LANDMARK MULTI-STATE TAX FREE FUNDS, N-30B-2, 1995-11-06

LANDMARK MULTI-STATE TAX FREE FUNDS
N-30B-2, 1995-11-06

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<PAGE>
[LOGO] LANDMARK(SM) FUNDS
Advised by Citibank, N.A.

LANDMARK
CALIFORNIA
TAX FREE
RESERVES

ANNUAL
REPORT
August 31, 1995
<PAGE>
- - --------------------------------------------------------------------------------
A LETTER TO OUR SHAREHOLDERS
- - --------------------------------------------------------------------------------

Dear Shareholder:

The past year has been one of marked contrasts for the U.S. economy and its
financial markets. During the first half of the year, short-term cash equivalent
investments such as Landmark California Tax Free Reserves did relatively well as
interest rates rose in response to inflation fears, while longer term bonds and
stocks fared poorly. As the economy slowed in the second half of the fiscal
year, broad measures of stock and bond performance rallied to new highs and
yields on most short-term tax-exempt money market investments dropped.

The Landmark Funds' investment adviser, Citibank, N.A., manages Landmark
California Tax Free Reserves to provide high levels of current income that are
largely exempt from both federal and California personal income taxes, as well
as preservation of capital and liquidity. The Fund seeks to offer an attractive
yield by investing in a high-quality portfolio composed primarily of short-term
municipal obligations issued by state and municipal governments and by public
authorities. A portion of the Fund's income may not be exempt from California
personal income taxes.

This Annual Report reviews the Fund's investment activities and performance
over the past 12 months and provides a summary of Citibank's perspective on and
outlook for the financial markets. On behalf of the Board of Trustees of the
Landmark Funds, I want to thank you for your confidence and participation. We
look forward to serving you in the months and years ahead.

/s/ Philip W. Coolidge
- - ----------------------------
Philip W. Coolidge
President
September 20, 1995

- - ----------------------------------------
Remember that Mutual Fund Shares:
o Are not bank deposits or FDIC insured
o Are not obligations of or guaranteed
by Citibank or Citicorp Investment
Services
o Are subject to investment risks,
including possible loss of the
principal amount invested.

TABLE OF CONTENTS

LANDMARK CALIFORNIA
TAX FREE RESERVES
- - ----------------------------------------
1 Letter to Shareholders
- - ----------------------------------------
2 Market Environment
Fund Snapshot
- - ----------------------------------------
3 Fund Quotes
The Portfolio Manager Responds
Strategy and Outlook
- - ----------------------------------------
4 Fund Data
7-Day Yield Comparisons
- - ----------------------------------------
5 Portfolio of Investments
- - ----------------------------------------
7 Statement of Assets and Liabilities
Statement of Operations
- - ----------------------------------------
8 Statement of Changes in Net Assets
Financial Highlights
- - ----------------------------------------
9 Notes to Financial Statements
- - ----------------------------------------
11 Independent Auditors' Report
<PAGE>
- - --------------------------------------------------------------------------------
MARKET ENVIRONMENT
- - --------------------------------------------------------------------------------

When the Fund's fiscal year began on September 1, 1994, the U.S. economy
was growing faster than its available supply of labor and materials, fueling
inflation fears. Investors reacted by selling stocks and bonds and shifting
assets to short-term money market securities. As a result, stocks and bonds
provided below-average returns in 1994 while yields on cash equivalents rose.

In the face of these inflationary pressures, the Federal Reserve Board
continued to raise short-term interest rates in an effort to slow the rate of
economic growth enough to forestall a further acceleration of inflation. By the
beginning of 1995, signs began to emerge that the economy was indeed slowing to
a pace below the rate at which inflationary pressures become a problem. As the
rate of economic growth moderated and the likelihood of further interest-rate
hikes receded, yields on money market securities generally declined during the
second half of the fiscal year.

The Fund's investments were also influenced by events specific to both
California and the nation's municipal bond markets. In December, losses in
Orange County's investment fund created considerable uncertainty about some
California issuers' ability to pay interest and repay principal in a timely
manner, and some issuers were unable to sell their bonds at all without also
providing insurance or other guarantees of repayment. Nationally, tax reform
proposals in Congress put downward pressure on tax-exempt money market yields as
demand for short-term issues strengthened.

- - --------------------------------------------------------------------------------
FUND SNAPSHOT
- - --------------------------------------------------------------------------------

COMMENCEMENT OF OPERATIONS
March 10, 1992

NET ASSETS AS OF 8/31/95
$51.8 million

FUND OBJECTIVE
Provide high levels of current income which is exempt from both Federal and
California personal income taxes,* preservation of capital and liquidity.

DIVIDENDS
Declared daily, paid monthly

CAPITAL GAINS
Distributed annually, if any

BENCHMARKS
o Lipper California Tax Exempt Money Market Funds Average
o IBC/Donoghue California Tax Free Money Funds Average

INVESTMENT ADVISER
Citibank, N.A.

* A portion of the income may be subject to the Federal Alternative Minimum Tax.
Consult your personal tax advisor.
<PAGE>
- - --------------------------------------------------------------------------------
FUND QUOTES FROM THE PORTFOLIO MANAGER
- - --------------------------------------------------------------------------------

"In the wake of Orange County's bankruptcy, we have stayed away from small,
local issues in favor of larger, more well-known issuers."

"A recent appellate court ruling legally requires California municipalities to
set aside funds in reserve to repay their debt obligations, which should help
prevent problems similar to Orange County's in the future."

"Looking forward, we expect interest rates to decline modestly if the Federal
Reserve eases monetary policy in response to a weakening economy."

- - --------------------------------------------------------------------------------
THE PORTFOLIO MANAGER RESPONDS
- - --------------------------------------------------------------------------------

We carefully monitored the various economic and political influences
affecting California's municipal bond marketplace during the year and took
action opportunistically. Although we maintained an overall neutral
average-maturity posture for the Fund during most of the period, we extended
maturities to the long end of the neutral range to lock in higher yields when
interest rates rose. Conversely, we reduced maturities when interest rates
temporarily declined in order to keep funds available for higher yielding
securities as they became available.

Landmark California Tax Free Reserves held no securities issued by Orange
County, California, or its municipalities at the time of the bankruptcy, and the
Fund's California holdings quickly recovered as investors recognized their
creditworthiness. Yet, we continued to take a cautious approach to the
California municipal bond market by avoiding smaller issuers and focusing
instead on well known, highly rated securities. We were also able to find
attractive opportunities in variable-rate demand notes. In addition, we
conducted a thorough review of all California holdings soon after the Orange
County incident.

- - --------------------------------------------------------------------------------
STRATEGY AND OUTLOOK
- - --------------------------------------------------------------------------------

Our forecast for the U.S. economy calls for slow-but-positive growth over
the near term. The Federal Reserve appears to have been successful in its
efforts to slow the U.S. economy to non-inflationary levels without causing a
recession, and, despite July's modest interest-rate reduction, we expect
monetary policy to remain unchanged over the next few months. If the economy
heats up unexpectedly, short-term interest rates may rise in response. Absent an
economic rebound, tax-exempt money market yields should decline modestly as
demand continues to outweigh the available supply of new issues.

Over the longer term, we expect the Federal Reserve to resume easing if the
U.S. economy shows further signs of weakness. The prospect of recession is
unacceptable to many in Washington, D.C., especially in an election year. We
believe, therefore, that lower yields are more likely than higher ones.

In California, we continue to monitor the political and economic
environments carefully. On one hand, ongoing litigation regarding Orange
County's actions after the bankruptcy continues to add an element of uncertainty
to the marketplace. On the other hand, California's economy continues to
strengthen, as does the State's financial condition, reducing the need to
finance budget deficits in the short-term tax-exempt market.

As these national, regional and local issues evolve, we will continue to
manage Landmark California Tax Free Reserves to maximize tax-exempt yields
without sacrificing preservation of capital.
<PAGE>
- - --------------------------------------------------------------------------------
FUND DATA All Periods Ending August 31, 1995
- - --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
TOTAL RETURNS
---------------------
SINCE
ONE MARCH 10, 1992
YEAR INCEPTION*
----- --------------
<S> <C> <C>
Landmark California Tax Free Reserves..................................... 3.49% 2.77%
Lipper California Tax Exempt Money Market Funds Average................... 3.19% 2.47%+

* Average Annual Total Return
+ Since 2/29/92
</TABLE>

7-DAY YIELDS
- - ----------
Annualized Current 3.35%
Effective 3.40%

The Annualized Current 7-Day Yield reflects the amount of income generated by
the investment during that seven day period and assumes that the income is
generated each week over a 365 day period. The yield is shown as a percentage of
the investment.

The Effective 7-Day Yield is calculated similarly, but when annualized, the
income earned by the investment during that seven day period is assumed to be
reinvested.

The effective yield is slightly higher than the current yield because of the
compounding effect of this assumed reinvestment.

IMPORTANT TAX INFORMATION
- - -------------------------
For the fiscal year ended August 31, 1995, the Fund paid $0.03434 per share
to shareholders from net investment income. For such period, the Fund designated
all dividends paid as exempt-interest dividends. Thus, 100% of these
distributions were exempt from Federal income tax and 77.5% of dividends earned
were also exempt from California personal income tax. In addition, 8.3% of the
dividends were derived from income earned from certain municipal obligations
which may be subject to Federal Alternative Minimum Tax (AMT).

- - --------------------------------------------------------------------------------
7-DAY YIELD COMPARISONS
- - --------------------------------------------------------------------------------

As the graph illustrates, Landmark California Tax Free Reserves generally had a
higher average annualized 7-day yield than the comparable Money Market Funds, as
published in IBC/Donoghue's Money Fund Report over most of the period.

COMPARISON OF 7-DAY YIELDS FOR LANDMARK CALIFORNIA TAX FREE RESERVES
VS. IBC/DONOGHUE CALIFORNIA TAX FREE FUNDS AVERAGE

Landmark IBC/Donoghue
California California Tax
Tax Free Free Funds
Reserves Average
---------- --------------
9/6/94 2.85% 2.58%
9/13/94 2.72% 2.51%
9/20/94 2.97% 2.62%
9/27/94 3.13% 2.78%
10/4/94 3.18% 2.90%
10/11/94 2.71% 2.60%
10/18/94 2.65% 2.40%
10/25/94 2.96% 2.56%
11/1/94 3.18% 2.60%
11/8/94 3.07% 2.72%
11/15/94 3.25% 2.81%
11/22/94 3.36% 2.98%
11/29/94 3.42% 3.07%
12/6/94 3.25% 2.98%
12/13/94 3.14% 2.81%
12/20/94 3.71% 3.37%
12/27/94 3.95% 3.88%
1/3/95 4.06% 4.23%
1/10/95 3.45% 3.34%
1/17/95 3.08% 2.73%
1/24/95 3.12% 2.66%
1/31/95 3.55% 3.06%
2/7/95 3.48% 3.09%
2/14/95 3.59% 3.26%
2/21/95 3.77% 3.45%
2/28/95 3.72% 3.40%
3/7/95 3.63% 3.31%
3/14/95 3.51% 3.15%
3/21/95 3.59% 3.22%
3/28/95 3.72% 3.35%
4/4/95 3.78% 3.46%
4/11/95 3.59% 3.28%
4/18/95 3.68% 3.40%
4/25/95 3.82% 3.57%
5/2/95 3.90% 3.72%
5/9/95 3.86% 3.72%
5/16/95 3.96% 3.82%
5/23/95 3.81% 3.61%
5/30/95 3.75% 3.50%
6/6/95 3.50% 3.23%
6/13/95 3.16% 2.78%
6/20/95 3.68% 3.26%
6/27/95 3.72% 3.48%
7/4/95 3.65% 3.39%
7/11/95 3.23% 2.86%
7/18/95 3.18% 2.69%
7/25/95 3.43% 3.10%
8/1/95 3.45% 3.21%
8/8/95 3.33% 3.07%
8/15/95 3.43% 3.17%
8/22/95 3.43% 3.18%
8/29/95 3.33% 3.11%

Notes: The Fund seeks to maintain a stable $1.00 per share price, although there
is no assurance that this will be so on a continuing basis. Fund shares are not
insured or guaranteed by the U.S. Government. Yields and total returns will
fluctuate and past performance is no guarantee of future results. Total return
figures include reinvestment of dividends. Returns and yields reflect certain
voluntary fee waivers. If the waivers were not in place, the Fund's returns
would have been lower and the 7-Day annualized current yield would have been
3.05%.
<PAGE>
- - --------------------------------------------------------------------------------
Landmark California Tax Free Reserves
- - --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS August 31, 1995
- - --------------------------------------------------------------------------------

PRINCIPAL
AMOUNT
ISSUER (000'S OMITTED) VALUE
- - -----------------------------------------------------------------------
TAX EXEMPT COMMERCIAL PAPER--26.1%
- - -----------------------------------------------------------------------
California Pollution Control
Finance Authority,
4.15%, due 9/7/95........................ $2,000 $ 2,000,000
California Pollution Control
Finance Authority,
4.10%, due 9/8/95........................ 1,000 1,000,000
California Pollution Control
Finance Authority,
3.20%, due 10/11/95...................... 1,200 1,200,000
California Pollution Control
Finance Authority,
3.75%, due 10/13/95...................... 1,300 1,300,000
Long Beach, CA Harbor Authority,
3.85%, due 10/10/95...................... 1,500 1,500,000
Los Angeles County, CA Series A,
3.70%, due 11/9/95....................... 1,000 1,000,000
Los Angeles County, CA
Transportation Authority,
4.10%, due 9/7/95........................ 1,000 1,000,000
Lower Colorado River
Authority Service,
3.90%, due 9/12/95....................... 1,000 1,000,000
Puerto Rico Industrial Tourist,
3.70%, due 11/8/95....................... 1,500 1,500,000
Sacramento, CA
Municipal Utility District,
4.10%, due 9/8/95........................ 2,000 2,000,000
-----------
13,500,000
-----------

- - -----------------------------------------------------------------------
ANNUAL AND SEMI-ANNUAL TENDER REVENUE BONDS
AND NOTES (PUTS)--16.1%
- - -----------------------------------------------------------------------
Aurora Hanover Park, IL Single
Family Mortgage Revenue, AMT,
4.26%, due 12/15/95...................... $ 790 $ 790,000
California Pollution Control
Finance Authority,
4.25%, due 6/15/96....................... 1,360 1,365,725
California State,
5.75%, due 4/25/96....................... 1,000 1,014,352
Oklahoma State Water Resource,
4.50%, due 9/1/95........................ 1,000 1,000,000
Puerto Rico Public
Buildings Authority,
8.00%, due 7/1/96........................ 2,000 2,126,022
Virgin Islands Housing
Financial Authority, AMT,
4.38%, due 2/1/96........................ 1,000 1,000,000
Sacramento, CA
Municipal Utility District,
7.50%, due 5/1/96........................ 1,000 1,041,342
-----------
8,337,441
-----------

- - -----------------------------------------------------------------------
BOND ANTICIPATION NOTES, TAX AND REVENUE
ANTICIPATION NOTES -- 4.8%
- - -----------------------------------------------------------------------
Butte County, CA Bond Anticipation Notes,
5.00%, due 10/27/95...................... 1,000 1,001,222
Sacramento, CA
Tax and Revenue Anticipation Notes,
5.00%, due 11/10/95...................... 500 500,689
Texas State, TX
Tax and Revenue Anticipation Notes,
4.75%, due 8/30/96....................... 1,000 1,006,610
-----------
2,508,521
-----------

- - -----------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES*-- 58.4%
- - -----------------------------------------------------------------------
Alameda County, CA
Industrial Development
Authority, due 6/1/04.................... $ 400 $ 400,000
Angelina & Niches, TX River
Authority, due 5/1/14.................... 400 400,000
Berkeley County, SC
Pollution Control, due 7/1/12............ 1,000 1,000,000
California Health Facilities Finance
Authority, due 7/1/13.................... 2,170 2,170,000
California Health Facilities Finance
Authority, due 7/1/16.................... 100 100,000
California Health Facilities Finance
Authority, due 3/1/20.................... 1,500 1,500,000
California Health Facilities Finance
Authority, due 7/1/20.................... 1,200 1,200,000
California Pollution Control Finance
Authority, due 9/1/13.................... 1,100 1,100,000
California Pollution Control Finance
Authority, AMT, due 9/1/18............... 400 400,000
California Pollution Control Finance
Authority, AMT, due 9/1/20............... 600 600,000
California Pollution Control Recovery
Authority, due 12/1/24................... 500 500,000
California Pollution Control
Solid Waste, AMT,
due 10/1/24.............................. 1,000 1,000,000
California Statewide
Community Development,
due 7/1/15............................... 300 300,000
California Statewide
Community Development,
due 11/1/15.............................. 2,000 2,000,000
Carlsbad, CA
Multi-Family Housing Revenue,
due 6/1/11............................... 400 400,000
Chula Vista, CA
Multi-Family Housing Revenue,
due 3/1/05............................... 1,000 1,000,000
Contra Costa, CA
Transportation Revenue,
due 3/1/09............................... 1,600 1,600,000
Eastern, CA Municipal
Water District Revenue,
due 7/1/20............................... 700 700,000
Jackson County, MS
Pollution Control Authority,
due 6/1/23............................... 100 100,000
Kern County, CA
Certificates of Participation,
due 8/1/06............................... 2,400 2,400,000
Los Angeles, CA Community
Redevelopment Authority,
due 12/1/05.............................. 700 700,000
Los Angeles County, CA Community
Metropolitan Transportation,
due 7/1/20............................... 2,000 2,000,000
Monterey County, CA
Financial Authority,
due 9/1/36............................... 1,600 1,600,000
Monterey Peninsula, CA Water Authority,
due 7/1/22............................... 500 500,000
Pittsburg, CA, due 12/30/22................. 2,400 2,400,000
Sacramento, CA, due 9/15/07................. 800 800,000
San Francisco, CA Multi-Family
Redevelopment Authority,
due 12/1/05.............................. 1,000 1,000,000
San Joaquin County, CA
Transportation Authority,
due 4/1/11............................... 2,400 2,400,000
-----------
30,270,000
-----------
TOTAL INVESTMENTS,
AT AMORTIZED COST ........................ 105.4% 54,615,962
OTHER ASSETS,
LESS LIABILITIES ......................... (5.4) (2,783,650)
----- -----------
NET ASSETS ................................. 100.0% $51,832,312
===== ===========

AMT - Subject to Alternative Minimum Tax
* Variable rate demand notes have a demand feature under which the Fund
could tender them back to the issuer on no more than 7 days' notice.

See notes to financial statements
<PAGE>
- - --------------------------------------------------------------------------------
Landmark California Tax Free Reserves
- - --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES August 31, 1995
- - --------------------------------------------------------------------------------

ASSETS:
Investments, at amortized cost (Note 1A)....................... $54,615,962
Cash........................................................... 73,158
Interest receivable............................................ 377,412
Receivable for shares of beneficial interest sold.............. 12,345
Receivable from Administrator (Note 9)......................... 51,915
-----------
Total assets............................................... 55,130,792
-----------
LIABILITIES:
Payable for investments purchased.............................. 3,159,517
Payable for shares of beneficial interest repurchased.......... 80,000
Dividends payable.............................................. 17,993
Accrued expenses and other liabilities......................... 40,970
-----------
Total liabilities.......................................... 3,298,480
-----------
NET ASSETS for 51,841,085 shares of beneficial
interest outstanding.......................................... $51,832,312
===========
NET ASSETS CONSIST OF:
Paid-in capital................................................ $51,841,085
Accumulated net realized loss on investments................... (8,773)
-----------
Total...................................................... $51,832,312
===========
NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PRICE PER SHARE $1.00
=====
<PAGE>
- - --------------------------------------------------------------------------------
Landmark California Tax Free Reserves
- - --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS For the Year Ended August 31, 1995
- - --------------------------------------------------------------------------------

INVESTMENT INCOME (Note 1B)........................ $1,710,465
EXPENSES:
Shareholder Servicing Agents' fees (Note 4B)....... $ 183,755
Investment Advisory fees (Note 3).................. 91,878
Administrative fees (Note 4A)...................... 68,908
Custodian fees..................................... 65,566
Auditing fees...................................... 37,000
Legal fees......................................... 26,739
Distribution fees (Note 5)......................... 22,969
Shareholder reports................................ 20,004
Trustee fees....................................... 17,768
Transfer agent fees................................ 10,000
Miscellaneous...................................... 11,360
---------
Total expenses................................. 555,947
Less aggregate amount waived by Investment Adviser,
Administrator, Shareholder Servicing Agents, and
Distributor (Notes 3, 4A, 4B, and 5).............. (367,510)
Expenses assumed by Administrator (Note 9)......... (51,915)
----------
Net expenses................................... 136,522
----------
Net investment income.......................... 1,573,943
NET REALIZED LOSS ON INVESTMENTS................... (7,800)
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $1,566,143
==========

See notes to financial statements
<PAGE>
- - --------------------------------------------------------------------------------
Landmark California Tax Free Reserves
- - --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- - --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
-----------------------------
1995 1994
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income..................................................... $ 1,573,943 $ 976,463
Net realized loss on investments.......................................... (7,800) (988)
------------ ------------
Net increase in net assets resulting from operations...................... 1,566,143 975,475
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income..................................................... (1,573,943) (976,463)
------------ ------------
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST AT NET ASSET VALUE OF
$1.00 PER SHARE (Note 6):
Proceeds from sale of shares.............................................. 163,071,202 146,519,662
Net asset value of shares issued to shareholders from reinvestment
of dividends ............................................................ 1,256,049 742,999
Cost of shares repurchased................................................ (165,350,381) (132,206,536)
------------ ------------
Net increase (decrease) in net assets from
transactions in shares of beneficial interest............................ (1,023,130) 15,056,125
------------ ------------
Net increase (decrease) in net assets .................................... (1,030,930) 15,055,137
NET ASSETS:
Beginning of period....................................................... 52,863,242 37,808,105
------------ ------------
End of period............................................................. $ 51,832,312 $ 52,863,242
============ ============
</TABLE>

- - --------------------------------------------------------------------------------
Landmark California Tax Free Reserves
- - --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARCH 10, 1992
YEAR ENDED AUGUST 31, (COMMENCEMENT
____________________________________________ OF OPERATIONS) TO
1995 1994 1993 AUGUST 31, 1992
--------- --------- --------- -----------------
<S> <C> <C> <C> <C>
Net Asset Value, beginning of period...... $ 1.00000 $ 1.00000 $ 1.00000 $ 1.00000
Net investment income..................... 0.03434 0.02288 0.02467 0.01304
Less dividends from net investment income (0.03434) (0.02288) (0.02467) (0.01304)
--------- --------- --------- ---------
Net Asset Value, end of period............ $ 1.00000 $ 1.00000 $ 1.00000 $ 1.00000
========= ========= ========= =========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 51,832 $ 52,863 $ 37,808 $ 16,295
Ratio of expenses to average net assets ... 0.30% 0.25% 0.00% 0.00%*
Ratio of net investment income to average
net assets................................ 3.43% 2.30% 2.42% 2.71%*
Total return............................... 3.49% 2.31% 2.50% 2.75%*

Note: If Agents of the Fund had not voluntarily waived all or a portion of their fees from the Fund and the
Administrator had not voluntarily assumed expenses for the periods indicated, the ratios and net investment
income per share would have been as follows:

Net investment income per share............ $0.02513 $0.01423 $0.01121 $0.00279
Ratios
Expenses to average net assets............. 1.21% 1.12% 1.32% 2.13%*
Net investment income to average net assets 2.51% 1.43% 1.10% 0.58%*

* Annualized
</TABLE>

See notes to financial statements
<PAGE>
- - --------------------------------------------------------------------------------
Landmark California Tax Free Reserves
- - --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- - --------------------------------------------------------------------------------

(1) SIGNIFICANT ACCOUNTING POLICIES
Landmark California Tax Free Reserves (the "Fund") is a separate non-diversified
series of Landmark Multi-State Tax Free Funds (the "Trust"), which is organized
as a Massachusetts business trust and is registered under the Investment Company
Act of 1940, as amended, as an open-end, management investment company. The
Investment Adviser of the Fund is Citibank, N.A. ("Citibank"). The Landmark
Funds Broker-Dealer Services, Inc. ("LFBDS") acts as the Trust's Administrator
and Distributor. Citibank also serves as Sub-Administrator and makes shares
available to customers through various Shareholder Servicing Agents.

The significant accounting policies consistently followed by the Fund are in
conformity with generally accepted accounting principles and are as follows:

A. VALUATION OF INVESTMENTS -- Money market instruments are valued at amortized
cost, which the Trustees have determined in good faith constitutes fair value.
The Fund's use of amortized cost is subject to the Fund's compliance with
certain conditions as specified under Rule 2a-7 of the Investment Company Act of
1940.

B. INTEREST INCOME -- Interest income consists of interest accrued, less the
amortization of any premium and accretion of market discount on the investments
of the Fund.

C. FEDERAL TAXES -- The Fund's policy is to comply with the provisions of the
Internal Revenue Code available to regulated investment companies and to
distribute to shareholders all of its net investment income. Accordingly, no
provision for federal income or excise tax is necessary. At August 31, 1995, the
Fund, for federal income tax purposes, had a capital loss carryover of $988, of
which $988 will expire August 31, 2003. Such capital loss carryover will reduce
the Fund's taxable income arising from future net realized gain on investment
transactions, if any, to the extent permitted by the Internal Revenue Code, and
thus will reduce the amount of distributions to shareholders which would
otherwise be necessary to relieve the Fund of any liability for federal income
tax. Dividends paid by the Fund from net interest received on tax-exempt money
market instruments are not includable by shareholders as gross income for
federal income tax purposes because the Fund intends to meet certain
requirements of the Internal Revenue Code applicable to regulated investment
companies which will enable the Fund to pay exempt-interest dividends. The
portion of such interest, if any, earned on private activity bonds issued after
August 7, 1986, may be considered a tax preference item to shareholders.

D. EXPENSES -- The Fund bears all costs of its operations other than expenses
specifically assumed by Citibank and LFBDS. Expenses incurred by the Trust with
respect to any two or more Funds in a series are allocated in proportion to the
average net assets of each fund, except when allocations of direct expenses to
each fund can otherwise be made fairly. Expenses directly attributable to a fund
are charged to that fund.

E. OTHER -- Purchases, and maturities and sales, of money market instruments are
accounted for on the date of the transaction.

(2) DIVIDENDS
The net income of the Fund is determined once daily, as of 12:00 noon, New York
City time, and all of the net income of the Fund so determined is declared as a
dividend to shareholders of record at the time of such determination. Dividends
are distributed in the form of additional shares of the Fund or, at the election
of the shareholder, in cash (subject to the policies of the shareholder's
Shareholder Servicing Agent), on or prior to the last business day of the month.

(3) INVESTMENT ADVISORY FEES
The investment advisory fee paid to Citibank, as compensation for overall
investment management services, amounted to $91,878, all of which was
voluntarily waived for the year ended August 31, 1995. The investment advisory
fee is computed at the annual rate of 0.20% of the Fund's average daily net
assets.

(4) ADMINISTRATIVE SERVICES PLAN
The Trust has adopted an Administrative Services Plan (the "Administrative
Services Plan") which provides that the Trust, on behalf of each Fund, may
obtain the services of an Administrator, one or more Shareholder Servicing
Agents and other Servicing Agents and may enter into agreements providing for
the payment of fees for such services. Under the Administrative Services Plan,
the aggregate of the fee paid to the Administrator from the Fund, the fees paid
to the Shareholder Servicing Agents from the Fund under such plan and the Basic
Distribution Fee paid from the Fund to the Distributor under the Distribution
Plan may not exceed 0.60% of the Fund's average daily net assets on an
annualized basis for the Fund's then-current fiscal year.

A. ADMINISTRATIVE FEES -- Under the terms of an Administrative Services
Agreement, LFBDS is entitled to an administrative fee from the Fund, as
compensation for overall administrative services and general office facilities,
which is computed at the annual rate of 0.15% of the Fund's average daily net
assets. The administrative fee amounted to $68,908, all of which was voluntarily
waived for the year ended August 31, 1995. Citibank acts as Sub-Administrator
and performs such duties and receives such compensation from LFBDS as from time
to time is agreed to by LFBDS and Citibank. The Fund pays no compensation
directly to any Trustee or any officer who is affiliated with the Administrator,
all of whom receive remuneration for their services to the Fund from the
Administrator or its affiliates. Certain of the officers and a Trustee of the
Fund are officers and a director of the Administrator or its affiliates.

B. SHAREHOLDER SERVICING AGENT FEES -- The Trust, on behalf of the Fund, has
entered into shareholder servicing agreements with each Shareholder Servicing
Agent pursuant to which that Shareholder Servicing Agent acts as an agent for
its customers and provides other related services. For their services, each
Shareholder Servicing Agent receives fees from the Fund, which may be paid
periodically, which may not exceed, on an annualized basis, an amount equal to
0.40% of the average daily net assets of the Fund represented by shares owned
during the period by investors for whom such Shareholder Servicing Agent
maintains a servicing relationship. Shareholder Servicing Agent fees amounted to
$183,755, all of which was voluntarily waived for the year ended August 31,
1995.

(5) DISTRIBUTION FEES
The Trust has adopted a Plan of Distribution pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended, in which the Fund reimburses the
Distributor for expenses incurred or anticipated in connection with the sale of
shares of the Fund, at an annual rate not to exceed 0.10% of the Fund's average
daily net assets. The Distributor may also receive an additional fee from the
Fund not to exceed 0.10% of the Fund's average daily net assets in anticipation
of, or as reimbursement for, advertising expenses incurred by the Distributor in
connection with the sale of shares of the Fund. No payments of such additional
fees have been made to date. Under the Administrative Services Plan the
distribution fees were computed at an annual rate of 0.05% of the Fund's average
daily net assets. The distribution fee amounted to $22,969, all of which was
voluntarily waived for the year ended August 31, 1995.

(6) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional Shares of Beneficial Interest (without par value).

(7) INVESTMENT TRANSACTIONS
Purchases, and maturities and sales, of money market instruments aggregated
$275,571,541 and $273,612,200, respectively, for the year ended August 31, 1995.

(8) FEDERAL INCOME TAX BASIS OF INVESTMENT SECURITIES
The cost of investment securities owned at August 31, 1995, for federal income
tax purposes, amounted to $54,615,962.

(9) ASSUMPTION OF EXPENSES
LFBDS has voluntarily agreed to pay a portion of the unwaived expenses of the
Fund for the year ended August 31, 1995, which amounted to $51,915.

(10) LINE OF CREDIT
The Fund, along with other Landmark Funds, entered into an agreement with a bank
which allows the Funds collectively to borrow up to $40 million for temporary or
emergency purposes. Interest on borrowings, if any, is charged to the specific
fund executing the borrowing at the base rate of the bank. In addition, the $15
million committed portion of the line of credit requires a quarterly payment of
a commitment fee based on the average daily unused portion of the line of
credit. For the year ended August 31, 1995, the commitment fee allocated to the
Fund was $348. Since the line of credit was established there have been no
borrowings.
<PAGE>
- - --------------------------------------------------------------------------------
Landmark California Tax Free Reserves
- - --------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
- - --------------------------------------------------------------------------------

TO THE TRUSTEES AND SHAREHOLDERS OF LANDMARK CALIFORNIA TAX FREE RESERVES:

We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of Landmark California Tax Free Reserves
(the "Fund"), a separate series of Landmark Multi-State Tax Free Funds (the
"Trust") (a Massachusetts business trust), as of August 31, 1995, the related
statement of operations for the year then ended, the statement of changes in net
assets for the years ended August 31, 1995 and 1994 and the financial highlights
for each of the years in the three-year period ended August 31, 1995, and for
the period from March 10, 1992 (Commencement of Operations) to August 31, 1992.
These financial statements and financial highlights are the responsibility of
the Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of the securities owned as of
August 31, 1995, by correspondence with the Custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Landmark California
Tax Free Reserves at August 31, 1995, the results of its operations, the changes
in its net assets, and its financial highlights for the respective stated
periods in conformity with generally accepted accounting principles.

DELOITTE & TOUCHE LLP

Boston, Massachusetts
October 9, 1995
<PAGE>
- - --------------------------------------------------------------------------------
SHAREHOLDER SERVICING AGENTS
- - --------------------------------------------------------------------------------

FOR CITIBANK NEW YORK RETAIL BANKING AND BUSINESS AND PROFESSIONAL CUSTOMERS:
Citibank, N.A.
450 West 33rd Street, New York, NY 10001
(212) 564-3456 or (800) 846-5300

FOR CITIGOLD CUSTOMERS:
Citigold
P.O. Box 5130, New York, NY 10126-5130
Call Your Citigold Executive or in NY or CT (800) 285-1701, or for all
other states, (800) 285-1707

FOR CITIBANK PRIVATE BANKING CLIENTS:
Citibank, N.A.
The Citibank Private Bank
153 East 53rd Street, New York, NY 10043
Call Your Citibank Private Banking Account Officer,
Investment Specialist or (212) 559-5959

FOR CITIBANK GLOBAL ASSET MANAGEMENT CLIENTS:
Citibank, N.A.
Citibank Global Asset Management
153 East 53rd Street, New York, NY 10043
(212) 559-7117

FOR CITIBANK NORTH AMERICAN INVESTOR SERVICES CLIENTS:
Citibank, N.A.
111 Wall Street, New York, NY 10043
Call Your Account Manager or (212) 657-9100

FOR CITICORP INVESTMENT SERVICES CUSTOMERS:
Citicorp Investment Services
One Court Square, Long Island City, NY 11120
Call Your Investment Consultant or (800) 846-5200,
(212) 736-8170 in New York City
<PAGE>
TRUSTEES AND OFFICERS
Philip W. Coolidge*, President
H. B. Alvord
Elliott J. Berv
Mark T. Finn
Riley C. Gilley
Diana R. Harrington
Susan B. Kerley
C. Oscar Morong, Jr.
Walter E. Robb, III
E. Kirby Warren
William S. Woods, Jr.

ASSISTANT TREASURER
Barbara M. O'Dette*

ASSISTANT SECRETARIES
Susan Jakuboski*
Molly S. Mugler*

*Affiliated Person of Administrator and Distributor

- - --------------------------| |----------------------

INVESTMENT ADVISER
Citibank, N.A.
153 East 53rd Street, New York, NY 10043

ADMINISTRATOR AND DISTRIBUTOR
The Landmark Funds Broker-Dealer Services, Inc.
6 St. James Avenue, Boston, MA 02116
(617) 423-1679

TRANSFER AGENT AND CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street, Boston, MA 02110

AUDITORS
Deloitte & Touche LLP
125 Summer Street, Boston, MA 02110

LEGAL COUNSEL
Bingham, Dana & Gould
150 Federal Street, Boston, MA 02110

- - --------------------------| |----------------------

SHAREHOLDER SERVICING AGENTS
(See Inside Cover)

This report is prepared for the information of shareholders. It is authorized
for distribution to prospective investors only when preceded or accompanied by
an effective prospectus.

This Report is Prepared & Printed on Recycled Paper [RECYCLE SYMBOL]
CATR/A/95

<PAGE>

[LOGO] LANDMARK(SM) FUNDS
Advised by Citibank, N.A.

LANDMARK
CONNECTICUT
TAX FREE
RESERVES

The past year has been one of marked contrasts for the U.S. economy and its
financial markets. During the first half of the year, short-term cash equivalent
investments such as Landmark Connecticut Tax Free Reserves did relatively well
as interest rates rose in response to inflation fears, while longer term bonds
and stocks fared poorly. As the economy slowed in the second half of the fiscal
year, broad measures of stock and bond performance rallied to new highs and
yields on most short-term tax-exempt money market investments dropped.

The Landmark Funds' investment adviser, Citibank, N.A., manages Landmark
Connecticut Tax Free Reserves to provide high levels of current income that are
largely exempt from both federal and Connecticut personal income taxes, as well
as preservation of capital and liquidity. The Fund seeks to offer an attractive
yield by investing primarily in a high-quality portfolio of short-term municipal
obligations issued by state and municipal governments and by public authorities.
A portion of the Fund's income may not be exempt from Connecticut personal
income taxes.

/s/ Philip W. Coolidge
- - -------------------------------
Philip W. Coolidge
President
September 20, 1995

- - -------------------------------------------------
Remember that Mutual Fund Shares:
o Are not bank deposits or FDIC insured
o Are not obligations of or guaranteed by Citibank or Citicorp Investment
Services
o Are subject to investment risks, including possible loss of the
principal amount invested.

TABLE OF CONTENTS

LANDMARK CONNECTICUT
TAX FREE RESERVES
- - -------------------------------------------------
1 Letter to Shareholders
- - -------------------------------------------------
2 Market Environment
Fund Snapshot
- - -------------------------------------------------
3 Fund Quotes
The Portfolio Manager Responds
Strategy and Outlook
- - -------------------------------------------------
4 Fund Data
7-Day Yield Comparisons
- - -------------------------------------------------
5 Portfolio of Investments
- - -------------------------------------------------
7 Statement of Assets and Liabilities
Statement of Operations
- - -------------------------------------------------
8 Statement of Changes in Net Assets
Financial Highlights
- - -------------------------------------------------
9 Notes to Financial Statements
- - -------------------------------------------------
11 Independent Auditors' Report
- - -------------------------------------------------
<PAGE>
- - --------------------------------------------------------------------------------
MARKET ENVIRONMENT
- - --------------------------------------------------------------------------------

The Fund's investments were also influenced by events specific to both
Connecticut and the nation's municipal bond markets. In Connecticut, the effects
of further job losses at the State's military bases were largely offset by
spending cuts and certain sales tax increases enacted by the Connecticut
government. Nationally, tax reform proposals in Congress put downward pressure
on tax-exempt money market yields as demand for short-term issues strengthened.
In response, tax-exempt money market yields from Connecticut issuers fell to as
low as 63% of the yield provided by comparable taxable U.S. Treasury securities.

- - --------------------------------------------------------------------------------
FUND SNAPSHOT
- - --------------------------------------------------------------------------------

COMMENCEMENT OF OPERATIONS
December 1, 1993

NET ASSETS AS OF 8/31/95
$46.6 million

FUND OBJECTIVE
Provide high levels of current income which is exempt from both Federal and
Connecticut personal income taxes,* preservation of capital and liquidity.

DIVIDENDS
Declared daily, paid monthly

CAPITAL GAINS
Distributed annually, if any

BENCHMARKS
o Lipper Connecticut Tax Exempt Money Market Funds Average
o IBC/Donoghue Connecticut Tax Free Money Funds Average

INVESTMENT ADVISER
Citibank, N.A.

*A portion of the income may be subject to the Federal Alternative Minimum Tax
(AMT). Consult your personal tax advisor.

- - --------------------------------------------------------------------------------
FUND QUOTES FROM THE PORTFOLIO MANAGER
- - --------------------------------------------------------------------------------

"The economic recovery in Connecticut has not been as robust as in most other
states."

"We found attractive values in bond anticipation notes as well as securities
issued by small, non-rated school districts throughout Connecticut."

"Looking forward, we expect interest rates to decline modestly if the Federal
Reserve eases monetary policy in response to a weakening economy."

We carefully monitored the various economic and political influences
affecting Connecticut's municipal bond marketplace during the year and took
action opportunistically. Although we maintained an overall neutral
average-maturity posture for the Fund during most of the period, we extended
maturities to the long end of the neutral range to lock in higher yields when
interest rates rose. Conversely, we reduced maturities when interest rates
temporarily declined in order to keep funds available for higher yielding
securities as they became available.

In the wake of reduced spending and higher tax revenues, many major
Connecticut issuers either reduced their issuance volume in the municipal bond
market or eliminated such borrowing altogether. As a result, the supply of new
short-term municipal issues was scarce, and many investors had trouble finding
investment opportunities. Because our municipal credit analysts look beyond the
issuers covered by the major rating agencies, however, we were able to find a
good supply of attractive opportunities in variable-rate notes as well as the
short-term notes of smaller issuers such as non-rated school districts.
Typically, these short-term notes are secured by anticipated tax or fee
revenues, making them the equivalent of AAA-rated securities.

- - --------------------------------------------------------------------------------
STRATEGY AND OUTLOOK
- - --------------------------------------------------------------------------------

Our forecast for the U.S. economy calls for slow-but-positive growth over
the near term. The Federal Reserve appears to have been successful in its
efforts to slow the U.S. economy to non-inflationary levels without causing a
recession, and, despite July's modest interest-rate reduction, we expect
monetary policy to remain unchanged over the next few months. If the economy
heats up unexpectedly, short-term rates may rise in response. Absent an economic
rebound, tax-exempt money market yields should decline modestly as demand
continues to outweigh the available supply of new issues.

In Connecticut, we continue to monitor the political and economic
environments carefully. On one hand, the prospect of further cuts in state aid
to local municipalities and school districts could put pressure on these smaller
entities' ability to finance their operations. On the other hand, these same
pressures have forced localities to make their revenue and spending projections
more accurate, reducing the need to borrow to cover unexpected expenditures.

As these national, regional and local issues evolve, we will continue to
manage Landmark Connecticut Tax Free Reserves to maximize tax-exempt yields
without sacrificing preservation of capital.

- - --------------------------------------------------------------------------------
FUND DATA All Periods Ending August 31, 1995
- - --------------------------------------------------------------------------------
TOTAL RETURNS
---------------------
SINCE
ONE 12/1/93
YEAR INCEPTION*
----- ---------
Landmark Connecticut Tax Free Reserves............. 3.62% 3.12%
Lipper Connecticut Tax Exempt Money
Market Funds Average.............................. 3.07% 2.55%+
* Annualized
+ From 11/30/93

7-DAY YIELDS
- - ------------
Annualized Current 3.33%
Effective 3.38%

The Effective 7-Day Yield is calculated similarly, but when annualized, the
income earned by the investment during that seven day period is assumed to be
reinvested.

The effective yield is slightly higher than the current yield because of the
compounding effect of this assumed reinvestment.

IMPORTANT TAX INFORMATION
- - -------------------------
For fiscal year ended August 31, 1995, the Fund paid $0.03564 per share to
shareholders from net investment income. For such period, the Fund designated
all dividends paid as exempt-interest dividends. Thus, 100% of these
distributions were exempt from Federal income tax and 75.8% of dividends earned
were also exempt from Connecticut personal income tax. In addition, 12.3% of the
dividends were derived from income earned from certain municipal obligations
which may be subject to Federal Alternative Minimum Tax (AMT).

- - --------------------------------------------------------------------------------
7-DAY YIELD COMPARISONS
- - --------------------------------------------------------------------------------

As the graph indicates, the seven day yield of Landmark Connecticut Tax Free
Reserves generally exceeded that of the IBC/Donoghue comparable average of
similar money funds, as reported in the IBC/Donoghue Money Fund Report, for most
of the period.

COMPARISON OF 7-DAY YIELDS FOR LANDMARK CONNECTICUT TAX FREE RESERVES VS.
IBC/DONOGHUE CONNECTICUT TAX FREE MONEY FUNDS AVERAGE

LANDMARK IBC/DONOGHUE
CONNECTICUT CT TAX FREE
TAX FREE MONEY FUNDS
RESERVES AVG
---------- -------------

9/6/94 3.12% 2.48%
9/13/94 2.95% 2.42%
9/20/94 3.12% 2.53%
9/27/94 3.42% 2.68%
10/4/94 3.56% 2.81%
10/11/94 3.06% 2.55%
10/18/94 2.91% 2.36%
10/25/94 3.14% 2.48%
11/1/94 3.39% 2.70%
11/8/94 3.29% 2.67%
11/15/94 3.37% 2.69%
11/22/94 3.58% 2.90%
11/29/94 3.70% 3.01%
12/6/94 3.52% 2.90%
12/13/94 3.19% 2.66%
12/20/94 4.02% 3.24%
12/27/94 4.66% 3.79%
1/3/95 3.97% 4.94%
1/10/95 3.84% 3.08%
1/17/95 2.99% 2.58%
1/24/95 3.03% 2.57%
1/31/95 3.04% 2.93%
2/7/95 3.65% 2.91%
2/14/95 3.86% 3.06%
2/21/95 4.02% 3.27%
2/28/95 4.08% 3.25%
3/7/95 3.61% 3.14%
3/14/95 3.35% 2.99%
3/21/95 3.44% 3.02%
3/28/95 3.66% 3.19%
4/4/95 3.81% 3.30%
4/11/95 3.61% 3.14%
4/18/95 3.75% 3.31%
4/25/95 3.91% 3.42%
5/2/95 4.10% 3.58%
5/9/95 4.01% 3.56%
5/16/95 4.11% 3.62%
5/23/95 3.90% 3.47%
5/30/95 3.82% 3.37%
6/6/95 3.50% 3.10%
6/13/95 3.01% 2.64%
6/20/95 3.55% 3.17%
6/27/95 3.76% 3.36%
7/4/95 3.67% 3.26%
7/11/95 3.15% 2.86%
7/18/95 3.02% 2.62%
7/25/95 3.36% 2.94%
8/1/95 3.44% 3.08%
8/8/95 3.32% 2.98%
8/15/95 3.43% 3.07%
8/22/95 3.46% 3.08%
8/29/95 3.33% 3.01%

- - --------------------------------------------------------------------------------
Landmark Connecticut Tax Free Reserves
- - --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS August 31, 1995
- - --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT
ISSUER (000'S OMITTED) VALUE
- - -------------------------------------------------------------
TAX EXEMPT COMMERCIAL
PAPER--16.0%
- - -------------------------------------------------------------
Connecticut State Health and
Educational Facilities, 3.15%,
due 9/14/95........................ $1,250 $ 1,250,000
Connecticut State Health and
Educational Facilities, 3.65%,
due 10/6/95........................ 1,300 1,300,000
Connecticut State Housing
Finance Authority, AMT, 3.30%,
due 9/14/95........................ 1,300 1,300,000
Puerto Rico Industrial, Medical and
Environment, 3.15%, due 9/7/95 600 600,000
Puerto Rico Industrial Tourist,
3.20%, due 9/7/95.................. 1,000 1,000,000
Puerto Rico Industrial Tourist,
3.70%, due 11/8/95................. 2,000 2,000,000
-----------
7,450,000
-----------
- - -------------------------------------------------------------
BOND, TAX AND REVENUE
ANTICIPATION NOTES AND
GENERAL OBLIGATION BONDS
AND NOTES--20.7%
- - -------------------------------------------------------------
Colchester, CT, General Obligation
Bonds, 6.75%, due 12/15/95......... 100 100,543
Connecticut State General Obligation
Notes, 5.40%, due 12/15/95......... 400 400,550
Connecticut State Housing Finance
Authority, General Obligation
Bonds, 6.60%, due 11/15/95......... 250 251,268
Connecticut State Housing Finance
Authority, General Obligation
Bonds, 7.70%, due 11/15/95......... 630 634,182
Connecticut State, General Obligation
Notes, 5.50%, due 6/15/96.......... 1,350 1,368,063
Fairfield, CT, Bond Anticipation Notes,
5.25%, due 1/16/96................. 1,500 1,502,302
Glastonbury, CT, Bond Anticipation
Notes, 4.00%, due 12/21/95......... 1,900 1,903,682
New Britain, CT, Bond Anticipation
Notes, 4.25%, due 2/7/96........... 1,000 1,002,530
Norwich, CT, General Obligation Bonds,
7.50%, due 9/15/95................. 410 410,546
Puerto Rico Commonwealth,
General Obligation Notes,
7.90%, due 7/1/96.................. 1,000 1,062,891
Stratford, CT, Bond Anticipation Notes,
4.26%, due 10/18/95................ 1,000 1,000,243
---------
9,636,800
---------
- - -------------------------------------------------------------
ANNUAL AND SEMI-ANNUAL
TENDER REVENUE BONDS AND
NOTES (PUTS)--15.8%
- - -------------------------------------------------------------
Aurora Hanover Park, IL Single Family
Mortgage Revenue, AMT, 4.26%,
due 12/15/95....................... 160 160,000
Connecticut State, 4.90%, due 11/15/95 600 601,132
Connecticut State, 7.00%, due 3/15/96 1,000 1,015,322
Connecticut State, 3.55%, due 6/1/96 . 800 800,000
Connecticut State Clean Water Fund,
9.50%, due 2/1/96.................. 400 409,133
Connecticut State Housing Finance
Authority, AMT, 4.40%, due 9/1/95 . 70 70,000
Connecticut State Housing Financial
Authority, 3.75%, due 4/15/96 ..... 1,000 1,000,000
Connecticut State Special Assessment
Revenue, 3.90%, due 7/1/96......... 1,000 1,000,000
Norwalk, Connecticut Maritime Control
Authority, 5.90%, due 2/1/96....... 250 251,922
Puerto Rico Public Building Authority,
8.00%, due 7/1/96.................. 1,000 1,063,011
Virgin Islands Housing
Finance Authority, AMT,
4.375%, due 2/1/96................. 1,000 1,000,000
---------
7,370,520
---------
- - -------------------------------------------------------------
VARIABLE RATE DEMAND
NOTES*--52.6%
- - -------------------------------------------------------------
Berkeley County, SC Pollution Control
Authority, due 7/1/12.............. $ 400 $ 400,000
Connecticut Pollution Control Authority,
due 8/1/23......................... 1,000 1,000,000
Connecticut Pollution
Control Authority, due 9/1/28...... 4,600 4,600,000
Connecticut Pollution
Control Authority, AMT, due 9/1/28 1,600 1,600,000
Connecticut State, due 3/15/12........ 2,500 2,500,000
Connecticut State Special
Assessment Revenue, due 11/1/01 ... 2,500 2,500,000
Connecticut State Special
Tax Obligations, due 12/1/10....... 2,400 2,400,000
Connecticut State Water Authority,
AMT, due 4/1/35.................... 1,000 1,000,000
Coweta County, Georgia Industrial
Development Authority,
due 3/1/09......................... 400 400,000
Daviess County, Kentucky Solid Waste,
due 12/1/23........................ 600 600,000
Loudoun County, VA Industrial
Development Authority,
due 2/1/15......................... 100 100,000
Maricopa County, Arizona Pollution
Control Authority, due 5/1/29...... 500 500,000
North Carolina Medical Care Hospitals,
due 10/1/20........................ 800 800,000
Orangeburg County, SC Industrial
Development Authority,
due 11/1/24........................ 2,200 2,200,000
Pitkin County, CO Industrial
Development Authority, due 4/1/14 900 900,000
Puerto Rico Commonwealth
Government Development Authority,
due 12/1/15........................ 700 700,000
Puerto Rico Commonwealth
Highway & Transportation Authority,
due 7/1/99......................... 100 100,000
Stamford, CT Housing Authority Revenue,
due 12/1/24........................ 1,600 1,600,000
Washington State Health Care Facilities,
due 10/1/05........................ 600 600,000
-----------
24,500,000
-----------
TOTAL INVESTMENTS, AT
AMORTIZED COST.................. 105.1% 48,957,320
OTHER ASSETS, LESS
LIABILITIES..................... (5.1) (2,401,118)
----- -----------
NET ASSETS.................. 100.0% $46,556,202
===== ===========

AMT-Subject to Alternative Minimum Tax

*Variable rate demand notes have a demand feature under which the fund could
tender them back to the issuer on no more than 7 days' notice

See notes to financial statements
<PAGE>
- - --------------------------------------------------------------------------------
Landmark Connecticut Tax Free Reserves
- - --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES August 31, 1995
- - --------------------------------------------------------------------------------

ASSETS:
Investments, at amortized cost (Note 1A).................. $48,957,320
Cash...................................................... 80,291
Interest receivable....................................... 421,532
-----------
Total assets.......................................... 49,459,143
-----------
LIABILITIES:
Payable for investments purchased......................... 2,821,484
Dividends payable......................................... 52,425
Accrued expenses and other liabilities.................... 29,032
-----------
Total liabilities..................................... 2,902,941
-----------
NET ASSETS for 46,561,186 shares of beneficial
interest outstanding..................................... $46,556,202
===========
NET ASSETS CONSIST OF:
Paid-in capital........................................... $46,561,186
Accumulated net realized loss on investments.............. (4,984)
-----------
Total................................................. $46,556,202
===========
NET ASSET VALUE, OFFERING PRICE,
AND REDEMPTION PRICE PER SHARE........................... $1.00
=====

INVESTMENT INCOME (Note 1B)............................... $1,414,659
EXPENSES:
Shareholder Servicing Agents' fees (Note 4B).............. $ 148,126
Investment Advisory fees (Note 3)......................... 74,063
Administrative fees (Note 4A)............................. 55,547
Auditing fees............................................. 25,200
Custodian fees............................................ 20,514
Distribution fees (Note 5)................................ 18,516
Legal fees................................................ 12,705
Registration fees......................................... 10,777
Shareholder reports....................................... 9,807
Trustee fees.............................................. 9,236
Transfer agent fees....................................... 6,000
Miscellaneous............................................. 2,985
---------
Total expenses........................................ 393,476
Less aggregate amount waived by Investment Adviser,
Administrator, Shareholder Servicing Agents, and
Distributor (Notes 3, 4A, 4B and 5).................. (296,252)
Expenses assumed by Administrator (Note 9)............ (16,937)
----------
Net expenses...................................... 80,287
----------
Net investment income............................. 1,334,372

NET REALIZED LOSS ON INVESTMENTS...................... (4,984)
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.. $1,329,388
==========
See notes to financial statements
<PAGE>
- - --------------------------------------------------------------------------------
Landmark Connecticut Tax Free Reserves
- - --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- - --------------------------------------------------------------------------------
DECEMBER 1, 1993
(COMMENCEMENT
YEAR ENDED OF OPERATIONS) TO
AUGUST 31, 1995 AUGUST 31, 1994
--------------- --------------
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS:
Net investment income.................. $ 1,334,372 $ 137,418
Net realized loss on investments....... (4,984) --
----------- -----------
Net increase in net assets
from operations................... 1,329,388 137,418
----------- -----------
DIVIDENDS TO SHAREHOLDERS FROM
Net investment income.................. (1,334,372) (137,418)
----------- -----------
TRANSACTIONS IN SHARES OF BENEFICIAL
INTEREST AT NET ASSET VALUE OF $1.00
PER SHARE (Note 6):
Net proceeds from sale of shares....... 126,404,505 23,701,429
Net asset value of shares issued
to shareholders from reinvestment
of dividends ......................... 885,293 110,355
Cost of shares repurchased............. (96,677,250) (7,863,146)
----------- -----------
Net increase in net assets from
transactions in shares of
beneficial interest .................. 30,612,548 15,948,638
----------- -----------
NET INCREASE IN NET ASSETS ............ 30,607,564 15,948,638
NET ASSETS:
Beginning of period.................... 15,948,638 --
----------- -----------
End of period.......................... $46,556,202 $15,948,638
=========== ===========
<PAGE>
- - --------------------------------------------------------------------------------
Landmark Connecticut Tax Free Reserves
- - --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- - --------------------------------------------------------------------------------
DECEMBER 1, 1993
(COMMENCEMENT
YEAR ENDED OF OPERATIONS) TO
AUGUST 31, 1995 AUGUST 31, 1994
--------------- ---------------
Net Asset Value, beginning of period..... $ 1.00000 $ 1.00000
Net investment income.................... 0.03564 0.01754
Less dividends from net
investment income....................... (0.03564) (0.01754)
--------- ---------
Net Asset Value, end of period........... $ 1.00000 $ 1.00000
========= =========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000's omitted)......................... $ 46,556 $ 15,949
Ratio of expenses to average net assets.. 0.22% 0.00%*
Ratio of net investment income to
average net assets...................... 3.60% 2.61%*
Total return............................. 3.62% 1.75%**

Note: If Agents of the Fund had not voluntarily waived all or a portion of their
fees from the Fund and the Administrator had not voluntarily assumed expenses
for the periods indicated, the ratios and net investment income per share would
have been as follows:

Net investment income per share.......... $0.02732 $ 0.00128
RATIOS:
Expenses to average net assets........... 1.06% 2.42%*
Net investment income to
average net assets...................... 2.76% 0.19%*

* Annualized.
** Not Annualized.

See notes to financial statements
<PAGE>

The significant accounting policies consistently followed by the Fund are in
conformity with generally accepted accounting principles and are as follows:

B. INTEREST INCOME -- Interest income consists of interest accrued, less the
amortization of any premium and accretion of market discount on the investments
of the Fund.

E. OTHER -- Purchases, and maturities and sales, of money market instruments are
accounted for on the date of the transaction.

(2) DIVIDENDS
The net income of the Fund is determined once daily, as of 12:00 noon, New York
City time, and all of the net income of the Fund so determined is declared as a
dividend to shareholders of record at the time of such determination. Dividends
are distributed in the form of additional shares of the Fund or, at the election
of the shareholder, in cash (subject to the policies of the shareholder's
Shareholder Servicing Agent) on or prior to the last business day of the month.

(3) INVESTMENT ADVISORY FEES
The investment advisory fee paid to Citibank, as compensation for overall
investment management services, amounted to $74,063, all of which was
voluntarily waived for the year ended August 31, 1995. The investment advisory
fee is computed at the annual rate of 0.20% of the Fund's average daily net
assets.

A. ADMINISTRATIVE FEES -- Under the terms of an Administrative Services
Agreement, LFBDS is entitled to an administrative fee from the Fund, as
compensation for overall administrative services and general office facilities,
which is computed at the annual rate of 0.15% of the Fund's average daily net
assets. The Administrator's fees amounted to $55,547, all of which was
voluntarily waived for the year ended August 31, 1995. Citibank acts as
Sub-Administrator and performs such duties and receives such compensation from
LFBDS as from time to time is agreed to by LFBDS and Citibank. The Fund pays no
compensation directly to any Trustee or any officer who is affiliated with the
Administrator, all of whom receive remuneration for their services to the Fund
from the Administrator or its affiliates. Certain of the officers and a Trustee
of the Fund are officers and a director of the Administrator or its affiliates.

B. SHAREHOLDER SERVICING AGENT FEES -- The Trust, on behalf of the Fund, has
entered into shareholder servicing agreements with each Shareholder Servicing
Agent pursuant to which that Shareholder Servicing Agent acts as an agent for
its customers and provides other related services. For their services, each
Shareholder Servicing Agent receives fees from the Fund, which may be paid
periodically, which may not exceed, on an annualized basis, an amount equal to
0.40% of the average daily net assets of the Fund represented by shares owned
during the period by investors for whom such Shareholder Servicing Agent
maintains a servicing relationship. Shareholder Servicing Agent fees amounted to
$148,126, all of which was voluntarily waived for the year ended August 31,
1995.

(5) DISTRIBUTION FEES
The Trust has adopted a Plan of Distribution pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended, in which the Fund reimburses the
Distributor for expenses incurred or anticipated in connection with the sale of
shares of the Fund, at an annual rate not to exceed 0.10% of the Fund's average
daily net assets. The Distributor may also receive an additional fee from the
Fund not to exceed 0.10% of the Fund's average daily net assets in anticipation
of, or as reimbursement for, advertising expenses incurred by the Distributor in
connection with the sale of shares of the Fund. No payments of such additional
fees have been made to date. Under the Administrative Services Plan the
distribution fees were computed at an annual rate of 0.05% of the Fund's average
daily net assets and amounted to $18,516, all of which was voluntarily waived
for the year ended August 31, 1995.

(6) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional Shares of Beneficial Interest (without par value).

(7) INVESTMENT TRANSACTIONS
Purchases, and maturities and sales, of money market instruments aggregated
$181,399,486 and $148,226,000, respectively, for the year ended August 31, 1995.

(8) FEDERAL INCOME TAX BASIS OF INVESTMENT SECURITIES
The cost of investment securities owned at August 31, 1995, for federal income
tax purposes, amounted to $48,957,320.

(9) ASSUMPTION OF EXPENSES
LFBDS has voluntarily agreed to pay a portion of the unwaived expenses of the
Fund for the year ended August 31, 1995, which amounted to $16,937. Effective
March 1, 1995 the Fund accrued expenses at an annual rate of 0.35% of the Fund's
average daily net assets.

(10) LINE OF CREDIT
The Fund, along with other Landmark Funds, entered into an agreement with a bank
which allows the Funds collectively to borrow up to $40 million for temporary or
emergency purposes. Interest on borrowings, if any, is charged to the specific
fund executing the borrowing at the base rate of the bank. In addition, the $15
million committed portion of the line of credit requires a quarterly payment of
a commitment fee based on the average daily unused portion of the line of
credit. For the year ended August 31, 1995, the commitment fee allocated to the
Fund was $229. Since the line of credit was established there have been no
borrowings.
<PAGE>
- - --------------------------------------------------------------------------------
Landmark Connecticut Tax Free Reserves
- - --------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
- - --------------------------------------------------------------------------------

TO THE TRUSTEES AND SHAREHOLDERS OF LANDMARK CONNECTICUT TAX FREE RESERVES:

We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of Landmark Connecticut Tax Free
Reserves (the "Fund"), a separate series of Landmark Multi-State Tax Free Funds
(the "Trust") (a Massachusetts business trust), as of August 31, 1995, the
related statement of operations for the year then ended, and the statement of
changes in net assets and the financial highlights for the year then ended, and
for the period from December 1, 1993 (Commencement of Operations) to August 31,
1994. These financial statements and financial highlights are the responsibility
of the Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.

In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Landmark Connecticut
Tax Free Reserves at August 31, 1995, the results of its operations, the changes
in its net assets, and its financial highlights for the respective stated
periods in conformity with generally accepted accounting principles.

DELOITTE & TOUCHE LLP

FOR CITIBANK NEW YORK RETAIL BANKING AND BUSINESS AND PROFESSIONAL CUSTOMERS:
Citibank, N.A.
450 West 33rd Street, New York, NY 10001
(212) 564-3456 or (800) 846-5300

FOR CITIGOLD CUSTOMERS:
Citigold
P.O. Box 5130, New York, NY 10126-5130
Call Your Citigold Executive or, in NY or CT (800) 285-1701,
or for all other states, (800) 285-1707

FOR CITIBANK GLOBAL ASSET MANAGEMENT CLIENTS:
Citibank, N.A.
Citibank Global Asset Management
153 East 53rd Street, New York, NY 10043
(212) 559-7117

FOR CITIBANK NORTH AMERICAN INVESTOR SERVICE CLIENTS:
Citibank, N.A.
111 Wall Street, New York, NY 10043
Call Your Account Manager or (212) 657-9100

TRUSTEES AND OFFICERS
Philip W. Coolidge*, President
H. B. Alvord
Elliott J. Berv
Mark T. Finn
Riley C. Gilley
Diana R. Harrington
Susan B. Kerley
C. Oscar Morong, Jr.
Walter E. Robb, III
E. Kirby Warren
William S. Woods, Jr.

ASSISTANT TREASURER
Barbara M. O'Dette*

ASSISTANT SECRETARIES
Susan Jakuboski*
Molly S. Mugler*
*Affiliated Person of Administrator and Distributor

- - ----------------------| |--------------------------

INVESTMENT ADVISER
Citibank, N.A.
153 East 53rd Street, New York, NY 10043

ADMINISTRATOR AND DISTRIBUTOR
The Landmark Funds Broker-Dealer Services, Inc.
6 St. James Avenue, Boston, MA 02116
(617) 423-1679

TRANSFER AGENT AND CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street, Boston, MA 02110

AUDITORS
Deloitte & Touche LLP
125 Summer Street, Boston, MA 02110

LEGAL COUNSEL
Bingham, Dana & Gould
150 Federal Street, Boston, MA 02110

- - ----------------------| |--------------------------

SHAREHOLDER SERVICING AGENTS
(See Inside of Cover)

This report is prepared for the information of shareholders. It is authorized
for distribution to prospective investors only when preceded or accompanied by
an effective prospectus.

This Report is Prepared & Printed on Recycled Paper [RECYCLE SYMBOL]
CTTR/A/95
<PAGE>

[LOGO] LANDMARK(SM) FUNDS
Advised by Citibank, N.A.

LANDMARK
NEW YORK TAX FREE
RESERVES

Dear Shareholder:

The past year has been one of marked contrasts for the U.S. economy and its
financial markets. During the first half of the year, short-term cash equivalent
investments such as Landmark New York Tax Free Reserves did relatively well as
interest rates rose in response to inflation fears, while longer term bonds and
stocks fared poorly. As the economy slowed in the second half of the fiscal
year, broad measures of stock and bond performance rallied to new highs and
yields on most short-term tax-exempt money market investments dropped.

The Landmark Funds' investment adviser, Citibank, N.A., manages Landmark
New York Tax Free Reserves to provide high levels of current income that are
largely exempt from federal, New York State and New York City personal income
taxes, as well as preservation of capital and liquidity. The Fund seeks to offer
an attractive yield by investing in a high-quality portfolio primarily composed
of short-term municipal obligations issued by New York State, its municipalities
and their agencies. A portion of the Fund's income may not be exempt from New
York State and New York City personal income taxes.

/s/ Philip W. Coolidge
- - ----------------------
Philip W. Coolidge
President
September 20, 1995

Remember that Mutual Fund Shares:
o Are not bank deposits or FDIC insured
o Are not obligations of or guaranteed by Citibank or Citicorp Investment
Services
o Are subject to investment risks, including possible loss of the
principal amount invested

TABLE OF CONTENTS

LANDMARK NEW YORK TAX FREE RESERVES
- - ----------------------------------------------
1 Letter to Shareholders
- - ----------------------------------------------
2 Market Environment
Fund Snapshot
- - ----------------------------------------------
3 Fund Quotes
The Portfolio Manager Responds
Strategy and Outlook
- - ----------------------------------------------
4 Fund Data
7-Day Yield Comparisons
- - ----------------------------------------------
5 Portfolio of Investments
- - ----------------------------------------------
9 Statement of Assets and Liabilities
- - ----------------------------------------------
10 Statement of Operations
- - ----------------------------------------------
11 Statement of Changes in Net Assets
- - ----------------------------------------------
12 Financial Highlights
- - ----------------------------------------------
13 Notes to Financial Statements
- - ----------------------------------------------
15 Independent Auditors' Report
<PAGE>
- - --------------------------------------------------------------------------------
MARKET ENVIRONMENT
- - --------------------------------------------------------------------------------

The Fund's investments were also influenced by events specific to both New
York and the nation's municipal bond markets. In New York, the effects of
sluggish economic growth relative to the national average were largely offset by
spending cuts and other reforms enacted by the New York State government.
Nationally, tax reform proposals in Congress put downward pressure on tax-exempt
money market yields as demand for short-term issues strengthened. In response,
tax-exempt money market yields from New York issuers fell to as low as 63% of
the yield provided by comparable taxable U.S. Treasury securities.

- - --------------------------------------------------------------------------------
FUND SNAPSHOT
- - --------------------------------------------------------------------------------

COMMENCEMENT OF OPERATIONS
November 4, 1985

NET ASSETS AS OF 8/31/95
$767.1 million

FUND OBJECTIVE
To provide its shareholders with high levels of current income exempt from
federal, New York State and New York City personal income taxes*, preservation
of capital and liquidity.

DIVIDENDS
Accrued daily, paid monthly

BENCHMARKS
o Lipper New York Tax Exempt Money Market Funds Average
o IBC/Donoghue New York Tax Free Funds Average

INVESTMENT ADVISER
Citibank, N.A.

* A portion of the income may be subject to the Federal Alternative Minimum Tax
(AMT). Consult your personal tax advisor.
<PAGE>
- - --------------------------------------------------------------------------------
FUND QUOTES FROM THE PORTFOLIO MANAGER
- - --------------------------------------------------------------------------------

"The economic recovery in New York has not been as robust as in most other
states."

"Standard & Poor's, a major independent rating agency, has issued a positive
outlook regarding New York's ability to maintain or improve its current "A"
credit rating."

"Looking forward, we expect interest rates to decline modestly if the Federal
Reserve eases monetary policy in response to a weakening economy."

We carefully monitored the various economic and political influences
affecting New York's municipal bond marketplace during the year and took action
opportunistically. Although we maintained an overall neutral average-maturity
posture for the Fund during most of the period, we extended maturities to the
long end of the neutral range to lock in higher yields when interest rates rose.
Conversely, we reduced maturities somewhat when interest rates temporarily
declined to keep funds available for higher yielding securities as they became
available.

Because of financing reforms in the State capital, New York did not come to
the market for its usual Spring financing in 1995. As a result, the supply of
new short-term municipal issues was scarce, and many investors had trouble
finding investment opportunities. Because our municipal credit analysts look
beyond the issuers covered by the major rating agencies, however, we were able
to find an abundant supply of attractive opportunities in the short-term notes
of smaller, non-rated school districts. Typically, these short-term notes are
secured by anticipated tax or fee revenues, making them the equivalent of
AAA-rated securities.

- - --------------------------------------------------------------------------------
STRATEGY AND OUTLOOK
- - --------------------------------------------------------------------------------

Our forecast for the U.S. economy calls for slow-but-positive growth over
the near term. The Federal Reserve appears to have been successful in its
efforts to slow the U.S. economy to non-inflationary levels without causing a
recession, and, despite July's modest interest-rate reduction, we expect
monetary policy to remain unchanged over the next few months. If the economy
shows signs of heating up unexpectedly, short-term rates may rise modestly in
response. Absent an economic rebound, tax-exempt money market yields should
decline modestly as demand continues to outweigh the available supply of new
issues.

In New York, we will continue to monitor political and economic conditions
carefully. On one hand, the prospect of further cuts in state aid to local
municipalities and school districts could put pressure on these smaller
entities' ability to finance their operations. On the other hand, these same
pressures have forced localities to make their revenue and spending projections
more accurate, sometimes reducing the need to borrow.

As these national, regional and local issues evolve, we will continue to
manage Landmark New York Tax Free Reserves to maximize tax-exempt yields without
sacrificing preservation of capital.
<PAGE>
- - --------------------------------------------------------------------------------
FUND DATA All Periods Ended August 31, 1995
- - --------------------------------------------------------------------------------
TOTAL RETURNS
-------------------------------
SINCE
ONE FIVE 11/4/85
YEAR YEARS* (INCEPTION)*
---- ------ ----------
Landmark New York Tax Free Reserves........ 3.18% 2.85% 3.65%
Lipper New York Tax Exempt Money
Market Funds Average ..................... 3.12% 2.83% 3.75%+

*Average Annual Total Return
+From 10/31/85

7-DAY YIELDS
- - -----------------------------------
Annualized Current 3.13%
Effective 3.18%

The Annualized Current 7-Day Yield reflects the amount of income generated by
the investment during that seven-day period and assumes that the income is
generated each week over a 365 day period. The yield is shown as a percentage of
the investment.

The Effective 7-Day Yield is calculated similarly, but when annualized the
income earned by the investment during that seven-day period is assumed to be
reinvested.

The effective yield is slightly higher than the current yield because of the
compounding effect of this assumed reinvestment.

IMPORTANT TAX INFORMATION
- - -------------------------
For the fiscal year ended August 31, 1995, the Fund paid $0.03136 per share to
shareholders from net investment income. For such period, the Fund designated
all dividends paid as exempt-interest dividends. Thus, 100% of these
distributions during this period were exempt from Federal income tax and 90.8%
of dividends earned were also exempt from New York State and City taxes. In
addition, 16.3% of the dividends were derived from income earned from certain
government obligations which may be subject to the Federal Alternative Minimum
Tax (AMT).

- - --------------------------------------------------------------------------------
7-DAY YIELD COMPARISONS
- - --------------------------------------------------------------------------------

As the graph illustrates, Landmark New York Tax Free Reserves generally provided
a higher annualized seven-day yield than the average of comparable Money Market
Funds, as published in IBC/Donoghue's Money Fund Report over most of the one
year period.

COMPARISON OF 7-DAY YIELDS FOR LANDMARK NEW YORK TAX FREE RESERVES VS.
IBC/DONOGHUE NEW YORK TAX FREE FUNDS AVERAGE

LANDMARK NY IBC/DONOGHUE NY
TAX FREE TAX FREE FUNDS
RESERVES AVERAGE
-------- --------------
9/6/94 2.49% 2.41%
9/13/94 2.49% 2.36%
9/20/94 2.57% 2.46%
9/27/94 2.69% 2.58%
10/4/94 2.76% 2.70%
10/11/94 2.60% 2.45%
10/18/94 2.55% 2.27%
10/25/94 2.63% 2.42%
11/1/94 2.77% 2.77%
11/8/94 2.76% 3.00%
11/15/94 2.81% 2.65%
11/22/94 2.97% 2.80%
11/29/94 3.02% 2.87%
12/6/94 2.97% 2.81%
12/13/94 2.85% 2.59%
12/20/94 3.23% 3.12%
12/27/94 3.62% 3.53%
1/3/95 3.75% 3.81%
1/10/95 3.19% 3.05%
1/17/95 2.85% 2.56%
1/24/95 2.83% 2.51%
1/31/95 3.10% 2.97%
2/7/95 3.08% 3.00%
2/14/95 3.19% 3.16%
2/21/95 3.32% 3.30%
2/28/95 3.30% 3.27%
3/7/95 3.31% 3.19%
3/14/95 3.24% 3.06%
3/21/95 3.30% 3.16%
3/28/95 3.40% 3.32%
4/4/95 3.46% 3.41%
4/11/95 3.30% 3.26%
4/18/95 3.43% 3.35%
4/25/95 3.56% 3.53%
5/2/95 3.68% 3.71%
5/9/95 3.67% 3.68%
5/16/95 3.73% 3.76%
5/23/95 3.57% 3.52%
5/30/95 3.48% 3.46%
6/6/95 3.25% 3.17%
6/13/95 2.92% 2.73%
6/20/95 3.28% 3.21%
6/27/95 3.44% 3.42%
7/4/95 3.34% 3.34%
7/11/95 3.06% 2.74%
7/18/95 2.92% 2.61%
7/25/95 3.18% 3.00%
8/1/95 3.23% 3.11%
8/8/95 3.14% 3.01%
8/15/95 3.21% 3.12%
8/22/95 3.19% 3.11%
8/29/95 3.14% 3.04%

<PAGE>
- - --------------------------------------------------------------------------------
Landmark New York Tax Free Reserves
- - --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS August 31, 1995
- - --------------------------------------------------------------------------------

PRINCIPAL
AMOUNT
ISSUER (000'S OMITTED) VALUE
- - --------------------------------------------------------------------

TAX EXEMPT COMMERCIAL PAPER--12.3%
Lower Colorado River Authority,
3.90%, due 9/12/95 ................. $ 2,600 $ 2,600,000
New York State,
3.15%, due 9/6/95 .................. 2,500 2,500,000
New York State,
3.60%, due 10/5/95 ................. 7,900 7,900,000
New York State,
3.85%, due 10/12/95 ................ 3,000 3,000,000
New York State Dormitory Authority
Revenue, 4.10%, due 9/8/95 ......... 1,088 1,088,000
New York State Dormitory Authority
Revenue, 3.40%, due 9/20/95 ........ 28,225 28,225,000
New York State Dormitory Authority
Revenue, 3.50%, due 9/20/95 ........ 8,000 8,000,000
New York State Dormitory Authority
Revenue, 3.60%, due 10/12/95 ....... 3,000 3,000,000
New York State Dormitory Authority
Revenue, 3.75%, due 10/13/95 ....... 8,000 8,000,000
New York State Dormitory Authority
Revenue, 3.60%, due 11/13/95 ....... 18,000 18,000,000
New York State Environmental Solid
Waste, 3.15%, due 10/10/95 ......... 1,400 1,400,000
Port Authority of New York & New Jersey,
AMT, 3.50%, due 9/22/95 ............ 1,285 1,285,000
Port Authority of New York & New Jersey,
AMT, 3.25%, due 10/10/95 ........... 2,720 2,720,000
Puerto Rico Industrial Tourist,
3.70%, due 11/8/95 ................. 6,700 6,700,000
------------
94,418,000
------------
REVENUE, TAX, BOND AND TAX
REVENUE ANTICIPATION NOTES--19.3%
Albany County, NY, BANs,
6.00%, due 2/21/96 ................. 10,000 10,054,270
Babylon, NY Union Free School
District, TANs,
4.25%, due 4/15/96 ................. 3,500 3,510,504
Broome County, NY, BANs,
5.00%, due 4/19/96 ................. 5,500 5,521,616
California State, RANs,
5.75%, due 4/25/96 ................. 5,000 5,068,770
Cattaraugus County, NY, TANs,
6.00%, due 12/15/95 ................ 6,000 6,011,516
Guilderland, NY, Central School
District, TANs,
4.00%, due 11/21/95 ................ 1,000 1,000,757
Levittown Central School District,
TANs, 4.50%, due 6/26/96 ........... 7,000 7,031,366
Longwood Central School District,
TANs, 4.50%, due 6/26/96 ........... 10,000 10,035,336
Nassau County, NY, BANs,
4.25%, due 3/15/96 ................. 10,000 10,031,697
New York Board Coop Educational
Services, RANs,
4.25%, due 6/21/96 ................. 3,750 3,760,119
New York Board Coop Educational
Services, RANs,
4.25%, due 6/27/96 ................. 5,000 5,019,735
<PAGE>
New York Board Coop Educational
Services, RANs,
4.50%, due 6/27/96 ................. 18,000 18,085,047
New York, NY, TANs,
4.50%, due 2/15/96 ................. 8,000 8,030,247
North Hempstead, NY, BANs,
5.00%, due 5/30/96 ................. 7,000 7,045,089
Orange County, NY, BANs,
5.00%, due 11/22/95 ................ 5,000 5,005,362
Oyster Bay, NY, BANs,
5.25%, due 12/8/95 ................. 1,000 1,001,408
Phelps Clifton Springs,
NY, BANs,
4.50%, due 6/21/96 ................. 14,990 15,071,138
Rensselaer County, NY, TANs,
4.25%, due 2/29/96 ................. 5,000 5,009,622
Riverhead, NY, Central School
District, BANs, 5.00%
due 4/19/96........................ 1,750 1,756,346
Saranac, NY, Central School
District, BANs,
4.50%, due 6/28/96 ................. 10,726 10,772,413
Southeast Town, NY, BANs,
5.00%, due 9/22/95 ................. 4,452 4,453,987
Suffolk County, NY, TANs,
4.50%, due 9/14/95 ................. 1,500 1,500,215
Westchester County, NY, TANs,
5.00%, due 12/14/95 ................ 3,000 3,004,136
------------
147,780,696
------------

ANNUAL, SEMI-ANNUAL AND QUARTERLY TENDER REVENUE
BONDS AND NOTES (PUTS)--13.8%
Aurora, IL Single Family
Mortgage Revenue, AMT,
4.26%, due 12/15/95 ................ 5,160 5,160,000
New York State Energy, Research
& Development,
4.10%, due 10/16/95 ................ 1,000 1,000,000
New York State Energy, Research
& Development,
4.70%, due 3/1/96 .................. 15,000 15,000,000
New York State Medical Care Facilities,
8.875%, due 1/15/96 ................ 16,940 17,561,320
New York State Medical Care Facilities,
4.40%, due 2/15/96 ................. 1,065 1,065,000
New York State Power Authority,
4.40%, due 9/1/95 .................. 47,000 47,000,000
New York State Power Authority
Revenue, 7.375%, due 1/1/96 ........ 1,195 1,231,248
New York State Urban
Development Corp. Revenue,
8.00%, due 1/1/96 .................. 8,970 9,246,905
Puerto Rico Public Building Authority,
8.00%, due 7/1/96 .................. 2,000 2,126,023
Virgin Islands Housing Finance
Authority, AMT,
4.375%, due 2/1/96 ................. 1,750 1,750,000
Westchester County, NY,
4.75%, due 11/15/95 ................ 4,890 4,896,324
------------
106,036,820
------------

GENERAL OBLIGATION BONDS--0.4%
Nassau County, NY,
6.300%, due 11/1/95 ................ 1,050 1,053,310
Suffolk County, NY,
7.375%, due 3/1/96 ................. 1,700 1,729,472
---------
2,782,782
---------
<PAGE>
VARIABLE RATE DEMAND NOTES*--53.8%
Babylon, NY Industrial
Development Agency, AMT,
due 7/1/14 ......................... 900 900,000
Babylon, NY Union Free School District,
due 12/1/24......................... 1,000 1,000,000
Connecticut State Special
Assessment Revenue,
due 11/1/01......................... 900 900,000
Connecticut State Special Tax
Obligation Revenue,
due 12/1/10......................... 300 300,000
Coweta County, GA Industrial
Development Authority,
due 3/1/09.......................... 1,400 1,400,000
Eastern California Municipal Water
District Revenue,
due 7/1/20.......................... 3,000 3,000,000
Erie County, NY Water Authority,
due 12/1/16......................... 1,900 1,900,000
Jefferson County, NY Industrial
Development, AMT,
due 7/1/05.......................... 2,500 2,500,000
Jefferson Parish, LA Industrial
Development Authority, AMT,
due 4/1/24.......................... 2,300 2,300,000
Manatee County, FL Housing, AMT,
due 10/16/95........................ 5,200 5,200,000
Metropolitan Transit Authority, NY,
due 7/1/21.......................... 5,000 5,000,000
Michigan State, Strategic Fund,
due 6/1/10.......................... 200 200,000
Nassau County, NY, Industrial
Development Revenue,
due 12/1/99......................... 3,000 3,000,000
New York City, NY,
due 8/15/96......................... 3,150 3,150,000
New York City, NY,
due 8/1/00.......................... 8,940 8,940,000
New York City, NY,
due 8/1/09.......................... 200 200,000
New York City, NY,
due 8/1/10.......................... 300 300,000
New York City, NY,
due 2/15/12......................... 14,500 14,500,000
New York City, NY,
due 2/15/16......................... 6,000 6,000,000
New York City, NY,
due 8/1/17.......................... 800 800,000
New York City, NY,
due 8/1/18.......................... 4,000 4,000,000
New York City, NY,
due 8/15/18......................... 700 700,000
New York City, NY,
due 8/1/19.......................... 1,000 1,000,000
New York City, NY,
due 8/1/20.......................... 1,300 1,300,000
New York City Housing Development,
due 8/1/15.......................... 6,200 6,200,000
New York City Housing Development,
due 2/1/17.......................... 1,500 1,500,000
New York City Housing Development,
due 1/1/23.......................... 4,000 4,000,000
New York City Housing
Development, AMT,
due 12/15/24........................ 13,500 13,500,000
New York City Housing Development,
due 3/15/25......................... 9,100 9,100,000
New York City Industrial
Development Agency,
due 6/30/23......................... 2,400 2,400,000
New York City Industrial
Development Agency,
due 6/30/14......................... 2,000 2,000,000
New York City Industrial
Development Agency,
due 12/1/14......................... 1,600 1,600,000
New York City Industrial
Development Agency, AMT,
due 11/1/15......................... 300 300,000
New York City Municipal Water
Finance Authority,
due 6/15/24......................... 8,500 8,500,000
New York City, Cultural Affairs
(Carnegie Hall),
due 12/1/10......................... 2,000 2,000,000
New York City, Cultural Affairs
(Carnegie Hall),
due 12/1/15......................... 4,325 4,325,000
New York State Dormitory Authority,
due 7/1/23.......................... 3,600 3,600,000
New York State Dormitory Authority,
due 7/1/24.......................... 2,000 2,000,000
New York State Dormitory Authority,
due 7/1/25.......................... 700 700,000
New York State Energy, Research
& Development,
due 10/1/14......................... 1,700 1,700,000
New York State Energy, Research
& Development,
due 11/1/20......................... 15,000 15,000,000
New York State Energy, Research
& Development, AMT,
due 10/1/24......................... 10,000 10,000,000
New York State Energy, Research
& Development,
due 12/1/25......................... 1,000 1,000,000
New York State Energy, Research
& Development, AMT
due 12/1/25......................... 1,500 1,500,000
New York State Energy, Research
& Development
due 6/1/25.......................... 10,000 10,000,000
New York State Energy, Research
& Development, AMT
due 12/1/26......................... 2,300 2,300,000
New York State Energy, Research
& Development
due 6/1/27.......................... 2,000 2,000,000
New York State Energy, Research
& Development
due 6/1/29.......................... 1,000 1,000,000
New York State Housing Finance
Authority, due 5/15/15.............. 4,600 4,600,000
New York State Housing Finance
Authority, Normandy, AMT,
due 11/1/02......................... 2,520 2,520,000
New York State Job Development
Authority,
due 3/1/99.......................... 2,295 2,295,000
New York State Job Development
Authority,
due 3/1/00.......................... 6,795 6,795,000
New York State Job Development
Authority, AMT,
due 3/1/00.......................... 2,675 2,675,000
New York State Job Development
Authority, AMT,
due 3/1/03.......................... 7,105 7,105,000
New York State Job Development
Authority,
due 3/1/05.......................... 3,100 3,100,000
New York State Job Development
Authority, AMT
due 3/1/07.......................... 1,100 1,100,000
New York State Local Government
Assistance Corp.,
due 4/1/22.......................... 25,300 25,300,000
New York State Local Government
Assistance Corp.,
due 4/1/23.......................... 29,800 29,800,000
New York State Local Government
Assistance Corp.,
due 4/1/25.......................... 3,500 3,500,000
New York State Medical Care
Facilities Agency,
due 11/1/03......................... 9,600 9,600,000
New York State Thruway Authority
General Revenue,
due 1/1/23.......................... 3,500 3,500,000
New York State Thruway Authority,
due 1/1/24.......................... 500 500,000
Niagara Falls, NY
due 10/1/19......................... 2,000 2,000,000
Pitkin County, CO Industrial
Development Revenue,
due 4/1/16.......................... 1,130 1,130,000
Pitkin County, CO Industrial
Development Revenue, AMT
due 4/1/14.......................... 800 800,000
Port Authority of New York &
New Jersey, AMT,
due 1/1/01.......................... 65,000 65,000,000
Puerto Rico Commonwealth
Government Development,
due 12/1/15......................... 1,000 1,000,000
Saint Charles Parish, LA Pollution
Control Authority, AMT,
due 9/1/23.......................... 200 200,000
Schenectady County, NY Industrial
Development, due 6/1/09............. 2,130 2,130,000
Seneca, NY Industrial Development
Authority, due 10/1/21.............. 3,900 3,900,000
Smyra, Georgia Housing Authority,
due 6/1/25.......................... 5,000 5,000,000
Thornton, CO Industrial Development
Revenue, due 12/15/99............... 1,000 1,000,000
Triborough Bridge & Tunnel
Authority, NY, due 1/1/07........... 1,800 1,800,000
Triborough Bridge & Tunnel
Authority, NY,
due 1/1/08.......................... 7,000 7,000,000
Triborough Bridge & Tunnel
Authority, NY,
due 1/1/24.......................... 29,800 29,800,000
University of Arkansas, Revenue,
due 12/1/19......................... 3,000 3,000,000
Warren & Washington County, NY
Industrial Development Revenue,
due 11/1/98......................... 7,800 7,800,000
Westchester County, NY Industrial
Development Revenue,
due 7/1/98.......................... 4,300 4,300,000
------------
412,965,000
------------
TOTAL INVESTMENTS
AT AMORTIZED COST................... 99.6% 763,983,298

OTHER ASSETS, LESS LIABILITIES........ 0.4 3,145,783
------ ------------
NET ASSETS............................ 100.0% $767,129,081
====== ============

AMT-Subject to Alternative Minimum Tax.
*Variable rate demand notes have a demand feature under which the fund could
tender them back to the issuer on no more than 7 days notice.

See notes to financial statements
<PAGE>
- - --------------------------------------------------------------------------------
Landmark New York Tax Free Reserves
- - --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES August 31, 1995
- - --------------------------------------------------------------------------------

ASSETS:
Investments, at amortized cost (Note 1A)......................... $763,983,298
Cash............................................................. 60,975
Interest receivable.............................................. 5,698,462
Receivable for shares of beneficial interest sold ............... 3,082,668
------------
Total assets................................................. 772,825,403
------------
LIABILITIES:
Payable for investments purchased................................ 2,152,907
Dividends payable................................................ 952,274
Payable for shares of beneficial interest repurchased............ 2,100,804
Payable to affiliates:
Investment advisory fees (Note 3)................ $106,657
Shareholder servicing agents' fees (Note 4B)..... 161,495 268,152
Accrued expenses and other liabilities............... -------- 222,185
------------
Total liabilities............................................ 5,696,322
------------

NET ASSETS for 767,134,112 shares of
beneficial interest outstanding................................. $767,129,081
============

NET ASSETS CONSIST OF:
Paid-in capital.................................................. $767,129,186
Accumulated net realized loss on investments..................... (105)
------------
Total........................................................ $767,129,081
============

NET ASSET VALUE, OFFERING PRICE, AND
REDEMPTION PRICE PER SHARE...................................... $1.00
=====

See notes to financial statements
<PAGE>
- - --------------------------------------------------------------------------------
Landmark New York Tax Free Reserves
- - --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Year Ended August 31, 1995
- - --------------------------------------------------------------------------------

INTEREST INCOME (NOTE 1B):......................................... $26,681,351

EXPENSES:
Shareholder Servicing Agents' fees (Note 4B)......... $2,811,494
Investment Advisory fees (Note 3).................... 1,405,747
Administrative fees (Note 4A)........................ 1,054,310
Distribution fees (Note 5)........................... 351,437
Custodian fees....................................... 259,294
Trustee fees......................................... 97,350
Auditing fees........................................ 30,800
Shareholder reports.................................. 25,834
Registration fees.................................... 21,555
Legal fees........................................... 18,932
Transfer agent fees.................................. 4,331
Miscellaneous........................................ 26,491
----------
Total expenses................................... 6,107,575
Less aggregate amount waived by Investment
Adviser, Administrator, Shareholder
Servicing Agents, and Distributor
(Notes 3, 4A, 4B and 5)............................. (1,538,638)
----------
Net expenses.................................................. 4,568,937
-----------
Net investment income......................................... 22,112,414
NET REALIZED GAIN ON INVESTMENTS................................... 16,174
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............... $22,128,588

See notes to financial statements
<PAGE>

- - --------------------------------------------------------------------------------
Landmark New York Tax Free Reserves
- - --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- - --------------------------------------------------------------------------------

YEAR ENDED AUGUST 31,
---------------------------------
1995 1994
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS:
Net investment income...................... $ 22,112,414 $ 12,413,426
Net realized gain on investments........... 16,174 9,906
------------ ------------
Net increase in net assets resulting
from operations......................... 22,128,588 12,423,332
------------ ------------

DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income...................... $(22,112,414) (12,413,426)
------------ -------------

TRANSACTIONS IN SHARES OF BENEFICIAL
INTEREST AT NET ASSET VALUE OF
$1.00 PER SHARE (Note 6):
Net proceeds from sale of shares........... 825,094,071 738,691,933
Net asset value of shares issued
to shareholders from reinvestment
of dividends.............................. 12,406,021 7,816,192
Cost of shares repurchased................. (755,073,983) (669,823,228)
------------ ------------
Net increase in net assets from
transactions in shares of
beneficial interest...................... 82,426,109 76,684,897
------------ ------------
NET INCREASE IN NET ASSETS ................ 82,442,283 76,694,803

NET ASSETS:
Beginning of period........................ 684,686,798 607,991,995
------------ ------------
End of period.............................. $767,129,081 $684,686,798
============ ============

See notes to financial statements
<PAGE>
- - --------------------------------------------------------------------------------
Landmark New York Tax Free Reserves
- - --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- - --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31
-------------------------------------------------------------------
1995 1994 1993 1992 1991
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net Asset Value, beginning of period............. $ 1.00000 $ 1.00000 $ 1.00000 $ 1.00000 $ 1.00000
Net investment income............................ 0.03136 0.01954 0.01858 0.02914 0.04211
Dividends from net investment income............. (0.03136) (0.01954) (0.01858) (0.02914) (0.4211)
--------- --------- --------- --------- ---------
Net Asset Value, end of period................... $ 1.00000 $ 1.00000 $ 1.00000 $ 1.00000 $ 1.00000
========= ========= ========= ========= =========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)........ $ 767,129 $ 684,687 $ 607,992 $ 675,238 $ 586,720
Ratio of expenses to average net assets.......... 0.65% 0.65% 0.65% 0.65% 0.64%
Ratio of net investment income to average
net assets..................................... 3.15% 1.96% 1.86% 2.88% 4.21%
Total return..................................... 3.18% 1.97% 1.87% 2.94% 4.29%

Note: If agents of the Fund had not voluntarily agreed to waive all or a
portion of their fees for the periods indicated, the net investment income
per share and ratios would have been as follows:

Net investment income per share............... $ 0.02917 $ 0.01715 $ 0.01628 $ 0.02691 $ 0.04001

Ratios:
Expenses to average net assets................ 0.87% 0.88% 0.88% 0.87% 0.85%
Net investment income to
average net assets.......................... 2.93% 1.72% 1.63% 2.66% 4.00%

See notes to financial statements
</TABLE>
<PAGE>
- - --------------------------------------------------------------------------------
Landmark New York Tax Free Reserves
- - --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- - --------------------------------------------------------------------------------

(1) SIGNIFICANT ACCOUNTING POLICIES
Landmark New York Tax Free Reserves (the "Fund") is a separate non-diversified
series of Landmark Multi-State Tax Free Funds (the "Trust") which is organized
as a Massachusetts business trust and is registered under the Investment Company
Act of 1940, as amended, as an open-end, management investment company. The
Investment Adviser of the Fund is Citibank, N.A. ("Citibank"). The Landmark
Funds Broker-Dealer Services, Inc. ("LFBDS") acts as the Trust's Administrator
and Distributor. Citibank also serves as Sub-Administrator and makes Fund shares
available to customers through various Shareholder Servicing Agents.

The significant accounting policies consistently followed by the Fund are in
conformity with generally accepted accounting principles and are as follows:

B. INTEREST INCOME -- Interest income consists of interest accrued less the
amortization of any premium and accretion of market discount on the investments
of the Fund.

C. FEDERAL TAXES -- The Fund's policy is to comply with the provisions of the
Internal Revenue Code available to regulated investment companies and to
distribute to shareholders all of its net investment income. Accordingly, no
provision for federal income or excise tax is necessary. At August 31, 1995, the
Fund, for federal income tax purposes, had a capital loss carryover of $105
which will expire on August 31, 1999. Such capital loss carryover will reduce
the Fund's taxable income arising from future net realized gain on investment
transactions, if any, to the extent permitted by the Internal Revenue Code, and
thus will reduce the amount of distri butions to shareholders which would
otherwise be necessary to relieve the Fund of any liability for federal income
tax. Dividends paid by the Fund from net interest received on tax-exempt money
market instruments are not includable by shareholders as gross income for
federal income tax purposes because the Fund intends to meet certain
requirements of the Internal Revenue Code applicable to regulated investment
companies which will enable the Fund to pay exempt-interest dividends. The
portion of such interest, if any, earned on private activity bonds issued after
August 7, 1986 may be considered a tax preference item to shareholders.

D. EXPENSES -- The Fund bears all costs of its operations other than expenses
specifically assumed by Citibank and LFBDS. Expenses incurred by the Trust with
respect to any two or more Funds in the series are allocated in proportion to
the average net assets of each fund, except when allocations of direct expenses
to each fund can otherwise be made fairly. Expenses directly attributable to a
fund are charged to that fund.

E. OTHER -- Purchases, and maturities and sales of money market instruments are
accounted for on the date of the transaction.

(3) INVESTMENT ADVISORY FEES
The investment advisory fee paid to Citibank, as compensation for overall
investment management services, amounted to $1,405,747 of which $242,164 was
voluntarily waived for the year ended August 31, 1995. The investment advisory
fee is computed at the annual rate of 0.20% of the Fund's average daily net
assets.
<PAGE>

(4) ADMINISTRATIVE SERVICES PLAN
The Trust has adopted an Administrative Services Plan (the "Administrative
Services Plan") which provides that the Trust on behalf of each Fund may obtain
the services of an Administrator, one or more Shareholder Servicing Agents and
other Servicing Agents and may enter into agreements providing for the payment
of fees for such services. Under the Administrative Services Plan, the aggregate
of the fee paid to the Administrator from the Fund, the fees paid to the
Shareholder Servicing Agents from the Fund under such Plan and the Basic
Distribution Fee paid from the Fund to the Distributor under the Distribution
Plan may not exceed 0.60% of the Fund's average daily net assets on an
annualized basis for the Fund's then-current fiscal year.

A. ADMINISTRATIVE FEES -- Under the terms of an Administrative Services
Agreement, the administrative fee paid to the Administrator, as compensation for
overall administrative services and general office facilities, is computed at
the annual rate of 0.20% of the Fund's average daily net assets, provided that
the aggregate of any such fee paid to the Administrator and the basic
distribution fee paid to the Distributor may not exceed an amount equal to 0.20%
of the Fund's average daily net assets. For the year ended August 31, 1995, the
Administrator received fees computed at the annual rate of 0.15% of the Fund's
average daily net assets which amounted to $1,054,310 of which $61,120 was
voluntarily waived. Citibank acts as Sub-Administrator and performs such duties
and receives such compensation from LFBDS as from time to time is agreed to by
LFBDS and Citibank. The Fund pays no compensation directly to any Trustee or any
officer who is affiliated with the Administrator, all of whom receive
remuneration for their services to the Fund from the Administrator or its
affiliates. Certain of the officers and a Trustee of the Fund are officers or a
director of the Administrator or its affiliates.

B. SHAREHOLDER SERVICING AGENTS FEES -- The Trust on behalf of the Fund has
entered into shareholder servicing agreements with each Shareholder Servicing
Agent pursuant to which that Shareholder Servicing Agent acts as an agent for
its customers and provides other related services. For their services, each
Shareholder Servicing Agent receives fees from the Fund, which may be paid
periodically, which may not exceed, on an annualized basis, an amount equal to
0.40% of the average daily net assets of the Fund represented by shares owned
during the period by investors for whom such Shareholder Servicing Agent
maintains a servicing relationship. Share holder Servicing Agents fees amounted
to $2,811,494, of which $1,054,310 was voluntarily waived for the year ended
August 31, 1995.

(5) DISTRIBUTION FEES
The Trust has adopted a Plan of Distribution pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended, in which the Fund reimburses the
Distributor for expenses incurred or anticipated in connection with sales of
shares of the Fund, at an annual rate not to exceed 0.05% of the Fund's average
daily net assets. The Distributor may also receive an additional fee from the
Fund not to exceed 0.10% of the Fund's average daily net assets in anticipation
of, or as reimbursement for, advertising expenses incurred by the Distributor in
connection with the sale of shares of the Fund. No payments of such additional
fees have been made to date. For the year ended August 31, 1995, the
distribution fees were computed at the annual rate of 0.05% of the Fund's
average daily net assets and amounted to $351,437, of which $181,044 was
voluntarily waived.

(6) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional Shares of Beneficial Interest (without par value).

(7) INVESTMENT TRANSACTIONS
Purchases, and maturities and sales, of money market instruments aggregated
$1,966,810,591 and $1,886,131,614, respectively, for the year ended August 31,
1995.

(8) FEDERAL INCOME TAX BASIS OF INVESTMENT SECURITIES
The cost of investment securities owned at August 31, 1995, for federal income
tax purposes, amounted to $763,983,298.

(9) LINE OF CREDIT
The Fund, along with other Landmark Funds, entered into an agreement with a bank
which allows the Funds collectively to borrow up to $40 million for temporary or
emergency purposes. Interest on borrowings, if any, is charged to the specific
fund executing the borrowing at the base rate of the bank. In addition, the $15
million committed portion of the line of credit requires a quarterly payment of
a commitment fee based on the average daily unused portion of the line of
credit. For the year ended August 31, 1995, the commitment fee allocated to the
Fund was $5,314. Since the line of credit was established, there have been no
borrowings.
<PAGE>
- - --------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
- - --------------------------------------------------------------------------------

TO THE TRUSTEES AND SHAREHOLDERS OF LANDMARK NEW YORK TAX FREE RESERVES:

We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Landmark New York Tax Free Reserves (the
"Fund"), a separate series of Landmark Multi-State Tax Free Funds (the "Trust"),
(a Massachusetts business trust) as of August 31, 1995, the related statement of
operations for the year then ended, the statement of changes in net assets for
the years ended August 31, 1995 and 1994, and the financial highlights for each
of the years in the five-year period ended August 31, 1995. These financial
statements and financial highlights are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.

In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Landmark New York
Tax Free Reserves at August 31, 1995, the results of its operations, the changes
in its net assets, and its financial highlights for the respective stated
periods in conformity with generally accepted accounting principles.

DELOITTE & TOUCHE LLP

FOR CITIBANK NEW YORK RETAIL BANKING AND BUSINESS AND PROFESSIONAL CUSTOMERS:
Citibank, N.A.
450 West 33rd Street, New York, NY 10001
(212) 564-3456 or (800) 846-5300

FOR CITIGOLD CUSTOMERS:
Citibank, N.A.
Citigold
P.O. Box 5130, New York, NY 10126-5130
Call Your Citigold Executive or, in NY or CT, (800) 285-1701,
for all other states, (800)285-1707

FOR CITIBANK GLOBAL ASSET MANAGEMENT CLIENTS:
Citibank, N.A.
Citibank Global Asset Management
153 East 53rd Street, New York, NY 10043
(212) 559-7117

FOR CITIBANK NORTH AMERICAN INVESTOR SERVICES CLIENTS:
Citibank, N.A.
111 Wall Street, New York, NY 10043
Call Your Account Manager or (212) 657-9100

FOR CITICORP INVESTMENT SERVICES CUSTOMERS:
Citicorp Investment Services
One Court Square, Long Island City, NY 11120
Call Your Investment Consultant or (800) 846-5200
(212) 736-8170 in New York City
<PAGE>
TRUSTEES AND OFFICERS
Philip W. Coolidge*, President
H. B. Alvord
Elliott J. Berv
Mark T. Finn
Riley C. Gilley
Diana R. Harrington
Susan B. Kerley
C. Oscar Morong, Jr.
Walter E. Robb, III
E. Kirby Warren
William S. Woods, Jr.

ASSISTANT TREASURER
Barbara M. O'Dette*

ASSISTANT SECRETARIES
Susan Jakuboski*
Molly S. Mugler*
*Affiliated Person of Administrator and Distributor

- - ---------------------------| |--------------------------------

INVESTMENT ADVISER
Citibank, N.A.
153 East 53rd Street, New York, NY 10043

ADMINISTRATOR AND DISTRIBUTOR
The Landmark Funds Broker-Dealer Services, Inc.
6 St. James Avenue, Boston, MA 02116
(617) 423-1679

TRANSFER AGENT AND CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street, Boston, MA 02110

AUDITORS
Deloitte & Touche LLP
125 Summer Street, Boston, MA 02110

LEGAL COUNSEL
Bingham, Dana & Gould
150 Federal Street, Boston, MA 02110

- - ---------------------------[ ]--------------------------------

SHAREHOLDER SERVICING AGENTS
(See Inside Cover)

This report is prepared for the information of shareholders. It is authorized
for distribution to prospective investors only when preceded or accompanied by
an effective prospectus.

This Report is Prepared & Printed on Recycled Paper [RECYCLE SYMBOL]
NYTFR/A/95