PRUDENTIAL CALIFORNIA MUNICIPAL FUND, N-30D, 2000-05-05

PRUDENTIAL CALIFORNIA MUNICIPAL FUND
N-30D, 2000-05-05

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SEMIANNUAL REPORT FEBRUARY 29, 2000

Prudential
California Municipal Fund/
California Series

Fund Type Municipal bond
Objective Maximize current income that is exempt from
California State and federal income
taxes, consistent with the preservation of
capital

(GRAPHIC)

(LOGO)

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

<PAGE>
Build on the Rock

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

Contents
1 Message From the Fund's President
2 Performance Review
2 Portfolio Composition
3 Performance at a Glance
4 Credit Quality
5 Five Largest Issuers
7 Financial Statements

www.prudential.com (800) 225-1852

Message From the Fund's President As of April 17, 2000

(PHOTO)
Dear Shareholder
The Class A shares of Prudential California
Municipal Fund/California Series returned 0.30%
during its fiscal half year that ended February 29,
2000. For the same period, the return on the
Series' benchmark Lipper Average was a negative
1.40%. After the initial sales charge, the Series'
Class A shares posted a negative return of 2.70%.
Prices of municipal bonds declined primarily
because investors required higher yields in light
of two short-term rate increases implemented by the
Federal Reserve to slow the rapid pace of U.S.
economic growth.

Staying the course amid ups and downs of financial markets
Many investors consider selling an asset class that
has performed poorly in favor of investments that
are currently gaining in value. That may not be the
best move. Changes in asset allocation should
reflect basic shifts in an investor's time horizon
and tolerance for risk--not recent fluctuations in
the performance of financial markets. One strategy
may be to own a diversified portfolio of mutual
funds that invests in stocks, bonds, and money
market instruments because this approach may help
to reduce risk.

Deciding on the correct level of diversification is
not easy. It requires
an understanding of an investor's risk tolerance
and overall investment strategy. In these volatile
times, we recommend consulting your financial
advisor to develop your asset allocation goals.

Thank you for your continued confidence in
Prudential mutual funds.

Sincerely,

John R. Strangfeld
President
Prudential California Municipal Fund

1
<PAGE>

Prudential California Municipal Fund California Series
Performance Review

(PHOTO) (PHOTO) Portfolio Managers Evan Lamp (Municipal
Bonds Sector Team Leader) and James M. Murphy

Bear market in municipal bonds continued
During our six-month review period, increases in
short-term interest
rates by the Federal Reserve and sales of municipal
bonds by investors who wanted to realize tax losses
pressured the prices of tax-exempt debt securities.
Given this bearish trend, we positioned the Series
so that it would be less vulnerable to the decline
in bond prices.

The Fed raised its target for the federal funds
rate (what U.S. banks charge each other for
overnight loans) by a quarter of a percentage point
in November 1999 and February 2000 to curb U.S.
economic growth and reduce the economic imbalances
that can lead to higher inflation. These moves
pushed up the rate to 5.75% by February 2000. The
Fed also engineered two quarter-point increases
that raised its discount rate on loans to banks
from the Federal Reserve system to 5.25% by
February 2000. As short-term rates rose, investors
required higher yields on both short- and long-term
municipal bonds, which caused their prices to fall.

More selling pressure emerged in late December
1999. As interest rates climbed, investors realized
capital losses by selling bonds or bond funds. Many
investors reinvest in new bonds or other bond funds
with a lower cost basis for tax purposes (due to
the higher level of yields). This is called "tax
loss swapping." In the municipal bond market, the
capital loss often reduces taxes, while the higher
yields on the new bonds or other funds are
generally tax exempt.

Portfolio Composition

Expressed as a percentage of
total investments as of 2/29/00
48.28% General Obligations
33.27 Revenue Bonds
17.45 Prerefunded Bonds
1.00 Cash Equivalents

2
<PAGE>

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

<TABLE>
Cumulative Total Returns1 As of 2/29/00
<CAPTION>
Six One Five Ten Since
Months Year Years Years Inception2
<S> <C> <C> <C> <C> <C>
Class A 0.30% -3.02% 29.70% (29.47) 85.21% (84.88) 86.33% (86.00)
Class B 0.18 -3.27 27.25 (27.02) 78.12 (77.80) 189.00 (183.83)
Class C 0.05 -3.52 25.68 (25.46) N/A 28.99 (28.76)
Class Z 0.43 -2.86 N/A N/A 17.16 (17.05)
Lipper CA Muni
Debt Fund Avg.3 -1.40 -4.88 26.99 82.64 ***
</TABLE>

<TABLE>
Average Annual Total Returns1 As of 3/31/00
<CAPTION>
One Five Ten Since
Year Years Years Inception2
<S> <C> <C> <C> <C>
Class A -3.66% 4.97% (4.93) 6.27% (6.25) 6.22% (6.20)
Class B -5.94 5.05 (5.01) 6.18 (6.16) 7.23 (7.09)
Class C -3.17 4.74 (4.70) N/A 4.82 (4.79)
Class Z -0.52 N/A N/A 5.26 (5.24)
</TABLE>

<TABLE>
Distributions and Yields As of 2/29/00
<CAPTION>
Total Distributions 30-Day Taxable Equivalent Yield4 at tax rates of
Paid for Six Months SEC Yield 36% 39.6%
<S> <C> <C> <C>
Class A $0.30 4.54% 7.82% 8.29%
Class B $0.28 4.44 7.65 8.10
Class C $0.27 4.15 7.15 7.58
Class Z $0.31 4.94 8.51 9.02
</TABLE>

Past performance is not indicative of future results.
Principal and investment return will fluctuate so
that an investor's shares, when redeemed, may be
worth more or less than their original cost.
1 Source: Prudential Investments Fund Management
LLC and Lipper Inc. The cumulative total returns do
not take into account sales charges. The average
annual total returns do take into account
applicable sales charges. The Series charges a
maximum front-end sales charge of 3% for Class A
shares and a declining contingent deferred sales
charge (CDSC) of 5%, 4%, 3%, 2%, 1%, and 1% for six
years for Class B shares. Class B shares will
automatically convert to Class A shares, on a
quarterly basis, approximately seven years after
purchase. Class C shares are subject to a front-end
sales charge of 1% and a CDSC for 18 months. Class
Z shares are not subject to a sales charge or
distribution and service (12b-1) fees. Without
waiver of management fees and/or expense
subsidization, the Series' cumulative and average
annual total returns would have been lower, as
indicated in parentheses ( ).

2 Inception dates: Class A, 1/22/90; Class B,
9/19/84; Class C, 8/1/94; and Class Z, 9/18/97.

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

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

***Lipper Since Inception returns are 84.80% for
Class A, 216.43% for Class B, 30.52% for Class C,
and 12.97% for Class Z, based on all funds in each
share class.

3
<PAGE>

Prudential California Municipal Fund California Series
Performance Review

A silver lining among the clouds
Despite the bear market, the Series generated
positive returns, and we
were able to increase the Series' distribution
yield in this rising-interest-rate environment.

Another positive development occurred in February
2000. Fitch IBCA, a U.S. credit-rating agency,
upgraded California general obligation bonds,
citing the state's fundamental strengths that are
enhanced by its favorable economic conditions and
financial operations. California has led the nation
in employment growth since 1996 with its diverse
economy comprised of Silicon Valley's high-tech
industries in the north and tourism, entertainment,
telecommunications, and defense-related businesses
in the south, to name a few.

We pursued a short-duration strategy
When bond markets sell off, lowering a portfolio's
duration generally provides some degree of protection by making the
portfolio less sensitive to the rise in bond
yields. (Duration measures how much a portfolio's
bonds will fluctuate in price for a given change in
interest rates. It is expressed in years.) The
Series' share classes, without sales charges
factored in, performed better than its benchmark
Lipper Average, which does not consider sales
charges. This occurred largely because we kept the
Series' duration shorter than average for much of
its fiscal half year.

However, we began to lengthen the Series' duration
in January 2000 because we believe the Fed's
monetary policy moves will keep inflation in check,
which could allow municipal bond yields to decline
as the year progresses.

Credit Quality
Expressed as a percentage of total
investments as of 2/29/00
16.18% AAA
5.88 AA
10.55 A
17.29 BBB
3.92 BB
2.14 B
43.04 Insured
1.00 Cash Equivalents

4
<PAGE>

www.prudential.com (800) 225-1852

In addition, the Series' performance was enhanced
by its considerable
exposure to prerefunded bonds, which stood at 17%
of its total investments as of February 29, 2000.
Prices of prerefunded bonds fared better due to
their high coupon rates, shorter-term maturities,
and sound credit quality. (Many prerefunded bonds
are backed by direct obligations of the U.S.
government.)

We lessened the impact of "market-discount taxation"
Another strategy that aided the Series involved
selling some of its municipal bonds before they
became subject to ordinary income taxes for new
buyers. Here's how it works: When yields climb
beyond a certain point for every municipal bond,
the market discount on that bond may become subject
to ordinary income taxes for new buyers. This
lowers the value of the bond because new buyers
would want to purchase the bond cheaply enough to
compensate for the greater tax liability.

Looking Ahead
The powerful U.S. economic expansion has improved
the credit quality of many state and local
governments and reduced their borrowing needs,
allowing them to issue fewer bonds. The supply of
new municipal bonds has also decreased because the
rising-interest-rate environment has provided less
opportunity for issuers to save money by replacing
older higher-coupon bonds with new lower-coupon
bonds. With the declining supply, if investor
demand remains strong, then the tax-exempt bond
market should perform better than other U.S. fixed-
income markets in 2000.

Five Largest Issuers
Expressed as a percentage of net assets
as of 2/29/00

13.80% Southern California Public
Power Authority
7.05 Orange County Local
Transportation Authority
5.16 Santa Margarita Dana
Point Authority
4.30 Long Beach Harbor Revenue
3.90 Brea Public Finance Authority

<PAGE>
Prudential California Municipal Fund California Series

Financial
Statements

<PAGE>
Prudential California Municipal Fund California Series
Portfolio of Investments as of February 29, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Moody's Interest Maturity Amount Value
Description (a) Rating Rate Date (000) (Note 1)
- ----------------------------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS 99.0%
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Alisal Union Sch. Dist.,
Capital Apprec., Ser C, F.G.I.C. Aaa Zero 8/01/12 $ 225 $ 113,708
Capital Apprec., Ser C, F.G.I.C. Aaa Zero 8/01/16 1,005 386,161
Baldwin Park Pub. Fin. Auth. Rev.,
Tax Alloc. BBB(d) 7.05% 9/01/14 1,020 1,093,236
Berkeley Hosp. Rev., Alta Bates
Hosp. Corp. Aaa 7.65 12/01/15 1,325(c) 1,364,233
Brea Pub. Fin. Auth. Rev., Sub. Tax
Alloc. Redev. Proj., Ser. C NR 8.10 3/01/21 5,000 5,179,600
Buena Park Cmnty. Redev. Agcy.,
Central Bus. Dist. Proj. BBB+(d) 7.10 9/01/14 2,500 2,581,725
California St. Hlth. Facs. Fin.
Auth. Rev., Eskaton Properties NR 7.50 5/01/20 4,500(c)(e) 4,616,145
California St. Hsg. Fin. Agcy.
Rev., Sngl. Fam. Mtge., Ser. A Aa2 Zero 2/01/15 8,420 1,949,146
Chula Vista Redev. Agcy., Bayfront
Tax Alloc. BBB+(d) 7.625 9/01/24 4,500 4,894,695
Commerce California Cmnty. Dev.
Comm., Rfdg. Merged Redev. Proj.,
Ser. A NR 5.65 8/01/18 1,175 1,033,518
Contra Costa Cnty., Spec. Tax
Cmnty. Facs. Dist. Pleasant Hill NR 8.125 8/01/16 1,300(c) 1,347,879
Desert Hosp. Dist., Cert. of Part. AAA(d) 8.10 7/01/20 5,000(c)(e) 5,168,850
East Palo Alto Sanit. Dist.,
Cert. of Part. NR 8.25 10/01/15 1,295 1,333,384
Fairfield Pub. Fin. Auth. Rev.,
Fairfield Redev. Projs., Ser. A NR 7.90 8/01/21 4,200(c) 4,487,532
Foothill/Eastern Trans.
Corridor Agcy.,
Toll Rd. Rev. Aaa Zero 1/01/16 5,000 1,999,850
Toll Rd. Rev. Aaa Zero 1/01/18 2,950 1,025,803
Toll Rd. Rev. Baa3 Zero 1/15/26 5,200 2,629,224
</TABLE>
See Notes to Financial Statements 7

<PAGE>
Prudential California Municipal Fund California Series
Portfolio of Investments as of February 29, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Principal
Moody's Interest Maturity Amount Value
Description (a) Rating Rate Date (000) (Note 1)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Kings Cnty. Wst. Mgmt. Auth., Solid
Wst. Rev., A.M.T. BBB(d) 7.20% 10/01/14 $ 1,150 $ 1,207,420
La Canada Unified Sch. Dist.,
Capital Apprec., F.G.I.C. Aaa Zero 8/01/12 1,600 808,592
Unltd. Tax Gen. Oblig., F.G.I.C. Aaa Zero 8/01/13 1,680 793,212
Long Beach Harbor Rev., Ser. A,
A.M.T., F.G.I.C. Aaa 6.00 5/15/16 5,500 5,696,130
Long Beach Redev. Agcy. Dist.
No. 3, Spec. Tax Rev.
(cost $2,950,530; purchased
10/18/93) NR 6.375 9/01/23 3,000(g) 2,831,340
Los Angeles Cnty., Cert. of Part.,
Correctional Facs. Proj., M.B.I.A. Aaa Zero 9/01/10 3,770 2,171,633
Los Angeles Cnty., Hsg. Auth.,
Multi-fam. Mtge. Rev., Mayflower
Gardens Proj., Ser. K, G.N.M.A. NR 8.875 12/20/10 2,100(c)(e) 2,240,406
Los Angeles Conv. & Exhib. Ctr.
Auth., Cert. of Part. Aaa 9.00 12/01/10 1,250(c) 1,515,338
Madera Redev. Agcy. Tax Rev. Tax
Alloc. Redev. Proj., F.S.A. Aaa 4.75 9/01/28 1,000 815,370
Met. Wtr. Dist. of Southern
California,
Rev. Linked S.A.V.R.S. & R.I.B.S. Aa2 5.75 8/10/18 1,000 992,110
Waterworks Rev. Rfdg., Ser. A Aa2 5.75 7/01/21 4,000 3,994,760
Midpeninsula Regional Open Space
Dist. Fin. Auth. Rev., 1996,
A.M.B.A.C. Aaa Zero 9/01/15 3,000 1,225,140
Mojave Desert Solid Wst. Victor
Vally Materials, Recov. Fac.,
A.M.T. Baa1 7.875 6/01/20 1,175 1,251,634
Orange Cnty. Loc. Trans. Auth.,
Linked S.A.V.R.S. & R.I.B.S.,
A.M.B.A.C. Aaa 6.20 2/14/11 8,000 8,537,040
Spec. Tax Rev., R.I.B.S. Aa3 7.807(f) 2/14/11 750 828,750
</TABLE>
8 See Notes to Financial Statements

<PAGE>
Prudential California Municipal Fund California Series
Portfolio of Investments as of February 29, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Principal
Moody's Interest Maturity Amount Value
Description (a) Rating Rate Date (000) (Note 1)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Petaluma City Joint Union High
Sch. Dist.,
Capital Apprec., M.B.I.A. Aaa Zero 8/01/15 $ 1,600 $ 657,536
Capital Apprec., M.B.I.A. Aaa Zero 8/01/16 1,455 559,069
Capital Apprec., M.B.I.A. Aaa Zero 8/01/17 3,015 1,076,415
Port Redwood City Rev., A.M.T. BBB(d) 5.40% 6/01/19 500 423,985
Puerto Rico Commonwealth, M.B.I.A. Aaa 5.75 7/01/10 2,000 2,091,840
Redding Elec. Sys. Rev.,
Cert. of Part., R.I.B.S., M.B.I.A. Aaa 8.70(f) 7/01/22 1,750 1,944,687
Linked S.A.V.R.S. & R.I.B.S.,
M.B.I.A. Aaa 6.368 7/01/22 50 52,809
Roseville City Sch. Dist., Cap.
Apprec. Ser. A, F.G.I.C. Aaa Zero 8/01/10 1,230 707,312
San Bernardino Cnty., Cert. of
Part., Med. Ctr. Fin. Proj.,
M.B.I.A. Aaa 5.50 8/01/22 4,400 4,198,216
San Francisco California Bay Area
Rapid Transit Dist., Sales Tax
Rev., A.M.B.A.C. Aaa 4.75 7/01/23 1,300 1,085,799
San Francisco City & Cnty., Redev.
Agcy., Lease Rev., Cap. Apprec. A1 Zero 7/01/09 2,000 1,199,500
San Jose, Unified Sch. Dist., Santa
Clara, Gen. Oblig., Ser. A,
F.G.I.C. Aaa Zero 8/01/17 1,350 481,977
Santa Margarita, Dana Point Auth.,
Impvt. Dists. 3, Ser. B, M.B.I.A. Aaa 7.25 8/01/08 2,500 2,881,725
Impvt. Dists. 3, Ser. A, M.B.I.A. Aaa 7.25 8/01/09 1,400 1,624,602
Impvt. Dists. 3, Ser. B, M.B.I A. Aaa 7.25 8/01/09 1,000 1,160,430
Impvt. Dists. 3, Ser. B, M.B.I.A. Aaa 7.25 8/01/14 1,000 1,186,440
So. Orange Cnty. Pub. Fin. Auth.,
Spec. Tax Rev., M.B.I.A. Aaa 7.00 9/01/11 3,500(e) 4,030,530
So. Tahoe Joint Pwrs. Fin. Auth.
Rev., Rfdg. So. Tahoe Redev.
Proj., Ser. A BBB-(d) 5.375 10/01/30 1,250 1,011,013
</TABLE>
See Notes to Financial Statements 9

<PAGE>
Prudential California Municipal Fund California Series
Portfolio of Investments as of February 29, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Principal
Moody's Interest Maturity Amount Value
Description (a) Rating Rate Date (000) (Note 1)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Southern California Pub. Pwr.
Auth.,
Proj. Rev. A2 6.75% 7/01/10 $ 2,265 $ 2,516,007
Proj. Rev. A2 6.75 7/01/11 1,195 1,329,282
Proj. Rev. A2 6.75 7/01/12 2,935 3,293,892
Proj. Rev. A2 6.75 7/01/13 4,000 4,467,840
Proj. Rev., A.M.B.A.C. Aaa Zero 7/01/16 7,925(e) 3,098,992
Transmission Proj. Rev. Rfdg.,
Ser. A, F.G.I.C. Aaa Zero 7/01/12 7,080 3,620,429
Stockton Cmnty. Facs. Dist. No.
90-2, Brookside Estates NR 6.20 8/01/15 700 678,237
Sulphur Springs Union Sch. Dist.,
Ser. A, M.B.I.A. Aaa Zero 9/01/09 2,000 1,216,420
Torrance Redev. Agcy., Rfdg. Tax.
Alloc., Downtown Redev. Baa2 7.125 9/01/21 1,580(c) 1,675,132
Vacaville Cmnty. Redev. Agcy.,
Cmnty. Hsg. Fin. Multi-fam. A-(d) 7.375 11/01/14 1,110 1,124,663
Victor Valley Union High Sch.
Dist.,
Gen. Oblig., M.B.I.A. Aaa Zero 9/01/09 2,075 1,269,070
Gen. Oblig., M.B.I.A. Aaa Zero 9/01/15 5,070 2,092,440
Virgin Islands Terr., Hugo Ins.
Claims Fund Proj., Ser. 91 NR 7.75 10/01/06 605(c) 634,760
Walnut Valley Unified Sch. Dist.,
M.B.I.A. Aaa 6.00 8/01/15 1,870 1,962,284
------------
Total long-term investments
(cost $125,883,433) 131,466,897

SHORT-TERM INVESTMENTS 1.0%
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
California St. Poll. Ctrl. Fin.,
Pacific Gas & Elec Co. Auth. Rev.,
Ser. 96-C, F.R.D.D. A1+(d) 3.15 3/01/00 700 700,000
</TABLE>
10 See Notes to Financial Statements

Other liabilities in excess of
assets (19,353)
------------
Net Assets 100% $132,747,544
------------
------------
</TABLE>
- ------------------------------
(a) The following abbreviations are used in portfolio descriptions:
A.M.B.A.C.--American Municipal Bond Assurance Corporation.
A.M.T.--Alternative Minimum Tax.
F.G.I.C.--Financial Guaranty Insurance Company.
F.R.D.D.--Floating Rate (Daily) Demand Note (b).
F.S.A.--Financial Security Assurance.
G.N.M.A.--Government National Mortgage Association.
M.B.I.A.--Municipal Bond Insurance Association.
R.I.B.S.--Residual Interest Bearing Securities.
S.A.V.R.S.--Select Auction Variable Rate Securities.
(b) For purposes of amortized cost valuation, the maturity date of Floating Rate
Demand Notes is considered to be the later of the next date on which the
security can be redeemed at par, or the next date on which the rate of
interest is adjusted.
(c) Prerefunded issues are secured by escrowed cash and/or direct U.S.
guaranteed obligations.
(d) Standard & Poor's Rating.
(e) When-issued security
(f) Inverse floating rate bond. The coupon is inversely indexed to a floating
interest rate. The rate shown is the rate at year end.
(g) Indicates a restricted security. The aggregate cost of restricted securities
is $2,950,530 and the aggregate value is $2,831,340 which represents
approximately 2.1% of net assets.
NR--Not Rated by Moody's or Standard & Poor's.
The Fund's current Statement of Additional Information contains a description of
Moody's and Standard & Poor's ratings.
See Notes to Financial Statements 11

<PAGE>
Prudential California Municipal Fund California Series
Statement of Assets and Liabilities (Unaudited)
<TABLE>
<CAPTION>
February 29, 2000
<S> <C> <C>
- ----------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $127,183,433) $ 132,766,897
Cash 72,386
Interest receivable 1,679,483
Receivable for Series shares sold 1,923
Other assets 3,150
-----------------
Total assets 134,523,839
-----------------
LIABILITIES
Payable for investments purchased 1,086,434
Payable for Series shares reacquired 460,834
Accrued expenses 92,624
Management fee payable 52,566
Dividends payable 39,667
Distribution fee payable 34,188
Deferred trustee's fees 9,982
-----------------
Total liabilities 1,776,295
-----------------
NET ASSETS $ 132,747,544
-----------------
-----------------
Net assets were comprised of:
Shares of beneficial interest, at par $ 118,788
Paid-in capital in excess of par 129,750,403
-----------------
129,869,191
Accumulated net realized loss on investments (2,705,111)
Net unrealized appreciation on investments 5,583,464
-----------------
Net assets, February 29, 2000 $ 132,747,544
-----------------
-----------------
</TABLE>

12 See Notes to Financial Statements

<PAGE>
Prudential California Municipal Fund California Series
Statement of Assets and Liabilities (Unaudited) Con't.
<TABLE>
<CAPTION>
February 29, 2000
<S> <C> <C>
- ----------------------------------------------------------------------------------------
Class A:
Net asset value and redemption price per share ($91,505,966
/ 8,187,510 shares of beneficial interest issued and
outstanding) $11.18
Maximum sales charge (3% of offering price) .35
-----------------
Maximum offering price to public $11.53
-----------------
-----------------
Class B:
Net asset value, offering price and redemption price per
share
($38,630,621 / 3,457,697 shares of beneficial interest
issued and outstanding) $11.17
-----------------
-----------------
Class C:
Net asset value and redemption price per share
($1,151,395 / 103,058 shares of beneficial interest
issued and outstanding) $11.17
Sales charge (1% of offering price) .11
-----------------
Offering price to public $11.28
-----------------
-----------------
Class Z:
Net asset value, offering price and redemption price per
share
($1,459,562 / 130,524 shares of beneficial interest
issued and outstanding) $11.18
-----------------
-----------------
</TABLE>

See Notes to Financial Statements 13

<PAGE>
Prudential California Municipal Fund California Series
Statement of Operations (Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended
February 29, 2000
<S> <C> <C>
- ----------------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest $ 4,244,334
-----------------
Expenses
Management fee 344,037
Distribution fee--Class A 116,132
Distribution fee--Class B 105,863
Distribution fee--Class C 5,243
Custodian's fees and expenses 42,000
Transfer agent's fees and expenses 30,000
Reports to shareholders 22,000
Registration fees 14,000
Legal fees and expenses 7,000
Audit fee and expenses 6,500
Trustees' fees and expenses 5,000
Miscellaneous 2,201
-----------------
Total expenses 699,976
Less: Custodian fee credit (Note 1) (1,299)
-----------------
Net expenses 698,677
-----------------
Net investment income 3,545,657
-----------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on:
Investment transactions (250,879)
Financial futures transactions 424,723
-----------------
173,844
-----------------
Net change in unrealized appreciation (depreciation) on:
Investments (3,394,251)
Financial futures contracts (87,938)
-----------------
(3,482,189)
-----------------
Net loss on investments (3,308,345)
-----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 237,312
-----------------
-----------------
</TABLE>

14 See Notes to Financial Statements

<PAGE>
Prudential California Municipal Fund California Series
Statement of Changes in Net Assets (Unaudited)
<TABLE>
<CAPTION>
Six Months Year Ended
Ended August 31,
February 29, 2000 1999
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income $ 3,545,657 $ 7,409,014
Net realized gain on investment
transactions 173,844 324,713
Net change in unrealized appreciation
(depreciation) of investments (3,482,189) (10,186,236)
----------------- --------------
Net increase (decrease) in net assets
resulting from operations 237,312 (2,452,509)
----------------- --------------
Dividends and distributions (Note 1)
Dividends from net investment income
Class A (2,432,421) (4,684,010)
Class B (1,053,530) (2,591,035)
Class C (33,053) (60,435)
Class Z (26,653) (73,534)
----------------- --------------
(3,545,657) (7,409,014)
----------------- --------------
Distributions in excess of net investment
income
Class A (28,246) --
Class B (12,173) --
Class C (412) --
Class Z (300) --
----------------- --------------
(41,131) --
----------------- --------------
Series share transactions (net of share
conversions) (Note 5)
Net proceeds from shares sold 11,132,305 18,346,773
Net asset value of shares issued in
reinvestment of dividends and
distributions 1,984,354 4,059,444
Cost of shares reacquired (20,458,713) (24,798,715)
----------------- --------------
Net decrease in net assets from Series
share transactions (7,342,054) (2,392,498)
----------------- --------------
Total decrease (10,691,530) (12,254,021)
NET ASSETS
Beginning of period 143,439,074 155,693,095
----------------- --------------
End of period $ 132,747,544 $ 143,439,074
----------------- --------------
----------------- --------------
</TABLE>

See Notes to Financial Statements 15

<PAGE>
Prudential California Municipal Fund California Series
Notes to Financial Statements (Unaudited)

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 the preparation of its financial statements.

Securities Valuations: The Series values municipal securities
(including commitments to purchase such securities on a 'when-issued' basis) on
the basis of prices provided by a pricing service which uses information with
respect to transactions in bonds, quotations from bond dealers, market
transactions in comparable securities and various relationships between
securities in determining values. If market quotations are not readily available
from such pricing service, a security is valued at its fair value as determined
under procedures established by the Trustees. Short-term securities which mature
in more than 60 days are valued at current market quotations. Short-term
securities which mature in 60 days or less are valued at amortized cost.

The Series held illiquid securities, including those which are restricted
as to disposition under securities law ('restricted securities'). None of the
issues of restricted securities held by the Series at February 29, 2000 include
registration rights under which the Series may demand registration by the
issuer. Restricted securities, sometimes referred to as private placements, are
valued pursuant to the valuation procedures noted above.

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.'
16

<PAGE>
Prudential California Municipal Fund California Series
Notes to Financial Statements (Unaudited) Cont'd.

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 of 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, 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.
17

<PAGE>
Prudential California Municipal Fund California Series
Notes to Financial Statements (Unaudited) Cont'd.

Reclassification of Capital Accounts: The Fund accounts and reports for
distributions to shareholders in accordance with Statement of Position 93-2:
Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment Companies. The
effect of applying this statement was to increase undistributed net investment
income and increase accumulated net realized loss by $41,131, due to the sale of
securities purchased with market discount. Net investment income, net realized
gains and net assets were not affected by this change.

Note 2. Agreements

The Fund has a management agreement with Prudential Investments Fund Management
LLC ('PIFM'). Pursuant to this agreement, PIFM has responsibility for all
investment advisory services and supervises the subadviser's performance of such
services. PIFM has entered into a subadvisory agreement with The Prudential
Investment Corporation ('PIC'); PIC furnishes investment advisory services in
connection with the management of the Fund. PIFM pays for the services of PIC,
the cost of compensation of officers of the Fund, occupancy and certain clerical
and bookkeeping costs of the Fund. The Fund bears all other costs and expenses.

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

The Fund has a distribution agreement with Prudential Investment
Management Services LLC ('PIMS') which acts as the distributor of the Fund. The
Fund compensates PIMS for distributing and servicing the Fund's Class A, Class B
and Class C shares, pursuant to plans of distribution (the 'Class A, B and C
Plans'), regardless of expenses actually incurred by it. The distribution fees
are accrued daily and payable monthly. No distribution or service fees are paid
to PIMS as distributor of the Class Z shares of the Fund.

Pursuant to the Class A, B and C Plans, the Fund compensates PIMS for
distribution-related activities at an annual rate of up to .30 of 1%, .50 of 1%
and 1% of the average daily net assets of the Class A, B and C shares,
respectively. Such expenses under the Plans were .25 of 1%, .50 of 1% and .75 of
1% of the average daily net assets of the Class A, B and C shares for the six
month period ended February 29, 2000.

PIMS has advised the Series that it has received approximately $13,000 and
$5,500 in front-end sales charges resulting from sales of Class A and Class C
shares during the six months ended February 29, 2000. From these fees, PIMS paid
such
18

<PAGE>
Prudential California Municipal Fund California Series
Notes to Financial Statements (Unaudited) Cont'd.

sales charges to affiliated broker-dealers, which in turn paid commissions to
salespersons and incurred other distribution costs.

PIMS has advised the Series that for the six months ended February 29,
2000, they received approximately $51,700 and $400 in contingent deferred sales
charges imposed upon certain redemptions by Class B and Class C shareholders,
respectively.

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

The Fund, along with other affiliated registered investment companies (the
'Funds'), entered into a syndicated credit agreement ('SCA') with an
unaffiliated lender. The maximum commitment under the SCA is $1 billion and
interest on any borrowings will be at market rates. For the period prior to
March 9, 2000, the commitment fee on the unused portion of the credit facility
was .065 of 1%. Subsequent to March 9, 2000, the SCA was renewed with a maximum
commitment of $1 billion at a commitment fee of .08 of 1% of the unused portion
of the credit facility. The expiration date of the SCA is March 9, 2001. The
Fund did not borrow any amounts during the six months ended February 29, 2000.
The purpose of the credit agreements is to serve as an alternative source of
funding for capital share redemptions.

Note 3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC ('PMFS'), a wholly owned subsidiary of PIFM,
serves as the Fund's transfer agent. During the six months ended February 29,
2000, the Series incurred fees of approximately $22,500 for the services of
PMFS. As of February 29, 2000, approximately $3,700 of such fees were due to
PMFS. Transfer agent fees and expenses in the Statement of Operations include
certain out-of-pocket expenses paid to nonaffiliates.

Note 4. Portfolio Securities
Purchases and sales of portfolio securities of the Series, excluding short-term
investments, for the six months ended February 29, 2000 were $6,573,770 and
$14,120,196, respectively.

The cost basis of investments for federal income tax purposes at February
29, 2000 was substantially the same as for financial reporting purposes and,
accordingly, net unrealized appreciation of investments for federal income tax
purposes was $5,583,464 (gross unrealized appreciation--$7,477,536; gross
unrealized depreciation--$1,894,072).

For federal income tax purposes, the Series has a capital loss
carryforward as of August 31, 1999 of approximately $2,749,900, of which,
$2,747,000 expires in 2003 and $2,900 expires in 2006. Accordingly, no capital
gains distribution is
19

<PAGE>
Prudential California Municipal Fund California Series
Notes to Financial Statements (Unaudited) Cont'd.

expected to be paid to shareholders until net gains have been realized in excess
of such carryforward.

Note 5. Capital
The Series offers Class A, Class B, Class C and Class Z shares. Class A shares
are sold with a front-end sales charge of up to 3%. Class B shares are sold with
a contingent deferred sales charge which declines from 5% to zero depending on
the period of time the shares are held. Class C shares are sold with a front-end
sales charge of 1% and a contingent deferred sales charge of 1% during the first
18 months. Class B shares will automatically convert to Class A shares on a
quarterly basis approximately seven years after purchase. 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, 2000 and fiscal year ended August 31, 1999 were as follows:

<TABLE>
<CAPTION>
Class A Shares Amount
- ------------------------------------------------------------ ---------- ------------
<S> <C> <C>
Six months ended February 29, 2000:
Shares sold................................................. 609,410 $ 6,866,596
Shares issued in reinvestment of dividends and
distributions............................................. 121,065 1,358,201
Shares reacquired........................................... (944,517) (10,594,385)
---------- ------------
Net decrease in shares outstanding before conversion........ (214,042) (2,369,588)
Shares issued upon conversion from Class B.................. 287,802 3,284,622
---------- ------------
Net increase in shares outstanding.......................... 73,760 $ 915,034
---------- ------------
---------- ------------
Year ended August 31, 1999:
Shares sold................................................. 795,762 $ 9,586,464
Shares issued in reinvestment of dividends.................. 216,108 2,593,281
Shares reacquired........................................... (914,438) (10,998,324)
---------- ------------
Net increase in shares outstanding before conversion........ 97,432 1,181,421
Shares issued upon conversion from Class B.................. 541,419 6,534,806
---------- ------------
Net increase in shares outstanding.......................... 638,851 $ 7,716,227
---------- ------------
---------- ------------
</TABLE>
20

<PAGE>
Prudential California Municipal Fund California Series
Notes to Financial Statements (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class B Shares Amount
- ------------------------------------------------------------ ---------- ------------
Six months ended February 29, 2000
<S> <C> <C>
Shares sold................................................. 192,322 $ 2,162,715
Shares issued in reinvestment of dividends and
distributions............................................. 51,704 580,108
Shares reacquired........................................... (710,485) (8,009,228)
---------- ------------
Net decrease in shares outstanding before conversion........ (466,459) (5,266,405)
Shares reacquired upon conversion into Class A.............. (287,888) (3,284,622)
---------- ------------
Net decrease in shares outstanding.......................... (754,347) $ (8,551,027)
---------- ------------
---------- ------------
Year ended August 31, 1999:
Shares sold................................................. 514,171 $ 6,183,598
Shares issued in reinvestment of dividends.................. 114,358 1,373,595
Shares reacquired........................................... (952,947) (11,419,751)
---------- ------------
Net decrease in shares outstanding before conversion........ (324,418) (3,862,558)
Shares reacquired upon conversion into Class A.............. (541,523) (6,534,806)
---------- ------------
Net decrease in shares outstanding.......................... (865,941) $(10,397,364)
---------- ------------
---------- ------------
<CAPTION>
Class C
- ------------------------------------------------------------
<S> <C> <C>
Six months ended February 29, 2000
Shares sold................................................. 120,814 $ 1,371,794
Shares issued in reinvestment of dividends and
distributions............................................. 2,291 25,703
Shares reacquired........................................... (146,496) (1,655,760)
---------- ------------
Net decrease in shares outstanding.......................... (23,391) $ (258,263)
---------- ------------
---------- ------------
Year ended August 31, 1999:
Shares sold................................................. 53,745 $ 647,299
Shares issued in reinvestment of dividends.................. 3,582 42,860
Shares reacquired........................................... (33,739) (402,855)
---------- ------------
Net increase in shares outstanding.......................... 23,588 $ 287,304
---------- ------------
---------- ------------
<CAPTION>
Class Z
- ------------------------------------------------------------
<S> <C> <C>
Six months ended February 29, 2000
Shares sold................................................. 65,472 $ 731,200
Shares issued in reinvestment of dividends and
distributions............................................. 1,812 20,342
Shares reacquired........................................... (17,788) (199,340)
---------- ------------
Net increase in shares outstanding.......................... 49,496 $ 552,202
---------- ------------
---------- ------------
Year ended August 31, 1999:
Shares sold................................................. 161,138 $ 1,929,412
Shares issued in reinvestment of dividends.................. 4,138 49,708
Shares reacquired........................................... (169,051) (1,977,785)
---------- ------------
Net increase (decrease) in shares outstanding............... (3,775) $ 1,335
---------- ------------
---------- ------------
</TABLE>

<PAGE>
Prudential California Municipal Fund California Series
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
Class A
-----------------
Six Months Ended
February 29, 2000
- ----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 11.45
-----------------
Income from investment operations
Net investment income .30
Net realized and unrealized gain (loss) on investment
transactions (.27)
-----------------
Total from investment operations .03
-----------------
Less distributions
Dividends from net investment income (.30)
Distributions in excess of net investment income --(c)
-----------------
Total distributions (.30)
-----------------
Net asset value, end of period $ 11.18
-----------------
-----------------
TOTAL RETURN(b): .30%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 91,506
Average net assets (000) $ 93,416
Ratios to average net assets:
Expenses, including distribution fees .94%(d)
Expenses, excluding distribution fees .69%(d)
Net investment income 5.24%(d)
For Class A, B, C and Z shares:
Portfolio turnover rate 5%
</TABLE>
- ------------------------------
(a) Net of management 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.
(c) Less than $.005 per share.
(d) Annualized.
22 See Notes to Financial Statements

<PAGE>
Prudential California Municipal Fund California Series
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class A
- ----------------------------------------------------------------------------------------------------------
Year Ended August 31,
- ----------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------
$ 12.22 $ 11.80 $ 11.44 $ 11.49 $ 11.30
- ---------------- ---------------- ---------------- ---------------- ----------------
.59 .62 .65(a) .65(a) .66(a)
(.77) .43 .36 (.05) .19
- ---------------- ---------------- ---------------- ---------------- ----------------
(.18) 1.05 1.01 .60 .85
- ---------------- ---------------- ---------------- ---------------- ----------------
(.59) (.62) (.65) (.65) (.66)
-- (.01) --(c) -- --
- ---------------- ---------------- ---------------- ---------------- ----------------
(.59) (.63) (.65) (.65) (.66)
- ---------------- ---------------- ---------------- ---------------- ----------------
$ 11.45 $ 12.22 $ 11.80 $ 11.44 $ 11.49
- ---------------- ---------------- ---------------- ---------------- ----------------
- ---------------- ---------------- ---------------- ---------------- ----------------
(1.56)% 9.13% 9.01% 5.23% 7.90%
$ 92,868 $ 91,356 $ 81,535 $ 72,876 $ 68,403
$ 94,868 $ 85,624 $ 78,347 $ 71,119 $ 42,617
.89% .78% .76%(a) .81%(a) .73%(a)
.69% .68% .66%(a) .71%(a) .63%(a)
4.94% 5.18% 5.53%(a) 5.58%(a) 5.90%(a)
13% 11% 14% 26% 44%
</TABLE>

See Notes to Financial Statements 23

<PAGE>
Prudential California Municipal Fund California Series
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class B
-----------------
Six Months Ended
February 29, 2000
- ----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 11.44
-----------------
Income from investment operations
Net investment income .28
Net realized and unrealized gain (loss) on investment
transactions (.27)
-----------------
Total from investment operations .01
-----------------
Less distributions
Dividends from net investment income (.28)
Distributions in excess of net investment income --(c)
-----------------
Total distributions (.28)
-----------------
Net asset value, end of period $ 11.17
-----------------
-----------------
TOTAL RETURN(b): .18%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 38,631
Average net assets (000) $ 42,578
Ratios to average net assets:
Expenses, including distribution fees 1.19%(d)
Expenses, excluding distribution fees .69%(d)
Net investment income 4.98%(d)
</TABLE>

- ------------------------------
(a) Net of management 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.
(c) Less than $.005 per share.
(d) Annualized.
24 See Notes to Financial Statements

<PAGE>
Prudential California Municipal Fund California Series
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class B
- ----------------------------------------------------------------------------------------------------------
Year Ended August 31,
- ----------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 12.22 $ 11.80 $ 11.43 $ 11.49 $ 11.29
- ---------------- ---------------- ---------------- ---------------- ----------------
.56 .58 .60(a) .60(a) .62(a)
(.78) .43 .37 (.06) .20
- ---------------- ---------------- ---------------- ---------------- ----------------
(.22) 1.01 .97 .54 .82
- ---------------- ---------------- ---------------- ---------------- ----------------
(.56) (.58) (.60) (.60) (.62)
-- (.01) --(c) -- --
- ---------------- ---------------- ---------------- ---------------- ----------------
(.56) (.59) (.60) (.60) (.62)
- ---------------- ---------------- ---------------- ---------------- ----------------
$ 11.44 $ 12.22 $ 11.80 $ 11.43 $ 11.49
- ---------------- ---------------- ---------------- ---------------- ----------------
- ---------------- ---------------- ---------------- ---------------- ----------------
(1.94)% 8.70% 8.67% 4.73% 7.56%
$ 48,196 $ 62,043 $ 70,093 $ 85,190 $103,891
$ 56,041 $ 66,086 $ 75,935 $ 96,525 $136,275
1.19% 1.18% 1.16%(a) 1.21%(a) 1.13%(a)
.69% .68% .66%(a) .71%(a) .63%(a)
4.62% 4.78% 5.13%(a) 5.18%(a) 5.50%(a)
</TABLE>

See Notes to Financial Statements 25

<PAGE>
Prudential California Municipal Fund California Series
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class C
-----------------
Six Months Ended
February 29, 2000
- ----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 11.44
-----------------
Income from investment operations
Net investment income .27
Net realized and unrealized gain (loss) on investment
transactions (.27)
-----------------
Total from investment operations --
-----------------
Less distributions
Dividends from net investment income (.27)
Distributions in excess of net investment income --(c)
-----------------
Total distributions (.27)
-----------------
Net asset value, end of period $ 11.17
-----------------
-----------------
TOTAL RETURN(b): .05%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 1,151
Average net assets (000) $ 1,406
Ratios to average net assets:
Expenses, including distribution fees 1.44%(d)
Expenses, excluding distribution fees .69%(d)
Net investment income 4.73%(d)
</TABLE>

<PAGE>
Prudential California Municipal Fund California Series
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class C
- ----------------------------------------------------------------------------------------------------------
Year Ended August 31,
- ----------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 12.22 $ 11.80 $ 11.43 $ 11.49 $ 11.29
- ---------------- ---------------- ---------------- ---------------- ----------------
.53 .55 .57(a) .57(a) .59(a)
(.78) .43 .37 (.06) .20
- ---------------- ---------------- ---------------- ---------------- ----------------
(.25) .98 .94 .51 .79
- ---------------- ---------------- ---------------- ---------------- ----------------
(.53) (.55) (.57) (.57) (.59)
-- (.01) --(c) -- --
- ---------------- ---------------- ---------------- ---------------- ----------------
(.53) (.56) (.57) (.57) (.59)
- ---------------- ---------------- ---------------- ---------------- ----------------
$ 11.44 $ 12.22 $ 11.80 $ 11.43 $ 11.49
- ---------------- ---------------- ---------------- ---------------- ----------------
- ---------------- ---------------- ---------------- ---------------- ----------------
(2.18)% 8.43% 8.40% 4.47% 7.29%
$ 1,447 $ 1,257 $ 334 $ 543 $ 129
$ 1,373 $ 689 $ 480 $ 286 $ 76
1.44% 1.43% 1.41%(a) 1.46%(a) 1.38%(a)
.69% .68% .66%(a) .71%(a) .63%(a)
4.40% 4.53% 4.88%(a) 4.93%(a) 5.25%(a)
</TABLE>

See Notes to Financial Statements 27

<PAGE>
Prudential California Municipal Fund California Series
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class Z
-----------------
Six Months Ended
February 29, 2000
- ----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 11.45
-----------------
Income from investment operations
Net investment income .31
Net realized and unrealized gain (loss) on investment
transactions (.27)
-----------------
Total from investment operations .04
-----------------
Less distributions
Dividends from net investment income (.31)
Distributions in excess of net investment income --(c)
-----------------
Total distributions (.31)
-----------------
Net asset value, end of period $ 11.18
-----------------
-----------------
TOTAL RETURN(b): .43%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 1,460
Average net assets (000) $ 970
Ratios to average net assets:
Expenses, including distribution fees .69%(e)
Expenses, excluding distribution fees .69%(e)
Net investment income 5.52%(e)
</TABLE>

<PAGE>
Prudential California Municipal Fund California Series
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class Z
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------
<CAPTION>
Year Ended August 31, September 18, 1996(d)
- ------------------------------------------ through August 31,
1999 1998 1997
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 12.23 $ 11.81 $ 11.50
- ---------------- ---------------- ----------
.62 .63 .64(a)
(.78) .43 .31
- ---------------- ---------------- ----------
(.16) 1.06 .95
- ---------------- ---------------- ----------
(.62) (.63) (.64)
-- (.01) --(c)
- ---------------- ---------------- ----------
(.62) (.64) (.64)
- ---------------- ---------------- ----------
$ 11.45 $ 12.23 $ 11.81
- ---------------- ---------------- ----------
- ---------------- ---------------- ----------
(1.44)% 9.24% 8.35%
$ 928 $ 1,037 $ 710
$ 1,427 $ 847 $ 458
.69% .68% .66%(a)/(e)
.69% .68% .66%(a)/(e)
5.15% 5.28% 5.35%(a)/(e)
</TABLE>

See Notes to Financial Statements 29

Prudential California Municipal Fund California Series
Getting the Most From Your Prudential Mutual Fund

Some mutual fund shareholders won't ever read
this--they don't read annual and semiannual reports.
It's quite understandable. These annual and
semiannual reports are prepared to comply with
federal regulations, and are often written in
language that is difficult to understand. So when
most people run into those particularly daunting
sections of these reports, they don't read them.

We think that's a mistake
At Prudential Mutual Funds, we've made some changes
to our report to make it easier to understand and
more pleasant to read. We hope you'll find it
profitable to spend a few minutes familiarizing
yourself with your investment. Here's what you'll
find in the report:

Performance at a Glance
Since an investment's performance is often a
shareholder's primary concern, we present
performance information in two different formats.
You'll find it first on the "Performance at a
Glance" page where we compare the Fund and the
comparable average calculated by Lipper, Inc., a
nationally recognized mutual fund rating agency. We
report both the cumulative total returns and the
average annual total returns. The cumulative total
return is the total amount of income and
appreciation the Fund has achieved in various time
periods. The average annual total return is an
annualized representation of the Fund's
performance. It gives you an idea of how much the
Fund has earned in an average year for a given time
period. Under the performance box, you'll see
legends that explain the performance information,
whether fees and sales charges have been included
in returns, and the inception dates for the Fund's
share classes.

See the performance comparison charts at the back
of the report for more performance information.
Please keep in mind that past performance is not
indicative of future results.

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

Performance review
The portfolio manager, who invests your money for
you, reports on successful--and not-so-successful--strategies in this
section of your report. Look for recent purchases
and sales here, as well as information about the
sectors the portfolio manager favors, and any
changes that are on the drawing board.

Portfolio of Investments
This is where the report begins to appear
technical, but it's really just a
listing of each security held at the end of the
reporting period, along with valuations and other
information. Please note that sometimes we discuss
a security in the Performance Review that doesn't
appear in this listing because it was sold before
the close of the reporting period.

Statement of Assets and Liabilities
The balance sheet shows the assets (the value of
the Fund's holdings), liabilities (how much the Fund owes), and net
assets (the Fund's equity, or holdings after the Fund pays its debts)
as of the end of the reporting period. It also
shows how we calculate the net asset value per
share for each class of shares. The net asset value
is reduced by payment of your
dividend, capital gain, or other distribution, but
remember that the money or new shares are being
paid or issued to you. The net asset value
fluctuates daily, along with the value of every
security in the portfolio.

Statement of Operations
This is the income statement, which details income
(mostly interest and
dividends earned) and expenses (including what you
pay us to manage your money). You'll also see
capital gains here--both realized and unrealized.

<PAGE>
Prudential California Municipal Fund California Series
Getting the Most From Your Prudential Mutual Fund

Statement of Changes in Net Assets
This schedule shows how income and expenses
translate into changes
in net assets. The Fund is required to pay out the
bulk of its income to shareholders every year, and
this statement shows you how we do it (through
dividends and distributions) and how that affects
the net assets. This statement also shows how money
from investors flowed into and out of the Fund.

Notes to Financial Statements
This is the kind of technical material that can
intimidate readers, but it does contain useful
information. The Notes provide a brief history and
explanation of your Fund's objectives. In addition,
they outline how Prudential Mutual Funds prices
securities. The Notes also explain who manages and
distributes the Fund's shares and, more
importantly, how much they are paid for doing so.
Finally, the Notes explain how many shares are
outstanding and the number issued and redeemed over
the period.

Financial Highlights
This information contains many elements from prior
pages, but on a per-share basis. It is designed to help you
understand how the Fund
performed, and to compare this year's performance
and expenses to those of prior years.

Independent Auditor's Report
Once a year, an outside auditor looks over our
books and certifies that the information is fairly
presented and complies with generally accepted
accounting principles.

Tax Information
This is information that we report annually about
how much of your total return is taxable. Should
you have any questions, you may want to consult a
tax adviser.

<PAGE>

www.prudential.com (800) 225-1852

Performance Comparison
These charts are included in the annual report and
are required by the Securities Exchange Commission.
Performance is presented here as a hypothetical
$10,000 investment in the Fund since its inception
or for 10 years (whichever is shorter). To help you
put that return in context, we
are required to include the performance of an
unmanaged, broad-based securities index as well.
The index does not reflect the cost of buying the
securities it contains or the cost of managing a
mutual fund. Of course, the index holdings do not
mirror those of the Fund--the index is a broad-based
reference point commonly used by investors to
measure how well they are doing. A definition of
the selected index is also provided. Investors
cannot invest directly in an index.

<PAGE>

Prudential California Municipal Fund California Series
Getting the Most From Your Prudential Mutual Fund

When you invest through Prudential Mutual Funds,
you receive financial advice from a Prudential
Securities Financial Advisor or Pruco Securities
registered representative. Your advisor or
representative can provide you with the following
services:

There's No Reward Without Risk; but Is This Risk
Worth It?
Your financial advisor or registered representative
can help you match the reward you seek with the
risk you can tolerate. Risk can be difficult to
gauge--sometimes even the simplest investments bear
surprising risks. The educated investor knows that
markets seldom move in just one direction. There
are times when a market sector or asset class will
lose value or provide little in the way of total
return. Managing your own expectations is easier
with help from someone who understands the markets
and who knows you!

Keeping Up With the Joneses
A financial advisor or registered representative
can help you wade through the numerous available
mutual funds to find the ones that fit your
individual investment profile and risk tolerance.
While the newspapers and popular magazines are full
of advice about investing, they are aimed at
generic groups of people or representative
individuals--not at you personally. Your financial
advisor or registered representative will review
your investment objectives with you. This means you
can make financial decisions based on the assets
and liabilities in your current portfolio and your
risk tolerance--not just based on the current
investment fad.

Buy Low, Sell High
Buying at the top of a market cycle and selling at
the bottom are among the most common investor
mistakes. But sometimes it's difficult to hold on
to an investment when it's losing value every
month. Your financial advisor or registered
representative can answer questions when you're
confused or worried about your investment, and
should remind you that you're investing for the
long haul.

<PAGE>
Prudential California Municipal Fund California Series
Prudential Mutual Fund Family

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

STOCK FUNDS
Prudential Emerging Growth Fund, Inc.
Prudential Equity Fund, Inc.
Prudential Equity Income Fund
Prudential Index Series Fund
Prudential Small-Cap Index Fund
Prudential Stock Index Fund
The Prudential Investment Portfolios, Inc.
Prudential Jennison Growth Fund
Prudential Jennison Growth & Income Fund
Prudential Mid-Cap Value Fund
Prudential Real Estate Securities Fund
Prudential Sector Funds, Inc.
Prudential Financial Services Fund
Prudential Health Sciences Fund
Prudential Technology Fund
Prudential Utility Fund
Prudential Small-Cap Quantum Fund, Inc.
Prudential Small Company Value Fund, Inc.
Prudential Tax-Managed Funds
Prudential Tax-Managed Equity Fund
Prudential 20/20 Focus Fund
Nicholas-Applegate Fund, Inc.
Nicholas-Applegate Growth Equity Fund
Target Funds
Large Capitalization Growth Fund
Large Capitalization Value Fund
Small Capitalization Growth Fund
Small Capitalization Value Fund

Asset Allocation/Balanced Funds
Prudential Balanced Fund

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

GLOBAL FUNDS
Global Stock Funds
Prudential Developing Markets Fund
Prudential Developing Markets Equity Fund
Prudential Latin America Equity Fund
Prudential Europe Growth Fund, Inc.
Prudential Global Genesis Fund, Inc.
Prudential Index Series Fund
Prudential Europe Index Fund
Prudential Pacific Index Fund
Prudential Natural Resources Fund, Inc.
Prudential Pacific Growth Fund, Inc.
Prudential World Fund, Inc.
Prudential Global Growth Fund
Prudential International Value Fund
Prudential Jennison International Growth Fund
Global Utility Fund, Inc.
Target Funds
International Equity Fund

Global Bond Funds
Prudential Global Total Return Fund, Inc.
Prudential International Bond Fund, Inc.
www.prudential.com(800) 225-1852

<PAGE>

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

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

MONEY MARKET FUNDS
Taxable Money Market Funds
Cash Accumulation Trust
Liquid Assets Fund
National Money Market Fund
Prudential Government Securities Trust
Money Market Series
U.S. Treasury Money Market Series
Prudential Special Money Market Fund, Inc.
Money Market Series
Prudential MoneyMart Assets, Inc.

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

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

Institutional Money Market Funds
Prudential Institutional Liquidity Portfolio, Inc.
Institutional Money Market Series

<PAGE>
www.prudential.com (800) 225-1852
For More Information

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

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

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

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

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

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

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

Transfer Agent
Prudential Mutual Fund Services LLC
194 Wood Avenue South
Iselin, NJ 08830

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

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

Fund Symbols NASDAQ CUSIP
Class A PRMCX 744313107
Class B PBCMX 744313206
Class C -- 744313701
Class Z -- 744313883

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

The accompanying financial statements as
of February 29, 2000, were not audited and,
accordingly, no opinion is expressed on them.

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

BULK RATE
U.S. POSTAGE
PAID
Permit 6807
New York, NY

MF116E2 744313107 744313206 744313701 744313883

(ICON) Printed on Recycled Paper

<PAGE>
SEMIANNUAL REPORT FEBRUARY 29, 2000

Prudential
California Municipal Fund/
California Income Series

Fund Type Municipal bond
Objective Maximize current income that is
exempt from California State and federal income
taxes, consistent with the preservation of
capital

(GRAPHIC)

(LOGO)

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

<PAGE>

Build on the Rock

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

Contents
1 Message From the Fund's President
2 Performance Review
2 Portfolio Composition
3 Performance at a Glance
4 Credit Quality
5 Five Largest Issuers
7 Financial Statements

<PAGE>

www.prudential.com (800) 225-1852
Message From the Fund's President As of April 17, 2000

(PHOTO)
Dear Shareholder
The Class A shares of Prudential California
Municipal Fund/California Income Series had a
negative return of 1.05% during its fiscal half
year that ended February 29, 2000. For the same
period, the Series' benchmark Lipper Average was a
negative 1.40%. After the initial sales charge, the
Class A shares' return was a negative 4.02%. Prices
of municipal bonds declined
primarily because investors required higher yields
in light of two short-term rate increases
implemented by the Federal Reserve during our
review period to slow the rapid pace of U.S. economic
growth.

Thank you for your continued confidence in
Prudential mutual funds.

Sincerely,

John R. Strangfeld
President
Prudential California Municipal Fund

1
<PAGE>

Prudential California Municipal Fund California Income Series
Performance Review

(PHOTO) (PHOTO) Portfolio Managers Evan Lamp (Municipal Bonds
Sector Team Leader) and James M. Murphy

Bear market in municipal bonds continued
During our six-month review period, increases in
short-term interest rates by the Federal Reserve
and sales of municipal bonds by investors who
wanted to realize tax losses pressured the prices
of tax-exempt debt securities. Given this bearish
trend, we positioned the Series so that it would be
less vulnerable to the decline in bond prices.

The Fed raised its target for the federal funds
rate (what U.S. banks charge each other for
overnight loans) by a quarter of a percentage point
in November 1999 and February 2000 to curb U.S.
economic growth and reduce the economic imbalances
that can lead to higher inflation. These moves
pushed up the rate to 5.75% by February 2000. The
Fed also engineered two quarter-point increases
that raised its discount rate on loans
to banks from the Federal Reserve system to 5.25%
by February 2000. As
short-term rates rose, investors required higher
yields on both short- and
long-term municipal bonds, which caused their
prices to fall.

Portfolio Composition
Expressed as a percentage of
total investments as of 2/29/00

52.85% General Obligations
28.38 Revenue Bonds
15.59 Prerefunded Bonds
1.17 Miscellaneous
2.01 Cash Equivalents

2
<PAGE>

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

<TABLE>
Cumulative Total Returns1 As of 2/29/00
<CAPTION>
Six One Five Since
Months Year Years Inception2
<S> <C> <C> <C> <C>
Class A -1.05% -4.19% 33.00% (32.34) 89.09% (84.78)
Class B -1.18 -4.43 30.60 (29.96) 33.27 (32.09)
Class C -1.30 -4.67 28.99 (28.35) 31.76 (30.85)
Class Z -0.93 -3.95 N/A 17.68 (17.57)
Lipper CA Muni
Debt Fund Avg.3 -1.40 -4.88 26.99 ***
</TABLE>

<TABLE>
Average Annual Total Returns1 As of 3/31/00
<CAPTION>
One Five Since
Year Years Inception2
<S> <C> <C> <C>
Class A -4.49% 5.53% (5.43) 7.04% (6.77)
Class B -6.78 5.64 (5.53) 5.11 (4.96)
Class C -4.01 5.32 (5.22) 5.31 (5.18)
Class Z -1.29 N/A 5.54 (5.51)
</TABLE>

<TABLE>
Distributions and Yields As of 2/29/00
<CAPTION>
Total Distributions 30-Day Taxable Equivalent Yield4 at tax rates of
Paid for Six Months SEC Yield 36% 39.6%
<S> <C> <C> <C>
Class A $0.27 4.95% 8.53% 9.04%
Class B $0.26 4.85 8.36 8.85
Class C $0.25 4.56 7.86 8.32
Class Z $0.29 5.35 9.22 9.77
</TABLE>

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

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

2 Inception dates: Class A, 12/3/90; Class B,
12/7/93; Class C, 8/1/94; and Class Z, 9/18/96.

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

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

***Lipper Since Inception returns are 72.61% for
Class A, 28.73% for Class B, 30.52% for Class C,
and 12.97% for Class Z, based on all funds in each
share class.

3
<PAGE>
Prudential California Municipal Fund California Income Series
Performance Review

Lower-quality bonds languished
Municipal bonds whose credit quality is considered
below investment grade comprised roughly 24% of the
Series' total investments. As interest rates rose,
prices of these bonds and bonds of higher quality
declined. Bargain hunters snapped up the higher-
quality bonds. There was less demand, however, for
below-investment-grade bonds, and they cheapened
relative to higher-quality bonds. Thus, our below-
investment-grade bonds were a drag on the Series'
performance.

A silver lining among the clouds
Although the bear market detracted from the Series'
returns, we were able to increase its distribution
yield in this rising-interest-rate environment.

We purchased California general obligation bonds
based on our view of the California economy before
they were upgraded. We booked trading profits by
liquidating the position after they were upgraded.

Credit Quality
Expressed as a percentage
of total investments as of 2/29/00
5.03% AAA
4.79 AA
5.77 A
11.27 BBB
28.34 Insured
42.79 Not Rated
2.01 Cash Equivalents

4
<PAGE>

www.prudential.com (800) 225-1852
We pursued a short-duration strategy
When bond markets sell off, lowering a portfolio's
duration generally
provides some degree of protection by making the
portfolio less sensitive to the rise in bond
yields. (Duration measures how much a portfolio's
bonds will fluctuate in price for a given change in
interest rates. It is expressed in years.) The
Series' share classes, without sales charges
factored in, performed better than its benchmark
Lipper Average, which does not consider sales
charges. This occurred largely because we kept the
Series' duration shorter than average for much of
its fiscal half year.

We lessened the impact of "market-discount
taxation"
We also sold some of the Series' municipal bonds
before they became
subject to ordinary income taxes for investors who
might want to buy them. Here's how it works: When
yields climb beyond a certain point for every
municipal bond, the market discount on that bond
may become subject to ordinary income taxes for new
buyers. This lowers the value of the bond because
new buyers would want to purchase the bond cheaply
enough to compensate for the greater tax liability.

Looking Ahead
The powerful U.S. economic expansion has improved
the credit quality of many state and local
governments and reduced their borrowing needs,
allowing them to issue fewer bonds. The supply of
new municipal bonds has also decreased because the
rising-interest-rate environment has provided less
opportunity for issuers to save money by replacing
older higher-coupon bonds with new lower-coupon
bonds. With the declining supply, if investor
demand remains strong, the tax-exempt bond market
should perform better than other U.S. fixed-income
markets in 2000.

Five Largest Issuers
Expressed as a percentage of net assets
as of 2/29/00

5.18% Southern California
Public Power Authority
4.39 Orange County Local
Transportation Authority
3.12 Long Beach Harbor Revenue
3.02 Foothill/Eastern
Transit Corridor Agency
2.28 San Joaquin Hills
Transit Corridor Agency

<PAGE>

Prudential California Municipal Fund California Income Series

Financial
Statements

<PAGE>
Prudential California Municipal Fund California Income Series
Portfolio of Investments as of February 29, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Moody's Interest Maturity Amount Value
Description (a) Rating Rate Date (000) (Note 1)
- ----------------------------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS 97.3%
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Alisal Union Sch. Dist.,
Cap. Apprec., Ser. C., F.G.I.C. Aaa Zero 8/01/15 $ 975 $ 400,686
Cap. Apprec., Ser. C., F.G.I.C. Aaa Zero 8/01/19 1,615 503,670
Cap. Apprec., Ser. C., F.G.I.C. Aaa Zero 8/01/22 675 173,185
Arcadia Unif. Sch. Dist.,
Gen. Oblig., Ser. A, M.B.I.A. Aaa Zero 9/01/11 1,325 712,134
Gen. Oblig., Ser. A, M.B.I.A. Aaa Zero 9/01/12 2,045 1,028,758
Assoc. of Bay Area Govt's. Fin.
Auth.,
Cert. of Part., Channing House,
Ser. A NR 7.125% 1/01/21 1,500(e) 1,566,375
Ref. Amer. Baptist Homes, Ser. A BBB(b) 6.20 10/01/27 2,000 1,761,520
Brea Pub. Fin. Auth. Rev., Tax
Alloc. Redev. Proj., Ser. C NR 8.10 3/01/21 3,000 3,107,760
Brentwood Infrastructure Fin. Auth.
Rev. NR 5.60 9/02/19 1,990 1,708,415
Buena Park Cmnty. Redev. Agcy.
Cent. Bus. Dist. Proj. NR 7.80 9/01/14 3,325 3,479,313
Calabasas Spec. Tax Ref. Cmnty.
Facs., Dist. 98-1 NR 5.75 9/01/28 1,000 844,390
California Cmnty. Dev. Comm. Ref.,
Ser. A NR 5.70 8/01/28 2,250 1,909,080
California Hsg. Fin. Agcy., Single
Fam. Mtge., Ser. A, A.M.T.,
M.B.I.A. Aaa 6.00 8/01/20 3,590 3,560,598
California Infrastructure & Econ.
Dev.,
Amer. Ctr. for Wine, Food & Arts A(b) 5.80 12/01/29 1,000 943,280
California St. Cmnty. Cap. Apprec.,
Cmnty. Facs., Dist. No. 97-1 NR Zero 9/01/22 4,440 912,376
California St. Dept. Wtr. Res.
Rev., Central Valley Proj., Ser.
J-3 Aa2 7.00 12/01/12 1,000 1,165,180
California St. Edl. Facs. Auth.
Rev., Chapman College Baa2 7.50 1/01/18 600(e) 628,764
</TABLE>
See Notes to Financial Statements 7

<PAGE>
Prudential California Municipal Fund California Income Series
Portfolio of Investments as of February 29, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Principal
Moody's Interest Maturity Amount Value
Description (a) Rating Rate Date (000) (Note 1)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Capistrano Unif. Sch. Dist.,
No. 98-2 NR 5.70% 9/01/20 $ 1,000 $ 856,880
No. 98-2-Ladera NR 5.75 9/01/29 2,500 2,077,350
Carson City Ltd. Oblig. Impvt.
Rev., Assmt. Dist. NR 7.375 9/02/22 2,310 2,415,013
Chula Vista Cmnty. Redev. Agcy.,
Ref. Tax Alloc. Sr. Bayfront, Ser.
A BBB+(b) 7.625 9/01/24 2,500 2,719,275
Ref. Tax Alloc. Sub. Bayfront,
Ser. C NR 8.25 5/01/24 2,500 2,728,600
Chula Vista Spec. Tax Cmnty. Facs.,
Dist. No. 97-3 NR 6.05 9/01/29 2,770 2,488,263
Contra Costa Cnty., Spec. Tax
Cmnty. Facs., Dist. No. 91-1 NR 8.125 8/01/16 1,520(e) 1,575,982
Corona Cert. of Part., Vista Hosp.
Sys., Inc., Ser. C NR 8.375 7/01/11 2,000 1,817,280
Davis Pub. Facs. Fin. Auth., Mace
Ranch, Ser. A NR 6.60 9/01/25 2,000 1,957,540
Delano Cert. of Part., Reg. Med.
Ctr., Ser. 92-A NR 9.25 1/01/22 2,810(e) 3,187,861
Desert Hosp. Dist., Cert. of Part. AAA(b) 8.10 7/01/20 2,000(e) 2,067,540
East Palo Alto San. Dist.,
Cert. of Part. NR 8.25 10/01/15 500 514,820
El Dorado Cnty., Spec. Tax,
Cmnty. Facs., Dist. No. 92-1 NR 6.125 9/01/16 1,000 931,780
Cmnty. Facs., Dist. No. 92-1 NR 6.25 9/01/29 3,000 2,748,540
El Dorado Hills Dev., Cmnty. Facs.,
Dist. No. 92-1 NR 8.25 9/01/24 1,945(e) 2,247,798
Fairfield Pub. Fin. Auth. Rev.,
Fairfield Redev. Proj., Ser. A NR 7.90 8/01/21 2,500(e) 2,671,150
Folsom Spec. Tax,
Cmnty. Facs. Dist. No. 10 NR 6.875 9/01/19 2,000 1,974,660
Cmnty. Facs. Dist. No. 7 NR 6.00 9/01/24 2,500 2,227,675
Fontana Pub. Fin. Auth., N. Fontana
Tax Alloc. Rev. NR 7.65 12/01/09 1,575(e) 1,691,203
Fontana Redev. Agcy. Tax Alloc.,
Ref. Jurupa Hills Redev. Proj. A BBB+(b) 5.50 10/01/17 2,150 1,891,656
Ref. Jurupa Hills Redev. Proj. A BBB+(b) 5.60 10/01/27 1,595 1,351,300
</TABLE>
8 See Notes to Financial Statements

<PAGE>
Prudential California Municipal Fund California Income Series
Portfolio of Investments as of February 29, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Principal
Moody's Interest Maturity Amount Value
Description (a) Rating Rate Date (000) (Note 1)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Foothill/Eastern Trans. Corr.
Agcy.,
Conv. Cap. Apprec. Baa3 Zero 1/15/26 $ 4,800 $ 2,426,976
Conv. Cap. Apprec. Baa3 Zero 1/15/28 4,890 2,436,002
Toll Rd., Ser. A Baa3 Zero 1/01/20 10,000 3,059,400
Gateway Impvt. Auth. Rev., Marin
City Cmnty. Facs. Dist. & Redev. NR 7.75% 9/01/25 2,100(e) 2,433,396
Irvine Impvt. Bond Act of 1915,
Assmt. Dist. No. 87-8 Grp. NR 6.00 9/02/24 3,000 2,705,700
Assmt. Dist. No. 94-13 NR 6.00 9/02/22 1,000 907,400
Kings Cnty. Wst. Mgmt. Auth.,
Solid Wst. Rev., A.M.T. BBB(b) 7.20 10/01/14 1,200 1,259,916
La Mesa Impvt. Bond Act of 1915,
Ltd. Oblig., Dist. No. 98-1 NR 5.75 9/02/23 1,000 858,900
La Mirada Redev. Agcy. Spec. Tax,
Ref. Cmnty. Facs., Dist. No. 89-1 NR 5.70 10/01/20 1,000 856,550
La Quinta Redev. Agcy.,
Proj. Area No. 1, M.B.I.A. Aaa 7.30 9/01/10 1,000 1,170,820
Tax Alloc. Ref. Proj. No. 1,
M.B.I.A. Aaa 7.30 9/01/11 1,000 1,176,700
Lincoln Impvt. Bond Act of 1915,
Pub. Fin. Auth., Twelve Bridges NR 6.20 9/02/25 2,980 2,730,574
Long Beach Hbr. Rev.,
Ref. Ser. A., A.M.T., F.G.I.C. Aaa 6.00 5/15/17 5,000 5,134,950
Ref. Ser. A., A.M.T., F.G.I.C. Aaa 6.00 5/15/19 3,000 3,047,730
Long Beach Redev. Agcy. Hsg.,
Multifamily Hsg. Rev., Pacific Ct.
Apts., Ser. B
(cost $1,490,475; purchased
10/18/93) NR 6.80 9/01/13 1,000(f)(g) 620,000
Multifamily Hsg. Rev., Pacific Ct.
Apts., Ser. B
(cost $991,820; purchased
10/18/93) NR 6.95 9/01/23 1,500(f)(g) 930,000
Los Angeles Cmnty. Facs., Dist.
No. 5, Rowland Heights Area NR 7.25 9/01/19 1,500(e) 1,676,925
</TABLE>
See Notes to Financial Statements 9

<PAGE>
Prudential California Municipal Fund California Income Series
Portfolio of Investments as of February 29, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Principal
Moody's Interest Maturity Amount Value
Description (a) Rating Rate Date (000) (Note 1)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Los Angeles Dept. of Wtr. & Pwr.,
Waterworks Rev. Aa3 4.50% 5/15/23 $ 1,900 $ 1,505,142
Plant Rev. Aa3 6.00 2/15/30 5,000 4,951,800
Lynwood Pub. Fin. Auth. Rev., Wtr.
Sys. Impvt. Proj. BBB(b) 6.50 6/01/21 1,500 1,481,100
Met. Wtr. Dist. of Southern
California, Waterworks Rev.,
Linked S.A.V.R.S. & R.I.B.S. Aa2 5.75 8/10/18 1,000 992,110
Mojave Desert & Mtn. Solid Waste,
Victor Valley Nat'l. Recov. Facs.,
A.M.T. Baa1 7.875 6/01/20 1,175 1,251,633
Montebello Unified Sch. Dist.,
Cap. Apprec., F.G.I.C. Aaa Zero 8/01/18 2,195 732,098
Cap. Apprec., F.G.I.C. Aaa Zero 8/01/19 2,250 701,708
Cap. Apprec., F.G.I.C. Aaa Zero 8/01/20 2,300 674,199
Ontario California Impvt. Bond Act
of 1915, Assmt. Dist. 100C,
Com. Ctr. III NR 8.00 9/02/11 1,050 1,089,417
Orange Cnty. Cmnty. Facs. Dist.,
Spec. Tax Rev.,
No. 87-5B, Rancho Santa Margarita NR 7.50 8/15/17 1,750(e) 1,900,115
No. 88-1, Aliso Viejo, Ser. A AAA(b) 7.15 8/15/06 805(e) 869,996
Orange Cnty. Loc. Trans. Auth.,
Sales Tax Rev., Linked S.A.V.R.S.
& R.I.B.S., A.M.B.A.C. Aaa 6.20 2/14/11 10,000 10,671,300
Spec. Tax Rev., Linked S.A.V.R.S.
& R.I.B.S. Aa3 8.212(d) 2/14/11 750 828,750
Perris Sch. Dist., Cert. of Part.,
Cap. Proj. NR 7.75 3/01/21 1,500(e) 1,583,175
Pico Rivera California Wtr. Auth.
Rev., Wtr. Sys. Proj., Ser. A,
M.B.I.A. Aaa 5.50 5/01/29 2,500 2,344,875
Pittsburg California Redev. Agcy.
Tax Alloc.,
Ext. Spec. Redem. Los Medanos,
F.S.A. Aaa 5.80 8/01/34 2,700 2,647,026
</TABLE>
10 See Notes to Financial Statements

<PAGE>
Prudential California Municipal Fund California Income Series
Portfolio of Investments as of February 29, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Principal
Moody's Interest Maturity Amount Value
Description (a) Rating Rate Date (000) (Note 1)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Los Medanos Cmnty. Dev. Proj.,
A.M.B.A.C. Aaa Zero 8/01/26 $ 1,375 $ 273,240
Los Medanos Cmnty. Dev. Proj.,
A.M.B.A.C. Aaa Zero 8/01/30 4,145 643,055
Placentia Pub. Fin. Auth., Spec.
Tax Rev., Ser. B NR 6.60% 9/01/15 1,500 1,504,440
Port Redwood City Rev., A.M.T. BBB(b) 5.125 6/01/30 1,600 1,227,952
Poway Cmnty. Facs., Dist. No. 88-1,
Parkway Bus. Ctr. NR 6.75 8/15/15 1,000 1,010,410
Puerto Rico Commonwealth, Gen.
Oblig., M.B.I.A. Aaa 5.75 7/01/10 2,000 2,091,840
Puerto Rico Pub. Bldgs. Auth., Gtd.
Pub. Ed. & Hlth. Facs., Ser. J Baa1 Zero 7/01/06 1,605 1,154,894
Redding Elec. Sys. Rev.,
Cert. of Part., M.B.I.A. Aaa 8.802 (d) 7/01/22 1,850 2,055,812
Linked S.A.V.R.S. & R.I.B.S.,
M.B.I.A. Aaa 6.368 7/01/22 50 52,809
Richmond Redev. Agcy. Tax Alloc.,
Cap. Apprec. Ref. Harbor, Ser. B.,
M.B.I.A. Aaa Zero 7/01/20 1,150 336,789
Cap. Apprec. Ref. Harbor, Ser. B.,
M.B.I.A. Aaa Zero 7/01/21 1,150 314,444
Multifamily Hsg., Bridge
Affordable Hsg. NR 7.50 9/01/23 2,500 2,520,375
Rio Vista Impvt. Bond Act of 1915,
Assmt. Dist. No. 96-1,
River View Pt. NR 7.50 9/02/22 1,940 1,985,687
Riverside Cnty. Cert. of Part.,
Air Force Village West NR 8.125 6/15/20 3,000(e) 3,284,220
Rocklin Stanford Ranch Cmnty.,
Spec. Tax Facs., Dist. No. 3 NR 8.10 11/01/15 1,000(e) 1,046,930
Rocklin Unif. Sch. Dist., Gen.
Oblig.,
Cap. Apprec., Ser. C, M.B.I.A. Aaa Zero 8/01/12 1,110 560,961
Cap. Apprec., Ser. C, M.B.I.A. Aaa Zero 8/01/13 1,165 550,055
Cap. Apprec., Ser. C, M.B.I.A. Aaa Zero 8/01/14 1,220 537,873
Cap. Apprec., Ser. C, M.B.I.A. Aaa Zero 8/01/15 1,285 528,084
Cap. Apprec., Ser. C, M.B.I.A. Aaa Zero 8/01/16 1,400 537,936
</TABLE>
See Notes to Financial Statements 11

<PAGE>
Prudential California Municipal Fund California Income Series
Portfolio of Investments as of February 29, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Principal
Moody's Interest Maturity Amount Value
Description (a) Rating Rate Date (000) (Note 1)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Roseville California Spec. Tax,
Highland Cmnty. Fac., Dist. No. 1 NR 6.30% 9/01/25 $ 1,900 $ 1,745,796
Ref. N. Central Cmnty., Dist. No.
1 NR 5.80 9/01/17 2,500 2,242,150
Sacramento City Fin. Auth.,
Cap. Apprec., Tax Alloc. Comb.
Proj., Ser. B, M.B.I.A. Aaa Zero 11/01/16 5,700 2,158,476
Cap. Apprec., Tax Alloc. Comb.
Proj., Ser. B, M.B.I.A. Aaa Zero 11/01/17 5,695 2,003,387
Sacramento Cnty. Spec. Tax Rev.,
Dist. No. 1, Laguna Creek Ranch NR 5.70 12/01/20 1,410 1,193,368
Dist. No. 1, Laguna Creek Ranch NR 8.25 12/01/20 1,000(e) 1,050,560
Sacramento Impvt. Bond Act of 1915,
Willowcreek II,
Assmt. Dist. No. 96-1 NR 6.70 9/02/22 2,500 2,515,050
Sacramento Spec. Purpose Facs.,
Y.M.C.A. of Sacramento NR 7.25 12/01/18 2,060 2,093,578
San Bernardino Cnty., Cert. of
Part., Med. Ctr. Fin. Proj.,
M.B.I.A. Aaa 5.50 8/01/22 4,540 4,331,796
San Bruno Park Sch. Dist.,
Cap. Apprec., F.S.A. Aaa Zero 8/01/20 1,275 373,741
Cap. Apprec., F.S.A. Aaa Zero 8/01/21 1,220 333,975
Cap. Apprec., F.S.A. Aaa Zero 8/01/22 1,080 277,095
San Clemente Impvt. Bond Act of
1915, Assmt. Dist. No. 98-1 NR 6.05 9/02/28 2,000 1,778,380
San Diego Conv. Ctr. Exp. Fin.
Auth. Lease Rev., Ser. A Aaa 4.75 4/01/28 1,205 985,353
San Diego Spec. Tax, Cmnty. Facs.,
Dist. No. 1, Ser. B NR 7.10 9/01/20 2,000(e) 2,256,860
San Francisco City & Cnty.,
Redev. Agcy., Lease Rev. A1 Zero 7/01/06 1,500 1,082,010
Redev. Agcy., Lease Rev. A1 Zero 7/01/07 2,250 1,528,335
San Joaquin Hills Trans. Corridor
Agcy.,
Toll Rd. Rev. Aaa Zero 1/01/11 2,000 1,119,000
Toll Rd. Rev. Aaa Zero 1/01/22 15,000 4,021,050
Toll Rd. Rev. Aaa 5.00 1/01/33 1,000 852,130
</TABLE>
12 See Notes to Financial Statements

<PAGE>
Prudential California Municipal Fund California Income Series
Portfolio of Investments as of February 29, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Principal
Moody's Interest Maturity Amount Value
Description (a) Rating Rate Date (000) (Note 1)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
San Jose Redev. Proj., M.B.I.A. Aaa 6.00% 8/01/15 $ 3,000 $ 3,157,650
San Jose Unif. Sch. Dist., Santa
Clara,
Gen. Oblig., Ser. A., F.G.I.C. Aaa Zero 8/01/16 2,630 1,010,551
Gen. Oblig., Ser. A., F.G.I.C. Aaa Zero 8/01/18 2,765 922,211
Gen. Oblig., Ser. A., F.G.I.C. Aaa Zero 8/01/19 2,835 884,151
San Luis Obispo, Certs. of Part.,
Vista Hosp. Sys. NR 8.375 7/01/29 1,000 869,610
San Marcos Pub. Fac. Auth. Rev.,
Ref., Ser. 1998 NR 5.80 9/01/18 1,000 869,280
San Marino Unif. Sch. Dist.,
Gen. Oblig., Ser. A AA(b) 5.25 7/01/19 1,840 1,718,045
Gen. Oblig., Ser. A AA(b) 5.00 6/01/23 1,500 1,308,000
Santa Margarita, Dana Point Auth.,
Impvt. Dist., Ser. A, M.B.I.A. Aaa 7.25 8/01/09 905 1,050,189
Impvt. Dist., Ser. B, M.B.I.A. Aaa 7.25 8/01/14 1,000 1,186,440
Santa Margarita Wtr. Dist. Spec.
Tax,
Cmnty. Facs., Dist. No. 99-1 NR 6.20 9/01/20 2,000 1,885,140
Cmnty. Facs., Dist. No. 99-1 NR 6.25 9/01/29 2,000 1,858,320
Santa Rosa Impvt. Bond Act of 1915,
Ref. Fountaingrove Parkway NR 5.70 9/02/19 1,000 870,640
South Orange Cnty., Pub. Fin.
Auth., Spec. Tax Rev., M.B.I.A. Aaa 7.00 9/01/10 2,535 2,909,648
South San Francisco Redev. Agcy.,
Tax Alloc., Gateway Redev. Proj. NR 7.60 9/01/18 2,375(e) 2,591,220
South Tahoe Joint Pwrs. Fin. Ref.,
Redev. Proj., Ser. A BBB-(b) 5.375 10/01/30 2,500 2,022,025
Southern California Pub. Pwr.
Auth.,
Proj. Rev. A3 6.75 7/01/10 6,250 6,942,625
Proj. Rev. A3 6.75 7/01/13 3,000 3,350,880
Proj. Rev., A.M.B.A.C. Aaa Zero 7/01/16 8,400 3,284,736
Stockton Cmnty. Facs., Dist.
No. 90-2, Brookside Estates NR 6.20 8/01/15 1,050 1,017,355
Sulphur Springs Unif. Sch. Dist.,
Ser. A, M.B.I.A. Aaa Zero 9/01/11 3,000 1,612,380
</TABLE>
See Notes to Financial Statements 13

<PAGE>
Prudential California Municipal Fund California Income Series
Portfolio of Investments as of February 29, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Principal
Moody's Interest Maturity Amount Value
Description (a) Rating Rate Date (000) (Note 1)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Temecula Valley Unif. Sch. Dist.,
Cmnty. Facs., Spec. Tax, Dist.
No. 89-1 NR 8.60% 9/01/17 $ 2,600 $ 2,675,400
Torrance Redev. Agcy.,
Ref. Tax Alloc. Sub. Lien NR 5.625 9/01/28 1,000 838,150
Tax Alloc. Downtown Redev. Baa2 7.125 9/01/22 2,105(e) 2,231,742
Vacaville Cmnty. Redev. Agcy.,
Multifamily Hsg. Rev. NR 7.375 11/01/14 1,110 1,124,663
Vallejo California, Cert. of Part.,
Touro Univ. Ba2 7.375 6/01/29 2,500 2,451,725
Ventura California Port Dist.,
Cert. of Part. NR 6.375 8/01/28 4,000 3,697,720
Victor Valley,
Union H.S. Dist., M.B.I.A. Aaa Zero 9/01/17 4,500 1,620,585
Union H.S. Dist., M.B.I.A. Aaa Zero 9/01/19 5,450 1,717,023
Union H.S. Dist., M.B.I.A. Aaa Zero 9/01/20 5,850 1,733,647
Virgin Islands Territory, Hugo Ins.
Claims Fund Proj., Ser. 91 NR 7.75 10/01/06 785(e) 823,614
West Contra Costa Unif. Sch. Dist.,
Cert. of Part. Baa3 6.875 1/01/09 1,060 1,132,652
Westminster Redev. Agcy., Tax
Alloc. Rev., Orange Cnty.,
Proj. No. 1, Ser. A AAA(b) 7.30 8/01/21 3,000(e) 3,182,940
------------
Total long-term investments (cost
$254,771,048) 254,914,886
------------
<CAPTION>
SHORT-TERM INVESTMENTS 2.9%
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
California Poll. Ctrl. Fin. Auth.
Ref., Pacific Gas & Elec. Co.,
Ser. 96C, F.R.D.D. A1+(b) 3.15 3/01/00 1,700 1,700,000
California Poll. Ctrl. Fin. Auth.
Rev., Arco Proj., Ser. 94A,
F.R.D.D. VMIG1 3.20 3/01/00 400 400,000
California St. Cmnty. Dev. Auth.,
Chevron Proj., Ser. 94, F.R.D.D. P-1 3.15 3/01/00 5,100 5,100,000
</TABLE>
14 See Notes to Financial Statements

<PAGE>
Prudential California Municipal Fund California Income Series
Portfolio of Investments as of February 29, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Principal
Moody's Interest Maturity Amount Value
Description (a) Rating Rate Date (000) (Note 1)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Chula Vista Ind. Dev. Rev. San
Diego Gas & Elec. Co.,
Ser. 96B, F.R.D.D. VMIG1 3.40% 3/01/00 $ 300 $ 300,000
------------
Total short-term investments (cost
$7,500,000) 7,500,000
------------
Total Investments 100.2%
(cost $262,271,048; Note 4) 262,414,886
Liabilities in excess of other
assets (0.2)% (402,718)
Net Assets 100% $262,012,168
------------
------------
</TABLE>
- ------------------------------
(a) The following abbreviations are used in portfolio descriptions:
A.M.B.A.C.--American Municipal Bond Assurance Corporation.
A.M.T.--Alternative Minimum Tax.
F.G.I.C.--Financial Guaranty Insurance Company.
F.R.D.D.--Floating Rate (Daily) Demand Notes (c).
F.S.A.--Financial Security Assurance.
M.B.I.A.--Municipal Bond Insurance Association.
R.I.B.S.--Residual Interest Bearing Securities.
S.A.V.R.S.--Select Auction Variable Rate Securities.
Y.M.C.A.--Young Mens Christian Association.
(b) Standard & Poor's Rating.
(c) For purposes of amortized cost valuation, the maturity date of Floating Rate
Demand Notes is considered to be the later of the next date on which the
security can be redeemed at par, or the next date on which the rate of
interest is adjusted.
(d) Inverse floating rate bond. The coupon is inversely indexed to a floating
interest rate. The rate shown is the rate at year end.
(e) Prerefunded issues are secured by escrowed cash and/or direct U.S.
guaranteed obligations.
(f) Indicates a restricted security. The aggregate cost of restricted securities
is $2,482,295 and the aggregate value is $1,550,000 which represents
approximately 0.6% of net assets.
(g) Issue in default on interest payment, non-income producing security.
NR--Not Rated by Moody's or Standard & Poor's.
The Fund's current Statement of Additional Information contains a description of
Moody's and Standard & Poor's ratings.
See Notes to Financial Statements 15

<PAGE>
Prudential California Municipal Fund California Income Series
Statement of Assets and Liabilities (Unaudited)
<TABLE>
<CAPTION>
February 29, 2000
<S> <C> <C>
- ----------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $262,271,048) $ 262,414,886
Cash 108,798
Interest receivable 4,439,301
Receivable for Series shares sold 617,873
Receivable for investments sold 62,048
Other assets 4,677
-----------------
Total assets 267,647,583
-----------------
LIABILITIES
Payable for investments purchased 4,928,667
Payable for Series shares reacquired 327,199
Accrued expenses 118,802
Management fee payable 101,524
Dividends payable 80,354
Distribution fee payable 68,649
Deferred trustee's fees 10,220
-----------------
Total liabilities 5,635,415
-----------------
NET ASSETS $ 262,012,168
-----------------
-----------------
Net assets were comprised of:
Shares of beneficial interest, at par $ 259,365
Paid-in capital in excess of par 266,176,702
-----------------
266,436,067
Accumulated net realized loss on investments (4,567,737)
Net unrealized appreciation on investments 143,838
-----------------
Net assets, February 29, 2000 $ 262,012,168
-----------------
-----------------
</TABLE>

16 See Notes to Financial Statements

<PAGE>
Prudential California Municipal Fund California Income Series
Statement of Assets and Liabilities (Unaudited) Cont'd.
<TABLE>
<CAPTION>
February 29, 2000
<S> <C> <C>
- ----------------------------------------------------------------------------------------
Class A:
Net asset value and redemption price per share
($172,845,906 / 17,109,997 shares of beneficial interest
issued and outstanding) $10.10
Maximum sales charge (3% of offering price) .31
-----------------
Maximum offering price to public $10.41
-----------------
-----------------
Class B:
Net asset value, offering price and redemption price per
share ($76,975,706 / 7,619,797 shares of beneficial
interest issued and outstanding) $10.10
-----------------
-----------------
Class C:
Net asset value and redemption price per share ($8,489,813
/ 840,396 shares of beneficial interest issued and
outstanding) $10.10
Sales charge (1% of offering price) .10
-----------------
Offering price to public $10.20
-----------------
-----------------
Class Z:
Net asset value, offering price and redemption price per
share ($3,700,743 / 366,305 shares of beneficial
interest issued and outstanding) $10.10
-----------------
-----------------
</TABLE>

See Notes to Financial Statements 17

<PAGE>
Prudential California Municipal Fund California Income Series
Statement of Operations (Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended
February 29, 2000
<S> <C> <C>
- ----------------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest $ 8,402,075
-----------------
Expenses
Management fee 679,208
Distribution fee--Class A 222,051
Distribution fee--Class B 199,501
Distribution fee--Class C 36,152
Custodian's fees and expenses 47,000
Transfer agent's fees and expenses 29,000
Registration fees 25,000
Reports to shareholders 24,000
Trustees' fees and expenses 6,500
Audit fees and expenses 6,500
Legal fees and expenses 5,000
Miscellaneous 4,951
-----------------
Total expenses 1,284,863
Custodian fee credit (Note 1) (3,490)
-----------------
Net expenses 1,281,373
-----------------
Net investment income 7,120,702
-----------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on:
Investment transactions (1,503,694)
Financial futures transactions 849,456
-----------------
(654,238)
-----------------
Net change in unrealized appreciation/depreciation on:
Investments (9,435,753)
Financial futures contracts (156,625)
-----------------
(9,592,378)
-----------------
Net loss on investments (10,246,616)
-----------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(3,125,914)
-----------------
-----------------
</TABLE>

18 See Notes to Financial Statements

<PAGE>
Prudential California Municipal Fund California Income Series
Statement of Changes in Net Assets (Unaudited)
<TABLE>
<CAPTION>
Six Months Year Ended
Ended August 31,
February 29, 2000 1999
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income $ 7,120,702 $ 14,041,421
Net realized loss on investment transactions (654,238) (825,958)
Net change in unrealized
appreciation/depreciation on investments (9,592,378) (17,810,023)
----------------- -------------
Net decrease in net assets resulting from
operations (3,125,914) (4,594,560)
----------------- -------------
Dividends and distributions (Note 1):
Dividends from net investment income
Class A (4,697,456) (9,496,580)
Class B (2,091,991) (3,882,376)
Class C (230,711) (413,457)
Class Z (100,544) (249,008)
----------------- -------------
(7,120,702) (14,041,421)
----------------- -------------
Distributions in excess of net investment
income
Class A (29,079) --
Class B (12,950) --
Class C (1,428) --
Class Z (623) --
----------------- -------------
(44,080) --
----------------- -------------
Series share transactions (net of share
conversions) (Note 5):
Net proceeds from shares sold 51,368,941 92,907,502
Net asset value of shares issued to
shareholders in reinvestment of dividends
and distributions 3,389,172 6,830,426
Cost of shares reacquired (66,891,041) (59,179,182)
----------------- -------------
Net increase (decrease) in net assets from
Series share transactions (12,132,928) 40,558,746
----------------- -------------
Total increase (decrease) (22,423,624) 21,922,765
NET ASSETS
Beginning of period 284,435,792 262,513,027
----------------- -------------
End of period $ 262,012,168 $ 284,435,792
----------------- -------------
----------------- -------------
</TABLE>

See Notes to Financial Statements 19

<PAGE>
Prudential California Municipal Fund California Income Series
Notes to Financial Statements (Unaudited)

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.
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 nonrated securities which 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.

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.

<PAGE>
Prudential California Municipal Fund California Income Series
Notes to Financial Statements (Unaudited) Cont'd.

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.

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.

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.
21

<PAGE>
Prudential California Municipal Fund California Income Series
Notes to Financial Statements (Unaudited) Cont'd.

Reclassification of Capital Accounts: The Fund accounts for and reports
distributions to shareholders in accordance with Statement of Position 93-2:
Determination, Disclosure, and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment Companies. The
effect of applying this statement was to decrease undistributed net investment
income and increase accumulated net realized loss by $44,080 due to the sale of
securities purchased with market discount. Net investment income, net realized
gains and net assets were not affected by this change.

Note 2. Agreements
The Fund has a management agreement with Prudential Investments Fund Management
LLC ('PIFM'). Pursuant to this agreement, PIFM has responsibility for all
investment advisory services and supervises the subadviser's performance of such
services. PIFM has entered into a subadvisory agreement with The Prudential
Investment Corporation ('PIC'); PIC furnishes investment advisory services in
connection with the management of the Fund. PIFM pays for 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 PIFM is computed daily and payable monthly, at an
annual rate of .50 of 1% of the average daily net assets of the Series.

PIMS has advised the Series that it received approximately $85,500 and
$7,000 in front-end sales charges resulting from sales of Class A and Class C
shares, respectively, during the six months ended February 29, 2000. From these
fees, PIMS
22

<PAGE>
Prudential California Municipal Fund California Income Series
Notes to Financial Statements (Unaudited) Cont'd.

paid such sales charges to affiliated broker-dealers which in turn paid
commissions to sales persons and incurred other distribution costs.

PIMS has advised the Series that for the six months ended February 29,
2000, it received approximately $163,000 and $5,200 in contingent deferred sales
charges imposed upon certain redemptions by Class B and Class C shareholders,
respectively.

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

The Fund, along with other affiliated registered investment companies (the
'Funds'), entered into a syndicated credit agreement ('SCA') with an
unaffiliated lender. The maximum commitment under the SCA is $1 billion and
interest on any borrowings will be at market rates. For the period
3/11/99-3/9/00, the commitment fee on the unused portion of the credit facility
was .065 of 1%. Subsequent to March 9, 2000, the SCA was renewed with a maximum
commitment of $1 billion at a commitment fee of .080 of 1% of the unused portion
of the credit facility. The expiration date of the SCA is March 9, 2001. The
commitment fee is accrued and paid quarterly on a pro rata basis by the Funds.
Prior to March 11, 1999, the Funds had a credit agreement with a maximum
commitment of $200,000,000. The commitment fee was .055 of 1% on the unused
portion of the credit facility. The Fund did not borrow any amounts during the
year ended January 31, 2000. The purpose of the credit agreements is to serve as
an alternative source of funding for capital share redemptions.

Note 3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC ('PMFS'), a wholly owned subsidiary of PIFM,
serves as the Fund's transfer agent. During the six months ended February 29,
2000, the Series incurred fees of approximately $25,400 for the services of
PMFS. As of February 29, 2000 approximately $4,300 of such fees were due to
PMFS. Transfer agent fees and expenses in the Statement of Operations include
certain out-of-pocket expenses paid to nonaffiliates.

Note 4. Portfolio Securities
Purchases and sales of portfolio securities of the Series, excluding short-term
investments, for the six months ended February 29, 2000 were $29,398,746 and
$46,291,234, respectively.

The United States federal income tax cost basis of the Fund's investments
as of February 29, 2000 was $262,442,343 and accordingly, net unrealized
depreciation
23

<PAGE>
Prudential California Municipal Fund California Income Series
Notes to Financial Statements (Unaudited) Cont'd.
on investments for federal income tax purposes was $27,457 (gross unrealized
appreciation--$10,895,793; gross unrealized depreciation--$10,923,250).

For federal income tax purposes, the Series has a capital loss
carryforward at August 31, 1999 of approximately $2,496,600 of which $1,520,900
expires in 2003 and $975,700 expires in 2004. Accordingly, no capital gains
distributions are expected to be paid to shareholders until net gains have been
realized in excess of such amount.

For federal income tax purposes, the Series will elect to treat net
capital losses of $1,104,800 incurred in the ten month period ended August 31,
1999 as being incurred in the current fiscal year.

Note 5. Capital
The Series offers Class A, Class B, Class C and Class Z shares. Class A shares
are sold with a front-end sales charge of up to 3%. Class B shares are sold with
a contingent deferred sales charge which declines from 5% to zero depending on
the period of time the shares are held. Class C shares are sold with front-end
sales charge of 1% and a contingent deferred sales charge of 1% during the first
18 months. Class B shares will automatically convert to Class A shares on a
quarterly basis approximately seven years after purchase. 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, 2000 and the fiscal year ended August 31, 1999 were as follows:
<TABLE>
<CAPTION>
Class A Shares Amount
- ------------------------------------------------------------ ---------- ------------
<S> <C> <C>
Six months ended February 29, 2000:
Shares sold 4,120,559 $ 42,040,251
Shares issued in reinvestment of dividends 217,535 2,221,987
Shares reacquired (4,790,857) (49,016,023)
---------- ------------
Net decrease in shares outstanding before conversion (452,763) (4,753,785)
Shares issued upon conversion from Class B 62,279 647,620
---------- ------------
Net decrease in shares outstanding (390,484) $ (4,106,165)
---------- ------------
---------- ------------
</TABLE>
24

<PAGE>
Prudential California Municipal Fund California Income Series
Notes to Financial Statements (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class A Shares Amount
- ------------------------------------------------------------ ---------- ------------
Year ended August 31, 1999:
<S> <C> <C>
Shares sold 4,622,707 $ 50,892,275
Shares issued in reinvestment of dividends 417,857 4,593,136
Shares reacquired (3,868,964) (42,458,852)
---------- ------------
Net increase in shares outstanding before conversion 1,171,600 13,026,559
Shares issued upon conversion from Class B 109,917 1,217,865
---------- ------------
Net increase in shares outstanding 1,281,517 $ 14,244,424
---------- ------------
---------- ------------
<CAPTION>
Class B
- ------------------------------------------------------------
<S> <C> <C>
Six months ended February 29, 2000:
Shares sold 688,026 $ 7,033,595
Shares issued in reinvestment of dividends 91,035 929,425
Shares reacquired (1,155,620) (11,809,077)
---------- ------------
Net decrease in shares outstanding before conversion (376,559) (3,846,057)
Shares reacquired upon conversion into Class A (62,279) (647,620)
---------- ------------
Net decrease in shares outstanding (438,838) $ (4,493,677)
---------- ------------
---------- ------------
Year ended August 31, 1999:
Shares sold 2,701,343 $ 29,886,200
Shares issued in reinvestment of dividends 160,200 1,758,724
Shares reacquired (995,244) (10,928,291)
---------- ------------
Net increase in shares outstanding before conversion 1,866,299 20,716,633
Shares reacquired upon conversion into Class A (109,917) (1,217,865)
---------- ------------
Net increase in shares outstanding 1,756,382 $ 19,498,768
---------- ------------
---------- ------------
<CAPTION>
Class C
- ------------------------------------------------------------
<S> <C> <C>
Six months ended February 29, 2000
Shares sold 102,293 $ 1,052,218
Shares issued in reinvestment of dividends 15,677 160,151
Shares reacquired (311,527) (3,186,839)
---------- ------------
Net decrease in shares outstanding (193,557) $ (1,974,470)
---------- ------------
---------- ------------
Year ended August 31, 1999:
Shares sold 696,989 $ 7,705,871
Shares issued in reinvestment of dividends 26,026 285,305
Shares reacquired (221,550) (2,436,064)
---------- ------------
Net increase in shares outstanding 501,465 $ 5,555,112
---------- ------------
---------- ------------
</TABLE>
25

<PAGE>
Prudential California Municipal Fund California Income Series
Notes to Financial Statements (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class Z Shares Amount
- ------------------------------------------------------------ ---------- ------------
Six months ended February 29, 2000:
<S> <C> <C>
Shares sold 122,101 $ 1,242,877
Shares issued in reinvestment of dividends 7,602 77,609
Shares reacquired (282,867) (2,879,102)
---------- ------------
Net decrease in shares outstanding (153,164) $ (1,558,616)
---------- ------------
Year ended August 31, 1999:
Shares sold 405,701 $ 4,423,156
Shares issued in reinvestment of dividends 17,560 193,261
Shares reacquired (306,708) (3,355,975)
---------- ------------
Net increase in shares outstanding 116,553 $ 1,260,442
---------- ------------
---------- ------------
</TABLE>

<PAGE>
This page intentionally left blank
27

<PAGE>
Prudential California Municipal Fund California Income Series
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
Class A
-----------------
Six Months Ended
February 29, 2000
- ----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 10.49
-----------------
Income from investment operations
Net investment income .27
Net realized and unrealized gain (loss) on investment
transactions (.39)
-----------------
Total from investment operations (.12)
-----------------
Less distributions
Dividends from net investment income (.27)
Distributions in excess of net investment income --(c)
-----------------
Total distributions (.27)
-----------------
Net asset value, end of period $ 10.10
-----------------
-----------------
TOTAL RETURN(b): (1.05)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 172,845
Average net assets (000) $ 178,617
Ratios to average net assets:
Expenses, including distribution fees .86%(d)
Expenses, excluding distribution fees .61%(d)
Net investment income 5.33%(d)
For Class A, B, C and Z shares:
Portfolio turnover rate 11%
</TABLE>

<PAGE>
Prudential California Municipal Fund California Income Series
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class A
- ----------------------------------------------------------------------------------------------------------
Year Ended August 31,
- ----------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 11.19 $ 10.71 $ 10.33 $ 10.28 $ 10.19
- ---------------- ---------------- ---------------- ---------------- ----------------
.56(a) .59(a) .60(a) .63(a) .65(a)
(.70) .49 .38 .05 .09
- ---------------- ---------------- ---------------- ---------------- ----------------
(.14) 1.08 .98 .68 .74
- ---------------- ---------------- ---------------- ---------------- ----------------
(.56) (.59) (.60) (.63) (.65)
-- (.01) --(c) -- --
- ---------------- ---------------- ---------------- ---------------- ----------------
(.56) (.60) (.60) (.63) (.65)
- ---------------- ---------------- ---------------- ---------------- ----------------
$ 10.49 $ 11.19 $ 10.71 $ 10.33 $ 10.28
- ---------------- ---------------- ---------------- ---------------- ----------------
- ---------------- ---------------- ---------------- ---------------- ----------------
(1.37)% 10.31% 9.72% 6.67% 7.67%
$183,593 $181,512 $156,684 $153,236 $163,538
$187,106 $165,771 $153,019 $161,420 $165,500
.76%(a) .68%(a) .73%(a) .50%(a) .40%(a)
.56%(a) .58%(a) .63%(a) .40%(a) .30%(a)
5.03%(a) 5.39%(a) 5.66%(a) 6.01%(a) 6.49%(a)
23% 10% 16% 22% 39%
</TABLE>

See Notes to Financial Statements 29

<PAGE>
Prudential California Municipal Fund California Income Series
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class B
-----------------
Six Months Ended
February 29, 2000
- ----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 10.49
--------
Income from investment operations
Net investment income .26
Net realized and unrealized gain (loss) on investment
transactions (.39)
--------
Total from investment operations (.13)
--------
Less distributions
Dividends from net investment income (.26)
Distributions in excess of net investment income --(c)
--------
Total distributions (.26)
--------
Net asset value, end of period $ 10.10
--------
--------
TOTAL RETURN(b): (1.18)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $76,976
Average net assets (000) $80,239
Ratios to average net assets:
Expenses, including distribution fees 1.11%(d)
Expenses, excluding distribution fees .61%(d)
Net investment income 5.08%(d)
</TABLE>

<PAGE>
Prudential California Municipal Fund California Income Series
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class B
- ----------------------------------------------------------------------------------------------------------
Year Ended August 31,
- ----------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 11.19 $ 10.71 $ 10.33 $ 10.28 $ 10.19
-------- -------- -------- -------- --------
.53(a) .55(a) .55(a) .59(a) .61(a)
(.70) .49 .38 .05 .09
-------- -------- -------- -------- --------
](.17) 1.04 .93 .64 .70
-------- -------- -------- -------- --------
(.53) (.55) (.55) (.59) (.61)
-- (.01) --(c) -- --
-------- -------- -------- -------- --------
(.53) (.56) (.55) (.59) (.61)
-------- -------- -------- -------- --------
$ 10.49 $ 11.19 $ 10.71 $ 10.33 $ 10.28
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
(1.67)% 9.87% 9.28% 6.25% 7.24%
$ 84,546 $ 70,535 $ 47,436 $ 35,983 $ 28,609
$ 81,163 $ 56,011 $ 40,983 $ 32,555 $ 23,722
1.06%(a) 1.08%(a) 1.13%(a) .90%(a) .80%(a)
.56%(a) .58%(a) .63%(a) .40%(a) .30%(a)
4.78%(a) 4.99%(a) 5.26%(a) 5.61%(a) 6.09%(a)
</TABLE>

See Notes to Financial Statements 31

<PAGE>
Prudential California Municipal Fund California Income Series
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class C
-----------------
Six Months Ended
February 29, 2000
- ----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 10.49
-------
Income from investment operations
Net investment income .25
Net realized and unrealized gain (loss) on investment
transactions (.39)
-------
Total from investment operations (.14)
-------
Less distributions
Dividends from net investment income (.25)
Distributions in excess of net investment income --(c)
-------
Total distributions (.25)
-------
Net asset value, end of period $ 10.10
-------
-------
TOTAL RETURN(b): (1.30)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 8,490
Average net assets (000) $ 9,694
Ratios to average net assets:
Expenses, including distribution fees 1.36%(d)
Expenses, excluding distribution fees .61%(d)
Net investment income 4.83%(d)
</TABLE>

<PAGE>
Prudential California Municipal Fund California Income Series
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class C
- ----------------------------------------------------------------------------------------------------------
Year Ended September 30,
- ----------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 11.19 $10.71 $10.33 $10.28 $10.19
-------- ------- ------- ------- -------
.50(a) .52(a) .53(a) .56(a) .58(a)
(.70) .49 .38 .05 .09
-------- ------- ------- ------- -------
(.20) 1.01 .91 .61 .67
-------- ------- ------- ------- -------
(.50) (.52) (.53) (.56) (.58)
-- (.01) --(c) -- --
-------- ------- ------- ------- -------
(.50) (.53) (.53) (.56) (.58)
-------- ------- ------- ------- -------
$ 10.49 $11.19 $10.71 $10.33 $10.28
-------- ------- ------- ------- -------
-------- ------- ------- ------- -------
(1.91)% 9.60% 9.01% 5.99% 6.98%
$ 10,847 $5,960 $3,611 $3,269 $2,762
$ 9,088 $4,491 $3,135 $3,300 $1,751
1.31%(a) 1.33%(a) 1.38%(a) 1.15%(a) 1.05%(a)
.56%(a) .58%(a) .63%(a) .40%(a) .30%(a)
4.53%(a) 4.74%(a) 5.01%(a) 5.36%(a) 5.84%(a)
</TABLE>

See Notes to Financial Statements 33

<PAGE>
Prudential California Municipal Fund California Income Series
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class Z
-----------------
Six Months Ended
February 29, 2000
- ----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 10.49
-------
Income from investment operations
Net investment income .29
Net realized and unrealized gain (loss) on investment
transactions (.39)
-------
Total from investment operations (.10)
-------
Less distributions
Dividends from net investment income (.29)
Distributions in excess of net investment income --(c)
-------
Total distributions (.29)
-------
Net asset value, end of period $ 10.10
-------
-------
TOTAL RETURN(b): (.93)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 3,701
Average net assets (000) $ 4,626
Ratios to average net assets:
Expenses, including distribution fees .61%(d)
Expenses, excluding distribution fees .61%(d)
Net investment income 5.58%(d)
</TABLE>

<PAGE>
Prudential California Municipal Fund California Income Series
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class Z
- ---------------------------------------------------------------------------------------
September 18, 1996(d)
Year Ended August 31, through August 31,
1999 1998 1997
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
$11.19 $10.71 $10.38
------- ------- -------
.58(a) .61(a) .57(a)
(.70) .49 .33
------- ------- -------
(.12) 1.10 .90
------- ------- -------
(.58) (.61) (.57)
-- (.01) --(c)
------- ------- -------
(.58) (.62) (.57)
------- ------- -------
$10.49 $11.19 $10.71
------- ------- -------
------- ------- -------
(1.18)% 10.42% 8.86%
$5,449 $4,507 $1,963
$4,725 $3,312 $ 970
.56%(a) .58%(a) .63%(a)(d)
.56%(a) .58%(a) .63%(a)(d)
5.28%(a) 5.49%(a) 5.76%(a)(d)
</TABLE>

See Notes to Financial Statements 35

Prudential California Municipal Fund California Income Series
Getting the Most From Your Prudential Mutual Fund