reacquired 678,140
Accrued expenses 66,944
Management fee payable 35,505
Dividends payable 29,208
Deferred trustee's fees 6,218
Distribution fee payable 4,525
---------------
Total liabilities 820,540
---------------
NET ASSETS $81,224,653
---------------
---------------
Net assets were comprised of:
Shares of beneficial interest, at $.01 par value $ 812,246
Paid-in capital in excess of par 80,412,407
---------------
Net assets, August 31, 2000 $81,224,653
---------------
---------------
Net asset value, offering price and redemption price per share
($81,224,653 / 81,224,653 shares of beneficial interest
issued and outstanding; unlimited number of shares
authorized) $1.00
</TABLE>

8 See Notes to Financial Statements

<PAGE>
Prudential Municipal Series Fund Connecticut Money Market Series
Statement of Operations
<TABLE>
<CAPTION>
Year
Ended
August 31, 2000
<S> <C> <C>
----------------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest $ 3,049,551
---------------
Expenses
Management fee 410,257
Distribution fee 102,564
Custodian's fees and expenses 58,000
Reports to shareholders 33,000
Registration fees 24,000
Transfer agent's fees and expenses 21,000
Legal fees and expenses 9,700
Audit fees 8,000
Trustees' fees and expenses 4,500
Miscellaneous 3,964
---------------
Total expenses 674,985
Less: Custodian fee credit (Note 1) (4,296)
---------------
Net expenses 670,689
---------------
Net investment income 2,378,862
---------------
REALIZED LOSS ON INVESTMENTS
Net realized loss on investment transactions (94)
---------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 2,378,768
---------------
---------------
</TABLE>

See Notes to Financial Statements 9

<PAGE>
Prudential Municipal Series Fund Connecticut Money Market Series
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended August 31,
------------------------------
2000 1999
---------------------------------------------------------------------------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income $ 2,378,862 $ 2,014,902
Net realized gain (loss) on investment
transactions (94) 5,471
------------- -------------
Net increase in net assets resulting from
operations 2,378,768 2,020,373
------------- -------------
Dividends and distributions (Note 1) (2,378,768) (2,020,373)
------------- -------------
Series share transactions (at $1 per share)
Net proceeds from shares sold 283,078,236 311,218,175
Net asset value of shares issued in
reinvestment of dividends and
distributions 2,336,383 1,968,000
Cost of shares reacquired (287,264,699) (325,228,890)
------------- -------------
Net decrease in net assets from Series share
transactions (1,850,080) (12,042,715)
------------- -------------
Total decrease (1,850,080) (12,042,715)
NET ASSETS
Beginning of year 83,074,733 95,117,448
------------- -------------
End of year $ 81,224,653 $ 83,074,733
------------- -------------
------------- -------------
</TABLE>

10 See Notes to Financial Statements

<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 11
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 nondiversified and seeks
to provide the highest level of income that is exempt from Connecticut state 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 Policies
The following is a summary of significant accounting policies 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 Net 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. The Series amortizes premiums and accretes
original issue discount on portfolio securities as adjustments to interest
income. Expenses are recorded on the accrual basis which may require the use of
certain estimates by management.

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, no federal income tax provision is
required.

Dividends: The Series declares daily dividends from net investment
income and net realized short-term capital gains or losses. 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.

Custody Fee Credits: The Series has an arrangement with its custodian
bank, whereby uninvested monies earn credits which reduce the fees charged by
the custodian.

<PAGE>
Prudential Municipal Series Fund Connecticut Money Market Series
Notes to Financial Statements Cont'd.

performance of such services. PIFM has entered into a subadvisory agreement with
The Prudential Investment Corporation ('PIC'). The subadvisory agreement
provides that PIC will furnish investment advisory services in connection with
the management of the Fund. PIFM continues to have responsibility for all
investment advisory services pursuant to the management agreement and supervises
PIC's performance of such services. PIFM pays for the services of PIC, the
compensation of officers of the Fund, occupancy and certain clerical and
bookkeeping costs of the Fund. The Fund bears all other costs and expenses.

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

Effective January 1, 2000, the subadvisory fee paid to PIC by PIFM is
computed daily and payable monthly at an annual rate of .250 of 1% of the
average daily net assets of the Fund. Prior to January 1, 2000, PIC was
reimbursed by PIFM for reasonable costs and expenses incurred in furnishing
investment advisory services. The change in the subadvisory fee structure has no
impact on the management fee charged to the Fund or its shareholders.

The Series has a distribution agreement with Prudential Investment
Management Services LLC ('PIMS'), which acts as the distributor of the Series'
shares. The Series compensates PIMS for distributing and servicing the Series'
shares pursuant to the plan of distributing at an annual rate of .125 of 1% of
the Series' average daily net assets. The distribution fee is accrued daily and
payable monthly.

PIFM, PIC and PIMS are indirect, wholly owned subsidiaries of The
Prudential Insurance Company of America.

Note 3. Other Transactions with Affiliates Prudential Mutual Fund Services
LLC ('PMFS'), a wholly owned subsidiary of PIFM, serves as the Fund's transfer
agent. During the year ended August 31, 2000, the Series incurred fees of
approximately $19,900 for the services of PMFS. As of August 31, 2000,
approximately $1,500 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 nonaffiliates.

Note 4. Proposed Reorganization
On August 23, 2000, the Trustees approved an Agreement and Plan of
Reorganization and Liquidation of the Series (the 'Plan of Reorganization')
which provides for the transfer of substantially all of the assets and
liabilities of the Prudential Municipal Series Fund, Connecticut Money Market
Series to Prudential Tax-Free Money Fund, Inc. Class A shares of the Series will
be exchanged at net asset value for Class A shares of the equivalent value of
Prudential Tax-Free Money Fund, Inc. The Fund will then cease operations. The
Plan of Reorganization is subject to approval by the shareholders of the
Connecticut Money Market Series.
12

<PAGE>
Prudential Municipal Series Fund Connecticut Money Market Series
Financial
Highlights
' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' '
' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' '
' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' '

<PAGE>
Prudential Municipal Series Fund Connecticut Money Market Series
Financial Highlights
<TABLE>
<CAPTION>
Year
Ended
August 31, 2000
<S> <C> <C>
----------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year $ 1.00
Net investment income and realized gains 0.03
Dividends and distributions to shareholders (0.03)
---------------
Net asset value, end of year $ 1.00
---------------
---------------
TOTAL RETURN(b): 2.97%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) $81,225
Average net assets (000) $82,051
Ratios to average net assets:
Expenses, including distribution and service (12b-1) 0.82%
Expenses, excluding distribution and service (12b-1) 0.69%
Net investment income 2.90%
</TABLE>

------------------------------
(a) Net of management fee waiver.
(b) Total return includes reinvestment of dividends and distributions.
14 See Notes to Financial Statements

<PAGE>
Prudential Municipal Series Fund Connecticut Money Market Series
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Year Ended August 31,
-------------------------------------------------------------------------------------
1999 1998 1997 1996
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 1.00 $ 1.00 $ 1.00 $ 1.00
.02 .03 .03(a) .03(a)
(.02) (.03) (.03) (.03)
-------- -------- -------- --------
$ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- --------
-------- -------- -------- --------
2.34% 2.72% 3.10% 3.17%
$ 83,075 $ 95,117 $ 75,927 $ 77,683
$ 87,744 $ 84,800 $ 77,500 $ 74,576
.82% .86% .46%(a) .47%(a)
.69% .74% .34%(a) .35%(a)
2.30% 2.68% 3.06%(a) 3.12%(a)
</TABLE>

See Notes to Financial Statements 15

<PAGE>
Prudential Municipal Series Fund Connecticut Money Market Series
Report of Independent Accountants

To the Shareholders and Board of Trustees of
Prudential Municipal Series Fund, Connecticut Money Market Series

In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Prudential Municipal Series Fund,
Connecticut Money Market Series (the 'Fund', one of the portfolios constituting
Prudential Municipal Series Fund) at August 31, 2000, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for each of
the four years in the period then ended, in conformity with accounting
principles generally accepted in the United States of America. These financial
statements and financial highlights (hereafter referred to as 'financial
statements') are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with auditing
standards generally accepted in the United States of America, which require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of securities at August 31, 2000 by correspondence with the custodian, provide a
reasonable basis for our opinion. The accompanying financial highlights for the
two year period ended August 31, 1996 were audited by other independent
accountants, whose opinion dated October 14, 1996 was unqualified.
As described in Note 4 to the financial statements, on August 23, 2000, the
Board of Trustees of the Series approved an Agreement and Plan of
Reorganization, subject to shareholder approval, whereby the Series would be
merged into Tax-Free Money Fund, Inc.

PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York
October 20, 2000
16

<PAGE>
Prudential Municipal Series Fund Connecticut Money Market Series
Federal Income Tax Information (Unaudited)

<PAGE>
Prudential Municipal Series Fund Connecticut Money Market Series

Getting the Most from Your Prudential Mutual Fund

How many times have you read these reports-or other
financial materials-and stumbled across a word that
you don't understand?

Many shareholders have run into the same problem.
We'd like to help. So we'll use this space from
time to time to explain some of the words you might
have read, but not understood. And if you have a
favorite word that no one can explain to your
satisfaction, please write to us.

Basis Point: 1/100th of 1%. For example, one-half
of one percent is 50 basis points.

Collateralized Mortgage Obligations (CMOs):
Mortgage-backed bonds that separate mortgage pools
into different maturity classes called tranches.
These instruments are sensitive to changes in
interest rates and homeowner refinancing activity.
They are subject to prepayment and maturity
extension risk.

Derivatives: Securities that derive their value
from other securities. The rate of return of these
financial instruments rises and falls-sometimes
very suddenly-in response to changes in some
specific interest rate, currency, stock, or other
variable.

Discount Rate: The interest rate charged by the
Federal Reserve on loans to member banks.

Federal Funds Rate: The interest rate charged by
one bank to another on overnight loans.

Futures Contract: An agreement to purchase or sell
a specific amount of
a commodity or financial instrument at a set price
at a specified date in
the future.

<PAGE>

www.prudential.com (800) 225-1852

Leverage: The use of borrowed assets to enhance
return. The expectation is that the interest rate
charged on borrowed funds will be lower than the
return on the investment. While leverage can
increase profits, it can also magnify losses.

Liquidity: The ease with which a financial
instrument (or product) can be bought or sold
(converted into cash) in the financial markets.

Price/Earnings Ratio: The price of a share of stock
divided by the earnings per share for a 12-month
period.

Option: An agreement to purchase or sell something,
such as shares of stock, by a certain time for a
specified price. An option need not be exercised.

Spread: The difference between two values; often
used to describe the
difference between "bid" and "asked" prices of a
security, or between the yields of two similar
maturity bonds.

Yankee Bond: A bond sold by a foreign company or
government on the U.S. market and denominated in
U.S. dollars.

<PAGE>

Prudential Municipal Series Fund Connecticut Money Market Series

Prudential Mutual Funds

Prudential offers a broad range of mutual funds
designed to meet your individual needs. For
information about these funds, contact your
financial adviser or call us at (800) 225-1852.
Read the prospectus carefully before you invest or
send money.

STOCK FUNDS
Large Capitalization Stock Funds
Prudential 20/20 Focus Fund
Prudential Equity Fund, Inc.
Prudential Stock Index Fund
Prudential Tax-Managed Funds
Prudential Tax-Managed Equity Fund
Strategic Partners Focused Growth Fund
Target Funds
Large Capitalization Growth Fund
Large Capitalization Value Fund
The Prudential Investment Portfolios, Inc.
Prudential Jennison Growth Fund
Prudential Value Fund

Small- to Mid-Capitalization Stock Funds
Nicholas-Applegate Fund, Inc.
Nicholas-Applegate Growth Equity Fund
Prudential Small Company Fund, Inc.
Prudential Tax-Managed Small-Cap Fund, Inc.
Prudential U.S. Emerging Growth Fund, Inc.
Target Funds
Small Capitalization Growth Fund
Small Capitalization Value Fund
The Prudential Investment Portfolios, Inc.
Prudential Jennison Equity Opportunity Fund

Sector Stock Funds
Prudential Natural Resources Fund, Inc.
Prudential Real Estate Securities Fund
Prudential Sector Funds, Inc.
Prudential Financial Services Fund
Prudential Health Sciences Fund
Prudential Technology Fund
Prudential Utility Fund

Global/International Stock Funds
Global Utility Fund, Inc.
Prudential Europe Growth Fund, Inc.
Prudential Pacific Growth Fund, Inc.
Prudential World Fund, Inc.
Prudential Global Growth Fund
Prudential International Value Fund
Prudential Jennison International Growth Fund
Target Funds
International Equity Fund

balanced/allocation funds
Prudential Diversified Funds
Conservative Growth Fund
Moderate Growth Fund
High Growth Fund
The Prudential Investment Portfolios, Inc.
Prudential Active Balanced Fund

<PAGE>

www.prudential.com (800) 225-1852

BOND FUNDS
Taxable Bond Funds
Prudential Government Income Fund, Inc.
Prudential Government Securities Trust
Short-Intermediate Term Series
Prudential High Yield Fund, Inc.
Prudential High Yield Total Return Fund, Inc.
Prudential Short-Term Corporate Bond Fund, Inc.
Income Portfolio
Prudential Total Return Bond Fund, Inc.
Target Funds
Total Return Bond Fund

Tax-Free Bond Funds
Prudential California Municipal Fund
California Series
California Income Series
Prudential Municipal Bond Fund
High Income Series
Insured Series
Prudential Municipal Series Fund
Florida Series
Massachusetts Series
New Jersey Series
New York Series
North Carolina Series
Ohio Series
Pennsylvania Series
Prudential National Municipals Fund, Inc.

Global/International Bond Funds
Prudential Global Total Return Fund, Inc.
Prudential International Bond Fund, Inc.
MONEY MARKET FUNDS
Taxable Money Market Funds
Cash Accumulation Trust
Liquid Assets Fund
National Money Market Fund
Prudential Government Securities Trust
Money Market Series
U.S. Treasury Money Market Series
Prudential Institutional Liquidity Portfolio, Inc.
Institutional Money Market Series
Prudential MoneyMart Assets, Inc.
Prudential Special Money Market Fund, Inc.
Money Market Series

Tax-Free Money Market Funds
Prudential California Municipal Fund
California Money Market Series
Prudential Municipal Series Fund
Connecticut Money Market Series
Massachusetts Money Market Series
New Jersey Money Market Series
New York Money Market Series
Prudential Tax-Free Money Fund, Inc.

Other Money Market Funds
Command Government Fund
Command Money Fund
Command Tax-Free Fund

<PAGE>

For More Information

Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852

Visit Prudential's web site at:
http://www.prudential.com

Trustees
Eugene C. Dorsey
Delayne Dedrick Gold
Robert F. Gunia
Thomas T. Mooney
Stephen P. Munn
David R. Odenath, Jr.
Richard A. Redeker
John R. Strangfeld
Nancy H. Teeters
Louis A. Weil, III

Officers
John R. Strangfeld, President
Robert F. Gunia, Vice President
David R. Odenath, Jr., Vice President
Grace C. Torres, Treasurer
Deborah A. Docs, Secretary
William V. Healey, Assistant Secretary

Manager
Prudential Investments
Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077

Investment Adviser
The Prudential Investment Corporation
Prudential Plaza
Newark, NJ 07102-3777

Distributor
Prudential Investment
Management Services LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077

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

Transfer Agent
Prudential Mutual Fund Services LLC
P.O. Box 8098
Philadelphia, PA 19101

Independent Accountants
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036

Legal Counsel
Swidler Berlin Shereff Friedman, LLP
The Chrysler Building
405 Lexington Avenue
New York, NY 10174

Fund Symbols NASDAQ CUSIP
PMCXX 74435M648

MF154E

(ICON) Printed on Recycled Paper

<PAGE>

ANNUAL REPORT AUGUST 31, 2000

Prudential
Municipal Series Fund/
Florida Series

Fund Type Municipal Bond

Objective Maximize current income that is exempt
from federal income taxes, consistent with the
preservation of capital, and to invest in
securities which will enable its shares to be
exempt from the Florida intangibles tax

(GRAPHIC)

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

The views expressed in this report and information
about the Fund's portfolio holdings are for the
period covered by this report
and are subject to change thereafter.

(LOGO)

<PAGE>

Build on the Rock

Investment Goals and Style
The Prudential Municipal Series Fund/Florida
Series' investment objective is to maximize current
income that is exempt from federal income taxes,
consistent with the preservation of capital, and to
invest in securities that will enable its shares to
be exempt from the Florida intangibles tax.
However, certain shareholders may be subject to the
alternative minimum tax (AMT) because some of the
Series' bonds are AMT eligible. There can be no
assurance that the Series will achieve its
investment objective.

Portfolio Composition

Expressed as a percentage of
total investments as of 8/31/00
54.0% Revenue Bonds
27.0 General Obligation Bonds
18.0 Prerefunded
1.0 Miscellaneous

Credit Quality
Expressed as a percentage of
total investments as of 8/31/00
3.0% AAA
15.0 AA
10.0 A
16.0 BBB
6.0 BB
4.0 B
46.0 Insured

Ten Largest Issuers

Expressed as a percentage of
net assets as of 8/31/00
6.1% Puerto Rico Commonwealth
4.2 Dade County Prof.
Sports Franchise*
3.9 Brevard County School Board
Ctfs. of Part.*
3.3 Lakeland Electric &
Water Revenue*
3.2 Alachua County. Ind. Dev.
Authority Revenue
2.6 Orlando Utilities Comm.
Water & Electric
2.5 Puerto Rico Tel.
Authority Revenue*
2.2 Tampa Sports
Authority Revenue
2.1 Tampa Gtd.
Entitlement Revenue
2.1 Escambia County Health
Facilities Revenue

* Prerefunded issues are secured by escrowed cash
and/or direct U.S. guaranteed obligations.

<PAGE>

www.prudential.com (800) 225-1852

Performance at a Glance

Cumulative Total Returns1 As of 8/31/00
One Five Since
Year Years Inception2
Class A 5.73% 31.36% (30.33%) 90.17% (80.13%)
Class B 5.46 29.09 (28.08) 38.57 (36.13)
Class C 5.20 27.49 (26.49) 37.46 (33.43)
Class Z 5.99 N/A 19.59 (19.36)
Lipper FL
Muni Debt
Fund Avg.3 4.86 27.53 ***

Average Annual Total Returns1 As of 9/30/00
One Five Since
Year Years Inception2
Class A 2.23% 4.73% (4.58%) 6.42% (5.83%)
Class B 0.13 4.84 (4.69) 5.35 (5.04)
Class C 2.82 4.53 (4.38) 4.31 (3.87)
Class Z 5.54 N/A 4.67 (4.62)

Distributions and Yields As of 8/31/00

Total Distributions 30-Day Taxable Equivalent Yield4 at Tax Rates of
Paid for 12 Months SEC Yield 36% 39.6%
Class A $0.51 4.61% 7.20% 7.63%
Class B $0.48 4.50 7.03 7.45
Class C $0.46 4.22 6.59 6.99
Class Z $0.53 5.01 7.83 8.29

Past performance is not indicative of future
results. Principal and investment return will
fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their
original cost.

1 Source: Prudential Investments Fund Management
LLC and Lipper Inc. The cumulative total returns do
not take into account sales charges. The average
annual total returns do take into account
applicable sales charges. The Series charges a
maximum front-end sales charge of 3% for Class A
shares, and a declining contingent deferred sales
charge (CDSC) of 5%, 4%, 3%, 2%, 1%, and 1% for six
years for Class B shares. Class B shares will
automatically convert to Class A shares, on a
quarterly basis, approximately seven years after
purchase. Class C shares are subject to a front-end
sales charge of 1% and a CDSC of 1% for 18 months.
Class Z shares are not subject to a sales charge or
distribution and service (12b-1) fees. Without
waiver of management fees and/or expense
subsidization, the Series' cumulative and average
annual total returns would have been lower, as
indicated in parentheses ( ).

2 Inception dates: Class A, 12/28/90; Class B,
8/1/94; Class C, 7/26/93; and Class Z, 12/6/96.

3 Lipper Average returns are for all funds in each
share class for the one- and five-year periods in
the Florida Municipal Debt Fund category. Single-
state Municipal Debt funds limit their securities
that are exempt from taxation in a specified state
(double tax exempt) or city (triple tax exempt).

4 Taxable equivalent yields reflect federal and
applicable state tax rates.

***Lipper Since Inception returns are 83.93% for
Class A, 38.26% for Class B, 39.13% for Class C,
and 16.42% for Class Z, based on all funds in each
share class.

1
<PAGE>

(LOGO) October 18, 2000

Dear Shareholder,
During our fiscal year ended August 31, 2000, share
classes of the Prudential Municipal Series
Fund/Florida Series, without considering the
initial sales charge, outperformed their benchmark
Lipper Average, which is not subject to sales
charges. The Series performed well even though
conditions in the municipal bond market were very
volatile.

Municipal bond prices began to fall early in our
fiscal year because the Federal Reserve repeatedly
increased short-term interest rates to slow a
rapidly expanding U.S. economy. However, higher
interest rates and strong economic growth caused
issuance of municipal bonds to decline at a time
when many investors sought the tax-exempt income
provided by these securities. This strong investor
demand helped municipal bond prices end the 12
months higher.

Amid these shifting market conditions, Prudential's Municipal Bond
sector team took advantage of changing investment
opportunities. The team accomplished this by
skillfully managing the risk that fluctuating
interest rates could pose to the Series'
securities, by evaluating bond issuers' ability to
make timely principal and interest payments, and by
identifying undervalued bonds.

We discuss developments in the municipal bond
market and explain the Series' investments on the
following pages. As always, we appreciate your
continued confidence in Prudential mutual funds,
and look forward to serving your future investment
needs.

Sincerely,

John R. Strangfeld, President
Prudential Municipal Series Fund

2
<PAGE>

Prudential Municipal Series Fund Florida Series

Annual Report August 31, 2000

Investment Adviser's Report

Municipal bonds gained amid volatile market
conditions
Prices of municipal bonds went on a roller coaster
ride during our fiscal year that began September 1,
1999. They ended the 12 months higher as investors
hurriedly bought a shrinking supply of newly issued
tax-exempt securities. Furthermore, prices of munis
finished the 12 months higher on the
belief that the Federal Reserve (the Fed) was
nearly through with its latest round of increases
in short-term interest rates.

The Fed raised short-term rates four times during
our fiscal year out of concern that an overheated
U.S. economy might ignite higher inflation via
rising consumer prices and accelerating wages. By
lifting short-term rates, the Fed pushed borrowing
costs higher for businesses and consumers, hoping
it would slow economic growth to a more sustainable
pace and keep inflationary pressures in check.

Timely duration moves
The trend toward higher short-term rates had
initially led investors to require higher yields on
municipal securities (and lower prices). In order
to reduce our portfolio's sensitivity to the rise
in interest rates, we lowered the Series' duration
in the early autumn of 1999. (Duration measures how
much a portfolio's bonds will fluctuate in price
for a given change in interest rates. It is
expressed in years.)

As the year 2000 began, we expected the Fed to
continue tightening monetary policy. We also
believed that further rate increases would
ultimately be viewed as positive by the bond market
because they would show the Fed's determination to
fight inflation. With this in mind, we began to
lengthen the Series' duration in January 2000,
which enabled the Series to benefit more fully as
prices of munis rallied later in the year. Our
timely adjustments to the Series' duration was an
important reason that, without considering sales
charges, the Series' share classes outperformed
their benchmark Lipper

3
<PAGE>

Prudential Municipal Series Fund Florida Series

Annual Report August 31, 2000

Average, which is not subject to sales charges.

This strong demand for tax-exempt bonds helped the
Lehman Municipal Bond Index to return 7.56% for the
first eight months of 2000, compared with only
4.10% for the Standard & Poor's 500 Composite Stock
Price Index.

While investors scrambled to buy municipal bonds,
the supply of newly issued tax-exempt securities
dwindled. Many state and local governments
accumulated such hefty cash reserves during the
long U.S. economic expansion that their borrowing
needs declined. This, in turn, led to decreased
issuance of tax-exempt bonds. In addition, the
supply of new munis due to refunding activity
shrank because many state and local governments had
already replaced higher-cost debt securities with
lower-cost bonds to save on interest expenses.

Puerto Rico Bonds Enhanced Series' Returns
In Florida, the amount of newly issued tax-exempt
bonds from August 31, 1999 to August 31, 2000
dropped 17%, compared with the same period a year
earlier, according to Thomson Financial Securities
Data. As an alternative to Florida securities, some
market participants, including us, turned to Puerto
Rico bonds, which are triple tax exempt in all 50
states. Not surprisingly, Puerto Rico bonds
performed exceptionally well. The Series benefited
from this trend since Puerto Rico general
obligation bonds were its largest holding at the
end of our fiscal year, accounting for 6.1% of its
total investments.

4
<PAGE>
www.prudential.com (800) 225-1852

Another position that enhanced the Series' returns
was bonds of Florida Municipal Power Agency issued
for the Stanton II Project. The issuer offered to
buy the bonds back at a very attractive price in an
attempt to restructure their outstanding debt. We
accepted the offer and booked a considerable profit
by selling our bonds.

Looking Ahead
Several factors could keep the rally of municipal
bond prices on track. As the Fed rate hikes work
their way through the economy, economic growth
could continue to moderate, allowing further
declines in bond yields and gains in bond prices.
Even if the economic expansion does not slow enough
to satisfy the Fed, the central bank may resume
tightening monetary policy.

We also expect further gains in tax-exempt bond
prices because demand for munis will likely
continue to outpace supply for some time. We
believe this imbalance will persist due to the
aging population's higher preference for tax-
exempt, fixed-income products, and the declining
supply of long-term debt securities in general. In
the near term, however, two risks to this
bullish scenario are the proposals or policies that
may come out of the U.S. Presidential election and
the extent of price increases for energy.
Uncertainty about these factors may make investors
somewhat reluctant to continue driving prices of
tax-exempt securities higher. However,
uncertainty could also make munis more attractive
as a means to reduce risks in the context of a
broader portfolio.

Prudential Municipal Series Fund Management Team

5
<PAGE>
Prudential Municipal Series Fund Florida Series

Annual Report August 31, 2000

Financial
Statements

<PAGE>
Prudential Municipal Series Fund Florida Series
Portfolio of Investments as of August 31, 2000
<TABLE>
<CAPTION>
Moody's Principal
Rating Interest Maturity Amount Value
Description (a) (Unaudited) Rate Date (000) (Note 1)
<S> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS 98.3%
Alachua Cnty. Ind. Dev. Auth. Rev.,
H.B. Fuller Co. Proj., A.M.T. NR 7.75% 11/01/16 $ 3,000 $ 3,064,890
Arbor Greene Cmnty. Dev. Dist.,
Florida Assmt. Rev. NR 5.75 05/01/06 330 325,278
Florida Assmt. Rev. NR 6.50 05/01/07 500 502,355
Florida Assmt. Rev. NR 6.30 05/01/19 340 322,480
Bayside Impvt. Cmnty. Dev. Dist.,
Florida Cap. Impvt. Rev., Ser. A NR 6.30 05/01/18 1,000 945,000
Brevard Cnty. Edl. Facs. Auth. Rev.
Ref., Florida Inst. of Tech. BBB-(c) 6.875 11/01/22 1,500 1,553,445
Brevard Cnty. Sch. Brd. Ctfs. of
Part., Ser. A, A.M.B.A.C. Aaa 6.50 07/01/12 3,500(b) 3,697,575
Broward Cnty. Edl. Facs. Auth. Rev.,
Nova Univ. Dorm. Proj., Ser. A NR 7.50 04/01/17 1,500(b) 1,556,190
Broward Cnty. Hlth. Facs. Auth.,
North Beach Hosp., M.B.I.A. Aaa 6.75 08/15/06 1,000 1,040,530
Clay Cnty. Hsg. Fin. Auth. Rev.,
Sngl. Fam. Mtge., Ser. A, A.M.T.,
G.N.M.A. Aa1 7.45 09/01/23 375 385,035
Cocoa Wtr. & Swr. Rev. Ref.,
F.G.I.C. Aaa 5.25 10/01/17 1,230 1,232,694
Dade Cnty. Aviation Dept. Rev.,
Ser. B, A.M.T., M.B.I.A. Aaa 6.00 10/01/24 1,500 1,561,260
Dade Cnty. Hlth. Facs. Auth. Rev.,
Baptist Hosp. of Miami Proj.,
Ser. A, E.T.M., M.B.I.A. Aaa 6.75 05/01/08 500 545,775
Dade Cnty. Hsg. Fin. Auth. Rev.,
Multi. Fam. Mtge., Golden Lakes
Apts. Proj., Ser. A, A.M.T. NR 6.05 11/01/39 1,000 960,910
Sngl. Fam. Mtge., Ser. B, A.M.T.,
G.N.M.A Aaa 7.25 09/01/23 285 291,438
Sngl. Fam. Mtge., Ser. C, A.M.T.,
G.N.M.A. Aaa 7.75 09/01/22 540 550,800
Dade Cnty. Prof. Sports Franchise
Facs. Tax Rev., E.T.M., M.B.I.A. Aaa 5.25 10/01/30 4,300 4,142,534
Duval Cnty. Hsg. Fin. Auth. Rev.,
Sngl. Fam. Mtge., A.M.T., G.N.M.A. AAA(c) 8.375 12/01/14 160 162,968
</TABLE>
See Notes to Financial Statements 7

<PAGE>
Prudential Municipal Series Fund Florida Series
Portfolio of Investments as of August 31, 2000 Cont'd.
<TABLE>
<CAPTION>
Moody's Principal
Rating Interest Maturity Amount Value
Description (a) (Unaudited) Rate Date (000) (Note 1)
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Escambia Cnty. Hlth. Facs. Rev.,
Florida Hlth. Care Facs. Loan,
A.M.B.A.C. Aaa 5.95% 07/01/20 $ 2,000 $ 2,090,380
Florida Hsg. Fin. Corp. Rev.,
Cypress Trace Apts., Ser. G, A.M.T. NR 6.60 07/01/38 1,220 1,157,548
Westchase Apts., Ser. B, A.M.T. NR 6.61 07/01/38 1,510 1,452,348
Florida St. Mun. Loan Council Rev.
Cap. Apprec. Ser. A, M.B.I.A.,
Gen. Oblig. AAA-(c) Zero 04/01/22 1,520 447,169
Cap. Apprec. Ser. A, M.B.I.A.,
Gen. Oblig. AAA-(c) Zero 04/01/23 1,520 421,602
Cap. Apprec. Ser. A, M.B.I.A.,
Gen. Oblig. AAA-(c) Zero 04/01/24 1,520 397,404
Greater Orlando Aviation Rev. Auth.
Facs., Orlando Arpt., A.M.T.,
F.G.I.C. Aaa 5.25 10/01/23 2,000 1,902,380
Hillsborough Cnty. Ind. Dev. Auth.
Poll. Ctrl. Rev., Tampa Elec.
Proj.,
Ser. 92 Aa3 8.00 05/01/22 1,750 1,877,890
Indigo Cmty. Dev. Dist. Cap. Impvt.
Rev. Ser. B NR 6.40 05/01/06 1,500 1,500,540
Jacksonville Elec. Auth. Rev.,
Elec. Sys. Ser. A Aa2 6.00 10/01/30 1,000 1,030,480
St. Johns Rvr. Pwr. Park Issue 2,
Ser. 7 Aa2 Zero 10/01/10 3,000 1,826,880
Jacksonville Hlth. Facs. Auth.
Hosp. Rev., Nat'l. Ben. Assoc. Baa1 7.00 12/01/22 1,825 1,842,027
St. Lukes Hosp. Assoc. Proj. AA+(c) 7.125 11/15/20 1,000 1,047,150
Jacksonville Swr. & Sld. Wste. Disp.
Facs. Rev., Anheuser Busch Proj.,
A.M.T. A1 5.875 02/01/36 1,000 1,011,970
Jacksonville Wtr. & Swr. Dev. Rev.,
Suburban Utils., A.M.T. A3 6.75 06/01/22 1,000 1,037,060
United Wtr. Proj., A.M.T.,
A.M.B.A.C. Aaa 6.35 08/01/25 1,500 1,588,710
Lakeland Elec. & Wtr. Rev. A1 5.625 10/01/36 3,000(b) 3,223,500
Lee Cnty. Ind. Dev. Auth. Hlth.
Care,
Facs. Rev., Shell Point Proj., Ser.
A BBB-(c) 5.50 11/15/29 1,500 1,215,195
Leon Cnty. Hsg. Fin. Auth. Rev.,
Sngl.
Fam. Mtge., Ser. A, A.M.T.,
G.N.M.A. Aaa 7.30 04/01/21 230 234,839
</TABLE>
8 See Notes to Financial Statements

<PAGE>
Prudential Municipal Series Fund Florida Series
Portfolio of Investments as of August 31, 2000 Cont'd.
<TABLE>
<CAPTION>
Moody's Principal
Rating Interest Maturity Amount Value
Description (a) (Unaudited) Rate Date (000) (Note 1)
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Lexington Oaks Cmnty. Dev. Dist.
Rev., Ser. B NR 6.70% 05/01/07 $ 1,000 $ 1,012,180
Lynn Haven Cap. Impvt. Rev.,
M.B.I.A. AAA-(c) 5.50 12/01/26 1,295 1,285,987
Martin Cnty. Ind. Dev. Auth. Rev.,
Indiantown Cogen. Proj., Ser. A,
A.M.T. Baa3 7.875 12/15/25 1,200 1,218,012
Maryland St. Hlth. and Higher Educ.
Facs., Auth. Rev. Baa1 6.75 07/01/30 500 511,115
Massachusetts St. Turnpike Auth.
Metropolitan Highway Sys., Rev. Aaa 6.05 01/01/28 2,000 428,100
Miami Spec. Oblig., Admn. Bldg.
Acquis. Proj., F.G.I.C. Aaa 6.00 02/01/16 1,000 1,049,480
Miami-Dade Cnty. Ind. Dev. Auth.
Rev., Facs., United Air Lines Inc.
Proj. Baa3 6.05 03/01/35 1,000 1,008,620
Miami-Dade Cnty. Prof. Sports Fac.
Tax Cap. Apprec. Ref., M.B.I.A. Aaa Zero 10/01/16 2,650 1,107,303
Minnesota Ag. & Econ. Dev., Fairview
Hlth. Care Sys., Ser. A A2 6.375 11/15/22 1,380 1,416,529
Mirimar Wste. Wtr. Impvt. Assmt.
Rev., F.G.I.C. Aaa 6.75 10/01/16 1,590(b) 1,740,875
Oakstead Cmnty. Dev. Dist. Cap.
Impvt., Ser. B NR 6.50 05/01/07 1,000 995,090
Okaloosa Cnty. Cap. Impvt. Rev.,
M.B.I.A. Aaa Zero 12/01/06 450 332,721
Orange Cnty. Hlth. Facs. Auth. Rev.,
Adventist Hlth. Sys., Baa1 6.375 11/15/20 1,000 992,030
Orange Cnty. Hsg. Fin. Auth. Mtge.
Rev., Ser. A, A.M.T., G.N.M.A. AAA(c) 7.375 09/01/24 420 433,852
Orange Cnty. Hsg. Fin. Auth. Rev.,
Multi. Fam. Ashley Point Apts.,
Ser. A, A.M.T. BBB+(c) 6.85 10/01/16 1,200 1,209,588
Multi. Fam. Ashley Point Apts.,
Ser. A, A.M.T. BBB+(c) 7.10 10/01/24 855 861,643
Orlando Util. Comm., Wtr. & Elec.
Rev., Ser. D Aa2 6.75 10/01/17 2,200 2,546,412
</TABLE>
See Notes to Financial Statements 9

<PAGE>
Prudential Municipal Series Fund Florida Series
Portfolio of Investments as of August 31, 2000 Cont'd.
<TABLE>
<CAPTION>
Moody's Principal
Rating Interest Maturity Amount Value
Description (a) (Unaudited) Rate Date (000) (Note 1)
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Palm Beach Cnty. Hlth. Facs. Auth.
Rev.,
Abbey Delray South Proj. BBB(c) 5.50% 10/01/11 $ 750 $ 706,087
Good Samaritan Hlth. Sys. Aaa 6.30 10/01/22 1,000(b) 1,070,170
Palm Beach Cnty. Hsg. Fin. Multi.
Fam. Auth. Rev., Windsor Pk. Apts.,
Ser. A, A.M.T., M.B.I.A. AAA-(c) 5.80 12/01/28 1,000 994,390
Pensacola Hlth. Facs. Auth. Rev.,
Daughters of Charity, M.B.I.A. Aaa 5.25 01/01/11 1,600(b) 1,646,672
Polk Cnty. Ind. Dev. Auth., Sld.
Wste. Disp. Fac. Rev.,
Tampa Elec. Co. Proj., A.M.T. Aa2 5.85 12/01/31 1,000 1,017,100
Puerto Rico Comnwlth.,
Cap. Apprec. Ref. Pub. Impvt., Gen.
Oblig. Baa1 Zero 07/01/15 1,955 901,138
Cap. Apprec. Ref. Pub. Impvt., Gen.
Oblig. Baa1 Zero 07/01/16 2,500 1,081,975
Cap. Apprec. Ref. Pub. Impvt., Gen.
Oblig. Baa1 Zero 07/01/17 5,300 2,154,344
Rites-Pennsylvania 642B, M.B.I.A.,
Gen. Oblig. NR 7.496 07/01/12 1,500 1,760,505
Puerto Rico Ind. Tourist Educ.,
Cogen Facs. Proj., A.M.T. Baa2 6.625 06/01/26 1,500 1,563,645
Puerto Rico Pub. Bldgs. Auth. Rev.
Gtd., Gov. Fac. Ser. B, F.S.A. AAA-(c) 5.25 07/01/21 1,915 1,893,341
Puerto Rico Tel. Auth. Rev., Ser. I,
M.B.I.A., R.I.B.S. Aaa 6.763 01/16/15 2,250(d)(b) 2,387,812
Seacoast Util. Auth. Wtr. & Swr.
Util., Sys. Rev., F.G.I.C. Aaa 5.50 03/01/16 2,000 2,067,620
St. Petersburg Hlth. Facs. Auth.
Rev., Allegheny Hlth. Proj.,
M.B.I.A. Aaa 7.00 12/01/15 1,000(b) 1,048,000
Sunrise Pub. Facs. Rev. Cap.
Apprec., Ser. B, M.B.I.A. Aaa Zero 10/01/20 1,120 365,232
Sunrise Util. Sys. Rev., Ref.,
A.M.B.A.C. Aaa 5.50 10/01/18 2,000 2,055,460
Tampa Gtd. Entitlement Rev.,
A.M.B.A.C. Aaa 7.05 10/01/07 2,000 2,092,660
</TABLE>
10 See Notes to Financial Statements

------------------------------
(a) The following abbreviations are used in portfolio descriptions:
A.M.B.A.C.--American Municipal Bond Assurance Corporation.
A.M.T.--Alternative Minimum Tax.
E.T.M.--Escrowed to Maturity.
F.G.I.C.--Financial Guaranty Insurance Company.
F.S.A.--Financial Security Assurance.
G.N.M.A.--Government National Mortgage Association.
M.B.I.A.--Municipal Bond Insurance Corporation.
R.I.B.S.--Residual Interest Bonds.
(b) Prerefunded issues are secured by escrowed cash and/or direct U.S.
guaranteed obligations.
(c) Standard & Poor's Rating.
(d) Inverse floating rate bond. The coupon is inversely indexed to a floating
interest rate. The rate shown is the rate at year end.
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.
See Notes to Financial Statements 11

<PAGE>
Prudential Municipal Series Fund Florida Series
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
August 31, 2000
<S> <C> <C>
----------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $92,909,044) $95,792,092
Interest receivable 1,644,312
Receivable for investment sold 1,050,021
Receivable for Series shares sold 105,315
Unrealized appreciation on swap 28,779
Other assets 2,420
---------------
Total assets 98,622,939
---------------
LIABILITIES
Bank overdraft 652,786
Payable for Series shares reacquired 297,340
Dividends payable 52,002
Accrued expenses 50,421
Management fee payable 41,319
Distribution fee payable 27,702
Deferred trustees' fees 6,254
---------------
Total liabilities 1,127,824
---------------
NET ASSETS $97,495,115
---------------
---------------
Net assets were comprised of:
Shares of beneficial interest, at par $ 95,335
Paid-in capital in excess of par 95,443,949
---------------
95,539,284
Accumulated net realized loss on investments (955,996)
Net unrealized appreciation on investments 2,911,827
---------------
Net assets, August 31, 2000 $97,495,115
---------------
---------------
</TABLE>

12 See Notes to Financial Statements

<PAGE>
Prudential Municipal Series Fund Florida Series
Statement of Assets and Liabilities Cont'd.
<TABLE>
<CAPTION>
August 31, 2000
<S> <C> <C>
----------------------------------------------------------------------------------------
Class A:
Net asset value and redemption price per share
($68,701,116 / 6,718,054 shares of beneficial interest
issued and outstanding) $10.23
Maximum sales charge (3% of offering price) .32
---------------
Maximum offering price to public $10.55
---------------
---------------
Class B:
Net asset value, offering price and redemption price per
share ($22,875,029 / 2,236,700 shares of beneficial
interest issued and outstanding) $10.23
---------------
---------------
Class C:
Net asset value and redemption price per share
($5,456,222 / 533,506 shares of beneficial interest issued
and outstanding) $10.23
Sales charge (1% of offering price) .10
---------------
Offering price to public $10.33
---------------
---------------
Class Z:
Net asset value, offering price and redemption price per
share
($462,748 / 45,267 shares of beneficial interest issued
and outstanding) $10.22
---------------
---------------
</TABLE>

See Notes to Financial Statements 13

<PAGE>
Prudential Municipal Series Fund Florida Series
Statement of Operations
<TABLE>
<CAPTION>
Year
Ended
August 31, 2000
<S> <C> <C>
----------------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest $ 6,065,696
---------------
Expenses
Management fee 502,329
Distribution fee--Class A 177,706
Distribution fee--Class B 115,957
Distribution fee--Class C 44,140
Custodian's fees and expenses 80,000
Reports to shareholders 46,000
Transfer agent's fees and expenses 28,000
Registration fees 37,000
Legal fees and expenses 14,000
Audit fees 10,000
Trustees' fees and expenses 8,000
Miscellaneous 4,280
---------------
Total expenses 1,067,412
Custodian fee credit (636)
---------------
Net expenses 1,066,776
---------------
Net investment income 4,998,920
---------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on:
Investment transactions (936,600)
Financial futures transactions 81,614
---------------
(854,986)
---------------
Net change in unrealized appreciation on:
Investments 1,034,298
Swaps 28,779
---------------
Net change in unrealized appreciation 1,063,077
---------------
Net gain on investments 208,091
---------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 5,207,011
---------------
---------------
</TABLE>

14 See Notes to Financial Statements

<PAGE>
Prudential Municipal Series Fund Florida Series
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended August 31,
-----------------------------
2000 1999
---------------------------------------------------------------------------------
<S> <C> <C> <C>
DECREASE IN NET ASSETS
Operations
Net investment income $ 4,998,920 $ 5,424,084
Net realized gain (loss) on investment
transactions (854,986) 447,190
Net change in unrealized appreciation
(depreciation) of investments 1,063,077 (6,574,512)
------------- ------------
Net increase (decrease) in net assets
resulting from operations 5,207,011 (703,238)
------------- ------------
Dividends and Distributions (Note 1):
Dividends from net investment income
Class A (3,597,698) (4,002,478)
Class B (1,116,649) (1,091,852)
Class C (268,305) (309,399)
Class Z (16,268) (20,355)
------------- ------------
(4,998,920) (5,424,084)
------------- ------------
Distributions in excess of net investment
income
Class A -- (8,316)
Class B -- (2,283)
Class C -- (710)
Class Z -- (45)
------------- ------------
-- (11,354)
------------- ------------
Distributions from net realized gains
Class A -- (8,316)
Class B -- (2,283)
Class C -- (710)
Class Z -- (46)
------------- ------------
-- (11,355)
------------- ------------
Series share transactions (net of share
conversions)
(Note 5):
Net proceeds from shares sold 11,228,470 13,296,170
Net asset value of shares issued in
reinvestment of dividends and distributions 2,239,613 2,387,979
Cost of shares reacquired (25,414,666) (19,003,105)
------------- ------------
Net decrease in net assets from Series share
transactions (11,946,583) (3,318,956)
------------- ------------
Total decrease (11,738,492) (9,468,987)
NET ASSETS
Beginning of year 109,233,607 118,702,594
------------- ------------
End of year $ 97,495,115 $109,233,607
------------- ------------
------------- ------------
</TABLE>

See Notes to Financial Statements 15

<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 11
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 nondiversified 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 Policies
The following is a summary of significant accounting policies followed by the
Fund, and the Series, in the preparation of its financial statements.

Securities Valuations: The Series 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 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. When the contract expires or is closed, the gain or
16

<PAGE>
Prudential Municipal Series Fund Florida Series
Notes to Financial Statements Cont'd.

loss is realized and is presented in the statement of operations as net realized
gain (loss) on financial futures contracts.

The Series invests in financial futures contracts in order to hedge its
existing portfolio securities, or securities the Series intends to purchase,
against fluctuations in value caused by changes in prevailing 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.

Options: The Series may either purchase or write options in order to
hedge against adverse market movements or fluctuations in value caused by
changes in prevailing interest rates or foreign currency exchange rates with
respect to securities or currencies which the Series currently owns or intends
to purchase. When a Series purchases an option, it pays a premium and an amount
equal to that premium is recorded as an investment. When a Series writes an
option, it receives a premium and an amount equal to that premium is recorded as
a liability. The investment or liability is adjusted daily to reflect the
current market value of the option. If an option expires unexercised, the Series
realizes a gain or loss to the extent of the premium received or paid. If an
option is exercised, the premium received or paid is an adjustment to the
proceeds from the sale or the cost basis of the purchase in determining whether
a Series has realized a gain or loss. The difference between the premium and the
amount received or paid on effecting a closing purchase or sale transaction is
also treated as a realized gain or loss. Gain or loss on purchased options is
included in net realized gain (loss) on investment transactions. Gain or loss on
written options is presented separately as net realized gain (loss) on written
option transactions.

The Series, as writer of an option, has no control over whether the
underlying securities or currencies may be sold (called) or purchased (put). As
a result a Series bears the market risk of an unfavorable change in the price of
the security or currency underlying the written option. The Series, as purchaser
of an option, bears the risk of the potential inability of the counterparties to
meet the terms of their contracts.

Interest Rate Swaps: The Series may enter into interest rate swaps. In
a simple interest rate swap, one investor pays a floating rate of interest on a
notional principal amount and receives a fixed rate of interest on the same
notional principal amount for a specified period of time. Alternatively, an
investor may pay a fixed rate and receive a floating rate. Interest rate swaps
were conceived as asset/liability management tools. In more complex swaps, the
notional principal amount may decline (or amortize) over time.
17

<PAGE>
Prudential Municipal Series Fund Florida Series
Notes to Financial Statements Cont'd.

During the term of the swap, changes in the value of the swap are
recognized as unrealized gains or losses by 'marking-to-market' to reflect the
market value of the swap. When the swap is terminated, the Series will record a
realized gain or loss equal to the difference between the proceeds from (or cost
of) the closing transaction and the Series basis in the contract, if any.

The Fund is exposed to credit loss in the event of non-performance by the
other party to the interest rate swap. However, the Fund does not anticipate
non-performance by any counterparty.

Inverse Floaters: The Series invests in variable rate securities
commonly called 'inverse floaters'. The interest rates on these securities have
an inverse relationship to the interest rate of other securities or the value of
an index. Changes in interest rate on the other security or index inversely
affect the rate paid on the inverse floater, and the inverse floater's price
will be more volatile than that of a fixed-rate bond. Additionally, some of
these securities contain a 'leverage factor' whereby the interest rate moves
inversely by a 'factor' to the benchmark rate. Certain interest rate movements
and other market factors can substantially affect the liquidity of inverse
floating rate notes.

Securities Transactions and Net 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 accretes
original issue discount on portfolio securities as adjustments to interest
income. Expenses are recorded on the accrual basis which may require the use of
certain estimates by management.

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 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.
18

<PAGE>
Prudential Municipal Series Fund Florida Series
Notes to Financial Statements Cont'd.

Custody Fee Credits: The Fund has an arrangement with its custodian
bank, whereby uninvested monies earn credits which reduce the fees charged by
the custodian.

Note 2. Agreements
The Fund has a management agreement with Prudential Investments Fund Management
LLC ('PIFM'). Pursuant to this agreement, PIFM has responsibility for all
investment advisory services and supervises the subadviser's performance of such
services. PIFM has entered into a subadvisory agreement with The Prudential
Investment Corporation ('PIC'). The subadvisory agreement provides that PIC will
furnish investment advisory services in connection with the management of the
Fund. In connection therewith, PIC is obligated to keep certain books and
records of the Fund. PIFM continues to have responsibility for all investment
advisory services pursuant to the management agreement and supervises PIC's
performance of such services. PIFM pays for the services of PIC, the
compensation of officers of the Fund, occupancy and certain clerical and
bookkeeping costs of the Fund. The Fund bears all other costs and expenses.

The management fee paid to PIFM 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 a distribution agreement with Prudential Investment
Management Services LLC ('PIMS'), which acts as the distributor of the Class A,
Class B, Class C and Class Z shares of the Fund. The Fund compensates PIMS 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. The distribution fees were accrued daily and payable
monthly. No distribution or service fees were paid to PIMS as distributor for
Class Z shares of the Fund.

Pursuant to the Class A, B and C Plans, the Fund compensates PIMS 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. Such expenses under the Plans were .25 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 year ended August 31, 2000.
19

<PAGE>
Prudential Municipal Series Fund Florida Series
Notes to Financial Statements Cont'd.

PIMS has advised the Series that they have received approximately $16,200
and $100 in front-end sales charges resulting from sales of Class A and C
shares, respectively during the year ended August 31, 2000. From these fees,
PIMS paid such sales charges to affiliated broker-dealers, which in turn paid
commissions to salespersons and incurred other distribution costs.

PIMS has advised the Series that for the year ended August 31, 2000, they
received approximately $77,200 and $300 in contingent deferred sales charges
imposed upon certain redemptions by Class B and Class C shareholders,
respectively.

PIFM, PIMS and PIC are wholly owned subsidiaries of The Prudential
Insurance Company of America ('Prudential').

The Fund, along with other affiliated registered investment companies (the
'Funds'), entered into a syndicated credit agreement ('SCA') with an
unaffiliated lender. The maximum commitment under the SCA is $1 billion.
Interest on any borrowings will be at market rates. The purpose of the agreement
is to serve as an alternative source of funding for capital share redemptions.
The Funds pay a commitment fee at an annual rate of .080 of 1% of the unused
portion of the credit facility. The commitment fee is accrued and paid quarterly
on a pro rata basis by the Funds. The expiration date of the SCA is March 9,
2001. Prior to March 9, 2000, the commitment fee was .065 of 1% of the unused
portion of the credit facility. The Fund did not borrow any amounts pursuant to
the SCA during the year ended August 31, 2000.

Note 3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC ('PMFS'), a wholly owned subsidiary of PIFM,
serves as the Fund's transfer agent. During the year ended August 31, 2000, the
Series incurred fees of approximately $25,000 for the services of PMFS. As of
August 31, 2000, approximately $1,900 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 nonaffiliates.

Note 4. Portfolio Securities
Purchases and sales of portfolio securities of the Series, excluding short-term
investments, for the year ended August 31, 2000 were $40,921,468 and
$52,871,191, respectively.

The cost basis of investments for federal income tax purposes at August
31, 2000 was $92,910,295 and accordingly, net unrealized appreciation of
investments for federal income tax purposes was $2,881,797 (gross unrealized
appreciation--$4,081,136 gross unrealized depreciation--$1,199,339).
20

<PAGE>
Prudential Municipal Series Fund Florida Series
Notes to Financial Statements Cont'd.

The Series elected, for United States federal income tax purposes, to
treat capital losses of $821,000 incurred in the ten months ended August 31,
2000 as having been incurred in the current fiscal year.

For federal income tax purposes, the Series had a capital loss
carryforward as of August 31, 2000 of approximately $135,000 which expires in
2008. Accordingly, no capital gains distributions are expected to be paid to
shareholders until future net gains have been realized in excess of such capital
loss carryforward.

The Fund entered into interest rate swap agreements. Under the agreements
the Fund receives the excess, if any, of a floating rate over a fixed rate. The
Fund paid a transaction fee for the agreements. Details of the swaps at August
31, 2000 are as follows:
<TABLE>
<CAPTION>
Notional Unrealized
Amount Fixed Floating Open Termination Appreciation
Type Counterparty (000) Rate Rate Date Date (Depreciation)
--------- --------------- --------- --------- -------- -------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Interest 3 month
rate Morgan Stanley $ 2,000 5.25% LIBOR 6/27/00 12/29/10 $ 28,779
</TABLE>

Note 5. Capital
The Series offers Class A, Class B, Class C and Class Z shares. Class A shares
are sold with a front-end sales charge of up to 3%. 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 are sold with a front-end
sales charge of 1% during the first 18 months. Class B shares will automatically
convert to Class A shares on a quarterly basis approximately seven years after
purchase. Special exchange privileges are also available for shareholders who
qualify to purchase Class A shares at net asset value. Class Z shares are not
subject to any sales or redemption charge and are offered exclusively for sale
to a limited group of investors. The Fund has authorized an unlimited number of
shares of beneficial interest of each class at $.01 par value per share.
21

<PAGE>
Prudential Municipal Series Fund Florida Series
Notes to Financial Statements Cont'd.

Transactions in shares of beneficial interest for the year ended August
31, 2000 and August 31, 1999 were as follows:
<TABLE>
<CAPTION>
Class A Shares Amount
------------------------------------------------------------ ---------- ------------
<S> <C> <C>
Year ended August 31, 2000:
Shares sold 703,618 $ 7,017,315
Shares issued in reinvestment of dividends 162,746 1,622,887
Shares reacquired (1,861,628) (18,551,269)
---------- ------------
Net increase (decrease) in shares outstanding before
conversion (995,264) (9,911,067)
Shares issued upon conversion from Class B 107,510 1,075,123
---------- ------------
Net increase (decrease) in shares outstanding (887,754) $ (8,835,944)
---------- ------------
---------- ------------
Year ended August 31, 1999:
Shares sold 459,241 $ 4,897,168
Shares issued in reinvestment of dividends 166,808 1,765,475
Shares reacquired (1,315,210) (13,931,649)
---------- ------------
Net decrease in shares outstanding before conversion (689,161) (7,269,006)
Shares issued upon conversion from
Class B 94,743 1,008,731
---------- ------------
Net decrease in shares outstanding (594,418) $ (6,260,275)
---------- ------------
---------- ------------
<CAPTION>
Class B
------------------------------------------------------------
<S> <C> <C>
Year ended August 31, 2000:
Shares sold 380,094 $ 3,773,316
Shares issued in reinvestment of dividends 44,997 448,789
Shares reacquired (500,627) (4,967,810)
---------- ------------
Net increase (decrease) in shares outstanding before
conversion (75,536) (745,705)
Shares reacquired upon conversion into Class A (107,510) (1,075,123)
---------- ------------
Net increase (decrease) in shares outstanding (183,046) $ (1,820,828)
---------- ------------
---------- ------------
Year ended August 31, 1999:
Shares sold 665,024 $ 7,087,108
Shares issued in reinvestment of dividends 41,768 441,754
Shares reacquired (311,472) (3,295,872)
---------- ------------
Net increase in shares outstanding before conversion 395,320 4,232,990
Shares reacquired upon conversion into Class A (94,763) (1,008,731)
---------- ------------
Net increase in shares outstanding 300,557 $ 3,224,259
---------- ------------
---------- ------------
</TABLE>
22

<PAGE>
Prudential Municipal Series Fund Florida Series
Notes to Financial Statements Cont'd.
<TABLE>
<CAPTION>
Class C Shares Amount
------------------------------------------------------------ ---------- ------------
Year ended August 31, 2000:
<S> <C> <C>
Shares sold 12,865 $ 126,949
Shares issued in reinvestment of dividends 15,441 153,989
Shares reacquired (166,189) (1,652,877)
---------- ------------
Net increase (decrease) in shares outstanding (137,883) $ (1,371,939)
---------- ------------
---------- ------------
Year ended August 31, 1999:
Shares sold 57,676 $ 610,380
Shares issued in reinvestment of dividends 15,461 163,559
Shares reacquired (102,072) (1,072,067)
---------- ------------
Net decrease in shares outstanding (28,935) $ (298,128)
---------- ------------
---------- ------------
<CAPTION>
Class Z
------------------------------------------------------------
<S> <C> <C>
Year ended August 31, 2000:
Shares sold 30,977 $ 310,890
Shares issued in reinvestment of dividends 1,396 13,948
Shares reacquired (24,170) (242,710)
---------- ------------
Net increase (decrease) in shares outstanding 8,203 $ 82,128
---------- ------------
---------- ------------
Year ended August 31, 1999:
Shares sold 66,050 $ 701,514
Shares issued in reinvestment of dividends 1,623 17,191
Shares reacquired (66,254) (703,517)
---------- ------------
Net increase in shares outstanding 1,419 $ 15,188
---------- ------------
---------- ------------
</TABLE>

<PAGE>
Prudential Municipal Series Fund Florida Series
Financial Highlights
<TABLE>
<CAPTION>
Class A
---------------
Year Ended
August 31, 2000
----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year $ 10.18
---------------
Income from investment operations
Net investment income .51
Net realized and unrealized gain (loss) on investment
transactions .05
---------------
Total from investment operations .56
---------------
Less distributions
Dividends from net investment income (.51)
Distributions in excess of net investment income --
Distributions from net realized gains --
---------------
Total distributions (.51)
---------------
Net asset value, end of year $ 10.23
---------------
---------------
TOTAL RETURN(b): 5.73%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) $68,701
Average net assets (000) $71,083
Ratios to average net assets:
Expenses, including distribution fees and service (12b-1)
fees .98%
Expenses, excluding distribution fees and service (12b-1)
fees .73%
Net investment income 5.06%
For Class A, B, C and Z shares:
Portfolio turnover rate 41%
</TABLE>

------------------------------
(a) Net of expense subsidy and fee waiver.
(b) 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 year reported and includes reinvestment of dividends and
distributions.
(c) Less than $.005 per share.
24 See Notes to Financial Statements

<PAGE>
Prudential Municipal Series Fund Florida Series
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Class A
-------------------------------------------------------------------------------------
Year Ended August 31,
-------------------------------------------------------------------------------------
1999 1998 1997 1996
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 10.74 $ 10.41 $ 10.11 $ 10.06
-------- -------- -------- ----------------
.50 .52 .54(a) .57(a)
(.56) .33 .31 .05
-------- -------- -------- ----------------
(.06) .85 .85 .62
-------- -------- -------- ----------------
(.50) (.52) (.54) (.57)
--(c) -- (.01) --
--(c) -- -- --
-------- -------- -------- ----------------
(.50) (.52) (.55) (.57)
-------- -------- -------- ----------------
$ 10.18 $ 10.74 $ 10.41 $ 10.11
-------- -------- -------- ----------------
-------- -------- -------- ----------------
(.61)% 8.34% 8.65% 6.20%
$ 77,398 $ 88,045 $ 92,579 $101,999
$ 84,810 $ 90,437 $ 97,700 $112,266
.89% .80% .57%(a) .37%(a)
.69% .70% .47%(a) .27%(a)
4.72% 4.89% 5.32%(a) 5.56%(a)
13% 35% 22% 68%
</TABLE>

See Notes to Financial Statements 25

<PAGE>
Prudential Municipal Series Fund Florida Series
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Class B
---------------
Year Ended
August 31, 2000
----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year $ 10.18
---------------
Income from investment operations
Net investment income .48
Net realized and unrealized gain (loss) on investment
transactions .05
---------------
Total from investment operations .53
---------------
Less distributions
Dividends from net investment income (.48)
Distributions in excess of net investment income --
Distributions from net realized gains --
---------------
Total distributions (.48)
---------------
Net asset value, end of year $ 10.23
---------------
---------------
TOTAL RETURN(b): 5.46%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) $22,875
Average net assets (000) $23,191
Ratios to average net assets:
Expenses, including distribution fees and service (12b-1)
fees 1.23%
Expenses, excluding distribution fees and service (12b-1)
fees .73%
Net investment income 4.81%
</TABLE>

<PAGE>
Prudential Municipal Series Fund Florida Series
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Class B
-------------------------------------------------------------------------------------
Year Ended August 31,
-------------------------------------------------------------------------------------
1999 1998 1997 1996
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 10.74 $ 10.41 $ 10.11 $ 10.06
-------- -------- -------- --------
.47 .48 .50(a) .53(a)
(.56) .33 .31 .05
-------- -------- -------- --------
(.09) .81 .81 .58
-------- -------- -------- --------
(.47) (.48) (.50) (.53)
--(c) -- (.01) --
--(c) -- -- --
-------- -------- -------- --------
(.47) (.48) (.51) (.53)
-------- -------- -------- --------
$ 10.18 $ 10.74 $ 10.41 $ 10.11
-------- -------- -------- --------
-------- -------- -------- --------
(.91)% 7.91% 8.22% 5.79%
$ 24,626 $ 22,755 $ 18,820 $ 14,699
$ 24,665 $ 21,154 $ 17,565 $ 12,570
1.19% 1.20% .97%(a) .77%(a)
.69% .70% .47%(a) .27%(a)
4.43% 4.49% 4.92%(a) 5.16%(a)
</TABLE>

See Notes to Financial Statements 27

<PAGE>
Prudential Municipal Series Fund Florida Series
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Class C
---------------
Year Ended
August 31, 2000
----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year $ 10.18
-------
Income from investment operations
Net investment income .46
Net realized and unrealized gain (loss) on investment
transactions .05
-------
Total from investment operations .51
-------
Less distributions
Dividends from net investment income (.46)
Distributions in excess of net investment income --
Distributions from net realized gains --
-------
Total distributions (.46)
-------
Net asset value, end of year $ 10.23
-------
-------
TOTAL RETURN(b): 5.20%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) $ 5,456
Average net assets (000) $ 5,885
Ratios to average net assets:
Expenses, including distribution fees and service (12b-1)
fees 1.48%
Expenses, excluding distribution fees and service (12b-1)
fees .73%
Net investment income 4.56%
</TABLE>

<PAGE>
Prudential Municipal Series Fund Florida Series
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Class C
-------------------------------------------------------------------------------------
Year Ended August 31,
-------------------------------------------------------------------------------------
1999 1998 1997 1996
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$10.74 $10.41 $10.11 $10.06
------- ------- ------- -------
.44 .45 .48(a) .50(a)
(.56) .33 .31 .05
------- ------- ------- -------
(.12) .78 .79 .55
------- ------- ------- -------
(.44) (.45) (.48) (.50)
--(c) -- (.01) --
--(c) -- -- --
------- ------- ------- -------
(.44) (.45) (.49) (.50)
------- ------- ------- -------
$10.18 $10.74 $10.41 $10.11
------- ------- ------- -------
------- ------- ------- -------
(1.16)% 7.64% 7.95% 5.52%
$6,833 $7,520 $7,336 $7,792
$7,420 $7,325 $7,575 $8,293
1.44% 1.45% 1.22%(a) 1.02%(a)
.69% .70% .47%(a) .27%(a)
4.17% 4.24% 4.67%(a) 4.91%(a)
</TABLE>

See Notes to Financial Statements 29

<PAGE>
Prudential Municipal Series Fund Florida Series
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Class Z
---------------
Year Ended
August 31, 2000
----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 10.17
-------
Income from investment operations
Net investment income .53
Net realized and unrealized gain (loss) on investment
transactions .05
-------
Total from investment operations .58
-------
Less distributions
Dividends from net investment income (.53)
Distributions in excess of net investment income --
Distributions from net realized gains --
-------
Total distributions (.53)
-------
Net asset value, end of period $ 10.22
-------
-------
TOTAL RETURN(b): 5.99%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 463
Average net assets (000) $ 307
Ratios to average net assets:
Expenses, including distribution fees and service (12b-1)
fees .73%
Expenses, excluding distribution fees and service (12b-1)
fees .73%
Net investment income 5.31%
</TABLE>

------------------------------
(a) Net of expense subsidy and fee waiver.
(b) 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.
(c) Annualized.
(d) Commencement of offering of Class Z shares.
(e) Less than $.005 per share.
30 See Notes to Financial Statements

<PAGE>
Prudential Municipal Series Fund Florida Series
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Class Z
---------------------------------------------------------------------------------------
Year Ended August 31, September 18, 1996(d)
------------------------------------------ through August 31,
1999 1998 1997
---------------------------------------------------------------------------------------
<S> <C> <C> <C>
$10.73 $10.41 $10.36
------- ------- -------
.52 .53 .41(a)
(.56) .32 .06
------- ------- -------
(.04) .85 .47
------- ------- -------
(.52) (.53) (.41)
--(e) -- (.01)
--(e) -- --
------- ------- -------
(.52) (.53) (.42)
------- ------- -------
$10.17 $10.73 $10.41
------- ------- -------
------- ------- -------
(.42)% 8.34% 4.57%
$ 377 $ 383 $ 94
$ 413 $ 373 $ 36
.69% .70% .47%(a)(c)
.69% .70% .47%(a)(c)
4.93% 4.99% 5.48%(a)(c)
</TABLE>

See Notes to Financial Statements 31

<PAGE>
Prudential Municipal Series Fund Florida Series
Report of Independent Accountants

To the Shareholders and Trustees of
Prudential Municipal Series Fund, Florida Series

In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Prudential Municipal Series Fund,
Florida Series (the 'Fund', one of the portfolios constituting Prudential
Municipal Series Fund) at August 31, 2000, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the four years in the
period then ended, in conformity with accounting principles generally accepted
in the United States of America. These financial statements and financial
highlights (hereafter referred to as 'financial statements') are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at August
31, 2000 by correspondence with the custodian, provide a reasonable basis for
our opinion. The accompanying financial highlights for the year ended August 31,
1996 were audited by other independent accountants, whose opinion dated October
14, 1996 was unqualified.

PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York
October 20, 2000
32

<PAGE>
Prudential Municipal Series Fund Florida Series
Federal Income Tax Information (Unaudited)

We wish to advise you that the corporate dividends received deduction for
the Series is zero. Only funds that invest in U.S. equity securities are
entitled to pass-through a corporate dividends received deduction.
33

Prudential Municipal Series Fund Florida Series
Class A Growth of a $10,000 Investment
(GRAPH)

Average Annual Total Returns as of 8/31/00
One Year Five Years Ten Years Since Inception
With Sales
Charge 2.56% 4.97% (4.80%) N/A 6.53% (5.94%)
Without Sales
Charge 5.73% 5.61% (5.44%) N/A 6.87% (6.27%)

The Index is a weighted index comprised of
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 unmanaged, and the total return includes the
reinvestment of all dividends, but does not include
the effect of sales charges or operating expenses of a
mutual fund. The securities that comprise the Index
may differ substantially from the securities in the
Series.

The Index is not the only one that may be used to
characterize performance of municipal bond funds.
Other indexes may portray different comparative
performance. Investors cannot invest directly in an
index.

This graph is furnished to you in accordance with
SEC regulations.

<PAGE>

www.prudential.com (800) 225-1852
Class B Growth of a $10,000 Investment
(GRAPH)

Average Annual Total Returns as of 8/31/00
One Year Five Years Ten Years Since Inception
With Sales
Charge 0.46% 5.08% (4.91%) N/A 5.51% (5.20%)
Without Sales
Charge 5.46% 5.24% (5.07%) N/A 5.51% (5.20%)

The Index is a weighted index comprised of
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 unmanaged, and the total
return includes the reinvestment of all dividends,
but does not include the effect of sales charges or
operating expenses of a mutual fund.
The securities that comprise the Index may differ
substantially from the securities in the Series.
The Index is not the only one that may be used to
characterize performance of municipal bond funds.
Other indexes may portray different comparative
performance. Investors cannot invest directly in an
index.

This graph is furnished to you in accordance with
SEC regulations.

<PAGE>

Prudential Municipal Series Fund Florida Series
Class C Growth of a $10,000 Investment
(GRAPH)

Average Annual Total Returns as of 8/31/00
One Year Five Years Ten Years Since Inception
With Sales
Charge 3.15% 4.77% (4.60%) N/A 4.44% (4.00%)
Without Sales
Charge 5.20% 4.98% (4.81%) N/A 4.58% (4.15%)

The Index is a weighted index comprised of
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 unmanaged, and the total
return includes the
reinvestment of all dividends, but does not include
the effect of sales charges or operating expenses
of a mutual fund. The securities that comprise the
Index may differ substantially from the securities
in the Series. The Index is not the only one that
may be used to characterize performance of
municipal bond funds. Other indexes may portray
different comparative performance. Investors cannot
invest directly in an index.

This graph is furnished to you in accordance with
SEC regulations.

<PAGE>

www.prudential.com (800) 225-1852
Class Z Growth of a $10,000 Investment
(GRAPH)

Average Annual Total Returns as of 8/31/00
One Year Five Years Ten Years Since Inception
With Sales
Charge 5.99% N/A N/A 4.91% (4.85%)
Without Sales
Charge 5.99% N/A N/A 4.91% (4.85%)

The Index is a weighted index comprised of
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 unmanaged, and the total
return includes the
reinvestment of all dividends, but does not include
the effect of sales charges or operating expenses
of a mutual fund. The securities that comprise the
Index may differ substantially from the securities
in the Series. The Index is not the only one that
may be used to characterize performance of
municipal bond funds. Other indexes may portray
different comparative performance. Investors cannot
invest directly in an index.

This graph is furnished to you in accordance with
SEC regulations.

<PAGE>
For More Information