PRUDENTIAL CALIFORNIA MUNICIPAL FUND, 485BPOS, 1996-08-16

PRUDENTIAL CALIFORNIA MUNICIPAL FUND
485BPOS, 1996-08-16

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
ON AUGUST 15, 1996

SECURITIES ACT REGISTRATION NO. 2-91215

INVESTMENT COMPANY ACT REGISTRATION NO. 811-4024
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/

PRE-EFFECTIVE AMENDMENT NO. / /

POST-EFFECTIVE AMENDMENT NO. 22 /X/

AND/OR
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 /X/

AMENDMENT NO. 23 /X/

(Check appropriate box or boxes)

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

PRUDENTIAL CALIFORNIA MUNICIPAL FUND
(Exact name of registrant as specified in charter)

ONE SEAPORT PLAZA,
NEW YORK, NEW YORK 10292
(Address of Principal Executive Offices) (Zip Code)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 214-1250

S. JANE ROSE, ESQ.
ONE SEAPORT PLAZA
NEW YORK, NEW YORK 10292
(Name and Address of Agent for Service)

APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
As soon as practicable after the effective
date of the Registration Statement.

It is proposed that this filing will become effective
(check appropriate box):

/ / immediately upon filing pursuant to paragraph (b)
/X/ on September 3, 1996 pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/ / on (date) pursuant to paragraph (a)(1)
/ / 75 days after filing pursuant to paragraph (a)(2)

/ / on (date) pursuant to paragraph (a)(2) of rule
485.
If appropriate, check the following box:
/ / this post-effective amendment designates a new
effective date for a previously filed
post-effective amendment.

Pursuant to Rule 24f-2 under the Investment Company Act of 1940,
Registrant has previously registered an indefinite number of shares of
beneficial interest, par value $.01 per share. The Registrant filed a notice
under such Rule for its fiscal year ended August 31, 1995 on November 1,
1995.

- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
<PAGE>
CROSS REFERENCE SHEET
(AS REQUIRED BY RULE 495)

<TABLE>
<CAPTION>
N-1A ITEM NO. LOCATION
- ------------------------------------------------------------------------------- ---------------------------------------------
<S> <C> <C>
PART A
Item 1. Cover Page.......................................................... Cover Page; Wrapper
Item 2. Synopsis............................................................ Fund Expenses; Fund Highlights; Wrapper;
Supplement
Item 3. Condensed Financial Information..................................... Fund Expenses; Financial Highlights; How the
Fund Calculates Performance
Item 4. General Description of Registrant................................... Cover Page; Fund Highlights; How the Fund
Invests; General Information
Item 5. Management of the Fund.............................................. Financial Highlights; How the Fund is
Managed; Wrapper
Item 6. Capital Stock and Other Securities.................................. Taxes, Dividends and Distributions; General
Information; Supplement
Item 7. Purchase of Securities Being Offered................................ Shareholder Guide; How the Fund Values its
Shares; Wrapper
Item 8. Redemption or Repurchase............................................ Shareholder Guide; How the Fund Values its
Shares; General Information
Item 9. Pending Legal Proceedings........................................... Not Applicable
PART B
Item 10. Cover Page.......................................................... Cover Page
Item 11. Table of Contents................................................... Table of Contents
Item 12. General Information and History..................................... General Information; Organization and
Capitalization
Item 13. Investment Objectives and Policies.................................. Investment Objectives and Policies;
Investment Restrictions
Item 14. Management of the Fund.............................................. Trustees and Officers; Manager; Distributor;
Supplement
Item 15. Control Persons and Principal Holders of Securities................. Trustees and Officers; Supplement
Item 16. Investment Advisory and Other Services.............................. Manager; Distributor; Custodian, Transfer and
Dividend Disbursing Agent and Independent
Accountants
Item 17. Brokerage Allocation and Other Practices............................ Portfolio Transactions and Brokerage
Item 18. Capital Stock and Other Securities.................................. Not Applicable
Item 19. Purchase, Redemption and Pricing of Securities Purchase and Redemption of Fund Shares;
Being Offered....................................................... Shareholder Investment Account; Net Asset
Value; Supplement
Item 20. Tax Status.......................................................... Distributions and Tax Information
Item 21. Underwriters........................................................ Distributor
Item 22. Calculation of Performance Data..................................... Performance Information
Item 23. Financial Statements................................................ Financial Statements
PART C
Information required to be included in Part C is set forth under the appropriate Item, so numbered, in Part C to this Post-
Effective Amendment to this Registration Statement.
</TABLE>

<PAGE>

The Prospectuses and Statement of Additional Information of the California
Series, California Income Series and California Money Market Series, each dated
November 1, 1995, are incorporated herein by reference in their entirety from
Post-Effective Amendment No. 21 to Registrant's Registration Statement (File No.
2-91215) filed on November 1, 1995. This Registration Statement does not amend,
the prospectus and statement of additional information of the California Money
Market Series dated November 1, 1995, which remains in full force and effect.

<PAGE>

PRUDENTIAL CALIFORNIA MUNICIPAL FUND

(CALIFORNIA SERIES)

(CLASS Z SHARES)

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

PROSPECTUS DATED SEPTEMBER 3, 1996

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

Prudential California Municipal Fund (the "Fund") (California Series) (the
"Series") is one of three series of an open-end, management investment company,
or mutual fund. This Series is diversified and seeks to provide the maximum
amount of income that is exempt from California State and federal income taxes
consistent with the preservation of capital and, in conjunction therewith, the
Series may invest in debt securities with the potential for capital gain. The
net assets of the Series are invested in obligations within the four highest
ratings of either Moody's Investors Service or Standard & Poor's Ratings Group
or in unrated obligations which, in the opinion of the Fund's investment
adviser, are of comparable quality. Subject to the limitations described herein,
the Series may utilize derivatives, including buying and selling futures
contracts and options thereon for the purpose of hedging its portfolio
securities. There can be no assurance that the Series' investment objective will
be achieved. See "How the Fund Invests--Investment Objective and Policies." The
Fund's address is One Seaport Plaza, New York, New York 10292, and its telephone
number is (800) 225-1852.

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

Class Z shares are offered exclusively for sale to a limited group of investors.
Only Class Z shares are offered through this Prospectus. The Series also offers
Class A, Class B and Class C shares through the attached Prospectus dated
November 1, 1995 (the Retail Class Prospectus) which is a part hereof.

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

This Prospectus sets forth concisely the information about the Fund and the
California Series that a prospective investor should know before investing.
Additional information about the Fund has been filed with the Securities and
Exchange Commission in a Statement of Additional Information dated November 1,
1995, which information is incorporated herein by reference (is legally
considered a part of this Prospectus) and is available without charge upon
request to the Fund at the address or telephone number noted above.

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

INVESTORS ARE ADVISED TO READ THIS PROSPECTUS AND RETAIN IT FOR FUTURE
REFERENCE.

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

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

<PAGE>

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

FUND EXPENSES

<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES CLASS Z SHARES
----------------
<S> <C>
Maximum Sales Load Imposed on Purchases (as a percentage of offering price)..................... None
Maximum Sales Load or Deferred Sales Load Imposed on Reinvested Dividends....................... None
Deferred Sales Load (as a percentage of original purchase price or redemption proceeds,
whichever is lower)............................................................................ None
Redemption Fees................................................................................. None
Exchange Fee.................................................................................... None

<CAPTION>
ANNUAL FUND OPERATING EXPENSES* CLASS Z SHARES
----------------
<S> <C>
(as a percentage of average net assets)
Management Fees (Before Waiver)................................................................. .50%
12b-1 Fees...................................................................................... None
Other Expenses.................................................................................. .17%
----------------
Total Fund Operating Expenses (Before Waiver)................................................... .67%
----------------
----------------
</TABLE>

<TABLE>
<CAPTION>
EXAMPLE (EACH SERIES) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end
of each time period:....................................... $ 7 $ 21 $ 37 $ 83
The above example is based on expenses expected to have been incurred if Class Z shares had been in existence
throughout the fiscal year ended August 31, 1995. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
The purpose of this table is to assist investors in understanding the various costs and expenses that an investor
in Class Z shares of the California Series will bear, whether directly or indirectly. For more complete
descriptions of the various costs and expenses, see "How the Fund is Managed." "Other Expenses" includes operating
expenses of the Series, such as Trustees' and professional fees, registration fees, reports to shareholders and
transfer agency and custodian fees.
<FN>

--------------
*Estimated based on expenses expected to have been incurred if Class Z shares
had been in existence throughout the fiscal year ended August 31, 1995,
without taking into account the management fee waiver. At the current level of
management fee waiver (.05%), Management Fees would be .45% and Total Fund
Operating Expenses would be .62% of average net assets of the Series' Class Z
shares.
</TABLE>

2
<PAGE>

THE FOLLOWING INFORMATION REPLACES THE INFORMATION UNDER "SHAREHOLDER
GUIDE--HOW TO BUY SHARES OF THE FUND" AND "SHAREHOLDER GUIDE--HOW TO SELL YOUR
SHARES" IN THE RETAIL CLASS PROSPECTUS:

Class Z shares of the Series are available for purchase by participants (other
than benefit plans and individual retirement accounts) in any fee-based program
sponsored by Prudential Securities or its affiliates which includes mutual funds
as investment options and for which the Series is an available option.

THE FOLLOWING INFORMATION SUPPLEMENTS "SHAREHOLDER GUIDE--HOW TO EXCHANGE YOUR
SHARES" IN THE RETAIL CLASS PROSPECTUS:

Class Z shareholders of the Series may exchange their Class Z shares for Class
Z shares of another Series or other Prudential Mutual Funds on the basis of
relative net asset value. Shareholders who qualify to purchase Class Z shares
(other than participants in any fee-based program) will have their Class B and
Class C shares which are not subject to contingent deferred sales charges and
their Class A shares exchanged for Class Z shares on a quarterly basis.
Participants (other than benefit plans and individual retirement accounts) in
any fee-based program for which the Series is an available option will have
their Class A shares, if any, exchanged for Class Z shares when they elect to
have those assets become a part of the fee-based program. Upon leaving the
program (whether voluntarily or not), such Class Z shares (and, to the extent
provided for in the program, Class Z shares acquired through participation in
the program) will be exchanged for Class A shares at net asset value. See
"Shareholder Guide--How to Exchange Your Shares--Special Exchange Privilege."

THE FOLLOWING INFORMATION SUPPLEMENTS "HOW THE FUND IS MANAGED--DISTRIBUTOR"
IN THE RETAIL CLASS PROSPECTUS:

Prudential Securities serves as the Distributor of Class Z shares and incurs
the expenses of distributing the Series' Class Z shares under a Distribution
Agreement with the Fund, none of which is reimbursed by or paid for by the
Series.

THE FOLLOWING INFORMATION SUPPLEMENTS "TAXES, DIVIDENDS AND DISTRIBUTIONS" IN
THE RETAIL CLASS PROSPECTUS:

The Fund has obtained opinions of counsel to the effect that neither (i) the
conversion of Class B shares into Class A shares nor (ii) the exchange of any
class of the Series' shares for any other class of its shares constitutes a
taxable event for federal income tax purposes. However, such opinions are not
binding on the Internal Revenue Service.

THE INFORMATION ABOVE ALSO SUPPLEMENTS THE INFORMATION UNDER "FUND HIGHLIGHTS"
IN THE RETAIL CLASS PROSPECTUS AS APPROPRIATE.

3
<PAGE>

No dealer, sales representative or any other person has been authorized to give
any information or to make any representations, other than those contained in
this Prospectus, in connection with the offer contained herein, and, if given or
made, such other information or representations must not be relied upon as
having been authorized by the Fund or the Distributor. This Prospectus does not
constitute an offer by the Fund or by the Distributor to sell or a solicitation
of any offer to buy any of the securities offered hereby in any jurisdiction to
any person to whom it is unlawful to make such offer in such jurisdiction.

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

TABLE OF CONTENTS

<TABLE>
<S> <C>
PAGE
----
FUND HIGHLIGHTS...................................................... 2
Risk Factors and Special Characteristics........................... 2
FUND EXPENSES........................................................ 4
FINANCIAL HIGHLIGHTS................................................. 5
HOW THE FUND INVESTS................................................. 8
Investment Objective and Policies.................................. 8
Other Investments and Policies..................................... 12
Investment Restrictions............................................ 13
HOW THE FUND IS MANAGED.............................................. 13
Manager............................................................ 13
Distributor........................................................ 14
Portfolio Transactions............................................. 16
Custodian and Transfer and Dividend Disbursing Agent............... 16
HOW THE FUND VALUES ITS SHARES....................................... 16
HOW THE FUND CALCULATES PERFORMANCE.................................. 16
TAXES, DIVIDENDS AND DISTRIBUTIONS................................... 17
GENERAL INFORMATION.................................................. 19
Description of Shares.............................................. 19
Additional Information............................................. 20
SHAREHOLDER GUIDE.................................................... 20
How to Buy Shares of the Fund...................................... 20
Alternative Purchase Plan.......................................... 22
How to Sell Your Shares............................................ 24
Conversion Feature--Class B Shares................................. 26
How to Exchange Your Shares........................................ 27
Shareholder Services............................................... 28
THE PRUDENTIAL MUTUAL FUND FAMILY.................................... A-1
</TABLE>

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

MF116A 4440472

CUSIP No.: Class Z:

PROSPECTUS
SEPTEMBER 3,
1996

PRUDENTIAL

CALIFORNIA
MUNICIPAL FUND

(CALIFORNIA SERIES)

(CLASS Z SHARES)

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

[LOGO]

<PAGE>
- --------------------------------------------------------------------------------

PRUDENTIAL CALIFORNIA MUNICIPAL FUND
(CALIFORNIA SERIES)
Supplement dated September 3, 1996 to
Prospectus dated November 1, 1995

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

THE FOLLOWING INFORMATION SUPPLEMENTS "GENERAL INFORMATION--DESCRIPTION OF
SHARES" IN THE PROSPECTUS:

The Fund is authorized to offer an unlimited number of shares of beneficial
interest, divided into four classes of shares, designated Class A, Class B,
Class C and Class Z shares. Each class represents an interest in the same assets
of the Series and is identical in all respects except that (i) each class is
subject to different sales charges and distribution and/or service fees (except
for Class Z shares which are not subject to any sales charges and distribution
and/or service fees), which may affect performance, (ii) each class has
exclusive voting rights on any matter submitted to shareholders that relates
solely to its distribution arrangements and has separate voting rights on any
matter submitted to shareholders in which the interests of one class differ from
the interests of any other class, (iii) each class has a different exchange
privilege, (iv) only Class B shares have a conversion feature and (v) Class Z
shares are offered exclusively for sale to a limited group of investors. For
more information about Class Z shares, contact your Prudential Securities
financial adviser or Prusec representative or telephone the Fund at (800)
225-1852. Since Class B and Class C shares generally bear higher distribution
expenses than Class A shares, the liquidation proceeds to shareholders of those
classes are likely to be lower than to Class A shareholders and to Class Z
shareholders, whose shares are not subject to any distribution and/or service
fee. In accordance with the Fund's Declaration of Trust, the Board of Trustees
may authorize the creation of additional series and classes of shares within
such series, with such preferences, privileges, limitations and voting and
dividend rights as the Board of Trustees may determine.

THE FOLLOWING INFORMATION SUPPLEMENTS "HOW THE FUND CALCULATES PERFORMANCE" IN
THE RETAIL CLASS PROSPECTUS:

The Fund may include comparative performance information in advertising or
marketing the Series' shares. The Fund may include performance information about
each of the Series' classes and is no longer required to include performance
data for all classes of shares in an advertisement or other information
including performance data of the Series. See "How the Fund Calculates
Performance."

MF116C- (9/3/96)

<PAGE>

THE FOLLOWING INFORMATION SUPPLEMENTS "FINANCIAL HIGHLIGHTS" IN THE

PROSPECTUS:

FINANCIAL HIGHLIGHTS
(for a share outstanding throughout the period indicated)
(Class A, Class B and Class C shares)

The following financial highlights for Class A, Class B and Class C shares
are unaudited. This information should be read in conjunction with the financial
statements and the notes thereto, which appear in the Statement of Additional
Information. The financial highlights contain selected data for a Class A, Class
B and Class C share of beneficial interest, respectively, outstanding, total
return, ratios to average net assets and other supplemental data for the period
indicated. The information has been determined based on data contained in the
financial statements. No Class Z shares were outstanding during the indicated
period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
FEBRUARY 29, 1996 (UNAUDITED)
---------------------------------------------
CLASS A CLASS B CLASS C
------- -------- -----------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period............................. $ 11.49 $ 11.49 $11.49
------- -------- -----------
INCOME FROM INVESTMENT OPERATIONS
- -----------------------------------------------------------------
Net investment income............................................ .33(a) .31(a) .29(a)
Net realized and unrealized gain on investment transactions...... .30 .30 .30
------- --------
Total from investment operations............................. .63 .61 .59
------- --------
LESS DISTRIBUTIONS
- -----------------------------------------------------------------
Dividends from net investment income............................. (.33) (.31) (.29)
Distributions from net realized gains............................ -- -- --
------- -------- -----------
Total distributions.......................................... (.33) (.31) (.29)
------- --------
Net asset value, end of period................................... $ 11.79 $ 11.79 $11.79
------- -------- -----------
------- -------- -----------
TOTAL RETURN (b):................................................ 5.52% 5.31% 5.18%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000).................................. $70,154 $100,069 $ 243
Average net assets (000)......................................... $70,018 $103,217 $ 186
Ratios to average net assets
Expenses, including distribution fees.......................... .76%(a)/(c) 1.16%(a)/(c) 1.41%(a)/(c)
Expenses, excluding distribution fees.......................... .66%(a)/(c) .66%(a)/(c) .66%(a)/(c)
Net investment income.......................................... 5.63%(a)/(c) 5.23%(a)/(c) 4.98%(a)/(c)
Portfolio turnover rate.......................................... 18% 18% 18%
<FN>
- ---------------
(a) Net of fee waiver
(b) Total return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day of the period reported and includes reinvestment of dividends and
distributions. Total returns for periods of less than a full year are not
annualized.
(c) Annualized.
</TABLE>

<PAGE>

PRUDENTIAL CALIFORNIA MUNICIPAL FUND
(CALIFORNIA SERIES)
Supplement dated September 3, 1996 to
Statement of Additional Information dated
November 1, 1995

THE FOLLOWING INFORMATION SUPPLEMENTS "TRUSTEES AND OFFICERS" IN THE STATEMENT
OF ADDITIONAL INFORMATION

As of July 26, 1996, the Trustees and officers of the Fund, as a group,
owned beneficially less than 1% of the outstanding shares of beneficial interest
of the California Series of the Fund.

As of July 26, 1996, Prudential Securities was record holder for other
beneficial owners of 3,738,168 Class A shares (or 57% of the outstanding Class A
shares), 4,670,137 Class B shares (or 62% of the outstanding Class B shares) and
37,815 Class C shares (or 83% of the outstanding Class C shares) of the Series.
In the event of any meetings of shareholders, Prudential Securities will
forward, or cause the forwarding of, proxy materials to the beneficial owners
for which it is the record holder.

As of July 26, 1996, the beneficial owners, directly or indirectly, of more
than 5% of the outstanding shares of any class (except Class Z shares) of
beneficial interest of the California Series were: George T. Vangilder, 1864
Doris Drive, Menlo Park, CA 94025-6102 who held 13,318 Class C shares (29.2%);
Natanmuay Soparpun, 1266 Lisbon Ln., Pebble Beach, CA 93953-3204 who held 2,681
Class C shares (5.9%); Margaret R. Reddell TTEE, Successor Trust FBO Ferd D. &
Margaret Reddell Family Trust, 13 Fountain Grove Circle, Napa, CA 94558-2463 who
held 4,030 Class C shares (8.8%); Mrs. Rita C. Smith TTEE, Rita C. Smith
Survivors Trust, 2222 Francisco Dr. #510-180, El Dorado Hills, CA 95762-3762 who
held 8,999 Class C shares (19.7%); Anong Jackson Trust, Anong Jackson TTEE, PBO
Anong Jackson, 1266 Lisbon Ln., Pebble Beach, CA 93953-3204 who held 2,658 Class
C shares (5.8%); and James M. Stone, Pearl C. Stone, Co-Ttees, 20 W. Monterey
Ave., Stockton, CA 95204-3602 who held 4,624 Class C shares (10.1%).

As of September 3, 1996, Prudential Mutual Fund Management, Inc., located at
One Seaport Plaza, New York, NY 10292, owned all of the Series' outstanding
Class Z shares and therefore controlled Class Z of the Series.

THE FOLLOWING INFORMATION SUPPLEMENTS "DISTRIBUTOR" IN THE STATEMENT OF
ADDITIONAL INFORMATION:

THE FOLLOWING INFORMATION SUPPLEMENTS "PURCHASE AND REDEMPTION OF FUND SHARES"
IN THE STATEMENT OF ADDITIONAL INFORMATION:

Shares of the Series may be purchased at a price equal to the next
determined net asset value per share plus a sales charge which, at the election
of the investor, may be imposed either (i) at the time of purchase (Class A
shares) or (ii) on a deferred basis (Class B or Class C shares). Class Z shares
of the Series are offered to a limited group of investors at net asset value
without any sales charges. See "Shareholder Guide--How to Buy Shares of the
Fund" in the Prospectus.

Each class of shares represents an interest in the same assets of the Series
and is identical in all respects except that (i) each class is subject to
different sales charges and distribution and/or service fees (except for Class Z
shares, which are not subject to any sales charges and distribution and/or
service fees), which may affect performance, (ii) each class has exclusive
voting rights on any matter submitted to shareholders that relates solely to its
distribution arrangements and has separate voting rights on any matter submitted
to shareholders in which the interests of one class differ from the interests of
any other class, (iii) each class has a different exchange privilege, (iv) only
Class B shares have a conversion feature and (v) Class Z shares are offered for
sale to a limited group of investors. See "Distributor" and "Shareholder
Investment Account--Exchange Privilege."

<PAGE>

SPECIMEN PRICE MAKE-UP

Under the current distribution arrangements between the Fund and the
Distributor, Class A shares are sold with a maximum sales charge of 3% and Class
B*, Class C* and Class Z** shares are sold at net asset value. Using the Series'
net asset value at February 29, 1996, the maximum offering price of the Series'
shares is as follows:

<TABLE>
<S> <C>
CLASS A
Net asset value and redemption price per Class A share................................. $ 11.79
Maximum sales charge (3% of offering price)............................................ .36
-----------
Offering price to public............................................................... $ 12.15
-----------
-----------
CLASS B
Net asset value, offering price and redemption price per Class B share*................ $ 11.79
-----------
-----------
CLASS C
Net asset value, offering price and redemption price per Class C share*................ $ 11.79
-----------
-----------
CLASS Z
Net asset value, offering price and redemption price per Class Z share**............... $ 11.79
-----------
-----------
</TABLE>

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

* Class B and Class C shares are subject to a contingent deferred sales charge
on certain redemptions. See "Shareholder Guide--How to Sell Your
Shares--Contingent Deferred Sales Charges" in the Prospectus.

**Class Z shares did not exist at February 29, 1996.

THE FOLLOWING INFORMATION SUPPLEMENTS "SHAREHOLDER INVESTMENT ACCOUNT--EXCHANGE
PRIVILEGE" IN THE STATEMENT OF ADDITIONAL INFORMATION:

CLASS Z. Class Z shares may be exchanged for Class Z shares of other
Prudential Mutual Funds.

MF116C- (9/3/96)

<PAGE>

PORTFOLIO OF INVESTMENTS AS OF PRUDENTIAL CALIFORNIA MUNICIPAL FUND
FEBRUARY 29, 1996 (UNAUDITED) CALIFORNIA SERIES
- -----------------------------------------------------------------------------

<TABLE>
<CAPTION>
PRINCIPAL
MOODY'S INTEREST MATURITY AMOUNT VALUE
DESCRIPTION (a) RATING RATE DATE (000) (NOTE 1)

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

LONG-TERM INVESTMENTS--99.1%

- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>

Alameda Imprvt. Bond Act of 1915,
Marina Vlg. Assmt. Dist. 89-1 NR 7.55% 9/02/06 $ 1,700 $ 1,763,087
Marina Vlg. Assmt. Dist. 89-1 NR 7.65 9/02/06 1,120 1,163,669
Arcadia Unified Sch. Dist.,
Gen. Oblig., Ser. A, M.B.I.A. Aaa Zero 9/01/10 1,765 797,762
Gen. Oblig., Ser. A, M.B.I.A. Aaa Zero 9/01/14 1,370 484,199
Gen. Oblig., Ser. A, M.B.I.A. Aaa Zero 9/01/15 2,555 853,677
Gen. Oblig., Ser. A, M.B.I.A. Aaa Zero 9/01/16 1,225 383,082
Gen. Oblig., Ser. A, M.B.I.A. Aaa Zero 9/01/17 1,790 523,432
Bakersfield Pub. Fac. Corp., Cert. of Part., Wst. Wtr.
Treat. Plant, No. 3 Al 8.00 1/01/10 2,750(c) 2,978,195
Baldwin Park Pub. Fin. Auth. Rev. BBB(b) 7.05 9/01/14 1,020 1,092,716
Berkeley Hosp. Rev., Atla Bates Hosp. Corp. Baal 7.65 12/01/15 1,645(c) 1,879,774
Brea Pub. Fin. Auth. Rev., Sub. Tax Alloc. Redev.
Proj., Ser. C NR 8.10 3/01/21 5,000 5,308,900
Buena Park Cmnty. Redev. Agcy. Tax Allocation, Central Bus.
Dist. Proj. BBB+(b) 7.10 9/01/14 2,500 2,660,575
California St. Brd. Of Pub. Wks. Lease Rev., Univ. of
California at Santa Barbara, High Technology Facs., Ser. A Al 8.125 2/01/08 2,500(c) 2,750,675
California St. Brd. of Pub., Wks. Lease Rev., Ser. A Al 5.00 6/01/23 3,115 2,779,390
California St. Hlth. Facs. Fin. Auth. Rev.,
Episcopal Homes Foundation, Ser. A A(b) 7.70 7/01/18 2,500 2,703,100
Eskaton Properties A(b) 7.50 5/01/20 4,500(c) 5,090,040
California St. Hsg. Fin. Agcy. Rev., Sngl. Fam. Mtge., Ser A Aa Zero 2/01/15 8,420 1,347,958
California Statewide Cmnty. Dev. Corp.,
Children's Hosp., M.B.I.A. Aaa 4.75 6/01/21 2,265 2,003,438
Chula Vista Redev. Agcy., Bayfront Tax Alloc. BBB+(b) 7.625 9/01/24 4,500 5,026,455
Contra Costa Cnty., Spec. Tax Cmnty. Facs. Dist. No. 1991-1,
Pleasant Hill NR 8.125 8/01/16 1,300 1,387,152
Desert Hosp. Dist., Cert. of Part. AAA(b) 8.10 7/01/20 5,000(c) 5,871,050
East Palo Alto Sanit. Dist., Cert. of Part. NR 8.25 10/01/15 1,295 1,401,799
Fairfield Pub. Fin. Auth. Rev., Fairfield Redev.
Projs., Ser. A NR 7.90 8/01/21 4,200(c) 4,995,354
Fontana Cmnty. Facs., Dist. No. 2, Spec. Tax Rev., Ser. B NR 8.50 9/01/17 3,000 3,196,380
Foothill/Eastern Trans. Corridor Agcy.
Toll Rd. Rev., 1995-A Baa Zero 1/01/16 5,000 1,432,800
Toll Rd. Rev. Baa Zero 1/01/18 2,950 745,288
Kings Cnty. Wst. Mgmt. Auth., Solid Wst. Rev. BBB+(b) 7.20 10/01/14 1,225 1,326,871
Long Beach Redev. Agcy. Dist. No. 3, Spec. Tax Rev. NR 6.375 9/01/23 3,000 2,870,970
Los Angeles Cnty., Cert. of Part.,
Civic Ctr. Heating & Refrigeration Plant Al 8.00 6/01/10 2,000(c) 2,215,120
Correctional Facs. Proj., M.B.I.A. Aaa Zero 9/01/10 3,770 1,656,613
Solheim Lutheran Home Inc. A(b) 8.125 11/01/17 2,000(c) 2,182,100

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

See Notes to Financial Statements. 3

</TABLE>

<PAGE>

PORTFOLIO OF INVESTMENTS AS OF PRUDENTIAL CALIFORNIA MUNICIPAL FUND
FEBRUARY 29, 1996 (UNAUDITED) CALIFORNIA SERIES
- -----------------------------------------------------------------------------

- ----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
MOODY'S INTEREST MATURITY AMOUNT VALUE
DESCRIPTION (a) RATING RATE DATE (000) (NOTE 1)

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

Los Angeles Cnty., Hsg. Auth., Multifam. Mtge. Rev.,
Mayflower Gardens Proj., Ser. K, G.N.M.A. AAA(b) 8.875% 12/20/10 $2,100(c) $2,560,341
Los Angeles Conv. & Exhib. Ctr. Auth., Cert. of Part. Aaa 9.00 12/01/10 1,250(c)/(e) 1,681,800
La Canada Unified School Dist.,
Capital Apprec., F.G.I.C. Aaa Zero 8/01/12 1,600 640,832
Gen. Oblig., Tax Rev., F.G.I.C. Aaa Zero 8/01/13 1,680 631,042
Manhattan Beach California Unified School Dist.,
Capital Apprec., Ser. A, F.G.I.C. Aaa Zero 9/01/12 1,000 398,660
Capital Apprec., Ser. A, F.G.I.C. Aaa Zero 9/01/13 1,250 467,325
Capital Apprec., Ser. A, F.G.I.C. Aaa Zero 9/01/14 2,000 706,860
Capital Apprec., Ser. A, F.G.I.C. Aaa Zero 9/01/15 2,605 870,383
Met. Wtr. Dist. of Southern California,
Rev. Linked S.A.V.R.S. & R.I.B.S Aa 5.75 8/10/18 1,000 1,034,570
Waterworks Rev., Ser. A Aa 5.75 7/01/21 4,000 4,203,120
Waterworks Rev., Ser. B, M.B.I.A. Aaa 4.75 7/01/21 2,500 2,235,725
Mojave Desert & Solid Wst. Victor Valley Materials,
Recov. Fac. Baal 7.875 6/01/20 1,175 1,293,828
Orange Cnty. Loc. Trans. Auth., S.A.V.R.S. & R.I.B.S.,
A.M.B.A.C. Aaa 6.20 2/14/11 4,000 4,333,280
Orange Cnty. Loc. Trans., Auth. Linked S.A.V.R.S.
& R.I.B.S. Aa 6.20 2/14/11 1,500 1,591,650
Petaluma City Joint Union High School Dist.,
Capital Apprec., M.B.I.A. Aaa Zero 8/01/14 1,170 415,455
Capital Apprec., M.B.I.A. Aaa Zero 8/01/15 1,600 537,088
Capital Apprec., M.B.I.A. Aaa Zero 8/01/16 1,455 457,161
Capital Apprec., M.B.I.A. Aaa Zero 8/01/17 3,015 885,837
Puerto Rico Public Bldgs. Auth. Rev., Govt. Facs., Ser. A,
A.M.B.A.C. Aaa 5.50 7/01/25 6,000 5,939,160
Redding Elec. Sys. Rev., Cert. of Part., Reg. Linked
S.A.V.R.S. & R.I.B.S., M.B.I.A. Aaa 6.368(d) 7/01/22 3,550 3,964,427
Roseville City Sch. Dist., Ser A, F.G.I.C. Aaa Zero 8/01/10 1,230 558,494
San Bernadino Cnty., Cert. of Part., Med. Ctr. Fin. Proj. Baal 5.50 8/01/22 4,400 4,066,260
San Francisco City & Cnty.,
Pub. Utils. Comn. Wtr. Rev. Aa 8.00 11/01/11 2,000 2,172,940
Redev. Agcy., Lease Rev. A Zero 7/01/09 2,000 932,860
Santa Ana Tax Alloc., South Main St. Redev., M.B.I.A. Aaa 5.00 9/01/19 3,000 2,769,990
Santa Cruz Cnty. Pub. Fin. Auth. Rev., Tax Alloc.
Sub. Ln., Ser. B. AAA(b) 7.625 9/01/21 2,350(c) 2,678,859
Santa Margarita, Dana Point Auth., M.B.I.A.,
Impvt. Dists. 3, 3A, 4 & 4A. Ser. B Aaa 7.25 8/01/09 2,400 2,915,328
Impvt. Dists. 3, 3A, 4 & 4A, Ser. B Aaa 7.25 8/01/14 1,000 1,216,810
Impvt. Dists. 3, 3A, 4 & 4A. Ser. B Aaa 7.25 8/01/08 2,500 3,031,275
So. Orange Cnty. Pub. Fin. Auth.,
Foothill Area Proj., F.G.I.C. Aaa 8.00 8/15/08 750 961,642
Foothill Area Proj., F.G.I.C. Aaa 6.50 8/15/10 750 853,163
Spec. Tax Rev., M.B.I.A. Aaa 7.00 9/01/11 3,500 4,148,410
</TABLE>

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

4 See Notes to Financial Statements.

<PAGE>

PORTFOLIO OF INVESTMENTS AS OF PRUDENTIAL CALIFORNIA MUNICIPAL FUND
FEBRUARY 29, 1996 (UNAUDITED) CALIFORNIA SERIES
- ------------------------------------------------------------------------------

<TABLE>
<CAPTION>
PRINCIPAL
MOODY'S INTEREST MATURITY AMOUNT VALUE
DESCRIPTION (a) RATING RATE DATE (000) (NOTE 1)

- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>

Sonoma Cnty., Cert. of Part., Correctional Facs. Proj. NR 8.125% 6/01/12 $ 4,000(c) $ 4,336,040
South Tahoe Joint Pwr. Fin. Auth. Rfdg.,
Redev. Proj. No. 1, Ser. B BBB-(b) 6.25 10/01/20 1,000 997,440
Redev. Proj. No. 1, Ser. B BBB-(b) 6.00 10/01/28 2,100 2,010,309
Southern California Pub. Pwr. Auth.,
Proj. Rev. A 6.75 7/01/10 2,250 2,564,842
Proj. Rev. A 6.75 7/01/12 2,935 3,361,250
Proj. Rev., A 6.75 7/01/13 4,000 4,587,920
Proj. Rev., A.M.B.A.C. Aaa Zero 7/01/16 7,925(c) 2,526,728
Proj. Rev., A.M.B.A.C. Aaa 4.75 7/01/16 1,000 907,660
Transmission Proj. Rev. Rfdg., Ser. A, F.G.I.C. Aaa Zero 7/01/12 7,080(c) 2,871,577
Sulphur Springs Union Schl. Dist., Ser. A, M.B.I.A. Aaa Zero 9/01/09 2,000 961,140
Torrance Redev. Agcy., Rfdg. Tax. Alloc., Downtown Redev. Baa 7.125 9/01/21 1,580 1,679,287
Vacaville Cmnty. Redev. Agcy., Cmnty. Hsg. Fin. Multifamily A-(b) 7.375 11/01/14 1,110 1,189,076
Victor Valley Union High Sch. Dist.,
Gen. Oblig., M.B.I.A. Aaa Zero 9/01/09 2,075 997,183
Gen. Oblig., M.B.I.A. Aaa Zero 9/01/15 5,070 1,693,988
Virgin Islands Terr., Hugo Ins. Claims Fund Prog., Ser. 91 NR 7.75 10/01/06 835 909,632
Walnut Valley Unified School Dist., M.B.I.A. Aaa 6.00 8/01/15 1,870 2,006,211
Whittier Hlth. Fac. Rev., Presbyterian Interemnty., M.B.I.A. Aaa 6.25 6/01/09 2,240 2,483,488
Whittier Pub. Fin. Auth. Rev., Whittier Blvd. Redev.
Proj., Ser. A NR 7.50 9/01/14 825 859,485
------------
TOTAL INVESTMENTS--99.1%
(cost $154,653,056; Note 4) 168,969,452
Other assents in excess of liabilities--0.9% 1,496,585
------------
NET ASSETS--100% $170,466,037
============
- ----------------
(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.
G.N.M.A.--Government National Mortgage Association.
M.B.I.A.--Municipal Bond Insurance Association.
R.I.B.S.--Residual Interest Bonds.
S.A.V.R.S.--Select Auction Variable Rate Securities.
(b) Standard & Poor's Rating.
(c) Prerefunded issues are secured by escrowed cash and/or direct U.S. guaranteed obligations.
(d) Inverse floating rate bond. The coupon is inversely indexed to a floating interest rate. The rate shown
is the rate at period end.
(e) 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.

</TABLE>

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

See Notes to Financial Statements. 5

<PAGE>

STATEMENT OF ASSETS AND LIABILITIES PRUDENTIAL CALIFORNIA MUNICIPAL FUND
(UNAUDITED) CALIFORNIA SERIES
- -------------------------------------------------------------------------------

ASSETS FEBRUARY 29, 1996
-------------------
<S> <C>
Investments, at value (cost $154,653,056).................................................................. $168,969,452
Cash....................................................................................................... 129,694
Interest receivable........................................................................................ 2,478,436
Receivable for Series shares sold.......................................................................... 33,474
Due from broker - variation margin......................................................................... 10,125
Other assets............................................................................................... 3,709
-------------------
Total assets........................................................................................... 171,624,890
-------------------
LIABILITIES
Payable for Series shares reacquired....................................................................... 941,617
Dividends payable.......................................................................................... 104,055
Management fee payable..................................................................................... 62,221
Distribution fee payable................................................................................... 46,299
Deferred trustee's fees.................................................................................... 4,661
------------------
Total liabilities...................................................................................... 1,158,853
------------------
NET ASSETS................................................................................................. $170,466,037
------------------
------------------
Net assets were comprised of:
Shares of beneficial interest, at par.................................................................. $ 144,599
Paid-in capital in excess of par....................................................................... 159,348,943
------------------
159,493,542
Accumulated net realized loss on investments........................................................... (2,908,529
Net unrealized appreciation on investments............................................................. 13,881,020
------------------
Net assets, February 29, 1996.............................................................................. $170,466,037
------------------
------------------
Class A:
Net asset value and redemption price per share
($70,154,045 DIVIDED BY 5,949,988 shares of beneficial interest issued and outstanding).............. $11.79
Maximum sales charge (3.0% of offering price).......................................................... .36
------
Maximum offering price to public....................................................................... $12.15
------
------
Class B:
Net asset value, offering price and redemption price per share
($100,068,825 DIVIDED BY 8,489,243 shares of beneficial interest issued and outstanding)............. $11.79
------
------
Class C:
Net asset value, offering price and redemption price per share
($243,167 DIVIDED BY 20,629 shares of beneficial interest issued and outstanding).................... $11.79
------
------
</TABLE>

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

6 See Notes to Financial Statements.

<PAGE>

PRUDENTIAL CALIFORNIA MUNICIPAL FUND
CALIFORNIA SERIES
STATEMENT OF OPERATIONS
(UNAUDITED)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
SIX MONTHS
ENDED
NET INVESTMENT INCOME FEBRUARY 29, 1996
-----------------
<S> <C>
Income
Interest . . . . . . . . . . . . . $ 5,507,514
-----------------
Expenses
Management fee . . . . . . . . . . 431,186
Distribution fee--Class A. . . . . 34,818
Distribution fee--Class B. . . . . 256,633
Distribution fee--Class C. . . . . 695
Reports to shareholders. . . . . . 56,000
Transfer agent's fees and expenses 45,000
Custodian's fees and expenses. . . 37,000
Registration fees. . . . . . . . . 15,000
Legal fees and expenses. . . . . . 12,000
Audit fees and expenses. . . . . . 8,000
Trustees' fees . . . . . . . . . . 4,000
Miscellaneous. . . . . . . . . . . 4,331
-----------------
Total expenses . . . . . . . . 904,663
Less: Management fee waiver . . . . (43,119)
Custodian fee credit. . . . . (2,919)
-----------------
Net expenses . . . . . . . . . 858,625
-----------------
Net investment income . . . . . . . . 4,648,889
-----------------

REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on:
Investment transactions. . . . . . 2,318,851
Financial futures transactions . . (472,965)
-----------------
1,845,886
-----------------
Net change in unrealized appreciation on:
Investments. . . . . . . . . . . . 2,899,334
Financial futures contracts. . . . (320,688)
-----------------
2,578,646
-----------------
Net gain on investments. . . . . . . . 4,424,532
-----------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS. . . . . . . $ 9,073,421
=================
</TABLE>

PRUDENTIAL CALIFORNIA MUNICIPAL FUND
CALIFORNIA SERIES
STATEMENT OF CHANGES IN NET ASSETS
(UNAUDITED)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
INCREASE (DECREASE) FEBRUARY 29, AUGUST 31,
IN NET ASSETS 1996 1995
------------ -----------
<S> <C> <C>
Operations
Net investment income . . . . . . $4,648,889 $10,047,914
Net realized gain (loss) on
investment transactions. . . . 1,845,886 (198,389)
Net change in unrealized
appreciation of investments . . 2,578,646 2,510,222
------------ -----------
Net increase in net assets
resulting from operations . . . . 9,073,421 12,359,747
------------ -----------

Dividends and distributions (Note 1)
Dividends to shareholders from net
investment income
Class A . . . . . . . . . . . . . (1,959,738) (2,510,344)
Class B . . . . . . . . . . . . . (2,684,543) (7,533,552)
Class C . . . . . . . . . . . . . (4,608) (4,018)
------------ -----------
(4,648,889) (10,047,914)
------------ -----------
Series share transactions (net of
share conversions) (Note 5)
Net proceeds from shares sold . . 6,973,400 14,662,935
Net asset value of shares issued
in reinvestment of dividends
and distributions . . . . . . . 2,560,448 5,451,092
Cost of shares reacquired . . . . (15,915,298) (47,070,094)
------------ -----------
Net decrease in net assets from
Series share transactions . . . (6,381,450) (26,956,067)
------------ -----------
Total decrease . . . . . . . . . . . (1,956,918) (24,644,234)
NET ASSETS
Beginning of period . . . . . . . . . 172,422,955 197,067,189
------------ -----------
End of period . . . . . . . . . . . . $170,466,037 $172,422,955
============ ===========

</TABLE>

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

See Notes to Financial Statements. 7

<PAGE>

NOTES TO FINANCIAL STATEMENTS PRUDENTIAL CALIFORNIA MUNICIPAL FUND
(UNAUDITED) CALIFORNIA SERIES
- ------------------------------------------------------------------------------

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 POLICIES

The following is a summary of significant accounting policies 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, marker transactions in
comparable securities and various relationships between securities in
determining values. If market quotations are not readily available from such
pricing service, a security is valued at its fair value as determined under
procedures established by the Trustees.

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

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

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

SECURITIES TRANSACTIONS AND NET INVESTMENT INCOME: Securities transactions are
recorded on the trade date. Realized gains and losses on sales of securities
are calculated on the identified cost basis. Interest income is recorded on
the accrual basis. The Series amortizes premiums and original issue discount
paid on purchases of portfolio securities as adjustments to interest income.
Expenses are recorded on the accrual basis which may require the use of
certain estimates by management.

Net investment income (other than distribution fees) and 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.

CUSTODY FEE CREDITS: The Fund has an arrangement with its custodian bank,
whereby uninvested monies earn credits which reduce the fees charged by the
custodian.

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

<PAGE>

PRUDENTIAL CALIFORNIA MUNICIPAL FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CALIFORNIA SERIES
- ------------------------------------------------------------------------------

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 subadvisor's
services, 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 has
agreed to waive a portion (.05 of 1% of the Series' average daily net assets)
of its management fee, which amounted to $43,119 ($.003 per share). The Series
is not required to reimburse PMF for such waiver.

The Fund had distribution agreements with Prudential Mutual Fund Distributors,
Inc. ("PMFD"), which acts as the distributor of the Class A shares of the
Fund through January 1, 1996. Effective January 2, 1996, Prudential
Securities Incorporated ("PSI") became the distributor of the Class A shares
of the Fund and is servicing the Fund under the same terms and conditions as
under the arrangement with PMFD. PSI is also the distributor of the Class B
and Class C shares of the Fund. The Fund compensated PMFD and PSI 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.

Pursuant to the Class A, B and C Plans, the Fund compensated PSI, and PMFD for
the period September 1, 1995 through January 1, 1996 with respect to Class A
shares, 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 six months ended February 29, 1996.

PMFD and PSI have advised the Series that they have received approximately
$8,800 in front-end sales charges resulting from sales of Class A shares
during the six months ended February 29, 1996. From these fees, PMFD and PSI
paid such sales charges to Pruco Securities Corporation, an affiliated
broker-dealer, which in turn paid commissions to salespersons and incurred
other distribution costs.

PSI has advised the Series that for the six months ended February 29, 1996,
it received approximately $113,400 in contingent deferred sales charges
imposed upon certain redemptions by Class B and Class C 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 3. OTHER TRANSACTIONS WITH AFFILIATES

Prudential Mutual Fund Services, Inc. ("PMFS"), a wholly-owned subsidiary of
PMF, serves as the Fund's transfer agent. During the six months ended
February 29, 1996, the Series incurred fees of approximately $31,200 for the
services of PMFS. As of February 29, 1996, approximately $5,200 of such fees
were due to PMFS. Tranfer agent fees and expenses in the Statement of
Operations include certain out-of-pocket expenses paid to non-affiliates.
________________________________________________________________________________

NOTE 4. PORTFOLIO SECURITIES

Purchases and sales of portfolio securities of the Series, excluding short-term
investments, for the six months ended February 29, 1996 were $30,261,635 and
$37,191,382, respectively.

At February 29, 1996, the Series sold 81 financial futures contracts on U.S.
Treasury Bonds which expire in March 1996. The value at disposition of such
contracts was $9,737,720. The value of such contracts on February 29, 1996
was $9,302,344, thereby resulting in an unrealized loss of $435,376.

The cost basis of investments for federal income tax purposes was substantially
the same as for financial reporting purposes and, accordingly, at February 29,
1996 net unrealized appreciation on investments for federal income tax purposes
was $14,316,396 (gross unrealized appreciation--$15,025,174; gross
unrealized depreciation--$708,778).

For federal income tax purposes, the Series has a capital loss carryforward
as of August 31, 1996 of approximately $4,882,400 which expires in 2003.
________________________________________________________________________________

NOTE 5. CAPITAL

- -------------------------------------------------------------------------------
9

<PAGE>

NOTES TO FINANCIAL STATEMENTS PRUDENTIAL CALIFORNIA MUNICIPAL FUND
(UNAUDITED) CALIFORNIA SERIES
- ------------------------------------------------------------------------------

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.

The Fund has authorized an unlimited number of shares of beneficial interest for
each class at $.01 par value per share. A special exchange privilege is also
available for shareholders who qualify to purchase Class A shares at net
asset value.

Transactions in shares of beneficial interest for the six months ended
February 29, 1996 and the fiscal year ended August 31, 1995 were as follows:

Class A SHARES AMOUNT
- ------- ----------- ------------
<S> <C> <C>
Six months ended February 29, 1996:
Shares sold.......................... 225,054 $ 2,653,270
Shares issued in reinvestment of
dividends........................... 91,666 1,077,393
Shares reacquired.................... (619,069) (7,292,735)
----------- ------------
Net decrease in shares outstanding
before conversion................... (302,349) (3,562,072)
Shares issued upon conversion from
Class B............................. 301,484 3,605,755
----------- -----------
Net decrease in shares outstanding... (865) $ 43,683
=========== ===========
Year ended August 31, 1995:
Shares sold.......................... 378,328 $ 4,180,841
Shares issued in reinvestment of
dividends........................... 117,773 1,337,448
Shares reacquired.................... (1,225,036) (13,742,541)
----------- -----------
Net decrease in shares outstanding
before conversion................... (728,935) (8,224,252)
Shares issued upon conversion from
Class B 5,610,964 62,338,422
----------- -----------
Net increase in shares outstanding... $4,882,029 $54,114,170
=========== ===========

Class B
- -------
Six months ended February 29, 1996:
Shares sold.......................... 355,747 $ 4,194,044
Shares issued in reinvestment of
dividends........................... 125,962 1,479,353
Shares reacquired.................... (731,436) (8,604,259)
----------- -----------
Net decrease in shares outstanding
before conversion................... (249,727) (2,930,862)
Shares reacquired upon conversion
into Class A........................ (301,484) (3,605,755)
----------- -----------
Net decrease in shares outstanding... (551,211) $ (6,536,617)
=========== ===========

Year ended August 31, 1995:
Shares sold.......................... 928,019 $ 10,337,210
Shares issued in reinvestment of
dividends........................... 370,841 4,111,099
Shares reacquired.................... (3,028,920) (33,303,902)
----------- -----------
Net decrease in shares outstanding
before conversion................... (1,730,060) (18,855,593)

Shares reacquired upon conversion
into Class A........................ (5,610,964) (62,338,422)
----------- -----------
Net decrease in shares outstanding... (7,341,024) $(81,194,015)
=========== ===========

Class C
- -------
Six months ended February 29, 1996:
Shares sold.......................... 10,635 $ 126,086
Shares issued in reinvestment of
dividends........................... 314 3,702
Shares reacquired.................... (1,557) (18,304)
----------- -----------
Net increase in shares outstanding... 9,392 $ 111,484
=========== ===========

Year ended August 31, 1995:
Shares sold.......................... 13,073 $ 144,884
Shares issued in reinvestment of
dividends........................... 224 2,545
Shares reacquired.................... (2,078) (23,651)
----------- -----------
Net increase in shares outstanding... 11,219 $ 123,778
=========== ===========
</TABLE>
- --------------------------------------------------------------------------------
10

<PAGE>

Net asset value, beginning of period.. $ 11.49 $ 11.30 $ 12.16 $ 11.48 $11.01 $10.57
------- ------- ------- ------- ------ ------
INCOME FROM INVESTMENT OPERATIONS

Net investment income................. .33(a) .66(a) .65 .69 .70 .69

Net realized and unrealized gain
(loss) on investment transactions... .30 .19 (.74) .68 .47 .44
------- ------- ------- ------- ------ ------
Total from investment operations.... .63 .85 (.09) 1.37 1.17 1.13
------- ------- ------- ------- ------ ------
LESS DISTRIBUTIONS

Dividends from net investment income.. (.33) (.66) (.65) (.69) (.70) (.69)

Distributions from net realized
gains................................ -- -- (.12) -- -- --
------- ------- ------- ------- ------ ------
Total distributions................. (.33) (.66) (.77) (.69) (.70) (.69)
------- ------- ------- ------- ------ ------
Net asset value, end of period........ $ 11.79 $ 11.49 $ 11.30 $12.16 $11.48 $11.01
------- ------- ------- ------- ------ ------
------- ------- ------- ------- ------ ------

TOTAL RETURN(b):...................... 5.52% 7.90% (0.80)% 12.30% 10.95% 10.98%

RATIOS/SUPPLEMENTAL DATA:

Net assets, end of period (000)....... $70,154 $68,403 $12,082 $11,116 $5,388 $4,188

Average net assets (000).............. $70,018 $42,617 $11,812 $ 7,728 $4,322 $2,748

Ratios to average net assets:

Expenses, including distribution
fees............................... .76%(a)/(c) .73%(a) .73% .77% .82% .88%

Expenses, excluding distribution
fees............................... .66%(a)/(c) .63%(a) .63% .67% .72% .78%

Net investment income............... 5.63%(a)/(c) 5.90%(a) 5.57% 5.82% 6.25% 6.37%

Portfolio turnover rate............... 18% 44% 69% 43% 53% 53%

</TABLE>

- ------------
(a) Net of fee waiver.

(b) Total return does not consider the effects of sales loads. Total return
is calculated assuming a purchase of shares on the first day and a sale
on the last day of each period reported and includes reinvestment of
dividends and distributions. Total returns for periods of less than a
full year are not annualized.

See Notes to Financial Statements.

<PAGE>

PRUDENTIAL CALIFORNIA MUNICIPAL FUND
FINANCIAL HIGHLIGHTS (UNAUDITED) CALIFORNIA SERIES
- --------------------------------------------------------------------------------------------------------------
Class B Class C
------------------------------------------------------------------ ---------------------------------
Six Six August 1,
Months Months Year 1994(d)
Ended Year Ended August 31, Ended Ended through
February 29, ---------------------------------------------------- February 29, August 31, August 31,
1996 1995 1994 1993 1992 1991 1996 1995 1994
----------- -------- -------- -------- -------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value,
beginning of period.... $ 11.49 $ 11.29 $ 12.15 $ 11.48 $ 11.01 $ 10.57 $ 11.49 $ 11.29 $ 11.32
-------- -------- -------- -------- -------- -------- -------- -------- --------
Income from investment
operations
Net investment income.... .31(a) .62(a) .60 .64 .66 .64 .29(a) .59(a) .04
Net realized and
unrealized gain
(loss) on investment
transactions............ .30 .20 (.74) .67 .47 .44 .30 .20 (.03)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Total from investment
operations.......... .61 .82 (.14) 1.31 1.13 1.08 .59 .79 .01
-------- -------- -------- -------- -------- -------- -------- -------- --------
Less distributions
Dividends from net
investment income...... (.31) (.62) (.60) (.64) (.66) (.64) (.29) (.59) (.04)
Distributions from
net realized gains..... -- -- (.12) -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- -------- --------
Total distributions... (.31) (.62) (.72) (.64) (.66) (.64) (.29) (.59) (.04)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net asset value,
end of period.......... $ 11.79 $ 11.49 $ 11.29 $ 12.15 $ 11.48 $ 11.01 $ 11.79 $ 11.49 $ 11.29
-------- -------- -------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- -------- -------- --------
TOTAL RETURN(b)......... 5.31% 7.56% (1.20)% 11.74% 10.52% 10.54% 5.18% 7.29% .05%
RATIOS/SUPPLEMENTAL DATA:
Net assets,
end of period (000).... $100,069 $103,891 $184,985 $207,634 $177,861 $169,190 $243 $129 $200(e)
Average net
assets (000)........... $103,217 $136,275 $201,556 $190,944 $172,495 $169,220 $186 $ 76 $199(e)
Ratios to average
net assets:
Expenses, including
distribution fees.... 1.16%(a)/(c) 1.13%(a) 1.13% 1.17% 1.22% 1.28% 1.41%(a)/(c) 1.38%(a) 1.71%(c)
Expenses, excluding
distribution fees.... .66%(a)/(c) .63%(a) .63% .67% .72% .78% .66%(a)/(c) .63%(a) .96%(c)
Net investment
income............... 5.23%(a)/(c) 5.50%(a) 5.17% 5.44% 5.85% 5.98% 4.98%(a)/(c) 5.25%(a) 4.87%(c)
Portfolio turnover
rate.................. 18% 44% 69% 43% 53% 53% 18% 44% 69%

</TABLE>

- ------------
(a) Net of fee waiver.

(d) Commencement of offering of Class C shares.

(e) Figures are actual and not rounded to the nearest thousand.

<PAGE>

PRUDENTIAL CALIFORNIA MUNICIPAL FUND

(CALIFORNIA INCOME SERIES)

(CLASS Z SHARES)

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

PROSPECTUS DATED SEPTEMBER 3, 1996

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

Prudential California Municipal Fund (the "Fund") (California Income Series)
(the "Series") is one of three series of an open-end, management investment
company, or mutual fund. This Series is diversified and seeks to provide the
maximum amount of income that is exempt from California State and federal income
taxes consistent with the preservation of capital. The Series will invest
primarily in investment grade municipal obligations but may also invest a
portion of its assets in lower-quality municipal obligations or in non-rated
securities which, in the opinion of the Fund's investment adviser, are of
comparable quality. Subject to limitations described herein, the Series may
utilize derivatives, including buying and selling futures contracts and options
thereon for the purpose of hedging its portfolio securities. There can be no
assurance that the Series' investment objective will be achieved. See "How the
Fund Invests--Investment Objective and Policies." The Fund's address is One
Seaport Plaza, New York, New York 10292, and its telephone number is (800)
225-1852.

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

This Prospectus sets forth concisely the information about the Fund and the
California Income Series that a prospective investor should know before
investing. Additional information about the Fund has been filed with the
Securities and Exchange Commission in a Statement of Additional Information
dated November 1, 1995, which information is incorporated herein by reference
(is legally considered a part of this Prospectus) and is available without
charge upon request to the Fund at the address or telephone number noted above.

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

INVESTORS ARE ADVISED TO READ THIS PROSPECTUS AND RETAIN IT FOR FUTURE
REFERENCE.

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

<PAGE>

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

FUND EXPENSES

<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES CLASS Z SHARES
----------------
<S> <C>
Maximum Sales Load Imposed on Purchases (as a percentage of offering price)..................... None
Maximum Sales Load or Deferred Sales Load Imposed on Reinvested Dividends....................... None
Deferred Sales Load (as a percentage of original purchase price or redemption proceeds,
whichever is lower)........................................................................... None
Redemption Fees................................................................................. None
Exchange Fee.................................................................................... None

<CAPTION>
ANNUAL FUND OPERATING EXPENSES* CLASS Z SHARES
----------------
<S> <C>
(as a percentage of average net assets)
Management Fees (Before Waiver)................................................................. .50%
12b-1 Fees...................................................................................... None
Other Expenses.................................................................................. .21%
----------------
Total Fund Operating Expenses (Before Waiver)................................................... .71%
----------------
----------------
</TABLE>

<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end
of each time period:....................................... $ 7 $ 23 $ 40 $ 88
The above example is based on expenses expected to have been incurred if Class Z shares had been in existence
throughout the fiscal year ended August 31, 1995. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
The purpose of this table is to assist investors in understanding the various costs and expenses that an investor
in Class Z shares of the California Income Series will bear, whether directly or indirectly. For more complete
descriptions of the various costs and expenses, see "How the Fund is Managed." "Other Expenses" includes operating
expenses of the Series, such as Trustees' and professional fees, registration fees, reports to shareholders and
transfer agency and custodian fees.
</TABLE>

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

*Estimated based on expenses expected to have been incurred if Class Z shares
had been in existence throughout the fiscal year ended August 31, 1995,
without taking into account the management fee waiver. At the current level of
management fee waiver (.425%), Management Fees would be .075% and Total Fund
Operating Expenses would be .285% of average net assets of the Series' Class Z
shares.

2
<PAGE>

THE FOLLOWING INFORMATION REPLACES THE INFORMATION UNDER "SHAREHOLDER
GUIDE--HOW TO BUY SHARES OF THE FUND" AND "SHAREHOLDER GUIDE--HOW TO SELL YOUR
SHARES" IN THE RETAIL CLASS PROSPECTUS:

Class Z shares of the Series are available for purchase by participants
(other than benefit plans and individual retirement accounts) in any fee-based
program sponsored by Prudential Securities or its affiliates which includes
mutual funds as investment options and for which the Series is an available
option.

THE FOLLOWING INFORMATION SUPPLEMENTS "SHAREHOLDER GUIDE--HOW TO EXCHANGE
YOUR SHARES" IN THE RETAIL CLASS PROSPECTUS:

Class Z shareholders of the Series may exchange their Class Z shares for
Class Z shares of another Series or other Prudential Mutual Funds on the basis
of relative net asset value. Shareholders who qualify to purchase Class Z shares
(other than participants in any fee-based program) will have their Class B and
Class C shares which are not subject to contingent deferred sales charges and
their Class A shares exchanged for Class Z shares on a quarterly basis.
Participants (other than benefit plans and individual retirement accounts) in
any fee-based program for which the Series is an available option will have
their Class A shares, if any, exchanged for Class Z shares when they elect to
have those assets become a part of the fee-based program. Upon leaving the
program (whether voluntarily or not), such Class Z shares (and, to the extent
provided for in the program, Class Z shares acquired through participation in
the program) will be exchanged for Class A shares at net asset value. See
"Shareholder Guide--How to Exchange Your Shares--Special Exchange Privilege."

THE FOLLOWING INFORMATION SUPPLEMENTS "HOW THE FUND IS MANAGED--DISTRIBUTOR"
IN THE RETAIL CLASS PROSPECTUS:

THE FOLLOWING INFORMATION SUPPLEMENTS "TAXES, DIVIDENDS AND DISTRIBUTIONS"
IN THE RETAIL CLASS PROSPECTUS:

THE INFORMATION ABOVE ALSO SUPPLEMENTS THE INFORMATION UNDER "FUND
HIGHLIGHTS" IN THE RETAIL CLASS PROSPECTUS AS APPROPRIATE.

3
<PAGE>

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

TABLE OF CONTENTS

<TABLE>
<S> <C>
PAGE
----
FUND HIGHLIGHTS...................................................... 2
Risk Factors and Special Characteristics........................... 2
FUND EXPENSES........................................................ 4
FINANCIAL HIGHLIGHTS................................................. 5
HOW THE FUND INVESTS................................................. 8
Investment Objective and Policies.................................. 8
Other Investments and Policies..................................... 13
Investment Restrictions............................................ 13
HOW THE FUND IS MANAGED.............................................. 14
Manager............................................................ 14
Distributor........................................................ 14
Portfolio Transactions............................................. 17
Custodian and Transfer and Dividend Disbursing Agent............... 17
HOW THE FUND VALUES ITS SHARES....................................... 17
HOW THE FUND CALCULATES PERFORMANCE.................................. 18
TAXES, DIVIDENDS AND DISTRIBUTIONS................................... 18
GENERAL INFORMATION.................................................. 21
Description of Shares.............................................. 21
Additional Information............................................. 22
SHAREHOLDER GUIDE.................................................... 22
How to Buy Shares of the Fund...................................... 22
Alternative Purchase Plan.......................................... 23
How to Sell Your Shares............................................ 25
Conversion Feature--Class B Shares................................. 28
How to Exchange Your Shares........................................ 28
Shareholder Services............................................... 29
DESCRIPTION OF SECURITY RATINGS...................................... A-1
THE PRUDENTIAL MUTUAL FUND FAMILY.................................... B-1
</TABLE>

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

MF146Z 444-1272

CUSIP No.: Class Z:

PROSPECTUS
SEPTEMBER 3,
1996

PRUDENTIAL

CALIFORNIA
MUNICIPAL FUND

(CALIFORNIA INCOME SERIES)

(CLASS Z SHARES)

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

[LOGO]

<PAGE>
- --------------------------------------------------------------------------------

PRUDENTIAL CALIFORNIA MUNICIPAL FUND
(CALIFORNIA INCOME SERIES)
Supplement dated September 3, 1996 to
Prospectus dated November 1, 1995

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

THE FOLLOWING INFORMATION SUPPLEMENTS "GENERAL INFORMATION--DESCRIPTION OF
SHARES" IN THE PROSPECTUS:

THE FOLLOWING INFORMATION SUPPLEMENTS "HOW THE FUND CALCULATES PERFORMANCE" IN
THE RETAIL CLASS PROSPECTUS:

MF146C- (9/3/96)

<PAGE>

THE FOLLOWING INFORMATION SUPPLEMENTS "FINANCIAL HIGHLIGHTS" IN THE

PROSPECTUS:

FINANCIAL HIGHLIGHTS
(for a share outstanding throughout the period indicated)
(Class A, Class B and Class C shares)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
FEBRUARY 29, 1996 (UNAUDITED)
-------------------------------------
CLASS A CLASS B CLASS C
-------- ------- ----------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.................................. $ 10.28 $10.28 $10.28
-------- ------- ----------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------
Net investment income................................................. .32 .30 .28
Net realized and unrealized gain on investment transactions........... .29 .29 .29
-------- ------- ----------
Total from investment operations.................................. .61 .59 .57
-------- ------- ----------
LESS DISTRIBUTIONS
- ----------------------------------------------------------------------
Dividends from net investment income.................................. (.32) (.30 ) (.28)
Distributions from net realized gains................................. -- -- --
-------- ------- ----------
Total distributions............................................... (.32) (.30 ) (.28)
-------- ------- ----------
Net asset value, end of period........................................ $ 10.57 $10.57 $10.57
-------- ------- ----------
-------- ------- ----------
TOTAL RETURN (c):..................................................... 5.97% 5.76 % 5.63%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)....................................... $164,052 $32,927 $3,673
Average net assets (000).............................................. $165,597 $30,911 $2,967
Ratios to average net assets (b):
Expenses, including distribution fees............................... .37%(a) .77 %(a) 1.02%(a)
Expenses, excluding distribution fees............................... .27%(a) .27 %(a) .27%(a)
Net investment income............................................... 6.08%(a) 5.68 %(a) 5.43%(a)
Portfolio turnover rate............................................... 16% 16 % 16%
<FN>
- ---------------
(a) Annualized.
(b) Net of expense subsidy and/or fee waiver.
(c) 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 the period reported and includes reinvestment of dividends and
distributions. Total returns for periods of less than a full year are not
annualized.
</TABLE>

<PAGE>

PRUDENTIAL CALIFORNIA MUNICIPAL FUND
(CALIFORNIA INCOME SERIES)
Supplement dated September 3, 1996 to
Statement of Additional Information dated
November 1, 1995

THE FOLLOWING INFORMATION SUPPLEMENTS "TRUSTEES AND OFFICERS" IN THE STATEMENT
OF ADDITIONAL INFORMATION:

As of July 26, 1996, the Trustees and officers of the Fund, as a group,
owned beneficially less than 1% of the outstanding shares of beneficial interest
of The California Income Series of the Fund.

As of July 26, 1996, Prudential Securities was record holder for other
beneficial owners of 13,046,943 Class A shares (or 84% of the outstanding Class
A shares), 3,096,542 Class B shares (or 91% of the outstanding Class B shares)
and 334,941 Class C shares (or 93% of the outstanding Class C shares) of the
Series. In the event of any meetings of shareholders, Prudential Securities will
forward, or cause the forwarding of, proxy materials to the beneficial owners
for which it is the record holder.

As of July 26, 1996, the beneficial owners, directly or indirectly, of more
than 5% of the outstanding shares of any class (except Class Z shares) of
beneficial interest of The California Income Series were: Donald Aluisi &
Dolores K. Aluisi JT TEN, 1269 E. Copper Ave., Fresno, CA 93720-3502 who held
77,290 Class C shares (21.4%); Zoe Ann On TTEE, 740 Brewington Ave.,
Watsonville, CA 95076-3260 who held 30,729 Class C shares (8.5%); and Markarian
Farms, 10278 South Elm Ave., Fresno, CA 93706-9221 who held 39,250 Class C
shares (10.9%)

THE FOLLOWING INFORMATION SUPPLEMENTS "DISTRIBUTOR" IN THE STATEMENT OF
ADDITIONAL INFORMATION:

THE FOLLOWING INFORMATION SUPPLEMENTS "PURCHASE AND REDEMPTION OF FUND SHARES"
IN THE STATEMENT OF ADDITIONAL INFORMATION:

<PAGE>

SPECIMEN PRICE MAKE-UP

Under the current distribution arrangements between the Fund and the
Distributor, Class A shares are sold with a maximum sales charge of 3% and Class
B*, Class C* and Class Z** shares are sold at net asset value. Using the Fund's
net asset value at February 29, 1996, the maximum offering price of the Fund's
shares is as follows:

<TABLE>
<CAPTION>
CLASS A
<S> <C>
Net asset value and redemption price per Class A share................................. $ 10.57
Maximum sales charge (3% of offering price)............................................ .33
-----------
Offering price to public............................................................... $ 10.90
-----------
-----------
CLASS B
Net asset value, offering price and redemption price per Class B share*................ $ 10.57
-----------
-----------
CLASS C
Net asset value, offering price and redemption price per Class C share*................ $ 10.57
-----------
-----------
CLASS Z
Net asset value, offering price and redemption price per Class Z share**............... $ 10.57
-----------
-----------
</TABLE>

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

**Class Z shares did not exist prior to February 29, 1996.

THE FOLLOWING INFORMATION SUPPLEMENTS "SHAREHOLDER INVESTMENT ACCOUNT--EXCHANGE
PRIVILEGE" IN THE STATEMENT OF ADDITIONAL INFORMATION:

CLASS Z. Class Z shares may be exchanged for Class Z shares of other
Prudential Mutual Funds.

MF146C- (9/3/96)

<PAGE>

PORTFOLIO OF INVESTMENTS AS OF FEBRUARY 29, 1996 PRUDENTIAL CALIFORNIA
(UNAUDITED) MUNICIPAL FUND
CALIFORNIA INCOME SERIES
- ------------------------------------------------------------------------------

<TABLE>
<CAPTION>
PRINCIPAL
DESCRIPTION (a) MOODY'S INTEREST MATURITY AMOUNT VALUE
RATING RATE DATE (000) (NOTE 1)
- -----------------------------------------------------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS-98.6%
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alameda Cmnty. Facs. Dist., Spec. Tax Rev. No. 1 NR 7.75% 9/01/19 $ 3,000 $ 3,159,960
Arcadia Unified Sch. Dist.,
Gen. Oblig., Ser. A, M.B.I.A. Aaa Zero 9/01/09 1,200 576,684
Gen. Oblig., Ser. A, M.B.I.A. Aaa Zero 9/01/11 1,875 796,312
Gen. Oblig., Ser. A, M.B.I.A. Aaa Zero 9/01/12 2,045 815,260
Gen. Oblig., Ser. A, M.B.I.A. Aaa Zero 9/01/13 1,205 450,501
Gen. Oblig., Ser. A, M.B.I.A. Aaa Zero 9/01/18 1,940 524,169
Assoc. Of Bay Area Govt's. Fin. Auth., Cert. of Part.,
Ser. A. Channing House A(e) 7.125 1/01/21 1,500 1,626,585
Brea Pub. Fin. Auth. Rev., Tax Alloc. Redev. Proj., Ser. C NR 8.10 3/01/21 3,000 3,185,340
Buena Park Cmnty. Redev. Agcy., Cent. Bus. Dist. Proj. NR 7.80 9/01/14 3,325 3,485,531
California St. Dept. Wrr. Res. Rev., Central Valley Proj. Aa 7.00 12/01/12 1,000 1,184,660
California St. Edl. Facs. Auth. Rev., Chapman College Baa 7.50 1/01/18 600 645,738
California St. Gen. Oblig., A.M.B.A.C. Aaa 6.50 9/01/10 1,250 1,433,413
California Statewide Cmnty. Dev. Rev., Cert. Of Part.,
Villaview Cmnty. Hosp. A(e) 7.00 9/01/09 1,000 1,089,240
Carson City Ltd. Oblig. Impvt. Rev., Assmt. Dist. NR 7.375 9/02/22 2,445 2,549,206
Chula Vista Cmnty. Redev. Agcy.,
Ref. Tax Alloc. Sr. Bayfront, Ser. A BBB+(e) 7.625 9/01/24 2,500 2,792,475
Ref. Tax Alloc. Sub. Bayfront, Ser. C NR 8.25 5/01/24 2,500 2,774,725
Contra Costa Cnty., Spec. Tax, Cmnty. Facs. Dist. No. 91-1 NR 8.125 8/01/16 1,520 1,621,901
Corona Cert. of Part., Vista Hosp. Sys. Inc., Ser. C NR 8.375 7/01/11 2,000 1,998,260
Delano, Cert. of Part., Reg. Med. Ctr., Ser. 92A NR 9.25 1/01/22 2,910 3,312,540
Desert Hosp. Dist., Cert. of Part. AAA(e) 8.10 7/01/20 2,000(c) 2,348,420
East Palo Alto San. Dist., Cert. of Part. NR 8.25 10/01/15 500 541,235
El Dorado Cnty., Spec. Tax, Cmnty. Facs. Dist. No. 92-1 NR 8.25 9/01/24 2,000 2,219,980
Fairfield Impvt. Bond Act of 1915, No. Cordella Impvt. Dist. NR 8.00 9/02/11 690 715,337
Fairfield Pub. Fin. Auth. Rev., Fairfield Redev.
Projs., Ser. A NR 7.90 8/01/21 2,500(c) 2,973,425
Folsom Spec. Tax. Cmnty. Facs. Dist. No. 2 NR 7.70 12/01/19 3,130 3,278,487
Fontana Pub. Fin. Auth., N. Fontana Tax Alloc. Rev. NR 7.65 12/01/09 1,575(c) 1,862,453
Fontana Spec. Tax, Cmnty. Facs. Dist. No. 2, Ser. B NR 8.50 9/01/17 3,590 3,825,001
Foothill/Eastern Trans. Corr. Agcy., Toll Rd., Ser. A Baa Zero 1/01/20 10,000 2,201,700
Gateway Impv. Auth. Rev., Marin City Cmnty. Facs. Dist.-A NR 7.75 9/01/25 2,100 2,170,581
Kings Cnty. Wst. Mgmt. Auth., Solid Wst. Rev. BBB+(e) 7.20 10/01/14 1,275 1,381,029
La Quinta Redev. Agcy.,
Tax Alloc., M.B.I.A. Aaa 7.30 9/01/10 1,000 1,228,250
Tax Alloc., M.B.I.A. Aaa 7.30 9/01/11 1,000 1,226,490
Long Beach Redev. Agcy. Hsg.,
Multifamily Hsg. Rev., Pacific Court Apts. NR 6.80 9/01/13 1,000 807,930
Multifamily Hsg. Rev., Pacific Court Apts. NR 6.95 9/01/23 1,500 1,190,175
- -----------------------------------------------------------------------------------------------------------------------------

</TABLE>

- --------------------------------------------------------------------------------
See Notes to Financial Statements. 3

<PAGE>
PORTFOLIO OF INVESTMENTS AS OF FEBRUARY 29, 1996 PRUDENTIAL CALIFORNIA
(UNAUDITED) MUNICIPAL FUND
CALIFORNIA INCOME SERIES
- ------------------------------------------------------------------------------

PRINCIPAL
DESCRIPTION (a) MOODY'S INTEREST MATURITY AMOUNT VALUE
RATING RATE DATE (000) (NOTE 1)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Los Angeles Cmnty. Facs. Dist.,
No. 3, Spec. Tax NR 7.125% 9/01/20 $ 2,500 $2,487,075
No. 5, Spec. Tax NR 7.25 9/01/19 1,500 1,556,925
Los Angeles Dept. of Wtr. & Pwr., Waterworks Rev. Aa 4.50 5/15/23 1,900 1,586,519
Lynwood Pub. Fin. Auth. Rev., Wtr. Sys. Impvt. Proj. BBB-(e) 6.50 6/01/21 1,500 1,518,915
Met. Wtr. Dist. of Southern California,
Waterworks Rev. Aa 5.75 6/10/18 1,000 1,034,570
Waterworks Rev., Ser. A Aa 5.75 7/01/21 2,000 2,101,560
Mojave Desert & Mtn Solid Waste Joint Pwrs Authority
California Project Revenue Baa1 7.875 6/01/20 1,175 1,293,828
Ontario California Impvt. Bond Act of 1915, Assmt.
Dist. 100C- Com. CTR. III NR 8.00 9/02/11 1,410 1,461,705
Orange Cnty. Cmnty. Facs. Dist., Spec. Tax Rev.,
No. 87-4, Foothill Ranch, Ser. A NR 7.375 8/15/18 3,500(c) 4,137,175
No. 87-5B, Rancho Santa Margarita NR 7.50 8/15/17 1,750(c) 2,074,240
No. 88-1, Aliso Viejo, Ser. A AAA(e) 7.15 8/15/06 805(c) 943,943
Orange Cnty. Cmnty. Loc. Trans. Auth.,
Sales Tax Rev. Aa 6.20 2/14/11 1,500 1,591,650
Sales Tax Rev., A.M.B.A.C. Aaa 6.20 2/14/11 6,000 6,499,920
Perris Sch. Dist., Cert. of Part., Cap. Projs. NR 7.75 3/01/21 1,500(c) 1,756,560
Puerto Rico Hwy. & Trans. Auth. Rev., Ser. Q AAA(e) 7.75 7/01/10 2,100(d) 2,437,806
Puerto Rico Pub. Bldgs. Auth., Gtd. Pub. Ed.
& Hlth. Facs., Ser. J Baa1 Zero 7/01/06 1,605 944,960
Redding California Elec. Sys. Rev., Cert. of Part., M.B.I.A. Aaa 6.368(f) 7/01/22 3,750 4,187,775
Richmond Redev. Agcy. Rev., Multifamily Bridge
Affordable Hsg. NR 7.50 6/01/23 2,500 2,514,400
Riverside Cnty. Cert. of Part., Air Force Vlg. West NR 8.125 6/15/20 3,000 3,144,810
Riverside Cnty. Impvt. Bond Act 1915, Assmt.
Dist. 159, Ser. A NR 7.625 9/02/14 2,500 2,578,675
Rocklin Stanford Ranch Cmnty. No. 3, Facs. Dist., Spec. Tax NR 8.10 11/01/15 1,000 1,178,400
Rocklin Unified Sch. Dist., Gen. Oblig.,
Cap. Apprec., Ser. C, M.B.I.A. Aaa Zero 8/01/12 1,110 444,577
Cap. Apprec., Ser. C, M.B.I.A. Aaa Zero 8/01/13 1,165 437,597
Cap. Apprec., Ser. C, M.B.I.A. Aaa Zero 8/01/14 1,220 433,210
Cap. Apprec., Ser. C, M.B.I.A. Aaa Zero 8/01/15 1,285 431,349
Cap. Apprec., Ser. C, M.B.I.A. Aaa Zero 8/01/16 1,400 439,880
Roseville Jr. Union H.S. Dist., Ser. B, F.G.I.C. Aaa Zero 6/01/20 5,000 1,220,250
Sacramento City, Fin. Auth.,
Cap. Apprec., Tax Alloc. Comb. Proj., Ser. B, M.B.I.A. Aaa Zero 11/01/16 5,700 1,765,746
Cap. Apprec., Tax Alloc. Comb. Proj., Ser. B, M.B.I.A. Aaa Zero 11/01/17 5,695 1,649,500
Sacramento Cnty. Spec. Tax Cmnty.,
Dist. No. 1, Elliot Ranch NR 8.20 8/01/21 2,000 2,121,640
Dist. No. 1, Laguna Creek Ranch NR 8.25 12/01/20 1,000 1,075,000
Sacramento Spec. Purpose Fac., Y.M.C.A. of Sacramento NR 7.25 12/01/18 2,200 2,244,066
- -----------------------------------------------------------------------------------------------------------------------------

</TABLE>

- --------------------------------------------------------------------------------
4 See Notes to Financial Statements.

PRINCIPAL
DESCRIPTION (a) MOODY'S INTEREST MATURITY AMOUNT VALUE
RATING RATE DATE (000) (NOTE 1)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
San Bernardino Cnty., Cert. of Part.,
Med. Ctr. Fin. Proj. Baa1 5.50% 8/01/22 $4,540 $4,195,641
Med. Ctr. Fin. Proj. Baa1 5.50 8/01/24 6,750 6,097,005
San Diego Cnty. Wtr. Auth., Wtr. Rev., Cert. of
Part., F.G.I.C. Aaa 5.681(f) 4/23/08 2,000 2,096,460
San Diego Spec. Tax, Cmnty. Facs. Dist. No. 1, Ser. B NR 7.10 9/01/20 2,000 1,997,680
San Francisco City & Cnty.,
Redev. Agcy., Lease Rev. A Zero 7/01/06 1,500 861,180
Redev. Agcy., Lease Rev. A Zero 7/01/07 2,250 1,209,488
San Joaquin Hills Trans. Corridor Agcy., Toll Road Rev. NR Zero 1/01/11 2,000 695,140
San Jose Redev. Proj., M.B.I.A. Aaa 6.00 8/01/15 3,000 3,203,520
Santa Margarita, Dana Point Auth.,
Impvt. Dist., Ser. A, M.B.I.A. Aaa 7.25 8/01/09 905 1,099,322
Impvt. Dist., Ser. B, M.B.I.A. Aaa 7.25 8/01/14 1,000 1,216,810
South Orange Cnty., Pub. Fin. Auth.,
Foothill Area Proj., F.G.I.C. Aaa 8.00 8/15/08 750 961,642
Foothill Area Proj., F.G.I.C. Aaa 6.50 8/15/10 750 853,163
Spec. Tax Rev., M.B.I.A. Aaa 7.00 9/01/10 2,535 3,012,974
South San Francisco Redev., Agcy., Tax Alloc.,
Gateway Redev. Proj. NR 7.60 9/01/18 2,375 2,513,463
South Tahoe Jr. Pwrs. Fin. Auth., Redev. Proj.
Area No. 1, Ser. B BBB-(e) 6.25 10/01/20 1,000 997,440
Southern California Pub. Pwr. Auth.,
Proj. Rev. A 6.75 7/01/10 6,250 7,124,562
Proj. Rev. A 6.75 7/01/13 3,000 3,440,940
Proj. Rev., A.M.B.A.C. Aaa Zero 7/01/16 8,400(c) 2,678,172
Proj. Rev., A.M.B.A.C. Aaa 4.75 7/01/16 1,500 1,361,490
Sulphur Springs Unified Sch. Dist., Ser. A, M.B.I.A. Aaa Zero 9/01/11 3,000 1,274,100
Temecula Valley Unified Sch. Dist., Cmnty. Facs.,
Spec. Tax Dist.
No. 89-1 NR 8.60 9/01/17 2,600 2,737,696
Torrance Redev. Agcy.,
Tax Alloc. Downtown Redev. Baa 7.125 9/01/22 3,925 4,159,558
Tax Alloc. Ind. Redev. Proj. NR 7.75 9/01/13 2,500 2,614,075
Vacaville Cmnty. Redev. Agcy., Multifamily Hsg. Rev. A-(e) 7.375 11/01/14 1,110 1,189,076
Victor Valley,
Union H.S. Dist., M.B.I.A. Aaa Zero 9/01/17 4,500 1,315,890
Union H.S. Dist., M.B.I.A. Aaa Zero 9/01/19 5,450 1,389,369
Union H.S. Dist., M.B.I.A. Aaa Zero 9/01/20 5,850 1,407,100
Virgin Islands Pub. Fin. Auth. Rev., Hwy. Trans. Trust Fund BBB(e) 7.70 10/01/04 1,000 1,094,700
Virgin Islands Territory, Hugo Ins. Claims Fund Prog.,
Ser. 91 NR 7.75 10/01/06 1,080 1,176,530
West Contra Costa Unified Sch. Dist., Cert. of Part. Ba1 6.875 1/01/09 1,140 1,206,895
- ----------------------------------------------------------------------------------------------------------------------------

</TABLE>

- --------------------------------------------------------------------------------
See Notes to Financial Statements. 5

California Poll. Ctrl. Fin. Auth. Rev.,
Ultrapower Malaga Fresno Proj., Ser. 88A, F.R.D.D. P1 3.30 3/01/96 800 800,000
Ultrapower Malaga Fresno Proj., Ser. 88B, F.R.D.D. P1 3.30 3/01/96 400 400,000
Ultrapower Rocklin Proj., Ser. 88B, F.R.D.D. P1 3.30 3/01/96 300 300,000
------------
Total short-term investments (cost $1,500,000) 1,500,000
------------
TOTAL INVESTMENTS-99.4%
(cost $183,603,598; Note 4) 199,392,562
Other assets in excess of liabilities-0.6% 1,259,229
------------
NET ASSETS-100% $200,651,791
============

</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 (b).
M.B.I.A.-Municipal Bond Insurance Association.
(b) 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.
(c) Prerefunded issues are secured by escrowed cash and/or direct U.S.
guaranteed obligations.
(d) Pledged as initial margin on financial futures contracts.
(e) Standard & Poor's Rating.
(f) Inverse floating rate bond. The coupon is inversely indexed to a floating
interest rate. The rate shown is the rate at period end.
NR--Not Rated by Moody's or Standard & Poor's.
The Fund's current Statement of Additional Information contains a description of
Moody's and Standard & Poor's ratings.

- --------------------------------------------------------------------------------
6 See Notes to Financial Statements.

<PAGE>

STATEMENT OF ASSETS AND LIABILITIES PRUDENTIAL CALIFORNIA MUNICIPAL FUND
(UNAUDITED) CALIFORNIA INCOME SERIES
- ------------------------------------------------------------------------------

FEBRUARY 29, 1996
ASSETS -----------------
<S> <C>
Investments, at value (cost $183,603,598) . . . . . . . $199,392,562
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . 43,009
Interest receivable . . . . . . . . . . . . . . . . . . 3,380,679
Receivable for Series shares sold . . . . . . . . . . . 218,230
Receivable for investments sold . . . . . . . . . . . . 30,000
Due from broker-variation margin. . . . . . . . . . . . 5,875
Deferred expenses and other assets. . . . . . . . . . . 2,111
------------
Total assets. . . . . . . . . . . . . . . . . . . . 203,072,466
------------

LIABILITIES
Payable for investments purchased . . . . . . . . . . . 2,016,750
Payable for Series shares reacquired. . . . . . . . . . 188,139
Dividends payable . . . . . . . . . . . . . . . . . . . 135,496
Management fee payable. . . . . . . . . . . . . . . . . 32,230
Distribution fee payable. . . . . . . . . . . . . . . . 28,563
Accrued expenses. . . . . . . . . . . . . . . . . . . . 14,836
Deferred trustee's fees . . . . . . . . . . . . . . . . 4,661
------------
Total liabilities . . . . . . . . . . . . . . . . . 2,420,675
------------
NET ASSETS. . . . . . . . . . . . . . . . . . . . . . . $200,651,791
============
Net assets were comprised of:
Shares of beneficial interest, at par . . . . . . . $ 189,760
Paid-in capital in excess of par. . . . . . . . . . 188,552,528
------------
188,742,288
Accumulated net realized loss on investments. . . . (3,609,023)
Net unrealized appreciation on investments. . . . . 15,518,526
------------
Net assets, February 29, 1996 . . . . . . . . . . . . . $200,651,791
============
Class A:
Net asset value and redemption price per share
($164,052,023 DIVIDED BY 15,514,793 shares of
beneficial interest issued and outstanding) . . $10.57
Maximum sales charge (3.0% of offering price) . . . .33
------
Maximum offering price to public. . . . . . . . . . $10.90
======
Class B:
Net asset value, offering price and redemption price per share
($32,926,695 DIVIDED BY 3,113,832 shares of $10.57
beneficial interest issued and outstanding) . . ======
Class C:
Net asset value, offering price and redemption price per share
($3,673,073 DIVIDED BY 347,358 shares of $10.57
beneficial interest issued and outstanding) . . ======

</TABLE>

- --------------------------------------------------------------------------------
See Notes to Financial Statements. 7

<PAGE>

PRUDENTIAL CALIFORNIA MUNICIPAL FUND
CALIFORNIA INCOME SERIES
STATEMENT OF OPERATIONS (UNAUDITED)
- ------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
NET INVESTMENT INCOME FEBRUARY 29, 1996
-----------------
<S> <C>
Income
Interest . . . . . . . . . . . . . $ 6,393,480
-----------
Expenses
Management fee . . . . . . . . . . 495,962
Distribution fee-Class A . . . . . 82,346
Distribution fee-Class B . . . . . 76,855
Distribution fee-Class C . . . . . 11,066
Custodian's fees and expenses. . . 46,000
Transfer agent's fees and expenses 32,000
Reports to shareholders. . . . . . 31,000
Registration fees. . . . . . . . . 17,000
Audit fees and expenses. . . . . . 7,500
Legal fees and expenses. . . . . . 7,000
Trustees' fees . . . . . . . . . . 4,000
Amortization of organizational
expenses. . . . . . . . . . . . 1,900
Miscellaneous. . . . . . . . . . . 5,985
-----------
Total expenses . . . . . . . . 818,614
Less: Management fee waiver. . . . (379,961)
Custodian fee credit. . . . . (2,422)
-----------
Net expenses . . . . . . . . . 436,231
-----------
Net investment income. . . . . . . . . 5,957,249
-----------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on:
Investment transactions. . . . . . 1,286,525
Financial futures transactions . . (298,731)
-----------
987,794
-----------
Net change in unrealized appreciation on:

Investments. . . . . . . . . . . . 4,856,582
Financial futures contracts. . . . (258,251)
-----------
4,598,331
-----------
Net gain on investments. . . . . . . . 5,586,125
-----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS. . . . . . . . . . . . $11,543,374
===========
</TABLE>

PRUDENTIAL CALIFORNIA MUNICIPAL FUND
CALIFORNIA INCOME SERIES
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
- ----------------------------------------------
<TABLE>
<CAPTION>

SIX MONTHS
ENDED YEAR ENDED
INCREASE (DECREASE) FEBRUARY 29, AUGUST 31,
IN NET ASSETS 1996 1995
------------ ------------
<S> <C> <C>
Operations
Net investment income . . . . . . $5,957,249 $ 12,281,82x
Net realized gain (loss) on
investment transactions. . . . 987,794 (2,117,78x)
Net change in unrealized
appreciation of investments . . 4,598,331 3,177,88x
------------ ------------
Net increase in net assets
resulting from operations . . . . 11,543,374 13,341,92x
Dividends to shareholders from net
investment income (Note 1)
Class A . . . . . . . . . . . . . (5,004,249) (10,737,20x)
Class B . . . . . . . . . . . . . (872,821) (1,442,73x)
Class C . . . . . . . . . . . . . (80,179) (101,88x)
------------ ------------
(5,957,249) (12,281,82x)
------------ ------------
Series share transactions (net of
share conversions) (Note 5)
Net proceeds from shares sold . . 15,693,411 45,244,90x
Net asset value of shares issued
to shareholders in reinvestment
of dividends and distributions. 2,699,009 5,353,44x
Cost of shares reacquired . . . . (19,236,054) (60,456,28x)
------------ ------------
Net increase (decrease) in net
assets from Series share
transactions. . . . . . . . . . 156,366 (9,877,93x)
------------ ------------
Total increase (decrease) . . . . . . 5,742,491 (8,817,83x)
NET ASSETS
Beginning of period . . . . . . . . . 194,909,300 203,727,13x
------------ ------------
End of period . . . . . . . . . . . . $200,651,791 $194,909,30x
============ ============

</TABLE>
- -------------------------------------------------------------------------------

8 See Notes to Financial Statements.

<PAGE>

PRUDENTIAL CALIFORNIA MUNICIPAL FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CALIFORNIA INCOME SERIES
- ------------------------------------------------------------------------------

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
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 POLICIES

The following is a summary of significant accounting policies 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.

The Series invests in financial futures contracts in order to hedge its existing
portfolio securities or securities the Series intends to purchase, against
fluctuations in value caused by changes in prevailing interest rates. Should
interest rates move unexpectedly, the Series may not achieve the anticipated
benefits of the financial futures contracts and may realize a loss. The use of
futures transactions involves the risk of imperfect correlation in movements in
the price of futures contracts, interest rates and the underlying hedged assets.

SECURITIES TRANSACTIONS AND NET INVESTMENT INCOME. Securities transactions are
recorded on the trade date. Realized gains and losses on sales of securities
are calculated on the identified cost basis. Interest income is recorded on the
accrual basis. The Series amortizes premiums and original issue discount paid
on purchases of portfolio securities as adjustments to interest income.
Expenses are recorded on the accrual basis which may require the use of certain
estimates by management.

Net investment income (other than distribution fees) and unrealized and realized
gains or losses are allocated daily to each class of shares based upon the
relative proportion of net assets of each class at the beginning of the day.

FEDERAL INCOME TAXES: For federal income tax purposes, each series in the
Fund is treated as a separate taxpaying entity. It is the intent of the
Series to continue to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of the 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.

- --------------------------------------------------------------------------------
9

<PAGE>

PRUDENTIAL CALIFORNIA MUNICIPAL FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CALIFORNIA INCOME SERIES
- ------------------------------------------------------------------------------

CUSTODY FEE CREDITS: The Fund has an arrangement with its custodian bank,
whereby uninvested monies earn credits which reduce the fees charged by the
custodian.

DEFERRED ORGANIZATION EXPENSES: The Series incurred approximately
$36,000 in organization and initial registration expenses. Such amount has been
amortized over a period of 60 months ended 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. Effective
January 1, 1996, PMF decreased its voluntary waiver from 85% to 75% of its
management fee. The amount of such fees waived for the six months ended
February 29, 1996 amounted to $379,961 ($.02 per share, .38% of average net
assets). The Series is not required to reimburse PMF for such waiver.

The Fund had a distribution agreement with Prudential Mutual Fund Distributors,
Inc. ("PMFI"), which acted as the distributor of the Class A shares of the Fund
through January 1, 1996. Effective January 2, 1996 Prudential Securities
Incorporated ("PSI") became the distributor of the Class A shares of the Fund
and is serving the Fund under the same terms and conditions as under the
arrangement with PMFD, the distributor of the Class B and Class C shares of the
Fund. The Fund compensated PMFD and PSI 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.

Pursuant to the Class A, B and C Plans, the Fund compensated PSI, and PMFD for
the period September 1, 1995 through January 1, 1996 with respect to Class A
shares 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 six months ended February 29, 1996.

PMFD and PSI have advised the Series that they have received approximately
$105,300 in front-end sales charges resulting from sales of Class A shares
during the six months ended February 29, 1996. From these fees, PMFD and PSI
paid such sales charges to Pruco Securities Corporation, an affiliated
broker-dealer, which in turn paid commissions to sales persons and incurred
other distribution costs.

PSI has advised the Series that for the six months ended February 29, 1996, it
received approximately $23,000 and $4,000 in contingent deferred sales charges
imposed upon certain redemptions by Class B and Class C shareholders,
respectively.

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

NOTE 3. OTHER TRANSACTIONS WITH AFFILIATES

Prudential Mutual Fund Services, Inc. ("PMFS"), is a wholly-owned subsidiary
of PMF, serves as the Fund's transfer agent. During the six months ended
February 29, 1996, the Series incurred fees of approximately $23,000 for the
services of PMFS. As of February 29, 1996 approximately $4,000 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.
________________________________________________________________________________

NOTE 4. PORTFOLIO SECURITIES

Purchases and sales of portfolio securities of the Series, excluding short-term
investments, for the six months ended February 29, 1996 were $31,531,896 and
$30,435,243 respectively.

The cost basis of investments for federal income tax purposes was substantially
the same as for financial reporting purposes and accordingly, as of February 29,
1996 net unrealized appreciation on investments for federal income tax purposes
was $15,788,964 (gross unrealized appreciation--$16,358,990; (gross unrealized
depreciation--$570,026).

At February 29, 1996, the Series held 47 financial futures contracts on U.S.
Treasury Bonds which expire in March 1996. The value at acquisition of the

- --------------------------------------------------------------------------------
10

<PAGE>

contracts was $5,668,094. The value of such contracts on February 29, 1996 was
$5,397,656, thereby resulting in an unrealized loss of $270,438.

For federal income tax purposes, the Series has a capital loss carryforward at
August 31, 1995, of approximately $2,741,000 which expires in 2003.
Accordingly, no capital gains distributions are expected to be paid to
shareholders until net gains have been realized in excess of such amount.

The Series has elected to treat approximately $1,685,900 of net capital losses
incurred in the ten-month period ended August 31, 1995, as having been incurred
in the current fiscal year.
________________________________________________________________________________

NOTE 5. CAPITAL

The Series offers Class A, Class B and Class C shares. Class A shares are sold
with a front-end sales charge of up to 3%. Class B shares are sold with a
contingent deferred sales charge which declines from 5% to zero depending on the
period of time the shares are held. Class C shares are sold with a 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. A special exchange privilege is also available for
shareholders who qualify to purchase Class A shares at net asset value.

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 six months ended February
29, 1996 and the fiscal year ended August 31, 1995 were as follows.

Class A Shares Amount
- ------- ------ ------
Six month ended February 29, 1996:
Shares sold.......................... 721,165 $ 7,628,749
Shares issued in reinvestment of
dividends 215,558 2,267,123
Shares reacquired.................... (1,364,554) (14,406,518)
----------- ------------
Net decrease in shares outstanding
before conversion................... (427,831) (4,510,646)
Shares issued upon conversion from
Class B............................. 31,853 341,781
----------- -----------
Net decrease in shares outstanding... (395,978) $(4,168,865)
=========== ===========

Class A Shares Amount
- ------- ------ ------
Year ended August 31, 1995:
Shares sold.......................... 2,688,054 $26,760,642
Shares issued in reinvestment of
dividends 465,901 4,658,191
Shares reacquired.................... (5,339,235) (52,933,797)
----------- ------------
Net decrease in shares outstanding
before conversion.................... (2,185,280) (21,514,964)
Shares issued upon conversion from
Class B.............................. 64,557 643,530
----------- -----------
Net decrease in shares outstanding... (2,120,723) $(20,871,434)
=========== ===========

Class B
- -------
Six months ended February 29, 1996:
Shares sold.......................... 595,571 $ 6,298,267
Shares issued in reinvestment of
dividends............................ 35,172 370,118
Shares reacquired.................... (268,365) (2,834,519)
----------- -----------
Net increase in shares outstanding
before conversion.................... 362,378 3,833,866
Shares reacquired upon conversion
into Class A......................... (31,853) (341,781)
----------- -----------
Net increase in shares outstanding... 330,525 $ 3,492,085
=========== ===========

Year ended August 31, 1995:
Shares sold.......................... 1,511,295 $ 15,116,805
Shares issued in reinvestment of
dividends............................ 61,615 617,971
Shares reacquired.................... (582,865) (5,794,588)
----------- -----------
Net increase in shares outstanding
before conversion.................... 990,045 9,940,188

Shares reacquired upon conversion
into Class A......................... (64,557) (643,530)
----------- -----------
Net increase in shares outstanding... 925,488 $ 9,296,658
=========== ===========

Class C
- -------
Six months ended February 29, 1996:
Shares sold.......................... 166,777 $ 1,766,395
Shares issued in reinvestment of
dividends............................ 5,868 61,768
Shares reacquired.................... (93,979) (995,017)
----------- -----------
Net increase in shares outstanding... 78,666 $ 833,146
=========== ===========

Year ended August 31, 1995:
Shares sold.......................... 330,637 $ 3,347,460
Shares issued in reinvestment of
dividends............................ 7,682 77,278
Shares reacquired.................... (173,108) (1,727,896)
----------- -----------
Net increase in shares outstanding... 165,211 $ 1,696,842
=========== ===========

- --------------------------------------------------------------------------------
11

<PAGE>

PRUDENTIAL CALIFORNIA MUNICIPAL FUND
FINANCIAL HIGHLIGHTS (UNAUDITED) CALIFORNIA INCOME SERIES
- ------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Class A
---------------------------------------------------------------------------------------
December 3,
Six Months 1990(d)
Ended Year Ended August 31, Through
February 29, --------------------------------------------------------- August 31,
1996 1995 1994 1993 1992 1991
------------- ------------ ------------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period. $10.28 $10.19 $10.68 $10.08 $9.76 $9.55
------------- ------------ ------------- -------------- ------------ ------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income(b)............. .32 .65 .65 .67 .69 .51
Net realized and unrealized gain
(loss) on investment transactions.. .29 .09 (.39) .65 .35 .21
------------- ------------ ------------- -------------- ------------ ------------
Total from investment operations. .61 .74 .26 1.32 1.04 .72
------------- ------------ ------------- -------------- ------------ ------------
LESS DISTRIBUTIONS
Dividends from net investment
income............................. (.32) (.65) (.65) (.67) (.69) (.51)
Distributions from net realized
gains.............................. -- -- (.10) (.05) (.03) --
------------- ------------ ------------- -------------- ------------ ------------
Total distributions.............. (.32) (.65) (.75) (.72) (.72) (.51)
------------- ------------ ------------- -------------- ------------ ------------
Net asset value, end of period....... $10.57 $10.28 $10.19 $10.68 $10.08 $9.76
============= ============ ============= ============== ============ ============
TOTAL RETURN(c)...................... 5.97% 7.67% 2.55% 11.67% 11.08% 7.97%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)...... $164,052 $163,538 $183,742 $200,899 $141,101 $72,241
Average net assets (000)............. $165,597 $165,500 $195,610 $165,895 $102,227 $47,540
Ratios to average net assets(b):
Expenses, including distribution
fees............................. .37%(a) .40% .35% .20% .10% .0%(a)
Expenses, excluding distribution
fees............................. .27%(a) .30% .25% .10% .04% .0%(a)
Net investment income.............. 6.08%(a) 6.49% 6.25% 6.52% 6.91% 7.04%(a)
Portfolio turnover rate.............. 16% 39% 46% 34% 69% 35%
</TABLE>
- -------------------
(a) Annualized.
(b) Net of expense subsidy and/or fee waiver.
(c) 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.
(d) Commencement of investment operations.
- --------------------------------------------------------------------------------

12 See Notes to Financial Statements.

<PAGE>

PRUDENTIAL CALIFORNIA MUNICIPAL FUND
FINANCIAL HIGHLIGHTS (UNAUDITED) CALIFORNIA INCOME SERIES
- ------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Class B Class C
------------------------------------------ ------------------------------------------
December 7, August 1,
Six Months 1993(d) Six Months 1994(e)
Ended Year Ended Through Ended Year Ended Through
February 29, August 31, August 31, February 29, August 31, August 31,
1996 1995 1994 1996 1995 1994
------------- ------------ ------------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period. $10.28 $10.19 $10.61 $10.28 $10.19 $10.18
------------- ------------ ------------- -------------- ------------ ------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income(b)............. .30 .61 .44 .28 .58 .05
Net realized and unrealized gain
(loss) on investment transactions.. .29 .09 (.42) .29 .09 .01
------------- ------------ ------------- -------------- ------------ ------------
Total from investment operations. .59 .70 .02 .57 .67 .06
------------- ------------ ------------- -------------- ------------ ------------
LESS DISTRIBUTIONS
Dividends from net investment
income............................. (.30) (.61) (.44) (.28) (.58) (.05)
------------- ------------ ------------- -------------- ------------ ------------
Total distributions.............. (.30) (.61) (.44) (.28) (.58) (.05)
------------- ------------ ------------- -------------- ------------ ------------
Net asset value, end of period....... $10.57 $10.28 $10.19 $10.57 $10.28 $10.19
============= ============ ============= ============== ============ ============
TOTAL RETURN(c)...................... 5.76% 7.24% (.14)% 5.63% 6.98% .47%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)...... $32,927 $28,609 $18,931 $3,673 $2,762 $1,054
Average net assets (000)............. $30,911 $23,722 $ 6,814 $2,967 $1,751 $ 353
Ratios to average net assets(b):
Expenses, including distribution
fees............................. .77%(a) .80% 1.11% 1.02%(a) 1.05% 1.12%(a)
Expenses, excluding distribution
fees............................. .27%(a) .30% .43%(a) .27%(a) .30% .37%(a)
Net investment income.............. 5.68%(a) 6.09% 8.15%(a) 5.43%(a) 5.84% 6.25%(a)
Portfolio turnover rate.............. 16% 39% 46% 16% 39% 46%
</TABLE>
- -------------------
(a) Annualized.
(b) Net of expense subsidy and/or fee waiver.
(c) 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.
(d) Commencement of offering of Class B shares.
(e) Commencement of offering of Class C shares.
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 13

<PAGE>
PART C
OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.

(A) FINANCIAL STATEMENTS:

(1) The following financial statements are included in the Prospectuses
constituting Part A of this Registration Statement:

Financial Highlights.

(2) The following financial statements are included in the Statement of
Additional Information constituting Part B of this Registration Statement:

Portfolio of Investments at August 31, 1995 and February 29,
1996 (unaudited).

Statement of Assets and Liabilities at August 31, 1995 and
February 29, 1996 (unaudited).

Statement of Operations for the six-month period ended
February 29, 1996 (unaudited) and the year ended August 31,
1995.

Statement of Changes in Net Assets for the six-month period
ended February 29, 1996 (unaudited) and the year ended
August 31, 1995.

Notes to Financial Statements.

Financial Highlights.

Independent Auditors' Reports.

(B) EXHIBITS:

1. (a) Amended and Restated Declaration of Trust of the Registrant.
(Incorporated by reference to Exhibit No. 1(a) to Post-Effective
Amendment No. 20 to Registration Statement on Form N-1A filed via
EDGAR December 20, 1994 (File No. 2-91215).)

(b) Amended and Restated Certificate of Designation. (Incorporated by
reference to Exhibit No. 1(b) to Post-Effective Amendment No. 20 to
Registration Statement on Form N-1A filed via EDGAR December 20, 1994
(File No. 2-91215).)

2. Restated By-Laws. (Incorporated by reference to Exhibit No. 2 to
Registration Statement on Form N-1A filed via EDGAR May 12, 1994 (File
No. 2-91215).)

4. (a) Specimen receipt for shares of beneficial interest, $.01 par
value, of the Registrant (for Class B shares and shares of the
California Money Market Series). (Incorporated by reference to Exhibit
No. 4 to Post-Effective Amendment No. 5 to Registration Statement on
Form N-1A filed October 31, 1988 (File No. 2-91215).)

(b) Specimen receipt for shares of beneficial interest, $.01 par
value, of the Registrant (for Class A shares). (Incorporated by
reference to Exhibit No. 4(b) to Post-Effective Amendment No. 10 to
Registration Statement on Form N-1A filed August 24, 1990 (File No.
2-91215).)

(c) Specimen receipt for shares of beneficial interest of California
Income Series. (Incorporated by reference to Exhibit No. 4(c) to
Post-Effective Amendment No. 12 to Registration Statement on Form N-1A
filed December 3, 1990 (File No. 2-91215).)

5. (a) Management Agreement between the Registrant and Prudential
Mutual Fund Management, Inc. (Incorporated by reference to Exhibit No.
5(a) to Post-Effective Amendment No. 7 to Registration Statement on
Form N-1A filed November 2, 1989 (File No. 2-91215).)

(b) Subadvisory Agreement between Prudential Mutual Fund Management,
Inc. and The Prudential Investment Corporation. (Incorporated by
reference to Exhibit No. 5(b) to Post-Effective Amendment No. 7 to
Registration Statement on Form N-1A filed November 2, 1989 (File No.
2-91215).)

6. Amended and Restated Distribution Agreement.*

C-1
<PAGE>
8. (a) Custodian Agreement between the Registrant and State Street Bank
and Trust Company. (Incorporated by reference to Exhibit No. 8 to
Post-Effective Amendment No. 7 to Registration Statement on Form N-1A
filed November 2, 1989 (File No. 2-91215).)

(b) Custodian Contract between the Registrant and State Street Bank
and Trust Company. (Incorporated by reference to Exhibit No. 8(b) to
Post-Effective Amendment No. 10 to Registration Statement on Form N-1A
filed August 24, 1990 (File No. 2-91215).)

9. Transfer Agency and Service Agreement between the Registrant and
Prudential Mutual Fund Services, Inc. (Incorporated by reference to
Exhibit No. 9 to Post-Effective Amendment No. 7 to Registration
Statement on Form N-1A filed November 2, 1989 (File No. 2-91215).)

10. Opinion of Counsel. (Incorporated by reference to Exhibit No. 10 to
Post-Effective Amendment No. 21 to Registration Statement on Form N-1A
filed via EDGAR on November 1, 1995 (File No. 2-91215).)

11. Consent of Independent Accountants.*

13. Purchase Agreement. (Incorporated by reference to Exhibit No. 13 to
Pre-Effective Amendment No. 1 to Registration Statement on Form N-1A
filed August 29, 1984 (File No. 2-91215).)

15. (a) Distribution and Service Plan with respect to California Money
Market Series between the Registrant and Prudential Mutual Fund
Distributors, Inc. (Incorporated by reference to Exhibit No. 15(h) to
Post-Effective Amendment No. 17 to Registration Statement on Form N-1A
filed via EDGAR November 1, 1993 (File No. 2-91215).)

(b) Distribution and Service Plan for Class A shares. (Incorporated by
reference to Exhibit No. 15(b) to Post-Effective Amendment No. 20 to
Registration Statement on Form N-1A filed via EDGAR December 20, 1994
(File No. 2-91215).)

(c) Distribution and Service Plan for Class B shares. (Incorporated by
reference to Exhibit No. 15(c) to Post-Effective Amendment No. 20 to
Registration Statement on Form N-1A filed via EDGAR December 20, 1994
(File No. 2-91215).)

(d) Distribution and Service Plan for Class C shares. (Incorporated by
reference to Exhibit No. 15(d) to Post-Effective Amendment No. 20 to
Registration Statement on Form N-1A filed via EDGAR December 20, 1994
(File No. 2-91215).)

16. (a) Schedule of Computation of Performance Information.
(Incorporated by reference to Exhibit No. 16 to Post-Effective
Amendment No. 7 to Registration Statement on Form N-1A filed November
2, 1989 (File No. 2-91215).)

(b) Schedule of Computation of Performance Information for Class A
shares. (Incorporated by reference to Exhibit No. 16(b) to
Post-Effective Amendment No. 12 to Registration Statement on Form N-1A
filed December 3, 1990 (File No. 2-91215).)

18. Rule 18f-3 Plan.*

27. Financial Data Schedules for six months ended February 29, 1996
(unaudited).* Financial Data Schedules for the period ended August 31,
1995 filed as Exhibit No. 27 to Post-Effective Amendment No. 21 to
Registration Statement on Form N-1A filed via EDGAR on November 1,
1995 (File No. 2-91215).

- ------------------------
*Filed herewith.

Powers of Attorney. Executed copies filed under "Other Exhibits" to
Post-Effective Amendment No. 11 to Registration Statement on Form N-1A filed
October 10, 1990 (File No. 2-91215).

ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.

None.

ITEM 26. NUMBER OF HOLDERS OF SECURITIES.

As of July 26, 1996, each series of the Fund had the following number of
record holders of shares of beneficial interest, $.01 par value per share:
California Series, 2,451 record holders of Class A shares, 2,799 record holders
of Class B shares and 18 record holders of Class C shares; California Income
Series, 2,916 record holders of Class A shares, 851 record holders of Class B
shares and 66 record holders of Class C shares; California Money Market Series,
6067 record holders. No Class Z Shares were outstanding on that date.

C-2
<PAGE>
ITEM 27. INDEMNIFICATION.

Article V, Section 5.1 of the Registrant's Declaration of Trust provides that
neither shareholders nor Trustees, officers, employees or agents shall be
subject to personal liability to any other person, except (with respect to
Trustees, officers, employees or agents) liability arising from bad faith,
willful misfeasance, gross negligence or reckless disregard of his of her
duties. Section 5.1 also provides that the Registrant will indemnify and hold
harmless each shareholder against all claims and all expenses reasonably related
thereto.

As permitted by Sections 17(h) and (i) of the Investment Company Act of 1940
(the 1940 Act) and pursuant to Article VI of the Fund's By-Laws (Exhibit 2 to
the Registration Statement), officers, Trustees, employees and agents of the
Registrant will not be liable to the Registrant, any shareholder, officer,
Trustee, employee, agent or other person for any action or failure to act,
except for bad faith, willful misfeasance, gross negligence or reckless
disregard of duties, and those individuals may be indemnified against
liabilities in connection with the Registrant, subject to the same exceptions.
As permitted by Section 17(i) of the 1940 Act, pursuant to Section 9 of the
Distribution Agreement (Exhibit 6 to the Registration Statement), the
Distributor of the Registrant may be indemnified against liabilities which it
may incur, except liabilities arising from bad faith, gross negligence, willful
misfeasance or reckless disregard of duties.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (Securities Act) may be permitted to Trustees, officers and controlling
persons of the Registrant pursuant to the foregoing provisions or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
1940 Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a Trustee, officer or controlling
person of the Registrant in connection with the successful defense of any
action, suit or proceeding) is asserted against the Registrant by such Trustee,
officer or controlling person in connection with the shares being registered,
the Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the 1940 Act and will be governed by the final adjudication of such
issue.

The Registrant has purchased an insurance policy insuring its officers and
Trustees against liabilities, and certain costs of defending claims against such
officers and Trustees, to the extent such officers and Trustees are not found to
have committed conduct constituting willful misfeasance, bad faith, gross
negligence or reckless disregard in the performance of their duties. The
insurance policy also insures the Registrant against the cost of indemnification
payments to officers and Trustees under certain circumstances.

Section 9 of the Management Agreement (Exhibit 5(a) to the Registration
Statement) and Section 4 of the Subadvisory Agreement (Exhibit 5(b) to the
Registration Statement) limit the liability of Prudential Mutual Fund
Management, Inc. (PMF) and The Prudential Investment Corporation (PIC),
respectively, to liabilities arising from willful misfeasance, bad faith or
gross negligence in the performance of their respective obligations and duties
under the agreements.

The Registrant hereby undertakes that it will apply the indemnification
provisions of its By-Laws and each Distribution Agreement in a manner consistent
with Release No. 11330 of the Securities and Exchange Commission under the 1940
Act so long as the interpretations of Sections 17(h) and 17(i) of such Act
remain in effect and are consistently applied.

ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

(a) Prudential Mutual Fund Management, Inc.

See "How the Fund is Managed--Manager" in the Prospectuses constituting Part
A of this Registration Statement and "Manager" in the Statement of Additional
Information constituting Part B of this Registration Statement.

The business and other connections of the officers of PMF are listed in
Schedules A and D of Form ADV of PMF as currently on file with the Securities
and Exchange Commission, the text of which is hereby incorporated by reference
(File No. 801-31104, filed on March 30, 1996).

The business and other connections of PMF's directors and principal
executive officers are set forth below. Except as otherwise indicated, the
address of each person is One Seaport Plaza, New York, NY 10292.

<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH PMF PRINCIPAL OCCUPATIONS
- ----------------------------- ------------------------- -----------------------------------------------------------------
<S> <C> <C>
Stephen P. Fisher Senior Vice President Senior Vice President, PMF; Senior Vice President, Prudential
Securities Incorporated (Prudential Securities); Vice President,
Prudential Mutual Fund Distributors, Inc. (PMFD)
</TABLE>

C-3
<PAGE>

<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH PMF PRINCIPAL OCCUPATIONS
- ----------------------------- ------------------------- -----------------------------------------------------------------
<S> <C> <C>
Frank W. Giordano Executive Vice President, Executive Vice President, General Counsel, Secretary and
General Counsel, Director, PMF and PMFD; Senior Vice President, Prudential
Secretary and Director Securities; Director, Prudential Mutual Fund Services, Inc.
(PMFS)

Robert F. Gunia Executive Vice President, Executive Vice President, Chief Financial and Administrative
Chief Financial and Officer, Treasurer and Director, PMF; Senior Vice President,
Administrative Officer, Prudential Securities; Executive Vice President, Chief Financial
Treasurer and Director Officer, Treasurer and Director, PMFD; Director, PMFS

Theresa A. Hamacher Director Director, PMF; Vice President, The Prudential Insurance Company
751 Broad Street of America (Prudential); Vice President, The Prudential
Newark, NJ 07102 Investment Corporation (PIC); President, Prudential Mutual Fund
Investment Management (PMFIM)

Timothy J. O'Brien Director President, Chief Executive Officer, Chief Operating Officer and
Raritan Plaza One Director, PMFD; Chief Executive Officer and Director, PMFS;
Edison, NJ 08837 Director, PMF

Richard A. Redeker President, Chief President, Chief Executive Officer and Director, PMF; Executive
Executive Officer and Vice President, Director and Member of Operating Committee,
Director Prudential Securities; Director, Prudential Securities Group,
Inc. (PSG); Executive Vice President, PIC; Director, PMFD;
Director, PMFS

S. Jane Rose Senior Vice President, Senior Vice President, Senior Counsel and Assistant Secretary,
Senior Counsel and PMF; Senior Vice President and Senior Counsel, Prudential
Assistant Secretary Securities

Donald Webber Executive Vice President Executive Vice President and Director of Sales, PMF
and Director of Sales
</TABLE>

(b) The Prudential Investment Corporation (PIC)

See "How the Fund is Managed--Manager" in the Prospectus constituting Part A
of the Registration Statement and "Manager" in the Statement of Additional
Information constituting Part B of this Registration Statement.

The business and other connections of PIC's directors and executive officers
are as set forth below. Except as otherwise indicated, the address of each
person is Prudential Plaza, Newark, NJ 07102.

<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH PIC PRINCIPAL OCCUPATIONS
- ----------------------------- ------------------------- -----------------------------------------------------------------
<S> <C> <C>
William M. Bethke Senior Vice President Senior Vice President, Prudential; Senior Vice President, PIC
Two Gateway Center
Newark, NJ 07102

Barry M. Gillman Director Director, PIC

Theresa A. Hamacher Vice President Vice President, Prudential; Vice President, PIC; Director, PMF;
President, PMFIM

Richard A. Redeker Executive Vice President President, Chief Executive Officer and Director, PMF; Executive
One Seaport Plaza Vice President, Director and Member of Operating Committee,
New York, NY 10292 Prudential Securities; Director, PSG; Executive Vice President,
PIC; Director, PMFD; Director, PMFS

John L. Reeve Senior Vice President Managing Director, Prudential Asset Management Group; Senior Vice
Four Gateway Center President, PIC
Newark, NJ 07102

Eric A. Simonson Vice President and Vice President and Director, PIC; Executive Vice President,
Director Prudential
</TABLE>

C-4
<PAGE>
ITEM 29. PRINCIPAL UNDERWRITERS

(a)(i) Prudential Securities Incorporated

Prudential Securities is distributor for The BlackRock Government Income
Trust, Command Money Fund, Command Government Fund, Command Tax-Free Fund, The
Global Government Plus Fund, Inc., The Global Total Return Fund, Inc., Global
Utility Fund, Inc., Nicholas-Applegate Fund, Inc. (NIcholas-Applegate Equity
Fund), Prudential Allocation Fund, Prudential California Municipal Fund,
Prudential Distressed Securities Fund, Inc., Prudential Diversified Bond Fund,
Inc., Prudential Equity Fund, Inc., Prudential Equity Income Fund, Prudential
Europe Growth Fund, Inc., Prudential Global Fund, Inc., Prudential Global
Genesis Fund, Inc., Prudential Global Limited Maturity Fund, Inc., Prudential
Global Natural Resources Fund, Inc., Prudential Government Income Fund, Inc.,
Prudential Government Securities Trust, Prudential High Yield Fund, Inc.,
Prudential Institutional Liquidity Portfolio, Inc., Prudential Intermediate
Global Income Fund, Inc., Prudential Jennison Fund, Inc., Prudential MoneyMart
Assets, Inc., Prudential Mortgage Income Fund, Inc., Prudential Multi-Sector
Fund, Inc., Prudential Municipal Bond Fund, Prudential Municipal Series Fund,
Prudential National Municipals Fund, Inc., Prudential Pacific Growth Fund, Inc.,
Prudential Small Companies Fund, Inc., Prudential Special Money Market Fund,
Inc., Prudential Structured Maturity Fund, Inc., Prudential Tax-Free Money Fund,
Inc., Prudential Utility Fund, Inc. and The Target Portfolio Trust. Prudential
Securities is also a depositor for the following unit investment trusts:

The Corporate Investment Trust
Prudential Equity Trust Shares
National Equity Trust
Prudential Unit Trust
Government Securities Equity Trust
National Municipal Trust

(b)(i) Information concerning the officers and directors of Prudential
Securities Incorporated is set forth below.

<TABLE>
<CAPTION>
POSITIONS AND
POSITIONS AND OFFICES OFFICES
NAME(1) WITH UNDERWRITER WITH REGISTRANT
- ------------------------------------ ----------------------------------------------------------------- -----------------
<S> <C> <C>
Robert Golden....................... Executive Vice President and Director None
One New York Plaza
New York, NY 10292
Alan D. Hogan....................... Executive Vice President, Chief Administrative Officer and None
Director
George A. Murray.................... Executive Vice President and Director None
Leland B. Paton..................... Executive Vice President and Director None
One New York Plaza
New York, NY 10292
Martin Pfinsgraff................... Executive Vice President, Chief Financial Officer and Director None
Vincent T. Pica, II................. Executive Vice President and Director None
One New York Plaza
New York, NY 10292
Richard A. Redeker.................. Executive Vice President and Director President and
Trustee
Gregory W. Scott.................... Executive Vice President, Chief Financial Officer and Director None
Hardwick Simmons.................... Chief Executive Officer, President and Director None
Lee B. Spencer, Jr.................. Executive Vice President, Secretary, General Counsel and Director None
<FN>
- ------------------------
(1) The address of each person named is One Seaport Plaza, New York, NY 10292
unless otherwise indicated.
</TABLE>

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS

All accounts, books and other documents required to be maintained by Section
31(a) of the 1940 Act and the Rules thereunder are maintained at the offices of
State Street Bank and Trust Company, 1776 Heritage Drive, North Quincy,
Massachusetts, The Prudential Investment Corporation, Prudential Plaza, 751
Broad Street, Newark, New Jersey, the Registrant, One Seaport Plaza, New York,
New York, and Prudential Mutual Fund Services, Inc., Raritan Plaza One, Edison,
New Jersey. Documents required by

C-5
<PAGE>
Rules 31a-1(b)(5), (6), (7), (9), (10) and (11) and 31a-1(f) will be kept at Two
Gateway Center, documents required by Rules 31a-1(b)(4) and (11) and 31a-1(d) at
One Seaport Plaza and the remaining accounts, books and other documents required
by such other pertinent provisions of Section 31(a) and the Rules promulgated
thereunder will be kept by State Street Bank and Trust Company and Prudential
Mutual Fund Services, Inc.

ITEM 31. MANAGEMENT SERVICES

Other than as set forth under the captions "How the Fund is Managed--Manager"
and "How the Fund is Managed--Distributor" in the Prospectuses and the captions
"Manager" and "Distributor" in the Statement of Additional Information,
constituting Parts A and B, respectively, of this Registration Statement,
Registrant is not a party to any management-related service contract.

ITEM 32. UNDERTAKINGS

The Registrant hereby undertakes to furnish each person to whom a Prospectus
is delivered with a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.

C-6
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Post-Effective Amendment to the
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and has duly caused this Post-Effective Amendment to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of New York, and State of New York, on the 15th day of August, 1996.

PRUDENTIAL CALIFORNIA MUNICIPAL
FUND

By: /s/ RICHARD A. REDEKER

-------------------------------
Richard A. Redeker,
President

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been signed below by
the following persons in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
NAME TITLE DATE
- ------------------------------------------------------ ---------------------------------------------- ------------------
<C> <S> <C>
/s/ RICHARD A. REDEKER
------------------------------------------- President and Trustee August 15, 1996
Richard A. Redeker
/s/ EDWARD D. BEACH
------------------------------------------- Trustee August 15, 1996
Edward D. Beach
/s/ EUGENE C. DORSEY
------------------------------------------- Trustee August 15, 1996
Eugene C. Dorsey
/s/ DELAYNE D. GOLD
------------------------------------------- Trustee August 15, 1996
Delayne D. Gold
/s/ HARRY A. JACOBS, JR.
------------------------------------------- Trustee August 15, 1996
Harry A. Jacobs, Jr.
/s/ THOMAS T. MOONEY
------------------------------------------- Trustee August 15, 1996
Thomas T. Mooney
/s/ THOMAS H. O'BRIEN
------------------------------------------- Trustee August 15, 1996
Thomas H. O'Brien
/s/ NANCY HAYS TEETERS
------------------------------------------- Trustee August 15, 1996
Nancy Hays Teeters
/s/ EUGENE S. STARK
------------------------------------------- Principal Financial and Accounting Officer August 15, 1996
Eugene S. Stark
</TABLE>

C-7
<PAGE>
PRUDENTIAL CALIFORNIA MUNICIPAL FUND
EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
- ------ ------------------------------------------------------------------------------------------ ------
<S> <C> <C>
1(a) Amended and Restated Declaration of Trust of the Registrant. (Incorporated by reference to --
Exhibit No. 1(a) to Post-Effective Amendment No. 20 to Registration Statement on Form N-1A
filed via EDGAR December 20, 1994 (File No. 2-91215).)
1(b) Amended and Restated Certificate of Designation. (Incorporated by reference to Exhibit No. --
1(b) to Post-Effective Amendment No. 20 to Registration Statement on Form N-1A filed via
EDGAR December 20, 1994 (File No. 2-91215).)
1(c) Form of Amended Certificate of Designation.*
2 Restated By-Laws. (Incorporated by reference to Exhibit No. 2 to Post-Effective Amendment --
No. 18 to the Registration Statement on Form N-1A filed via EDGAR on May 12, 1994 (File
No. 2-91215).)
4(a) Specimen receipt for shares of beneficial interest, $.01 par value, of the Registrant (for --
Class B shares and shares of the California Money Market Series). (Incorporated by
reference to Exhibit No. 4 to Post-Effective Amendment No. 5 to Registration Statement on
Form N-1A filed October 31, 1988 (File No. 2-91215).)
4(b) Specimen receipt for shares of beneficial interest, $.01 par value, of the Registrant (for --
Class A shares). (Incorporated by reference to Exhibit No. 4(b) to Post-Effective
Amendment No. 10 to Registration Statement on Form N-1A filed August 24, 1990 (File No.
2-91215).)
4(c) Specimen receipt for shares of beneficial interest of California Income Series. --
(Incorporated by reference to Exhibit No. 4(c) to Post-Effective Amendment No. 12 to
Registration Statement on Form N-1A filed December 3, 1990 (File No. 2-91215).)
5(a) Management Agreement between the Registrant and Prudential Mutual Fund Management, Inc. --
(Incorporated by reference to Exhibit No. 5(a) to Post-Effective Amendment No. 7 to
Registration Statement on Form N-1A filed November 2, 1989 (File No. 2-91215).)
5(b) Subadvisory Agreement between Prudential Mutual Fund Management, Inc. and The Prudential --
Investment Corporation. (Incorporated by reference to Exhibit No. 5(b) to Post-Effective
Amendment No. 7 to Registration Statement on Form N-1A filed November 2, 1989 (File No.
2-91215).)
6 Amended and Restated Distribution Agreement.*
8(a) Custodian Agreement between the Registrant and State Street Bank and Trust Company. --
(Incorporated by reference to Exhibit No. 8 to Post-Effective Amendment No. 7 to
Registration Statement on Form N-1A filed November 2, 1989 (File No. 2-91215).)
8(b) Custodian Contract between the Registrant and State Street Bank and Trust Company. --
(Incorporated by reference to Exhibit No. 8(b) to Post-Effective Amendment No. 10 to
Registration Statement on Form N-1A filed August 24, 1990 (File No. 2-91215).)
9 Transfer Agency and Service Agreement between the Registrant and Prudential Mutual Fund --
Services, Inc. (Incorporated by reference to Exhibit No. 9 to Post-Effective Amendment No.
7 to Registration Statement on Form N-1A filed November 2, 1989 (File No. 2-91215).)
10 Opinion of Counsel. (Incorporated by reference to Exhibit No. 10 to Post-Effective --
Amendment No. 21 to Registration Statement on Form N-1A filed via EDGAR on November 1,
1995 (File No. 2-91215).)
</TABLE>

<PAGE>

Other Exhibits:

Powers of Attorney.
</TABLE>

- ------------------------
*Filed herewith.

<PAGE>
EXHIBIT 1(c)

PRUDENTIAL CALIFORNIA MUNICIPAL FUND

FORM OF AMENDED CERTIFICATE OF DESIGNATION

The undersigned, being the Assistant Secretary of Prudential California
Municipal Fund (hereinafter referred to as the "Trust"), a trust with
transferable shares of the type commonly called a Massachusetts business trust,
DOES HEREBY CERTIFY that, pursuant to the authority conferred upon the Trustees
of the Trust by Section 6.9 and Section 9.3 of the Declaration of Trust, dated
May 18, 1984, as amended to date (hereinafter referred to as the "Declaration of
Trust"), and by the affirmative vote of a majority of the Trustees at a meeting
duly called and held on May 9, 1996, the Amended and Restated Establishment and
Designation of Series of Shares of Beneficial Interest, $.01 Par Value, filed
with the Secretary of The Commonwealth of Massachusetts on December 30, 1988, as
amended to date, the Certificate of Designation dated December 18, 1989 and
filed with the Secretary of The Commonwealth of Massachusetts on January 18,
1990 and the Amended and Restated Certificate of Designation dated July 28, 1994
and filed with the Secretary of The Commonwealth of Massachusetts on August 1,
1994, amending the Declaration of Trust are amended effective as of August 1,
1996, to read in their entirety as follows:

The shares of beneficial interest of the Trust shall be divided into three
separate series, each series to have the following special and relative rights:

(1) The series shall be designated as follows:

California Series
California Income Series
California Money Market Series

(2) Each series shall be authorized to invest in cash, securities,
instruments and other property as from time to time described in the Trust's
then currently effective registration statement under the Securities Act of
1933. Each share of beneficial interest of each series ("share") shall be
redeemable, shall be entitled to one vote or fraction thereof in respect of a
fractional share on matters on which shares of that series shall be entitled to
vote and shall

<PAGE>

represent a pro rata beneficial interest in the assets allocated to that series,
and shall be entitled to receive its pro rata share of net assets of that series
upon liquidation of that series, all as provided in the Declaration of Trust.

(3) The shares of beneficial interest of the California Series and the
California Income Series are classified into four classes, designated "Class A
Shares," "Class B Shares," "Class C Shares" and "Class Z Shares," respectively,
of which an unlimited number may be issued. Class A Shares, Class B Shares and
Class C Shares of the California Series and the California Income Series
outstanding on the date on which the amendments provided for herein become
effective shall be and continue to be Class A Shares, Class B Shares and Class C
Shares, respectively, of such series.

(4) The holders of Class A Shares, Class B Shares, Class C Shares and
Class Z Shares of each series shall be considered Shareholders of such series,
and shall have the relative rights and preferences set forth herein and in the
Declaration of Trust with respect to Shares of such series, and shall also be
considered Shareholders of the Trust for all other purposes (including, without
limitation, for purposes of receiving reports and notices and the right to vote)
and, for matters reserved to the Shareholders of one or more other classes or
series by the Declaration of Trust or by any instrument establishing and
designating a particular class or series, or as required by the Investment
Company Act of 1940 and/or the rules and regulations of the Securities and
Exchange Commission thereunder (collectively, as from time to time in effect,
the "1940 Act") or other applicable laws.

(5) The Class A Shares, Class B Shares, Class C Shares and Class Z Shares
of each series shall represent an equal proportionate interest in the share of
such class in the Trust Property belonging to that series, adjusted for any
liabilities specifically allocable to the Shares of that class, and each Share
of any such class shall have identical voting, dividend, liquidation and other
rights and the same terms and conditions, except that the expenses related
directly or indirectly to the distribution of the Shares of a class, and any
service fees to which such class is subject (as determined by the Trustees),
shall be borne solely by such class, and such expenses

-2-

<PAGE>

shall be appropriately reflected in the determination of net asset value and the
dividend, distribution and liquidation rights of such class.

(6) (a) Class A Shares of each series shall be subject to (i) a front-end
sales charge and (ii)(A) an asset-based sales charge pursuant to a plan under
Rule 12b-1 of the 1940 Act (a "Plan"), and/or (B) a service fee for the
maintenance of shareholder accounts and personal services, in such amounts as
shall be determined from time to time.

(b) Class B Shares of each series shall be subject to (i) a
contingent deferred sales charge and (ii)(A) an asset-based sales charge
pursuant to a Plan, and/or (B) a service fee for the maintenance of shareholder
accounts and personal services, in such amounts as shall be determined from time
to time.

(c) Class C Shares of each series having the same shall be subject to
(i) a contingent deferred sales charge and (ii)(A) an asset-based sales charge
pursuant to a Plan, and/or (B) a service fee for the maintenance of shareholder
accounts and personal services, in such amounts as shall be determined from time
to time.

(d) Class Z Shares of each series shall not be subject to either an
initial or contingent deferred sales charge nor subject to any Rule 12b-1 fee.

(7) Subject to compliance with the requirements of the 1940 Act, the
Trustees shall have the authority to provide that holders of Shares of any
series shall have the right to convert said Shares into Shares of one or more
other series of registered investment companies specified for the purpose in
this Trust's Prospectus for the Shares accorded such right, that holders of any
class of Shares of a series shall have the right to convert such Shares into
Shares of one or more other classes of such series, and that Shares of any class
of a series shall be automatically converted into Shares of another class of
such series, in each case in accordance with such requirements and procedures as
the Trustees may from time to time establish. The requirements and procedures
applicable to such mandatory or optional conversion of any such Shares shall be
set forth in the Prospectus in effect with respect to such Shares.

-3-

<PAGE>

(8) Shareholders of each series and class shall vote as a separate series
or class, as the case may be, on any matter to the extent required by, and any
matter shall be deemed to have been effectively acted upon with respect to any
series or class as provided in, Rule 18f-2, as from time to time in effect,
under the 1940 Act, or any successor rule and by the Declaration of Trust.
Except as otherwise required by the 1940 Act, the Shareholders of each class of
any series having more than one class of Shares, voting as a separate class,
shall have sole and exclusive voting rights with respect to the provisions of
any Plan applicable to Shares of such class, and shall have no voting rights
with respect to provisions of any Plan applicable solely to any other class of
Shares of such series.

(9) The assets and liabilities of the Trust shall be allocated among the
above-referenced series as set forth in Section 6.9 of the Declaration of Trust,
except as provided below:

(a) Costs incurred and payable by the Trust in connection with its
organization and initial registration and public offering of shares shall be
borne by the California Series (except to the extent that such costs may be
fairly allocated to the California Income Series and the California Money Market
Series) and shall be amortized for each such series over the period beginning on
the date that such costs become payable and ending sixty months after the
commencement of operations of the Trust.

(b) The liabilities, expenses, costs, charges or reserves of the
Trust (other than the management fee or the organizational expenses paid by the
Trust) which are not readily identifiable as belonging to any particular series
shall be allocated among the series on the basis of their relative average daily
net assets.

(10) The Trustees (including any successor Trustees) shall have the right
at any time and from time to time to reallocate assets and expenses or to change
the designation of any series now or hereafter created, or to otherwise change
the special and relative rights of any such series provided that such change
shall not adversely affect the rights of holders of shares of a series.

-4-

<PAGE>

IN WITNESS WHEREOF, the undersigned has set her hand and seal this ______
day of July, 1996.

/s/ Deborah A. Docs
------------------------------------
Deborah A. Docs, Assistant Secretary

-5-

<PAGE>

ACKNOWLEDGMENT

STATE OF NEW YORK )
) SS July _______ , 1996
COUNTY OF NEW YORK )

Then personally appeared before me the above named Deborah A. Docs,
Assistant Secretary, and acknowledged the foregoing instrument to be her free
act and deed.

------------------------------------
Notary Public

-6-

<PAGE>

PRUDENTIAL CALIFORNIA MUNICIPAL FUND

DISTRIBUTION AGREEMENT

Agreement made as of May 9, 1996, between Prudential California
Municipal Fund, a Massachusetts business trust (the Fund), and Prudential
Securities Incorporated, a Delaware corporation (the Distributor).

WITNESSETH

WHEREAS, the Fund is registered under the Investment Company Act of
1940, as amended (the Investment Company Act), as a diversified open-end,
management investment company and it is in the interest of the Fund to offer its
shares for sale continuously;

WHEREAS, the shares of the Fund may be divided into classes and/or
series (all such shares being referred to herein as Shares) and the Fund
currently is authorized to offer Class A, Class B, Class C shares;

WHEREAS, the Distributor is a broker-dealer registered under the
Securities Exchange Act of 1934, as amended, and is engaged in the business of
selling shares of registered investment companies either directly or through
other broker-dealers;

WHEREAS, the Fund and the Distributor wish to enter into an agreement
with each other, with respect to the continuous offering of the Fund's Shares
from and after the date hereof in order to promote the growth of the Fund and
facilitate the distribution of its Shares; and

WHEREAS, upon approval by the holders of the respective classes and/or
series of Shares of the Fund it is contemplated that the Fund will adopt a plan
(or plans) of distribution pursuant to Rule 12b-1 under the Investment Company
Act with respect to certain of its classes and/or series of Shares (the Plans)
authorizing payments by the Fund to the Distributor with respect to the
distribution of such classes and/or series of Shares and the maintenance of
related shareholder accounts.

NOW, THEREFORE, the parties agree as follows:

Section 1. APPOINTMENT OF THE DISTRIBUTOR

The Fund hereby appoints the Distributor as the principal underwriter
and distributor of the Shares of the Fund to sell Shares to the public on behalf
of the Fund and the Distributor hereby accepts such appointment and agrees to
act hereunder. The

<PAGE>

Fund hereby agrees during the term of this Agreement to sell Shares of the
Fund through the Distributor on the terms and conditions set forth below.

Section 2. EXCLUSIVE NATURE OF DUTIES

The Distributor shall be the exclusive representative of the Fund to
act as principal underwriter and distributor of the Fund's Shares, except that:

2.1 The exclusive rights granted to the Distributor to sell Shares of
the Fund shall not apply to Shares of the Fund issued in connection with the
merger or consolidation of any other investment company or personal holding
company with the Fund or the acquisition by purchase or otherwise of all (or
substantially all) the assets or the outstanding shares of any such company by
the Fund.

2.2 Such exclusive rights shall not apply to Shares issued by the
Fund pursuant to reinvestment of dividends or capital gains distributions or
through the exercise of any conversion feature or exchange privilege.

2.3 Such exclusive rights shall not apply to Shares issued by the
Fund pursuant to the reinstatement privilege afforded redeeming shareholders.

2.4 Such exclusive rights shall not apply to purchases made through
the Fund's transfer and dividend disbursing agent in the manner set forth in the
currently effective Prospectus of the Fund. The term "Prospectus" shall mean
the Prospectus and Statement of Additional Information included as part of the
Fund's Registration Statement, as such Prospectus and Statement of Additional
Information may be amended or supplemented from time to time, and the term
"Registration Statement" shall mean the Registration Statement filed by the Fund
with the Securities and Exchange Commission and effective under the Securities
Act of 1933, as amended (Securities Act), and the Investment Company Act, as
such Registration Statement is amended from time to time.

Section 3. PURCHASE OF SHARES FROM THE FUND

3.1 The Distributor shall have the right to buy from the Fund on
behalf of investors the Shares needed, but not more than the Shares needed
(except for clerical errors in transmission) to fill unconditional orders for
Shares placed with the Distributor by investors or registered and qualified
securities dealers and other financial institutions (selected dealers).

3.2 The Shares shall be sold by the Distributor on behalf of the Fund
and delivered by the Distributor or selected

2
<PAGE>

dealers, as described in Section 6.4 hereof, to investors at the offering
price as set forth in the Prospectus.

3.3 The Fund shall have the right to suspend the sale of any or all
classes and/or series of its Shares at times when redemption is suspended
pursuant to the conditions in Section 4.3 hereof or at such other times as may
be determined by the Board of Trustees. The Fund shall also have the right to
suspend the sale of any or all classes and/or series of its Shares if a banking
moratorium shall have been declared by federal or New York authorities.

3.4 The Fund, or any agent of the Fund designated in writing by the
Fund, shall be promptly advised of all purchase orders for Shares received by
the Distributor. Any order may be rejected by the Fund; provided, however, that
the Fund will not arbitrarily or without reasonable cause refuse to accept or
confirm orders for the purchase of Shares. The Fund (or its agent) will confirm
orders upon their receipt, will make appropriate book entries and upon receipt
by the Fund (or its agent) of payment therefor, will deliver deposit receipts
for such Shares pursuant to the instructions of the Distributor. Payment shall
be made to the Fund in New York Clearing House funds or federal funds. The
Distributor agrees to cause such payment and such instructions to be delivered
promptly to the Fund (or its agent).

Section 4. REPURCHASE OR REDEMPTION OF SHARES BY THE FUND

4.1 Any of the outstanding Shares may be tendered for redemption at
any time, and the Fund agrees to repurchase or redeem the Shares so tendered in
accordance with its Declaration of Trust as amended from time to time, and in
accordance with the applicable provisions of the Prospectus. The price to be
paid to redeem or repurchase the Shares shall be equal to the net asset value
determined as set forth in the Prospectus. All payments by the Fund hereunder
shall be made in the manner set forth in Section 4.2 below.

4.2 The Fund shall pay the total amount of the redemption price as
defined in the above paragraph pursuant to the instructions of the Distributor
on or before the seventh day subsequent to its having received the notice of
redemption in proper form. The proceeds of any redemption of Shares shall be
paid by the Fund as follows: (I) in the case of Shares subject to a contingent
deferred sales charge, any applicable contingent deferred sales charge shall be
paid to the Distributor, and the balance shall be paid to or for the account of
the redeeming shareholder, in each case in accordance with applicable provisions
of the Prospectus; and (ii) in the case of all other Shares, proceeds shall be
paid to or for the account of the redeeming shareholder, in each case in
accordance with applicable provisions of the Prospectus.

<PAGE>

4.3 Redemption of any class and/or series of Shares or payment may be
suspended at times when the New York Stock Exchange is closed for other than
customary weekends and holidays, when trading on said Exchange is restricted,
when an emergency exists as a result of which disposal by the Fund of securities
owned by it is not reasonably practicable or it is not reasonably practicable
for the Fund fairly to determine the value of its net assets, or during any
other period when the Securities and Exchange Commission, by order, so permits.

Section 5. DUTIES OF THE FUND

5.1 Subject to the possible suspension of the sale of Shares as
provided herein, the Fund agrees to sell its Shares so long as it has Shares of
the respective class and/or series available.

5.2 The Fund shall furnish the Distributor copies of all information,
financial statements and other papers which the Distributor may reasonably
request for use in connection with the distribution of Shares, and this shall
include one certified copy, upon request by the Distributor, of all financial
statements prepared for the Fund by independent public accountants. The Fund
shall make available to the Distributor such number of copies of its Prospectus
and annual and interim reports as the Distributor shall reasonably request.

5.3 The Fund shall take, from time to time, but subject to the
necessary approval of the Board of Trustees and the shareholders, all necessary
action to fix the number of authorized Shares and such steps as may be necessary
to register the same under the Securities Act, to the end that there will be
available for sale such number of Shares as the Distributor reasonably may
expect to sell. The Fund agrees to file from time to time such amendments,
reports and other documents as may be necessary in order that there will be no
untrue statement of a material fact in the Registration Statement, or necessary
in order that there will be no omission to state a material fact in the
Registration Statement which omission would make the statements therein
misleading.

5.4 The Fund shall use its best efforts to qualify and maintain the
qualification of any appropriate number of its Shares for sales under the
securities laws of such states as the Distributor and the Fund may approve;
provided that the Fund shall not be required to amend its Declaration of Trust
or By-Laws to comply with the laws of any state, to maintain an office in any
state, to change the terms of the offering of its Shares in any state from the
terms set forth in its Registration Statement, to qualify as a foreign
corporation in any state or to consent to service of process in any state other
than with respect to claims arising out of the offering of its Shares. Any such
qualification

<PAGE>

may be withheld, terminated or withdrawn by the Fund at any time in its
discretion. As provided in Section 9 hereof, the expense of qualification
and maintenance of qualification shall be borne by the Fund. The Distributor
shall furnish such information and other material relating to its affairs and
activities as may be required by the Fund in connection with such
qualifications.

Section 6. DUTIES OF THE DISTRIBUTOR

6.1 The Distributor shall devote reasonable time and effort to effect
sales of Shares, but shall not be obligated to sell any specific number of
Shares. Sales of the Shares shall be on the terms described in the Prospectus.
The Distributor may enter into like arrangements with other investment
companies. The Distributor shall compensate the selected dealers as set forth
in the Prospectus.

6.2 In selling the Shares, the Distributor shall use its best efforts
in all respects duly to conform with the requirements of all federal and state
laws relating to the sale of such securities. Neither the Distributor nor any
selected dealer nor any other person is authorized by the Fund to give any
information or to make any representations, other than those contained in the
Registration Statement or Prospectus and any sales literature approved by
appropriate officers of the Fund.

6.3 The Distributor shall adopt and follow procedures for the
confirmation of sales to investors and selected dealers, the collection of
amounts payable by investors and selected dealers on such sales and the
cancellation of unsettled transactions, as may be necessary to comply with the
requirements of the National Association of Securities Dealers, Inc. (NASD).

6.4 The Distributor shall have the right to enter into selected
dealer agreements with registered and qualified securities dealers and other
financial institutions of its choice for the sale of Shares, provided that the
Fund shall approve the forms of such agreements. Within the United States, the
Distributor shall offer and sell Shares only to such selected dealers as are
members in good standing of the NASD. Shares sold to selected dealers shall be
for resale by such dealers only at the offering price determined as set forth in
the Prospectus.

Section 7. PAYMENTS TO THE DISTRIBUTOR

7.1 With respect to classes and/or series of Shares which impose a
front-end sales charge, the Distributor shall receive and may retain any portion
of any front-end sales charge which is imposed on such sales and not reallocated
to selected dealers as set forth in the Prospectus, subject to the limitations
of Article III, Section 26 of the NASD Rules of Fair Practice.

<PAGE>

Payment of these amounts to the Distributor is not contingent upon the
adoption or continuation of any applicable Plans.

7.2 With respect to classes and/or series of Shares which impose a
contingent deferred sales charge, the Distributor shall receive and may retain
any contingent deferred sales charge which is imposed on such sales as set forth
in the Prospectus, subject to the limitations of Article III, Section 26 of the
NASD Rules of Fair Practice. Payment of these amounts to the Distributor is not
contingent upon the adoption or continuation of any Plan.

Section 8. PAYMENT OF THE DISTRIBUTOR UNDER THE PLAN

8.1 The Fund shall pay to the Distributor as compensation for
services under any Plans adopted by the Fund and this Agreement a distribution
and service fee with respect to the Fund's classes and/or series of Shares as
described in each of the Fund's respective Plans and this Agreement.

8.2 So long as a Plan or any amendment thereto is in effect, the
Distributor shall inform the Board of Trustees of the commissions and account
servicing fees with respect to the relevant class and/or series of Shares to be
paid by the Distributor to account executives of the Distributor and to
broker-dealers and financial institutions which have dealer agreements with the
Distributor. So long as a Plan (or any amendment thereto) is in effect, at the
request of the Board of Trustees or any agent or representative of the Fund, the
Distributor shall provide such additional information as may reasonably be
requested concerning the activities of the Distributor hereunder and the costs
incurred in performing such activities with respect to the relevant class and/or
series of Shares.

Section 9. ALLOCATION OF EXPENSES

The Fund shall bear all costs and expenses of the continuous offering
of its Shares (except for those costs and expenses borne by the Distributor
pursuant to a Plan and subject to the requirements of Rule 12b-1 under the
Investment Company Act), including fees and disbursements of its counsel and
auditors, in connection with the preparation and filing of any required
Registration Statements and/or Prospectuses under the Investment Company Act or
the Securities Act, and all amendments and supplements thereto, and preparing
and mailing annual and periodic reports and proxy materials to shareholders
(including but not limited to the expense of setting in type any such
Registration Statements, Prospectuses, annual or periodic reports or proxy
materials). The Fund shall also bear the cost of expenses of qualification of
the Shares for sale, and, if necessary or advisable in connection therewith, of
qualifying the Fund as a broker or dealer, in such states of the United States
or other

<PAGE>

jurisdictions as shall be selected by the Fund and the Distributor pursuant
to Section 5.4 hereof and the cost and expense payable to each such state for
continuing qualification therein until the Fund decides to discontinue such
qualification pursuant to Section 5.4 hereof. As set forth in Section 8
above, the Fund shall also bear the expenses it assumes pursuant to any Plan,
so long as such Plan is in effect.

Section 10. INDEMNIFICATION

10.1 The Fund agrees to indemnify, defend and hold the Distributor,
its officers and directors and any person who controls the Distributor within
the meaning of Section 15 of the Securities Act, free and harmless from and
against any and all claims, demands, liabilities and expenses (including the
cost of investigating or defending such claims, demands or liabilities and any
reasonable counsel fees incurred in connection therewith) which the Distributor,
its officers, directors or any such controlling person may incur under the
Securities Act, or under common law or otherwise, arising out of or based upon
any untrue statement of a material fact contained in the Registration Statement
or Prospectus or arising out of or based upon any alleged omission to state a
material fact required to be stated in either thereof or necessary to make the
statements in either thereof not misleading, except insofar as such claims,
demands, liabilities or expenses arise out of or are based upon any such untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with information furnished in writing by the Distributor
to the Fund for use in the Registration Statement or Prospectus; provided,
however, that this indemnity agreement shall not inure to the benefit of any
such officer, director, trustee or controlling person unless a court of
competent jurisdiction shall determine in a final decision on the merits, that
the person to be indemnified was not liable by reason of willful misfeasance,
bad faith or gross negligence in the performance of its duties, or by reason of
its reckless disregard of its obligations under this Agreement (disabling
conduct), or, in the absence of such a decision, a reasonable determination,
based upon a review of the facts, that the indemnified person was not liable by
reason of disabling conduct, by (a) a vote of a majority of a quorum of
directors or trustees who are neither "interested persons" of the Fund as
defined in Section 2(a)(19) of the Investment Company Act nor parties to the
proceeding, or (b) an independent legal counsel in a written opinion. The Fund's
agreement to indemnify the Distributor, its officers and directors or trustees
and any such controlling person as aforesaid is expressly conditioned upon the
Fund's being promptly notified of any action brought against the Distributor,
its officers or directors or trustees, or any such controlling person, such
notification to be given by letter or telegram addressed to the Fund at its
principal business office. The Fund agrees promptly to notify the Distributor
of the commencement of any litigation or proceedings against it or any of

<PAGE>

its officers or directors in connection with the issue and sale of any Shares.

10.2 The Distributor agrees to indemnify, defend and hold the Fund,
its officers and Trustees and any person who controls the Fund, if any, within
the meaning of Section 15 of the Securities Act, free and harmless from and
against any and all claims, demands, liabilities and expenses (including the
cost of investigating or defending against such claims, demands or liabilities
and any reasonable counsel fees incurred in connection therewith) which the
Fund, its officers and Trustees or any such controlling person may incur under
the Securities Act or under common law or otherwise, but only to the extent that
such liability or expense incurred by the Fund, its Trustees or officers or such
controlling person resulting from such claims or demands shall arise out of or
be based upon any alleged untrue statement of a material fact contained in
information furnished in writing by the Distributor to the Fund for use in the
Registration Statement or Prospectus or shall arise out of or be based upon any
alleged omission to state a material fact in connection with such information
required to be stated in the Registration Statement or Prospectus or necessary
to make such information not misleading. The Distributor's agreement to
indemnify the Fund, its officers and Trustees and any such controlling person as
aforesaid, is expressly conditioned upon the Distributor's being promptly
notified of any action brought against the Fund, its officers and Trustees or
any such controlling person, such notification being given to the Distributor at
its principal business office.

Section 11. DURATION AND TERMINATION OF THIS AGREEMENT

11.1 This Agreement shall become effective as of the date first above
written and shall remain in force for two years from the date hereof and
thereafter, but only so long as such continuance is specifically approved at
least annually by (a) the Board of Trustees of the Fund, or by the vote of a
majority of the outstanding voting securities of the applicable class and/or
series of the Fund, and (b) by the vote of a majority of those Trustees who are
not parties to this Agreement or interested persons of any such parties and who
have no direct or indirect financial interest in this Agreement or in the
operation of any of the Fund's Plans or in any agreement related thereto
(Independent Trustees), cast in person at a meeting called for the purpose of
voting upon such approval.

11.2 This Agreement may be terminated at any time, without the payment
of any penalty, by a majority of the Independent Trustees or by vote of a
majority of the outstanding voting securities of the applicable class and/or
series of the Fund, or by the Distributor, on sixty (60) days' written notice to
the other party. This Agreement shall automatically terminate in the event of
its assignment.

<PAGE>

11.3 The terms "affiliated person," "assignment," "interested person"
and "vote of a majority of the outstanding
voting securities", when used in this Agreement, shall have the respective
meanings specified in the Investment Company Act.

Section 12. AMENDMENTS TO THIS AGREEMENT

This Agreement may be amended by the parties only if such amendment is
specifically approved by (a) the Board of Trustees of the Fund, or by the vote
of a majority of the outstanding voting securities of the applicable class
and/or series of the Fund, and (b) by the vote of a majority of the Independent
Trustees cast in person at a meeting called for the purpose of voting on such
amendment.

Section 13. SEPARATE AGREEMENT AS TO CLASSES AND/OR SERIES

The amendment or termination of this Agreement with respect to any
class and/or series shall not result in the amendment or termination of this
Agreement with respect to any other class and/or series unless explicitly so
provided.

Section 14. GOVERNING LAW

The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of the State of New York as at the time in effect and
the applicable provisions of the Investment Company Act. To the extent that the
applicable law of the State of New York, or any of the provisions herein,
conflict with the applicable provisions of the Investment Company Act, the
latter shall control.

Section 15. LIABILITIES OF THE FUND

The name Prudential California Municipal Fund is the designation of the
Trustees under a Declaration of Trust, dated May 18, 1984, as thereafter
amended, and all persons dealing with the Fund must look solely to the property
of the Fund for the enforcement of any claims against the Fund as neither the
Trustees, officers, agents or shareholders assume any personal liability for
obligations entered into on behalf of the Fund.

<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year above written.

Prudential Securities Incorporated

By: /s/ Robert F. Gunia
--------------------------------
Robert F. Gunia
Senior Vice President

Prudential California Municipal
Series Fund

By: /s/ Richard A. Redeker
--------------------------------
Richard A. Redeker
President

<PAGE>

EXHIBIT 11

CONSENT OF INDEPENDENT AUDITORS

We consent to the use in Post-Effective Amendment No. 22 to Registration
Statement No. 2-91215 of Prudential California Municipal Fund of our reports
dated October 16, 1995, appearing in the Statement of Additional Information,
which is incorporated by reference in such Registration Statement, and to the
references to us under the headings "Financial Highlights" in the
Prospectuses, which are incorporated by reference in such Registration
Statement, and "Custodian, Transfer and Dividend Disbursing Agent and
Independent Accountants" in the Statement of Additional Information.

/S/Deloitte & Touche LLP

Deloitte & Touche LLP
New York, New York
August 9, 1996

<PAGE>

PRUDENTIAL CALIFORNIA MUNICIPAL FUND
(the Fund)

PLAN PURSUANT TO RULE 18F-3

The Fund hereby adopts this plan pursuant to Rule 18f-3 under the
Investment Company Act of 1940 (the 1940 Act), setting forth the separate
arrangement and expense allocation of each class of shares. Any material
amendment to this plan is subject to prior approval of the Board of
Directors, including a majority of the independent Directors.

CLASS CHARACTERISTICS

CLASS A SHARES: Class A shares are subject to a high initial sales charge
and a distribution and/or service fee pursuant to Rule
12b-1 under the 1940 Act (Rule 12b-1 fee) not to exceed
.30 of 1% per annum of the average daily net assets of the
class. The initial sales charge is waived or reduced for
certain eligible investors.

CLASS B SHARES: Class B shares are not subject to an initial sales charge
but are subject to a high contingent deferred sales charge
(declining by 1% each year) which will be imposed on
certain redemptions and a Rule 12b-1 fee of not to exceed
[.75 of 1%/1%] per annum of the average daily net assets
of the class. The contingent deferred sales charge is
waived for certain eligible investors. Class B shares
automatically convert to Class A shares approximately
[seven] years after purchase.

CLASS C SHARES: Class C shares are not subject to an initial sales charge
but are subject to a low contingent deferred sales charge
(declining by 1% each year) which will be imposed on
certain redemptions and a Rule 12b-1 fee not to exceed 1%
per annum of the average daily net assets of the class.

CLASS Z SHARES: Class Z shares are not subject to either an initial or
contingent deferred sales charge nor are they subject to
any Rule 12b-1 fee.

INCOME AND EXPENSE ALLOCATIONS

Income, any realized and unrealized capital gains and losses, and
expenses not allocated to a particular class,

<PAGE>

will be allocated to each class on the basis of the net asset value of
that class in relation to the net asset value of the Fund.

DIVIDENDS AND DISTRIBUTIONS

Dividends and other distributions paid by the Fund to each class of
shares, to the extent paid, will be paid on the same day and at the
same time, and will be determined in the same manner and will be in the
same amount, except that the amount of the dividends and other
distributions declared and paid by a particular class may be different
from that paid by another class because of Rule 12b-1 fees and other
expenses borne exclusively by that class.

EXCHANGE PRIVILEGE

Each class of shares is generally exchangeable for the same class of
shares (or the class of shares with similar characteristics), if any, of
the other Prudential Mutual Funds (subject to certain minimum investment
requirements) at relative net asset value without the imposition of any
sales charge.

Class B and Class C shares (which are not subject to a contingent
deferred sales charge) of shareholders who qualify to purchase Class A
shares at net asset value will be automatically exchanged for Class A
shares on a quarterly basis, unless the shareholder elects otherwise.

CONVERSION FEATURES

Class B shares will automatically convert to Class A shares on a
quarterly basis approximately seven years after purchase. Conversions
will be effected at relative net asset value without the imposition of
any additional sales charge.

GENERAL

A. Each class of shares shall have exclusive voting rights on any matter
submitted to shareholders that relates solely to its arrangement and
shall have separate voting rights on any matter submitted to shareholders
in which the interests of one class differ from the interests of any
other class.

B. On an ongoing basis, the Directors, pursuant to their fiduciary
responsibilities under the 1940 Act and otherwise, will monitor the Fund
for the existence of any material conflicts among the interests of its
several classes. The Directors, including a majority of the independent

<PAGE>

Directors, shall take such action as is reasonably necessary to eliminate
any such conflicts that may develop. Prudential Mutual Fund Management,
Inc., the Fund's Manager, will be responsible for reporting any potential
or existing conflicts to the Directors.

C. For purposes of expressing an opinion on the financial statements of the
Fund, the methodology and procedures for calculating the net asset value
and dividends/distributions of the Fund's several classes and the proper
allocation of income and expenses among such classes will be examined
annually by the Fund's independent auditors who, in performing such
examination, shall consider the factors set forth in the relevant
auditing standards adopted, from time to time, by the American Institute
of Certified Public Accountants.

Dated: March 1, 1996

<PAGE>
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<PERIOD-END> FEB-29-1996
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<OTHER-ITEMS-LIABILITIES> 403,925
<TOTAL-LIABILITIES> 2,420,675
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<PAID-IN-CAPITAL-COMMON> 188,742,288
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<SHARES-COMMON-PRIOR> 18,962,770
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<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (3,609,023)
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<NET-ASSETS> 200,651,791
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 6,393,480
<EXPENSES-NET> 436,231
<NET-INVESTMENT-INCOME> 5,957,249
<REALIZED-GAINS-CURRENT> 987,794
<APPREC-INCREASE-CURRENT> 4,598,331
<NET-CHANGE-FROM-OPS> 11,543,374
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<PAGE>
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<PAGE>
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<NAME> PRUDENTIAL CALIFORNIA MUNICIPAL FUND
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<PAGE>
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<NAME> CALIFORNIA SERIES CLASS A

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> FEB-29-1996
<INVESTMENTS-AT-COST> 154,653,056
<INVESTMENTS-AT-VALUE> 168,969,452
<RECEIVABLES> 2,522,035
<ASSETS-OTHER> 133,403
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 171,624,890
<PAYABLE-FOR-SECURITIES> 941,617
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 217,236
<TOTAL-LIABILITIES> 1,158,853
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 159,493,546
<SHARES-COMMON-STOCK> 14,459,860
<SHARES-COMMON-PRIOR> 15,002,544
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<PAGE>
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<PAGE>
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<PAGE>
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<NAME> PRUDENTIAL CALIFORNIA MUNICIPAL FUND-MONEY MARKET SERI

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