VAN KAMPEN AMERICAN CAPITAL VALUE MUNICIPAL INCOME TRUST, N-30D, 1997-06-20

VAN KAMPEN AMERICAN CAPITAL VALUE MUNICIPAL INCOME TRUST
N-30D, 1997-06-20

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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.............. 13
Statement of Operations.......................... 14
Statement of Changes in Net Assets............... 15
Financial Highlights............................. 16
Notes to Financial Statements.................... 17
Dividend Reinvestment Plan....................... 22
</TABLE>

VKV SAR 6/97
<PAGE> 2

LETTER TO SHAREHOLDERS

June 5, 1997

Dear Shareholder,
As mentioned in your previous
report, VK/AC Holding, Inc., the parent
company of Van Kampen American Capital,
Inc., was acquired by Morgan Stanley
Group Inc., a world leader in asset
management. More recently, on February
5, 1997, Morgan Stanley Group Inc. and [photo]
Dean Witter, Discover & Co. announced DENNIS J. MCDONNELL AND DON G. POWELL
their agreement to merge, and you
received a proxy in April. The merger
was completed on May 31, 1997, creating
the combined company of Morgan Stanley, Dean Witter, Discover & Co. This
preeminent global financial services firm boasts a market capitalization of $21
billion and leading market positions in securities, asset management, and credit
services. As the financial industry continues to witness unprecedented
consolidations and new partnerships, we believe that those firms that are
leaders in all facets of their business will be able to offer investors the
greatest opportunities and services as we move into the next century. We are
confident that this merger will provide investors with those benefits.

ECONOMIC REVIEW

Bond prices were volatile during the six months ended April 30, 1997. Prices
initially rose as the economy slowed, erasing fears of an interest rate hike by
the Federal Reserve Board. The November election of a Democratic president and
Republican Congress was positive for bonds because the split government was
viewed as a restraint on spending increases that could potentially swell the
budget deficit. In addition, support diminished for radical tax reform that
could threaten the tax-free status of municipal bonds.
By the beginning of 1997, the situation changed. Bond prices began to fall
as the economy picked up speed, culminating in a 5.60 percent annualized growth
rate in the first quarter. This strength, coupled with warnings by Fed Chairman
Alan Greenspan that tighter monetary policy might be appropriate, reignited
fears of a rate hike. On March 25, the Fed raised short-term rates by a modest
0.25 percent, which sent the 30-year Treasury bond yield above 7.00 percent for
the first time in six months. By the end of April, the 30-year Treasury bond
yield slipped back below 7.00 percent as the market turned its attention to
positive news about inflation, and bonds recovered some of their earlier losses.
Throughout most of the six months ended April 30, municipal bonds generally
outperformed Treasuries. Between October 31 and April 30, yields on long-term
municipal revenue bonds rose 21 basis points, while yields on 30-year Treasury
bonds jumped 31 basis points. Because bond yields move in the opposite direction
of prices, the smaller

Continued on page two

<PAGE> 3
increase in municipal yields meant that municipal bond prices did not fall as
sharply as Treasury bond prices did. A relatively stable supply of new issues,
combined with an increase in retail demand, contributed to the improved
performance of municipal bonds.

FUND STRATEGY

In managing the Trust, we maintained a concentration of high-quality bonds.
As of April 30, approximately 61 percent of the Trust's long-term investments
were rated AAA, the highest credit rating assigned to bonds by the Standard &
Poor's Ratings Group. Most of the AAA-rated bonds are insured securities, which
are extremely liquid and provide the potential for safety of principal. These
bonds have tended to perform better when interest rates are falling, which was
not the case for most of the period. Approximately 14 percent of long-term
investments were rated AA or A, and 18 percent were rated BBB, the lowest credit
rating Standard & Poor's assigns to bonds in the investment-grade category. In
addition, approximately 7 percent of long-term investments were below investment
grade or non-rated.

[CREDIT QUALITY GRAPH]

Portfolio Composition by Credit Quality as a Percentage of Long-Term
Investments as of April 30, 1997
<TABLE>
<S> <C>
AAA............... 60.7%
AA................ 8.8%
A................. 5.7%
BBB............... 18.0%
BB................ 6.3%
Non-Rated......... 0.5%
</TABLE>

Based upon credit quality ratings issued by Standard & Poor's. For securities
not rated by Standard & Poor's, the Moody's rating is used.

Portfolio turnover was moderate during the period because market conditions
offered few opportunities to add value over existing holdings. The average
yields of bonds in the portfolio were higher than current market yields.
Activity was also limited by the tight spreads between yields of AAA-rated bonds
and lower-rated bonds. These spreads have remained narrow due to the increasing
number of insured bonds in the municipal market. As a result, there was often
not enough yield reward to justify the additional credit risk of purchasing
lower-rated securities.
We sold bonds that had become relatively expensive and used the proceeds of
these sales to purchase long-term discount bonds that had appreciation
potential. (A bond that is priced at its face value is selling at par. If it is
priced below par, it is selling at a discount. Conversely, a bond priced above
par is selling at a premium.) As a result of tight yield spreads in the market,
purchases favored new long-term AAA-rated issues that could enhance the call
protection of the Trust. In other words, we hope to lessen the concentration of
bonds that can be called at any one time. When buying new securities for the
portfolio, we attempt to identify those bonds that we believe will outperform
within a particular sector and that can be purchased at an attractive price. We
believe this

Continued on page three

2
<PAGE> 4

"bottom-up" approach, supported by our research, provides significant added
value to the portfolio.
We maintained a short duration during this period of rising interest rates
in order to potentially reduce the Trust's volatility to rate increases.
Duration, which is expressed in years, is a measure of a portfolio's sensitivity
to interest rate movements. Portfolios with long durations have tended to
perform better when rates are falling, and portfolios with short durations have
tended to perform better when rates are rising. At the end of the period, the
Trust's portfolio duration stood at 7.26 years compared to 8.10 years for the
Lehman Brothers Municipal Bond Index benchmark.

[BAR GRAPH]
Six-month Dividend History
For the Period Ended April 30, 1997

<TABLE>
<CAPTION>
Distribution per Share
<S> <C>
Nov 1996 $.0675
Dec 1996 $.0675
Jan 1997 $.0675
Feb 1997 $.0675
Mar 1997 $.0675
Apr 1997 $.0675
</TABLE>

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

PERFORMANCE SUMMARY

We are pleased to report that the Van Kampen American Capital Value
Municipal Income Trust continued its positive performance over the first half of
its fiscal year. For the six-month period ended April 30, 1997, the Trust
generated a total return at market price of 5.35 percent(1). The Trust offered a
tax-exempt distribution rate of 6.42 percent(3), based on the closing common
stock price of $12.625 per share on April 30, 1997. Because income from the
Trust is exempt from federal income tax, this distribution rate represents a
yield equivalent to a taxable investment earning 10.03 percent(4) (for investors
in the 36 percent federal income tax bracket). At the end of the reporting
period, the closing share price of the Trust traded at a 11.7 percent discount
to its net asset value of $14.29.

Continued on page four

3
<PAGE> 5

TOP FIVE PORTFOLIO HOLDINGS BY SECTOR AS OF APRIL 30, 1997*

Health Care....................... 19.3%
Industrial Revenue................ 12.0%
General Purpose.................... 9.3%
Public Building.................... 9.3%
Higher Education................... 8.4%

*As a Percentage of Long-Term Investments

MUNICIPAL MARKET OUTLOOK

We continue to see signs of a strong economy, although we do not expect the
unusually brisk growth rate of the first quarter to be sustained throughout the
year. As a result, we believe the Fed will monitor the economy closely and take
aggressive action to control growth if inflation picks up or the high growth
rate is sustained. However, if growth slows, we believe the Fed will leave rates
unchanged. Given this outlook, we expect that yields on the 30-year Treasury
bond will range between 6.75 and 7.40 percent for the remainder of the year,
with higher levels occurring early and lower yields dominating the second half
of 1997. Although short-term interest rates have risen, this has not had a
significant impact on the leveraged structure of the Trust.
We believe the Trust is positioned to perform well in the coming months, and
we do not anticipate major structural changes in the portfolio. In light of our
expectations for interest rates, we will continue to maintain a slightly
defensive posture by keeping a relatively short duration for the portfolio and
adjusting the duration when prudent. We will also continue to seek a balance
between the Trust's total return and its dividend income, as well as to add
value through security selection. Thank you for your continued confidence in Van
Kampen American Capital and your Trust's team of managers.

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 APRIL 30, 1997

VAN KAMPEN AMERICAN CAPITAL VALUE MUNICIPAL INCOME TRUST
(NYSE TICKER SYMBOL--VKV)

COMMON SHARE TOTAL RETURNS

<TABLE>
<S> <C>
Six-month total return based on market price(1)............ 5.35%
Six-month total return based on NAV(2)..................... 1.33%

DISTRIBUTION RATES

Distribution rate as a % of closing common stock
price(3)................................................. 6.42%
Taxable-equivalent distribution rate as a % of closing
common stock price(4).................................... 10.03%

SHARE VALUATIONS

Net asset value............................................ $ 14.29
Closing common stock price................................. $12.625
Six-month high common stock price (03/11/97)............... $13.000
Six-month low common stock price (12/11/96)................ $11.875
Preferred share (Series A) rate(5)......................... 4.000%
Preferred share (Series B) rate(5)......................... 3.700%
Preferred share (Series C) rate(5)......................... 3.689%
Preferred share (Series D) rate(5)......................... 3.750%
Preferred share (Series E) rate(5)......................... 3.950%
</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 36%
federal income tax bracket.

(5) See "Notes to Financial Statements" footnote #5, 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.

Market forecasts provided in this report may not necessarily come to pass.

5
<PAGE> 7

PORTFOLIO OF INVESTMENTS

April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MUNICIPAL BONDS
ALABAMA 2.5%
$ 3,815 Alabama Agricultural & Mechanical Univ Rev (MBIA
Insd)............................................ 6.500% 11/01/25 $ 4,098,950
5,000 Birmingham Baptist Med Cent AL Spl Care Fac Fin
Auth Rev (MBIA Insd)............................. 5.750 11/15/10 5,080,000
2,650 Huntsville, AL Hlthcare Auth Hlthcare Fac Rev
Ser A (MBIA Insd)................................ 6.375 06/01/22 2,766,839
2,000 Mobile, AL Indl Dev Brd Solid Waste Disp Rev
Mobile Energy Svcs Co Proj Rfdg.................. 6.950 01/01/20 2,116,140
------------
14,061,929
------------
ALASKA 0.2%
1,000 North Slope Borough, AK Ser B (FSA Insd)......... 7.500 06/30/01 1,100,180
------------
ARIZONA 1.0%
4,990 Pima Cnty, AZ Indl Dev Auth Indl Rev Lease Oblig
Irvington Proj Tucson Ser A Rfdg (FSA Insd)...... 7.250 07/15/10 5,503,920
------------
CALIFORNIA 11.8%
980 California Hsg Fin Agy Rev Home Mtg Ser B1....... 6.300 08/01/08 1,016,015
1,660 California Rural Home Mtg Fin Auth Single Family
Mtg Rev Ser B (GNMA Collateralized).............. 7.750 09/01/26 1,853,324
1,500 California St Pub Wks Brd Lease Rev Dept of
Corrections Monterey Ser A (MBIA Insd)........... 6.400 11/01/10 1,614,405
6,000 California St Pub Wks Brd Lease Rev Dept of
Corrections St Prisons Ser A Rfdg (AMBAC Insd)... 5.250 12/01/13 5,796,720
2,000 California St Pub Wks Brd Lease Rev Dept of
Corrections St Prisons Ser A Rfdg (AMBAC Insd)... 5.000 12/01/19 1,833,980
1,000 Foothill/Eastern Tran Corridor Agy CA Toll Rd Rev
Ser A............................................ 6.500 01/01/32 1,029,890
2,000 Fresno, CA Hlth Fac Rev Holy Cross Hlth Sys Saint
Agnes Med (MBIA Insd)............................ 6.625 06/01/21 2,142,240
1,250 Kings Cnty, CA Waste Mgmt Auth Solid Waste Rev... 7.200 10/01/14 1,356,763
9,500 Los Angeles, CA Dept Wtr & Pwr Elec Plant Rev
Crossover Rfdg (FGIC Insd) (c)................... 5.375 09/01/23 8,890,765
12,500 Mount Diablo, CA Hosp Dist Rev Ser A (Embedded
Cap) (AMBAC Insd)................................ 5.125 12/01/23 11,170,875
5,000 Orange Cnty, CA Recovery Ctfs Ser A (MBIA
Insd)............................................ 6.000 07/01/06 5,318,350
1,000 Orange Cnty, CA Recovery Ser A Rfdg (MBIA
Insd)............................................ 5.600 06/01/07 1,037,800
2,995 Orange Cnty, CA Recovery Ser A Rfdg (MBIA
Insd)............................................ 6.000 06/01/08 3,209,142
5,700 Sacramento, CA City Fin Auth Rev Comb Proj B
(MBIA Insd)...................................... * 11/01/15 1,968,324
16,500 San Bernardino Cnty, CA Ctfs Partn Med Cent Fin
Proj (MBIA Insd)................................. 5.000 08/01/28 14,701,500
3,250 San Marcos, CA Pub Fac Auth Rev Pub Impt Civic
Cent
Ser A Rfdg....................................... 6.200 08/01/22 3,254,647
------------
66,194,740
------------
</TABLE>

See Notes to Financial Statements

6
<PAGE> 8

PORTFOLIO OF INVESTMENTS (CONTINUED)

April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COLORADO 5.3%
$ 5,640 Adams & Arapahoe Cntys, CO Jt Sch Dist Ser C
(MBIA Insd)...................................... 5.750% 12/01/08 $ 5,879,700
1,000 Arapahoe Cnty, CO Cap Impt Trust Fund Hwy Rev
E-470 Proj Ser B................................. 6.950 08/31/20 1,068,280
3,000 Arapahoe Cnty, CO Cap Impt Trust Fund Hwy Rev
E-470 Proj Ser B................................. 7.000 08/31/26 3,211,920
9,000 Arapahoe Cnty, CO Cap Impt Trust Fund Hwy Rev
E-470 Proj Ser C................................. * 08/31/26 1,106,280
1,750 Denver, CO City & Cnty Arpt Rev Ser A............ 6.900 11/15/98 1,811,250
1,250 Denver, CO City & Cnty Arpt Rev Ser A............ 8.875 11/15/12 1,470,988
3,095 Denver, CO City & Cnty Arpt Rev Ser A............ 8.500 11/15/23 3,500,414
3,000 Denver, CO City & Cnty Arpt Rev Ser B (MBIA
Insd)............................................ 6.250 11/15/07 3,207,840
6,000 Denver, CO City & Cnty Arpt Rev Ser C............ 6.600 11/15/04 6,353,460
2,000 Meridian Metro Dist CO Rfdg...................... 7.500 12/01/11 2,187,380
------------
29,797,512
------------
CONNECTICUT 0.5%
2,500 Connecticut St Hlth & Edl Fac Auth Rev Nursing
Home Pgm AHF/Hartford............................ 7.125 11/01/14 2,787,650
------------
FLORIDA 4.9%
1,985 Bay Cnty, FL Sch Brd Ctfs Partn (AMBAC Insd)..... 6.750 07/01/12 2,172,563
3,500 Citrus Cnty, FL Hosp Brd Rev Citrus Mem Hosp Ser
A Rfdg (FSA Insd)................................ 6.500 08/15/12 3,755,255
1,425 Florida Hsg Fin Agy Single Family Mtg Ser A Rfdg
(GNMA Collateralized)............................ 6.650 01/01/24 1,473,051
3,000 Hillsborough Cnty, FL Cap Impt Pgm Rev Criminal
Justice Fac Rfdg (FGIC Insd)..................... 5.250 08/01/16 2,844,810
3,000 Hillsborough Cnty, FL Indl Dev Auth Pollutn Ctl
Rev Tampa Elec Co Proj Ser 92 Rfdg............... 8.000 05/01/22 3,469,830
2,945 Hillsborough Cnty, FL Sch Brd Ctfs Partn (MBIA
Insd)............................................ 6.000 07/01/12 3,046,455
1,300 Jacksonville, FL Hlth Fac Auth Hosp Rev Baptist
Med Cent Proj Ser A Rfdg (MBIA Insd)............. 7.300 06/01/19 1,385,514
4,000 Orlando, FL Util Comm Wtr & Elec Rev Ser A
(Prerefunded @ 10/01/01)......................... 6.500 10/01/20 4,346,760
5,000 Pinellas Cnty, FL Hsg Fin Auth Single Family Mtg
Rev Multi-Cnty Pgm Ser A (GNMA Collateralized)... 6.700 02/01/28 5,180,300
------------
27,674,538
------------
GEORGIA 2.6%
3,000 Burke Cnty, GA Dev Auth Pollutn Ctl Rev GA Pwr Co
Plant Vogtle Proj (MBIA Insd).................... 6.350 05/01/19 3,083,220
4,000 Chatham Cnty, GA Hosp Auth Rev Mem Med Cent Ser A
Rfdg & Impt (AMBAC Insd)......................... 5.250 01/01/16 3,796,680
5,000 Georgia Muni Elec Auth Pwr Rev Ser B Rfdg (FGIC
Insd)............................................ 5.700 01/01/19 5,039,950
</TABLE>

See Notes to Financial Statements

7
<PAGE> 9

PORTFOLIO OF INVESTMENTS (CONTINUED)

April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
GEORGIA (CONTINUED)
$ 2,700 Marietta, GA Dev Auth Rev First Mtg Life College
Ser B (FSA Insd)................................. 5.375% 09/01/09 $ 2,691,360
------------
14,611,210
------------
HAWAII 0.4%
2,250 Hawaii St Arpt Sys Rev 3rd Ser Rfdg (AMBAC
Insd)............................................ 5.750 07/01/09 2,288,272
------------
ILLINOIS 3.5%
3,500 Chicago, IL Cap Apprec (AMBAC Insd).............. * 01/01/17 1,028,545
1,000 Chicago, IL Park Dist............................ 6.700 01/01/11 1,086,900
1,560 Illinois Hlth Fac Auth Rev Carle Fndtn Ser A Rfdg
(FGIC Insd)...................................... 6.750 01/01/10 1,650,012
3,180 Illinois Hlth Fac Auth Rev Children's Mem Hosp
(MBIA Insd)...................................... 6.250 08/15/13 3,374,139
2,250 Illinois Hlth Fac Auth Rev Evangelical Hosp Ser A
Rfdg (FSA Insd).................................. 6.750 04/15/17 2,522,745
1,250 Illinois Hlth Fac Auth Rev Evangelical Hosp Ser C
(FSA Insd)....................................... 6.750 04/15/17 1,401,525
2,070 Northern IL Univ Ctfs Partn Hoffman Estates Cent
Proj (Cap Guar Insd)............................. 5.400 09/01/16 1,982,439
5,000 Regional Tran Auth IL Ser A (AMBAC Insd)......... 8.000 06/01/17 6,410,800
------------
19,457,105
------------
INDIANA 1.0%
12,750 Indiana Tran Fin Auth Hwy Rev Cap Apprec Ser A
(AMBAC Insd)..................................... * 06/01/17 3,896,400
5,500 Indiana Tran Fin Auth Hwy Rev Cap Apprec Ser A
(AMBAC Insd)..................................... * 06/01/18 1,584,440
------------
5,480,840
------------
KENTUCKY 2.7%
9,900 Kenton Cnty, KY Arpt Brd Arpt Rev Spl Fac Delta
Airls Proj Ser A................................. 7.500 02/01/12 10,640,718
3,500 Kenton Cnty, KY Arpt Brd Arpt Rev Spl Fac Delta
Airls Proj Ser A................................. 7.500 02/01/20 3,761,870
500 Mount Sterling, KY Lease Rev KY League Cities Ser
B................................................ 6.100 03/01/18 513,980
------------
14,916,568
------------
LOUISIANA 1.1%
6,000 Saint Charles Parish, LA Solid Waste Disp Rev LA
Pwr & Lt Co Proj (FSA Insd)...................... 7.050 04/01/22 6,437,040
------------
MAINE 0.9%
3,000 Maine Edl Ln Mktg Corp Student Ln Rev Ser A4..... 5.950 11/01/03 3,089,460
2,000 Maine St Hsg Auth Mtg Purp Ser C2................ 6.875 11/15/23 2,082,140
------------
5,171,600
------------
MARYLAND 1.4%
7,400 Maryland St Cmnty Dev Admin Dept Hsg & Cmnty Dev
Rev Single Family Pgm 7th Ser.................... 7.300 04/01/25 7,815,880
------------
MASSACHUSETTS 3.9%
2,000 Massachusetts St Hlth & Edl Fac Auth Rev (AMBAC
Insd)............................................ 7.100 07/01/21 2,171,720
1,000 Massachusetts St Hlth & Edl Fac Auth Rev Brigham
& Women's Hosp Ser C............................. 7.125 06/01/09 1,064,000
1,000 Massachusetts St Indl Fin Agy Wtr Treatment
American Hingham................................. 6.750 12/01/20 1,040,740
1,000 Massachusetts St Indl Fin Agy Wtr Treatment
American Hingham................................. 6.900 12/01/29 1,049,710
1,000 Massachusetts St Indl Fin Agy Wtr Treatment
American Hingham................................. 6.950 12/01/35 1,038,160

</TABLE>

See Notes to Financial Statements

8
<PAGE> 10

PORTFOLIO OF INVESTMENTS (CONTINUED)

April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MASSACHUSETTS (CONTINUED)
$14,500 Massachusetts St Wtr Res Auth Ser A (Prerefunded
@ 12/01/01)...................................... 6.500% 12/01/19 $ 15,777,160
------------
22,141,490
------------
MICHIGAN 2.4%
1,250 Battle Creek, MI Downtown Dev Auth Tax Increment
Rev.............................................. 7.600 05/01/16 1,424,625
5,000 Detroit, MI Downtown Dev Auth Tax Increment Rev
Dev Area No 1 Proj Ser C1........................ 6.250 07/01/25 5,094,050
2,750 Detroit, MI Ser B Rfdg........................... 7.000 04/01/04 2,974,730
4,000 Michigan St Bldg Auth Rev Ser I Rfdg (MBIA
Insd)............................................ 6.250 10/01/20 4,132,920
------------
13,626,325
------------
MINNESOTA 0.2%
1,400 Minnesota Agricultural & Econ Dev Brd Rev
Hlthcare Sys Fairview Hosp Ser A (MBIA Insd)..... 5.750 11/15/26 1,377,474
------------
MISSISSIPPI 0.3%
1,500 Claiborne Cnty, MS Pollutn Ctl Rev Sys Energy Res
Inc Rfdg......................................... 7.300 05/01/25 1,572,120
------------
MISSOURI 0.4%
2,395 Kansas City, MO Port Auth Fac Riverfront Park
Proj Ser A....................................... 5.750 10/01/03 2,437,248
------------
NEVADA 1.6%
5,750 Clark Cnty, NV Indl Dev Rev NV Pwr Co Proj Ser C
Rfdg (AMBAC Insd)................................ 7.200 10/01/22 6,340,812
2,660 Nevada Hsg Div Single Family Pgm Mezz B.......... 6.550 10/01/12 2,743,950
------------
9,084,762
------------
NEW JERSEY 3.2%
1,000 Bordentown, NJ Swr Auth Rev Ser C (MBIA Insd)
(c).............................................. 6.800 12/01/25 1,079,410
1,000 New Jersey Econ Dev Auth Econ Dev Rev Manahawkin
Convalescent Ser A Rfdg (FHA Gtd)................ 6.650 02/01/23 1,048,780
2,500 New Jersey Econ Dev Auth Mkt Transition Fac Rev
Sr Lien Ser A (MBIA Insd)........................ 5.800 07/01/09 2,569,900
1,695 New Jersey Hlthcare Fac Fin Auth Rev Genl Hosp
Cent at Passaic (FSA Insd)....................... 6.000 07/01/06 1,806,124
2,500 New Jersey Hlthcare Fac Fin Auth Rev Genl Hosp
Cent at Passaic (FSA Insd)....................... 6.750 07/01/19 2,714,400
2,250 New Jersey St Edl Fac Auth Rev Glassboro St
College Ser A (MBIA Insd)........................ 6.700 07/01/21 2,423,925
6,750 Salem Cnty, NJ Indl Pollutn Ctl Fin Auth Rev
Pollutn Ctl Pub Svc Elec & Gas Ser A (MBIA
Insd)............................................ 5.450 02/01/32 6,223,635
------------
17,866,174
------------
NEW YORK 15.4%
3,000 Nassau Cnty, NY Genl Impt Ser V (AMBAC Insd)..... 5.250 03/01/16 2,853,390
3,000 New York City Muni Assist Corp Ser J (b)......... 5.750 07/01/03 3,118,770
2,070 New York City Muni Wtr Fin Auth Wtr & Swr Sys Rev
Ser A............................................ 7.000 06/15/09 2,260,730
2,105 New York City Muni Wtr Fin Auth Wtr & Swr Sys Rev
Ser A (Prerefunded @ 06/15/01)................... 7.000 06/15/09 2,297,313

</TABLE>

See Notes to Financial Statements

9
<PAGE> 11
PORTFOLIO OF INVESTMENTS (CONTINUED)

April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NEW YORK (CONTINUED)
$ 7,270 New York City Ser A Rfdg......................... 7.000% 08/01/04 $ 7,877,990
5,700 New York City Ser E Rfdg......................... 6.600 08/01/03 6,054,540
5,000 New York City Ser G.............................. 5.750 02/01/14 4,812,350
9,000 New York City Ser I.............................. 6.000 04/15/12 8,955,810
2,000 New York St Dorm Auth Rev City Univ 3rd Genl Res
Ser 2 (MBIA Insd)................................ 6.250 07/01/19 2,072,720
7,575 New York St Dorm Auth Rev Cons City Univ Sys Ser
A................................................ 5.625 07/01/16 7,341,311
4,000 New York St Dorm Auth Rev Court Fac Lease Ser
A................................................ 5.250 05/15/21 3,535,000
2,500 New York St Dorm Auth Rev Dept of Hlth........... 5.500 07/01/25 2,313,325
4,000 New York St Dorm Auth Rev St Univ Edl Fac Ser A
Rfdg (AMBAC Insd)................................ 5.500 05/15/09 4,100,880
5,215 New York St Dorm Auth Rev St Univ Edl Fac Ser B
Rfdg............................................. 7.375 05/15/14 5,658,536
5,885 New York St Energy Resh & Dev Auth Fac Rev....... 7.125 12/01/29 6,507,868
2,310 New York St Med Care Fac Fin Agy Rev Saint
Peter's Hosp Proj Ser A (AMBAC Insd)............. 5.375 11/01/13 2,242,386
3,130 New York St Urban Dev Corp Rev Correctional Fac
Ser A Rfdg....................................... 5.500 01/01/16 2,927,082
5,000 New York St Urban Dev Corp Rev St Fac Rfdg....... 5.700 04/01/20 4,865,750
7,000 Port Auth NY & NJ Spl Oblig Spl Proj JFK Intl
Arpt Terminal 6 (MBIA Insd) (b).................. 5.750 12/01/25 6,831,790
------------
86,627,541
------------
NORTH CAROLINA 0.8%
5,000 North Carolina Med Care Comm Duke Univ Hosp Ser
C................................................ 5.250 06/01/21 4,648,300
------------
OHIO 4.3%
2,110 Cleveland Rock Glen Hsg Assistance Corp OH Mtg
Rev Ser A Rfdg (FHA Gtd)......................... 6.750 01/15/25 2,198,177
2,000 Cuyahoga Cnty, OH Multi-Family Rev Hsg Dale Brdg
Apt (GNMA Collateralized)........................ 6.600 10/20/30 2,062,460
3,345 Franklin Cnty, OH Hosp Rev & Impt Doctor's Hosp
Proj Rfdg........................................ 5.875 12/01/23 3,239,967
5,515 Lucas Cnty, OH Hosp Rev Promedica Hlthcare Oblig
(MBIA Insd)...................................... 6.000 11/15/06 5,858,364
3,610 Miami Cnty, OH Hosp Fac Rev Upper Vly Med Cent
Ser C Rfdg & Impt................................ 5.600 05/15/02 3,595,813
5,130 Muskingum Cnty, OH Hosp Fac Rev Bethesda Care Sys
Rfdg & Impt (Connie Lee Insd).................... 6.250 12/01/10 5,465,194
2,000 Ohio St Wtr Dev Auth Pollutn Ctl Fac Rev OH
Edison Co Proj Rfdg.............................. 5.950 05/15/29 1,914,100
------------
24,334,075
------------
OKLAHOMA 1.9%
10,000 Tulsa, OK Muni Arpt Tran Rev American Airls
Inc.............................................. 7.375 12/01/20 10,611,500
------------
OREGON 1.7%
6,000 Oregon Hlth Sciences Univ Rev Ser B (MBIA
Insd)............................................ 5.250 07/01/28 5,620,380
3,795 Oregon St Dept Admin Serv Ctfs Partn Ser A (MBIA
Insd)............................................ 5.250 11/01/10 3,735,570
------------
9,355,950
------------
</TABLE>

See Notes to Financial Statements

10
<PAGE> 12

PORTFOLIO OF INVESTMENTS (CONTINUED)

April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PENNSYLVANIA 3.9%
$ 1,000 Pennsylvania Hsg Fin Agy Single Family Mtg Ser
43............................................... 7.500% 10/01/25 $ 1,078,470
3,000 Pennsylvania St Higher Edl Fac Auth Rev Med
College PA Ser A (Prerefunded @ 03/01/01)........ 7.250 03/01/11 3,312,840
9,450 Philadelphia, PA Gas Wks Rev 14th Ser (FSA
Insd)............................................ 6.250 07/01/08 10,054,328
2,525 Philadelphia, PA Gas Wks Rev 14th Ser Rfdg (FSA
Insd)............................................ 6.375 07/01/26 2,647,437
800 Philadelphia, PA Hosp & Higher Edl Fac Auth Rev
Cmnty College Ser A (MBIA Insd).................. 6.100 05/01/09 844,472
1,370 Philadelphia, PA Hosp & Higher Edl Fac Auth Rev
Cmnty College Ser B Rfdg (MBIA Insd)............. 6.500 05/01/08 1,522,056
2,500 Ridley Park, PA Hosp Auth Rev Taylor Hosp Ser
A................................................ 6.000 12/01/05 2,492,050
------------
21,951,653
------------
RHODE ISLAND 0.2%
1,050 Rhode Island St Hlth & Edl Bldg Corp Rev Higher
Edl Fac Roger Williams (Prerefunded @ 11/15/04)
(Connie Lee Insd)................................ 7.200 11/15/14 1,212,047
------------
TENNESSEE 1.0%
2,250 Tennessee Hsg Dev Agy Homeownership Proj T....... 7.375 07/01/23 2,344,995
3,000 Tennessee Hsg Dev Agy Mtg Fin Ser A.............. 7.125 07/01/26 3,150,240
------------
5,495,235
------------
TEXAS 3.6%
9,065 Alliance Arpt Auth Inc TX Spl Fac Rev American
Airls Inc Proj................................... 7.500 12/01/29 9,671,448
2,250 Harris Cnty, TX Hlth Fac Dev Corp Hosp Rev
Hermann Hosp Proj (MBIA Insd).................... 6.375 10/01/24 2,350,687
5,000 Harris Cnty, TX Toll Rd Sr Lien Rfdg (FGIC
Insd)............................................ 5.000 08/15/16 4,579,500
1,275 Matagorda Cnty, TX Navig Dist No 1 Rev Houston Lt
& Pwr Ser A Rfdg (AMBAC Insd).................... 6.700 03/01/27 1,373,647
2,250 Tomball, TX Hosp Auth Rev Rfdg................... 6.125 07/01/23 2,203,268
------------
20,178,550
------------
UTAH 0.3%
4,950 Intermountain Pwr Agy UT Pwr Supply Rev Ser A
Rfdg (FGIC Insd)................................. * 07/01/17 1,520,096
------------
VIRGINIA 1.7%
2,250 Fredericksburg, VA Indl Dev Auth Hosp Fac Rev
(Prerefunded @ 08/15/01) (FGIC Insd)............. 6.600 08/15/23 2,449,125
3,000 Isle Wight Cnty, VA Indl Dev Auth Solid Waste
Disp Fac Rev Union Camp Corp Proj................ 6.550 04/01/24 3,162,900
2,000 Loudoun Cnty, VA Ctfs Partn (FSA Insd)........... 6.900 03/01/19 2,200,200
1,500 Virginia St Hsg Dev Auth Multi-Family Ser E
Rfdg............................................. 5.900 11/01/17 1,506,960
------------
9,319,185
------------

</TABLE>

See Notes to Financial Statements

11
<PAGE> 13
PORTFOLIO OF INVESTMENTS (CONTINUED)

*Zero coupon bond

(a) At April 30, 1997, for federal income tax purposes, cost of long- and
short-term investments is $532,540,550; the aggregate gross unrealized
appreciation is $22,413,305 and the aggregate gross unrealized depreciation
is $1,075,948, resulting in net unrealized appreciation including options
and futures transactions of $21,337,357.

(b) Securities purchased on a when issued or delayed delivery basis.

(c) Assets segregated as collateral for when issued or delayed delivery purchase
commitments, open option and open futures transactions.
See Notes to Financial Statements

12
<PAGE> 14
STATEMENT OF ASSETS AND LIABILITIES

April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Long-Term Investments, at Market Value (Cost $530,540,550)
(Note 1).................................................. $551,830,534
Short-Term Investments (Cost $2,000,000) (Note 1)........... 2,000,000
Receivables:
Interest.................................................. 10,086,177
Securities Sold........................................... 9,098,874
Unamortized Organizational Costs (Note 1)................... 7,201
Other....................................................... 7,983
------------
Total Assets.......................................... 573,030,769
------------
LIABILITIES:
Payables:
Securities Purchased...................................... 10,030,384
Investment Advisory Fee (Note 2).......................... 298,518
Income Distributions--Common and Preferred Shares......... 279,992
Custodian Bank............................................ 244,273
Variation Margin on Futures (Note 4)...................... 122,438
Administrative Fee (Note 2)............................... 91,852
Affiliates (Note 2)....................................... 11,776
Accrued Expenses............................................ 253,718
Deferred Compensation and Retirement Plans (Note 2)......... 59,703
Options at Market Value (Net premiums received of $70,877)
(Note 4).................................................. 8,344
------------
Total Liabilities..................................... 11,400,998
------------
NET ASSETS.................................................. $561,629,771
============
NET ASSETS CONSIST OF:
Preferred Shares ($.01 par value, authorized 100,000,000
shares, 4,500 issued with liquidation preference of
$50,000 per share) (Note 5)............................... $225,000,000
------------
Common Shares ($.01 par value with an unlimited number of
shares authorized, 23,555,115 shares issued and
outstanding).............................................. 235,551
Paid in Surplus............................................. 348,118,080
Net Unrealized Appreciation on Securities................... 21,337,357
Accumulated Undistributed Net Investment Income............. 2,005,932
Accumulated Net Realized Loss on Securities................. (35,067,149)
------------
Net Assets Applicable to Common Shares................ 336,629,771
------------
NET ASSETS.................................................. $561,629,771
============
NET ASSET VALUE PER COMMON SHARE ($336,629,771 divided
by 23,555,115 shares outstanding)......................... $ 14.29
============
</TABLE>

See Notes to Financial Statements

13
<PAGE> 15

STATEMENT OF OPERATIONS

For the Six Months Ended April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.................................................... $16,679,204
-----------
EXPENSES:
Investment Advisory Fee (Note 2)............................ 1,826,347
Administrative Fee (Note 2)................................. 561,954
Preferred Share Maintenance (Note 5)........................ 300,260
Custody..................................................... 27,890
Trustees Fees and Expenses (Note 2)......................... 18,333
Legal (Note 2).............................................. 13,155
Amortization of Organizational Costs (Note 1)............... 3,966
Other....................................................... 151,515
-----------
Total Expenses.......................................... 2,903,420
-----------
NET INVESTMENT INCOME....................................... $13,775,784
===========
REALIZED AND UNREALIZED GAIN/LOSS ON SECURITIES:
Realized Gain/Loss on Securities:
Investments............................................... $ 766,806
Options................................................... (577,108)
Futures................................................... (987,384)
-----------
Net Realized Loss on Securities............................. (797,686)
-----------
Unrealized Appreciation/Depreciation on Securities:
Beginning of the Period................................... 25,714,797
-----------
End of the Period:
Investments............................................. 21,289,984
Options................................................. 62,533
Futures................................................. (15,160)
-----------
21,337,357
-----------
Net Unrealized Depreciation on Securities During the
Period.................................................... (4,377,440)
-----------
NET REALIZED AND UNREALIZED LOSS ON SECURITIES.............. $(5,175,126)
===========
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $ 8,600,658
===========
</TABLE>

See Notes to Financial Statements

14
<PAGE> 16

STATEMENT OF CHANGES IN NET ASSETS

For the Six Months Ended April 30, 1997 and the
Year Ended October 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Year Ended
April 30, 1997 October 31, 1996
- --------------------------------------------------------------------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income................................... $ 13,775,784 $ 27,521,890
Net Realized Gain/Loss on Securities.................... (797,686) 533,057
Net Unrealized Appreciation/Depreciation on Securities
During the Period..................................... (4,377,440) 2,544,494
------------ ------------
Change in Net Assets from Operations.................... 8,600,658 30,599,441
------------ ------------
Distributions from Net Investment Income:
Common Shares......................................... (9,539,618) (19,526,930)
Preferred Shares...................................... (3,894,704) (8,000,204)
------------ ------------
Total Distributions..................................... (13,434,322) (27,527,134)
------------ ------------
NET CHANGE IN NET ASSETS FROM INVESTMENT ACTIVITIES..... (4,833,664) 3,072,307
NET ASSETS:
Beginning of the Period................................. 566,463,435 563,391,128
------------ ------------
End of the Period (Including accumulated undistributed
net investment income of $2,005,932 and $1,664,470,
respectively)......................................... $561,629,771 $566,463,435
============ ============
</TABLE>

See Notes to Financial Statements

15
<PAGE> 17

FINANCIAL HIGHLIGHTS

The following schedule presents financial highlights for one common share of
the Trust outstanding throughout the periods indicated. (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
March 26, 1993
Six Months (Commencement
Ended Year Ended October 31, of Investment
April 30, -------------------------------- Operations) to
1997 1996 1995 1994 October 31, 1993
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of the Period
(a)........................ $14.496 $14.366 $12.901 $16.427 $14.789
------- ------- ------- ------- -------
Net Investment Income...... .584 1.168 1.183 1.177 .639
Net Realized and Unrealized
Gain/Loss on
Securities............... (.219) .131 1.571 (3.340) 1.487
------ ------ ------ ------ ------
Total from Investment
Operations................. .365 1.299 2.754 (2.163) 2.126
------ ------ ------ ------ ------
Less:
Distributions from Net
Investment Income:
Paid to Common
Shareholders........... .405 .829 .912 .912 .380
Common Share Equivalent
of Distributions Paid
to Preferred
Shareholders........... .165 .340 .377 .238 .108
Distributions from Net
Realized Gain on
Investments (Note 1):
Paid to Common
Shareholders........... -0- -0- -0- .177 -0-
Common Share Equivalent
of Distributions Paid
to Preferred
Shareholders........... -0- -0- -0- .036 -0-
------ ------ ------ ------ ------
Total Distributions.......... .570 1.169 1.289 1.363 .488
------ ------ ------ ------ ------
Net Asset Value, End of the
Period..................... $14.291 $14.496 $14.366 $12.901 $16.427
======= ======= ======= ======= =======
Market Price Per Share at
End of the Period.......... $12.625 $12.375 $12.750 $10.750 $15.250
Total Investment Return at
Market Price (b)........... 5.35%* 3.70% 27.67% (23.52%) 4.25%*
Total Return at Net Asset
Value (c).................. 1.33%* 6.87% 19.04% (15.48%) 12.14%*
Net Assets at End of the
Period
(In millions).............. $ 561.6 $ 566.5 $ 563.4 $ 528.9 $ 611.9
Ratio of Expenses to Average
Net Assets Applicable to
Common Shares.............. 1.71% 1.77% 1.80% 1.70% 1.46%
Ratio of Expenses to Average
Net Assets................. 1.03% 1.06% 1.06% 1.03% 1.00%
Ratio of Net Investment
Income to Average Net
Assets Applicable to Common
Shares (d)................. 5.83% 5.78% 5.90% 6.39% 5.59%
Portfolio Turnover........... 17%* 42% 50% 79% 66%*
</TABLE>

(a) Net Asset Value at March 26, 1993, is adjusted for common and preferred
share offering costs of $.211 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

16
<PAGE> 18

NOTES TO FINANCIAL STATEMENTS

April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------

1. SIGNIFICANT ACCOUNTING POLICIES

Van Kampen American Capital Value Municipal Income Trust (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 tax,
consistent with preservation of capital. The Trust will invest in a portfolio
consisting substantially of municipal obligations rated investment grade at the
time of investment. The Trust commenced investment operations on March 26, 1993.

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.

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.

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 $40,000. These costs
are being amortized on a

17
<PAGE> 19

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------

straight line basis over the 60 month period ending March 25, 1998. Van Kampen
American Capital Investment Advisory Corp. (the "Adviser") has agreed that in
the event any of the initial shares of the Trust originally purchased by VKAC
are redeemed during the amortization period, the Trust will be reimbursed for
any unamortized organizational costs in the same proportion as the number of
shares redeemed bears to the number of initial shares held at the time of
redemption.

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, 1996, the Trust had an accumulated capital loss carry
forward for tax purposes of $35,214,824 which will expire between October 31,
2002 and October 31, 2004.

F. DISTRIBUTION OF INCOME AND GAINS--The Trust declares and pays dividends from
net investment income to common shareholders monthly. 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.

2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Trust's Investment Advisory Agreement, 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 reporting
responsibilities with respect to the Trust's portfolio and preferred shares and
providing certain services to shareholders.

Certain legal expenses are paid to Skadden, Arps, Slate, Meagher & Flom
(Illinois), counsel to the Trust, of which a trustee of the Trust is an
affiliated person.

For the six months ended April 30, 1997, the Trust recognized expenses of
approximately $49,800 representing VKAC's cost of providing accounting and legal
services to the Trust.

18
<PAGE> 20

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------

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 has implemented 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.

At April 30, 1997, VKAC owned 6,700 common shares of the Trust.

3. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $93,978,207 and $95,027,899,
respectively.

4. DERIVATIVE FINANCIAL INSTRUMENTS
A derivative financial instrument in very general terms refers to a security
whose value is "derived" from the value of an underlying asset, reference rate
or index.

The Trust has a variety of reasons to use derivative instruments, such as to
attempt to protect the Trust against possible changes in the market value of its
portfolio and to manage the portfolio's effective yield, maturity and duration.
All of the Trust's portfolio holdings, including derivative instruments, are
marked to market each day with the change in value reflected in the unrealized
appreciation/depreciation on securities. Upon disposition, a realized gain or
loss is recognized accordingly, except for exercised option contracts where the
recognition of gain or loss is postponed until the disposal of the security
underlying the option contract.

Summarized below are the specific types of derivative financial instruments
used by the Trust.

A. OPTION CONTRACTS--An option contract gives the buyer the right, but not the
obligation to buy (call) or sell (put) an underlying item at a fixed exercise
price during a specified period. These contracts are generally used by the Trust
to manage the portfolio's effective maturity and duration.

19
<PAGE> 21

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------

Transactions in options for the six months ended April 30, 1997, were as
follows:

<TABLE>
<CAPTION>
CONTRACTS PREMIUM
- -------------------------------------------------------------------------
<S> <C> <C>
Outstanding at October 31, 1996................... 153 $(288,110)
Options Written and Purchased (Net)............... 1,552 (212,136)
Options Terminated in Closing Transactions
(Net)........................................... (1,527) 571,123
------- ---------
Outstanding at April 30, 1997..................... 178 $ 70,877
======= =========
</TABLE>

The related futures contracts of the outstanding option transactions as of
April 30, 1997, and the description and market value is as follows:

<TABLE>
<CAPTION>
MARKET
EXP. MONTH/ VALUE
CONTRACTS EXERCISE PRICE OF OPTIONS
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Municipal Bond Index Futures
June 1997--Written Puts (Current
Notional Value of $114,375 per
contract)......................... 178 June/108 $(8,344)
=== =======
</TABLE>

B. FUTURES CONTRACTS--A futures contract is an agreement involving the delivery
of a particular asset on a specified future date at an agreed upon price. The
Trust generally invests in futures on U.S. Treasury Bonds and the Municipal Bond
Index and typically closes the contract prior to the delivery date. These
contracts are generally used to manage the portfolio's effective maturity and
duration.

Upon entering into futures contracts, the Trust maintains, in a segregated
account with its custodian, securities with a value equal to its obligation
under the futures contracts. During the period the futures contract is open,
payments are received from or made to the broker based upon changes in the value
of the contract (the variation margin). The cost of securities acquired through
delivery under a contract is adjusted by the unrealized gain or loss on the
contract. The fluctuation in market value of the contracts is settled daily
through a cash margin account.

Transactions in futures contracts for the six months ended April 30, 1997,
were as follows:

<TABLE>
<CAPTION>
CONTRACTS
- ----------------------------------------------------------------------
<S> <C>
Outstanding at October 31, 1996............................. 130
Futures Opened.............................................. 452
Futures Closed.............................................. (295)
----
Outstanding at April 30, 1997............................... 287
====
</TABLE>

20
<PAGE> 22

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------

The futures contracts outstanding as of April 30, 1997, and the descriptions
and unrealized appreciation/depreciation are as follows:

<TABLE>
<CAPTION>
UNREALIZED
APPRECIATION/
CONTRACTS DEPRECIATION
- -------------------------------------------------------------------------
<S> <C> <C>
Ten-year U.S. Treasury Bond Futures
June 1997--Sells to Open (Current Notional
Value $106,969 per contract)............... 50 $(61,341)
Municipal Bond Index Futures
June 1997--Sells to Open (Current Notional
Value $114,375 per contract)............... 237 46,181
--- ---------
287 $(15,160)
=== =========
</TABLE>

C. EMBEDDED CAPS--These securities, which are identified in the portfolio of
investments, include a cap strike level such that the coupon payment may be
supplemented by cap payments if the floating rate index upon which the cap is
based rises above the strike level. The price of these securities may be more
volatile than the price of a comparable fixed rate security. The Trust invests
in these instruments as a hedge against a rise in the short-term interest rates
which it pays on its preferred shares.

5. PREFERRED SHARES
The Trust has outstanding 4,500 Auction Preferred Shares ("APS") in five series.
Series A, B, C and D each contain 1,000 shares and Series E contains 500 shares.
Dividends are cumulative and the dividend rate is periodically reset through an
auction process. The dividend period for Series A and E is seven days, and for
Series B, C and D is 28 days. The average rate in effect on April 30, 1997 was
3.803%. During the six months ended April 30, 1997, the rates ranged from 3.14%
to 4.00%.

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.

21
<PAGE> 23

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

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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 Jersey Tax Free 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 Allocation Fund
Global Fixed Income Fund
High Yield Fund
International Magnum Fund
Latin American Fund
U.S. Real Estate 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 1-800-282-4404 for Morgan Stanley retail funds.

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VAN KAMPEN AMERICAN CAPITAL VALUE MUNICIPAL INCOME TRUST

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.

(SM) denotes a service mark of
Van Kampen American Capital Distributors, Inc.