ACM MANAGED DOLLAR INCOME FUND INC, N-30D, 1996-06-05

ACM MANAGED DOLLAR INCOME FUND INC
N-30D, 1996-06-05

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<PAGE>

Letter To Shareholders ACM Managed Dollar Income Fund, Inc.
- --------------------------------------------------------------------------------

May 1, 1996
Dear Shareholder:

The U.S. bond market enjoyed a sustained broad-based rally throughout most of
1995 and into early 1996, but economic news led to a setback in February. The
market reacted negatively to the stronger-than-expected job growth in the U.S.
and doubts about whether the Federal Reserve would lower interest rates again.

INVESTMENT RESULTS

Across all major sectors of the U.S. fixed income market, longer-duration
securities outperformed shorter-duration securities as interest rates for all
maturities declined. We are pleased to report that ACM Managed Dollar Income
Fund benefited from this favorable investment environment. For the six months
ended March 31, 1996, the Managed Dollar Income Fund returned +12.58% on a net
asset value basis. Over the 12-month period ended March 31, the Fund achieved a
total return of +49.21% on a net asset value basis.

ECONOMIC REVIEW

The U.S. economy survived an inventory scare in 1995 and entered 1996 in a
relatively balanced and healthy condition. The latest economic data show the
U.S. economy's "soft landing" is still intact. February's shocking payroll gain
grabbed headlines, but the 12 month comparisons were all numbers that support a
soft landing. Consumer confidence has bounced back, debt service burdens are
still manageable, and February retail sales had their best showing since last
summer, climbing 5% on a year-on-year basis. Manufacturing is likely to remain a
soft spot, although new orders for durable goods are showing hidden strength and
unfilled orders continue to rise. Revised data show the much-feared slowdown in
capital spending has already occurred. We expect a gradual re-strengthening in
the U.S. economy over the next six to 12 months.

Measured inflation at the consumer and producer levels remains well behaved and
the U.S. economy continues to operate in the inflation "safe zone." However,
recent increases in unit labor costs and commodity prices warn against
complacency. Federal Reserve policy has moved into a holding pattern, and
chances for a meaningful deficit reduction plan have receded as politicians
increasingly turn their attention to the 1996 election campaign.

INVESTMENT OUTLOOK

The U.S. economy appears to be healthy, with modest growth expected in the
period ahead and falling into the 2%-2.5% range by year end. With a gradually
strengthening economy and steady inflation, we expect no Federal Reserve action
on interest rates over the medium term. If our forecast proves correct, the
result should be steady U.S. bond prices.

We continue to have a favorable outlook for emerging market debt securities.
Moderate growth in the U.S., stable inflation and steady bond prices provide a
strong positive environment for this area of fixed income investing. Further,
emerging market countries continue to follow policies leading to improving
fundamentals. The last 15 months have proved to be a difficult period, but in
general, the reform process has not been halted. We continue to believe that
Argentina and Poland provide very good risk/return profiles. Argentina has held
steady to the economic policies designed to keep inflation around 2.0%, and bank
deposits and international reserves have returned to levels existing prior to
the Mexican peso devaluation in December 1994. Poland's Brady bonds received an
investment-grade rating from Moody's Investor Services in January, highlighting
Poland's improving credit fundamentals. This rating is a breakthrough event as
it proves that Brady bonds
<PAGE>

ACM Managed Dollar Income Fund, Inc.
- --------------------------------------------------------------------------------

can receive investment-grade ratings if the countries undertake necessary
economic reforms.

Some of the significant factors that could affect emerging market bond prices in
the coming months include elections in Russia and Ecuador, the International
Monetary Fund agreement on economic reforms in Brazil, and ongoing resolution of
the banking system problems in Mexico.

The U.S. high-yield market turned in a respectable performance in 1995 but
trailed investment-grade portfolios for the first time since 1990. However,
high-yield securities are again outpacing most other fixed income instruments--
returning 2.16% for the first quarter of 1996 according to the First Boston High
Yield Index. Our substantial presence in this large, diverse market has helped
us to add yield enhancement and prudent diversification to the Fund. We expect
high yield securities to outperform other fixed income asset classes for the
remainder of 1996.

Thank you for your interest in ACM Managed Dollar Income Fund. We look forward
to reporting to you again on market activity and the Fund's investment results
in coming periods.
Sincerely,

[SIGNATURE OF JOHN D. CARIFA APPEARS HERE]
John D. Carifa
Chairman

[SIGNATURE OF WAYNE D. LYSKI APPEARS HERE]
Wayne D. Lyski
President
<PAGE>

Portfolio Of Investments
March 31, 1996 (unaudited) ACM Managed Dollar Income Fund, Inc.
- --------------------------------------------------------------------------------

Principal
Amount
(000) U.S. $ Value
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SOVEREIGN DEBT OBLIGATIONS--67.1%
COLLATERALIZED BRADY BONDS*--42.5%
<S> <C> <C>
VENEZUELA--9.4%
Republic of Venezuela
Par Bonds
6.75%, 3/31/20
Series A.................... $ 46,750 $26,501,289
Series B.................... 5,000 2,834,363
-----------
Total Venezuelan Securities
(cost $28,356,180).......... 29,335,652
-----------
BULGARIA--9.0%
Republic of Bulgaria
Discount Bonds FRN
6.25%, 7/28/24
(cost $30,254,835).......... 56,500 28,250,000
-----------
ECUADOR--8.7%
Republic of Ecuador
Discount Bonds FRN
6.0625%, 2/28/25............ 45,350 24,517,344
Par Bonds
3.25%, 2/28/25.............. 8,000 2,807,480
-----------
Total Ecuadorian Securities
(cost $27,772,145).......... 27,324,824
-----------
NIGERIA--6.2%
Central Bank of Nigeria
Par Bonds
6.25%, 11/15/20 (a)
(cost $19,408,172).......... 37,000 19,321,030
-----------
MEXICO--4.3%
United Mexican States
Euro Par Bonds
6.25%, 12/31/19
Series A................... 9,000 5,734,710
Series B................... 4,000 2,548,760
Discount Notes
6.5469%, 12/31/19
Series D................... 6,900 5,228,889
-----------
Total Mexican Securities
(cost $13,829,025).......... 13,512,359
-----------
</TABLE>

ALGERIA--2.3%
Algeria Refinanced Trust
Tranche B
Loan Assignment FRN
6.6875%, 3/04/97
(cost $13,840,860).......... 15,000 7,350,000
------------
NICARAGUA--0.4%
Republic of Nicaragua
Loan Assignment (b)
(cost $1,740,000)........... 13,000 1,040,000
------------
Total Loan Participations &
Assignments
(cost $15,580,860).......... 8,390,000
------------
OTHER SOVEREIGN
DEBT OBLIGATIONS--21.9%

ARGENTINA--10.9%
Republic of Argentina Pensioner
Bocon Series I, FRN
5.32031%, 4/01/01........... 31,172 25,907,563
------------
Republic of Argentina Pensioner
Bocon Series II, FRN
5.32031%, 9/01/02........... 11,670 8,268,735
------------
Total Argentinian Securities
(cost $33,164,301).......... 34,176,298
------------
</TABLE>
<PAGE>

Portfolio Of Investments (continued) ACM Managed Dollar Income Fund, Inc.
- --------------------------------------------------------------------------------

Principal
Amount
(000) U.S. $ Value
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
BRAZIL--6.2%
Republic of Brazil C Bonds
8.00%, 4/15/14 (c)
(cost $20,114,083).......... $ 32,898 $ 19,419,729
------------
POLAND--4.4%
Republic of Poland
PDI Bonds FRN
3.75%, 10/27/14
(cost $13,062,229).......... 17,900 13,626,375
------------
BULGARIA--0.4%
Republic of Bulgaria
IAB Bonds FRN
6.25%, 7/28/11
(cost $1,345,075)........... 2,650 1,179,250
------------
Total Other Sovereign Debt
Obligations (cost $67,685,688) 68,401,652
------------
Total Sovereign
Debt Obligations
(cost $220,428,784)......... 209,992,392
------------
U.S. CORPORATE DEBT
OBLIGATIONS--50.6%

Alamo Rent A Car
11.75%, 1/31/06............. 5,250 5,328,750
Albritton Communications Co.
9.75%, 11/30/07 (d)......... 5,000 4,718,750
Alpine Group, Inc.
12.25%, 7/15/03............. 4,000 3,940,000
APS, Inc.
11.875%, 1/15/06 (d)........ 6,000 6,105,000
CAI Wireless Systems, Inc.
12.25%, 9/15/02............. 5,000 5,325,000
Calmar, Inc.
11.50%, 8/15/05 (d)......... 5,000 5,025,000
Carr-Gottstein Foods, Co.
12.00%, 11/15/05 (d)........ 3,500 3,552,500
Charter Communications L.P.
11.25%, 3/15/06 (d)......... 4,000 4,000,000
Crain Industries, Inc.
13.50%, 8/15/05 (d)......... 5,000 5,137,500
Dictaphone Corp.
11.75%, 8/01/05............. 6,000 5,970,000
Dynacare, Inc.
10.75%, 1/15/06............. 5,000 5,050,000
Fundy Cable, Ltd.
11.00%, 11/15/05............ 4,000 4,160,000
Galaxy Telecom L.P.
12.375%, 10/01/05........... 910 964,600
Graphic Controls Corp.
12.00%, 9/15/05 (d)......... 4,500 4,815,000
Harris Chemical
North America, Inc.
10.75%, 10/15/03............ 4,500 4,365,000
International Wire Group, Inc.
11.75%, 6/01/05 (d)......... 6,000 5,910,000
Jitney-Jungle Stores
12.00%, 3/01/06............. 5,000 5,025,000
Johnstown America
Industries, Inc.
11.75%, 8/15/05............. 5,000 4,625,000
Knoll, Inc.
10.875%, 3/15/06 (d)........ 5,000 5,150,000
Penn Traffic Co.
8.625%, 12/15/03............ 5,400 4,934,250
People's Telephone Co., Inc.
12.25%, 7/15/02 (d)......... 5,000 4,425,000
Premier Parks, Inc.
12.00%, 8/15/03 (d)......... 5,000 5,275,000
Primeco, Inc.
12.75%, 3/01/05............. 3,000 3,165,000
Prime Hospitality Corp.
9.25%, 1/15/06.............. 5,500 5,362,500
Renaissance Cosmetics
Warrants (b)(e)............. 8 180,000
Riverwood International
10.875%, 4/01/08............ 6,000 6,030,000
Specialty Foods Corp.
11.125%, 10/01/02 (d)....... 5,000 4,693,750
Telemundo Group, Inc.
7.00%, 2/15/06.............. 6,400 5,736,000
Telewest Communication PLC
9.625%, 10/01/06............ 3,000 3,007,500
Terex Corp.
13.75%, 5/15/02 (d)......... 5,150 5,201,500
Trans-Resources, Inc.
11.875%, 7/01/02 (d)........ 5,000 4,525,000
Trizec Finance Corp, Ltd.
10.875%, 10/15/05........... 5,000 5,062,500
Tultex Corp.
10.625%, 3/15/05............ 3,750 3,825,000
</TABLE>
<PAGE>

ACM Managed Dollar Income Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount
(000) U.S. $ Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Uniroyal Technology
11.75%, 6/01/03............. $3,000 $ 2,805,000
Warrants (b)(f)............. 30 30,000
Unisys Corp.
12.00%, 4/15/03 (d)......... 5,000 5,000,000
------------
Total U.S. Corporate Debit
Obligations and Warrants
(cost $158,412,969)......... 158,425,100
------------
NON-U.S. FIXED
INCOME SECURITIES--1.8%

MEXICO--1.8%
Ispat Mexicana
10.375%, 3/15/01............ 3,000 2,700,000
Grupo Industrial Durango
12.00%, 7/15/01............. 3,000 2,812,500
------------
Total Non-U.S. Fixed
Income Securities
(cost $5,816,056)........... 5,512,500
------------

OTHER SOVEREIGN
DEBT RELATED--1.5%
Morgan Guaranty Trust Co.
Spread Note (g)
U.S. Treasury Bond
5.875%, 11/15/05 V.S.
Poland PDI Bonds
3.75% 10/27/14
10.00%, 7/25/96
(cost $3,200,000)........... $3,200 $ 4,720,349
------------
TIME DEPOSIT--0.1%
State Street Bank & Trust Co.
5.125%, 4/01/96
(cost $387,000)............. 387 387,000
------------
TOTAL INVESTMENTS--121.1% 379,037,341
(cost $388,244,809)
Other assets less liabilities--(21.1%) (65,952,820)
------------
NET ASSETS--100% $313,084,521
============
</TABLE>
- --------------------------------------------------------------------------------
* Sovereign debt obligations issued as part of debt restructurings that are
collateralized in full as to principal due at maturity by U.S. Treasury
zero coupon obligations which have the same maturity as the Brady Bond.
(a) Coupon will increase periodically based upon a predetermined schedule.
Stated interest rate in effect at March 31, 1996.
(b) Non-income producing security.
(c) Coupon consists of 4.00% cash payment and 4.00% paid-in-kind.
(d) Securities are exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At March 31,
1996, these securities amounted to $73,534,000 or 23.5% of net assets.
(e) The warrants entitle the holders to purchase at an exercise price of $0.01
per share. The warrants are exerciseable until August 15, 2001.
(f) The warrants entitle the holders to purchase at an exercise price of $4.375
per share. The warrants are exercisable until June 1, 2003.
(g) The redemption value of this security is indexed to the spread between the
referenced treasury yield and the referenced emerging market debt yield.

Glossary of terms:
FRN Floating Rate Note. Coupon will fluctuate based upon an interest rate
index. Stated interest rate in effect at March 31, 1996.
IAB Interest Arrears Bonds.
PDI Past Due Interest Bonds.

See notes to financial statements.
<PAGE>

Statement Of Assets And Liabilities
March 31, 1996 (unaudited) ACM Managed Dollar Income Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

ASSETS
<S> <C>
Investments in securities, at value (cost $388,244,809)....... $379,037,341
Cash.......................................................... 281
Receivable for investment securities sold..................... 29,736,851
Interest receivable........................................... 9,346,893
Deferred organization expenses and other assets............... 28,607
------------
Total assets.................................................. 418,149,973
------------
LIABILITIES
Loan payable.................................................. 92,500,000
Payable for investment securities purchased................... 10,359,571
Net unrealized depreciation of swap contracts................. 1,088,125
Interest payable.............................................. 685,067
Advisory fee payable.......................................... 252,494
Administrative fee payable.................................... 50,499
Accrued expenses and other liabilities........................ 129,696
------------
Total liabilities 105,065,452
------------
NET ASSETS $313,084,521
============
COMPOSITION OF NET ASSETS
Common stock, at par.......................................... $ 283,250
Additional paid-in capital.................................... 391,817,637
Distributions in excess of net investment income.............. (897,478)
Accumulated net realized loss................................. (67,823,295)
Net unrealized depreciation of investments and swap contracts. (10,295,593)
------------
$313,084,521
============
NET ASSET VALUE PER SHARE (based on 28,325,009 shares
outstanding) $11.05
============
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
<PAGE>

Statement Of Operations
Six months ended March 31, 1996 (unaudited) ACM Managed Dollar Income Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C> <C>
Interest................................ $ 22,276,168
------------
EXPENSES
Advisory fee............................ $ 1,480,946
Administrative fee...................... 296,189
Custodian............................... 79,030
Transfer agency......................... 59,556
Audit and legal......................... 43,176
Reports and notices to shareholders..... 23,953
Loan origination fee and loan expenses.. 17,392
Directors' fees......................... 12,505
Amortization of organization expenses... 3,966
Miscellaneous........................... 24,342
------------
Total expenses before interest........... 2,041,055
Interest expense......................... 3,288,023
------------
Total expenses........................... 5,329,078
------------
Net investment income.................... 16,947,090
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND OPTIONS
Net realized gain on investment
transactions............................ 17,584,456
Net realized gain on option
transactions............................ 2,029,563
Net change in unrealized depreciation
of investments, options and swap
contracts............................... (644,987)
------------
Net gain on investments 18,969,032
------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS.............................. $ 35,916,122
============
</TABLE>

Statement Of Changes In Net Assets
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended For the
March 31, 1996 Year Ended
(unaudited) September 30, 1995
---------------- ------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment income................... $ 16,947,090 $ 37,347,975
Net realized gain (loss) on investment
and option transactions................ 19,614,019 (48,890,891)
Net change in unrealized depreciation
of investments, options and swap
contracts.............................. (644,987) 25,563,387
------------ ------------
Net increase in net assets from
operations............................. 35,916,122 14,020,471

DIVIDENDS TO SHAREHOLDERS
Dividends from net investment income... (16,947,090) (37,303,113)
Distributions in excess of net
investment income..................... (897,478) -0-
Tax return of capital distribution..... -0- (465,363)

COMMON STOCK TRANSACTIONS
Reinvestment of dividends resulting in
the issuance of Common Stock.......... -0- 4,941,844
------------ ------------
Total increase (decrease).............. 18,071,554 (18,806,161)

NET ASSETS
Beginning of year...................... 295,012,967 313,819,128
------------ ------------
End of period.......................... $313,084,521 $295,012,967
============ ============
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
<PAGE>

Statement Of Cash Flows
Six Months Ended March 31, 1996 (unaudited) ACM Managed Dollar Income Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INCREASE (DECREASE) IN CASH FROM OPERATING ACTIVITIES:
<S> <C> <C>
Interest received........................ $ 21,610,942
Interest expense paid..................... (3,142,989)
Operating expenses paid................... (2,032,748)
-------------
Net increase in cash from operating
activities............................... $ 16,435,205

INVESTING ACTIVITES:
Purchases of long-term portfolio
investments.............................. (829,331,706)
Proceeds from disposition of long-term
portfolio investments.................... 812,603,206
Proceeds from disposition of short-term
portfolio investments, net............... 5,520,688
-------------
Net decrease in cash from investing
activities................................ (11,207,812)

FINANCING ACTIVITIES*:
Cash dividends and distributions paid (17,844,568)
Proceeds from borrowings 14,500,000
Repayment of borrowings (2,500,000)
-------------
Net decrease in cash from financing
activities................................ (5,844,568)
-------------
Net decrease in cash...................... (617,175)
Cash at beginning of year................. 617,456
-------------
Cash at end of period $ 281
=============

- --------------------------------------------------------------------------------
RECONCILIATION OF NET INCREASE IN NET ASSETS FROM
OPERATIONS TO NET INCREASE IN CASH FROM OPERATING
ACTIVITIES:
Net increase in net assets from
operations............................... $ 35,916,122

ADJUSTMENTS:
Decrease in interest receivable........... $ 886,526
Accretion of bond discount................ (1,551,751)
Increase in accrued expenses.............. 8,307
Increase in interest payable.............. 145,033
Net gain on investments................... (18,969,032)
-------------
Total adjustments......................... (19,480,917)
-------------
NET INCREASE IN CASH FROM OPERATING
ACTIVITIES................................ $ 16,435,205
=============
</TABLE>
- --------------------------------------------------------------------------------
* Non-cash financing activities not included herein consist of reinvestment of
dividends and distributions.
See notes to financial statements.
<PAGE>

Notes To Financial Statements
March 31, 1996 (unaudited) ACM Managed Dollar Income Fund, Inc.
- --------------------------------------------------------------------------------

NOTE A: Significant Accounting Policies

ACM Managed Dollar Income Fund, Inc. (the "Fund") was incorporated under the
laws of the State of Maryland on August 10, 1993 and is registered under the
Investment Company Act of 1940 as a non-diversified, closed-end management
investment company.

1. Security Valuation
Portfolio securities traded on a national securities exchange are valued at the
last sale price on such exchange on the day of valuation or, if there was no
sale on such day, the last bid price quoted on such day. Listed securities not
traded and securities traded in the over-the-counter market, including listed
debt securities whose primary market is believed to be over-the-counter, are
valued at the mean between the most recent quoted bid and asked prices provided
by the principal market makers. Publicly traded sovereign debt obligations are
typically traded internationally on the over-the-counter market. Due to the
nature of the markets for sovereign debt obligations, quotations from several
sources are obtained so that the Fund's portfolio investments are not generally
priced by a single source. Readily marketable sovereign debt obligations and
fixed income securities may be valued on the basis of prices provided by a
pricing service when such prices are believed by the Adviser to reflect the fair
value of such securities. Options are valued at market value or fair value using
methods determined by the Board of Directors. Securities for which market
quotations are not readily available are valued in good faith at fair value
using methods determined by the Board of Directors. Securities which mature in
60 days or less are valued at amortized cost, which approximates market value,
unless this method does not represent fair value.

2. Organization Expenses
Organization expenses of approximately $40,000 were deferred and are being
amortized on a straight-line basis through October 1998.

3. Taxes
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if applicable, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.

4. Investment Income and Investment Transactions
Interest income is accrued daily. Dividend income is recorded on the ex-dividend
date. Investment transactions are accounted for on the date the investments are
purchased or sold. Investment gains and losses are determined on the identified
cost basis. The Fund accretes discounts as adjustments to interest income.

5. Dividends and Distributions
Dividends and distributions to shareholders are recorded on the ex-dividend date
and are determined in accordance with income tax regulations.

- --------------------------------------------------------------------------------

NOTE B: Advisory and Administrative Fees
Under the terms of an Investment Advisory Agreement, the Fund pays the Adviser
an advisory fee equal to an annualized rate of .75 of 1% of the average adjusted
weekly net assets of the Fund during the month. Under the terms of an
Administration Agreement, the Fund pays Princeton Administrators, L.P (the
"Administrator") a monthly fee equal to the annualized rate of .15 of 1% of the
Fund's average adjusted weekly net assets. The Administrator prepares financial
and regulatory reports for the Fund and provides clerical and other services.
<PAGE>

Notes To Financial Statements (cont.) ACM Managed Dollar Income Fund, Inc.
- --------------------------------------------------------------------------------

NOTE C: Investment Transactions
Purchases and sales of investment securities (excluding short-term investments
and options) aggregated $813,615,889 and $811,672,164, respectively, for the six
months ended March 31, 1996. At March 31, 1996 the cost of securities for
federal income tax purposes was $388,244,809. Accordingly, gross unrealized
appreciation of investments was $6,646,721 and gross unrealized depreciation of
investments was $15,854,189, resulting in net unrealized depreciation of
$9,207,468.

For federal income tax purposes, the Fund had a capital loss carryforward at
September 30, 1995 of approximately $48,700,000 which will expire in 2003.

Options Transactions
For hedging purposes, the Fund purchases and writes (sells) put and call options
on U.S. and foreign government securities that are traded on U.S. and foreign
securities exchanges and over-the-counter markets.

The risk associated with purchasing an option is that the Fund pays a premium
whether or not the option is exercised. Additionally, the Fund bears the risk of
loss of premium and change in market value should the counterparty not perform
under the contract. Put and call options purchased are accounted for in the same
manner as portfolio securities. The cost of securities acquired through the
exercise of call options is increased by premiums paid. The proceeds from
securities sold through the exercise of put options are decreased by the premium
paid.

When the Fund writes an option, the premium received by the Fund is recorded as
a liability and is subsequently adjusted to the current market value of the
option written. Premiums received from writing options which expire unexercised
are recorded by the Fund on the expiration date as realized gains from option
transactions. The difference between the premium and the amount paid on
effecting a closing purchase transaction, including brokerage commissions, is
also treated as a realized gain, or if the premium is less than the amount paid
for the closing purchase transaction, as a realized loss. If a call option is
exercised, the premium is added to the proceeds from the sale of the underlying
security in determining whether the Fund has realized a gain or loss. If a put
option is exercised, the premium reduces the cost basis of the security
purchased by the Fund. In writing an option, the Fund bears the market risk of
an unfavorable change in the price of the security underlying the written
option. Exercise of an option written by the Fund could result in the Fund
selling or buying a security at a price different from the current market value.

Transactions in options written for the six months ended March 31, 1996 were as
follows:
<TABLE>
<CAPTION>
Number of Premiums
Options Written Contracts Received
----------- -----------
<S> <C> <C>
Options outstanding at
beginning of period..................... 165 $ 1,441,276
Options written........................... 165 379,500
Options expired........................... -0- -0-
Options exercised......................... -0- -0-
Options terminated in
closing transactions.................... (330) (1,820,776)
----------- -----------
Options outstanding at
March 31, 1996.......................... -0- $ -0-
=========== ===========
</TABLE>
<PAGE>

ACM Managed Dollar Income Fund, Inc.
- --------------------------------------------------------------------------------

NOTE D: Swap Agreements
The Fund enters into swaps on sovereign debt obligations to protect itself from
interest rate fluctuations on the underlying floating rate debt instruments. A
swap is an agreement that obligates two parties to exchange a series of cash
flows at specified intervals based upon or calculated by reference to changes in
specified prices or rates for a specified amount of an underlying asset. The
payment flows are usually netted against each other, with the difference being
paid by one party to the other.

Risks may arise as a result of the failure of another party to the swap contract
to comply with the terms of the swap contract. The loss incurred by the failure
of a counterparty is generally limited to the net interest payment to be
received by the Fund, and/or the termination value at the end of the contract.
Therefore, the Fund considers the creditworthiness of each counterparty to a
swap contract in evaluating potential credit risk. Additionally, risks may
arise from unanticipated movements in interest rates or in the value of the
underlying securities.

The Fund records a net receivable or payable on a daily basis for the net
interest income or expense expected to be received or paid in the interest
period. Net interest received or paid on these contracts is recorded as interest
income (or as an offset to interest income). Fluctuations in the value of swap
contracts are recorded for financial statement purposes as unrealized
appreciation or depreciation on swap contracts.

At March 31, 1996 the Fund had outstanding swap contracts as follows:

Payments Made By the Fund Payments Received By the Fund
------------------------- -----------------------------

Unrealized
Swap Termination Notional Notional Appreciation
Counterparty Date Amount Rate Amount Rate (Depreciation)
- -------------- -------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Morgan 5/09/96 $15,653,255 Floating-LIBOR + $25,000,000 Floating-LIBOR
Guaranty plus 1.00% plus .8125% $ 2,046,875*

Morgan 1/01/09 50,000,000 Floating-LIBOR 50,000,000 Fixed-6.6100%
Guaranty plus .8125% (3,135,000)
-----------
$(1,088,125)
===========
</TABLE>

+ LIBOR - London Interbank Offered Rate.

* Unrealized appreciation on this is calculated based on the present value of
future interest payments to be exchanged and is also linked to the relative
value of Kindom of Morocco Restructured Loans Consolidated Tranche A.

- --------------------------------------------------------------------------------

NOTE E: Capital Stock
There are 300,000,000 shares of $.01 par value capital stock authorized. Of the
28,325,009 shares of Common Stock outstanding at March 31, 1996, the Adviser
owned 7,100 shares. During the six months ended March 31, 1996 and for the year
ended September 30, 1995, the Fund issued -0-, and 530,592 shares, respectively,
in connection with the Fund's Dividend Reinvestment Plan.
<PAGE>

Notes To Financial Statements (continued) ACM Managed Dollar Income Fund, Inc.
- --------------------------------------------------------------------------------

NOTE F: Bank Borrowing
The Fund entered into a Revolving Credit Agreement with Citibank, N.A. on March
31, 1994. The maximum credit available is $100,000,000 and the amount
outstanding as of March 31, 1996 was $92,500,000 with an average interest rate
of 6.01%. Interest payments on current borrowings are based on the London
Interbank Offered Rate plus a premium. The average daily amount of the loan
outstanding during the six months ended March 31, 1996 was approximately
$86,232,240 with a related weighted average annualized interest rate of 7.50%.
The Fund is also obligated to pay Citibank, N.A. a commitment fee computed at
the rate of .25 of 1% per annum on the average daily unused portion of the
revolving credit.

- --------------------------------------------------------------------------------

NOTE G: Concentration of Risk
Investing in securities of foreign companies and foreign governments involves
special risks which include revaluation of currencies and future adverse
political and economic developments. Moreover, securities of many foreign
companies and foreign governments and their markets may be less liquid and their
prices more volatile than those of comparable U.S. companies and the United
States Government. The Fund invests in the sovereign debt obligations of
countries that are considered emerging market countries at the time of purchase.
Therefore, the Fund is susceptible to governmental factors and economic and debt
restructuring developments adversely affecting the economies of these emerging
market countries. In addition, these debt obligations may be less liquid and
subject to greater volatility than debt obligations of more developed countries.
<PAGE>

Financial Highlights ACM Managed Dollar Income Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Selected Data For A Share Of Common Stock Outstanding Throughout Each Period

Six Months Ended Year Ended October 22, 1993 *
March 31, 1996 September to
(unaudited) 30, 1995 September 30, 1994
---------------- ------------ ------------------
<S> <C> <C> <C>
Net asset value, beginning
of period................. $ 10.42 $ 11.29 $ 14.04(a)
-------- -------- --------
Income From Investment
Operations
- ----------------------
Net investment income...... .59 1.32 1.13
Net realized and
unrealized gain (loss) on
investment and option
transactions.............. .67 (.85) (2.66)
-------- -------- --------
Net increase (decrease) in
net asset value from
operations................. 1.26 .47 (1.53)
-------- -------- --------
Less: Distributions
- ----------------------
Dividends from net
investment income......... (.60) (1.32) (1.13)
Distributions in excess of
net investment income..... (.03) -0- (.02)
Tax return of capital
distribution.............. -0- (.02) (.07)
-------- -------- --------
Total distributions........ (.63) (1.34) (1.22)
-------- -------- --------
Net asset value, end of
period.................... $ 11.05 $ 10.42 $ 11.29
======== ======== ========
Market value, end of period $ 11.00 $ 9.875 $ 11.25
======== ======== ========

Total Return (b)
- ----------------------
Total investment return
based on:
Market value.............. 18.25% 0.92% (11.94)%
Net asset value........... 12.58% 6.11% (11.62)%

Ratios/Supplemental Data
- -----------------------
Net assets, end of period
(000's omitted)........... $313,085 $295,013 $313,819
Ratio of expenses to
average net assets........ 2.69%(c) 2.83% 1.78%(c)
Ratio of expenses to
average net assets
excluding interest
expense................... 1.03%(c) 1.17% 1.07%(c)
Ratio of net investment
income to average net
assets.................... 8.58%(c) 10.56% 8.54%(c)
Portfolio turnover rate.... 218% 344% 225%
</TABLE>
- --------------------------------------------------------------------------------
* Commencement of operations.
(a) Net of offering costs of $.06.
(b) Total investment return is calculated assuming a purchase of common stock
on the opening of the first day and a sale on the closing of the last day
of the period reported. Dividends and distributions, if any, are assumed
for purposes of this calculation, to be reinvested at prices obtained under
the Fund's dividend reinvestment plan. Generally, total investment return
based on net asset value will be higher than total investment return based
on market value in periods where there is an increase in the discount or a
decrease in the premium of the market value to the net asset value from the
beginning to the end of such periods. Conversely, total investment return
based on net asset value will be lower than total investment return based
on market value in periods where there is a decrease in the discount or an
increase in the premium of the market value to the net asset value from the
beginning to the end of such periods. Total investment return calculated
for a period of less than one year is not annualized.
(c) Annualized.
<PAGE>

ACM Managed Dollar Income Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Board Of Directors
John D. Carifa, Chairman William H. Foulk, Jr./(1)/
Ruth Block/(1)/ Dr. James M. Hester/(1)/
David H. Dievler/(1)/ Clifford L. Michel/(1)/
John H. Dobkin/(1)/ Robert C. White/(1)/

Officers
Wayne D. Lyski, President Edmund P. Bergan, Jr., Secretary
Kathleen A. Corbet, Senior Vice President Mark D. Gersten, Treasurer &
Paul J. DeNoon, Vice President Chief Financial Officer
Vicki L. Fuller, Vice President Joseph J. Mantineo, Controller

ADMINISTRATOR INDEPENDENT AUDITORS
Princeton Administrators, L.P. Ernst & Young LLP
P.O. Box 9011 787 Seventh Avenue
Princeton, NJ 08543 New York, NY 10019

CUSTODIAN, DIVIDEND PAYING AGENT,
TRANSFER AGENT AND REGISTRAR
State Street Bank & Trust Company
225 Franklin Street
Boston, MA 02110
</TABLE>

/(1)/ Member of the Audit Committee

Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Fund may purchase at market prices from time to
time shares of its Common Stock in the open market.

This report, including the financial statements herein, is transmitted to the
shareholders of ACM Managed Dollar Income Fund, Inc. for their information. This
is not a prospectus, circular or representation intended for use in the purchase
of shares of the Fund or any securities mentioned in this report.

<PAGE>

[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>

ACM Managed Dollar Income Fund, Inc.
Summary of General Information

The Fund
ACM Managed Dollar Income Fund, Inc. is a closed-end management investment
company investing substantially all of its assets in U.S. and non-U.S. fixed
income securities denominated in U.S. dollars. The Fund is designed for
investors who seek high current income and capital appreciation over a period of
years from investing in a portfolio of high yield, high risk U.S. and non-U.S.
fixed income securities which the Fund's investment adviser expects to benefit
from improving economic and credit fundamentals.

Shareholder Information
Daily market prices for the Fund's shares are published in the New York Stock
Exchange Composite Transaction Section of newspapers each day. The Fund's NYSE
trading symbol is "ADF". Weekly comparative net asset value (NAV) and market
price information about the Fund is published each Monday in the Wall Street
Journal and each Saturday in The New York Times and Barron's and other
newspapers in a table called "Closed-End Funds." Additional information about
the Fund is available by calling 1-800-221-5672.

Dividend Reinvestment Plan
Pursuant to the Fund's Dividend Reinvestment Plan shareholders whose shares are
registered in their own names may elect to have all distributions reinvested
automatically in additional shares of the Fund by State Street Bank & Trust
Company, as agent under the Plan. Shareholders whose shares are held in the name
of a broker or nominee should contact the broker or nominee for details. All
distributions to investors who elect not to participate in the Plan will be paid
by check mailed directly to the record holder by or under the direction of State
Street Bank & Trust Company. For a copy of the Plan Brochure, please call State
Street Bank and Trust Company at 800-219-4218.

ACM Managed Dollar Income Fund, Inc.
1345 Avenue of the Americas
New York, New York 10105

[LOGO OF ALLIANCE CAPITAL APPEARS HERE]

(R)These registered service marks used under license from the owner,
Alliance Capital Management L.P.

MDISR

ACM
-------------
Managed
-------------
Dollar
-------------
Income Fund
-------------

Semi-Annual
Report
March 31, 1996

Alliance
Mutual funds without the Mystery.