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

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

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ANNUAL REPORT August 31, 1994

Prudential
California
Municipal Fund

(ICON)

California Series

(LOGO)

<PAGE>
Letter to Shareholders

October 18, 1994

Dear Shareholder:

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

The California Series seeks maximum current income exempt from state and
federal income taxes* consistent with preservation of capital. The Series
is comprised of investment grade municipal obligations. The Series
performed in line with the Lipper California Municipal Debt Average
over the last year, but because long-term interest rates rose, total
returns were disappointing. As a result, the Series has become more
cautious and shortened its average maturity.
<TABLE>
SERIES PERFORMANCE
As of August 31, 1994
<CAPTION>
30-day Taxable Equivalent Yields
NAV SEC Yield @28% @31% @39.6%
<S> <C> <C> <C> <C> <C>
Class A $11.30 4.9% 7.7% 8.0% 9.2%
Class B $11.29 4.7% 7.3% 7.6% 8.7%
Class C $11.29 N/A N/A N/A N/A
</TABLE>

Investment return and principal value will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than
their original cost. Past performance is no guarantee of future results.

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

N/A = Yield information with respect to Class C is not available
as operations commenced in August 1994.

-1-

<PAGE>
<TABLE>
TOTAL RETURNS
<CAPTION>
Historical (As of 8/31/94)1 Average Annual (As of 9/30/94)2
1-Yr. 5-Yr. Since Incep.** 1-Yr. 5-Yr. Since Incep.**
<S> <C> <C> <C> <C> <C> <C>
Class A -0.8% N/A +39.7% -6.5% N/A +6.4%
Class B -1.2% +40.5% +121.1% -9.0% +6.7% +8.1%
Class C N/A N/A +0.1% N/A N/A -2.3%
Lipper CA
Muni Debt Avg.*** -1.4% +43.7% +144.3% N/A N/A N/A
</TABLE>

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

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

**Inception on January 22, 1990 for Class A, September 19, 1984 for Class
B and August 1, 1994 for Class C.

***These are the average returns of 86 California municipal debt funds
for one-year, five-year, and since inception of Class B shares, as determined
by Lipper Analytical Services, Inc.

Note: Without expense subsidies and management fee waivers, the Series'
historical and average annual total returns would have been slightly lower.

Once Was Not Enough

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

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

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

California: Recovering Slowly

After losing 660,000 jobs in three and a half years, California seems to be
recovering from its worst recession since the Great Depression. Yet
employment growth is still minimal, particularly in the southern portion
of the state. And defense cutbacks, while decelerating, are still being
felt. The California

-2-

<PAGE>

Department of Finance projects that defense employment, which lost
50,000 jobs in 1993 (a 17% reduction), will drop another 14% this
year and 10% in 1995.

Positive economic growth in California is still slow. The June 1994
unemployment rate was 8.3%, the second highest in the nation, and fiscally,
the state is also in a bind. Unable to reduce its expenditures to match its
economic performance, California now has a $2.3 billion deficit, likely to
approach $6 billion in two years if nothing is done. This year's budget was
balanced only by short-term borrowing, for which the state will probably
have to borrow again to repay. As a result, California has the second-lowest
bond rating in the country.

The long-term outlook is more favorable. As the state continues to
pull itself out of recession, revenues should increase. This growth,
plus a more realistic state budget, will ultimately help the state move
forward.

Because of the state government's financial condition, we have generally
avoided its general obligation and state public works bonds for most of
this year. We will continue to do so until its fiscal position improves
or until yields more accurately reflect the present state of affairs.

A Tax Reminder

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

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

The Outlook

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

In the months ahead, we expect supply -- or the lack of it -- to
become more important in the tax-free municipal bond market. Through
the first

-3-

<PAGE>

eight months of the year, new issue volume is off 42%, according
to Securities Data Co., which tracks this statistic. The pace is
accelerating. In August, new issue volume fell 56%.

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

Sincerely,

Lawrence C. McQuade
President

Christian Smith
Portfolio Manager

-4-

<PAGE>
PRUDENTIAL CALIFORNIA MUNICIPAL FUND Portfolio of Investments
CALIFORNIA SERIES August 31, 1994
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount Value
(Unaudited) (000) Description(a) (Note 1)
<C> <C> <S> <C>
LONG-TERM INVESTMENTS--97.9%
Alameda Impvt. Bond Act of 1915,
Marina Vlg. Assmt. Dist. 89-1,
NR $ 1,700 7.55%, 9/2/06......... $ 1,748,620
NR 1,120 7.65%, 9/2/09......... 1,152,278
Arcadia Unified Sch.
Dist., Ser. A,
M.B.I.A.,
Aaa 1,765 Zero Coupon, 9/1/10... 664,434
Aaa 1,370 Zero Coupon, 9/1/14... 395,450
Aaa 2,555 Zero Coupon, 9/1/15... 691,690
Aaa 1,225 Zero Coupon, 9/1/16... 310,293
Aaa 1,790 Zero Coupon, 9/1/17... 424,087
Azusa Pub. Fin. Auth.
Rev.,
5.00%, 7/1/23, Ser. A,
Aaa 2,515 F.G.I.C............. 2,071,103
Bakersfield Pub. Fac.
Corp.,
Cert. of Part.,
Wst. Wtr. Treat.
Plant, No. 3,
A1 2,750(D) 8.00%, 1/1/10......... 3,043,040
Baldwin Park
California Pub. Fin.
Auth. Rev.
BBB* 1,020 7.05%, 9/1/14......... 1,044,888
Benicia Unified Sch.
Dist.,
Gen. Oblig.,
Aaa 1,000 6.85%, 8/1/16, Ser.
A................... 1,054,340
Berkeley Hosp. Rev.,
Alta Bates Hosp.
Corp.,
Aaa 1,785(D) 7.65%, 12/1/15........ 2,019,799
Brea Pub. Fin. Auth.
Rev.,
Tax Alloc. Redev.
Proj.,
NR 5,000 8.10%, 3/1/21, Ser.
C................... 5,331,400
Buena Park Cmnty.
Redev.
Agcy., Central Bus.
Dist. Proj.,
BBB+* 2,500 7.10%, 9/1/14......... 2,555,575
California St. Brd. of
Pub. Wks.,
Lease Rev., Univ. of
California at San
Diego, High
Technology Facs.,
A1 1,570 7.375%, 4/1/06, Ser.
A................... 1,741,318
California St. Brd. of
Pub.
Wks., Lease Rev.,
Univ. of California at
Santa Barbara, High
Technology Facs.,
Aaa $ 2,500(D) 8.125%, 2/1/08, Ser.
A................... $ 2,804,800
California St. Hlth.
Facs. Fin. Auth.
Rev.,
Brookside Hosp.,
NR 1,500(D) 8.10%, 11/1/17, Ser.
A................... 1,678,425
Catholic Hlth. Facs.,
Aaa 2,000 5.00%, 7/1/14,
A.M.B.A.C........... 1,711,740
Aaa 1,000 5.00%, 7/1/21,
A.M.B.A.C........... 828,150
Episcopal Homes
Foundation,
A* 2,500 7.70%, 7/1/18, Ser.
A................... 2,699,200
Eskaton Properties,
NR 4,500(D)/@ 7.50%, 5/1/20......... 5,145,615
Sisters of Providence
Hosp.,
A1 1,500 7.50%, 10/1/10........ 1,625,280
Sutter Hlth. Sys.,
A1 1,500 9.125%, 1/1/06........ 1,560,525
NR 750(D) 8.00%, 1/1/16, Ser.
B................... 819,750
California St. Hsg. Fin. Agcy. Rev.,
Sngl. Fam. Mtge.,
Aa 10,765 Zero Coupon, 2/1/15,
Ser. A.............. 1,468,131
California St. Poll.
Ctrl. Fin. Auth.
Rev., Pacific Gas
& Elec. Co.,
A1 1,650 6.625%, 6/1/09, Ser.
A................... 1,679,387
A1 3,250 8.20%, 12/1/18, Ser.
A................... 3,513,672
California St., Rev.
Antic. Wts.,
MIG1 12,000 5.75%, 4/25/96, Ser.
C................... 12,187,939
California Statewide
Cmnty. Dev. Corp.,
Children's Hosp.,
Aaa 1,700 4.75%, 6/1/21,
M.B.I.A............. 1,351,942
Contra Costa Cnty.,
Spec. Tax, Cmnty.
Facs. Pleasant Hill,
NR 1,300 8.125%, 8/1/16........ 1,398,176
</TABLE>

-5- See Notes to Financial Statements.
<PAGE>
<PAGE>
PRUDENTIAL CALIFORNIA MUNICIPAL FUND
CALIFORNIA SERIES
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount Value
(Unaudited) (000) Description(a) (Note 1)
<C> <C> <S> <C>
Contra Costa Wtr.
Dist. Rev.,
A $ 2,000(D)/@ 7.25%, 10/1/10, Ser.
A................... $ 2,266,420
Desert Hosp. Dist., Cert. of Part.,
AAA* 5,000(D) 8.10%, 7/1/20......... 5,883,750
East Palo Alto San.
Dist.,
Cert. of Part.,
NR 1,295 8.25%, 10/1/15........ 1,381,027
Fairfield Pub. Fin.
Auth. Rev.,
Fairfield Redev.
Projs.,
NR 4,200(D) 7.90%, 8/1/21, Ser.
A................... 4,929,120
Fontana Cmnty. Facs.,
Dist. No. 2, Spec.
Tax Rev.,
NR 3,000 8.50%, 9/1/17, Ser.
B................... 3,270,330
Industry City,
Gen. Oblig.,
Aaa 1,660(D) 8.00%, 7/1/11,
F.G.I.C............. 1,907,905
Aaa 1,795(D) 8.00%, 7/1/12,
F.G.I.C............. 2,064,842
Urban Dev. Agcy.,
NR 970 10.40%, 5/1/15........ 1,042,061
Long Beach Redev.
Agcy.,
Dist. 3, Spec. Tax
Rev.,
NR 3,000 6.375%, 9/1/23........ 2,772,030
Los Angeles Cmnty.
Redev. Agcy., Bunker
Hill Proj.,
Sub. Tax. Alloc.,
6.00%, 12/1/09, Ser.
Aaa 750(D) C, M.B.I.A.......... 801,293
Los Angeles Cnty Met.
Trans.
Auth., Sales Tax
Rev.,
Aaa 1,450 5.25%, 7/1/23,
A.M.B.A.C........... 1,246,884
Los Angeles Cnty.,
Cert. of Part.,
Civic Ctr. Heating &
Refrigeration Plant,
A1 2,000(D) 8.00%, 6/1/10......... 2,260,100
Correctional Facs.
Proj.,
Zero Coupon, 9/1/10,
Aaa 3,770 M.B.I.A............. 1,403,873
Solheim Lutheran
Nursing Home Proj.,
A* 2,000(D) 8.125%, 11/1/17....... 2,239,960
Los Angeles Cnty.,
Hsg. Auth.,
Multifam. Mtge.
Rev.,
Mayflower Gardens
Proj.,
8.875%, 12/20/10, Ser.
K,
AAA* $ 2,100(D) G.N.M.A............. $ 2,596,692
Los Angeles Conv. &
Exhib.
Ctr. Auth., Cert. of
Part.,
Aaa 1,250(D)/@ 9.00%, 12/1/10........ 1,621,825
Los Angeles Dept. of
Wtr. & Pwr., Elec.
Plant Rev.,
Aa 4,035 5.375%, 9/1/23........ 3,488,015
Waterworks Rev.,
Aa 4,670 4.50%, 5/15/18........ 3,566,526
Met. Wtr. Dist. of
Southern
California,
Waterworks Rev.,
Aa 4,000 5.75%, 7/1/21, Ser.
A................... 3,780,640
Mt. Diablo Hosp. Dist.
Rev.,
8.00%, 12/1/11, Ser.
Aaa 1,250(D) A, A.M.B.A.C........ 1,476,250
Petaluma, Cert. of
Part.,
Petaluma Cmnty. Ctr.
Proj.,
A 1,380(D) 8.10%, 6/15/12........ 1,449,455
Port of Oakland Rev.,
6.50%, 11/1/16, Ser.
E,
Aaa 1,000 M.B.I.A............. 1,023,020
Puerto Rico Hwy. &
Trans. Auth. Rev.,
Baa1 5,000 6.625%, 7/1/12, Ser.
V................... 5,191,400
AAA* 250(D) 6.625%, 7/1/18, Ser.
T................... 277,215
Baa1 1,000 6.625%, 7/1/18, Ser.
T................... 1,039,770
Riverside Wtr. Rev.,
Aa 1,660 Zero Coupon,
10/1/07............. 767,866
Aa 2,920 6.00%, 10/1/15........ 2,844,869
Roseville City Sch.
Dist.,
Zero Coupon, 8/1/10,
Aaa 1,230 Ser. A, F.G.I.C..... 460,389
Sacramento Mun. Util.
Dist. Elec. Rev.,
5.75%, 11/15/09, Ser.
Aaa 3,650 C, M.B.I.A.......... 3,591,563
</TABLE>

-6- See Notes to Financial Statements.
<PAGE>
PRUDENTIAL CALIFORNIA MUNICIPAL FUND
CALIFORNIA SERIES
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount Value
(Unaudited) (000) Description(a) (Note 1)
<C> <C> <S> <C>
San Bernardino Cnty.,
Cert. of
Part., Med. Ctr.
Fin. Proj.,
Baa1 $ 6,500 5.50%, 8/1/19......... $ 5,491,720
San Diego Cnty. Regl.
Trans.
Cmnty., Sales Tax
Rev.,
A1 1,750 6.00%, 4/1/08, Ser.
A................... 1,782,480
San Francisco City &
Cnty.,
Pub. Utils. Comn.
Wtr. Rev.,
Aa 2,000 8.00%, 11/1/11........ 2,227,040
Redev. Agcy., Lease
Rev.,
A 2,000 Zero Coupon, 7/1/09... 774,360
San Jose Redev. Proj.,
Tax Alloc.,
Aaa 2,100 6.00%, 8/1/15,
M.B.I.A............. 2,075,220
Aaa 5,000 4.75%, 8/1/24,
M.B.I.A............. 3,933,950
Santa Ana Tax Alloc.,
South Main St.
Redev.,
Aaa 3,000 5.00%, 9/1/19,
M.B.I.A............. 2,499,060
Santa Cruz Cnty. Pub.
Fin.
Auth. Rev.,
Tax Alloc. Sub. Ln.,
AAA* 2,350(D) 7.625%, 9/1/21, Ser.
B................... 2,677,073
Santa Margarita, Dana
Point
Auth., Impvt. Dist.,
Ser. B,
Aaa 2,500 7.25%, 8/1/08,
M.B.I.A............. 2,855,325
Aaa 1,000 7.25%, 8/1/09,
M.B.I.A............. 1,145,540
So. Orange Cnty. Pub.
Fin. Auth., Foothill
Area Proj.,
Aaa 750 8.00%, 8/15/08,
F.G.I.C............. 912,015
Aaa 750 6.50%, 8/15/10,
F.G.I.C............. 795,277
Spec. Tax Rev.
Aaa 3,500 7.00%, 9/1/11,
M.B.I.A............. 3,889,620
Sonoma Cnty., Cert. of
Part.,
Correctional Facs.
Proj.,
NR 4,000(D) 8.125%, 6/1/12........ 4,479,080
Southern California
Pub. Pwr. Auth.,
Proj. Rev.,
A 2,000 6.75%, 7/1/12......... 2,110,780
A 4,000 6.75%, 7/1/13......... 4,288,280
Aaa 1,500 4.75%, 7/1/16,
A.M.B.A.C........... 1,226,070
Southern California
Pub. Pwr. Auth.,
Proj. Rev.,
Transmission Proj.,
Zero Coupon, 7/1/12,
Aaa $ 7,080 Ser. A, F.G.I.C..... $ 2,362,525
4.75%, 7/1/23, Ser. A,
Aaa 8,000 M.B.I.A............. 6,280,880
Southern California
Rapid
Transit Dist., Cert.
of Part.,
Worker's
Compensation Fund,
Aaa 2,095 6.00%, 7/1/10,
M.B.I.A............. 2,099,881
Sulphur Springs Union
Sch. Dist.,
Zero Coupon, 9/1/09,
Aaa 2,000 Ser. A, M.B.I.A..... 802,640
Torrance Redev. Agcy.,
Tax Alloc., Downtown
Redev.,
Baa 1,580 7.125%, 9/1/21........ 1,619,468
Univ. of California
Rev.,
Pkg. Sys.,
A 2,000(D) 7.75%, 11/1/14, Ser.
C................... 2,174,540
Virgin Islands Pub.
Fin. Auth.
Rev., Hwy. Trans.
Trust Fund,
NR 600 7.25%, 10/1/18, Ser.
A................... 618,972
Virgin Islands Terr.,
Hugo Ins. Claims
Fund Prog.,
NR 925 7.75%, 10/1/06, Ser.
91.................. 1,011,423
Virgin Islands Wtr. &
Pwr. Auth.,
Elec. Sys. Rev.,
NR 500 7.40%, 7/1/11, Ser.
A................... 522,300
Whittier Pub. Fin.
Auth. Rev.,
Whittier Blvd.
Redev. Proj.,
NR 825 7.50%, 9/1/14, Ser.
A................... 885,382
------------
Total long-term
investments
(cost
$184,041,604)....... 192,907,038
------------
SHORT-TERM INVESTMENTS--1.7%
California Hlth. Facs. Fin. Auth.
Rev.,
St. Francis Mem. Hosp., F.R.D.D.,
VMIG1 2,225 3.20%, 9/1/94, Ser.
B................... 2,225,000
</TABLE>

-7- See Notes to Financial Statements.
<PAGE>
<PAGE>
PRUDENTIAL CALIFORNIA MUNICIPAL FUND
CALIFORNIA SERIES
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount Value
(Unaudited) (000) Description(a) (Note 1)
<C> <C> <S> <C>
California Poll. Ctrl. Fin. Auth.
Rev.,
Honey Lake Pwr. Co. Proj.,
F.R.D.D.,
NR $ 1,200 3.25%, 9/1/94, Ser.
89.................. $ 1,200,000
------------
Total short-term
investments
(cost $3,425,000)... 3,425,000
------------
Total Investments--99.6%
(cost $187,466,604;
Note 4)............. 196,332,038
Other assets in excess
of
liabilities--0.4%... 735,151
------------
Net Assets--100%...... $197,067,189
------------
------------
</TABLE>

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.
-8- See Notes to Financial Statements.

<PAGE>
PRUDENTIAL CALIFORNIA MUNICIPAL FUND
CALIFORNIA SERIES
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
August 31,
Assets 1994
------------
<S> <C>
Investments, at value (cost $187,466,604)................................................. $196,332,038
Interest receivable....................................................................... 3,145,956
Receivable for investments sold........................................................... 1,539,850
Receivable for Series shares sold......................................................... 231,974
Other assets.............................................................................. 5,883
------------
Total assets.......................................................................... 201,255,701
------------
Liabilities
Payable for investments purchased......................................................... 2,882,009
Payable for Series shares reacquired...................................................... 860,666
Dividends payable......................................................................... 172,140
Accrued expenses and other liabilities.................................................... 99,620
Management fee payable.................................................................... 84,461
Distribution fee payable.................................................................. 80,299
Due to broker-variation margin payable.................................................... 6,923
Deferred trustees' fees................................................................... 2,394
------------
Total liabilities..................................................................... 4,188,512
------------
Net Assets................................................................................ $197,067,189
------------
------------
Net assets were comprised of:
Shares of beneficial interest, at par................................................... $ 174,503
Paid-in capital in excess of par........................................................ 192,656,560
------------
192,831,063
Accumulated net realized losses on investments.......................................... (4,556,026)
Net unrealized appreciation on investments.............................................. 8,792,152
------------
Net assets, August 31, 1994............................................................. $197,067,189
------------
------------
Class A:
Net asset value and redemption price per share
($12,082,289 / 1,068,824 shares of beneficial interest issued and outstanding)........ $11.30
Maximum sales charge (3.0% of offering price)........................................... .35
------------
Maximum offering price to public........................................................ $11.65
------------
------------
Class B:
Net asset value, offering price and redemption price per share
($184,984,700 / 16,381,478 shares of beneficial interest issued and outstanding)...... $11.29
------------
------------
Class C:
Net asset value, offer price and redemption price per share
($199.76 / 17.69 shares of beneficial interest issued and outstanding)................ $11.29
------------
------------
</TABLE>

See Notes to Financial Statements.
-9-
<PAGE>
<PAGE>
PRUDENTIAL CALIFORNIA MUNICIPAL FUND
CALIFORNIA SERIES
Statement of Operations
<TABLE>
<CAPTION>
Year Ended
August 31,
Net Investment Income 1994
------------
<S> <C>
Income
Interest........................... $ 13,438,117
------------
Expenses
Management fee..................... 1,066,852
Distribution fee--Class A.......... 11,813
Distribution fee--Class B.......... 1,007,790
Transfer agent's fees and
expenses........................... 100,000
Custodian's fees and expenses...... 64,000
Reports to shareholders............ 42,000
Registration fees.................. 25,000
Legal fees......................... 25,000
Audit fee.......................... 15,000
Trustees' fees..................... 8,000
Miscellaneous...................... 1,420
------------
Total expenses................... 2,366,875
------------
Net investment income................ 11,071,242
------------
Realized and Unrealized
Gain (Loss) on Investments
Net realized gain (loss) on:
Investment transactions............ (2,909,347)
Financial futures transactions..... 1,627,909
------------
(1,281,438)
------------
Net change in unrealized appreciation/
depreciation on:
Investments........................ (12,444,936)
Financial futures contracts........ (22,469)
------------
(12,467,405)
------------
Net loss on investments.............. (13,748,843)
------------
Net Decrease in Net Assets
Resulting from Operations............ $ (2,677,601)
------------
------------
</TABLE>

PRUDENTIAL CALIFORNIA MUNICIPAL FUND
CALIFORNIA SERIES
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended August 31,
Increase (Decrease) ----------------------------
in Net Assets 1994 1993
------------ ------------
<S> <C> <C>
Operations
Net investment
income............... $ 11,071,242 $ 10,834,798
Net realized gain
(loss) on investment
transactions......... (1,281,438) 1,873,737
Net change in
unrealized
appreciation/depreciation
of investments....... (12,467,405) 9,704,370
------------ ------------
Net increase (decrease)
in net assets
resulting from
operations........... (2,677,601) 22,412,905
------------ ------------
Dividends and distributions (Note 1)
Dividends from net
investment income
Class A.............. (658,209) (449,523)
Class B.............. (10,413,033) (10,385,275)
------------ ------------
(11,071,242) (10,834,798)
------------ ------------
Distributions from net
realized gains
Class A.............. (111,145) --
Class B.............. (1,998,700) --
------------ ------------
(2,109,845) --
------------ ------------
Series share transactions
(Note 5)
Net proceeds from
shares sold.......... 27,913,990 49,271,241
Net asset value of
shares issued in
reinvestment of
dividends and
distributions........ 7,430,369 5,878,940
Cost of shares
reacquired........... (41,168,151) (31,227,312)
------------ ------------
Net increase (decrease)
in net assets from
Series share
transactions......... (5,823,792) 23,922,869
------------ ------------
Total increase
(decrease)............. (21,682,480) 35,500,976
Net Assets
Beginning of year........ 218,749,669 183,248,693
------------ ------------
End of year.............. $197,067,189 $218,749,669
------------ ------------
------------ ------------
</TABLE>

See Notes to Financial Statements. See Notes to Financial Statements.
-10-
<PAGE>
<PAGE>
PRUDENTIAL CALIFORNIA MUNICIPAL FUND
CALIFORNIA SERIES
Notes to Financial Statements
Prudential California Municipal 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
three series. The monies of each series are invested in separate, independently
managed portfolios. The California Series (the ``Series'') commenced investment
operations on September 19, 1984. The Series is diversified and seeks to achieve
its investment objective of obtaining the maximum amount of income exempt from
federal and California state income taxes with the minimum of risk by investing
in ``investment grade'' tax-exempt securities whose ratings are within the four
highest ratings categories by a nationally recognized statistical rating
organization or, if not rated, are of comparable quality. The ability of the
issuers of the securities held by the Series to meet their obligations may be
affected by economic developments in a specific state, industry or region.

Note 1. Accounting The following is a summary
Policies of significant accounting poli-
cies followed by the Fund, and the Series, in
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 debt securities at a set
price for delivery on a future date. Upon entering into a financial futures
contract, the Series is required to pledge to the broker an amount of cash
and/or other assets equal to a certain percentage of the contract amount. This
amount is known as the ``initial margin''. Subsequent payments, known as
``variation margin'', are made or received by the Series each day, depending on
the daily fluctuations in the value of the underlying security. Such variation
margin is recorded for financial statement purposes on a daily basis as
unrealized gain or loss. The Series invests in financial futures contracts
solely for the purpose of hedging its existing portfolio securities or
securities the Series intends to purchase against fluctuations in value caused
by changes in prevailing market interest rates. Should interest rates move
unexpectedly, the Series may not achieve the anticipated benefits of the
financial futures contracts and may realize a loss. The use of futures
transactions involves the risk of imperfect correlation in movements in the
price of futures contracts, interest rates and the underlying hedged assets.
Securities Transactions and Investment Income: Securities transactions are
recorded on the trade date. Realized gains and losses on sales of securities are
calculated on the identified cost basis. Interest income is recorded on the
accrual basis. The Series amortizes premiums and original issue discount paid on
purchases of portfolio securities as adjustments to interest income.
Net investment income (other than distribution fees) and realized and
unrealized 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
continue to meet the requirements of the Internal Revenue Code applicable to
regulated investment companies and to distribute all of its net income to
shareholders. For this reason and because substantially all of the Series' gross
income consists of tax-exempt interest, no federal income tax provision is
required.
Dividends and Distributions: The Series declares daily dividends from net
investment income. Payment of dividends is made monthly. Distributions of net
capital gains, if any, are made annually.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles.
-11-
<PAGE>
<PAGE>

Note 2. Agreements The Fund has a management
agreement with Prudential Mutual Fund Management,
Inc. (``PMF''). Pursuant to this agreement, PMF has responsibility for all
investment advisory services and supervises the subadviser's performance of such
services. PMF has entered into a subadvisory agreement with The Prudential
Investment Corporation (``PIC''); PIC furnishes investment advisory services in
connection with the management of the Fund. PMF pays for the cost of the
subadviser's services, 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 PMF is computed daily and payable monthly, at an
annual rate of .50 of 1% of the average daily net assets of the Series.
The Fund has distribution agreements with Prudential Mutual Fund
Distributors, Inc. (``PMFD''), which acts as the distributor of the Class A
shares of the Fund, and with Prudential Securities Incorporated (``PSI''), which
acts as distributor of the Class B and Class C shares of the Fund (collectively
the ``Distributors''). The Fund compensates the Distributors for distributing
and servicing the Fund's Class A, Class B and Class C shares, pursuant to plans
of distribution, (the ``Class A, B and C Plans'') (regardless of expenses
actually incurred by them). The distribution fees are accrued daily and payable
monthly.
On July 19, 1994, shareholders of the Fund approved amendments to the Class A
and Class B distribution plans under which the distribution plans became
compensation plans, effective August 1, 1994. Prior thereto, the distribution
plans were reimbursement plans, under which PMFD and PSI were reimbursed for
expenses actually incurred by them up to the amount permitted under the Class A
and Class B Plans, respectively. The Fund is not obligated to pay any prior or
future excess distribution costs (costs incurred by the Distributors in excess
of distribution fees paid by the Fund or contingent deferred sales charges
received by the Distributors). The rate of the distribution fees charged to
Class A and Class B shares of the Fund did not change under the amended plans of
distribution. The Fund began offering Class C shares on August 1, 1994.
Pursuant to the Class A, B and C Plans, the Fund compensates the Distributors
for distribution-related activities at an annual rate of up to .30 of 1%, .50 of
1% and 1%, of the average daily net assets of the Class A, B and C shares,
respectively. Such expenses under the Plans were .10 of 1%, .50 of 1% and .75 of
1% of the average daily net assets of the Class A, B and C shares, respectively,
for the fiscal year ended August 31, 1994.
PMFD has advised the Series that it has received approximately $126,600 in
front-end sales charges resulting from sales of Class A shares during the fiscal
year ended August 31, 1994. From these fees, PMFD paid such sales charges to PSI
and Pruco Securities Corporation, affiliated broker-dealers, which in turn paid
commissions to salespersons and incurred other distribution costs.
PSI has advised the Series that for the fiscal year ended August 31, 1994, it
received approximately $390,800 in contingent deferred sales charges imposed
upon certain redemptions by Class B shareholders.
PMFD is a wholly-owned subsidiary of PMF; PSI, PMF and PIC are indirect,
wholly-owned subsidiaries of The Prudential Insurance Company of America.

Note 4. Portfolio Purchases and sales of port-
Securities folio securities of the Series,
excluding short-term investments, for the year
ended August 31, 1994 were $143,010,257 and $159,964,525, respectively.
At August 31, 1994, the Series sold 62 financial futures contracts on U.S.
Treasury Bonds which expire in September 1994. The value at disposition of such
contracts was $6,357,281. The value of such contracts on August 31, 1994 was
$6,430,563, thereby resulting in an unrealized loss of $73,282.
The cost basis of investments for federal income tax purposes was
substantially the same as for financial reporting purposes and, accordingly, at
August 31, 1994 net unrealized appreciation of investments for federal income
tax purposes was $8,865,434 (gross unrealized appreciation--$11,023,414; gross
unrealized depreciation--$2,157,980).
The Series utilized its capital loss carryforward of approximately $1,216,000
to offset taxable gains realized and recognized subsequent to August 31, 1993.
In addition, the Series will elect to treat net capital losses of approximately
$4,629,000 incurred in the ten month period ended August 31, 1994 as having been
incurred in the following year.
-12-
<PAGE>
<PAGE>

Note 5. Capital The Series currently offers
Class A, Class B and Class C shares. Class A shares are
sold with a front-end sales charge of up to 3.0%. Class B shares are sold with a
contingent deferred sales charge which declines from 5% to zero depending on the
period of time the shares are held. Class C shares are sold with a contingent
deferred sales charge of 1% during the first year. Class B shares will
automatically convert to Class A shares on a quarterly basis approximately seven
years after purchase commencing on or about February 1995.
The Fund has authorized an unlimited number of shares of beneficial interest
for each class at $.01 par value per share.
Transactions in shares of beneficial interest for the fiscal year ended
August 31, 1994 and 1993 were as follows:
<TABLE>
<CAPTION>
Class A Shares Amount
- ------------------------------ ---------- ------------
<S> <C> <C>
Year ended August 31, 1994:
Shares sold................... 418,290 $ 4,907,256
Shares issued in reinvestment
of
dividends and
distributions............... 37,214 435,710
Shares reacquired............. (300,703) (3,517,825)
---------- ------------
Net increase in shares
outstanding................. 154,801 $ 1,825,141
---------- ------------
---------- ------------
Year ended August 31, 1993:
Shares sold................... 551,246 $ 6,493,924
Shares issued in reinvestment
of
dividends................... 20,712 244,188
Shares reacquired............. (127,066) (1,500,007)
---------- ------------
Net increase in shares
outstanding................. 444,892 $ 5,238,105
---------- ------------
---------- ------------
<CAPTION>
Class B Shares Amount
- ------------------------------ ---------- ------------
<S> <C> <C>
Year ended August 31, 1994:
Shares sold................... 1,940,266 $ 23,006,534
Shares issued in reinvestment
of
dividends and
distributions............... 596,575 6,994,659
Shares reacquired............. (3,247,104) (37,650,326)
---------- ------------
Net decrease in shares
outstanding................. (710,263) $ (7,649,133)
---------- ------------
---------- ------------
Year ended August 31, 1993:
Shares sold................... 3,646,925 $ 42,777,317
Shares issued in reinvestment
of
dividends................... 480,211 5,634,752
Shares reacquired............. (2,532,383) (29,727,305)
---------- ------------
Net increase in shares
outstanding................. 1,594,753 $ 18,684,764
---------- ------------
---------- ------------
<CAPTION>
Class C
- ------------------------------
<S> <C> <C>
August 1, 1994* through August
31, 1994:
Shares sold................... 18 $ 200
---------- ------------
---------- ------------
</TABLE>

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

<PAGE>
PRUDENTIAL CALIFORNIA MUNICIPAL FUND
CALIFORNIA SERIES
Financial Highlights
<TABLE>
<CAPTION>
Class A Class B Class C
-------------------------------------------------- -------------------------------------------------------- ----------
January 22, August 1,
1990(D) 1994(D)(D)
Year Ended August 31, Through Year Ended August 31, Through
----------------------------------- August 31, -------------------------------------------------------- August 31,
1994 1993 1992 1991 1990 1994 1993 1992 1991 1990 1994
------- ------- ------ ------ ------------ ------------ -------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE
OPERATING
PERFORMANCE:
Net
asset
value,
beginning
of
period $ 12.16 $ 11.48 $11.01 $10.57 $10.77 $ 12.15 $ 11.48 $ 11.01 $ 10.57 $ 10.76 $ 11.32
------- ------- ------ ------ ------------ ------------ -------- -------- -------- -------- ----------
Income
from
investment
operations
Net
investment
income. .65 .69 .70 .69 .41 .60 .64 .66 .64 .64 .04
Net
realized
and
unrealized
gain
(loss)
on
investment
trans-
actions. (.74) .68 .47 .44 (.20) (.74) .67 .47 .44 (.19) (.03)
------- ------- ------ ------ ------------ ------------ -------- -------- -------- -------- ----------
Total
from
investment
oper-
ations. (.09) 1.37 1.17 1.13 .21 (.14) 1.31 1.13 1.08 .45 .01
------- ------- ------ ------ ------------ ------------ -------- -------- -------- -------- ----------
Less
distributions
Dividends
from
net
investment
income... (.65) (.69) (.70) (.69) (.41) (.60) (.64) (.66) (.64) (.64) (.04)
Distributions
from net
realized
gains... (.12) -- -- -- -- (.12) -- -- -- -- --
------ ------- ------ ------ ------------ ------------ -------- -------- -------- -------- ----------
Total
distri-
butions... (.77) (.69) (.70) (.69) (.41) (.72) (.64) (.66) (.64) (.64) (.04)
------- ------- ------ ------ ------------ ------------ -------- -------- -------- -------- ----------
Net
asset
value,
end
of
period.$ 11.30 $ 12.16 $11.48 $11.01 $10.57 $ 11.29 $ 12.15 $ 11.48 $ 11.01 $ 10.57 $ 11.29
------- ------- ------ ------ ------------ ------------ -------- -------- -------- -------- ----------
------- ------- ------ ------ ------------ ------------ -------- -------- -------- -------- ----------
TOTAL
RETURN#:... (0.80)% 12.30% 10.95% 10.98% 1.85% (1.20)% 11.74% 10.52% 10.54% 4.21% .05%
RATIOS/SUPPLEMENTAL
DATA:
Net
assets,
end
of
period
(000). $12,082 $11,116 $5,388 $4,188 $1,774 $184,985 $207,634 $177,861 $169,190 $174,005 $200@@
Average
net
assets
(000).. $11,812 $7,728 $4,322 $2,748 $1,214 $201,558 $190,944 $172,495 $169,220 $175,990 $199@@
Ratios to
average net
assets: @
Expenses,
including
distribution
fees... .73% .77% .82% .88% .90%* 1.13% 1.17% 1.22% 1.28% 1.24% 1.71%*
Expenses,
excluding
distribution
fees... .63% .67% .72% .78% .80%* .63% .67% .72% .78% .76% .96%*
Net
investment
income... 5.57% 5.82% 6.25% 6.37% 6.28%* 5.17% 5.44% 5.85% 5.98% 5.95% 4.87%*
Portfolio
turnover... 69% 43% 53% 53% 119% 69% 43% 53% 53% 119% 69%

- ---------------
(D) Commencement of offering of Class A shares.
(D)(D) Commencement of offering of Class C shares.
* Annualized.
# Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase
of shares on the first day and a sale on the last day of each period reported and includes reinvestment
of dividends and distributions. Total returns for periods of less than a full year are not annualized.
@ Because of the events referred to in (D)(D) and the timing of such, the ratios for the Class C shares are
not necessarily comparable to that of Class A or B shares and are not necessarily indicative of future
ratios.
@@ Figures are actual and not rounded to the nearest thousand.
</TABLE>
See Notes to Financial Statements.
-14-
<PAGE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Shareholders and Board of Trustees
Prudential California Municipal Fund, California Series
We have audited the accompanying statement of assets and liabilities of
Prudential California Municipal Fund, California Series, including the portfolio
of investments, as of August 31, 1994, the related statements of operations for
the year then ended and of changes in net assets for each of the two years in
the period then ended, and the financial highlights for each of the five years
in the period then ended. These financial statements and financial highlights
are the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of the securities owned as of
August 31, 1994 by correspondence with the custodian and brokers; where replies
were not received from brokers, we performed other auditing procedures. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Prudential
California Municipal Fund, California Series, as of August 31, 1994, the results
of its operations, the changes in its net assets, and its financial highlights
for the respective stated periods, in conformity with generally accepted
accounting principles.
Deloitte & Touche LLP
New York, New York
October 17, 1994
FEDERAL INCOME TAX INFORMATION
We are required by the Internal Revenue Code to advise you within 60 days of
the Series' fiscal year end (August 31, 1994) as to the federal tax status of
dividends and distributions paid by the Series during such fiscal year.
Accordingly, we are advising you that in the fiscal year ended August 31, 1994,
dividends paid from net investment income of $.65 per Class A share, $.60 per
Class B share and $.04 per Class C shares were all federally tax-exempt interest
dividends. In addition, the Series paid to both Class A and B shares a long-term
capital gain distribution of $0.12 per share which is taxable as such.
In January 1995, you will be advised on IRS Form 1099 DIV or substitute 1099
DIV as to the federal tax status of the distributions received by you in
calendar year 1994.
-15-
<PAGE>
<PAGE>
These graphs are furnished to you in accordance with SEC regulations. They
compare a $10,000 investment in Prudential California Municipal Fund: California
Series (Class A, Class B, and Class C) with a similar investment in the Lehman
Brothers Municipal Bond Index (the Index) by portraying the initial account
values at the commencement of operations of each class and subsequent account
values at the end of each fiscal year (August 31) beginning in 1990 for Class A,
in 1984 for Class B shares and 1994 for Class C shares. For purposes of the
graphs and, unless otherwise indicated, the accompanying tables, it has been
assumed that (a) the maximum sales charge was deducted from the initial $10,000
investment in Class A shares; (b) the maximum applicable contingent deferred
sales charge was deducted from the value of the investment in Class B shares and
Class C shares assuming full redemption on August 31, 1994; (c) all recurring
fees (including management fees) were deducted; and (d) all dividends and
distributions were reinvested. Class B shares will automatically convert to
Class A shares on a quarterly basis approximately seven years after purchase.
This conversion feature is expected to be implemented on or about February 1995
and is not reflected in the graph. The graph and accompanying tables reflect the
past subsidy and/or waiver of expenses and/or management fees. Without fee
waivers and expense subsidies, the value of a $10,000 investment in the Series
and the Series' average annual total return, as shown above, would have been
lower.
The Index is a weighted index comprised of 21,000 municipal bonds (general
obligation bonds, revenue bonds, insured bonds and prerefunded bonds) selected
by Lehman Brothers as representative of the long-term investment grade municipal
bond market. The Index is an unmanaged index and includes the reinvestment of
all income, but does not reflect the payment of transaction costs and advisory
fees associated with an investment in the Series. The securities which comprise
the Index may differ substantially from the securities in the Series' portfolio
because the Index, among other things, is not state specific. The Lehman
Brothers Municipal Bond Index is not the only index which may be used to
characterize performance of long-term, investment-grade tax-exempt bond funds
and other indexes may portray different comparative performance.
-16-
<PAGE>
<PAGE>

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

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

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

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

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

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

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

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

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

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

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

744313107
744313206 MF 116E
744313701 (LOGO) Cat. #642112D

<PAGE>

ANNUAL REPORT August 31, 1994

Prudential
California
Municipal Fund

(ICON)

California
Income Series

(LOGO)

<PAGE>
Letter to
Shareholders
----------------------------------------------------
October 18, 1994

Dear Shareholder:

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

The California Income Series seeks maximum current income exempt from state
and federal income taxes* consistent with preservation of capital. The Series
invests in both investment grade and lower quality municipal bonds. The
Series outperformed the Lipper California Municipal Debt Average over the
last year, in part because of its holdings in non-rated real-estate related
bonds which performed well as California's housing market emerged from its
recession. Still, with long-term interest rates rising this year, the
Series has become cautious and shortened its average maturity.

<TABLE>

SERIES PERFORMANCE
As of August 31, 1994
<CAPTION>
30-day Taxable Equivalent Yields
NAV SEC Yield @28% @31% @39.6%
<S> <C> <C> <C> <C> <C>
Class A $10.19 5.8% 9.0% 9.4% 10.7%
Class B $10.19 5.5% 8.7% 9.0% 10.3%
Class C $10.19 N/A N/A N/A N/A
</TABLE>

Investment return and principal value will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost. Past
performance is no guarantee of future results.

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

N/A = Yield information with respect to Class C is not available as operations
commenced in August 1994.

-1-
<PAGE>

<TABLE>

TOTAL RETURNS
<CAPTION>
Historical (As of 8/31/94)1 Average Annual (As of 9/30/94)2
1-Yr. 5-Yr. Since Incep.** 1-Yr. 5-Yr. Since Incep.**
<S> <C> <C> <C> <C> <C> <C>
Class A +2.6% N/A +39.4% -3.2% N/A +7.9%
Class B N/A N/A -0.1% N/A N/A -6.2%
Class C N/A N/A +0.5% N/A N/A -1.6

Lipper CA
Muni Debt Avg.***-1.4% +43.7% +144.3% N/A N/A N/A
</TABLE>

1 Source: Lipper Analytical Services, Inc. These figures do not take into
account sales charges.
2 Source: Prudential Mutual Fund Management, Inc. These averages take into
account applicable sales charges. The Series charges a maximum initial sales
charge of 3% for Class A shares. Class B shares are subject to a declining
contingent deferred sales charge of 5%, 4%, 3%, 2%, 1%
and 1%, respectively, for the first six years. Class B shares will
automatically convert to Class A shares approximately seven years after
purchase. This conversion feature is expected to be implemented in February
1995. Class C shares are subject to a contingent deferred sales charge of 1%
during the first year.

**Inception on December 3, 1990 for Class A, and December 7, 1993 for Class B
and August 1, 1994 for Class C.

***These are the average returns of 86 California municipal debt funds for one-
year, five-year, and since inception of Class A shares, as determined by Lipper
Analytical Services, Inc.

Note: Without expense subsidies and management fee waivers, the Series'
historical and average annual total returns would have been lower. The Series'
Class A, Class B and Class C average annual total return since inception would
have been 7.8%, -6.2%, and -1.6%, respectively.

Once Was Not Enough

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

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

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

California: Recovering Slowly

After losing 660,000 jobs in three and a half years, California seems to be
recovering from its worst recession since the Great Depression. Yet employment
growth is still minimal, particularly in the southern portion of the state. And
defense cutbacks, while decelerating, are still being felt. The California

-2-

<PAGE>

Department of Finance projects that defense employment, which lost 50,000 jobs
in 1993, (a 17% reduction), will drop another 14% this year and 10% in 1995.

Economic growth in California is still slow. The June 1994 unemployment rate
was 8.3%, the second highest in the nation, and fiscally, the state is also in a
bind. Unable to reduce its expenditures to match its economic performance,
California now has a $2.3 billion deficit, likely to approach $6 billion in two
years if nothing is done. This year's budget was balanced only by short-term
borrowing, for which the state will probably have to borrow again to repay. As
a result, California has the second-lowest bond rating in the country.

The long-term outlook is more favorable. As the state continues to pull
itself out of recession, revenues should increase. This growth, plus a more
realistic state budget, will ultimately help the state move forward.

Because of the state government's financial condition, we have generally
avoided its general obligation and state public works bonds for most of this
year. We will continue to do so until its fiscal position improves or until
yields more accurately reflect the present state of affairs.

A Tax Reminder

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

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

The Outlook

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

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

-3-
<PAGE>

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

Sincerely,

Lawrence C. McQuade
President

Christian Smith
Portfolio Manager

-4-

<PAGE>

PRUDENTIAL CALIFORNIA MUNICIPAL FUND Portfolio of Investments
CALIFORNIA INCOME SERIES August 31, 1994

<TABLE>
<CAPTION>
Moody's Principal
Rating Amount Value
(Unaudited) (000) Description(a) (Note 1)
<C> <C> <S> <C>
LONG-TERM INVESTMENTS--94.7%
Alameda Cmnty. Facs.
Dist., Spec. Tax Rev.
No. 1,
NR $ 3,000 7.75%, 9/1/19.......... $ 3,099,450
Alameda Impvt. Bond Act of 1915,
Marina Vlg. Assmt. Dist. 89-1,
NR 1,000 7.65%, 9/2/10.......... 1,027,940
NR 2,000 7.65%, 9/2/11.......... 2,055,700
Arcadia Unified Sch.
Dist.,
Gen. Oblig.,
M.B.I.A., Ser. A,
Aaa 1,200 Zero Coupon, 9/1/09.... 481,584
Aaa 1,875 Zero Coupon, 9/1/11.... 660,750
Aaa 2,045 Zero Coupon, 9/1/12.... 675,443
Aaa 1,205 Zero Coupon, 9/1/13.... 372,176
Aaa 1,940 Zero Coupon, 9/1/18.... 429,730
Assoc. of Bay Area
Govt's. Fin.
Auth., Cert. of
Part.,
Channing House,
A* 1,500@ 7.125%, 1/1/21, Ser.
A.................... 1,564,275
Baldwin Park Pub. Fin.
Auth. Rev., Tax
Alloc. Bonds,
BBB* 1,225 7.10%, 9/1/24.......... 1,248,765
Brea Pub. Fin. Auth.
Rev.,
Tax Alloc. Redev.
Proj.,
NR 3,000 8.10%, 3/1/21, Ser.
C.................... 3,198,840
Buena Park Cmnty. Redev. Agcy.,
Cent. Bus. Dist. Proj.,
NR 3,325 7.80%, 9/1/14.......... 3,528,689
California Hlth. Facs.
Fin. Auth.
Rev., Catholic Hlth.
Facs.,
Aaa 1,370 5.00%, 7/1/21,
A.M.B.A.C............ 1,134,566
California St.,
Rev. Antic. Wts.,
MIG1 5,000 5.75%, 4/25/96, Ser.
C.................... 5,078,870
California St. Brd. of
Pub.
Wks., Lease Rev.,
A1 3,300 5.00%, 6/1/23, Ser.
A.................... 2,626,866
California St. Dept. Wtr. Res. Rev.,
Central Valley Proj.,
Aa 1,000 7.00%, 12/1/12......... 1,109,860
California St. Edl.
Facs. Auth. Rev.,
Chapman Coll.,
Baa 600 7.50%, 1/1/18.......... 630,186
California St. Hsg.
Fin. Agcy., Mtge.
Rev., M.B.I.A.,
Aaa $ 1,000 7.20%, 2/1/26, Ser.
91A.................. $ 1,028,350
California St. Poll.
Ctrl. Fin. Auth.,
Res. Recovery Rev.,
Waste Mgmt., Inc.,
A1 2,000 7.15%, 2/1/11, Ser.
A.................... 2,123,580
California St. Gen.
Oblig.,
NR 1,250 6.50%, 9/1/10.......... 1,313,625
California Statewide
Cmnty. Dev.
Rev., Cert. of Part.,
Catholic Hlth. Care
West,
Aaa 1,500 5.50%, 7/1/23,
M.B.I.A.............. 1,354,050
Villaview Cmnty. Hosp.,
A* 1,000 7.00%, 9/1/09.......... 1,039,170
California Transit Finance Corp.,
Los Angeles Cnty. Trans. Comn.,
A1 2,500 6.25%, 7/1/04, Ser.
B.................... 2,621,350
Carson City Ltd. Oblig.
Impvt. Rev., Assmt.
Dist.,
NR 2,475 7.375%, 9/2/22......... 2,561,798
Contra Costa Cnty., Spec. Tax,
Cmnty. Facs. Pleasant Hill,
NR 1,520 8.125%, 8/1/16......... 1,634,790
Contra Costa Trans.
Auth.,
Sales Tax Rev.,
A1 1,000(D) 6.875%, 3/1/07, Ser.
A.................... 1,094,640
Danville Impvt. Bd.,
Tassajara Ranch No.
93-1,
NR 1,000 6.75%, 9/2/11.......... 995,000
NR 1,000 6.80%, 9/2/12.......... 992,310
Delano, Cert. of Part.,
Regional Medical
Center,
NR 2,970 9.25%, 1/1/22, Ser.
92A.................. 3,252,150
Desert Hosp. Dist., Cert. of Part.,
AAA* 2,000(D) 8.10%, 7/1/20.......... 2,353,500
Dry Creek Jt. Sch.
Dist., Spec. Tax
Rev.,
Cmnty. Facs. Dist.
No. 1,
BBB* 1,355 7.25%, 9/1/11.......... 1,392,127
East Bay Mun. Util.
Dist.,
Wtr. Sys. Rev.,
A1 1,620 6.00%, 6/1/12.......... 1,588,621
</TABLE>

-5- See Notes to Financial Statements.
<PAGE>
<PAGE>

PRUDENTIAL CALIFORNIA MUNICIPAL FUND
CALIFORNIA INCOME SERIES

<TABLE>
<CAPTION>
Moody's Principal
Rating Amount Value
(Unaudited) (000) Description(a) (Note 1)
<C> <C> <S> <C>
East Palo Alto San.
Dist.,
Cert. of Part., Aux.
Facs.
Sch. Bldg. Corp.,
NR $ 500 8.25%, 10/1/15......... $ 533,215
Fairfield Impvt. Bd.,
Act of 1915,
No. Cordella Impvt.
Dist.,
NR 825 7.20%, 9/2/09.......... 844,016
NR 915 7.20%, 9/2/10.......... 934,215
NR 770 8.00%, 9/2/11.......... 791,691
NR 995 7.375%, 9/2/18......... 1,025,477
Fairfield Pub. Fin.
Auth. Rev.,
Fairfield Redev.
Projs.,
NR 2,500(D) 7.90%, 8/1/21, Ser.
A.................... 2,934,000
Folsom Spec. Tax Dist.
No. 2,
NR 3,130 7.70%, 12/1/19......... 3,340,492
Fontana Redev. Agcy.,
Downtown Redev.
Proj.,
BBB* 2,000 7.00%, 9/1/21.......... 2,026,560
No. Fontana Redev.
Proj.,
NR 1,575(D) 7.65%, 12/1/09......... 1,833,363
Fontana Special Tax
Cmnty. Facs.,
Dist. No. 2, Spec.
Tax Rev.,
NR 3,595 8.50%, 9/1/17, Ser.
B.................... 3,918,945
Hemet Pub. Fin. Auth., Wtr. Rev.,
NR 1,720 6.50%, 2/1/12, Ser.
A.................... 1,672,786
Industry Impvt. Bond Act of 1915,
Assmt. Dist. No. 91-1,
NR 1,200 7.65%, 9/2/21.......... 1,235,748
La Quinta Redev. Agcy.,
Aaa 1,000 7.30%, 9/1/11,
M.B.I.A.............. 1,139,660
Long Beach Redev. Agcy.
Hsg.,
Multifamily Hsg.
Rev.,
Pacific Court Apts.,
NR 1,000 6.80%, 9/1/13.......... 980,180
NR 1,500 6.95%, 9/1/23.......... 1,483,395
Los Angeles Cmnty.
Facs. Dist.,
No. 5 Spec. Tax,
NR 1,500 7.25%, 9/1/19.......... 1,481,250
Los Angeles Cnty. Met. Trans. Auth.,
Sales Tax Rev.,
Aaa 1,500 5.25%, 7/1/23,
A.M.B.A.C............ 1,289,880
Los Angeles Cnty. Trans. Comn.,
Sales Tax Rev.,
A1 2,000 7.40%, 7/1/15, Ser.
A.................... 2,190,820
Los Angeles Dept. of Wtr. & Pwr.,
Waterworks Rev.,
Aa $ 1,945 6.875%, 4/1/14......... $ 2,144,246
Aa 2,600 4.50%, 5/15/18......... 1,985,646
Aa 1,900 4.50%, 5/15/23......... 1,414,284
Met. Wtr. Dist. of
Southern
California,
Waterworks Rev.,
Aa 2,000@ 5.75%, 7/1/21, Ser.
A.................... 1,890,320
Ontario Impvt. Bond Act of 1915,
Assmt. Dist. 100,
NR 1,410 8.00%, 9/2/11.......... 1,449,720
Orange Cnty., Cert. of
Part.,
Pub. Facs. Corp.,
Solid Wst. Mgmt.,
A 3,000 7.875%, 12/1/13........ 3,321,210
Orange Cnty. Cmnty.
Facs. Dist.,
Special Tax Rev.,
No. 87-4, Foothill
Ranch,
NR 3,500(D) 7.375%, 8/15/18, Ser.
A.................... 4,029,795
No. 87-5B, Rancho Santa
Margarita,
NR 1,750(D) 7.50%, 8/15/17......... 2,027,743
No. 88-1, Aliso Viejo,
NR 805(D) 7.15%, 8/15/06, Ser.
A.................... 923,705
NR 3,500(D) 7.35%, 8/15/18, Ser.
92................... 4,061,470
Perris Sch. Dist., Cert. of Part.,
Cap. Projs.,
NR 1,500(D) 7.75%, 3/1/21.......... 1,736,490
Puerto Rico Hwy. &
Trans. Auth. Rev.,
AAA* 2,100(D)@ 7.75%, 7/1/10, Ser.
Q.................... 2,434,257
Baa1 5,000 6.625%, 7/1/12, Ser.
V.................... 5,191,400
Baa1 2,175(D) 6.625%, 7/1/18, Ser.
T.................... 2,291,554
Puerto Rico Pub. Bldgs.
Auth.,
Gtd. Pub. Ed. & Hlth.
Facs.,
Baa1 1,605 Zero Coupon, 7/1/06,
Ser. J............... 817,763
Aaa 2,625(D)@ 6.875%, 7/1/21, Ser.
L.................... 2,952,679
Richmond Jt. Pwrs. Fin.
Auth. Impvt. Bond,
Act 1915,
NR 2,500 7.40%, 9/2/19.......... 2,578,400
</TABLE>

-6- See Notes to Financial Statements.
<PAGE>
<PAGE>

PRUDENTIAL CALIFORNIA MUNICIPAL FUND
CALIFORNIA INCOME SERIES

<TABLE>
<CAPTION>
Moody's Principal
Rating Amount Value
(Unaudited) (000) Description(a) (Note 1)
<C> <C> <S> <C>
Richmond Redev. Agcy.
Rev.,
Multifamily Bridge
Affordable Hsg.,
NR $ 2,500 7.50%, 6/1/23.......... $ 2,413,825
Riverside Cnty. Cert.
of Part.,
Air Force Vlg. West,
NR 3,000 8.125%, 6/15/20........ 3,132,030
Riverside Cnty. Impvt.
Bond Act 1915,
NR 2,500 7.625%, 9/2/14, Ser.
A.................... 2,510,975
Riverside Sch. Dist. Special Tax,
Cmnty. Facs. Dist. No. 2,
NR 1,000 7.25%, 9/1/18, Ser.
A.................... 1,000,000
Rocklin Stanford Ranch Cmnty.
Facs., Dist. Spec. Tax,
NR 1,000 8.10%, 11/1/15......... 1,066,210
Sacramento Cnty. Spec. Tax Rev.,
Dist. No. 1, Elliot Ranch,
NR 2,000 8.20%, 8/1/21.......... 2,121,900
Dist. No. 1, Laguna
Creek Ranch,
NR 1,000 8.25%, 12/1/20......... 1,074,190
Sacramento Spec. Purpose Fac.,
NR 2,200 7.25%, 12/1/18......... 2,157,804
San Bernardino Cnty.,
Cert. of Part., Cap.
Facs. Proj.,
AAA* 3,500(D) 6.25%, 8/1/19, Ser.
B.................... 3,742,445
Medical Cent. Fin.
Proj.,
Baa1 2,750 5.50%, 8/1/24.......... 2,283,105
San Diego Cnty. Wtr. Auth. Rev.,
Aaa 1,000 8.061%, 4/23/08,
F.G.I.C.............. 967,500
San Francisco City &
Cnty.,
Redev. Agcy., Lease
Rev.,
A 1,500 Zero Coupon, 7/1/06.... 736,695
A 2,250 Zero Coupon, 7/1/07.... 1,023,862
San Joaquin Hills
Trans.
Corridor Agcy.,
Toll Road Rev.,
NR 2,000 Zero Coupon, 1/1/11.... 497,540
NR 1,000 5.00%, 1/1/33.......... 721,520
San Jose Redev. Proj.,
Aaa 2,900 6.00%, 8/1/15,
M.B.I.A.............. 2,865,780
Santa Cruz Cnty. Pub.
Fin. Auth.
Rev., Tax Alloc.
Sub.,
AAA* $ 2,500(D) 7.625%, 9/1/21, Ser.
B.................... $ 2,847,950
Santa Margarita, Dana Point Auth.,
Impvt. Dist., Ser B,
Aaa 905 7.25%, 8/1/09,
M.B.I.A.............. 1,036,714
South Orange Cnty. Pub. Fin. Auth.,
NR 1,900 7.00%, 9/1/08.......... 1,915,656
Aaa 2,535 7.00%, 9/1/10,
M.B.I.A.............. 2,821,176
NR 2,000 7.25%, 9/1/13.......... 2,016,380
Foothill Area Proj.,
Aaa 750 8.00%, 8/15/08,
F.G.I.C.............. 912,015
Aaa 750 6.50%, 8/15/10,
F.G.I.C.............. 795,278
South San Francisco
Redev., Agcy., Tax
Alloc., Gateway
Redev. Proj.,
NR 2,375 7.60%, 9/1/18.......... 2,438,484
Southern California
Pub. Pwr. Auth.,
Proj. Rev.,
A 3,000 6.75%, 7/1/13.......... 3,216,210
Aaa 1,500 4.75%, 7/1/16,
A.M.B.A.C............ 1,226,070
Transmission Proj.,
4.75%, 7/1/23, Ser. A,
Aaa 950 M.B.I.A.............. 745,854
Std. Elem. Sch. Dist.,
Cert. of Part.,
A-* 1,000 7.375%, 6/1/11......... 1,032,740
Temecula Valley Unified
Sch. Cmnty. Facs.,
Spec. Tax Dist. No.
89-1,
NR 1,500 8.60%, 9/1/17.......... 1,350,000
Torrance Redev. Agcy.,
Tax Alloc. Downtown Redev.,
Baa 3,925 7.125%, 9/1/22......... 4,009,780
Tax Alloc. Ind. Redev.
Proj.,
NR 2,500 7.75%, 9/1/13.......... 2,630,550
Virgin Islands Pub. Fin. Auth. Rev.,
Hwy. Trans. Trust Fund,
BBB* 1,000 7.70%, 10/1/04......... 1,092,870
NR 1,200 7.25%, 10/1/18, Ser.
A.................... 1,237,944
</TABLE>

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

PRUDENTIAL CALIFORNIA MUNICIPAL FUND
CALIFORNIA INCOME SERIES

<TABLE>
<CAPTION>
Moody's Principal
Rating Amount Value
(Unaudited) (000) Description(a) (Note 1)
<C> <C> <S> <C>
Virgin Islands Territory,
Hugo Ins. Claims Fund Prog.,
NR $ 1,200 7.75%, 10/1/06, Ser.
91................... $ 1,312,116
Virgin Islands Wtr. & Pwr. Auth.,
Elec. Sys. Rev.,
NR 1,000 7.40%, 7/1/11, Ser.
A.................... 1,044,600
West Contra Costa
Unified Sch. Dist.,
Cert. of Part.,
Ba 1,140 6.875%, 1/1/09......... 1,145,803
West Sacramento Impvt.
Bond Act of 1915,
Lighthouse Marina
Assmt. Dist. 90-1,
NR 2,500 8.50%, 9/2/17.......... 2,577,225
Westminster Redev.
Agcy.,
Tax Allocation Rev.,
Orange County, Proj.
No. 1,
Baa1 2,000 7.30%, 8/1/21, Ser.
A.................... 2,084,840
------------
Total long-term
investments
(cost
$185,216,140)........ 192,980,762
------------
SHORT-TERM INVESTMENTS--1.5%
California Hlth. Facs. Fin. Auth.
Rev.,
St. Francis Mem. Hosp., Ser. B,
P1 2,000 2.95%, 9/2/94.......... 2,000,000
California Poll. Ctrl. Fin. Auth.
Rev.,
Delano Proj., F.R.D.D.,
P1 200 3.05%, 9/1/94, Ser.
89................... 200,000
California Poll. Ctrl. Fin. Auth.
Rev.,
Delano Proj., F.R.D.D.,
P1 $ 800 3.05%, 9/1/94, Ser.
90................... $ 800,000
P1 100 3.05%, 9/1/94, Ser.
91................... 100,000
------------
Total short-term
investments
(cost $3,100,000).... 3,100,000
------------
Total Investments--96.2%
(cost $188,316,140;
Note 4).............. 196,080,762
Other assets in excess
of
liabilities--3.8%.... 7,646,372
------------
Net Assets--100%....... $203,727,134
------------
------------
</TABLE>

- ------------------
(a) The following abbreviations are used in portfolio descriptions:
A.M.B.A.C.--American Municipal Bond Assurance Corporation.
F.G.I.C.--Financial Guaranty Insurance Company.
F.R.D.D.--Floating Rate (Daily) Demand Note #.
M.B.I.A.--Municipal Bond Insurance Association.
# For purposes of amortized cost valuation, the maturity date of this security
is considered to be the later of the next date on which the security can be
redeemed at par or the next date on which the rate of interest is adjusted.
* Standard & Poor's rating.
(D) Prerefunded issues are secured by escrowed cash and/or direct U.S.
guaranteed obligations.
@ Pledged as initial margin on financial futures contracts.
NR--Not Rated by Moody's or Standard & Poor's.
The Fund's current Statement of Additional Information contains a description of
Moody's and Standard & Poor's ratings.
-8- See Notes to Financial Statements.
<PAGE>
<PAGE>
PRUDENTIAL CALIFORNIA MUNICIPAL FUND
CALIFORNIA INCOME SERIES
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
Assets August 31, 1994
---------------
<S> <C>
Investments, at value (cost $188,316,140)................................................ $ 196,080,762
Cash..................................................................................... 64,533
Receivable for investments sold.......................................................... 5,064,928
Interest receivable...................................................................... 3,756,390
Receivable for Series shares sold........................................................ 1,261,973
Deferred expenses and other assets....................................................... 17,333
---------------
Total assets......................................................................... 206,245,919
---------------
Liabilities
Payable for investments purchased........................................................ 1,314,979
Payable for Series shares reacquired..................................................... 866,501
Dividends payable........................................................................ 209,196
Accrued expenses......................................................................... 79,494
Distribution fee payable................................................................. 23,098
Management fee payable................................................................... 21,373
Deferred trustees' fees.................................................................. 2,394
Due to broker - variation margin......................................................... 1,750
---------------
Total liabilities.................................................................... 2,518,785
---------------
Net Assets............................................................................... $ 203,727,134
---------------
---------------
Net assets were comprised of:
Shares of beneficial interest, at par.................................................. $ 199,928
Paid-in capital in excess of par....................................................... 198,285,423
---------------
198,485,351
Accumulated net realized loss on investments........................................... (2,500,527)
Net unrealized appreciation on investments............................................. 7,742,310
---------------
Net assets, August 31, 1994............................................................ $ 203,727,134
---------------
---------------
Class A:
Net asset value and redemption price per share
($183,741,793 / 18,031,494 shares of beneficial interest issued and outstanding)..... $10.19
Maximum sales charge (3.0% of offering price).......................................... .32
---------------
Maximum offering price to public....................................................... $10.51
---------------
---------------
Class B:
Net asset value, offering price and redemption price per share
($18,930,886 / 1,857,819 shares of beneficial interest issued and outstanding)....... $10.19
---------------
---------------
Class C:
Net asset value, offer price and redemption price per share
($1,054,455 / 103,481 shares of beneficial interest issued and outstanding).......... $10.19
---------------
---------------
</TABLE>

See Notes to Financial Statements.
-9-
<PAGE>
<PAGE>
PRUDENTIAL CALIFORNIA MUNICIPAL FUND
CALIFORNIA INCOME SERIES
Statement of Operations
<TABLE>
<CAPTION>
Year Ended
August 31,
Net Investment Income 1994
-----------
<S> <C>
Income
Interest............................ $13,372,762
-----------
Expenses
Management fee, net of waiver of
$822,628.......................... 189,532
Distribution fee--Class A........... 195,610
Distribution fee--Class B........... 34,070
Distribution fee--Class C........... 210
Custodian's fees and expenses....... 100,000
Transfer agent's fees and
expenses.......................... 63,000
Registration fees................... 46,000
Reports to shareholders............. 46,000
Legal fees.......................... 27,000
Audit fee........................... 15,000
Trustees' fees...................... 8,000
Amortization of organizational
expenses.......................... 7,164
Miscellaneous....................... 12,391
-----------
Total expenses.................... 743,977
-----------
Net investment income................. 12,628,785
-----------
Realized and Unrealized
Gain (Loss) on Investments
Net realized gain (loss) on:
Investment transactions............. (1,351,074)
Financial futures transactions...... 350,491
-----------
(1,000,583)
-----------
Net change in unrealized
appreciation/depreciation on:
Investments......................... (6,821,610)
Financial futures contracts......... 145,563
-----------
(6,676,047)
-----------
Net loss on investments............... (7,676,630)
-----------
Net Increase in Net Assets
Resulting from Operations............. $ 4,952,155
-----------
-----------
</TABLE>

PRUDENTIAL CALIFORNIA MUNICIPAL FUND
CALIFORNIA INCOME SERIES
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Increase (Decrease) Year Ended August 31,
in Net Assets 1994 1993
------------ ------------
<S> <C> <C>
Operations
Net investment
income............... $ 12,628,785 $ 10,812,389
Net realized gain
(loss) on investment
transactions......... (1,000,583) 704,119
Net change in
unrealized
appreciation on
investments.......... (6,676,047) 10,324,900
------------ ------------
Net increase in net
assets
resulting from
operations........... 4,952,155 21,841,408
------------ ------------
Dividends and Distributions (Note 1)
Dividends to
shareholders
from net investment
income
Class A.............. (12,219,313) (10,812,389)
Class B.............. (407,719) --
Class C.............. (1,753) --
------------ ------------
(12,628,785) (10,812,389)
------------ ------------
Distributions to
shareholders
from net realized
gain
Class A.............. (1,957,806) (738,313)
------------ ------------
Series share transactions (Note 5)
Net proceeds from
shares
subscribed........... 50,787,060 79,117,892
Net asset value of
shares
issued in
reinvestment of
dividends and
distributions........ 6,449,654 4,887,486
Cost of shares
reacquired........... (44,773,937) (34,498,281)
------------ ------------
Net increase in net
assets
from Series share
transactions......... 12,462,777 49,507,097
------------ ------------
Total increase........... 2,828,341 59,797,803
Net Assets
Beginning of year........ 200,898,793 141,100,990
------------ ------------
End of year.............. $203,727,134 $200,898,793
------------ ------------
------------ ------------
</TABLE>

See Notes to Financial Statements.
-10-
<PAGE>
<PAGE>
PRUDENTIAL CALIFORNIA MUNICIPAL FUND
CALIFORNIA INCOME SERIES
Notes to Financial Statements
Prudential California Municipal 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
three series. The monies of each series are invested in separate, independently
managed portfolios. The California Income Series (the ``Series'') commenced
investment operations on December 3, 1990. The Series is non-diversified and
seeks to achieve its investment objective of obtaining the maximum amount of
income exempt from federal and California state income taxes with the minimum of
risk by investing primarily 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 but may also invest in lower-quality tax-exempt securities. The ability
of the issuers of the securities held by the Series to meet their obligations
may be affected by economic developments in a specific state, industry or
region.

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

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

Securities Transactions and Investment Income: Securities transactions are
recorded on the trade date. Realized gains and losses on sales of securites are
calculated on the identified cost basis. Interest income is recorded on the
accrual basis. The Series amortizes premiums and original issue discount paid on
purchases of portfolio securities as adjustments to interest income.
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
continue to meet the requirements of the Internal Revenue Code applicable to
regulated investment companies and to distribute all of its net income to
shareholders. For this reason and because substantially all of the Series' gross
income consists of tax-exempt interest, no federal income tax provision is
required.

Dividends and Distributions: The Series declares daily dividends from net
investment income. Payment of dividends are made monthly. Distributions of net
capital gains, if any, are made annually.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles.
-11-
<PAGE>
<PAGE>
Deferred Organization Expenses: The Series incurred approximately $36,000 in
organization and initial registration expenses. Such amount has been deferred
and is being amortized over a period of 60 months ending December 1995.

Note 2. Agreements The Fund has a management
agreement with Prudential Mutual Fund Management,
Inc. (``PMF''). Pursuant to this agreement, PMF has responsibility for all
investment advisory services and supervises the subadviser's performance of such
services. PMF has entered into a subadvisory agreement with The Prudential
Investment Corporation (``PIC''); PIC furnishes investment advisory services in
connection with the management of the Fund. PMF pays for the cost of the
subadviser's services, 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 PMF is computed daily and payable monthly, at an
annual rate of .50 of 1% of the average daily net assets of the Series. PMF
voluntarily waived 100% of its management fee during the three months ended
November 30, 1993. Effective December 1, 1993, PMF reduced its voluntary waiver
to 75% of its management fee. The amount of such fees waived for the year ended
August 31, 1994 amounted to $822,628 ($.039 per Class A share, $.029 per Class B
share, $.003 per Class C share; .41% of average net assets).
The Fund has distribution agreements with Prudential Mutual Fund
Distributors, Inc. (``PMFD''), which acts as the distributor of the Class A
shares of the Fund, and with Prudential Securities Incorporated (``PSI''), which
acts as distributor of the Class B and Class C shares of the Fund (collectively
the ``Distributors''). The Fund compensates the Distributors for distributing
and servicing the Fund's Class A, Class B and Class C shares, pursuant to plans
of distribution, (the ``Class A, B and C Plans'') regardless of expenses
actually incurred by them. The distribution fees are accrued daily and payable
monthly.
On July 19, 1994, shareholders of the Fund approved amendments to the Class A
and Class B distribution plans under which the distribution plans became
compensation plans, effective August 1, 1994. Prior thereto, the distribution
plans were reimbursement plans, under which PMFD and PSI were reimbursed for
expenses actually incurred by them up to the amount permitted under the Class A
and Class B Plans, respectively. The Fund is not obligated to pay any prior or
future excess distribution costs (costs incurred by the Distributors in excess
of distribution fees paid by the Fund or contingent deferred sales charges
received by the Distributors). The rate of the distribution fees charged to
Class A and Class B shares of the Fund did not change under the amended plans of
distribution. The Fund began offering Class B and C shares on December 7, 1993
and August 1, 1994 respectively.
Pursuant to the Class A, B and C Plans, the Fund compensates the Distributors
for distribution-related activities at an annual rate of up to .30 of 1%, .50 of
1% and 1%, of the average daily net assets of the Class A, B and C shares,
respectively. Such expenses under the Plans were .10 of 1%, .50 of 1% and .75 of
1% of the average daily net assets of the Class A, B and C shares, respectively,
for the fiscal year ended August 31, 1994.
PMFD has advised the Series that it has received approximately $1,114,200 in
front-end sales charges resulting from sales of Class A shares during the fiscal
year ended August 31, 1994. From these fees, PMFD paid such sales charges to PSI
and Pruco Securities Corporation, affiliated broker-dealers, which in turn paid
commissions to salespersons and incurred other distribution costs.
PSI has advised the Series that for the fiscal year ended August 31, 1994, it
received approximately $1,300 in contingent deferred sales charges imposed upon
certain redemptions by Class B shareholders.
PMFD is a wholly-owned subsidiary of PMF; PSI, PMF and PIC are indirect,
wholly-owned subsidiaries of The Prudential Insurance Company of America.

Note 4. Portfolio Purchases and sales of port-
Securities folio securities of the Series,
excluding short-term investments, for the year
ended August 31, 1994 were $92,629,213 and $90,523,886, respectively.
The cost basis of investments for federal income tax purposes was
substantially the same as for financial reporting
purposes and accordingly, as of August 31, 1994 net unrealized appreciation of
investments for federal income tax purposes was $7,764,622 (gross unrealized
appreciation--$9,672,798; gross unrealized depreciation--$1,908,176).
-12-
<PAGE>
<PAGE>
At August 31, 1994, the Series sold 70 financial futures contracts on U.S.
Treasury Bonds which expire in September 1994. The value at disposition of such
contracts was $703,719. The value of such contracts on August 31, 1994 was
$726,031, thereby resulting in an unrealized loss of $22,312.
The Series will elect to treat net capital losses of approximately $2,225,000
incurred in the ten month period ended August 31, 1994 as having been incurred
in the following year.

<TABLE>
<CAPTION>
Class A Shares Amount
- ------------------------------ ---------- ------------
<S> <C> <C>
Year ended August 31, 1994:
Shares sold................... 2,832,276 $ 29,779,955
Shares issued in reinvestment
of
dividends and
distributions............... 603,170 6,281,627
Shares reacquired............. (4,212,175) (43,795,883)
---------- ------------
Net decrease in shares
outstanding................. (776,729) $ (7,734,301)
---------- ------------
---------- ------------
<CAPTION>
Class A Shares Amount
- ------------------------------ ---------- ------------
<S> <C> <C>
Year ended August 31, 1993:
Shares sold................... 7,698,093 $ 79,117,890
Shares issued in reinvestment
of
dividends and
distributions............... 476,213 4,887,486
Shares reacquired............. (3,368,427) (34,498,280)
---------- ------------
Net increase in shares
outstanding................. 4,805,879 $ 49,507,096
---------- ------------
---------- ------------
<CAPTION>
Class B
- ------------------------------
December 7, 1993* through
August 31, 1994:
Shares sold................... 1,938,204 $ 19,956,652
Shares issued in reinvestment
of
dividends................... 16,467 167,359
Shares reacquired............. (96,852) (978,054)
---------- ------------
Net increase in shares
outstanding................. 1,857,819 $ 19,145,957
---------- ------------
---------- ------------
<CAPTION>
Class C
- ------------------------------
August 1, 1994** through
August 31, 1994:
Shares sold................... 103,415 $ 1,050,453
Shares issued in reinvestment
of
dividends................... 66 668
---------- ------------
Net increase in shares
outstanding................. 103,481 $ 1,051,121
---------- ------------
---------- ------------
- ---------------
* Commencement of Class B operations.
** Commencement of Class C operations.
</TABLE>
-13-
<PAGE>
<PAGE>
PRUDENTIAL CALIFORNIA MUNICIPAL FUND
CALIFORNIA INCOME SERIES
Financial Highlights
<TABLE>
<CAPTION>
Class A Class B Class C
------------------------------------------------------- ------------ -----------
December 3, December 7, August 1,
1990* 1993(D)(D) 1994(D)(D)(D)
Year Ended August 31, Through Through Through
-------------------------------------- August 31, August 31, August 31,
1994 1993 1992 1991 1994 1994
------------ -------- -------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of
period.............................. $ 10.68 $ 10.08 $ 9.76 $ 9.55 $ 10.61 $ 10.18
------------ -------- -------- ------------ ------------ -----------
Income from investment operations
Net investment income(D).............. .65 .67 .69 .51 .44 .05
Net realized and unrealized gain
(loss) on investment transactions... (.39) .65 .35 .21 (.42) .01
------------ -------- -------- ------------ ------------ -----------
Total from investment operations.... .26 1.32 1.04 .72 .02 .06
------------ -------- -------- ------------ ------------ -----------
Less distributions
Dividends from net investment
income.............................. (.65) (.67) (.69) (.51) (.44) (.05)
Distributions from net realized
gains............................... (.10) (.05) (.03) -- -- --
------------ -------- -------- ------------ ------------ -----------
Total distributions................. (.75) (.72) (.72) (.51) (.44) (.05)
------------ -------- -------- ------------ ------------ -----------
Net asset value, end of period........ $ 10.19 $ 10.68 $ 10.08 $ 9.76 $ 10.19 $ 10.19
------------ -------- -------- ------------ ------------ -----------
------------ -------- -------- ------------ ------------ -----------
TOTAL RETURN#......................... 2.55% 13.67% 11.08% 7.97% (.14)% .47%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000)....... $ 183,742 $200,899 $141,101 $ 72,241 $ 18,931 $ 1,054
Average net assets (000).............. $ 195,610 $165,895 $102,227 $ 47,540 $ 6,814 $ 353
Ratios to average net assets(D)/@:
Expenses, including distribution
fees.............................. .35% .20% .10% .0%** 1.11%** 1.12%**
Expenses, excluding distribution
fees.............................. .25% .10% .04% .0%** .43%** 8.18%**
Net investment income............... 6.25% 6.52% 6.91% 7.04%** 8.15%** 6.25%**
Portfolio turnover.................... 46% 34% 69% 35% 46% 46%
</TABLE>
- ---------------
* Commencement of investment operations.
** Annualized.
(D) Net of expense subsidy and/or fee waiver.
(D)(D) Commencement of offering of Class B shares.
(D)(D)(D) Commencement of offering of Class C shares.
# Total return does not consider the effects of sales loads. Total
return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each period reported and includes
reinvestment of dividends and distributions. Total returns for periods
of less than a full year are not annualized.
@ Because of the events referred to in (D)(D) and (D)(D)(D) and the
timing of such, the ratios for the Class A shares are not necessarily
comparable to that of Class B and Class C shares and are not
necessarily indicative of future ratios.

See Notes to Financial Statements.
-14-
<PAGE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Shareholders and Board of Trustees
Prudential California Municipal Fund, California Income Series
We have audited the accompanying statement of assets and liabilities of
Prudential California Municipal Fund, California Income Series, including the
portfolio of investments, as of August 31, 1994, the related statements of
operations for the year then ended and of changes in net assets for each of the
two years in the period then ended, and the financial highlights for each of the
three years in the period then ended and for the period December 3, 1990
(commencement of investment operations) through August 31, 1991. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of the securities owned as of
August 31, 1994 by correspondence with the custodian and brokers; where replies
were not received from brokers, we performed other auditing procedures. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Prudential
California Municipal Fund, California Income Series, as of August 31, 1994, the
results of its operations, the changes in its net assets, and its financial
highlights for the respective stated periods in conformity with generally
accepted accounting principles.
Deloitte & Touche LLP
New York, New York
October 17, 1994
FEDERAL INCOME TAX INFORMATION
We are required by the Internal Revenue Code to advise you within 60 days of
the Series' fiscal year end (August 31, 1994) as to the federal tax status of
dividends and distributions paid by the Series during such fiscal year.
Accordingly, we are advising you that in the fiscal year ended August 31, 1994,
dividends paid from net investment income of $.65 per Class A share, $.41 per
Class B share and $.05 per Class C shares were all federally tax-exempt interest
dividends. In addition, the Series paid to Class A shares a long-term capital
gain distribution of $.008 per share which is taxable as such and a short-term
capital gain distribution of $.095 which is taxable as ordinary income.
In January 1995, you will be advised on IRS Form 1099 DIV or substitute 1099
DIV as to the federal tax status of the distributions received by you in
calendar year 1994.
-15-
<PAGE>
<PAGE>
These graphs are furnished to you in accordance with SEC regulations. They
compare a $10,000 investment in Prudential California Municipal Fund: California
Income Series (Class A, Class B, and Class C) with a similar investment in the
Lehman Brothers Municipal Bond Index (the Index) by portraying the initial
account values at the commencement of operations of each class and subsequent
account values at the end of each fiscal year (August 31) beginning in 1990 for
Class A, in 1993 for Class B shares and 1994 for Class C shares. For purposes of
the graphs and, unless otherwise indicated, the accompanying tables, it has been
assumed that (a) the maximum sales charge was deducted from the initial $10,000
investment in Class A shares; (b) the maximum applicable contingent deferred
sales charge was deducted from the value of the investment in Class B shares and
Class C shares, assuming full redemption on August 31, 1994; (c) all recurring
fees (including management fees) were deducted; and (d) all dividends and
distributions were reinvested. Class B shares will automatically convert to
Class A shares on a quarterly basis approximately seven years after purchase.
This conversion feature is expected to be implemented on or about February 1995
and is not reflected in the graph. The graph and accompanying tables reflect the
past subsidy and/or waiver of expenses and/or management fees. Without fee
waivers and expense subsidies, the value of a $10,000 investment in the Series
and the Series' average annual total return, as shown above, would have been
lower.
The Index is a weighted index comprised of 21,000 municipal bonds (general
obligation bonds, revenue bonds, insured bonds and prerefunded bonds) selected
by Lehman Brothers as representative of the long-term investment grade municipal
bond market. The Index is an unmanaged index and includes the reinvestment of
all income, but does not reflect the payment of transaction costs and advisory
fees associated with an investment in the Series. The securities which comprise
the Index may differ substantially from the securities in the Series' portfolio
because the Index, among other things, is not state specific. The Lehman
Brothers Municipal Bond Index is not the only index which may be used to
characterize performance of long-term, investment-grade tax-exempt bond funds
and other indexes may portray different comparative performance.
-16-

<PAGE>

Trustees
Edward D. Beach
Eugene C. Dorsey
Delayne Dedrick Gold
Harry A. Jacobs, Jr.
Lawrence C. McQuade

Thomas T. Mooney
Thomas H. O'Brien
Richard A. Redeker
Nancy H. Teeters
Officers
Lawrence C. McQuade, President
Robert F. Gunia, Vice President
Susan C. Cote, Treasurer
S. Jane Rose, Secretary
Deborah A. Docs, Assistant Secretary
Manager
Prudential Mutual Fund Management, Inc.
One Seaport Plaza
New York, NY 10292
Investment Adviser
The Prudential Investment Corporation
Prudential Plaza
Newark, NJ 07101
Distributors
Prudential Mutual Fund Distributors, Inc.
Prudential Securities Incorporated
One Seaport Plaza
New York, NY 10292
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services, Inc.
P.O. Box 15005
New Brunswick, NJ 08906
Independent Accountants
Deloitte & Touche LLP
1633 Broadway
New York, NY 10019
Legal Counsel
Gardner, Carton & Douglas
Quaker Tower
321 North Clark Street
Chicago, IL 60610-4795
Prudential Mutual Funds
One Seaport Plaza
New York, NY 10292
Toll free (800) 225-1852, Collect (908) 417-7555

This report is not authorized for distribution to prospective investors unless
preceded or accompanied by a current prospectus.
744313305 MF 146E
744313404 Cat. #4443509
744313800 Prudential Mutual Fund Management (LOGO)

ANNUAL REPORT August 31, 1994

Prudential
California
Municipal Fund

(ICON)

California
Money Market Series

(LOGO)

<PAGE>

Letter to Shareholders

October 18, 1994

Dear Shareholder:

Short-term interest rates moved steadily higher during the last 12
months, accelerating in 1994 as the Federal Reserve boosted short-term
interest rates in hopes of preventing inflation from increasing as the
economy began to expand rapidly. As a result, your Prudential California
Municipal Fund -- California Money Market Series -- produced higher yields
than six months ago.
<TABLE>
SERIES PERFORMANCE1
As of August 31, 1994
<CAPTION>
Net Asset Weighted 7-Day Taxable Equivalent Yield Net
Value2 Avg. Mat. Current Yield @28% @31% @39.6% Assets (Mil.)
<S> <C> <C> <C> <C> <C> <C>
$1.00 62 days 2.56% 4.0% 4.2% 4.8% $300.7
</TABLE>

1 Past performance is no guarantee of future results.

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

The California Money Market Series seeks to provide the highest level
of state and federally tax-exempt current income consistent with the
preservation of principal and liquidity. Interest on municipal obligations
may be subject to the federal alternative minimum tax. The Series invests
primarily in high-quality, short-term, tax-exempt obligations issued by the
state, municipalities and authorities. During the year, the Series' credit
quality remained consistently high, with 92% of its holdings rated in the
highest category, as determined by Moody's Investors Service or Standard &
Poor's, or if unrated, deemed to be of comparable quality by the adviser.

In 1994, Rates Rose Rapidly

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

The Municipal Market Is Different

While the fed funds rate spiked 175 basis points (100 basis points is
one percentage point), the yields of tax-free securities did not increase
by a similar margin. Although this rising interest rate activity in the
taxable market

-1-

<PAGE>

does affect the tax-free market, the impact generally lags. The
short-term municipal market is also more influenced by seasonal
supply and demand factors than taxable Treasury bills.

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

California's Economy is Recovering

California seems to be recovering from its worst recession since the Great
Depression. Although defense cutbacks are decelerating, the effects are
still being felt, so overall employment growth remains slow, particularly
in the southern portion of the state. The California Department of
Finance projects that the defense industry, which lost 50,000 jobs
in 1993 (a 17% reduction), will drop another 14% this year and 10%
in 1995.

Economic growth in California is still slow. The June 1994 unemployment
rate was 8.3%, the second highest in the nation and, fiscally, the state
is also in a bind. Unable to reduce its expenditures to match its
economic performance, California now has a $2.3 billion deficit,
likely to approach $6 billion in two years if nothing is done.
This year's budget was balanced only by short-term borrowing, for
which the state will probably have to borrow again to repay. As a
result, California has the second-lowest bond rating in the country.

The Outlook: Rates May Rise Again

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

-2-

<PAGE>

Once again, it is a pleasure to have you as a shareholder in the
Prudential California Municipal Fund -- California Money Market Series,
and to take this opportunity to report our activities to you.

Sincerely,

Lawrence C. McQuade
President

J. Christopher Nicholl
Portfolio Manager

-3-

<PAGE>
PRUDENTIAL CALIFORNIA MUNICIPAL FUND Portfolio of Investments
CALIFORNIA MONEY MARKET SERIES August 31, 1994
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount Value
(Unaudited) (000) Description (a) (Note 1)
<C> <C> <S> <C>
Alameda Cnty.,
T.R.A.N.,
MIG1 $ 3,500 4.75%, 8/11/95......... $ 3,517,311
Alameda Rev.,
KQED, Inc. Proj.,
F.R.W.D.,
VMIG2 5,700 4.00%, 9/7/94, Ser.
90................... 5,700,000
California Hlth. Facs.
Fin. Auth. Rev.,
St. Francis Mem.
Hosp., F.R.D.D,
VMIG1 3,100 3.20%, 9/1/94, Ser.
B.................... 3,100,000
California Hsg. Fin.
Agcy. Rev.,
A.N.N.M.T.,
Home Mtge. Rev.,
SP1* 10,000 4.30%, 5/1/95, Ser.
94-2................. 10,000,000
California Poll. Ctrl.
Fin. Auth. Rev.,
Burney Forest Proj.,
F.R.D.D.,
P1 1,400 2.90%, 9/1/94, Ser.
88A.................. 1,400,000
Chevron U.S.A. Inc.
Proj., A.N.N.O.T.,
NR 4,155 3.10%, 5/15/95, Ser.
84................... 4,118,326
Delano Proj., F.R.D.D.,
P1 6,300 3.25%, 9/1/94, Ser.
90................... 6,300,000
P1 23,200 3.25%, 9/1/94, Ser.
91................... 23,200,000
Honey Lake Pwr. Proj.,
F.R.D.D.,
NR 1,200 3.25%, 9/1/94, Ser.
88................... 1,200,000
NR 1,700 3.25%, 9/1/94, Ser.
89................... 1,700,000
San Diego Gas & Elec.
Co., A.N.N.O.T.,
A-1* 9,000 4.25%, 9/1/95,
Ser.84A.............. 9,000,000
Southern California
Edison, T.E.C.P.,
P1 8,200 2.90%, 9/9/94, Ser.
85C.................. 8,200,000
California Poll. Ctrl.
Fin. Auth. Rev.,
Ultrapower Malaga
Fresno Proj.,
F.R.D.D.,
P1 $ 9,800 3.30%, 9/1/94, Ser.
88A.................. $ 9,800,000
P1 3,000 3.30%, 9/1/94, Ser.
88B.................. 3,000,000
Ultrapower Rocklin
Proj., F.R.D.D.,
P1 1,800 3.30%, 9/1/94, Ser.
88A.................. 1,800,000
P1 6,500 3.30%, 9/1/94, Ser.
88B.................. 6,500,000
California Rural Home
Mtge.
Fin. Auth. Rev.,
O.T.W.M.R.,
VMIG1 7,315 3.38%, 9/1/94, Ser.
93................... 7,315,000
Chula Vista Ind. Dev.
Auth. Rev.,
San Diego Gas & Elec.
Co., T.E.C.P.,
P1 6,500 2.90%, 9/8/94, Ser.
92C.................. 6,500,000
Conejo Valley Unified
Sch.
Dist. Rev., T.R.A.N.,
MIG1 5,000 4.25%, 7/5/95.......... 5,009,990
Contra Costa Trans.
Auth. Rev., F.R.W.D.,
VMIG1 3,900 2.85%, 9/7/94.......... 3,900,000
East Bay Muni. Util.
Dist.,
Wst. Wtr., T.E.C.P.,
P1 8,500 3.10%, 9/29/94......... 8,500,000
Fremont Unified Sch.
Dist., T.R.A.N.,
SP1* 6,000 4.50%, 7/6/95.......... 6,039,042
Irvine Ranch Wtr.
Dist., F.R.D.D.,
A-1* 800 2.85%, 9/1/94, Ser.
85B.................. 800,000
Kings Cnty.
Multi-family Rev.
Hsg. Auth.,
Edgewatger Isle
Proj., F.R.W.D.,
VMIG1 15,070 3.05%, 9/7/94, Ser.
85A.................. 15,070,000
Long Beach, T.R.A.N.,
MIG1 15,000 3.25%, 9/21/94, Ser.
93-94................ 15,002,636

-4- See Notes to Financial Statements.
</TABLE>
<PAGE>
PRUDENTIAL CALIFORNIA MUNICIPAL FUND
CALIFORNIA MONEY MARKET SERIES
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount Value
(Unaudited) (000) Description (a) (Note 1)
<C> <C> <S> <C>
Los Angeles Cnty. Local
Ed. Agy., Cert. of
Part., T.R.A.N.,
MIG1 $ 10,050 4.50%, 7/6/95, Ser.
94-95A............... $ 10,111,228
Los Angeles Cnty. Trans., T.E.C.P.,
A1* 3,000 2.90%, 9/6/94, Ser.
A.................... 3,000,000
Los Angeles Hsg. Auth.,
Multi-family Rev.,
Lanewood Apts. Proj.,
F.R.W.D.,
VMIG1 7,000 3.05%, 9/7/94, Ser.
85................... 7,000,000
Moorpark Ind. Dev. Auth. Rev.,
Kavli & Kavlico Corp., F.R.W.D.,
VMIG1 6,795 3.25%, 9/1/94, Ser.
85................... 6,795,000
Oakland Multi-family
Hsg. Rev.,
Skyline Hills Assoc.,
F.R.W.D.,
MIG1 6,700 3.15%, 9/1/94, Ser.
85A.................. 6,700,000
Olcese Wtr. Dist., Rio
Bravo Wtr. Delivery
Sys., T.E.C.P.,
P1 8,500 3.15%, 9/26/94, Ser.
86A.................. 8,500,000
Ontario Multi-family
Hsg. Rev.,
Park Ctr. Proj.,
F.R.W.D.,
VMIG1 8,400 3.10%, 9/1/94, Ser.
85A.................. 8,400,000
Orange Cnty. Apt. Dev.
Rev.,
Bear Brand Apts.
Proj., F.R.W.D.,
VMIG1 4,000 3.10%, 9/1/94, Ser.
85Z.................. 4,000,000
Lakes Proj., F.R.W.D.,
A-1* 4,600 3.05%, 9/1/94, Ser.
91A.................. 4,600,000
Lantern Pines Proj.,
F.R.W.D.,
VMIG1 3,475 3.20%, 9/7/94, Ser.
85C.................. 3,475,000
Robinson Ranch Apts., F.R.W.D.,
VMIG1 8,400 3.05%, 9/1/94, Ser.
85Y.................. 8,400,000
Vintage Woods Apts., F.R.W.D.,
VMIG1 8,300 3.10%, 9/1/94, Ser.
84E.................. 8,300,000
Orange Cnty., Teeter
Plan Tax Exempt
Notes, F.R.M.I.N.,
MIG1 $ 15,000 3.325%, 9/1/94, Ser.
94-95................ $ 15,000,000
Orange Cnty., T.R.A.N.,
4.50%, 7/19/95,
MIG1 10,000 Ser. 94-95A............ 10,063,438
Palmdale Cmnty. Redev.
Agy.,
Manzanita Villas Apt.
Proj., F.R.W.D.,
VMIG1 4,800 3.05%, 9/1/94, Ser.
93A.................. 4,800,000
Puerto Rico Comnwlth.,
Gov't. Dev. Bank.,
F.R.W.D.,
VMIG1 200 2.90%, 9/7/94, Ser.
85................... 200,000
San Joaquin Cnty.Trans.
Auth.,
Sales Tax Rev.,
F.R.W.D.,
P1 5,700 2.95%, 9/7/94, Ser.
93................... 5,700,000
San Marcos Ind. Dev.
Auth. Rev.,
Village Square Proj.,
F.R.W.D.,
NR 4,000 3.15%, 9/1/94, Ser.
92................... 4,000,000
Santa Clara Cnty.
Transit Dist., Rfdg.
Equip. Trust,
F.R.D.D.,
VMIG1 2,500 3.15%, 9/1/94, Ser.
85A.................. 2,500,000
Southern Pub. Pwr.
Auth.,
Transmission Proj.
Rev., F.R.W.D.,
P1 14,900 3.00%, 9/7/94, Ser.
91................... 14,900,000
Visalia, Cert. of
Part.,
Convention Ctr.,
F.R.W.D.,
A1+ * 8,980 3.15%, 9/7/94.......... 8,980,000
------------
Total Investments--103.8%
(amortized cost--
$312,096,971**)...... 312,096,971
Liabilities in excess
of other
assets--(3.8%)....... (11,421,418)
------------
Net Assets--100%....... $300,675,553
------------
------------

-5- See Notes to Financial Statements.
</TABLE>
<PAGE>
PRUDENTIAL CALIFORNIA MUNICIPAL FUND
CALIFORNIA MONEY MARKET SERIES

(a) The following abbreviations are used in portfolio descriptions:
A.N.N.M.T.--Annual Mandatory Tender.
A.N.N.O.T.--Annual Optional Tender.
F.R.D.D.--Floating Rate (Daily) Demand Note #.
F.R.M.I.N.--Floating Rate (Monthly) Index Note # (Indexed to 70% of LIBOR).
F.R.W.D.--Floating Rate (Weekly) Demand Note #.
O.T.W.M.R.--Optional Tender With Monthly Reset #.
T.E.C.P.--Tax-Exempt Commercial Paper.
T.R.A.N.--Tax & Revenue Anticipation Note.
# For purposes of amortized cost valuation, the maturity date of such
securities 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.
NR--Not Rated by Moody's or Standard & Poor's.
* Standard & Poor's rating.
** The cost of securities for federal income tax purposes is substantially the
same as for financial reporting purposes.
The Fund's current Statement of Additional Information contains
a description of Moody's and Standard & Poor's ratings.
-6- See Notes to Financial Statements.
<PAGE>
<PAGE>
PRUDENTIAL CALIFORNIA MUNICIPAL FUND
CALIFORNIA MONEY MARKET SERIES
Statement of Assets and Liabilities

<TABLE>
<CAPTION>
August 31,
1994
------------
<S> <C>
Assets
Investments, at amortized cost which approximates market value................................. $312,096,971
Cash........................................................................................... 39,080
Receivable for Series shares sold.............................................................. 1,543,843
Accrued interest receivable.................................................................... 1,375,643
Other assets................................................................................... 7,465
------------
Total assets............................................................................... 315,063,002
------------
Liabilities
Payable for investments purchased.............................................................. 9,000,000
Payable for Series shares reacquired........................................................... 4,969,694
Accrued expenses and other liabilities......................................................... 132,713
Management fee payable......................................................................... 132,613
Dividends payable.............................................................................. 131,803
Distribution fee payable....................................................................... 18,232
Deferred trustees' fees........................................................................ 2,394
------------
Total liabilities.......................................................................... 14,387,449
------------
Net Assets..................................................................................... $300,675,553
------------
------------
Net assets were comprised of:
Shares of benefical interest, at $.01 par value.............................................. $ 3,006,756
Paid-in capital in excess of par............................................................. 297,668,797
------------
Net assets, August 31, 1994.................................................................. $300,675,553
------------
------------
Net asset value, offering price and redemption price per share ($300,675,553 / 300,675,553
shares of beneficial interest issued and outstanding; unlimited
number of shares authorized)................................................................. $1.00
------------
------------
</TABLE>

See Notes to Financial Statements.
-7-
<PAGE>
<PAGE>
PRUDENTIAL CALIFORNIA MUNICIPAL FUND
CALIFORNIA MONEY MARKET SERIES
Statement of Operations
<TABLE>
<CAPTION>
Year Ended
August 31,
Net Investment Income 1994
----------
<S> <C>
Income
Interest and discount earned........... $8,616,584
----------
Expenses
Management fee......................... 1,632,146
Distribution fee....................... 408,036
Transfer agent's fees and expenses..... 133,000
Custodian's fees and expenses.......... 80,000
Reports to shareholders................ 58,000
Legal fees............................. 25,000
Audit fee.............................. 15,000
Registration fees...................... 11,000
Insurance expense...................... 10,000
Trustees' fees......................... 8,000
Amortization of organization expense... 5,980
Miscellaneous.......................... 517
----------
Total expenses....................... 2,386,679
----------
Net investment income.................... 6,229,905
----------
Realized Gain on Investments
Net realized gain on investment
transactions........................... 20,403
----------
Net Increase in Net Assets
Resulting from Operations................ $6,250,308
----------
----------
</TABLE>

PRUDENTIAL CALIFORNIA MUNICIPAL FUND
CALIFORNIA MONEY MARKET SERIES
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended August 31,
Increase (Decrease) ---------------------------------
in Net Assets 1994 1993
--------------- ---------------
<S> <C> <C>
Operations
Net investment
income................. $ 6,229,905 $ 5,852,209
Net realized gain on
investment
transactions......... 20,403 10,297
--------------- ---------------
Net increase in net
assets resulting from
operations........... 6,250,308 5,862,506
--------------- ---------------
Dividends and
distributions
to shareholders (Note
1)..................... (6,250,308) (5,862,506)
--------------- ---------------
Series share transactions
(at $1 per share)
Net proceeds from
shares subscribed.... 1,419,314,621 1,219,363,584
Net asset value of
shares issued to
shareholders in
reinvestment of
dividends and
distributions........ 5,984,806 5,672,116
Cost of shares
reacquired........... (1,439,549,204) (1,226,000,814)
--------------- ---------------
Net decrease in net
assets from Series
share transactions... (14,249,777) (965,114)
--------------- ---------------
Total decrease........... (14,249,777) (965,114)
Net Assets
Beginning of year........ 314,925,330 315,890,444
--------------- ---------------
End of year.............. $ 300,675,553 $ 314,925,330
--------------- ---------------
--------------- ---------------
</TABLE>

See Notes to Financial Statements. See Notes to Financial Statements.
-8-
<PAGE>
<PAGE>
PRUDENTIAL CALIFORNIA MUNICIPAL FUND
CALIFORNIA MONEY MARKET SERIES
Notes to Financial Statements
Prudential California Municipal 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
three series. The monies of each series are invested in separate, independently
managed portfolios. The California Money Market Series (the ``Series'')
commenced investment operations on March 3, 1989. The Series is diversified and
seeks to achieve its investment objective of obtaining the maximum amount of
income exempt from California state and federal income taxes with the minimum
risk by investing in ``investment grade'' tax-exempt securities having a
maturity of thirteen months or less whose ratings are within the two highest
ratings categories by a nationally recognized statistical rating organization
or, if not rated, are of comparable quality. The ability of the issuers of the
securities held by the Series to meet their obligations may be affected by
economic developments in a specific state, industry or region.

Note 1. Accounting The following is a summary
Policies of significant accounting poli-
cies followed by the Fund, and the Series, in the
preparation of its financial statements.
Securities Valuations: Portfolio securities of the Series are valued at
amortized cost, which approximates market value. The amortized cost method of
valuation involves valuing a security at its cost on the date of purchase and
thereafter assuming a constant amortization to maturity of any discount or
premium.
All securities are valued as of 4:30 P.M., New York time.
Securities Transactions and Investment Income: Securities transactions are
recorded on the trade date. Realized gains and losses on sales of investments
are calculated on the identified cost basis. Interest income is recorded on the
accrual basis.
Federal Income Taxes: For federal income tax purposes, each series in the Fund
is treated as a separate taxpaying entity. It is the intent of the Series to
continue to meet the requirements of the Internal Revenue Code applicable to
regulated investment companies and to continue to distribute all of its net
income to shareholders. For this reason and because substantially all of the
Series' gross income consists of tax-exempt interest, no federal income tax
provision is required.
Dividends: The Series declares daily dividends from net investment income.
Payment of dividends is made monthly.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles.
Deferred Organization Expenses: The Series incurred $46,000 in organization and
initial registration expenses. Such amount was deferred and amortized over a
period of 60 months ended March 1994.

Note 2. Agreements The Fund has a management
agreement with Prudential Mutual Fund Management,
Inc. (``PMF''). Pursuant to this agreement PMF has responsibility for all
investment advisory services and supervises the subadviser's performance of such
services. PMF has entered into a subadvisory agreement with The Prudential
Investment Corporation (``PIC''); PIC furnishes investment advisory services in
connection with the management of the Fund. PMF pays for the cost of the
subadviser's services, 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 PMF is computed daily and payable monthly, at the
annual rate of .50 of 1% of the average daily net assets of the Series.
The Fund has a distribution agreement with Prudential Mutual Fund
Distributors, Inc. (``PMFD''). To reimburse PMFD for its expenses incurred
pursuant to a plan of distribution, the Fund pays PMFD a reimbursement, accrued
daily and payable monthly, at an annual rate of .125 of 1% of the Series'
average daily net assets. PMFD pays various broker-dealers, including Prudential
Securities Incorporated (``PSI'') and Pruco Securities Corporation, affiliated
broker-dealers, for account servicing fees and other expenses incurred by such
broker-dealers.
PMFD is a wholly-owned subsidiary of PMF; PSI, PIC, and PMF are (indirect)
wholly-owned subsidiaries of The Prudential Insurance Company of America.

Note 3. Other Prudential Mutual Fund Ser-
Transactions vices, Inc. (``PMFS''), a
with Affiliates wholly-owned subsidiary of
PMF, serves as the Fund's transfer agent. During
the year ended August 31, 1994, the Series incurred fees of approximately
$122,000 for the services of PMFS. As of August 31, 1994, approximately $10,000
of such fees were due to PMFS. Transfer agent fees and expenses in the Statement
of Operations include certain out-of-pocket expenses paid to non-affiliates.
-9-
<PAGE>
<PAGE>
PRUDENTIAL CALIFORNIA MUNICIPAL FUND
CALIFORNIA MONEY MARKET SERIES
Financial Highlights
<TABLE>
<CAPTION>
Year Ended August 31,
------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE: 1994 1993 1992 1991 1990
------------ -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year................................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net investment income and net realized gains...................... .02 .02 .03 .04(D) .05(D)
Dividends and distributions....................................... (.02) (.02) (.03) (.04) (.05)
------------ -------- -------- -------- --------
Net asset value, end of year...................................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ -------- -------- -------- --------
------------ -------- -------- -------- --------
TOTAL RETURN#:.................................................... 1.94% 1.86% 2.91% 4.48% 5.59%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000)..................................... $300,676 $314,925 $315,890 $341,625 $388,739
Average net assets (000).......................................... $326,429 $319,464 $339,941 $375,655 $330,581
Ratios to average net assets:
Expenses, including distribution fee............................ .73% .76% .76% .63%(D)) .38%(D)
Expenses, excluding distribution fee............................ .61% .63% .63% .51%(D) .25%(D)
Net investment income........................................... 1.91% 1.83% 2.89% 4.37%(D) 5.40%(D)
</TABLE>

- ---------------
(D)Net of management fee waiver and/or expense subsidy.
# Total return includes reinvestment of dividends and distributions.

See Notes to Financial Statements.
-10-

<PAGE>
INDEPENDENT AUDITORS' REPORT
The Shareholders and Board of Trustees
Prudential California Municipal Fund, California Money Market Series
We have audited the accompanying statement of assets and liabilities of
Prudential California Municipal Fund, California Money Market Series, including
the portfolio of investments, as of August 31, 1994, the related statements of
operations for the year then ended and of changes in net assets for each of the
two years in the period then ended, and the financial highlights for each of the
five years in the period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of the securities owned as of
August 31, 1994 by correspondence with the custodian and brokers; where replies
were not received from brokers, we performed other auditing procedures. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Prudential
California Municipal Fund, California Money Market Series, as of August 31,
1994, the results of its operations, the changes in its net assets, and its
financial highlights for the respective stated periods in conformity with
generally accepted accounting principles.
Deloitte & Touche LLP
New York, New York
October 17, 1994
FEDERAL INCOME TAX INFORMATION
We are required by the Internal Revenue Code to advise you within 60 days of
the Series' fiscal year end (August 31, 1994) as to the federal tax status of
dividends and distributions paid by the Series during such fiscal year.
Accordingly, we are advising you that for the year ended August 31, 1994,
dividends paid from net investment income totalling $.02 per share were
federally tax-exempt interest dividends.
-11-

<PAGE>

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

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

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

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

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

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

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

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

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

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

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

MF 139E
744313503 (LOGO) Cat. #642862U