DWS Strategic Government Securities Fund N-CSR Certified annual shareholder report (management investment company)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM N-CSR

Investment Company Act file number   811-02719

DWS Strategic Government Securities Fund

 (Exact Name of Registrant as Specified in Charter)

345 Park Avenue

New York, NY 10154-0004

 (Address of Principal Executive Offices) (Zip Code)

Registrant’s Telephone Number, including Area Code: (201) 593-6408

Paul Schubert

100 Plaza One

Jersey City, NJ 07311

(Name and Address of Agent for Service)

Date of fiscal year end:	10/31
Date of reporting period:	10/31/2010

ITEM 1. REPORT TO STOCKHOLDERS

OCTOBER 31, 2010

Annual Report

to Shareholders

DWS Strategic Government

Securities Fund

Contents

4 Performance Summary

7 Information About Your Fund's Expenses

9 Portfolio Management Review

14 Portfolio Summary

15 Investment Portfolio

23 Statement of Assets and Liabilities

25 Statement of Operations

26 Statement of Changes in Net Assets

27 Financial Highlights

32 Notes to Financial Statements

46 Report of Independent Registered Public Accounting Firm

47 Tax Information

48 Investment Management Agreement Approval

53 New Sub-Advisory Agreement Approval

56 Summary of Management Fee Evaluation by Independent Fee Consultant

60 Board Members and Officers

64 Account Management Resources

This report must be preceded or accompanied by a prospectus. To obtain a summary prospectus, if available, or prospectus for any of our funds, refer to the Account Management Resources information provided in the back of this booklet. We advise you to consider the fund's objectives, risks, charges and expenses carefully before investing. The summary prospectus and prospectus contain this and other important information about the fund. Please read the prospectus carefully before you invest.

Bond investments are subject to interest-rate and credit risks. When interest rates rise, bond prices generally fall. Credit risk refers to the ability of an issuer to make timely payments of principal and interest. The fund may use derivatives, including as part of its global alpha strategy. Investing in derivatives entails special risks relating to liquidity, leverage and credit that may reduce returns and/or increase volatility. In the current market environment, mortgage backed securities are experiencing increased volatility. See the prospectus for details.

DWS Investments is part of Deutsche Bank's Asset Management division and, within the US, represents the retail asset management activities of Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Investment Management Americas Inc. and DWS Trust Company.

NOT FDIC/NCUA INSURED NO BANK GUARANTEE MAY LOSE VALUE NOT A DEPOSIT NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY

Performance Summary October 31, 2010

Average Annual Total Returns as of 10/31/10
Unadjusted for Sales Charge	1-Year	3-Year	5-Year	10-Year
Class A	6.54%	7.16%	6.16%	5.59%
Class B	5.72%	6.23%	5.25%	4.66%
Class C	5.83%	6.34%	5.34%	4.75%
Adjusted for the Maximum Sales Charge
Class A (max 2.75% load)	3.61%	6.17%	5.57%	5.29%
Class B (max 4.00% CDSC)	2.72%	5.64%	5.08%	4.66%
Class C (max 1.00% CDSC)	5.83%	6.34%	5.34%	4.75%
No Sales Charges					Life of Class S*
Class S	6.84%	7.38%	6.37%	N/A	5.99%
Institutional Class	6.80%	7.37%	6.40%	5.81%	N/A
Barclays Capital GNMA Index+	7.19%	7.65%	6.77%	6.24%	6.43%

Sources: Lipper Inc. and Deutsche Investment Management Americas Inc.

* Class S shares commenced operations on August 1, 2005. Index returns began on July 31, 2005.

Performance in the Average Annual Total Returns table above and the Growth of an Assumed $10,000 Investment line graph that follows is historical and does not guarantee future results. Investment return and principal fluctuate, so your shares may be worth more or less when redeemed. Current performance may differ from performance data shown. Please visit www.dws-investments.com for the Fund's most recent month-end performance. Performance includes reinvestment of all distributions. Unadjusted returns do not reflect sales charges and would have been lower if they had.

The gross expense ratios of the Fund, as stated in the fee table of the prospectus dated February 1, 2010 are 0.81%, 1.77%, 1.59%, 0.64% and 0.57% for Class A, Class B, Class C, Class S and Institutional Class shares, respectively, and may differ from the expense ratios disclosed in the Financial Highlights tables in this report.

Index returns, unlike Fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.

Performance figures do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

Growth of an Assumed $10,000 Investment (Adjusted for Maximum Sales Charge)

[] DWS Strategic Government Securities Fund — Class A

[] Barclays Capital GNMA Index+

Yearly periods ended October 31

The Fund's growth of an assumed $10,000 investment is adjusted for the maximum sales charge of 2.75%. This results in a net initial investment of $9,725.

The growth of $10,000 is cumulative.

Performance of other share classes will vary based on the sales charges and the fee structure of those classes.

+The unmanaged Barclays Capital GNMA Index is a market-value-weighted measure of all fixed-rate securities backed by mortgage pools of the Government National Mortgage Association.

Net Asset Value and Distribution Information
	Class A			Class B			Class C			Class S			Institutional Class
Net Asset Value: 10/31/10	$	8.91		$	8.91		$	8.93		$	8.91		$	8.90
10/31/09	$	8.79		$	8.79		$	8.81		$	8.80		$	8.79
Distribution Information: Twelve Months as of 10/31/10: Income Dividends	$	.37		$	.29		$	.30		$	.39		$	.39
October Income Dividend	$	.0312		$	.0243		$	.0254		$	.0325		$	.0330
Capital Gain Distributions	$	.08		$	.08		$	.08		$	.08		$	.08
SEC 30-day Yield as of 10/31/10++		3.16	%		2.32	%		2.48	%		3.30	%		3.52	%
Current Annualized Distribution Rate as of 10/31/10++		4.20	%		3.27	%		3.41	%		4.38	%		4.45	%

++The SEC yield is net investment income per share earned over the month ended October 31, 2010, shown as an annualized percentage of the maximum offering price per share on the last day of the period. The SEC yield is computed in accordance with a standardized method prescribed by the Securities and Exchange Commission. Current annualized distribution rate is the latest monthly dividend shown as an annualized percentage of net asset value on October 31, 2010. Distribution rate simply measures the level of dividends and is not a complete measure of performance. Yields and distribution rates are historical, not guara nteed and will fluctuate.

Lipper Rankings — GNMA Funds Category as of 10/31/10
Period	Rank		Number of Fund Classes Tracked	Percentile Ranking (%)
Class A 1-Year	42	of	66	63
3-Year	29	of	61	47
5-Year	28	of	56	50
10-Year	23	of	44	52
Class B 1-Year	62	of	66	93
3-Year	55	of	61	89
5-Year	54	of	56	95
10-Year	43	of	44	96
Class C 1-Year	59	of	66	89
3-Year	52	of	61	84
5-Year	51	of	56	90
10-Year	42	of	44	94
Class S 1-Year	31	of	66	47
3-Year	24	of	61	39
5-Year	21	of	56	37
Institutional Class 1-Year	32	of	66	48
3-Year	25	of	61	41
5-Year	19	of	56	34
10-Year	15	of	44	34

Source: Lipper Inc. Rankings are historical and do not guarantee future results. Rankings are based on total return unadjusted for sales charges with distributions reinvested. If sales charges had been included, rankings might have been less favorable.

Information About Your Fund's Expenses

As an investor of the Fund, you incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees, distribution and service (12b-1) fees and other Fund expenses. Examples of transaction costs include sales charges (loads), redemption fees and account maintenance fees, which are not shown in this section. The following tables are intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. The example in the table is based on an investment of $1,000 invested at the beginning of the six-month period and held for the entire period (May 1, 2010 to October 31, 2010).

The tables illustrate your Fund's expenses in two ways:

•Actual Fund Return. This helps you estimate the actual dollar amount of ongoing expenses (but not transaction costs) paid on a $1,000 investment in the Fund using the Fund's actual return during the period. To estimate the expenses you paid over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the "Expenses Paid per $1,000" line under the share class you hold.

• Hypothetical 5% Fund Return. This helps you to compare your Fund's ongoing expenses (but not transaction costs) with those of other mutual funds using the Fund's actual expense ratio and a hypothetical rate of return of 5% per year before expenses. Examples using a 5% hypothetical fund return may be found in the shareholder reports of other mutual funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period.

Please note that the expenses shown in these tables are meant to highlight your ongoing expenses only and do not reflect any transaction costs. The "Expenses Paid per $1,000" line of the tables is useful in comparing ongoing expenses only and will not help you determine the relative total expense of owning different funds. An account maintenance fee of $6.25 per quarter for Class S shares may apply for certain accounts whose balances do not meet the applicable minimum initial investment. This fee is not included in these tables. If it was, the estimate of expenses paid for Class S shares during the period would be higher, and account value during the period would be lower, by this amount.

Expenses and Value of a $1,000 Investment for the six months ended October 31, 2010
Actual Fund Return	Class A		Class B		Class C		Class S		Institutional Class
Beginning Account Value 5/1/10	$	1,000.00	$	1,000.00	$	1,000.00	$	1,000.00	$	1,000.00
Ending Account Value 10/31/10	$	1,032.80	$	1,028.10	$	1,029.90	$	1,034.80	$	1,034.10
Expenses Paid per $1,000*	$	4.10	$	8.69	$	7.93	$	3.18	$	2.51
Hypothetical 5% Fund Return	Class A		Class B		Class C		Class S		Institutional Class
Beginning Account Value 5/1/10	$	1,000.00	$	1,000.00	$	1,000.00	$	1,000.00	$	1,000.00
Ending Account Value 10/31/10	$	1,021.17	$	1,016.64	$	1,017.39	$	1,022.08	$	1,022.74
Expenses Paid per $1,000*	$	4.08	$	8.64	$	7.88	$	3.16	$	2.50

* Expenses are equal to the Fund's annualized expense ratio for each share class, multiplied by the average account value over the period, multiplied by the number of days in the most recent six-month period, then divided by 365.

Annualized Expense Ratios	Class A	Class B	Class C	Class S	Institutional Class
DWS Strategic Government Securities Fund	.80%	1.70%	1.55%	.62%	.49%

For more information, please refer to the Fund's prospectus.

Portfolio Management Review

DWS Strategic Government Securities Fund: A Team Approach to Investing

Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), which is part of Deutsche Asset Management, is the investment advisor for DWS Strategic Government Securities Fund. DIMA and its predecessors have more than 90 years of experience managing mutual funds and DIMA provides a full range of investment advisory services to both institutional and retail clients.

DIMA is an indirect, wholly owned subsidiary of Deutsche Bank AG. Deutsche Bank AG is a major global banking institution that is engaged in a wide range of financial services, including investment management, mutual funds, retail, private and commercial banking, investment banking and insurance.

DWS Investments is the retail brand name of the US asset management activities of Deutsche Bank AG and DIMA, representing a wide range of investing expertise and resources. This well-resourced global investment platform brings together a wide variety of experience and investment insight across industries, regions, asset classes and investing styles.

QS Investors, LLC ("QS Investors"), New York, New York, is the subadvisor for a portion of the fund. QS Investors manages and advises assets on behalf of institutional clients and retail funds, providing global expertise in research, portfolio management and quantitative analysis. On August 1, 2010, members of the Advisor's Quantitative Strategies Group, including some members of the fund's portfolio management team, separated from the Advisor and formed QS Investors as a separate investment advisory firm unaffiliated with the Advisor (the "Separation").

Portfolio Management Team

William Chepolis, CFA

Ohn Choe, CFA

John D. Ryan

Portfolio Managers, Deutsche Investment Management Americas Inc.

Thomas Picciochi

Robert Wang

Portfolio Managers, QS Investors

Overview of Market and Fund Performance

The views expressed in the following discussion reflect those of the portfolio management team only through the end of the period of the report as stated on the cover. The management team's views are subject to change at any time based on market and other conditions and should not be construed as a recommendation. Past performance is no guarantee of future results. Current and future portfolio holdings are subject to risk.

For the 12 months ended October 31, 2010, the fund's Class A shares posted a 6.54% total return, compared with the 7.19% return of its benchmark, the Barclays Capital GNMA Index and the 6.94% return of its average peer in the Lipper GNMA Funds category.1,2 At the close of the period, the fund's duration (a measure of interest rate sensitivity based on when investors can expect payments of principal and interest from a bond) stood at 3.3 years, compared with 3.4 years for the Barclays Capital GNMA Index.3 (Returns are unadjusted for sales charges. If sales charges had been included, returns would have been lower. Past performance is no guarantee of future results. Please see pages 4 through 6 for the performance of other share classes and for more complete performance information.)

Government National Mortgage Association (GNMA) investors pay close attention to the direction of interest rates, as falling rates can lead to increased prepayments on underlying loans and negatively impact returns. The US Federal Reserve Board (the Fed) left short-term interest rates at essentially zero during the 12 months, maintaining a target range for the federal funds rate of between 0% and 0.25%.4 Early in the period, market interest rate levels generally rose as the economy emerged from the depths of the financial crisis. For the full 12 months, however, interest rates fell along the entire Treasury yield curve, with the steepest declines occurring on intermediate-term issues.5 To illustrate, the two-year yield went from 0.90% to 0.34%, the five-year from 2.31% to 1.17%, the 10-year from 3.41% to 2.63% and the 30-year from 4.23% to 3.99%.

Mortgage rates remained near historical lows for most of the period, supported by the Fed's zero interest rate policy and direct purchases of mortgage-backed issuance. Prepayments remained modest despite lower rates, as homeowners continued to deal with negative equity and tighter mortgage underwriting standards.

Positive Contributors to Performance

As we expected prepayments to remain low, the fund has maintained a focus on higher coupon mortgages.6 At the same time, we have continued to emphasize mortgage pools with predictable cash flows. We believed this would allow shareholders to benefit from increased income with very low incremental risk. Early in the period, the market was willing to pay a significant premium for these characteristics, as prepayments remained low and prices of these bonds rose sharply.

The fund had holdings of interest-only collateralized mortgage obligations that were structured to perform well if prepayments remained low and with yields that vary inversely with LIBOR — a leading benchmark for taxable interest rates.7 As interest-only securities are the most sensitive to prepayment expectations, we sought protection by carefully evaluating the underlying mortgage pools, looking for such characteristics as a track record of low prepayments, lower remaining loan balances and a preferred geographical exposure. This exposure worked well for the fund as prepayments remained low and taxable rates declined.

The fund's overall duration and sensitivity to interest rate changes was longer than the benchmark for most of the period, adding to relative performance in an environment of declining interest rates.

For much of the fiscal period, given a relatively steep yield curve, we used futures in order gain added exposure to the 10-year Treasury while simultaneously shorting the two-year portion of the curve. This worked well for the fund as the yield curve flattened via declining rates on intermediate- and longer-term issues.

As part of our approach, we seek to enhance total returns by employing a global tactical asset allocation overlay strategy.8 This strategy seeks to identify the relative value to be found among global bond and currency markets, and then to benefit from disparities through the use of fixed- income futures and currency forward contracts. For the 12 months ended October 31, 2010, the global tactical asset allocation overlay strategy was a positive contributor to performance.

Negative Contributors to Performance

Late in the period, the fund's relatively low exposure to more recently issued securities with lower underlying coupons acted as a constraint on relative performance. Lower coupon pools benefited from investors seeking protection against proposals floated to help underwater homeowners refinance at today's low rates. Some of these proposals could, in theory, result in higher coupon pools that have traded at premium prices being prepaid at par, hurting returns for investors. In our view this scenario is not likely to come to pass, and we have not seen the value in holding long-term securities with coupons of 4% or lower.

As interest rates reached extreme lows late in the fiscal period, some of the interest-only securities in the fund declined in value as investors sought protection against the potential for increased prepayments. Prepayments have not increased to any significant degree, and we remain comfortable with this exposure.

Outlook and Positioning

The current economic recovery continues to be less than robust by historical standards, with employment lagging and consumer demand for homes and autos tepid. We expect the Fed to maintain its zero interest rate policy for the foreseeable future, as it has signaled that it is more concerned with deflation and excess capacity than inflation. In addition, there is discussion of the Fed making additional purchases of securities in order to bring mortgage rates down that could influence prepayments on higher coupon mortgages.

While we expect the Fed to remain on hold with its zero interest rate policy for the near-to-intermediate term, with mortgage rates at historic lows, we are carefully managing the fund's overall duration and looking at other ways to position the portfolio ahead of the eventual rise in interest rates.

We will continue to monitor the economy and Fed policy closely as we position the fund going forward.

1The unmanaged Barclays Capital GNMA Index is a market-value-weighted measure of all fixed-rate securities backed by mortgage pools of the Government National Mortgage Association. Index returns, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.

2The Lipper GNMA Funds category includes funds that invest at least 65% of their assets in Government National Mortgage Association securities. Lipper figures represent the average of the total returns reported by all of the mutual funds designated by Lipper Inc. as falling into the Lipper GNMA Funds category. For the 1-, 5- and 10-year periods this category's average was 6.94% (66 funds), 6.31% (56 funds) and 5.63% (44 funds), respectively, as of 10/31/10.

3Duration is a measure of a fund's sensitivity to interest rate changes, i.e., the longer a fund's duration, the more sensitive it is to changes in interest rates.

4The federal funds rate is the interest rate, set by the US Federal Reserve Board, at which banks lend money to each other, usually on an overnight basis.

5The yield curve is a graphical representation of how yields on bonds of different maturities compare. Normally, yield curves slant up, as bonds with longer maturities typically offer higher yields than short-term bonds.

6Coupon — The interest rate on a bond the issuer (in the case of mortgage-backed securities, the government) promises to pay to the holder of the bond until maturity, expressed as an annual percentage of face value. As an example, a bond with a 10% coupon would pay $100 on $1,000 of the face amount each year. When mortgages are pooled for sale to investors, they are pooled by the note rate that the homeowner pays to his mortgage company, so that a GNMA security with a 6% coupon would only contain mortgages where homeowners are paying roughly 6% mortgage interest rates and a GNMA with a 7.0% coupon would be a p ool of homeowners with roughly 7% interest rates on their mortgages. A coupon's relationship to current interest rates helps determine how likely that homeowner is to refinance his mortgage, causing a prepayment. As a rule of thumb, a higher coupon rate will be more sensitive to prepayments of the mortgage than lower coupons will be.

7LIBOR, or the London Interbank Offered Rate, is the most widely used benchmark or reference rate for short-term interest rates. LIBOR is the rate of interest at which banks borrow funds from other banks, in large volume, in the international market.

8The global tactical asset allocation overlay strategy is designed to add value by taking advantage of short-term mispricings in the bond and currency markets. The portable alpha strategy may use instruments including but not limited to futures, options and currency forwards.

Portfolio Summary

Asset Allocation (As a % of Investment Portfolio excluding Securities Lending Collateral)	10/31/10	10/31/09
Mortgage-Backed Securities Pass-Throughs	76%	70%
Collateralized Mortgage Obligations	13%	12%
Government & Agency Obligations	6%	14%
Cash Equivalents	5%	4%
	100%	100%

Coupons*	10/31/10	10/31/09
Less than 4.5%	23%	18%
4.5%-5.49%	37%	25%
5.5%-6.49%	33%	42%
6.5%-7.49%	6%	9%
7.5% and Greater	1%	6%
	100%	100%

Credit Quality (Excluding Securities Lending Collateral and Cash Equivalents)	10/31/10	10/31/09
US Government and Agencies	98%	93%
AAA	2%	7%
	100%	100%

Interest Rate Sensitivity	10/31/10	10/31/09
Effective Maturity	4.5 years	5.0 years
Effective Duration	3.3 years	4.2 years

Effective maturity is the weighted average of the bonds held by the Fund taking into consideration any maturity shortening features.

Effective duration is the measurable change in the value of a security in response to a change in interest rates.

* Excludes Cash Equivalents, Securities Lending Collateral and US Treasury Obligations.

Asset allocation, coupons and interest rate sensitivity are subject to change.

The quality ratings represent the lower of Moody's Investors Service, Inc. ("Moody's") or Standard & Poor's Corporation ("S&P") credit ratings and are unaudited. The ratings of Moody's and S&P represent their opinions as to the quality of the securities they rate. Ratings are relative and subjective and are not absolute standards of quality. The Fund's credit quality does not remove market risk and is subject to change.

For more complete details about the Fund's investment portfolio, see page 15. A quarterly Fact Sheet is available upon request. Please see the Account Management Resources section for contact information.

Following the Fund's fiscal first and third quarter-end, a complete portfolio holdings listing is filed with the SEC on Form N-Q. The form will be available on the SEC's Web site at www.sec.gov, and it also may be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the SEC's Public Reference Room may be obtained by calling (800) SEC-0330. The Fund's portfolio holdings are also posted on www.dws-investments.com from time to time. Please see the Fund's current prospectus for more information.

Investment Portfolio as of October 31, 2010

	Principal Amount ($)		Value ($)
Mortgage-Backed Securities Pass-Throughs 83.1%
Federal Home Loan Mortgage Corp.:
6.5%, 7/1/2035		1,362,873		1,481,646
7.0%, with various maturities from 6/1/2032 until 10/1/2038		1,113,219		1,246,150
Federal National Mortgage Association:
5.0%, 3/1/2036 (a)		145,000,000		154,005,388
6.0%, 8/1/2035		398,722		426,928
Government National Mortgage Association:
4.5%, with various maturities from 6/1/2039 until 10/15/2040 (a)		168,296,848		178,520,685
5.0%, with various maturities from 2/15/2033 until 10/15/2040 (a) (b)		424,784,363		459,828,918
5.5%, with various maturities from 12/15/2028 until 3/20/2040 (a) (b)		431,388,742		468,679,747
6.0%, with various maturities from 11/15/2023 until 7/20/2039 (a) (b)		229,872,436		254,742,088
6.5%, with various maturities from 6/15/2031 until 6/20/2039 (b)		76,948,216		85,291,520
7.0%, with various maturities from 10/15/2022 until 3/20/2039		28,750,517		31,974,384
7.5%, with various maturities from 3/15/2022 until 1/15/2037		12,719,457		14,531,894
Total Mortgage-Backed Securities Pass-Throughs (Cost $1,577,738,789)				1,650,729,348
Collateralized Mortgage Obligations 14.4%
FannieMae Whole Loan, "IO2", Series 2007-W8, Interest Only, 6.0%, 9/25/2037		2,860,104		380,528
Federal Home Loan Mortgage Corp.:
"FP", Series 2341, 1.156%*, 7/15/2031		1,522,745		1,545,548
"FO", Series 2418, 1.156%*, 2/15/2032		2,188,201		2,223,875
"GF", Series 2412, 1.206%*, 2/15/2032		1,381,487		1,404,603
"FA", Series 2419, 1.256%*, 2/15/2032		1,701,223		1,731,173
"F", Series 2439, 1.256%*, 3/15/2032		2,417,855		2,458,391
"FA", Series 2436, 1.256%*, 3/15/2032		2,176,069		2,212,551
"EF", Series 2470, 1.256%*, 3/15/2032		3,431,791		3,489,326
"57", Series 256, Interest Only, 5.0%, 3/15/2023		4,128,834		387,009
"ZK", Series 3382, 5.0%, 7/15/2037		8,096,570		8,870,464
"PT", Series 3586, IOette, 5.006%**, 2/15/2038		6,333,717		6,356,440
"PE", Series 2489, 6.0%, 8/15/2032		9,225,347		10,166,860
"TZ", Series 2778, 6.0%, 2/15/2034		2,622,046		2,809,531
"S17", Series 244, Interest Only, 6.194%**, 12/15/2036		25,920,842		2,783,967
"WS", Series 2877, Interest Only, 6.344%**, 10/15/2034		13,427,066		1,018,470
"A", Series 172, Interest Only, 6.5%, 1/1/2024		431,025		73,482
"SB", Series 2742, Interest Only, 6.744%**, 1/15/2019		4,230,471		645,456
"SB", Series 2788, Interest Only, 6.844%**, 10/15/2022		1,136,970		83,499
Federal National Mortgage Association:
"1", Series 17, Principal Only, Zero Coupon, 5/1/2017		1,189		1,162
"OF", Series 2001-60, 1.206%*, 10/25/2031		937,744		952,969
"OF", Series 2001-70, 1.206%*, 10/25/2031		468,872		476,484
"FB", Series 2002-30, 1.256%*, 8/25/2031		2,425,177		2,470,319
"PF", Series 2001-69, 1.256%*, 12/25/2031		1,463,597		1,491,493
"FJ", Series 2002-52, 1.256%*, 9/25/2032		1,720,475		1,751,604
"FB", Series 2002-84, 1.256%*, 12/25/2032		3,590,258		3,653,427
"25", Series 351, Interest Only, 4.5%, 5/1/2019		4,300,874		426,546
"21", Series 334, Interest Only, 5.0%, 3/1/2018		5,018,599		484,617
"20", Series 334, Interest Only, 5.0%, 3/1/2018		3,784,407		386,526
''23", Series 339, Interest Only, 5.0%, 7/1/2018		3,595,240		363,299
"PZ", Series 2007-47, 5.0%, 5/25/2037		5,799,322		6,490,250
"ZA", Series 2008-24, 5.0%, 4/25/2038		14,219,681		15,589,172
"ZX", Series 2010-13, 5.0%, 3/25/2040		11,372,059		12,184,344
"SD", Series 2008-45, Interest Only, 6.244%**, 6/25/2023		11,049,996		1,351,991
"ZQ", Series G93-39, 6.5%, 12/25/2023		4,214,620		4,704,115
Government National Mortgage Association:
"FG", Series 2002-76, 0.656%*, 10/16/2029		1,327,067		1,336,806
"HI", Series 2010-H06, Interest Only, 1.142%**, 4/20/2060		13,492,425		675,970
"FP", Series 2003-67, 1.156%*, 8/20/2033		5,621,875		5,816,440
"BI", Series 2010-H01, Interest Only, 1.638%**, 1/20/2060		15,928,321		1,196,217
"HI", Series 2010-H21, Interest Only, 1.78%**, 10/20/2060		18,000,000		1,496,250
"FI", Series 2009-H01, Interest Only, 1.843%**, 11/20/2059		50,022,887		3,916,792
"LI", Series 2009-104, Interest Only, 4.5%, 12/16/2018		7,261,631		761,175
"PI", Series 2010-20, Interest Only, 4.5%, 9/16/2033		6,530,549		514,625
"NI", Series 2010-44, Interest Only, 4.5%, 10/20/2037		2,620,508		395,690
"VB", Series 2010-26, 5.0%, 1/20/2024		2,114,467		2,385,121
"KE", Series 2004-19, 5.0%, 3/16/2034		4,500,000		5,055,674
"ZB", Series 2004-31, 5.0%, 4/20/2034		7,745,340		8,574,008
"Z", Series 2004-61, 5.0%, 8/16/2034		1,700,354		1,860,506
"LE", Series 2004-87, 5.0%, 10/20/2034		7,241,000		8,015,780
"ZB", Series 2005-15, 5.0%, 2/16/2035		11,940,897		13,376,280
"Z", Series 2005-25, 5.0%, 3/16/2035		2,642,522		2,955,267
"ZA", Series 2006-47, 5.0%, 8/16/2036		6,558,803		7,394,431
"CK", Series 2007-31, 5.0%, 5/16/2037		7,412,000		8,252,748
"ZN", Series 2009-64, 5.0%, 7/20/2039		14,699,246		16,153,435
"EY", Series 2010-46, 5.0%, 4/20/2040		30,000,000		33,064,905
"AI", Series 2008-77, Interest Only, 5.5%, 10/20/2020		696,235		11,772
"AI", Series 2008-40, Interest Only, 5.5%, 5/16/2023		3,142,423		444,904
"AI", Series 2008-51, Interest Only, 5.5%, 5/16/2023		8,833,265		1,104,541
"AI", Series 2008-46, Interest Only, 5.5%, 5/16/2023		2,921,247		380,802
"PC", Series 2003-19, 5.5%, 3/16/2033		8,045,000		9,119,574
"MI", Series 2004-38, Interest Only, 5.5%, 11/20/2033		2,797,202		435,656
"PI", Series 2005-73, Interest Only, 5.5%, 12/20/2034		4,163,462		520,964
"PC", Series 2007-2, 5.5%, 6/20/2035		10,000,000		11,242,794
"PD", Series 2005-91, 5.5%, 12/20/2035		5,000,000		5,682,993
"IL", Series 2009-93, Interest Only, 6.0%, 10/16/2014		8,107,947		854,667
"BZ", Series 2004-46, 6.0%, 6/20/2034		2,824,667		3,130,207
"CI", Series 2009-42, Interest Only, 6.0%, 8/16/2035		749,734		165,557
"CT", Series 2009-42, 6.0%, 8/16/2035		8,996,805		10,027,262
"PY", Series 2009-122, 6.0%, 12/20/2039		10,441,194		11,398,908
"SC", Series 2008-64, Interest Only, 6.244%**, 4/20/2028		5,060,672		191,318
"PS", Series 2008-40, Interest Only, 6.244%**, 5/16/2038		2,850,643		460,754
"SJ", Series 2004-22, Interest Only, 6.344%**, 4/20/2034		3,019,297		38,516
"PS", Series 2003-55, Interest Only, 6.444%**, 6/20/2033		4,856,414		763,880
"SA", Series 2006-47, Interest Only, 6.544%**, 8/16/2036		1,285,032		233,299
"LS", Series 2003-74, Interest Only, 6.894%**, 12/20/2030		863,396		30,577
"SM", Series 2004-49, Interest Only, 6.894%**, 1/20/2034		2,392,915		311,724
"SA", Series 2004-42, Interest Only, 7.344%**, 3/20/2032		6,016,189		1,084,676
"SM", Series 2003-60, Interest Only, 7.494%**, 1/16/2033		15,505,990		1,716,592
"SA", Series 1999-30, Interest Only, 7.744%**, 4/16/2029		5,130,570		561,904
"S", Series 2000-14, Interest Only, 8.094%**, 2/16/2030		2,942,399		741,853
Total Collateralized Mortgage Obligations (Cost $257,261,995)				285,273,305
Government & Agency Obligations 6.3%
Other Government Related (c) 2.3%
Ally Financial, Inc., FDIC Guaranteed, 1.75%, 10/30/2012		6,200,000		6,354,634
Citibank NA, FDIC Guaranteed, 0.448%*, 5/7/2012		14,300,000		14,313,213
Citigroup Funding, Inc., FDIC Guaranteed, 1.875%, 10/22/2012		5,000,000		5,135,810
JPMorgan Chase & Co.:
FDIC Guaranteed, 0.522%*, 6/15/2012		5,853,000		5,880,480
Series 3, FDIC Guaranteed, 0.539%*, 12/26/2012		5,097,000		5,129,713
Western Corporate Federal Credit Union, 1.75%, 11/2/2012		7,800,000		7,982,481
				44,796,331
US Government Sponsored Agencies 0.4%
Federal Home Loan Mortgage Corp., 1.375%, 1/9/2013		4,752,000		4,845,367
Federal National Mortgage Association, 0.5%, 10/30/2012		3,945,000		3,953,979
				8,799,346
US Treasury Obligations 3.6%
US Treasury Bill, 0.185%***, 3/17/2011 (d)		7,357,000		7,353,248
US Treasury Inflation-Indexed Note, 1.375%, 1/15/2020 (b)		10,095,100		10,961,855
US Treasury Notes:
0.375%, 8/31/2012 (b)		8,000,000		8,005,000
0.875%, 2/29/2012 (e)		18,000,000		18,144,180
1.375%, 5/15/2013 (b)		15,000,000		15,359,700
3.625%, 2/15/2020		10,000,000		10,917,970
				70,741,953
Total Government & Agency Obligations (Cost $122,939,100)				124,337,630

	Shares		Value ($)
Securities Lending Collateral 22.7%
Daily Assets Fund Institutional, 0.26% (f) (g) (Cost $450,134,016)		450,134,016		450,134,016
Cash Equivalents 5.9%
Central Cash Management Fund, 0.20% (f) (Cost $117,519,831)		117,519,831		117,519,831

	% of Net Assets			Value ($)
Total Investment Portfolio (Cost $2,525,593,731)+		132.4			2,627,994,130
Other Assets and Liabilities, Net		(32.4	)		(642,775,702	)
Net Assets		100.0			1,985,218,428

* These securities are shown at their current rate as of October 31, 2010. Floating rate securities' yields vary with a designated market index or market rate, such as the coupon-equivalent of the US Treasury bill rate.

** These securities are shown at their current rate as of October 31, 2010.

*** Annualized yield at time of purchase; not a coupon rate.

+The cost for federal income tax purposes was $2,525,634,635. At October 31, 2010, net unrealized appreciation for all securities based on tax cost was $102,359,495. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $103,728,795 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $1,369,300.

(a) When-issued or delayed delivery securities included.

(b) All or a portion of these securities were on loan (see Notes to Financial Statements). The value of all securities loaned at October 31, 2010 amounted to $442,112,334, which is 22.3% of net assets.

(c) Government-backed debt issued by financial companies or government sponsored enterprises.

(d) At October 31, 2010, this security has been pledged, in whole or in part, to cover initial margin requirements for open futures contracts.

(e) At October 31, 2010, this security has been pledged, in whole or in part, as collateral for open swap contracts.

(f) Affiliated fund managed by Deutsche Investment Management Americas Inc. The rate shown is the annualized seven-day yield at period end.

(g) Represents collateral held in connection with securities lending. Income earned by the Fund is net of borrower rebates.

FDIC: Federal Deposit Insurance Corp.

Interest Only: Interest Only (IO) bonds represent the "interest only" portion of payments on a pool of underlying mortgages or mortgage-backed securities. IO securities are subject to prepayment risk of the pool of underlying mortgages.

IOettes: These securities represent the right to receive interest payments on an underlying pool of mortgages with similar features as those associated with IO securities. Unlike IO's, a nominal amount of principal is assigned to an IOette which is small in relation to the interest flow that constitutes almost all of the IOette cash flow. The effective yield of this security is lower than the stated interest rate.

Principal Only: Principal Only (PO) bonds represent the "principal only" portion of payments on a pool of underlying mortgages or mortgage-backed securities.

Included in the portfolio are investments in mortgage or asset-backed securities which are interests in separate pools of mortgages or assets. Effective maturities of these investments may be shorter than stated maturities due to prepayments. Some separate investments in the Federal Home Loan Mortgage Corp. and Government National Mortgage Association issues which have similar coupon rates have been aggregated for presentation purposes in this investment portfolio.

At October 31, 2010, open futures contracts purchased were as follows:

	Currency	Expiration Date	Contracts		Notional Value ($)		Unrealized Appreciation/ (Depreciation) ($)
10 Year Japanese Government Bond	JPY	12/9/2010		25		44,488,629		661,738
10 Year US Treasury Note	USD	12/21/2010		717		90,543,656		300,031
2 Year US Treasury Note	USD	12/31/2010		695		152,889,141		436,110
Federal Republic of Germany Euro-Schatz	EUR	12/8/2010		2,326		352,302,107		(1,906,980	)
Ultra Long Term US Treasury Bond	USD	12/21/2010		33		4,449,844		(1,031	)
Total net unrealized depreciation								(510,132	)

At October 31, 2010, open futures contracts sold were as follows:

	Currency	Expiration Date	Contracts		Notional Value ($)		Unrealized Appreciation/ (Depreciation) ($)
10 Year Australian Treasury Bond	AUD	12/15/2010		71		7,367,721		83,934
10 Year Canadian Government Bond	CAD	12/20/2010		359		44,495,725		(260,477	)
10 Year US Treasury Note	USD	12/21/2010		466		58,847,063		278,500
5 Year US Treasury Note	USD	12/31/2010		650		79,025,781		71,094
Federal Republic of Germany Euro-Bund	EUR	12/8/2010		944		169,790,033		1,497,800
United Kingdom Long Gilt Bond	GBP	12/29/2010		257		50,800,166		478,480
Total net unrealized appreciation								2,149,331

At October 31, 2010, open interest rate swaps were as follows:

Effective/ Expiration Date	Notional Amount ($)			Cash Flows Paid by the Fund	Cash Flows Received by the Fund	Value ($)			Upfront Payments Paid/ (Received) ($)		Unrealized Depreciation ($)
11/1/2010 11/1/2025		6,100,000	1	Floating — LIBOR	Floating — 4.293%++		(335,519	)		—		(335,519	)
10/28/2010 10/28/2025		3,590,000	2	Floating — LIBOR	Floating — 4.138%++		(131,823	)		—		(131,823	)
Total unrealized depreciation												(467,342	)

++These interest rate swaps are shown at their current rate as of October 31, 2010.

At October 31, 2010, open total return swap contracts were as follows:

Effective/ Expiration Date	Notional Amount ($)			Fixed Cash Flows Paid			Reference Entity	Value ($)		Upfront Payments Paid/ (Received) ($)		Unrealized Appreciation ($)
6/9/2010 6/1/2012		75,100,000	3		0.45	%	Citi Global Interest Rate Strategy Index		1,259,882		50,067		1,209,815
Counterparties: 1Barclays Bank PLC 2Morgan Stanley 3Citigroup, Inc.

At October 31, 2010, open written option contracts were as follows:

Written Options	Coupon Rate (%)		Contract Amount		Expiration Date	Strike Price ($)		Value ($) (h)
Call Options 30-Year GNSF		4.0		25,000,000	12/13/2010		104.5		66,406
30-Year GNSF		4.0		25,000,000	1/13/2011		104.2		85,938
30-Year GNSF		4.5		25,000,000	11/12/2010		105.3		226,563
30-Year GNSF		4.5		50,000,000	11/12/2010		105.2		515,625
30-Year GNSF		4.5		25,000,000	12/13/2010		105.9		117,187
30-Year GNSF		4.5		25,000,000	12/13/2010		106.8		35,156
30-Year GNSF		4.5		25,000,000	1/13/2011		106.4		62,500
30-Year GNSF		5.0		25,000,000	11/12/2010		107.0		116,617
30-Year GNSF		5.0		50,000,000	11/12/2010		106.7		406,250
30-Year GNSF		5.0		25,000,000	12/13/2010		107.4		78,125
30-Year GNSF		5.0		25,000,000	1/13/2011		107.3		130,170
30-Year GNSF		5.5		25,000,000	11/12/2010		107.8		166,348
30-Year GNSF		5.5		25,000,000	11/12/2010		107.5		250,000
30-Year GNSF		5.5		25,000,000	1/13/2011		108.2		70,313
Total Call Options (Premiums received $1,807,617)									2,327,198
Put Options 30-Year GNSF		4.0		25,000,000	12/13/2010		103.5		175,781
30-Year GNSF		4.0		25,000,000	1/13/2011		103.2		226,563
30-Year GNSF		4.5		25,000,000	11/12/2010		104.8		7,812
30-Year GNSF		4.5		25,000,000	11/12/2010		104.8		4,322
30-Year GNSF		4.5		25,000,000	12/13/2010		105.8		125,781
30-Year GNSF		4.5		25,000,000	1/13/2011		105.4		132,813
30-Year GNSF		5.0		25,000,000	11/12/2010		106.5		3,242
30-Year GNSF		5.0		25,000,000	11/12/2010		106.4		7,812
30-Year GNSF		5.0		25,000,000	1/13/2011		107.3		262,509
30-Year GNSF		5.5		25,000,000	1/13/2011		108.2		101,563
Total Put Options (Premiums received $1,279,297)									1,048,198
Total Written Options (Premiums received $3,086,914)									3,375,396

(h) Unrealized depreciation on written options at October 31, 2010 was $288,482.

GNSF: Government National Single Family

LIBOR: London Interbank Offered Rate

As of October 31, 2010, the Fund had the following open forward foreign currency exchange contracts:

Contracts to Deliver		In Exchange For		Settlement Date	Unrealized Appreciation ($)		Counterparty
CHF	22,125,000	USD	23,108,256	11/22/2010		644,959	UBS AG
EUR	13,014,000	USD	18,101,433	11/22/2010		24,030	Morgan Stanley
Total unrealized appreciation						668,989

Contracts to Deliver		In Exchange For		Settlement Date	Unrealized Depreciation ($)			Counterparty
USD	23,397,076	SEK	156,365,000	11/22/2010		(97,166	)	Morgan Stanley
USD	11,522,766	NOK	67,456,000	11/22/2010		(60,534	)	UBS AG
USD	35,549,800	AUD	36,093,000	11/22/2010		(273,577	)	UBS AG
USD	11,596,208	CAD	11,817,000	11/22/2010		(2,844	)	UBS AG
JPY	1,647,327,000	USD	20,280,035	11/22/2010		(190,588	)	Bank of New York Mellon Corp.
NZD	2,389,000	USD	1,797,639	11/22/2010		(20,922	)	Morgan Stanley
GBP	11,646,000	USD	18,521,798	11/22/2010		(133,611	)	Bank of New York Mellon Corp.
Total unrealized depreciation						(779,242	)

Currency Abbreviations

AUD Australian Dollar

CAD Canadian Dollar

CHF Swiss Franc

EUR Euro

GBP British Pound

JPY Japanese Yen

NOK Norwegian Krone

NZD New Zealand Dollar

SEK Swedish Krona

USD United States Dollar

For information on the Fund's policy and additional disclosures regarding futures contracts, interest rate swap contracts, total return swap contracts, options contracts and forward foreign currency exchange contracts, please refer to Note B in the accompanying Notes to Financial Statements.

Fair Value Measurements

Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used as of October 31, 2010 in valuing the Fund's investments. For information on the Fund's policy regarding the valuation of investments, please refer to the Security Valuation section of Note A in the accompanying Notes to Financial Statements.

Assets	Level 1		Level 2			Level 3			Total
Fixed Income Investments (i)
Mortgage-Backed Securities Pass-Throughs	$	—	$	1,650,729,348		$	—		$	1,650,729,348
Collateralized Mortgage Obligations		—		277,988,076			7,285,229			285,273,305
Government & Agency Obligations		—		116,984,382			—			116,984,382
Short-Term Investments (i)		567,653,847		7,353,248			—			575,007,095
Derivatives (j)		1,639,199		1,878,804			—			3,518,003
Total	$	569,293,046	$	2,054,933,858		$	7,285,229		$	2,631,512,133
Liabilities
Derivatives (j)	$	—	$	(1,246,584	)	$	(3,375,696	)	$	(4,622,280	)
Total	$	—	$	(1,246,584	)	$	(3,375,396	)	$	(4,622,280	)

There have been no significant transfers in and out of Level 1 and Level 2 fair value measurements during the year ended October 31, 2010.

(i) See Investment Portfolio for additional detailed categorizations.

(j) Derivatives include unrealized appreciation (depreciation) on futures contracts, interest rate swaps, total return swaps and forward foreign currency exchange contracts and options written, at value.

Level 3 Reconciliation

The following is a reconciliation of the Fund's Level 3 investments for which significant unobservable inputs were used in determining value:

	Collateralized Mortgage Obligations			Government & Agency Obligations			Total			Written Options
Balance as of October 31, 2009	$	31,381,324		$	10,865,463		$	42,246,787		$	(2,940,699	)
Net realized gain (loss)		1,660,038			32,500			1,692,538			1,916,016
Change in unrealized appreciation (depreciation)		836,322			312,037			1,148,359			736,201
Amortization premium/discount		(468,242	)		—			(468,242	)		—
Net purchases (sales)		(26,124,213	)		(11,210,000	)		(37,334,213	)		(3,086,914	)
Transfers into Level 3		—			—			—			—
Transfers (out) of Level 3		—			—			—			—
Balance as of October 31, 2010	$	7,285,229		$	—		$	7,285,229		$	(3,375,396	)
Net change in unrealized appreciation (depreciation) from investments still held as of October 31, 2010	$	1,030,390		$	—		$	1,030,390		$	(288,482	)

Transfers between price levels are recognized at the beginning of the reporting period.

The accompanying notes are an integral part of the financial statements.

Statement of Assets and Liabilities

as of October 31, 2010
Assets
Investments: Investments in securities, at value (cost $1,957,939,884) — including $442,112,334 of securities loaned	$	2,060,340,283
Investment in Daily Assets Fund Institutional (cost $450,134,016)*		450,134,016
Investment in Central Cash Management Fund (cost $117,519,831)		117,519,831
Total investments, at value (cost $2,525,593,731)		2,627,994,130
Cash		515,723
Foreign currency, at value (cost $54,421)		42,764
Deposits with broker for open futures contracts		9,677,813
Deposit from broker for open swap contracts		1,025,000
Receivable for investments sold — when-issued securities		332,956,061
Upfront payments paid on open swap contracts		50,067
Receivable for Fund shares sold		713,433
Interest receivable		7,719,864
Receivable for variation margin on open futures contracts		936,200
Unrealized appreciation on forward foreign currency exchange contracts		668,989
Unrealized appreciation on open swap contracts		1,209,815
Other assets		54,483
Total assets		2,983,564,342
Liabilities
Payable upon return of securities loaned		450,134,016
Payable for investments purchased		28,057,101
Payable for investments purchased — when-issued securities		508,697,917
Payable for Fund shares redeemed		3,026,024
Unrealized depreciation on open swap contracts		467,342
Payable upon return of deposit for open swap contracts		1,025,000
Options written, at value (premiums received $3,086,914)		3,375,396
Unrealized depreciation on forward foreign currency exchange contracts		779,242
Accrued management fee		584,979
Other accrued expenses and payables		2,198,897
Total liabilities		998,345,914
Net assets, at value	$	1,985,218,428

* Represents collateral on securities loaned.

The accompanying notes are an integral part of the financial statements.

Statement of Assets and Liabilities as of October 31, 2010 (continued)
Net Assets Consist of
Undistributed net investment income		14,292,383
Net unrealized appreciation (depreciation) on: Investments		102,400,399
Futures		1,639,199
Written options		(288,482	)
Foreign currency		(121,947	)
Swap contracts		742,473
Accumulated net realized gain (loss)		(81,404,433	)
Paid-in capital		1,947,958,836
Net assets, at value	$	1,985,218,428
Net Asset Value
Class A Net Asset Value and redemption price per share ($1,800,311,338 ÷ 202,013,440 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized)	$	8.91
Maximum offering price per share (100 ÷ 97.25 of $8.91)	$	9.16
Class B Net Asset Value, offering and redemption price (subject to contingent deferred sales charge) per share ($8,720,794 ÷ 979,076 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized)	$	8.91
Class C Net Asset Value, offering and redemption price (subject to contingent deferred sales charge) per share ($81,643,929 ÷ 9,142,669 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized)	$	8.93
Class S Net Asset Value, offering and redemption priceper share ($92,731,860 ÷ 10,402,439 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized)	$	8.91
Institutional Class Net Asset Value, offering and redemption price per share ($1,810,507 ÷ 203,428 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized)	$	8.90

The accompanying notes are an integral part of the financial statements.

Statement of Operations

for the year ended October 31, 2010
Investment Income
Income: Interest	$	82,480,554
Income distributions — Central Cash Management Fund		181,865
Securities lending income, including income from Daily Assets Fund Institutional, net of borrower rebates		79,604
Total income		82,742,023
Expenses: Management fee		6,453,394
Administration fee		2,001,095
Distribution and service fees		5,106,528
Services to shareholders		2,189,857
Custodian fee		106,940
Professional fees		124,280
Trustees' fees and expenses		55,979
Reports to shareholders		140,112
Registration fees		99,567
Other		158,650
Total expenses before expense reductions		16,436,402
Expense reductions		(2,247	)
Total expenses after expense reductions		16,434,155
Net investment income		66,307,868
Realized and Unrealized Gain (Loss)
Net realized gain (loss) from: Investments		30,781,137
Futures		17,727,021
Written options		(3,416,510	)
Foreign currency		(212,129	)
Swap contracts		(7,340,903	)
		37,538,616
Change in net unrealized appreciation (depreciation) on: Investments		24,242,881
Futures		(971,387	)
Written options		(401,859	)
Foreign currency		(1,817,411	)
Swap contracts		2,650,252
		23,702,476
Net gain (loss)		61,241,092
Net increase (decrease) in net assets resulting from operations	$	127,548,960

The accompanying notes are an integral part of the financial statements.

Statement of Changes in Net Assets

	Years Ended October 31,
Increase (Decrease) in Net Assets	2010			2009
Operations: Net investment income	$	66,307,868		$	79,572,812
Net realized gain (loss)		37,538,616			34,656,857
Change in net unrealized appreciation (depreciation)		23,702,476			139,191,626
Net increase (decrease) in net assets resulting from operations		127,548,960			253,421,295
Distributions to shareholders from: Net investment income: Class A		(76,826,827	)		(78,595,654	)
Class B		(359,528	)		(629,473	)
Class C		(2,480,404	)		(2,052,583	)
Class S		(3,848,050	)		(3,670,858	)
Institutional Class		(49,309	)		(20,156	)
Net realized gains: Class A		(16,276,388	)		—
Class B		(122,616	)		—
Class C		(561,281	)		—
Class S		(743,232	)		—
Institutional Class		(4,400	)		—
Total distributions		(101,272,035	)		(84,968,724	)
Fund share transactions: Proceeds from shares sold		191,875,272			139,963,880
Reinvestment of distributions		79,269,554			63,202,372
Cost of shares redeemed		(321,043,254	)		(309,802,460	)
Redemption fees		—			20,012
Net increase (decrease) in net assets from Fund share transactions		(49,898,428	)		(106,616,196	)
Increase from regulatory settlements (see Note G)		119,602			—
Increase (decrease) in net assets		(23,501,901	)		61,836,375
Net assets at beginning of period		2,008,720,329			1,946,883,954
Net assets at end of period (including undistributed net investment income of $14,292,383 and $43,912,695, respectively)	$	1,985,218,428		$	2,008,720,329

The accompanying notes are an integral part of the financial statements.

Financial Highlights

Class A Years Ended October 31,	2010			2009			2008			2007			2006
Selected Per Share Data
Net asset value, beginning of period	$	8.79		$	8.08		$	8.36		$	8.39		$	8.41
Income from investment operations: Net investment incomea		.30			.34			.39			.39			.36
Net realized and unrealized gain (loss)		.27			.73			(.25	)		(.00	)*		.02
Total from investment operations		.57			1.07			.14			.39			.38
Less distributions from: Net investment income		(.37	)		(.36	)		(.39	)		(.42	)		(.40	)
Net realized gains		(.08	)		—			—			—			—
Return of capital		—			—			(.03	)		—			—
Total distributions		(.45	)		(.36	)		(.42	)		(.42	)		(.40	)
Redemption fees		—			.00	*		.00	*		.00	*		.00	*
Net asset value, end of period	$	8.91		$	8.79		$	8.08		$	8.36		$	8.39
Total Return (%)b		6.54			13.67			1.60	c		4.78	c		4.59
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		1,801			1,847			1,794			1,982			2,196
Ratio of expenses before expense reductions (%)		.80			.81			.83			.82			.85
Ratio of expenses after expense reductions (%)		.80			.81			.83			.82			.85
Ratio of net investment income (%)		3.33			4.00			4.63			4.63			4.33
Portfolio turnover rate (%)		186			207			186			336			305
aBased on average shares outstanding during the period. bTotal return does not reflect the effect of any sales charges. cTotal return would have been lower had certain expenses not been reduced. *Amount is less than $.005.

Class B Years Ended October 31,	2010			2009			2008			2007			2006
Selected Per Share Data
Net asset value, beginning of period	$	8.79		$	8.07		$	8.35		$	8.38		$	8.39
Income from investment operations: Net investment incomea		.22			.27			.31			.31			.28
Net realized and unrealized gain (loss)		.27			.74			(.25	)		(.00	)*		.03
Total from investment operations		.49			1.01			.06			.31			.31
Less distributions from: Net investment income		(.29	)		(.29	)		(.31	)		(.34	)		(.32	)
Net realized gains		(.08	)		—			—			—			—
Return of capital		—			—			(.03	)		—			—
Total distributions		(.37	)		(.29	)		(.34	)		(.34	)		(.32	)
Redemption fees		—			.00	*		.00	*		.00	*		.00	*
Net asset value, end of period	$	8.91		$	8.79		$	8.07		$	8.35		$	8.38
Total Return (%)b,c		5.72			12.52			.79			3.80			3.76
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		9			15			23			36			57
Ratio of expenses before expense reductions (%)		1.72			1.77			1.76			1.72			1.83
Ratio of expenses after expense reductions (%)		1.70			1.69			1.74			1.71			1.75
Ratio of net investment income (%)		2.43			3.12			3.72			3.74			3.43
Portfolio turnover rate (%)		186			207			186			336			305
aBased on average shares outstanding during the period. bTotal return does not reflect the effect of any sales charges. cTotal return would have been lower had certain expenses not been reduced. *Amount is less than $.005.

Class C Years Ended October 31,	2010			2009			2008			2007			2006
Selected Per Share Data
Net asset value, beginning of period	$	8.81		$	8.09		$	8.37		$	8.41		$	8.42
Income from investment operations: Net investment incomea		.23			.27			.32			.32			.29
Net realized and unrealized gain (loss)		.27			.75			(.25	)		(.00	)*		.03
Total from investment operations		.50			1.02			.07			.32			.32
Less distributions from: Net investment income		(.30	)		(.30	)		(.32	)		(.36	)		(.33	)
Net realized gains		(.08	)		—			—			—			—
Return of capital		—			—			(.03	)		—			—
Total distributions		(.38	)		(.30	)		(.35	)		(.36	)		(.33	)
Redemption fees		—			.00	*		.00	*		.00	*		.00	*
Net asset value, end of period	$	8.93		$	8.81		$	8.09		$	8.37		$	8.41
Total Return (%)b		5.83			12.76			.78	c		3.85	c		3.88
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		82			63			51			39			41
Ratio of expenses before expense reductions (%)		1.56			1.59			1.63			1.64			1.61
Ratio of expenses after expense reductions (%)		1.56			1.59			1.62			1.63			1.61
Ratio of net investment income (%)		2.57			3.22			3.84			3.82			3.57
Portfolio turnover rate (%)		186			207			186			336			305
aBased on average shares outstanding during the period. bTotal return does not reflect the effect of any sales charges. cTotal return would have been lower had certain expenses not been reduced. *Amount is less than $.005.

Class S Years Ended October 31,	2010			2009			2008			2007			2006
Selected Per Share Data
Net asset value, beginning of period	$	8.80		$	8.08		$	8.36		$	8.39		$	8.41
Income from investment operations: Net investment incomea		.31			.36			.41			.40			.37
Net realized and unrealized gain (loss)		.27			.74			(.26	)		(.00	)*		.02
Total from investment operations		.58			1.10			.15			.40			.39
Less distributions from: Net investment income		(.39	)		(.38	)		(.40	)		(.43	)		(.41	)
Net realized gains		(.08	)		—			—			—			—
Return of capital		—			—			(.03	)		—			—
Total distributions		(.47	)		(.38	)		(.43	)		(.43	)		(.41	)
Redemption fees		—			.00	*		.00	*		.00	*		.00	*
Net asset value, end of period	$	8.91		$	8.80		$	8.08		$	8.36		$	8.39
Total Return (%)		6.84			13.87			1.78	b		4.83	b		4.92	b
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		93			84			79			80			91
Ratio of expenses before expense reductions (%)		.62			.64			.65			.66			.73
Ratio of expenses after expense reductions (%)		.62			.64			.64			.65			.69
Ratio of net investment income (%)		3.51			4.17			4.82			4.79			4.49
Portfolio turnover rate (%)		186			207			186			336			305
aBased on average shares outstanding during the period. bTotal return would have been lower had certain expenses not been reduced. *Amount is less than $.005.

Institutional Class Years Ended October 31,	2010			2009			2008			2007			2006
Selected Per Share Data
Net asset value, beginning of period	$	8.79		$	8.07		$	8.35		$	8.39		$	8.39
Income from investment operations: Net investment incomea		.32			.36			.41			.40			.39
Net realized and unrealized gain (loss)		.26			.74			(.26	)		(.00	)*		.02
Total from investment operations		.58			1.10			.15			.40			.41
Less distributions from: Net investment income		(.39	)		(.38	)		(.40	)		(.44	)		(.41	)
Net realized gains		(.08	)		—			—			—			—
Return of capital		—			—			(.03	)		—			—
Total distributions		(.47	)		(.38	)		(.43	)		(.44	)		(.41	)
Redemption fees		—			.00	*		.00	*		.00	*		.00	*
Net asset value, end of period	$	8.90		$	8.79		$	8.07		$	8.35		$	8.39
Total Return (%)		6.80			13.90			1.75	b		4.94	b		5.00
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		2			.49			.37			.19			.11
Ratio of expenses before expense reductions (%)		.51			.57			.65			.81			.50
Ratio of expenses after expense reductions (%)		.51			.57			.65			.67			.50
Ratio of net investment income (%)		3.62			4.24			4.81			4.78			4.68
Portfolio turnover rate (%)		186			207			186			336			305
aBased on average shares outstanding during the period. bTotal return would have been lower had certain expenses not been reduced. *Amount is less than $.005.

Notes to Financial Statements

A. Organization and Significant Accounting Policies

DWS Strategic Government Securities Fund (the "Fund"), is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end, diversified management investment company organized as a Massachusetts business trust.

The Fund offers multiple classes of shares which provide investors with different purchase options. Class A shares are offered to investors subject to an initial sales charge. Class B shares of the Fund are closed to new purchases, except exchanges or the reinvestment of dividends or other distributions. Class B shares were offered to investors without an initial sales charge and are subject to higher ongoing expenses than Class A shares and a contingent deferred sales charge payable upon certain redemptions. Class B shares automatically convert to Class A shares six years after issuance. Class C shares are offered to investors without an initial sales charge but are subject to higher ongoing expenses than Class A shares and a contingent deferred sales charge payable upon certain redemptions within one year of purchas e. Class C shares do not automatically convert into another class. Institutional Class shares are offered to a limited group of investors, are not subject to initial or contingent deferred sales charges and have lower ongoing expenses than other classes. Class S shares are not subject to initial or contingent deferred sales charges and are generally not available to new investors except under certain circumstances.

Investment income, realized and unrealized gains and losses, and certain fund-level expenses and expense reductions, if any, are borne pro rata on the basis of relative net assets by the holders of all classes of shares, except that each class bears certain expenses unique to that class such as services to shareholders, distribution and service fees and certain other class-specific expenses. Differences in class-level expenses may result in payment of different per share dividends by class. All shares of the Fund have equal rights with respect to voting subject to class-specific arrangements.

The Fund's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America which require the use of management estimates. Actual results could differ from those estimates. The policies described below are followed consistently by the Fund in the preparation of its financial statements.

Security Valuation. Investments are stated at value determined as of the close of regular trading on the New York Stock Exchange on each day the exchange is open for trading.

Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, and credit risk). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

Debt securities are valued by independent pricing services approved by the Fund's Board. If the pricing services are unable to provide valuations, securities are valued at the most recent bid quotation or evaluated price, as applicable, obtained from one or more broker-dealers. Such services may use various pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as broker quotes. These securities are generally categorized as Level 2.

Futures contracts are generally valued at the settlement prices established each day on the exchange on which they are traded and are categorized as Level 1.

Forward currency contracts are valued at the prevailing forward exchange rate of the underlying currencies and are categorized as Level 2.

Swap contracts are valued daily based upon prices supplied by a Board approved pricing vendor, if available, and otherwise are valued at the price provided by the broker-dealer. Swap contracts are generally categorized as Level 2.

Exchange-traded options are valued at the last sale price or, in the absence of a sale, the mean between the closing bid and asked prices or at the most recent asked price (bid for purchased options) if no bid or asked price are available. Exchange-traded options are categorized as Level 1. Over-the-counter written or purchased options on TBAs are valued at the price provided by the broker-dealer with which the option was traded and are generally categorized as Level 3.

Money market instruments purchased with an original or remaining maturity of sixty days or less, maturing at par, are valued at amortized cost, which approximates value, and are categorized as Level 2. Investments in open-end investment companies are valued at their net asset value each business day and are categorized as Level 1.

Securities and other assets for which market quotations are not readily available or for which the above valuation procedures are deemed not to reflect fair value are valued in a manner that is intended to reflect their fair value as determined in accordance with procedures approved by the Board and are generally categorized as Level 3. In accordance with the Fund's valuation procedures, factors used in determining value may include, but are not limited to, the type of the security; the size of the holding; the initial cost of the security; the existence of any contractual restrictions on the security's disposition; the price and extent of public trading in similar securities of the issuer or of comparable companies; quotations or evaluated prices from broker-dealers and/or pricing services; information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities); an analysis of the company's or issuer's financial statements; an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold and with respect to debt securities; the maturity, coupon, creditworthiness, currency denomination and the movement of the market in which the security is normally traded. The value determined under these procedures may differ from published values for the same securities.

Disclosure about the classification of fair value measurements is included in a table following the Fund's Investment Portfolio.

Securities Lending. The Fund lends securities to certain financial institutions. The Fund retains beneficial ownership of the securities it has loaned and continues to receive interest and dividends paid by the issuer of securities and to participate in any changes in their market value. The Fund requires the borrowers of the securities to maintain collateral with the Fund consisting of either cash or liquid, unencumbered assets having a value at least equal to the value of the securities loaned. When the collateral falls below specified amounts, the lending agent will use its best effort to obtain additional collateral on the next business day to meet required amounts under the security lending agreement. The Fund may invest the cash collateral into a joint trading account in an affiliated money market fund pursuant to Exemptive Orders issued by the SEC. The Fund receives compensation for lending its securities either in the form of fees or by earning interest on invested cash collateral net of borrower rebates and fees paid to a lending agent. Either the Fund or the borrower may terminate the loan. There may be risks of delay and costs in recovery of securities or even loss of rights in the collateral should the borrower of the securities fail financially. The Fund is also subject to all investment risks associated with the reinvestment of any cash collateral received, including, but not limited to, interest rate, credit and liquidity risk associated with such investments.

When-Issued/Delayed Delivery Securities. The Fund may purchase securities with delivery or payment to occur at a later date beyond the normal settlement period. At the time the Fund enters into a commitment to purchase a security, the transaction is recorded and the value of the security is reflected in the net asset value. The price of such security and the date when the security will be delivered and paid for are fixed at the time the transaction is negotiated. The value of the security may vary with market fluctuations. No interest accrues to the Fund until payment takes place. At the time the Fund enters into this type of transaction it is required to segregate cash or other liquid assets at least equal to the amount of the commitment.

Certain risks may arise upon entering into when-issued or delayed delivery securities from the potential inability of counterparties to meet the terms of their contracts or if the issuer does not issue the securities due to political, economic, or other factors. Additionally, losses may arise due to changes in the value of the underlying securities.

Federal Income Taxes. The Fund's policy is to comply with the requirements of the Internal Revenue Code, as amended, which are applicable to regulated investment companies, and to distribute all of its taxable income to its shareholders.

At October 31, 2010, the Fund had a net tax basis capital loss carryforward of approximately $79,800,000, which may be applied against any realized net taxable capital gains of each succeeding year until fully utilized October 31, 2012 ($7,500,000), October 31, 2013 ($21,430,000), October 31, 2014 ($32,163,000), October 31, 2015 ($4,867,000) and October 31, 2017 ($13,840,000), the respective expiration dates, whichever occurs first.

During the year ended October 31, 2010, the Fund utilized $33,444,000 of prior year capital loss carryforward.

The Fund has reviewed the tax positions for each of the three open tax years as of October 31, 2010 and has determined that no provision for income tax is required in the Fund's financial statements. The Fund's federal tax returns for the prior three fiscal years remain open subject to examination by the Internal Revenue Service.

Distribution of Income and Gains. Net investment income of the Fund, is declared and distributed to shareholders monthly. Net realized gains from investment transactions, in excess of available capital loss carryforwards, would be taxable to the Fund if not distributed, and, therefore, will be distributed to shareholders at least annually.

The timing and characterization of certain income and capital gains distributions are determined annually in accordance with federal tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences primarily relate to investments in futures, swap contracts, forward currency contracts, recognition of certain currency gain (loss) as ordinary income, mortgage-backed securities, premium amortization on debt securities, certain securities sold at a loss and regulatory settlements. As a result, net investment income (loss) and net realized gain (loss) on investment transactions for a reporting period may differ significantly from distributions during such period. Accordingly, the Fund may periodically make reclassifications among certain of its capital account s without impacting the net asset value of the Fund.

At October 31, 2010, the Fund's components of distributable earnings (accumulated losses) on a tax-basis were as follows:

Undistributed ordinary income*	$	15,290,150
Capital loss carryforwards	$	(79,800,000	)
Unrealized appreciation (depreciation) on investments	$	102,359,495

In addition, the tax character of distributions paid to shareholders by the Fund is summarized as follows:

	Years Ended October 31,
	2010		2009
Distributions from ordinary income*	$	101,272,035	$	84,968,724

* For tax purposes, short-term capital gain distributions are considered ordinary income distributions.

Contingencies. In the normal course of business, the Fund may enter into contracts with service providers that contain general indemnification clauses. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet been made. However, based on experience, the Fund expects the risk of loss to be remote.

Other. Investment transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment transactions are reported on trade date. Interest income is recorded on the accrual basis. Realized gains and losses from investment transactions are recorded on an identified cost basis. All premiums and discounts are amortized/accreted for financial reporting purposes.

B. Derivative Instruments

Interest Rate Swap Contracts. For the year ended October 31, 2010, the Fund entered into interest rate swap transactions to gain exposure to different parts of the yield curve while managing overall duration. The use of interest rate swaps is a highly specialized activity that involves investment techniques and risks different from those associated with ordinary portfolio security transactions. In an interest rate swap, the Fund agrees to pay to the other party to the interest rate swap (which is known as the "counterparty") a fixed rate payment in exchange for the counterparty agreeing to pay to the Fund a variable rate payment, or the Fund agrees to receive from the counterparty a fixed rate payment in exchange for the counterparty agreeing to receive from the Fund a variable rate payment. The payment obligations are based on the notional amount of the swap. Certain risks may arise when entering into swap transactions including counterparty default, liquidity or unfavorable changes in interest rates. In connection with these agreements, securities and or cash may be identified as collateral in accordance with the terms of the swap agreements to provide assets of value and recourse in the event of default. The maximum counterparty credit risk is the net present value of the cash flows to be received from or paid to the counterparty over the term of the interest rate swap contract, to the extent that this amount is beneficial to the Fund, in addition to any related collateral posted to the counterparty by the Fund. This risk may be partially reduced by a master netting arrangement between the Fund and the counterparty. The value of the swap is adjusted daily and the change in value, if any, is recorded as unrealized appreciation or depreciation in t he Statement of Assets and Liabilities. An upfront payment made by the Fund is recorded as an asset in the Statement of Assets and Liabilities. An upfront payment received by the Fund is recorded as a liability in the Statement of Assets and Liabilities. Payments received or made at the end of the measurement period are recorded as realized gain or loss in the Statement of Operations.

A summary of the open interest rate swap contracts as of October 31, 2010 is included in a table following the Fund's Investment Portfolio. For the year ended October 31, 2010, the Fund invested in interest rate swap contracts with a total notional amount generally indicative of a range from approximately $9,690,000 to $125,800,000.

Total Return Swap Contracts. Total return swaps involve commitments to pay interest in exchange for a market-linked return based on a notional amount. For the year ended October 31, 2010, the Fund entered into total return swap transactions to enhance potential gains. To the extent the total return of the reference security or index underlying the total return swap exceeds or falls short of the offsetting interest rate obligation, the Fund will receive a payment or make a payment to the counterparty, respectively. Certain risks may arise when entering into swap transactions including counterparty default, liquidity or unfavorable changes in the value of the underlying reference security or index. The value of the swap is adjusted daily and the ch ange in value, if any, is recorded as unrealized appreciation or depreciation in the Statement of Assets and Liabilities. An upfront payment made by the Fund is recorded as an asset in the Statement of Assets and Liabilities. An upfront payment received by the Fund is recorded as a liability in the Statement of Assets and Liabilities. Payments received or made at the end of each measurement period are recorded as realized gain or loss in the Statement of Operations.

A summary of the open total return swap contracts as of October 31, 2010 is included in a table following the Fund's Investment Portfolio. For the year ended October 31, 2010, the Fund invested in total return swap contracts with a total notional amount generally indicative of a range from approximately $75,100,000 to $89,300,000.

Options. An option contract is a contract in which the writer (seller) of the option grants the buyer of the option, upon payment of a premium, the right to purchase from (call option), or sell to (put option), the writer a designated instrument at a specified price within a specified period of time. Certain options, including options on indices, will require cash settlement by the Fund if the option is exercised. For the year ended October 31, 2010, the Fund entered into options on interest rate swaps and futures to gain exposure to different parts of the yield curve while managing overall duration. In addition, the Fund entered into options on GNMA TBAs to enhance potential gain.

The liability representing the Fund's obligation under an exchange traded written option or investment in a purchased option is valued at the last sale price or, in the absence of a sale, the mean between the closing bid and asked prices or at the most recent asked price (bid for purchased options) if no bid and asked price are available. Over-the-counter written or purchased options are valued using dealer-supplied quotations. Gain or loss is recognized when the option contract expires or is closed.

If the Fund writes a covered call option, the Fund foregoes, in exchange for the premium, the opportunity to profit during the option period from an increase in the market value of the underlying security above the exercise price. If the Fund writes a put option it accepts the risk of a decline in the value of the underlying security below the exercise price. Over-the-counter options have the risk of the potential inability of counterparties to meet the terms of their contracts. For exchange traded contracts, the counterparty risk is minimized as the exchange's clearinghouse acts as the counterparty, and guarantees the futures against default. The Fund's maximum exposure to purchased options is limited to the premium initially paid. In addition, certain risks may arise upon entering into option contracts including the risk that an illiquid secondary market will limit the Fund's ability to close out an option contract prior to the expiration date and that a change in the value of the option contract may not correlate exactly with changes in the value of the securities or currencies hedged.

A summary of the open purchased option contracts as of October 31, 2010 is included in the Fund's Investment Portfolio. A summary of open written option contracts is included in a table following the Fund's Investment Portfolio. For the year ended October 31, 2010, the Fund invested in written options contracts with a total value generally indicative of a range from approximately $2,960,000 to $5,643,000 and purchased option contracts with a total value generally indicative of a range from $0 to approximately $3,559,000.

Futures Contracts. A futures contract is an agreement between a buyer or seller and an established futures exchange or its clearinghouse in which the buyer or seller agrees to take or make a delivery of a specific amount of a financial instrument at a specified price on a specific date (settlement date). For the year ended October 31, 2010, the Fund entered into interest rate futures to gain exposure to different parts of the yield curve while managing overall duration. In addition, the Fund seeks to enhance returns by employing a global tactical asset allocation overlay strategy. For the year ended October 31, 2010, as part of this strategy, the Fund used futures contracts to attempt to take advantage of short-term and medium-term inefficiencies within the global bond markets.

Futures contracts are valued at the most recent settlement price. Upon entering into a futures contract, the Fund is required to deposit with a financial intermediary cash or securities ("initial margin") in an amount equal to a certain percentage of the face value indicated in the futures contract. Subsequent payments ("variation margin") are made or received by the Fund dependent upon the daily fluctuations in the value and are recorded for financial reporting purposes as unrealized gains or losses by the Fund. Gains or losses are realized when the contract expires or is closed. Since all futures contracts are exchange traded, counterparty risk is minimized as the exchange's clearinghouse acts as the counterparty, and guarantees the futures against default.

Certain risks may arise upon entering into futures contracts, including the risk that an illiquid market will limit the Fund's ability to close out a futures contract prior to the settlement date and that a change in the value of a futures contract may not correlate exactly with the changes in the value of the underlying hedged security, index or currency. Risk of loss may exceed amounts recognized in the Statement of Assets and Liabilities.

A summary of the open futures contracts as of October 31, 2010 is included in a table following the Fund's Investment Portfolio. For the year ended October 31, 2010, the Fund invested in futures contracts with a total notional value generally indicative of a range from approximately $1,055,000,000 to $1,754,593,000.

Forward Foreign Currency Exchange Contracts. A forward foreign currency exchange contract "forward currency contract" is a commitment to purchase or sell a foreign currency at the settlement date at a negotiated rate. The Fund seeks to enhance returns by employing a global tactical asset allocation overlay strategy. For the year ended October 31, 2010, as part of this strategy, the Fund used forward currency exchange contracts to gain exposure to changes in the value of foreign currencies, and to attempt to take advantage of short-term and medium-term inefficiencies within the currency markets. Forward currency contracts are valued at the prevailing forward exchange rate of the underlying currencies and unrealized gain (loss) is recorded daily. O n the settlement date of the forward currency contract, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value of the contract at the time it was closed. Certain risks may arise upon entering into forward currency contracts from the potential inability of counterparties to meet the terms of their contracts. The maximum counterparty credit risk to the Fund is measured by the unrealized gain on appreciated contracts.

A summary of the open forward currency contracts as of October 31, 2010 is included in a table following the Fund's Investment Portfolio. For the year ended October 31, 2010, the Fund invested in forward foreign currency exchange contracts with a total value generally indicative of a range from approximately $163,875,000 to $452,958,000.

The following tables summarize the value of the Fund's derivative instruments held as of October 31, 2010 and the related location in the accompanying Statement of Assets and Liabilities, presented by primary underlying risk exposure:

Asset Derivatives	Swap Contracts		Forward Contracts		Futures Contracts		Total
Interest Rate Contracts (a)	$	1,209,815	$	—	$	1,639,199	$	2,849,014
Foreign Exchange Contracts (b)		—		668,989		—		668,989
	$	1,209,815	$	668,989	$	1,639,199	$	3,518,003

Each of the above derivatives is located in the following Statement of Assets and Liabilities accounts:

(a) Net unrealized appreciation (depreciation) on futures and unrealized appreciation on open swap contracts, respectively. Asset of receivable for variation margin on open futures contracts reflects unsettled variation margins.

(b) Unrealized appreciation on forward foreign currency exchange contracts

Liability Derivatives	Swap Contracts			Written Options			Forward Contracts			Total
Interest Rate Contracts (a)	$	(467,342	)	$	(3,375,396	)	$	—		$	(3,842,738	)
Foreign Exchange Contracts (b)		—			—			(779,242	)		(779,242	)
	$	(467,342	)	$	(3,375,396	)	$	(779,242	)	$	(4,621,980	)

Each of the above derivatives is located in the following Statement of Assets and Liabilities accounts:

(a) Unrealized depreciation on open swap contracts and options written, at value

(b) Unrealized depreciation on forward foreign currency exchange contracts

Additionally, the amount of unrealized and realized gains and losses on derivative instruments recognized in Fund earnings during the year ended October 31, 2010 and the related location in the accompanying Statement of Operations is summarized in the following tables by primary underlying risk exposure:

Realized Gain (Loss)
	Purchased Options			Written Options			Forward Contracts		Swap Contracts			Futures Contracts		Total
Interest Rate Contracts (a)	$	(3,486,361	)	$	(3,416,510	)	$	—	$	(7,340,903	)	$	17,727,021	$	3,483,247
Foreign Exchange Contracts (b)		—			—			632,021		—			—		632,021
	$	(3,486,361	)	$	(3,416,510	)	$	632,021	$	(7,340,903	)	$	17,727,021	$	4,115,268

Each of the above derivatives is located in the following Statement of Operations accounts:

(a) Net realized gain (loss) from investments (includes purchased options), written options, swap contracts and futures, respectively

(b) Net realized gain (loss) from foreign currency (Statement of Operations includes both forward currency contracts and foreign currency transactions)

Change in Net Unrealized Appreciation (Depreciation)
	Purchased Options		Written Options			Forward Contracts			Swap Contracts		Futures Contracts			Total
Interest Rate Contracts (a)	$	40,915	$	(401,859	)	$	—		$	2,650,252	$	(971,387	)	$	1,317,921
Foreign Exchange Contracts (b)		—		—			(1,830,132	)		—		—			(1,830,132	)
	$	40,915	$	(401,859	)	$	(1,830,132	)	$	2,650,252	$	(971,387	)	$	(512,211	)

Each of the above derivatives is located in the following Statement of Operations accounts:

(a) Change in net unrealized appreciation (depreciation) from investments (includes purchased options), written options, swap contracts and futures, respectively

(b) Change in net unrealized appreciation on foreign currency (Statement of Operations includes both forward currency contracts and foreign currency transactions)

C. Purchases and Sales of Securities

During the year ended October 31, 2010, purchases and sales of investment securities (excluding short-term investments and US Treasury obligations) aggregated $3,727,969,782 and $3,666,919,911, respectively. Purchases and sales of US Treasury obligations aggregated $185,781,825 and $157,469,681, respectively.

For the year ended October 31, 2010, transactions for written options on futures contracts and securities were as follows:

	Contract Amount/Number of Contracts			Premium
Outstanding, beginning of period		475,000,210		$	3,072,976
Options written		2,925,006,760			16,939,279
Options closed		(1,250,001,550	)		(6,378,661	)
Options expired		(1,050,002,740	)		(6,896,443	)
Options exercised		(450,002,680	)		(3,650,237	)
Outstanding, end of period		650,000,000		$	3,086,914

D. Related Parties

Management Agreement. Under the Investment Management Agreement with Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), an indirect, wholly owned subsidiary of Deutsche Bank AG, the Advisor directs the investments of the Fund in accordance with its investment objectives, policies and restrictions. The Advisor determines the securities, instruments and other contracts relating to investments to be purchased, sold or entered into by the Fund or delegates such responsibility to the Fund's subadvisor.

QS Investors, LLC ("QS Investors") acts as an investment subadvisor to the Fund. On August 1, 2010, members of the Advisor's Quantitative Strategies Group, including some members of the Fund's portfolio management team, separated from the Advisor and formed QS Investors as a separate investment advisory firm unaffiliated with the Advisor (the "Separation"). As an investment subadvisor to the Fund, QS Investors manages the portion of assets allocated to the Fund's global tactical asset allocation overlay strategy. QS Investors is paid by the Advisor, not the Fund, for the services QS Investors provides to the Fund.

Under the Investment Management Agreement, the Fund pays a monthly management fee, computed and accrued daily and payable monthly at the following annual rates:

First $250 million of the Fund's average daily net assets	.35	%
Next $750 million of such net assets	.33	%
Next $1.5 billion of such net assets	.31	%
Next $2.5 billion of such net assets	.30	%
Next $2.5 billion of such net assets	.28	%
Next $2.5 billion of such net assets	.26	%
Next $2.5 billion of such net assets	.24	%
Over $12.5 billion of such net assets	.22	%

Accordingly, for the year ended October 31, 2010, the management fee pursuant to the Investment Management Agreement was equivalent to an annual effective rate of 0.32% of the Fund's average daily net assets.

For the period from November 1, 2009 through January 31, 2011, the Advisor has contractually agreed to waive its fees and/or reimburse certain operating expenses of Class B shares to the extent necessary to maintain the operating expenses (excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest) at 1.70%.

Administration Fee. Pursuant to an Administrative Services Agreement, DIMA provides most administrative services to the Fund. For all services provided under the Administrative Services Agreement, the Fund pays the Advisor an annual fee ("Administration Fee") of 0.10% of the Fund's average daily net assets, computed and accrued daily and payable monthly. For the year ended October 31, 2010, the Administration Fee was $2,001,095, of which $169,552 is unpaid.

Service Provider Fees. DWS Investments Service Company ("DISC"), an affiliate of the Advisor, is the transfer agent, dividend-paying agent and shareholder service agent of the Fund. Pursuant to a sub-transfer agency agreement between DISC and DST Systems, Inc. ("DST"), DISC has delegated certain transfer agent, dividend-paying agent and shareholder service agent functions to DST. DISC compensates DST out of the shareholders servicing fee it receives from the Fund. For the year ended October 31, 2010, the amounts charged to the Fund by DISC were as follows:

Services to Shareholders	Total Aggregated		Waived		Unpaid at October 31, 2010
Class A	$	1,490,049	$	—	$	396,099
Class B		26,652		2,247		12,471
Class C		49,259		—		13,074
Class S		76,948		—		19,846
Institutional Class		417		—		134
	$	1,643,325	$	2,247	$	441,624

Distribution and Service Fees. Under the Fund's Class B and Class C 12b-1 plans, DWS Investments Distributors, Inc., ("DIDI"), an affiliate of the Advisor, receives a fee ("Distribution Fee") of 0.75% of average daily net assets of each of Class B and Class C shares. In accordance with the Fund's Underwriting and Distribution Services Agreement, DIDI enters into related selling group agreements with various firms at various rates for sales of Class B and C shares. For the year ended October 31, 2010, the Distribution Fee was as follows:

Distribution Fee	Total Aggregated		Unpaid at October 31, 2010
Class B	$	82,436	$	6,592
Class C		540,850		52,191
	$	623,286	$	58,783

In addition, DIDI provides information and administrative services for a fee ("Service Fee") to Class A, B and C shareholders at an annual rate of up to 0.25% of average daily net assets for each such class. DIDI in turn has various agreements with financial services firms that provide these services and pays these fees based upon the assets of shareholder accounts the firms service. For the year ended October 31, 2010, the Service Fee was as follows:

Service Fee	Total Aggregated		Unpaid at October 31, 2010		Annual Effective Rate
Class A	$	4,277,853	$	1,237,994		.23	%
Class B		26,439		8,727		.24	%
Class C		178,950		50,995		.25	%
	$	4,483,242	$	1,297,716

Underwriting and Contingent Deferred Sales Charge. DIDI is the principal underwriter for the Fund. Underwriting commissions paid in connection with the distribution of Class A shares for the year ended October 31, 2010 aggregated $155,595.

In addition, DIDI receives any contingent deferred sales charge ("CDSC") from Class B share redemptions occurring within six years of purchase and Class C share redemptions occurring within one year of purchase. There is no such charge upon redemption of any share appreciation or reinvested dividends. The CDSC is based on declining rates ranging from 4% to 1% for Class B and 1% for Class C, of the value of the shares redeemed. For the year ended October 31, 2010, the CDSC for Class B and C shares aggregated $30,853 and $11,668, respectively. A deferred sales charge of up to 0.50% is assessed on certain redemptions of Class A shares. For the year ended October 31, 2010, DIDI received $7,820 for Class A shares.

Typesetting and Filing Service Fees. Under an agreement with DIMA, DIMA is compensated for providing typesetting and certain regulatory filing services to the Fund. For the year ended October 31, 2010, the amount charged to the Fund by DIMA included in the Statement of Operations under "reports to shareholders" aggregated $20,661, of which $8,727 is unpaid.

Trustees' Fees and Expenses. The Fund paid each Trustee not affiliated with the Advisor retainer fees plus specified amounts for various committee services and for the Board Chairperson.

Affiliated Cash Management Vehicles. The Fund may invest uninvested cash balances in Central Cash Management Fund and other affiliated money market funds managed by the Advisor. The Fund indirectly bears its proportionate share of the expenses of the underlying money market funds. Central Cash Management Fund does not pay the Advisor an investment management fee. Central Cash Management Fund seeks a high level of current income consistent with liquidity and the preservation of capital.

E. Line of Credit

The Fund and other affiliated funds (the "Participants") share in a $450 million revolving credit facility provided by a syndication of banks. The Fund may borrow for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. The Participants are charged an annual commitment fee which is allocated based on net assets, among each of the Participants. Interest is calculated at a rate per annum equal to the sum of the Federal Funds Rate plus 1.25 percent plus if LIBOR exceeds the Federal Funds Rate the amount of such excess. The Fund may borrow up to a maximum of 33 percent of its net assets under the agreement.

F. Share Transactions

The following table summarizes share and dollar activity of the Fund:

	Year Ended October 31, 2010						Year Ended October 31, 2009
	Shares			Dollars			Shares			Dollars
Shares sold
Class A		13,201,545		$	117,021,962			12,162,402		$	103,316,250
Class B		135,244			1,190,647			493,121			4,174,663
Class C		3,910,268			34,703,431			2,704,567			22,966,461
Class S		4,217,267			37,559,070			1,108,493			9,413,156
Institutional Class		157,958			1,400,162			11,002			93,350
				$	191,875,272					$	139,963,880
Shares issued in reinvestment of dividends
Class A		8,334,565		$	73,477,871			6,940,406		$	58,987,011
Class B		46,357			407,983			61,734			522,718
Class C		216,310			1,912,253			146,449			1,247,649
Class S		387,446			3,418,289			285,062			2,424,838
Institutional Class		6,006			53,158			2,369			20,156
				$	79,269,554					$	63,202,372
Shares redeemed
Class A		(29,600,414	)	$	(261,581,389	)		(31,052,390	)	$	(264,133,279	)
Class B		(853,133	)		(7,507,373	)		(1,723,722	)		(14,638,968	)
Class C		(2,128,729	)		(18,830,730	)		(2,011,664	)		(17,151,125	)
Class S		(3,708,286	)		(32,979,812	)		(1,624,509	)		(13,847,471	)
Institutional Class		(16,462	)		(143,950	)		(3,616	)		(31,617	)
				$	(321,043,254	)				$	(309,802,460	)
Redemption fees				$	—					$	20,012
Net increase (decrease)
Class A		(8,064,304	)	$	(71,081,556	)		(11,949,582	)	$	(101,814,546	)
Class B		(671,532	)		(5,908,743	)		(1,168,867	)		(9,940,412	)
Class C		1,997,849			17,784,954			839,352			7,063,945
Class S		896,427			7,997,547			(230,954	)		(2,007,072	)
Institutional Class		147,502			1,309,370			9,755			81,889
				$	(49,898,428	)				$	(106,616,196	)

G. Regulatory Settlements

On March 30, 2010, the Fund received $119,602 as part of a settlement with the SEC by a non-affiliated third party broker. This payment is included in "Increase from regulatory settlements" in the Statement of Changes in Net Assets. The amount of the payment was less than 0.01% of the Fund's average net assets, thus having no impact on the Fund's total return.

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees of DWS Strategic Government Securities Fund:

We have audited the accompanying statement of assets and liabilities of DWS Strategic Government Securities Fund (the "Fund"), including the investment portfolio, as of October 31, 2010, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Fund's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and d isclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of October 31, 2010, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of DWS Strategic Government Securities Fund at October 31, 2010, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts December 21, 2010

Tax Information (Unaudited)

A total of 3% of the dividends distributed during the fiscal year was derived from interest on US government securities, which is generally exempt from state income tax.

Please consult a tax advisor if you have questions about federal or state income tax laws, or on how to prepare your tax returns. If you have specific questions about your account, please call (800) 621-1048.

Investment Management Agreement Approval

The Board of Trustees, including the Independent Trustees, approved the renewal of the Fund's investment management agreement (the "Agreement") with Deutsche Investment Management Americas Inc. ("DWS") and sub-advisory agreement (the "Sub-Advisory Agreement" and together with the Agreement the "Agreements") between DWS and QS Investors, LLC ("QS Investors") in September 2010.

In terms of the process that the Board followed prior to approving the Agreements, shareholders should know that:

• In September 2010, all but one of the Fund's Trustees were independent of DWS and its affiliates.

• The Trustees meet frequently to discuss fund matters. Each year, the Trustees dedicate substantial time to contract review matters. Over the course of several months, the Board's Contract Committee, in coordination with the Board's Fixed Income and Quant Oversight Committee, reviewed comprehensive materials received from DWS, independent third parties and independent counsel. These materials included an analysis of the Fund's performance, fees and expenses, and profitability compiled by the Fund's independent fee consultant. The Board also received extensive information throughout the year regarding performance of the Fund.

• The Independent Trustees regularly meet privately with their independent counsel to discuss contract review and other matters. In addition, the Independent Trustees were also advised by the Fund's independent fee consultant in the course of their review of the Fund's contractual arrangements and considered a comprehensive report prepared by the independent fee consultant in connection with their deliberations (the "IFC Report").

• In connection with reviewing the Agreements, the Board also reviewed the terms of the Fund's Rule 12b-1 plan, distribution agreement, administrative services agreement, transfer agency agreement and other material service agreements.

• Based on its evaluation of the information provided, the Contract Committee presented its findings and recommendations to the Independent Trustees as a group. The Independent Trustees reviewed the Contract Committee's findings and recommendations and presented their recommendations to the full Board.

In connection with the contract review process, the Contract Committee and the Board considered the factors discussed below, among others. The Board also considered that DWS and its predecessors have managed the Fund since its inception, and the Board believes that a long-term relationship with a capable, conscientious advisor is in the best interests of the Fund. The Board considered, generally, that shareholders chose to invest or remain invested in the Fund knowing that DWS managed the Fund, and that the Agreement was approved by the Fund's shareholders. DWS is part of Deutsche Bank, a major global banking institution that is engaged in a wide range of financial services. The Board believes that there are significant advantages to being part of a global asset management business that offers a wide range of investin g expertise and resources, including hundreds of portfolio managers and analysts with research capabilities in many countries throughout the world.

While shareholders may focus primarily on fund performance and fees, the Fund's Board considers these and many other factors, including the quality and integrity of DWS's and QS Investors' personnel and such other issues as back-office operations, fund valuations, and compliance policies and procedures. In addition, in connection with approving the continuation of the Fund's Sub-Advisory Agreement, the Board noted it had engaged in a comprehensive review of the agreement in connection with its initial approval in May 2010.

Nature, Quality and Extent of Services. The Board considered the terms of the Agreements, including the scope of advisory services provided under the Agreements. The Board noted that, under the Agreements, DWS and QS Investors provide portfolio management services to the Fund and that, pursuant to a separate administrative services agreement, DWS provides administrative services to the Fund. The Board considered the experience and skills of senior management and investment personnel, the resources made available to such personnel, the ability of DWS to attract and retain high-quality personnel, and the organizational depth and stability of DWS. The Board reviewed the Fund's performance over short-term and long-term periods and compared those retu rns to various agreed-upon performance measures, including market indices and a peer universe compiled by the independent fee consultant using information supplied by Lipper Inc. ("Lipper"). The Board also noted that it has put into place a process of identifying "Focus Funds" (e.g., funds performing poorly relative to their benchmark or a peer universe compiled by Lipper), and receives more frequent reporting and information from DWS regarding such funds, along with DWS's remedial plans to address underperformance. The Board believes this process is an effective manner of identifying and addressing underperforming funds. Based on the information provided, the Board noted that for the one-, three- and five-year periods ended December 31, 2009, the Fund's performance (Class A shares) was in the 2nd quartile, 3rd quartile and 2nd quartile, respectively, of the applicable Lipper universe (the 1st quartile being the best performers and the 4th quartile being the worst performers). The Board also observed that th e Fund has outperformed its benchmark in the one-year period and has underperformed its benchmark in the three- and five-year periods ended December 31, 2009.

On the basis of this evaluation and the ongoing review of investment results by the Board, the Board concluded that the nature, quality and extent of services provided by DWS and QS Investors historically have been and continue to be satisfactory.

Fees and Expenses. The Board considered the Fund's investment management fee schedule, sub-advisory fee schedule, operating expenses, and total expense ratios, and comparative information provided by Lipper and the independent fee consultant regarding investment management fee rates paid to other investment advisors by similar funds (1st quartile being the most favorable and 4th quartile being the least favorable). With respect to management fees paid to other investment advisors by similar funds, the Board noted that the contractual fee rates paid by the Fund, which include the 0.10% fee paid to DWS under the Fund's administrative services agreement, were lower than the median (1st quartile) of the applicable Lipper peer group (based on Lipper d ata provided as of December 31, 2009). With respect to the sub-advisory fee paid to QS Investors, the Board noted that the fee is paid by DWS out its fee and not directly by the Fund. The Board noted that the Fund's Class A shares total (net) operating expenses (excluding 12b-1 fees) were expected to be lower than the median (1st quartile) of the applicable Lipper expense universe (based on Lipper data provided as of December 31, 2009, and analyzing Lipper expense universe Class A expenses less any applicable 12b-1 fees) ("Lipper Universe Expenses"). The Board also reviewed data comparing each share class's total (net) operating expenses to the applicable Lipper Universe Expenses. The Board considered the Fund's management fee rate as compared to fees charged by DWS and certain of its affiliates for comparable mutual funds and considered differences in fund and fee structures between the DWS Funds. The Board also considered how the Fund's total (net) operating expenses compared to the total (net) operating e xpenses of a more customized peer group selected by Lipper (based on such factors as asset size). The Board also noted that the expense limitation agreed to by DWS helped to ensure that the Fund's total (net) operating expenses would remain competitive.

The information considered by the Board as part of its review of management fees included information regarding fees charged by DWS and its affiliates to similar institutional accounts and to similar funds offered primarily to European investors ("DWS Europe funds"), in each case as applicable. The Board observed that advisory fee rates for institutional accounts generally were lower than the management fees charged by similarly managed DWS US mutual funds ("DWS Funds"), but also took note of the differences in services provided to DWS Funds as compared to institutional accounts. In the case of DWS Europe funds, the Board observed that fee rates for DWS Europe funds generally were higher than for similarly managed DWS Funds, but noted that differences in the types of services provided to DWS Funds relative to DWS Euro pe funds made it difficult to compare such fees.

On the basis of the information provided, the Board concluded that management fees were reasonable and appropriate in light of the nature, quality and extent of services provided by DWS and QS Investors.

Profitability. The Board reviewed detailed information regarding revenues received by DWS under the Agreement. The Board considered the estimated costs and pre-tax profits realized by DWS from advising the DWS Funds, as well as estimates of the pre-tax profits attributable to managing the Fund in particular. The Board also received information regarding the estimated enterprise-wide profitability of DWS and its affiliates with respect to all fund services in totality and by fund. The Board reviewed DWS's methodology in allocating its costs to the management of the Fund. Based on the information provided, the Board concluded that the pre-tax profits realized by DWS in connection with the management of the Fund were not unreasonable. The Board also reviewed information regarding the profitability of certain similar investment management firms. The Board noted that while information regarding the profitability of such firms is limited (and in some cases is not necessarily prepared on a comparable basis), DWS and its affiliates' overall profitability with respect to the DWS fund complex (after taking into account distribution and other services provided to the funds by DWS and its affiliates) was lower than the overall profitability levels of many comparable firms for which such data was available. The Board did not consider the profitability of QS Investors with respect to the Fund. The Board noted that DWS pays QS Investors' fee out of its management fee, and its understanding that the Fund's sub-advisory fee schedule was the product of an arm's length negotiation with DWS.

Economies of Scale. The Board considered whether there are economies of scale with respect to the management of the Fund and whether the Fund benefits from any economies of scale. The Board noted that the Fund's management fee schedule includes fee breakpoints. The Board concluded that the Fund's fee schedule represents an appropriate sharing between the Fund and DWS of such economies of scale as may exist in the management of the Fund at current asset levels.

Other Benefits to DWS and QS Investors and Their Affiliates. The Board also considered the character and amount of other incidental benefits received by DWS and QS Investors and their affiliates, including any fees received by DWS for administrative services provided to the Fund and any fees received by an affiliate of DWS for distribution services. The Board also considered benefits to DWS and QS Investors related to brokerage and soft-dollar allocations, including allocating brokerage to pay for research generated by parties other than the executing broker dealers, which pertain primarily to funds investing in equity securities, along with the incidental public relations benefits to DWS and QS Investors related to DWS Funds advertising and cros s-selling opportunities among DWS products and services. The Board concluded that management fees were reasonable in light of these fallout benefits.

Compliance. The Board considered the significant attention and resources dedicated by DWS to documenting and enhancing its compliance processes in recent years. The Board noted in particular (i) the experience and seniority of both DWS's chief compliance officer and the Fund's chief compliance officer; (ii) the large number of compliance personnel; and (iii) the substantial commitment of resources by DWS and its affiliates to compliance matters. The Board also considered the attention and resources dedicated by DWS to the oversight of the investment sub-advisor's compliance program and compliance with the applicable fund policies and procedures.

Based on all of the information considered and the conclusions reached, the Board unanimously (including the Independent Trustees) determined that the continuation of the Agreements is in the best interests of the Fund. In making this determination the Board did not give particular weight to any single factor identified above. The Board considered these factors over the course of numerous meetings, certain of which were in executive session with only the Independent Trustees and their counsel present. It is possible that individual Trustees may have weighed these factors differently in reaching their individual decisions to approve the continuation of the Agreements.

New Sub-Advisory Agreement Approval

The Board of Trustees, including the Independent Trustees, unanimously approved the New Sub-Advisory Agreement (the "New Agreement") between Deutsche Investment Management Americas Inc. ("DWS") and QS Investors, LLC ("QS Investors") in May 2010.

In terms of the process that the Board followed prior to approving the New Agreement, shareholders should know that:

• In May 2010, all but one of the Fund's Trustees were independent of DWS and its affiliates.

• The Board engaged in a comprehensive review of the operational, financial and investment capabilities of QS Investors and the terms of the proposed Separation. As part of this review, the Board also reviewed and considered the terms of the New Agreement.

• To facilitate its review, the Board created several ad hoc subcommittees, each focused on different aspects of the Board's consideration of the Separation, and each comprised solely of Independent Trustees.

• The Board and its subcommittees conducted numerous meetings between January 2010 and May 2010 to review and discuss the Separation, including the New Agreement, and were assisted in this review by their independent legal counsel and fund counsel.

• In the course of its review, the Board requested and received substantial additional information.

• As part of its review process, the Board and its subcommittees met with various representatives of DWS and QS Investors, including key investment personnel and other members of senior management.

• The Board requested and evaluated all information that it deemed reasonably necessary to evaluate the New Agreement.

In connection with the approval of the New Agreement, the Board considered the factors described below, among others.

Continuity of Investment Management Services. In reviewing the New Agreement, the Board considered that it had renewed the investment management agreement between DWS and the Fund as part of the annual contract renewal process (the "Annual Review") in September 2009, at which time it had determined that such renewal was in the best interests of the Fund, given the nature, quality and extent of services provided by DWS (among other considerations). In considering the New Agreement, the Board noted that in light of the transition of the group within DWS responsible for day-to-day portfolio management of the Fund to a separate, unaffiliated firm (i.e., QS Investors), it was necessary to approve a sub-advisory agreement between DWS and QS Investors t o secure continued access to these same personnel and services. The Board also considered that, despite the change in corporate identity of the portfolio management services provider and the fact that it would no longer be affiliated with DWS, the nature, quality and extent of services provided to the Fund are not expected to change under the New Agreement.

Fees and Expenses. The Board noted that it had concluded during the Annual Review that the overall investment management fees paid by the Fund are reasonable and appropriate in light of the nature, quality and extent of services provided. The Board considered that, under the New Agreement, QS Investors' sub-advisory fee would be paid by DWS out of its management fee and not directly by the Fund, and therefore there would be no change in the Fund's overall investment management fees under the New Agreement.

Profitability. The Board noted that it had considered the profitability of DWS during the Annual Review. The Board did not consider the profitability of QS Investors to be a material factor. In particular, the Board noted that QS Investors has not yet commenced operations, and that any projections of profitability are likely to be of limited value. The Board also noted that DWS would pay QS Investors' sub-advisory fee out of its management fee, and further noted that the sub-advisory fee arrangement with respect to the Fund was the product of an arm's length negotiation.

Other Benefits to QS Investors. The Board noted that it had considered fallout benefits to DWS during the Annual Review in its determination that management fees paid were reasonable. The Board also considered the character and amount of incidental benefits expected to be realized by QS Investors in light of the New Agreement, including the incidental public relations benefits to QS Investors related to DWS US mutual funds advertising and cross-selling opportunities among DWS products and services. The Board noted that QS Investors did not propose to implement a "soft dollar" program. The Board reaffirmed its determination from the Annual Review process that management fees paid were reasonable in light of fallout benefits to its investment advis ory service providers.

Compliance. The Board considered QS Investors' proposed compliance program and resources. The Board also considered that DWS would oversee QS Investors' compliance program and its compliance with applicable Fund policies and procedures, and considered the attention and resources DWS would dedicate to that oversight. The Board also noted that it had considered DWS's compliance monitoring capabilities in connection with the Annual Review, at which time it had noted (i) the experience and seniority of both DWS's chief compliance officer and the Fund's chief compliance officer; (ii) the large number of DWS compliance personnel; and (iii) the substantial commitment of resources by DWS and its affiliates to compliance matters.

Based on all of the information considered and the conclusions reached, the Board unanimously (including the Independent Trustees) determined that the terms of the New Agreement are fair and reasonable and that the approval of the New Agreement is in the best interests of the Fund. In reaching this conclusion, the Board did not give particular weight to any single factor identified above. It is possible that individual Trustees may have weighed these factors differently in reaching their individual decisions to approve the New Agreement.

Summary of Management Fee Evaluation by Independent Fee Consultant

October 3, 2010

Pursuant to an Order entered into by Deutsche Investment Management Americas and affiliates (collectively, "DeAM") with the Attorney General of New York, I, Thomas H. Mack, have been appointed the Independent Fee Consultant for the DWS Funds (formerly the DWS Scudder Funds). My duties include preparing an annual written evaluation of the management fees DeAM charges the Funds, considering among other factors the management fees charged by other mutual fund companies for like services, management fees DeAM charges other clients for like services, DeAM's costs of supplying services under the management agreements and related profit margins, possible economies of scale if a Fund grows larger, and the nature and quality of DeAM's services, including fund performance. This rep ort summarizes my evaluation for 2010, including my qualifications, the evaluation process for each of the DWS Funds, consideration of certain complex-level factors, and my conclusions. I served in substantially the same capacity in 2007, 2008, and 2009.

Qualifications

For more than 35 years I have served in various professional capacities within the investment management business. I have held investment analysis and advisory positions, including securities analyst, portfolio strategist and director of investment policy with a large investment firm. I have also performed business management functions, including business development, financial management and marketing research and analysis.

Since 1991, I have been an independent consultant within the asset management industry. I have provided services to over 125 client organizations, including investment managers, mutual fund boards, product distributors and related organizations. Over the past ten years I have completed a number of assignments for mutual fund boards, specifically including assisting boards with management contract renewal.

I hold a Master of Business Administration degree, with highest honors, from Harvard University and Master of Science and Bachelor of Science (highest honors) degrees from the University of California at Berkeley. I am an independent director and audit committee financial expert for two closed-end mutual funds and have served in various leadership and financial oversight capacities with non-profit organizations.

Evaluation of Fees for each DWS Fund

My work focused primarily on evaluating, fund-by-fund, the fees charged to each of the 118 publicly offered Fund portfolios in the DWS Fund family. For each Fund, I considered each of the key factors mentioned above, as well as any other relevant information. In doing so I worked closely with the Funds' Independent Directors in their annual contract renewal process, as well as in their approval of contracts for several new funds (documented separately).

In evaluating each Fund's fees, I reviewed comprehensive materials provided by or on behalf of DeAM, including expense information prepared by Lipper Analytical, comparative performance information, profitability data, manager histories, and other materials. I also accessed certain additional information from the Lipper and Morningstar databases and drew on my industry knowledge and experience.

To facilitate evaluating this considerable body of information, I prepared for each Fund a document summarizing the key data elements in each area as well as additional analytics discussed below. This made it possible to consider each key data element in the context of the others.

In the course of contract renewal, DeAM agreed to implement a number of fee and expense adjustments requested by the Independent Directors which will favorably impact future fees and expenses, and my evaluation includes the effects of these changes.

Fees and Expenses Compared with Other Funds

The competitive fee and expense evaluation for each fund focused on two primary comparisons:

The Fund's contractual management fee (the advisory fee plus the administration fee where applicable) compared with those of a group of typically 12-15 funds in the same Lipper investment category (e.g. Large Capitalization Growth) having similar distribution arrangements and being of similar size.

The Fund's total expenses compared with a broader universe of funds from the same Lipper investment category and having similar distribution arrangements.

These two comparisons provide a view of not only the level of the fee compared with funds of similar scale but also the total expense the Fund bears for all the services it receives, in comparison with the investment choices available in the Fund's investment category and distribution channel. The principal figure-of-merit used in these comparisons was the subject Fund's percentile ranking against peers.

DeAM's Fees for Similar Services to Others

DeAM provided management fee schedules for all of its US domiciled fund and non-fund investment management accounts in any of the investment categories where there is a DWS Fund. These similar products included the other DWS Funds, non-fund pooled accounts, institutional accounts and sub-advisory accounts. Using this information, I calculated for each Fund the fee that would be charged to each similar product, at the subject Fund's asset level.

Evaluating information regarding non-fund products is difficult because there are varying levels of services required for different types of accounts, with mutual funds generally requiring considerably more regulatory and administrative types of service as well as having more frequent cash flows than other types of accounts. Also, while mutual fund fees for similar fund products can be expected to be similar, there will be some differences due to different pricing conditions in different distribution channels (e.g. retail funds versus those used in variable insurance products), differences in underlying investment processes and other factors.

Costs and Profit Margins

DeAM provided a detailed profitability analysis for each Fund. After making some adjustments so that the presentation would be more comparable to the available industry figures, I reviewed profit margins from investment management alone, from investment management plus other fund services (excluding distribution) provided to the Funds by DeAM (principally shareholder services), and DeAM profits from all sources, including distribution. A later section comments on overall profitability.

Economies of Scale

Economies of scale — an expected decline in management cost per dollar of fund assets as fund assets grow — are very rarely quantified and documented because of inherent difficulties in collecting and analyzing relevant data. However, in virtually every investment category that I reviewed, larger funds tend to have lower fees and lower total expenses than smaller funds. To see how each DWS Fund compares with this industry observation, I reviewed:

The trend in Fund assets over the last five years and the accompanying trend in total expenses. This shows if the Fund has grown and, if so, whether total expense (management fees as well as other expenses) have declined as a percent of assets.

Whether the Fund has break-points in its management fee schedule, the extent of the fee reduction built into the schedule and the asset levels where the breaks take effect, and in the case of a sub-advised Fund how the Fund's break-points compare with those of the sub-advisory fee schedule.

How the Fund's contractual fee schedule compares with trends in the industry data. To accomplish this, I constructed a chart showing how actual latest-fiscal-year contractual fees of the Fund and of other similar funds relate to average fund assets, with the subject Fund's contractual fee schedule superimposed.

Quality of Service — Performance

The quality-of-service evaluation focused on investment performance, which is the principal result of the investment management service. Each Fund's performance was reviewed over the past 1, 3, 5 and 10 years, as applicable, and compared with that of other funds in the same investment category and with a suitable market index.

In addition, I calculated and reviewed risk-adjusted returns relative to an index of similar mutual funds' returns and a suitable market index. The risk-adjusted returns analysis provides a way of determining the extent to which the Fund's return comparisons are mainly the product of investment value-added (or lack thereof) or alternatively taking considerably more or less risk than is typical in its investment category.

I also received and considered the history of portfolio manager changes for each Fund, as this provided an important context for evaluating the performance results.

Complex-Level Considerations

While this evaluation was conducted mainly at the individual fund level, there are some issues relating to the reasonableness of fees that can alternatively be considered across the whole fund complex:

I reviewed DeAM's profitability analysis for all DWS Funds, with a view toward determining if the allocation procedures used were reasonable and how profit levels compared with public data for other investment managers.

I considered whether DeAM and affiliates receive any significant ancillary or "fall-out" benefits that should be considered in interpreting the direct profitability results. These would be situations where serving as the investment manager of the Funds is beneficial to another part of the Deutsche Bank organization.

I considered how aggregated DWS Fund expenses had varied over the years, by asset class and in the context of trends in asset levels.

I reviewed the structure of the DeAM organization, trends in staffing levels, and information on compensation of investment management and other professionals compared with industry data.

Findings

Based on the process and analysis discussed above, which included reviewing a wide range of information from management and external data sources and considering among other factors the fees DeAM charges other clients, the fees charged by other fund managers, DeAM's costs and profits associated with managing the Funds, economies of scale, possible fall-out benefits, and the nature and quality of services provided, in my opinion the management fees charged the DWS Funds are reasonable.

Thomas H. Mack

Board Members and Officers

The following table presents certain information regarding the Board Members and Officers of the Trust as of October 31, 2010. Each Board Member's year of birth is set forth in parentheses after his or her name. Unless otherwise noted, (i) each Board Member has engaged in the principal occupation(s) noted in the table for at least the most recent five years, although not necessarily in the same capacity; and (ii) the address of each Independent Board Member is c/o Paul K. Freeman, Independent Chairman, DWS Funds, PO Box 101833, Denver, CO 80250-1833. Except as otherwise noted below, the term of office for each Board Member is until the election and qualification of a successor, or until such Board Member sooner dies, resigns, is removed or as otherwise provided in the governing documents of the fund. Because the fund does not hold an annual meeting of shareholders, each Board Member will hold office for an indeterminate period. The Board Members may also serve in similar capacities with other funds in the fund complex. The Length of Time Served represents the year in which the Board Member joined the board of one or more DWS funds now overseen by the Board.

Independent Board Members
Name, Year of Birth, Position with the Fund and Length of Time Served1	Business Experience and Directorships During the Past Five Years	Number of Funds in DWS Fund Complex Overseen
Paul K. Freeman (1950) Chairperson since 2009 Board Member since 1993	Consultant, World Bank/Inter-American Development Bank; Governing Council of the Independent Directors Council (governance, education committees); formerly, Project Leader, International Institute for Applied Systems Analysis (1998-2001); Chief Executive Officer, The Eric Group, Inc. (environmental insurance) (1986-1998)	123
John W. Ballantine (1946) Board Member since 1999	Retired; formerly, Executive Vice President and Chief Risk Management Officer, First Chicago NBD Corporation/The First National Bank of Chicago (1996-1998); Executive Vice President and Head of International Banking (1995-1996). Directorships: Healthways, Inc. (provider of disease and care management services); Portland General Electric (utility company); Stockwell Capital Investments PLC (private equity). Former Directorships: First Oak Brook Bancshares, Inc. and Oak Brook Bank; Prisma Energy International	123
Henry P. Becton, Jr. (1943) Board Member since 1990	Vice Chair and former President, WGBH Educational Foundation. Directorships: Association of Public Television Stations; Lead Director, Becton Dickinson and Company3 (medical technology company); Lead Director, Belo Corporation3 (media company); Public Radio International; Public Radio Exchange (PRX); The PBS Foundation. Former Directorships: Boston Museum of Science; American Public Television; Concord Academy; New England Aquarium; Mass. Corporation for Educational Telecommunications; Committee for Economic De velopment; Public Broadcasting Service	123
Dawn-Marie Driscoll (1946) Board Member since 1987	President, Driscoll Associates (consulting firm); Executive Fellow, Center for Business Ethics, Bentley University; formerly, Partner, Palmer & Dodge (1988-1990); Vice President of Corporate Affairs and General Counsel, Filene's (1978-1988). Directorships: Trustee of 22 open-end mutual funds managed by Sun Capital Advisers, Inc. (since 2007); Director of ICI Mutual Insurance Company (since 2007); Advisory Board, Center for Business Ethics, Bentley University; Trustee, Southwest Florida Community Foundation (charitable organization). Former Directorships: Investment Company Institute (audit, executive, nominating committees) and Independent Directors Council (governance, executive committees)	123
Keith R. Fox (1954) Board Member since 1996	Managing General Partner, Exeter Capital Partners (a series of private investment funds). Directorships: Progressive Holding Corporation (kitchen goods importer and distributor); Box Top Media Inc. (advertising); The Kennel Shop (retailer); former Chairman, National Association of Small Business Investment Companies	123
Kenneth C. Froewiss (1945) Board Member since 2001	Adjunct Professor of Finance, NYU Stern School of Business (September 2009-present; Clinical Professor from 1997-September 2009); Member, Finance Committee, Association for Asian Studies (2002-present); Director, Mitsui Sumitomo Insurance Group (US) (2004-present); prior thereto, Managing Director, J.P. Morgan (investment banking firm) (until 1996)	123
Richard J. Herring (1946) Board Member since 1990	Jacob Safra Professor of International Banking and Professor, Finance Department, The Wharton School, University of Pennsylvania (since July 1972); Co-Director, Wharton Financial Institutions Center (since July 2000); Director, Japan Equity Fund, Inc. (since September 2007), Thai Capital Fund, Inc. (since September 2007), Singapore Fund, Inc. (since September 2007); Independent Director of Barclays Bank Delaware (since September 2010). Formerly, Vice Dean and Director, Wharton Undergraduate Division (July 1995-June 2000); Director, Lauder Institute of International Management Studies (July 2000-June 2006)	123
William McClayton (1944) Board Member since 2004	Private equity investor (since October 2009); previously, Managing Director, Diamond Management & Technology Consultants, Inc. (global consulting firm) (2001-2009); Directorship: Board of Managers, YMCA of Metropolitan Chicago; formerly: Senior Partner, Arthur Andersen LLP (accounting) (1966-2001); Trustee, Ravinia Festival	123
Rebecca W. Rimel (1951) Board Member since 1995	President and Chief Executive Officer, The Pew Charitable Trusts (charitable organization) (1994 to present); Trustee, Thomas Jefferson Foundation (charitable organization) (1994 to present); Trustee, Executive Committee, Philadelphia Chamber of Commerce (2001-2007); Trustee, Pro Publica (2007-present) (charitable organization); Director, CardioNet, Inc.2 (2009-present) (health care). Formerly, Executive Vice President, The Glenmede Trust Company (investment trust and wealth management) (1983-2004); Board Member, Investor Education (charitable organization) (2004-2005); Director, Viasys Health Care2 (January 2007-June 2007)	123
William N. Searcy, Jr. (1946) Board Member since 1993	Private investor since October 2003; Trustee of 22 open-end mutual funds managed by Sun Capital Advisers, Inc. (since October 1998). Formerly, Pension & Savings Trust Officer, Sprint Corporation2 (telecommunications) (November 1989-September 2003)	123
Jean Gleason Stromberg (1943) Board Member since 1997	Retired. Formerly, Consultant (1997-2001); Director, Financial Markets US Government Accountability Office (1996-1997); Partner, Fulbright & Jaworski, L.L.P. (law firm) (1978-1996). Directorships: The William and Flora Hewlett Foundation. Former Directorships: Service Source, Inc., Mutual Fund Directors Forum (2002-2004), American Bar Retirement Association (funding vehicle for retirement plans) (1987-1990 and 1994-1996)	123
Robert H. Wadsworth (1940) Board Member since 1999	President, Robert H. Wadsworth & Associates, Inc. (consulting firm) (1983 to present); Director, The Phoenix Boys Choir Association	126

Interested Board Member and Officer4
Name, Year of Birth, Position with the Trust/ Corporation and Length of Time Served1,5	Business Experience and Directorships During the Past Five Years	Number of Funds in DWS Fund Complex Overseen
Ingo Gefeke7 (1967) Board Member since 2010 Executive Vice President since 2010	Managing Director3, Deutsche Asset Management; Global Head of Distribution and Product Management, DWS Global Head of Trading and Securities Lending. Member of the Board of Directors of DWS Investment GmbH Frankfurt (since July 2009) and DWS Holding & Service GmbH Frankfurt (since January 2010); formerly, Global Chief Administrative Officer, Deutsche Asset Management (2004-2009); Global Chief Operating Officer, Global Transaction Banking, Deutsche Bank AG, New York (2001-2004); Chief Operating Officer, Global Banking Division Americas, Deutsche Bank AG, New York (1999-2001); Central Management, Global Banking Services, Deutsche Bank AG, Frankfurt (1998-1999); Relationship Management, Deutsche Bank AG, Tokyo, Japan (1997-1998)	56

Officers4
Name, Year of Birth, Position with the Fund and Length of Time Served5	Principal Occupation(s) During Past 5 Years and Other Directorships Held
Michael G. Clark6 (1965) President, 2006-present	Managing Director3, Deutsche Asset Management (2006-present); President of DWS family of funds; Director, ICI Mutual Insurance Company (since October 2007); formerly, Director of Fund Board Relations (2004-2006) and Director of Product Development (2000-2004), Merrill Lynch Investment Managers; Senior Vice President Operations, Merrill Lynch Asset Management (1999-2000)
John Millette8 (1962) Vice President and Secretary, 1999-present	Director3, Deutsche Asset Management
Paul H. Schubert6 (1963) Chief Financial Officer, 2004-present Treasurer, 2005-present	Managing Director3, Deutsche Asset Management (since July 2004); formerly, Executive Director, Head of Mutual Fund Services and Treasurer for UBS Family of Funds (1998-2004); Vice President and Director of Mutual Fund Finance at UBS Global Asset Management (1994-1998)
Caroline Pearson8 (1962) Chief Legal Officer, April 2010-present	Managing Director3, Deutsche Asset Management; formerly, Assistant Secretary for DWS family of funds (1997-2010)
Rita Rubin9 (1970) Assistant Secretary, 2009-present	Vice President and Counsel, Deutsche Asset Management (since October 2007); formerly, Vice President, Morgan Stanley Investment Management (2004-2007)
Paul Antosca8 (1957) Assistant Treasurer, 2007-present	Director3, Deutsche Asset Management (since 2006); Vice President, The Manufacturers Life Insurance Company (U.S.A.) (1990-2006)
Jack Clark8 (1967) Assistant Treasurer, 2007-present	Director3, Deutsche Asset Management (since 2007); formerly, Vice President, State Street Corporation (2002-2007)
Diane Kenneally8 (1966) Assistant Treasurer, 2007-present	Director3, Deutsche Asset Management
John Caruso10 (1965) Anti-Money Laundering Compliance Officer, 2010-present	Managing Director3, Deutsche Asset Management
Robert Kloby9 (1962) Chief Compliance Officer, 2006-present	Managing Director3, Deutsche Asset Management

1The length of time served represents the year in which the Board Member joined the board of one or more DWS funds currently overseen by the Board.

2A publicly held company with securities registered pursuant to Section 12 of the Securities Exchange Act of 1934.

3Executive title, not a board directorship.

4As a result of their respective positions held with the Advisor, these individuals are considered "interested persons" of the Advisor within the meaning of the 1940 Act. Interested persons receive no compensation from the fund.

5The length of time served represents the year in which the officer was first elected in such capacity for one or more DWS funds.

6Address: 100 Plaza One, Jersey City, NJ 07311.

7 The mailing address of Mr. Gefeke is 345 Park Avenue, New York, New York 10154. In addition, Mr. Gefeke is an interested Board Member of certain DWS funds by virtue of his positions with Deutsche Asset Management. As an interested person, Mr. Gefeke receives no compensation from the fund.

8Address: One Beacon Street, Boston, MA 02108.

9Address: 280 Park Avenue, New York, New York 10017.

10Address: 60 Wall Street, New York, New York 10005.

The fund's Statement of Additional Information ("SAI") includes additional information about the Board Members. The SAI is available, without charge, upon request. If you would like to request a copy of the SAI, you may do so by calling the following toll-free number: (800) 621-1048.

Account Management Resources

For More Information	The automated telephone system allows you to access personalized account information and obtain information on other DWS funds using either your voice or your telephone keypad. Certain account types within Classes A, B, C and S also have the ability to purchase, exchange or redeem shares using this system. For more information, contact your financial advisor. You may also access our automated telephone system or speak with a DWS Investments representative by calling the appropriate number below: For shareholders of Classes A, B, C and Institutional Class: (800) 621-1048 For shareholders of Class S: (800) 728-3337
Web Site	www.dws-investments.com View your account transactions and balances, trade shares, monitor your asset allocation, and change your address, 24 hours a day. Obtain prospectuses and applications, blank forms, interactive worksheets, news about DWS funds, subscription to fund updates by e-mail, retirement planning information, and more.
Written Correspondence	DWS Investments PO Box 219151 Kansas City, MO 64121-9151
Proxy Voting	A description of the fund's policies and procedures for voting proxies for portfolio securities and information about how the fund voted proxies related to its portfolio securities during the 12-month period ended June 30 is available on our Web site — www.dws-investments.com (click on "proxy voting"at the bottom of the page) — or on the SEC's Web site — www.sec.gov. To obtain a written copy of the fund's policies and procedures without charge, upon request, call us toll free at (800) 621-1048.
Principal Underwriter	If you have questions, comments or complaints, contact: DWS Investments Distributors, Inc. 222 South Riverside Plaza Chicago, IL 60606-5808 (800) 621-1148

	Class A	Class B	Class C	Class S	Institutional Class
Nasdaq Symbol	KUSAX	KUSBX	KUSCX	KUSMX	KUSIX
CUSIP Number	23338C 108	23338C 207	23338C 306	23338C 405	23338C 504
Fund Number	018	218	318	2098	1418

Notes

Notes

Notes

Notes

Notes

ITEM 2.	CODE OF ETHICS
	As of the end of the period covered by this report, the registrant has adopted a code of ethics, as defined in Item 2 of Form N-CSR, that applies to its Principal Executive Officer and Principal Financial Officer. There have been no amendments to, or waivers from, a provision of the code of ethics during the period covered by this report that would require disclosure under Item 2. A copy of the code of ethics is filed as an exhibit to this Form N-CSR.
ITEM 3.	AUDIT COMMITTEE FINANCIAL EXPERT
	The fund’s audit committee is comprised solely of trustees who are "independent" (as such term has been defined by the Securities and Exchange Commission ("SEC") in regulations implementing Section 407 of the Sarbanes-Oxley Act (the "Regulations")). The fund’s Board of Trustees has determined that there are several "audit committee financial experts" (as such term has been defined by the Regulations) serving on the fund’s audit committee including Mr. William McClayton, the chair of the fund’s audit committee. An “audit committee financial expert” is not an “expert” for any purpose, including for purposes of Section 11 of the Securities Act of 1933 and the designation or identification of a person as an “audit committee financial expert” does not impose on su ch person any duties, obligations or liability that are greater than the duties, obligations and liability imposed on such person as a member of the audit committee and board of directors in the absence of such designation or identification.
ITEM 4.	PRINCIPAL ACCOUNTANT FEES AND SERVICES

DWS STRATEGIC GOVERNMENT SECURITIES FUND

FORM N-CSR DISCLOSURE RE: AUDIT FEES

The following table shows the amount of fees that Ernst & Young LLP (“E&Y”), the Fund’s Independent Registered Public Accounting Firm, billed to the Fund during the Fund’s last two fiscal years.  The Audit Committee approved in advance all audit services and non-audit services that E&Y provided to the Fund.

Services that the Fund’s Independent Registered Public Accounting Firm Billed to the Fund

Fiscal Year Ended October 31,	Audit Fees Billed to Fund		Audit-Related Fees Billed to Fund		Tax Fees Billed to Fund		All Other Fees Billed to Fund
2010	$	77,230	$	0	$	12,935	$	0
2009	$	74,531	$	0	$	8,281	$	0

The above “Tax Fees” were billed for professional services rendered for tax return preparation.

Services that the Fund’s Independent Registered Public Accounting Firm Billed to the Adviser and Affiliated Fund Service Providers

The following table shows the amount of fees billed by E&Y to Deutsche Investment Management Americas, Inc. (“DIMA” or the “Adviser”), and any entity controlling, controlled by or under common control with DIMA (“Control Affiliate”) that provides ongoing services to the Fund (“Affiliated Fund Service Provider”), for engagements directly related to the Fund’s operations and financial reporting, during the Fund’s last two fiscal years.

Fiscal Year Ended October 31,	Audit-Related Fees Billedto Adviser and Affiliated Fund Service Providers		Tax Fees Billed to Adviser and Affiliated Fund Service Providers		All Other Fees Billed to Adviser and Affiliated Fund Service Providers
2010	$	0	$	295,930	$	0
2009	$	0	$	440,000	$	0

The above “Tax Fees” were billed in connection with tax compliance services and agreed upon procedures.

Non-Audit Services

The following table shows the amount of fees that E&Y billed during the Fund’s last two fiscal years for non-audit services. The Audit Committee pre-approved all non-audit services that E&Y provided to the Adviser and any Affiliated Fund Service Provider that related directly to the Fund’s operations and financial reporting. The Audit Committee requested and received information from E&Y about any non-audit services that E&Y rendered during the Fund’s last fiscal year to the Adviser and any Affiliated Fund Service Provider.  The Committee considered this information in evaluating E&Y’s independence.

Fiscal Year Ended October 31,	Total Non-Audit Fees Billed to Fund (A)		Total Non-Audit Fees billed to Adviser and Affiliated Fund Service Providers (engagements related directly to the operations and financial reporting of the Fund) (B)		Total Non-Audit Fees billed to Adviser and Affiliated Fund Service Providers (all other engagements) (C)		Total of (A), (B) and (C)
2010	$	12,935	$	295,930	$	645,807	$	954,672
2009	$	8,281	$	440,000	$	711,000	$	1,159,281

All other engagement fees were billed for services in connection with internal control reviews, agreed upon procedures and tax compliance for DIMA and other related entities that provide support for the operations of the Fund.

Audit Committee Pre-Approval Policies and Procedures.  Generally, each Fund’s Audit Committee must pre approve (i) all services to be performed for a Fund by a Fund’s Independent Registered Public Accounting Firm and (ii) all non-audit services to be performed by a Fund’s Independent Registered Public Accounting Firm for the DIMA Entities with respect to operations and financial reporting of the Fund, except that the Chairperson or Vice Chairperson of each Fund’s Audit Committee may grant the pre-approval for non-audit services described in items (i) and (ii) above for non-prohibited services for engagements of less than $100,000.  All such delegated pre approvals shall be presented to each Fund’s Audit Committee no later than the next Audit Committee meeting.

There were no amounts that were approved by the Audit Committee pursuant to the de minimis exception under Rule 2-01 of Regulation S-X.

According to the registrant’s principal Independent Registered Public Accounting Firm, substantially all of the principal Independent Registered Public Accounting Firm's hours spent on auditing the registrant's financial statements were attributed to work performed by full-time permanent employees of the principal Independent Registered Public Accounting Firm.

***

In connection with the audit of the 2009 and 2010 financial statements, the Fund entered into an engagement letter with E&Y.  The terms of the engagement letter required by E&Y, and agreed to by the Audit Committee, include provisions in which the parties consent to the sole jurisdiction of federal courts in New York, Boston or the Northern District of Illinois, as well as a waiver of right to a trial by jury and an exclusion of punitive damages.

***

E&Y advised the Fund’s Audit Committee that E&Y had identified three matters that it determined to be inconsistent with the SEC’s auditor independence rules.

First, E&Y advised the Fund’s Audit Committee that, in 2007 and 2008, Deutsche Bank AG (“DB”) provided standard overdraft protection on a depository account to the E&Y member firm in India (“E&Y India”).  DB is within the “Investment Company Complex” (as defined by SEC rules) and therefore covered by the SEC auditor independence rules applicable to the Fund.   E&Y advised the Audit Committee that E&Y India utilized this arrangement twice in 2007; therefore, the arrangement constituted a lending type arrangement in violation of Rule 2-01(c)(1)(ii)(A) of Regulation S-X as described above.  E&Y advised the Audit Committee that E&Y believes its independence has not been impacted as it relates to the audit of the Fund. In reaching this conclusion, E&Y noted a number of factors,including that the arrangement did not create a mutual or conflicting interest between E&Y and the Fund and that the arrangement did not involve the Fund, but rather affiliates of the Fund in the Investment Company Complex.  E&Y informed the Audit Committee that E&Y India has cancelled the overdraft arrangement.

Second, E&Y advised the Fund’s Audit Committee that, in 2008, an E&Y professional purchased interests in a fund sponsored by a subsidiary of Deutsche Bank AG that is not audited by E&Y.  Subsequent to the purchase, the E&Y professional became a Covered Person (as defined by SEC rules) of the Fund as a result of providing non-audit services to a DB entity within the Investment Company Complex.  E&Y informed the Audit Committee that this investment constituted an investment in an affiliate of an audit client in violation of the Rule 2-01(c)(1) of Regulation S-X.  E&Y advised the Audit Committee that E&Y believes its independence has not been impacted as it relates to the audit of the Fund. In reaching this conclusion, E&Y noted a number of factors, incl uding thatthe E&Y professional did not have any financial interest in the Fund and was not involved with the provision of audit services to the Fund.  E&Y informed the Audit Committee that the E&Y professional no longer provides any services to any entity within the Investment Company Complex and is no longer deemed to be a Covered Person with respect to the Fund.

Finally, E&Y advised the Fund’s Audit Committee that, in 2008, an E&Y professional whose spouse owned interests in two DWS Funds that are not audited by E&Y, became a Covered Person of the Fund as a result of providing attest services to a DB entity within the Investment Company Complex.  E&Y informed the Audit Committee that this investment constituted an investment in an affiliate of an audit client in violation of the Rule 2-01(c)(1) of Regulation S-X.  E&Y advised the Audit Committee that E&Y believes its independence has not been impacted as it relates to the audit of the Fund. In reaching this conclusion, E&Y noted a number of factors, including thatthe E&Y professional did not have any financi al interest in the Fund and was not involved with the provision of audit services to the Fund.  E&Y informed the Audit Committee that the E&Y professional no longer provides any services to any entity within the Investment Company Complex and is no longer deemed to be a Covered Person with respect to the Fund.

ITEM 5.	AUDIT COMMITTEE OF LISTED REGISTRANTS
	Not applicable
ITEM 6.	SCHEDULE OF INVESTMENTS
	Not applicable
ITEM 7.	DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES
	Not applicable
ITEM 8.	PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES
	Not applicable
ITEM 9.	PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS
	Not Applicable.
ITEM 10.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
	There were no material changes to the procedures by which shareholders may recommend nominees to the Fund’s Board.  The primary function of the Nominating and Governance Committee is to identify and recommend individuals for membership on the Board and oversee the administration of the Board Governance Guidelines. Shareholders may recommend candidates for Board positions by forwarding their correspondence by U.S. mail or courier service to Paul K. Freeman, Independent Chairman, DWS Funds, P.O. Box 101833, Denver, CO 80250-1833.
ITEM 11.	CONTROLS AND PROCEDURES
	(a)	The Chief Executive and Financial Officers concluded that the Registrant’s Disclosure Controls and Procedures are effective based on the evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report.
	(b)	There have been no changes in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal controls over financial reporting.
ITEM 12.	EXHIBITS
	(a)(1)	Code of Ethics pursuant to Item 2 of Form N-CSR is filed and attached hereto as EX-99.CODE ETH.
	(a)(2)	Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT.
	(b)	Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as Exhibit 99.906CERT.

Form N-CSR Item F

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Registrant:	DWS Strategic Government Securities Fund
By:	/s/Michael G. Clark Michael G. Clark President
Date:	December 28, 2010

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:	/s/Michael G. Clark Michael G. Clark President
Date:	December 28, 2010
By:	/s/Paul Schubert Paul Schubert Chief Financial Officer and Treasurer
Date:	December 28, 2010