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SIGNATURE GRACE TORRES
TITLE TREASURER
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<NAME> DUFF & PHELPS UTILITIES TAX FREE INC.
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Page 2
Mr. John R. Williams February 8, 199x
Supplementary Report of Independent Auditors
Shareholders and Board of Directors
Duff & Phelps Utilities Tax-Free Income Inc.
In planning and performing our audit of the
financial statements of Duff & Phelps Utilities
Tax-Free Income Inc. for the year ended October
31, 1996, we considered its internal control
structure, including procedures for safeguarding
securities, in order to determine our auditing
procedures for the purpose of expressing our
opinion on the financial statements and to comply
with the requirements of N-SAR, not to provide
assurance on the internal control structure.
The management of Duff & Phelps Utilities Tax-Free
Income Inc. is responsible for establishing and
maintaining an internal control structure. In
fulfilling this responsibility, estimates and
judgments by management are required to assess the
expected benefits and related costs of internal
control structure policies and procedures. Two of
the objectives of an internal control structure
are to provide management with reasonable, but not
absolute, assurance that assets are safeguarded
against loss from unauthorized use or disposition
and that transactions are executed in accordance
with management's authorization and recorded
properly to permit preparation of financial
statements in conformity with generally accepted
accounting principles.
Our consideration of the internal control
structure would not necessarily disclose all
matters in the internal control structure that
might be material weaknesses under standards
established by the American Institute of Certified
Public Accountants. A material weakness is a
condition in which the design or operation of the
specific internal control structure elements does
not reduce to a relatively low level the risk that
errors or irregularities in amounts that would be
material in relation to the financial statements
being audited may occur and not be detected within
a timely period by employees in the normal course
of performing their assigned functions. However,
we noted no matters involving the internal control
structure, including procedures for safeguarding
securities, that we consider to be material
weaknesses as defined above as of October 31,
1996.
Because of inherent limitations in any internal
control structure, errors or irregularities may
occur and not be detected. Also projection of any
evaluation of the structure to future periods is
subject to the risk that it may become inadequate
because of changes in conditions or that the
effectiveness of the design and operation may
deteriorate.
This report is intended solely for the information
and use of management and the Securities and
Exchange Commission.
Chicago, Illinois
November 22, 1996
