<PAGE>
--------------------------------------------------------------------------------
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 annual report of North Carolina Daily Municipal
Income Fund, Inc. for the year ended August 31, 2000.
The Fund had net assets of $247,851,833 and 2,765 active shareholders as of
August 31, 2000.
We thank you for your support and look forward to continuing to serve your cash
management needs.
Sincerely,
\s\Steven W. Duff
Steven W. Duff
President
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
NORTH CAROLINA DAILY MUNICIPAL INCOME FUND, INC.
STATEMENT OF NET ASSETS
AUGUST 31, 2000
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- --------
Tax Exempt Investments (8.74%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 1,425,000 Charlotte, NC COPS (b)
(Fiscal Year 2000 Equipment Acquisition Project) 03/01/01 4.11% $ 1,430,593
1,540,000 Durham & Wake Counties, NC Special Airport District (b) 04/01/01 4.33 1,551,205
1,400,000 Guilford County, NC GO Bond (b) 02/01/01 4.06 1,410,717
3,400,000 Mecklenburg County, NC Public Improvement - Series B 02/01/01 3.89 3,413,746 Aaa AAA
2,650,000 New Hanover, NC GO Bonds Public Improvement (b) 11/01/00 3.85 2,655,788
2,000,000 North Carolina State Public School Bond 04/01/01 3.98 2,004,120 Aaa AAA
8,160,000 Wake County, NC GO Refunding Bond 03/01/01 3.88 8,181,864 Aaa AAA
1,000,000 Wake County, NC GO Refunding Bond 02/01/01 3.89 1,004,863 Aaa AAA
----------- -----------
21,575,000 Total Tax Exempt Investments 21,652,896
----------- -----------
<CAPTION>
Variable Rate Demand Instruments (c) (79.09%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 1,400,000 Alamance County, NC Industrial Facilities & PCFA
LOC PNC Bank, N.A. 04/01/15 4.35% $ 1,400,000 VMIG-1
3,000,000 Beaufort, NC Industrial Facilities & PCFA RB (b)
(Texas Gulf Inc.) - Series 1985
LOC Societe Generale 12/01/00 4.30 3,000,000
3,000,000 Catawba County, NC Industrial Facilities & PCFA (b)
(Plastic Package Project)
LOC First Union National Bank 02/01/11 4.50 3,000,000
4,700,000 Chapel Hill School of Medicine (Ambulatory Health Clinic) 07/01/12 4.30 4,700,000 A1+
11,500,000 Charlotte, NC Airport Refunding Bonds - Series A
Insured by MBIA Insurance Corp. 07/01/17 4.35 11,500,000 VMIG-1 A1
700,000 Cleveland County, NC Industrial Facilities & PCFA (b)
(Curtis Wright Flight System)
LOC Bank of Nova Scotia 11/01/23 4.40 700,000
1,000,000 Columbus County, NC (Conflandey Project) (b)
LOC Bank Nationale de Paris 01/01/15 4.45 1,000,000
1,400,000 Cumberland County, NC Industrial Facilities (b)
LOC Branch Bank & Trust 03/01/18 4.45 1,400,000
880,000 Durham County, NC Public Improvement GO Bonds 05/01/07 4.35 880,000 VMIG-1 A2
1,900,000 Durham County, NC Public Improvement GO Bonds 02/01/10 4.30 1,900,000 VMIG-1 A1+
3,000,000 Gaston County, NC Industrial Facilities RB (Duke Energy) 10/01/12 4.50 3,000,000 P1 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
------ ---- ----- ------ ------- --------
Variable Rate Demand Instruments (c) (Continued)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 5,000,000 Granville County, NC Industrial Facilities & PCFA (b)
(Mayville Metal Product Project)
LOC Toronto-Dominion Bank 05/23/20 4.45% $ 5,000,000
1,200,000 Greensboro, NC Enterprise System - Series 1995B
LOC Dexia CLF 06/01/22 4.25 1,200,000 VMIG-1 A1+
5,415,000 Halifax County, NC Industrial Facilities & PCFA RB
(Habson Partners Roanoke Valley)
LOC Credit Suisse First Boston 12/01/19 4.40 5,415,000 A1
600,000 Halifax County, NC Industrial Facilities & PCFA RB
(Roanoke - Lights Gas & Electricity)
LOC Credit Suisse First Boston 12/01/19 4.35 600,000 A1
2,145,000 Halifax County, NC Industrial Facilities
(Roanoke - Lights Gas & Electricity)
LOC Credit Suisse First Boston 06/01/21 4.45 2,145,000 A1+
2,400,000 Harnett County, NC Industrial Facilities & PCFA IDRB (b)
(Edwards Brothers Inc. Project)
LOC Wachovia Bank & Trust Co., N.A. 01/01/07 4.35 2,400,000
6,000,000 Herford County, NC Industrial Facilities & PCFA (b)
(Easco Corporation Project)
LOC Royal Bank of Canada 11/01/13 4.45 6,000,000
900,000 Johnson County, NC Industrial Facilities & PCFA (b)
(House Authority Mills Inc. Project)
LOC ABN AMRO Bank N.V. 03/01/11 4.45 900,000
2,400,000 Johnson County, NC Industrial Facilities & PCFA (b)
(House Authority Mills Inc. Project)
LOC Branch Bank & Trust 02/01/13 4.45 2,400,000
3,800,000 Lenoir County, NC Industrial Facilities (b)
(West Co. of Nebraska Inc.) - Series 1985
LOC Dresdner Bank, A.G. 10/01/05 4.25 3,800,000
8,395,000 Martin County, NC Industrial Facilities
(Weyerhaeuser Company Project) 06/01/04 4.35 8,395,000 A1
3,990,000 Mecklenberg County, NC Industrial Facilities & PCFA (b)
(EDG Comb Metals)
LOC Wells Fargo Bank, N.A. 12/01/09 4.20 3,990,000
1,500,000 Mecklenburg County, NC Industrial Facilities & PCFA
(Griffith Micro Science Project)
LOC ABN AMRO Bank N.V. 11/01/07 4.30 1,500,000 A1+
</TABLE>
--------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
--------------------------------------------------------------------------------
NORTH CAROLINA DAILY MUNICIPAL INCOME FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
AUGUST 31, 2000
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- --------
Variable Rate Demand Instruments (c) (Continued)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 1,250,000 Mecklenburg County, NC Industrial Facilities & PCFA (b)
(Ferguson Supply & Box Manufacturing Project)
LOC Branch Bank & Trust 08/01/10 4.20% $ 1,250,000
2,700,000 Mecklenburg County, NC Industrial Facilities & PCFA IDRB (b)
(Otto Industry)
LOC Bank of Austria 10/01/08 4.40 2,700,000
1,500,000 Mecklenburg County, NC PCFA IDRB (Virkler Company) (b)
LOC First Union National Bank 12/01/04 4.40 1,500,000
900,000 Mecklenburg County, NC - Series C (b)
LOC Union Bank of Switzerland 12/01/08 4.45 900,000
1,000,000 Mecklenburg County, NC - Series C 02/01/12 4.30 1,000,000 VMIG-1 A1+
10,000,000 Mecklenburg, NC COPS
LOC Bank of America 04/01/20 4.25 10,000,000 VMIG-1 A1+
3,500,000 Mecklenburg County, NC P-Floats-PA 710
LOC Merrill Lynch, Pierce, Finner & Smith Incorporated 04/01/10 4.33 3,500,000 A1+
5,000,000 Moore County, NC Industrial Facilities & PCFA RB
(Perdue Farm Project) - Series 1990
LOC Rabobank Nederland 06/01/10 4.15 5,000,000 P1 A1+
1,000,000 North Carolina Educational Facilities Finance Agency RB
(Elton College)
LOC Bank of America 01/01/19 4.30 1,000,000 VMIG-1 A1+
1,000,000 North Carolina Educational Facilities Finance Agency RB
(Gardner Webb University)
LOC First Union National Bank 07/01/17 4.25 1,000,000 A1
1,470,000 North Carolina Educational Facilities Finance Authority (b)
(Duke University)
LOC Branch Bank & Trust 03/01/12 4.30 1,470,000
4,700,000 North Carolina Educational Facilities Finance Authority
(Duke University) - Series 1987A 12/01/17 4.15 4,700,000 VMIG-1 A1+
1,200,000 North Carolina Educational Facilities Finance Authority RB
(Gardner Webb University)
LOC First Union National Bank 07/01/19 4.25 1,200,000 A1
2,400,000 North Carolina Educational Facilities Finance Authority RB
(Bowman Grey School Medical Project)
LOC Wachovia Bank & Trust Co., N.A. 09/01/20 4.20 2,400,000 VMIG-1
</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
------ ---- ----- ------ ------- --------
Variable Rate Demand Instruments (c) (Continued)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 3,000,000 North Carolina Educational Facilities Finance Authority
(Duke University)-Series 1991B 12/01/21 4.15% $ 3,000,000 VMIG-1 A1+
9,995,000 North Carolina Housing Facility Authority
Municipal Trust Receipts - Series CMC4 01/01/27 4.40 9,995,000 VMIG-1
1,100,000 North Carolina Medical Care Commission (Angel Medical Center, Inc.)
LOC First Union National Bank 10/01/16 4.25 1,100,000 A1
3,300,000 North Carolina Medical Care Commission Hospital RB
(Duke University Hospital) 06/01/15 4.15 3,300,000 VMIG-1 A1+
6,500,000 North Carolina Medical Care Commission Hospital RB
(Baptist Hospitals Project)
LOC Wachovia Bank & Trust Co., N.A. 06/01/30 4.25 6,500,000 VMIG-1 A1+
5,000,000 North Carolina Medical Care Commission Hospital RB
(J Authur Dosher Memorial Hospital)
LOC Branch Bank & Trust 05/01/18 4.30 5,000,000 A1
1,000,000 North Carolina Medical Care Commission Hospital RB
(Duke University Project) - Series 1985C
LOC Bank One 06/01/15 4.15 1,000,000 VMIG-1 A1+
3,000,000 North Carolina Medical Care Commission Hospital RB
(The Givens Estates Inc. Project)
LOC First Union National Bank 12/01/26 4.35 3,000,000 VMIG-1
3,000,000 North Carolina Medical Care Commission
(Moses H. Cone Memorial Hospital) 10/01/23 4.25 3,000,000 A1+
2,500,000 North Carolina Medical Care Commission
(Lutheran Services for the Aging)
LOC Branch Bank & Trust 03/01/28 4.35 2,500,000 A1
730,000 North Carolina Medical Care Commission HRB
(Methodist Home Project)
LOC Branch Bank & Trust 03/01/18 4.50 730,000 A1
3,800,000 North Carolina Medical Care Commission Health Care Facilities RB (b)
(Pungo District Hospital)
LOC Centura Bank & Norwest Bank 12/01/18 4.30 3,800,000
11,600,000 North Carolina Medical Care Commission Health System RB
(Updates Catholic Health Project)
Insured by AMBAC Indemnity Corp. 11/15/28 4.25 11,600,000 VMIG-1 A1+
6,700,000 North Carolina Medical Care Commission HRB
(Park Ridge Hospital Project)
LOC Suntrust Bank 08/15/18 4.25 6,700,000 A1
</TABLE>
--------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
--------------------------------------------------------------------------------
NORTH CAROLINA DAILY MUNICIPAL INCOME FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
AUGUST 31, 2000
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- --------
Variable Rate Demand Instruments (c) (Continued)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 1,500,000 North Carolina Medical Care Commission Hospital RB
(Duke University Project) - Series A 06/01/23 4.15% $ 1,500,000 VMIG-1 A1+
1,000,000 North Carolina Medical Care Commission Hospital RB
(Pooled Equipment Financing Program)
Insured by MBIA Insurance Corp. 12/01/25 4.20 1,000,000 VMIG-1 A1+
8,000,000 North Carolina Medical Care Commission Retirement
Community RB - Series B
LOC LaSalle National Bank 11/15/09 4.30 8,000,000 A1+
400,000 Randolph County, NC Industrial Facilities & PCFA (b)
LOC Bank One 09/01/05 4.45 400,000
1,000,000 Sampson County, NC Industrial Facilities & PCFA IDRB (b)
(DuBose Strapping)
LOC First Union National Bank 07/01/07 4.50 1,000,000
6,525,000 Warren County, NC Industrial Facilities & PCFA IDRB (b)
(Glen Raven Mills Project)
LOC Wachovia Bank & Trust Co., N.A. 05/01/08 4.35 6,525,000
2,030,000 Winston-Salem, NC COPS - Series 1988 07/01/09 4.35 2,030,000 VMIG-1 A1+
500,000 Winston-Salem, NC GO Bond 06/01/07 4.25 500,000 VMIG-1 A1+
------------ ------------
196,025,000 Total Variable Rate Demand Instruments 196,025,000
------------ ------------
<CAPTION>
Put Bonds (d) (5.52%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 650,000 North Carolina Industrial Facilities & PCFA
(Jasper Textiles Inc. Project)
LOC Branch Bank & Trust 12/01/00 4.25% $ 650,000 A
500,000 North Carolina Industrial Facilities & PCFA
(Greer Labs Inc. Project)
LOC First Union National Bank 12/01/00 4.12 500,000 A1+
3,900,000 North Carolina Industrial Facilities & PCFA (GVK America Inc.) (b)
LOC Citibank 09/01/00 5.00 3,900,000
1,000,000 North Carolina State GO 06/01/01 5.00 1,005,097 Aaa AAA
2,500,000 Puerto Rico Industrial Medical & Environmental PCFA RB
(Reynolds Metals Corporation)
LOC ABN AMRO Bank N.V. 09/01/00 3.50 2,500,000 VMIG-1 A1+
5,125,000 Puerto Rico Industrial Medical & Environmental PCFA RB
(Abbot Laboratories Project) 03/01/01 4.00 5,125,000 Aa1 AAA
------------ ------------
13,675,000 Total Put Bonds 13,680,097
------------ ------------
</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 (5.87%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 1,500,000 Puerto Rico Government Development Bank 11/08/00 3.95% $ 1,500,000 A1+
11,000,000 Puerto Rico Government Development Bank 11/09/00 3.80 11,000,000 A1+
2,050,000 Winston-Salem, NC (Summit Square Garden) - Series 1989
Guaranteed by FHA/VA Private Mortgages 10/10/00 4.15 2,050,000 A1+
------------ ------------
14,550,000 Total Tax Exempt Commercial Paper 14,550,000
------------ ------------
Total Investments (99.22%) (Cost $245,907,993+) $245,907,993
Cash and Other Assets, Net of Liabilities (0.78%) 1,943,840
------------
Net Assets (100.00%) $247,851,833
------------
Net Asset Value, offering and redemption price per share:
Class A Shares, 225,591,352 Shares Outstanding (Note 3) $ 1.00
============
Evergreen Shares,22,261,611 Shares Outstanding (Note 3) $ 1.00
============
+ Aggregate cost for federal income tax purpose is identical.
</TABLE>
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 insures 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 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.
(c) 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.
(d) The maturity date indicated is the next put date.
<TABLE>
<CAPTION>
KEY:
<S> <C><C> <C> <C> <C>
COPS = Certificate of Participations LOC = Letter of Credit
GO = General Obligation PCFA = Pollution Control Finance Authority
HRB = Hospital Revenue Bond RB = Revenue Bond
IDRB = Industrial Development Revenue Bond
</TABLE>
--------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
--------------------------------------------------------------------------------
NORTH CAROLINA DAILY MUNICIPAL INCOME FUND, INC.
STATEMENT OF OPERATIONS
YEAR ENDED AUGUST 31, 2000
================================================================================
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C>
Income:
Interest....................................................................$ 10,141,090
-----------------
Expenses: (Note 2)
Investment management fee................................................... 1,044,455
Shareholder servicing fee (Class A)......................................... 593,406
Shareholder servicing fee (Evergreen Shares)................................ 59,378
Administration fee.......................................................... 548,339
Custodian expenses.......................................................... 44,153
Shareholder servicing and related shareholder expenses+..................... 150,646
Legal, compliance and filing fees........................................... 40,377
Audit and accounting........................................................ 57,543
Directors' fees............................................................. 6,103
Other....................................................................... 14,511
-----------------
Total expenses........................................................... 2,558,911
Less: Fees waived (Note 2)...............................................( 208,891)
Less: Expenses paid indirectly (Note 2)..................................( 25)
-----------------
Net expenses............................................................. 2,349,995
-----------------
Net investment income.......................................................... 7,791,095
REALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments........................................ -0-
-----------------
Increase in net assets from operations.........................................$ 7,791,095
=================
</TABLE>
+ Includes class specific transfer agency expenses of $118,672 and $11,875
for Class A shares and Evergreen shares, respectively.
--------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
--------------------------------------------------------------------------------
NORTH CAROLINA DAILY MUNICIPAL INCOME FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED AUGUST 31, 2000 AND 1999
================================================================================
<TABLE>
<CAPTION>
2000 1999
-------------- ---------------
INCREASE (DECREASE) IN NET ASSETS
<S> <C> <C>
Operations:
Net investment income............................................ $ 7,791,095 $ 5,974,908
Net realized gain (loss) on investments.......................... -0- 173
-------------- ---------------
Increase in net assets from operations............................. 7,791,095 5,975,081
Dividends to shareholders from net investment income:
Class A.......................................................... ( 7,083,896)* ( 5,903,885)*
Evergreen shares................................................. ( 707,199)* ( 71,023)*
Capital share transactions (Note 3):
Class A.......................................................... ( 3,676,818) ( 1,405,711)
Evergreen shares................................................. ( 57,248) 22,318,859
------------- --------------
Total increase (decrease)....................................... ( 3,734,066) 20,913,321
Net assets:
Beginning of year................................................ 251,585,899 230,672,578
-------------- ---------------
End of year...................................................... $ 247,851,833 $ 251,585,899
============== ===============
</TABLE>
* Designated as exempt-interest dividends for federal income tax purposes.
--------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
--------------------------------------------------------------------------------
NORTH CAROLINA DAILY MUNICIPAL INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
================================================================================
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 is a short-term, tax exempt money market fund. The Fund
has three classes of stock authorized, Class A, Class B and Evergreen shares.
The Class A and Evergreen 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. In all other respects, all share classes
represent the same interest in the income and assets of the Fund. Distribution
of Class B shares commenced December 12, 1994. The Evergreen shares commenced on
July 9, 1999 The Fun's 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 .40%
of the Fund's average daily net assets.
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
================================================================================
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 and Evergreen shares of the Fund. For its services
under the Shareholder Servicing Agreement, the Distributor receives from the
Fund a fee equal to .25% of the Fund's average daily net assets with respect
only to the Class A and Evergreen shares,. There were no additional expenses
borne by the Fund pursuant to the Distribution Plan.
During the year ended August 31, 2000, the Manager voluntarily waived
administration fees of $208,891.
Fees are paid to Trustees 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 "Shareholder servicing
and related shareholder expenses" are fees of $130,599 paid to Reich & Tang
Services, Inc., an affiliate of the Manager, as shareholder servicing agent to
the Fund.
Included in the Statement of Operations under the caption "Shareholder servicing
and related shareholder expenses" are expense offsets of $25.
3. Capital Stock.
At August 31, 2000, 20,000,000,000 shares of $.001 par value stock were
authorized and capital paid in amounted to $247,852,963. Transactions in capital
stock, all at $1.00 per share, were as follows:
<TABLE>
<CAPTION>
Year Year
Class A Ended Ended
------- August 31, 2000 August 31, 1999
--------------- ---------------
<S> <C> <C>
Sold............................................. 646,519,476 702,669,413
Issued on reinvestment of dividends.............. 3,436,505 2,951,637
Redeemed......................................... ( 653,632,799) ( 707,026,761)
--------------- ---------------
Net increase (decrease).......................... ( 3,676,818) ( 1,405,711)
=============== ===============
<CAPTION>
Year July 9, 1999
Evergreen shares Ended (Commencement of Offering) to
---------------- August 31, 2000 August 31, 1999
--------------- ---------------
<S> <C> <C>
Sold............................................. 48,922,993 26,976,076
Issued on reinvestment of dividends.............. 707,090 81,622
Redeemed......................................... ( 49,687,331) ( 4,738,839)
--------------- ---------------
Net increase (decrease).......................... ( 57,248) 22,318,859
=============== ===============
</TABLE>
There were no Class B shares transactions since August 31, 1995 and no shares
were outstanding as of August 31, 2000.
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
NORTH CAROLINA DAILY MUNICIPAL INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
4. Sales of Securities.
Accumulated undistributed realized losses at August 31, 2000 amounted to $1,130.
Such amount represents tax basis capital losses which may be carried forward to
offset future capital gains. Such losses expire August 31, 2001.
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 credit enhancements such
as letters of credit, municipal bond insurance and guarantees 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 credit enhancements, and by limiting the
amount of holdings with credit enhancements from one financial institution.
6. Financial Highlights.
<TABLE>
<CAPTION>
Year Ended August 31,
Class A ------------------------------------------------------------
------- 2000 1999 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
(for a share outstanding throughout the year)
Net asset value, beginning of year............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income....................... 0.030 0.024 0.028 0.028 0.029
Less distributions:
Dividends from net investment
income.................................... ( 0.030) ( 0.024) ( 0.028) ( 0.028) ( 0.029)
------- ------- ------- ------- -------
Net asset value, end of year.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return.................................. 3.02% 2.38% 2.82% 2.82% 2.87%
Ratios/Supplemental Data
Net assets, end of year (000)................. $ 225,591 $ 229,267 $ 230,673 $ 197,353 $ 172,385
Ratios to average net assets:
Expenses (Net of fees waived)............... 0.90% 0.89% 0.85% 0.80% 0.80%
Net investment income....................... 2.98% 2.34% 2.77% 2.78% 2.82%
Management, shareholder servicing
and administration fees waived ............ 0.04% 0.10% 0.13% 0.18% 0.20%
</TABLE>
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<PAGE>
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================================================================================
6. Financial Highlights. (Continued)
<TABLE>
<CAPTION>
Year July 9, 1999
Evergreen Shares Ended (Commencement of Offering) to
---------------- August 31, 2000 August 31, 1999
--------------- ---------------
<S> <C> <C>
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period........... $ 1.00 $ 1.00
-------- --------
Income from investment operations:
Net investment income....................... 0.030 0.003
Less distributions:
Dividends from net investment income........ ( 0.030) ( 0.003)
-------- --------
Net asset value, end of period................. $ 1.00 $ 1.00
======== ========
Total Return................................... 3.02% 0.33%*
Ratios/Supplemental Data
Net assets, end of period (000)................ $ 22,262 $ 22,319
Ratios to average net assets:
Expenses (Net of fees waived)............... 0.90% 0.89%+
Net investment income....................... 2.98% 2.34%+
Management, shareholder servicing and
administration fees waived ............... 0.04% 0.10%+
</TABLE>
* Not Annualized
+ Annualized
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
NORTH CAROLINA DAILY MUNICIPAL INCOME FUND, INC.
REPORT OF INDEPENDENT ACCOUNTANTS
================================================================================
To the Board of Directors and Shareholders of
North Carolina Daily Municipal Income Fund, Inc.
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
North Carolina Daily Municipal Income Fund, Inc. (the "Fund") at August 31,
2000, the results of its operations for the year then ended, and the changes in
its net assets and the financial highlights for each of the two years in the
period then ended, in conformity with accounting principles generally accepted
in the United States of America. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States of America which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at August
31, 2000 by correspondence with the custodian, provide a reasonable basis for
the opinion expressed above. The financial highlights for each of the three
years in the period ended August 31, 1998 were audited by other independent
accountants whose report dated September 25, 1998 expressed an unqualified
opinion on those financial statements.
PricewaterhouseCoopers LLP
New York, New York
September 29, 2000
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
NORTH CAROLINA
DAILY
MUNICIPAL
INCOME
FUND, INC.
Annual Report
August 31, 2000
--------------------------------------------------------------------------------
<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.
--------------------------------------------------------
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
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
NC7/00A
--------------------------------------------------------------------------------
<PAGE>
