MUNICIPAL INVESTMENT TR FD MULTISTATE SER 212 DEF ASSET FDS, 497, 1996-08-02

MUNICIPAL INVESTMENT TR FD MULTISTATE SER 212 DEF ASSET FDS
497, 1996-08-02

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DEFINED ASSET FUNDSSM
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MUNICIPAL INVESTMENT ESTIMATED CURRENT RETURN shows the estimated
TRUST FUND annual cash to be received from interest-bearing
MULTISTATE SERIES 212 bonds in the Portfolio (net of estimated annual
(UNIT INVESTMENT expenses) divided by the Public Offering Price
TRUSTS) (including the maximum sales charge).
- ------------------------------ESTIMATED LONG TERM RETURN is a measure of the
/ / EXEMPT FROM REGULAR estimated return over the estimated life of the
FEDERAL INCOME TAX Fund. This represents an average of the yields to
AND SOME STATE TAXES maturity (or in certain cases, to an earlier call
/ / DEFINED PORTFOLIOS OF date) of the individual bonds in the Portfolio,
MUNICIPAL BONDS adjusted to reflect the maximum sales charge and
/ / MONTHLY INCOME estimated expenses. The average yield for the
COLORADO INSURED TRUST Portfolio is derived by weighting each bond's
5.21% yield by its market value and the time remaining
ESTIMATED CURRENT RETURN to the call or maturity date, depending on how the
5.25% bond is priced. Unlike Estimated Current Return,
ESTIMATED LONG TERM RETURN Estimated Long Term Return takes into account
NEW JERSEY INSURED TRUST maturities, discounts and premiums of the
5.16% underlying bonds.
ESTIMATED CURRENT RETURN No return estimate can be predictive of your
5.23% actual return because returns will vary with
ESTIMATED LONG TERM RETURN purchase price (including sales charges), how long
NEW YORK TRUST units are held, changes in Portfolio composition,
5.39% changes in interest income and changes in fees and
ESTIMATED CURRENT RETURN expenses. Therefore, Estimated Current Return and
5.56% Estimated Long Term Return are designed to be
ESTIMATED LONG TERM RETURN comparative rather than predictive. A yield
PENNSYLVANIA TRUST calculation which is more comparable to an
5.44% individual bond may be higher or lower than
ESTIMATED CURRENT RETURN Estimated Current Return or Estimated Long Term
5.51% Return which are more comparable to return
ESTIMATED LONG TERM RETURN calculations used by other investment products.
AS OF JULY 31, 1996

-------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
SPONSORS: HAS THE COMMISSION OR ANY STATE SECURITIES
Merrill Lynch, COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
Pierce, Fenner & Smith OF THIS DOCUMENT. ANY REPRESENTATION TO THE
Incorporated CONTRARY IS A CRIMINAL OFFENSE.
Smith Barney Inc. Inquiries should be directed to the Trustee at
PaineWebber Incorporated 1-800-323-1508.
Prudential Securities Prospectus dated August 1, 1996.
Incorporated INVESTORS SHOULD READ THIS PROSPECTUS CAREFULLY
Dean Witter Reynolds Inc. AND RETAIN IT FOR FUTURE REFERENCE.

<PAGE>
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Defined Asset FundsSM

Defined Asset Funds is America's oldest and largest family of unit investment
trusts, with over $100 billion sponsored in the last 25 years. Each Defined
Asset Fund is a portfolio of preselected securities. Each portfolio is divided
into 'units' representing equal shares of the underlying assets. Each unit
receives an equal share of income and principal distributions.

Defined Asset Funds offer several defined 'distinctives'. You know in advance
what you are investing in and that changes in the portfolio are limited - a
defined portfolio. Most defined bond funds pay interest monthly - defined
income. The portfolio offers a convenient and simple way to invest - simplicity
defined.

Your financial professional can help you select a Defined Asset Fund to meet
your personal investment objectives. Our size and market presence enable us to
offer a wide variety of investments. The Defined Asset Funds family offers:

o Municipal portfolios
o Corporate portfolios
o Government portfolios
o Equity portfolios
o International portfolios

The terms of Defined Funds are as short as one year or as long as 30 years.
Special defined funds are available including: insured funds, double and triple
tax-free funds and funds with 'laddered maturities' to help protect against
changing interest rates. Defined Asset Funds are offered by prospectus only.

- ---------------------------------------------------
Defined Multistate Series
- ---------------------------------------------------

Our defined portfolios of municipal bonds offers you a simple and convenient way
to earn tax-free monthly income. And by purchasing Defined Asset Funds, you not
only receive professional selection but also gain the advantage of reduced risk
by investing in bonds of several different issuers.

INVESTMENT OBJECTIVE

To provide interest income exempt from regular federal income taxes through
investment in a fixed portfolio consisting primarily of municipal bonds issued
by or on behalf of a single State and its local governments and authorities.
Units may also be exempt from certain state and local taxes for residents of the
State.

DIVERSIFICATION

Each Portfolio contains a number of different bond issues. Spreading your
investment among different issuers reduces your risk, but does not eliminate it,
especially since each Portfolio contains bonds of only one State. Because of
maturities, sales or other dispositions of bonds, the size, composition and
return of the Portfolio will change over time.
- ---------------------------------------------------
Defining Your Portfolio
- ---------------------------------------------------

PROFESSIONAL SELECTION AND SUPERVISION

Each Portfolio contains a variety of bonds selected by experienced buyers and
research analysts. The Fund is not actively managed; however, it is regularly
reviewed and a bond can be sold if retaining it is considered detrimental to
investors' interests.

MONTHLY FEDERALLY TAX-FREE INTEREST INCOME

Each Portfolio pays monthly income, even though the bonds generally pay interest
semi-annually.

INSURANCE

Certain bonds are insured. This insurance guarantees the timely payment of
principal and interest of the bonds, but does not guarantee the value of the
bonds or the units. Insurance does not cover accelerated payments of principal
or any increase in interest payments or premiums payable on mandatory
redemptions, including if interest on a bond is determined to be taxable. (See
Bonds Backed by Letters of Credit or Insurance in Part B).

BOND CALL FEATURES

It is possible that during periods of falling interest rates, a bond with a
coupon higher than current market rates will be prepaid or 'called', at the
option of the bond issuer, before its expected maturity. When bonds are
initially callable, the price is usually at a premium to par which then declines
to par over time. Bonds may also be subject to a mandatory sinking fund or have
extraordinary redemption provisions. For example, if the bond's proceeds are not
able to be used as intended the bond may be redeemed. This redemption and the
sinking fund are often at par.

CALL PROTECTION

Although many bonds are subject to optional refunding or call provisions, we
have selected bonds with call protection. This call protection means that any
bond in a Portfolio generally cannot be called for a number of years and
thereafter at a declining premium over par.

TAX INFORMATION

Based on the opinion of bond counsel, income from the bonds held by this Fund is
generally 100% exempt under existing laws from regular federal income tax and
certain state and local personal income taxes for residents of a particular
State. Any gain on a disposition of the underlying bonds or units will be
subject to tax.

A-2
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Defining Your Investment
- ---------------------------------------------------

PUBLIC OFFERING PRICE

The Public Offering Price as of July 31, 1996, the business day prior to the
Initial Date of Deposit, is based on the aggregate offer side value of the
underlying bonds in the Portfolio, plus a sales charge on the value of the
underlying bonds, plus cash, divided by the number of units outstanding. The
Public Offering Price on any subsequent date will vary. An amount equal to
principal cash, if any, as well as net accrued but undistributed interest on the
unit is added to the Public Offering Price. The underlying bonds are evaluated
by an independent evaluator at 3:30 p.m. Eastern time on every business day.

UNIT PAR VALUE

The par value of your unit--the amount of money you will receive by termination
of the Trust, assuming all the bonds are paid at maturity or are redeemed by the
issuer at par or sold by the Fund at par to meet redemptions--is $1,000.

LOW MINIMUM INVESTMENT

You can get started with a minimum purchase of about $1,000.

REINVESTMENT OPTION

You can elect to automatically reinvest your distributions into a separate
portfolio of federally tax-exempt bonds. Most or all of the bonds in that
portfolio, however, will not be insured or exempt from state and local taxes.
Reinvesting helps to compound your income free of federal income taxes.

PRINCIPAL DISTRIBUTIONS

Principal from sales, redemptions and maturities of bonds in the Portfolios will
be distributed to investors periodically when the amount to be distributed is
more than $5.00 per unit.

TERMINATION DATE

The Portfolios will generally terminate no later than the maturity date of the
last maturing bond listed in the Portfolio. The Portfolios may be terminated if
the value is less than 40% of the face amount of bonds deposited.

SPONSORS' PROFIT OR LOSS

The Sponsors' profit or loss associated with each Portfolio will include the
receipt of applicable sales charges, any fees for underwriting or placing bonds,
fluctuations in the Public Offering Price or secondary market price of units and
a gain or loss on the deposit of the bonds (see Underwriters' and Sponsors'
Profit in Part B).

SELLING YOUR INVESTMENT

You may sell your units at any time. Your price is based on the then current net
asset value of the Portfolio (generally based on the lower, bid side evaluation
of the bonds, as determined by an independent evaluator, plus principal cash, if
any, as well as accrued interest). There is no fee for selling your units.

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Defining Your Risks
- ---------------------------------------------------

RISK FACTORS

Unit price fluctuates and could be adversely affected by increasing interest
rates as well as the financial condition of the issuers of the bonds and any
insurance companies backing certain of the bonds. Because of the possible
maturity, sale or other disposition of securities, the size, composition and
return of the portfolio may change at any time. Because of the sales charges,
returns of principal and fluctuations in unit price, among other reasons, the
sale price will generally be less than the cost of your units. Unit prices could
also be adversely affected if a limited trading market exists in any security to
be sold. There is no guarantee that the Fund will achieve its investment
objective.

In addition, each Portfolio has fewer bond issues than a national fund, and is
concentrated in bonds of issuers located in only one State. There may be
additional risk from decreased diversification as well as from factors
particular to that State.

UNDERWRITING ACCOUNT

One or more of the Sponsors has participated as underwriter, managing
underwriter or member of an underwriting syndicate from which approximately 4%
of the bonds in the Fund were acquired.

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
P.O. Box 9051
Princeton, NJ 08543-9051 60.39%

SMITH BARNEY INC.
388 Greenwich Street--23rd Floor
New York, NY 10013 11.43%

PAINEWEBBER INCORPORATED
1285 Avenue of the Americas
New York, NY 10019 15.23%

PRUDENTIAL SECURITIES INCORPORATED
One New York Plaza
New York, NY 10292 5.33%

DEAN WITTER REYNOLDS INC.
Two World Trade Center--59th Floor
New York, NY 10048 7.62%
-------
100.00%
-------

A-3
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Defined Colorado Insured Trust
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PORTFOLIO DIVERSIFICATION

The Portfolio contains 7 Colorado bond issues.

TYPES OF BONDS
The Portfolio consists of $3,285,000 face amount of municipal bonds of the
following types:

APPROXIMATE
PORTFOLIO PERCENTAGE

/ / Airports/Ports/Highway Revenue Bonds 15%
/ / General Obligation Bonds 9%
/ / Hospitals/Nursing Homes/Mental Health 46%
/ / Lease Rental Appropriation 15%
/ / Universities/Colleges 15%

INSURED AAA-RATED BONDS

As a result of insurance, the bonds are rated AAA by Standard & Poor's Ratings
group.

The approximate percentage of the aggregate face amount insured by each
insurance company is:

AMBAC Insurance Corporation 24%
MBIA Insurance Corporation 76%

PORTFOLIO CONCENTRATIONS

The Portfolio is considered to be concentrated in Hospital/Nursing Home/Mental
Health bonds and is therefore dependent to a significant degree on revenues
generated from those particular activities (see Risk Factors in Part B). The
Portfolio is also concentrated in bonds of Colorado issuers and is subject to
additional risk from decreased diversification as well as from factors that may
be particular to Colorado, which are briefly described on page A-6.

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Defining Your Income
- ---------------------------------------------------

WHAT YOU MAY EXPECT
(PAYABLE ON THE 25TH DAY OF THE MONTH TO HOLDERS OF RECORD ON THE 10TH DAY OF
THE MONTH):

First Distribution per unit
(August 25, 1996): $ 1.33
Regular Monthly Income per unit
(Beginning on September 25, 1996): $ 4.43
Annual Income per unit: $53.27

These figures are estimates determined as of the business day prior to the
Initial Date of Deposit and actual payments may vary.

Estimated cash flows are available upon request from the Sponsors.

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Defining Your Costs
- ---------------------------------------------------

SALES CHARGE

Although the Trust is a unit investment trust rather than a mutual fund, the
following information is presented to permit a comparison of fees and an
understanding of the direct or indirect costs and expenses that you pay.

As a % As a %
of Initial of
Offering Secondary
Period Market
Public Public
Offering Offering
Price Price
---------- ----------
Maximum Sales Charges 4.50% 5.50%

The Trust (and therefore the investors) will bear all or a portion of its
organizational costs--including costs of preparing the registration statement,
the trust indenture and other closing documents, registering units with the SEC
and the states and the initial audit of the Portfolio--as is common for mutual
funds.

ESTIMATED ANNUAL FUND OPERATING EXPENSES

As a %
of Average
Net Assets* Per Unit
----------- -----------
Trustee's Fee .071% $ 0.69
Maximum Portfolio
Supervision and
Bookkeeping Fees .046% 0.45
Evaluator's Fee .041% 0.40
Organizational Costs .020% 0.20
Other Operating
Expenses .085% 0.82
----------- -----------
TOTAL .263% $ 2.56

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* Based on the mean of the bid and offer side evaluations.

COSTS OVER TIME

You would pay the following cumulative expenses on a $1,000 investment, assuming
a 5% annual return on the investment throughout the indicated periods:

1 Year 3 Years 5 Years 10 Years
$48 $53 $59 $77

The example assumes reinvestment of all distributions into additional units of
the Fund (a reinvestment option different from that offered by this Fund) and
uses a 5% annual rate of return as mandated by Securities and Exchange
Commission regulations applicable to mutual funds. The Costs Over Time above
reflect both sales charges and operating expenses on an increasing investment
(because the net annual return is reinvested). The example should not be
considered a representation of past or future expenses or annual rate of return;
the actual expenses and annual rate of return may be more or less than the
example.

As of July 31, 1996, the Public Offering Price was $1,022.02, based on the
aggregate offer side value of the bonds ($3,206,900.00), plus a maximum sales
charge of 4.712% on the value of the underlying bonds, plus cash ($31,000.00),
divided by the number of units outstanding (3,316). An amount equal to principal
cash, if any, as well as net accrued but undistributed interest on the unit is
added to the Public Offering Price. Sponsors' profit on deposit was $32,415.00.

The bid side redemption and secondary market repurchase price as of July 31,
1996 was $972.48 ($49.54 less than the Public Offering Price).

A-4
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<TABLE><CAPTION>
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Defined Colorado Insured Portfolio
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Municipal Investment Trust Fund
Multistate Series--212
Colorado Insured Trust August 1, 1996

- ----------------------------
(1) All ratings are by Standard & Poor's Ratings Group. (See Appendix A.)
(2) Bonds are first subject to optional redemptions (which may be exercised in
whole or in part) on the dates and at the prices indicated under the Optional
Refunding Redemptions column. In subsequent years, bonds are redeemable at
declining prices, but typically not below par value. Some issues may be subject
to sinking fund redemption or extraordinary redemption without premium prior to
the dates shown.
(3) Evaluation of the bonds by the Evaluator is made on the basis of current
offer side evaluation. On this basis, approximately 30% of the bonds were
deposited at a premium, 24% at par and 46% at a discount from par.

A-5
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Colorado Taxes and Risks
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COLORADO RISK FACTORS

Colorado's economic growth is estimated to have surpassed the nation's for
the past eight consecutive years, due in large part to above-average population
growth and net migration into the State. Population increased approximately 2.3%
in 1995 (down from 2.6% in 1994), net migration into Colorado is estimated to be
55,320 in 1995 (down from 62,412 in 1994); and job growth in 1995 is estimated
to be 4.7% (down from 5.1% in 1994). Slower population growth, net migration and
job growth may adversely affect Colorado's overall economic performance to an
extent that cannot be predicted. The most significant sectors of the Colorado
economy continue to include services, trade, manufacture of durable and
non-durable goods and tourism. Colorado's estimated unemployment rate remained
below the estimated national unemployment rate during 1995.

The State and local governments continue to confront the effects of a
Colorado constitutional amendment known as 'The Taxpayers' Bill of Rights' (or
'TABOR'), which was approved by Colorado voters on November 3, 1992. TABOR
imposes strict limitations on the ability of the State and local governments to
increase taxes, revenues, debt and spending. Many provisions of TABOR are
currently being construed by Colorado courts, or will require judicial
interpretation in the future.

TABOR restricts the annual spending and revenues of a district (defined to
include the State and most local governments) to its spending and revenues for
the prior calendar year, plus or minus an amount necessary to account for
inflation and population growth for the prior year, unless the district receives
voter approval to the contrary. Excess revenues must be refunded by any
reasonable method. Districts are required to establish emergency reserves under
TABOR, and are specifically authorized to reduce or end subsidies to any program
(other than public education through grade 12 or as required by federal law)
delegated to them for administraton by the Colorado legislature. TABOR also
requires voter approval before a district can impose any new tax, tax rate
increase, mill levy increase or valuation for assessment ratio increase, or
extend an expiring tax, or, except in certain circumstances, create any
'multiple-fiscal year' direct or indirect debt or other financial obligation.
Elections required by TABOR must meet certain new timing and procedural
requirements imposed by TABOR. New or increased real property transfer taxes,
new State real property taxes and new local district income taxes are
prohibited.

TABOR has affected virtually all of the rules governing State and local
government finance in Colorado. Although the effects of TABOR on particular
governmental entities vary greatly, the volume of new bond issuances by local
governments in Colorado is believed to have substantially declined in the period
immediately following its adoption. TABOR severely limits the ability of the
State and local governments to respond to service demands by increasing their
capital and operating expenditures, but may also reduce the burden of property
and other taxes upon individuals and businesses in the State over the long term.
TABOR may adversely affect the financial condition and operations of the State
and local governments in Colorado, including those whose securities are held by
the Fund, to an extent which cannot be predicted.

The State is authorized to issue short-term notes to alleviate temporary
cash flow shortfalls, but has no authority to issue long-term general obligation
indebtedness. Short-term notes issued by the State on July 1, 1996 and maturing
June 27, 1997 were given the highest rating available for short-term obligations
by Moody's Investor's Service, Inc. and Fitch Investors Service, Inc. Because of
the short-term nature of the notes, these ratings should not necessarily be
considered indicative of the State's general financial condition.

COLORADO TAXES

In the opinion of Becker Stowe Bowles & Lynch P.C., special counsel on
Colorado tax matters, under existing Colorado law and for Colorado income tax
purposes only:

1. The Colorado Trust will be treated as a trust and will not be taxable
as a corporation. Income of the Colorado Trust will be treated as income of
the Holders of Units of the Colorado Trust in the same manner as for Federal
income tax purposes.

2. Each Holder of Units of the Colorado Trust will be treated as
receiving his or her pro rata share of interest on each Debt Obligation in
the Colorado Trust when it is received by the Colorado Trust. Interest on
Debt Obligations in the Colorado Trust that would be exempt from Colorado
income tax if paid directly to a

A-6
<PAGE>
Holder will be treated as exempt from Colorado income tax when received by
the Colorado Trust and distributed to the Holders of Units of the Colorado
Trust.

3. Each Holder of Units of the Colorado Trust will be treated as
recognizing gain or loss when the Colorado Trust disposes of a Debt
Obligation or when the Holder disposes of all or a portion of his or her
Units, whether by sale, exchange, redemption or payment at maturity, in the
same manner as for Federal income tax purposes. The amount of such gain or
loss is determined by reference to the amount of such gain or loss for
Federal income tax purposes.

4. Interest on indebtedness incurred or continued by a Holder of Units
of the Colorado Trust to purchase or carry such Units is not deductible for
Colorado income tax purposes to the extent it is not deductible for Federal
income tax purposes.

The foregoing opinions concerning Colorado income tax apply only to
Holders who are individuals and have been made in reliance upon the opinion
of Davis Polk & Wardwell concerning the Federal income tax treatment of the
Colorado Trust and the Holders of its Units.

A-7
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Defined New Jersey Insured Trust
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PORTFOLIO DIVERSIFICATION

The Portfolio contains 7 New Jersey bond issues.

TYPES OF BONDS
The Portfolio consists of $3,250,000 face amount of municipal bonds of the
following types:

APPROXIMATE
PORTFOLIO PERCENTAGE

/ / Airports/Ports/Highways 31%
/ / Hospitals/Nursing Homes/Mental Health 31%
/ / Industrial Development Revenue 15%
/ / Universities/Colleges 23%

INSURED AAA-RATED BONDS
As a result of insurance, the bonds are rated AAA by Standard & Poor's Ratings
group.

The approximate percentage of the aggregate face amount insured by each
insurance company is:

MBIA Insurance Corporation 46%
AMBAC Insurance Corporation 8%
Financial Guaranty Insurance
Company 31%
Connie Lee Insurance Company 15%

PORTFOLIO CONCENTRATIONS

The Portfolio is considered to be concentrated in Airport/Port/Highway bonds and
Hospital/Nursing Home/Mental Health bonds and is therefore dependent to a
significant degree on revenues generated from those particular activities. (See
Risk Factors in Part B.) The Portfolio is also concentrated in bonds of New
Jersey issuers and is subject to additional risk from decreased diversification
as well as from factors that may be particular to New Jersey, which are briefly
described on page A-10.
- ---------------------------------------------------
Defining Your Income
- ---------------------------------------------------

WHAT YOU MAY EXPECT
(PAYABLE ON THE 25TH DAY OF THE MONTH TO HOLDERS OF RECORD ON THE 10TH DAY OF
THE MONTH):

First Distribution per unit
(August 25, 1996): $ 1.31
Regular Monthly Income per unit
(Beginning on September 25, 1996): $ 4.37
Annual Income per unit: $52.51

These figures are estimates determined as of the business day prior to the
Initial Date of Deposit and actual payments may vary.

Estimated cash flows are available upon request from the Sponsors.

- ---------------------------------------------------
Defining Your Costs
- ---------------------------------------------------

SALES CHARGE

As a % As a %
of Initial of
Offering Secondary
Period Market
Public Public
Offering Offering
Price Price
----------- -----------
Maximum Sales Charges 4.50% 5.50%

ESTIMATED ANNUAL FUND OPERATING EXPENSES

As a %
of Average
Net Assets* Per Unit
----------- -----------
Trustee's Fee .072% $ 0.69
Maximum Portfolio
Supervision and
Bookkeeping Fees .046% 0.45
Evaluator's Fee .041% 0.40
Organizational Costs .021% 0.20
Other Operating
Expenses .085% 0.83
----------- -----------
TOTAL .265% $ 2.57

- ------------
* Based on the mean of the bid and offer side evaluations.

COSTS OVER TIME

You would pay the following cumulative expenses on a $1,000 investment, assuming
a 5% annual return on the investment throughout the indicated periods:

1 Year 3 Years 5 Years 10 Years
$48 $53 $59 $77

As of July 31, 1996, the Public Offering Price was $1,017.56, based on the
aggregate offer side value of the bonds ($3,158,787.50), plus a maximum sales
charge of 4.712% on the value of the underlying bonds, plus cash ($31,000.00),
divided by the number of units outstanding (3,281). An amount equal to principal
cash, if any, as well as net accrued but undistributed interest on the unit is
added to the Public Offering Price. Sponsors' profit on deposit was $36,220.00.

The bid side redemption and secondary market repurchase price as of July 31,
1996 was $968.24 ($49.32 less than the Public Offering Price).

A-8
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<TABLE><CAPTION>
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Defined New Jersey Insured Portfolio
- --------------------------------------------------------------------------------

Municipal Investment Trust Fund
Multistate Series--212
New Jersey Insured Trust August 1, 1996

- ----------------------------
(1) All ratings are by Standard & Poor's Ratings Group (see Appendix A to Part
B).
(2) Bonds are first subject to optional redemptions (which may be exercised in
whole or in part) on the dates and at the prices indicated under the Optional
Refunding Redemptions column. In subsequent years, bonds are redeemable at
declining prices, but typically not below par value. Some issues may be subject
to sinking fund redemption or extraordinary redemption without premium prior to
the dates shown.
(3) Evaluation of the bonds by the Evaluator is made on the basis of current
offer side evaluation. On this basis, approximately 15% of the bonds were
deposited at premium, 15% at par and 70% at a discount from par.
(4) These bonds are when-issued bonds that are expected to settle 1 to 3 days
after the settlement date for Units. The Trustee's fees and expenses will be
reduced by $0.09 per unit to compensate for interest that would have accrued on
the bonds between the settlement date for Units and the actual date of delivery
of the bonds. (See Income, Distributions and Reinvestment--Income in Part B.)

A-9
<PAGE>
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New Jersey Taxes and Risks
- --------------------------------------------------------------------------------

NEW JERSEY RISK FACTORS

New Jersey and certain of its public authorities have in recent years
experienced financial difficulties and pressures to a significant degree.
Employment in manufacturing, wholesale and retail trade and construction have
been in decline although gains have been recorded in the services, government,
financial/insurance/real estate and tranportation/communication/public utilities
sectors. The economic recovery in New Jersey is likely to be slow and uneven
because some sectors, like commercial and industrial construction, suffer from
excess capacity, and even in rebounding sectors, employers are expected to be
cautious about hiring.

State appropriations of funds are distributed among a diverse group of
public recipients. In fiscal 1996, the largest state aid appropriation is
provided for local elementary and secondary education programs, followed by
appropriations for operation of the state government (including the State
Legislature, Judiciary and Executive Office) and other programs including, among
others, correctional facilities and the State Police, higher education and
environmental protection. The effect on these appropriations and other State
funding requirements cannot yet be evaluated. By a bill signed into law on July
4, 1995, New Jersey personal income tax rates have been reduced so that coupled
with the prior rate reductions, beginning with tax year 1996, personal income
tax rates will be, depending on taxpayers' level of income and filing status,
30%, 15%, or 9% lower than 1993 rates.

The primary method for State financing of capital projects is through the
sale of the general obligation bonds of the State. These bonds are backed by the
full faith and credit of the State. Tax revenues and certain other fees are
pledged to meet the principal and interest payments required to pay the debt
fully. With certain exceptions, no general obligation debt can be issued by the
State without prior voter approval.

General obligation bonds of New Jersey are currently rated Aa1 by Moody's
and AA+ by Standard & Poor's.

NEW JERSEY TAXES

In the opinion of Shanley & Fisher, P.C., Morristown, New Jersey, special
counsel on New Jersey tax matters, under existing New Jersey law:

1. The proposed activities of the Fund will not cause it to be subject to
the New Jersey Corporation Business Tax Act.

2. The income of the Fund will be treated as the income of individuals,
estates and trusts who are the investors in the Fund for purposes of the New
Jersey Gross Income Tax Act, and interest which is exempt from tax under the New
Jersey Gross Income Tax Act when received by the Fund will retain its status as
tax exempt in the hands of such investors. Gains arising from the sale or
redemption by an investor of his Units or from the sale or redemption by the
Fund of any Bond are exempt from taxation under the New Jersey Gross Income Tax
Act, as enacted and construed on the date hereof, to the extent such gains are
attributable to Bonds the interest on which is exempt from tax under the New
Jersey Gross Income Tax Act.

3. Units of the Fund may be subject, in the estates of New Jersey residents,
to taxation under the Transfer Inheritance Tax Law of the State of New Jersey.

A-10
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Defined New York Trust
- --------------------------------------------------------------------------------

PORTFOLIO DIVERSIFICATION

The Portfolio contains 8 New York bond issues.

TYPES OF BONDS
The Portfolio consists of $3,250,000 face amount of municipal bonds of the
following types:

APPROXIMATE
PORTFOLIO PERCENTAGE

/ / Hospitals/Nursing Homes/Mental Health 31%
/ / Industrial Development Revenue 15%
/ / Lease Rental Appropriation 15%
/ / Special Tax Issues 8%
/ / Universities/Colleges 31%

PORTFOLIO CONCENTRATIONS

The Portfolio is considered to be concentrated in Hospital/Nursing Home/Mental
Health bonds and University/College bonds and is therefore dependent to a
significant degree on revenues generated from those particular activities. (See
Risk Factors in Part B.) The Portfolio is also concentrated in bonds of New York
issuers and is subject to additional risk from decreased diversification as well
as from factors that may be particular to New York, which are briefly described
on page A-13.

- ---------------------------------------------------
Defining Your Income
- ---------------------------------------------------

WHAT YOU MAY EXPECT
(PAYABLE ON THE 25TH DAY OF THE MONTH TO HOLDERS OF RECORD ON THE 10TH DAY OF
THE MONTH):

First Distribution per unit
(August 25, 1996): $ 1.30
Regular Monthly Income per unit
(Beginning on September 25, 1996): $ 4.36
Annual Income per unit: $52.32

These figures are estimates determined as of the business day prior to the
Initial Date of Deposit and actual payments may vary.

Estimated cash flows are available upon request from the Sponsors.
- ---------------------------------------------------
Defining Your Costs
- ---------------------------------------------------

SALES CHARGE

As a % As a %
of Initial of
Offering Secondary
Period Market
Public Public
Offering Offering
Price Price
----------- -----------
Maximum Sales Charges 4.50% 5.50%

ESTIMATED ANNUAL FUND OPERATING EXPENSES

As a %
of Average
Net Assets* Per Unit
----------- -----------
Trustee's Fee .075% $ 0.69
Maximum Portfolio
Supervision and
Bookkeeping Fees .048% 0.45
Evaluator's Fee .043% 0.40
Organizational Costs .022% 0.20
Other Operating
Expenses .090% 0.83
----------- -----------
TOTAL .278% $ 2.57

- ------------
* Based on the mean of the bid and offer side evaluations.

COSTS OVER TIME

You would pay the following cumulative expenses on a $1,000 investment, assuming
a 5% annual return on the investment throughout the indicated periods:

1 Year 3 Years 5 Years 10 Years
$48 $54 $60 $79

As of July 31, 1996, the Public Offering Price was $969.84, based on the
aggregate offer side value of the bonds ($3,009,251.00), plus a maximum sales
charge of 4.712% on the value of the underlying bonds, plus cash ($31,000.00),
divided by the number of units outstanding (3,281). An amount equal to principal
cash, if any, as well as net accrued but undistributed interest on the unit is
added to the Public Offering Price. Sponsors' profit on deposit was $35,420.50.

The bid side redemption and secondary market repurchase price as of July 31,
1996 was $922.66 ($47.18 less than the Public Offering Price).

A-11
<PAGE>
<TABLE><CAPTION>
- --------------------------------------------------------------------------------
Defined New York Portfolio
- --------------------------------------------------------------------------------

Municipal Investment Trust Fund
Multistate Series--212
New York Trust August 1, 1996

OPTIONAL SINKING
RATING REFUNDING FUND
OF ISSUES REDEMPTIONS REDEMPTIONS COST
PORTFOLIO TITLE (1) (2) (2) TO FUND (3)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. $500,000 New York State Energy
Research and Dev. Auth., Fac. Rfdg.
Rev. Bonds (Consol. Edison Co. of
New York, Inc. Proj.), Ser. 1995 A,
6.10%, 8/15/20 A+ 7/1/05 @ 102 -- $ 503,930.00
2. $500,000 Dormitory Auth. of the
State of New York, Mental Hlth.
Svcs. Fac. Imp. Rev. Bonds, Ser.
1996 B, 5.375%, 2/15/26 A(f) 2/15/06 @ 102 2/15/22 450,625.00
3. $500,000 Dormitory Auth. of the
State of New York, Dept. of Hlth.
of the State of New York, Rev.
Bonds, Ser. 1996, 5.50%, 7/1/25 A(f) 7/1/06 @ 102 7/1/18 456,290.00
4. $500,000 Dormitory Auth. of the
State of New York, State Univ.
Educl. Facs. Rev. Bonds, Ser. 1993
C, 5.40%, 5/15/23 A(f) 5/15/04 @ 102 5/15/14 451,005.00
5. $500,000 Dormitory Auth. of the
State of New York, Rev. Bonds,
Upstate Cmnty. Coll., Ser. 1994 A,
5.70%, 7/1/21 A(f) 7/1/04 @ 102 7/1/15 474,515.00
6. $300,000 New York State Urban
Dev. Corp., Corr. Cap. Fac. Rev.
Bonds, Ser. 4, 5.375%, 1/1/23 A(f) 1/1/04 @ 102 1/1/14 269,808.00
7. $200,000 New York State Urban
Dev. Corp., Corr. Cap. Fac. Rev.
Bonds, Rfdg. Ser. 1993 A, 5.25%,
1/1/21 A(f) 1/1/04 @ 102 1/1/17 177,388.00
8. $250,000 Grand Central Dist.
Mgmt. Assoc., Inc., NY, Grand
Central Bus. Imp. Dist., Cap. Imp.
Rfdg. Bonds, Ser. 1994, 5.25%,
1/1/22 A1(m) 1/1/04 @ 102 1/1/15 225,690.00
--------------
$ 3,009,251.00
--------------
--------------
</TABLE>
- ----------------------------
(1) All ratings are by Standard & Poor's Ratings Group unless followed by
('m'), which indicates a Moody's Investors Service rating or by ('f'), which
indicates a Fitch Investors Service rating. Moody's and Fitch ratings have been
furnished by the Evaluator but not confirmed with Moody's or Fitch. '++'
indicates that while there is no available rating, in the opinion of Defined
Asset Funds research analysts the bond has credit characteristics comparable to
bonds rated A or better. (see Appendix A to Part B).
(2) Bonds are first subject to optional redemptions (which may be exercised in
whole or in part) on the dates and at the prices indicated under the Optional
Refunding Redemptions column. In subsequent years, bonds are redeemable at
declining prices, but typically not below par value. Some issues may be subject
to sinking fund redemption or extraordinary redemption without premium prior to
the dates shown.
(3) Evaluation of the bonds by the Evaluator is made on the basis of current
offer side evaluation. On this basis, approximately 15% of the bonds were
deposited at a premium and 85% at a discount from par.

A-12
<PAGE>
- --------------------------------------------------------------------------------
New York Taxes and Risks
- --------------------------------------------------------------------------------

NEW YORK RISK FACTORS

The State of New York and several of its public authorities and
municipalities including, in particular, New York City, continue to face
financial difficulties. For many years, the State accumulated deficits by
extraordinary borrowing, which have been paid off by the issuance of long-term
bonds under legislation limiting future borrowing for deficits. The State's
accumulated deficit is about $7.5 billion. For the 1996 fiscal year (ended March
31), to address a $5 billion projected budget gap, the State budget included
nearly $1 billion of non-recurring measures; a $445 million surplus was
realized. To address a $3.9 billion projected gap, the current year's budget
(adopted more than three months after the beginning of the fiscal year) includes
$1.3 billion of non-recurring measures. Moody's sharply criticized this budget,
concluding that it fails to solve the problem of recurring deficits and is
likely to cause extensive delays in adoption of future budgets. State general
obligation debt is rated A-by Standard & Poor's and A by Moody's; at March 31,
1995, approximately $5.2 billion face amount was outstanding. 18 State
authorities had an aggregate of $70.3 billion of debt outstanding at September
30, 1994, of which approximately $28 billion was State supported.

New York City implemented nearly $3.5 billion of gap-closing measures for
the 1995 fiscal year. The City finished its 1996 fiscal year with a small
surplus, after adopting measures to eliminate a projected $3.1 billion budget
gap. In June, the City adopted a budget to close a projected $2.7 billion budget
gap for the 1997 fiscal year (that began July 1, 1996). One fiscal monitor
commented that, in spite of massive gap-closing efforts in the last few years,
City finances continue to deteriorate. Budget revisions rely heavily on
questionable assumptions and non-recurring measures ($2 billion, $1.3 billion
and $1.5 billion, respectively, in the 1995-97 fiscal years), and spending is
projected to increase faster than revenue for the next three years, leaving
City-projected future budget gaps of $1.7 billion, $2.7 billion and $3.4
billion, respectively; fiscal monitors have higher estimates. By fiscal 1999,
the City is scheduled to reach its constitutional limit on debt issuance, and
debt service will require 18.5% of projected tax revenues. Yet the Mayor
proposes borrowing an additional $1.4 billion over the next four years for
school repairs. Courts struck down a Mayoral proposal to sell the City Water
System without the City Comptroller's approval, which would have reduced City
debt by $1.3 billion and made $800 million available for other purposes. The
Mayor also proposes creation of an Infrastructure Financing Authority to sell
revenue bonds secured by City personal income tax revenues to avoid being
foreclosed from issuance of additional debt. This proposal will need approval by
the City Council and the State Legislature. New York City bonds are rated BBB+
by Standard & Poor's and Baa1 by Moody's. At December 31, 1995, approximately
$24.4 billion of New York City bonds (excluding City debt held by The Municipal
Assistance Corporation for the City of New York (MAC)) and approximately $4.0
billion of MAC bonds and $1.1 billion of public benefit corporation debt were
outstanding. Other localities in the State had an aggregate of approximately
$17.7 billion of indebtedness outstanding in 1993. A report by Moody's concluded
25 cities in the State are facing significant fiscal problems.

For decades, the State's economy has grown more slowly than that of the rest
of the nation as a whole. This low growth rate has been attributed, in part, to
the combined State and New York City tax burden which is among the highest in
the U.S. Because their tax structures are particularly sensitive to economic
cycles, both the State and New York City are prone to substantial budget gaps
during periods of economic weakness. Each has suffered a decline in population
and in manufacturing jobs over many years, and has become particularly dependent
on the financial services industry. Unemployment rates, especially in New York
City, have been above the national average for several years.

Both the State and New York City suffer from long-term structural imbalances
between revenues and expenditures, which historically have been narrowed through
extensive use of non-recurring measures such as bond refinancings, depletion of
reserves, sales of assets, cost-cuts and layoffs. Except for property taxes,
changes in New York City revenue measures require State approval. The City is
also particularly subject to unanticipated increases in labor costs, resulting
primarily from expiring union contracts and overtime expense. Both the State and
New York City also face substantial replacement costs for infrastructure (such
as roads, bridges and other public facilities) which has suffered from reduced
maintenance expenditures during various economic declines.

Various municipalities and State and local authorities in New York
(particularly, the Metropolitan Transportation Authority) are dependent to
varying degrees on State and federal aid, and could be adversely affected by the
State's and federal government's actions to balance their budgets. Because the
State constitution has broader requirements, limits on benefits under the
welfare reform bill passed by the House of Representatives on July 31, 1996

A-13
<PAGE>
(which the President has agreed to sign) were estimated to add up to $720
million annually of new costs to the City by 2002. The State is expected to
receive $1.3 billion less in Federal welfare and Medicaid grants in the first
year. The State's dependence on federal aid and sensitivity to economic cycles,
as well as high levels of taxes and unemployment, may continue to make it
difficult to balance State and local budgets in the future.

NEW YORK TAXES

In the opinion of Davis Polk & Wardwell, special counsel for the
Sponsors, under existing New York law:

Under the income tax laws of the State and City of New York, the Trust is
not an association taxable as a corporation and income received by the Trust
will be treated as the income of the investors in the same manner as for
federal income tax purposes. Accordingly, each investor will be considered
to have received the interest on his pro rata portion of each Bond when
interest on the Bond is received by the Trust. In the opinion of bond
counsel delivered on the date of issuance of the Bonds, such interest will
be exempt from New York State and City personal income taxes except where
such interest is subject to federal income taxes (see Taxes). A noncorporate
investor in Units of the Trust who is a New York State (and City) resident
will be subject to New York State (and City) personal income taxes on any
gain recognized when he disposes of all or part of his pro rata portion of a
Bond. A noncorporate investor who is not a New York State resident will not
be subject to New York State or City personal income taxes on any such gain
unless such Units are attributable to a business, trade, profession or
occupation carried on in New York. A New York State (and City) resident
should determine his tax basis for his pro rata portion of each Bond for New
York State (and City) income tax purposes in the same manner as for federal
income tax purposes. Interest income on, as well as any gain recognized on
the disposition of, an investor's pro rata portion of the Bonds is generally
not excludable from income in computing New York State and City corporate
franchise taxes.

A-14
<PAGE>

- --------------------------------------------------------------------------------
Defined Pennsylvania Trust
- --------------------------------------------------------------------------------

PORTFOLIO DIVERSIFICATION

The Portfolio contains 6 Pennsylvania bond issues and 1 Puerto Rico bond issue.
TYPES OF BONDS

The Portfolio consists of $3,250,000 face amount of municipal bonds of the
following types:

APPROXIMATE
PORTFOLIO PERCENTAGE

/ / General Obligation Bonds 8%
/ / Hospitals/Nursing Homes/Mental Health 46%
/ / Municipal Water/Sewer Utilities 16%
/ / State/Local Gas Utilities 15%
/ / Universities/Colleges 15%

INSURANCE

Approximately 62% of the bonds are insured (see Risk Factors--Bonds Backed by
Letters of Credit or Insurance in Part B).

PORTFOLIO CONCENTRATIONS

The Portfolio is considered to be concentrated in Hospital/Nursing Home/Mental
Health bonds and is therefore dependent to a significant degree on revenues
generated from those particular activities. (See Risk Factors in Part B.) The
Portfolio is also concentrated in bonds of Pennsylvania issuers and is subject
to additional risk from decreased diversification as well as from factors that
may be particular to Pennsylvania, which are briefly described on page A-17.

- ---------------------------------------------------
Defining Your Income
- ---------------------------------------------------

WHAT YOU MAY EXPECT
(PAYABLE ON THE 25TH DAY OF THE MONTH TO HOLDERS OF RECORD ON THE 10TH DAY OF
THE MONTH):

First Distribution per unit
(August 25, 1996): $ 1.38
Regular Monthly Income per unit
(Beginning on September 25, 1996): $ 4.63
Annual Income per unit: $55.56

These figures are estimates determined as of the business day prior to the
Initial Date of Deposit and actual payments may vary.

Estimated cash flows are available upon request from the Sponsors.

- ---------------------------------------------------
Defining Your Costs
- ---------------------------------------------------

SALES CHARGE

As a % As a %
of Initial of
Offering Secondary
Period Market
Public Public
Offering Offering
Price Price
----------- -----------
Maximum Sales Charges 4.50% 5.50%

ESTIMATED ANNUAL FUND OPERATING EXPENSES

As a %
of Average
Net Assets* Per Unit
----------- -----------
Trustee's Fee .071% $ 0.69
Maximum Portfolio
Supervision and
Bookkeeping Fees .046% 0.45
Evaluator's Fee .041% 0.40
Organizational Costs .021% 0.20
Other Operating
Expenses .085% 0.83
----------- -----------
TOTAL .264% $ 2.57

- ------------
* Based on the mean of the bid and offer side evaluations.

COSTS OVER TIME

You would pay the following cumulative expenses on a $1,000 investment, assuming
a 5% annual return on the investment throughout the indicated periods:

1 Year 3 Years 5 Years 10 Years
$48 $53 $59 $77

As of July 31, 1996, the Public Offering Price was $1,020.51, based on the
aggregate offer side value of the bonds ($3,168,015.00), plus a maximum sales
charge of 4.712% on the value of the underlying bonds, plus cash ($31,000.00),
divided by the number of units outstanding (3,281). An amount equal to principal
cash, if any, as well as net accrued but undistributed interest on the unit is
added to the Public Offering Price. Sponsors' profit on deposit was $42,220.00.

The bid side redemption and secondary market repurchase price as of July 31,
1996 was $971.05 ($49.46 less than the Public Offering Price).

A-15
<PAGE>
<TABLE><CAPTION>
- --------------------------------------------------------------------------------
Defined Pennsylvania Portfolio
- --------------------------------------------------------------------------------

Municipal Investment Trust Fund
Multistate Series--212
Pennsylvania Trust August 1, 1996

OPTIONAL SINKING
RATING REFUNDING FUND
OF ISSUES REDEMPTIONS REDEMPTIONS COST
PORTFOLIO TITLE (1) (2) (2) TO FUND (3)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. $500,000 Northeastern
Pennsylvania Hosp. and Educ. Auth.,
Univ. Rev. Bonds (Wilkes Univ.),
Ser. 1993 (Asset Guaranty Ins.),
5.625%, 10/1/18 AA 10/1/04 @ 102 10/1/12 $ 477,580.00
2. $500,000 City of Philadelphia,
PA, Gas Wks. Rev. Bonds, Fifteenth
Ser. (Asset Guaranty Ins.), 5.25%,
8/1/15 AA 8/1/04 @ 102 8/1/11 457,820.00
3. $500,000 Municipal Auth. of
Westmoreland Cnty., PA, Muni. Svc.
Rev. Bonds, Ser. 1996 (Financial
Guaranty Ins.), 5.90%, 2/15/25 AAA 2/15/06 @ 100 -- 500,000.00
4. $500,000 Potter Cnty. Hosp.
Auth. PA, Hosp. Rev. Bonds (Charles
Cole Mem. Hosp.), Ser. 1996 (Asset
Guaranty Ins.), 6.05%, 8/1/24 (4) AA 8/1/06 @ 102 8/1/17 493,355.00
5. $500,000 The Hospitals and
Higher Educ. Facs. Auth. of
Philadelphia, PA, Hosp. Rev. Bonds
(Frankford Hosp.), Ser. 1993 A,
6.00%, 6/1/23 A(m) 6/1/03 @ 102 6/1/15 491,115.00
6. $500,000 The Hospitals and
Higher Educ. Facs. Auth. of
Philadelphia, PA, Hosp. Rev. Bonds
(Temple Univ. Hosp.), Ser. 1993,
6.625%, 11/15/23 A- 11/15/03 @ 102 11/15/09 513,580.00
7. $250,000 Commonwealth of Puerto
Rico, Pub. Imp. Bonds of 1996 (G.O.
Bonds), 5.40%, 7/1/25 A 7/1/06 @ 101.5 7/1/18 234,565.00
--------------
$ 3,168,015.00
--------------
--------------
</TABLE>
- ----------------------------
(1) All ratings are by Standard & Poor's Ratings Group unless followed by
('m'), which indicates a Moody's Investors Service rating or by ('f'), which
indicates a Fitch Investors Service rating. Moody's and Fitch ratings have been
furnished by the Evaluator but not confirmed with Moody's or Fitch. '++'
indicates that while there is no available rating, in the opinion of Defined
Asset Funds research analysts the bond has credit characteristics comparable to
bonds rated A or better. (see Appendix A to Part B).
(2) Bonds are first subject to optional redemptions (which may be exercised in
whole or in part) on the dates and at the prices indicated under the Optional
Refunding Redemptions column. In subsequent years, bonds are redeemable at
declining prices, but typically not below par value. Some issues may be subject
to sinking fund redemption or extraordinary redemption without premium prior to
the dates shown.
(3) Evaluation of the bonds by the Evaluator is made on the basis of current
offer side evaluation. On this basis, approximately 15% of the bonds were
deposited at a premium, 15% at par and 70% at a discount from par.
(4) This bond is a when-issued bond and is expected to settle 14 days after the
settlement date for units. The Trustee's fees and expenses will be reduced by
$0.36 per unit to compensate for interest that would have accrued on the bonds
between the settlement date for units and the actual date of delivery of the
bonds. (See Income, Distributions and Reinvestment--Income in Part B.)

A-16
<PAGE>
- --------------------------------------------------------------------------------
Pennsylvania Taxes and Risks
- --------------------------------------------------------------------------------

PENNSYLVANIA RISK FACTORS

The Commonwealth of Pennsylvania and certain of its municipal subdivisions,
including the City of Philadelphia, have undergone the financial difficulties
and pressures that accompany a decline in economic conditions. As the heavy
industries historically associated with Pennsylvania -- e.g., coal, steel and
railroad -- have declined with increasing competition from foreign producers,
the services sector, including trade, medical and health services, education and
financial institutions, has provided major new sources of growth. Agriculture
and related industries continue to be an important part of Pennsylvania's
economy.

Both the Commonwealth of Pennsylvania and the City of Philadelphia have
historically experienced significant revenue shortfalls. On the other hand,
rising demands on state programs, particularly for medical assistance and cash
assistance programs, and the increased cost of special education programs and
correction facilities and programs, have contributed to increased expenditures.
In response, the Commonwealth and the City of Philadelphia have, in recent
years, sought to balance budgets with a combination of tax increases and
expenditure restraints.

To deal with its budget deficits, Philadelphia has considered significant
service cuts and a plan to privatize certain city-provided services. In
addition, in 1991 the Commonwealth created the Pennsylvania Inter-Governmental
Cooperation Authority ('PICA'), with authority to issue notes and bonds on
behalf of Philadelphia to cover budget shortfalls, to eliminate projected
deficits and to fund capital spending. PICA has issued approximately $1.4
billion of Special Revenue Bonds on behalf of the City. However, its power to
issue bonds for the most purposes expired on December 31, 1994 and its power to
issue bonds to finance a cash flow deficit will expire on December 31, 1996.
PICA's authority to refund existing debt will not expire.

Although there can be no assurance that such conditions will continue, the
Commonwealth's general obligation bonds are currently rated AA-by Standard &
Poor's and A1 by Moody's, while Philadelphia's general obligation bonds are
rated BBB-and Baa by Standard & Poor's and Moody's, respectively.

PENNSYLVANIA TAXES

The following summarizes the opinion of Drinker Biddle & Reath,
Philadelphia, Pennsylvania, special counsel on Pennsylvania tax matters, under
existing law:

1. The Fund will be recognized as a trust and will not be taxable as a
corporation for Pennsylvania state and local tax purposes.

2. Units of the Fund are not subject to the County Personal Property Tax
presently in effect in Pennsylvania to the extent of that proportion of the Fund
represented by bonds issued by the Commonwealth of Pennsylvania, its agencies
and instrumentalities, or by any county, city, borough, town, township, school
district, municipality or local housing or parking authority in the Commonwealth
of Pennsylvania ('Pennsylvania Obligations'). Fund Units may be taxable under
the Pennsylvania inheritance and estate taxes.

3. Distributions to investors in the Fund attributable to interest from
Pennsylvania Obligations are not taxable under the Pennsylvania Personal Income
Tax or under the Corporate Net Income Tax imposed on corporations by Article IV
of the Pennsylvania Tax Reform Code, nor are such distributions taxable under
the Philadelphia School District Investment Income Tax imposed on Philadelphia
resident individuals.

4. Although there is no published authority on the subject, counsel is of
the opinion that any insurance proceeds paid in lieu of interest on defaulted
tax-exempt bonds will be exempt from the Pennsylvania Personal Income Tax either
as payment in lieu of tax-exempt interest or as payments of insurance proceeds
which are not included in any of the classes of income specified as taxable
under the Pennsylvania Personal Income Tax Law. Further, because such insurance
proceeds are excluded from the Federal income tax base, such proceeds will not
be subject to the Pennsylvania Corporate Net Income Tax. Proceeds from insurance
policies are expressly excluded from the Philadelphia School District Investment
Income Tax and, accordingly, insurance proceeds paid to replace defaulted
payments under any bonds will not be subject to that tax.

5. Distributions to investors in the Fund attributable to gain on the
disposition by the Fund of Pennsylvania Obligations (whether by sale, redemption
or payment at maturity) will be taxable under the Pennsylvania Personal Income
Tax, the Pennsylvania Corporate Income Tax, and, unless the obligation has been
held for more than six

A-17
<PAGE>
months, the Philadelphia School District Investment Income Tax. Distributions
attributable to gain on the disposition of any obligation held more than six
months will not be subject to the Philadelphia School District Investment Income
Tax.

6. To the extent the value of Units is represented by obligations of the
Commonwealth of Puerto Rico or obligations of the territory of Guam, such value
will not be subject to the Pennsylvania County Personal Property Tax to the
extent required by Federal statutes. Distributions to investors in the Fund
attributable to interest on such obligations is not taxable under any of the
Pennsylvania State and local income taxes referred to above. Distributions to
investors in the Fund attributable to gain on the disposition of such
obligations will be taxable under the Pennsylvania State and local income taxes
referred to above, except that gain on any obligation held for more than six
months is not subject to the Philadelphia School District Investment Income Tax.

7. Gain on the disposition of a Unit will be taxable under the Pennsylvania
Personal Income Tax, the Pennsylvania Corporate Income Tax, and, unless the Unit
has been held for more than six months, the Philadelphia School District
Investment Income tax. Gain on the disposition of a Unit held more than six
months will not be subject to the Philadelphia School District Investment Income
Tax.

A-18
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

The Sponsors, Trustee and Holders of Municipal Investment Trust Fund, Multistate
Series--212, Defined Asset Funds (Colorado, New Jersey, New York and
Pennsylvania Trusts) (the 'Trusts'):

We have audited the accompanying statements of condition and the related defined
portfolios included in the prospectus of the Trusts as of August 1, 1996. These
financial statements are the responsibility of the Trustee. Our responsibility
is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. Our procedures included
confirmation of cash, securities and an irrevocable letter of credit deposited
for the purchase of securities, as described in the statements of condition,
with the Trustee. An audit also includes assessing the accounting principles
used and significant estimates made by the Trustee, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of each of the Trusts as of August
1, 1996 in conformity with generally accepted accounting principles.

DELOITTE & TOUCHE LLP
New York, N.Y.
August 1, 1996
<TABLE><CAPTION>
STATEMENTS OF CONDITION AS OF AUGUST 1, 1996

TRUST PROPERTY

COLORADO NEW JERSEY NEW YORK
TRUST TRUST TRUST
-------------------- -------------------- --------------------
<S> <C> <C> <C>
Investments--Bonds and Contracts to purchase Bonds(1) $ 3,206,900.00 $ 3,158,787.50 $ 3,009,251.00
Cash 31,000.00 31,000.00 31,000.00
Accrued interest to initial date of deposit on underlying
Bonds 45,942.90 22,184.03 38,940.98
Organizational Costs(2) 3,316.00 3,281.00 3,281.00
-------------------- -------------------- --------------------
Total $ 3,287,158.90 $ 3,294,283.90 $ 3,082,472.98
-------------------- -------------------- --------------------
-------------------- -------------------- --------------------
LIABILITIES AND INTEREST OF HOLDERS
Liabilities: Advance by the Trustee for accrued
interest(3) $ 45,942.90 $ 22,184.03 $ 38,940.98
Accrued Liability(2) 3,316.00 3,281.00 3,281.00
-------------------- -------------------- --------------------
Subtotal 49,258.90 25,465.03 42,221.98
-------------------- -------------------- --------------------
Interest of Holders of units of fractional undivided
interest outstanding
(Colorado Trust--3,316; New Jersey Trust-- 3,281; New
York Trust--3,281; Pennsylvania
Trust--3,281)
Cost to investors(4) 3,389,010.12 3,338,613.66 3,182,055.82
Gross underwriting commissions(5) (151,110.12) (148,826.16) (141,804.82)
-------------------- -------------------- --------------------
Subtotal 3,237,900.00 3,189,787.50 3,040,251.00
-------------------- -------------------- --------------------
Total $ 3,287,158.90 $ 3,215,252.53 $ 3,082,472.98
-------------------- -------------------- --------------------
-------------------- -------------------- --------------------
<CAPTION>
PENNSYLVANIA
TRUST
--------------------
<S> <C>
Investments--Bonds and Contracts to purchase Bonds(1) $ 3,168,015.00
Cash 31,000.00
Accrued interest to initial date of deposit on underlying
Bonds 23,804.16
Organizational Costs(2) 3,281.00
--------------------
Total $ 3,226,100.16
--------------------
--------------------
LIABILITIES AND INTEREST OF HOLDERS
Liabilities: Advance by the Trustee for accrued
interest(3) $ 23,804.16
Accrued Liability(2) 3,281.00
--------------------
Subtotal 27,085.16
--------------------
Interest of Holders of units of fractional undivided
interest outstanding
(Colorado Trust--3,316; New Jersey Trust-- 3,281; New
York Trust--3,281; Pennsylvania
Trust--3,281)
Cost to investors(4) 3,348,300.50
Gross underwriting commissions(5) (149,285.50)
--------------------
Subtotal 3,199,015.00
--------------------
Total $ 3,226,100.16
--------------------
--------------------
</TABLE>

- ------------
(1) Aggregate cost to the Fund of the bonds listed under each Defined
Portfolio is based upon the offer side evaluation determined by the Evaluator at
the evaluation time on the business day prior to the initial date of deposit.
The contracts to purchase the bonds are collateralized by an irrevocable letter
of credit which has been issued by Development Bank of Singapore Ltd., New York
Agency, in the amount of $10,562,814.71 deposited with the Trustee. The amount
of the letter of credit includes $10,455,923.00 for the purchase of $11,035,000
face amount of the bonds, plus $106,891.71 for accrued interest.
(2) This represents a portion of the Trust's organizational costs, which
will be deferred and amortized over five years.
(3) Representing a special distribution to the Sponsors by the Trustee
of an amount equal to the accrued interest on the bonds as of the initial date
of deposit.
(4) Aggregate public offering price (exclusive of interest) computed on
the basis of the offer side evaluation of the underlying bonds as of the
evaluation time on the business day prior to the Initial Date of Deposit (3:30
p.m., Eastern time).
(5) Assumes the maximum sales charge of 4.50% of the Public Offering
Price (4.712% of the value of the bonds).

A-19

<PAGE>

<TABLE><CAPTION>
- --------------------------------------------------------------------------------
TAX-FREE VS. TAXABLE INCOME: A COMPARISON OF TAXABLE AND TAX-FREE YIELDS

FOR COLORADO RESIDENTS
- --------------------------------------------------------------------------------
COMBINED
EFFECTIVE
TAXABLE INCOME 1996* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 4% 4.5% 5% 5.5% 6% 6.5% 7% 7.5% 8%
IS EQUIVALENT TO A TAXABLE YIELD OF
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0- 24,000 $ 0- 40,100 19.25 4.95 5.57 6.19 6.81 7.43 8.05 8.67 9.29 9.91
$ 24,000- 58,150 $ 40,100- 96,900 31.60 5.85 6.58 7.31 8.04 8.77 9.50 10.23 10.96 11.70
$ 58,150-121,300 $ 96,900-147,700 34.45 6.10 6.86 7.63 8.39 9.15 9.92 10.68 11.44 12.20
$ 121,300-263,750 $ 147,700-263,750 39.20 6.58 7.40 8.22 9.05 9.87 10.69 11.51 12.34 13.16
OVER $263,750 OVER $263,750 42.62 6.97 7.84 8.71 9.59 10.46 11.33 12.20 13.07 13.94

<CAPTION>
FOR NEW JERSEY RESIDENTS
- --------------------------------------------------------------------------------
COMBINED
EFFECTIVE
TAXABLE INCOME 1996* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 4% 4.5% 5% 5.5% 6% 6.5% 7% 7.5% 8%
IS EQUIVALENT TO A TAXABLE YIELD OF
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 24,000 $ 0- 40,100 16.49 4.79 5.39 5.99 6.59 7.18 7.78 8.38 8.98 9.58
$ 24,000- 58,150 $ 40,100- 96,900 31.98 5.88 6.62 7.35 8.09 8.82 9.56 10.29 11.03 11.76
$ 96,900-147,700 34.81 6.14 6.90 7.67 8.44 9.20 9.97 10.74 11.51 12.27
$ 58,150-121,300 35.40 6.19 6.97 7.74 8.51 9.29 10.06 10.84 11.61 12.38
$ 121,300-263,750 $ 147,700-263,750 40.08 6.68 7.51 8.34 9.18 10.01 10.85 11.68 12.52 13.35
OVER $263,750 OVER $263,750 43.45 7.07 7.96 8.84 9.73 10.61 11.49 12.38 13.26 14.15
</TABLE>

To compare the yield of a taxable security with the yield of a tax-free
security, find your taxable income and read across. Yield figures are for
example only. The table incorporates 1996 federal and applicable State income
tax rates and assumes that all income would otherwise be taxed at the investor's
highest tax rate. Yield figures are for example only.

*Based upon net amount subject to federal income tax after deductions and
exemptions. This table does not reflect the possible effect of other tax
factors, such as alternative minimum tax, personal exemptions, the phase out of
exemptions, itemized deductions or the possible partial disallowance of
deductions. Consequently, investors are urged to consult their own tax advisers
in this regard.

A-20
<PAGE>

<TABLE><CAPTION>
- --------------------------------------------------------------------------------
TAX-FREE VS. TAXABLE INCOME: A COMPARISON OF TAXABLE AND TAX-FREE YIELDS

FOR NEW YORK CITY RESIDENTS
- --------------------------------------------------------------------------------
COMBINED
EFFECTIVE
TAXABLE INCOME 1996* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 4% 4.5% 5% 5.5% 6% 6.5% 7% 7.5% 8%
IS EQUIVALENT TO A TAXABLE YIELD OF
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 24,000 $ 0- 40,100 24.22 5.28 5.94 6.60 7.26 7.92 8.58 9.24 9.90 10.56
$ 24,000- 58,150 $ 40,100- 96,900 35.82 6.23 7.01 7.79 8.57 9.35 10.13 10.91 11.69 12.46
$ 58,150-121,300 $ 96,900-147,700 38.53 6.51 7.32 8.13 8.95 9.76 10.57 11.39 12.20 13.01
$ 121,300-263,750 $ 147,700-263,750 42.98 7.02 7.89 8.77 9.65 10.52 11.40 12.28 13.15 14.03
OVER $263,750 OVER $263,750 46.19 7.43 8.36 9.29 10.22 11.15 12.08 13.01 13.94 14.87

<CAPTION>
FOR NEW YORK STATE RESIDENTS
- --------------------------------------------------------------------------------
COMBINED
EFFECTIVE
TAXABLE INCOME 1996* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 4% 4.5% 5% 5.5% 6% 6.5% 7% 7.5% 8%
IS EQUIVALENT TO A TAXABLE YIELD OF
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 24,000 $ 0- 40,100 20.95 5.06 5.69 6.33 6.96 7.59 8.22 8.86 9.49 10.12
$ 24,000- 58,150 $ 40,100- 96,900 33.04 5.97 6.72 7.47 8.21 8.96 9.71 10.45 11.20 11.95
$ 58,150-121,300 $ 96,900-147,700 35.83 6.23 7.01 7.79 8.57 9.35 10.13 10.91 11.69 12.47
$ 121,300-263,750 $ 147,700-263,750 40.48 6.72 7.56 8.40 9.24 10.08 10.92 11.76 12.60 13.44
OVER $263,750 OVER $263,750 43.83 7.12 8.01 8.90 9.79 10.68 11.57 12.46 13.35 14.24

<CAPTION>
FOR PENNSYLVANIA RESIDENTS
- --------------------------------------------------------------------------------
COMBINED
EFFECTIVE
TAXABLE INCOME 1996* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 4% 4.5% 5% 5.5% 6% 6.5% 7% 7.5% 8%
IS EQUIVALENT TO A TAXABLE YIELD OF
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 24,000 $ 0- 40,100 17.38 4.84 5.45 6.05 6.66 7.26 7.87 8.47 9.08 9.68
$ 24,000- 58,150 $ 40,100- 96,900 30.02 5.72 6.43 7.14 7.86 8.57 9.29 10.00 10.72 11.43
$ 58,150-121,300 $ 96,900-147,700 32.93 5.96 6.71 7.46 8.20 8.95 9.69 10.44 11.18 11.93
$ 121,300-263,750 $ 147,700-263,750 37.79 6.43 7.23 8.04 8.84 9.65 10.45 11.25 12.06 12.86
OVER $263,750 OVER $263,750 41.29 6.81 7.66 8.52 9.37 10.22 11.07 11.92 12.77 13.63
</TABLE>

To compare the yield of a taxable security with the yield of a tax-free
security, find your taxable income and read across. Yield figures are for
example only. The table incorporates 1996 federal and applicable State (and
City) income tax rates and assumes that all income would otherwise be taxed at
the investor's highest tax rate. Yield figures are for example only.

A-21
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND
MULTISTATE SERIES
DEFINED ASSET FUNDS
I want to learn more about automatic reinvestment in the Investment Accumulation
Program. Please send me information about participation in the Municipal Fund
Accumulation Program, Inc. and a current Prospectus.
My name (please
print) ________________________________________________________________________
My address (please print):
Street and Apt.
No. ___________________________________________________________________________
City, State, Zip
Code __________________________________________________________________________
This page is a self-mailer. Please complete the information above, cut along the
dotted line, fold along the lines on the reverse side, tape, and mail with the
Trustee's address displayed on the outside.
<PAGE>

BUSINESS REPLY MAIL NO POSTAGE
FIRST CLASS PERMIT NO. 644 NEW YORK, NY NECESSARY
IF MAILED
POSTAGE WILL BE PAID BY ADDRESSEE IN THE
THE CHASE MANHATTAN BANK UNITED STATES
RETAIL PROCESSING DEPARTMENT
770 BROADWAY--7th FLOOR
NEW YORK, NY 10003-9598

- --------------------------------------------------------------------------------
(Fold along this line.)

<PAGE>
DEFINED ASSET FUNDSSM
PROSPECTUS--PART B
DEFINED ASSET FUNDS MUNICIPAL SERIES
MUNICIPAL INVESTMENT TRUST FUND
FURTHER DETAIL REGARDING ANY OF THE INFORMATION PROVIDED IN THE PROSPECTUS MAY
BE OBTAINED
WITHIN FIVE DAYS BY WRITING OR CALLING THE TRUSTEE, THE ADDRESS AND
TELEPHONE NUMBER OF WHICH ARE SET FORTH ON THE BACK COVER OF PART A OF THIS
PROSPECTUS.

Index

PAGE
----
Fund Description........................... 1
Risk Factors............................... 2
How to Buy Units........................... 8
How to Sell Units.......................... 10
Income, Distributions and Reinvestment..... 11
Fund Expenses.............................. 12
Taxes...................................... 12
Records and Reports........................ 13
PAGE
----
Trust Indenture............................ 14
Miscellaneous.............................. 14
Exchange Option............................ 16
Supplemental Information................... 17
Appendix A--Description of Ratings......... a-1
Appendix B--Sales Charge Schedules for
Defined Asset Funds Municipal Series..... b-1
Appendix C--Sales Charge Schedules for
Municipal Investment Trust Fund.......... c-1

FUND DESCRIPTION

BOND PORTFOLIO SELECTION

Professional buyers and research analysts for Defined Asset Funds, with
access to extensive research, selected the Bonds for the Portfolio after
considering the Fund's investment objective as well as the quality of the Bonds
(all Bonds in the Portfolio are initially rated in the category A or better by
at least one nationally recognized rating organization or have comparable credit
characteristics), the yield and price of the Bonds compared to similar
securities, the maturities of the Bonds and the diversification of the
Portfolio. Only issues meeting these stringent criteria of the Defined Asset
Funds team of dedicated research analysts are included in the Portfolio. No
leverage or borrowing is used nor does the Portfolio contain other kinds of
securities to enhance yield. A summary of the Bonds in the Portfolio appears in
Part A of the Prospectus. In a Fund that includes multiple Trusts or Portfolios,
the word Fund should be understood to mean each individual Trust or Portfolio.

The deposit of the Bonds in the Fund on the initial date of deposit
established a proportionate relationship among the face amounts of the Bonds.
During the 90-day period following the initial date of deposit the Sponsors may
deposit additional Bonds in order to create new Units, maintaining to the extent
possible that original proportionate relationship. Deposits of additional Bonds
subsequent to the 90-day period must generally replicate exactly the
proportionate relationship among the face amounts of the Bonds at the end of the
initial 90-day period.

Yields on bonds depend on many factors including general conditions of the
bond markets, the size of a particular offering and the maturity and quality
rating of the particular issues. Yields can vary among bonds with similar
maturities, coupons and ratings. Ratings represent opinions of the rating
organizations as to the quality of the bonds rated, based on the credit of the
issuer or any guarantor, insurer or other credit provider, but these ratings are
only general standards of quality (see Appendix A).

After the initial date of deposit, the ratings of some Bonds may be reduced
or withdrawn, or the credit characteristics of the Bonds may no longer be
comparable to bonds rated A or better. Bonds rated BBB or Baa (the lowest
investment grade rating) or lower may have speculative characteristics, and
changes in economic conditions or other circumstances are more likely to lead
to a weakened capacity to make principal and interest

1
<PAGE>
payments than is the case with higher grade bonds. Bonds rated
below investment grade or unrated bonds with similar credit characteristics are
often subject to greater market fluctuations and risk of loss of principal and
income than higher grade bonds and their value may decline precipitously in
response to rising interest rates.

Because each Defined Asset Fund is a preselected portfolio of bonds, you
know the securities, maturities, call dates and ratings before you invest. Of
course, the Portfolio will change somewhat over time, as Bonds mature, are
redeemed or are sold to meet Unit redemptions or in other limited circumstances.
Because the Portfolio is not actively managed and principal is returned as the
Bonds are disposed of, this principal should be relatively unaffected by changes
in interest rates.

BOND PORTFOLIO SUPERVISION

The Fund follows a buy and hold investment strategy in contrast to the
frequent portfolio changes of a managed fund based on economic, financial and
market analyses. The Fund may retain an issuer's bonds despite adverse financial
developments. Experienced financial analysts regularly review the Portfolio and
a Bond may be sold in certain circumstances including the occurrence of a
default in payment or other default on the Bond, a decline in the projected
income pledged for debt service on a revenue bond, institution of certain legal
proceedings, if the Bond becomes taxable or is otherwise inconsistent with the
Fund's investment objectives, a decline in the price of the Bond or the
occurrence of other market or credit factors (including advance refunding) that,
in the opinion of Defined Asset Funds research analysts, makes retention of the
Bond detrimental to the interests of investors. The Trustee must generally
reject any offer by an issuer of a Bond to exchange another security pursuant to
a refunding or refinancing plan.

The Sponsors and the Trustee are not liable for any default or defect in a
Bond. If a contract to purchase any Bond fails, the Sponsors may generally
deposit a replacement bond so long as it is a tax-exempt bond, has a fixed
maturity or disposition date substantially similar to the failed Bond and is
rated A or better by at least one nationally recognized rating organization or
has comparable credit characteristics. A replacement bond must be deposited
within 110 days after deposit of the failed contract, at a cost that does not
exceed the funds reserved for purchasing the failed Bond and at a yield to
maturity and current return substantially equivalent (considering then current
market conditions and relative creditworthiness) to those of the failed Bond, as
of the date the failed contract was deposited.

RISK FACTORS

An investment in the Fund entails certain risks, including the risk that the
value of your investment will decline with increases in interest rates.
Generally speaking, bonds with longer maturities will fluctuate in value more
than bonds with shorter maturities. In recent years there have been wide
fluctuations in interest rates and in the value of fixed-rate bonds generally.
The Sponsors cannot predict the direction or scope of any future fluctuations.

Certain of the Bonds may have been deposited at a market discount or premium
principally because their interest rates are lower or higher than prevailing
rates on comparable debt securities. The current returns of market discount
bonds are lower than comparably rated bonds selling at par because discount
bonds tend to increase in market value as they approach maturity. The current
returns of market premium bonds are higher than comparably rated bonds selling
at par because premium bonds tend to decrease in market value as they approach
maturity. Because part of the purchase price is returned through current income
payments and not at maturity, an early redemption at par of a premium bond will
result in a reduction in yield to the Fund. Market premium or discount
attributable to interest rate changes does not indicate market confidence or
lack of confidence in the issue.

Certain Bonds deposited into the Fund may have been acquired on a
when-issued or delayed delivery basis. The purchase price for these Bonds is
determined prior to their delivery to the Fund and a gain or loss may result
from fluctuations in the value of the Bonds. Additionally, in any Defined Asset
Funds Municipal Series, if the value of the Bonds reserved for payment of the
periodic deferred sales charge, together with the interest thereon, were to
become insufficient to pay these charges, additional bonds would be required to
be sold.

The Fund may be concentrated in one or more of types of bonds. Concentration
in a State may involve additional risk because of the decreased diversification
of economic, political, financial and market risks. Set forth below is a brief
description of certain risks associated with bonds which may be held by the
Fund. Additional

2
<PAGE>
information is contained in the Information Supplement which is
available from the Trustee at no charge to the investor.

GENERAL OBLIGATION BONDS

Certain of the Bonds may be general obligations of a governmental entity.
General obligation bonds are backed by the issuer's pledge of its full faith,
credit and taxing power for the payment of principal and interest. However, the
taxing power of any governmental entity may be limited by provisions of state
constitutions or laws and its credit will depend on many factors, including an
erosion of the tax base resulting from population declines, natural disasters,
declines in the state's industrial base or an inability to attract new
industries, economic limits on the ability to tax without eroding the tax base
and the extent to which the entity relies on federal or state aid, access to
capital markets or other factors beyond the entity's control. In addition,
political restrictions on the ability to tax and budgetary constraints affecting
state governmental aid may have an adverse impact on the creditworthiness of
cities, counties, school districts and other local governmental units.

As a result of the recent recession's adverse impact upon both revenues and
expenditures, as well as other factors, many state and local governments have
confronted deficits which were the most severe in recent years. Many issuers are
facing highly difficult choices about significant tax increases and spending
reductions in order to restore budgetary balance. The failure to implement these
actions on a timely basis could force these issuers to issue additional debt to
finance deficits or cash flow needs and could lead to a reduction of their bond
ratings and the value of their outstanding bonds.

MORAL OBLIGATION BONDS

The Portfolio may include 'moral obligation' bonds. If an issuer of moral
obligation bonds is unable to meet its obligations, the repayment of the bonds
becomes a moral commitment but not a legal obligation of the state or local
government in question. Even though the state or local government may be called
on to restore any deficits in capital reserve funds of the agencies or
authorities which issued the bonds, any restoration generally requires
appropriation by the state or local legislature and does not constitute a
legally enforceable obligation or debt of the state or local government. The
agencies or authorities generally have no taxing power.

REFUNDED BONDS

Refunded bonds are typically secured by direct obligations of the U.S.
Government or in some cases obligations guaranteed by the U.S. Government placed
in an escrow account maintained by an independent trustee until maturity or a
predetermined redemption date. These obligations are generally noncallable prior
to maturity or the predetermined redemption date. In a few isolated instances,
however, bonds which were thought to be escrowed to maturity have been called
for redemption prior to maturity.

MUNICIPAL REVENUE BONDS

Municipal revenue bonds are tax-exempt securities issued by states,
municipalities, public authorities or similar entities to finance the cost of
acquiring, constructing or improving various projects. Municipal revenue bonds
are not general obligations of governmental entities backed by their taxing
power and payment is generally solely dependent upon the creditworthiness of the
public issuer or the financed project or state appropriations. Examples of
municipal revenue bonds are:

Municipal utility bonds, including electrical, water and sewer revenue
bonds, whose payments are dependent on various factors, including the rates
the utilities may charge, the demand for their services and their operating
costs, including expenses to comply with environmental legislation and other
energy and licensing laws and regulations. Utilities are particularly
sensitive to, among other things, the effects of inflation on operating and
construction costs, the unpredictability of future usage requirements, the
costs and availability of fuel and, with certain electric utilities, the
risks associated with the nuclear industry. The movement to introduce
competition in the investor-owned electric utility industry is likely to
indirectly affect municipal utility systems by inducing them to maintain
rates as low as possible. In this effort to keep rates low, municipal
utilities may have more trouble raising rates to completely recover
investment in generating plant;

Lease rental bonds which are generally issued by governmental financing
authorities with no direct taxing power for the purchase of equipment or
construction of buildings that will be used by a state or local

3
<PAGE>
government. Lease rental bonds are generally subject to an annual risk
that the lessee government might not appropriate funds for the
leasing rental payments to service the bonds and may also be
subject to the risk that rental obligations may terminate in
the event of damage to or destruction or condemnation of the
equipment or building;

Multi-family housing revenue bonds and single family mortgage revenue
bonds which are issued to provide financing for various housing projects and
which are payable primarily from the revenues derived from mortgage loans to
housing projects for low to moderate income families or notes secured by
mortgages on residences; repayment of this type of bond is therefore
dependent upon, among other things, occupancy levels, rental income, the
rate of default on underlying mortgage loans, the ability of mortgage
insurers to pay claims, the continued availability of federal, state or
local housing subsidy programs, economic conditions in local markets,
construction costs, taxes, utility costs and other operating expenses and
the managerial ability of project managers. Housing bonds are generally
prepayable at any time and therefore their average life will ordinarily be
less than their stated maturities;

Hospital, mental health and nursing home facility bonds whose payments
are dependent upon revenues of hospitals and other health care facilities.
These revenues come from private third-party payors and government programs,
including the Medicare and Medicaid programs, which have generally
undertaken cost containment measures to limit payments to health care
facilities. Hospitals and health care facilities are subject to various
legal claims by patients and others and are adversely affected by increasing
costs of insurance. The Internal Revenue Service has been engaged in a
program of intensive audits of certain large tax-exempt hospital and health
care facility organizations. Although these audits have not yet been
completed, it has been reported that the tax-exempt status of some of these
organizations may be revoked;

Airport, port, highway and transit authority revenue bonds which are
dependent for payment on revenues from the financed projects, including user
fees from ports and airports, tolls on turnpikes and bridges, rents from
buildings, transit fare revenues and additional financial resources
including federal and state subsidies, lease rentals paid by state or local
governments or a pledge of a special tax such as a sales tax or a property
tax. In the case of the air travel industry, airport income is largely
affected by the airlines' ability to meet their obligations under use
agreements which in turn is affected by increased competition among
airlines, excess capacity and increased fuel costs, among other factors;

Solid waste disposal bonds which are generally payable from dumping and
user fees and from revenues that may be earned by the facility on the sale
of electrical energy generated in the combustion of waste products and which
are therefore dependent upon the ability of municipalities to fully utilize
the facilities, sufficient supply of waste for disposal, economic or
population growth, the level of construction and maintenance costs, the
existence of lower-cost alternative modes of waste processing and increasing
environmental regulation. A recent decision of the U.S. Supreme Court
limiting a municipality's ability to require use of its facilities may have
an adverse affect on the credit quality of various issues of these bonds;

Special tax bonds which are not secured by general tax revenues but are
only payable from and secured by the revenues derived by a municipality from
a particular tax--for example, a tax on the rental of a hotel room, on the
purchase of food and beverages, on the rental of automobiles or on the
consumption of liquor and may therefore be adversely affected by a reduction
in revenues resulting from a decline in the local economy or population or a
decline in the consumption, use or cost of the goods and services that are
subject to taxation;

Student loan revenue bonds which are typically secured by pledges of new
or existing student loans. The loans, in turn, are generally either
guaranteed by eligible guarantors and reinsured by the Secretary of the U.S.
Department of Education, directly insured by the federal government, or
financed as part of supplemental or alternative loan programs within a state
(e.g., loan repayments are not guaranteed). These bonds often permit the
issuer to enter into interest rate swap agreements with eligible
counterparties in which event the bonds are subject to the additional risk
of the counterparty's ability to fulfill its swap obligation;

University and college bonds, the payments on which are dependent upon
various factors, including the size and diversity of their sources of
revenues, enrollment, reputation, the availability of endowments and other
funds and, in the case of public institutions, the financial condition of
the relevant state or other governmental entity and its policies with
respect to education; and

4
<PAGE>
Tax increment and tax allocation bonds, which are secured by ad valorem
taxes imposed on the incremental increase of taxable assessed valuation of
property within a jurisdiction above an established base of assessed value.
The issuers of these bonds do not have general taxing authority and the tax
assessments on which the taxes used to service the bonds are based may be
subject to devaluation due to market price declines or governmental action.

Puerto Rico. Certain Bonds may be affected by general economic conditions in
the Commonwealth of Puerto Rico. Puerto Rico's economy is largely dependent for
its development on federal programs, and current federal budgetary policies
suggest that an expansion of its programs is unlikely. Reductions in federal tax
benefits or incentives or curtailment of spending programs could adversely
affect the Puerto Rican economy.

Industrial Development Revenue Bonds. Industrial development revenue bonds
are municipal obligations issued to finance various privately operated projects
including pollution control and manufacturing facilities. Payment is generally
solely dependent upon the creditworthiness of the corporate operator of the
project and, in certain cases, an affiliated or third party guarantor and may be
affected by economic factors relating to the particular industry as well as
varying degrees of governmental regulation. In many cases industrial revenue
bonds do not have the benefit of covenants which would prevent the corporations
from engaging in capital restructurings or borrowing transactions which could
reduce their ability to meet their obligations and result in a reduction in the
value of the Portfolio.

BONDS BACKED BY REPURCHASE COMMITMENTS

Certain Funds contain Bonds that were purchased from commercial banks,
savings banks, savings and loan associations or other institutions (thrifts)
that had held the Bonds in their investment portfolios prior to selling the
Bonds to the Fund. These banks or thrifts (the Sellers) have committed to
repurchase the Bonds from the Fund in certain circumstances. In some cases a
Seller's Repurchase Commitments may be backed by a security interest in
collateral or by a letter of credit (see Bonds Backed by Letters of Credit or
Insurance below).

A Seller may have committed to repurchase any Bond sold by it if necessary
to satisfy investors' unit redemption requests (a Liquidity Repurchase). A
Seller may also have committed to repurchase any Bond sold by it if the issuer
of the Bond fails to make payments of interest or principal on the Bond (a
Default Repurchase) or if the issuer becomes or is deemed to be bankrupt or
insolvent (an Insolvency Repurchase). A Seller may have committed to repurchase
any Bond if the interest on that Bond becomes taxable (a Tax Repurchase).
Investors should realize that they are subject to having all or a portion of the
principal amount of their investment returned prior to termination of the Fund
if any of these situations occurs. A Seller may also have committed to
repurchase the Bonds sold by it on their scheduled disposition dates (as shown
under Portfolio in Part A) (a Disposition Repurchase). The price at which any of
these repurchases will occur (the Put Price) is shown in Part A of the
Prospectus. Any collateral securing any of the Repurchase Commitments may
consist of mortgage-backed securities issued by GNMA (Ginnie Maes), FNMA (Fannie
Maes) or FHLMC (Freddie Macs); mortgages; municipal obligations; corporate
obligations; U.S. government securities; and cash.

Investors in a Fund containing any of these credit-supported Bonds should be
aware that many thrifts have failed in recent years and that the thrift industry
generally has experienced severe strains. New federal legislation has resulted
that imposes many new limitations on the ways banks and thrifts may do business
and mandates aggressive, early intervention into unhealthy institutions. One
result of this legislation is an increased possibility of early payment of the
principal amount of an investment in Bonds backed by collateralized letters of
credit or repurchase commitments if a Seller becomes or is deemed to be
insolvent.

BONDS BACKED BY LETTERS OF CREDIT OR INSURANCE

Certain Bonds may be secured by letters of credit issued by commercial banks
or savings banks, savings and loan associations and similar thrift institutions
or are direct obligations of banks or thrifts. The letter of credit may be drawn
upon, and the Bonds redeemed, if an issuer fails to pay amounts due on the Bonds
or, in certain cases, if the interest on the Bond becomes taxable. Letters of
credit are irrevocable obligations of the issuing institutions. The
profitability of a financial institution is largely dependent upon the credit
quality of its loan portfolio which, in turn, is affected by the institution's
underwriting criteria, concentrations within the portfolio and specific industry
and general economic conditions. The operating performance of financial
institutions is also

5
<PAGE>
impacted by changes in interest rates, the availability and
cost of funds, the intensity of competition and the degree of governmental
regulation.

Certain Bonds may be insured or guaranteed by insurance companies listed
below. The claims-paying ability of each of these companies, unless otherwise
indicated, was rated AAA by Standard & Poor's or another nationally recognized
rating organization at the time the insured Bonds were purchased by the Fund.
The ratings are subject to change at any time at the discretion of the rating
agencies. In the event that the rating of an Insured Fund is reduced, the
Sponsors are authorized to direct the Trustee to obtain other insurance on
behalf of the Fund. The insurance policies guarantee the timely payment of
principal and interest on the Bonds but do not guarantee their market value or
the value of the Units. The insurance policies generally do not provide for
accelerated payments of principal or cover redemptions resulting from events of
taxability.

The following summary information relating to the listed insurance
companies has been obtained from publicly available information:

<TABLE><CAPTION>
FINANCIAL INFORMATION
AS OF DECEMBER 31, 1995
(IN MILLIONS OF DOLLARS)
--------------------------------
DATE ADMITTED POLICYHOLDERS'
NAME ESTABLISHED ASSETS SURPLUS
- ------------------------------------------- ------------- ------------ ----------------
<S> <C> <C> <C>
AMBAC Indemnity Corporation................ 1970 $ 2,204 $ 792
Asset Guaranty Insurance Co. (AA by S&P)... 1988 198 80
Capital Markets Assurance Corp. (CAPMAC) 1987 284 195
Connie Lee Insurance Company............... 1987 214 110
Continental Casualty Company (A+ by S&P)... 1948 25,573 3,989
Financial Guaranty Insurance Company....... 1984 2,282 1,002
Financial Security Assurance Inc. (FSA)
(including Financial Security Assurance
of Maryland Inc. (FSAM) (formerly Capital
Guaranty Insurance Company).............. 1984 1,083 461
Firemen's Insurance Company of Newark, NJ
(A-by S&P) 1855 2,030 421
Industrial Indemnity Co. (HIBI)
(A+ by S&P).............................. 1920 1,613 297
MBIA Insurance Corporation................. 1986 3,814 1,274
</TABLE>

Insurance companies are subject to extensive regulation and supervision
where they do business by state insurance commissioners who regulate the
standards of solvency which must be maintained, the nature of and limitations on
investments, reports of financial condition, and requirements regarding reserves
for unearned premiums, losses and other matters. A significant portion of the
assets of insurance companies are required by law to be held in reserve against
potential claims on policies and is not available to general creditors. Although
the federal government does not regulate the business of insurance, federal
initiatives including pension regulation, controls on medical care costs,
minimum standards for no-fault automobile insurance, national health insurance,
tax law changes affecting life insurance companies and repeal of the antitrust
exemption for the insurance business can significantly impact the insurance
business.

STATE RISK FACTORS

Investment in a single State Trust, as opposed to a Fund which invests in
the obligations of several states, may involve some additional risk due to the
decreased diversification of economic, political, financial and market risks. A
brief description of the factors which may affect the financial condition of the
applicable State for any State Trust, together with a summary of tax
considerations relating to that State, appear in Part A of the Prospectus;
further information is contained in the Information Supplement.

LITIGATION AND LEGISLATION

The Sponsors do not know of any pending litigation as of the initial date of
deposit which might reasonably be expected to have a material adverse effect
upon the Fund. At any time after the initial date of deposit, litigation

6
<PAGE>
may be initiated on a variety of grounds, or legislation may be enacted,
affecting the Bonds in the Fund. Litigation, for example, challenging the
issuance of pollution control revenue bonds under environmental protection
statutes may affect the validity of certain Bonds or the tax-free nature of
their interest. While the outcome of litigation of this nature can never be
entirely predicted, opinions of bond counsel are delivered on the date of
issuance of each Bond to the effect that it has been validly issued and that
the interest thereon is exempt from federal income tax. From time to time,
proposals are introduced in Congress to, among other things, reduce federal
income tax rates, impose a flat tax, exempt investment income from tax or
abolish the federal income tax and replace it with another form of tax.
Enactment of any such legislation could adversely affect the value of the
Units. The Fund, however, cannot predict what legislation, if any, in respect
of tax rates may be proposed, nor can it predict which proposals, if any,
might be enacted.

Also, certain proposals, in the form of state legislative proposals or voter
initiatives, seeking to limit real property taxes have been introduced in
various states, and an amendment to the constitution of the State of California,
providing for strict limitations on real property taxes, has had a significant
impact on the taxing powers of local governments and on the financial condition
of school districts and local governments in California. In addition, other
factors may arise from time to time which potentially may impair the ability of
issuers to make payments due on the Bonds. Under the Federal Bankruptcy Code,
for example, municipal bond issuers, as well as any underlying corporate
obligors or guarantors, may proceed to restructure or otherwise alter the terms
of their obligations.

From time to time Congress considers proposals to prospectively and
retroactively tax the interest on state and local obligations, such as the
Bonds. The Supreme Court clarified in South Carolina v. Baker (decided on April
20, 1988) that the U.S. Constitution does not prohibit Congress from passing a
nondiscriminatory tax on interest on state and local obligations. This type of
legislation, if enacted into law, could require investors to pay income tax on
interest from the Bonds and could adversely affect an investment in Units. See
Taxes.

PAYMENT OF THE BONDS AND LIFE OF THE FUND

The size and composition of the Portfolio will change over time. Most of the
Bonds are subject to redemption prior to their stated maturity dates pursuant to
optional refunding or sinking fund redemption provisions or otherwise. In
general, optional refunding redemption provisions are more likely to be
exercised when the value of a Bond is at a premium over par than when it is at a
discount from par. Some Bonds may be subject to sinking fund and extraordinary
redemption provisions which may commence early in the life of the Fund.
Additionally, the size and composition of the Fund will be affected by the level
of redemptions of Units that may occur from time to time. Principally, this will
depend upon the number of investors seeking to sell or redeem their Units and
whether or not the Sponsors are able to sell the Units acquired by them in the
secondary market. As a result, Units offered in the secondary market may not
represent the same face amount of Bonds as on the initial date of deposit.
Factors that the Sponsors will consider in determining whether or not to sell
Units acquired in the secondary market include the diversity of the Portfolio,
the size of the Fund relative to its original size, the ratio of Fund expenses
to income, the Fund's current and long-term returns, the degree to which Units
may be selling at a premium over par and the cost of maintaining a current
prospectus for the Fund. These factors may also lead the Sponsors to seek to
terminate the Fund earlier than its mandatory termination date.

FUND TERMINATION

The Fund will be terminated no later than the mandatory termination date
specified in Part A of the Prospectus. It will terminate earlier upon the
disposition of the last Bond or upon the consent of investors holding 51% of the
Units. The Fund may also be terminated earlier by the Sponsors once the total
assets of the Fund have fallen below the minimum value specified in Part A of
the Prospectus. A decision by the Sponsors to terminate the Fund early will be
based on factors similar to those considered by the Sponsors in determining
whether to continue the sale of Units in the secondary market.

Notice of impending termination will be provided to investors and thereafter
units will no longer be redeemable. On or shortly before termination, the Fund
will seek to dispose of any Bonds remaining in the Portfolio although any Bond
unable to be sold at a reasonable price may continue to be held by the Trustee
in a liquidating trust pending its final disposition. A proportional share of
the expenses associated with termination, including brokerage costs in disposing
of Bonds, will be borne by investors remaining at that time. This may have the
effect of reducing the amount of proceeds those investors are to receive in any
final distribution.

7
<PAGE>
LIQUIDITY

Up to 40% of the value of the Portfolio may be attributable to guarantees or
similar security provided by corporate entities. These guarantees or other
security may constitute restricted securities that cannot be sold publicly by
the Trustee without registration under the Securities Act of 1933, as amended.
The Sponsors nevertheless believe that, should a sale of the Bonds guaranteed or
secured be necessary in order to meet redemption of Units, the Trustee should be
able to consummate a sale with institutional investors.

The principal trading market for the Bonds will generally be in the
over-the-counter market and the existence of a liquid trading market for the
Bonds may depend on whether dealers will make a market in them. There can be no
assurance that a liquid trading market will exist for any of the Bonds,
especially since the Fund may be restricted under the Investment Company Act
of 1940 from selling Bonds to any Sponsor. The value of the Portfolio will be
adversely affected if trading markets for the Bonds are limited or absent.

HOW TO BUY UNITS

Units are available from any of the Sponsors, Underwriters and other
broker-dealers at the Public Offering Price plus accrued interest on the Units.
The Public Offering Price varies each Business Day with changes in the value of
the Portfolio and other assets and liabilities of the Fund.

Net accrued interest and principal cash, if any, are added to the Public
Offering Price, the Sponsors' Repurchase Price and the Redemption Price per
Unit. This represents the interest accrued on the Bonds, net of Fund expenses,
from the initial date of deposit to, but not including, the settlement date for
Units (less any prior distributions of interest income to investors). Bonds
deposited also carry accrued but unpaid interest up to the initial date of
deposit. To avoid having investors pay this additional accrued interest (which
earns no return) when they purchase Units, the Trustee advances and distributes
this amount to the Sponsors; it recovers this advance from interest received on
the Bonds. Because of varying interest payment dates on the Bonds, accrued
interest at any time will exceed the interest actually received by the Fund.

Because accrued interest on the Bonds is not received by the Fund at a
constant rate throughout the year, any Monthly Income Distribution may be more
or less than the interest actually received by the Fund. To eliminate
fluctuations in the Monthly Income Distribution, a portion of the Public
Offering Price may consist of cash in an amount necessary for the Trustee to
provide approximately equal distributions. Upon the sale or redemption of Units,
investors will receive their proportionate share of this cash. In addition, if a
Bond is sold, redeemed or otherwise disposed of, the Fund will periodically
distribute to investors the portion of this cash that is attributable to the
Bond.

The regular Monthly Income Distribution is stated in Part A of the
Prospectus and will change as the composition of the Portfolio changes over
time.

PUBLIC OFFERING PRICE--THE FOLLOWING SECTIONS APPLY TO TWO DIFFERENT TYPES OF
DEFINED MUNICIPAL FUNDS. INVESTORS SHOULD NOTE THE EXACT NAME OF THE FUND ON THE
COVER OF PART A OF THE PROSPECTUS TO MAKE SURE THEY REFER TO THE CORRECT SECTION
BELOW.

SECTION A--MUNICIPAL INVESTMENT TRUST FUND

In the initial offering period, the Public Offering Price is based on the
next offer side evaluation of the Bonds, and includes a sales charge based on
the number of Units of a single Fund or Trust purchased on the same or any
preceding day by a single purchaser. See Initial Offering sales charge schedule
in Appendix C. The purchaser or his dealer must notify the Sponsors at the time
of purchase of any previous purchase to be aggregated and supply sufficient
information to permit confirmation of eligibility; acceptance of the purchase
order is subject to confirmation. Purchases of Fund Units may not be aggregated
with purchases of any other unit trust. This procedure may be amended or
terminated at any time without notice.

In the secondary market (after the initial offering period), the Public
Offering Price is based on the bid side evaluation of the Bonds, and includes a
sales charge based (a) on the number of Units of the Fund and any other Series
of Municipal Investment Trust Fund purchased in the secondary market on the same
day by a single purchaser (see Secondary Market sales charge schedule in
Appendix C) and (b) the maturities of the underlying Bonds (see Effective Sales
Charge Schedule in Appendix C). To qualify for a reduced sales charge, the
dealer must confirm that the sale is to a single purchaser or is purchased for
its own account and not for distribution. For these

8
<PAGE>
purposes, Units held in the name of the purchaser's spouse or child under 21
years of age are deemed to be purchased by a single purchaser. A trustee or
other fiduciary purchasing securities for a single trust estate or single
fiduciary account is also considered a single purchaser.

In the secondary market, the Public Offering Price is further reduced
depending on the maturities of the various Bonds in the Portfolio, by
determining a sales charge percentage for each Bond, as stated in Effective
Sales Charge in Appendix C. The sales charges so determined, multiplied by the
bid side evaluation of the Bonds, are aggregated and the total divided by the
number of Units outstanding to determine the Effective Sales Charge. On any
purchase, the Effective Sales Charge is multiplied by the applicable secondary
market sales charge percentage (depending on the number of Units purchased) in
order to determine the sales charge component of the Public Offering Price.

SECTION B--DEFINED ASSET FUNDS MUNICIPAL SERIES

During the initial offering period for at least the first three months of
the Fund, the Public Offering Price (and the Initial Repurchase Price) is based
on the higher, offer side evaluation of the Bonds at the next Evaluation Time
after the order is received. In the secondary market (after the initial offering
period), the Public Offering Price (and the Sponsors' Repurchase Price and the
Redemption Price) is based on the lower, bid side evaluation of the Bonds.

Investors will be subject to differing types and amounts of sales charge
depending upon the timing of their purchases and redemptions of Units. A
periodic deferred sales charge will be payable quarterly through about the fifth
anniversary of the Fund from a portion of the interest on and principal of Bonds
reserved for that purpose. Commencing on the first anniversary of the Fund, the
Public Offering Price will also include an up-front sales charge applied to the
value of the Bonds in the Portfolio. Lastly, investors redeeming their Units
prior to the fourth anniversary of the Fund will be charged a contingent
deferred sales charge payable out of the redemption proceeds of their Units.
These charges may be less than you would pay to buy and hold a comparable
managed fund. A complete schedule of sales charges appears in Appendix B. The
Sponsors have received an opinion of their counsel that the deferred sales
charge described in this Prospectus is consistent with an exemptive order
received from the SEC.

* * *

Employees of certain Sponsors and Sponsor affiliates and non-employee
directors of Merrill Lynch & Co. Inc. may purchase Units at any time at prices
including a sales charge of not less than $5 per Unit.

EVALUATIONS

Evaluations are determined by the independent Evaluator on each Business
Day. This excludes Saturdays, Sundays and the following holidays as observed by
the New York Stock Exchange: New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas. Bond
evaluations are based on closing sales prices (unless the Evaluator deems these
prices inappropriate). If closing sales prices are not available, the evaluation
is generally determined on the basis of current bid or offer prices for the
Bonds or comparable securities or by appraisal or by any combination of these
methods. In the past, the bid prices of publicly offered tax-exempt issues have
been lower than the offer prices by as much as 3 1/2% or more of face amount in
the case of inactively traded issues and as little as 1/2 of 1% in the case of
actively traded issues, but the difference between the offer and bid prices has
averaged between 1 and 2% of face amount. Neither the Sponsors, the Trustee or
the Evaluator will be liable for errors in the Evaluator's judgment. The fees of
the Evaluator will be borne by the Fund.

CERTIFICATES

Certificates for Units are issued upon request and may be transferred by
paying any taxes or governmental charges and by complying with the requirements
for redeeming Certificates (see How To Sell Units--Trustee's Redemption of
Units). Certain Sponsors collect additional charges for registering and shipping
Certificates to purchasers. Lost or mutilated Certificates can be replaced upon
delivery of satisfactory indemnity and payment of costs.

9
<PAGE>
HOW TO SELL UNITS

SPONSORS' MARKET FOR UNITS

You can sell your Units at any time without a fee. The Sponsors (although
not obligated to do so) will normally buy any Units offered for sale at the
repurchase price next computed after receipt of the order. The Sponsors have
maintained secondary markets in Defined Asset Funds for over 20 years. Primarily
because of the sales charge and fluctuations in the market value of the Bonds,
the sale price may be less than the cost of your Units. You should consult your
financial professional for current market prices to determine if other
broker-dealers or banks are offering higher prices for Units.

The Sponsors may discontinue this market without prior notice if the supply
of Units exceeds demand or for other business reasons; in that event, the
Sponsors may still purchase Units at the redemption price as a service to
investors. The Sponsors may reoffer or redeem Units repurchased.

TRUSTEE'S REDEMPTION OF UNITS

You may redeem your Units by sending the Trustee a redemption request
together with any certificates you hold. Certificates must be properly endorsed
or accompanied by a written transfer instrument with signatures guaranteed by an
eligible institution. In certain instances, additional documents may be required
such as a certificate of death, trust instrument, certificate of corporate
authority or appointment as executor, administrator or guardian. If the Sponsors
are maintaining a market for Units, they will purchase any Units tendered at the
repurchase price described above. While Defined Asset Funds Municipal Series
have a declining deferred sales charge payable on redemption (see Appendix B), a
Municipal Investment Trust Fund has no back-end load or 12b-1 fees, so there is
never a fee for cashing in your investment (see Appendix C). If they do not
purchase Units tendered, the Trustee is authorized in its discretion to sell
Units in the over-the-counter market if it believes it will obtain a higher net
price for the redeeming investor.

By the seventh calendar day after tender you will be mailed an amount equal
to the Redemption Price per Unit. Because of market movements or changes in the
Portfolio, this price may be more or less than the cost of your Units. The
Redemption Price per Unit is computed each Business Day by adding the value of
the Bonds, net accrued interest, cash and the value of any other Fund assets;
deducting unpaid taxes or other governmental charges, accrued but unpaid Fund
expenses, unreimbursed Trustee advances, cash held to redeem Units or for
distribution to investors and the value of any other Fund liabilities; and
dividing the result by the number of outstanding Units.

The Trustee is authorized, on a redemption request for Units with a value
exceeding $250,000 by any investor who acquired 25% or more of the outstanding
Units of a Trust, to pay part or all of the redemption 'in kind' (by the
distribution of Bonds and cash with an aggregate value equal to the applicable
Redemption Price of the Units tendered for redemption). The Trustee will attempt
to make a pro rata distribution of Bonds in the Portfolio, but reserves the
right to distribute solely one or more Bonds. The distribution will be made to
the distribution agent and either held for the account of the investor or
disposed of in accordance with the instructions of the investor. Any transaction
costs as well as transfer and ongoing custodial fees on sales of the Bonds
distributed in kind will be borne by the redeeming investor.

For Defined Asset Funds Municipal Series, Bonds are evaluated on the offer
side during the initial offering period and for at least the first three months
of the Fund (even in the secondary market) and on the bid side thereafter. For a
Municipal Investment Trust Fund, Bonds are evaluated on the offer side during
the initial offering period and on the bid side thereafter.

If cash is not available in the Fund's Income and Capital Accounts to pay
redemptions, the Trustee may sell Bonds selected by the Agent for the Sponsors
based on market and credit factors determined to be in the best interest of the
Fund. These sales are often made at times when the Bonds would not otherwise be
sold and may result in lower prices than might be realized otherwise and will
also reduce the size and diversity of the Fund.

Redemptions may be suspended or payment postponed if the New York Stock
Exchange is closed other than for customary weekend and holiday closings, if the
SEC determines that trading on that Exchange is restricted or

10
<PAGE>
that an emergency exists making disposal or evaluation of the Bonds not
reasonably practicable, or for any other period permitted by the SEC.

INCOME, DISTRIBUTIONS AND REINVESTMENT

INCOME

Some of the Bonds may have been purchased on a when-issued basis or may have
a delayed delivery. Since interest on these Bonds does not begin to accrue until
the date of their delivery to the Fund, the Trustee's annual fee and expenses
may be reduced to provide tax-exempt income to investors for this non-accrual
period. If a when-issued Bond is not delivered until later than expected and the
amount of the Trustee's annual fee and expenses is insufficient to cover the
additional accrued interest, the Sponsors will treat the contracts as failed
Bonds. The Trustee is compensated for its fee reduction by drawing on the letter
of credit deposited by the Sponsors before the settlement date for these Bonds
and depositing the proceeds in a non-interest bearing account for the Fund.

Interest received is credited to an Income Account and other receipts to a
Capital Account. A Reserve Account may be created by withdrawing from the Income
and Capital Accounts amounts considered appropriate by the Trustee to reserve
for any material amount that may be payable out of the Fund.

DISTRIBUTIONS

Each Unit receives an equal share of monthly distributions of interest
income net of estimated expenses. Interest on the Bonds is generally received by
the Fund on a semi-annual or annual basis. Because interest on the Bonds is not
received at a constant rate throughout the year, any Monthly Income Distribution
may be more or less than the interest actually received. To eliminate
fluctuations in the Monthly Income Distribution, the Trustee will advance
amounts necessary to provide approximately equal interest distributions; it will
be reimbursed, without interest, from interest received on the Bonds, but the
Trustee is compensated, in part, by holding the Fund's cash balances in
non-interest bearing accounts. Along with the Monthly Income Distributions, the
Trustee will distribute the investor's pro rata share of principal received from
any disposition of a Bond to the extent available for distribution. In addition,
for Defined Asset Funds Municipal Series, distributions of amounts necessary to
pay the deferred portion of the sales charge will be made from the Capital and
Income Accounts to an account maintained by the Trustee for purposes of
satisfying investors' sales charge obligations.

The initial estimated annual income per Unit, after deducting estimated
annual Fund expenses (and, for Defined Asset Funds Municipal Series, the portion
of the deferred sales charge payable from interest income) as stated in Part A
of the Prospectus, will change as Bonds mature, are called or sold or otherwise
disposed of, as replacement bonds are deposited and as Fund expenses change.
Because the Portfolio is not actively managed, income distributions will
generally not be affected by changes in interest rates. Depending on the
financial conditions of the issuers of the Bonds, the amount of income should be
substantially maintained as long as the Portfolio remains unchanged; however,
optional bond redemptions or other Portfolio changes may occur more frequently
when interest rates decline, which would result in early returns of principal
and possibly earlier termination of the Fund.

RETURN CALCULATIONS

Estimated Current Return shows the estimated annual cash to be received from
interest-bearing bonds in a Portfolio (net of estimated annual expenses) divided
by the Public Offering Price (including the maximum sales charge). Estimated
Long Term Return is a measure of the estimated return over the estimated life of
the Trust. This represents an average of the yields to maturity (or in certain
cases, to an earlier call date) of the individual Bonds in the Portfolio,
adjusted to reflect the maximum sales charge and estimated expenses. The average
yield for the Portfolio is derived by weighting each Bond's yield by its market
value and the time remaining to the call or maturity date, depending on how the
Bond is priced. Unlike Estimated Current Return, Estimated Long Term Return
takes into account maturities, discounts and premiums of the underlying Bonds.

No return estimate can be predictive of your actual return because returns
will vary with purchase price (including sales charges), how long units are
held, changes in Portfolio composition, changes in interest income and changes
in fees and expenses. Therefore, Estimated Current Return and Estimated Long
Term Return are designed to be comparative rather than predictive. A yield
calculation which is more comparable to an individual

11
<PAGE>
Bond may be higher or lower than Estimated Current Return or Estimated Long
Term Return which are more comparable to return calculations used by other
investment products.

REINVESTMENT

Distributions will be paid in cash unless the investor elects to have
distributions reinvested without sales charge in the Municipal Fund Accumulation
Program, Inc. The Program is an open-end management investment company whose
investment objective is to obtain income exempt from regular federal income
taxes by investing in a diversified portfolio of state, municipal and public
authority bonds rated A or better or with comparable credit characteristics.
Reinvesting compounds earnings free from federal tax. Investors participating in
the Program will be subject to state and local income taxes to the same extent
as if the distributions had been received in cash, and most of the income on the
Program is subject to state and local income taxes. For more complete
information about the Program, including charges and expenses, request the
Program's prospectus from the Trustee. Read it carefully before you decide to
participate. Written notice of election to participate must be received by the
Trustee at least ten days before the Record Day for the first distribution to
which the election is to apply.

FUND EXPENSES

Estimated annual Fund expenses are listed in Part A of the Prospectus; if
actual expenses exceed the estimate, the excess will be borne by the Fund. The
Trustee's annual fee is payable in monthly installments. The Trustee also
benefits when it holds cash for the Fund in non-interest bearing accounts.
Possible additional charges include Trustee fees and expenses for maintaining
the Fund's registration statement current with Federal and State authorities,
extraordinary services, costs of indemnifying the Trustee and the Sponsors,
costs of action taken to protect the Fund and other legal fees and expenses,
Fund termination expenses and any governmental charges. The Trustee has a lien
on Fund assets to secure reimbursement of these amounts and may sell Bonds for
this purpose if cash is not available. The Sponsors receive an annual fee of a
maximum of $0.35 per $1,000 face amount to reimburse them for the cost of
providing Portfolio supervisory services to the Fund. While the fee may exceed
their costs of providing these services to the Fund, the total supervision fees
from all Defined Asset Funds Municipal Series will not exceed their costs for
these services to all of those Series during any calendar year; and the total
supervision fees from all Series of Municipal Investment Trust Fund will not
exceed their costs for these services to all of those Series during any calendar
year. The Sponsors may also be reimbursed for their costs of providing
bookkeeping and administrative services to the Fund, currently estimated at a
maximum of $0.10 per Unit. The Trustee's, Sponsors' and Evaluator's fees may be
adjusted for inflation without investors' approval.

All or a portion of expenses incurred in establishing the Fund, including
the cost of the initial preparation of documents relating to the Fund, Federal
and State registration fees, the initial fees and expenses of the Trustee, legal
expenses and any other out-of-pocket expenses will be paid by the Fund and
amortized over five years. Advertising and selling expenses will be paid from
the Underwriting Account at no charge to the Fund. Sales charges on Defined
Asset Funds range from under 1.0% to 5.5%. This may be less than you might pay
to buy and hold a comparable managed fund. Defined Asset Funds can be a
cost-effective way to purchase and hold investments. Annual operating expenses
are generally lower than for managed funds. Because Defined Asset Funds have no
management fees, limited transaction costs and no ongoing marketing expenses,
operating expenses are generally less than 0.25% a year. When compounded
annually, small differences in expense ratios can make a big difference in your
investment results. Because our portfolios rarely hold any significant amount of
cash, your money is more fully invested.

TAXES

The following discussion addresses only the U.S. federal and certain New
York State and City income tax consequences under current law of Units held as
capital assets and does not address the tax consequences of Units held by
dealers, financial institutions or insurance companies or other investors with
special circumstances.

In the opinion of Davis Polk & Wardwell, special counsel for the Sponsors,
under existing law:

The Fund is not an association taxable as a corporation for federal
income tax purposes. Each investor will be considered the owner of a pro
rata portion of each Bond in the Fund under the grantor trust rules of
Sections 671-679 of the Internal Revenue Code of 1986, as amended (the
'Code'). Each investor will be considered to have received the interest and
accrued the original issue discount, if any, on his pro rata

12
<PAGE>
portion of each Bond when interest on the Bond is received or original
issue discount is accrued by the Fund. The investor's basis in his Units
will be equal to the cost of his Units, including any up-front sales
charge and the organizational expenses borne by the investor.

When an investor pays for accrued interest, the investor's confirmation
of purchase will report to him the amount of accrued interest for which he
paid. These investors will receive the accrued interest amount as part of
their first monthly distribution. Accordingly, these investors should reduce
their tax basis by the accrued interest amount after the first monthly
distribution.

An investor will recognize taxable gain or loss when all or part of his
pro rata portion of a Bond is disposed of by the Fund. An investor will also
be considered to have disposed of all or a portion of his pro rata portion
of each Bond when he sells or redeems all or some of his Units. An investor
who is treated as having acquired his pro rata portion of a Bond at a
premium will be required to amortize the premium over the term of the Bond.
The amortization is only a reduction of basis for the investor's pro rata
portion of the Bond and does not result in any deduction against the
investor's income. Therefore, under some circumstances, an investor may
recognize taxable gain when his pro rata portion of a Bond is disposed of
for an amount equal to or less than his original tax basis therefor.

Under Section 265 of the Code, a non-corporate investor is not entitled
to a deduction for his pro rata share of fees and expenses of the Fund,
because the fees and expenses are incurred in connection with the production
of tax-exempt income. Further, if borrowed funds are used by an investor to
purchase or carry Units of the Fund, interest on this indebtedness will not
be deductible for federal income tax purposes. In addition, under rules used
by the Internal Revenue Service, the purchase of Units may be considered to
have been made with borrowed funds even though the borrowed funds are not
directly traceable to the purchase of Units.

Under the income tax laws of the State and City of New York, the Fund is
not an association taxable as a corporation and income received by the Fund
will be treated as the income of the investors in the same manner as for
federal income tax purposes, but will not be tax-exempt except to the extent
such income is earned by bonds in the Fund that are otherwise tax-exempt for
New York purposes.

The foregoing discussion relates only to U.S. federal and certain aspects
of New York State and City income taxes. Depending on their state of
residence, investors may be subject to state and local taxation and should
consult their own tax advisers in this regard.

* * *

In the opinion of bond counsel rendered on the date of issuance of each
Bond, the interest on each Bond is excludable from gross income under existing
law for regular federal income tax purposes (except in certain circumstances
depending on the investor) but may be subject to state and local taxes, and
interest on some or all of the Bonds may become subject to regular federal
income tax, perhaps retroactively to their date of issuance, as a result of
changes in federal law or as a result of the failure of issuers (or other users
of the proceeds of the Bonds) to comply with certain ongoing requirements. If
the interest on a Bond should be determined to be taxable, the Bond would
generally have to be sold at a substantial discount. In addition, investors
could be required to pay income tax on interest received prior to the date on
which the interest is determined to be taxable.

Neither the Sponsors nor Davis Polk & Wardwell have made or will make any
review of the proceedings relating to the issuance of the Bonds or the basis for
these opinions and there can be no assurance that the issuer (and other users)
will comply with any ongoing requirements necessary for a Bond to maintain its
tax-exempt character.

The Internal Revenue Service is currently engaged in a program of intensive
audits of certain tax-exempt hospital and health care facility organizations.
Although these audits have not yet been completed, it has been reported that the
tax-exempt status of some of these organizations may be revoked. At this time,
it is uncertain whether any of the hospital and health care facility obligations
held by the Fund will be affected by such audit proceedings.

RECORDS AND REPORTS

The Trustee keeps a register of the names, addresses and holdings of all
investors. The Trustee also keeps records of the transactions of the Fund,
including a current list of the Bonds and a copy of the Indenture, and

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supplemental information on the operations of the Fund and the risks associated
with the Bonds held by the Fund, which may be inspected by investors at
reasonable times during business hours.

With each distribution, the Trustee includes a statement of the interest and
any other receipts being distributed. Within five days after deposit of Bonds in
exchange or substitution for Bonds (or contracts) previously deposited, the
Trustee will send a notice to each investor, identifying both the Bonds removed
and the replacement bonds deposited. The Trustee sends each investor of record
an annual report summarizing transactions in the Fund's accounts and
amounts distributed during the year and Bonds held, the number of Units
outstanding and the Redemption Price at year end, the interest received by the
Fund on the Bonds, the gross proceeds received by the Fund from the disposition
of any Bond (resulting from redemption or payment at maturity or sale of any
Bond), and the fees and expenses paid by the Fund, among other matters. The
Trustee will also furnish annual information returns to each investor and to the
Internal Revenue Service. Investors are required to report to the Internal
Revenue Service the amount of tax-exempt interest received during the year.
Investors may obtain copies of Bond evaluations from the Trustee to enable them
to comply with federal and state tax reporting requirements. Fund accounts are
audited annually by independent accountants selected by the Sponsors. Audited
financial statements are available from the Trustee on request.

TRUST INDENTURE

The Fund is a 'unit investment trust' created under New York law by a Trust
Indenture among the Sponsors, the Trustee and the Evaluator. This Prospectus
summarizes various provisions of the Indenture, but each statement is qualified
in its entirety by reference to the Indenture.

The Indenture may be amended by the Sponsors and the Trustee without consent
by investors to cure ambiguities or to correct or supplement any defective or
inconsistent provision, to make any amendment required by the SEC or other
governmental agency or to make any other change not materially adverse to the
interest of investors (as determined in good faith by the Sponsors). The
Indenture may also generally be amended upon consent of investors holding 51% of
the Units. No amendment may reduce the interest of any investor in the Fund
without the investor's consent or reduce the percentage of Units required to
consent to any amendment without unanimous consent of investors. Investors will
be notified on the substance of any amendment.

The Trustee may resign upon notice to the Sponsors. It may be removed by
investors holding 51% of the Units at any time or by the Sponsors without the
consent of investors if it becomes incapable of acting or bankrupt, its affairs
are taken over by public authorities, or if under certain conditions the
Sponsors determine in good faith that its replacement is in the best interest of
the investors. The Evaluator may resign or be removed by the Sponsors and the
Trustee without the investors' consent. The resignation or removal of either
becomes effective upon acceptance of appointment by a successor; in this case,
the Sponsors will use their best efforts to appoint a successor promptly;
however, if upon resignation no successor has accepted appointment within 30
days after notification, the resigning Trustee or Evaluator may apply to a court
of competent jurisdiction to appoint a successor.

Any Sponsor may resign so long as one Sponsor with a net worth of $2,000,000
remains and is agreeable to the resignation. A new Sponsor may be appointed by
the remaining Sponsors and the Trustee to assume the duties of the resigning
Sponsor. If there is only one Sponsor and it fails to perform its duties or
becomes incapable of acting or bankrupt or its affairs are taken over by public
authorities, the Trustee may appoint a successor Sponsor at reasonable rates of
compensation, terminate the Indenture and liquidate the Fund or continue to act
as Trustee without a Sponsor. Merrill Lynch, Pierce, Fenner & Smith Incorporated
has been appointed as Agent for the Sponsors by the other Sponsors.

The Sponsors, the Trustee and the Evaluator are not liable to investors or
any other party for any act or omission in the conduct of their responsibilities
absent bad faith, willful misfeasance, negligence (gross negligence in the case
of a Sponsor or the Evaluator) or reckless disregard of duty. The Indenture
contains customary provisions limiting the liability of the Trustee.

MISCELLANEOUS

LEGAL OPINION

The legality of the Units has been passed upon by Davis Polk & Wardwell, 450
Lexington Avenue, New York, New York 10017, as special counsel for the Sponsors.

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AUDITORS

The Statement of Condition in the Prospectus was audited by Deloitte &
Touche LLP, independent accountants, as stated in their opinion. It is included
in reliance upon that opinion given on the authority of that firm as experts in
accounting and auditing.

TRUSTEE

The Trustee and its address are stated on the back cover of the Prospectus.
The Trustee is subject to supervision by the Federal Deposit Insurance
Corporation, the Board of Governors of the Federal Reserve System and either the
Comptroller of the Currency or state banking authorities.