FIDELITY MUNICIPAL TRUST II, N-30D, 1997-02-25

FIDELITY MUNICIPAL TRUST II
N-30D, 1997-02-25

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SPARTAN(registered trademark)

(registered trademark)
PENNSYLVANIA
MUNICIPAL
FUNDS

ANNUAL REPORT
DECEMBER 31, 1996
CONTENTS

CHECK PAGE NUMBERS !!!

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PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.

SPARTAN PENNSYLVANIA MUNICIPAL INCOME FUND

PERFORMANCE 4 How the fund has done over time.

FUND TALK 7 The manager's review of fund
performance, strategy and outlook.

INVESTMENT CHANGES 10 A summary of major shifts in the
fund's investments over the past six
months
and one year.

INVESTMENTS 11 A complete list of the fund's
investments with their market
values.

FINANCIAL STATEMENTS 18 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

SPARTAN PENNSYLVANIA MUNICIPAL MONEY MARKET FUND

PERFORMANCE 22 How the fund has done over time.

FUND TALK 24 The manager's review of fund
performance, strategy and outlook.

INVESTMENT CHANGES 26 A summary of major shifts in the
fund's investments over the past six
months
and one year.

INVESTMENTS 27 A complete list of the fund's
investments with their market
values.

FINANCIAL STATEMENTS 32 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 36 Notes to the financial statements.

REPORT OF INDEPENDENT 39 The auditors' opinion.
ACCOUNTANTS

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To reduce expenses and demonstrate respect for our environment, we have
initiated a project through which we will begin eliminating duplicate
copies of most financial reports and prospectuses to most households, even
if they have more than one account in the fund. If additional copies of
financial reports, prospectuses or historical account information are
needed, please call 1-800-544-6666.

THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUNDS. THIS REPORT IS NOT AUTHORIZED
FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUNDS UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUNDS NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND
MONEY.
PRESIDENT'S MESSAGE

(PHOTO_OF_EDWARD_C_JOHNSON_3D)DEAR SHAREHOLDER:
Although stocks managed to post solid returns throughout 1996, signs of
strength in the economy have led to inflation fears, causing some
uncertainty in both the stock and bond markets. In 1995, both stock and
bond markets posted strong results, while the year before, stocks posted
below-average returns and bonds had one of the worst years in history.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
Keeping in mind that the effects of interest rate changes on your bond
investments will only be "paper" gains or losses unless you sell your
shares, staying in your bond fund may be appropriate if your investment
horizon is at least a year or more. The longer your investing time frame,
the more likely it is that you will retain your principal investment
through both up and down markets. For example, a 10-year time frame, such
as saving for a college education, enables you to weather these ups and
downs in a long-term fund, which has higher potential returns.
An intermediate-length fund could be appropriate if your investment horizon
is two to four years, and a short-term bond fund could be the right choice
if you need your money in one or two years.
If your time horizon is less than a year, you might want to consider moving
some of your bond investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. Of course, there is no assurance that a money market fund will
achieve its goal, and it is important to remember that money market funds
are not insured or guaranteed by any agency of the U.S. government.
No matter what your investment horizon or portfolio diversity, it makes
good sense to follow a regular investment plan - investing a certain amount
of money at the same time each month or quarter - and to review your
portfolio periodically. A periodic investment plan will not, of course,
assure a profit or protect against a loss.
If you have any questions, please call us at 1-800-544-8888. We stand ready
to provide the information you need to make the investments that are right
for you.
Best regards,
Edward C. Johnson 3d

SPARTAN PENNSYLVANIA MUNICIPAL INCOME FUND

PERFORMANCE: THE BOTTOM LINE

There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Total return
reflects the change in the value of an investment, assuming reinvestment of
the fund's dividend income and capital gains (the profits the fund earned
upon the sale of securities that have grown in value), and the effect of
the $5 account closeout fee on an average sized account. You can also look
at the fund's income, as measured by the fund's yield, to measure
performance. If Fidelity had not reimbursed certain fund expenses during
the periods shown, the past ten years total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Spartan Pennsylvania Municipal Income Fu 4.01% 43.25% 104.23%
nd

Lehman Brothers Pennsylvania 4.54% n/a n/a
Municipal Bond Index

Pennsylvania Municipal Debt Funds 3.52% 40.13% n/a
Average

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, five years, or ten years. For
example, if you invested $1,000 in a fund that had a 5% return over the
past year, the value of your investment would be $1,050. You can compare
the fund's returns to the performance of the Lehman Brothers Pennsylvania
Municipal Bond Index, which includes Pennsylvania investment-grade
municipal bonds. To measure how the fund's performance stacked up against
its peers, you can compare it to the Pennsylvania municipal debt funds
average, which reflects the performance of 66 mutual funds with similar
objectives tracked by Lipper Analytical Services, Inc. over the past one
year. Both benchmarks include reinvested dividends and capital gains, if
any, and exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Spartan Pennsylvania Municipal Income Fu 4.01% 7.45% 7.40%
nd

Lehman Brothers Pennsylvania 4.54% n/a n/a
Municipal Bond Index

Pennsylvania Municipal Debt Funds 3.52% 6.98% n/a
Average

$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was invested
in Spartan Pennsylvania Municipal Income Fund on December 31, 1986. As the
chart shows, by December 31, 1996, the value of the investment would have
grown to $20,424 - a 104.24% increase on the initial investment. This
assumes the fund is still owned on December 31, 1996, and therefore does
not include the effect of the $5 account closeout fee. For comparison, look
at how the Lehman Brothers Municipal Bond Index - which reflects the
performance of the investment-grade municipal bond market - did over the
same period. With dividends and capital gains, if any, reinvested, the same
$10,000 would have grown to $21,181 - a 111.81% increase.

UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will
do tomorrow. Bond prices,
for example, generally
move in the opposite
direction of interest rates. In
turn, the share price, return,
and yield of a fund that
invests in bonds will vary.
That means if you sell your
shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
TOTAL RETURN COMPONENTS
YEARS ENDED DECEMBER 31,

1996 1995 1994 1993 1992

Dividend returns 5.01% 6.52% 5.73% 6.68% 7.00%

Capital appreciation returns -1.00% 10.91% -10.77% 6.49% 2.11%

Total returns 4.01% 17.43% -5.04% 13.17% 9.11%

DIVIDEND returns and capital appreciation returns are both part of a bond
fund's total return. A dividend return reflects the actual dividends paid
by the fund. A capital appreciation return reflects both the amount paid by
the fund to shareholders as capital gain distributions and changes in the
fund's share price. Both returns assume the dividends or gains are
reinvested. Capital appreciation and total returns include the effect of
the $5 account closeout fee.
DIVIDENDS AND YIELD

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PERIODS ENDED DECEMBER 31, 1996 PAST PAST 6 PAST 1
MONTH MONTHS YEAR

Dividends per share 4.42(cents) 26.05(cents) 52.01(cents)

Annualized dividend rate 4.94% 4.95% 4.98%

30-day annualized yield 4.81% - -

30-day annualized tax-equivalent yield 7.73% - -

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DIVIDENDS per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $10.54 over
the past month, $10.45 over the past six months and $10.45 over the past
year, you can compare the fund's income over these three periods. The
30-day annualized YIELD is a standard formula for all funds based on the
yields of the bonds in the fund, averaged over the past 30 days. This
figure shows you the yield characteristics of the fund's investments at the
end of the period. It also helps you compare funds from different companies
on an equal basis. The tax-equivalent yield shows what you would have to
earn on a taxable investment to equal the fund's tax-free yield, if you're
in the 37.79% combined effective 1996 federal and state tax bracket. A
portion of the fund's income may be subject to the federal alternative
minimum tax.
SPARTAN PENNSYLVANIA MUNICIPAL INCOME FUND

FUND TALK: THE MANAGER'S OVERVIEW

MARKET RECAP
Solid demand helped municipal
bonds perform better than their
investment-grade taxable
counterparts in 1996, even
though new issue supply saw
one of its strongest years ever.
For the year, the Lehman
Brothers Municipal Bond Index -
a broad measure of the municipal
bond market - had a total return
of 4.43%. In comparison, the
Lehman Brothers Aggregate
Bond Index - a broad measure
of the performance of the U.S.
taxable bond market - had a
total return of 3.63%. Demand for
munis came from both insurance
companies and individual
investors. The diminishing
likelihood of significant tax reform
in the near future also helped
support the muni market. Like
most domestic bonds, munis
were affected by
stronger-than-expected signs of
strength in the economy early in
1996. Nevertheless, the market
conditions that supported the
muni market prevailed to the
point that munis entered the fall
trading at expensive levels
relative to their taxable
counterparts. At that point and
through October, the
performance of the municipal
market stalled somewhat, as
investor demand declined and
institutional investors sold off
some of their municipal bond
holdings to take profits. That
sell-off subsided somewhat in
November and December, when
munis outperformed comparable
Treasury securities. However,
even though demand helped
buoy munis somewhat in
December, munis were caught in
the overall bond market
downdraft caused by conflicting
economic data and renewed
fears that inflation might lead the
Federal Reserve Board to raise
short-term interest rates.
An interview with Steven Harvey, Portfolio Manager of Spartan Pennsylvania
Municipal Income Fund
Q. HOW DID THE FUND PERFORM, STEVE?
A. Even though the municipal bond market was volatile in 1996, the fund
performed relatively well. For the year ending December 31, 1996, the fund
had a total return of 4.01%. The Pennsylvania municipal debt funds average
returned 3.52% for the same period, according to Lipper Analytical
Services. Also for the 12-month period, the Lehman Brothers Pennsylvania
Municipal Bond Index returned 4.54%.
Q. WHAT FACTORS HELPED THE FUND BEAT THE AVERAGE?
A. Non-callable bonds - which can't be redeemed by their issuer before
maturity - did well during the year and helped the fund's performance. As
interest rates fell throughout the past six months, investors began to seek
bonds that would perform well in a declining rate environment. Therefore,
they were willing to pay relatively high prices for non-callable bonds. As
the year ended, I felt that investors were overpaying for some non-callable
bonds, so I sold some of them to lock in significant gains.
Q. WHAT OTHER TYPES OF BONDS PERFORMED WELL?
A. Discount bonds also had a positive effect on performance, especially
over the past six months. In the spring and summer, I was a buyer of
discount bonds at a time when I thought their prices were cheap and didn't
reflect their full value. The discount - or below par price - meant that
the bond had very little DE MINIMUS protection, which in the municipal
market means that the bond is not necessarily protected from the
unfavorable tax treatment that can occur during certain market
environments. Investors were worried that some discount bonds would be
subject to taxable price appreciation, so they pushed discount bond prices
quite low. But as interest rates fell, discount bonds performed quite well.
More recently, I've sold some discount bonds to lock in their appreciation,
and I've looked for opportunities in bonds selling closer to par, or face
value.
Q. CAN YOU GIVE EXAMPLES OF SOME SPECIFIC BONDS THAT YOU FOUND ATTRACTIVE
OVER THE PAST SIX MONTHS OR SO?
A. Sure. Philadelphia Gas Works is one holding that I added to recently.
There are several reasons why I found this utility attractive. For one,
Philadelphia continues to enjoy an economic rebound, which translated into
increased energy usage. Another positive is last year's brutal winter
weather, which increased demand for gas and is still having a positive
effect on Philadelphia Gas Work's financial statements. Finally, the city
has installed an entirely new management team at the utility, which has
brought it a measure of efficiency, primarily in the collection of
revenues.
Q. CONSOLIDATION AMONG HEALTH CARE PROVIDERS HAS BEEN A MAJOR TREND IN
PENNSYLVANIA. HOW HAS THAT TREND AFFECTED YOUR STRATEGY?
A. Because of the consolidation among health care providers, particularly
in the metropolitan Philadelphia area, I've put health care entities under
a microscope, attempting to identify those hospitals that will benefit from
consolidation and to weed out those that will suffer from it. I've
concentrated on finding lower investment-grade hospitals that have a very
attractive service mix or are located in a very attractive service area. I
believe that the hospitals I've chosen for inclusion in the fund are
stable, well-run hospitals with sound finances. One example is Crozer
Chester Medical Center in Delaware County. And if the trend toward
consolidation continues and any of the fund's holdings are acquired by
stronger competitors at some point down the road, it would most likely be
an added plus for the fund.
Q. WHAT'S YOUR OUTLOOK?
A. Over the past six months, we've experienced a healthy municipal bond
market rally as interest rates have fallen. In my view, it may be
unrealistic to expect the recent rally to continue at its recent pace.
Therefore, the fund's returns likely will derive less from price
appreciation and more from the income that the fund's holdings generate.
However, I believe that with careful research I can identify situations
that offer the potential for price appreciation based on positive events
that would enhance their credit rating, while avoiding those with
deteriorating credit quality.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.

FUND FACTS
GOAL: to provide high current
income exempt from federal
and Pennsylvania personal
income taxes by investing
normally in
investment-grade municipal
securities
TRADING SYMBOL: FPXTX
FUND NUMBER: 402
START DATE: August 6, 1986
SIZE: as of December 31, 1996,
more than $270 million
MANAGER: Steven Harvey,
since 1993; manager, Spartan
Maryland Municipal Income
Fund, since 1993; Fidelity
Ohio Municipal Income
Fund, since 1994; Fidelity
Massachusetts Municipal
Income and Spartan New
Jersey Municipal Income
funds, since 1996; joined
Fidelity in 1986
(checkmark)

STEVE HARVEY ON THE
PENNSYLVANIA ECONOMY:
"The Pennsylvania economy
has not recovered at the same
robust pace that other areas of
the country have enjoyed.
One of the things holding it back
is employment growth. In the
early 1990s, the state's
economy was driven primarily
by gains in the service sector,
particularly the health care
industry. But with consolidation
in the health care industry,
employment growth in that
sector has slowed dramatically.
Pennsylvania is trying to create
business-friendly policies to
help increase employment.
Governor Tom Ridge has
committed to reducing
business taxes and has put
forward a number of tax
incentives to create jobs and
grow small businesses. To
date, however, these
initiatives have not resulted in
a large amount of economic
growth."

SPARTAN PENNSYLVANIA MUNICIPAL INCOME FUND

INVESTMENT CHANGES

TOP FIVE SECTORS AS OF DECEMBER 31, 1996
% OF FUND'S % OF FUND'S INVESTMENT
INVESTMENTS S
IN THESE SECTORS
6 MONTHS AGO

General Obligation 38.2 30.9

Water & Sewer 11.1 12.1

Escrowed/Pre-Refunded 10.8 12.8

Education 8.8 8.8

Health Care 7.1 7.8

AVERAGE YEARS TO MATURITY AS OF DECEMBER 31, 1996
6 MONTHS AGO

Years 12.7 12.9

AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY DOLLAR
AMOUNT.
DURATION AS OF DECEMBER 31, 1996
6 MONTHS AGO

Years 7.1 7.2

DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH A
FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER FACTORS
ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE. ACCORDINGLY,
A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS EXAMPLE.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF DECEMBER 31, 1996 AS OF JUNE 30, 1996
Aaa 55.8%
Aa, A 28.3%
Baa 11.8%
Ba, B 0.0%
Non-rated 3.4%
Short-term investments 0.7%
Aaa 55.6%
Aa, A 23.6%
Baa 12.5%
Ba, B 0.2%
Non-rated 3.4%
Short-term investments 4.7%
Row: 1, Col: 1, Value: 54.8
Row: 1, Col: 2, Value: 27.9
Row: 1, Col: 3, Value: 11.8
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 3.4
Row: 1, Col: 6, Value: 2.1
Row: 1, Col: 1, Value: 55.6
Row: 1, Col: 2, Value: 23.6
Row: 1, Col: 3, Value: 12.5
Row: 1, Col: 4, Value: 0.2
Row: 1, Col: 5, Value: 3.4
Row: 1, Col: 6, Value: 4.7
SHOWN AS A PERCENTAGE OF THE FUND'S INVESTMENTS. WHERE MOODY'S RATINGS ARE
NOT AVAILABLE, WE HAVE USED S&P RATINGS.
SPARTAN PENNSYLVANIA MUNICIPAL INCOME FUND

INVESTMENTS DECEMBER 31, 1996
Showing Percentage of Total Value of Investments in Securities

MUNICIPAL BONDS - 99.3 %
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
PENNSYLVANIA - 96.7 %
Allegheny County Gen. Oblig.
0% 4/1/11 (MBIA Insured) Aaa $ 2,560,000 $ 1,187,200
Allegheny County Higher Ed. Bldg. Auth. Rev.
(Duquesne Univ. Proj.) 6.50% 3/1/10,
(AMBAC Insured) Aaa 400,000 456,000
Allegheny County Hosp. Dev. Auth. Rev. Rfdg.
(South Side Hosp.) Series A, 8.75% 6/1/10
(Pre-Refunded to 6/1/97 @ 100) (d) BBB 2,750,000 2,806,430
Allegheny County Ind. Dev. Auth. Rev.
(YMCA Pittsburgh Proj.) Series 1990,
8.75% 3/1/10 - 2,535,000 2,712,450
Allegheny County Residential Fin. Auth.
Mtg. Rev.:
Series H, 8% 6/1/17 (GNMA Coll.) Aaa 200,000 206,500
Series 1990, 7.95% 6/1/23
(GNMA Coll.) (b) Aaa 1,390,000 1,450,813
Allegheny County San. Auth. Swr. Rev.:
Series B, 7.50% 12/1/16 (FGIC Insured)
(Pre-Refunded to 6/1/99 @ 100) (d) Aaa 750,000 806,250
0% 12/1/12 (FGIC Insured) Aaa 2,260,000 926,600
Bethlehem Wtr. Auth. Rev. 6.25% 11/15/21
(MBIA Insured) (Pre-Refunded to
11/15/01 @ 100) (d) Aaa 1,000,000 1,075,000
Delaware County Auth. Hosp. Rev.
(Crozer-Chester Med. Ctr.):
6% 12/15/09 Baa 1,000,000 1,001,250
6% 12/15/20 Baa 6,700,000 6,465,500
Delaware County Gen. Oblig. Rfdg.
5.30% 11/15/01 Aa 2,200,000 2,285,250
Delaware County Ind. Dev. Auth. Rev. Rfdg.
(Resource Recovery Proj.) Series A,
8.10% 12/1/13, LOC Bank of America
National Trust & Savings Aa 1,400,000 1,464,134
Erie County Series B, 6.75% 9/1/16
(FGIC Insured) (Pre-Refunded to
9/1/01 @ 100) (d) Aaa 1,000,000 1,093,750
Harrisburg Auth. Rev. (Pooled Bond Program)
Series I, 5.625% 4/1/15 (MBIA Insured) Aaa 6,000,000 6,000,000
Jenks Township Muni. Auth. Rev.
(Abraxas Group, Inc.) 8% 4/1/18 - 6,605,000 6,316,031
Lehigh County Gen. Purp. Auth. Rev.
(Hosp. Healtheast, Inc.) Series B, 9% 7/1/15
(Pre-Refunded to 7/1/97 @102) (d) A1 1,000,000 1,045,930
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
PENNSYLVANIA - CONTINUED
McKeesport Area School Dist. Rfdg. Series C,
5% 4/1/13 A $ 1,000,000 $ 937,500
Meadville Rfdg. Series B, 6% 10/1/05
(AMBAC Insured) Aaa 3,210,000 3,470,813
Northumberland County Auth. Commonwealth
Lease Rev. 0% 10/15/10, (MBIA Insured) Aaa 1,000,000 475,000
Pennsbury School Dist. Rfdg.:
6% 8/15/05 (FGIC Insured) Aaa 1,605,000 1,753,463
6.80% 8/15/14 (FGIC Insured)
(Pre-Refunded to 8/15/04 @ 100) (d) Aaa 1,025,000 1,158,250
Pennsylvania Convention Ctr. Auth. Rev.
Rfdg. Series A:
6.60% 9/1/09 (MBIA Insured) Aaa 9,150,000 10,099,313
6.70% 9/1/14 (MBIA Insured) Aaa 3,965,000 4,391,238
6.75% 9/1/19 (MBIA Insured) Aaa 3,420,000 3,787,650
Pennsylvania Gen. Oblig.:
Unltd. Tax:
Rfdg. Series 1:
5.30% 5/1/04 A1 2,500,000 2,587,500
5% 4/15/13 A1 7,665,000 7,243,425
Series 1:
6% 9/15/98 A1 2,000,000 2,062,500
6% 9/15/01 A1 1,100,000 1,168,750
Series 1-A, 6.75%, 1/1/11
(Pre-Refunded to 1/1/01@ 101.50) (d) A1 1,100,000 1,203,125
Series 2:
5.50% 7/1/01 A1 4,135,000 4,290,063
5.60% 7/1/02 A1 1,000,000 1,051,250
0% 7/1/07 (AMBAC Insured) Aaa 1,770,000 1,039,875
6.25% 7/1/10 A1 2,000,000 2,207,500
6.25% 7/1/11 A1 1,200,000 1,318,500
Series 3, 6.10% 11/15/04 (FGIC Insured) Aaa 1,000,000 1,090,000
Series A:
6.75% 5/1/98 (e) A1 1,000,000 1,033,750
6.10% 11/15/03 (AMBAC Insured) Aaa 10,310,000 11,096,138
5.10% 6/15/03 (MBIA Insured) Aaa 1,000,000 1,023,750
6.125% 9/15/03 A1 2,000,000 2,165,000
5% 9/1/09 A1 1,245,000 1,212,319
Pennsylvania Higher Ed. Assistance Agcy.
Student Loan Rev.:
6.173% 3/1/22 (AMBAC Insured) (b) Aaa 4,000,000 4,035,000
6.854% 9/1/26 (AMBAC Insured) (b) Aaa 2,000,000 2,087,500
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
PENNSYLVANIA - CONTINUED
Pennsylvania Higher Edl. Facs. Auth.
College & Univ. Rev. Rfdg.:
(Carnegie-Mellon Univ.) 6% 11/1/05 AA- $ 1,000,000 $ 1,091,250
(Univ. of Pennsylvania) Series A:
6.50% 9/1/02 Aa 2,750,000 3,007,813
6.50% 9/1/04 Aa 2,650,000 2,938,188
5.90% 9/1/15 Aa 1,200,000 1,221,000
(Pennsylvania Med. College Proj.) Series A,
8.375% 3/1/11 (Pre-Refunded to
3/1/99 @ 102) (d) Baa 900,000 993,375
(Univ. of Pennsylvania):
Series A, 7% 9/1/01 Aa 2,000,000 2,207,500
Series B:
Rfdg.:
6.50% 9/1/02 Aa 1,950,000 2,132,813
6.50% 9/1/04 Aa 2,100,000 2,328,375
7% 9/1/05 Aa 2,000,000 2,302,500
Pennsylvania Higher Edl. Facs. Auth. Health
Services Rev. Rfdg. (Univ. of Pennsylvania)
Series A, 5.35% 1/1/08 Aa 4,000,000 4,055,000
Pennsylvania Hsg. Fin. Agcy. Single Family Mtg.:
Rfdg.:
Series 51, 5.65% 4/1/20 Aa 2,875,000 2,882,188
Series 53A, 5.40% 10/1/27 (b) Aa 1,000,000 1,005,000
Series V, 7.8% 4/1/16 Aa 500,000 518,750
6.10% 10/1/13 Aa 5,000,000 5,043,750
Pennsylvania Ind. Dev. Auth. Econ. Dev. Rev.:
7% 7/1/06 (AMBAC Insured) Aaa 1,000,000 1,153,750
7% 1/1/07 (AMBAC Insured) Aaa 1,500,000 1,728,750
7% 7/1/07 (AMBAC Insured) Aaa 2,650,000 3,067,375
5.80% 1/1/08 (AMBAC Insured) Aaa 2,000,000 2,117,500
5.80% 7/1/09 (AMBAC Insured) Aaa 1,295,000 1,366,225
Pennsylvania Intergovernmental Coop. Auth.:
Spl. Tax Rev.:
Rfdg. Series A, 5% 6/15/15 A 3,500,000 3,220,000
(Philadelphia City Funding Prog.)
6.80% 6/1/22 (Pre-Refunded to
6/15/02 @ 100) (d) Aaa 2,000,000 2,210,000
6.75% 6/15/21 (FGIC Insured)
(Pre-Refunded to 6/15/05 @ 100) (d) Aaa 2,190,000 2,474,700
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
PENNSYLVANIA - CONTINUED
Pennsylvania Turnpike Commission Rev:
Rfdg. Series P, 5.70% 12/1/05 A1 $ 1,460,000 $ 1,534,825
Series J, 7.20% 12/1/17 (FGIC Insured)
(Pre-Refunded to 12/1/01 @ 102) (d) Aaa 1,000,000 1,133,750
Series L, 6.25% 6/1/11 (AMBAC Insured) Aaa 3,000,000 3,165,000
Series N, 5.50% 12/1/17 A1 2,000,000 1,940,000
Philadelphia Gas Wks. Rev. Rfdg. Series A-14:
6.375% 7/1/14 Baa 3,550,000 3,678,688
6.375% 7/1/26 Baa 5,905,000 6,082,150
Philadelphia Gen. Oblig.:
Rfdg. 5.125% 5/15/03 (FGIC Insured) Aaa 8,000,000 8,190,000
6.25% 5/15/10 (MBIA Insured) Aaa 3,200,000 3,436,000
Philadelphia Hosp. & Higher Ed. Facs. Auth. Rev.
Rfdg.:
6.15% 7/1/05 Baa 2,100,000 2,152,500
6.25% 7/1/06 Baa 2,600,000 2,671,500
Philadelphia Muni. Auth. Rev.
(Muni. Svcs. Bldg. Lease):
0% 3/15/11 (Cap. Guaranty Insured) Aaa 1,000,000 455,000
0% 3/15/14 (Cap. Guaranty Insured) Aaa 7,360,000 2,796,800
Philadelphia Redev. Auth. Hsg. Rev.
Sub-Series 3, 8.125% 8/1/26,
(GNMA Coll.) AAA 45,000 48,263
Philadelphia Wtr. & Swr. Rev.:
(Cap. Appreciation) 14th Series,
0% 10/1/08 (MBIA Insured) Aaa 5,300,000 2,895,125
16th Series, 7.50% 8/1/10 (Pre-Refunded
to 8/1/01 @ 102) (d) Baa 3,000,000 3,416,250
Philadelphia Wtr. & Wastewtr. Rev.:
6.75% 8/1/04 (MBIA Insured) Aaa 2,085,000 2,353,444
6.75% 8/1/05 (MBIA Insured) Aaa 3,110,000 3,533,738
6.25% 8/1/07 (MBIA Insured) Aaa 1,840,000 2,024,000
5.65% 6/15/12 (FGIC Insured) Aaa 7,000,000 6,930,000
Pittsburgh Gen. Oblig. Series A:
Rfdg. 5.50% 9/1/14 (AMBAC Insured) Aaa 5,310,000 5,389,650
5.875% 9/1/00 (MBIA Insured) Aaa 1,315,000 1,382,394
Pittsburgh School Dist. Series B:
0% 8/1/07 (AMBAC Insured) Aaa 2,610,000 1,543,163
0% 8/1/08 (AMBAC Insured) Aaa 2,000,000 1,117,500
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
PENNSYLVANIA - CONTINUED
Pittsburgh Wtr. & Swr. Auth. Wtr. & Swr. Sys. Rev.:
Rdfg. Series A:
0% 9/1/04 (FGIC Insured)
(Escrowed to Maturity) (d) Aaa $ 5,000,000 $ 3,425,000
6.50% 9/1/13 (FGIC Insured) Aaa 10,000,000 11,250,000
Scranton Parking Auth. Parking Rev.
8.125% 9/15/14, LOC Northeastern Bank
(Pre-Refunded to 9/15/98 @ 100) (d) A 500,000 532,500
Southeastern Pennsylvania Transportation
Auth. Spl. Rev. Series A:
6.50% 3/1/03 (FGIC Insured) Aaa 2,520,000 2,775,150
6.50% 3/1/04 (FGIC Insured) Aaa 1,485,000 1,646,494
Westmoreland County Muni. Auth. Svc. Rev.
Series K, 0% 7/1/13 (FGIC Insured)
(Escrowed to Maturity) (d) Aaa 3,500,000 1,365,000
Wilson Area School Dist. (Cap. Appreciation):
0% 5/15/09 (AMBAC Insured) Aaa 3,275,000 1,686,625
0% 5/15/10 (AMBAC Insured) Aaa 3,280,000 1,582,600
0% 5/15/11 (AMBAC Insured) Aaa 3,500,000 1,596,875
Wyoming Ind. Dev. Auth. Poll. Rfdg.
(Proctor & Gamble Paper Proj.)
5.55% 5/1/10 Aa 5,000,000 5,162,500
York City Swr. Auth. Swr. Rev. 0% 12/1/12
(MBIA Insured) Aaa 3,235,000 1,322,298
260,568,844
PUERTO RICO - 2.6 %
Puerto Rico Commonwealth Urban
Renewal & Hsg. Corp. Rfdg.
7.875% 10/1/04 Baa 1,000,000 1,093,750
Puerto Rico Elec. Pwr. Auth. Pwr. Rev.
Series P, 7% 7/1/21 (Pre-Refunded to
7/1/01 @102) (d) Aaa 4,000,000 4,495,000
Puerto Rico Ports Auth. Spl. Facs.
(American Airlines) Series A,
6.25% 6/1/26 Baa 1,500,000 1,546,875
7,135,625
TOTAL MUNICIPAL BONDS
(Cost $259,545,458) 267,704,469
MUNICIPAL NOTES (A) - 0.7 %
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
PENNSYLVANIA - 0.7%
Berks County Ind. Dev. Auth. Facs. Rev.
(Manufacturing Facs. - Ram Industries Proj.)
4.50% 12/1/11, LOC Corestates Bank,
VRDN (b) - $ 750,000 $ 750,000
Delaware County Ind. Dev. Auth. Arpt. Fac. Rev.
(United Parcel Svc. Proj.) Series 1985,
5.90%, VRDN A-1+ 1,000,000 1,000,000
Schuylkill County. Ind. Dev. Auth.
(Pine Grove Landfill, Inc.) Series 1995,
5.70%, LOC Meridian Bank NA, VRDN (b) - 100,000 100,000
TOTAL MUNICIPAL NOTES
(Cost $1,850,000) 1,850,000
TOTAL INVESTMENTS - 100%
(Cost $261,395,458) $ 269,554,469
FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
PURCHASED
20 Municipal Bond Contracts March 1997 $ 2,336,694 $ 15,444
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 0.9%
SECURITY TYPE ABBREVIATIONS
VRDN - Variable Rate Demand Notes
LEGEND
1. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
2. Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals.
3. Standard & Poor's credit ratings are used in the absence of a rating by
Moody's Investors Service, Inc.
4. Security collateralized by an amount sufficient to pay interest and
principal.
5. A portion of the Security was pledged to cover margin requirements for
futures contracts. At the period end, the value of securities pledged
amounted to $155,063.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investment in securities, is as follows (ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 83.2% AAA, AA, A 83.1%
Baa 10.8% BBB 11.3%
Ba 0.0% BB 0.6%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by both S&P and Moody's amounted to 3.35%.
The distribution of municipal securities by revenue source, as a percentage
of total value of investment in securities, is as follows:
General Obligation 38.2%
Water and Sewer 11.1
Escrowed/Pre-Refunded 10.8
Education 8.8
Health Care 7.1
Others (individually less than 5%) 24.0
TOTAL 100.0%
INCOME TAX INFORMATION
At December 31, 1996, the aggregate cost of investment securities for
income tax purposes was $261,395,458. Net unrealized appreciation
(depreciation) aggregated $8,159,011, of which $8,492,787 related to
appreciated investment securities and $333,776 related to depreciated
investment securities.
The fund hereby designates approximately $256,917 as a capital gain
dividend for the purpose of the dividend paid deduction.
At December 31, 1996 the fund was required to defer approximately
$1,726,445 of losses on futures contracts.
During fiscal year ended 1996, 100% of the fund's income dividends was free
from federal income tax, and 8.28% of the fund's income dividends was
subject to the federal alternative minimum tax.
SPARTAN PENNSYLVANIA MUNICIPAL INCOME FUND

FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
DECEMBER 31, 1996

ASSETS

Investment in securities, at value (cost $261,395,458) - $ 269,554,469
See accompanying schedule

Interest receivable 4,036,854

Receivable for daily variation on futures contracts 22,500

TOTAL ASSETS 273,613,823

LIABILITIES

Payable to custodian bank $ 123,443

Payable for investments purchased 1,000,133

Payable for fund shares redeemed 751,641

Distributions payable 634,737

Accrued management fee 123,100

Other payables and accrued expenses 3,739

TOTAL LIABILITIES 2,636,793

NET ASSETS $ 270,977,030

Net Assets consist of:

Paid in capital $ 264,325,957

Accumulated undistributed net realized gain (loss) (1,523,382)
on investments

Net unrealized appreciation (depreciation) on 8,174,455
investments

NET ASSETS, for 25,843,441 shares outstanding $ 270,977,030

NET ASSET VALUE, offering price and redemption price per $10.49
sh are ($270,977,030 (divided by) 25,843,441 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1996

INTEREST INCOME $ 15,228,094

EXPENSES

Management fee $ 1,516,877

Non-interested trustees' compensation 4,881

Total expenses before reductions 1,521,758

Expense reductions (61,652) 1,460,106

NET INTEREST INCOME 13,767,988

REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:

Investment securities 2,591,704

Futures contracts (213,138) 2,378,566

Change in net unrealized appreciation (depreciation) on:

Investment securities (5,824,734)

Futures contracts 15,444 (5,809,290)

NET GAIN (LOSS) (3,430,724)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 10,337,264
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1996 1995

INCREASE (DECREASE) IN NET ASSETS

Operations $ 13,767,988 $ 15,573,846
Net interest income

Net realized gain (loss) 2,378,566 (433,700)

Change in net unrealized appreciation (depreciation) (5,809,290) 27,933,708

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 10,337,264 43,073,854
FROM OPERATIONS

Distributions to shareholders (13,767,988) (15,573,846)
From net interest income

From net realized gain (1,824,023) -

TOTAL DISTRIBUTIONS (15,592,011) (15,573,846)

Share transactions 21,774,414 39,446,593
Net proceeds from sales of shares

Reinvestment of distributions 11,734,811 11,652,492

Cost of shares redeemed (45,710,814) (31,916,917)

Redemption fees 8,045 13,800

NET INCREASE (DECREASE) IN NET ASSETS RESULTING (12,193,544) 19,195,968
FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS (17,448,291) 46,695,976

NET ASSETS

Beginning of period 288,425,321 241,729,345

End of period $ 270,977,030 $ 288,425,321

OTHER INFORMATION
Shares

Sold 2,081,780 3,861,028

Issued in reinvestment of distributions 1,121,799 1,130,166

Redeemed (4,380,499) (3,101,862)

Net increase (decrease) (1,176,920) 1,889,332

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED DECEMBER 31,

1996 1995 1994 1993 C 1992

SELECTED PER-SHARE DATA

Net asset value, beginning $ 10.670 $ 9.620 $ 11.130 $ 10.590 $ 10.370
of period

Income from Investment .520 .590 .652 .679 .693
Operations
Net interest income

Net realized and unrealized (.109) 1.049 (1.201) .679 .219
gain (loss)

Total from investment .411 1.639 (.549) 1.358 .912
operations

Less Distributions

From net interest income (.520) (.590) (.652) (.679) (.693)

From net realized gain (.071) - (.310) (.140) -

Total distributions (.591) (.590) (.962) (.819) (.693)

Redemption fees added to paid - .001 .001 .001 .001
in capital

Net asset value, end of period $ 10.490 $ 10.670 $ 9.620 $ 11.130 $ 10.590

TOTAL RETURN A 4.02% 17.44% (5.04) 13.18% 9.11%
%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period $ 270,977 $ 288,425 $ 241,729 $ 306,246 $ 242,375
(000 omitted)

Ratio of expenses to average .55% .55% .55% .55% .55%
net assets

Ratio of expenses to average .53% .55% .55% .55% .55%
net assets after expense B
reductions

Ratio of net interest income to 4.98% 5.73% 6.33% 6.13% 6.65%
average net assets

Portfolio turnover rate 53% 49% 26% 38% 8%

</TABLE>

A TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE. THE TOTAL RETURNS
WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE
PERIODS SHOWN.
B FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES (SEE NOTE 5 OF
NOTES TO FINANCIAL STATEMENTS).
C EFFECTIVE JANUARY 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INTEREST INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.

SPARTAN PENNSYLVANIA MUNICIPAL MONEY MARKET FUND

PERFORMANCE: THE BOTTOM LINE

To measure a money market fund's performance, you can look at either total
return or yield. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income, and the
effect of the fund's $5 account closeout fee. Yield measures the income
paid by a fund. Since a money market fund tries to maintain a $1 share
price, yield is an important measure of performance. If Fidelity had not
reimbursed certain fund expenses during the periods shown, the past five
and ten years total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Spartan Pennsylvania Municipal 3.21% 15.36% 48.99%
Money Market

All Tax-Free Money Market Funds Average 2.98% 14.05% 44.79%

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, five years, or ten years. For
example, if you invested $1,000 in a fund that had a 5% return over the
past year, the value of your investment would be $1,050. To measure how the
fund's performance stacked up against its peers, you can compare it to the
all tax-free money market funds average, which reflects the performance of
416 all tax-free money market funds tracked by IBC Financial Data, Inc.
over the past one year. (The periods covered by IBC Financial Data, Inc.
numbers are the closest available match to those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Spartan Pennsylvania Municipal 3.21% 2.90% 4.07%
Money Market

All Tax-Free Money Market Funds Averag 2.98% 2.66% 3.77%
e

AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and show you
what would have happened if the fund had performed at a constant rate each
year.
YIELDS
1/1/96 4/1/96 7/1/96 9/30/96 12/30/96

Spartan Pennsylvania 4.18% 3.08% 3.08% 3.39% 3.54%
Municipal Money Market

All Tax-Free 3.95% 2.87% 2.89% 3.18% 3.32%
Money Market Funds
Average

Spartan Pennsylvania 6.72% 4.95% 4.95% 5.45% 5.69%
Municipal Money Market -
Tax-equivalent

Row: 1, Col: 1, Value: 4.18
Row: 1, Col: 2, Value: 3.95
Row: 2, Col: 1, Value: 3.08
Row: 2, Col: 2, Value: 2.87
Row: 3, Col: 1, Value: 3.08
Row: 3, Col: 2, Value: 2.89
Row: 4, Col: 1, Value: 3.39
Row: 4, Col: 2, Value: 0.0
Row: 5, Col: 1, Value: 3.54
Row: 5, Col: 2, Value: 3.32
Spartan Pennsylvania
Municipal Money
Market
All Tax-Free Money
Market Funds
Average
5% -
4% -
3% -
2% -
1% -
0%
YIELD refers to the income paid by the fund over a given period. Yields for
money market funds are usually for seven-day periods, expressed as annual
percentage rates. A yield that assumes income earned is reinvested or
compounded is called an effective yield. The chart above shows the fund's
current seven-day yield at quarterly intervals over the past year. You can
compare these yields to the all tax-free money market funds average as
tracked by IBC Financial Data, Inc. Or you can look at the fund's
tax-equivalent yield, which is based on a combined effective 1996 federal
and state income tax rate of 37.79%. A portion of the fund's income may be
subject to the federal alternative minimum tax.
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT PAST
RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.

COMPARING
PERFORMANCE
Yields on tax-free investments
are usually lower than yields
on taxable investments.
However, a straight
comparison between the two
may be misleading because it
ignores the way taxes reduce
taxable returns. Tax-equivalent
yield - the yield you'd have to
earn on a similar taxable
investment to match the
tax-free yield - makes the
comparison more
meaningful. Keep in mind that
the U.S. Government neither
insures nor guarantees a
money market fund. In fact,
there is no assurance that a
money fund will maintain a $1
share price.
(checkmark)
SPARTAN PENNSYLVANIA MUNICIPAL MONEY MARKET FUND

FUND TALK: THE MANAGER'S OVERVIEW

An interview with Deborah Watson, Portfolio Manager of Spartan Pennsylvania
Municipal Money Market Fund
Q. DEB, WHAT HAS THE INVESTMENT CLIMATE BEEN LIKE OVER THE PAST 12 MONTHS?
A. At the beginning of the period, most market participants expected the
Fed to continue lowering the rate banks charge each other for overnight
loans - known as the federal funds rate - due to a moderate rate of growth
in the economy and mild inflationary pressures. These conditions helped
persuade the Fed to continue pursuing monetary policy designed to stimulate
economic growth. The Fed lowered the federal funds rate one-quarter
percentage point in January 1996, bringing the rate down to 5.25%. In
mid-February, Fed Chairman Alan Greenspan, testifying before Congress,
surprised many by suggesting that the economy was in no need of further
stimulus. Greenspan's opinion was reinforced dramatically in early March
with the release of the February employment report, which came in much
higher than expected. Market sentiment shifted, and a sharp sell-off in the
bond market ensued. Over the past few months, however, signs of weakness in
employment and a lack of inflationary pressures in price indices have kept
the Fed on the sidelines, while the market has responded with lower rates.
Q. WHAT SORT OF STRATEGY DID THE FUND PURSUE THROUGH THIS CHANGING
ENVIRONMENT?
A. When the period began, the fund was well-positioned for a declining rate
environment with an average maturity of 58 days. Through the spring,
however, the maturity was allowed to roll down due to the expectation of
higher rates and thin supply. By July, the supply picture changed
dramatically and prices on money market instruments began to reflect
anticipated rate increases by the Fed. I added longer-term securities,
extending the fund's average maturity to 53 days. Since then, supply has
been constrained, and I've maintained the maturity in the mid to high
50-day range, waiting for more concrete signals on the direction of the
economy and Fed policy.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on December 31, 1996, was 3.56%, compared to
4.15% 12 months earlier. The latest yield was the equivalent of a taxable
yield of 5.72% for Pennsylvania investors in the 37.79% combined federal
and state tax bracket. The fund's total return during the 12-month period
was 3.21%. That beat the total return of 2.98% for the all tax-free money
market funds average, according to IBC Financial Data, Inc.
Q. WHAT DO YOU SEE HAPPENING OVER THE NEXT SIX MONTHS?
A. I anticipate the Fed will keep the fed funds rate stable at 5.25%
probably through the first quarter of 1997. Until then, the market will be
anxiously awaiting further signals on the economy as new data is released.
However, I believe it is more probable that the next move will be for the
Fed to raise the fed funds rate due to tightness in the labor market and
the possibility for wages to increase, among other factors. That said, I
will keep the average maturity fairly stable, in the 40-to 50-day range.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.

FUND FACTS
GOAL: to seek high current
income exempt from federal
and Pennsylvania state
income tax by investing in
high-quality, short-term
municipal money market
securities, while maintaining
a $1.00 share price
TRADING SYMBOL: FPTXX
FUND NUMBER: 401
START DATE: August 6, 1986
SIZE: as of December 31,
1996, more than $242 million
MANAGER: Deborah Watson,
since 1989; various Fidelity
and Spartan municipal
money market funds, since
1985; joined Fidelity in 1982
(checkmark)
WORDS TO KNOW
COMMERCIAL PAPER: A security
issued by a municipality to
finance capital or operating
needs.
FEDERAL FUNDS RATE: The interest
rate banks charge each other
for overnight loans.
MATURITY: The time remaining
before an issuer is scheduled
to repay the principal amount
on a debt security. When the
fund's average maturity -
weighted by dollar amount -
is short, the fund manager is
anticipating a rise in interest
rates. When the average
maturity is long, the manager
is expecting rates to fall.
When the average maturity is
neutral, the manager wants
the flexibility to respond to
rising rates, while still
capturing a portion of the
higher yields available from
issues with longer maturities.
MUNICIPAL NOTE: A security
issued in advance of future
tax or other revenues and
payable from those specific
sources.
TENDER BOND: A variable-rate,
long-term security that gives
the bond holder the option to
redeem the bond at face
value before maturity.
VARIABLE RATE DEMAND NOTE
(VRDN): A tender bond that
can be redeemed on short
notice, typically one or seven
days. VRDNs are useful in
managing the fund's average
maturity and liquidity.

SPARTAN PENNSYLVANIA MUNICIPAL MONEY MARKET FUND

INVESTMENT CHANGES

MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
12/31/96 6/30/96 12/31/95

0 - 30 67 83 67

31 - 90 12 3 11

91 - 180 3 7 6

181 - 397 18 7 16

WEIGHTED AVERAGE MATURITY
12/31/96 6/30/96 12/31/95

Spartan Pennsylvania 55 days 44 days 58 days
Municipal Money Market

All Tax-Free Money 51 days 50 days 53 days
Market Funds Average *

ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF DECEMBER 31, 1996 AS OF JUNE 30, 1996

Row: 1, Col: 1, Value: 66.0
Row: 1, Col: 2, Value: 14.0
Row: 1, Col: 3, Value: 0.0
Row: 1, Col: 4, Value: 18.0
Row: 1, Col: 5, Value: 2.0
Row: 1, Col: 1, Value: 80.0
Row: 1, Col: 2, Value: 11.0
Row: 1, Col: 3, Value: 0.0
Row: 1, Col: 4, Value: 6.0
Row: 1, Col: 5, Value: 3.0
Variable rate
demand notes
(VRDNs) 66%
Commercial
paper 15%
Municipal
notes 18%
Other 1%
Variable rate
demand notes
(VRDNs) 80%
Commercial
paper 11%
Municipal
notes 6%
Other 3%
* SOURCE: IBC'S MONEY FUND REPORT(registered trademark)
SPARTAN PENNSYLVANIA MUNICIPAL MONEY MARKET FUND

INVESTMENTS DECEMBER 31, 1996
Showing Percentage of Total Value of Investments in Securities

MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
PENNSYLVANIA - 100%
Allegheny County Hosp. Dev. Auth. Rev.
(St. Margaret Mem. Hosp.) Series 1992 A,
4.25%, LOC Mellon Bank, VRDN $ 8,865,000 $ 8,865,000
Allegheny County Ind. Dev. Auth. Commercial Dev. Rev. Rfdg.
(Parkway Ctr. Mall Proj.) Series 1994 A,
4.25%, LOC Mellon Bank, VRDN 1,900,000 1,900,000
Allegheny County Ind. Dev. Auth. Rev. VRDN:
Rfdg. (Chelsea Industries, Inc.), Series 1994,
4.15%, LOC First Nat'l. Bank of Boston 3,500,000 3,500,000
(Union Elec. Steel Co. Proj.):
Series 1996 A, 4.25%, LOC PNC Bank, VRDN (b) 3,120,000 3,120,000
Series 1996 B, 4.25%, LOC PNC Bank (b) 1,000,000 1,000,000
Berks County Ind. Dev. Auth. Mfg. Facs. Rev. VRDN (b):
(The Bachman Co. Proj.) Series 1994,
4.50%, LOC CoreStates Bank 2,310,000 2,310,000
(Grafika Commercial Printing Inc.)
4.50%, LOC CoreStates Bank NA 1,655,000 1,655,000
Berks County Ind. Dev. Auth. Rev.:
(Construction Fastener Proj.) Series 1996 B,
4.50%, LOC CoreStates Bank, VRDN (b) 1,030,000 1,030,000
(RAM Industries, Inc.) Series 1996,
4.50%, LOC CoreStates Bank, VRDN (b) 2,800,000 2,800,000
Bonds (Citizens Utilities) Series 1996,
3.65%, tender 3/7/97 (b) 4,200,000 4,200,000
Bucks County Ind. Dev. Auth. (Associates Proj.) Series 1993,
4.50%, LOC CoreStates Bank, VRDN (b) 1,290,000 1,290,000
Butler County Ind. Dev. Auth. (Armco Proj.) Series 1996 A,
4.25%, LOC Chase Manhattan, VRDN (b) 700,000 700,000
Carbon County Ind. Dev. Auth. Resource Recovery Rev. Bonds:
(Panther Creek Partners Proj.) (b):
Series 1990 A, 3.65%, tender 2/19/97,
LOC Nat'l. Westminster Bank PLC 2,800,000 2,800,000
Series 1990 B, 3.60%, tender 2/14/97,
LOC Nat'l Westminster Bank PLC 2,200,000 2,200,000
Series 1991 A:
3.55%, tender 4/9/97, LOC Nat'l Westminster PLC 3,200,000 3,200,000
3.60%, tender 4/9/97, LOC Nat'l Westminster PLC 2,000,000 2,000,000
Chester County Health & Ed. Fac. Auth. Hosp. Rev. Bonds
Series 1996 A, 3.90% 7/1/97 (MBIA Insured) 1,165,000 1,165,000
Chester County Ind. Dev. Auth. Rfdg. Rev.
(General Motors Corp. Proj.) Series 1996, 5.25%, VRDN 800,000 800,000
Cumberland County Ind. Dev. Auth. (Lane Enterprises, Inc. Proj.)
4.50%, LOC CoreStates Bank, VRDN (b) 2,600,000 2,600,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
PENNSYLVANIA - CONTINUED
Dauphin County Gen. Auth. Hosp. Rev.
(Reading Hosp. & Med. Ctr.) Series 1994 A,
4.30%, VRDN $ 1,000,000 $ 1,000,000
Delaware County Auth. Hosp. Rev.
(Crozer-Chester Med. Ctr.)
Series 1996, 4.03%, LOC Kriedietbank, VRDN 4,900,000 4,900,000
Delaware County Ind. Dev. Auth. Bonds (Philadelphia Elec.):
Series 1988 A:
3.50%, tender 1/14/97 (FGIC Insured)
(Liquidity Facility Financial Guaranty Insurance Co.) 1,000,000
1,000,000
3.50%, tender 3/6/97 (FGIC Insured)
(Liquidity Facility Federal Guaranty Insurance Co.) 3,300,000 3,300,000
3.50%, tender 4/8/97 (FGIC Insured)
(Liquidity Facility Federal Guaranty Insurance Co.) 2,000,000 2,000,000
Series 1988 B, 3.45%, tender 2/26/97 (FGIC Insured)
(Liquidity Facility Federal Guaranty Insurance Co.) 2,200,000 2,200,000
Delaware Valley Reg. Fin. Auth. Local Gov't. Rev. VRDN:
Series 1985 A, 4.15%, LOC Midland Bank PLC 1,300,000 1,300,000
Series 1985 C, 4.15%, LOC Midland Bank PLC 3,600,000 3,600,000
Series 1986, 4.15%, LOC Midland Bank PLC 300,000 300,000
Doylestown Hosp. Auth. Rev. Bonds (Doylestown Hosp.)
Participating VRDN, Series BT-63, 4.20% (AMBAC Insured)
(Liquidity Facility ADP) (c) 10,098,000 10,098,000
Emmaus Gen. Auth. Local Govt. Rev. Pool Prog. VRDN:
Series 1989 E-7, 4.20%, LOC Midland Bank PLC 2,400,000 2,400,000
Series 1989 G-7, 4.20%
(Liquidity Facility Midland Bank PLC) 3,000,000 3,000,000
Erie County Ind. Dev. Auth. Rev. (Carlisle Corp. Proj.)
Series 1993, 4.25%, LOC SunTrust Bank, VRDN (b) 1,000,000 1,000,000
Harrisburg Auth. Wtr. Rev. Participating VRDN, Series BT-193,
4.35% (Liquidity Facility Bankers Trust Company) (c) 6,000,000 6,000,000
Lancaster Higher Ed. Auth. College Rev.
(Franklin & Marshall College Proj.) Series 1995,
4.20%, VRDN 925,000 925,000
Langhorne-St. Mary Hosp. Auth.
(Franciscan Health Sys. Pooled Fin.)
Series B, 4.85%, LOC Toronto Dominion Bank 200,000 200,000
Lehigh County Ind. Dev. Auth. Poll. Cont. Rev.
(Allegheny Elec. Co.) VRDN:
Series 1984 A, 3.65%, LOC Rabobank Nederland 500,000 500,000
Series 1984 B, 3.65%, LOC Rabobank Nederland 1,000,000 1,000,000
Lycoming County Ind. Dev. Auth. (Coastal Aluminum Rolling
Mills) Series 1995, 4.50%, LOC CoreStates Bank (b) 1,910,000 1,910,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
PENNSYLVANIA - CONTINUED
Montgomery County Ind. Dev. Auth. Rev.:
(H.P. Cadwallader Inc. Proj.) Series 1995, 4.50%,
LOC CoreStates Bank, VRDN (b) $ 1,120,000 $ 1,120,000
(RJI Limited Proj.) Series 1992, 4.50%,
LOC CoreStates Bank, VRDN (b) 1,820,000 1,820,000
(Sirius Dev. Assoc. Proj.) 4.25%,
LOC PNC Bank, VRDN (b) 1,500,000 1,500,000
Bonds (Peco Energy Co.) Series 1996 A, 3.50%,
tender 1/14/97, LOC Canadian Imperial Bank
Of Commerce 1,000,000 1,000,000
Montour County Health Sys. Rev. (Geisinger Auth.)
Series 1992 B,5% (BPA Morgan Guaranty
Trust Co.) VRDN 2,000,000 2,000,000
North Lebanon Township Rev. (Grace Commty. Inc. Proj.)
Series 1992 B, 4.25%, LOC CoreStates Bank, VRDN 10,000 10,000
North Pennsylvania Wtr. Auth. Wtr. Rev. Participating VRDN,
Series SG-30, 4.35% (Liquidity Facility Societe Generale,
France) (c) 10,000,000 10,000,000
Northampton County Ind. Dev. Auth. Rev. VRDN (b):
(Victoria Vogue Proj.) 4.50%, LOC CoreStates Bank 2,885,000 2,885,000
(Bedford Park Proj.):
Series 1996 A, 4.35%, LOC Harris Trust 2,105,000 2,105,000
Series 1996 B, 4.45%, LOC Harris Trust 950,000 950,000
Northampton County Ind. Dev. Auth. Bonds
(Citizens Utilities Co. Proj.) Series 1991,
3.55%, tender 4/8/97 (b) 1,100,000 1,100,000
Northeastern Pennsylvania Hosp. & Ed. Auth.
(Allhealth Pool Fing.) 4.30%, LOC Chase
Manhattan Bank, VRDN 5,000,000 5,000,000
Northumberland County Ind. Dev. Auth. Rev. VRDN (b):
(Foster Wheeler Mt. Carmel, Inc. Proj.):
Series 1987 A, 4.20%, LOC Union Bank of Switzerland 17,095,000
17,095,000
Series 1987 B, 4.20%, LOC Union Bank of Switzerland 1,140,000 1,140,000
Pennsylvania Econ. Dev. Fin. Auth. Rev. VRDN (b):
(Henry Molded Prod. Inc.) Series 1992 A-4, 4.25%,
LOC PNC Bank 800,000 800,000
(Pappafava Proj. ) Series 1989 D-7, 4.25%,
LOC PNC Bank 200,000 200,000
(Payne Printery Proj.) Series 1989 B-8, 4.25%,
LOC PNC Bank 275,000 275,000
(Port Erie Plastics Proj.) Series 1989 D-9, 4.25%,
LOC PNC Bank 500,000 500,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
PENNSYLVANIA - CONTINUED
Pennsylvania Econ. Dev. Fin. Auth. Rev. VRDN (b): - continued
(Respironics Inc. Proj.) Series 1989 F, 4.25%,
LOC PNC Bank $ 800,000 $ 800,000
Pennsylvania Econ. Dev. Fin. Auth. Econ. Dev. Rev. VRDN (b):
(Esschem, Inc.) Series 1991 D-10, 4.25%,
LOC PNC Bank, NA 700,000 700,000
(Landmark) Series 1995 I-3, 4.25%,
LOC PNC Bank, NA 2,100,000 2,100,000
Series 1996 A-1, 4.25%, LOC PNC Bank, NA 675,000 675,000
Series 1996 A-2, 4.25%, LOC PNC Bank, NA 2,100,000 2,100,000
Series 1996 A-3, 4.25%, LOC PNC Bank, NA 1,000,000 1,000,000
Series 1996 A-7, 4.25%, LOC PNC Bank, NA 750,000 750,000
Series 1996 A-8, 4.25%, LOC PNC Bank, NA 1,100,000 1,100,000
Series 1996 F-4, 4.25%, LOC PNC Bank, NA 1,000,000 1,000,000
Pennsylvania Econ. Dev. Fin. Auth. Ind. Dev. Rev. VRDN (b):
(The Babcock & Wilcox Co. Proj.)
Series 1989 A-2, 4.25%, LOC PNC Bank 4,850,000 4,850,000
(Suntory Wtr. Group Proj.) Series 1992 D, 4.25%,
LOC Wachovia Bank & Trust 4,900,000 4,900,000
Pennsylvania Gen. Oblig. Bonds 4.75% 6/15/97 2,000,000 2,007,304
Pennsylvania Higher Ed. Assistance Agcy. Student Loan Rev.
VRDN (b):
Series 1988 A, 4.25%, LOC SLMA 4,600,000 4,600,000
Series 1988 B, 4.25%, LOC SLMA 3,300,000 3,300,000
Series 1988 C, 4.25%, LOC SLMA 2,700,000 2,700,000
Pennsylvania Higher Ed. Fac. Auth. (Carnegie Mellon Univ.)
Series 1995 A, 5% (BPA Morgan Guaranty/Union Bank of
Switzerland), VRDN 500,000 500,000
Pennsylvania TAN Series 1996-97, 4.50% 6/30/97 15,100,000 15,157,679
Philadelphia Hosp. Rev. (Children's Hosp. Proj.)
Series 1996 A, 5% (Liquidity Facility Morgan Guaranty
Trust Co., NY, VRDN 600,000 600,000
Philadelphia RAN (Southwark Plaza Proj.)
Series 1996, 3.85% 12/30/97, LOC Federal Guaranty
Insurance Co./Capital Market Svc. 8,000,000 8,000,704
Philadelphia School Dist. TRAN Series 1996-97,
4.50% 6/30/97 10,000,000 10,023,741
Philadelphia TRAN Series 1996-97, 4.50% 6/30/97 11,000,000 11,028,661
Pittsburgh Wtr. & Swr. Sys. Rev. Participating VRDN,
Series BTP-181, 4.15%
(Liquidity Facility Bankers Trust Co.) (c) 4,935,000 4,935,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
PENNSYLVANIA - CONTINUED
Schuylkill County Ind. Dev. Auth. Rev. VRDN (b):
(Craftex Mills Inc. Proj.) Series 1996, 4.50%,
LOC CoreStates Bank, N.A $ 2,000,000 $ 2,000,000
(Interlock Realty Co.) 4.40%, LOC Star Bank 300,000 300,000
(Metal Sales Manufacturing Corp.) 4.30%, LOC Star Bank 1,350,000
1,350,000
(Prime Packaging Inc. Proj.) Series 1995, 4.50%,
LOC CoreStates Bank 2,000,000 2,000,000
Venango Ind. Dev. Auth. Resource Recovery Rev. Bonds
(Scrubgrass Proj.) (b):
Series 1990 A:
3.45%, tender 2/12/97, LOC Nat'l Westminster PLC 3,000,000 3,000,000
3.55%, tender 2/12/97, LOC Nat'l Westminster PLC 1,700,000 1,700,000
3.65%, tender 2/20/97, LOC Nat'l Westminster PLC 3,000,000 3,000,000
3.60%, tender 2/21/97, LOC Nat'l Westminster PLC 2,000,000 2,000,000
3.60%, tender 2/21/97, LOC Nat'l Westminster PLC 500,000 500,000
Series 1990 B, 3.65%, tender 2/25/97,
LOC Nat'l Westminster PLC 3,000,000 3,000,000
Washington County Ind. Dev. Auth. Ind. Dev. Rev.
(Mac Plastics, Inc. Proj.)Series 1990, 4.30%,
LOC Nat'l. City Bank, VRDN (b) 460,000 460,000
TOTAL INVESTMENTS - 100% $ 245,406,089
Total Cost for Income Tax Purposes $ 245,406,089
SECURITY TYPE ABBREVIATIONS
RAN - Revenue Anticipation Notes
TAN - Tax Anticipation Notes
TRAN - Tax and Revenue Anticipation Notes
VRDN - Variable Rate Demand Notes
LEGEND
1. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
2. Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals.
3. Provides evidence of ownership in one or more underlying municipal
bonds.
INCOME TAX INFORMATION
At December 31, 1996, the fund had a capital loss carryforward of
approximately $65,000 of which $5,000, $5,000, $19,000, $10,000 and $26,000
will expire on December 31, 1997, 1998, 2002, 2003 and 2004, respectively.
During fiscal year ended 1996, 100% of the fund's income dividends was free
from federal income tax, and 48.36% of the fund's income dividends was
subject to the federal alternative minimum tax.
SPARTAN PENNSYLVANIA MUNICIPAL MONEY MARKET FUND

FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
DECEMBER 31, 1996

ASSETS

Investment in securities, at value - $ 245,406,089
See accompanying schedule

Cash 1,582,540

Receivable for investments sold 5,000,417

Interest receivable 1,523,630

TOTAL ASSETS 253,512,676

LIABILITIES

Payable for investments purchased $ 11,000,701

Distributions payable 25,365

Accrued management fee 95,777

Other payables and accrued expenses 4,451

TOTAL LIABILITIES 11,126,294

NET ASSETS $ 242,386,382

Net Assets consist of:

Paid in capital $ 242,451,093

Accumulated net realized gain (loss) on investments (64,711)

NET ASSETS, for 242,449,142 shares outstanding $ 242,386,382

NET ASSET VALUE, offering price and redemption price $1.00
per share ($242,386,382 (divided by) 242,449,142 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1996

INTEREST INCOME $ 8,643,964

EXPENSES

Management fee $ 1,180,152

Non-interested trustees' compensation 5,419

Total expenses before reductions 1,185,571

Expense reductions (53,525) 1,132,046

NET INTEREST INCOME 7,511,918

NET REALIZED GAIN (LOSS) ON INVESTMENTS (26,471)

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 7,485,447

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1996 1995

INCREASE (DECREASE) IN NET ASSETS

Operations $ 7,511,918 $ 7,945,808
Net interest income

Net realized gain (loss) (26,471) (10,005)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 7,485,447 7,935,803
FROM OPERATIONS

Distributions to shareholders from net interest income (7,511,918) (7,945,808)

Share transactions at net asset value of $1.00 per share 168,791,356 169,779,742
Proceeds from sales of shares

Reinvestment of distributions from net interest income 7,197,082 7,567,810

Cost of shares redeemed (175,218,462) (193,302,893)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 769,976 (15,955,341)
FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS 743,505 (15,965,346)

NET ASSETS

Beginning of period 241,642,877 257,608,223

End of period $ 242,386,382 $ 241,642,877

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED DECEMBER 31,

1996 1995 1994 1993 1992

SELECTED PER-SHARE DATA

Net asset value, beginning $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
of period

Income from Investment .032 .035 .026 .022 .029
Operations
Net interest income

Less Distributions

From net interest income (.032) (.035) (.026) (.022) (.029)

Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000

TOTAL RETURN A 3.21% 3.56% 2.61% 2.21% 2.90%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period $ 242,386 $ 241,643 $ 257,608 $ 240,983 $ 243,335
(000 omitted)

Ratio of expenses to average .50% .50% .50% .50% .47%
net assets B

Ratio of expenses to average .48% .50% .50% .50% .47%
net assets after expense C
reductions

Ratio of net interest income to 3.17% 3.50% 2.58% 2.19% 2.88%
average net assets

</TABLE>

A TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE. THE TOTAL RETURNS
WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE
PERIODS SHOWN.
B FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
C FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES (SEE NOTE 5 OF
NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended December 31, 1996

1. SIGNIFICANT ACCOUNTING POLICIES.
Spartan Pennsylvania Municipal Income Fund (the income fund) (formerly
Spartan Pennsylvania High Yield Portfolio)is a fund of Fidelity Municipal
Trust. Spartan Pennsylvania Municipal Money Market Fund (the money market
fund)(formerly Spartan Pennsylvania Money Market Portfolio) is a fund of
Fidelity Municipal Trust II. Each trust is registered under the Investment
Company Act of 1940, as amended (the 1940 Act), as an open-end management
investment company. Fidelity Municipal Trust and Fidelity Municipal Trust
II (the trusts) are organized as a Massachusetts business trust and a
Delaware business trust, respectively. Each fund is authorized to issue an
unlimited number of shares. The financial statements have been prepared in
conformity with generally accepted accounting principles which permit
management to make certain estimates and assumptions at the date of the
financial statements. The following summarizes the significant accounting
policies of the money market fund and the income fund:
SECURITY VALUATION.
INCOME FUND. Securities are valued based upon a computerized matrix system
and/or appraisals by a pricing service, both of which consider market
transactions and dealer-supplied valuations. Short-term securities with
remaining maturities of sixty days or less for which quotations are not
readily available are valued at amortized cost or original cost plus
accrued interest, both of which approximate current value. Securities for
which quotations are not readily available are valued at their fair value
as determined in good faith under consistently applied procedures under the
general supervision of the Board of Trustees.
MONEY MARKET FUND. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost and
thereafter assume a constant amortization to maturity of any discount or
premium.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, each fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
the fiscal year. The schedules of investments include information regarding
income taxes under the caption "Income Tax Information."
INTEREST INCOME. Interest income, which includes amortization of premium
and accretion of original issue discount, is accrued as earned. For the
money market fund, accretion of market discount represents unrealized gain
until realized at the time of a security disposition or maturity.
EXPENSES. Most expenses of each trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income. Distributions to shareholders from
realized capital gains on investments, if any, are recorded on the
ex-dividend date. Income and capital gain distributions are determined in
accordance with income tax regulations which may differ from
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
generally accepted accounting principles. These differences, which may
result in distribution reclassifications, are primarily due to differing
treatments for futures transactions, market discount and losses deferred
due to wash sales and futures. The fund also utilized earnings and profits
distributed to shareholders on redemption of shares as a part of the
dividends paid deduction for income tax purposes.
REDEMPTION FEES. Shares held in the income fund less than 180 days are
subject to a redemption fee equal to .50% of the proceeds of the redeemed
shares. The fee, which is retained by the fund, is accounted for as an
addition to paid in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
DELAYED DELIVERY TRANSACTIONS. Each fund may purchase or sell securities on
a delayed delivery basis. Payment and delivery may take place a month or
more after the date of the transaction. The price of the underlying
securities and the date when the securities will be delivered and paid for
are fixed at the time the transaction is negotiated. With respect to
purchase agreements, each fund identifies securities as segregated in its
custodial records with a value at least equal to the amount of the
commitment. Losses may arise due to changes in the market value of the
underlying securities or if the counterparty does not perform under the
contract.
FUTURES CONTRACTS. The income fund may use futures contracts to manage its
exposure to the bond market and to fluctuations in interest rates. Buying
futures tends to increase the fund's exposure to the underlying instrument,
while selling futures tends to decrease the fund's exposure to the
underlying instrument or hedge other fund investments. Futures contracts
involve, to varying degrees, risk of loss in excess of the futures
variation margin reflected in the Statement of Assets and Liabilities. The
underlying face amount at value of any open futures contracts at period
end, is shown in the schedule of investments under the caption "Futures
Contracts." This amount reflects each contract's exposure to the underlying
instrument at period end. Losses may arise from changes in the value of the
underlying instruments, if there is an illiquid secondary market for the
contracts, or if the counterparties do not perform under the contracts'
terms. Futures contracts are valued at the settlement price established
each day by the board of trade or exchange on which they are traded.
3. PURCHASES AND SALES OF INVESTMENTS.
INCOME FUND. Purchases and sales of securities, other than short-term
securities, aggregated $139,229,102 and $138,771,394, respectively. The
market value of futures contracts opened and closed during the period
amounted to $38,056,273 and $36,021,576, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, Fidelity Management &
Research Company (FMR) pays all expenses, except the compensation of the
non-interested Trustees and certain exceptions such as interest, taxes,
brokerage commissions and extraordinary expenses. FMR receives a fee that
is computed daily at an annual rate of .55% and .50% of average net assets
for the income and money market funds, respectively.
FMR also bears the cost of providing shareholder services to each fund. To
offset the cost of providing these services, FMR or its affiliates
collected certain transaction fees from shareholders which amounted to
$3,165 and $7,358 for the income and money market funds, respectively.
SUB-ADVISER FEE. As the money market fund's investment sub-adviser, FMR
Texas Inc., a wholly owned subsidiary of FMR, receives a fee from FMR of
50% of the management fee payable to FMR. The fee is paid prior to any
voluntary expense reimbursements which may be in effect.
5. EXPENSE REDUCTIONS.
FMR has entered into arrangements on behalf of each fund with the fund's
custodian and transfer agent whereby interest earned on uninvested cash
balances was used to offset a portion of the fund's expenses. During the
period, the fund's expenses were reduced by $61,652 and $53,525 for the
income and money market funds, respectively, under these arrangements.
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Municipal Trust and Fidelity Municipal Trust II
and the Shareholders of Spartan Pennsylvania Municipal Income Fund
(formerly Spartan Pennsylvania Municipal High Yield Portfolio) and
Spartan Pennsylvania Municipal Money Market Fund (formerly Spartan
Pennsylvania Municipal Money Market Portfolio):
We have audited the accompanying statements of assets and liabilities of
Fidelity Municipal Trust: Spartan Pennsylvania Municipal Income Fund
(formerly Spartan Pennsylvania Municipal High Yield Portfolio) and
Fidelity Municipal Trust II: Spartan Pennsylvania Municipal Money Market
Fund (formerly Spartan Pennsylvania Municipal Money Market Portfolio),
including the schedules of portfolio investments, as of December 31, 1996,
and the related statements of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period
then ended and the financial highlights for each of the five years in the
period then ended. These financial statements and financial highlights are
the responsibility of the funds' management. Our responsibility is to
express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of December 31, 1996 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Municipal Trust: Spartan Pennsylvania Municipal Income Fund
and Fidelity Municipal Trust II: Spartan Pennsylvania Municipal Money
Market Fund as of December 31, 1996, the results of their operations for
the year then ended, the changes in their net assets for each of the two
years in the period then ended, and the financial highlights for each of
the five years in the period then ended, in conformity with generally
accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
February 4, 1997
MANAGING YOUR INVESTMENTS

Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a day.
BY PHONE
Fidelity TouchTone Xpressprovides a single toll-free number to access
account balances, positions, quotes and trading. It's easy to navigate the
service, and on your first call, the system will help you create a personal
identification number (PIN) for security.
SM
(PHONE_GRAPHIC)(PHONE_GRAPHIC)TOUCHTONE XPRESS
1-800-544-5555
PRESS
For mutual fund and brokerage trading.
1
For quotes.*
2
For account balances and holdings.
3
To review orders and mutual
fund activity.
4
To change your PIN.
5
To speak to a Fidelity representative.
*
0
BY PC
Fidelity's Web site on the Internet provides a wide range of information,
including daily financial news, fund performance, interactive planning
tools and news about Fidelity products and services.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call Fidelity at 1-800-544-7272
for significant savings on Web access from internetMCI.
SM
(PHONE_GRAPHIC)(PHONE_GRAPHIC)
FIDELITY ON-LINE XPRESS+
TM
Fidelity On-line Xpress+ software for Windows combines comprehensive
portfolio management capabilities, securities trading and access to
research and analysis tools . . . all on your desktop. Call Fidelity at
1-800-544-7272 or visit our Web site for more information on how to manage
your investments via your PC.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT
IN A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
TO WRITE FIDELITY

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(LETTER_GRAPHIC)(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
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SELLING SHARES
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P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75309-5517
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Boston, MA 02210-0193
(LETTER_GRAPHIC)(LETTER_GRAPHIC)FOR RETIREMENT
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P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75309-5517
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P.O. Box 660602
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For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
811 Wilshire Boulevard
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
950 Northgate Drive
San Rafael, CA
1400 Civic Drive
Walnut Creek, CA
6300 Canoga Avenue
Woodland Hills, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
29 South Main Street
West Hartford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
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4001 Tamiami Trail, North
Naples, FL
1907 West State Road 434
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8065 Beneva Road
Sarasota, FL
1502 N. Westshore Blvd.
Tampa, FL
GEORGIA
3525 Piedmont Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
215 East Erie Street
Chicago, IL
One North Franklin
Chicago, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
3232 Lake Avenue
Wilmette, IL
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
1 West Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
21 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
29155 Northwestern Hwy.
Southfield, MI
MINNESOTA
7600 France Avenue South
Edina, MN
MISSOURI
700 West 47th Street
Kansas City, MO
8885 Ladue Road
Ladue, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
505 Millburn Avenue
Short Hills, NJ
NEW YORK
1050 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the
Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
10 Bank Street
White Plains, NY
NORTH CAROLINA
4611 Sharon Road
Charlotte, NC
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
1903 East Ninth Street
Cleveland, OH
OREGON
121 S.W. Morrison Street
Portland, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
5100 Poplar Avenue
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
7001 Preston Road
Dallas, TX
1155 Dairy Ashford
Houston, TX
2701 Drexel Drive
Houston, TX
1010 Lamar Street
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
UTAH
215 South State Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
511 Pine Street
Seattle, WA
WASHINGTON, DC
1775 K Street, N.W.
Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, WI

INVESTMENT ADVISER
(registered trademark)
Fidelity Management & Research
Company
Boston, MA
SUB-ADVISER, MONEY MARKET FUND
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Fred L. Henning Jr., Vice President - INCOME FUND
Sarah H. Zenoble, Vice President - MONEY MARKET FUND
Deborah F. Watson, Vice President -
MONEY MARKET FUND
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Thomas D. Maher, Assistant
Vice President - MONEY MARKET FUND
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Thomas J. Simpson, Assistant Treasurer -
MONEY MARKET FUND
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
Phyllis Burke Davis*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Edward H. Malone*
Marvin L. Mann*
Gerald C. McDonough*
Thomas R. Williams*
ADVISORY BOARD
William O. McCoy
* INDEPENDENT TRUSTEES
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
UMB Bank, n.a.
Kansas City, MO
and
Fidelity Service Co.
Boston, MA
CUSTODIAN
UMB Bank, n.a.
Kansas City, MO
THE FIDELITY TELEPHONE CONNECTION
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for the deaf and hearing impaired
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TouchTone Xpress 1-800-544-5555
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AUTOMATED LINE FOR QUICKEST SERVICE
DISTRIBUTIONS

The Board of Trustees of Spartan Pennsylvania Municipal Income Fund voted
to pay to shareholders of record at the opening of business
on record date, the following distributions derived from capital gains
realized from sales of portfolio securities:
PAY DATE RECORD DATE CAPITAL GAINS
1/2/97 12/27/96 $0.07

FIDELITY

(registered trademark)
OHIO
MUNICIPAL
FUNDS

ANNUAL REPORT
DECEMBER 31, 1996
CHECK PAGE NUMBERS !!!

CONTENTS

<TABLE>
<CAPTION>
<S> <C> <C>
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.

FIDELITY OHIO MUNICIPAL INCOME FUND

PERFORMANCE 4 How the fund has done over time.

FUND TALK 7 The manager's review of fund
performance, strategy and outlook.

INVESTMENT CHANGES 10 A summary of major shifts in the
fund's investments over the past six
months
and one year.

INVESTMENTS 11 A complete list of the fund's
investments with their market
values.

FINANCIAL STATEMENTS 22 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

FIDELITY OHIO MUNICIPAL MONEY MARKET FUND

PERFORMANCE 26 How the fund has done over time.

FUND TALK 28 The manager's review of fund
performance, strategy and outlook.

INVESTMENT CHANGES 30 A summary of major shifts in the
fund's investments over the past six
months
and one year.

INVESTMENTS 31 A complete list of the fund's
investments with their market
values.

FINANCIAL STATEMENTS 39 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 43 Notes to the financial statements.

REPORT OF INDEPENDENT 46 The auditors' opinion.
ACCOUNTANTS

DISTRIBUTIONS 47

</TABLE>

FIDELITY OHIO MUNICIPAL INCOME FUND

PERFORMANCE: THE BOTTOM LINE

There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Total return
reflects the change in the value of an investment, assuming reinvestment of
the fund's dividend income and capital gains (the profits the fund earned
upon the sale of securities that have grown in value). You can also look at
the fund's income, as reflected in the fund's yield, to measure
performance. If Fidelity had not reimbursed certain fund expenses, the past
10 years total return would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Fidelity Ohio Municipal Income Fund 4.23% 40.15% 103.59%

Lehman Brothers Ohio 4 Plus Year 4.60% n/a n/a
Municipal Bond Index

Ohio Municipal Debt Funds Average 3.35% 39.16% 96.39%

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, five years, or 10 years. For
example, if you invested $1,000 in a fund that had a 5% return over the
past year, the value of your investment would be $1,050. You can compare
the fund's returns to the performance of the Lehman Brothers Ohio 4 Plus
Year Municipal Bond Index, which includes Ohio investment-grade municipal
bonds with maturities of four years or greater. To measure how the fund's
performance stacked up against its peers, you can compare it to the Ohio
municipal debt funds average, which reflects the performance of 56 mutual
funds with similar objectives tracked by Lipper Analytical Services, Inc.
over the past one year. Both benchmarks include reinvested dividends and
capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Fidelity Ohio Municipal Income Fund 4.23% 6.98% 7.37%

Lehman Brothers Ohio 4 Plus Year 4.60% n/a n/a
Municipal Bond Index

Ohio Municipal Debt Funds Average 3.35% 6.83% 6.97%

$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was invested
in Fidelity Ohio Municipal Income Fund on December 31, 1986. As the chart
shows, by December 31, 1996, the value of the investment would have grown
to $20,359 a 103.59% increase on the initial investment. For comparison,
look at how the Lehman Brothers Municipal Bond Index, which reflects the
performance of the investment-grade municipal bond market, did over the
same period. With dividends reinvested, the same $10,000 would have grown
to $21,181 - a 111.81% increase.

UNDERSTANDING
PERFORMANCE
How a fund did yesterday
is no guarantee of how it
will do tomorrow. Bond
prices, for example,
generally move in the
opposite direction of interest
rates. In turn, the share price,
return, and yield of a fund
that invests in bonds will vary.
That means if you sell your
shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
TOTAL RETURN COMPONENTS
YEARS ENDED DECEMBER 31,

1996 1995 1994 1993 1992

Dividend returns 4.98% 6.22% 5.37% 6.19% 6.63%

Capital appreciation returns -0.75% 10.17% -10.92% 6.37% 2.03%

Total returns 4.23% 16.39% -5.55% 12.56% 8.66%

TOTAL RETURN COMPONENTS include both dividend returns and capital
appreciation returns. A dividend return reflects the actual dividends paid
by the fund. A capital appreciation return reflects both the amount paid by
the fund to shareholders as capital gain distributions and changes in the
fund's share price. Both returns assume the dividends or capital gains are
paid by the fund reinvested.
DIVIDENDS AND YIELD

<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED DECEMBER 31, 1996 PAST PAST 6 PAST 1
MONTH MONTHS YEAR

Dividends per share 4.78(cents) 28.30(cents) 56.01(cents)

Annualized dividend rate 4.90% 4.94% 4.93%

30-day annualized yield 4.74% - -

30-day annualized tax-equivalent yield 7.96% - -

</TABLE>

DIVIDENDS per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $11.48 over
the past month, $11.36 over the past six months and $11.35 over the past
year, you can compare the fund's income over these three periods. The
30-day annualized YIELD is a standard formula for all funds based on the
yields of the bonds in the fund, averaged over the past 30 days. This
figure shows you the yield characteristics of the fund's investments at the
end of the period. It also helps you compare funds from different companies
on an equal basis. The tax-equivalent yield shows what you would have to
earn on a taxable investment to equal the fund's tax-free yield, if you're
in the 40.48% combined effective 1996 federal and state tax bracket, but
does not reflect the payment of the federal alternative minimum tax, if
applicable.
FIDELITY OHIO MUNICIPAL INCOME FUND

FUND TALK: THE MANAGER'S OVERVIEW

MARKET RECAP
Solid demand helped municipal
bonds perform better than their
investment-grade taxable
counterparts in 1996, even
though new issue supply saw
one of its strongest years ever.
For the year, the Lehman
Brothers Municipal Bond Index -
a broad measure of the municipal
bond market - had a total return
of 4.43%. In comparison, the
Lehman Brothers Aggregate
Bond Index - a broad measure
of the performance of the U.S.
taxable bond market - had a
total return of 3.63%. Demand for
munis came from both insurance
companies and individual
investors. The diminishing
likelihood of significant tax reform
in the near future also helped
support the muni market. Like
most domestic bonds, munis
were affected by
stronger-than-expected signs of
strength in the economy early in
1996. Nevertheless, the market
conditions that supported the
muni market prevailed to the
point that munis entered the fall
trading at expensive levels
relative to their taxable
counterparts. At that point and
through October, the
performance of the municipal
market stalled somewhat, as
investor demand declined and
institutional investors sold off
some of their municipal bond
holdings to take profits. That
sell-off subsided somewhat in
November and December, when
munis outperformed comparable
Treasury securities. However,
even though demand helped
buoy munis somewhat in
December, munis were caught in
the overall bond market
downdraft caused by conflicting
economic data and renewed
fears that inflation might lead the
Federal Reserve Board to raise
short-term interest rates.
An interview with Steven Harvey, Portfolio Manager of Fidelity Ohio
Municipal Income Fund
Q. HOW DID THE FUND PERFORM, STEVE?
A. While it's been a volatile year for municipal bonds, the fund outpaced
its peers. For the year ending December 31, 1996, the fund had a total
return of 4.23%. The Ohio municipal debt funds average returned 3.35% for
the same period, according to Lipper Analytical Services. Also, for the
12-month period, the Lehman Brothers Ohio 4 Plus Year Municipal Bond Index
returned 4.60%.
Q. WHAT WERE THE KEYS TO THE FUND'S PERFORMANCE?
A. Non-callable bonds - which can't be redeemed by their issuer before
maturity - did well during the year and helped the fund's performance. As
interest rates fell throughout the past six months, investors began to seek
bonds that would perform well in a declining rate environment. Therefore,
they were willing to pay relatively high prices for non-callable bonds. As
the year ended, I felt that investors were overpaying for some non-callable
bonds, so I sold some of them to lock in significant gains.
Q. WHAT OTHER TYPES OF BONDS PERFORMED WELL?
A. Discount bonds also had a positive effect on performance, especially
over the past six months. In the spring and summer, I bought discount bonds
at a time when I thought their prices were cheap and didn't reflect their
full value. The discount - or below par price - meant that the bond had
very little DE MINIMUS protection, which in the municipal market means that
the bond is not necessarily protected from the unfavorable tax treatment
that can occur during certain market environments. Investors were worried
that some discount bonds would be subject to taxable price appreciation, so
they pushed discount bond prices quite low. But as interest rates fell,
discount bonds performed quite well. More recently, I've sold some discount
bonds to lock in their appreciation and looked for opportunities in bonds
selling closer to par, or face value.
Q. SOME OF THE FUND'S HOSPITAL BONDS ALSO WERE SOLID CONTRIBUTORS.
A. Yes, they were. To the benefit of the fund, some Baa-rated hospital
holdings were the subject of advanced refundings. In an advanced refunding,
an issuer with existing bonds in the market will issue a second set of
bonds with a lower interest rate than the existing bonds. Proceeds from
this sale are then invested in high-quality U.S. Treasury securities, and
these Treasuries then secure the original bonds until the call date or
maturity of the original bonds. The bond investor can gain two important
advantages in this situation: one, the bonds are backed by high-quality
Treasuries, and two, because an advanced refunding can lower the effective
maturity date of the original bonds, there is the potential for price
appreciation since they trade to a shorter call date, rather than to a
longer maturity date. The issuer, on the other hand, gains a lower interest
rate on its debt.
Q. WHERE HAVE YOU FOUND OPPORTUNITIES RECENTLY?
A. In my view, student loan bonds offered some of the best opportunities to
add yield to the fund, and I was able to buy them at what I believed to be
attractive prices. Investors often fear that the loans backing these bonds
will be paid off early and, therefore, force them to reinvest at lower
interest rates. Given the concern about pre-payment, the bonds were - in my
opinion - cheap relative to what I believed to be their value. The student
loan bonds I selected carried relatively high credit ratings and yields, as
well as a relatively low risk of being prepaid.
Q. WHAT'S YOUR OUTLOOK?
A. Over the past six months, we've experienced a healthy municipal bond
market rally as interest rates have fallen. I think it may be unrealistic
to expect the recent rally to continue at its recent pace. Therefore, the
fund's returns likely will derive less from price appreciation and more
from the income that the fund's holdings generate. However, I believe that
with careful research I can identify situations that offer the potential
for price appreciation based on positive events that would enhance their
credit rating, while avoiding those with deteriorating credit quality.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.

FUND FACTS
GOAL:
START DATE:
SIZE:
MANAGER:
(checkmark)

(solid bullet)
(solid bullet)

FIDELITY OHIO MUNICIPAL INCOME FUND

INVESTMENT CHANGES

TOP FIVE SECTORS AS OF DECEMBER 31, 1996
% OF FUND'S % OF FUND'S INVESTMENT
INVESTMENTS S
IN THESE SECTORS
6 MONTHS AGO

General Obligation 39.0 37.5

Water & Sewer 17.0 17.0

Health Care 10.0 11.6

Electric Revenue 8.4 5.6

Education 8.2 7.8

AVERAGE YEARS TO MATURITY AS OF DECEMBER 31, 1996
6 MONTHS AGO

Years 12.9 12.5

AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY DOLLAR
AMOUNT.
DURATION AS OF DECEMBER 31, 1996
6 MONTHS AGO

Years 7.5 7.6

DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH A
FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER FACTORS
ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE. ACCORDINGLY,
A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS EXAMPLE.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF DECEMBER 31, 1996 AS OF JUNE 30, 1996
Row: 1, Col: 1, Value: 55.2
Row: 1, Col: 2, Value: 31.1
Row: 1, Col: 3, Value: 8.199999999999999
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 3.3
Row: 1, Col: 6, Value: 2.2
Aaa 50.8%
Aa, A 33.0%
Baa 9.7%
Non-rated 3.6%
Short-term investments 2.9%
Aaa 55.2%
Aa, A 31.1%
Baa 8.2%
Non-rated 3.3%
Short-term investments 2.2%
Row: 1, Col: 1, Value: 50.8
Row: 1, Col: 2, Value: 33.0
Row: 1, Col: 3, Value: 9.699999999999999
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 3.6
Row: 1, Col: 6, Value: 2.9
SHOWN AS A PERCENTAGE OF THE FUND'S INVESTMENTS. WHERE MOODY'S RATINGS ARE
NOT AVAILABLE, WE HAVE USED S&P RATINGS.
FIDELITY OHIO MUNICIPAL INCOME FUND

INVESTMENTS DECEMBER 31, 1996
Showing Percentage of Total Value of Investments in Securities

MUNICIPAL BONDS - 97.8%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
OHIO - 94.7%
Adams County Valley Local School Dist.:
(Unltd. Tax):
6.65% 12/1/03 (MBIA Insured) Aaa $ 1,000,000 $ 1,122,500
6.65% 12/1/04 (MBIA Insured) Aaa 1,000,000 1,130,000
6.65% 12/1/05 (MBIA Insured) Aaa 1,000,000 1,136,250
Akron Parking Facs. Ltd. Tax:
8.75% 11/1/03 A 160,000 195,600
8.75% 11/1/04 A 160,000 198,800
8.75% 11/1/05 A 160,000 201,400
Akron Str. Impt. Ltd. Tax Series 1985 - 1:
8.75% 11/1/03 A 200,000 244,500
8.75% 11/1/04 A 200,000 248,500
8.75% 11/1/05 A 200,000 251,750
Akron Wtrwks. Rev. Rfdg. (Mtg. Impt.)
4.875% 3/1/12 (MBIA Insured) Aaa 2,250,000 2,112,188
Alliance Wtrwks. Rev. (Cap. Appreciation)
0% 10/15/06 (FGIC Insured) Aaa 765,000 472,388
Bedford Hosp. Impt. Rev. Rfdg.
(Bedford Commty. Hosp.) Series 1990,
8.50% 5/15/09 (Escrowed to Maturity) (d) - 765,000 850,106
Berea Gen. Oblig. Ltd. Tax Rfdg. 0% 12/1/04 Aa 535,000 364,469
Berea Wtrwks. Rfdg. 0% 12/1/06 Aa 510,000 309,188
Berlin & Milan Local School Dist.
7.45% 12/1/11 A 675,000 745,875
Bexley School Dist:
0% 12/1/06 Aa 440,000 266,750
0% 12/1/07 Aa 540,000 307,800
0% 12/1/08 Aa 540,000 288,900
Buckeye Local School Dist. Rfdg.
(Jefferson County) (Cap. Appreciation):
0% 12/1/06 (AMBAC Insured) Aaa 375,000 229,688
0% 12/1/07 (AMBAC Insured) Aaa 760,000 437,950
Buckeye Valley Local School Dist.
(Delaware County) Series A,
6.85% 12/1/15 (MBIA Insured) Aaa 2,000,000 2,357,500
Butler County Hosp. Facs. Auth. Rev. Rfdg. & Impt.
7.50% 1/1/10 Baa 1,500,000 1,586,250
Cambridge Hosp. Impt. Rev. Rfdg.
(Guernsey Mem. Hosp.) 8% 12/1/11 BBB 1,500,000 1,625,625
Cleveland Arpt. Sys. Rev. Series A, 6% 1/1/10
(FGIC Insured) Aaa 2,620,000 2,741,175
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
OHIO - CONTINUED
Cleveland Gen. Oblig. Rfdg.:
5.375% 9/1/11 (AMBAC Insured) Aaa $ 1,960,000 $ 1,955,100
5.50% 9/1/16 (AMBAC Insured) Aaa 2,000,000 2,007,500
Cleveland Pub. Pwr. Sys. Rev.:
Rfdg. (First Mtg.) Series 1, 5% 11/15/24
(MBIA Insured) Aaa 3,000,000 2,760,000
(Capital Appreciation) (First Mtg.) Series A:
0% 11/15/08 (MBIA Insured) Aaa 5,480,000 2,966,050
0% 11/15/10 (MBIA Insured) Aaa 2,685,000 1,275,375
0% 11/15/11 (MBIA Insured) Aaa 2,685,000 1,191,469
Cleveland Wtrwks. Rev. Rfdg. (1st Mtg.):
Series F-92 A, 6.25% 1/1/15
(AMBAC Insured) Aaa 3,000,000 3,150,000
Series F-92 B, 6.25% 1/1/05
(AMBAC Insured) Aaa 1,000,000 1,085,000
Series G, 5.50% 1/1/21 (MBIA Insured) Aaa 8,725,000 8,768,625
Columbus Gen. Oblig.:
Rfdg Series B, 5.90% 1/1/01 Aaa 1,000,000 1,055,000
(Various Purpose):
Series 1, 6% 5/15/10 Aaa 1,000,000 1,061,250
9.50% 4/15/04 Aaa 500,000 645,625
8.125% 5/1/01 Aaa 1,000,000 1,142,500
Columbus Swr. Syst. Imp. Unltd. Tax
9.375% 4/15/07 Aaa 590,000 798,713
Columbus Swr. Impt. #26-E
6.50% 9/15/01 Aaa 2,000,000 2,180,000
Columbus Wtrwks. Enlargement #44
6%, 5/1/12 Aaa 1,250,000 1,310,938
Cuyahoga County Cap. Appreciation Unltd.
Tax Rfdg. Series A:
0% 10/1/08 (MBIA Insured) Aaa 4,000,000 2,225,000
0% 10/1/09 (MBIA Insured) Aaa 4,200,000 2,184,000
0% 10/1/10 (MBIA Insured) Aaa 5,000,000 2,431,250
0% 10/1/11 (MBIA Insured) Aaa 2,400,000 1,101,000
0% 10/1/12 (MBIA Insured) Aaa 1,505,000 641,506
0% 10/1/13 (MBIA Insured) Aaa 3,000,000 1,200,000
Cuyahoga County Gen. Oblig.
5.50% 11/15/05 Aa 2,400,000 2,505,000
Cuyahoga County Hosp. Rev. Rfdg.:
(Cleveland Clinic Foundation) Series A:
8% 12/1/08 Aa 1,000,000 1,046,330
8% 12/1/15 Aa 2,250,000 2,344,208
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
OHIO - CONTINUED
Dayton Arpt. Rev. Rfdg.
(James M. Cox Dayton Intl. Arpt.):
5.15% 12/1/07 (AMBAC Insured) Aaa $ 1,300,000 $ 1,311,375
5.25% 12/1/15 (AMBAC Insured) Aaa 1,000,000 968,750
Defiance Spl. Assessments 7% 12/1/11 A 365,000 397,850
Delaware City School Dist. Capital Appreciation
(Const. & Impt.) Series B:
0% 12/1/08 (FGIC Insured) Aaa 1,100,000 596,750
5.50% 12/1/08 (FGIC Insured) Aaa 1,400,000 1,442,000
0% 12/1/09 (FGIC Insured) Aaa 1,000,000 507,500
Delaware County Wtr. & Swr.
6.50% 12/1/03 A1 1,750,000 1,925,000
Dublin School Dist.:
Unltd. Tax Rfdg. (Cap. Appreciation)
0% 12/1/04 (AMBAC Insured) Aaa 1,930,000 1,331,700
6.20% 12/1/19, (AMBAC Insured) Aaa 1,400,000 1,480,500
Fairfield City School Dist.:
7.10% 12/1/07 (FGIC Insured) Aaa 1,120,000 1,314,600
7.45% 12/1/14 (FGIC Insured) Aaa 1,000,000 1,231,250
Franklin City School Dist. Unltd. Tax
(Warren County Impt.) 7% 12/1/14 A 1,250,000 1,331,250
Franklin County Ltd. Tax:
(Courthouse) 6.375% 12/1/17
(Pre-Refunded to 12/1/01 @ 102) (d) AAA 2,500,000 2,743,750
5.50% 12/1/15 Aaa 1,225,000 1,226,531
5.50% 12/1/16 Aaa 1,290,000 1,291,613
Franklin County Rev.
(Online Computer Library Ctr.):
7.20% 7/15/06 - 1,000,000 1,080,000
6% 4/15/12 - 3,500,000 3,508,750
Granville Village School Dist. Rfdg:
(Cap. Appreciation):
0% 12/1/06 (AMBAC Insured) Aaa 625,000 382,813
0% 12/1/07 (AMBAC Insured) Aaa 665,000 383,206
0% 12/1/08 (AMBAC Insured) Aaa 650,000 352,625
0% 12/1/09 (AMBAC Insured) Aaa 645,000 328,144
Greene County Swr. Sys. Rev.
(Cap. Appreciation) 0% 12/1/09
(AMBAC Insured) Aaa 775,000 394,281
Greene County Wtr. Sys. Rev. Series A,
6% 12/1/16 (FGIC Insured) Aaa 2,500,000 2,621,875
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
OHIO - CONTINUED
Hamilton Elec. Sys. Mtg. Rev. Rfdg.:
Series A, 6% 10/15/09 (FGIC Insured) Aaa $ 2,920,000 $ 3,091,550
Series 1992 A, 6% 10/15/08 (FGIC Insured) Aaa 2,000,000 2,095,000
Hamilton County Health Care Sys. Rev.:
Rfdg. (Providence Hosp. - Franciscan Sisters
Poor Health Sys.) 6.875% 7/1/15 Baa1 5,000,000 5,243,750
(Sisters of Charity Health Care) Series A:
6.25% 5/15/14 (AMBAC Insured) Aaa 1,000,000 1,051,250
6.25% 5/15/08 (AMBAC Insured) Aaa 4,220,000 4,552,325
Hamilton County Swr. Sys. Rev. Rfdg. Series A.:
6% 12/1/05 (FGIC Insured) Aaa 4,500,000 4,899,375
5.40% 12/1/08 (FGIC Insured) Aaa 3,715,000 3,831,094
5.45% 12/1/09 (FGIC Insured) Aaa 1,000,000 1,028,750
Hilliard School Dist.:
Series A:
6% 12/1/05 (FGIC Insured) Aaa 1,415,000 1,537,044
0% 12/1/11 (FGIC Insured) Aaa 1,600,000 712,000
Unltd. Tax 5% 12/1/09 (FGIC Insured) Aaa 1,000,000 977,500
Lakewood Gen. Oblig.:
Series A, 6.60% 12/1/11 Aa 1,630,000 1,850,050
6.60% 12/1/08 Aa 1,525,000 1,723,250
Lakota Local School Dist. Rfdg. (Cap. Appreciation):
Unltd. Tax 0% 12/1/99 A1 445,000 390,488
0% 12/1/00 A1 625,000 521,875
0% 12/1/01 A1 590,000 469,050
0% 12/1/02 A1 555,000 419,025
0% 12/1/03 A1 260,000 185,900
0% 12/1/04 A1 730,000 492,750
0% 12/1/05 A1 690,000 439,875
0% 12/1/06 A1 650,000 390,000
0% 12/1/07 A1 610,000 343,888
Lima Swr. Sys. Rev. Rfdg. & Impt. 6.30%
12/1/12 (AMBAC Insured) Aaa 5,000,000 5,325,000
Logan-Hocking Local School Dist. Rfdg.
Series B, 0% 12/1/08 (AMBAC Insured) Aaa 1,065,000 584,419
Lorain Gen. Oblig. Ltd. Tax 7.875% 12/1/09 Baa 1,000,000 1,096,250
Lowellville San. Swr. Sys. Rev.
(Browning-Ferris Industries, Inc.)
7.25% 6/1/06 (b) A 1,200,000 1,224,000
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
OHIO - CONTINUED
Lucas County Convention Ctr. Site Acquisition
Bonds Ltd. Tax:
6.50% 12/1/09 A $ 340,000 $ 379,100
6.50% 12/1/10 A 340,000 377,825
6.50% 12/1/11 A 340,000 378,250
6.50% 12/1/12 A 340,000 374,000
Lucas County Hosp. Rev.:
Rfdg. (Riverside Hosp. Proj.)
7.625% 6/1/15 Baa1 7,485,000 7,682,829
(Promedica Healthcare Oblig. Group)
6% 11/15/04 (MBIA Insured) Aaa 4,000,000 4,310,000
Mahoning Valley San. Dist.:
7.85% 12/15/12 - 1,200,000 1,254,000
7.85% 12/15/13 - 1,275,000 1,332,375
Mahoning Valley San. Dist. Wtr. Rev.
7.75% 5/15/14 - 3,250,000 3,388,125
Marion County Hosp. Impt. Rev. Rfdg.
(Commty. Hosp.):
5.70% 5/15/02 BBB+ 1,500,000 1,507,500
5.80% 5/15/03 BBB+ 1,825,000 1,836,406
6.10% 5/15/06 BBB+ 1,000,000 1,015,000
6.375% 5/15/11 BBB+ 1,500,000 1,511,250
Marysville Exempt Village School Rfdg.
(Cap. Appreciation):
0% 12/1/05 (AMBAC Insured) Aaa 795,000 518,738
0% 12/1/06 (AMBAC Insured) Aaa 750,000 461,250
0% 12/1/07 (AMBAC Insured) Aaa 690,000 400,200
Mason Sch. Dist.:
6.05% 12/1/09 (FGIC Insured) Aaa 1,225,000 1,329,125
6.15% 12/1/10 (FGIC Insured) Aaa 1,420,000 1,546,025
Mentor Exempt Village School Dist. Rdfg.
(Cap. Appreciation):
0% 12/1/00 (MBIA Insured) Aaa 755,000 637,031
0% 12/1/01 (MBIA Insured) Aaa 795,000 635,006
0% 12/1/02 (MBIA Insured) Aaa 845,000 643,256
0% 12/1/03 (MBIA Insured) Aaa 840,000 609,000
Miami County Hosp. Facs. Rev. (Upper Valley
Med. Ctr. Proj.) Series B, 8.25% 5/1/04
(BIG Insured) (Pre-Refunded to
5/1/97 @ 102) (d) Aaa 410,000 424,395
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
OHIO - CONTINUED
Middleburg Heights Hosp. Impt. Rev.
(Southwest Gen. Hosp.) 7.20% 8/15/19
(Pre-Refunded to 8/15/01 @ 102) (d) A $ 2,000,000 $ 2,265,000
Montgomery County Solid Waste Rev. Rfdg.
6% 11/1/05 (MBIA Insured) Aaa 1,940,000 2,107,325
Newark Wtr. (Cap. Appreciation)
0% 12/1/07 (AMBAC Insured) Aaa 455,000 263,900
North Canton School Dist. 5.90% 12/1/14
(AMBAC Insured) Aaa 2,000,000 2,060,000
Northeast Ohio Regional Swr. Dist. Wastewtr. Rev.
Rfdg. 6.25% 11/15/04 (AMBAC Insured) Aaa 1,000,000 1,106,250
Ohio Air Quality Dev. Auth. Rev. Rfdg.:
(Dayton Pwr. & Lt. Co. Proj.)
6.10% 9/1/30 A1 4,000,000 4,120,000
(Ohio Pwr. Co. Proj.) Series B,
7.40% 8/1/09 Baa1 3,250,000 3,445,000
(Columbus & Southern Pwr. Co.) Series A,
6.375% 12/1/20 (FGIC Insured) Aaa 3,000,000 3,172,500
Ohio Bldg. Auth.:
Rfdg. (Ohio Ctr. Arts) Series A,
5.45% 10/1/07 A1 2,000,000 2,055,000
Rfdg. (State Correctional Facs.) Series A:
6.50% 10/1/03 A1 2,750,000 2,980,313
5.70% 10/1/04 A1 1,125,000 1,178,438
5.75% 10/1/05 A1 2,080,000 2,181,400
5.25% 10/1/09 A1 3,000,000 2,996,250
Rfdg. (State Facs. - Vern Riffe) Series A,
5.75% 10/1/04 (AMBAC Insured) Aaa 8,250,000 8,786,250
(Administration Bldg. Fund Proj.) Series A:
5.60% 10/1/07 A1 3,330,000 3,413,250
4.875% 10/1/10 A1 1,000,000 940,000
(Adult Correctional Facs.)
6% 4/1/06 (AMBAC Insured) Aaa 1,930,000 2,084,400
(Workers Compensation Bldg. A)
4.75% 4/1/14 A 1,620,000 1,455,975
Ohio Cap. Corp. Multi-Family Hsg. Rev. Rfdg:
Series A, 7.50% 1/1/24 (FNMA Coll.) AAA 1,000,000 1,057,500
Series C, 7.375% 7/1/23 (FNMA Coll.) AAA 2,000,000 2,065,000
Ohio Expositions Commission Ctfs. of Prtn.
(Agricenter Facs.) 8.25% 10/1/06
(Pre-Refunded to 4/1/00 @ 101) (d) - 1,090,000 1,226,250
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
OHIO - CONTINUED
Ohio Gen. Oblig.:
(Cap. Appreciation) (Infrastructure Impt.)
Series 1989, 0% 9/1/07 Aa1 $ 7,225,000 $ 4,208,563
(College Savings Bonds):
0% 8/1/09 Aa1 2,290,000 1,173,625
0% 8/1/10 Aa1 2,000,000 962,500
0% 8/1/14 Aa1 1,375,000 515,625
(Infrastructure Impt.):
Rfdg. Series R:
0% 9/1/00 Aa1 3,260,000 2,787,300
5.45% 9/1/03 Aa1 2,350,000 2,467,500
5.75% 8/1/04 Aa1 1,000,000 1,066,250
6.50% 8/1/04 Aa1 5,670,000 6,307,875
6.65% 8/1/05 Aa1 3,000,000 3,386,250
6.50% 9/1/01 Aa1 1,000,000 1,092,500
6.65% 9/1/09 Aa1 1,000,000 1,138,750
Ohio Higher Edl. Facs. Commission Rev.:
(Case Western Reserve Univ. Proj.):
Rfdg.:
6% 10/1/14 Aa 1,500,000 1,595,625
6.125% 10/1/15 Aa 2,000,000 2,150,000
6.25% 10/1/16 Aa 2,500,000 2,731,250
Series B, 6.50% 10/1/20 Aa 2,250,000 2,536,875
7.70% 10/1/18 Aa 70,000 73,166
6% 10/1/22 Aa 650,000 658,938
(Kenyon College Proj.) 5.90% 12/1/06
(AMBAC Insured) Aaa 1,000,000 1,061,250
Ohio Hsg. Fin. Agcy. Mtg. Rev.
(Residential B-2) 5.375% 9/1/19 (b) AAA 4,000,000 3,985,000
Ohio Poll. Cont. Rev. (Standard Oil Co.)
6.75% 12/1/15 Aa3 3,100,000 3,611,500
Ohio Pub. Facs. Commission Higher Ed. Cap. Facs.:
Series II-A, 4.50% 11/1/09 (MBIA Insured) Aaa 2,600,000 2,408,250
Series II-B, 5% 11/1/07 (MBIA Insured) Aaa 9,275,000 9,251,813
Ohio Pub. Facs. Commission Mental Health
Cap. Facs. Series II-B, 5.125% 6/1/11
(FSA Insured) Aaa 2,600,000 2,522,000
Ohio Turnpike Commission Rev:
Series A:
6% 2/15/04 (FSA Insured) Aaa 5,140,000 5,551,200
6% 2/15/05 (FSA Insured) Aaa 2,000,000 2,165,000
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
OHIO - CONTINUED
Ohio Turnpike Commission Rev: - continued
Series A: - continued
6% 2/15/06 (FSA Insured) Aaa $ 2,200,000 $ 2,384,250
6% 2/15/07 (FSA Insured) Aaa 3,100,000 3,355,750
5.60% 2/15/12 (MBIA Insured) Aaa 2,840,000 2,886,150
5.70% 2/15/13 (MBIA Insured) Aaa 2,660,000 2,713,200
Ohio Wtr. Dev. Auth. Rev.:
Rfdg. (Pure Wtr.) 5.50% 12/1/18
(AMBAC Insured) Aaa 2,500,000 2,484,375
(Pure Wtr.) Series I, 6% 12/1/16
(AMBAC Insured) (Escrowed to Maturity) (d) Aaa 1,685,000 1,762,931
(Fresh Wtr.):
6.25% 12/1/02 (AMBAC Insured) Aaa 1,915,000 2,084,956
6.25% 12/1/03 (AMBAC Insured) Aaa 2,025,000 2,219,906
Ohio Wtr. Dev. Auth. Poll. Cont. Facs. Rev.:
(Wtr. Control Loan Fd.) State Matching Series
6.50% 1/1/04 (MBIA Insured) Aaa 1,000,000 1,117,500
6.50% 12/1/05 (MBIA Insured) Aaa 2,735,000 3,066,619
Ohio Wtr. Dev. Auth. Solid Waste Disp. Rev.
(North Star BHP Steel - Cargill)
6.30% 9/1/20 Aa3 6,350,000 6,596,063
Olentangy Local School Dist. Unltd. Tax:
7.75% 12/1/07 (BIG Insured) Aaa 500,000 617,500
7.75% 12/1/09 (BIG Insured) Aaa 100,000 124,500
7.75% 12/1/11 (BIG Insured) Aaa 190,000 237,975
Ottawa County Gen. Oblig. Ltd. Tax
7.50% 10/1/14 (AMBAC Insured) A1 500,000 551,875
Ottawa County San. Swr. Sys. Rev. Rfdg.
(Cap. Appreciation) (Danbury Proj.)
0% 10/1/06 (AMBAC Insured) Aaa 1,445,000 892,288
Pickerington Local School Dist. Constr. & Impt.
5.8% 12/1/09 (FGIC Insured) Aaa 1,000,000 1,062,500
Portage County Hosp. Rev.
(Robinson Memorial Hosp. Proj.)
6/50% 11/15/03 (MBIA Insured) Aaa 1,080,000 1,193,400
South Western City Sch. Dist. Rfdg.
(Franklin & Pickway Counties) Series A,
6.20% 12/1/06 (AMBAC Insured) Aaa 1,000,000 1,080,000
Southwest Local School Dist. (Hamilton County):
0% 12/1/04 (AMBAC Insured) Aaa 500,000 344,375
0% 12/1/05 (AMBAC Insured) Aaa 525,000 342,563
0% 12/1/06 (AMBAC Insured) Aaa 525,000 322,875
0% 12/1/07 (AMBAC Insured) Aaa 520,000 301,600
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
OHIO - CONTINUED
Springboro Commty. School Dist. Rfdg.
0% 12/1/06 (AMBAC Insured) Aaa $ 915,000 $ 552,431
Stark County Gen. Oblig. 5.60% 11/15/08
(AMBAC Insured) Aaa 1,150,000 1,183,063
Stow School Dist. School Impt. Unltd. Tax
9.125% 12/1/06 A 590,000 756,675
Student Loan Fund Corp. Student Loan Rev.:
Series A, 5.50% 12/1/01 (b) A1 5,500,000 5,610,000
(Cincinnati Student Loan):
Rfdg. Series A:
5.75% 8/1/02 A 3,475,000 3,587,938
7.25% 2/1/08 (b) A 4,000,000 4,195,000
Sr. Sub-Series A:
5.75% 8/1/03 A1 2,000,000 2,030,000
5.85% 8/1/04 A1 5,500,000 5,575,625
Toledo Gen. Oblig.:
7.625% 12/1/04 (AMBAC Insured) Aaa 1,000,000 1,192,500
6.10% 12/1/04 (AMBAC Insured) Aaa 1,750,000 1,857,188
Toledo Wtrwks. Rev. 6% 11/15/06
(FGIC Insured) Aaa 1,000,000 1,090,000
Warren County Gen. Oblig.
Ltd. Tax 6.65% 12/1/11 Aa 500,000 565,625
6.10% 12/1/12 Aa 500,000 534,375
Warren County Swr. Impt. (P&G Co./Lower
Miami) 5.50% 12/1/16 Aa 1,455,000 1,409,521
Willoughby Gen. Oblig. Road Impt. Ltd. Tax
7.40% 12/1/11 A1 1,200,000 1,453,500
359,340,046
PUERTO RICO - 3.1%
Puerto Rico Elec. Pwr. Auth. Rev. Rfdg. Series W,
7% 7/1/07 (MBIA Insured) Aaa 6,000,000 7,020,000
Puerto Rico Infrastructure Fing. Auth. Spl. Tax
Series 1988 A, 7.75% 7/1/08 Baa1 2,500,000 2,656,250
Puerto Rico Ports Auth. Spl. Facs.
(American Airlines) Series A,
6.25% 6/1/26 Baa3 1,875,000 1,933,594
11,609,844
TOTAL MUNICIPAL BONDS
(Cost $358,696,314) 370,949,890
MUNICIPAL NOTES (A) - 2.2%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
OHIO - 2.2%
Franklin County Hosp. Rev.
(Holy Cross Health Sys. & Mount Carmel
Health Sys.) Series 95, 4.10%, Liquidity
Facility Morgan Guaranty Trust Co., VRDN VMIG 1 $ 400,000 $ 400,000
Hamilton Health Sys. Rev.
(Franciscan Sisters Poor Health Sys.)
Series 1987 A, 0.05%,
LOC Chemical Bank, VRDN VMIG 1 400,000 400,000
Ohio Air Quality Dev. Auth. Rev. VRDN (b):
(JMG Funding):
Series 1994-A, 4.15%,
LOC Societe Generale VMIG 1 1,200,000 1,200,000
Series 1994-B, 4.10%,
LOC Societe Generale VMIG 1 1,000,000 1,000,000
Series 1995-B, 4.10%,
LOC Societe Generale A-1+ 500,000 500,000
(Cincinnati Gas & Elec.) Series B, 4.90%,
LOC Canadian Imperial Bank
of Commerce VMIG 1 1,200,000 1,200,000
Ohio State Univ. Rev. (Gen. Receipts)
Series 1985 B, 4.05%,
LOC Nat'l. Westminster Bank PLC,
VRDN VMIG 1 435,000 435,000
Scioto County Hosp. Facs. Rev. (VHA Central,
Inc.) Series 85-E, 3.90%, (AMBAC Insured)
(BPA First Nat'l. Bank Chicago), VRDN A-1+ 800,000 800,000
Toledo Svcs. Spl. Assessment Notes
Spl. Oblig. Series 1996, 4.15%,
LOC Canadian Imperial
Bank of Commerce, VRDN VMIG 1 1,500,000 1,500,000
Twinsburg Ind. Dev. Rev.
(United Stationers, Inc. Proj.) 5.15%,
LOC Pittsburgh Nat'l. Bank, VRDN P-1 800,000 800,000
TOTAL MUNICIPAL NOTES
(Cost $8,235,000) 8,235,000
TOTAL INVESTMENTS - 100%
(Cost $366,931,314) $ 379,184,890
SECURITY TYPE ABBREVIATIONS
VRDN - Variable Rate Demand Notes
LEGEND
6. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
7. Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals.
8. Standard & Poor's credit ratings are used in the absence of a rating by
Moody's Investors Service, Inc.
9. Security collateralized by an amount sufficient to pay interest and
principal.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investment in securities, is as follows (ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 83.4% AAA, AA, A 76.0%
Baa 6.2% BBB 6.5%
Ba 0.0% BB 0.5%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by both S&P and Moody's amounted to 3.3%. FMR has
determined that unrated debt securities that are lower quality account for
1.6% of the total value of investment in securities.
The distribution of municipal securities by revenue source, as a percentage
of total value of investment in securities, is as follows:
General Obligation 39.0%
Water and Sewer 17.0
Health Care 10.0
Electric Revenue 8.4
Education 8.2
Transportation 6.3
Others (individually less than 5%) 11.1
TOTAL 100.0%
INCOME TAX INFORMATION
At December 31, 1996, the aggregate cost of investment securities for
income tax purposes was $366,931,314. Net unrealized appreciation
(depreciation) aggregated $12,253,576, of which $12,818,136 related to
appreciated investment securities and $564,560 related to depreciated
investment securities.
The fund hereby designates approximately $191,583 as a capital gain
dividend for the purpose of the dividend paid deduction.
At December 31, 1996, the fund was required to defer approximately
$1,222,675 of losses on futures contracts.
During fiscal year ended 1996, 100% of the fund's income dividends was free
from federal income tax, and 8.28% of the fund's income dividends was
subject to the federal alternative minimum tax.
FIDELITY OHIO MUNICIPAL INCOME FUND

FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
DECEMBER 31, 1996

ASSETS

Investment in securities, at value (cost $366,931,314) - $ 379,184,890
See accompanying schedule

Interest receivable 4,478,549

TOTAL ASSETS 383,663,439

LIABILITIES

Payable to custodian bank $ 202,451

Payable for fund shares redeemed 811,348

Distributions payable 797,811

Accrued management fee 125,130

Other payables and accrued expenses 100,393

TOTAL LIABILITIES 2,037,133

NET ASSETS $ 381,626,306

Net Assets consist of:

Paid in capital $ 369,241,664

Accumulated undistributed net realized gain (loss) 131,066
on investments

Net unrealized appreciation (depreciation) on investments 12,253,576

NET ASSETS, for 33,382,388 shares outstanding $ 381,626,306

NET ASSET VALUE, offering price and redemption $11.43
price per share ($381,626,306 (divided by) 33,382,388 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1996

INTEREST INCOME $ 21,317,128

EXPENSES

Management fee $ 1,524,443

Transfer agent, accounting and custodian fees 668,128
and expenses

Non-interested trustees' compensation 1,474

Registration fees 37,746

Audit 38,756

Legal 5,495

Miscellaneous 6,557

Total expenses before reductions 2,282,599

Expense reductions (4,808) 2,277,791

NET INTEREST INCOME 19,039,337

REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:

Investment securities 3,704,367

Futures contracts (281,334) 3,423,033

Change in net unrealized appreciation (depreciation) (6,935,610)
on investment securities

NET GAIN (LOSS) (3,512,577)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 15,526,760
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1996 1995

INCREASE (DECREASE) IN NET ASSETS

Operations $ 19,039,337 $ 21,258,088
Net interest income

Net realized gain (loss) 3,423,033 1,492,811

Change in net unrealized appreciation (depreciation) (6,935,610) 34,935,377

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 15,526,760 57,686,276
FROM OPERATIONS

Distributions to shareholders (19,039,337) (21,258,088)
From net interest income

From net realized gain (2,343,618) -

TOTAL DISTRIBUTIONS (21,382,955) (21,258,088)

Share transactions 52,548,440 98,716,714
Net proceeds from sales of shares

Reinvestment of distributions 16,325,366 16,250,656

Cost of shares redeemed (85,834,479) (97,218,900)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING (16,960,673) 17,748,470
FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS (22,816,868) 54,176,658

NET ASSETS

Beginning of period 404,443,174 350,266,516

End of period $ 381,626,306 $ 404,443,174

OTHER INFORMATION
Shares

Sold 4,629,316 8,863,429

Issued in reinvestment of distributions 1,436,229 1,447,995

Redeemed (7,582,296) (8,706,556)

Net increase (decrease) (1,516,751) 1,604,868

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED DECEMBER 31,

1996 1995 1994 1993 A 1992

SELECTED PER-SHARE DATA

Net asset value, beginning $ 11.590 $ 10.520 $ 12.020 $ 11.550 $ 11.320
of period

Income from Investment .560 .618 .657 .693 .718
Operations
Net interest income

Net realized and unrealized (.090) 1.070 (1.310) .720 .230
gain (loss)

Total from investment .470 1.688 (.653) 1.413 .948
operations

Less Distributions

From net interest income (.560) (.618) (.657) (.693) (.718)

From net realized gain (.070) - (.190) (.250) -

Total distributions (.630) (.618) (.847) (.943) (.718)

Net asset value, end of period $ 11.430 $ 11.590 $ 10.520 $ 12.020 $ 11.550

TOTAL RETURN 4.23% 16.39% (5.55) 12.56% 8.66%
%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period $ 381,626 $ 404,443 $ 350,267 $ 457,872 $ 384,861
(000 omitted)

Ratio of expenses to average .59% .58% .57% .57% .61%
net assets

Ratio of net interest income to 4.93% 5.52% 5.88% 5.67% 6.31%
average net assets

Portfolio turnover rate 43% 48% 22% 41% 20%

</TABLE>

D EFFECTIVE JANUARY 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INTEREST INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.

FIDELITY OHIO MUNICIPAL MONEY MARKET FUND

PERFORMANCE: THE BOTTOM LINE

To evaluate a money market fund's historical performance, you can look at
either total return or yield. Total return reflects the change in the value
of an investment, assuming reinvestment of the fund's dividend income.
Yield measures the income paid by a fund. Since a money market fund tries
to maintain a $1 share price, yield is an important measure of performance.
If Fidelity had not reimbursed certain fund expenses the past five years
and life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Fidelity Ohio Municipal Money Market Fun 3.08% 14.75% 29.72%
d

Ohio Tax-Free Money Market Funds 3.05% 14.49% 28.39%
Average

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, five years or since the fund
started on August 29, 1989. For example, if you invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment would
be $1,050. To measure how the fund's performance stacked up against its
peers, you can compare it to the Ohio tax-free money market funds average,
which reflects the performance of 11 Ohio tax-free money market funds with
similar objectives tracked by IBC Financial Data, Inc. over the past one
year. (The periods covered by IBC Financial Data, Inc. numbers are the
closest available match to those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Fidelity Ohio Municipal Money Market Fun 3.08% 2.79% 3.60%
d

Ohio Tax-Free Money Market Funds 3.05% 2.74% 3.36%
Average

Fidelity Ohio Municipal 4.06% 2.98% 2.94% 3.21% 3.45%
Money Market Fund

Ohio Tax-Free Money 4.03% 2.90% 2.93% 3.19% 3.36%
Market Funds Average

Ohio Municipal Money 6.82% 5.01% 4.94% 5.39% 5.80%
Market Tax-equivalent

Row: 1, Col: 1, Value: 3.57
Row: 1, Col: 2, Value: 3.63
Row: 2, Col: 1, Value: 3.66
Row: 2, Col: 2, Value: 3.65
Row: 3, Col: 1, Value: 4.06
Row: 3, Col: 2, Value: 4.03
Row: 4, Col: 1, Value: 2.98
Row: 4, Col: 2, Value: 2.9
Row: 5, Col: 1, Value: 2.94
Row: 5, Col: 2, Value: 2.93
Ohio Municipal
Money Market
Fund
Ohio Tax-Free
Money Market
Funds Average
5% -
4% -
3% -
2% -
1% -
0%
YIELD refers to the income paid by the fund over a given period. Yields for
money market funds are usually for seven-day periods, expressed as annual
percentage rates. A yield that assumes income earned is reinvested or
compounded is called an effective yield. The chart above shows the fund's
current seven-day yield at quarterly intervals over the past year. You can
compare these yields to the Ohio tax-free money market funds average as
tracked by IBC Financial Data, Inc. Or you can look at the fund's
tax-equivalent yield, which is based on a combined effective 1996 federal
and state income tax rate of 40.48% and reflects that a portion of the
fund's income was subject to state taxes. A portion of the fund's income
may be subject to the alternative minimum tax.
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT PAST
RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.

COMPARING
PERFORMANCE
Yields on tax-free investments
are usually lower than yields
on taxable investments.
However, a straight
comparison between the two
may be misleading because it
ignores the way taxes reduce
taxable returns. Tax-equivalent
yield - the yield you'd have to
earn on a similar taxable
investment to match the
tax-free yield - makes the
comparison more
meaningful. Keep in mind that
the U.S. Government neither
insures nor guarantees a
money market fund. And there
is no assurance that a money
fund will maintain a $1 share
price.
(checkmark)
FIDELITY OHIO MUNICIPAL MONEY MARKET FUND

FUND TALK: THE MANAGER'S OVERVIEW

NOTE TO SHAREHOLDERS: Scott Orr became Portfolio Manager of Fidelity Ohio
Municipal Money Market Fund on August 1, 1996
Q. SCOTT, CAN YOU PLEASE DESCRIBE THE INVESTMENT ENVIRONMENT OF THE PAST
YEAR?
A. In early 1996, the Federal Reserve Board responded to sluggish economic
growth and mild inflationary pressures by lowering the rate banks charge
each other for overnight loans - known as the federal funds rate. Lower
interest rates tend to stimulate economic growth by easing access to
credit. In January 1996, the Fed lowered the funds rate by one-quarter
percentage point to 5.25%. At that time, most analysts believed further
rate cuts would be necessary to lift the economy out of the doldrums. Then,
suddenly, the mood shifted.
Q. WHY DID THE OUTLOOK CHANGE?
A. The first sign may have been Fed Chairman Alan Greenspan's surprisingly
upbeat testimony before the Senate Banking Committee in February. Then the
February employment report showed an increase in new jobs nearly four
times greater than expected. That sent interest rates up sharply and
prompted a sell-off in the stock and bond markets. In the following months,
market sentiment - and corresponding interest rates - hung on the release
of every economic report and pronouncement by the Fed. At times, it
appeared the Fed would raise rates; at others, the situation was more
stable. For the past few months, the consensus has been that the Fed's next
move will be a tightening - an interest rate increase - but data have come
in fairly mixed. That has pushed the expected time table for interest rate
increases further into the future.
Q. WHAT HAS BEEN THE FUND'S STRATEGY IN RESPONSE TO THIS BACKDROP?
A. At the beginning of 1996, the fund's average maturity was 59 days, a
level that preserved some flexibility in the face of a changing market.
Once money market rates rose dramatically in March, the fund took advantage
of buying opportunities in longer-term securities. That brought the
maturity out to around 65 days at the beginning of July. Since taking over
the fund, I've kept the maturity at about that level, increasing it to 70
days at the end of December. I've typically kept the fund's average
maturity five or 10 days longer than similar funds, even in periods when I
expected Fed interest rate increases. That's because I felt the yields on
the fixed-rate notes I purchased were going to outperform alternatives in
the market even if the Fed did raise rates.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on December 31, 1996, was 3.47%, compared to
4.04% 12 months ago. For Ohio investors in the 40.48% combined state and
federal income-tax bracket, the latest yield was the equivalent of a 5.83%
return on a taxable investment. Through December 31, 1996, the fund's
12-month total return was 3.08%, compared to 3.05% for the Ohio tax-free
money market funds average, according to IBC Financial Data, Inc.
Q. WHAT'S YOUR OUTLOOK AS WE HEAD INTO 1997?
A. It's difficult to know what the Fed's going to do. I believe it's more
likely that the Fed will tighten, but we continue to receive mixed signals
on the economy. There have been some signs of strength, but not enough to
warrant action at this time, especially since inflation appears to be in
check. For the Fed to feel compelled to raise rates, data will have to be
more convincing that the economy is heating up and inflation is a threat.
I'll be monitoring data week-to-week as it comes out, but my feeling is
that there is more risk the economy could get stronger, leading to higher
rates over the next few months.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.

WORDS TO KNOW
COMMERCIAL PAPER: A security
issued by a municipality to
finance capital or operating
needs.
FEDERAL FUNDS RATE: The interest
rate banks charge each other
for overnight loans.
MATURITY: The time remaining
before an issuer is scheduled
to repay the principal amount
on a debt security. When the
fund's average maturity -
weighted by dollar amount -
is short, the fund manager is
anticipating a rise in interest
rates. When the average
maturity is long, the manager
is expecting rates to fall. When
the average maturity is
neutral, the manager wants
the flexibility to respond to
rising rates, while still
capturing a portion of the
higher yields available from
issues with longer maturities.
MUNICIPAL NOTE: A security
issued in advance of future tax
or other revenues and payable
from those specific sources.
TENDER BOND: A variable-rate,
usually long-term security that
give the bond holder the
option to redeem the bond at
face value before maturity.
VARIABLE RATE DEMAND NOTE
(VRDN): A tender bond that
can be redeemed on short
notice, typically one or seven
days. VRDNs are useful in
managing the fund's average
maturity and liquidity.

FIDELITY OHIO MUNICIPAL MONEY MARKET FUND

INVESTMENT CHANGES

MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
12/31/96 6/30/96 12/31/95

0 - 30 61 60 62

31 - 90 10 13 15

91 - 180 16 15 12

181 - 397 13 12 11

WEIGHTED AVERAGE MATURITY
12/31/96 6/30/96 12/31/95

Ohio Municipal 70 days 65 days 59 days
Money Market Fund

Ohio Tax-Free Money 60 days 58 days 60 days
Market Funds Average*

ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF DECEMBER 31, 1996 AS OF JUNE 30, 1996

Row: 1, Col: 1, Value: 61.0
Row: 1, Col: 2, Value: 5.0
Row: 1, Col: 3, Value: 5.0
Row: 1, Col: 4, Value: 27.0
Row: 1, Col: 5, Value: 2.0
Row: 1, Col: 1, Value: 59.0
Row: 1, Col: 2, Value: 3.0
Row: 1, Col: 3, Value: 8.0
Row: 1, Col: 4, Value: 27.5
Row: 1, Col: 5, Value: 2.5
Variable rate
demand notes
(VRDNs) 61%
Commercial
paper 5%
Tender bonds 5%
Municipal
notes 28%
Other 1%
Variable rate
demand notes
(VRDNs) 59%
Commercial
paper 3%
Tender bonds 8%
Municipal
notes 28%
Other 2%
* SOURCE: IBC'S MONEY FUND REPORT(registered trademark)
FIDELITY OHIO MUNICIPAL MONEY MARKET FUND

INVESTMENTS DECEMBER 31, 1996
Showing Percentage of Total Value of Investments in Securities

MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
OHIO - 100.0%
American Muni. Pwr. BAN:
(Bldg. Acquisition) 3.95% 11/12/97 $ 1,800,000 $ 1,800,000
(Cleveland Public Pwr. Proj.) 4.15% 9/3/97 7,750,000 7,750,000
3.95% 12/09/97 600,000 600,000
Beavercreek City BAN 4% 8/15/97 5,000,000 5,009,644
Bedford Heights Ind. Dev. (Olympic Steel) Series 1989,
4.30%, LOC Nat'l. City Bank, Cleveland, VRDN (b) 1,250,000 1,250,000
Bexley BAN 4.14% 6/26/97 850,000 850,551
Bowling Green BAN 4.50% 6/19/97 2,710,000 2,717,851
Butler County Ind. Dev. Rev. (Trey Corrugated Inc.)
Series 1995, 4.45%, LOC First of America,
Indiana, VRDN (b) 4,905,000 4,905,000
Butler County (Meadow Ridge Apts.) Series 1996 A,
4.20% (FNMA Guaranteed) VRDN 7,600,000 7,600,000
Cambridge Bonds (Southeastern Reg. Med. Ctr.)
3.70%, tender 2/1/97, LOC Nat'l City Bank, Columbus 4,000,000 4,000,000
Canton County Ind. Dev. Rev. (Alpha Enterprises Proj.)
4.40%, LOC Key Bank Nat'l. VRDN (b) 3,500,000 3,500,000
Clermont County Ind. Dev. Rev.
(American Micro Porducts Proj.) 4.45%,
LOC Star Bank, VRDN (b) 5,435,000 5,435,000
Cleveland School Dist. RAN 4.50% 6/1/97 (AMBAC Insured) 5,000,000
5,012,010
Clinton County Arpt. Facs. Rev. (Wilmington Air Park Inc.)
Series 1991, 4.15%, LOC Wachovia Bank, VRDN 5,000,000 5,000,000
Cuyahoga County Health Care Facs. Rev.
(Benjamin Rose Institute Proj.) Series 1995 B, 4.30%,
LOC Key Bank, VRDN 2,750,000 2,750,000
Cuyahoga Falls City BAN 4% 8/28/97 2,000,000 2,004,460
Dayton City (Dep. of Aviation Airport Impt.) BAN
Series 1996, 4.5% 3/25/97 (b) 4,250,000 4,254,703
Dublin Central School Dist. BAN 4% 6/10/97 7,000,000 7,015,077
East Muskingum Wtr. Auth. Wtr. Resource Rev. BAN
4.50% 6/27/97 1,971,000 1,974,686
Elyria BAN 4.40% 10/10/97 1,000,000 1,002,225
Erie County Garbage and Refuse Dist. BAN
4.50% 7/11/97 2,000,000 2,005,027
Fairfax Ind. Dev. Rev. (Johnson & Hardin Co. Proj.)
Series 1990, 4.25%, LOC PNC Bank, Ohio, VRDN (b) 2,500,000 2,500,000
Finneytown Local School Dist. BAN 4.22% 7/17/97 1,270,000 1,274,170
Forest Hills School Dist. (School Impt.) BAN
4.21% 6/17/97 5,000,000 5,014,855
Franklin County (Colonial Courts) 4.35%,
LOC Fed. Home Loan Bank, Indiana, VRDN (b) 2,500,000 2,500,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
OHIO - CONTINUED
Franklin County Ind. Dev. Rev.:
Rfdg. (Alco Standard Corp. Proj.) Series 1994, 4.35%,
LOC NationsBank NC, VRDN $ 1,700,000 $ 1,700,000
(Inland Products Inc.) 4.25%,
LOC PNC Bank, Ohio, VRDN (b) 900,000 900,000
Greene County BAN:
4.40% 6/4/97 1,782,034 1,784,744
4.50% 6/4/97 3,300,000 3,306,707
4% 12/11/97 3,000,000 3,009,528
Grove BAN 4.50% 6/27/97 1,300,000 1,303,637
Hamilton County Health Care Facs. Rev.
(West Park Retirement Commty.) Series 1989, 4.15%,
LOC Fifth Third Bank, Cincinnati, VRDN 3,400,000 3,400,000
Hancock County BAN 4.83% 11/21/97 3,000,000 3,027,695
Harrison County Econ. Dev. Rev. Rfdg.
(Carriage of Cadiz Proj.) 4.30%, LOC Key Bank Nat'l,
VRDN 1,830,000 1,830,000
Holmes County Ind. Dev. Rev. (Poultry Processing, Inc.)
Series 1990, 4.35%,
LOC Rabobank Nederland, VRDN (b) 500,000 500,000
Holmes County Sewer BAN 4.25% 5/21/97 1,970,000 1,971,813
Lakewood City BAN 4.15% 10/3/97 881,000 881,632
Lancaster BAN 4.15% 11/18/97 1,060,000 1,062,237
Lebanon BAN:
4.37% 6/17/97 1,900,000 1,902,249
Lima Rfdg. (Lima Mem. Hosp.) 4.30%
LOC BankOne, Columbus, VRDN 2,530,000 2,530,000
Lorain County BAN 4.40% 9/19/97 1,000,000 1,002,746
Lorain County Independent Living & Hosp. Rev.
(Elyria United Methodist Village) 4.20%,
LOC Key Bank Nat'l, VRDN 4,820,000 4,820,000
Madiera Local School Dist. BAN 4.22% 7/17/97 1,000,000 1,003,283
Marion County Hosp. Impt. Rev. (Pooled Lease Prog.) VRDN:
Series 1990, 4.20%, LOC Bank One, Columbus 2,365,000 2,365,000
Series 1991, 4.20%, LOC Bank One, Columbus 2,420,000 2,420,000
Series 1992, 4.20%, LOC Bank One, Akron 2,350,000 2,350,000
Mason BAN 4.125% 4/1/97 3,300,000 3,301,926
Maumee City - Lucas County BAN 4.5% 7/17/97 2,000,000 2,004,651
Medina County Ind. Dev. Rev. VRDN (b):
(North American Roto Engravers, Inc. Proj.)
Series 1988 4.30%, LOC Bank One, Akron 600,000 600,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
OHIO - CONTINUED
Medina County Ind. Dev. Rev. VRDN (b): - continued
(Rembond Proj.) Series 1996, 4.30%,
LOC Bank One, Akron $ 3,000,000 $ 3,000,000
Mentor (Timeless Enterprises Proj.) 4.4%,
LOC Key Bank Nat'l, VRDN (b) 2,500,000 2,500,000
Miamisburg BAN 4.29% 9/26/97 735,000 736,245
Middletown Ind. Dev. Rev. (Pilot Chemical Proj.) 4.30%,
LOC Bank One, Dayton, VRDN (b) 2,400,000 2,400,000
Montgomery County Multifamily Hsg Rev.
(Pedcor Investments - Lyons Gate) 4.35%,
LOC Fed Home Loan Cincinnati, VRDN (b) 3,000,000 3,000,000
Montgomery County Hosp. Facs. Auth. Bonds
(Miami Valley Hosp.) Series C:
3.55%, tender 2/20/97,
LOC Nat'l City Bank, Columbus 1,400,000 1,400,000
3.55%, tender 2/21/97,
LOC Nat'l City Bank, Columbus 3,000,000 3,000,000
3.55%, tender 2/25/97,
LOC Nat'l City Bank, Columbus 2,000,000 2,000,000
Moreland Hills BAN 3.95% 12/17/97 500,000 501,155
Napolean School Dist. BAN Series 1996, 4.08% 3/18/97 1,850,000 1,850,855
New Bremen Local School Dist. BAN 4.20% 5/29/97 1,000,000 1,002,206
Ohio Air Quality Dev. Auth. Rev.:
(Cincinnati Gas & Elec.):
Series A, 5.10%, LOC ABN-AMRO Bank, VRDN 600,000 600,000
Series B, 4.9%, LOC Canadian Imperial Bank
of Commerce, VRDN 500,000 500,000
(JMG Funding Ltd.):
Series 1994-A, 4.15%, LOC Societe
Generale, France, VRDN (b) 700,000 700,000
Series 1994-B, 4.10%, LOC Societe
Generale, France, VRDN (b) 6,900,000 6,900,000
Series B, 4.10%, LOC Societe
Generale, France, VRDN (b) 10,000,000 10,000,000
4.15%, LOC Societe Generale, France, VRDN (b) 1,200,000 1,200,000
Bonds (Ohio Edison Co. Proj.)
Series 1988 B, 3.80%, tender 5/1/97,
LOC Union Bank of Switzerland (b) 4,000,000 4,000,000
Ohio Bldg. Auth. Rfdg. Bonds (Disalle Gov't Ctr.)
Series A, 4.5% 4/1/97 1,300,000 1,302,177
Ohio Envir. Impt. Rev. (Newark Group Industries, Inc. Proj.)
Series 1996, 4.10%,
LOC Chase Manhattan Bank, VRDN (b) 4,000,000 4,000,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
OHIO - CONTINUED
Ohio Higher Ed. Facs. Comm. Pooled Fin.
Series 1996, 4.20%, LOC Fifth Third Bank, VRDN $ 4,800,000 $ 4,800,000
Ohio Hsg. Fin. Agcy. Multifamily Hsg. Rev. VRDN:
(Club at Spring Valley Apts.) Series 1996 A, 4.25%,
LOC Key Bank Nat'l (b) 5,000,000 5,000,000
(Hunter's Glen Apt. Proj.)
Series 1996, 4.20%, LOC PNC Bank, Ohio, (b) 2,000,000 2,000,000
(Kenwood Congregate Retirement Commty. Proj.) 3.50%,
LOC Morgan Guaranty Trust Co 2,100,000 2,100,000
Ohio Hsg. Fin. Agcy. Participating VRDN, Series 96C3501,
4.21% (Liquidity Facility Citibank) (b) (c) 10,800,000 10,800,000
Ohio Hsg. Fin. Auth. Participating VRDN,
Series PA-93, 4.25% (Liquidity Facility
Merrill Lynch) (b)(c) 4,865,000 4,865,000
Ohio Hsg. Fin. Agcy. Single Family Mtg. Participating
VRDN (b)(c):
Series 96-5, 4.25% (Liquidity Facility Bank of New York) 6,300,000
6,300,000
Series 96-6, 4.25% (Liquidity Facility Bank of New York) 3,900,000
3,900,000
Ohio Hsg. Single Family Mtg. Rev. Bonds
Series C-18, 3.90%, tender 1/31/97
(Liquidity Facility Citibank) (b) 3,455,000 3,455,000
Ohio Ind. Dev. Rev. VRDN (b):
(Aerolite Extrusion) Series 1991 IA, 4.35%,
LOC Nat'l. City Bank, Columbus 170,000 170,000
(Anomatic Corp.) Series 1989 I, 4.35%,
LOC Nat'l. City Bank, Columbus 215,000 215,000
(Arthur Corp.) Series 1989 IIIA, 4.35%,
LOC Nat'l. City Bank, Columbus 205,000 205,000
(Burnham Corp.):
Series 1987 N, 4.35%, LOC Bank One, Columbus 255,000 255,000
Series 1988 II, 4.35%, LOC PNC Bank, Ohio 265,000 265,000
(CCE Inc.) Series 1989 I, 4.35%,
LOC Nat'l. City Bank, Columbus 845,000 845,000
(Carpenter/ Clapp & Haney Tool Co.)
Series 1987 P, 4.35%,
LOC Bank One, Columbus 325,000 325,000
(Cole Tool & Die) Series 1988 H, 4.35%,
LOC Bank One, Columbus 165,000 165,000
(Corpad Head Co.) Series 1988 II, 4.35%,
LOC PNC Bank, Ohio 495,000 495,000
(Die Matic Inc.) Series 1987 O, 4.35%,
LOC Bank One, Columbus 270,000 270,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
OHIO - CONTINUED
Ohio Ind. Dev. Rev. VRDN (b): - continued
(Dramex Int'l., Inc.):
Series 1988 I, 4.35%, LOC Bank One, Columbus $ 1,000,000 $ 1,000,000
Series 1988 II, 4.35%, LOC PNC Bank, Ohio 200,000 200,000
(EPIC Technologies Inc.) Series 1988 D, 4.35%,
LOC Bank One, Columbus 220,000 220,000
(Gary W. James) Series 1986 B, 4.35%,
LOC Nat'l. City Bank, Cleveland 240,000 240,000
(HGN Realty/Shalmet Ohio, Inc.) Series 1989 III A, 4.35%,
LOC Nat'l. City Bank, Columbus, Columbus 1,640,000 1,640,000
(Hydro Tube Corp.) 4.35%,
LOC Nat'l. City Bank, Columbus 85,000 85,000
(K&S Realty) Series 1989 I, 4.35%,
LOC Nat'l. City Bank, Columbus 275,000 275,000
(K&S Realty/Starr Fabricating, Inc.) Series 1989 III, 4.35%,
LOC Nat'l. City Bank, Columbus 230,000 230,000
(Kaufmans Bakery) Series 1987 K, 4.35%,
LOC Bank One, Columbus 695,000 695,000
(Midwest Acoust-A-Fiber, Inc.) Series 1989 I, 4.35%,
LOC Nat'l. City Bank, Columbus 480,000 480,000
(Morrow Macke Realty) Series 1988 C, 4.35%,
LOC Bank One, Columbus 560,000 560,000
(Oak Printing) Series 1991, 4.35%,
LOC Nat'l. City Bank, Columbus 300,000 300,000
(Plasticos Co.) Series 1989 IIIA, 4.35%,
LOC Nat'l. City Bank, Columbus 545,000 545,000
(Prentke Romich) Series 1989 III, 4.35%,
LOC Nat'l. City Bank, Columbus 70,000 70,000
(SBD Properties Co.) Series 1986 L, 4.35%,
LOC Nat'l. City Bank, Cleveland 180,000 180,000
(Samuel and Annie Sherman) Series 1989 III A, 4.35%,
LOC Nat'l. City Bank, Columbus 250,000 250,000
(Sheffield Steel) Series 1988 B, 4.35%,
LOC Bank One, Columbus 35,000 35,000
(Southwest Fin. Svcs.) Series 1986 J, 4.35%,
LOC Nat'l. City Bank, Cleveland 70,000 70,000
(Standby Screw) Series 1991 IA, 4.35%,
LOC Nat'l. City Bank, Columbus 650,000 650,000
(Steubenville Area) Series 1988 II, 4.35%,
LOC PNC Bank, Ohio 330,000 330,000
(Thomas K. Issacs) Series 1990 IB, 4.35%,
LOC Nat'l. City Bank, Columbus 175,000 175,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
OHIO - CONTINUED
Ohio Ind. Dev. Rev. VRDN (b): - continued
(United Steel Svc.) Series 1988 J, 4.35%,
LOC Bank One, Columbus $ 560,000 $ 560,000
(VRE Inc.) Series 1988 F, 4.35%,
LOC Bank One, Columbus 170,000 170,000
(Walker-Williams Lumber Co.) Series 1989 IIIA, 4.35%,
LOC Nat'l. City Bank, Columbus 1,010,000 1,010,000
(Wooster Iron Metal Co.) Series 1988 R, 4.35%,
LOC Bank One, Columbus 335,000 335,000
Ohio Mental Health Cap. Facs. Bonds
Series 2 1996 B, 5% 6/1/97 1,900,000 1,908,797
Ohio Wtr. Dev. Auth. Poll. Cont. Rev. Bonds:
Rfdg. (Cleveland Elec.) Series PJT 1988 A,
3.55%, tender 3/10/97 (FGIC Insured) 2,435,000 2,435,000
(Duquesne Light Co. Proj.):
3.50%, tender 2/26/97, LOC Toronto Dominion (b) 3,800,000 3,800,000
3.50%, tender 3/7/97, LOC Toronto Dominion (b) 2,000,000 2,000,000
3.55%, tender 4/15/97, LOC Toronto Dominion (b) 1,000,000 1,000,000
(Ohio Edison) 3.80%, tender 5/1/97,
LOC Union Bank of Switzerland (b) 3,500,000 3,500,000
Ohio Wtr. Dev. Auth. Solid Waste Disp. Rev.
(American Steel & Wire Corp.) 4.50%,
LOC Bank of America, Illinois, VRDN (b) 3,900,000 3,900,000
Paulding County Solid Waste Disposal Rev.
(Lafarge Corp. Proj.) Series 1996, 5.25%,
LOC Royal Bank of Canada, VRDN (b) 1,000,000 1,000,000
Ross County Hosp. Facs. Rev. (Medical Center Hosp. Proj.)
Series 1995, 4.25% LOC Fifth Third Bank, VRDN 3,000,000 3,000,000
Seven Hills BAN Series 1, 4% 2/6/97 1,660,000 1,660,315
Sharonville Ind. Dev. Rev. (Xtec, Inc.) Series 1991, 4.35%,
LOC Fifth Third Bank, VRDN (b) 800,000 800,000
Solon Ind. Dev. Rev. (Cleveland Twist Drill Co.) Series 1995,
4.50%, LOC NationsBank, VRDN (b) 1,000,000 1,000,000
Springdale BAN 4.50% 9/19/97 2,000,000 2,005,622
Springfield BAN 4.60% 8/14/97 1,500,000 1,504,438
Springfield City School Dist. Rfdg. (Clark County)
3.65% 12/1/97 540,000 540,000
Stark County Ind. Dev. Rev. (Liquid Cont. Corp. Proj.)
Series 1987, 4.30%, LOC Bank One, Akron, VRDN (b) 350,000 350,000
Stow County BAN 4% 12/18/97 1,940,000 1,946,286
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
OHIO - CONTINUED
Student Loan Funding Corp. Rev. VRDN (b):
Series 1990-A1, 4.20%,
LOC Nat'l. Westminster Bank PLC $ 5,700,000 $ 5,700,000
Series 1990-A2, 4.20%,
LOC Nat'l. Westminster Bank PLC 9,700,000 9,700,000
Series 1990-A3, 4.20%,
LOC Nat'l. Westminster Bank PLC 6,400,000 6,400,000
Summit County Ind. Dev. Rev. Bonds (b):
(Kuchar Proj.) 3.95%, tender 4/1/97,
LOC Bank One Akron 470,000 470,000
(SGS Tool Co. Proj.) 3.80%, tender 4/1/97,
LOC Bank One, Akron 1,800,000 1,800,000
(Spark Tec Int'l. Proj.) Series 1989, 3.90%, tender
5/1/97, LOC Bank One, Akron 265,000 265,000
Summit County Ind. Dev. Rev. VRDN:
(Hampshire Properties) 4.3%, LOC Key Bank Nat'l (b) 1,140,000 1,140,000
(Kaiser Dev. Proj.) 4.3%, LOC Bank One, Akron 850,000 850,000
(Keltec Inc. Proj.) Series 1987, 4.30%,
LOC Bank One, Akron (b) 360,000 360,000
(Kuchar Proj.) Series 1987, 4.30%,
LOC Bank One, Akron (b) 955,000 955,000
(Mannix County Proj.) Series 1987, 4.30%,
LOC Bank One, Akron (b) 1,985,000 1,985,000
(Triumph Holdings Proj.) 4.40%, LOC Nat'l. City Bank (b) 1,835,000
1,835,000
Trumbull County Ind. Dev. Rev. (McDonald Steel Corp.)
Series 1990, 4.25%, LOC PNC Bank, VRDN (b) 2,000,000 2,000,000
Twinsburg Ind. Dev. Rev. (United Stationers, Inc. Proj.)
5.15%, LOC PNC Bank, VRDN (b) 2,700,000 2,700,000
Union County Gen. Oblig. BAN 4.50% 6/27/97 1,000,000 1,002,329
Univ. of Cincinnati BAN Series AA, 3.89% 3/20/97 2,300,000 2,301,390
Van Wert County Ind. Dev. Auth. Rev.
(Toledo Molding & Die Inc.) Series 1994, 4.30%
LOC Bank One, Columbus VRDN (b) 3,315,000 3,315,000
Wadsworth City BAN 3.8% 12/19/97 1,600,000 1,600,000
Warren County Ind. Dev. Rev. (Johnson & Hardin Enterprise)
Series 1990 A, 4.25%, LOC PNC Bank, Ohio, VRDN (b) 3,000,000 3,000,000
Washington County BAN 4.25% 11/05/97 1,385,000 1,389,500
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
OHIO - CONTINUED
Washington County Ind. Dev. Rev.
(Forma Scientific, Inc. Proj.) 4.25%,
LOC Bank One, Akron, VRDN (b) $ 400,000 $ 400,000
Wood County Ind. Dev. Rev.
(TL Industries & AMPP Inc. Proj.)
4.40%, LOC Nat'l. City Bank, VRDN (b) 2,000,000 2,000,000
TOTAL INVESTMENTS - 100% $ 327,549,422
Total Cost for Income Tax Purposes $ 327,549,422
SECURITY TYPE ABBREVIATIONS
BAN - Bond Anticipation Notes
RAN - Revenue Anticipation Notes
VRDN - Variable Rate Demand Notes
LEGEND
1. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
2. Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals.
3. Provides evidence of ownership in one or more underlying municipal
bonds.
INCOME TAX INFORMATION
At December 31, 1996, the fund had a capital loss carryforward of
approximately $79,000 of which $5,000, $6,000, $11,000, $7,000 and $50,000
will expire on December 31, 1998, 2000, 2002, 2003 and 2004, respectively.
During fiscal year ended 1996, 100% of the fund's income dividends was free
from federal income tax, and 50.21% of the fund's income dividends was
subject to the federal alternative minimum tax.
FIDELITY OHIO MUNICIPAL MONEY MARKET FUND

FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

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DECEMBER 31, 1996

ASSETS

Investment in securities, at value - $ 327,549,422
See accompanying schedule

Cash 3,896,842

Interest receivable 2,167,146

TOTAL ASSETS 333,613,410

LIABILITIES

Payable for investments purchased $ 5,812,360

Distributions payable 21,786

Accrued management fee 104,785

Other payables and accrued expenses 81,559

TOTAL LIABILITIES 6,020,490

NET ASSETS $ 327,592,920

Net Assets consist of:

Paid in capital $ 327,672,301

Accumulated net realized gain (loss) on investments (79,381)

NET ASSETS, for 327,672,301 shares outstanding $ 327,592,920

NET ASSET VALUE, offering price and redemption price $1.00
per share ($327,592,920 (divided by) 327,672,301 shares)

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STATEMENT OF OPERATIONS

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YEAR ENDED DECEMBER 31, 1996

INTEREST INCOME $ 11,295,418

EXPENSES

Management fee $ 1,231,605

Transfer agent, accounting and custodian fees 567,787
and expenses

Non-interested trustees' compensation 1,182

Registration fees 38,623

Audit 17,653

Legal 2,646

Miscellaneous 1,746

Total expenses before reductions 1,861,242

Expense reductions (27,115) 1,834,127

NET INTEREST INCOME 9,461,291

NET REALIZED GAIN (LOSS) ON INVESTMENTS (49,874)

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 9,411,417

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STATEMENT OF CHANGES IN NET ASSETS

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YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1996 1995

INCREASE (DECREASE) IN NET ASSETS

Operations $ 9,461,291 $ 9,823,353
Net interest income

Net realized gain (loss) (49,874) (7,269)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 9,411,417 9,816,084
FROM OPERATIONS

Distributions to shareholders from net interest income (9,461,291) (9,823,353)

Share transactions at net asset value of $1.00 per share 616,078,137 442,960,400
Proceeds from sales of shares

Reinvestment of distributions from net interest income 9,169,404 9,431,453

Cost of shares redeemed (593,825,109) (457,855,477)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 31,422,432 (5,463,624)
FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS 31,372,558 (5,470,893)

NET ASSETS

Beginning of period 296,220,362 301,691,255

End of period $ 327,592,920 $ 296,220,362

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FINANCIAL HIGHLIGHTS

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YEARS ENDED DECEMBER 31,

1996 1995 1994 1993 1992

SELECTED PER-SHARE DATA

Net asset value, beginning $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
of period

Income from Investment .030 .034 .025 .021 .028
Operations
Net interest income

Less Distributions

From net interest income (.030) (.034) (.025) (.021) (.028)

Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000

TOTAL RETURN A 3.08% 3.48% 2.50% 2.09% 2.81%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period $ 327,593 $ 296,220 $ 301,691 $ 262,371 $ 270,248
(000 omitted)

Ratio of expenses to average .60% .61% .57% .59% .58%
net assets B

Ratio of expenses to average .59% .61% .57% .59% .58%
net assets after expense C
reductions

Ratio of net interest income to 3.03% 3.42% 2.48% 2.07% 2.78%
average net assets

</TABLE>

A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
B FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
C FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES (SEE NOTE 5 OF
NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended December 31, 1996

1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Ohio Municipal Income Fund (the income fund) (formerly Fidelity
Ohio Tax-Free High Yield Portfolio)is a fund of Fidelity Municipal Trust.
Fidelity Ohio Municipal Money Market Fund (the money market fund) (formerly
Fidelity Ohio Money Market Portfolio) is a fund of Fidelity Municipal Trust
II. Each trust is registered under the Investment Company Act of 1940, as
amended (the 1940 Act), as an open-end management investment company.
Fidelity Municipal Trust and Fidelity Municipal Trust II (the trusts) are
organized as a Massachusetts business trust and a Delaware business trust,
respectively. Each fund is authorized to issue an unlimited number of
shares. The financial statements have been prepared in conformity with
generally accepted accounting principles which permit management to make
certain estimates and assumptions at the date of the financial statements.
The following summarizes the significant accounting policies of the income
and the money market fund:
SECURITY VALUATION.
INCOME FUND. Securities are valued based upon a computerized matrix system
and/or appraisals by a pricing service, both of which consider market
transactions and dealer-supplied valuations. Short-term securities with
remaining maturities of sixty days or less for which quotations are not
readily available are valued at amortized cost or original cost plus
accrued interest, both of which approximate current value. Securities for
which quotations are not readily available are valued at their fair value
as determined in good faith under consistently applied procedures under the
general supervision of the Board of Trustees.
MONEY MARKET FUND. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost and
thereafter assume a constant amortization to maturity of any discount or
premium.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, each fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
the fiscal year. The schedules of investments include information regarding
income taxes under the caption "Income Tax Information."
INTEREST INCOME. Interest income, which includes amortization of premium
and accretion of original issue discount, is accrued as earned. For the
money market fund, accretion of market discount represents unrealized gain
until realized at the time of a security disposition or maturity.
EXPENSES. Most expenses of each trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income. Distributions to shareholders from
realized capital gains on investments, if any, are
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
recorded on the ex-dividend date. Income and capital gain distributions are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences, which may
result in distribution reclassifications, are primarily due to differing
treatments for futures transactions, market discount, and losses deferred
due to futures. The fund also utilized earnings and profits distributed to
shareholders on redemption of shares as a part of the dividends paid
deduction for income tax purposes.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FUTURES CONTRACTS. The income fund may use futures contracts to manage its
exposure to the bond market and to fluctuations in interest rates. Buying
futures tends to increase the fund's exposure to the underlying instrument,
while selling futures tends to decrease the fund's exposure to the
underlying instrument or hedge other fund investments. Losses may arise
from changes in the value of the underlying instruments, if there is an
illiquid secondary market for the contracts, or if the counterparties do
not perform under the contracts' terms. Futures contracts are valued at the
settlement price established each day by the board of trade or exchange on
which they are traded.
3. PURCHASES AND SALES OF INVESTMENTS.
INCOME FUND. Purchases and sales of securities, other than short-term
securities, aggregated $160,847,113 and $162,292,870, respectively.
The market value of futures contracts opened and closed during the period
amounted to $35,378,127 and $35,128,030, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, Fidelity Management &
Research Company (FMR) receives a monthly basic fee that is calculated on
the basis of a group fee rate plus a fixed individual fund fee rate applied
to the average net assets of each fund. The group fee rate is the weighted
average of a series of rates and is based on the monthly average net assets
of all the mutual funds advised by FMR. The rates ranged from .1100% to
.3700% for the period. In the event that these rates were lower than the
contractual rates in effect during the period, FMR voluntarily implemented
the above rates, as they resulted in the same or a lower management fee.
The annual individual fund fee rate is .25%. For the period, the management
fees were equivalent to an annual rate of .40% of average net assets for
the income and money market funds.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SUB-ADVISER FEE. As the money market fund's investment sub-adviser, FMR
Texas Inc., a wholly owned subsidiary of FMR, receives a fee from FMR of
50% of the management fee payable to FMR. The fee is paid prior to any
voluntary expense reimbursements which may be in effect.
TRANSFER AGENT AND ACCOUNTING FEES. UMB Bank, n.a. (UMB) is the custodian
and transfer and shareholder servicing agent for the funds. UMB has entered
into a sub-contract with Fidelity Service Co. (FSC), an affiliate of FMR,
under which FSC performs the activities associated with the funds' transfer
and shareholder servicing agent and accounting functions. The funds pay
account fees and asset-based fees that vary according to account size and
type of account. FSC pays for typesetting, printing and mailing of all
shareholder reports, except proxy statements. The accounting fee is based
on the level of average net assets for the month plus out-of-pocket
expenses. For the period, FSC received transfer agent and accounting fees
amounting to $478,032 and $166,150 for the income fund and $483,895 and
$63,897 for the money market fund, respectively.
For the period, the transfer agent fees were equivalent to an annual rate
of .12% and .16% of average net assets for the income fund and the money
market fund, respectively.
Money market fund shareholders participating in the Fidelity Ultra Service
Account(registered trademark) Program (the Program) pay a $5.00 monthly fee
to Fidelity Brokerage Services, Inc. (FBSI), an affiliate of FMR, for
performing services associated with the Program. For the period, fees paid
to FBSI by shareholders participating in the Program amounted to $8,370.
5. EXPENSE REDUCTIONS.
Each fund has entered into arrangements with its custodian and transfer
agent whereby interest earned on uninvested cash balances was used to
offset a portion of each fund's expenses. During the period, the custodian
and transfer agent fees were reduced by $4,808 and $27,115, for the income
and money market funds respectively, under these arrangements.
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Municipal Trust and Fidelity Municipal Trust II
and the Shareholders of Fidelity Ohio Municipal Income Fund (formerly
Fidelity Ohio Tax-Free High Yield Portfolio) and Fidelity Ohio Municipal
Money Market Fund (formerly Fidelity Ohio Municipal Money Market
Portfolio):
We have audited the accompanying statements of assets and liabilities of
Fidelity Municipal Trust: Fidelity Ohio Municipal Income Fund (formerly
Fidelity Ohio Tax-Free High Yield Portfolio) and Fidelity Municipal Trust
II: Fidelity Ohio Municipal Money Market Fund (formerly Fidelity Ohio
Municipal Money Market Portfolio), including the schedule of portfolio
investments, as of December 31, 1996, and the related statements of
operations for the year then ended, the statements of changes in net assets
for each of the two years in the period then ended and the financial
highlights for each of the five years in the period then ended. These
financial statements and financial highlights are the responsibility of the
funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of December 31, 1996 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Municipal Trust: Fidelity Ohio Municipal Income Fund and
Fidelity Municipal Trust II: Fidelity Ohio Municipal Money Market Fund as
of December 31, 1996, the results of their operations for the year then
ended, the changes in their net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years
in the period then ended, in conformity with generally accepted accounting
principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
February 4, 1997
DISTRIBUTIONS

The Board of Trustees of Fidelity Ohio Municipal Income Fund voted to pay
to shareholders of record at the opening of business on record date, the
following distributions derived from capital gains realized from sales of
portfolio securities:
PAY DATE RECORD DATE CAPITAL GAINS
2/10/97 2/7/97 $0.04

INVESTMENT ADVISER
(registered trademark)
Fidelity Management & Research
Company
Boston, MA
INVESTMENT SUB-ADVISER,
MONEY MARKET FUND
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Fred L. Henning, Jr., Vice President -
INCOME FUND
Sarah H. Zenoble, Vice President -
MONEY MARKET FUND
Scott A. Orr, Vice President -
MONEY MARKET FUND
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Thomas D. Maher, Assistant
Vice President - MONEY MARKET FUND
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Thomas J. Simpson, Assistant
Treasurer - MONEY MARKET FUND
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Richard J. Flynn *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
Edward H. Malone *
Gerald C. McDonough *
Thomas R. Williams *
ADVISORY BOARD
William O. McCoy
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
UMB Bank, n.a.
Kansas City, MO
and
Fidelity Service Co.
Boston, MA
CUSTODIAN
UMB Bank, n.a
Kansas City, MO
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-7777
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
TouchTone Xpress 1-800-544-5555
SM
AUTOMATED LINES FOR QUICKEST SERVICE
* INDEPENDENT TRUSTEES

FIDELITY

(registered trademark)
MICHIGAN
MUNICIPAL
FUNDS

ANNUAL REPORT
DECEMBER 31, 1996
CONTENTS

CHECK PAGE NUMBERS !!!

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PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.

FIDELITY MICHIGAN MUNICIPAL INCOME FUND

PERFORMANCE 4 How the fund has done over time.

FUND TALK 7 The manager's review of fund
performance, strategy and outlook.

INVESTMENT CHANGES 10 A summary of major shifts in the
fund's investments over the past six
months
and one year.

INVESTMENTS 11 A complete list of the fund's
investments with their market
values.

FINANCIAL STATEMENTS 20 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

FIDELITY MICHIGAN MUNICIPAL MONEY MARKET FUND

PERFORMANCE 24 How the fund has done over time.

FUND TALK 26 The manager's review of fund
performance, strategy and outlook.

INVESTMENT CHANGES 28 A summary of major shifts in the
fund's investments over the past six
months
and one year.

INVESTMENTS 29 A complete list of the fund's
investments with their market
values.

FINANCIAL STATEMENTS 34 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 38 Notes to the financial statements.

REPORT OF INDEPENDENT 41 The auditors' opinion.
ACCOUNTANTS

</TABLE>

(PHOTO_OF_EDWARD_C_JOHNSON_3D)DEAR SHAREHOLDER:
Although stocks managed to post solid returns throughout 1996, signs of
strength in the economy have led to inflation fears, causing some
uncertainty in both the stock and bond markets. In 1995, both stock and
bond markets posted strong results, while the year before, stocks posted
below-average returns and bonds had one of the worst years in history.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
Keeping in mind that the effects of interest rate changes on your bond
investments will only be "paper" gains or losses unless you sell your
shares, staying in your bond fund may be appropriate if your investment
horizon is at least a year or more. The longer your investing time frame,
the more likely it is that you will retain your principal investment
through both up and down markets. For example, a 10-year time frame, such
as saving for a college education, enables you to weather these ups and
downs in a long-term fund, which has higher potential returns. An
intermediate-length fund could be appropriate if your investment horizon is
two to four years, and a short-term bond fund could be the right choice if
you need your money in one or two years.
If your time horizon is less than a year, you might want to consider moving
some of your bond investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. Of course, there is no assurance that a money market fund will
achieve its goal, and it is important to remember that money market funds
are not insured or guaranteed by any agency of the U.S. government.
No matter what your investment horizon or portfolio diversity, it makes
good sense to follow a regular investment plan - investing a certain amount
of money at the same time each month or quarter - and to review your
portfolio periodically. A periodic investment plan will not, of course,
assure a profit or protect against a loss.
If you have any questions, please call us at 1-800-544-8888. We stand ready
to provide the information you need to make the investments that are right
for you.
Best regards,
Edward C. Johnson 3d

FIDELITY MICHIGAN MUNICIPAL INCOME FUND

PERFORMANCE: THE BOTTOM LINE

There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Total return
reflects the change in the value of an investment assuming reinvestment of
the fund's dividend income and capital gains (the profits earned upon the
sale of securities that have grown in value). You can also look at the
fund's income as reflected in the fund's yield, to measure performance. If
Fidelity had not reimbursed certain fund expenses, the past ten years total
returns, dividends and yields would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Fidelity Michigan Municipal Income Fund 3.38% 37.60% 96.24%

Lehman Brothers Michigan Municipal 4.47% n/a n/a
Bond Index

Michigan Municipal Debt Funds Average 3.17% 38.84% 96.64%

CUMULATIVE TOTAL RETURNS show the fund's performance over a set period - in
this case, one year, five years, or ten years. For example, if you invested
$1,000 in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare the fund's returns to the
performance of the Lehman Brothers Michigan Municipal Bond Index, which
includes Michigan investment-grade municipal bonds. To measure how the
fund's performance stacked up against its peers, you can compare it to the
Michigan municipal debt funds average, which reflects the performance of 49
Michigan tax-exempt municipal bond funds with similar objectives tracked by
Lipper Analytical Services, Inc. over the past one year. Both benchmarks
include reinvested dividends and capital gains, if any and exclude the
effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Fidelity Michigan Municipal Income Fund 3.38% 6.59% 6.97%

Lehman Brothers Michigan Municipal 4.47% n/a n/a
Bond Index

Michigan Municipal Debt Funds Average 3.17% 6.78% 6.99%

AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and show you
what would have happened if the fund had performed at a constant rate each
year. (Note: Lipper calculates average annual total returns by annualizing
each fund's total return, then taking the arithmetic average. This may
produce a slightly different figure than that obtained by averaging the
cumulative total returns and annualizing the result.)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19961231 19970110 111721 S00000000000001
MI Muni Income LB Municipal Bond
00081 LB015
1986/12/31 10000.00 10000.00
1987/01/31 10287.11 10301.10
1987/02/28 10388.65 10351.78
1987/03/31 10277.07 10242.05
1987/04/30 9523.82 9728.11
1987/05/31 9409.89 9679.85
1987/06/30 9601.69 9964.06
1987/07/31 9757.97 10065.69
1987/08/31 9779.89 10088.34
1987/09/30 9293.45 9716.38
1987/10/31 9354.21 9750.78
1987/11/30 9554.20 10005.37
1987/12/31 9719.15 10150.55
1988/01/31 10149.14 10512.11
1988/02/29 10275.34 10623.22
1988/03/31 10038.61 10499.99
1988/04/30 10080.30 10579.79
1988/05/31 10141.85 10549.22
1988/06/30 10329.89 10703.55
1988/07/31 10420.06 10773.34
1988/08/31 10472.09 10782.82
1988/09/30 10653.33 10977.99
1988/10/31 10875.98 11171.20
1988/11/30 10788.03 11068.87
1988/12/31 10984.03 11182.11
1989/01/31 11141.10 11413.35
1989/02/28 11073.08 11283.13
1989/03/31 11077.20 11256.16
1989/04/30 11401.58 11523.38
1989/05/31 11634.82 11762.72
1989/06/30 11784.80 11922.46
1989/07/31 11893.27 12084.72
1989/08/31 11800.12 11966.42
1989/09/30 11772.76 11930.76
1989/10/31 11891.62 12076.67
1989/11/30 12056.45 12288.01
1989/12/31 12106.04 12388.53
1990/01/31 12031.37 12329.93
1990/02/28 12133.92 12439.66
1990/03/31 12128.97 12443.40
1990/04/30 11919.64 12353.31
1990/05/31 12202.36 12622.98
1990/06/30 12306.82 12733.94
1990/07/31 12479.56 12921.12
1990/08/31 12290.74 12733.51
1990/09/30 12352.00 12740.77
1990/10/31 12469.02 12971.88
1990/11/30 12713.18 13232.75
1990/12/31 12729.33 13290.31
1991/01/31 12850.28 13468.67
1991/02/28 12946.35 13585.85
1991/03/31 12972.01 13590.74
1991/04/30 13187.39 13771.49
1991/05/31 13248.00 13893.92
1991/06/30 13228.43 13880.17
1991/07/31 13437.13 14049.23
1991/08/31 13598.59 14234.26
1991/09/30 13747.86 14419.59
1991/10/31 13897.48 14549.36
1991/11/30 13948.63 14589.95
1991/12/31 14261.57 14903.05
1992/01/31 14313.21 14937.03
1992/02/29 14337.11 14941.81
1992/03/31 14353.38 14947.34
1992/04/30 14480.59 15080.37
1992/05/31 14637.49 15257.87
1992/06/30 14894.46 15513.90
1992/07/31 15438.27 15979.00
1992/08/31 15220.28 15823.21
1992/09/30 15323.62 15926.69
1992/10/31 15064.69 15770.13
1992/11/30 15433.18 16052.58
1992/12/31 15621.60 16216.47
1993/01/31 15850.56 16405.07
1993/02/28 16487.67 16998.44
1993/03/31 16299.49 16818.77
1993/04/30 16473.49 16988.47
1993/05/31 16583.27 17083.94
1993/06/30 16868.01 17369.08
1993/07/31 16855.57 17391.83
1993/08/31 17255.09 17753.93
1993/09/30 17473.40 17956.14
1993/10/31 17499.96 17990.80
1993/11/30 17385.79 17832.30
1993/12/31 17782.24 18208.74
1994/01/31 18023.76 18416.68
1994/02/28 17503.28 17939.69
1994/03/31 16712.05 17209.19
1994/04/30 16795.06 17355.12
1994/05/31 16881.02 17505.59
1994/06/30 16831.44 17398.63
1994/07/31 17128.06 17717.55
1994/08/31 17170.48 17778.85
1994/09/30 16938.54 17517.86
1994/10/31 16587.25 17206.74
1994/11/30 16065.07 16895.64
1994/12/31 16447.72 17267.52
1995/01/31 16942.52 17761.02
1995/02/28 17430.84 18277.51
1995/03/31 17285.80 18487.52
1995/04/30 17319.28 18509.34
1995/05/31 17877.67 19099.97
1995/06/30 17670.09 18933.80
1995/07/31 17782.94 19113.29
1995/08/31 18023.39 19355.65
1995/09/30 18162.85 19478.17
1995/10/31 18434.53 19761.38
1995/11/30 18787.30 20089.22
1995/12/31 18982.83 20282.28
1996/01/31 19114.85 20435.41
1996/02/29 18961.02 20297.47
1996/03/31 18679.54 20038.07
1996/04/30 18610.16 19981.36
1996/05/31 18592.50 19973.37
1996/06/30 18807.21 20190.88
1996/07/31 18973.70 20374.62
1996/08/31 18937.43 20369.73
1996/09/30 19153.14 20654.90
1996/10/31 19355.34 20888.51
1996/11/30 19710.24 21270.77
1996/12/31 19624.04 21181.43
IMATRL PRASUN SHR__CHT 19961231 19970110 111723 R00000000000123
IMAHDR PRASUN SHR__CHT 19961231 19970110 111721 S00000000000001
MI Muni Income LB Municipal Bond
00081 LB015
1986/12/31 10000.00 10000.00
1987/01/31 10287.11 10301.10
1987/02/28 10388.65 10351.78
1987/03/31 10277.07 10242.05
1987/04/30 9523.82 9728.11
1987/05/31 9409.89 9679.85
1987/06/30 9601.69 9964.06
1987/07/31 9757.97 10065.69
1987/08/31 9779.89 10088.34
1987/09/30 9293.45 9716.38
1987/10/31 9354.21 9750.78
1987/11/30 9554.20 10005.37
1987/12/31 9719.15 10150.55
1988/01/31 10149.14 10512.11
1988/02/29 10275.34 10623.22
1988/03/31 10038.61 10499.99
1988/04/30 10080.30 10579.79
1988/05/31 10141.85 10549.22
1988/06/30 10329.89 10703.55
1988/07/31 10420.06 10773.34
1988/08/31 10472.09 10782.82
1988/09/30 10653.33 10977.99
1988/10/31 10875.98 11171.20
1988/11/30 10788.03 11068.87
1988/12/31 10984.03 11182.11
1989/01/31 11141.10 11413.35
1989/02/28 11073.08 11283.13
1989/03/31 11077.20 11256.16
1989/04/30 11401.58 11523.38
1989/05/31 11634.82 11762.72
1989/06/30 11784.80 11922.46
1989/07/31 11893.27 12084.72
1989/08/31 11800.12 11966.42
1989/09/30 11772.76 11930.76
1989/10/31 11891.62 12076.67
1989/11/30 12056.45 12288.01
1989/12/31 12106.04 12388.53
1990/01/31 12031.37 12329.93
1990/02/28 12133.92 12439.66
1990/03/31 12128.97 12443.40
1990/04/30 11919.64 12353.31
1990/05/31 12202.36 12622.98
1990/06/30 12306.82 12733.94
1990/07/31 12479.56 12921.12
1990/08/31 12290.74 12733.51
1990/09/30 12352.00 12740.77
1990/10/31 12469.02 12971.88
1990/11/30 12713.18 13232.75
1990/12/31 12729.33 13290.31
1991/01/31 12850.28 13468.67
1991/02/28 12946.35 13585.85
1991/03/31 12972.01 13590.74
1991/04/30 13187.39 13771.49
1991/05/31 13248.00 13893.92
1991/06/30 13228.43 13880.17
1991/07/31 13437.13 14049.23
1991/08/31 13598.59 14234.26
1991/09/30 13747.86 14419.59
1991/10/31 13897.48 14549.36
1991/11/30 13948.63 14589.95
1991/12/31 14261.57 14903.05
1992/01/31 14313.21 14937.03
1992/02/29 14337.11 14941.81
1992/03/31 14353.38 14947.34
1992/04/30 14480.59 15080.37
1992/05/31 14637.49 15257.87
1992/06/30 14894.46 15513.90
1992/07/31 15438.27 15979.00
1992/08/31 15220.28 15823.21
1992/09/30 15323.62 15926.69
1992/10/31 15064.69 15770.13
1992/11/30 15433.18 16052.58
1992/12/31 15621.60 16216.47
1993/01/31 15850.56 16405.07
1993/02/28 16487.67 16998.44
1993/03/31 16299.49 16818.77
1993/04/30 16473.49 16988.47
1993/05/31 16583.27 17083.94
1993/06/30 16868.01 17369.08
1993/07/31 16855.57 17391.83
1993/08/31 17255.09 17753.93
1993/09/30 17473.40 17956.14
1993/10/31 17499.96 17990.80
1993/11/30 17385.79 17832.30
1993/12/31 17782.24 18208.74
1994/01/31 18023.76 18416.68
1994/02/28 17503.28 17939.69
1994/03/31 16712.05 17209.19
1994/04/30 16795.06 17355.12
1994/05/31 16881.02 17505.59
1994/06/30 16831.44 17398.63
1994/07/31 17128.06 17717.55
1994/08/31 17170.48 17778.85
1994/09/30 16938.54 17517.86
1994/10/31 16587.25 17206.74
1994/11/30 16065.07 16895.64
1994/12/31 16447.72 17267.52
1995/01/31 16942.52 17761.02
1995/02/28 17430.84 18277.51
1995/03/31 17285.80 18487.52
1995/04/30 17319.28 18509.34
1995/05/31 17877.67 19099.97
1995/06/30 17670.09 18933.80
1995/07/31 17782.94 19113.29
1995/08/31 18023.39 19355.65
1995/09/30 18162.85 19478.17
1995/10/31 18434.53 19761.38
1995/11/30 18787.30 20089.22
1995/12/31 18982.83 20282.28
1996/01/31 19114.85 20435.41
1996/02/29 18961.02 20297.47
1996/03/31 18679.54 20038.07
1996/04/30 18610.16 19981.36
1996/05/31 18592.50 19973.37
1996/06/30 18807.21 20190.88
1996/07/31 18973.70 20374.62
1996/08/31 18937.43 20369.73
1996/09/30 19153.14 20654.90
1996/10/31 19355.34 20888.51
1996/11/30 19710.24 21270.77
1996/12/31 19624.04 21181.43
IMATRL PRASUN SHR__CHT 19961231 19970110 111723 R00000000000123

$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was invested
in Fidelity Michigan Municipal Income Fund on December 31, 1986. As the
chart shows, by December 31, 1996, the value of the investment would have
grown to $19,624 - a 96.24% increase on the initial investment. For
comparison, look at how the Lehman Brothers Municipal Bond Index, which
reflects the performance of the investment-grade municipal bond market, did
over the same period. With dividends reinvested, the same $10,000 would
have grown to $21,181 - a 111.81% increase.

UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will
do tomorrow. Bond prices, for
example, generally move in
the opposite direction of
interest rates. In turn, the
share price, return, and yield of
a fund that invests in bonds
will vary. That means if you
sell your shares during a
market downturn, you might
lose money. But if you can ride
out the market's ups and
downs, you may have a gain.
(checkmark)
TOTAL RETURN COMPONENTS
YEARS ENDED DECEMBER 31,

1996 1995 1994 1993 1992

Dividend returns 5.63% 6.15% 5.40% 6.28% 6.72%

Capital appreciation returns -2.25% 9.26% -12.90% 7.55% 2.82%

Total returns 3.38% 15.41% -7.50% 13.83% 9.54%

<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED DECEMBER 31, 1996 PAST PAST 6 PAST 1
MONTH MONTHS YEAR

Dividends per share 9.79(cents) 33.76(cents) 63.05(cents)

Annualized dividend rate 10.16% 5.95% 5.94%

30-day annualized yield 4.79% - -

30-day annualized tax-equivalent yield 7.83% - -

</TABLE>

DIVIDENDS per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $11.34 over
the past month, $11.26 over the past six months and $11.27 over the past
year, you can compare the fund's income over these three periods. Dividends
per share reflect the income paid by the fund for a set period and do not
reflect any tax considerations. The 30-day annualized YIELD is a standard
formula for all funds based on the yields of the bonds in the fund,
averaged over the past 30 days. This figure shows you the yield
characteristics of the fund's investments at the end of the period. It also
helps you compare funds from different companies on an equal basis. The
tax-equivalent yield shows what you would have to earn on a taxable
investment to equal the fund's tax-free yield, if you're in the 38.82%
combined effective 1996 federal and state tax bracket, but does not reflect
the payment of the federal alternative minimum tax, if applicable.
FIDELITY MICHIGAN MUNICIPAL INCOME FUND

FUND TALK: THE MANAGER'S OVERVIEW

MARKET RECAP
Solid demand helped municipal
bonds perform better than their
investment-grade taxable
counterparts in 1996, even
though new issue supply saw
one of its strongest years ever.
For the year, the Lehman
Brothers Municipal Bond Index -
a broad measure of the municipal
bond market - had a total return of
4.43%. In comparison, the Lehman
Brothers Aggregate Bond Index
- - a broad measure of the
performance of the U.S. taxable
bond market - had a total return
of 3.63%. Demand for munis
came from both insurance
companies and individual
investors. The diminishing
likelihood of significant tax reform
in the near future also helped
support the muni market. Like
most domestic bonds, munis
were affected by
stronger-than-expected signs of
strength in the economy early in
1996. Nevertheless, the market
conditions that supported the
muni market prevailed to the
point that munis entered the fall
trading at expensive levels
relative to their taxable
counterparts. At that point and
through October, the
performance of the municipal
market stalled somewhat, as
investor demand declined and
institutional investors sold off
some of their municipal bond
holdings to take profits. That
sell-off subsided somewhat in
November and December, when
munis outperformed comparable
Treasury securities. However,
even though demand helped
buoy munis somewhat in
December, munis were caught in
the overall bond market
downdraft caused by conflicting
economic data and renewed
fears that inflation might lead the
Federal Reserve Board to raise
short-term interest rates.
An interview with David Murphy, Portfolio Manager of Fidelity Michigan
Municipal Income Fund
Q. HOW HAS THE FUND PERFORMED, DAVE?
A. Below my expectations. For the 12 months that ended December 31, 1996,
the fund provided a return of 3.38%. To get a sense of how the fund
performed relative to its peers, the Michigan municipal debt funds average
returned 3.17% over the same period, according to Lipper Analytical
Services. The Lehman Brothers Michigan Municipal Bond Index, which monitors
the marketplace in which the fund invests, had a 12-month return of 4.47%
as of December 31.
Q. WHAT STRATEGIES DID YOU EMPLOY?
A. I used three primary strategies over the course of the year. First, I
managed the fund to have approximately the same duration characteristics as
the securities in its benchmark. Duration is simply a measure of the fund's
sensitivity to interest rate movement. Thus, even though there was a fair
amount of interest rate volatility in the municipal market, I avoided
getting whipsawed by becoming bullish or bearish at the wrong time. Second,
I emphasized bonds in the 10 - 20-year maturity range at the expense of
bonds in the 20-plus year range. I felt that bonds in the 10 - 20-year
range offered more attractive opportunities relative to their longer
counterparts.
Q. WHAT WAS THE THIRD STRATEGY?
A. The third strategy was to use a barbelled coupon structure - that is,
owning premium-coupon bonds as well as discount-coupon bonds. Historically,
premium-coupon bonds, which pay higher annual income than newly issued
bonds, offer better downside protection should the market fall.
Discount-coupon bonds, which offer annual income below newly issued bonds,
offer price appreciation potential should the market rally. Over the entire
period, as either of these types of bonds moved closer to par (face value),
I attempted to sell them and replace them with similar premium or discount
bonds.
Q. WHAT OTHER CHANGES DID YOU MAKE IN THE PORTFOLIO?
A. In addition to the change in maturity structure that I described above,
I reduced the fund's exposure to BBB-rated bonds somewhat. Yield spreads
between BBB-rated bonds and AAA-rated bonds became too narrow for the
additional risk we were taking on, so I began to sell some of the fund's
BBB holdings.
Q. WHICH INDIVIDUAL HOLDINGS INFLUENCED PERFORMANCE?
A. The fund's positions in Michigan Health Care Corp. continued to be a
drag on performance. Due to a litany of management problems, Michigan
Health Care filed for bankruptcy in the spring of 1995 and has been in
bankruptcy proceedings since. We're actively monitoring the situation and
expect to see some sort of resolution in the near-term. On a positive note,
the fund's other hospital-related issues did well, as did bonds issued by
Cobo Hall Convention Center.
Q. BOND INSURANCE HAS BECOME QUITE POPULAR IN THE MUNICIPAL MARKETS. WHAT
EXACTLY IS BOND INSURANCE AND WHAT HAS DRIVEN ITS POPULARITY?
A. The amount of debt issuance that comes to market with insurance has
soared to 50% from approximately 30% a couple years ago. When an issuer
insures its debt, the insurer guarantees the payment of principal and
interest on the bond. It's important to note, however, that the insurance
does not guarantee against price losses. Bond insurance appeals to issuers
because they can bring their securities to market with higher ratings and,
thus, lower yields. Bond insurance also appeals to investors. The municipal
market is basically driven by retail investors who don't have either the
time or resources to research an issuer's credit fundamentals. For these
investors, bond insurance provides a higher degree of comfort. The fund
does buy insured paper, but I'd just as soon seek the higher income from
non-insured bonds and have our research team determine the issuer's
creditworthiness.
Q. WHAT'S YOUR OUTLOOK?
A. In terms of a nationwide perspective, I think the trends of low
inflation levels and strong municipal finances should continue. With
respect to the state of Michigan, the economy has been chugging along due
to the success of the automotive industry, and I don't see any stop signs
coming up in the near-term.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.

FUND FACTS
GOAL: high current income for
Michigan residents by normally
investing in investment-grade
municipal securities whose
interest is free from federal
income tax and Michigan
income tax
FUND NUMBER: 081
TRADING SYMBOL: FMHTX
START
DATE: November 12, 1985
SIZE: as of December
31, 1996, more than $455
million
MANAGER: David Murphy,
since 1996; manager, Fidelity
Municipal Income Fund, Fidelity
Advisor Intermediate
Municipal Income Fund,
Spartan Municipal Income
Fund, since 1995; Fidelity
Limited Term Municipal
Income Fund, since 1989;
joined Fidelity in 1989
(checkmark)
DAVE MURPHY ON THE
CONTINUING SUCCESS OF
MICHIGAN'S ECONOMY AND
THE AUTOMOTIVE INDUSTRY:
"The state of Michigan is still
enjoying economic success,
thanks largely to the
phenomenal performance of
the automotive industry. We
typically think of the
automobile business as being
very cyclical, but we've seen
strong sales for the past three
years. This steady
performance has stabilized the
employment situation in the
state and has translated into
steady revenues all around. As
a result, Michigan's economy
has grown at a rate of 2.5 -
3%. One underlying factor
driving this surge has been
the demand for light trucks
and vans. These vehicles
have managed to sustain their
popularity over the last five
years, and I see no
indications of that popularity
fading. In fact, I think we may
see the day when more light
trucks and vans are sold in a
year than passenger cars.
The "Big Three" - Chrysler,
Ford and General Motors -
have done very well in this
area and have been big
contributors to the state's
fiscal success. I can't think of
any other state where a single
industry is so closely
connected to the state's
economic performance."

FIDELITY MICHIGAN MUNICIPAL INCOME FUND

INVESTMENT CHANGES

TOP FIVE SECTORS AS OF DECEMBER 31, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE SECTORS
6 MONTHS AGO

General Obligation 20.3 19.1

Health Care 18.2 15.8

Electric Revenue 10.6 12.1

Water & Sewer 9.5 9.3

Escrowed/Pre-Refunded 7.4 9.7

AVERAGE YEARS TO MATURITY AS OF DECEMBER 31, 1996
6 MONTHS AGO

Years 14.6 14.7

AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY DOLLAR
AMOUNT.
DURATION AS OF DECEMBER 31, 1996
6 MONTHS AGO

Years 7.7 7.8

DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH A
FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER FACTORS
ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE. ACCORDINGLY,
A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS EXAMPLE. BEGINNING
WITH THE REPORTING CYCLE OF JUNE, 1996, THE MODEL USED TO CALCULATE
DURATIONS MAY BE SLIGHTLY MODIFIED IN ORDER TO FURTHER REFINE THIS
INFORMATION. THESE CHANGES IN METHODOLOGY MAY PRODUCE ADJUSTMENTS IN
HISTORICAL DURATION FIGURES.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF DECEMBER 31, 1996 AS OF JUNE 30, 1996
Row: 1, Col: 1, Value: 52.3
Row: 1, Col: 2, Value: 31.9
Row: 1, Col: 3, Value: 7.3
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 1.6
Row: 1, Col: 6, Value: 2.8
Row: 1, Col: 7, Value: 4.1
Aaa 52.4%
Aa, A 31.4%
Baa 10.2%
Ba, B 0.0%
Caa 0.9%
Non-rated 3.0%
Short-term investments 2.1%
Aaa 52.3%
Aa, A 32.9%
Baa 7.3%
Ba, B 0.0%
Caa 0.6%
Non-rated 2.8%
Short-term investments 4.1%
Row: 1, Col: 1, Value: 52.4
Row: 1, Col: 2, Value: 30.4
Row: 1, Col: 3, Value: 10.2
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 1.9
Row: 1, Col: 6, Value: 3.0
Row: 1, Col: 7, Value: 2.1
SHOWN AS A PERCENTAGE OF THE FUND'S INVESTMENTS. WHERE MOODY'S RATINGS ARE
NOT AVAILABLE, WE HAVE USED S&P RATINGS.
FIDELITY MICHIGAN MUNICIPAL INCOME FUND

INVESTMENTS DECEMBER 31, 1996

Showing Percentage of Total Value of Investments in Securities

MUNICIPAL BONDS - 95.9%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
MICHIGAN - 93.7%
Anchor Bay School Dist. 5.50% 5/1/18
(MBIA Insured) Aaa $ 2,720,000 $ 2,686,000
Brighton Area School Dist. (Livingston County)
Series II, 0% 5/1/15 (AMBAC Insured) Aaa 12,950,000 4,678,188
Brighton, Livingston County Wtr. Supply Sys. Ltd. Tax:
5.25% 11/1/08 A 200,000 201,000
5.25% 11/1/09 A 200,000 199,500
Clinton Township Bldg. Auth. 4.75% 11/1/10
(AMBAC Insured) Aaa 2,810,000 2,637,888
Clintondale Commty. Schools 5.50% 5/1/15 Aa 2,205,000 2,182,950
Comstock Pub. Schools (Cap. Appreciation) 0%
5/1/05 (CGIC Insured) Aaa 1,300,000 858,000
Davison Commty. School Dist. 5.375% 5/1/16
(FGIC Insured) Aaa 1,000,000 971,250
Dearborn Swr. Disp. Sys. Rev.:
Series A, 5.10% 4/1/12 (MBIA Insured) Aaa 1,625,000 1,557,969
6.50% 4/1/03 (MBIA Insured) Aaa 1,030,000 1,118,838
6.50% 4/1/04 (MBIA Insured) Aaa 1,095,000 1,196,288
Detroit City School Dist. Rfdg. 5.125% 5/1/07 Aa 1,000,000 990,000
Detroit Convention Facs. Rev. Rfdg.
(Cobo Hall Expansion Proj.) 5.25% 9/30/12 A 12,700,000 11,938,000
Detroit Econ. Dev. Corp. Ltd. Oblig. Rev.
(Michigan Health Care Corp. Proj.)
9.10% 12/1/09 (e) - 3,665,000 714,675
Detroit Gen. Oblig.:
(Distributable State Aid):
5.20% 5/1/07 (AMBAC Insured) Aaa 4,000,000 4,005,000
5.25% 5/1/08 (AMBAC Insured) Aaa 7,000,000 6,982,500
5.25% 5/1/09 (AMBAC Insured) Aaa 4,500,000 4,449,375
4.40% 4/1/98 Baa 1,005,000 1,006,256
5% 4/1/00 (FGIC Insured) Aaa 1,210,000 1,229,663
5% 4/1/01 (FGIC Insured) Aaa 1,000,000 1,015,000
Detroit Hosp. Fing. Auth. Facs. Rev. (Michigan
Healthcare Corp. Proj.) 10% 12/1/20 (e) Caa 14,520,000 2,831,400
Detroit Swr. Disp. Rev.:
6% 7/1/05 (MBIA Insured) Aaa 1,885,000 2,021,663
6.25% 7/1/07 (MBIA Insured) Aaa 1,130,000 1,248,650
5.70% 7/1/23 (FGIC Insured) Aaa 10,000,000 9,887,500
Detroit Wtr. Supply Sys. Rev. Rfdg.:
6.25% 7/1/12 (FGIC Insured) Aaa 1,000,000 1,063,750
6.50% 7/1/15 (FGIC Insured) Aaa 16,000,000 17,920,000
6.20% 7/1/04 (FGIC Insured) Aaa 3,795,000 4,117,575
Eastern Michigan Univ. Rev. 5.90% 6/1/02
(AMBAC Insured) Aaa 1,000,000 1,061,250
Ferndale School Dist. Rfdg.:
6% 5/1/07 (FGIC Insured) Aaa 1,250,000 1,346,875
6% 5/1/08 (FGIC Insured) Aaa 1,300,000 1,395,875
6% 5/1/09 (FGIC Insured) Aaa 1,300,000 1,391,000
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
MICHIGAN - CONTINUED
Flint Hosp. Bldg. Auth. Rev. (Hurley Med. Ctr.):
Rfdg. 9.50% 7/1/06 Baa $ 5,670,000 $ 5,788,957
6.50% 7/1/20 Baa 5,570,000 5,549,113
Forest Hills Pub. Schools Gen. Oblig. Unltd.
Tax 7.375% 5/1/15
(Pre-Refunded to 5/1/00 @ 101) (d) Aa 2,000,000 2,202,500
Grand Valley Univ. Gen. Oblig. Rev.:
Rfdg. 5.15% 1/01/09 (AMBAC Insured) Aaa 2,750,000 2,712,188
7.875% 10/1/08 A 1,000,000 1,082,500
Greater Detroit Resources Recovery Auth. Rev.:
5.50% 12/13/04 (AMBAC Insured) Aaa 2,000,000 2,085,000
6.25% 12/13/05 (AMBAC Insured) Aaa 2,000,000 2,187,500
6.25% 12/13/05 (AMBAC Insured) Aaa 4,000,000 4,380,000
6.25% 12/13/06 (AMBAC Insured) Aaa 3,945,000 4,324,706
6.25% 12/13/08 (AMBAC Insured) Aaa 6,000,000 6,547,500
Gull Lake Commty. School Dist.
(Cap. Appreciation) 0% 5/1/13,
(FGIC Insured) Aaa 3,000,000 1,211,250
Harbor Springs Pub. School Bldg. Unltd. Tax:
0% 5/1/11 (AMBAC Insured) Aaa 1,280,000 571,200
0% 5/1/12 (AMBAC Insured) Aaa 1,390,000 585,538
0% 5/1/13 (AMBAC Insured) Aaa 1,455,000 578,363
Holly Area School Dist.:
6.625% 5/1/03 (FGIC Insured) Aaa 1,225,000 1,353,625
6.625% 5/1/06 (FGIC Insured) Aaa 1,150,000 1,285,125
Howell Pub. Schools Unltd. Tax Rfdg.:
(Cap. Appreciation):
0% 5/1/10 (AMBAC Insured) Aaa 1,130,000 538,163
0% 5/1/11 (AMBAC Insured) Aaa 1,800,000 805,500
0% 5/1/12 (AMBAC Insured) Aaa 1,255,000 527,100
0% 5/1/13 (AMBAC Insured) Aaa 1,000,000 398,750
0% 5/1/14 (AMBAC Insured) Aaa 1,000,000 376,250
0% 5/1/15 (AMBAC Insured) Aaa 1,600,000 564,000
Huron Valley School Dist. Rfdg. Unltd. Tax
(Cap. Appreciation) 0% 5/1/11
(FGIC Insured) Aaa 5,830,000 2,630,788
Imlay City Commty. School Dist. Rfdg.
(Cap. Appreciation) 0% 5/1/06
(FGIC Insured) Aaa 1,375,000 859,375
Kalamazoo City School Dist. Unltd. Tax
(School Bldg. & Site) 0% 5/1/07 Aa 1,195,000 693,100
Kent County Refuse Disp. Sys. Ltd. Tax Rfdg.
8.40% 11/1/10 Aa 2,000,000 2,094,240
Kent Hosp. Fin. Auth. Rev. Rfdg.
(Butterworth Hospital) Series A,
7.25% 1/15/13 A1 3,685,000 4,375,938
Lakeshore Pub. Schools (Berrien County)
6.80% 5/1/06 (MBIA Insured) Aaa 1,000,000 1,143,750
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
MICHIGAN - CONTINUED
Lansing Bldg. Auth. Rev. (Deferred Interest):
0% 6/1/10 (AMBAC Insured) Aaa $ 2,500,000 $ 1,168,750
0% 6/1/12 (AMBAC Insured) Aaa 3,000,000 1,230,000
Lowell Area School Unltd. Tax
(Cap. Appreciation)
0% 5/1/15 (FGIC Insured)
(Pre-Refunded to 5/1/05 @ 49) (d) Aaa 11,375,000 3,682,656
Marquette City Hosp. Fin. Auth. Rev. Rfdg.
(Marquette Gen. Hosp.) Series C:
7.50% 4/1/07
(Pre-Refunded to 4/1/99 @ 102) (d) A 1,000,000 1,087,500
5.875% 4/1/11 (FSA Insured) Aaa 2,750,000 2,825,625
7.50% 4/1/19
(Pre-Refunded to 4/1/99 @ 102) (d) A 1,190,000 1,294,125
Mason Pub. School Dist. 6.50% 5/1/05
(FGIC Insured) Aaa 1,200,000 1,327,500
Michigan Bldg. Auth. Rev.:
Rfdg. Series I:
6% 10/1/00 A1 1,375,000 1,450,625
6.25% 10/1/20 A1 1,500,000 1,526,250
(Cap. Appreciation):
(Chippewa Correctional) Series I,
0% 10/1/00 (Escrowed to Maturity) (d) Aaa 2,275,000 1,928,063
(Detroit Reg'l.):
Series I (d):
0% 10/1/99 (Escrowed to Maturity) Aaa 2,000,000 1,780,000
0% 10/1/01 (Escrowed to Maturity) Aaa 1,000,000 806,250
0% 10/1/02 (Escrowed to Maturity) Aaa 2,000,000 1,525,000
0% 10/1/04 (Escrowed to Maturity) A 8,120,000 5,592,650
Series II, 6.75% 10/1/11 A1 1,000,000 1,080,000
6.25% 10/1/01 (AMBAC Insured) Aaa 1,000,000 1,071,250
(Western Michigan Univ.)
Series I, 6.75% 10/1/03
(Pre-Refunded to 10/1/00 @ 101.50) (d) Aaa 1,000,000 1,096,250
Michigan Comprehensive Trans. Rev. Rfdg.:
Series II, 7.625% 5/1/11 A1 2,145,000 2,268,338
Series B, 5.75% 5/15/04 A1 1,275,000 1,351,500
Michigan Gen. Oblig. (College Savings)
0% 8/1/01 Aa 1,045,000 846,450
Michigan Hosp. Fin. Auth. Rev.:
Rfdg. (Bay Med. Ctr.) Series A,
8.25% 7/1/12 Baa1 3,000,000 3,243,750
Rfdg. (Detroit Medical Center Sys.):
Series A:
6.375% 8/15/09 A 1,000,000 1,033,750
6.50% 8/15/18 A 4,000,000 4,140,000
Series B, 5.50% 8/15/23 A 3,400,000 3,200,250
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
MICHIGAN - CONTINUED
Michigan Hosp. Fin. Auth. Rev.: - continued
Rfdg. (McLaren Obligated Group)
Series A, 5.375% 10/15/13 A1 $ 4,280,000 $ 4,082,050
Rfdg. (Pontiac Osteopathic Hosp.)
6% 2/1/24 Baa1 3,500,000 3,338,125
Rfdg. (Sinai Hosp. of Detroit) 7% 1/1/03
(FGIC Insured)
(Pre-Refunded to 1/1/97 @ 102) (d) Aaa 1,000,000 1,020,000
Rfdg. (Sisters of Mercy Health Corp.)
5.375% 8/15/14 (MBIA Insured) Aaa 9,950,000 9,838,063
(Crittenton Hosp.) 5.25% 3/1/14 A1 6,520,000 6,136,950
(Daughters of Charity) (Providence Hosp.)
7% 11/1/21 Aa 1,000,000 1,081,250
(Daughters of Charity Health Sys.)
5.50% 11/1/05 Aa 1,745,000 1,806,075
(Presbyterian Villages):
6.40% 1/1/15 - 1,000,000 1,013,750
6.50% 1/1/25 - 1,225,000 1,241,844
(St. John Hosp. & Med. Ctr.):
6% 5/15/08 (AMBAC Insured) Aaa 1,615,000 1,728,050
6% 5/15/09 (AMBAC Insured) Aaa 1,710,000 1,821,150
(Mercy Health Svcs.) Series Q:
6% 8/15/08 (AMBAC Insured) Aaa 1,130,000 1,192,150
5.25% 8/15/10 (AMBAC Insured) Aaa 2,195,000 2,131,894
6% 8/15/10 (AMBAC Insured) Aaa 1,265,000 1,312,438
5.375% 8/15/26 (AMBAC Insured) Aaa 2,000,000 1,892,500
Michigan Hsg. Dev. Auth. Rental Hsg. Rev.
Series B:
5.80% 4/1/19 A+ 4,650,000 4,580,250
7.55% 4/1/23 A+ 4,750,000 4,999,375
Michigan Hsg. Dev. Auth. Single Family Mtg. Rev.:
Series A:
6.80% 12/1/16 AA+ 8,000,000 8,460,000
7.70% 12/1/16 AA+ 2,490,000 2,592,713
Series C:
5.95% 12/1/14 AA+ 2,500,000 2,493,750
5.90% 12/1/15 AA+ 2,000,000 1,992,500
6% 12/1/16 AA+ 2,500,000 2,493,750
5.95% 12/1/17 AA+ 2,905,000 2,908,631
Michigan Job Dev. Auth. Poll. Cont. Rev.
(General Motors Corp.) 5.55% 4/1/09 A3 8,825,000 8,813,969
Michigan Muni. Bond Auth. Rev.
(Local Gov't. Loan Prog.):
Rfdg. (Cap. Appreciation) Series A,
0% 12/1/07 (FGIC Insured) Aaa 1,000,000 557,500
Rfdg. Series A:
0% 12/1/04 (FGIC Insured) Aaa 2,000,000 1,340,000
0% 12/1/05 (FGIC Insured) Aaa 1,855,000 1,173,288
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
MICHIGAN - CONTINUED
Michigan Muni. Bond Auth. Rev. - continued
(Local Gov't. Loan Prog.): - continued
Rfdg. Series A: - continued
0% 12/1/06 (FGIC Insured) Aaa $ 5,000,000 $ 2,975,000
4.75% 12/1/09 (FGIC Insured) Aaa 6,000,000 5,655,000
Group 9, 8.75% 11/1/17 A 500,000 518,175
Group 19, 7.50% 11/1/09 (AMBAC Insured) Aaa 1,000,000 1,070,000
Michigan Pub. Pwr. Agcy. Rev. Rfdg.
(Belle River Proj.) Series A:
5.70% 1/1/03 A1 2,000,000 2,095,000
5.25% 1/1/18 A1 15,000,000 14,137,500
Michigan South Central Pwr. Agcy. Pwr.
Supply Sys. Rev. Rfdg:
Series 1991, 6.75% 11/1/10 Baa1 2,000,000 2,087,500
5.90% 11/1/06 (MBIA Insured) Aaa 3,000,000 3,210,000
5% 11/1/09 (AMBAC Insured) Aaa 1,675,000 1,595,438
Michigan Strategic Fund Ltd. Oblig. Rev.:
Rfdg. (Detroit Edison Co.):
Series AA, 6.40% 9/1/25 (MBIA Insured) Aaa 5,000,000 5,306,250
7% 7/15/08 (MBIA Insured) Aaa 2,000,000 2,305,000
6.50% 2/15/16 (FGIC Insured) Aaa 1,250,000 1,326,563
7% 5/1/21 (AMBAC Insured) Aaa 8,500,000 10,200,000
Rfdg. (Envir. Research Institute):
6.25% 8/15/06 A- 2,660,000 2,793,000
6.375% 8/15/12 A- 1,770,000 1,838,588
8.125% 10/1/14 - 8,595,000 9,475,988
Rfdg. (Ford Co. Proj.) Series A,
7.10% 2/1/06 A1 4,000,000 4,645,000
Rfdg. (General Motors Corp.)
6.20% 9/1/20 A3 1,500,000 1,550,625
(Gladwin Pines Nursing Home Proj.)
8.75% 1/1/08 A- 1,640,000 1,721,377
(Michigan Health Care Corp. Proj.)
9.10% 12/1/14 (e) - 1,795,000 350,025
Michigan State Univ. Rev. Series A:
6% 2/15/03 (AMBAC Insured) Aaa 1,030,000 1,104,675
6% 2/15/06 (AMBAC Insured) Aaa 1,065,000 1,143,544
6.25% 8/15/15 Aa 2,000,000 2,062,500
Michigan Trunk Line Series A:
5.75% 10/1/04 A1 4,145,000 4,372,975
5.40% 11/1/11 (FGIC Insured) A1 1,585,000 1,583,019
5.80% 11/15/24 (FGIC Insured) Aaa 3,120,000 3,135,600
Mona Shores School Dist. Rev. (School Bldg. & Site)
6.75% 5/1/10 (FGIC Insured) Aaa 2,220,000 2,530,800
Monroe County Poll. Cont. Rev. (Detroit Edison
Proj.) Series CC, 7.50% 12/1/19
(AMBAC Insured) Aaa 5,000,000 5,506,250
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
MICHIGAN - CONTINUED
Okemos Pub. School Dist. Rfdg.
(Cap. Appreciation):
0% 5/1/12 (MBIA Insured) Aaa $ 2,500,000 $ 1,065,625
0% 5/1/13 (MBIA Insured) Aaa 1,700,000 686,375
Port Huron Area School Dist. Unltd. Tax
(Cap. Appreciation) (School Bldg. & Site)
0% 5/1/08 Aa 1,975,000 1,068,969
Rochester Commty. School Dist. Unltd. Tax Rfdg.
5.625% 5/1/11 (FGIC Insured) Aaa 1,000,000 1,028,750
Romulus Commty. School Dist.
(Cap. Appreciation):
Series I, 0% 5/1/06 (FSA Insured) Aaa 3,610,000 2,256,250
0% 5/1/20 (FGIC Insured) Aaa 1,390,000 371,825
Royal Oak City School Dist. Unltd. Tax
0% 5/1/05 (AMBAC Insured) Aaa 3,000,000 1,987,500
Royal Oak Hosp. Fin. Auth. Hosp. Rev. Rfdg.
(William Beaumont Hosp.) 5.50% 1/1/14 Aa 4,000,000 3,950,000
St. Clair Shores Econ. Dev. Corp. Ltd. Oblig. Rev.
(Bon Secours Health Sys.)
Series B, 7.50% 9/1/15 A 1,900,000 2,042,500
St. John's Pub. Schools 6.50% 5/1/07
(FGIC Insured) Aaa 1,400,000 1,564,500
Saline Area Schools 6% 5/1/08 (FGIC Insured) Aaa 2,540,000 2,743,200
Univ. of Michigan Hosp. Rev.
Series 1990, 7% 12/1/21
(Pre-Refunded to 12/1/00 @ 102) (d) Aa 1,000,000 1,111,250
Vicksburg Commty. Schools
7% 5/1/07 (MBIA Insured)
(Pre-Refunded to 5/1/01 @ 102) (d) Aaa 1,750,000 1,953,438
Walled Lake Cons. School Dist. Rfdg.
5.30% 5/1/09 (MBIA Insured) Aaa 3,550,000 3,585,500
Wayne Charter County Arpt. Rev.:
(Subordinated Lien) (Detroit Metropolitan Arpt.):
Series B, 6.875% 12/1/11
(MBIA Insured) (b) Aaa 1,500,000 1,606,875
Series C, 5.25% 12/1/13
(MBIA Insured) Aaa 2,000,000 1,917,500
Wayne County Bldg. Auth. Ltd. Tax
Series A, 8% 3/1/17
(Pre-Refunded to 3/1/02 @ 102) (d) Baa1 2,250,000 2,626,875
West Ottawa Pub. School Dist. Rfdg.
5.25% 5/1/10 (FGIC Insured) Aaa 2,325,000 2,281,406
West Ottawa Pub. School Dist. Unltd. Tax
Gen. Oblig. (Cap. Appreciation) 0% 5/1/06
(MBIA Insured) Aaa 4,110,000 2,604,713
Western Michigan Univ. Rev.:
Rfdg. 6.50% 7/15/21 (AMBAC Insured)
(Pre-Refunded to 7/15/01 @ 102) (d) Aaa 2,500,000 2,750,000
1.67% 7/15/17 (FGIC Insured) (f) Aaa 2,500,000 2,237,500
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
MICHIGAN - CONTINUED
Western Townships Util. Auth. Swr. Disp. Sys. Ltd.
Tax 8.20% 1/1/18 BBB+ $ 2,500,000 $ 2,706,250
Williamston Commty. School Dist. 6.25% 5/1/09
(MBIA Insured) Aaa 1,500,000 1,629,362
Williamston Gen. Oblig. Rfdg. 6.90% 11/1/17
(AMBAC Insured) Aaa 1,000,000 1,096,250
424,122,249
PUERTO RICO - 2.2%
Puerto Rico Commonwealth Aqueduct & Swr.
5% 7/1/15 Baa1 4,000,000 3,700,000
Puerto Rico Commonwealth Hwy. & Trans. Auth.
Series W, 5.50% 7/1/13 (FSA Insured) Aaa 3,000,000 3,060,000
Puerto Rico Commonwealth Urban Renewal & Hsg.
Corp. Rfdg. 7.875% 10/1/04 Baa 2,800,000 3,062,500
9,822,500
TOTAL MUNICIPAL BONDS
(Cost $431,022,749) $ 433,944,749
MUNICIPAL NOTES (A) - 4.1.%
MICHIGAN - 4.1%
Delta County Econ. Dev. Corp. Environ. Impt. Rev.
(Mead Escanaba Paper Co. Proj.) Series 1992,
5%, LOC Union Bank of Switzerland,
VRDN (b) A-1+ 1,500,000 1,500,000
Detroit City School Dist. RAN 4.50% 5/1/97 SP-1+ 3,000,000 3,008,370
Detroit Wtr. Supply Sys. Participating VRDN
Series 95 SGB-6, 4.15%,
Liquidity Facility Societe Generale (g) Aaa 2,570,000 2,570,000
Michigan Hsg. Dev. Auth. Single Family Mtg.
Participating VRDN, Series PT-19, 4.30%,
Liquidity Facility Credit Suisse (b)(g) AA+ 1,000,000 1,000,000
Michigan Hosp. Fin. Auth. Rev.
(Hosp. Equip. Loan Program) Series A, 4.15%,
LOC First of America Bank, VRDN VMIG 1 300,000 300,000
Michigan Muni Bond Auth. RAN Series 1996-A,
4.50% 7/3/97 SP-1+ 1,120,000 1,125,734
Michigan Strategic Fund Ltd. Oblig. Rev. Rfdg., VRDN:
(Dow Chemical Co. Proj.) Series 1994, 5.10% P-1 1,100,000 1,100,000
(Peachwood Ctr. Associates) Series 1995, 4.25%,
LOC Nat'l. Bank of Detroit A-1+ 500,000 500,000
MUNICIPAL NOTES (A) - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
MICHIGAN - CONTINUED
Michigan Strategic Fund Poll. Cont. Rev. Bonds
(Dow Chemical Co. Proj.) Series 1986:
3.50% tender, 2/14/97 P-1 $ 2,000,000 $ 2,000,220
3.50% tender, 2/19/97 P-1 2,500,000 2,500,475
Michigan Strategic Fund Solid Waste Disp. Rev.
(Grayling Gen. Station Proj.) Series 1990, 4.25%,
LOC Barclays Bank, VRDN (b) VMIG 1 300,000 300,000
Michigan Trunk Line Participating VRDN
Series 96A SG-87, 4.15%,
Liquidity Facility Societe Generale (g) Aaa 1,000,000 1,000,000
Univ. of Michigan Rev., VRDN:
(Hospital Bonds) Series 1995-A, 5.10% VMIG 1 1,100,000 1,100,000
Series 1995 A, 5.10% VMIG 1 200,000 200,000
Wayne Charter County Arpt. Rev. Rfdg.
(Detroit Metro., Wayne County) Series 1996-A,
4.25%, LOC Bayerische Landesbank, VRDN VMIG 1 300,000 300,000
TOTAL MUNICIPAL NOTES
(Cost $18,498,414) 18,504,799
TOTAL INVESTMENTS
(Cost $449,521,163) $ 452,449,548
SECURITY TYPE ABBREVIATIONS
VRDN - Variable Rate Demand Notes
LEGEND
1.The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
2.Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals.
3.Standard & Poor's Corporation credit ratings are used in the absence of a
rating by Moody's Investors Service, Inc.
4.Security collateralized by an amount sufficient to pay interest and
principal.
5.Non-income producing-issuer filed for protection under the Federal
Bankruptcy Code or is in default of interest payment.
6.Debt obligation initially issued at one coupon which converts to a higher
coupon at a specified date.
7.Provides evidence of ownership in one or more underlying municipal bonds.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investment in securities, is as follows (ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 73.9% AAA, AA, A 85.1%
Baa 6.7% BBB 3.3%
Ba 0.0% BB 0.0%
B 0.0% B 0.0%
Caa 0.6% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.6%
The percentage not rated by either S&P or Moody's amounted to 2.8%. FMR has
determined that unrated debt securities that are lower quality account for
0.2% of the total value of investment in securities.
The distribution of municipal securities by revenue source, as a percentage
of total value of investment in securities, is as follows:
General Obligation 20.3%
Health Care 18.2
Electric Revenue 10.6
Water & Sewer 9.5
Escrowed/Pre-Refunded 7.4
Housing 6.7
Special Tax 5.4
Others
(individually less than 5%) 21.9
TOTAL 100.0%
INCOME TAX INFORMATION
At December 31, 1996, the aggregate cost of investment securities for
income tax purposes was $449,521,163. Net unrealized appreciation
aggregated $2,928,385, of which $20,543,087 related to appreciated
investment securities and $17,614,702 related to depreciated investment
securities.
At December 31, 1996, the fund had a capital loss carryforward of
approximately $676,169 which will expire on December 31, 2003.
At December 31, 1996, the fund was required to defer $2,475,010 of losses
on futures contracts.
During fiscal year ended 1996, 100% of the fund's income dividends was free
from federal income tax, and 1.95% of the fund's income dividends was
subject to the federal alternative minimum tax.
FIDELITY MICHIGAN MUNICIPAL INCOME FUND

FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
DECEMBER 31, 1996

ASSETS

Investment in securities, at value (cost $449,521,163) - $ 452,449,548
See accompanying schedule

Interest receivable 6,247,326

TOTAL ASSETS 458,696,874

LIABILITIES

Payable to custodian bank $ 21,002

Payable for investments purchased 1,300,178

Payable for fund shares redeemed 679,684

Distributions payable 702,460

Accrued management fee 149,191

Other payables and accrued expenses 115,121

TOTAL LIABILITIES 2,967,636

NET ASSETS $ 455,729,238

Net Assets consist of:

Paid in capital $ 455,952,033

Accumulated undistributed net realized gain (loss) (3,151,180)
on investments

Net unrealized appreciation (depreciation) 2,928,385
on investments

NET ASSETS, for 40,323,011 shares outstanding $ 455,729,238

NET ASSET VALUE, offering price and redemption price $11.30
per share ($455,729,238 (divided by) 40,323,011 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1996

INTEREST INCOME $ 28,458,408

EXPENSES

Management fee $ 1,839,031

Transfer agent, accounting and custodian fees 825,927
and expenses

Non-interested trustees' compensation 1,738

Registration fees 32,792

Audit 39,672

Legal 9,346

Reports to shareholders 1,084

Miscellaneous 5,046

Total expenses before reductions 2,754,636

Expense reductions (5,333) 2,749,303

NET INTEREST INCOME 25,709,105

REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:

Investment securities 1,128,209

Futures contracts 703,151 1,831,360

Change in net unrealized appreciation (depreciation) (12,978,543)
on investment securities

NET GAIN (LOSS) (11,147,183)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 14,561,922
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1996 1995

INCREASE (DECREASE) IN NET ASSETS

Operations $ 25,709,105 $ 26,006,935
Net interest income

Net realized gain (loss) 1,831,360 2,207,539

Change in net unrealized appreciation (depreciation) (12,978,543) 39,177,235

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 14,561,922 67,391,709
FROM OPERATIONS

Distributions to shareholders (25,709,105) (26,006,935)
From net interest income

In excess of net interest income (80,276) -

In excess of net realized gain - (3,890)

TOTAL DISTRIBUTIONS (25,789,381) (26,010,825)

Share transactions 57,025,517 110,232,268
Net proceeds from sales of shares

Reinvestment of distributions 19,641,907 19,680,585

Cost of shares redeemed (101,584,850) (113,113,870)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING (24,917,426) 16,798,983
FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS (36,144,885) 58,179,867

NET ASSETS

Beginning of period 491,874,123 433,694,256

End of period $ 455,729,238 $ 491,874,123

OTHER INFORMATION
Shares

Sold 5,052,266 9,948,827

Issued in reinvestment of distributions 1,742,412 1,766,407

Redeemed (9,019,787) (10,168,400)

Net increase (decrease) (2,225,109) 1,546,834

</TABLE>

FINANCIAL HIGHLIGHTS
YEARS ENDED DECEMBER 31,

1996 1995 1994 1993 A 1992

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA

Net asset value, $ 11.560 $ 10.580 $ 12.340 $ 11.710 $ 11.410
beginning of period

Income from Investment .630 B .611 .687 .709 .733
Operations
Net interest income

Net realized and (.258) .980 (1.590) .870 .320
unrealized gain (loss)

Total from investment .372 1.591 (.903) 1.579 1.053
operations

Less Distributions

From net interest income (.630) (.611) (.687) (.709) (.733)

In excess of net (.002) C - - - -
interest income

From net realized gain - - (.080) (.240) (.020)

In excess of net - - (.090) - -
realized gain

Total distributions (.632) (.611) (.857) (.949) (.753)

Net asset value, $ 11.300 $ 11.560 $ 10.580 $ 12.340 $ 11.710
end of period

TOTAL RETURN 3.38% 15.41% (7.50)% 13.83% 9.54%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period $ 455,729 $ 491,874 $ 433,694 $ 563,492 $ 463,816
(000 omitted)

Ratio of expenses to average .59% .59% .57% .59% .61%
net assets

Ratio of net interest income to 5.52% 5.49% 6.04% 5.79% 6.36%
average net assets

Portfolio turnover rate 29% 29% 18% 33% 15%

</TABLE>

A EFFECTIVE JANUARY 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INTEREST INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
B NET INTEREST INCOME PER SHARE REFLECTS A PAYMENT OF APPROXIMATELY $.049
RECEIVED FROM AN ISSUER THAT IS IN BANKRUPTCY.
C THE AMOUNT SHOWN REFLECTS CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO
TAX DIFFERENCES (SEE NOTE 1 OF NOTES TO FINANCIAL STATEMENTS).

FIDELITY MICHIGAN MUNICIPAL MONEY MARKET FUND

PERFORMANCE: THE BOTTOM LINE

To measure a money market fund's performance, you can look at either total
return or yield. Total return reflects the change in value of an
investment, assuming reinvestment of the fund's dividend income. Yield
measures the income paid by a fund. Since a money market fund tries to
maintain a $1 share price, yield is an important measure of performance. If
Fidelity had not reimbursed the fund for certain expenses, the past five
years and life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Fidelity Michigan Municipal 3.00% 14.20% 26.05%
Money Market Fund

All Tax-Free Money Market Funds Average 2.98% 14.05% 21.99%

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, five years, or since the fund
started on January 12, 1990. For example, if you invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment would
be $1,050. To measure how the fund's performance stacked up against its
peers, you can compare it to the all tax-free money market funds average,
which reflects the performance of 416 all tax-free money market funds with
similar objectives tracked by IBC Financial Data, Inc. over the past one
year. (The periods covered by the IBC Financial Data, Inc. numbers are the
closest available match to those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Fidelity Michigan Municipal 3.00% 2.69% 3.37%
Money Market Fund

All Tax-Free Money Market Funds Average 2.98% 2.66% 3.10%

AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and show you
what would have happened if the
fund had performed at a constant rate each year.
YIELDS
1/1/96 4/1/96 7/1/96 9/30/96 12/30/96

Fidelity Michigan Municipal 4.00% 2.86% 2.91% 3.18% 3.38%
Money Market Fund

All Tax-Free Money Market 3.95% 2.87% 2.89% 3.18% 3.32%
Funds Average

Fidelity Michigan Municipal 6.54% 4.67% 4.76% 5.20% 5.52%
Money Market Fund
Tax-equivalent

Row: 1, Col: 1, Value: 4.0
Row: 1, Col: 2, Value: 3.95
Row: 2, Col: 1, Value: 2.86
Row: 2, Col: 2, Value: 2.87
Row: 3, Col: 1, Value: 2.49
Row: 3, Col: 2, Value: 2.89
Row: 4, Col: 1, Value: 3.18
Row: 4, Col: 2, Value: 3.18
Row: 5, Col: 1, Value: 3.38
Row: 5, Col: 2, Value: 3.38
5% -
4% -
3% -
2% -
1% -
0%
Fidelity Michigan
Municipal Money
Market Fund
All Tax-Free Money
Market Funds
Average
YIELD refers to the income paid by the fund over a given period. Yields for
money market funds are usually for seven-day periods, expressed as annual
percentage rates. A yield that assumes income earned is reinvested or
compounded is called an effective yield. The chart above shows the fund's
current seven-day yield at quarterly intervals over the past year. You can
compare these yields to the all tax-free money market funds average as
tracked by IBC Financial Data, Inc. Or you can look at the fund's
tax-equivalent yield, which is based on a combined effective 1996 federal
and state income tax rate of 38.82%. A portion of the fund's income may be
subject to the federal alternative minimum tax.
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT PAST
RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.

COMPARING
PERFORMANCE
Yields on tax-free investments
are usually lower than yields
on taxable investments.
However, a straight
comparison between the two
may be misleading because it
ignores the way taxes reduce
taxable returns. Tax-equivalent
yield - the yield you'd have to
earn on a similar taxable
investment to match the
tax-free yield - makes the
comparison more
meaningful. Keep in mind that
the U.S. government neither
insures nor guarantees a
money market fund. And there
is no assurance that a money
fund will maintain a $1 share
price.
(checkmark)
FIDELITY MICHIGAN MUNICIPAL MONEY MARKET FUND

FUND TALK: THE MANAGER'S OVERVIEW

NOTE TO SHAREHOLDERS: Deborah Watson became Portfolio Manager of Fidelity
Michigan Municipal Money Market Fund on August 1, 1996
Q. DEB, WHAT HAS THE INVESTMENT CLIMATE BEEN LIKE OVER THE PAST 12 MONTHS?
A. At the beginning of the period, most market participants expected the
Federal Reserve Board to continue lowering the rate banks charge each other
for overnight loans - known as the federal funds rate - due to a moderate
rate of growth in the economy and mild inflationary pressures. These
conditions helped to persuade the Fed to continue pursuing monetary policy
designed to stimulate economic growth. The Fed lowered the federal funds
rate one-quarter percentage point in January 1996, bringing the rate down
to 5.25%. In mid-February, Fed Chairman Alan Greenspan, testifying before
Congress, surprised many by suggesting that the economy was in no need of
further stimulus. Greenspan's opinion was reinforced dramatically in early
March with the release of the February employment report, which came in
much higher than expected. Market sentiment shifted and a sharp sell-off in
the bond market ensued. Over the past few months, however, signs of
weakness in employment and a lack of inflationary pressures in price
indices have kept the Fed on the sidelines, while the market has responded
with lower rates.
Q. WHAT SORT OF STRATEGY DID THE FUND PURSUE THROUGH THIS CHANGING
ENVIRONMENT?
A. When the period began, the fund was well-positioned for a declining rate
environment with an average maturity of 47 days. Through the spring,
however, the maturity was allowed to roll down due to the expectation of
higher rates and thin supply. By July, the supply picture changed
dramatically and prices on money market instruments began to reflect
anticipated rate increases by the Fed. I added longer-term securities,
extending the fund's average maturity back out to 47 days. Since then,
supply has been constrained, and I've maintained the maturity in the mid to
high 40-day range, waiting for more concrete signals on the direction of
the economy and Fed policy.
Q. HOW DID THE FUND PERFORM OVER THE PAST YEAR?
A. The fund's seven-day yield on December 31, 1996, was 3.39%, compared to
3.98% 12 months earlier. The latest yield was the equivalent of a taxable
yield of 5.54% for Michigan investors in the 38.82% combined federal and
state tax bracket. The fund's total return during the 12-month period was
3.00%. That beat the total return of 2.98% for the all tax-free money
market funds average, according to IBC Financial Data, Inc.
Q. WHAT DO YOU SEE HAPPENING OVER THE NEXT SIX MONTHS?
A. I anticipate the Fed will keep the fed funds rate stable at 5.25%
probably through the first quarter of 1997. Until then, the market will be
anxiously awaiting further signals on the economy as new data is released.
However, I believe it is more probable that the next move will be for the
Fed to raise the fed funds rate due to tightness in the labor market and
the possibility for an increase in wages, among other factors. That said, I
will keep the average maturity fairly stable, in the 40- to 50-day range.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.

FUND FACTS
GOAL: high current tax-free
income while maintaining
a stable $1 share price by
investing in high-quality,
short-term municipal
money market securities
TRADING SYMBOL: FMIXX
FUND NUMBER: 420
START DATE: January 12, 1990
SIZE: as of December 31,
1996, more than $260 million
MANAGER: Deborah Watson,
since August 1996; manager,
various Fidelity and Spartan
state municipal money
market funds; joined Fidelity
in 1982
(checkmark)
WORDS TO KNOW
COMMERCIAL PAPER: A security
issued by a municipality to
finance capital or operating
needs.
FEDERAL FUNDS RATE: The interest
rate banks charge each other
for overnight loans.
MATURITY: The time remaining
before an issuer is scheduled
to repay the principal amount
on a debt security. When the
fund's average maturity -
weighted by dollar amount -
is short, the fund manager is
anticipating a rise in interest
rates. When the average
maturity is long, the manager
is expecting rates to fall.
When the average maturity is
neutral, the manager wants
the flexibility to respond to
rising rates, while still
capturing a portion of the
higher yields available from
issues with longer maturities.
MUNICIPAL NOTE: A security
issued in advance of future
tax or other revenues and
payable from those specific
sources.
TENDER BOND: A variable-rate,
usually long-term security that
gives the bond holder the
option to redeem the bond at
face value before maturity.
VARIABLE RATE DEMAND NOTE
(VRDN): A tender bond that
can be redeemed on short
notice, typically one or seven
days. VRDNs are useful in
managing the fund's average
maturity and liquidity.

FIDELITY MICHIGAN MUNICIPAL MONEY MARKET FUND

INVESTMENT CHANGES

MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
12/31/96 6/30/96 12/31/95

0 - 30 69 69 68

31 - 90 11 14 10

91 - 180 9 11 13

181 - 397 11 6 9

WEIGHTED AVERAGE MATURITY
12/31/96 6/30/96 12/31/95

Michigan Municipal
Money Market Fund 47 days 46 days 47 days

All Tax-Free Money Market
Funds Average* 51 days 50 days 53 days

ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF DECEMBER 31, 1996 AS OF JUNE 30, 1996

Row: 1, Col: 1, Value: 65.0
Row: 1, Col: 2, Value: 19.0
Row: 1, Col: 3, Value: 2.0
Row: 1, Col: 4, Value: 10.0
Row: 1, Col: 5, Value: 4.0
Row: 1, Col: 1, Value: 62.0
Row: 1, Col: 2, Value: 10.0
Row: 1, Col: 3, Value: 4.0
Row: 1, Col: 4, Value: 19.0
Row: 1, Col: 5, Value: 2.0
Variable rate
demand notes
(VRDNs) 68%
Commercial
paper 17%
Tender bonds 1%
Municipal
notes 11%
Other 3%
Variable rate
demand notes
(VRDNs) 65%
Commercial
paper 10%
Tender bonds 4%
Municipal
notes 19%
Other 2%
* SOURCE: IBC'S MONEY FUND REPORT(registered trademark)
FIDELITY MICHIGAN MUNICIPAL MONEY MARKET FUND

INVESTMENTS DECEMBER 31, 1996
Showing Percentage of Total Value of Investments in Securities

MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MICHIGAN - 100.%
Allegan Intermediate School Dist. Spl. Ed. TAN
4.25% 4/1/97 $ 1,300,000 $ 1,301,417
Bruce Township Hosp. Fin. Auth. Sisters of Charity
Health Care Sys. Rev. Bonds (St. Joseph Hosp. Ctr. Proj.)
3.65%, tender 5/1/97 (MBIA Insured)
(BPA Morgan Guaranty Trust Co.) 2,400,000 2,400,000
Chelsea Econ. Dev. Corp. Ltd. Oblig. Rev.
(Silver Maples of Chelsea Proj.) Series 1996, 4.15%,
LOC Comerica Bank, VRDN 3,000,000 3,000,000
Dearborn Econ. Dev. Corp. Ltd. Oblig. Rev.
(Oakbrook Common Proj.) Series 1991,
4.30%, LOC Mellon Bank, NA, VRDN 2,800,000 2,800,000
Delta County Econ. Dev. Corp. Envir. Impt. Rev.
(Mead Escanaba Paper Co. Proj.):
Series 1992, 5%, LOC Union Bank of Switzerland,
VRDN (b) 1,000,000 1,000,000
Bonds:
Series A:
3.60%, tender 1/8/97, LOC Swiss Bank Corp 1,050,000 1,050,000
3.55%, tender 2/6/97, LOC Swiss Bank Corp 1,000,000 1,000,000
Series B:
3.60%, tender 1/8/97,
LOC Union Bank of Switzerland 1,400,000 1,400,000
3.55%, tender 2/6/97,
LOC Union Bank of Switzerland 2,000,000 2,000,000
Detroit School Dist. RAN 4.50% 5/1/97 3,000,000 3,005,254
Detroit Swr. Disp. Rev. Bonds 6.70% 7/1/97 1,500,000 1,550,169
Detroit Wtr. Supply Sys. Participating VRDN (c):
Series SG-64, 4.15% (Liquidity Facility Societe Generale)
(MBIA Insured) 2,000,000 2,000,000
Series SGB-6, 4.15% (Liquidity Facility Societe Generale)
(MBIA Insured) 3,000,000 3,000,000
East China School Dist. RAN 4% 6/30/97 1,500,000 1,502,543
Flint Econ. Dev. Corp. Ltd. Oblig. Rev.
(Genessee County Real Estate Proj.) 4.35%,
LOC NBD Bank, VRDN (b) 1,000,000 1,000,000
Genesee County Econ. Dev. Corp. Ltd. Oblig. Econ. Dev. Rev.
(Creative Foam Corp. Proj.) Series 1994, 4.35%,
LOC NBD Bank, VRDN (b) 3,000,000 3,000,000
Georgetown Charter Township Ltd. Oblig. Ind. Dev. Rev.
(J&F Steel Corp. Proj.) Series 1989, 4.20%,
LOC Societe Generale, VRDN (b) 1,000,000 1,000,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MICHIGAN - CONTINUED
Grand Rapids Econ. Dev. Auth. Rev. (Calder Plaza Proj.)
Series 1992 A, 4.10%,
LOC Old Kent Bank, VRDN $ 750,000 $ 750,000
Grand Rapids Econ. Dev. Corp. Econ. Dev. Rev. Rfdg.
(Amway Hotel Proj.) Series 1991 B,
4.20%, LOC ABN-AMRO Bank, VRDN 3,100,000 3,100,000
Grand Rapids Econ. Dev. Corp. Ltd. Oblig. Rev.
(Holland Home Proj.) Series 1994 B,
4.20%, LOC Old Kent Bank, VRDN 2,250,000 2,250,000
Grand Rapids Ind. Dev. Rev. (Rowe Int'l.) Series 1984,
4.50%, LOC Chase Manhattan Bank, VRDN 5,300,000 5,300,000
Greater Detroit Resource Recovery Auth. Bonds Series A,
4% 12/13/97 (AMBAC Insured) 3,500,000 3,511,271
Jackson County Econ. Dev. Corp. Rev. (SPX Corp. Proj.)
3.70%, LOC NBD Bank, VRDN 2,000,000 2,000,000
Kalamazoo Econ. Dev. Corp. Rev. Rfdg.
(La Quinta Motor Inns) Series 1991,
4.35%, LOC NationsBank, VRDN 1,890,000 1,890,000
Kent County Hosp. Fin. Auth. Participating VRDN,
Series 94-C1, 4.35% (MBIA Insured)
(Liquidity Facility Norwest Bank)(c) 800,000 800,000
Kent County Hosp. Fin. Auth. Rev.
(Butterworth Hosp. Proj.) Series 1991 A,
4%, LOC Rabobank, VRDN 3,500,000 3,500,000
Livonia Econ. Dev. Corp., VRDN:
(Ajluni Proj.) Series 1993,
4.35%, LOC Nat'l Bank of Detroit (b) 2,000,000 2,000,000
(Foodland Distributors Corp.) 4.25%, LOC Comerica 2,100,000 2,100,000
Michigan Bldg. Auth. Rev.:
Bonds Series 1, 3.90% 10/1/97 1,000,000 1,001,781
3.50% 5/1/97, LOC Canadian Imperial Bank, CP 12,500,000 12,500,000
Michigan Higher Ed. Student Loan Auth. Rev., VRDN (b):
Rfdg.:
Series XII-B, 4.10% (AMBAC Insured)
(BPA Krediet Bank, NV) 8,300,000 8,300,000
Series XII-F, 4.10%
(MBIA Insured)(BPA Krediet Bank, NV) 5,200,000 5,200,000
Series XII-D, 4.10%
(AMBAC Insured) (BPA Krediet Bank, NV) 3,400,000 3,400,000
Michigan Muni. Bond Auth. RAN:
Series 1996 A, 4.50% 7/3/97 14,500,000 14,541,101
Series 1996 B, 4.50% 7/25/97 2,000,000 2,005,391
Series 1996 D, 4.50% 9/19/97 5,000,000 5,018,291
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MICHIGAN - CONTINUED
Michigan Hosp. Fin. Auth. Hosp. Equip. Rev.
4.15%, LOC First of America Bank-Michigan, VRDN $ 3,500,000 $ 3,500,000
Michigan Hosp. Fin. Auth. Rev., VRDN:
(Hosp. Equip. Loan Prog.):
Series A, 4.15% LOC First of America Bank 8,100,000 8,100,000
Series A, Installment 9, 4.15%,
LOC First of America Bank 1,200,000 1,200,000
4.15%, LOC First of America Bank 700,000 700,000
(St. Mary's Hosp. of Livonia) Series 1996 A, 4.30%,
LOC Comerica Bank 4,000,000 4,000,000
Michigan Hsg. Dev. Auth. Multi-Family Hsg. Rev. Bonds :
Series 1988 A:
3.625%, tender 1/15/97, LOC Credit Suisse (b) 1,000,000 1,000,000
3.55%, tender 2/11/97, LOC Credit Suisse (b) 2,000,000 2,000,000
Michigan Hsg. Dev. Auth. Participating VRDN (b)(c):
Series PT-19, 4.30% (Liquidity Facility Credit Suisse) 9,570,000
9,570,000
Series PT-38, 4.30% (FSA Insured)
(Liquidity Facility Commerzbank) 4,710,000 4,710,000
Series PT-58, 4.30% (Liquidity Facility Credit Suisse) 8,780,000
8,780,000
Michigan Strategic Fund Ltd. Oblig. Rev., VRDN:
(C-Tec, Inc. Proj.)
4.25%, LOC SunTrust Bank of Atlanta (b) 1,500,000 1,500,000
(Doss Ind. Dev. Co.) 4.35%, LOC NBD Bank (b) 3,900,000 3,900,000
(Envir. Quality Co. Proj.) Series 1995,
4.35%, LOC Comerica Bank (b) 1,700,000 1,700,000
(Hi Tech Mold & Engineering)
Series 1991, 4.35%, LOC NBD Bank (b) 1,200,000 1,200,000
(Peachwood Center Assoc.) Series 1995,
4.25%, LOC NBD Bank 1,000,000 1,000,000
(Orbital Fluid Tech Proj.) Series 1996, (b):
4.35%, LOC Comerica Bank 1,000,000 1,000,000
4.35%, LOC Comerica Bank 1,500,000 1,500,000
(R.H. Wyner Proj.) Series 1996,
4.23%, LOC State Street Bank & Trust 2,125,000 2,125,000
(The Spiratex Co. Proj.) Series 1994,
4.35% LOC NBD Bank (b) 2,600,000 2,600,000
(Ultimate Hydroforming Inc. Proj.)
4.35%, LOC NBD Bank (b) 800,000 800,000
(Uni Boring Co. Inc. Proj.) Series 1992,
4.35% LOC NBD Bank 1,900,000 1,900,000
(United Waste Sys. Proj.) Series 1995,
4.25%, LOC Bank of America 4,300,000 4,300,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MICHIGAN - CONTINUED
Michigan Strategic Fund Poll. Cont. Rev., VRDN:
Rfdg. (Consumers Pwr. Co. Proj.) Series 1988 A,
4.95%, LOC Union Bank of Switzerland $ 500,000 $ 500,000
(General Motors Corp. Composite) 3.10% 5,790,000 5,790,000
Michigan Strategic Fund Rev. Bonds
(Dow Chemical Co. Proj.):
Series 1986:
3.60%, tender 1/24/97 1,000,000 1,000,000
3.50%, tender 2/27/97 2,000,000 2,000,000
3.50%, tender 2/28/97 1,600,000 1,600,000
Series 1988 (b):
3.60%, tender 2/13/97 3,700,000 3,700,000
3.55%, tender 2/26/97 3,000,000 3,000,000
3.45%,tender 3/10/97 4,700,000 4,700,000
3.45%, tender 3/11/97 3,000,000 3,000,000
3.50%, tender 3/14/97 3,000,000 3,000,000
3.50%, tender 3/18/97 3,000,000 3,000,000
Michigan Strategic Fund Solid Waste Disp. Sys. Rev., VRDN (b):
(Grayling Gen. Station Proj.) Series 1990,
4.25%, LOC Barclays Bank 9,200,000 9,200,000
(Great Lakes Recovery) 4.30%, LOC NBD Bank 3,000,000 3,000,000
Michigan Trunk Line Participating VRDN (c):
Series SG-44, 4.15% (FGIC Insured)
(Liquidity Facility Societe Generale) 5,830,000 5,830,000
Series SG-87, 4.15% (FGIC Insured)
(Liquidity Facility Societe Generale) 3,000,000 3,000,000
Michigan Trunk Line Rev. Rfdg. Series B,
4.50% 11/15/97 (FGIC Insured) 1,000,000 1,007,343
Mona Shores School Dist. Participating VRDN, Series SG-26,
4.15% (Liquidity Facility Societe Generale) (c) 8,175,000 8,175,000
Northville Pub. Schools RAN 4.25% 4/1/97 2,300,000 2,302,171
Rochester Hills Econ. Dev. Corp. Ltd. Oblig. Rev. (Cardell Corp.)
4.30%, LOC Comerica Bank, VRDN (b) 200,000 200,000
Sterling Heights Econ. Dev. Corp. Ltd. Oblig. Rev.
(Cherrywood Ctr. Assoc. Proj.)
4.35%, LOC Comerica Bank, VRDN (b) 4,700,000 4,700,000
Univ. of Michigan Hosp. Rev., VRDN:
Series 1992 A, 5.10% 900,000 900,000
Series 1995 A, 5.10% 200,000 200,000
Univ. of Michigan Intercollegiate Athletic Rev.
4.95%, VRDN 700,000 700,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MICHIGAN - CONTINUED
Univ. of Michigan Med. Svc. Rev. Series 1995 A,
5.10%, VRDN $ 300,000 $ 300,000
Wayne County Arpt. Rev. Rfdg. VRDN (b):
Series 1996 A, 4.25%,
LOC Bayerische Landesbank Girozentale 9,200,000 9,200,000
Series 1996 B, 4.10%,
LOC Bayerische Landesbank Girozentale 4,900,000 4,900,000
TOTAL INVESTMENTS - 100% $ 263,166,732
Total Cost for Income Tax Purposes $ 263,167,107
SECURITY TYPE ABBREVIATIONS
CP - Commercial Paper
RAN - Revenue Anticipation Notes
TAN - Tax Anticipation Notes
VRDN - Variable Rate Demand Notes
LEGEND
8. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end. The due date on these types of
securities reflects the next interest rate reset date or, when applicable,
the final maturity date.
9. Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals.
10. Provides evidence of ownership in one or more underlying municipal
bonds.
INCOME TAX INFORMATION
At December 31, 1996, the fund had a capital loss carryforward of
approximately $96,800 of which $1,600, $1,700, $10,300, $39,100, $4,800 and
$39,300 will expire on December 31, 1998, 1999, 2001, 2002, 2003 and 2004,
respectively.
During fiscal year ended 1996, 100% of the fund's income dividends was free
from federal income tax, and 45.13% of the fund's income dividends was
subject to the federal alternative minimum tax.

FIDELITY MICHIGAN MUNICIPAL MONEY MARKET FUND

FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
DECEMBER 31, 1996

ASSETS

Investment in securities, at value - $ 263,166,732
See accompanying schedule

Cash 333,669

Interest receivable 1,513,785

TOTAL ASSETS 265,014,186

LIABILITIES

Payable for investments purchased $ 4,250,065

Distributions payable 17,846

Accrued management fee 83,793

Other payables and accrued expenses 70,824

TOTAL LIABILITIES 4,422,528

NET ASSETS $ 260,591,658

Net Assets consist of:

Paid in capital $ 260,688,444

Accumulated net realized gain (loss) on investments (96,786)

NET ASSETS, for 260,688,444 shares outstanding $ 260,591,658

NET ASSET VALUE, offering price and redemption price $1.00
per share ($260,591,658 (divided by) 260,688,444 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1996

INTEREST INCOME $ 8,407,488

EXPENSES

Management fee $ 930,291

Transfer agent, accounting and custodian fees 475,364
and expenses

Non-interested trustees' compensation 394

Registration fees 35,807

Audit 17,912

Legal 3,420

Miscellaneous 1,253

Total expenses before reductions 1,464,441

Expense reductions (24,038) 1,440,403

NET INTEREST INCOME 6,967,085

NET REALIZED GAIN (LOSS) ON INVESTMENTS (39,267)

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 6,927,818

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1996 1995

INCREASE (DECREASE) IN NET ASSETS

Operations $ 6,967,085 $ 7,277,883
Net interest income

Net realized gain (loss) (39,267) (4,791)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 6,927,818 7,273,092
FROM OPERATIONS

Distributions to shareholders from net interest income (6,967,085) (7,277,883)

Share transactions at net asset value of $1.00 per share 498,526,631 347,831,546
Proceeds from sales of shares

Reinvestment of distributions from net interest income 6,658,005 6,942,228

Cost of shares redeemed (475,812,666) (345,244,892)

NET INCREASE (DECREASE) IN NET ASSETS AND SHARES 29,371,970 9,528,882
RESULTING FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS 29,332,703 9,524,091

NET ASSETS

Beginning of period 231,258,955 221,734,864

End of period $ 260,591,658 $ 231,258,955

</TABLE>

FINANCIAL HIGHLIGHTS
YEARS ENDED DECEMBER 31,

1996 1995 1994 1993 1992

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA

Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period

Income from Investment .030 .033 .024 .020 .026
Operations
Net interest income

Less Distributions

From net interest income (.030) (.033) (.024) (.020) (.026)

Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000

TOTAL RETURN 1. 3.00% 3.38% 2.44% 1.98% 2.66%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period $ 260,592 $ 231,259 $ 221,735 $ 175,190 $ 160,817
(000 omitted)

Ratio of expenses to average .62% .63% .61% .62% .49% C
net assets

Ratio of expenses to average .61% B .63% .61% .62% .49%
net assets after expense
reductions

Ratio of net interest income to 2.96% 3.32% 2.45% 1.96% 2.64%
average net assets

</TABLE>

A TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
B FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES (SEE NOTE 5 OF
NOTES TO FINANCIAL STATEMENTS).
C FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER
NOTES TO FINANCIAL STATEMENTS
For the period ended December 31, 1996

1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Michigan Municipal Income Fund (the income fund)(formerly Fidelity
Michigan Tax-Free High Yield Portfolio) is a fund of Fidelity Municipal
Trust. Fidelity Michigan Municipal Money Market Fund (the money market
fund)(formerly Fidelity Michigan Municipal Money Market Portfolio) is a
fund of Fidelity Municipal Trust II. Each trust is registered under the
Investment Company Act of 1940, as amended (the 1940 Act), as an open-end
management investment company. Fidelity Municipal Trust and Fidelity
Municipal Trust II (the trusts) are organized as a Massachusetts business
trust and a Delaware business trust, respectively. Each fund is authorized
to issue an unlimited number of shares. The financial statements have been
prepared in conformity with generally accepted accounting principles which
permit management to make certain estimates and assumptions at the date of
the financial statements. The following summarizes the significant
accounting policies of the income and the money market fund:
SECURITY VALUATION.
INCOME FUND. Securities are valued based upon a computerized matrix system
and/or appraisals by a pricing service, both of which consider market
transactions and dealer-supplied valuations. Short-term securities with
remaining maturities of sixty days or less for which quotations are not
readily available are valued at amortized cost or original cost plus
accrued interest, both of which approximate current value. Securities for
which quotations are not readily available are valued at their fair value
as determined in good faith under consistently applied procedures under the
general supervision of the Board of Trustees.
MONEY MARKET FUND. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost and
thereafter assume a constant amortization to maturity of any discount or
premium.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, each fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
the fiscal year. The schedules of investments include information regarding
income taxes under the caption "Income Tax Information."
INTEREST INCOME. Interest income, which includes amortization of premium
and accretion of original issue discount, is accrued as earned. For the
money market fund, accretion of market discount represents unrealized gain
until realized at the time of a security disposition or maturity.
EXPENSES. Most expenses of each trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income. Distributions to shareholders from
realized capital gains on investments, if any, are recorded on the
ex-dividend date.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for futures
and options transactions, market discount and losses deferred due to
futures and options.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net investment income and realized
and unrealized gain (loss). Accumulated undistributed net realized gain
(loss) on investments may include temporary book and tax basis differences
which will reverse in a subsequent period. Distributions in excess of net
investment may include temporary book and tax basis differences that will
reverse in a subsequent period. Any taxable income or gain remaining at
fiscal year end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FUTURES CONTRACTS AND OPTIONS. The income fund may invest in futures and
options contracts, and may also write options. These investments involve,
to varying degrees, elements of market risk and risks in excess of the
amount recognized in the Statement of Assets and Liabilities. Risks may be
caused by an imperfect correlation between movements in the price of the
instruments and the price of the underlying securities and interest rates.
Risks also may arise if there is an illiquid secondary market for the
instruments, or due to the inability of counterparties to perform.
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Options traded
on an exchange are valued using the last sale price or, in the absence of a
sale, the last offering price. Options traded over-the-counter are valued
using dealer-supplied valuations.
3. PURCHASES AND SALES OF INVESTMENTS.
INCOME FUND. Purchases and sales of securities, other than short-term
securities, aggregated $131,241,299 and $158,462,059, respectively.
The market value of futures contracts opened and closed during the period
amounted to $50,514,583 and $50,178,417, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, Fidelity Management &
Research Company (FMR) receives a monthly basic fee that is calculated on
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
the basis of a group fee rate plus a fixed individual fund fee rate applied
to the average net assets of each fund. The group fee rate is the weighted
average of a series of rates and is based on the monthly average net assets
of all the mutual funds advised by FMR. The rates ranged from .1100% to
.3700% for the period. In the event that these rates were lower than the
contractual rates in effect during the period, FMR voluntarily implemented
the above rates, as they resulted in the same or a lower management fee.
The annual individual fund fee rate is .25%. For the period, the management
fees were equivalent to an annual rate of .40% for the income and money
market funds.
SUB-ADVISER FEE. As the money market fund's investment sub-adviser, FMR
Texas Inc., a wholly owned subsidiary of FMR, receives a fee from FMR of
50% of the management fee payable to FMR. The fee is paid prior to any
voluntary expense reimbursements which may be in effect.
TRANSFER AGENT AND ACCOUNTING FEES. UMB Bank, n.a. (UMB) is the custodian
and transfer and shareholder servicing agent for the funds. UMB has entered
into a sub-contract with Fidelity Service Co. (FSC), an affiliate of FMR,
under which FSC performs the activities associated with the funds' transfer
and shareholder servicing agent and accounting functions. The funds pay
account fees and asset-based fees that vary according to account size and
type of account. FSC pays for typesetting, printing and mailing of all
shareholder reports, except proxy statements. The accounting fee is based
on the level of average net assets for the month plus out-of-pocket
expenses. For the period, FSC received transfer agent and accounting fees
amounting to $596,754 and $203,023 for the income fund and $412,544 and
$49,657 for the money market fund, respectively.
For the period, the transfer agent fees were equivalent to an annual rate
of .13% and .18% of average net assets for the income fund and the money
market fund, respectively.
Shareholders participating in the Fidelity Ultra Service Account(registered
trademark) Program (the Program) pay a $5.00 monthly fee to Fidelity
Brokerage Services, Inc. (FBSI), an affiliate of FMR, for performing
services associated with the Program. For the period, fees paid to FBSI by
shareholders participating in the Program amounted to $8,520.
5. EXPENSE REDUCTIONS.
Each fund has entered into arrangements with its custodian and transfer
agent whereby interest earned on uninvested cash balances was used to
offset a portion of each fund's expenses. During the period, the transfer
agent fees were reduced by $5,333 and $24,038 for the income and money
market funds, respectively, under this arrangement.
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Municipal Trust and Fidelity Municipal Trust II
and the Shareholders of Fidelity Michigan Municipal Income Fund (formerly
Fidelity Michigan Tax-Free High Yield Portfolio) and Fidelity Michigan
Municipal Money Market Fund (formerly Fidelity Michigan Municipal Money
Market Portfolio):
We have audited the accompanying statements of assets and liabilities of
Fidelity Municipal Trust: Fidelity Michigan Municipal Income Fund (formerly
Fidelity Michigan Tax-Free High Yield Portfolio) and Fidelity Municipal
Trust II: Fidelity Michigan Municipal Money Market Fund (formerly Fidelity
Michigan Municipal Money Market Portfolio), including the schedules of
portfolio investments, as of December 31, 1996 and the related statements
of operations for the year then ended, the statements of changes in net
assets for each of the two years in the period then ended and the financial
highlights for each of the five years in the period then ended. These
financial statements and financial highlights are the responsibility of the
funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of December 31, 1996 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Michigan Municipal Income Fund and Fidelity Michigan Municipal
Money Market Fund as of December 31, 1996, the results of their operations
for the year then ended, the changes in their net assets for each of the
two years in the period then ended, and the financial highlights for each
of the five years in the period then ended, in conformity with generally
accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
February 4, 1997
MANAGING YOUR INVESTMENTS

INVESTMENT ADVISER
(registered trademark)
Fidelity Management & Research
Company
Boston, MA
INVESTMENT SUB-ADVISER,
MONEY MARKET FUND
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Fred L. Henning, Jr., Vice President
David L. Murphy, Vice President -
INCOME FUND
Deborah F. Watson, Vice President -
MONEY MARKET FUND
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Thomas D. Maher, Assistant
Vice President - MONEY MARKET FUND
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Thomas J. Simpson, Assistant Treasurer- MONEY MARKET FUND
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Richard J. Flynn *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Edward H. Malone *
Marvin L. Mann *
Gerald C. McDonough *
Thomas R. Williams *
ADVISORY BOARD
William O. McCoy
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
UMB Bank, n.a.
Kansas City, MO
and
Fidelity Service Co.
Boston, MA
CUSTODIAN
UMB Bank, n.a
Kansas City, MO
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
* INDEPENDENT TRUSTEES
AUTOMATED LINE FOR QUICKEST SERVICE