<PAGE>
--------------------------------------------------------------------------------
CALIFORNIA
DAILY TAX FREE 600 FIFTH AVENUE, NEW YORK, NY 10020
INCOME FUND, INC. 212-830-5200
================================================================================
Dear Shareholder:
We are pleased to present the semi-annual report of California Daily Tax Free
Income Fund, Inc. for the period January 1, 2000 through June 30, 2000.
The Fund had net assets of $385,840,056 and 917 active shareholders as of June
30, 2000.
We thank you for your support and we look forward to continuing to serve your
cash management needs.
Sincerely,
\s\Steven W. Duff
Steven W. Duff
President
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
CALIFORNIA DAILY TAX FREE INCOME FUND, INC.
STATEMENT OF NET ASSETS
JUNE 30, 2000
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- --------
Other Tax Exempt Investments (18.63%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 5,000,000 Alameda County, CA TRAN 07/02/01 4.24% $ 5,033,150 MIG-1 SP-1+
8,000,000 California School Cash Reserve Program Authority 2000 - Series A 07/03/01 4.21 8,075,120 MIG-1 SP-1+
3,500,000 California School Finance Authority Interim Financing Notes
(Smart Bonds) - Series C 10/01/00 4.01 3,505,470 SP-1+
7,000,000 Los Angeles, CA TRAN - Series A 06/29/01 4.09 7,056,490 MIG-1 SP-1+
2,800,000 Moreland, CA Unified School District TRAN (c) 07/05/01 4.24 2,818,732
2,700,000 New Haven, CA Unified School District TRAN (c) 07/05/01 4.24 2,718,063
2,500,000 Oxnard County, CA Oxnard School District TRAN - Series 1999 07/27/00 3.35 2,501,346 SP-1+
3,900,000 Perris, CA Unified School District TRAN (c) 07/05/01 4.24 3,926,091
4,550,000 Placentia, Orange County, CA TRAN 2001 (c) 06/29/01 4.14 4,554,277
5,000,000 Sacramento City, CA Unified School District TRAN 12/06/00 3.80 5,010,568 SP-1+
2,500,000 San Luis, CA Coastal Unified School District TRAN - Series 1999 07/14/00 3.39 2,500,581 SP-1+
4,085,000 Southern California Public Power Authority RB (Power Project) (c)
Collateralized by U.S. Government Securities 07/01/00 3.43 4,085,000
10,000,000 Ventura County, CA TRAN 1999 07/06/00 3.43 10,000,404 MIG-1 SP-1+
10,000,000 Ventura County, CA TRAN 2000 - Series A 07/03/01 4.14 10,076,100 MIG-1 SP-1+
------------ -----------
71,535,000 Total Other Tax Exempt Investments 71,861,392
------------ -----------
<CAPTION>
Other Variable Rate Demand Instruments (b) (67.10%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 6,300,000 Anaheim, CA COPS (1993 Refunding Projects)
Insured by AMBAC Indemnity Corp. 08/01/19 4.30% $ 6,300,000 VMIG-1 A1+
3,000,000 California Association for Bay Area Government
(Episcopal Homes Foundation Project)
LOC Wells Fargo Bank, N.A. 02/01/25 4.40 3,000,000 A1+
3,400,000 California EDFA (Fricke-Parks Press, Inc. Project)
LOC US Bank, N.A. 05/01/23 4.50 3,400,000 A1
9,100,000 California HFA (Southern California Health)
Insured by MBIA Insurance Corp. 10/01/22 4.65 9,100,000 VMIG-1 A1+
3,700,000 California HFA RB Municipal Securites Trust Receipts - Series CNC2
Insured by AMBAC Indemnity Corp. 08/01/27 4.55 3,700,000 VMIG-1
10,000,000 California HFA RB - Series L
Insured by FSA 08/01/15 4.65 10,000,000 VMIG-1 A1+
2,900,000 California PCFA (Atlantic Ridgefield) 12/01/32 4.50 2,900,000 VMIG-1 A1
3,000,000 California PCFA (Browning Ferris Industries)
LOC Deutsche Bank 09/01/17 4.40 3,000,000 VMIG-1 A1+
</TABLE>
--------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements
<PAGE>
--------------------------------------------------------------------------------
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- --------
Other Variable Rate Demand Instruments (b) (Continued)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 1,000,000 California PCFA PCRB (Exxon Project) - Series 1989 12/01/12 4.00% $ 1,000,000 P1 A1+
4,100,000 California PCFA PCRB (Pacific Gas & Electric Corp.)
LOC Union Bank of Switzerland 11/01/26 4.05 4,100,000 A1+
1,500,000 California PCFA PCRB (Pacific Gas & Electric Corp.) - Series B
LOC Rabobank Nederland 12/01/16 4.30 1,500,000 A1+
5,500,000 California PCFA PCRB (Pacific Gas & Electric)
LOC Morgan Guaranty Trust Company 11/01/26 4.35 5,500,000 A1+
2,400,000 California PCRB (Pacific Gas & Electric) - Series C
LOC Bank of America 11/01/26 4.10 2,400,000 A1+
2,000,000 California State EDFA IDRB (Standard Abrasives Manufacturing Project)
LOC Mellon Bank 03/01/23 4.50 2,000,000 A1+
2,000,000 California Statewide Communities Development (Karcher Properties)
LOC Bayerische HypoVereins Bank, A.G. 12/01/19 4.65 2,000,000 VMIG-1
2,000,000 California Statewide Communities Development (Kimberly Woods) - Series B
Guaranteed by Federal National Mortgage Association 06/15/25 4.55 2,000,000 A1+
9,800,000 California Statewide Communities Development Authority COPS
(Northern California Retired Officers)
LOC Dresdner Bank 06/01/26 4.20 9,800,000 VMIG-1
5,000,000 California Statewide Communities Development Authority RB
(Japanese American Museum) - Series A
LOC Canadian Imperial Bank of Commerce 08/01/30 4.30 5,000,000 A1+
5,400,000 California Water Refuse Finance Authority RB
Insured by FSA 05/01/28 4.35 5,400,000 A1+
1,200,000 Carlsbad, CA MHRB (La Costa Apartments Project) - Series A
LOC Bank of America 06/01/11 4.30 1,200,000 VMIG-1
8,190,000 Clipper Tax Exempt Certificate, CA Housing Finance Agency - Series 1999 01/07/03 4.77 8,190,000 VMIG-1
1,500,000 Colton, CA Redevelopment Agency 1985 Issue - Series A
Guaranteed by Federal Home Loan Bank 05/01/10 4.25 1,500,000 A1+
5,000,000 Commonwealth of Puerto Rico (Floating Rate Trust Receipts) 07/30/00 4.75 5,000,000 VMIG-1
3,500,000 Contra Costa County, CA MHRB (Del Norte Apartments)
LOC State Street Bank and Co. 10/20/28 4.90 3,500,000 A1+
1,000,000 Elsinor Valley, CA Municipal Water District
Insured by FGIC 07/01/29 4.25 1,000,000 VMIG-1
900,000 Fremont, CA COPS (Family Resource Center Finance Project)
LOC KBC Bank 08/01/28 4.40 900,000 A1+
</TABLE>
--------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
--------------------------------------------------------------------------------
CALIFORNIA DAILY TAX FREE INCOME FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
JUNE 30, 2000
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- --------
Other Variable Rate Demand Instruments (b) (Continued)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 10,225,000 Fresno, CA MHRB (Heron Pointe Apartments)
LOC Wells Fargo Bank, N.A. 06/01/07 4.30% $ 10,225,000 VMIG-1
1,400,000 Fullerton, CA IDA RB (PCL Packaging Inc. Project) - Series 1984
LOC Bank of Nova Scotia 12/01/04 4.40 1,400,000 A1+
1,400,000 Golden Empire Schools Financial Authority (Kern High School District)
LOC Canadian Imperial Bank of Commerce 12/01/24 4.25 1,400,000 A1+
6,050,000 Hemet, CA MHRB (Sunwest Retirement) - Series A
Guaranteed by Federal Home Loan Mortgage Corp. 01/01/25 4.35 6,050,000 A1+
1,000,000 Irwindale, CA IDRB (TOYS R'US, Inc. Project) - Series 1984 (c)
LOC Bankers Trust Company 12/01/19 4.92 1,000,000
4,400,000 Irvine, CA Improvement Board Act Assessment District #97-17
LOC Bayerische Landesbank Girozentrale 09/02/23 4.15 4,400,000 VMIG-1
1,800,000 Irvine, CA Public Facility (Infrastructure Authority Lease Capital)
LOC Bayerische HypoVereins Bank, A.G. 11/01/10 4.25 1,800,000 VMIG-1
1,000,000 Irvine Ranch, CA Water District Construction Bonds
LOC Landesbank Hessen 10/01/05 4.15 1,000,000 A1+
1,000,000 Kings County, CA MHRB (Edgewater Isle Apartments) - Series 1996A
LOC Wells Fargo Bank, N.A. 06/01/07 4.30 1,000,000 VMIG-1
7,000,000 Los Angeles, CA Community Redevelopment Agency MHRB
(Academy Village Apartments) - Series A
LOC Union Bank of Switzerland 10/01/19 4.35 7,000,000 VMIG-1
5,000,000 Los Angeles, CA Department of Water & Power,Electric Plant RB - Series D 02/01/10 4.25 5,000,000 VMIG-1 A1+
3,000,000 Los Angeles, CA HFA MHRB (Sand Canyon Ranch Project) - Series 1985F
LOC Citibank, N.A. 11/01/06 4.70 3,000,000 A1+
1,500,000 Los Angeles, CA Housing Authority MHRB
(Malibu Meadows Project) - Series 1998B
Collateralized by Federal National Mortgage Association 04/15/28 4.25 1,500,000 A1+
2,500,000 Los Angeles, CA IDA (P&C Poultry Distributors) (c)
LOC Comerica Bank 06/01/23 4.95 2,500,000
1,965,000 Los Angeles, CA IDRB (Cereal Food Processors, Inc. Project) - Series 1995
LOC Commerce Bank 12/01/05 5.05 1,965,000 A1
1,480,000 Los Angeles, CA MHRB
Guaranteed by Federal Home Loan Bank 12/01/10 4.40 1,480,000 A1+
4,000,000 Metropolitan Water District of Southern California - Series B 07/01/28 4.20 4,000,000 VMIG-1 A1+
1,800,000 M-S-R Public Power Agency, CA (San Juan Project) - Series F
Insured by MBIA Insurance Corp. 07/01/22 4.15 1,800,000 VMIG-1 A1+
</TABLE>
--------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
--------------------------------------------------------------------------------
CALIFORNIA DAILY TAX FREE INCOME FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
JUNE 30, 2000
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- --------
Other Variable Rate Demand Instruments (b) (Continued)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 9,100,000 Oakland, CA Joint Powers Financing Authority (Lease Revenues) - Series A-1
Insured by FSA 08/01/21 4.25% $ 9,100,000 VMIG-1 A1+
2,400,000 Ontario, CA Revenue Refunding Bonds Redevelopment Agency - Series A
LOC CA State Teachers Ret./Union Bank of California 09/01/27 4.35 2,400,000 A1+
1,000,000 Orange County, CA (Radnor/Aragon Corporation)
LOC Toronto Dominion Bank 08/01/19 4.92 1,000,000 P1
12,000,000 Orange County, CA Sanitation Districtributions COPS
Insured by FGIC 08/01/17 4.00 12,000,000 VMIG-1 A1+
2,500,000 Otay, CA Water District COPS - Series 1996
LOC Landesbank Hessen 09/01/26 4.25 2,500,000 VMIG-1 A1+
305,000 Oxnard, CA (Channel Island Business Center Project) - Series 1985
LOC Wells Fargo Bank, N.A. 07/01/05 5.02 305,000 VMIG-1
3,350,000 Paramount, CA Housing Authority Multifamily RB
(Cetury Place Apartments Project) - Series A
Collateralized by Federal National Mortgage Association 09/15/29 4.50 3,350,000 A1+
2,000,000 Riverside County, CA Housing Authority (Amanda Park Apartment Project)
Guaranteed by Federal Home Loan Mortgage Corp. 01/15/29 4.55 2,000,000 VMIG-1
2,160,000 Riverside County, CA IDA
LOC Union Bank of California 05/01/24 5.00 2,160,000 P1
5,500,000 Riverside County, CA(Riverside County Public Facility)
LOC Commerzbank A.G./National Westminster PLC 12/01/15 4.35 5,500,000 VMIG-1
4,500,000 Sacramento County, CA MHRB - Series C
Guaranteed by Federal Home Loan Mortgage Corp. 04/15/07 4.20 4,500,000 VMIG-1
8,500,000 Sacramento County, CA MHRB
(Shadowood Apartments Project) - Series 1992A
LOC General Electric Capital Corporation 12/01/22 4.70 8,500,000 A1+
2,480,000 Salinas, CA MHRB (Brentwood Gardens) - Series A
Guaranteed by Federal National Mortgage Association 05/15/27 4.35 2,480,000 A1+
1,800,000 San Bernadino County, CA COPS
(County Center Refinancing Project) - Series 1996
LOC Canadian Imperial Bank of Commerce 07/01/15 4.35 1,800,000 VMIG-1 A1+
2,700,000 San Bernadino County, CA MHRB (Evergreen Apartments)
Collateralized by Federal National Mortgage Association 05/15/29 4.25 2,700,000 A1+
1,900,000 San Francisco, CA (Filmore Center A-1)
LOC Credit Suisse First Boston 12/01/17 4.65 1,900,000 A1+
3,000,000 San Diego, CA (San Diego Museum of Art)
LOC Allied Irish Bank 09/01/30 4.30 3,000,000 VMIG-1
</TABLE>
--------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
--------------------------------------------------------------------------------
CALIFORNIA DAILY TAX FREE INCOME FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
JUNE 30, 2000
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- --------
Other Variable Rate Demand Instruments (b) (Continued)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 1,200,000 San Diego, CA IDRB (Kaiser Aerospace & Electric)
LOC ABN AMRO Bank 10/01/07 4.50% $ 1,200,000 P1
4,000,000 San Francisco, CA MHRB (City Hights Apartments)
Guaranteed by Federal National Mortgage Association 06/15/25 4.55 4,000,000 A1+
1,500,000 San Jose, CA MHRB
(Siena at Renaissance Square Apartments) - Series 1996A
LOC Landesbank Hessen 12/01/29 4.55 1,500,000 VMIG-1
2,000,000 San Diego, CA MHRB (University Town Center Apartment)
LOC Bank of America 10/01/15 4.50 2,000,000 VMIG-1
1,675,000 Santa Clara County, CA MHRB (Grove Garden Apartments) - Series 1997A
Collateralized by Federal National Mortgage Association 02/15/27 4.25 1,675,000 A1+
4,935,000 Santa Clara County, CA Transit District - Series 1985A
Insured by AMBAC Indemnity Corp. 06/01/15 4.35 4,935,000 AAA
4,800,000 Southern California Public Power Authority RB
(Public Power Transmission Project) - Series 1991
Insured by AMBAC Indemnity Corp. 07/01/19 4.30 4,800,000 VMIG-1 A1+
2,000,000 Southern California Public Power Authority RB
(Southern Transmission Project) - Series 1996B
Insured by FSA 07/01/23 4.30 2,000,000 VMIG-1 A1+
2,100,000 Southeast California Resource Recovery Facility Authority
Lease Revenue Refunding Bonds - Series 1995A
LOC Morgan Guaranty Trust Company/State Street Bank and Co. 12/01/18 4.40 2,100,000 VMIG-1 A1+
3,000,000 State of California GO RB
Insured by MBIA Insurance Corp. 09/01/21 4.32 3,000,000 A1+
2,500,000 Visalia, CA IDRB (Savannah Foods) (c)
LOC Suntrust Bank 06/01/05 4.85 2,500,000
2,100,000 Walnut Creek, CA MHRB (Creekside Drive Apartments)
LOC Bank of America 04/01/07 4.45 2,100,000 VMIG-1
2,000,000 West Basin Municipal Water District COPS (Recycled Water
Project-Phase III)
LOC Bayerische HypoVereins Bank, A.G. 08/01/29 4.25 2,000,000 VMIG-1 A1+
------------ ------------
258,915,000 Total Other Variable Rate Demand Instruments 258,915,000
------------- ------------
<CAPTION>
Put Bonds (d) (1.66%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 1,655,000 California Housing Mortgage Bonds (Single Family Mortgage Bonds) 08/01/00 3.40% $ 1,655,000 VMIG1 SP-1+
3,745,000 California PCFA PCRB (Chevron USA Incorporated Project) (c) 11/15/00 3.80 3,745,000
1,000,000 Los Angeles, CA State Building Authority Lease 10/01/00 3.44 1,001,192 A1
------------ ------------
6,400,000 Total Put Bonds 6,401,192
------------ ------------
</TABLE>
--------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements
<PAGE>
--------------------------------------------------------------------------------
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- --------
Tax Exempt Commercial Paper (21.61%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 4,000,000 California PCRB (Southern California Edison) - Series B 07/06/00 3.30% $ 4,000,000 P1 A1
1,500,000 Chula Vista, CA (San Diego Gas & Electric) 07/26/00 2.95 1,500,000 P1 A1
3,000,000 Long Beach, CA Harbor- Series A 07/12/00 3.40 3,000,000 P1 A1+
3,000,000 Long Beach, CA Harbor - Series A 08/01/00 4.00 3,000,000 P1 A1+
8,250,000 Los Angeles, CA Capital Assessment Corporation Lease Revenue Notes
LOC Bayerische Landesbank Girozentrale/Morgan Guaranty Trust Company/
Westdeutsche Landesbank 08/08/00 3.80 8,250,000 P1 A1+
5,000,000 Metropolitan Water District of Southern California - Series B 07/13/00 3.35 5,000,000 P1 A1+
8,480,000 Port of Oakland, CA - Series B
LOC Bank of Nova Scotia/Commerzbank 07/11/00 3.70 8,480,000 P1 A1+
5,000,000 Puerto Rico Government Development Bank 07/19/00 3.55 5,000,000 A1+
5,000,000 Puerto Rico Government Development Bank 08/02/00 3.40 5,000,000 A1+
5,720,000 Puerto Rico Government Development Bank 08/09/00 3.05 5,720,000 A1+
805,000 San Francisco Airport - Series 1997A
LOC Societe Generale 07/18/00 2.95 805,000 P1 A1+
945,000 San Francisco Airport - Series 1997A
LOC Societe Generale 08/01/00 3.80 945,000 P1 A1+
9,000,000 San Francisco Bay Area Transit
LOC Bayerische Landesbank Girozentrale 07/12/00 2.85 9,000,000 P1 A1+
2,000,000 San Francisco Bay Area Transit
LOC Bayerische Landesbank Girozentrale 07/18/00 2.90 2,000,000 P1 A1+
10,000,000 San Francisco Bay Area Transit Finance Authority - Series C
LOC Morgan Guaranty Trust Company 08/01/00 3.75 10,000,000 P1 A1+
7,000,000 San Francisco Bay Area Transit Finance Authority - Series F
LOC State Street Bank and Co. 07/12/00 3.35 7,000,000 P1 A1+
1,681,000 State of California Department of Resource Water RB 07/26/00 2.90 1,681,000 P1 A1+
1,000,000 The Regents of the University of California - Series A 07/06/00 3.30 1,000,000 P1 A1+
2,000,000 The Regents of the University of California - Series A 07/13/00 2.85 2,000,000 P1 A1+
------------ -----------
83,381,000 Total Tax Exempt Commercial Paper 83,381,000
------------ -----------
<CAPTION>
Variable Rate Demand Instruments - Private Placements (b) (1.86%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 3,505,000 City of Chico, CA IDRB (Gene E. Lynn Nursing Home Project) (c)
LOC Bank of America 12/01/15 6.12% $ 3,505,000
</TABLE>
--------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
--------------------------------------------------------------------------------
CALIFORNIA DAILY TAX FREE INCOME FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
JUNE 30, 2000
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- --------
Variable Rate Demand Instruments - Private Placements (b) (Continued)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 2,285,000 Redevelopment Agency of the City of Morgan Hill
(Kent Trust Project) - Series 1984B (c)
LOC Comerica Bank 12/01/14 4.75% $ 2,285,000
1,375,000 Redevelopment Agency of the City of Morgan Hill
(Nob Hill Venture Investments) - Series 1984 (c)
LOC Wells Fargo Bank, N.A. 12/01/09 4.75 1,375,000
------------ ------------
7,165,000 Total Variable Rate Demand Instruments - Private Placements 7,165,000
------------ ------------
Total Investments (110.86%) (Cost $427,723,584+) $427,723,584
Liabilities in Excess of Cash and Other Assets (-10.86%) (41,883,528)
------------
Net Assets (100.00%) $385,840,056
============
Net Asset Value, offering and redemption price per share:
Class A Shares, 133,449,349 Shares Outstanding (Note 3) $ 1.00
============
Class B Shares, 252,402,860 Shares Outstanding (Note 3) $ 1.00
============
</TABLE>
+ Aggregate cost for federal income tax purposes is identical.
FOOTNOTES:
(a) Unless the variable rate demand instruments are assigned their own ratings,
the ratings are those of the holding company of the bank whose letter of
credit guarantees the issue or the insurance company who issues the issue.
All letters of credit and insurance are irrevocable and direct pay covering
both principal and interest. Certain issuers have either a line of credit,
a liquidity facility, a standby purchase agreement or some other financing
mechanism to ensure the remarketing of the securities. This is not a
guarantee and does not serve to insure or collateralize the issue.
(b) Securities payable on demand at par including accrued interest (usually
with seven days notice) and, if indicated, unconditionally secured as to
principal and interest by a bank letter of credit. The interest rates are
adjustable and are based on bank prime rates or other interest rate
adjustment indices. The rate shown is the rate in effect at the date of
this statement.
(c) Securities that are not rated which the Fund's Board of Directors has
determined to be of comparable quality to those rated securities in which
the Fund invests.
(d) The maturity date indicated is the next put date.
<TABLE>
<CAPTION>
KEY:
<S> <C><C> <C> <C><C>
COPS = Certificates of Participations IDRB = Industrial Development Revenue Bond
EDFA = Economic Development Finance Authority LOC = Letter of Credit
FGIC = Financial Guaranteed Insurance Company MHRB = Multi-Family Housing Revenue Bond
FSA = Financial Securities Assurance PCFA = Pollution Control Finance Authority
GO = General Obligation PCRB = Pollution Control Revenue Bond
HFA = Housing Finance Agency RB = Revenue Bond
IDA = Industrial Development Authority TRAN = Tax and Revenue Anticipation Note
</TABLE>
--------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
--------------------------------------------------------------------------------
CALIFORNIA DAILY TAX FREE INCOME FUND, INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2000
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C>
Income:
Interest...................................................................... $ 7,795,137
------------------
Expenses: (Note 2)
Investment management fee..................................................... 694,549
Administration fee............................................................ 486,184
Shareholder servicing fee..................................................... 211,802
Custodian expenses............................................................ 61,919
Shareholder servicing and related shareholder expenses........................ 144,925
Legal, compliance and filing fees............................................. 29,825
Audit and accounting.......................................................... 38,858
Directors' fees............................................................... 4,508
Other......................................................................... 12,234
------------------
Total expenses............................................................. 1,684,804
------------------
Net investment income........................................................... 6,110,333
------------------
<CAPTION>
REALIZED GAIN (LOSS) ON INVESTMENTS
<S> <C>
Net realized gain (loss) on investments......................................... -0-
------------------
Increase in net assets from operations.......................................... $ 6,110,333
==================
</TABLE>
--------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
--------------------------------------------------------------------------------
CALIFORNIA DAILY TAX FREE INCOME FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
<TABLE>
<CAPTION>
Six Months
Ended Year
June 30, 2000 Ended
(Unaudited) December 31, 1999
--------- -----------------
INCREASE (DECREASE) IN NET ASSETS
<S> <C> <C>
Operations:
Net investment income......................................... $ 6,110,333 $ 6,706,142
Net realized gain (loss) on investments....................... -0- 3,459
--------------- ----------------
Increase in net assets from operations.......................... 6,110,333 6,709,601
Dividends to shareholders from net investment income:
Class A....................................................... ( 2,626,037)* ( 5,011,947)*
Class B....................................................... ( 3,484,296)* ( 1,694,195)*
Capital share transactions (Note 3):
Class A....................................................... ( 100,447,900) 23,967,484
Class B....................................................... 45,793,699 176,417,770
--------------- ----------------
Total increase (decrease)..................................... ( 54,654,201) 200,388,713
Net assets:
Beginning of period........................................... 440,494,257 240,105,544
--------------- ----------------
End of period................................................. $ 385,840,056 $ 440,494,257
=============== ================
</TABLE>
* Designated as exempt-interest dividends for federal income tax purposes.
--------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
--------------------------------------------------------------------------------
CALIFORNIA DAILY TAX FREE INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
================================================================================
1. Summary of Accounting Policies.
California Daily Tax Free Income Fund, Inc. is a no-load, non-diversified,
open-end management investment company registered under the Investment Company
Act of 1940. The Fund has two classes of stock authorized, Class A and Class B.
The Class A shares are subject to a service fee pursuant to the Distribution and
Service Plan. The Class B shares are not subject to a service fee. Additionally,
the Fund may allocate among its classes certain expenses, to the extent
allowable to specific classes, including transfer agent fees, government
registration fees, certain printing and postage costs, and administrative and
legal expenses. Class Specific expenses of the Fund were limited to distribution
fees and transfer agent expenses. In all other respects the Class A and Class B
shares represent the same interest in the income and assets of the Fund.
Distribution for Class B shares commenced on October 9, 1996 and all Fund shares
outstanding before October 9, 1996 were designated as Class A shares. The Fund
is a short-term, tax exempt money market Fund. Its financial statements are
prepared in accordance with accounting principles generally accepted in the
United States of America for investment companies as follows:
a) Valuation of Securities -
Investments are valued at amortized cost. Under this valuation method, a
portfolio instrument is valued at cost and any discount or premium is
amortized on a constant basis to the maturity of the instrument. The
maturity of variable rate demand instruments is deemed to be the longer of
the period required before the Fund is entitled to receive payment of the
principal amount or the period remaining until the next interest rate
adjustment.
b) Federal Income Taxes -
It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its tax exempt and taxable income to its shareholders. Therefore, no
provision for federal income tax is required.
c) Dividends and Distributions -
Dividends from investment income (excluding capital gains and losses, if
any, and amortization of market discount) are declared daily and paid
monthly. Distributions of net capital gains, if any, realized on sales of
investments are made after the close of the Fund's fiscal year, as declared
by the Fund's Board of Directors.
d) Use of Estimates -
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that effect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of increases and decreases in net assets from operations during the
reporting period. Actual results could differ from those estimates.
e) General -
Securities transactions are recorded on a trade date basis. Interest income
is accrued as earned. Realized gains and losses from securities
transactions are recorded on the identified cost basis.
2. Investment Management Fees and Other Transactions with Affiliates.
Under the Investment Management Contract, the Fund pays an investment management
fee to Reich & Tang Asset Management L.P. (Manager) at the annual rate of .30%
of the Fund's average daily net assets.
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<PAGE>
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CALIFORNIA DAILY TAX FREE INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
================================================================================
2. Investment Management Fees and Other Transactions with Affiliates
(Continued).
Pursuant to an Administrative Services Contract the Fund pays to the Manager an
annual fee of .21% of the Fund's average daily net assets.
Pursuant to a Distribution Plan adopted under Securities and Exchange Commission
Rule 12b-1, the Fund and Reich & Tang Distributors, Inc. (the Distributor) have
entered into a Distribution Agreement and a Shareholder Servicing Agreement,
only with respect to Class A shares of the Fund. For its services under the
Shareholder Servicing Agreement, the Distributor receives from the Fund with
respect only to Class A shares, a fee equal to .20% of the Fund's average daily
net assets. There were no additional expenses borne by the Fund pursuant to the
Distribution Plan.
Fees are paid to Directors who are unaffiliated with the Manager on the basis of
$2,000 per annum plus $250 per meeting attended.
Included in the Statement of Operations under the caption "Shareholder servicing
and related shareholder expenses" are fees of $104,041 paid to Reich & Tang
Services, Inc., an affiliate of the Manager, as servicing agent for the Fund.
3. Capital Stock.
At June 30, 2000, 20,000,000,000 shares of $.001 par value stock were authorized
and capital paid in amounted to $385,852,209. Transactions in capital stock, all
at $1.00 per share, were as follows:
<TABLE>
<CAPTION>
Six Months Year
Class A Ended Ended
------- June 30, 2000 December 31, 1999
------------- -----------------
<S> <C> <C>
Sold................................... 607,826,092 540,104,134
Issued on reinvestment of dividends.... 2,429,263 4,354,585
Redeemed............................... ( 710,703,255) ( 520,491,235)
------------- ------------
Net increase (decrease)................ ( 100,447,900) 23,967,484
============= ============
<CAPTION>
Six Months Year
Class B Ended Ended
------- June 30, 2000 December 31, 1999
------------- -----------------
<S> <C> <C>
Sold................................... 793,238,579 442,376,314
Issued on reinvestment of dividends.... 2,974,811 1,548,953
Redeemed............................... ( 750,419,691) ( 267,507,497)
------------- -------------
Net increase (decrease)................ 45,793,699 176,417,770
============= =============
</TABLE>
4. Sales of Securities.
Accumulated undistributed realized losses at June 30, 2000 amounted to $12,153.
This amount represents tax basis capital losses which may be carried forward to
offset future capital gains. Such losses expire December 31, 2002.
5. Concentration of Credit Risk.
The Fund invests primarily in obligations of political subdivisions of the State
of California and, accordingly, is subject to the credit risk associated with
the non-performance of such issuers. Approximately 43% of these investments are
further secured, as to principal and interest, by letters of credit issued by
financial institutions. The Fund maintains a policy of monitoring its exposure
by reviewing the creditworthiness of the issuers, as well as that of the
financial institutions issuing the letters of credit, and by limiting the amount
of holdings with letters of credit from one financial institution.
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
================================================================================
6. Financial Highlights.
<TABLE>
<CAPTION>
Six Months Year Ended December 31,
Class A Ended -----------------------------------------------------------
------- June 30, 2000 1999 1998 1997 1996 1995
------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- -------
Income from investment operations:
Net investment income......................... 0.013 0.022 0.025 0.028 0.027 0.032
Less distributions:
Dividends from net investment income.......... ( 0.013) ( 0.022) ( 0.025) ( 0.028) ( 0.027) ( 0.032)
------ ------ ------ ------ ------ ------
Net asset value, end of period.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ======= =======
Total Return.................................... 1.27%* 2.25% 2.48% 2.84% 2.76% 3.28%
Ratios/Supplemental Data
Net assets, end of period (000)................. $133,445 $233,890 $209,916 $182,653 $205,947 $171,808
Ratios to average net assets:
Expenses, net of fees waived.................. 0.86%+ 0.86% 0.88% 0.82% 0.75% 0.67%
Net investment income......................... 2.48%+ 2.23% 2.43% 2.80% 2.73% 3.24%
Management, administration and shareholder
servicing fees waived....................... 0.00% 0.00% 0.01% 0.05% 0.08% 0.22%
Expense offsets............................... 0.00% 0.00% 0.00% 0.00% 0.01% 0.01%
<CAPTION>
Six Months Year Ended October 9, 1996
Class B Ended December 31, (Commencement of Sales) to
------- June 30, 2000 1999 1998 1997 December 31, 1996
------------- ------- ------- ------- -----------------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- -------
Income from investment operations:
Net investment income......................... 0.014 0.025 0.027 0.030 0.004
Less distributions:
Dividends from net investment income.......... ( 0.014) ( 0.025) ( 0.027) ( 0.030) ( 0.004)
------ ------ ------ ------ ------
Net asset value, end of period.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= =======
Total Return.................................... 1.39%* 2.49% 2.76% 3.08% 3.08%*
Ratios/Supplemental Data
Net assets, end of period (000)................. $252,395 $206,604 $30,190 $15,163 $ 3,436
Ratios to average net assets:
Expenses, net of fees waived.................. 0.62%+ 0.62% 0.60% 0.58% 0.56%+
Net investment income......................... 2.77%+ 2.61% 2.72% 3.10% 3.09%+
Management administration fees waived......... 0.00% 0.00% 0.01% 0.05% 0.06%+
Expense offsets............................... 0.00% 0.00% 0.00% 0.00% 0.01%+
* Not Annualized
+ Annualixed
</TABLE>
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
CALIFORNIA
DAILY
TAX FREE
INCOME
FUND, INC.
Semi-Annual Report
June 30, 2000
(Unaudited)
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<PAGE>
--------------------------------------------------------------------------------
------------------------------------------------------
This report is submitted for the general information
of the shareholders of the Fund. It is not
authorized for distribution to prospective investors
in the Fund unless preceded or accompanied by an
effective prospectus, which includes information
regarding the Fund's objectives and policies,
experience of its management, marketability of
shares, and other information.
------------------------------------------------------
California Daily Tax Free Income Fund, Inc.
600 Fifth Avenue
New York, New York 10020
Manager
Reich & Tang Asset Management L.P.
600 Fifth Avenue
New York, New York 10020
Custodian
State Street Kansas City
801 Pennsylvania
Kansas City, Missouri 64105
Transfer Agent &
Dividend Disbursing Agent
Reich & Tang Services, Inc.
600 Fifth Avenue
New York, New York 10020
CA6/00S
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<PAGE>
