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NORTH
CAROLINA
DAILY
MUNICIPAL
INCOME
FUND, INC.
Semi-Annual Report
February 28, 1995
(Unaudited)
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<PAGE>
1
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NORTH CAROLINA
DAILY MUNICIPAL 600 FIFTH AVENUE, NEW YORK, N.Y. 10020
INCOME FUND, INC. 212/830-5200
===============================================================================
Dear Shareholder:
We are pleased to present the semi-annual report of North Carolina Daily
Municipal Income Fund, Inc. for the period ended February 28, 1995.
The Fund had net assets of $143,912,641 and 2,564 active shareholders as of
February 28, 1995. The Federal Reserve, during the last fiscal year, has raised
the Federal Funds rate from 3.00% to 6.25%. Rates on tax exempt investments have
risen accordingly.
We thank you for your support and look forward to continuing to serve your cash
management needs.
Sincerely,
/s/Steven W. Duff
Steven Duff
President
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<PAGE>
2
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NORTH CAROLINA DAILY MUNICIPAL INCOME FUND, INC.
STATEMENT OF NET ASSETS
FEBRUARY 28, 1995
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- -------- ------- ------
Other Tax Exempt Investments (14.42%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 1,449,000 Bryson City NC Water Bonds
U.S. Government Insured 08/09/95 4.38% 1,449,624
2,000,000 City of High Point North Carolina Public Improvement BAN 03/08/95 3.35 2,000,000 MIG-1 SP-1+
1,071,000 Columbus County Water and Sewer District #1
GO Water BAN
FHA Insured 04/12/95 3.76 1,071,146
1,750,000 Craven County N.C. BAN 09/13/95 4.06 1,757,965
3,608,000 East Central Water and Sewer Harnett County
FHA Insured 10/11/95 4.75 3,608,851
1,585,000 Harnett Cty N.C. COP
AMBAC Insured 12/01/95 4.90 1,585,000 Aaa AAA
1,130,000 Mecklenburg County North Carolina Series A Bonds 07/01/95 3.73 1,147,373 Aaa AAA
2,500,000 New Hanover, NC BAN 06/21/95 3.69 2,500,514
2,543,000 Northwestern Wayne Sanitary District, NC GO Water BAN
FHA Insured 06/07/95 3.74 2,543,465
1,093,000 Sampson County Water And Sewer District GO BAN
FHA Insured 08/09/95 3.94 1,093,323
2,000,000 Wake County, NC GO Refunding Bond 04/01/95 3.87 2,000,455 Aaa AAA
---------- ----------
20,729,000 Total Other Tax Exempt Investments 20,757,716
---------- ----------
<CAPTION>
Other Variable Rate Demand Instruments (b) (54.80%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 3,500,000 Alamance County, NC (SCI Manufacturing)
LOC Pittsburgh National Bank 04/01/15 3.80% $ 3,500,000 MIG-1
1,000,000 Beaufort, NC PCRB (Texas Gulf Inc.) - Series 85
LOC Societe Generale 12/01/00 4.35 1,000,000 Aaa
1,000,000 Bladen County, NC (Harriet and Henderson Yams)
LOC Nationsbank 12/01/03 4.25 1,000,000 A1+
2,000,000 Burke County, NC (Jobs Project)
LOC Wachovia Bank & Trust Co., N.A. 06/01/02 4.20 2,000,000 A1+
260,000 Gaston County, NC (Keystone Carbon Co.)
LOC Nationsbank 09/01/00 4.25 260,000 P1
2,000,000 Gaston County, NC Industrial Facilities PCRB
(Allibert, Inc. Project) - Series 1987A
LOC Credit Lyonnais 01/01/12 4.05 2,000,000
</TABLE>
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See Notes to Financial Statements.
<PAGE>
3
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===============================================================================
<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>
$ 1,500,000 Gaston County, NC Industrial Facilities PCRB
(Allibert, Inc. Project) - Series 1987A
LOC Credit Lyonnais 01/01/12 4.05% $ 1,500,000
5,000,000 Granville County, NC Industrial Facilities PCFA
(Mayville Metal Prod. Project)
LOC Pittsburgh National Bank 05/23/20 3.90 5,000,000 P1 A1
1,500,000 Guilford County, NC (Bonset America)
LOC Dai-Ichi Kangyo Bank, Ltd. 05/01/09 4.25 1,500,000 P1 A1+
2,500,000 Iredell County, NC (Jet Corr Inc.)
LOC National Bank of Canada 09/01/99 4.25 2,500,000
3,800,000 Lenoir County, NC Industrial Facilities
(West Co. of Nebraska Inc.) - Series 85
LOC Dresdner Bank A.G. 10/01/05 3.95 3,800,000
2,000,000 Lincoln County, NC Industrial Facilities PCFA RB
(General Marble)
LOC National Bank of Canada 09/01/00 4.25 2,000,000 P1 A1
1,500,000 Mecklenburg County, NC (Otto Ind.)
LOC Nationsbank 10/01/08 4.25 1,500,000 P1
2,000,000 Mecklenburg County, NC IDRB (Virkler Co.)
LOC First Union National Bank 12/01/04 4.25 2,000,000
3,080,000 Mecklenburg County, NC Industrial Facilities PCRB
LOC Barclays Bank 09/01/98 4.35 3,080,000 P1 A1+
2,000,000 Moore County, NC (Perdue Farm Project)
LOC Rabobank Nederland 06/01/10 4.05 2,000,000 P1 A1+
1,300,000 NC Education Facilities
(Bowman Grey School of Medicine)
LOC Wachovia Bank & Trust Co., N.A. 09/01/20 4.00 1,300,000 VMIG-1
2,525,000 NC Education Facilities Finance Agency RB
(Wake Forest University Project) 01/01/09 4.05 2,525,000 VMIG-1
200,000 NC Educational Facilities
(Guilford College Project)
LOC Wachovia Bank & Trust Co., N.A. 09/01/23 3.80 200,000 VMIG-1 A1+
3,700,000 NC Medical Care Commission (Carol Woods)
LOC Bank of Scotland 04/01/21 4.00 3,700,000 VMIG-1
</TABLE>
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See Notes to Financial Statements.
<PAGE>
4
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NORTH CAROLINA DAILY MUNICIPAL INCOME FUND, INC.
STATEMENT OF NET ASSETS
FEBRUARY 28, 1995
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
--------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ----- ----- ------- ------- ------
Other Variable Rate Demand Instruments (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 2,400,000 NC Medical Care Commission HRB
(NC Baptist Hospitals Project) - Series 92B 06/01/22 4.00% $ 2,400,000 VMIG-1 A1+
2,800,000 NC Medical Care Commission HRB
(Pooled Finance) - Series 91A
LOC Dai-Ichi Kangyo Bank, Ltd. 10/01/20 3.90 2,800,000 VMIG-1
2,900,000 North Carolina Education Facilities
(Davidson College Project) 12/01/04 4.00 2,900,000
2,600,000 Person County, NC PCRB
(Carolina Power and Light Solid Waste Disposal) - Series 86
LOC Fuji Bank, Ltd. 11/01/16 4.15 2,600,000 VMIG-1
1,000,000 Piedmont Triad, NC Airport Authority
(The Cessna Aircraft Company)
LOC Nationsbank 09/01/12 4.25 1,000,000 A1
900,000 Randolph County, NC Industrial Facility & PCFA
LOC Bank One Ohio 09/01/05 4.30 900,000
3,000,000 Richmond County, NC Industrial Facilities
PCFA (Bibb Co. Project)
LOC Citibank 12/01/03 4.20 3,000,000 A1
2,000,000 Samson County, NC (Dubose Strapping)
LOC First Union National Bank 02/01/99 3.70 2,000,000 P1
1,000,000 Union County, NC FAC Pollution Control (Square D)
LOC Morgan Guaranty Trust Company 03/01/03 4.10 1,000,000 VMIG-1
3,800,000 Wake County, NC Industrial Facilities PCFA
(Carolina Power and Light)
LOC Sumitomo Bank, Ltd. 03/01/17 3.90 3,800,000 VMIG-1
10,600,000 Wake County, NC Industrial Facilities PCFA
(Carolina Power and Light) - Series A
LOC Credit Suisse 05/01/15 4.00 10,600,000 P1 A1+
3,000,000 Winston-Salem, NC COPS - Series 88 07/01/09 4.15 3,000,000 VMIG-1 A1+
500,000 Winston-Salem, NC GO Bond 06/01/07 4.00 500,000 VMIG-1 A1+
---------- ----------
78,865,000 Total Other Variable Rate Demand Instruments 78,865,000
---------- ----------
</TABLE>
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See Notes to Financial Statements.
<PAGE>
5
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===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- ------
Put Bonds (8.48%)
=----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 4,000,000 Mecklenburg County, NC Industrial Facilities
PCFA (Ecolaire Combustion Products)
LOC Union Bank of Switzerland 08/01/95 4.70 % $ 4,000,000 Aaa AAA
2,500,000 North Carolina Ind. Facs & PCFA
(GVK America Inc.)
LOC Union Bank of Switzerland 12/01/95 5.00 2,500,000 AAA
2,700,000 Puerto Rico Industrial Medical & Environmental
PCFA (Merck & Co. Inc. Project) 12/01/95 4.10 2,700,000 Aaa AAA
3,000,000 Puerto Rico Industrial Medical & Environmental
PCFA RB (Abbot Laboratories) 03/01/96 5.10 3,000,000 Aaa AAA
---------- ----------
12,200,000 Total Put Bonds 12,200,000
---------- ----------
<CAPTION>
Revenue Bond (0.72%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 1,000,000 North Carolina Med Care for Mercy Hospital 08/01/95 3.90% $ 1,042,671 Aaa
- ----------- ---------
1,000,000 Total Revenue Bond 1,042,671
- ----------- ---------
<CAPTION>
Tax Exempt Commercial Paper (23.35%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 2,500,000 City of Durham, NC COP
LOC Wachovia Bank & Trust Co., N.A. 05/03/95 4.10 % $ 2,500,000 VMIG-1 A1+
1,375,000 County of Winston - NC Series 1989
(Summit Square Garden Apt. Project)
FHA Insured 03/08/95 4.30 1,375,000 AAA
3,000,000 County of Winston Salem, NC (Water & Sewer System)03/09/95 3.90 3,000,000 VMIG-1 A1+
2,000,000 NC Eastern Municipal Power Agency - Series 1988B
LOC Morgan Guaranty Trust Company &
Union Bank of Switzerland 03/07/95 3.75 2,000,000 A1+
6,726,000 NC Eastern Municipal Power Agency - Series 1988B
LOC Morgan Guaranty Trust Company &
Union Bank of Switzerland 03/08/95 3.90 6,726,000 A1+
2,000,000 NC Eastern Municipal Power Agency - Series 1988B
LOC Morgan Guaranty Trust Company &
Union Bank of Switzerland 03/09/95 4.00 2,000,000 A1+
</TABLE>
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See Notes to Financial Statements.
<PAGE>
6
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NORTH CAROLINA DAILY MUNICIPAL INCOME FUND, INC.
STATEMENT OF NET ASSETS
FEBRUARY 28, 1995
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ----- ------ ------- ------- ------
Tax Exempt Commercial Paper (Continued) (3.35%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 1,500,000 NC Eastern Municipal Power Agency - Series 1988B
LOC Morgan Guaranty Trust Company &
Union Bank of Switzerland 04/10/95 4.10 % $ 1,500,000 A1+
3,500,000 NC Eastern Municipal Power Agency - Series 1988B
LOC Morgan Guaranty Trust Company &
Union Bank of Switzerland 05/04/95 4.20 3,500,000 A1+
2,000,000 North Carolina Eastern Municipal Power Agency
LOC Morgan Guaranty Trust Company &
Union Bank of Switzerland 03/07/95 3.95 2,000,000 A1
5,000,000 North Carolina Municipal Power Agency Number 1
(Catawba Project) 04/12/95 4.10 5,000,000 P1 A1
4,000,000 UNC Chapel Hill School of Medicine Ambulatory Care Clinic 03/10/95 4.00 4,000,000 A1+
- ----------- ------------
33,601,000 Total Tax Exempt Commercial Paper 33,601,000
- ----------- ------------
Total Investments (101.77%) (Cost $146,466,387+) 146,466,387
Liabilities, in Excess of Cash and Other Assets (1.77%) ( 2,553,746)
------------
Net Assets (100.00%) $143,912,641
============
Net Asset Value, offering and redemption price per share:
Class A shares, 141,699,859 shares outstanding (Note 3) $ 1.00
======
Class B shares, 2,218,029 shares outstanding (Note 3) $ 1.00
======
+Aggregate cost for federal income tax purpose is identical.
</TABLE>
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See Notes to Financial Statements.
<PAGE>
7
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===============================================================================
FOOTNOTES:
(a) The ratings noted for variable rate demand instruments are those of the
bank whose letter of credit secures such instruments or the guarantor of
the bond. P1 and A1+ are the highest ratings assigned for tax exempt
commercial paper. The Fund's Board of Directors has determined that
securities which are not rated are of comparable quality to those rated
securities in which the Fund invests.
(b) Securities payable on demand at par including accrued interest (usually
with seven days notice) and 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.
<TABLE>
<CAPTION>
KEY:
<S> <C><C> <C> <C> <C>
BAN = Bond Anticipation Note PCFA = Pollution Control Finance Authority
CI = Certificate of Indebtedness PCRB = Pollution Control Revenue Bond
CLN = Construction Loan Note RAN = Revenue Anticipation Note
COP = Certificate of Participation RAW = Revenue Anticipation Warrant
FAN = Fund Anticipation Note RB = Revenue Bond
GAN = Grant Anticipation Note RN = Revenue Note
GO = General Obligation TAN = Tax Anticipation Note
IDRB = Industrial Development Revenue Bond TLN = Tax Loan Note
TRAN = Tax and Revenue Anticipation Note
</TABLE>
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See Notes to Financial Statements.
<PAGE>
8
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NORTH CAROLINA DAILY MUNICIPAL INCOME FUND, INC.
STATEMENT OF OPERATIONS
FEBRUARY 28, 1995
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C>
Income:
Interest............................................................ $2,416,224
----------
Expenses: (Note 2)
Investment management fee........................................... 255,546
Shareholder servicing fee (Class A)................................. 77,603
Administration fee.................................................. 61,757
Custodian, shareholder servicing and related shareholder expenses... 59,664
Legal, compliance and filing fees................................... 15,859
Audit and accounting................................................ 26,177
Directors' fees..................................................... 3,000
Amortization of organization expenses............................... 4,463
Other............................................................... 2,651
----------
Total expenses.................................................. 506,720
----------
Net investment income............................................... $ 1,909,504
==========
</TABLE>
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<PAGE>
9
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NORTH CAROLINA DAILY MUNICIPAL INCOME FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Six Month Year
Ended Ended
February 28, 1995 August 31, 1994
----------------- ---------------
INCREASE (DECREASE) IN NET ASSETS
<S> <C> <C>
Operations:
Net investment income...................................... $ 1,909,504 $ 1,991,239
Net realized gain (loss) on investments.................... -0- 268
------------ -----------
Increase in net assets from operations..................... 1,909,504 1,991,507
Dividends to shareholders from net investment income:
Class A.................................................... (1,891,111)* (1,991,239)*
Class B................................................... ( 18,393)* --
Capital share transactions (Note 3):
Class A.................................................... 18,874,517 29,525,848
Class B.................................................... 2,218,029 --
--------- ----------
Total increase (decrease).................................. 21,092,546 29,526,116
Net assets:
Beginning of period........................................ 122,820,095 93,293,979
----------- -----------
End of period.............................................. $ 143,912,641 $ 122,820,095
============= =============
* Designated as exempt-interest dividends for federal income tax purposes.
</TABLE>
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See Notes to Financial Statements.
<PAGE>
10
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NORTH CAROLINA DAILY MUNICIPAL INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
===============================================================================
1. Summary of Accounting Policies.
North Carolina Daily Municipal 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. In all other
respects, the Class A and Class B shares represent the same interest in the
income and assets of the Fund. Distribution of Class B shares commenced December
12, 1994. The Fund's financial statements are prepared in accordance with
generally accepted accounting principles 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) 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. (the Manager) at the annual rate of
.40% of the Fund's average daily net assets. The Manager is required to
reimburse the Fund for its expenses (exclusive of interest, taxes, brokerage,
and extraordinary expenses) to the extent that such expenses, including the
investment management and the shareholder servicing and administration fees, for
any fiscal year exceed the limits on investment company expenses prescribed by
any state in which the Fund's shares are qualified for sale. No such
reimbursement was required for the period ended February 28, 1995.
Pursuant to an Administrative Services Contract the Fund pays to the Manager an
annual fee of .20% of the Fund's average daily net assets.
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<PAGE>
11
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===============================================================================
2.Investment Management Fees and Other Transactions with Affiliates (Continued).
Pursuant to a Distribution and Service Plan adopted under Securities and
Exchange Commission Rule 12b-1, the Fund and Reich & Tang Distributors L.P. (the
Distributor) have entered into a Distribution Agreement and a Shareholder
Servicing Agreement only with respect to the Class A shares of the Fund. For its
services under the Shareholder Servicing Agreement, the Distributor receives
from the Fund with respect only to the Class A shares, a fee equal to .25% of
the Fund's average daily net assets. There were no additional expenses borne by
the Fund pursuant to the Distribution Plan.
During the period ended February 28,1995, the Manager and the Distributor
voluntarily waived investment management fees, administration fees and
shareholder servicing fees of $15,697, $73,864 and $90,569, respectively.
Fees are paid to Directors who are unaffiliated with the Manager on the basis of
$1,000 per annum plus $250 per meeting attended.
Included in the Statement of Operations under the caption "Custodian,
shareholder servicing and related shareholder expenses" are fees of $17,464 paid
to Fundtech Services L.P., an affiliate of the Manager, as servicing agent for
the Fund.
3. Capital Stock.
At February 28, 1995, 20,000,000,000 shares of $.001 par value stock were
authorized and capital paid in amounted to $143,917,880. Transactions in capital
stock, all at $1.00 per share, were as follows:
<TABLE>
<CAPTION>
Class A
Six Months Year
Ended Ended
February 28, 1995 August 31, 1994
----------------- ---------------
<S> <C> <C>
Sold.......................................... 365,463,093 394,716,582
Issued on reinvestment of dividends........... 1,034,151 1,413,037
Redeemed...................................... ( 347,622,727) ( 366,603,771)
---------------- ---------------
Net increase (decrease)....................... 18,874,517 29,525,848
================ ===============
<CAPTION>
Class B
Six Months
Ended
February 28, 1995
-----------------
<S> <C>
Sold.......................................... 5,002,449
Issued on reinvestment of dividends........... 15,580
Redeemed...................................... ( 2,800,000)
---------------
Net increase (decrease)....................... 2,218,029
===============
</TABLE>
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<PAGE>
12
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NORTH CAROLINA DAILY MUNICIPAL INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
===============================================================================
4. Sales of Securities.
Accumulated undistributed realized losses at February 28, 1995 amounted to
$5,239. Such amount represents tax basis capital losses which may be carried
forward to offset future capital gains. Such losses expire August 31, 2000.
5. Concentration of Credit Risk.
The Fund invests primarily in obligations of political subdivisions of the State
of North Carolina and, accordingly, is subject to the credit risk associated
with the non-performance of such issuers. Approximately 64% 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 credit worthiness 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.
6.Selected Financial Information.
<TABLE>
<CAPTION>
September 10, 1991
Six Months Year Year (Commencement)
Ended Ended Ended of Operations) to
February 28, 1995 August 31, 1994 August 31, 1993 August 31, 1992
----------------- --------------- --------------- ----------------
Class A Class B
------- -------
<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........ .014 .007 0.018 0.019 0.030
Less distributions:
Dividends from net investment income .014 .007 0.018 0.019 0.030
-------- --------- --------- --------- ----------
Net asset value, end of year. $1.00 $1.00 $1.00 $1.00 $ 1.00
======== ========= ========= ========= ===========
Total Return................. 2.85%* 3.42%* 1.86% 1.94% 3.07%*
Ratios/Supplemental Data
Net assets, end of period (000) $141,695 $2,218 $122,820 $93,294 $75,417
Ratios to average net assets:
Expenses..................... .75%*+ .50%*+ .75%+ 0.71%+ 0.50%*+
Net investment income........ 2.81%*+ 3.40%*+ 1.85%+ 1.91%+ 2.82%*+
* Annualized
+ Net of management, shareholder servicing, and administration fees waived
equivalent to .27%, .29%, .35% and .62% of average net assets for Class A and
net of management and administration fee equivalent to .25% for Class B.
</TABLE>
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<PAGE>
13
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14
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15
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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.
- -------------------------------------------------------------------------------
North Carolina Daily Municipal 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
Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, MO 64105
Transfer Agent &
Dividend Disbursing Agent
Supervised Service Company
811 Main Street
Kansas City, MO 64105
- -------------------------------------------------------------------------------
