VAN KAMPEN AMERICAN CAPITAL TR FOR INVT GRADE NEW JERSEY MUN
N-30D, 1997-12-22
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<PAGE>   1
 
                    TABLE OF CONTENTS
 
<TABLE>
<S>                                               <C>
Letter to Shareholders...........................  1
Performance Results..............................  5
Portfolio of Investments.........................  6
Statement of Assets and Liabilities..............  9
Statement of Operations.......................... 10
Statement of Changes in Net Assets............... 11
Financial Highlights............................. 12
Notes to Financial Statements.................... 13
Report of Independent Accountants................ 16
Dividend Reinvestment Plan....................... 17
</TABLE>
 
VTJ ANR 12/97
<PAGE>   2
 
                             LETTER TO SHAREHOLDERS
 
December 4, 1997
 
Dear Shareholder,
    In the past year, we have been
participants in and witnesses to two
mergers that we believe have positioned
our company at the forefront of the
financial industry's evolution. Our
latest announcement continues our
forward progress. I am pleased to                        [PHOTO]          
announce that Philip N. Duff, formerly                                    
the chief financial officer of Morgan      DENNIS J. MCDONNELL AND DON G. POWELL
Stanley, has joined Van Kampen American                                        
Capital as president and chief                                                 
executive officer. I will continue as                                          
chairman of the firm. Together, we will continue to work to the benefit of our
fund shareholders as Van Kampen American Capital advances toward the next
century.
 
ECONOMIC REVIEW
    The last quarter of 1996 brought renewed strength and rumblings of
inflation, which continued to feed investors' uncertainties about the direction
of interest rates. This was reflected in the volatility of taxable yields, with
the 30-year Treasury ranging from a high of 6.70 percent to a low of 6.35
percent, and ending the period at 6.64 percent.
    The bond market advanced in price during the first 10 months of 1997, but
its ascension was not a smooth ride. Bond prices fell early in the period as
economic growth soared, fueling concerns about rising inflation and a potential
interest rate hike by the Federal Reserve Board. When the Fed did raise interest
rates by a modest 0.25 percent in late March, bond prices fell further, sending
the yield of the 30-year U.S. Treasury bond above 7.0 percent for the first time
in six months. By mid-April, however, the market's mood had changed, reflecting
few signs of price pressures despite the economy's strength. Bonds also
benefited from continued heavy purchases by foreign investors and concerns that
the stock market rally was nearing an end. The 7.0 percent slump in the Dow
Jones Industrial Average on October 27 reinforced the benefit of owning bonds
for diversification. By the end of October, the yield on the 30-year Treasury
bond was near its lowest level in 20 months, at 6.15 percent.
    Throughout 1997, municipal bond prices moved in the same direction as the
Treasury bond market, but gained less when Treasury prices rallied and lost less
when Treasuries fell. Between December 31, 1996 and October 31, 1997, the yield
on the long-term municipal revenue bond index fell 36 basis points as the yield
on the 30-year Treasury bond fell 48 basis points. Because yields move in the
opposite direction of prices, the smaller yield decline of municipal bonds
indicates that their prices did not rise as much as Treasuries.
    In New Jersey, moderately strong economic growth contributed to a budget
surplus in excess of $1 billion--a level that has been achieved for the past
five years. Job growth picked up substantially, as did personal income growth,
although both still lag national
                                                           Continued on page two
 
                                        1
                     
<PAGE>   3
 
averages. State tax revenues rose as a result of these economic gains, which,
when combined with spending restraint, helped to boost reserves. The state's
fiscal health was also underpinned by a policy decision to end its reliance on
one-shot revenue sources, and the sale of $2.8 billion in new bonds--the state's
largest bond issue ever--to shore up the state's pension fund.
 
[CREDIT QUALITY GRAPH]
 
Portfolio Composition by Credit Quality
   as of October 31, 1997*

<TABLE>
<S>                 <C>
AAA............     66.8%
AA.............     18.7%
A..............      9.4%
BBB............      2.7%
Non-Rated......      2.4%

</TABLE>

* As a Percentage of Long-Term Investments. Based upon the highest credit 
quality ratings as issued by Standard & Poor's or Moody's.

TRUST STRATEGY
 
    In managing the Trust, we used the following strategies:
    We maintained a portfolio heavily weighted toward high-quality bonds. The
high concentration in AAA-rated securities in the portfolio reflects the
proliferation of insured bonds, which currently comprise well over half of new
issues in the municipal bond market. Bonds rated AAA are extremely liquid and
carry minimal credit risk. When interest rates fall, as they did for most of the
second half of the fiscal year, these bonds tend to outperform lower-rated
securities. Bonds rated BBB, the lowest investment-grade credit rating assigned
by Standard & Poor's, and below BBB tend to perform better when rates are rising
and have the potential to provide additional income.
    Portfolio turnover during the fiscal year was minimal due to a lack of
opportunities to add value to existing holdings. The average yield of bonds in
the Trust's portfolio was higher than average market yields. As a result, there
was little incentive to replace bonds in the portfolio, because such trades
would have reduced the Trust's dividend-paying ability. In addition, spreads
between the yields of high-quality and low-quality bonds were tight. These
spreads have compressed to historically narrow levels due to the increasing
number of insured bonds in the municipal market. In such an environment, it is
difficult to justify purchasing lower-rated securities and assuming the
additional credit risk. Trading was also restrained by a tight supply of new
municipal bond issues in New Jersey and the difficulty in finding discount
bonds.
    During the period, we focused on enhancing the Trust's call protection as
well as maintaining its dividend-paying ability. Because we hoped to limit the
number of bonds that could be "called" at any one time, we purchased long-term,
high quality par bonds that will not be callable for at least 10 years.
Acquisitions also included one high-yielding premium bond that was relatively
inexpensive. Acquisitions were financed by sales of bonds that had
 
                                                         Continued on page three
 
                                        2
<PAGE>   4
 
appreciated in price, as well as an extraordinary call on our $4.38 million
position in a Mercer County Improvement Authority bond, which had been issued to
finance a waste incinerator project. The call, effective mid-May, followed
cancellation of the project.
    When searching for new securities for the Trust's portfolio, we try to
identify bonds that we believe will outperform within a particular sector and
that can be purchased at an attractive price. We believe this "bottom-up"
approach, supported by our research, provides significant added value to the
portfolio.
    We continued to concentrate the Trust's holdings in general purpose and
health-care securities. General purpose bonds, backed by the full faith and
credit of state and local governments, have been underpinned by New Jersey's
strong economy. As a result of that strength, we expect the state's balance
sheet to show a surplus of more than $1 billion for 1997. The health-care sector
also continues to improve financially due to industry consolidation and efforts
to control operating expenses. Facilities serving many uninsured patients,
however, remain under pressure from cuts in state reimbursement rates. We
believe the Trust is well-positioned to handle stresses in the health-care
sector, because most of its securities in this sector are insured.
    During the second half of the fiscal year, we attempted to maintain the
Trust's duration comparable to its market benchmark. Duration, which is
expressed in years, is a measure of a portfolio's sensitivity to interest rate
movements. Portfolios with long durations tend to perform better when interest
rates are falling, while portfolios with short durations tend to do better when
rates are rising. As of October 31, the duration of the Trust's bond portfolio
stood at 7.21 years, compared to 7.34 years for the Lehman Brothers Municipal
Bond Index.
 
TOP FIVE PORTFOLIO INDUSTRY HOLDINGS BY SECTOR AS OF OCTOBER 31, 1997*

    General Purpose..................................... 27.9%
    Water & Sewer....................................... 15.1%
    Health Care......................................... 14.4%
    Transportation...................................... 11.3%
    Public Building.....................................  9.8%
 
    *As a Percentage of Long-Term Investments
 
PERFORMANCE SUMMARY
 
    For the one-year period ended October 31, 1997, the Van Kampen American
Capital Trust for Investment Grade New Jersey Municipals generated a total
return at market price of 14.32 percent(1). The Trust offered a tax-exempt
distribution rate of 5.72 percent(3), based on the closing common stock price on
October 31, 1997. At the end of the reporting period, the closing share price of
the Trust traded at $16.5625, a 5.7 percent discount to its net asset value of
$17.57. Because income from the Trust is exempt from federal and New Jersey
income taxes, this distribution rate represents a yield equivalent to a taxable
investment earning 9.55 percent(4) (for investors in the combined federal and
state income tax bracket of 40.1 percent).
    The Trust declared a capital gains distribution of $0.0093 per share paid
December 31, 1996.
 
                                                          Continued on page four
 
                                        3
<PAGE>   5
                         [DISTRIBUTION HISTORY GRAPH]
 
Twelve-month Distribution History
For the Period Ended October 31, 1997

<TABLE>
<CAPTION>
                                            Distribution per Common Share   
                                           Dividends        Capital Gains
<S>                                         <C>              <C>                                             
Nov 1996..................................  $.0790                  
Dec 1996..................................  $.0790           $.0093
Jan 1997..................................  $.0790
Feb 1997..................................  $.0790
Mar 1997..................................  $.0790      
Apr 1997..................................  $.0790
May 1997..................................  $.0790
Jun 1997..................................  $.0790
Jul 1997..................................  $.0790
Aug 1997..................................  $.0790
Sep 1997..................................  $.0790
Oct 1997..................................  $.0790

</TABLE>

The distribution history represents past performance of the Trust and does
not predict the Trust's future distributions.

OUTLOOK
 
    We expect the economy to remain strong in the coming months, although the
growth rate might slow to a more moderate pace. The weakness in the Far East,
which was the impetus for the recent volatility in world stock markets, will
most likely reduce U.S. exports to the region. In turn, this could trim U.S.
economic growth as well as the earnings of many U.S. companies. As a result, we
believe there is little chance that the Fed will raise interest rates in the
coming months. A rate hike reemerges as a possibility if inflation picks up, or
if growth continues at its current brisk pace.
    As a result of this outlook, we expect that the yield on the 30-year
Treasury bond will range between 5.75 percent and 6.50 percent for the next six
months, possibly falling further in mid-1998. A decline in rates would not only
boost the prices of long-term investments in the portfolio, but could also
positively affect the Trust as a result of its leveraged structure. That
structure, which involves borrowing short-term funds to purchase long-term
municipal bonds, provides common shareholders with above-market levels of
dividend income. It should be noted, however, that if short-term rates rise,
leveraged costs would increase; this would negatively impact the income and
performance of common shares.
    We will continue to seek a balance between the Trust's total return and its
dividend income, and to add value through our investment strategies and bond
selection. Thank you for your continued confidence in Van Kampen American
Capital and your Trust's portfolio manager.
 
Sincerely,
 
[SIG]          
Don G. Powell

Chairman
Van Kampen American Capital
Investment Advisory Corp.

[SIG]                
Dennis J. McDonnell

President
Van Kampen American Capital
Investment Advisory Corp.
 
                                               Please see footnotes on page five
 
                                        4
<PAGE>   6
 
           PERFORMANCE RESULTS FOR THE PERIOD ENDED OCTOBER 31, 1997
 
             VAN KAMPEN AMERICAN CAPITAL TRUST FOR INVESTMENT GRADE
                             NEW JERSEY MUNICIPALS
                           (NYSE TICKER SYMBOL--VTJ)
 
<TABLE>
<CAPTION>
COMMON SHARE TOTAL RETURNS
<S>                                                         <C>
One-year total return based on market price(1)............    14.32%
One-year total return based on NAV(2).....................     9.61%
 
 DISTRIBUTION RATES
 
Distribution rate as a % of closing common stock
  price(3)................................................     5.72%
Taxable-equivalent distribution rate as a % of closing
common stock price(4).....................................     9.55%
 
 SHARE VALUATIONS

Net asset value...........................................  $  17.57
Closing common stock price................................  $16.5625
One-year high common stock price (10/03/97)...............  $16.9375
One-year low common stock price (04/16/97)................  $ 15.000
Preferred share rate(5)...................................    3.600%
</TABLE>
 
(1) Total return based on market price assumes an investment at the market price
at the beginning of the period indicated, reinvestment of all distributions for
the period in accordance with the Trust's dividend reinvestment plan, and sale
of all shares at the closing common stock price at the end of the period
indicated.
 
(2) Total return based on net asset value (NAV) assumes an investment at the
beginning of the period indicated, reinvestment of all distributions for the
period, and sale of all shares at the end of the period, all at NAV.
 
(3) Distribution rate represents the monthly annualized distributions of the
Trust at the end of the period and not the earnings of the Trust.
 
(4) The taxable-equivalent distribution rate is calculated assuming a 40.1%
combined federal and state income tax bracket, which takes into consideration
the deductibility of individual state taxes paid.
 
(5) See "Notes to Financial Statements" footnote #4, for more information
concerning Preferred Share reset periods.
 
A portion of the interest income may be taxable for those investors subject to
the federal alternative minimum tax (AMT).
 
Past performance does not guarantee future results. Investment return, stock
price and net asset value will fluctuate with market conditions. Trust shares,
when sold, may be worth more or less than their original cost.
 
                                        5
<PAGE>   7
                            PORTFOLIO OF INVESTMENTS
 
                                October 31, 1997
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
  Par
Amount
 (000)                      Description                     Coupon    Maturity  Market Value
- --------------------------------------------------------------------------------------------
<S>       <C>                                               <C>       <C>       <C>
          MUNICIPAL BONDS  99.0%
          NEW JERSEY  90.2%
$ 2,500   Aberdeen Twp, NJ Muni Util Auth Swr Rev Cap Impt
          Ser B (FGIC Insd)...............................   6.500%   02/01/22  $  2,759,775
  2,000   Bergen Cnty, NJ Util Auth Wtr Pollutn Ctl Rev
          Ser A (Prerefunded @ 06/15/02) (FGIC Insd)......   6.500    12/15/12     2,221,200
  1,000   Bordentown, NJ Swr Auth Rev Ser C (MBIA Insd)...   6.800    12/01/25     1,090,180
  1,500   Brick Twp, NJ Muni Util Auth Rev (AMBAC Insd)...   6.500    12/01/12     1,658,820
  2,000   Camden Cnty, NJ Muni Util Auth Swr Rev Cap
          Apprec Ser B (FGIC Insd)........................       *    09/01/14       786,760
  2,500   Camden Cnty, NJ Muni Util Auth Swr Rev Cap
          Apprec Ser B (FGIC Insd)........................       *    09/01/15       925,600
  4,095   Camden, NJ (FSA Insd)...........................       *    02/15/11     2,105,199
  2,330   Edgewater, NJ Muni Util Auth Rev Swr Rfdg (MBIA
          Insd)...........................................       *    11/01/12     1,091,489
    500   Essex Cnty, NJ Impt Auth AMT Gtd Lease
          Sportsplex Proj B (AMBAC Insd)..................   5.625    10/01/27       503,830
    840   Essex Cnty, NJ Impt Auth Lease Jail & Youth
          House Proj (Prerefunded @ 12/01/04) (AMBAC
          Insd)...........................................   6.600    12/01/07       964,001
  2,000   Essex Cnty, NJ Impt Auth Rev Util Sys Orange
          Franchise A (MBIA Insd).........................   5.750    07/01/27     2,075,760
  3,000   Essex Cnty, NJ Impt Auth Rev Irvington Twp Sch
          Dist (Prerefunded @ 10/01/02) (FSA Insd)........   6.625    10/01/17     3,363,930
  4,875   Hudson Cnty, NJ Ctfs Partn Correctional Fac Rfdg
          (MBIA Insd).....................................   6.600    12/01/21     5,322,330
  2,000   Mercer Cnty, NJ Impt Auth Rev Ewing Brd Edl
          Lease Proj (Prerefunded @ 05/15/02) (MBIA
          Insd)...........................................   6.400    05/15/11     2,210,120
  2,300   Mercer Cnty, NJ Impt Auth Rev Gtd Site &
          Disposal Fac Proj Solid Waste Rfdg..............       *    04/01/08     1,407,577
  6,500   Mercer Cnty, NJ Impt Auth Rev Gtd Site &
          Disposal Fac Proj Solid Waste Rfdg..............       *    04/01/10     3,490,760
  7,055   Mercer Cnty, NJ Impt Auth Rev Gtd Site &
          Disposal Fac Proj Solid Waste Rfdg..............       *    04/01/12     3,356,275
  2,500   New Jersey Bldg Auth St Bldg Rev (Prerefunded @
          06/15/99).......................................   6.250    06/15/13     2,635,675
    515   New Jersey Econ Dev Auth Econ Dev Rev Ser F.....   6.600    06/01/12       547,836
    430   New Jersey Econ Dev Auth Econ Dev Rev Ser Y.....   6.600    06/01/12       457,417
  2,000   New Jersey Econ Dev Auth Mkt Transition Fac Rev
          Sr Lien Ser A (MBIA Insd).......................   5.800    07/01/07     2,163,440
  1,000   New Jersey Econ Dev Auth Mkt Transition Fac Rev
          Sr Lien Ser A (MBIA Insd).......................   5.800    07/01/08     1,075,380
  1,500   New Jersey Econ Dev Auth Mkt Transition Fac Rev
          Sr Lien Ser A (MBIA Insd).......................   5.800    07/01/09     1,602,810
 10,000   New Jersey Econ Dev Auth St Contract Econ
          Recovery (MBIA Insd)............................   5.900    03/15/21    10,968,600
</TABLE>
 
                                               See Notes to Financial Statements
 
                                        6
<PAGE>   8
 
                      PORTFOLIO OF INVESTMENTS (CONTINUED)
 
                                October 31, 1997
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
  Par
Amount
 (000)                      Description                     Coupon    Maturity  Market Value
- --------------------------------------------------------------------------------------------
<S>       <C>                                               <C>       <C>       <C>
          NEW JERSEY (CONTINUED)
$ 4,575   New Jersey Hlthcare Fac Fin Auth Rev Atlantic
          City Med Cent Ser C Rfdg........................   6.800%   07/01/11  $  5,022,389
    500   New Jersey Hlthcare Fac Fin Auth Rev Christ Hosp
          Group Issue (Connie Lee Insd)...................   7.000    07/01/04       570,030
    250   New Jersey Hlthcare Fac Fin Auth Rev Elizabeth
          Genl Med Cent Ser C.............................   7.375    07/01/15       265,825
  2,200   New Jersey Hlthcare Fac Fin Auth Rev Genl Hosp
          Cent at Passaic (FSA Insd)......................   6.500    07/01/11     2,518,780
  2,000   New Jersey Hlthcare Fac Fin Auth Rev Genl Hosp
          Cent at Passaic (FSA Insd)......................   6.750    07/01/19     2,310,980
  2,000   New Jersey Hlthcare Fac Fin Auth Rev Hackensack
          Med Cent (FGIC Insd)............................   6.625    07/01/11     2,174,580
  2,500   New Jersey Hlthcare Fac Fin Auth Rev Hackensack
          Med Cent (FGIC Insd)............................   6.625    07/01/17     2,709,375
  1,150   New Jersey St...................................   6.800    07/15/06     1,309,701
  4,750   New Jersey St Hsg & Mtg Fin Agy Rev.............   6.600    11/01/14     5,139,215
  4,800   New Jersey St Hwy Auth Garden St Pkwy Genl Rev
          Sr Pkwy.........................................   6.250    01/01/14     5,161,104
  1,000   Newark, NJ Sch Qualified Bond Act (MBIA Insd)...   5.300    09/01/14     1,008,470
  2,000   North Bergen Twp, NJ (FSA Insd).................       *    08/15/09     1,134,180
  2,675   Passaic Vly, NJ Wtr Comm Wtr Supply Rev Cap
          Apprec Ser A (FGIC Insd)........................       *    12/15/09     1,492,837
  2,000   Passaic Vly, NJ Wtr Comm Wtr Supply Rev Cap
          Apprec Ser A (FGIC Insd)........................       *    12/15/10     1,050,160
  1,000   Paterson, NJ (FSA Insd).........................   6.600    02/15/07     1,095,810
  2,850   Port Auth NY & NJ Cons Ser 78...................   6.500    04/15/11     3,096,297
  2,000   Rockaway Vly, NJ Regl Swr Auth Swr Rev Rfdg
          (MBIA Insd).....................................       *    12/15/09     1,116,140
  1,225   Rutgers St Univ of NJ Ser A Rfdg................   6.500    05/01/18     1,328,696
  2,000   Salem Cnty, NJ Indl Pollutn Ctl Fin Auth Rev Pub
          Svc Elec & Gas Ser D Rfdg (MBIA Insd)...........   6.550    10/01/29     2,220,140
    165   Union City, NJ (FSA Insd).......................   6.375    11/01/10       190,230
  1,500   Union City, NJ (MBIA Insd)......................   6.700    09/01/12     1,684,470
  1,000   Univ Medicine & Dentistry Ser A (MBIA Insd).....   5.000    09/01/17       977,780
                                                                                ------------
                                                                                  98,361,953
                                                                                ------------
</TABLE>
 
                                               See Notes to Financial Statements
 
                                        7
<PAGE>   9
 
                      PORTFOLIO OF INVESTMENTS (CONTINUED)
 
                                October 31, 1997
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
  Par
Amount
 (000)                      Description                     Coupon    Maturity  Market Value
- --------------------------------------------------------------------------------------------
<S>       <C>                                               <C>       <C>       <C>
          GUAM  4.2%
$ 1,000   Guam Arpt Auth Rev Ser B........................   6.700%   10/01/23  $  1,085,460
  1,800   Guam Govt Ltd Oblig Hwy Ser A Rfdg (FSA Insd)...   6.300    05/01/12     1,956,294
  1,500   Guam Govt Ser A.................................   5.625    09/01/02     1,519,755
                                                                                ------------
                                                                                   4,561,509
                                                                                ------------
          PUERTO RICO  4.6%
  1,750   Puerto Rico Comwlth Hwy & Tran Auth Hwy Rev Ser
          T (Prerefunded @ 07/01/02)......................   6.500    07/01/22     1,944,792
  1,700   Puerto Rico Comwlth Pub Impt (Prerefunded @
          07/01/02).......................................   6.800    07/01/21     1,910,664
  1,000   Puerto Rico Pub Bldgs Auth Rev Gtd Ser K
          (Prerefunded @ 07/01/02)........................   6.875    07/01/21     1,127,070
                                                                                ------------
                                                                                   4,982,526
                                                                                ------------
TOTAL INVESTMENTS  99.0%
  (Cost $97,083,666)..........................................................   107,905,988
OTHER ASSETS IN EXCESS OF LIABILITIES  1.0%...................................     1,072,435
                                                                                ------------
NET ASSETS  100.0%............................................................  $108,978,423
                                                                                ============
</TABLE>
 
* Zero coupon bond
 
                                               See Notes to Financial Statements
 
                                        8
<PAGE>   10
 
                      STATEMENT OF ASSETS AND LIABILITIES
 
                                October 31, 1997
- --------------------------------------------------------------------------------
 
<TABLE>
<S>                                                           <C>
ASSETS:
Total Investments (Cost $97,083,666)........................  $107,905,988
Interest Receivable.........................................     1,578,266
Other.......................................................         1,563
                                                              ------------
      Total Assets..........................................   109,485,817
                                                              ------------
LIABILITIES:
Payables:
  Income Distributions--Common and Preferred Shares.........       108,005
  Custodian Bank............................................       107,014
  Investment Advisory Fee...................................        59,900
  Administrative Fee........................................        18,431
  Affiliates................................................         7,982
Accrued Expenses............................................       133,640
Trustees' Deferred Compensation and Retirement Plans........        72,422
                                                              ------------
      Total Liabilities.....................................       507,394
                                                              ------------
NET ASSETS..................................................  $108,978,423
                                                              ============
NET ASSETS CONSIST OF:
Preferred Shares ($.01 par value, authorized 100,000,000
  shares, 800 issued
  with liquidation preference of $50,000 per share).........  $ 40,000,000
                                                              ------------
Common Shares ($.01 par value with an unlimited number of
  shares authorized,
  3,925,373 shares issued and outstanding)..................        39,254
Paid in Surplus.............................................    57,511,539
Net Unrealized Appreciation.................................    10,822,322
Accumulated Undistributed Net Investment Income.............       676,060
Accumulated Net Realized Loss...............................       (70,752)
                                                              ------------
      Net Assets Applicable to Common Shares................    68,978,423
                                                              ------------
NET ASSETS..................................................  $108,978,423
                                                              ============
NET ASSET VALUE PER COMMON SHARE ($68,978,423 divided
  by 3,925,373 shares outstanding)..........................  $      17.57
                                                              ============
</TABLE>
 
                                               See Notes to Financial Statements
 
                                        9
<PAGE>   11
 
                            STATEMENT OF OPERATIONS
 
                      For the Year Ended October 31, 1997
- --------------------------------------------------------------------------------
 
<TABLE>
<S>                                                           <C>
INVESTMENT INCOME:
Interest....................................................  $6,213,956
                                                              ----------  
EXPENSES:
Investment Advisory Fee.....................................     695,521
Administrative Fee..........................................     214,006
Preferred Share Maintenance.................................     109,135
Trustees' Fees and Expenses.................................      27,121
Custody.....................................................      12,076
Legal.......................................................       8,426
Amortization of Organizational Costs........................       2,001
Other.......................................................      94,848
                                                              ----------  
    Total Expenses..........................................   1,163,134
                                                              ----------  
NET INVESTMENT INCOME.......................................  $5,050,822
                                                              ==========  
REALIZED AND UNREALIZED GAIN/LOSS:

Net Realized Loss...........................................  $  (70,752)
                                                              ----------  
Unrealized Appreciation/Depreciation:
  Beginning of the Period...................................   8,181,770
  End of the Period.........................................  10,822,322
                                                              ----------  
Net Unrealized Appreciation During the Period...............   2,640,552
                                                              ----------  
NET REALIZED AND UNREALIZED GAIN............................  $2,569,800
                                                              ==========  
NET INCREASE IN NET ASSETS FROM OPERATIONS..................  $7,620,622
                                                              ==========  
</TABLE>
 
                                               See Notes to Financial Statements
 
                                       10
<PAGE>   12
 
                       STATEMENT OF CHANGES IN NET ASSETS
 
                 For the Years Ended October 31, 1997 and 1996
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                            Year Ended         Year Ended
                                                         October 31, 1997   October 31, 1996
- --------------------------------------------------------------------------------------------
<S>                                                        <C>                <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income...................................   $  5,050,822        $  5,050,553
Net Realized Gain/Loss..................................        (70,752)             50,811
Net Unrealized Appreciation During the Period...........      2,640,552             265,619
                                                           ------------        ------------
Change in Net Assets from Operations....................      7,620,622           5,366,983
                                                           ------------        ------------
Distributions from Net Investment Income:
  Common Shares.........................................     (3,721,001)         (3,689,685)
  Preferred Shares......................................     (1,402,750)         (1,414,964)
                                                           ------------        ------------
                                                             (5,123,751)         (5,104,649)
                                                           ------------        ------------
Distributions from Net Realized Gain:
  Common Shares.........................................        (36,667)            (81,248)
  Preferred Shares......................................        (14,144)            (35,215)
                                                           ------------        ------------
                                                                (50,811)           (116,463)
                                                           ------------        ------------
Total Distributions.....................................     (5,174,562)         (5,221,112)
                                                           ------------        ------------
NET CHANGE IN NET ASSETS FROM INVESTMENT ACTIVITIES.....      2,446,060             145,871
NET ASSETS:
Beginning of the Period.................................    106,532,363         106,386,492
                                                           ------------        ------------
End of the period (Including accumulated undistributed
  net investment income of $676,060 and $748,989,
  respectively).........................................   $108,978,423        $106,532,363
                                                           ============        ============
</TABLE>
 
                                               See Notes to Financial Statements
 
                                       11
<PAGE>   13
 
                              FINANCIAL HIGHLIGHTS
 
  The following schedule presents financial highlights for one common share of
            the Trust outstanding throughout the periods indicated.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                      March 27, 1992
                                                                                       (Commencement
                                              Year Ended October 31                     of Investment
                                -------------------------------------------------     Operations) to
                                    1997       1996      1995      1994      1993   October 31, 1992
- ----------------------------------------------------------------------------------------------------
<S>                             <C>        <C>        <C>       <C>       <C>       <C>
Net Asset Value,
  Beginning of the Period
  (a).........................  $ 16.949    $16.912   $14.800   $18.181   $14.882            $14.678
                                --------    -------   -------   -------   -------            -------
  Net Investment Income.......     1.287      1.286     1.288     1.286     1.314               .578
  Net Realized and Unrealized
    Gain/Loss.................      .654       .081     2.138    (3.371)    3.309               .156
                                --------    -------   -------   -------   -------            -------
Total from Investment
  Operations..................     1.941      1.367     3.426    (2.085)    4.623               .734
                                --------    -------   -------   -------   -------            -------
Less:
  Distributions from Net
    Investment Income:
    Paid to Common
      Shareholders............      .948       .940      .924      .924      .924               .385
    Common Share Equivalent of
      Distributions Paid to
      Preferred
      Shareholders............      .357       .360      .390      .292      .278               .145
  Distributions from Net
    Realized
    Gain:
    Paid to Common
      Shareholders............      .009       .021       -0-      .061      .092                -0-
    Common Share Equivalent of
      Distributions Paid to
      Preferred
      Shareholders............      .004       .009       -0-      .019      .030                -0-
                                --------    -------   -------   -------   -------            -------
Total Distributions...........     1.318      1.330     1.314     1.296     1.324               .530
                                --------    -------   -------   -------   -------            -------
Net Asset Value, End of the
  Period......................   $17.572    $16.949   $16.912   $14.800   $18.181            $14.882
                                ========    =======   =======   =======   =======            =======
Market Price Per Share
  at End of the Period........  $16.5625    $15.375   $14.750   $13.125   $16.750            $14.750
Total Investment Return at
  Market Price (b)............    14.32%     10.91%    19.79%   (16.32%)   20.92%               .83%*
Total Return at Net Asset
  Value (c)...................     9.61%      6.09%    21.03%   (13.59%)   29.84%              1.62%*
Net Assets at End of the
  Period
  (In millions)...............    $109.0     $106.5    $106.4     $98.1    $111.4              $98.4
Ratio of Expenses to Average
  Net Assets Applicable to
  Common Shares...............     1.74%      1.80%     1.89%     1.85%     1.80%              1.77%
Ratio of Expenses to Average
  Net Assets..................     1.09%      1.12%     1.15%     1.15%     1.12%              1.23%
Ratio of Net Investment Income
  to Average Net Assets
  Applicable to Common Shares
  (d).........................     5.44%      5.50%     5.63%     5.99%     6.15%              4.83%
Portfolio Turnover............        6%        11%       14%       12%       19%                28%*
</TABLE>
 
(a) Net Asset Value at March 27, 1992, is adjusted for common and preferred
    share offering costs of $.322 per common share.
 
(b) Total Investment Return at Market Price reflects the change in market value
    of the common shares for the period indicated with reinvestment of dividends
    in accordance with the Trust's dividend reinvestment plan.
 
(c) Total Return at Net Asset Value (NAV) reflects the change in value of the
    Trust's assets with reinvestment of dividends based upon NAV.
 
(d) Net Investment Income is adjusted for the common share equivalent of
    distributions paid to preferred shareholders.
 
 *  Non-Annualized
 
                                               See Notes to Financial Statements
 
                                       12
<PAGE>   14
 
                         NOTES TO FINANCIAL STATEMENTS
 
                                October 31, 1997
- --------------------------------------------------------------------------------
 
1. SIGNIFICANT ACCOUNTING POLICIES
 
Van Kampen American Capital Trust for Investment Grade New Jersey Municipals
(the "Trust") is registered as a diversified closed-end management investment
company under the Investment Company Act of 1940, as amended. The Trust's
investment objective is to provide a high level of current income exempt from
federal income taxes and New Jersey gross income taxes, consistent with
preservation of capital. The Trust will invest substantially all of its assets
in New Jersey municipal securities rated investment grade at the time of
investment. The Trust commenced investment operations on March 27, 1992.
 
    The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
 
A. SECURITY VALUATION--Investments are stated at value using market quotations
or, if such valuations are not available, estimates obtained from yield data
relating to instruments or securities with similar characteristics in accordance
with procedures established in good faith by the Board of Trustees. Short-term
securities with remaining maturities of 60 days or less are valued at amortized
cost.
 
B. SECURITY TRANSACTIONS--Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis. The
Trust may purchase and sell securities on a "when issued" or "delayed delivery"
basis with settlement to occur at a later date. The value of the security so
purchased is subject to market fluctuations during this period. The Trust will
maintain, in a segregated account with its custodian, assets having an aggregate
value at least equal to the amount of the when issued or delayed delivery
purchase commitments until payment is made. At October 31, 1997, there were no
when issued or delayed delivery purchase commitments.
 
C. INVESTMENT INCOME--Interest income is recorded on an accrual basis. Bond
premium and original issue discount are amortized over the expected life of each
applicable security.
 
                                       13
<PAGE>   15
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
                                October 31, 1997
- --------------------------------------------------------------------------------
 
D. ORGANIZATIONAL COSTS--The Trust has reimbursed Van Kampen American Capital
Distributors, Inc. or its affiliates (collectively "VKAC") for costs incurred in
connection with the Trust's organization in the amount of $25,000. These costs
were amortized on a straight line basis over the 60 month period ended March 26,
1997.
 
E. FEDERAL INCOME TAXES--It is the Trust's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute substantially all of its taxable income to its
shareholders. Therefore, no provision for federal income taxes is required.
 
    The Trust intends to utilize provisions of the federal income tax laws which
allow it to carry a realized capital loss forward for eight years following the
year of the loss and offset such losses against any future realized capital
gains. At October 31, 1997, the Trust had an accumulated capital loss
carryforward for tax purposes of $70,752 which will expire on October 31, 2005.
 
    At October 31, 1997, for federal income tax purposes, cost of long-term
investments is $97,083,666; the aggregate gross unrealized appreciation is
$10,822,322 and the aggregate gross unrealized depreciation is $0 resulting in
net unrealized appreciation on investments of $10,822,322.
 
F. DISTRIBUTION OF INCOME AND GAINS--The Trust declares and pays dividends
monthly from net investment income to common shareholders. Net realized gains,
if any, are distributed annually on a pro rata basis to common and preferred
shareholders. Distributions from net realized gains for book purposes may
include short-term capital gains which are included as ordinary income for tax
purposes.
 
    For the year ended October 31, 1997, 99.8% of the income distributions made
by the Trust were exempt from federal income taxes. In January, 1998, the Trust
will provide tax information to shareholders for the 1997 calendar year.
 
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Trust's Investment Advisory Agreement, Van Kampen
American Capital Investment Advisory Corp. (the "Adviser") will provide
investment advice and facilities to the Trust for an annual fee payable monthly
of .65% of the average net assets of the Trust. In addition, the Trust will pay
a monthly administrative fee to VKAC, the Trust's Administrator, at an annual
rate of .20% of the average net assets of the Trust. The administrative services
provided by the Administrator include record keeping and
 
                                       14
<PAGE>   16
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
                                October 31, 1997
- --------------------------------------------------------------------------------
 
reporting responsibilities with respect to the Trust's portfolio and preferred
shares and providing certain services to shareholders.
 
    For the year ended October 31, 1997, the Trust recognized expenses of
approximately $2,900 representing legal services provided by Skadden, Arps,
Slate, Meagher & Flom (Illinois), counsel to the Trust, of which a trustee of
the Trust is an affiliated person.
 
    For the year ended October 31, 1997, the Trust recognized expenses of
approximately $40,600 representing VKAC's cost of providing accounting and legal
services to the Trust.
 
    Certain officers and trustees of the Trust are also officers and directors
of VKAC. The Trust does not compensate its officers or trustees who are officers
of VKAC.
 
    The Trust provides deferred compensation and retirement plans for its
trustees who are not officers of VKAC. Under the deferred compensation plan,
trustees may elect to defer all or a portion of their compensation to a later
date. Benefits under the retirement plan are payable for a ten-year period and
are based upon each trustee's years of service to the Trust. The maximum annual
benefit under the plan is equal to the trustees' annual retainer fee, which is
currently $2,500.
 
3. INVESTMENT TRANSACTIONS
 
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $6,693,031 and $7,558,798, respectively.
 
4. PREFERRED SHARES
 
The Trust has outstanding 800 Auction Preferred Shares ("APS"). Dividends are
cumulative and the dividend rate is reset through an auction process every 28
days. The rate in effect on October 31, 1997, was 3.600%. During the year ended
October 31, 1997, the rates ranged from 3.250% to 3.925%.
    The Trust pays annual fees equivalent to .25% of the preferred share
liquidation value for the remarketing efforts associated with the preferred
auctions. These fees are included as a component of Preferred Share Maintenance
expense.
    The APS are redeemable at the option of the Trust in whole or in part at the
liquidation value of $50,000 per share plus accumulated and unpaid dividends.
The Trust is subject to certain asset coverage tests and the APS are subject to
mandatory redemption if the tests are not met.
 
                                       15
<PAGE>   17
 
                       REPORT OF INDEPENDENT ACCOUNTANTS
 
The Board of Trustees and Shareholders of
 
Van Kampen American Capital Trust for Investment Grade New Jersey Municipals:
 
We have audited the accompanying statement of assets and liabilities of Van
Kampen American Capital Trust for Investment Grade New Jersey Municipals (the
"Trust"), including the portfolio of investments, as of October 31, 1997, and
the related statement of operations for the year then ended, the statement of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the periods presented. These financial
statements and financial highlights are the responsibility of the Trust's
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
October 31, 1997, by correspondence with the custodian. 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 Van
Kampen American Capital Trust for Investment Grade New Jersey Municipals as of
October 31, 1997, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended,
and the financial highlights for each of the periods presented, in conformity
with generally accepted accounting principles.
 
                                                           KPMG Peat Marwick LLP
Chicago, Illinois
November 24, 1997
 
                                       16
<PAGE>   18
 
                           DIVIDEND REINVESTMENT PLAN
 
The Trust offers a dividend reinvestment plan (the "Plan") pursuant to which
Common Shareholders may elect to have dividends and capital gains distributions
reinvested in Common Shares of the Trust. The Trust declares dividends out of
net investment income, and will distribute annually net realized capital gains,
if any. Common Shareholders may join or withdraw from the Plan at any time.
    If you decide to participate in the Plan, State Street Bank and Trust
Company, as your Plan Agent, will automatically invest your dividends and
capital gains distributions in Common Shares of the Trust for your account.
 
HOW TO PARTICIPATE
 
If you wish to participate and your shares are held in your own name, call
1-800-341-2929 for more information and a Plan brochure. If your shares are held
in the name of a brokerage firm, bank, or other nominee, you should contact your
nominee to see if it would participate in the Plan on your behalf. If you wish
to participate in the Plan, but your brokerage firm, bank or nominee is unable
to participate on your behalf, you should request that your shares be re-
registered in your own name which will enable your participation in the Plan.
 
HOW THE PLAN WORKS
 
Participants in the Plan will receive the equivalent in Common Shares valued on
the valuation date, generally at the lower of market price or net asset value,
except as specified below. The valuation date will be the dividend or
distribution payment date or, if that date is not a trading day on the national
securities exchange or market system on which the Common Shares are listed for
trading, the next preceding trading day. If the market price per Common Share on
the valuation date equals or exceeds net asset value per Common Share on that
date, the Trust will issue new Common Shares to participants valued at the
higher of net asset value or 95% of the market price on the valuation date. In
the foregoing situation, the Trust will not issue Common Shares under the Plan
below net asset value. If net asset value per Common Share on the valuation date
exceeds the market price per Common Share on that date, or if the Board of
Trustees should declare a dividend or capital gains distribution payable to the
Common Shareholders only in cash, participants in the Plan will be deemed to
have elected to receive Common Shares from the Trust valued at the market price
on that date. Accordingly, in this circumstance, the Plan Agent will, as agent
for the participants, buy the Trust's Common Shares in the open market for the
participants' accounts on or shortly after the payment date. If, before the Plan
Agent has completed its purchases, the market price exceeds the net asset value
per share of the Common Shares, the average per share purchase price paid by the
Plan Agent may exceed the net asset value of the Trust's Common Shares,
resulting in the acquisition of fewer Common Shares than if the dividend or
distribution had been paid in Common Shares issued by the Trust. All
reinvestments are in full and fractional Common Shares and are carried to three
decimal places.
    Experience under the Plan may indicate that changes are desirable.
Accordingly, the Trust reserves the right to amend or terminate the Plan as
applied to any dividend or distribution paid subsequent to written notice of the
changes sent to all Common Shareholders of the Trust at least 90 days before the
record date for the dividend or distribution. The Plan also may be amended or
terminated by the Plan Agent by at least 90 days written notice to all Common
Shareholders of the Trust.
 
COSTS OF THE PLAN
 
The Plan Agent's fees for the handling of the reinvestment of dividends and
distributions will be paid by the Trust. However, each participant will pay a
pro rata share of brokerage commissions incurred with respect to the Plan
Agent's open market purchases in connection with the reinvestment of dividends
and distributions. No other charges will be made to participants for reinvesting
dividends or capital gains distributions, except for certain brokerage
commissions, as described above.
 
TAX IMPLICATIONS
 
You will receive tax information annually for your personal records and to help
you prepare your federal income tax return. The automatic reinvestment of
dividends and capital gains distributions does not relieve you of any income tax
which may be payable on dividends or distributions.
 
RIGHT TO WITHDRAW
 
Plan participants may withdraw at any time by calling 1-800-341-2929 or by
writing State Street Bank and Trust Company, P.O. Box 8200, Boston, MA
02266-8200. If you withdraw, you will receive, without charge, a share
certificate issued in your name for all full Common Shares credited to your
account under the Plan and a cash payment will be made for any fractional Common
Share credited to your account under the Plan. You may again elect to
participate in the Plan at any time by calling 1-800-341-2929 or writing to the
Trust at:
                          Van Kampen American Capital
                             Attn: Closed-End Funds
                              2800 Post Oak Blvd.
                               Houston, TX 77056
 
                                       17
<PAGE>   19
 
                FUNDS DISTRIBUTED BY VAN KAMPEN AMERICAN CAPITAL
 
GLOBAL AND
INTERNATIONAL
   Global Equity Fund
   Global Government Securities Fund
   Global Managed Assets Fund
   Short-Term Global Income Fund
   Strategic Income Fund
 
EQUITY
Growth
   Aggressive Growth Fund
   Emerging Growth Fund
   Enterprise Fund
   Growth Fund
   Pace Fund
Growth & Income
   Comstock Fund
   Equity Income Fund
   Growth and Income Fund
   Harbor Fund
   Real Estate Securities Fund
   Utility Fund
 
FIXED INCOME
   Corporate Bond Fund
   Government Securities Fund
   High Income Corporate Bond Fund
   High Yield Fund
   Limited Maturity Government Fund
   Prime Rate Income Trust
   Reserve Fund
   U.S. Government Fund
   U.S. Government Trust for Income
 
TAX-FREE
   California Insured Tax Free Fund
   Florida Insured Tax Free 
     Income Fund
   High Yield Municipal Fund
   Insured Tax Free Income Fund
   Intermediate Term Municipal 
     Income Fund
   Municipal Income Fund
   New York Tax Free Income Fund
   Pennsylvania Tax Free Income Fund
   Tax Free High Income Fund
   Tax Free Money Fund
 
MORGAN STANLEY
FUND, INC.
   Aggressive Equity Fund
   American Value Fund
   Asian Growth Fund
   Emerging Markets Fund
   Global Equity Fund
   Global Equity Allocation Fund
   Global Fixed Income Fund
   High Yield Fund
   International Magnum Fund
   Latin American Fund
   U.S. Real Estate Fund
   Value Fund
   Worldwide High Income Fund
 
   Ask your investment representative for a prospectus containing more complete
   information, including sales charges and expenses. Please read it carefully
   before you invest or send money. Or call us weekdays from 7:00 a.m. to 7:00
   p.m. Central time at 1-800-341-2911 for Van Kampen American Capital funds or
   Morgan Stanley funds.
 
                                       18
<PAGE>   20
 
  VAN KAMPEN AMERICAN CAPITAL TRUST FOR INVESTMENT GRADE NEW JERSEY MUNICIPALS
 
BOARD OF TRUSTEES
 
DAVID C. ARCH
ROD DAMMEYER
HOWARD J KERR
DENNIS J. MCDONNELL*--Chairman
THEODORE A. MYERS
HUGO F. SONNENSCHEIN
WAYNE W. WHALEN*
 

OFFICERS
 
DENNIS J. MCDONNELL*
  President
 
RONALD A. NYBERG*
  Vice President and Secretary
 
EDWARD C. WOOD, III*
  Vice President and Chief Financial Officer
 
CURTIS W. MORELL*
  Vice President and Chief Accounting Officer
 
JOHN L. SULLIVAN*
  Treasurer
 
TANYA M. LODEN*
  Controller
 
PETER W. HEGEL*
  Vice President


INVESTMENT ADVISER
 
VAN KAMPEN AMERICAN CAPITAL
INVESTMENT ADVISORY CORP.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
 
CUSTODIAN AND TRANSFER AGENT
 
STATE STREET BANK
AND TRUST COMPANY
225 Franklin Street
P.O. Box 1713
Boston, Massachusetts 02105
 
LEGAL COUNSEL
 
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM (ILLINOIS)
333 West Wacker Drive
Chicago, Illinois 60606
 
INDEPENDENT ACCOUNTANTS
 
KPMG PEAT MARWICK LLP
Peat Marwick Plaza
303 East Wacker Drive
Chicago, Illinois 60601
 
* "Interested" persons of the Trust, as defined in 
  the Investment Company Act of 1940.
 
(C) Van Kampen American Capital Distributors, Inc., 1997 
    All rights reserved.
 
(SM) denotes a service mark of 
     Van Kampen American Capital Distributors, Inc.
 
                                       19
<PAGE>   21
 
                          RESULTS OF SHAREHOLDER VOTES
 
    The Annual Meeting of Shareholders of the Trust was held on May 28, 1997,
where shareholders voted on a new investment advisory agreement, the election of
Trustees whose terms expired in 1997 and independent public accountants.
 
    1)  With regard to the approval of a new investment advisory agreement
between Van Kampen American Capital Investment Advisory Corp. and the Trust,
3,346,466 shares voted for the proposal, 53,094 shares voted against, 49,788
shares abstained and 0 shares represented broker non-votes.
 
    2)  With regard to the election of Rod Dammeyer as elected trustee by the
preferred shareholders of the Trust, 665 shares voted in his favor, 0 shares
withheld.
 
    3)  With regard to the election of Wayne W. Whalen as elected trustee by the
common shareholders of the Trust, 3,377,616 shares voted in his favor, 70,466
shares withheld.
 
    4)  With regard to the ratification of KPMG Peat Marwick LLP as independent
public accountants for its current fiscal year, 3,348,021 shares voted for the
proposal, 74,930 shares voted against, 25,796 shares abstained and 0 shares
represented broker non-votes.
 
                                       20

<TABLE> <S> <C>

<ARTICLE> 6
       
<S>                             <C>
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          OCT-31-1997
<PERIOD-START>                             NOV-01-1996
<PERIOD-END>                               OCT-31-1997
<INVESTMENTS-AT-COST>                       97,083,666
<INVESTMENTS-AT-VALUE>                     107,905,988
<RECEIVABLES>                                1,578,266
<ASSETS-OTHER>                                   1,563
<OTHER-ITEMS-ASSETS>                                 0
<TOTAL-ASSETS>                             109,485,817
<PAYABLE-FOR-SECURITIES>                             0
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                      507,394
<TOTAL-LIABILITIES>                            507,394
<SENIOR-EQUITY>                             40,000,000
<PAID-IN-CAPITAL-COMMON>                    57,550,793
<SHARES-COMMON-STOCK>                        3,925,373
<SHARES-COMMON-PRIOR>                        3,925,373
<ACCUMULATED-NII-CURRENT>                      676,060
<OVERDISTRIBUTION-NII>                               0
<ACCUMULATED-NET-GAINS>                       (70,752)
<OVERDISTRIBUTION-GAINS>                             0
<ACCUM-APPREC-OR-DEPREC>                    10,822,322
<NET-ASSETS>                               108,978,423
<DIVIDEND-INCOME>                                    0
<INTEREST-INCOME>                            6,213,956
<OTHER-INCOME>                                       0
<EXPENSES-NET>                             (1,163,134)
<NET-INVESTMENT-INCOME>                      5,050,822
<REALIZED-GAINS-CURRENT>                      (70,752)
<APPREC-INCREASE-CURRENT>                    2,640,552
<NET-CHANGE-FROM-OPS>                        7,620,622
<EQUALIZATION>                                       0
<DISTRIBUTIONS-OF-INCOME>                  (5,123,751)
<DISTRIBUTIONS-OF-GAINS>                      (50,811)
<DISTRIBUTIONS-OTHER>                                0
<NUMBER-OF-SHARES-SOLD>                              0
<NUMBER-OF-SHARES-REDEEMED>                          0
<SHARES-REINVESTED>                                  0
<NET-CHANGE-IN-ASSETS>                       2,446,060
<ACCUMULATED-NII-PRIOR>                        748,989
<ACCUMULATED-GAINS-PRIOR>                       50,811
<OVERDISTRIB-NII-PRIOR>                              0
<OVERDIST-NET-GAINS-PRIOR>                           0
<GROSS-ADVISORY-FEES>                          695,521
<INTEREST-EXPENSE>                                   0
<GROSS-EXPENSE>                              1,163,134
<AVERAGE-NET-ASSETS>                        67,000,968
<PER-SHARE-NAV-BEGIN>                           16.949
<PER-SHARE-NII>                                  1.287
<PER-SHARE-GAIN-APPREC>                          0.654
<PER-SHARE-DIVIDEND>                           (1.305)
<PER-SHARE-DISTRIBUTIONS>                      (0.013)
<RETURNS-OF-CAPITAL>                             0.000
<PER-SHARE-NAV-END>                             17.572
<EXPENSE-RATIO>                                   1.74
<AVG-DEBT-OUTSTANDING>                               0
<AVG-DEBT-PER-SHARE>                                 0
        

</TABLE>


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