Dupree Mutual Funds N-CSRS Certified semi-annual shareholder report (management investment company)

U. S.

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-2918

DUPREE MUTUAL FUNDS

(Exact Name of Registrant as Specified in Charter)

125 South Mill Street, Vine Center, Suite 100

Lexington, Kentucky 40507

(Address of Principal Executive Offices) (Zip Code)

Allen E. Grimes, III

125 South Mill Street, Vine Center, Suite 100

Lexington, Kentucky 40507

(Name and address of agent for service)

Registrant’s Telephone Number, including Area Code (859) 254-7741

Date of fiscal year end: June 30, 2016

Date of reporting period: July 1, 2015 through December 31, 2015

Item 1. Report to Stockholders

December 31, 2015

SEMI ANNUAL REPORT

TO SHAREHOLDERS

(Unaudited)

ABOUT DUPREE MUTUAL FUNDS

In 1941, Dupree & Company, Inc. began business in Harlan, Kentucky as a small securities brokerage firm specializing in tax-exempt municipal bonds.

Over the years the firm, which in 1963 moved its offices to Lexington, Kentucky, grew to become a regional leader in public finance, helping to structure complex and innovative municipal bond financing for some of the largest public projects in the Commonwealth of Kentucky.

In 1979, Dupree & Company began what is now Dupree Mutual Funds with the Kentucky Tax-Free Income Series and became the Fund’s investment adviser. The Fund was one of the first single-state municipal bond funds in the country, and the first mutual fund to invest solely in Kentucky municipal bonds. Since then, several new offerings have been added to the Dupree Mutual Funds family:

Kentucky Tax-Free Short-to-Medium Series in 1987;

Intermediate Government Bond Series in 1992;

Tennessee Tax-Free Income Series in 1993;

Tennessee Tax-Free Short-to-Medium Series in 1994;

North Carolina Tax-Free Income Series in 1995;

North Carolina Tax-Free Short-to-Medium Series in 1995;

Alabama Tax-Free Income Series in 2000;

Mississippi Tax-Free Income Series in 2000; and

Taxable Municipal Bond Series in 2010.

Today, after more than 60 years in business, Dupree continues to be a pioneer in the industry. Our Kentucky, Tennessee, and Mississippi Series are currently the ONLY 100% “no-load” municipal bond funds available in those states. No-load means simply shares of the funds are offered directly to investors with no front or back-end sales charges, as opposed to load funds which are sold through brokerage firms or other institutions.

At Dupree Mutual Funds, our goal is a simple one: to offer investors a high-quality, low-cost way to invest in municipal and government bonds while providing superior service to our shareholders. We encourage you to let us know how we’re doing.

TABLE OF CONTENTS (Unaudited)

Management’s Discussion of Fund Performance	i
Sector Allocation of Funds	iii
Financial Statements
Alabama Tax-Free Income Series	1
Kentucky Tax-Free Income Series	6
Kentucky Tax-Free Short-to-Medium Series	14
Mississippi Tax-Free Income Series	19
North Carolina Tax-Free Income Series	24
North Carolina Tax-Free Short-to-Medium Series	30
Tennessee Tax-Free Income Series	36
Tennessee Tax-Free Short-to-Medium Series	42
Intermediate Government Bond Series	47
Taxable Municipal Bond Series	50
Notes to Financial Statements	54
Trustee & Officer Information	62
Schedule of Shareholder Expenses	64
Shareholder Meeting	65

Management’s Discussion of Fund Performance: (Unaudited)

Six Months Ended December 31, 2015

The investment objective for our tax-exempt municipal bond funds is to provide a high level of tax-free income derived from state-specific municipal securities without incurring undue risk to principal. Similarly, the investment objectives for our government bond fund and taxable municipal bond fund are to provide a high level of taxable income derived from securities of the U.S. Government and its agencies and taxable municipal bonds, respectively, without incurring undue risk to principal. As a general rule, we do not try to anticipate market direction; instead, we attempt to buy high quality investment grade bonds at the best possible prices and yields and hold them in down markets as well as up markets.

Factors which may influence the performance of a state-specific tax-exempt municipal bond fund or a taxable municipal bond fund include, but are not limited to, movements in interest rates, a downgrade or upgrade of credit ratings assigned to bonds issued by state or local governments, changes in the credit ratings assigned to bond insurers, downturns or upturns in the specific economies of a given state, the rate at which bonds are called, and the rate at which revenues are received by state and local governments which are used to pay debt service on issued bonds. Similarly, many factors may influence the performance of a government bond fund including, but not limited to, movements in interest rates, prevailing conditions in the U.S. Government securities markets, changes in an issuer’s financial strength, changes in the credit rating assigned to an obligation, and the rate at which bonds are called.

During the six month period ended December 31, 2015 (the “Reporting Period”), economic activity expanded at a moderate pace. Real gross domestic product (GDP), a measure of the output of goods and services produced by labor and property in the United States, increased at an annual rate of 2.0 percent in the third quarter. Real GDP increased at a 0.7 percent (advance estimate) annual rate in the fourth quarter. The U.S. economy expanded at a much slower pace in the fourth quarter as households tempered spending and businesses cut back on capital investment and made adjustments to inventories.

The Federal Reserve Board (“Fed”) increased the federal funds target rate range in December to 0.25 to 0.50 percent. The 25 basis point hike in the fed funds rate was the first rate increase since June of 2006. The Fed’s December statement reaffirmed that “it expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate.” The Fed continued its existing policy of reinvesting principal payments from its holdings of agency debt and mortgage-backed securities in agency mortgage-backed securities and rolling over maturing Treasury securities at auction and indicated that it would continue this policy until normalization of interest rates is “well under way.”

Conditions in the labor market continued to gradually improve during the Reporting Period. The seasonally adjusted national unemployment rate was 5.0 percent in December. The labor participation rate remained at historically low levels. Average hourly earnings for all employees increased 2.5 percent over the twelve months ending in December. Activity in the housing sector showed mixed signs during the Reporting Period.

Key measures of inflation continued to trend lower during the second half of the year. The Consumer Price Index (CPI) increased at a 0.7 percent annual rate in December. The core CPI, which excludes food and energy prices, increased at a 2.1 percent annual rate in December. The Fed’s preferred inflation gauge, the Personal Consumption Expenditures Index (“PCE”), increased by 0.6 percent on a year-over-year basis in December. The core PCE increased at a 1.4 percent annual rate in December. Declining energy and commodity prices pushed inflation indices lower during the Reporting Period. Inflation measures continued to run well below the Fed’s longer-run objective of a 2.0 percent target rate. Longer-term inflation expectations also remained well anchored during the Reporting Period.

Treasury and tax-exempt bond yields declined during the Reporting Period with the long end of the yield moving the most. Tax-exempt yields on benchmark 10-year and 30-year AAA rated municipal securities declined by 36 and 46 basis points, respectively. Treasury yields also declined during the Reporting Period with benchmark 10-year and 30-year Treasuries declining by 8 and 11 basis points, respectively.

As bond yields declined, the prices of municipal bonds increased. Generally, longer-dated bonds performed better than shorter-dated bonds during the Reporting Period. The decline in yields was the result of a combination of factors including declining Treasury yields, favorable supply/demand patterns, improving credit quality at the state and local level, and historically low inflation rates. Conditions in the municipal bond market were generally stable. The prices of bonds issued by Puerto Rico, however, fluctuated significantly as the market attempted to digest the impact of a restructuring plan being proposed by the Commonwealth. We are pleased to report that none of our single-state municipal bond funds hold any Puerto Rican bonds.

i

State revenues generally continued to show positive trends during the Reporting Period. According to preliminary data compiled by the Rockefeller Institute, state tax revenue collections in forty-four early reporting states grew by 4.3 percent during the third quarter of 2015. States expect fiscal year 2016 to be a weaker year than 2015, primarily because of an anticipated slowdown in the growth of income and sales tax revenue. States benefited from the strong stock market in 2014, which led to strong income tax collections in fiscal 2015. The subsequent weakening of the stock market likely is contributing to states’ forecasts of slower income tax growth in 2016 and 2017. While the fiscal health of states and localities has continued to slowly improve, unfunded pension and healthcare obligations still present challenges for many jurisdictions.

A discussion of the performance of each of our funds for the six month period ended December 31, 2015 follows:

During the Reporting Period, longer-dated bonds outperformed shorter-dated bonds. As a general matter, this caused all of our Tax-Free Income Series funds to have total returns that were greater than those generated by the Short-to-Medium Series. The Barclays Capital Municipal Bond Index (“Index”) had a modified adjusted duration of 6.24 years as of December 31, 2015. The modified adjusted durations of each of our eight single-state municipal bond funds were shorter (in the case of the Short-to-Medium Series substantially shorter) than the Index which caused each of these funds (except the Mississippi Tax-Free Income Series) to underperform the Index. At the end of the Reporting period, the Mississippi Tax-Free Income Series had a slightly longer nominal maturity than the Index (16.24 years versus 13.11 years) which caused it to slightly outperform the Index.

The Kentucky Tax-Free Income Series achieved a total return of 2.55 percent during the Reporting Period compared to a total return of 3.18 percent for the Barclays Capital Municipal Bond Index. The Kentucky Tax-Free Short-to-Medium Series achieved a total return of 1.59 percent during the Reporting Period compared to a total return of 3.18 percent for the Barclays Capital Municipal Bond Index.

The Tennessee Tax-Free Income Series achieved a total return of 2.75 percent during the Reporting Period compared to a total return of 3.18 percent for the Barclays Capital Municipal Bond Index. The Tennessee Tax-Free Short-to-Medium Series achieved a total return of 1.49 percent during the Reporting Period compared to 3.18 percent for the Barclays Capital Municipal Bond Index.

The North Carolina Tax-Free Income Series achieved a total return of 3.00 percent during the Reporting Period compared to 3.18 percent for the Barclays Capital Municipal Bond Index. The North Carolina Tax-Free Short-to-Medium Series achieved a total return of 1.00 percent during the Reporting Period compared to 3.18 percent for the Barclays Capital Municipal Bond Index.

The Alabama Tax-Free Income Series achieved a total a total return of 2.77 percent during the Reporting Period compared to 3.18 percent for the Barclays Capital Municipal Bond Index.

The Mississippi Tax-Free Income Series achieved a total return of 3.42 percent during the Reporting Period compared to 3.18 percent for the Barclays Capital Municipal Bond Index.

The Intermediate Government Bond Series achieved a total return of 1.36 percent during the Reporting Period compared to 0.36 percent for the Barclays Capital U.S. Government Intermediate Bond Index. The modified adjusted duration of the fund is longer than the index which caused it to outperform versus the index.

The Taxable Municipal Bond Series achieved a total return of 3.00 percent during the Reporting Period compared to 2.69 percent for the Barclays Capital Taxable Municipal Bond Index. The nominal maturity of the fund was slightly longer than the index which caused it to outperform versus the index.

It should be noted that the aforementioned Barclays Capital indices do not take into account any operating expenses or transaction costs. An investment cannot be made directly in an index.

We appreciate your confidence in Dupree Mutual Funds. Thank you for investing with us.

Total returns include changes in share price, reinvestment of dividends, and reinvestment of capital gains, if any. Performance data quoted represents past performance which is not a guarantee of future results. The opinions expressed herein are those of the funds’ portfolio management and are current as of December 31, 2015. Management’s opinions are not guarantees of performance or investment results and should not be taken as investment advice. You may lose money investing in the funds.

ii

The illustrations below provide each Fund’s sector allocation and Unaudited

summarize key information about each Fund’s investments as of December 31, 2015

Kentucky Tax-Free Income Series
CREDIT QUALITY (reflects highest credit rating)*	% of Investments at Fair Value
Aaa/AAA		3.02%
Aa/AA		87.83%
A		8.79%
Baa/BBB		0.00%
Not Rated		0.36%
		100.00%
COMPOSITION
	% of Net Assets
Miscellaneous Public Improvement		26.13%
Municipal Utility Revenue		12.52%
Prerefunded		12.32%
Turnpikes and Toll Roads Revenue		11.90%
Refunded		9.35%
School Improvements		8.43%
Hospital and Healthcare Revenue		6.49%
University Consolidated Education and Building Revenue		5.59%
Public Facilities Revenue		3.81%
State and Local Mortgage Revenue		1.48%
Airport Revenue		0.82%
Other Assets Less Liabilities		1.16%
		100.00%

Kentucky Tax-Free Short-to-Medium Series
CREDIT QUALITY (reflects highest credit rating)*	% of Investments at Fair Value
Aaa/AAA		1.86%
Aa/AA		91.41%
A		6.73%
		100.00%
COMPOSITION
	% of Net Assets
Miscellaneous Public Improvement		22.76%
School Improvements		18.31%
Prerefunded		12.50%
Refunded		10.76%
Public Facilities Revenue		9.40%
Municipal Utility Revenue		5.78%
Turnpikes and Toll Roads Revenue		5.75%
Hospital and Healthcare Revenue		4.99%
University Consolidated Education and Building Revenue		4.52%
State and Local Mortgage Revenue		1.55%
Escrowed to Maturity		0.21%
Other Assets Less Liabilities		3.47%
		100.00%

Alabama Tax-Free Income Series
CREDIT QUALITY (reflects highest credit rating)*	% of Investments at Fair Value
Aaa/AAA		1.67%
Aa/AA		89.73%
A		5.92%
Not Rated		2.68%
		100.00%
COMPOSITION
	% of Net Assets
School Improvement Revenue		22.45%
Municipal Utility Revenue		18.80%
Prerefunded		17.08%
University Consolidated Education and Building Revenue		13.65%
Public Facilities Revenue		12.68%
Miscellaneous Public Improvement		8.12%
Refunded		5.10%
State and Local Mortgage Revenue		0.43%
Industrial Revenue		0.08%
Other Assets Less Liabilities		1.61%
		100.00%

Mississippi Tax-Free Income Series
CREDIT QUALITY (reflects highest credit rating)*	% of Investments at Fair Value
Aaa/AAA		0.23%
Aa/AA		82.27%
A		17.41%
Not Rated		0.09%
		100.00%
COMPOSITION	% of Net Assets
University Consolidated Education and Building Revenue		28.31%
Prerefunded		17.62%
Municipal Utility Revenue		15.66%
Public Facilities Revenue		15.59%
Turnpikes and Toll Roads Revenue		6.01%
Miscellaneous Public Improvement		5.24%
School Improvement Revenue		4.86%
Hospital and Healthcare Revenue		3.46%
Refunded		1.89%
State and Local Mortgage Revenue		0.23%
Other Assets Less Liabilities		1.13%
		100.00%

iii

The illustrations below provide each Fund’s sector allocation and Unaudited

summarize key information about each Fund’s investments as of December 31, 2015

Tennessee Tax-Free Income Series
CREDIT QUALITY (reflects highest credit rating)*	% of Investments at Fair Value
Aaa/AAA		5.16%
Aa/AA		84.75%
A		9.72%
Baa/BBB		0.14%
Not Rated		0.23%
		100.00%
COMPOSITION
	% of Net Assets
Municipal Utility Revenue		40.92%
Prerefunded		15.09%
Public Facilities Revenue		12.46%
Hospital and Healthcare Revenue		8.48%
University Consolidated Education and Building Revenue		6.94%
Refunded		6.57%
State and Local Mortgage Revenue		2.43%
Miscellaneous Public Improvement		2.06%
School Improvement Revenue		2.02%
Airport Revenue		1.81%
Industrial Revenue		0.86%
Escrowed to Maturity		0.07%
Other Assets Less Liabilities		0.29%
		100.00%

Tennessee Tax-Free Short-to-Medium Series
CREDIT QUALITY (reflects highest credit rating)*	% of Investments at Fair Value
Aaa/AAA		3.35%
Aa/AA		73.98%
A		19.24%
Not Rated		3.43%
		100.00%
COMPOSITION
	% of Net Assets
Prerefunded		21.10%
Public Facilities Revenue		16.41%
Refunded		12.76%
Municipal Utility Revenue		12.68%
School Improvement Revenue		7.92%
Miscellaneous Public Improvement		7.84%
Hospital and Healthcare Revenue		6.32%
University Consolidated Education and Building Revenue		5.93%
State and Local Mortgage Revenue		3.11%
Airport Revenue		1.00%
Escrowed to Maturity		0.23%
Other Assets Less Liabilities		4.70%
		100.00%

North Carolina Tax-Free Income Series
CREDIT QUALITY (reflects highest credit rating)*	% of Investments at Fair Value
Aaa/AAA		5.50%
Aa/AA		78.74%
A		14.79%
Not Rated		0.97%
		100.00%
COMPOSITION
	% of Net Assets
Prerefunded		19.24%
University Consolidated Education and Building Revenue		18.23%
Municipal Utility Revenue		15.69%
Hospital and Healthcare Revenue		12.69%
Refunding		9.34%
Public Facilities Revenue		7.52%
Miscellaneous Public Improvement		4.63%
School Improvement Revenue		4.16%
Airport Revenue		3.53%
Turnpikes and Toll Roads Revenue		1.78%
Lease Revenue		1.31%
Miscellaneous Revenue		0.43%
Other Assets Less Liabilities		1.45%
		100.00%

North Carolina Tax-Free Short-to-Medium Series
CREDIT QUALITY (reflects highest credit rating)*	% of Investments at Fair Value
Aaa/AAA		7.33%
Aa/AA		81.54%
A		10.93%
Not Rated		0.20%
		100.00%
COMPOSITION
	% of Net Assets
Prerefunded		26.08%
Municipal Utility Revenue		19.75%
Refunding		17.72%
Public Facilities Revenue		9.84%
School Improvement Revenue		7.68%
Miscellaneous Public Improvement		5.48%
Hospital and Healthcare Revenue		4.95%
University Consolidated Education and Building Revenue		3.43%
Turnpikes and Toll Roads Revenue		1.48%
Lease Revenue		1.18%
Airport Revenue		0.92%
Escrowed to Maturity		0.65%
State and Local Mortgage Revenue		0.46%
Other Assets Less Liabilities		0.38%
		100.00%

iv

The illustrations below provide each Fund’s sector allocation and Unaudited

summarize key information about each Fund’s investments as of December 31, 2015

Intermediate Government Bond Series
CREDIT QUALITY (reflects highest credit rating)*	% of Investments at Fair Value
Aaa/AAA		100.00%
COMPOSITION
	% of Net Assets
Federal Farm Credit		55.74%
Federal Home Loan Bank		34.47%
Federal National Mortgage Association		6.72%
Other Assets Less Liabilities		3.07%
		100.00%

Taxable Municipal Bond Series
CREDIT QUALITY (reflects highest credit rating)*	% of Investments at Fair Value
Aaa/AAA		0.19%
Aa/AA		82.00%
A		17.81%
		100.00%
COMPOSITION
	% of Net Assets
Public Facilities Revenue	32.63%
Municipal Utility Revenue		25.98%
School Improvement Revenue		13.67%
Miscellaneous Public Improvement		10.31%
Turnpikes and Toll Roads Revenue		6.84%
Hospital and Healthcare Revenue		4.21%
Marina/Port Authority Revenue		2.16%
University Consolidated Education and Building Revenue		1.07%
Other Assets Less Liabilities		3.13%
		100.00%

* Bond ratings reflect the highest credit quality rating assigned to a specific bond by a Nationally Recognized Statistical Rating Organization (NRSRO)

v

DUPREE MUTUAL FUNDS — ALABAMA TAX-FREE INCOME SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

Alabama Municipal Bonds

December 31, 2015

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
SCHOOL IMPROVEMENT BONDS
22.45% of Net Assets
Alabaster AL Board of Education Special Tax Warrants		5.000	%		09/01/2039	A1/AA*	$	600,000	$	682,128
Etowah County AL Board of Education Capital Outlay Tax		5.000			09/01/2037	A+*		200,000		223,102
Jasper AL Warrants		5.000			03/01/2032	A2/AA*		450,000		511,947
Limestone County AL Board of Education		5.000			07/01/2033	AA*		255,000		291,575
Madison County AL Board of Education Capital Outlay Tax		4.950			09/01/2025	Aa3/AA*		100,000		109,590
Madison County AL Board of Education Capital Outlay Tax		5.100			09/01/2028	Aa3/AA*		285,000		312,973
Madison County AL Board of Education Capital Outlay Tax		5.125			09/01/2034	Aa3/AA*		505,000		551,278
Mobile AL Public Education Building Authority		5.000			03/01/2033	A3/AA*/AA-@		200,000		214,066
Montgomery AL Warrants		5.000			03/01/2028	Aa1/AA*		35,000		36,670
Montgomery County AL Board of Education Capital Outlay School Warrants		5.000			09/01/2039	AA*		150,000		168,233
Morgan County AL Board of Education Capital Outlay Warrants		5.000			03/01/2035	AA-*		1,050,000		1,181,261
Opelika AL Warrants		5.000			11/01/2031	Aa2/AA*		150,000		173,762
Phenix City AL School Warrants		5.000			08/01/2024	AA-*		80,000		83,430
Shelby County AL Board of Education Capital Outlay Warrants		5.000			02/01/2031	Aa2/A*		615,000		685,153
Shelby County AL Board of Education Special Tax School Warrants		5.000			02/01/2025	Aa3/A+*		300,000		301,191
Sumter County AL Limited Obligation School Warrants		5.100			02/01/2034	NR		100,000		103,687
Sumter County AL Limited Obligation School Warrants		5.200			02/01/2039	NR		95,000		98,552
Troy AL Public Educational Building Authority Educational		5.250			12/01/2036	A2/AA*		225,000		256,023
										5,984,618
MUNICIPAL UTILITY REVENUE BONDS
18.80% of Net Assets
Auburn AL Waterworks Board Water Revenue		5.000			09/01/2036	Aa2		250,000		289,630
Bessemer AL Governmental Utility Services Water Supply		4.750			06/01/2033	A2		100,000		104,480
Birmingham AL Waterworks Board Water Revenue		4.750			01/01/2036	Aa2/AA*		215,000		231,108
Birmingham AL Waterworks Board Water Revenue		5.000			01/01/2026	Aa2/AA*		80,000		92,065
Birmingham AL Waterworks Board Water Revenue		5.000			01/01/2038	Aa2/AA*		550,000		617,144
Chatom AL Industrial Board Gulf Opportunity Zone		5.000			08/01/2037	A3/AA*/A-@		150,000		166,829
Cullman AL Utility Board Water Revenue		4.750			09/01/2037	A1/AA*		400,000		430,076
Fort Payne AL Waterworks Board Water Revenue		4.750			07/01/2034	AA-*		100,000		110,285
Huntsville AL Water Systems Revenue Bonds		5.000			11/01/2033	Aa1/AAA*		300,000		324,198
Jasper AL Waterworks and Sewer Board Utility Revenue		5.000			06/01/2030	A+*		455,000		516,753
Limestone County AL Water & Sewer Authority		5.000			12/01/2029	A+*		50,000		50,177
Limestone County AL Water & Sewer Authority		5.000			12/01/2033	A*		300,000		342,315
Limestone County AL Water & Sewer Authority		5.000			12/01/2034	A*		250,000		296,013
Limestone County AL Water & Sewer Authority		4.750			12/01/2035	AA*		400,000		439,612
Muscle Shoals AL Utilities Board Water & Sewer		5.750			12/01/2033	AA-*		100,000		112,694
Opelika AL Water Board Revenue		5.000			06/01/2037	Aa3/AA*		250,000		278,515
Opelika AL Water Board Revenue		5.250			06/01/2036	Aa3/A+*		70,000		78,969
Phenix City AL Water and Sewer		5.000			08/15/2034	A3/AA*/AA-@		90,000		99,387
Tallassee AL Water Gas and Sewer Warrants		5.125			05/01/2036	A2/AA*		75,000		82,484
West Morgan East Lawrence AL Water & Sewer		4.850			08/15/2035	AA*		250,000		268,475
West Morgan East Lawrence AL Water & Sewer		4.750			08/15/2030	AA*		75,000		81,196
										5,012,403
PREREFUNDED BONDS
17.08% of Net Assets
AL State Public School & College Authority Capital Improvement		5.000			12/01/2024	Aa1/AA*		100,000		107,852
AL State Public School & College Authority Capital Improvement		5.000			12/01/2025	Aa1/AA*		640,000		690,381
AL State Public School & College Authority Refinancing		5.000			05/01/2024	Aa1/AA*/AA+@		125,000		140,693
Albertville AL Warrants		5.000			02/01/2035	AA*		110,000		123,041
Auburn University AL General Fee Revenue		5.000			06/01/2032	Aa2/AA*		45,000		45,847
Auburn University AL General Fee Revenue		5.000			06/01/2027	Aa2/AA*		300,000		317,976
Auburn University AL General Fee Revenue		5.000			06/01/2033	Aa2/AA*		420,000		444,797
Auburn University AL General Fee Revenue		5.000			06/01/2038	Aa2/AA*		600,000		635,424
Auburn University AL General Fee Revenue		5.000			06/01/2022	Aa2/AA-*		50,000		54,738
Elmore County AL Public Education Cooperative		5.000			08/01/2032	Aa3		50,000		53,297
Huntsville AL Public Building Authority Lease Revenue		5.000			10/01/2027	Aa1/AA-*		130,000		136,910

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

1

DUPREE MUTUAL FUNDS — ALABAMA TAX-FREE INCOME SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

Alabama Municipal Bonds

December 31, 2015

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
Huntsville AL Public Building Authority Lease Revenue		5.000	%		10/01/2033	Aa1/AA-*	$	65,000	$	68,455
Montgomery AL Warrants		5.000			03/01/2028	Aa1		140,000		147,116
Montgomery County AL Public Building Authority		5.000			03/01/2031	Aa2/AA-*		105,000		105,803
Montgomery County AL Public Building Authority		5.000			03/01/2031	Aa2		70,000		70,537
Muscle Shoals AL Utilities Board Water & Sewer		5.750			12/01/2033	NR		330,000		373,821
North Marshall AL Utilities Board Water Revenue		5.100			10/01/2030	AA*		375,000		416,164
Phenix City AL School Warrants		5.000			02/01/2017	NR		120,000		125,693
University of AL General Revenue		5.000			07/01/2028	Aa2/AA*		325,000		332,410
West Morgan — East Lawrence Water Authority AL Water Revenue		5.000			08/15/2025	A2/AA*		150,000		161,735
										4,552,687
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS
13.65% of Net Assets
AL State Private Colleges & Universities Tuskegee University		4.750			09/01/2026	AA*		500,000		501,505
Auburn University General Fee Revenue		5.000			06/01/2036	Aa2/AA-*		150,000		168,237
Jacksonville AL State University Revenue Tuition and Fee		5.125			12/01/2033	AA*		450,000		491,517
Troy University AL Facilities Revenue		5.000			11/01/2028	A1/AA*		250,000		293,993
Tuscaloosa AL Public Education Building Authority Student Housing		6.375			07/01/2028	AA*		250,000		280,255
Tuscaloosa AL Public Education Building Authority Student Housing		6.750			07/01/2033	AA*		495,000		558,271
University of AL Birmingham		5.000			10/01/2037	Aa2/AA-*		225,000		256,235
University of Alabama General Revenue		5.000			07/01/2034	Aa2/AA*		250,000		271,455
University of South AL University Revenues Facilities		5.000			08/01/2029	Aa1/AA+*		550,000		599,913
University of South AL University Revenues Facilities		4.750			08/01/2033	Aa1/AA+*		100,000		107,517
University of South AL University Revenues Refunding Tuition		5.000			12/01/2029	Aa1/AA+*		105,000		108,763
										3,637,660
PUBLIC FACILITIES REVENUE BONDS
12.68% of Net Assets
Anniston AL Public Building Authority		5.000			03/01/2032	A2/AA*		400,000		442,652
Anniston AL Public Building Authority DHR Project		5.250			05/01/2030	AA-*		50,000		57,181
Anniston AL Public Building Authority		5.500			05/01/2033	AA-*		200,000		230,620
Bessemer AL Public Educational Building Authority Revenue		5.000			07/01/2030	AA*		250,000		280,975
Huntsville AL Public Building Authority Lease Revenue		5.000			10/01/2027	Aa1/AA+*		245,000		256,135
Huntsville AL Public Building Authority Lease Revenue		5.000			10/01/2033	Aa1/AA+*		110,000		114,916
Lowndes County AL Warrants		5.250			02/01/2037	A2/AA*		250,000		279,708
Montgomery AL Warrants		5.000			02/01/2030	A1/AA*		300,000		336,996
Trussville AL Warrants		5.000			10/01/2039	Aa2/AA+*		1,220,000		1,381,247
										3,380,430
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS
8.12% of Net Assets
AL Incentives Financing Authority Special Obligation		5.000			09/01/2029	AA-*		125,000		139,648
Daphne AL Warrants		5.000			04/01/2023	Aa2/AA+*		250,000		253,023
Jasper AL Warrants		5.000			03/01/2031	A2/AA*		250,000		286,163
Madison AL Warrants		5.000			04/01/2035	Aa2/AA+*		350,000		404,632
Mobile AL Refunding Warrants		5.000			02/15/2027	Aa2/A+*		335,000		372,801
Tuscaloosa AL Warrants		5.000			10/15/2034	Aa1/AA+*		175,000		193,065
Tuscaloosa AL Warrants		5.125			01/01/2039	Aa1/AA+*		150,000		165,753
Tuscaloosa AL Warrants		5.000			07/01/2034	Aa1/AA+*		300,000		349,863
										2,164,947
REFUNDING BONDS
5.10% of Net Assets
Enterprise AL Warrants		4.500			11/01/2032	Aa3/AA-*		115,000		123,449
Northport AL Warrants		5.000			08/01/2040	AA-*		735,000		827,720
Tuscaloosa AL Warrants		5.000			01/01/2032	Aa1/AA+*		350,000		409,493
										1,360,662
STATE AND LOCAL MORTGAGE/HOUSING BONDS
.43% of Net Assets
AL Housing Finance Authority Single Family Mortgage Revenue		5.375			10/01/2033	Aaa		110,000		114,613

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

2

DUPREE MUTUAL FUNDS — ALABAMA TAX-FREE INCOME SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

Alabama Municipal Bonds

December 31, 2015

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
INDUSTRIAL REVENUE/POLLUTION CONTROL BONDS
.08% of Net Assets
Auburn AL Industrial Development Board Facilities Revenue		6.200	%		11/01/2020	A*	$	20,000	$	20,000
Total Investments 98.39% of Net Assets (cost $24,809,230) (See (a) below for further explanation)									$	26,228,020
Other assets in excess of liabilities 1.61%										428,724
Net Assets 100%									$	26,656,744

* Standard and Poor’s Corporation

@ Fitch’s Investors Service

(All other ratings by Moody’s Investors Service, Inc.)

NR Not Rated

# Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm.

(a) Cost for federal income tax purposes is $24,809,086 and net unrealized appreciation of investments is as follows:

Unrealized appreciation	$	1,424,686
Unrealized depreciation		(5,752	)
Net unrealized appreciation	$	1,418,934

Other Information

The following is a summary of the inputs used, as of December 31, 2015, involving the Fund’s investments in securities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.

	Valuation Inputs	Municipal Bonds
Level 1	Quoted Prices	$	—
Level 2	Other Significant Observable Inputs		26,228,020
Level 3	Significant Unobservable Inputs		—
		$	26,228,020

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

3

ALABAMA TAX-FREE INCOME SERIES

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2015 UNAUDITED

ASSETS:
Investments in securities, at fair value (Cost: $24,809,230)		$	26,228,020
Cash			219,821
Receivable for fund shares sold			2,000
Interest receivable			352,669
Total assets			26,802,510
LIABILITIES:
Payable for:
Distributions to shareholders	107,691
Fund shares redeemed	11,613
Investment advisory fee	9,736
Transfer agent fee	3,878
Trustee fees	159
Accrued expenses	12,689
Total liabilities			145,766
NET ASSETS:
Capital			25,274,449
Accumulated net investment income			144
Accumulated net realized loss on investment transactions			(36,639	)
Net unrealized appreciation in value of investments			1,418,790
Net assets at value		$	26,656,744
NET ASSET VALUE, offering price and redemption price per share (2,133,387 shares outstanding; unlimited number of shares authorized no par value)		$	12.50

STATEMENT OF OPERATIONS

For the six months ended December 31, 2015

Net investment income:
Interest income	$	507,061
Expenses:
Investment advisory fee		64,891
Transfer agent fee		18,590
Custodian expense		4,623
Professional fees		6,355
Trustees fees		1,307
Other expenses		6,573
Total expenses		102,339
Fees waived by Adviser		(9,752	)
Custodian expense reduction		(25	)
Net expenses		92,562
Net investment income		414,499
Realized and unrealized gain on investments:
Net realized gain		6,783
Net change in unrealized appreciation/depreciation		268,484
Net realized and unrealized gain on investments		275,267
Net increase in net assets resulting from operations	$	689,766

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

4

ALABAMA TAX-FREE INCOME SERIES

STATEMENTS OF CHANGES IN NET ASSETS

For the six months ended December 31, 2015 and the year ended June 30, 2015 UNAUDITED

	Six Months Ended 12/31/2015			Year Ended 06/30/2015
Operations:
Net investment income	$	414,499		$	825,995
Net realized gain on investments		6,783			60,994
Net change in unrealized appreciation/depreciation		268,484			16,768
Net increase in net assets resulting from operations		689,766			903,757
Distributions from net investment income		(414,487	)		(825,972	)
Net fund share transactions (Note 4)		870,888			2,074,414
Total increase		1,146,167			2,152,199
Net assets:
Beginning of year		25,510,577			23,358,378
End of period	$	26,656,744		$	25,510,577
Accumulated Net Investment Income	$	144		$	132

FINANCIAL HIGHLIGHTS

Selected data for a share outstanding:	Six Months  Ended 12/31/2015			For the years ended June 30,
				2015			2014			2013			2012			2011
Net asset value, beginning of year		$12.36			$12.32			$12.10			$12.41			$11.72			$11.77
Income from investment operations:
Net investment income		0.20			0.41			0.42			0.43			0.44			0.45
Net gains/(losses) on securities		0.14			0.04			0.23			(0.30	)		0.70			(0.05	)
Total from investment operations		0.34			0.45			0.65			0.13			1.14			0.40
Less distributions:
Distributions from net investment income		(0.20	)		(0.41	)		(0.42	)		(0.43	)		(0.44	)		(0.45	)
Distributions from capital gains		—			—			(0.01	)		(0.01	)		(0.01	)		—
Total distributions		(0.20	)		(0.41	)		(0.43	)		(0.44	)		(0.45	)		(0.45	)
Net asset value, end of period		$12.50			$12.36			$12.32			$12.10			$12.41			$11.72
Total return		2.77%	(b)		3.64%			5.56%			0.94%			9.81%			3.45%
Net assets, end of period (in thousands)		$26,657			$25,511			$23,358			$24,300			$22,911			$21,235
Ratio of net expenses to average net assets (a)		0.72%	(c)		0.71%			0.72%			0.70%			0.68%			0.60%
Ratio of gross expenses to average net assets		0.79%	(c)		0.79%			0.81%			0.78%			0.78%			0.78%
Ratio of net investment income to average net assets		3.21%	(c)		3.26%			3.48%			3.40%			3.59%			3.83%
Portfolio turnover		1.38%	(b)		9.65%			10.48%			6.46%			7.80%			4.70%

(a) Percentages are after expense waivers and reductions by the Adviser and Custodian. The Adviser and Custodian have agreed not to seek recovery of these waivers and reductions.

(b) Not annualized

(c) Annualized

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

5

DUPREE MUTUAL FUNDS — KENTUCKY TAX-FREE INCOME SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

Kentucky Municipal Bonds

December 31, 2015

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS
26.13% of Net Assets
KY Association of Counties		5.000	%		02/01/2030	AA-*	$	625,000	$	706,130
KY Association of Counties		5.000			02/01/2032	AA-*		1,000,000		1,128,870
KY Association of Counties		5.000			02/01/2035	AA-*		995,000		1,115,355
KY Bond Corporation Finance Program		5.500			02/01/2031	AA-*		1,115,000		1,312,154
KY State Property & Building #100		5.000			08/01/2026	Aa3/A*/A+@		2,000,000		2,320,040
KY State Property & Building #100		5.000			08/01/2027	Aa3/A*/A+@		1,710,000		1,977,752
KY State Property & Building #100		5.000			08/01/2028	Aa3/A*/A+@		4,000,000		4,605,800
KY State Property & Building #100		5.000			08/01/2029	Aa3/A*/A+@		2,500,000		2,875,775
KY State Property & Building #100		5.000			08/01/2030	Aa3/A*/A+@		9,980,000		11,423,507
KY State Property & Building #100		5.000			08/01/2031	Aa3/A*/A+@		5,100,000		5,817,570
KY State Property & Building #105		4.750			04/01/2031	A1/A*/A@		2,110,000		2,348,894
KY State Property & Building #105		4.750			04/01/2032	A1/A*/A@		2,205,000		2,448,586
KY State Property & Building #105		4.750			04/01/2033	A1/A*/A@		2,310,000		2,560,427
KY State Property & Building #106		5.000			10/01/2028	Aa3/A*/A+@		2,030,000		2,374,552
KY State Property & Building #106		5.000			10/01/2029	Aa3/A*/A+@		4,130,000		4,815,208
KY State Property & Building #106		5.000			10/01/2032	Aa3/A*/A+@		6,275,000		7,239,970
KY State Property & Building #106		5.000			10/01/2030	Aa3/A*/A+@		7,165,000		8,321,001
KY State Property & Building #106		5.000			10/01/2031	Aa3/A*/A+@		4,910,000		5,691,034
KY State Property & Building #106		5.000			10/01/2033	Aa3/A*/A+@		4,870,000		5,600,597
KY State Property & Building #108		5.000			08/01/2031	Aa3/A*/A+@		8,290,000		9,699,466
KY State Property & Building #108		5.000			08/01/2034	Aa3/A*/A+@		4,900,000		5,662,244
KY State Property & Building #108		5.000			08/01/2026	Aa3/A*/A+@		955,000		1,153,697
KY State Property & Building #108		5.000			08/01/2032	Aa3/A*/A+@		8,820,000		10,279,534
KY State Property & Building #108		5.000			08/01/2033	Aa3/A*/A+@		5,270,000		6,118,259
KY State Property & Building #108		5.000			08/01/2030	Aa3/A*/A+@		5,000,000		5,872,900
KY State Property & Building #108		5.000			08/01/2028	Aa3/A*/A+@		2,670,000		3,170,545
KY State Property & Building #110		5.000			08/01/2029	Aa3/A*/A+@		4,200,000		4,956,378
KY State Property & Building #110		5.000			08/01/2032	Aa3/A*/A+@		1,515,000		1,762,960
KY State Property & Building #110		5.000			08/01/2033	Aa3/A*/A+@		1,000,000		1,153,770
KY State Property & Building #110		5.000			08/01/2034	Aa3/A*/A+@		1,900,000		2,188,762
KY State Property & Building #110		5.000			08/01/2035	Aa3/A*/A+@		3,030,000		3,490,499
KY State Property & Building #76		5.500			08/01/2021	Aa3/A*/A+@		1,400,000		1,678,908
KY State Property & Building #83		5.000			10/01/2017	Aa3/A*/A+@		5,000,000		5,352,350
KY State Property & Building #87		5.000			03/01/2019	Aa3/AA-*		35,000		36,712
KY State Property & Building #87		5.000			03/01/2022	Aa3/AA-*		30,000		31,395
KY State Property & Building #87		5.000			03/01/2023	Aa3/AA-*		95,000		99,441
KY State Property & Building #87		5.000			03/01/2025	Aa3/AA-*		270,000		282,428
KY State Property & Building #87		5.000			03/01/2026	Aa3/AA-*		170,000		177,662
KY State Property & Building #87		5.000			03/01/2027	Aa3/AA-*		165,000		172,437
KY State Property & Building #88		4.750			11/01/2027	Aa3/AA-*/A+@		5,800,000		6,147,130
KY State Property & Building #89		5.000			11/01/2025	Aa3/AA*/A+@		5,000,000		5,499,700
KY State Property & Building #89		5.000			11/01/2026	Aa3/AA*/A+@		13,390,000		14,653,748
KY State Property & Building #89		5.000			11/01/2027	Aa3/AA*/A+@		4,900,000		5,341,049
KY State Property & Building #90		5.375			11/01/2023	Aa3/A*/A+@		1,200,000		1,335,576
KY State Property & Building #90		5.500			11/01/2028	Aa3/A*/A+@		24,805,000		27,561,332
KY State Property & Building #91		5.750			04/01/2029	A1/A*/A@		210,000		230,601
KY State Property & Building #93		5.250			02/01/2025	Aa3/AA*/A+@		7,250,000		8,073,093
KY State Property & Building #93		4.875			02/01/2028	Aa3/AA*/A+@		500,000		540,275
KY State Property & Building #93		5.250			02/01/2028	Aa3/AA*/A+@		10,500,000		11,604,915
KY State Property & Building #93		5.000			02/01/2029	Aa3/AA*/A+@		500,000		549,195
KY State Property & Building #93		5.250			02/01/2029	Aa3/AA*/A+@		22,640,000		25,036,897
KY State Property & Building #96		5.000			11/01/2029	Aa3/A*/A+@		5,000,000		5,588,000
KY State Property & Building #98		5.000			08/01/2021	Aa3/A*/A+@		2,505,000		2,862,038
Lexington Fayette Urban County Government		5.000			01/01/2033	Aa2/AA*		1,685,000		1,989,867
Lexington Fayette Urban County Government		5.000			01/01/2028	Aa2/AA*		820,000		988,707
Lexington Fayette Urban County Government		5.000			01/01/2029	Aa2/AA*		345,000		412,592
Pendleton County KY Multi-County Lease Revenue		6.400			03/01/2019	B*		3,000,000		3,175,320
										259,613,604

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

6

DUPREE MUTUAL FUNDS — KENTUCKY TAX-FREE INCOME SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

Kentucky Municipal Bonds

December 31, 2015

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
MUNICIPAL UTILITY REVENUE BONDS
12.52% of Net Assets
Campbell and Kenton Counties Sanitary District No. 1		5.000	%		08/01/2025	Aa2/AA*	$	2,395,000	$	2,536,521
Campbell and Kenton Counties Sanitary District No. 1		5.000			08/01/2037	Aa2/AA*		11,220,000		11,852,023
Campbell and Kenton Counties Sanitary District No. 1		5.000			08/01/2026	Aa2/AA*		4,175,000		4,425,083
Campbell and Kenton Counties Sanitary District No. 1		5.000			08/01/2027	Aa2/AA*		4,385,000		4,654,809
Frankfort KY Electric & Water		4.750			12/01/2034	AA*		695,000		804,831
Frankfort KY Electric & Water		4.750			12/01/2035	AA*		725,000		831,546
Frankfort KY Electric & Water		4.750			12/01/2038	AA*		835,000		953,470
Frankfort KY Electric & Water		4.750			12/01/2036	AA*		760,000		871,044
Frankfort KY Electric & Water		4.750			12/01/2037	AA*		800,000		918,240
Kentucky Rural Water Financing Corporation		4.500			02/01/2023	A+*		1,085,000		1,251,678
Kentucky Rural Water Financing Corporation		4.500			02/01/2024	A+*		880,000		1,011,446
KY Infrastructure Authority Wastewater and Drinking Water		5.000			02/01/2027	Aaa/AAA*/AAA@		2,500,000		2,847,425
KY Infrastructure Authority Wastewater and Drinking Water		5.000			02/01/2028	Aaa/AAA*/AAA@		2,000,000		2,273,680
KY Rural Water Finance Corporation		5.125			02/01/2035	A+*		525,000		576,886
KY Rural Water Finance Corporation		5.375			02/01/2020	A+*		295,000		295,496
Louisville & Jefferson County Metropolitan Sewer		5.000			05/15/2031	Aa3/AA*/AA-@		2,465,000		2,852,326
Louisville & Jefferson County Metropolitan Sewer		4.750			05/15/2034	Aa3/AA*		2,230,000		2,556,249
Louisville & Jefferson County Metropolitan Sewer		4.750			05/15/2036	Aa3/AA*		2,795,000		3,175,763
Louisville & Jefferson County Metropolitan Sewer		4.750			05/15/2035	Aa3/AA*		2,245,000		2,562,129
Louisville & Jefferson County Metropolitan Sewer		5.000			05/15/2035	Aa3/AA*		4,825,000		5,712,028
Louisville & Jefferson County Metropolitan Sewer		5.000			05/15/2034	Aa3/AA*		4,595,000		5,465,890
Louisville & Jefferson County Metropolitan Sewer		5.000			05/15/2024	Aa3/AA*		7,000,000		7,516,600
Louisville & Jefferson County Metropolitan Sewer		5.000			05/15/2025	Aa3/AA*		5,185,000		5,645,635
Louisville & Jefferson County Metropolitan Sewer		5.000			05/15/2021	Aa3/AA*		2,865,000		3,274,523
Louisville & Jefferson County Metropolitan Sewer		5.000			05/15/2023	Aa3/AA*		2,500,000		2,844,100
Louisville & Jefferson County Metropolitan Sewer		5.000			05/15/2034	Aa3/AA*/AA-@		27,730,000		31,934,977
Northern KY Water District		6.000			02/01/2028	Aa3		1,010,000		1,130,200
Northern KY Water District		6.000			02/01/2031	Aa3		1,000,000		1,119,550
Northern KY Water District		6.500			02/01/2033	Aa3		1,585,000		1,791,526
Northern KY Water District		5.000			02/01/2033	Aa3		3,580,000		3,993,812
Northern KY Water District		5.000			02/01/2026	Aa3		1,000,000		1,157,360
Northern KY Water District		5.000			02/01/2027	Aa3		4,315,000		4,972,779
Owensboro KY Water Revenue		5.000			09/15/2025	A1		545,000		596,290
										124,405,912
PREREFUNDED BONDS
12.32% of Net Assets
Campbell County KY School District Finance Corporation		4.500			08/01/2023	Aa3		980,000		1,002,746
Hardin County KY School District Finance Corporation		4.750			06/01/2027	Aa3		1,250,000		1,320,138
Jefferson County KY School District Finance Corporation		4.750			12/01/2026	Aa2/AA*		3,770,000		3,914,203
Jefferson County KY School District Finance Corporation		4.750			06/01/2027	Aa2/AA-*		3,000,000		3,169,650
Jefferson County KY School District Finance Corporation		4.500			07/01/2023	Aa2/AA*	��	2,500,000		2,550,125
Jefferson County KY School District Finance Corporation		4.625			07/01/2025	Aa2/AA*		7,545,000		7,700,201
Jefferson County KY School District Finance Corporation		5.000			07/01/2026	Aa2/AA*		5,025,000		5,137,761
KY Asset Liability Commission University of KY Project Note		5.000			10/01/2024	Aa2/AA*		5,445,000		5,843,520
KY Asset Liability Commission University of KY Project Note		5.000			10/01/2026	Aa2/AA*		6,090,000		6,535,727
KY State Property & Building #87		5.000			03/01/2019	Aa3/AA-*		2,965,000		3,114,999
KY State Property & Building #87		5.000			03/01/2022	Aa3/AA-*		1,635,000		1,717,715
KY State Property & Building #87		5.000			03/01/2023	Aa3/AA-*		5,080,000		5,336,997
KY State Property & Building #87		5.000			03/01/2025	Aa3/AA-*		14,565,000		15,301,843
KY State Property & Building #87		5.000			03/01/2026	Aa3/AA-*		8,060,000		8,467,755
KY State Property & Building #87		5.000			03/01/2027	Aa3/AA-*		10,125,000		10,637,224
KY State Property & Building #88		5.000			11/01/2024	Aa3/AA-*/A+@		1,355,000		1,457,574
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2026	Aa2/AA*/A+@		4,720,000		4,828,607
Laurel County School District Finance Corporation		4.625			08/01/2026	Aa3		3,150,000		3,226,136
Laurel County School District Finance Corporation		4.750			06/01/2026	Aa3		1,000,000		1,056,260
Louisville & Jefferson County Metropolitan Health — St. Marys		6.125			02/01/2037	NR		1,300,000		1,438,723

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

7

DUPREE MUTUAL FUNDS — KENTUCKY TAX-FREE INCOME SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

Kentucky Municipal Bonds

December 31, 2015

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
Louisville & Jefferson County Metropolitan Sewer		5.000	%		05/15/2025	Aa3/AA*/AA-@	$	3,270,000	$	3,325,492
Louisville & Jefferson County Metropolitan Sewer		5.000			05/15/2026	Aa3/AA*/AA-@		3,230,000		3,284,199
Louisville & Jefferson County Metropolitan Sewer		5.000			05/15/2032	Aa3/AA*/AA-@		4,590,000		4,673,676
Louisville & Jefferson County Metropolitan Sewer		5.000			05/15/2036	Aa3/AA*/AA-@		2,000,000		2,036,460
Louisville & Jefferson County Waterworks		5.000			11/15/2027	Aaa/AAA*		2,000,000		2,077,320
Louisville & Jefferson County Waterworks		5.000			11/15/2031	Aaa/AAA*		10,695,000		11,108,469
Taylor County KY Detention Facility		4.750			09/01/2027	A1		2,110,000		2,170,030
										122,433,547
TURNPIKES/TOLLROAD/HIGHWAY BONDS
11.90% of Net Assets
KY Asset Liability Commission Federal Highway		5.000			09/01/2022	A2/AA*/A+@		3,500,000		4,010,895
KY Asset Liability Commission Federal Highway		5.250			09/01/2019	A2/AA*/A+@		1,765,000		2,005,658
KY Asset Liability Commission Federal Highway		5.250			09/01/2025	A2/AA*/A+@		3,400,000		4,093,226
KY Asset Liability Commission Federal Highway		5.000			09/01/2027	A2/AA*/A+@		9,760,000		11,585,218
KY Asset Liability Commission Federal Highway		5.000			09/01/2021	A2/AA*/A+@		1,570,000		1,806,787
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2025	Aa2/AA*/A+@		3,225,000		3,515,089
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2027	Aa2/AA*/A+@		9,530,000		10,369,974
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2028	Aa2/AA*/A+@		2,460,000		2,669,863
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2026	Aa2/AA*/A+@		4,440,000		4,958,281
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2027	Aa2/AA*/A+@		3,080,000		3,438,420
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2029	Aa2/AA*/A+@		10,035,000		11,261,076
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2025	Aa2/AA*/A+@		3,775,000		4,430,793
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2029	Aa2/AA*/A+@		5,165,000		6,018,000
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2030	Aa2/AA*/A+@		1,845,000		2,136,086
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2028	Aa2/AA*/A+@		4,930,000		5,765,043
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2031	Aa2/AA*/A+@		9,350,000		10,811,125
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2029	Aa2/AA*/A+@		7,235,000		8,417,633
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2032	Aa2/AA*/A+@		8,755,000		10,100,381
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2032	Aa2/AA*/A+@		1,315,000		1,552,450
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2033	Aa2/AA*/A+@		5,000,000		5,809,200
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2030	Aa2/AA*/A+@		1,465,000		1,700,631
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2024	Aa2/AA*/A+@		1,500,000		1,787,115
										118,242,942
REFUNDING BONDS
9.35% of Net Assets
KY State Property & Building #102		5.000			05/01/2024	Aa3/A*/A+@		405,000		479,390
KY State Property & Building #104		5.000			11/01/2021	A1/A*/A@		2,085,000		2,446,539
KY State Property & Building #104		5.000			11/01/2022	A1/A*/A@		1,290,000		1,531,462
KY State Property & Building #108		5.000			08/01/2025	Aa3/A*/A+@		2,690,000		3,277,819
KY State Property & Building #80		5.250			05/01/2018	Aa3/AA-*/A+@		2,940,000		3,221,681
KY State Property & Building #80		5.250			05/01/2020	Aa3/AA-*/A+@		1,000,000		1,157,200
KY State Property & Building #83		5.000			10/01/2018	Aa3/A*/A+@		17,750,000		19,538,490
KY State Property & Building #83		5.250			10/01/2020	Aa3/A*/A+@		24,220,000		28,126,928
KY State Property & Building #84		5.000			08/01/2019	Aa3/AA-*/A+@		10,000,000		11,280,000
KY State Property & Building #84		5.000			08/01/2021	Aa3/AA-*/A+@		310,000		363,546
KY State Property & Building #84		5.000			08/01/2022	Aa3/AA-*/A+@		18,000,000		21,412,980
										92,836,035
SCHOOL IMPROVEMENT BONDS
8.43% of Net Assets
Fayette County KY School District Finance Corporation		5.000			06/01/2031	A1/A+*		3,705,000		4,173,423
Fayette County KY School District Finance Corporation		5.000			10/01/2028	A1/A+*		2,875,000		3,345,408
Fayette County KY School District Finance Corporation		5.000			10/01/2029	A1/A+*		3,660,000		4,239,415
Fayette County KY School District Finance Corporation		5.000			10/01/2032	A1/A+*		3,615,000		4,143,766
Fayette County KY School District Finance Corporation		5.000			10/01/2033	A1/A+*		4,385,000		5,006,793
Fayette County KY School District Finance Corporation		4.750			11/01/2031	Aa3/A+*		1,730,000		1,998,185
Fayette County KY School District Finance Corporation		5.000			08/01/2034	Aa3/A+*		8,500,000		9,875,810
Fayette County KY School District Finance Corporation		5.000			08/01/2028	Aa3/A+*		1,330,000		1,583,033
Fayette County KY School District Finance Corporation		5.000			08/01/2032	Aa3/A+*		10,600,000		12,373,274

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

8

DUPREE MUTUAL FUNDS — KENTUCKY TAX-FREE INCOME SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

Kentucky Municipal Bonds

December 31, 2015

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
Franklin County KY School Building Revenue		4.750	%		05/01/2027	Aa3	$	3,570,000	$	3,724,938
Hardin County KY School District Finance Corporation		5.000			05/01/2030	Aa3		450,000		510,885
Hardin County KY School District Finance Corporation		5.000			05/01/2031	Aa3		470,000		532,078
Jefferson County KY School District Finance Corporation		5.000			05/01/2032	Aa2/AA-*		4,230,000		4,954,980
Jefferson County KY School District Finance Corporation		5.000			05/01/2033	Aa2/AA-*		5,145,000		6,018,415
Jefferson County KY School District Finance Corporation		5.000			05/01/2034	Aa2/AA-*		5,405,000		6,300,609
Jefferson County KY School District Finance Corporation		5.000			04/01/2030	Aa2/AA-*		975,000		1,153,055
Jefferson County KY School District Finance Corporation		5.000			04/01/2031	Aa2/AA-*		1,025,000		1,208,516
Jefferson County KY School District Finance Corporation		4.750			04/01/2034	Aa2/AA-*		1,165,000		1,335,661
Jefferson County KY School District Finance Corporation		4.750			04/01/2035	Aa2/AA-*		1,220,000		1,392,349
Kenton County KY School District Finance Corporation		5.000			02/01/2029	Aa3		3,270,000		3,591,735
Scott County KY School District Finance Corporation		4.500			01/01/2025	Aa3		4,890,000		5,725,408
Shelby County KY School District Finance Corporation		5.000			02/01/2028	Aa3		500,000		543,535
										83,731,268
HOSPITAL AND HEALTHCARE BONDS
6.49% of Net Assets
KY Development Finance Authority — Baptist Healthcare		5.625			08/15/2027	A3/A+@		4,855,000		5,335,014
KY Development Finance Authority — Baptist Heathcare		5.375			08/15/2024	A3/A+@		1,205,000		1,316,776
KY Development Finance Authority — Catholic Health		5.000			05/01/2029	A2/A*/A+@		2,410,000		2,624,056
KY Development Finance Authority — Catholic Health		5.375			01/01/2040	A2/A*/A+@		300,000		338,427
KY Development Finance Authority — St. Elizabeth		5.500			05/01/2039	AA*/AA@		1,000,000		1,115,030
KY Development Finance Authority — St. Elizabeth		5.125			05/01/2029	AA*/AA@		2,750,000		3,044,470
KY Development Finance Authority — St. Elizabeth		5.375			05/01/2034	AA*/AA@		2,560,000		2,843,315
Lexington Fayette Urban County Government		5.250			06/01/2032	Aa3/A*/A+@		1,500,000		1,701,315
Lexington Fayette Urban County Government Healthcare		5.250			06/01/2028	Aa3/A*/A+@		1,000,000		1,146,120
Lexington-Fayette Urban County Government Public Facilities		5.000			06/01/2033	Aa3/A*/A+@		5,260,000		5,862,901
Louisville & Jefferson County Catholic Health Initiatives		5.000			12/01/2030	A2/A*/A+@		2,000,000		2,233,080
Louisville & Jefferson County Catholic Health Initiatives		5.000			12/01/2035	A2/A*/A+@		14,785,000		16,263,352
Louisville & Jefferson County Catholic Health Initiatives		5.000			12/01/2031	A2/A*/A+@		2,750,000		3,053,545
Louisville & Jefferson County Metropolitan Health — Norton Health		5.000			10/01/2030	A-*/A-@		2,000,000		2,045,740
Louisville & Jefferson County Metropolitan Health — Norton Health		5.250			10/01/2036	A-*/A-@		3,460,000		3,536,397
Louisville & Jefferson County Metropolitan Health — Norton Health		5.500			10/01/2033	A-*/A-@		2,000,000		2,304,520
Louisville & Jefferson Metropolitan Government Health		5.000			10/01/2026	A-*/A-@		530,000	��	544,416
Pike County KY Mortgage Revenue-Phelps Regional Health		5.650			09/20/2027	NR		2,095,000		2,100,007
Warren County KY Hospital		5.000			04/01/2028	A+*		6,225,000		7,043,525
										64,452,007
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS
5.59% of Net Assets
Boyle County KY College Improvement — Centre College — A		4.750			06/01/2032	A3/AA*		5,330,000		5,558,071
Eastern KY University		5.000			04/01/2033	Aa3		910,000		1,062,425
Louisville & Jefferson County University of Louisville		4.750			03/01/2028	Aa3/AA-*		3,250,000		3,490,175
Morehead State University		5.000			04/01/2028	Aa3		1,780,000		2,148,674
Morehead State University		5.000			04/01/2029	Aa3		870,000		1,041,442
Murray State University		5.000			03/01/2032	Aa3		2,220,000		2,583,103
University of Kentucky General Receipts		5.000			04/01/2037	Aa2/AA*		7,180,000		8,301,731
University of Kentucky General Receipts		5.000			04/01/2038	Aa2/AA*		7,395,000		8,521,037
University of Kentucky General Receipts		5.000			04/01/2030	Aa2/AA*		5,490,000		6,596,894
University of Kentucky General Receipts		5.000			04/01/2036	Aa2/AA*		4,820,000		5,588,404
University of Kentucky General Receipts		5.000			09/01/2030	Aa3/AA-*		440,000		504,024
University of Kentucky General Receipts		5.000			09/01/2031	Aa3/AA-*		2,580,000		2,946,566
University of Louisville General Receipts		5.000			09/01/2029	Aa3/AA-*		2,280,000		2,623,550
Western KY University		4.750			09/01/2033	Aa3/A*		2,505,000		2,858,405
Western KY University		5.000			05/01/2032	Aa3/A*		1,500,000		1,707,975
										55,532,478
PUBLIC FACILITIES REVENUE BONDS
3.81% of Net Assets
Bracken County KY Public Property		5.000			08/01/2029	Aa3		840,000		962,926
Bracken County KY Public Property		5.000			08/01/2030	Aa3		1,110,000		1,266,799

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

9

DUPREE MUTUAL FUNDS — KENTUCKY TAX-FREE INCOME SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

Kentucky Municipal Bonds

December 31, 2015

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
Franklin County KY Public Properties Justice Center		5.000	%		04/01/2029	Aa3	$	2,630,000	$	2,984,761
KY State Certificates of Participation		5.000			06/15/2038	Aa3		7,535,000		8,607,532
KY State Certificates of Participation		5.000			06/15/2034	Aa3		1,640,000		1,899,497
Louisville & Jefferson County Metropolitan Parking		5.000			12/01/2022	Aa2/AA*		625,000		713,794
Louisville & Jefferson County Metropolitan Parking		5.750			12/01/2034	Aa2/AA*		2,750,000		3,197,480
Owensboro KY Public Property		4.500			04/01/2034	A1		1,165,000		1,254,530
River City, Inc. Parking Authority		4.750			06/01/2029	Aa2/AA*		1,160,000		1,318,839
River City, Inc. Parking Authority		4.750			06/01/2027	Aa2/AA*		750,000		866,325
River City, Inc. Parking Authority		4.750			06/01/2028	Aa2/AA*		940,000		1,078,236
River City, Inc. Parking Authority		4.750			06/01/2030	Aa2/AA*		1,025,000		1,161,674
River City, Inc. Parking Authority		4.750			06/01/2031	Aa2/AA*		1,270,000		1,435,697
River City, Inc. Parking Authority		4.750			06/01/2029	Aa2/AA*		980,000		1,114,191
River City, Inc. Parking Authority		5.000			06/01/2033	Aa2/AA*		1,395,000		1,600,232
River City, Inc. Parking Authority		5.000			06/01/2031	Aa2/AA*		1,080,000		1,244,354
River City, Inc. Parking Authority		5.000			06/01/2032	Aa2/AA*		1,130,000		1,297,873
Warren County KY Downtown Economic Development Authority		5.000			06/01/2038	AA-*		2,345,000		2,636,695
Wolfe County KY Public Property		5.000			04/01/2030	Aa3		2,855,000		3,230,861
										37,872,295
STATE AND LOCAL MORTGAGE/HOUSING BONDS
1.48% of Net Assets
Greater KY Housing Assistance Corporation — Chenowith Woods		6.100			01/01/2024	A3/AA-*		330,000		330,614
KY Economic Development Finance Authority — Christian Care		5.375			11/20/2035	AA+*		1,905,000		1,964,341
KY Housing Corporation		4.750			07/01/2032	Aaa/AAA*		1,265,000		1,284,392
KY Housing Corporation		4.900			07/01/2028	Aaa/AAA*		1,745,000		1,788,363
KY Housing Corporation		4.875			07/01/2023	Aaa/AAA*		1,330,000		1,370,219
KY Housing Corporation		4.850			07/01/2029	Aaa/AAA*		2,975,000		3,119,585
KY Housing Corporation		4.750			07/01/2035	Aaa/AAA*		3,610,000		3,812,954
KY Housing Corporation Country Place Apartments		4.750			04/20/2031	AA+*		935,000		988,921
										14,659,390
AIRPORT BONDS
.82% of Net Assets
Lexington Fayette Urban County Airport Board		5.000			07/01/2030	Aa2/AA*		1,250,000		1,455,963
Lexington Fayette Urban County Airport Board		5.000			07/01/2032	Aa2/AA*		1,430,000		1,639,552
Lexington Fayette Urban County Airport Board		5.000			07/01/2033	Aa2/AA*		1,520,000		1,731,994
Lexington Fayette Urban County Airport Board		5.000			07/01/2038	Aa2/AA*		1,720,000		1,931,491
Lexington Fayette Urban County Airport Board		5.000			07/01/2028	Aa2/AA*		1,170,000		1,355,117
										8,114,118
Total Investments 98.84% of Net Assets (cost $924,732,657) (See (a) below for further explanation)									$	981,893,596
Other assets in excess of liabilities 1.16%										11,547,965
Net Assets 100%									$	993,441,561

* Standard and Poor’s Corporation

@ Fitch’s Investors Service

(All other ratings by Moody’s Investors Service, Inc.)

NR Not Rated

# Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm.

(a) Cost for federal income tax purposes is $924,681,451 and net unrealized appreciation of investments is as follows:

Unrealized appreciation	$	57,435,095
Unrealized depreciation		(222,950	)
Net unrealized appreciation	$	57,212,145

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

10

DUPREE MUTUAL FUNDS — KENTUCKY TAX-FREE INCOME SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

Kentucky Municipal Bonds

December 31, 2015

Other Information

The following is a summary of the inputs used, as of December 31, 2015, involving the Fund’s investments in securities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.

	Valuation Inputs	Municipal Bonds
Level 1	Quoted Prices	$	—
Level 2	Other Significant Observable Inputs		981,893,596
Level 3	Significant Unobservable Inputs		—
		$	981,893,596

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

11

KENTUCKY TAX-FREE INCOME SERIES

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2015 UNAUDITED

ASSETS:
Investments in securities, at fair value (Cost: $924,732,657)		$	981,893,596
Cash			2,152,003
Receivable for fund shares sold			402,233
Interest receivable			13,144,549
Total assets			997,592,381
LIABILITIES:
Payable for:
Distributions to shareholders	3,259,569
Fund shares redeemed	163,362
Investment advisory fee	314,434
Transfer agent fee	100,824
Trustees fees	54,679
Accrued expenses	257,952
Total liabilities			4,150,820
NET ASSETS:
Capital			936,231,132
Accumulated net investment income			51,206
Accumulated net realized loss on investment transactions			(1,716	)
Net unrealized appreciation in value of investments			57,160,939
Net assets at value		$	993,441,561
NET ASSET VALUE, offering price and redemption price per share (125,786,375 shares outstanding; unlimited number of shares authorized no par value)		$	7.90

STATEMENT OF OPERATIONS

For the six months ended December 31, 2015

Net investment income:
Interest income	$	18,546,944
Expenses:
Investment advisory fee		1,864,958
Transfer agent fee		598,180
Custodian expense		48,435
Professional fees		103,480
Trustees fees		50,400
Other expenses		57,181
Total expenses		2,722,634
Custodian expense reduction		(265	)
Net expenses		2,722,369
Net investment income		15,824,575
Realized and unrealized gain on investments:
Net realized gain		63,057
Net change in unrealized appreciation/depreciation		8,914,902
Net realized and unrealized gain on investments		8,977,959
Net increase in net assets resulting from operations	$	24,802,534

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

12

KENTUCKY TAX-FREE INCOME SERIES

STATEMENTS OF CHANGES IN NET ASSETS

For the six months ended December 31, 2015 and the year ended June 30, 2015 UNAUDITED

	Six Months Ended 12/31/2015			Year Ended 06/30/2015
Operations:
Net investment income	$	15,824,575		$	32,471,978
Net realized gain on investments		63,057			215,331
Net change in unrealized appreciation/depreciation		8,914,902			(8,192,046	)
Net increase in net assets resulting from operations		24,802,534			24,495,263
Distributions from net investment income		(15,819,913	)		(32,463,029	)
Distributions from capital gains		(258,021	)		(402,816	)
Net fund share transactions (Note 4)		(4,913,008	)		28,451,332
Total increase		3,811,592			20,080,750
Net assets:
Beginning of year		989,629,969			969,549,219
End of period	$	993,441,561		$	989,629,969
Accumulated Net Investment Income	$	51,206		$	46,544

FINANCIAL HIGHLIGHTS

Selected data for a share outstanding:	Six Months  Ended 12/31/2015			For the years ended June 30,
				2015			2014			2013			2012			2011
Net asset value, beginning of year		$7.83			$7.89			$7.74			$7.99			$7.63			$7.67
Income from investment operations:
Net investment income		0.13			0.26			0.27			0.27			0.28			0.29
Net gains/(losses) on securities		0.07			(0.06	)		0.16			(0.25	)		0.39			(0.02	)
Total from investment operations		0.20			0.20			0.43			0.02			0.67			0.27
Less distributions:
Distributions from net investment income		(0.13	)		(0.26	)		(0.27	)		(0.27	)		(0.28	)		(0.29	)
Distributions from capital gains		(0.00	)(b)		(0.00	)(b)		(0.01	)		(0.00	)(b)		(0.03	)		(0.02	)
Total distributions		(0.13	)		(0.26	)		(0.28	)		(0.27	)		(0.31	)		(0.31	)
Net asset value, end of period		$7.90			$7.83			$7.89			$7.74			$7.99			$7.63
Total return		2.55%	(c)		2.60%			5.65%			0.17%			8.97%			3.57%
Net assets, end of period (in thousands)		$993,442			$989,630			$969,549			$948,276			$989,404			$896,625
Ratio of net expenses to average net assets (a)		0.55%	(d)		0.55%			0.57%			0.57%			0.57%			0.58%
Ratio of gross expenses to average net assets		0.55%	(d)		0.55%			0.57%			0.57%			0.57%			0.58%
Ratio of net investment income to average net assets		3.21%	(d)		3.29%			3.45%			3.35%			3.60%			3.78%
Portfolio turnover		6.37%	(c)		7.80%			9.43%			7.02%			8.39%			11.42%

(a) Percentages are after custodian reduction for which no recovery will be sought.

(b) Rounds to less than $0.01.

(c) Not annualized

(d) Annualized

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

13

DUPREE MUTUAL FUNDS — KENTUCKY TAX-FREE SHORT-TO-MEDIUM SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

Kentucky Municipal Bonds

December 31, 2015

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS
22.76% of Net Assets
KY Association of Counties		4.250	%		02/01/2017	AA-*	$	500,000	$	518,015
KY Association of Counties		4.000			02/01/2018	AA-*		115,000		121,531
KY Association of Counties		4.250			02/01/2019	AA-*		255,000		276,532
KY State Property & Building #100		5.000			08/01/2019	Aa3/A*/A+@		100,000		112,388
KY State Property & Building #100		5.000			08/01/2017	Aa3/A*/A+@		500,000		531,335
KY State Property & Building #100		5.000			08/01/2025	Aa3/A*/A+@		500,000		582,600
KY State Property & Building #106		5.000			10/01/2021	Aa3/A*/A+@		750,000		879,623
KY State Property & Building #106		5.000			10/01/2024	Aa3/A*/A+@		750,000		900,090
KY State Property & Building #106		5.000			10/01/2025	Aa3/A*/A+@		2,365,000		2,825,086
KY State Property & Building #106		5.000			10/01/2023	Aa3/A*/A+@		540,000		649,307
KY State Property & Building #108		5.000			08/01/2023	Aa3/A*/A+@		2,000,000		2,396,860
KY State Property & Building #108		5.000			08/01/2023	Aa3/A*/A+@		750,000		898,823
KY State Property & Building #110		5.000			08/01/2023	Aa3/A*/A+@		1,750,000		2,094,540
KY State Property & Building #76		5.500			08/01/2017	Aa3/A*/A+@		190,000		203,676
KY State Property & Building #76		5.500			08/01/2018	Aa3/A*/A+@		1,415,000		1,567,013
KY State Property & Building #83		5.000			10/01/2017	Aa3/A*/A+@		100,000		107,047
KY State Property & Building #87		5.000			03/01/2017	Aa3/AA-*/A+@		850,000		892,492
KY State Property & Building #87		5.000			03/01/2018	Aa3/AA-*/A+@		100,000		104,794
KY State Property & Building #87		5.000			03/01/2020	Aa3/AA-*		95,000		99,554
KY State Property & Building #89		3.750			11/01/2017	Aa3/AA*/A+@		100,000		105,113
KY State Property & Building #89		5.000			11/01/2020	Aa3/AA*/A+@		200,000		220,164
KY State Property & Building #90		5.000			11/01/2018	Aa3/A*/A+@		250,000		275,793
KY State Property & Building #90		5.750			11/01/2019	Aa3/A*/A+@		200,000		225,032
KY State Property & Building #90		5.000			11/01/2020	Aa3/A*/A+@		495,000		545,634
KY State Property & Building #93		5.250			02/01/2018	Aa3/A*/A+@		510,000		552,917
KY State Property & Building #93		5.250			02/01/2021	Aa3/AA*/A+@		200,000		223,928
KY State Property & Building #94		5.000			05/01/2017	Aa2/A*/A+@		500,000		526,965
KY State Property & Building #95		5.000			08/01/2017	Aa3/A*/A+@		200,000		212,404
KY State Property & Building #100		5.000			08/01/2024	Aa3/A*/A+@		750,000		875,198
										19,524,451
SCHOOL IMPROVEMENT BONDS
18.31% of Net Assets
Barren County KY School District Finance Corporation		5.000			08/01/2023	Aa3		500,000		598,825
Barren County KY School District Finance Corporation		5.000			08/01/2022	Aa3		1,055,000		1,250,017
Bullitt County KY School District Finance Corporation		5.000			09/01/2022	Aa3		300,000		355,902
Corbin KY Independent School District		4.000			02/01/2018	Aa3		300,000		309,771
Fayette County KY School District Finance Corporation		4.000			06/01/2022	A1/A+*		1,000,000		1,109,770
Fayette County KY School District Finance Corporation		5.000			06/01/2023	Aa3/A+*		500,000		599,475
Fayette County KY School District Finance Corporation		5.000			08/01/2023	Aa3/A+*		1,000,000		1,193,800
Grant County KY School District Finance Corporation		3.750			06/01/2017	Aa3		190,000		194,239
Hardin County KY School District		5.000			03/01/2023	Aa3		770,000		919,526
Jefferson County KY School District Finance Corporation		5.250			01/01/2017	Aa2/AA*		200,000		209,176
Jefferson County KY School District Finance Corporation		4.000			12/01/2023	Aa2/AA-*		1,000,000		1,136,340
Jessamine County KY School District Finance Corporation		5.000			02/01/2023	Aa3		575,000		686,717
Johnson County KY School District Finance Corporation		3.000			12/01/2019	Aa3		180,000		189,459
Laurel County KY School District Finance Corporation		4.000			06/01/2024	Aa3		465,000		526,692
Laurel County KY School District Finance Corporation		4.000			06/01/2022	Aa3		890,000		999,532
Oldham County KY School Building Corporation		4.375			06/01/2018	Aa3		2,570,000		2,689,454
Pendleton County KY School District Finance Corporation		4.000			02/01/2020	Aa3		450,000		463,172
Warren County KY School District Finance Corporation		4.000			02/01/2016	Aa3		1,330,000		1,333,963
Warren County KY School District Finance Corporation		4.000			04/01/2018	Aa3		125,000		132,918
Warren County KY School District Finance Corporation		4.000			06/01/2022	Aa3		725,000		813,298
										15,712,044

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

14

DUPREE MUTUAL FUNDS — KENTUCKY TAX-FREE SHORT-TO-MEDIUM SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

Kentucky Municipal Bonds

December 31, 2015

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
PREREFUNDED BONDS
12.50% of Net Assets
Adair County KY Public Properties		4.000	%		12/01/2022	Aa3	$	170,000	$	180,091
Campbell County KY School District Finance Corporation		4.375			08/01/2019	Aa3		875,000		894,670
Daviess Co KY School District Finance Corporation		4.250			08/01/2019	Aa3		100,000		105,449
Fayette County KY School District Finance Corporation		4.375			05/01/2021	A1/AA*		200,000		209,708
Jefferson County KY School District School Building Revenue		4.250			07/01/2017	Aa2/AA*		175,000		178,264
KY Asset Liability Commission Revenue University of Kentucky		4.125			10/01/2019	Aa2/AA*		150,000		158,676
KY Asset Liability University of Kentucky Project Notes		5.000			10/01/2019	Aa2/AA*		320,000		343,539
KY Asset Liability Commission University of Kentucky		5.000			10/01/2020	Aa2/AA*		150,000		161,061
KY State Property & Building #87		5.000			03/01/2020	Aa3/AA-*		4,405,000		4,626,792
KY Turnpike Authority Economic Development		5.000			07/01/2017	Aa2/AA*/A+@		2,570,000		2,628,725
Louisville & Jefferson County Municipal Sewer		5.000			05/15/2018	Aa3/AA*/AA-@		1,220,000		1,240,752
										10,727,727
REFUNDING BONDS
10.76% of Net Assets
KY State Property & Building #108		5.000			08/01/2022	Aa3/A*/A+@		200,000		237,378
KY State Property & Building #101		5.000			10/01/2019	Aa3/A*/A+@		1,050,000		1,187,193
KY State Property & Building #104		5.000			11/01/2021	A1/A*/A@		1,000,000		1,173,400
KY State Property & Building #106		5.000			10/01/2026	Aa3/A*/A+@		1,000,000		1,185,170
KY State Property & Building #82		5.250			10/01/2017	Aa3/AA*/A+@		1,260,000		1,356,314
KY State Property & Building #83		5.000			10/01/2016	Aa3/A*/A+@		775,000		801,125
KY State Property & Building #83		5.000			10/01/2019	Aa3/A*/A+@		1,750,000		1,974,543
KY State Property & Building #84		5.000			08/01/2019	Aa3/AA-*/A+@		1,000,000		1,128,000
Lexington Fayette Urban County Government Public Property		4.000			05/01/2017	Aa2/AA*		180,000		185,078
										9,228,201
PUBLIC FACILITIES REVENUE BONDS
9.40% of Net Assets
KY State Certificate of Participation		4.000			06/15/2022	Aa3		1,000,000		1,121,200
KY State Certificate of Participation		4.000			06/15/2023	Aa3		940,000		1,053,693
KY State Property & Building #109		5.000			10/01/2022	Aa3/A*/A+@		1,000,000		1,187,820
Laurel County KY Justice Center		5.000			03/01/2023	Aa3		600,000		716,076
Lexington-Fayette Urban County Government Public Facilities		4.000			10/01/2018	Aa3		1,540,000		1,571,493
Livingston County KY Public Properties		5.000			08/01/2022	Aa3		500,000		588,375
Todd County KY Public Properties Court House		3.250			06/01/2019	Aa3		100,000		106,116
Warren County KY Justice Center Expansion Corporation		5.000			09/01/2023	Aa3		1,250,000		1,509,363
Whitley County KY Public Properties — Justice Center		3.375			09/01/2019	Aa3		200,000		213,770
										8,067,906
MUNICIPAL UTILITY REVENUE BONDS
5.78% of Net Assets
Bourbon County KY Public Project		3.800			02/01/2019	A2		260,000		266,997
Frankfort Electric & Water		4.000			12/01/2023	AA*		440,000		502,744
Kentucky Rural Water Finance Corporation		3.000			02/01/2018	A+*		300,000		309,756
Kentucky Rural Water Finance Corporation		3.000			02/01/2019	A+*		250,000		260,488
KY Infrastructure Authority Wastewater & Drinking Water		5.000			02/01/2025	Aaa/AAA*/AAA@		175,000		208,128
KY Rural Water Finance Corporation		3.000			08/01/2019	A+*		545,000		574,196
KY Rural Water Finance Corporation		3.000			02/01/2018	A+*		530,000		547,903
KY Rural Water Finance Corporation		4.500			08/01/2021	A3/AA-*		100,000		105,257
Lawrenceburg KY Water and Sewer		3.000			10/01/2018	A1		375,000		387,731
Louisville & Jefferson County Municipal Sewer		5.000			05/15/2016	Aa3/AA*		100,000		101,686
Northern KY Water		5.000			02/01/2026	Aa3		815,000		965,441
Owensboro KY Electric Light &Power		5.000			01/01/2024	A2/AA*		650,000		731,536
										4,961,862
TURNPIKES/TOLLROAD/HIGHWAY BONDS
5.75% of Net Assets
KY Asset Liability Project Notes		4.000			09/01/2023	A2/AA*/A+@		250,000		281,020
KY Asset Liability Project Notes		4.500			09/01/2016	A2/AA*/A+@		175,000		179,498
KY Asset Liability Project Notes		5.000			09/01/2017	A2/AA*/A+@		1,500,000		1,597,875

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

15

DUPREE MUTUAL FUNDS — KENTUCKY TAX-FREE SHORT-TO-MEDIUM SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

Kentucky Municipal Bonds

December 31, 2015

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
KY Turnpike Authority Ecomonic Development		5.000	%		07/01/2023	Aa2/AA*/A+@	$	600,000	$	721,356
KY Turnpike Authority Ecomonic Development		5.000			07/01/2024	Aa2/AA*/A+@		1,000,000		1,174,870
KY Turnpike Authority Ecomonic Development		4.125			07/01/2019	Aa2/AA*/A+@		105,000		112,596
KY Turnpike Authority Ecomonic Development		5.000			07/01/2016	Aa2/AA*/A+@		750,000		767,175
KY Turnpike Authority Ecomonic Development		5.000			07/01/2024	Aa2/AA*/A+@		85,000		101,270
										4,935,659
HOSPITAL AND HEALTHCARE BONDS
4.99% of Net Assets
KY Asset Liability Commission General Receipts		4.000			10/01/2018	Aa2/AA*		105,000		110,356
KY Economic Development — Baptist Healthcare System		4.750			08/15/2019	A3/A+@		110,000		119,039
Lexington-Fayette Urban County Government		5.000			06/01/2024	Aa3/A*/A+@		2,800,000		3,224,480
Warren County Hospital		4.000			04/01/2020	A+*		235,000		246,891
Warren County Hospital		5.000			04/01/2023	A+*		500,000		578,805
										4,279,571
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS
4.52% of Net Assets
Boyle County KY Centre College		5.000			06/01/2020	A3/AA*		150,000		157,634
Boyle County KY Centre College		5.000			06/01/2018	A3/AA*		200,000		210,758
KY Asset Liability — University of Kentucky		4.000			10/01/2019	Aa2/AA*		100,000		102,402
Louisville & Jefferson County University of Louisville		4.000			03/01/2020	Aa3/AA-*		300,000		317,046
Morehead State University		5.000			10/01/2022	Aa3		310,000		371,036
Northern Ky University General Receipts		4.000			09/01/2018	Aa3/A*		150,000		160,416
Western KY University		4.000			09/01/2020	Aa3/AA-*		290,000		301,591
Western KY University		4.000			09/01/2017	Aa3/AA*		2,145,000		2,252,529
										3,873,412
STATE AND LOCAL MORTGAGE/HOUSING BONDS
1.55% of Net Assets
KY Housing Corporation		4.875			07/01/2023	Aaa/AAA*		1,290,000		1,329,010
ESCROWED TO MATURITY BONDS
.21% of Net Assets
Gallatin County KY School District Finance Corporation		4.000			05/01/2016	Aa3		175,000		177,097
Total Investments 96.53% of Net Assets (cost $80,676,927) (See (a) below for further explanation)									$	82,816,939
Other assets in excess of liabilities 3.47%										2,976,675
Net Assets 100%									$	85,793,614

* Standard and Poor’s Corporation

@ Fitch’s Investors Service

(All other ratings by Moody’s Investors Service, Inc.)

NR Not Rated

# Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm.

(a) Cost for federal income tax purposes is $80,676,927 and net unrealized appreciation of investments is as follows:

Unrealized appreciation	$	2,160,984
Unrealized depreciation		(20,972	)
Net unrealized appreciation	$	2,140,012

Other Information

The following is a summary of the inputs used, as of December 31, 2015, involving the Fund’s investments in securities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.

	Valuation Inputs	Municipal Bonds
Level 1	Quoted Prices	$	—
Level 2	Other Significant Observable Inputs		82,816,939
Level 3	Significant Unobservable Inputs		—
		$	82,816,939

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

16

KENTUCKY TAX-FREE SHORT-TO-MEDIUM SERIES

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2015 UNAUDITED

ASSETS:
Investments in securities, at fair value (Cost: $80,676,927)		$	82,816,939
Cash			3,260,688
Interest receivable			1,002,590
Total assets			87,080,217
LIABILITIES:
Payable for:
Investments purchased	1,122,633
Distributions to shareholders	57,823
Fund shares redeemed	32,287
Investment advisory fee	35,252
Transfer agent fee	15,611
Trustees fees	3,211
Accrued expenses	19,786
Total liabilities			1,286,603
NET ASSETS:
Capital			84,095,926
Accumulated net realized loss on investment transactions			(442,324	)
Net unrealized appreciation in value of investments			2,140,012
Net assets at value		$	85,793,614
NET ASSET VALUE, offering price and redemption price per share (15,943,903 shares outstanding; unlimited number of shares authorized no par value)		$	5.38

STATEMENT OF OPERATIONS

For the six months ended December 31, 2015

Net investment income:
Interest income	$	1,125,787
Expenses:
Investment advisory fee		204,588
Transfer agent fee		52,118
Custodian expense		8,988
Professional fees		12,717
Trustees fees		4,102
Other expenses		14,225
Total expenses		296,738
Custodian expense reduction		(48	)
Net expenses		296,690
Net investment income		829,097
Realized and unrealized gain on investments:
Net realized gain		9,584
Net change in unrealized appreciation/depreciation		411,925
Net realized and unrealized gain on investments		421,509
Net increase in net assets resulting from operations	$	1,250,606

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

17

KENTUCKY TAX-FREE SHORT-TO-MEDIUM SERIES

STATEMENTS OF CHANGES IN NET ASSETS

For the six months ended December 31, 2015 and the year ended June 30, 2015 UNAUDITED

	Six Months Ended 12/31/2015			Year Ended 06/30/2015
Operations:
Net investment income	$	829,097		$	1,726,545
Net realized gain on investments		9,584			115,898
Net change in unrealized appreciation/depreciation		411,925			(1,462,819	)
Net increase in net assets resulting from operations		1,250,606			379,624
Distributions from net investment income		(829,097	)		(1,726,545	)
Net fund share transactions (Note 4)		5,317,052			(815,873	)
Total increase/(decrease)		5,738,561			(2,162,794	)
Net assets:
Beginning of year		80,055,053			82,217,847
End of period	$	85,793,614		$	80,055,053

FINANCIAL HIGHLIGHTS

Selected data for a share outstanding:	Six Months  Ended 12/31/2015			For the years ended June 30,
				2015			2014			2013			2012			2011
Net asset value, beginning of year		$5.35			$5.44			$5.43			$5.54			$5.39			$5.36
Income from investment operations:
Net investment income		0.05			0.12			0.12			0.12			0.12			0.13
Net gains/(losses) on securities		0.03			(0.09	)		0.01			(0.11	)		0.15			0.03
Total from investment operations		0.08			0.03			0.13			0.01			0.27			0.16
Less distributions:
Distributions from net investment income		(0.05	)		(0.12	)		(0.12	)		(0.12	)		(0.12	)		(0.13	)
Net asset value, end of period		$5.38			$5.35			$5.44			$5.43			$5.54			$5.39
Total return		1.59%	(b)		0.50%			2.35%			0.11%			5.10%			3.04%
Net assets, end of period (in thousands)		$85,794			$80,055			$82,218			$89,403			$89,528			$72,405
Ratio of net expenses to average net assets (a)		0.73%	(c)		0.73%			0.74%			0.72%			0.73%			0.72%
Ratio of gross expenses to average net assets		0.73%	(c)		0.73%			0.74%			0.72%			0.73%			0.72%
Ratio of net investment income to average net assets		2.04%	(c)		2.17%			2.14%			2.12%			2.22%			2.44%
Portfolio turnover		13.71%	(b)		20.19%			9.06%			6.63%			4.73%			15.37%

(a) Percentages are after custodian reduction for which no recovery will be sought.

(b) Not annualized

(c) Annualized

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

18

DUPREE MUTUAL FUNDS — MISSISSIPPI TAX-FREE INCOME SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

Mississippi Municipal Bonds

December 31, 2015

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS
28.31% of Net Assets
Alcorn State University Educational Building		5.125	%		09/01/2034	Aa2	$	95,000	$	105,978
Jackson State University Education Building		5.000			03/01/2034	Aa2/AA@		250,000		288,718
Jackson State University Education Building		5.000			03/01/2034	Aa2/AA-*		175,000		194,254
Mississippi State University Educational Building		5.000			11/01/2032	Aa2/AA@		125,000		148,609
MS Development Bank Special Obligation Hinds College		5.000			10/01/2026	Aa2		85,000		95,873
MS Development Bank Special Obligation Hinds College		5.125			10/01/2028	Aa2		100,000		112,973
MS Development Bank Special Obligation Hinds College		5.375			10/01/2033	Aa2		60,000		67,836
MS Development Bank Special Obligation Hinds College		5.000			04/01/2036	A2/AA*		250,000		275,513
MS Development Bank Special Obligation Jones County Junior College		5.100			03/01/2028	AA*		55,000		60,794
MS Development Bank Special Obligation Jones County Junior College		5.000			03/01/2033	AA*		150,000		165,146
MS Development Bank Special Obligation Jones County Junior College		5.125			03/01/2039	AA*		45,000		48,745
MS State University Educational Building Corporation Revenue		5.250			08/01/2038	Aa2/AA@		300,000		350,790
MS State University Educational Building Corporation Revenue		5.250			08/01/2033	Aa2/AA@		50,000		56,405
MS State University Educational Building Corporation Revenue		5.000			08/01/2036	Aa2/AA@		175,000		196,597
Southern Mississippi Educational Building Corporation		5.000			03/01/2038	Aa2/AA@		600,000		671,916
University of Mississippi Educational Building Corporation		5.000			10/01/2028	Aa2/AA@		200,000		231,254
University Southern MS Educational Building Corporation		5.125			09/01/2029	Aa2/A+*		100,000		111,933
										3,183,332
PREREFUNDED BONDS
17.62% of Net Assets
MS Development Bank Special Obligation Capital Improvement		5.250			07/01/2026	A2/AA*		125,000		133,316
MS Development Bank Special Obligation Desoto County		5.000			07/01/2032	A*		45,000		47,813
MS Development Bank Special Obligation Desoto County		5.250			07/01/2031	A*		225,000		230,353
MS Development Bank Special Obligation Desoto County		4.750			01/01/2035	Aa3/AA-*		225,000		242,132
MS Development Bank Special Obligation Highway Construction		5.000			01/01/2027	Aa3/AA-*		125,000		135,161
MS Development Bank Special Obligation Highway Construction		5.000			01/01/2027	Aa3/AA-*		245,000		264,916
MS Development Bank Special Obligation Highway Construction		4.750			01/01/2031	Aa3/AA-*		125,000		134,518
MS Development Bank Special Obligation Jackson Public		5.375			04/01/2028	A2		70,000		76,780
MS Development Bank Special Obligation Lowndes County		5.000			07/01/2022	A2/AA*		80,000		85,025
MS Development Bank Special Obligation Lowndes County		5.000			07/01/2027	A2/AA*		150,000		159,422
MS Development Bank Special Obligation Rankin Utilities		5.000			01/01/2028	A2/AA*		55,000		59,471
MS Development Special Obligation Madison County Highway		5.000			01/01/2027	Aa3/AA-*		295,000		301,711
University Southern MS Educational Building Athletics		5.000			03/01/2034	Aa2		105,000		110,249
										1,980,865
MUNICIPAL UTILITY REVENUE BONDS
15.66% of Net Assets
MS State Development Bank Special Obligation Hattiesburg Water & Sewer		4.750			12/01/2038	A1/AA*		700,000		786,261
MS Development Bank Special Obligation Southaven Water		5.000			03/01/2025	A+*		325,000		339,492
MS State Development Bank Special Obligation Jackson Water & Sewer		6.875			12/01/2040	A2/AA*		250,000		328,953
MS State Development Bank Special Obligation Jackson Water & Sewer		5.000			12/01/2033	A*		50,000		56,361
MS State Development Bank Special Obligation Jackson Water & Sewer		5.000			09/01/2030	A2/AA*		125,000		142,593
MS State Development Bank Special Obligation Jackson Water & Sewer		4.500			09/01/2034	A2/AA*		100,000		107,490
										1,761,148
PUBLIC FACILITIES REVENUE BONDS
15.59% of Net Assets
MS Development Bank Special Obligation Department of Corrections		5.250			08/01/2027	AA-*/AA@		50,000		57,200
MS Development Bank Special Obligation Department of Corrections		5.250			08/01/2027	AA-*/AA@		305,000		348,920
MS State Capital Improvement Projects		5.000			10/01/2029	Aa2/AA*/AA+@		145,000		169,112
MS State Capital Improvement Projects		5.000			10/01/2036	Aa2/AA*/AA+@		480,000		552,202
MS State Development Bank Special Obligation Alcorn County		4.750			07/01/2031	AA*		100,000		109,039
MS State Development Bank Special Obligation Brandon Public Improvement		5.000			11/01/2033	A1		150,000		173,501

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

19

DUPREE MUTUAL FUNDS — MISSISSIPPI TAX-FREE INCOME SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

Mississippi Municipal Bonds

December 31, 2015

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
MS State Development Bank Special Obligation City of Jackson Convention Center		5.000	%		03/01/2027	A3/AA-*	$	125,000	$	154,319
MS State Development Bank Special Obligation Refunding — City of Jackson		5.000			03/01/2036	A3/AA-*		150,000		188,426
										1,752,717
TURNPIKES/TOLLROAD/HIGHWAY BONDS
6.01% of Net Assets
MS Development Bank Desoto County Highway		5.000			01/01/2030	Aa3/AA-*		100,000		115,270
MS Development Bank Special Obligation Highway		5.000			01/01/2025	Aa3/AA-*		200,000		245,131
MS Development Bank Special Obligation Marshall County		5.000			01/01/2028	Aa3/AA-*		200,000		227,578
MS State Development Bank Special Obligation Refunding — Marshall		5.000			01/01/2030	Aa3/AA-*		75,000		87,269
										675,248
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS
5.24% of Net Assets
Mississippi State Gaming Tax Revenue		5.000			10/15/2035	A3/A+*/A+@		125,000		142,984
MS Development Bank Special Obligation Canton		5.750			10/01/2031	A2		370,000		437,058
MS Development Bank Special Obligation Capital Projects		5.875			07/01/2024	NR		5,000		5,250
MS Development Bank Special Obligation Capital Projects		5.000			07/01/2024	NR		5,000		5,150
										590,442
SCHOOL IMPROVEMENT BONDS
4.86% of Net Assets
MississippI State Development Bank Special Obligation Canton School District		5.000			12/01/2033	A1/AA*		100,000		115,557
MS State Development Bank Special Obligation — Jackson Schools		5.000			04/01/2028	A+*		375,000		430,635
										546,192
HOSPITAL AND HEALTHCARE BONDS
3.46% of Net Assets
Medical Center Educational Building Corporation — University of Mississippi		5.000			06/01/2034	Aa2/AA-*		100,000		109,998
Medical Center Educational Building Corporation MS Revenue		5.500			12/01/2023	Aa2		120,000		140,486
MS Development Bank Special Obligation Jones County Rest Home		5.250			04/01/2028	A2/AA*		120,000		137,984
										388,469
REFUNDED BONDS
1.89% of Net Assets
MS State Development Bank Special Obligation Lowndes County		5.125			12/01/2027	AA*		135,000		155,137
MS State Refunding		5.250			11/01/2019	Aa2/AA*/AA+@		50,000		57,462
										212,599
STATE AND LOCAL MORTGAGE/HOUSING BONDS
.23% of Net Assets
MS Home Corporation Single Family Mortgage		5.050			12/01/2028	Aaa		25,000		25,534
Total Investments 98.87% of Net Assets (cost $10,461,201) (See (a) below for further explanation)									$	11,116,546
Other assets in excess of liabilities 1.13%										126,631
Net Assets 100%									$	11,243,177

* Standard and Poor’s Corporation

@ Fitch’s Investors Service

(All other ratings by Moody’s Investors Service, Inc.)

NR Not Rated

# Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm.

(a) Cost for federal income tax purposes is $10,461,000 and net unrealized appreciation of investments is as follows:

Unrealized appreciation	$	655,715
Unrealized depreciation		(103	)
Net unrealized appreciation	$	655,612

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

20

DUPREE MUTUAL FUNDS — MISSISSIPPI TAX-FREE INCOME SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

Mississippi Municipal Bonds

December 31, 2015

Other Information

The following is a summary of the inputs used, as of December 31, 2015, involving the Fund’s investments in securities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.

	Valuation Inputs	Municipal Bonds
Level 1	Quoted Prices	$	—
Level 2	Other Significant Observable Inputs		11,116,546
Level 3	Significant Unobservable Inputs		—
		$	11,116,546

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

21

MISSISSIPPI TAX-FREE INCOME SERIES

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2015 UNAUDITED

ASSETS:
Investments in securities, at fair value (Cost: $10,461,201)		$	11,116,546
Cash			19,725
Receivable for fund shares sold			20,000
Interest receivable			159,882
Total assets			11,316,153
LIABILITIES:
Payable for:
Distributions to shareholders	57,924
Investment advisory fee	3,088
Transfer agent fee	3,080
Accrued expenses	8,884
Total liabilities			72,976
NET ASSETS:
Capital			10,587,280
Accumulated net investment income			267
Accumulated net realized gain on investment transactions			285
Net unrealized appreciation in value of investments			655,345
Net assets at value		$	11,243,177
NET ASSET VALUE, offering price and redemption price per share (918,146 shares outstanding; unlimited number of shares authorized; no par value)		$	12.25

STATEMENT OF OPERATIONS

For the six months ended December 31, 2015

Net investment income:
Interest income	$	207,900
Expenses:
Investment advisory fee		27,802
Transfer agent fee		8,341
Custodian expense		3,166
Professional fees		3,736
Trustees fees		564
Registration fees		3,028
Other expenses		2,204
Total expenses		48,841
Fees waived by Adviser		(9,752	)
Custodian expense reduction		(17	)
Net expenses		39,072
Net investment income		168,828
Realized and unrealized gain on investments:
Net realized gain		285
Net change in unrealized appreciation/depreciation		196,477
Net realized and unrealized gain on investments		196,762
Net increase in net assets resulting from operations	$	365,590

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

22

MISSISSIPPI TAX-FREE INCOME SERIES

STATEMENTS OF CHANGES IN NET ASSETS

For the six months ended December 31, 2015 and the year ended June 30, 2015 UNAUDITED

	Six Months Ended 12/31/2015			Year Ended 06/30/2015
Operations:
Net investment income	$	168,828		$	337,233
Net realized gain on investments		285			10,004
Net change in unrealized appreciation/depreciation		196,477			53,973
Net increase in net assets resulting from operations		365,590			401,210
Distributions from net investment income		(168,791	)		(337,157	)
Distributions from capital gains		(2,937	)		—
Net fund share transactions (Note 4)		133,485			401,625
Total increase		327,347			465,678
Net assets:
Beginning of year		10,915,830			10,450,152
End of period	$	11,243,177		$	10,915,830
Accumulated Net Investment Income	$	267		$	230

FINANCIAL HIGHLIGHTS

Selected data for a share outstanding:	Six Months  Ended 12/31/2015			For the years ended June 30,
				2015			2014			2013			2012			2011
Net asset value, beginning of year		$12.03			$11.95			$11.65			$12.01			$11.33			$11.41
Income from investment operations:
Net investment income		0.18			0.37			0.38			0.39			0.42			0.44
Net gains/(losses) on securities		0.22			0.08			0.31			(0.33	)		0.68			(0.08	)
Total from investment operations		0.40			0.45			0.69			0.06			1.10			0.36
Less distributions:
Distributions from net investment income		(0.18	)		(0.37	)		(0.38	)		(0.42	)		(0.42	)		(0.44	)
Distributions from capital gains		(0.00	)(b)		—			(0.01	)		—			—			—
Total distributions		(0.18	)		(0.37	)		(0.39	)		(0.42	)		(0.42	)		(0.44	)
Net asset value, end of period		$12.25			$12.03			$11.95			$11.65			$12.01			$11.33
Total return		3.42%	(c)		3.80%			6.08%			0.38%			9.87%			3.19%
Net assets, end of period (in thousands)		$11,243			$10,916			$10,450			$8,309			$7,712			$6,376
Ratio of net expenses to average net assets (a)		0.71%	(d)		0.69%			0.69%			0.66%			0.65%			0.58%
Ratio of gross expenses to average net assets		0.88%	(d)		0.86%			0.90%			0.89%			0.92%			0.84%
Ratio of net investment income to average net assets		3.05%	(d)		3.07%			3.26%			3.22%			3.59%			3.86%
Portfolio turnover		1.42%	(c)		6.47%			1.96%			13.81%			9.99%			20.53%

(a) Percentages are after expense waivers and reductions by the Adviser and Custodian. The Adviser and Custodian have agreed not to seek recovery of these waivers and reductions.

(b) Rounds to less than $0.01.

(c) Not annualized

(d) Annualized

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

23

DUPREE MUTUAL FUNDS — NORTH CAROLINA TAX-FREE INCOME SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

North Carolina Municipal Bonds

December 31, 2015

Bond Description	Coupon			Maturity Date		Rating#	Par Value			Fair Value
PREREFUNDED BONDS
19.24% of Net Assets
Asheville NC Water System Revenue		4.750	%		08/01/2027	Aa2/AA*	$	1,000,000		$	1,062,510
Burke County NC Certificates of Participation		5.000			04/01/2023	A1/A*		250,000			252,933
Cabarrus County NC Certificates of Participation		5.000			06/01/2025	Aa2/AA*/AA@		1,000,000			1,095,260
Cabarrus County NC Certificates of Participation		5.000			01/01/2029	Aa2/AA*/AA@		750,000			836,790
Charlotte NC Water & Sewer Systems Revenue		4.500			07/01/2028	Aaa/AAA*/AAA@		750,000			765,420
Davie County NC Public School & Community College Facility		5.000			06/01/2023	Aa3/AA-*		1,000,000			1,019,040
Davie County NC Public School & Community College Facility		5.000			06/01/2025	Aa3/AA-*		1,690,000			1,720,960
Iredell County NC Certificates of Participation School Project		5.000			06/01/2024	Aa2/AA-*		1,000,000			1,018,960
Johnston NC Memorial Hospital Authority		5.250			10/01/2028	A2/AA*		490,000			535,634
Mecklenburg County NC Certificates of Participation		5.000			02/01/2028	Aa1/AA+*/AA+@		415,000			464,601
Mecklenburg County NC Certificates of Participation		5.000			02/01/2026	NR		450,000			487,602
Montgomery County NC Certificates of Participation		5.000			02/01/2030	A*		1,680,000	��		1,759,498
Mooresville NC Certificates of Participation		5.000			09/01/2032	AA-*		1,890,000			2,020,807
NC Eastern Municipal Power Agency Power System		6.000			01/01/2026	NR		275,000			346,833
NC Eastern Municipal Power Agency Power System		5.000			01/01/2021	AAApre@		1,000,000			1,000,100
NC Infrastructure Finance Corporation Certificates of Participation		5.000			02/01/2024	Aa1/AA+*		1,000,000			1,047,660
Raleigh NC Combined Enterprise System		5.000			03/01/2031	Aa1/AAA*/AAA@		500,000			503,945
Randolph County NC Certificates of Participation		5.000			02/01/2027	Aa3		1,000,000			1,047,320
Rockingham County NC Certificates of Participation		5.000			04/01/2032	Aa3/AA*		1,325,000			1,443,853
Sampson County NC Certificates of Participation		5.000			06/01/2022	A2/AA*		1,250,000			1,324,900
Sampson County NC Certificates of Participation		5.000			06/01/2026	A2/AA*		1,000,000			1,059,920
University of NC System Pool Revenue		5.000			10/01/2026	A1		1,000,000			1,090,240
University of NC System Pool Revenue		5.000			10/01/2034	Aa2		1,950,000			2,223,195
University of NC Wilmington Student Housing Project		5.000			06/01/2025	A3/AA-*		580,000			590,898
University of North Carolina		5.000			10/01/2033	A1		340,000			376,696
University of North Carolina		5.000			10/01/2033	Aa3/AA-*		145,000			149,088
University of North Carolina		5.000			10/01/2033	Aa3/AA-*		235,000			242,922
University of North Carolina		5.000			10/01/2033	Aa3/AA-*		50,000			51,698
Wilmington NC Storm Water Fee Revenue		5.000			06/01/2028	NR		385,000			407,503
Winston Salem NC Certificates of Participation		4.750			06/01/2031	NR		50,000			50,894
											25,997,677
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS
18.23% of Net Assets
Iredell County NC Community College		5.000			04/01/2026	Aa1/AA*/AA+@		225,000			244,656
Iredell County NC Community College		5.000			04/01/2027	Aa1/AA*/AA+@		325,000			352,934
NC Capital Facilities Financial Agency Education Duke University		5.000			10/01/2038	Aa1/AA+*		500,000			555,295
NC Capital Facilities Financial Agency Education Wake Forest		5.000			01/01/2031	Aa3/AA*		500,000			552,390
NC Capital Facilities Financial Agency Education Wake Forest		5.000			01/01/2038	Aa3/AA*		1,250,000			1,376,325
NC State Capital Facilities Davidson College		5.000			03/01/2032	AA+*		310,000			356,894
NC State Capital Facilities Duke University		5.000			10/01/2041	Aa1/AA+*		2,000,000			2,367,440
NC State Capital Facilities Finance Agency Davidson College		4.750			03/01/2035	AA+*		1,000,000			1,106,720
NC State University at Raleigh		5.000			10/01/2042	Aa1/AA*		750,000			864,773
Pitt County NC Limited Obligation		5.000			04/01/2035	Aa3/AA-*/AA@		105,000			116,053
University of NC Chapel Hill		5.000			12/01/2034	Aaa/AAA*		245,000			245,737
University of NC Chapel Hill		5.000			12/01/2031	Aaa/AAA*/AAA@		1,215,000			1,308,713
University of NC Charlotte		5.000			04/01/2040	Aa3/A+*		2,650,000			3,063,639
University of NC Charlotte		5.000			04/01/2035	Aa3/A+*		595,000			685,601
University of NC Charlotte		5.000			04/01/2031	Aa3/A+*		750,000			855,510
University of NC Charlotte Improvements		5.000			04/01/2043	Aa3/A+*		1,500,000			1,707,165
University of NC Charlottte		5.000			04/01/2038	Aa3/A+*		1,000,000			1,143,590
University of NC Greensboro		5.000			04/01/2039	Aa3/A*		2,870,000			3,288,877
University of NC Greensboro		5.000			04/01/2036	Aa3/A*		500,000			570,650
University of NC Greensboro		5.000			04/01/2031	Aa3/A*		500,000			577,840
University of NC Greensboro		5.000			04/01/2033	Aa3/A*		900,000			1,053,594
University of NC Wilmington Limited Obligation		5.000			06/01/2033	A2		500,000			573,975
University of North Carolina		5.000			10/01/2033	A1		660,000			716,958

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

24

DUPREE MUTUAL FUNDS — NORTH CAROLINA TAX-FREE INCOME SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

North Carolina Municipal Bonds

December 31, 2015

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
Western Carolina University		5.000	%		10/01/2045	Aa3	$	825,000	$	948,494
										24,633,822
MUNICIPAL UTILITY REVENUE BONDS
15.69% of Net Assets
Brunswick County NC Enterprise System Revenue		5.000			04/01/2031	Aa3/AA-*		500,000		596,265
Buncombe County NC Metropolitan Sewerage District		5.000			07/01/2039	Aa1/AA+*/AA+@		550,000		636,906
Gastonia NC Combined Utilities System Revenue		5.000			05/01/2034	Aa2/AA-*/AA@		570,000		677,502
Gastonia NC Combined Utilities System Revenue		5.000			05/01/2035	Aa2/AA-*/AA@		250,000		296,018
High Point NC Combined Enterprise		5.000			11/01/2039	Aa2/AAA*/AA+@		750,000		871,298
Martin County NC Limited Obligation Water and Sewer District		4.750			06/01/2034	A2		1,150,000		1,306,009
Moore County NC		5.000			06/01/2031	Aa3/AA-*		2,750,000		3,095,813
Mooresville NC Limited Obligation		5.000			11/01/2031	AA-*		1,250,000		1,447,738
NC Eastern Municipal Power Agency		6.000			01/01/2022	A3/AA*		915,000		1,154,611
NC Eastern Municipal Power Agency #1 Catawba Electric Revenue		5.000			01/01/2031	A2/A*/A@		500,000		566,565
NC Eastern Municipal Power Agency		6.000			01/01/2025	A3/AA-*/AAApre@		1,150,000		1,532,755
NC Eastern Municipal Power Agency		6.000			01/01/2018	AAApre@		1,000,000		1,100,440
NC Municipal Power Agency #1 Catawba Electric Revenue		4.750			01/01/2030	A2/A*/A@		290,000		315,497
NC Municipal Power Agency #1 Catawba Electric Revenue		5.000			01/01/2030	A2/A*/A@		2,545,000		2,798,253
NC State Municipal Power Agency #1 Catawba Electric Revenue		5.000			01/01/2032	A*/A@		500,000		593,925
Sampson County NC Water & Sewer District		5.000			06/01/2037	A1/A*		920,000		1,065,857
Wilmington NC Storm Water Fee Revenue		5.000			06/01/2028	AA+*		115,000		121,186
Wilson NC Certificates of Participation Public Facilities		5.000			05/01/2021	A1/AA*		780,000		820,248
Wilson NC Certificates of Participation Public Facilities		5.000			05/01/2025	A1/AA*		750,000		786,450
Wilson NC Certificates of Participation Public Facilities		5.000			05/01/2029	A1/AA*		1,355,000		1,415,880
										21,199,213
HOSPITAL AND HEALTHCARE BONDS
12.69% of Net Assets
Charlotte Mecklenburg NC Hospital Healthcare System		5.000			01/15/2039	Aa3/AA-*		1,500,000		1,667,940
Charlotte Mecklenburg NC Hospital Healthcare System		5.000			01/15/2031	Aa3/AA-*		450,000		466,790
Charlotte Mecklenburg NC Hospital Healthcare System		5.000			01/15/2027	Aa3/AA-*		1,090,000		1,157,024
Charlotte Mecklenburg NC Hospital Healthcare System		5.250			01/15/2039	Aa3/AA-*		750,000		818,498
NC State Medical Care Commission Duke University Health		5.000			06/01/2035	Aa2/AA*/AA@		500,000		570,805
NC State Medical Care Commission Health Care Facilities		5.000			06/01/2034	Aa2/AA*/AA@		1,670,000		1,845,701
NC State Medical Care Commission Health Care Facilities		5.000			07/01/2030	A2/AA-*/AA-@		500,000		558,990
NC State Medical Care Commission Health Care Facilities Rex Hospital		5.000			07/01/2033	A2/AA-*/AA-@		750,000		864,488
NC State Medical Care Commission Health Care Facilities Vidant Health		5.000			06/01/2040	A1/A+*		1,385,000		1,562,252
NC State Medical Care Commission Health Care Facilities Vidant Health		5.000			06/01/2036	A1/A+*		1,000,000		1,101,200
NC State Medical Care Commission Health Care Facilities Mission Health		5.000			10/01/2036	Aa3/AA-*/AA-@		2,500,000		2,874,225
NC State Medical Care Commission Hospital Revenue NC Baptist Hospital		5.250			06/01/2029	A2/A*		645,000		727,354
NC State Medical Care Commission Wake Forest Baptist Hospital		5.000			12/01/2033	A2/A*		1,000,000		1,130,060
NC State Medical Care Community Hospital Revenue NC Baptist Hospital		5.000			06/01/2034	A2/A*		1,225,000		1,351,200
NC State Medical Care Community Hospital Revenue NC Baptist Hospital		4.750			06/01/2030	A2/A*		405,000		437,064
										17,133,589
REFUNDING BONDS
9.34% of Net Assets
Buncombe County NC Limited Obligation		5.000			06/01/2035	Aa2/AA+*		1,000,000		1,179,160
Charlotte NC Certificates of Participation		5.000			06/01/2033	Aa2/AA+*/AA+@		840,000		969,049
Charlotte NC Certificates of Participation		5.000			06/01/2034	Aa2/AA+*/AA+@		750,000		873,578
Charlotte NC Certificates of Participation		5.000			06/01/2026	Aa2/AA+*/AA+@		1,455,000		1,583,375
Charlotte NC Certificates of Participation		5.000			06/01/2027	Aa2/AA+*/AA+@		775,000		842,030
Charlotte NC Certificates of Participation Convention Facilities		5.000			12/01/2024	Aa2/AA+*/AA@		1,000,000		1,002,940
Chatham County NC		5.000			11/01/2032	Aa2/AA+*		825,000		983,953
Dare County NC Limited Obligation Refunding		5.000			06/01/2029	Aa3/AA-*/AA-@		100,000		113,971

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

25

DUPREE MUTUAL FUNDS — NORTH CAROLINA TAX-FREE INCOME SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

North Carolina Municipal Bonds

December 31, 2015

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
Durham Capital Financing Corporation Limited Obligation		5.000	%		06/01/2034	Aa1/AA+*	$	500,000	$	581,560
Johnston County NC Installment Financing Contract		5.000			10/15/2027	Aa3/AA*		570,000		657,278
New Hanover County NC Limited Obligation		5.000			12/01/2027	Aa1/AA+*		505,000		594,547
Pitt County NC Certificates of Participation		5.000			04/01/2027	Aa3/AA-*/AA@		500,000		575,330
Rockingham County NC Limited Obligation		4.500			04/01/2032	Aa3/A+*		500,000		570,580
Rockingham County NC Limited Obligation		5.000			04/01/2027	Aa3/A+*		250,000		304,085
Sampson County NC Limited Obligation		5.000			12/01/2033	A1/A*		975,000		1,145,742
Thomasville NC Combined Enterprise System Revenue		4.750			05/01/2028	A1/AA*		435,000		493,895
Union County NC Limited Obligation Refunding		5.000			12/01/2024	Aa1/AA*/AA+@		125,000		154,794
										12,625,865
PUBLIC FACILITIES REVENUE BONDS
7.52% of Net Assets
Charlotte NC Certificates of Participation Convention Facilities		5.000			06/01/2034	Aa2/AA+*/AA@		900,000		994,689
Forsyth County NC Limited Tax		5.000			04/01/2031	Aa1/AA+*/AA+@		335,000		385,260
Henderson County NC Limited Obligation		5.000			10/01/2030	Aa3/AA*		250,000		297,103
Henderson County NC Limited Obligation		5.000			10/01/2031	Aa3/AA*		500,000		595,150
Jacksonville Public Facilities Corporation Limited Obligation		5.000			04/01/2031	A1/A+@		265,000		303,104
Jacksonville Public Facilities Corporation Limited Obligation		5.000			04/01/2032	A1/A+@		100,000		114,503
Kannapolis NC Limited Obligation		5.000			04/01/2032	Aa3/A+*		500,000		578,515
Mecklenburg County NC Certificates Participation		5.000			02/01/2026	Aa1/AA+*		550,000		591,806
Onslow County NC Limited Obligation		5.000			06/01/2032	Aa3/AA-*		500,000		590,490
Raleigh NC Limited Obligation		5.000			10/01/2034	Aa1/AA+*/AA+@		1,420,000		1,677,815
Raleigh NC Limited Obligation		5.000			10/01/2038	Aa1/AA+*/AA+@		500,000		573,135
Wake County NC Limited Obligation Bonds		5.000			06/01/2032	Aa1/AA+*/AA+@		1,500,000		1,673,145
Watauga NC Public Facilities Corporation Limited Obligation		5.000			06/01/2027	Aa3/AA-*		750,000		862,425
Winston Salem NC Limited Obligation		5.000			06/01/2031	Aa2/AA+*/AA+@		800,000		926,400
										10,163,540
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS
4.63% of Net Assets
Buncombe County NC Limited Obligation		5.000			06/01/2030	Aa2/AA+*		250,000		288,438
Buncombe County NC Limited Obligation		5.000			06/01/2033	Aa2/AA+*		600,000		711,864
Buncombe County NC Limited Obligation		5.000			06/01/2034	Aa2/AA+*		365,000		431,058
Buncombe County NC Limited Obligation		5.000			06/01/2032	Aa2/AA+*		250,000		286,358
Buncombe County NC Limited Obligation		5.000			06/01/2034	Aa2/AA+*		1,100,000		1,284,811
Charlotte NC Certificates of Participation		5.000			12/01/2029	Aa1/AA+*		340,000		397,470
Johnston County NC Limited Obligation		4.750			06/01/2033	Aa3/AA*		500,000		554,975
Orange County NC Public Facilities Company Limited Obligation		4.750			10/01/2032	Aa1/AA+*/AA+@		750,000		849,210
Wilmington NC Certificates of Participation		5.000			06/01/2038	Aa2/AA+*/AA@		250,000		269,943
Winston Salem NC Certificates of Participation		4.750			06/01/2031	Aa1/AA+*/AA+@		620,000		627,961
Winston Salem NC Limited Obligation		4.500			06/01/2034	Aa2/AA+*/AA+@		500,000		555,410
										6,257,496
SCHOOL IMPROVEMENT BONDS
4.16% of Net Assets
Brunswick County NC Limited Obligation		5.000			06/01/2030	Aa3/AA*		250,000		296,610
Brunswick County NC Limited Obligation		5.000			06/01/2031	Aa3/AA*		250,000		295,018
Franklin County NC Certificates of Participation		5.000			09/01/2027	Aa3/AA-*		750,000		794,438
Harnett County NC Certificates of Participation		5.000			06/01/2027	A1/AA*		300,000		328,533
Lee County NC Certificates of Participation		5.000			04/01/2025	Aa3/AA*		550,000		577,324
Nash County NC Limited Obligation		5.000			10/01/2030	Aa3/AA*		2,045,000		2,331,586
Onslow County NC Limited Obligation		5.000			06/01/2033	Aa3/AA-*		500,000		587,775
Wilkes County NC Limited Obligation		5.000			06/01/2031	A1/A+*		350,000		409,864
										5,621,147
AIRPORT BONDS
3.53% of Net Assets
Charlotte NC Douglas International Airport		5.000			07/01/2025	Aa3/A+*/A+@		1,000,000		1,063,270
Charlotte NC Douglas International Airport		5.000			07/01/2030	Aa3/A+*/A+@		1,095,000		1,297,017
Raleigh Durham NC Airport		5.000			05/01/2029	Aa3/AA-@		235,000		268,422

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

26

DUPREE MUTUAL FUNDS — NORTH CAROLINA TAX-FREE INCOME SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

North Carolina Municipal Bonds

December 31, 2015

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
Raleigh Durham NC Airport		5.000	%		05/01/2036	Aa3/AA-@	$	1,480,000	$	1,650,999
Raleigh Durham NC Airport		5.000			05/01/2032	Aa3/AA-@		440,000		495,686
										4,775,394
TURNPIKES/TOLLROAD/HIGHWAY BONDS
1.78% of Net Assets
NC State Grant Anticipation Revenue Vehicle Garvee		5.000			03/01/2030	A2/AA*/A+@		200,000		234,466
NC State Turnpike Authority Monroe Connector System		5.000			07/01/2029	Aa2/AA*		500,000		578,040
NC State Turnpike Authority Monroe Connector System		5.000			07/01/2031	Aa2/AA*		1,385,000		1,592,598
										2,405,104
LEASE REVENUE BONDS
1.31% of Net Assets
Buncombe County NC Limited Obligation		5.000			06/01/2032	Aa2/AA+*		1,500,000		1,764,330
MISCELLANEOUS REVENUE BONDS
.43% of Net Assets
Wilmington NC Storm Water Revenue		5.000			06/01/2035	Aa2/AA+*/AA@		500,000		585,970
Total Investments 98.55% of Net Assets (cost $126,978,829) (See (a) below for further explanation)									$	133,163,147
Other assets in excess of liabilities 1.45%										1,963,160
Net Assets 100%									$	135,126,307

* Standard and Poor’s Corporation

@ Fitch’s Investors Service

(All other ratings by Moody’s Investors Service, Inc.)

NR Not Rated

# Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm.

(a) Cost for federal income tax purposes is $126,975,977 and net unrealized appreciation of investments is as follows:

Unrealized appreciation	$	6,220,456
Unrealized depreciation		(33,286	)
Net unrealized appreciation	$	6,187,170

Other Information

The following is a summary of the inputs used, as of December 31, 2015, involving the Fund’s investments in securities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.

	Valuation Inputs	Municipal Bonds
Level 1	Quoted Prices	$	—
Level 2	Other Significant Observable Inputs		133,163,147
Level 3	Significant Unobservable Inputs		—
		$	133,163,147

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

27

NORTH CAROLINA TAX-FREE INCOME SERIES

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2015 UNAUDITED

ASSETS:
Investments in securities, at fair value (Cost: $126,978,829)		$	133,163,147
Cash			853,290
Receivable for fund shares sold			179,950
Interest receivable			1,418,569
Total assets			135,614,956
LIABILITIES:
Payable for:
Distributions to shareholders	327,597
Fund shares redeemed	68,246
Investment advisory fee	56,171
Transfer agent fee	24,605
Accrued expenses	12,030
Total liabilities			488,649
NET ASSETS:
Capital			129,504,841
Accumulated net investment income			2,852
Accumulated net realized loss on investment transactions			(565,704	)
Net unrealized appreciation in value of investments			6,184,318
Net assets at value		$	135,126,307
NET ASSET VALUE, offering price and redemption price per share (11,547,672 shares outstanding; unlimited number of shares authorized; no par value)		$	11.70

STATEMENT OF OPERATIONS

For the six months ended December 31, 2015

Net investment income:
Interest income	$	2,339,808
Expenses:
Investment advisory fee		312,139
Transfer agent fee		79,550
Custodian expense		9,960
Professional fees		13,815
Trustees fees		6,370
Other expenses		24,989
Total expenses		446,823
Custodian expense reduction		(53	)
Net expenses		446,770
Net investment income		1,893,038
Realized and unrealized gain on investments:
Net realized gain		891
Net change in unrealized appreciation/depreciation		1,883,403
Net realized and unrealized gain on investments		1,884,294
Net increase in net assets resulting from operations	$	3,777,332

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

28

NORTH CAROLINA TAX-FREE INCOME SERIES

STATEMENTS OF CHANGES IN NET ASSETS

For the six months ended December 31, 2015 and the year ended June 30, 2015 UNAUDITED

	Six Months Ended 12/31/2015			Year Ended 06/30/2015
Operations:
Net investment income	$	1,893,038		$	3,363,838
Net realized gain on investments		891			14,631
Net change in unrealized appreciation/depreciation		1,883,403			(437,611	)
Net increase in net assets resulting from operations		3,777,332			2,940,858
Distributions from net investment income		(1,892,751	)		(3,362,896	)
Net fund share transactions (Note 4)		9,524,395			25,260,770
Total increase		11,408,976			24,838,732
Net assets:
Beginning of year		123,717,331			98,878,599
End of period	$	135,126,307		$	123,717,331
Accumulated Net Investment Income	$	2,852		$	2,565

FINANCIAL HIGHLIGHTS

Selected data for a share outstanding:	Six Months  Ended 12/31/2015			For the years ended June 30,
				2015			2014			2013			2012			2011
Net asset value, beginning of year		$11.53			$11.54			$11.31			$11.59			$10.92			$11.01
Income from investment operations:
Net investment income		0.17			0.36			0.37			0.36			0.39			0.40
Net gains/(losses) on securities		0.17			(0.01	)		0.24			(0.26	)		0.67			(0.09	)
Total from investment operations		0.34			0.35			0.61			0.10			1.06			0.31
Less distributions:
Distributions from net investment income		(0.17	)		(0.36	)		(0.37	)		(0.36	)		(0.39	)		(0.40	)
Distributions from capital gains		—			—			(0.01	)		(0.02	)		—			—
Total distributions		(0.17	)		(0.36	)		(0.38	)		(0.38	)		(0.39	)		(0.40	)
Net asset value, end of period		$11.70			$11.53			$11.54			$11.31			$11.59			$10.92
Total return		3.00%	(b)		3.00%			5.57%			0.76%			9.87%			2.90%
Net assets, end of period (in thousands)		$135,126			$123,717			$98,879			$95,127			$88,304			$75,312
Ratio of net expenses to average net assets (a)		0.70%	(c)		0.71%			0.72%			0.71%			0.71%			0.70%
Ratio of gross expenses to average net assets		0.70%	(c)		0.71%			0.72%			0.71%			0.71%			0.70%
Ratio of net investment income to average net assets		2.98%	(c)		3.04%			3.29%			3.07%			3.46%			3.69%
Portfolio turnover		0.60%	(b)		4.56%			9.73%			3.59%			5.94%			14.16%

(a) Percentages are after Custodian reduction for which no recovery will be sought.

(b) Not annualized

(c) Annualized

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

29

DUPREE MUTUAL FUNDS — NORTH CAROLINA TAX-FREE SHORT-TO-MEDIUM SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

North Carolina Municipal Bonds

December 31, 2015

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
PREREFUNDED BONDS
26.08% of Net Assets
Brunswick County NC Community College		4.250	%		05/01/2022	Aa2/AA+*/AA@	$	125,000	$	130,895
Burke County NC Certificates of Participation		5.000			04/01/2020	A1/A*		180,000		182,052
Cabarrus County NC Certificates of Participation		5.000			06/01/2019	Aa2/AA*/AA@		420,000		460,328
Cabarrus County NC Certificates of Participation		5.000			01/01/2021	Aa2/AA*/AA@		200,000		223,144
Cabarrus County NC Public Improvement		5.000			03/01/2018	Aa1/AA+*/AA+@		100,000		100,768
Harnett County NC Certificates of Participation		5.000			12/01/2021	A1/AA*		200,000		215,666
Iredell County NC Certificates of Participation School Project		5.000			06/01/2018	Aa2/AA-*		425,000		432,914
Johnston NC Memorial Hospital Authority Mortgage Revenue		5.000			10/01/2018	A2/AA*		175,000		190,493
Mooreville NC Certificates of Participation		4.125			09/01/2018	AA-*		250,000		263,775
NC Eastern Municipal Power Agency		5.000			01/01/2020	AAA@		250,000		250,025
NC Eastern Municipal Power Agency		5.250			01/01/2019	A3/AA*/AAA@		550,000		596,970
NC Infrastructure Certificates of Participation		5.000			06/01/2018	Aa1/AA+*		100,000		101,883
NC Infrastructure Certificates of Participation		5.000			02/01/2020	Aa1/AA+*		425,000		444,355
NC Medical Care Duke University Health Systems		3.000			06/01/2019	Aa2/AA*/AA@		150,000		158,082
NC Municipal Power Agency #1 Catawba Electric		5.000			01/01/2021	AAA@		45,000		50,236
NC State Capital Improvement Obligation		5.000			05/01/2022	Aa1/AA+*		100,000		109,323
NC State Capital Improvement Obligation		5.000			05/01/2022	Aa1/AA+*		155,000		174,567
Onslow County NC Certificates of Participation		5.000			06/01/2018	Aa3/AA-*		140,000		142,673
Randolph County NC Certificates of Participation		5.000			02/01/2018	Aa3		200,000		209,354
Rockingham County NC Certificates of Participation		4.000			04/01/2019	Aa3/AA*		100,000		106,796
Rutherford County NC Certificates of Participation		5.000			12/01/2018	A1/AA*		205,000		221,179
Rutherford County NC Certificates of Participation		5.000			12/01/2020	A1/AA*		100,000		107,892
Rutherford NC Certificates of Participation		4.000			12/01/2019	A1/AA*		200,000		211,832
Sampson County NC Certificates of Participation		5.000			06/01/2020	A2/AA*		400,000		423,732
Union County NC Certificates of Participation		5.000			06/01/2020	Aa1/AA*		250,000		254,718
University NC Wilmington Certificates of Participation		4.250			06/01/2017	A3/AA-*		300,000		304,802
University of North Carolina		4.250			10/01/2021	A1		20,000		21,753
										6,090,205
MUNICIPAL UTILITY REVENUE BONDS
19.75% of Net Assets
Columbus County NC Limited Obligation		5.000			06/01/2023	A1		355,000		422,940
Gastonia North Carolina Combined Utilities System		4.000			05/01/2023	Aa2/AA-*/AA@		150,000		172,463
Monroe NC Certificates of Participation		4.000			03/01/2019	Aa3/AA*		100,000		107,831
Moore County NC		5.000			06/01/2017	Aa3/AA-*		685,000		725,038
Moore County NC		5.000			06/01/2021	Aa3/AA-*		200,000		229,620
Mooresville NC Limited Obligation		5.000			11/01/2021	AA-*		350,000		411,961
NC Eastern Municipal Power Agency		4.000			01/01/2016	AAA@		95,000		95,010
NC Eastern Municipal Power Agency		5.000			01/01/2016	AAA@		50,000		50,005
NC Eastern Municipal Power Agency		6.000			01/01/2022	A3/AA*		220,000		277,611
NC Eastern Municipal Power Agency		5.000			01/01/2021	AAA@		125,000		147,319
NC Eastern Municipal Power Agency		6.000			01/01/2022	AAA@		125,000		157,734
NC Eastern Municipal Power Agency		6.500			01/01/2018	A3/AA*		100,000		110,485
NC Municipal Power Agency #1 Catawba Electric		5.250			01/01/2017	A2/A*		130,000		135,805
NC Municipal Power Agency #1 Catawba Electric		5.000			01/01/2021	A2/A*		205,000		226,927
NC Municipal Power Agency #1 Catawba Electric		5.250			01/01/2018	A2/A*		95,000		102,837
NC Municipal Power Agency #1 Catawba Electric		4.000			01/01/2016	A2/A*/AAA@		100,000		100,010
NC Municipal Power Agency #1 Catawba Electric		5.000			01/01/2016	A2/A*/A@		125,000		125,013
Onslow NC Water & Sewer		4.250			06/01/2022	A3/AA-*		150,000		160,233
Union County NC Enterprise System Revenue		4.000			12/01/2022	Aa1/AA*/AA@		100,000		113,617
Wilson NC Certificates of Participation**		5.000			05/01/2016	A1/AA*		200,000		202,924
Wilson NC Certificates of Participation**		5.000			05/01/2018	A1/AA*		160,000		168,344
Wilson NC Certificates of Participation**		5.000			05/01/2022	A1/AA*		350,000		366,912
										4,610,636

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

30

DUPREE MUTUAL FUNDS — NORTH CAROLINA TAX-FREE SHORT-TO-MEDIUM SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

North Carolina Municipal Bonds

December 31, 2015

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
REFUNDING BONDS
17.72% of Net Assets
Bertie County Limited Obligatin		4.000	%		06/01/2022	A1/A*	$	200,000	$	222,952
Cabarrus County NC Certificates of Participation		5.000			04/01/2021	AA*		150,000		172,604
Charlotte NC Certificates of Participation		4.000			06/01/2022	Aa2/AA+*/AA+@		125,000		141,431
Charlotte NC Certificates of Participation		4.000			06/01/2025	Aa2/AA+*/AA+@		100,000		112,327
Charlotte NC Certificates of Participation		5.000			06/01/2023	Aa2/AA+*/AA+@		625,000		753,156
Cumberland County NC Certificates of Participation		5.000			12/01/2017	Aa2/AA*		350,000		377,066
Cumberland County NC Certificates of Participation		3.500			12/01/2020	Aa2/AA*		185,000		198,875
Dare County NC Limited Obligation		5.000			06/01/2024	Aa3/AA-*/AA-@		335,000		395,675
Dare County NC Limited Obligation		4.000			06/01/2019	Aa3/AA-*/AA-@		100,000		108,819
Durham NC Refunding		5.000			09/01/2022	Aaa/AAA*/AAA@		125,000		152,566
Pender County NC Limited Obligation		3.000			06/01/2019	Aa3		220,000		230,424
Raleigh NC Limited Obligation Refunding		5.000			10/01/2023	Aa2/AA+*/AA+@		250,000		304,993
Richmond County NC Limited Obligation Refunding		4.000			04/01/2019	A1/A*		225,000		241,733
Rockingham County Limited Obligation		5.000			04/01/2023	Aa3/A+*		250,000		300,003
Sampson County NC Limited Obligation		5.000			12/01/2023	A1/A*		165,000		199,596
Union County NC Limited Obligation		3.000			12/01/2018	Aa1/AA*/AA+@		100,000		105,085
Warren County NC Limited Obligation		5.000			06/01/2023	A1		100,000		119,516
										4,136,819
PUBLIC FACILITIES REVENUE BONDS
9.84% of Net Assets
Cabarrus County NC Certificates of Participation		5.625			02/01/2016	Aa2/AA*/AA@		125,000		125,543
Charlotte NC Certificates of Participation		4.000			12/01/2022	Aa1/AA+*		170,000		191,714
Charlotte NC Certificates of Participation		5.000			12/01/2021	Aa2/AA+*/AA@		270,000		270,799
Craven County NC Certificates of Participation		4.375			06/01/2016	Aa3/AA-*		115,000		116,784
Durham County NC Certificates of Participation		5.000			06/01/2020	Aa1/AA+*		435,000		489,079
Durham County NC Certificates of Participation		5.000			06/01/2021	Aa1/AA+*		240,000		270,266
Lee County NC Certificates of Participation		5.000			04/01/2018	Aa3/AA*		225,000		236,410
Mecklenburg NC Certificate of Participation		5.000			02/01/2017	Aa1/AA+*		60,000		62,779
University NC Wilmington Certificates of Participation		4.375			06/01/2019	A3/AA-*		100,000		101,644
Watauga NC Public Facillities Corporation Limited Obligation		5.000			06/01/2023	Aa3/AA-*		275,000		324,082
Wilmington NC Certificates of Participation		4.200			06/01/2019	Aa2/AA+*/AA@		100,000		107,223
										2,296,323
SCHOOL IMPROVEMENT BONDS
7.68% of Net Assets
Buncombe County NC Certificates of Participation		4.000			04/01/2016	Aa2/AA+*		125,000		126,106
Burke County NC Certificates of Participation		4.250			04/01/2016	A1/A*		50,000		50,455
Cabarrus County NC Certificates of Participation		4.250			06/01/2017	Aa2/AA*/AA@		175,000		183,386
Cabarrus County NC Certificates of Participation		5.000			01/01/2017	Aa2/AA*/AA@		150,000		156,401
Cabarrus County NC Certificates of Participation		5.000			01/01/2019	Aa2/AA*/AA@		100,000		110,945
Harnett County NC Certificates of Participation		3.500			06/01/2016	A1/AA*		250,000		253,065
Lincoln County NC Certificates of Participation		5.000			06/01/2016	A1/AA*/AA-@		200,000		203,818
Montgomery County NC Certificates of Participation		5.000			02/01/2017	A*		125,000		130,206
Nash County NC Limited Obligation		5.000			10/01/2018	Aa3/AA*		150,000		165,285
Onslow County NC Limted Obligation		5.000			06/01/2023	Aa3/AA-*		250,000		300,500
Rutherford County NC Certificates of Participation		5.000			12/01/2017	A1/AA*		105,000		113,037
										1,793,204
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS
5.48% of Net Assets
Johnston County NC Limited Obligation		4.000			06/01/2019	Aa3/AA*		150,000		163,649
NC Infrastructure Finance Certificates of Participation		5.000			02/01/2017	Aa1/AA+*/AA+@		150,000		156,899
NC State Capital Improvement Obligation		4.000			05/01/2025	Aa1/AA+*/AA+@		105,000		114,403
NC State Capital Improvement Obligation		5.000			05/01/2021	Aa1/AA+*/AA+@		350,000		405,510
NC State Capital Improvement Obligation		4.000			05/01/2020	Aa1/AA+*/AA+@		120,000		127,307
Salisbury NC Certificates of Participation		5.000			03/01/2019	A3/AA*		145,000		160,445
Winston Salem NC Limited Obligation		5.000			06/01/2023	Aa2/AA+*/AA+@		125,000		151,783
										1,279,994

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

31

DUPREE MUTUAL FUNDS — NORTH CAROLINA TAX-FREE SHORT-TO-MEDIUM SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

North Carolina Municipal Bonds

December 31, 2015

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
HOSPITAL AND HEALTHCARE BONDS
4.95% of Net Assets
Charlotte-Mecklenburg Hospital		5.000	%		01/15/2019	Aa3/AA-*	$	200,000	$	208,844
Charlotte-Mecklenburg Hospital		4.375			01/15/2019	Aa3/AA-*		150,000		159,126
Charlotte-Mecklenburg Hospital		5.000			01/15/2018	Aa3/AA-*		200,000		208,864
NC Medical Care Caromont Health		3.250			02/15/2018	A1/AA*		370,000		385,766
NC Medical Care Duke University		5.000			06/01/2026	Aa2/AA*/AA@		165,000		192,504
										1,155,104
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS
3.43% of Net Assets
University NC System Pool Revenue		5.000			10/01/2016	Aa2		250,000		258,428
University NC System Pool Revenue Asheville Wilmington		5.000			10/01/2016	A1/AA*		230,000		237,790
University NC Wilmington Certificates of Participation		4.000			06/01/2017	A2/AA*		100,000		104,353
University of NC at Greensboro		5.000			04/01/2025	Aa3/A*		100,000		115,309
University of North Carolina		4.250			10/01/2021	A1		80,000		85,904
										801,784
TURNPIKES/TOLLROAD/HIGHWAY BONDS
1.48% of Net Assets
NC State Grant Anticipation Revenue Vehicle		5.000			03/01/2021	A2/AA*/A+@		310,000		345,160
LEASE REVENUE BONDS
1.18% of Net Assets
Edgecombe County NC Limited Obligation		4.000			06/01/2022	A2		250,000		274,433
AIRPORT BONDS
.92% of Net Assets
Charlotte NC Airport — Charlotte Douglas International		4.125			07/01/2016	Aa3/A+*/A+@		100,000		101,793
Raleigh Durham NC Airport Authority		5.000			11/01/2017	Aa3/AA-@		105,000		112,829
										214,622
ESCROWED TO MATURITY BONDS
.65% of Net Assets
Mecklenburg NC Certificate of Participation		5.000			02/01/2017	NR		45,000		47,105
NC Municipal Power Agency #1 Catawba Electric		5.250			01/01/2017	AAA@		70,000		73,154
NC Municipal Power Agency #1 Catawba Electric		5.250			01/01/2018	AAA@		30,000		32,556
										152,815
STATE AND LOCAL MORTGAGE/HOUSING BONDS
.46% of Net Assets
NC Housing Finance Agency		3.850			01/01/2017	Aa2/AA*		105,000		107,040
Total Investments 99.62% of Net Assets (cost $22,730,112) (See (a) below for further explanation)									$	23,258,139
Other assets in excess of liabilities .38%										89,507
Net Assets 100%									$	23,347,646

* Standard and Poor’s Corporation

** Security is segregated — see footnote 1(D)

@ Fitch’s Investors Service

(All other ratings by Moody’s Investors Service, Inc.)

NR Not Rated

# Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm.

(a) Cost for federal income tax purposes is $22,730,112 and net unrealized appreciation of investments is as follows:

Unrealized appreciation	$	529,819
Unrealized depreciation		(1,792	)
Net unrealized appreciation	$	528,027

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

32

DUPREE MUTUAL FUNDS — NORTH CAROLINA TAX-FREE SHORT-TO-MEDIUM SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

North Carolina Municipal Bonds

December 31, 2015

Other Information

The following is a summary of the inputs used, as of December 31, 2015, involving the Fund’s investments in securities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.

	Valuation Inputs		Municipal Bonds
Level 1	Quoted Prices	��	$	—
Level 2	Other Significant Observable Inputs			23,258,139
Level 3	Significant Unobservable Inputs			—
			$	23,258,139

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

33

NORTH CAROLINA TAX-FREE SHORT-TO-MEDIUM SERIES

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2015 UNAUDITED

ASSETS:
Investments in securities, at fair value (Cost: $22,730,112)		$	23,258,139
Cash			719
Interest receivable			224,293
Total assets			23,483,151
LIABILITIES:
Payable for:
Distributions to shareholders	6,490
Fund shares redeemed	3,297
Investment advisory fee	9,838
Transfer agent fee	2,863
Trustees fees	951
Notes payable	99,000
Accrued expenses	13,066
Total liabilities			135,505
NET ASSETS:
Capital			22,821,122
Accumulated net realized loss on investment transactions			(1,503	)
Net unrealized appreciation in value of investments			528,027
Net assets at value		$	23,347,646
NET ASSET VALUE, offering price and redemption price per share (2,130,682 shares outstanding; unlimited number of shares authorized; no par value)		$	10.96

STATEMENT OF OPERATIONS

For the six months ended December 31, 2015

Net investment income:
Interest income	$	292,662
Expenses:
Investment advisory fee		59,932
Transfer agent fee		17,400
Custodian expense		4,691
Pricing fees		5,027
Professional fees		2,678
Trustees fees		1,234
Other expenses		8,759
Total expenses		99,721
Custodian expense reduction		(25	)
Net expenses		99,696
Net investment income		192,966
Realized and unrealized gain on investments:
Net realized gain		23
Net change in unrealized appreciation/depreciation		42,257
Net realized and unrealized gain on investments		42,280
Net increase in net assets resulting from operations	$	235,246

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

34

NORTH CAROLINA TAX-FREE SHORT-TO-MEDIUM SERIES

STATEMENTS OF CHANGES IN NET ASSETS

For the six months ended December 31, 2015 and the year ended June 30, 2015 UNAUDITED

	Six Months Ended 12/31/2015			Year Ended 06/30/2015
Operations:
Net investment income	$	192,966		$	427,514
Net realized gain on investments		23			1,485
Net change in unrealized appreciation/depreciation		42,257			(274,238	)
Net increase in net assets resulting from operations		235,246			154,761
Distributions from net investment income		(192,966	)		(427,514	)
Net fund share transactions (Note 4)		(1,157,742	)		(1,215,800	)
Total decrease		(1,115,462	)		(1,488,553	)
Net assets:
Beginning of year		24,463,108			25,951,661
End of period	$	23,347,646		$	24,463,108

FINANCIAL HIGHLIGHTS

Selected data for a share outstanding:	Six Months  Ended 12/31/2015			For the years ended June 30,
				2015			2014			2013			2012			2011
Net asset value, beginning of year		$10.94			$11.06			$11.00			$11.23			$10.93			$10.78
Income from investment operations:
Net investment income		0.09			0.19			0.20			0.21			0.24			0.26
Net gains/(losses) on securities		0.02			(0.12	)		0.08			(0.21	)		0.30			0.15
Total from investment operations		0.11			0.07			0.28			0.00			0.54			0.41
Less distributions:
Distributions from net investment income		(0.09	)		(0.19	)		(0.20	)		(0.21	)		(0.24	)		(0.26	)
Distributions from capital gains		—			—			(0.02	)		(0.02	)		—			—
Total distributions		(0.09	)		(0.19	)		(0.22	)		(0.23	)		(0.24	)		(0.26	)
Net asset value, end of period		$10.96			$10.94			$11.06			$11.00			$11.23			$10.93
Total return		1.00%	(b)		0.60%			2.53%			(0.06)%			4.98%			3.86%
Net assets, end of period (in thousands)		$23,348			$24,463			$25,952			$26,333			$24,734			$22,079
Ratio of net expenses to average net assets (a)		0.84%	(c)		0.83%			0.81%			0.78%			0.78%			0.77%
Ratio of gross expenses to average net assets		0.84%	(c)		0.83%			0.81%			0.78%			0.78%			0.77%
Ratio of net investment income to average net assets		1.62%	(c)		1.69%			1.80%			1.87%			2.15%			2.41%
Portfolio turnover		5.34%	(b)		9.79%			7.10%			10.19%			12.31%			5.15%

(a) Percentages are after custodian reduction for which no recovery will be sought.

(b) Not annualized

(c) Annualized

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

35

DUPREE MUTUAL FUNDS — TENNESSEE TAX-FREE INCOME SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

Tennessee Municipal Bonds

December 31, 2015

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
MUNICIPAL UTILITY REVENUE BONDS
40.92% of Net Assets
Blount County TN Public Building Authority Local Government		5.000	%		06/01/2032	Aa3	$	750,000	$	795,045
Bristol TN Electric Revenue		5.000			09/01/2038	AA-*		1,525,000		1,753,842
Chattanooga TN Electric Revenue		5.000			09/01/2035	AA+*/AA+@		250,000		298,158
Chattanooga TN Electric Revenue		5.000			09/01/2040	AA+*/AA+@		1,825,000		2,144,302
Citizens Gas Utility DistrictTN Gas Revenue Refunding		5.000			05/01/2029	A*		250,000		272,878
Clarksville TN Electric Systems Revenue		5.000			09/01/2028	Aa2/AA-*		1,000,000		1,153,740
Clarksville TN Electric Systems Revenue		5.000			09/01/2032	Aa2/AA-*		480,000		547,522
Clarksville TN Electric Systems Revenue		5.000			09/01/2033	Aa2/AA-*		2,000,000		2,282,300
Clarksville TN Water Sewer & Gas Revenue		5.000			02/01/2038	Aa3/AA-@		1,000,000		1,135,630
Clarksville TN Water Sewer & Gas Revenue		5.000			02/01/2033	Aa3/AA-@		500,000		575,070
Columbia TN Refunded — Sewer System		5.000			12/01/2024	Aa2		1,235,000		1,238,816
Columbia TN Waterworks Revenue		5.000			12/01/2032	Aa3		885,000		1,008,050
Franklin TN Water & Sewer Revenue and Tax Authority		5.000			04/01/2024	Aaa		750,000		932,565
Hallsdale-Powell Utility District Knox County Water & Sewer		5.000			04/01/2026	A3/AA*		1,000,000		1,049,810
Hallsdale-Powell Utility District Knox County Water & Sewer		5.000			04/01/2031	A3/AA*		740,000		772,878
Harpeth Valley TN Utilities District		5.000			09/01/2034	AA*		500,000		580,350
Harpeth Valley TN Utilities District		5.000			09/01/2040	AA*		1,000,000		1,129,020
Harpeth Valley TN Utilities District		5.000			09/01/2032	Aa3		1,420,000		1,505,356
Knox Chapman TN Utility District		4.500			01/01/2027	AA-*		1,000,000		1,135,960
Knox Chapman TN Utility District		5.000			01/01/2031	AA-*		250,000		299,870
Knox Chapman TN Utility District		5.000			01/01/2033	AA-*		250,000		297,650
Knox Chapman TN Utility District		5.250			01/01/2036	AA-*		700,000		788,200
Memphis TN Electric System Revenue		5.000			12/01/2031	Aa2/AA+*		225,000		271,503
Memphis TN Electric System Revenue		5.000			12/01/2034	Aa2/AA+*		1,250,000		1,488,450
Metropolitan Government Nashville & Davidson County Electric		5.000			05/15/2036	AA+*/AA+@		3,085,000		3,486,945
Metropolitan Government Nashville & Davidson County Electric		5.000			05/15/2036	AA+*/AA+@		500,000		588,100
Metropolitan Government Nashville & Davidson County Electric		5.000			05/15/2039	AA+*/AA+@		500,000		581,980
Metropolitan Government Nashville & Davidson County Electric		5.000			05/15/2033	AA+*/AA+@		500,000		598,770
Metropolitan Government Nashville & Davidson County Water & Sewer**		5.000			07/01/2030	Aa3/AA-*		3,250,000		3,846,408
Metropolitan Government Nashville & Davidson County Water & Sewer		5.000			07/01/2033	Aa3/AA-*		575,000		668,058
Metropolitan Government Nashville & Davidson County Water & Sewer		5.000			07/01/2040	Aa3/AA-*		2,265,000		2,577,004
Metropolitan Government Nashville & Davidson County Water & Sewer		5.000			07/01/2031	Aa3/AA-*		500,000		588,745
South Blount County TN Utility District Waterworks		5.000			12/01/2028	A2/AA*		1,125,000		1,272,848
Watauga River Tn Regional Water Authority Waterworks		5.000			07/01/2034	A*		500,000		561,480
West Wilson Utility District TN Waterworks		4.750			06/01/2028	Aa3		2,460,000		2,595,866
West Wilson Utility District TN Waterworks		5.000			06/01/2033	Aa3		1,170,000		1,329,354
White House Utility District TN Water & Sewer**		5.000			01/01/2028	Aa3		1,235,000		1,280,633
White House Utility District TN Water & Sewer		5.000			01/01/2030	Aa3		2,505,000		2,593,978
										46,027,131
PREREFUNDED BONDS
15.09% of Net Assets
Chattanooga TN Electric Revenue		5.000			09/01/2026	AA+*/AA+@		250,000		271,885
Clarksville TN Electric System Revenue Bonds		5.000			09/01/2032	Aa2		1,250,000		1,336,513
Gallatin TN Water & Sewer Revenue		5.000			01/01/2032	AA*		235,000		280,623
Gallatin TN Water & Sewer Revenue		5.000			01/01/2028	Aa3		2,540,000		2,746,477
Jackson TN Energy Authority Gas System Revenue		5.000			10/01/2028	Aa2		1,000,000		1,073,190
Johnson City TN Health & Educational Facilities Escrowed		5.125			07/01/2025	AA-*		190,000		190,391
Marion County TN Schools		5.000			06/01/2025	A1		1,050,000		1,069,772
Metropolitan Government Nashville & Davidson County TN		4.750			05/15/2028	AA+*/AA+@		460,000		500,222
Metropolitan Government Nashville & Davidson County TN		5.000			01/01/2025	Aa2/AA*		3,000,000		3,243,270
Metropolitan Government Nashville & Davidson County TN		5.000			05/15/2017	Aa2/AA-*		205,000		216,958
Metropolitan Government Nashville & Davidson County TN		5.000			05/15/2017	Aa2/AA-*		35,000		37,012
Metropolitan Government Nashville & Davidson County TN		5.000			05/15/2027	Aa2/AA*		1,195,000		1,263,689
Metropolitan Government Nashville & Davidson County TN		5.000			05/15/2028	Aa2/AA*		205,000		216,783
TN State School Board Authority Higher Education Facilities		5.000			05/01/2028	Aa1/AA*/AA@		1,000,000		1,092,740

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

36

DUPREE MUTUAL FUNDS — TENNESSEE TAX-FREE INCOME SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

Tennessee Municipal Bonds

December 31, 2015

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
TN State School Board Authority Higher Education Facilities		5.000	%		05/01/2034	Aa1/AA*/AA+@	$	500,000	$	563,295
TN State School Board Authority Higher Education Facilities		4.750			05/01/2030	Aa1/AA*		1,425,000		1,445,905
TN State School Board Authority Higher Education Facilities		5.125			05/01/2033	NR		235,000		257,240
TN State School Board Authority Higher Education Facilities		5.125			05/01/2033	Aa1/AA*		1,065,000		1,166,058
										16,972,022
PUBLIC FACILITIES REVENUE BONDS
12.46% of Net Assets
Blount County TN Public Building Authority Local Government		5.000			06/01/2025	Aa2/AA-*		100,000		112,325
Blount County TN Public Building Authority Local Government		5.000			06/01/2027	Aa2/AA-*		1,500,000		1,677,390
Blount County TN Public Building Authority Local Government		4.750			06/01/2031	Aa2/AA-*		750,000		829,290
Memphis Shelby County Sports Authority		5.250			11/01/2027	Aa3/AA-*/A+@		750,000		852,570
Memphis Shelby County Sports Authority		5.250			11/01/2026	Aa3/AA-*/A+@		500,000		569,385
Memphis TN Refunding General Improvement		5.000			04/01/2031	Aa2/AA*		800,000		941,056
Metropolitan Government Nashville & Davidson County Convention Center		5.000			07/01/2026	A1/A*		630,000		707,194
Metropolitan Government Nashville & Davidson County Sports Authority		5.000			08/01/2031	Aa3/AA-*		1,500,000		1,734,000
Metropolitan Government Nashville & Davidson County Sports Authority		5.000			08/01/2038	Aa3/AA-*		755,000		856,170
Pigeon Forge Industrial Development Board		5.000			06/01/2024	AA*		600,000		700,686
Pigeon Forge Industrial Development Board		5.000			06/01/2027	AA*		1,400,000		1,629,418
Pigeon Forge Industrial Development Board		5.000			06/01/2029	AA*		2,120,000		2,450,826
Pigeon Forge Industrial Development Board		5.000			06/01/2034	AA*		850,000		952,434
										14,012,744
HOSPITAL AND HEALTHCARE BONDS
8.48% of Net Assets
Chattanooga TN Health Educational and Housing Facilities Board		5.000			01/01/2033	A2/A*/A+@		500,000		550,770
Jackson TN Hospital Revenue Jackson Madison County Hospital		5.000			04/01/2036	A1/A+*		500,000		562,590
Rutherford County TN Health & Educational Facilities Ascension Health		5.000			11/15/2040	Aa2/AA+*/AA+@		1,500,000		1,652,115
Shelby County TN Health Education and Housing Facilities		5.000			05/01/2027	A1/A+*		750,000		844,193
Shelby County TN Health Education and Housing Facilities**		5.000			07/01/2031	Aa1/AAA@		4,750,000		4,850,320
Shelby County TN Health Education and Housing Facilities		5.250			09/01/2027	A1/AA*		1,000,000		1,080,970
										9,540,958
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS
6.94% of Net Assets
Franklin County TN Health & Education Facilities Board Revenue		5.000			09/01/2030	A+*		200,000		228,280
Metropolitan Government Nashville & Davidson County Vanderbilt University		5.000			10/01/2034	Aa2/AA*/AA+@		1,000,000		1,132,230
Metropolitan Government Nashville & Davidson County Vanderbilt University		5.000			10/01/2028	Aa2/AA*/AA+@		1,150,000		1,346,202
Shelby County TN Health Education & Housing Facilities Board Rhodes		5.000			08/01/2030	A1/A+*		500,000		568,380
Shelby County TN Health Education & Housing Facilities Board Rhodes		5.000			08/01/2040	A1/A+*		650,000		751,699
TN State School Bond Authority		5.000			11/01/2043	Aa1/AA*/AA+@		1,000,000		1,127,970
TN State School Bond Authority Higher Educational Facilities		5.000			11/01/2037	Aa1/AA*/AA+@		250,000		295,990
TN State School Bond Authority Higher Educational Facilities		5.000			11/01/2040	Aa1/AA*/AA+@		2,000,000		2,360,780
										7,811,531
REFUNDING BONDS
6.57% of Net Assets
Chattanooga TN Industrial Development Board Lease Rent Revenue		5.000			10/01/2027	A2/AA+*/AA@		1,000,000		1,065,050
Greene County TN General Obligation — Series B		5.000			06/01/2024	A1		505,000		514,337
Manchester TN Refunding General Obligation		5.000			06/01/2038	A2/AA*		100,000		114,212
Memphis TN General Improvement		5.000			04/01/2034	Aa2/AA*		500,000		582,110
Memphis TN General Improvement		5.000			04/01/2039	Aa2/AA*		250,000		286,685
Memphis TN Refunding		5.000			04/01/2035	Aa2/AA*		250,000		290,055
Memphis TN Refunding		5.000			04/01/2033	Aa2/AA*		250,000		292,060
Memphis TN Refunding		5.000			04/01/2040	Aa2/AA*		500,000		572,190
Memphis TN Refunding		5.000			04/01/2030	Aa2/AA*		1,000,000		1,175,510

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

37

DUPREE MUTUAL FUNDS — TENNESSEE TAX-FREE INCOME SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

Tennessee Municipal Bonds

December 31, 2015

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
Pigeon Forge TN Refunding Series A		4.900	%		06/01/2028	Aa3/AA*	$	1,000,000	$	1,081,880
Shelby County TN Refunding Series A		5.000			03/01/2026	Aa1/AA+*/AA+@		1,200,000		1,414,716
										7,388,805
STATE AND LOCAL MORTGAGE/HOUSING BONDS
2.43% of Net Assets
Oak Ridge TN Industrial Development Board Refunding Revenue		5.250			08/20/2018	Baa2		160,000		160,021
TN Housing Development Agency		5.000			07/01/2029	Aa1/AA+*		400,000		412,980
TN Housing Development Agency		5.000			07/01/2028	Aa1/AA+*		10,000		10,065
TN Housing Development Agency Homeownership Program 1		5.000			07/01/2029	Aa1/AA+*		530,000		552,228
TN Housing Development Agency Homeownership Program 2		4.700			07/01/2027	Aa1/AA+*		1,010,000		1,059,207
TN Housing Development Agency Housing Finance Program		4.850			01/01/2025	Aa2		500,000		533,675
										2,728,176
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS
2.06% of Net Assets
Memphis Shelby County TN Port Authority Community Development		5.000			04/01/2035	Aa3/AA-*		625,000		706,994
Memphis TN Refunding and General Impact General Obligation		5.000			05/01/2036	Aa2/AA*		850,000		959,531
Springfield TN Public Improvement		4.500			03/01/2024	A1		565,000		654,360
										2,320,885
SCHOOL IMPROVEMENT BONDS
2.02% of Net Assets
Cleveland TN General Obligation		5.000			06/01/2027	Aa3/AA*		680,000		692,111
Rhea County TN		5.000			04/01/2029	A1		1,385,000		1,576,407
										2,268,518
AIRPORT BONDS
1.81% of Net Assets
Metropolitan Nashville Airport Authority		5.000			07/01/2035	A1/A+*		250,000		292,417
Metropolitan Nashville Airport Authority		5.000			07/01/2040	A1/A+*		700,000		808,101
Metropolitan Nashville Airport Authority		5.000			07/01/2034	A1/A+*		800,000		939,360
										2,039,878
INDUSTRIAL REVENUE BONDS
0.86% of Net Assets
Industrial Development Board TN Blount County		5.000			06/01/2027	Aa3/AA*		850,000		965,311
ESCROWED TO MATURITY BONDS
.07% of Net Assets
Johnson City TN Health & Educational Facilities Medical Center		5.000			07/01/2018	AA-*		80,000		80,208
Total Investments 99.71% of Net Assets (cost $106,034,130) (See (a) below for further explanation)									$	112,156,167
Other assets in excess of liabilities .29%										328,555
Net Assets 100%									$	112,484,722

* Standard and Poor’s Corporation

** Security is segregated — see footnote 1(D)

@ Fitch’s Investors Service

(All other ratings by Moody’s Investors Service, Inc.)

NR Not Rated

# Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm.

(a) Cost for federal income tax purposes is $106,034,130 and net unrealized appreciation of investments is as follows:

Unrealized appreciation	$	6,122,782
Unrealized depreciation		(745	)
Net unrealized appreciation	$	6,122,037

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

38

DUPREE MUTUAL FUNDS — TENNESSEE TAX-FREE INCOME SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

Tennessee Municipal Bonds

December 31, 2015

Other Information

The following is a summary of the inputs used, as of December 31, 2015, involving the Fund’s investments in securities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.

	Valuation Inputs	Municipal Bonds
Level 1	Quoted Prices	$	—
Level 2	Other Significant Observable Inputs		112,156,167
Level 3	Significant Unobservable Inputs		—
		$	112,156,167

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

39

TENNESSEE TAX-FREE INCOME SERIES

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2015 UNAUDITED

ASSETS:
Investments in securities, at fair value (Cost: $106,034,130)		$	112,156,167
Cash			27,342
Interest receivable			1,424,043
Total assets			113,607,552
LIABILITIES:
Payable for:
Distributions to shareholders	258,109
Fund shares redeemed	151,167
Investment advisory fee	48,610
Transfer agent fee	12,181
Trustees fees	2,397
Notes Payable	604,000
Accrued expenses	46,366
Total liabilities			1,122,830
NET ASSETS:
Capital			106,961,551
Accumulated net realized loss on investment transactions			(598,866	)
Net unrealized appreciation in value of investments			6,122,037
Net assets at value		$	112,484,722
NET ASSET VALUE, offering price and redemption price per share (9,656,615 shares outstanding; unlimited number of shares authorized; no par value)		$	11.65

STATEMENT OF OPERATIONS

For the six months ended December 31, 2015

Net investment income:
Interest income	$	2,064,597
Expenses:
Investment advisory fee		275,428
Transfer agent fee		69,761
Custodian expense		10,370
Professional fees		12,256
Trustees fees		5,615
Other expenses		20,074
Total expenses		393,504
Custodian expense reduction		(57	)
Net expenses		393,447
Net investment income		1,671,150
Realized and unrealized gain on investments:
Net realized gain		41,288
Net change in unrealized appreciation/depreciation		1,258,650
Net realized and unrealized gain on investments		1,299,938
Net increase in net assets resulting from operations	$	2,971,088

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

40

TENNESSEE TAX-FREE INCOME SERIES

STATEMENTS OF CHANGES IN NET ASSETS

For the six months ended December 31, 2015 and the year ended June 30, 2015 UNAUDITED

	Six Months Ended 12/31/2015			Year Ended 06/30/2015
Operations:
Net investment income	$	1,671,150		$	3,376,320
Net realized gain on investments		41,288			29,899
Net change in unrealized appreciation/depreciation		1,258,650			(391,648	)
Net increase in net assets resulting from operations		2,971,088			3,014,571
Distributions from net investment income		(1,671,150	)		(3,376,320	)
Net fund share transactions (Note 4)		1,512,536			5,139,706
Total increase		2,812,474			4,777,957
Net assets:
Beginning of year		109,672,248			104,894,291
End of period	$	112,484,722		$	109,672,248

FINANCIAL HIGHLIGHTS

Selected data for a share outstanding:	Six Months  Ended 12/31/2015			For the years ended June 30,
				2015			2014			2013			2012			2011
Net asset value, beginning of year		$11.51			$11.55			$11.27			$11.56			$11.04			$11.04
Income from investment operations:
Net investment income		0.17			0.36			0.37			0.36			0.40			0.41
Net gains/(losses) on securities		0.14			(0.04	)		0.28			(0.29	)		0.52			0.00
Total from investment operations		0.31			0.32			0.65			0.07			0.92			0.41
Less distributions:
Distributions from net investment income		(0.17	)		(0.36	)		(0.37	)		(0.36	)		(0.40	)		(0.41	)
Net asset value, end of period		$11.65			$11.51			$11.55			$11.27			$11.56			$11.04
Total return		2.75%	(c)		2.77%			5.86%			0.56%			8.44%			3.78%
Net assets, end of period (in thousands)		$112,485			$109,672			$104,894			$105,696			$100,583			$91,740
Ratio of net expenses to average net assets (a)		0.71%	(d)		0.70%			0.71%			0.65%			0.70%			0.69%
Ratio of gross expenses to average net assets		0.71%	(d)		0.70%			0.71%			0.69%			0.70%			0.69%
Ratio of net investment income to average net assets		3.02%	(d)		3.08%			3.25%			3.10%			3.50%			3.68%
Portfolio turnover		2.50%	(c)		7.01%			14.44%			7.37%			8.39%			6.38%

(a) Percentages are after expense waivers and reductions by the Adviser and Custodian. The Adviser and Custodian have agreed not to seek recovery of these waivers and reductions.

(b) Rounds to less than $.01.

(c) Not annualized

(d) Annualized

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

41

DUPREE MUTUAL FUNDS — TENNESSEE TAX-FREE SHORT-TO-MEDIUM SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

Tennessee Municipal Bonds

December 31, 2015

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
PREREFUNDED BONDS
21.10% of Net Assets
Chattanooga TN Electric Revenue		5.000	%		09/01/2021	AA+*/AA+@	$	400,000	$	435,016
Memphis TN		5.000			04/01/2024	Aa2/AA*/AA-@		200,000		210,656
Memphis TN General Improvement		5.000			04/01/2022	Aa2/AA*/AA-@		185,000		208,033
Memphis TN General Obligation		5.000			05/01/2020	Aa2/AA*/AA-@		250,000		281,998
Metropolitan Government Nashville & Davidson County TN		4.000			07/01/2023	NR		140,000		156,926
Metropolitan Government Nashville & Davidson County TN		5.000			05/15/2017	NR		35,000		37,046
Metropolitan Government Nashville & Davidson County TN		5.000			05/15/2019	Aa2/AA*		215,000		227,571
Metropolitan Government Nashville & Davidson County TN		5.000			01/01/2019	Aa2/AA*		200,000		216,258
Robertson County TN School		4.000			06/01/2020	Aa3/AA*		250,000		267,800
Tennessee State		4.000			05/01/2021	Aaa/AA+*/AAA@		340,000		364,116
										2,405,420
PUBLIC FACILITIES REVENUE BONDS
16.41% of Net Assets
Memphis TN Center City Revenue Finance Corporation		5.250			11/01/2025	Aa3/AA*		100,000		118,049
Memphis TN Center City Revenue Finance Corporation Sports Facility		4.000			02/01/2021	Aa3/AA-*		100,000		109,925
Memphis TN Center City Revenue Finance Corporation Sports Facility		4.000			02/01/2022	Aa3/AA-*		220,000		244,281
Memphis-Shelby County TN Sports Authority Memphis Arena		5.000			11/01/2017	Aa3/AA-*/A+@		275,000		295,347
Metropolitan Government Nashville & Davidson County TN Convention		3.750			07/01/2018	A1/A*		100,000		105,526
Metropolitan Government Nashville & Davidson County TN Sports Authority		5.250			08/01/2025	Aa3/AA-*		195,000		235,722
Metropolitan Government Nashville & Davidson County TN Sports Authority		5.000			07/01/2023	Aa3/AA-*		125,000		150,708
Metropolitan Government Nashville & Davidson County TN Sports Authority		5.250			08/01/2024	Aa3/AA-*		190,000		231,008
Pigeon Forge Industrial Development Board		5.000			06/01/2024	AA*		175,000		204,367
Pigeon Forge Public Facilities		5.000			06/01/2023	AA*		150,000		175,678
										1,870,610
REFUNDING BONDS
12.76% of Net Assets
Memphis TN General Improvement		5.000			11/01/2023	Aa2/AA*		350,000		429,758
Metropolitan Government Nashville & Davidson County TN		4.000			07/01/2024	Aa2/AA*		100,000		112,849
Metropolitan Government Nashville & Davidson County TN		4.000			07/01/2023	Aa2/AA*		110,000		121,217
Metropolitan Government Nashville & Davidson County TN		5.000			07/01/2021	Aa2/AA*		175,000		202,715
Polk County TN Refinancing		5.000			05/01/2020	A2		150,000		158,151
Rhea County TN		3.000			04/01/2018	A1		200,000		207,604
Unicoi County TN Refunding		5.250			04/01/2019	A1/AA-*		200,000		221,816
										1,454,109
MUNICIPAL UTILITY REVENUE BONDS
12.68% of Net Assets
Castalian Springs — Bethpage TN Waterworks		3.000			01/01/2019	A+*		260,000		267,303
Chattanooga TN Electric Revenue		5.000			09/01/2023	AA+*/AA+@		250,000		307,245
Columbia TN Electric System Revenue		5.000			09/01/2021	Aa3		165,000		181,175
Cross Anchor TN Utility District		4.250			12/01/2016	AA*		65,000		66,880
Johnson City TN Electric Revenue		4.000			05/01/2022	Aa2/AA-*		100,000		103,664
Johnson City TN Electric Revenue		4.500			05/01/2021	Aa2/AA*		50,000		53,725
Metropolitan Government Nashville & Davidson County TN Water& Sewer		5.000			07/01/2026	Aa3/AA-*		100,000		120,180
Metropolitan Government Nashville & Davidson County TN Water& Sewer		5.250			01/01/2019	Aa2/AA*		125,000		140,070
New Market Utility District Jefferson County TN Waterworks		4.000			06/01/2017	A3/AA*		100,000		104,151
New Market Utility District Jefferson County TN Waterworks		4.000			06/01/2016	A3/AA*		100,000		101,404
										1,445,797
SCHOOL IMPROVEMENT BONDS
7.92% of Net Assets
Gibson County Special School District		5.000			04/01/2021	AA*		250,000		293,735
Lincoln County TN		5.250			04/01/2019	Aa3		200,000		224,444

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

42

DUPREE MUTUAL FUNDS — TENNESSEE TAX-FREE SHORT-TO-MEDIUM SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

Tennessee Municipal Bonds

December 31, 2015

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
Rhea County TN		4.000	%		04/01/2025	A1	$	250,000	$	274,450
Robertson County TN School and Public Improvement		4.000			06/01/2019	AA*		100,000		109,733
										902,362
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS
7.84% of Net Assets
Blount County TN Public Building Authority		4.000			06/01/2020	Aa2/AA-*		150,000		163,649
Blount County TN Public Building Authority		5.000			06/01/2021	Aa2/AA-*		175,000		196,194
Claiborne County TN Public Improvement		5.000			04/01/2017	NR		145,000		152,502
Gallatin County Capital Outlay Notes		4.625			01/01/2019	AA+*		100,000		110,187
Memphis TN Refunding General Improvement		5.000			10/01/2017	Aa2/AA*/AA-@		100,000		107,247
Sevier County TN Public Building Authority		5.000			06/01/2018	AA-*		150,000		163,799
										893,578
HOSPITAL AND HEALTHCARE BONDS
6.32% of Net Assets
Shelby County TN Health Educational & Housing Facilities		5.250			09/01/2020	A1/AA*		400,000		433,640
Shelby County TN Health Educational & Housing Facilities		4.250			09/01/2020	A-*		265,000		286,852
										720,492
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS
5.93% of Net Assets
Franklin County TN Health & Educational Facilities Board		4.000			09/01/2019	A+*		350,000		382,277
Franklin County TN Health & Educational Facilities Board		4.000			09/01/2024	A+*		135,000		149,194
Shelby County TN Health Educational & Housing Facilities Rhodes College		5.000			08/01/2022	A1/A+*		120,000		144,316
										675,787
STATE AND LOCAL MORTGAGE/HOUSING BONDS
3.11% of Net Assets
TN Housing Development Agency		4.800			07/01/2024	Aa1/AA+*		130,000		133,465
TN Housing Development Agency Homeownership Program		1.900			07/01/2019	Aa1/AA+*		220,000		221,489
										354,954
AIRPORT BONDS
1.00% of Net Assets
Metropolitan Nashville Airport Authority		4.000			07/01/2023	A1/A+*		100,000		114,540
ESCROWED TO MATURITY BONDS
.23% of Net Assets
Claiborne County TN Public Improvement		5.000			04/01/2017	NR		25,000		26,332
Total Investments 95.30% of Net Assets (cost $10,575,998) (See (a) below for further explanation)									$	10,863,981
Other assets in excess of liabilities 4.70%										535,326
Net Assets 100%									$	11,399,307

* Standard and Poor’s Corporation

@ Fitch’s Investors Service

(All other ratings by Moody’s Investors Service, Inc.)

NR Not Rated

# Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm.

(a) Cost for federal income tax purposes is $10,575,998 and net unrealized appreciation of investments is as follows:

Unrealized appreciation	$	290,131
Unrealized depreciation		(2,148	)
Net unrealized appreciation	$	287,983

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

43

DUPREE MUTUAL FUNDS — TENNESSEE TAX-FREE SHORT-TO-MEDIUM SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

Tennessee Municipal Bonds

December 31, 2015

Other Information

The following is a summary of the inputs used, as of December 31, 2015, involving the Fund’s investments in securities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.

	Valuation Inputs	Municipal Bonds
Level 1	Quoted Prices	$	—
Level 2	Other Significant Observable Inputs		10,863,981
Level 3	Significant Unobservable Inputs		—
		$	10,863,981

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

44

TENNESSEE TAX-FREE SHORT-TO-MEDIUM SERIES

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2015 UNAUDITED

ASSETS:
Investments in securities, at fair value (Cost: $10,575,998)		$	10,863,981
Cash			426,071
Interest receivable			126,839
Total assets			11,416,891
LIABILITIES:
Payable for:
Distributions to shareholders	2,473
Fund shares redeemed	2,156
Investment advisory fee	5,225
Transfer agent fee	1,576
Trustees fees	518
Accrued expenses	5,636
Total liabilities			17,584
NET ASSETS:
Capital			11,368,854
Accumulated net realized loss on investment transactions			(257,530	)
Net unrealized appreciation in value of investments			287,983
Net assets at value		$	11,399,307
NET ASSET VALUE, offering price and redemption price per share (1,053,425 shares outstanding; unlimited number of shares authorized; no par value)		$	10.82

STATEMENT OF OPERATIONS

For the six months ended December 31, 2015

Net investment income:
Interest income	$	132,013
Expenses:
Investment advisory fee		28,312
Transfer agent fee		8,494
Custodian expense		3,933
Professional fees		1,237
Trustees fees		2,079
Other expenses		4,924
Total expenses		48,979
Custodian expense reduction		(20	)
Net expenses		48,959
Net investment income		83,054
Realized and unrealized gain on investments:
Net realized gain		—
Net change in unrealized appreciation/depreciation		84,423
Net realized and unrealized loss on investments		84,423
Net increase in net assets resulting from operations	$	167,477

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

45

TENNESSEE TAX-FREE SHORT-TO-MEDIUM SERIES

STATEMENTS OF CHANGES IN NET ASSETS

For the six months ended December 31, 2015 and the year ended June 30, 2015 UNAUDITED

	Six Months Ended 12/31/2015			Year Ended 06/30/2015
Operations:
Net investment income	$	83,054		$	178,683
Net realized gain on investments		—			485
Net change in unrealized appreciation/depreciation		84,423			(78,224	)
Net increase in net assets resulting from operations		167,477			100,944
Distributions from net investment income		(83,054	)		(178,683	)
Net fund share transactions (Note 4)		281,412			326,636
Total increase		365,835			248,897
Net assets:
Beginning of year		11,033,472			10,784,575
End of period	$	11,399,307		$	11,033,472

FINANCIAL HIGHLIGHTS

Selected data for a share outstanding:	Six Months Ended 12/31/2015			For the years ended June 30,
				2015			2014			2013			2012			2011
Net asset value, beginning of year		$10.74			$10.81			$10.75			$11.01			$10.85			$10.82
Income from investment operations:
Net investment income		0.08			0.18			0.19			0.20			0.24			0.26
Net gains/(losses) on securities both realized and unrealized		0.08			(0.07	)		0.06			(0.26	)		0.16			0.03
Total from investment operations		0.16			0.11			0.25			(0.06	)		0.40			0.29
Less distributions:
Distributions from net investment income		(0.08	)		(0.18	)		(0.19	)		(0.20	)		(0.24	)		(0.26	)
Net asset value, end of period		$10.82			$10.74			$10.81			$10.75			$11.01			$10.85
Total return		1.49%	(b)		0.99%			2.36%			(0.53)%			3.74%			2.72%
Net assets, end of period (in thousands)		$11,399			$11,033			$10,785			$11,021			$12,026			$9,889
Ratio of net expenses to average net assets (a)		0.87%	(c)		0.85%			0.86%			0.86%			0.87%			0.80%
Ratio of gross expenses to average net assets		0.87%	(c)		0.85%			0.86%			0.86%			0.87%			0.82%
Ratio of net investment income to average net assets		1.47%	(c)		1.64%			1.78%			1.86%			2.21%			2.40%
Portfolio turnover		3.83%	(b)		14.32%			11.38%			20.56%			1.86%			18.32%

(a) Percentages are after expense waivers and reductions by the Adviser and Custodian. The Adviser and Custodian have agreed not to seek recovery of these waivers and reductions.

(b) Not annualized

(c) Annualized

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

46

DUPREE MUTUAL FUNDS — INTERMEDIATE GOVERNMENT BOND SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

U.S. Government Securities and Agencies

December 31, 2015

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
FEDERAL FARM CREDIT
55.74% of Net Assets
Federal Farm Credit Bank		5.250	%		10/25/2022	Aaa/AA+*/AAA@	$	1,500,000	$	1,778,259
Federal Farm Credit Bank		5.050			12/21/2021	Aaa/AA+*/AAA@		370,000		431,693
Federal Farm Credit Bank		5.840			07/20/2022	Aaa/AA+*/AAA@		2,650,000		3,219,212
Federal Farm Credit Bank		5.250			05/10/2022	Aaa/AA+*/AAA@		2,000,000		2,360,786
Federal Farm Credit Bank		5.125			11/28/2022	Aaa/AA+*/AAA@		2,000,000		2,354,264
										10,144,214
FEDERAL HOME LOAN BANK
34.47% of Net Assets
Federal Home Loan Bank		5.365			09/09/2024	Aaa/AA+*		1,750,000		2,120,908
Federal Home Loan Bank		5.250			12/11/2020	Aaa/AA+*		985,000		1,138,777
Federal Home Loan Bank		5.000			12/10/2021	Aaa/AA+*		500,000		579,951
Federal Home Loan Bank		5.750			06/10/2022	Aaa/AA+*		2,000,000		2,433,098
										6,272,734
FEDERAL NATIONAL MORTGAGE ASSOCIATION
6.72% of Net Assets
Federal National Mortgage Association		8.100			08/12/2019	Aaa/AA+*/AAA@		1,000,000		1,224,215
Total Investments 96.93% of Net Assets (cost $16,647,056) (See (a) below for further explanation)									$	17,641,163
Other liabilities in excess of assets 3.07%										557,876
Net Assets 100%									$	18,199,039

* Standard and Poor’s Corporation

@ Fitch’s Investors Service

All other ratings by Moody’s Investors Service, Inc.

# Bond ratings unaudited and not covered by Report of Independent Registered Public Accounting Firm.

(a) Cost for federal income tax purposes is $16,647,056 and net unrealized appreciation of investments is as follows:

Unrealized appreciation	$	994,107
Unrealized depreciation		—
Net unrealized appreciation	$	994,107

Other Information

The following is a summary of the inputs used, as of December 31, 2015, involving the Fund’s investments in securities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.

	Valuation Inputs	Government Agencies
Level 1	Quoted Prices	$	—
Level 2	Other Significant Observable Inputs		17,641,163
Level 3	Significant Unobservable Inputs		—
		$	17,641,163

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

47

INTERMEDIATE GOVERNMENT BOND SERIES

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2015 UNAUDITED

ASSETS:
Investments in securities, at fair value (Cost: $16,647,056)		$	17,641,163
Cash			403,825
Interest receivable			181,199
Total assets			18,226,187
LIABILITIES:
Payable for:
Distributions to shareholders	7,675
Fund shares redeemed	368
Investment advisory fee	3,096
Transfer agent fee	4,752
Trustee fee	1,268
Accrued expenses	9,989
Total liabilities			27,148
NET ASSETS:
Capital			17,476,372
Accumulated net realized loss on investment transactions			(271,440	)
Net unrealized appreciation in value of investments			994,107
Net assets at value		$	18,199,039
NET ASSET VALUE, offering price and redemption price per share (1,766,549 shares outstanding; unlimited number of shares authorized; no par value)		$	10.30

STATEMENT OF OPERATIONS

For the six months ended December 31, 2015

Net investment income:
Interest income	$	280,877
Expenses:
Investment advisory fee		18,648
Transfer agent fee		13,986
Custodian expense		4,300
Professional fees		2,123
Postage expense		2,513
Pricing		2,513
Trustees fees		983
Other expenses		3,934
Total expenses		49,000
Custodian expense reduction		(25	)
Net expenses		48,975
Net investment income		231,902
Realized and unrealized gain on investments:
Net realized gain		12,466
Net change in unrealized appreciation/depreciation		5,447
Net realized and unrealized gain on investments		17,913
Net increase in net assets resulting from operations	$	249,815

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

48

INTERMEDIATE GOVERNMENT BOND SERIES

STATEMENTS OF CHANGES IN NET ASSETS

For the six months ended December 31, 2015 and the year ended June 30, 2015 UNAUDITED

	Six Months Ended 12/31/2015			Year Ended 06/30/2015
Operations:
Net investment income	$	231,902		$	535,178
Net realized gain/(loss) on investments		12,466			(22,908	)
Net change in unrealized appreciation/depreciation		5,447			130,410
Net increase in net assets resulting from operations		249,815			642,680
Distributions from net investment income		(231,902	)		(535,178	)
Net fund share transactions (Note 4)		(546,751	)		(2,603,197	)
Total decrease		(528,838	)		(2,495,695	)
Net assets:
Beginning of year		18,727,877			21,223,572
End of period	$	18,199,039		$	18,727,877

FINANCIAL HIGHLIGHTS

Selected data for a share outstanding:	Six Months  Ended 12/31/2015			For the years ended June 30,
				2015			2014			2013			2012			2011
Net asset value, beginning of year		$10.29			$10.25			$10.05			$10.58			$9.96			$10.24
Income from investment operations:
Net investment income		0.13			0.26			0.28			0.30			0.34			0.35
Net gains/(losses) on securities		0.01			0.04			0.20			(0.53	)		0.62			(0.28	)
Total from investment operations		0.14			0.30			0.48			(0.23	)		0.96			0.07
Less distributions:
Distributions from net investment income		(0.13	)		(0.26	)		(0.28	)		(0.30	)		(0.34	)		(0.35	)
Net asset value, end of period		$10.30			$10.29			$10.25			$10.05			$10.58			$9.96
Total return		1.36%	(b)		2.96%			4.89%			(2.34)%			9.72%			0.71%
Net assets, end of period (in thousands)		$18,199			$18,728			$21,224			$23,395			$25,830			$25,004
Ratio of net expenses to average net assets (a)		0.53%	(c)		0.51%			0.56%			0.48%			0.52%			0.46%
Ratio of gross expenses to average net assets		0.53%	(c)		0.51%			0.56%			0.54%			0.52%			0.46%
Ratio of net investment income to average net assets		2.50%	(c)		2.54%			2.81%			2.77%			3.25%			3.48%
Portfolio turnover		0.00%	(b)		2.44%			15.33%			16.02%			8.94%			72.86%

(a) Percentages are after expenses waived by Adviser and Custodian reduction. No recovery of these waivers and reductions will be sought.

(b) Not annualized

(c) Annualized

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

49

DUPREE MUTUAL FUNDS — TAXABLE MUNICIPAL BOND SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

Taxable Municipal Bonds

December 31, 2015

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
PUBLIC FACILITIES REVENUE BONDS
32.63% of Net Assets
Buncombe County NC Limited Obligation Build America		6.800	%		06/01/2030	Aa2/AA+*	$	250,000	$	286,453
Decatur GA Urban Redevelopment Agency Revenue Build America		6.920			01/01/2038	Aa2/AA+*		150,000		172,899
Franklin County OH Convention Facilities Authority		6.640			12/01/2042	Aa2/AA*		240,000		291,756
Grand Junction CO Certificatesof Participation Build America		7.500			12/01/2030	A+*		500,000		579,320
Metropolitan Government Nashville & Davidson County TN		7.431			07/01/2043	A1/A*		285,000		368,417
Metropolitan Government Nashville & Davidson County TN		6.731			07/01/2043	Aa3/A*		125,000		159,821
Pennington County SD Certificates of Participation Build America		7.200			06/01/2037	Aa2		750,000		862,620
Pompano Beach FL Certificates of Participation		5.579			01/01/2040	A1/AA-*		225,000		235,346
Rhode Island Convention Center		6.060			05/15/2035	Aa3/AA*/AA-@		70,000		78,574
Sarasota County FL Capital Improvement Revenue Build America		7.016			10/01/2040	AA+*/AA+@		710,000		827,782
										3,862,987
MUNICIPAL UTILITY REVENUE BONDS
25.98% of Net Assets
Altoona PA Water Authority Sewer Revenue Build America		7.064			12/01/2040	AA*		500,000		569,655
Davie FL Water & Sewer Revenue Build America		6.849			10/01/2040	Aa3/AA*		40,000		46,574
FL State Utility Revenue		6.548			10/01/2040	A2		60,000		66,769
Heber UT Light & Power Build America		7.000			12/15/2030	A2/A+@		500,000		554,255
Metrolpolitan Government Nashville & Davidson County TN Recovery Zone		6.693			07/01/2041	Aa3/AA-*		200,000		262,102
Pigeon Forge TN Build America Recovery Zone		7.125			06/01/2040	AA*		300,000		381,333
Sedalia MO Certificates of Participation Build America		7.300			06/01/2035	AA*		500,000		538,280
West Knox Utilities District Knox County TN Water and Sewer		6.900			06/01/2040	AA+*		400,000		481,108
Williamsport PA Municipal Water Authority Build America		6.100			01/01/2040	A2/AA*		60,000		62,672
York County VA Sewer Revenue Build America		6.607			06/01/2040	Aa3		100,000		111,784
										3,074,532
SCHOOL IMPROVEMENT BONDS
13.67% of Net Assets
Armstrong School District PA Build America		7.000			03/15/2041	AA*		750,000		857,385
CO State Building Excellent Schools Today Certificates of Participation		7.017			03/15/2031	Aa2/AA-*		400,000		472,232
Jefferson County TN Build America Bonds		6.625			06/01/2040	Aa3/A+*		250,000		288,453
										1,618,070
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS
10.31% of Net Assets
Downtown Smyrna Development Authority GA		6.900			02/01/2035	Aa1/AAA*		20,000		21,761
KY State Property & Buildings Build America		5.921			11/01/2030	Aa3/A*/A+@		250,000		294,693
Lincoln AL Build America Recovery Zone		6.800			06/01/2040	AA*		500,000		554,650
Scottsboro AL Build America Bonds		6.400			11/01/2040	A2/AA*		250,000		274,273
Utah County UT Excise Tax Revenue		7.130			12/01/2039	AA-*		65,000		74,563
										1,219,939
TURNPIKES/TOLLROAD/HIGHWAY BONDS
6.84% of Net Assets
FL State Turnpike Authority Turnpike Revenue Build America		6.800			07/01/2039	Aa3/AA-*/AA-@		300,000		336,762
Washoe County NV Highway Revenue		7.969			02/01/2040	A1/A+*		370,000		472,849
										809,611
HOSPITAL AND HEALTHCARE BONDS
4.21% of Net Assets
Midland County TX Hospital District		6.440			05/15/2039	Aa2/AA@		185,000		219,464
University NC Chapel Hill Hospital Revenue Build America		6.329			02/01/2031	Aa3/AA*		250,000		278,723
										498,186
MARINA/PORT AUTHORITY BONDS
2.16% of Net Assets
Miami Dade County FL Special Obligation		7.500			04/01/2040	Aa3/AA*		200,000		256,066

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

50

DUPREE MUTUAL FUNDS — TAXABLE MUNICIPAL BOND SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

Taxable Municipal Bonds

December 31, 2015

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS
1.07% of Net Assets
Mesa State College CO Auxiliary Facilities Build America		6.746	%		05/15/2042	Aa2/AA-*	$	100,000	$	126,109
Total Investments 96.87% of Net Assets (cost $10,233,503) (See (a) below for further explanation)									$	11,465,500
Other assets in excess of liabilities 3.13%										370,113
Net Assets 100%									$	11,835,613

* Standard and Poor’s Corporation

@ Fitch’s Investors Service

(All other ratings by Moody’s Investors Service, Inc.)

NR Not Rated

# Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm.

(a) Cost for federal income tax purposes is $10,233,503 and net unrealized appreciation of investments is as follows:

Unrealized appreciation	$	1,248,831
Unrealized depreciation		(16,834	)
Net unrealized appreciation	$	1,231,997

Other Information

The following is a summary of the inputs used, as of December 31, 2015, involving the Fund’s investments in securities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.

	Valuation Inputs	Taxable Municipal Bonds
Level 1	Quoted Prices	$	—
Level 2	Other Significant Observable Inputs		11,465,500
Level 3	Significant Unobservable Inputs		—
		$	11,465,500

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

51

TAXABLE MUNICIPAL BOND SERIES

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2015 UNAUDITED

ASSETS:
Investments in securities, at fair value (Cost: $10,233,503)		$	11,465,500
Cash			258,789
Interest receivable			142,760
Total assets			11,867,049
LIABILITIES:
Payable for:
Distributions to shareholders	18,339
Investment advisory fee	5,044
Transfer agent fee	1,465
Trustees fees	430
Accrued expenses	6,158
Total liabilities			31,436
NET ASSETS:
Capital			10,630,485
Accumulated net realized loss on investment transactions			(26,869	)
Net unrealized appreciation in value of investments			1,231,997
Net assets at value		$	11,835,613
NET ASSET VALUE, offering price and redemption price per share (1,117,460 shares outstanding; unlimited number of shares authorized; no par value)		$	10.59

STATEMENT OF OPERATIONS

For the six months ended December 31, 2015

Net investment income:
Interest income	$	328,165
Expenses:
Investment advisory fee		29,241
Transfer agent fee		8,772
Custodian expense		3,675
Professional fees		1,314
Trustees fees		605
Pricing		1,759
Other expenses		4,530
Total expenses		49,896
Custodian expense reduction		(18	)
Net expenses		49,878
Net investment income		278,287
Realized and unrealized gain on investments:
Net realized gain		—
Net change in unrealized appreciation/depreciation		67,841
Net realized and unrealized gain on investments		67,841
Net increase in net assets resulting from operations	$	346,128

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

52

TAXABLE MUNICIPAL BOND SERIES

STATEMENT OF CHANGES IN NET ASSETS

For the six months ended December 31, 2015 and the year ended June 30, 2015 UNAUDITED

	Six Months Ended 12/31/2015			Year Ended 06/30/2015
Operations:
Net investment income	$	278,287		$	603,910
Net realized gain on investments		—			10,924
Net change in unrealized appreciation/depreciation		67,841			(65,832	)
Net increase in net assets resulting from operations		346,128			549,002
Distributions from net investment income		(278,287	)		(603,910	)
Net fund share transactions (Note 4)		465,225			(1,011,672	)
Total increase/(decrease)		533,066			(1,066,580	)
Net assets:
Beginning of year		11,302,547			12,369,127
End of period	$	11,835,613		$	11,302,547

FINANCIAL HIGHLIGHTS

Selected data for a share outstanding:	Six Months  Ended 12/31/2015			For the years ended June 30,												For the period ended June 30, 2011*
				2015			2014			2013			2012
Net asset value, beginning of period		$10.53			$10.57			$10.45			$10.82			$9.65			$10.00
Income from investment operations:
Net investment income		0.25			0.52			0.51			0.51			0.52			0.34
Net gains/(losses) on securities		0.06			(0.04	)		0.18			(0.36	)		1.17			(0.35	)
Total from investment operations		0.31			0.48			0.69			0.15			1.69			(0.01	)
Less distributions:
Distributions from net investment income		(0.25	)		(0.52	)		(0.51	)		(0.51	)		(0.52	)		(0.34	)
Distributions from capital gains		—			—			(0.06	)		(0.01	)		—			—
Total distributions		(0.25	)		(0.52	)		(0.57	)		(0.52	)		(0.52	)		(0.34	)
Net asset value, end of period		$10.59			$10.53			$10.57			$10.45			$10.82			$9.65
Total return		3.00%	(b)		4.49%			6.90%			1.35%			17.77%			0.04%	(b)
Net assets, end of period (in thousands)		$11,836			$11,303			$12,369			$16,006			$16,042			$10,872
Ratio of net expenses to average net assets (a)		0.86%	(c)		0.83%			0.89%			0.83%			0.85%			0.49%	(c)
Ratio of gross expenses to average net assets		0.86%	(c)		0.83%			0.89%			0.83%			0.86%			0.50%	(c)
Ratio of net investment income to average net assets		4.79%	(c)		4.80%			4.95%			4.71%			4.95%			3.71%	(c)
Portfolio turnover		0.21%	(b)		8.45%			9.71%			9.57%			0.00%			89.93%	(b)

(a) Percentages are after expense waivers and reductions by the Adviser and Custodian. The Adviser and Custodian have agreed not to seek recovery of these waivers and reductions.

(b) Not annualized

(c) Annualized

* Represents the period from commencement of operations (November 1, 2010) through June 30, 2011.

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

53

DUPREE MUTUAL FUNDS UNAUDITED

NOTES TO FINANCIAL STATEMENTS

December 31, 2015

1. Organization and Significant Accounting Policies

Dupree Mutual Funds is registered under the Investment Company Act of 1940, as amended, as a no-load, open-end investment company. The Declaration of Trust of Dupree Mutual Funds (the “Trust”) permits the Trustees to create an unlimited number of series of investment portfolios (each a “Fund” and collectively, the “Funds”) and with respect to each series to issue an unlimited number of full or fractional shares of a single class. The Trust currently offers ten series:

Alabama Tax-Free Income Series

Kentucky Tax-Free Income Series

Kentucky Tax-Free Short-to-Medium Series

Mississippi Tax-Free Income Series

North Carolina Tax-Free Income Series

North Carolina Tax-Free Short-to-Medium Series

Tennessee Tax-Free Income Series

Tennessee Tax-Free Short-to-Medium Series

Intermediate Government Bond Series

Taxable Municipal Bond Series

The investment strategy of the eight state tax-free funds is to maintain 100% of their investments in their respective states of Alabama, Kentucky, Mississippi, North Carolina, or Tennessee municipal securities.

The Intermediate Government Bond Series’ investment strategy is to invest only in obligations of the U.S. Treasury and Agencies of the U.S. Government. The Intermediate Government Bond Series will buy bonds and notes that will maintain an average maturity of no more than ten years.

The Taxable Municipal Bond Series’ investment strategy is to invest in taxable municipal bonds of investment grade quality.

Each Fund is an investment company following accounting and reporting guidance in Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 946 – Investment Companies. The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements. The policies are in conformity with U.S. generally accepted accounting principles (U.S. GAAP)

A. Security Valuation

Securities held by the Intermediate Government Bond Series are valued using market quotations as provided by an independent pricing service. Securities held by the nine municipal bond funds are valued as determined in good faith in accordance with consistently applied procedures established by and under the general supervision of the Board of Trustees. These procedures involve the use of matrix pricing models which take into consideration price quotations or appraisals for these securities, yield, stability, risk, quality, coupon rate, maturity, type of issue, trading characteristics, special circumstances of a security or trading market, and any other factors or market data considered relevant in determining the value. The procedures also include weekly verification of market quotations provided by two independent pricing services. A bond valuation that is not supported by a valuation source requires management to fair value the security in consultation with the Board’s Valuation committee. Shares of open-end mutual funds in which the Funds invest are valued at their respective net asset values as reported by the underlying funds.

The Funds have adopted the provisions of ASC 820, “Fair Value Measurements and Disclosures”. ASC 820 establishes a hierarchy that prioritizes the inputs to valuation techniques giving the highest priority to readily available unadjusted quoted prices in active markets for identical assets (level 1 measurements) and the lowest priority to unobservable inputs (level 3

54

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NOTES TO FINANCIAL STATEMENTS

December 31, 2015

1. Organization and Significant Accounting Policies, continued

measurements) when market prices are not readily available or reliable. The three levels of the hierarchy under ASC 820 are described as follows:

Level 1:	Quoted prices in active markets for identical securities.
Level 2:	Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.
Level 3:	Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or deemed less relevant (for example, where there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available.

The aggregate value by input level, as of December 31, 2015, for the Funds’ investments is included at the end of the Funds’ Schedules of Portfolio Investments. The Funds recognize transfers at the end of the reporting period. There were no transfers in and out of level 1, 2 or 3 during the year ended December 31, 2015.

B. Investment Transactions

Security transactions are accounted for on a trade date basis. Gains and losses on securities sold are determined on an identified cost basis.

C. Investment Income

Interest income, which includes the amortization of premiums and the accretion of discounts, is recorded on an accrual basis.

D. When-Issued and Extended Settlement Securities

The Funds may purchase securities with delivery or payment to occur at a later date. At the time the Funds enter 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 value of the security may vary with market fluctuations. No interest accrues to the Funds until the security is delivered and payment takes place. At the time the Funds enter into this type of transaction, they are required to segregate cash or other liquid assets equal to the value of the securities purchased.

E. Federal Income Taxes

It is each Fund’s policy to qualify as a regulated investment company by complying with the requirements of the Internal Revenue Code (the “code”) applicable to regulated investment companies, including the distribution of all or substantially all taxable and tax-exempt income to their shareholders. The Funds have met the requirements of the code applicable to regulated investment companies for the year ended June 30, 2015. Therefore, no federal income tax provision is required. Management of the Funds has concluded that there are no uncertain tax provisions that would require recognition in the financial statements. Generally, the tax authorities can examine all the tax returns for the last three years.

F. Distributions

Substantially all of the net investment income of the Funds is declared as a dividend to shareholders of record as of the close of business each day. Distributions are payable in cash or in additional shares at the net asset value on the payable date. Distributions are determined in accordance with income tax regulations.

55

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NOTES TO FINANCIAL STATEMENTS

December 31, 2015

1. Organization and Significant Accounting Policies, continued

Distributions are payable:

Monthly for:	Kentucky Tax-Free Short-to-Medium Series North Carolina Tax-Free Short-to-Medium Series Tennessee Tax-Free Short-to-Medium Series Intermediate Government Bond Series Taxable Municipal Bond Series
Quarterly for:	Alabama Tax-Free Income Series Kentucky Tax-Free Income Series Mississippi Tax-Free Income Series North Carolina Tax-Free Income Series Tennessee Tax-Free Income Series

G. Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures. Actual amounts could differ from those estimates.

H. Subsequent Events

Subsequent events occurring after December 31, 2015 have been evaluated for potential impact to this report through the date the financial statements were issued. There were no subsequent events to report that would have a material impact on the Funds’ financial statements.

2. Investment Advisory Fee and Other Transactions with Affiliates

Subject to the direction of the Trustees, Dupree & Company, Inc. (the Adviser) is responsible for the management of the Funds’ portfolios. Under the terms of the Investment Advisory Agreements, the Funds (except the Intermediate Government Bond Series) have agreed to pay to the Adviser as compensation for all services rendered, facilities furnished and expenses paid or assumed by it under the Agreements, a fee at the annual rate of .50 of 1% of the first $100,000,000 average daily net assets of each Fund determined separately; .45 of 1% of the average daily net assets between $100,000,001 and $150,000,000 of each Fund determined separately; .40 of 1% of the average daily net assets between $150,000,001 and $500,000,000 of each Fund determined separately; .35 of 1% of the average daily net assets between $500,000,001 and 750,000,000; .30 of 1% of the average daily net assets between $750,000,001 and 1,000,000,000; and .25 of 1% of the average daily net assets in excess of $1,000,000,000. The Intermediate Government Bond Series has agreed to pay to the Adviser, as compensation for all services rendered, facilities furnished and expenses paid or assumed by it under the Agreement, a fee at the annual rate of .20 of 1% of average daily net assets.

The Adviser may voluntarily waive investment advisory fees payable to it under the Investment Advisory Agreement with each Fund, and assume and pay other operating expenses. The Adviser will not seek to recoup any waived fees or other operating expenses it has assumed.

For the six months ended December 31, 2015, fees voluntarily waived by the Adviser were as follows:

	Fees waived by Adviser
Alabama Tax-Free Income Series	$	9,752
Mississippi Tax-Free Income Series		9,752

In addition, each Fund has entered into a Shareholder Service Agreement with Dupree & Company, Inc, the Funds’ transfer agent. The agreement provides for a fee computed on the average daily net asset value at the annual rate of .15 of 1% on the first $20,000,000 of average net assets and .12 of 1% of all amounts in excess of $20,000,000 of average net assets for each Fund.

56

DUPREE MUTUAL FUNDS UNAUDITED

NOTES TO FINANCIAL STATEMENTS

December 31, 2015

3. Purchases and Sales of Securities

During the six months ended December 31, 2015, the cost of purchases and the proceeds from sales/calls and maturities of securities (excluding short-term securities and U.S. government obligations, except for the Intermediate Government Bond Series which are all U.S. government obligations) for each of the Funds were as follows:

	Purchases		Sales/Calls
Alabama Tax-Free Income Series	$	1,108,569	$	350,184
Kentucky Tax-Free Income Series		62,502,455		71,312,461
Kentucky Tax-Free Short-to-Medium Series		14,956,442		11,049,699
Mississippi Tax-Free Income Series		336,511		155,786
North Carolina Tax-Free Income Series		10,494,568		755,891
North Carolina Tax-Free Short-to-Medium Series		1,263,074		2,132,124
Tennessee Tax-Free Income Series		5,283,348		2,339,376
Tennessee Tax-Free Short-to-Medium Series		415,864		460,000
Intermediate Government Bond Series		—		364,710
Taxable Municipal Bond Series		567,545		20,000

4. Capital Shares

Transactions in capital shares were as follows:

ALABAMA TAX-FREE INCOME SERIES	Six Months Ended December 31, 2015						Year Ended June 30, 2015
	SHARES			AMOUNT			SHARES			AMOUNT
Shares sold		106,901		$	1,327,066			348,252		$	4,338,373
Shares reinvested		16,107			200,767			32,772			409,254
Shares redeemed		(52,917	)		(656,945	)		(213,988	)		(2,673,213	)
Net increase		70,091		$	870,888			167,036		$	2,074,414
KENTUCKY TAX-FREE INCOME SERIES	Six Months Ended December 31, 2015						Year Ended June 30, 2015
	SHARES			AMOUNT			SHARES			AMOUNT
Shares sold		4,128,497		$	32,444,868			11,235,815		$	89,064,324
Shares reinvested		1,192,912			9,406,042			2,409,836			19,091,862
Shares redeemed		(5,950,728	)		(46,763,918	)		(10,054,449	)		(79,704,854	)
Net increase/(decrease)		(629,319	)	$	(4,913,008	)		3,591,202		$	28,451,332
KENTUCKY TAX-FREE SHORT-TO-MEDIUM SERIES	Six Months Ended December 31, 2015						Year Ended June 30, 2015
	SHARES			AMOUNT			SHARES			AMOUNT
Shares sold		2,318,181		$	12,442,631			3,001,267		$	16,255,332
Shares reinvested		90,389			485,516			207,625			1,123,674
Shares redeemed		(1,418,792	)		(7,611,095	)		(3,359,239	)		(18,194,879	)
Net increase/(decrease)		989,778		$	5,317,052			(150,347	)	$	(815,873	)

57

DUPREE MUTUAL FUNDS UNAUDITED

NOTES TO FINANCIAL STATEMENTS

December 31, 2015

4. Capital Shares, continued

MISSISSIPPI TAX-FREE INCOME SERIES	Six Months Ended December 31, 2015						Year Ended June 30, 2015
	SHARES			AMOUNT			SHARES			AMOUNT
Shares sold		33,100		$	401,327			100,220		$	1,222,632
Shares reinvested		4,733			57,743			9,388			114,056
Shares redeemed		(26,883	)		(325,585	)		(77,047	)		(935,063	)
Net increase		10,950		$	133,485			32,561		$	401,625
NORTH CAROLINA TAX-FREE INCOME SERIES	Six Months Ended December 31, 2015						Year Ended June 30, 2015
	SHARES			AMOUNT			SHARES			AMOUNT
Shares sold		1,412,434		$	16,427,116			3,088,138		$	36,022,454
Shares reinvested		105,822			1,234,416			184,173			2,145,388
Shares redeemed		(700,317	)		(8,137,137	)		(1,109,825	)		(12,907,072	)
Net increase		817,939		$	9,524,395			2,162,486		$	25,260,770
NORTH CAROLINA TAX-FREE SHORT-TO-MEDIUM SERIES	Six Months Ended December 31, 2015						Year Ended June 30, 2015
	SHARES			AMOUNT			SHARES			AMOUNT
Shares sold		48,351		$	529,250			255,618		$	2,817,986
Shares reinvested		14,089			154,484			30,368			334,675
Shares redeemed		(168,086	)		(1,841,476	)		(396,396	)		(4,368,461	)
Net decrease		(105,646	)	$	(1,157,742	)		(110,410	)	$	(1,215,800	)
TENNESSEE TAX-FREE INCOME SERIES	Six Months Ended December 31, 2015						Year Ended June 30, 2015
	SHARES			AMOUNT			SHARES			AMOUNT
Shares sold		972,124		$	11,263,355			1,037,008		$	12,075,002
Shares reinvested		99,039			1,150,310			198,391			2,311,270
Shares redeemed		(939,766	)		(10,901,129	)		(793,632	)		(9,246,566	)
Net increase		131,397		$	1,512,536			441,767		$	5,139,706
TENNESSEE TAX-FREE SHORT-TO-MEDIUM SERIES	Six Months Ended December 31, 2015						Year Ended June 30, 2015
	SHARES			AMOUNT			SHARES			AMOUNT
Shares sold		51,302		$	554,428			73,983		$	801,525
Shares reinvested		6,353			68,646			13,478			145,797
Shares redeemed		(31,608	)		(341,662	)		(57,469	)		(620,686	)
Net increase		26,047		$	281,412			29,992		$	326,636

58

DUPREE MUTUAL FUNDS UNAUDITED

NOTES TO FINANCIAL STATEMENTS

December 31, 2015

4. Capital Shares, continued

INTERMEDIATE GOVERNMENT BOND SERIES	Six Months Ended December 31, 2015						Year Ended June 30, 2015
	SHARES			AMOUNT			SHARES			AMOUNT
Shares sold		52,636		$	547,138			92,710		$	966,480
Shares reinvested		17,603			182,606			41,002			426,297
Shares redeemed		(122,940	)		(1,276,495	)		(385,931	)		(3,995,974	)
Net decrease		(52,701	)	$	(546,751	)		(252,219	)	$	(2,603,197	)
TAXABLE MUNICIPAL BOND SERIES	Six Months Ended December 31, 2015						Year Ended June 30, 2015
	SHARES			AMOUNT			SHARES			AMOUNT
Shares sold		72,307		$	766,990			109,450		$	1,178,580
Shares reinvested		16,093			170,925			35,388			381,058
Shares redeemed		(44,566	)		(472,690	)		(241,897	)		(2,571,310	)
Net increase/(decrease)		43,834		$	465,225			(97,059	)	$	(1,011,672	)

5. Concentration of Credit Risk

The Alabama Tax-Free Income Series, Kentucky Tax-Free Income Series, Kentucky Tax-Free Short-to-Medium Series, Mississippi Tax-Free Income Series, North Carolina Tax-Free Income Series, North Carolina Tax-Free Short-to-Medium Series, Tennessee Tax-Free Income Series, and Tennessee Tax-Free Short-to-Medium Series each invest solely in debt obligations issued by the states of Alabama, Kentucky, Mississippi, North Carolina, and Tennessee, respectively, and their respective political subdivisions, agencies and public authorities to obtain funds for various public purposes. Each of these state-specific Funds is more susceptible to economic and political factors adversely affecting issuers of their states’ respective municipal securities than a fund that is not concentrated in these issuers to the same extent.

6. Federal Income Taxes

At June 30, 2015, the Funds’ capital loss carry-forwards expire as follows:

									No Expiration
	2016		2017		2018		2019		Long-term		Short-term		Total
Alabama Tax Free Income Series	$	—	$	—	$	—	$	—	$	—	$	43,422	$	43,422
Kentucky Tax-Free Short-to-Medium Series		227,932		223,976		—		—		—		—		451,908
North Carolina Tax-Free Income Series		—		—		—		—		—		566,595		566,595
North Carolina Tax-Free Short-to-Medium Series		—		—		—		—		1,526		—		1,526
Tennessee Tax-Free Income Series		—		—		371,142		—		—		269,012		640,154
Tennessee Tax-Free Short-to-Medium Series		23,418		—		—		—		234,112				257,530
Intermediate Government Bond Series		—		—		—		—		140,615		120,261		260,876
Taxable Municipal Bond Series		—		—		—		—		—		14,680		14,680

During the year ended June 30, 2015, the following Funds utilized capital loss carry-forwards as follows:

	Amount
Kentucky Tax-Free Short-to-Medium Series	$	30,005
Mississippi Tax-Free Income Series		7,068
Tennessee Tax-Free Income Series		29,862

During the year ended June 30, 2015 the following funds had losses expire:

	Amount
Kentucky Tax-Free Short-to-Medium Series	$	173,224
Tennessee Tax-Free Short-to-Medium Series		25,194
Intermediate Government Bond Series		21,143

59

DUPREE MUTUAL FUNDS UNAUDITED

NOTES TO FINANCIAL STATEMENTS

December 31, 2015

6. Federal Income Taxes, continued

Capital losses incurred after October 31 (“Post-October” losses) within the taxable year are deemed to arise on the first business day of the Fund’s next taxable year. The following Funds incurred and will elect to defer net capital losses during the fiscal year 2015 as follows:

	Post-October Losses
Intermediate Government Bond Series	$	(23,028	)
Taxable Municipal Bond Series		(12,189	)

During the year ended June 30, 2015, as a result of permanent book to tax differences, certain reclassifications have been made to undistributed (accumulated) net investment income (loss), accumulated net realized gain (loss) on investments and aggregate paid in capital by the amounts in the table below. The differences are primarily due to expiration of capital loss carryforwards and the reclass market discount securities upon disposition. Net assets were not affected by these reclassifications.

	Accumulated Net Realized Gain/Loss		Paid in Capital
Kentucky Tax-Free Income Series	$	182	$	(182	)
Kentucky Tax-Free Short-to-Medium Series		173,224		(173,224	)
North Carolina Tax-Free Income Series		1,615		(1,615	)
Tennessee Tax-Free Short-to-Medium Series		25,194		(25,194	)
Intermediate Government Bond Series		21,143		(21,143	)

The tax character of distributions paid for the years ended June 30, 2015 and 2014 were as follows:

	2015						2014
	Tax Exempt Income		Ordinary Income		Long-Term Capital Gain		Tax Exempt Income		Ordinary Income		Long-Term Capital Gain
Alabama Tax-Free Income Series	$	825,972	$	—	$	—	$	776,616	$	—	$	29,276
Kentucky Tax-Free Income Series		32,463,029		—		402,816		32,479,238		—		1,302,574
Kentucky Tax-Free Short-to-Medium Series		1,726,545		—		—		1,803,910		—		—
Mississippi Tax-Free Income Series		337,157		—		—		294,715		—		9,925
North Carolina Tax-Free Income Series		3,362,896		—		—		2,991,028		—		112,821
North Carolina Tax-Free Short-to-Medium Series		427,514		—		—		477,000		—		41,274
Tennessee Tax-Free Income Series		3,376,320		—		—		3,330,499		—		—
Tennessee Tax-Free Short-to-Medium Series		178,683		—		—		191,049		—		—
Intermediate Government Bond Series		—		535,178		—		—		611,046		—
Taxable Municipal Bond Series		—		603,910		—		—		666,273		69,960

At June 30, 2015, the Funds’ components of distributable earnings (accumulated losses) on a tax basis were as follows:

	Undistributed Ordinary Income		Undistributed Tax Exempt Income		Undistributed Net Long-term Capital Gain		Net Unrealized Appreciation/ Depreciation  on Investments
Alabama Tax-Free Income	$	—	$	105,643	$	—	$	1,150,438
Kentucky Tax-Free Income		—		3,237,741		193,248		48,292,581
Kentucky Tax-Free Short-to-Medium		—		52,818		—		1,728,087
Mississippi Tax-Free Income		—		56,131		2,935		459,162
North Carolina Tax-Free Income		—		307,738		—		4,303,480
North Carolina Tax-Free Short-to-Medium		—		6,719		—		485,770
Tennessee Tax-Free Income		—		271,057		—		4,863,387
Tennessee Tax-Free Short-to-Medium		—		2,625		—		203,560
Intermediate Government Bond		8,427		—		—		988,660
Taxable Municipal Bond Series		18,690		—		—		1,164,156

60

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NOTES TO FINANCIAL STATEMENTS

December 31, 2015

6. Federal Income Taxes, continued

	Accumulated Capital and Other Losses			Other Temporary Differences			Total Accumulated Earnings/(Deficit)
Alabama Tax-Free Income	$	(43,422	)	$	(105,643	)	$	1,107,016
Kentucky Tax-Free Income					(3,237,741	)		48,485,829
Kentucky Tax-Free Short-to-Medium		(451,909	)		(52,818	)		1,276,178
Mississippi Tax-Free Income		—			(56,193	)		462,035
North Carolina Tax-Free Income		(566,595	)		(307,738	)		3,736,885
North Carolina Tax-Free Short-to-Medium		(1,526	)		(6,719	)		484,244
Tennessee Tax-Free Income		(640,154	)		(271,057	)		4,223,233
Tennessee Tax-Free Short-to-Medium		(257,530	)		(2,625	)		(53,970	)
Intermediate Government Bond		(283,906	)		(8,427	)		704,754
Taxable Municipal Bond Series		(26,869	)		(18,690	)		1,137,287

7. Contingencies and Commitments

The Funds indemnify the Trust’s officers and Trustees for certain liabilities that might arise from the performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts that contain a variety of representations and warranties and which may provide for indemnification. The Funds’ maximum exposure under these arrangements is unknown, as this would involve predicting future claims that may be made against the Funds, if any. However, based on experience, the Funds believe the risk of loss is remote.

8. Line of Credit Agreement and Custodian Agreement

Under the terms of an agreement with the Funds’ custodian, principal amounts up to 5% of a Fund’s net assets are available on a committed line of credit. The principal amounts borrowed are due on demand. The agreement expires on August 31, 2016, but may be renewed annually. Interest is payable based on the published prime rate of the bank. Securities with a minimum value of three times the loan proceeds will be assigned as collateral until the balance of the note and unpaid interest is paid in full and terminated.

At December 31, 2015, the Funds had an aggregate unused line of credit amount of $24,297,000. During the six months ended December 31, 2015, the average interest rate on borrowings was 3.26% and the daily weighted average borrowings for each Fund with borrowings were as follows:

	Weighted average borrowings
Alabama Tax-Free Income Series	$	1,707
Kentucky Tax Free Income Series		29,125
Kentucky Tax-Free Short-to-Medium Series		14,674
Mississippi Tax-Free Income Series		582
North Carolina Tax-Free Income Series		2,234
North Carolina Tax-Free Short-to-Medium Series		7,609
Tennessee Tax-Free Income Series		27,792
Intermediate Government Bond Series		3,391

The Funds have a contractual agreement with the custodian whereby the Funds compensate the custodian for custodial services incurred exceeding the credits realized as a result of uninvested cash balances. Credits realized as a result of uninvested cash balances are used to reduce each Fund’s expenses. During the six months ended December 31, 2015, these credits reduced each of the Fund’s expenses by the amount shown on the Statement of Operations as “Custodian expense reduction.”

61

DUPREE MUTUAL FUNDS UNAUDITED

OTHER UNAUDITED INFORMATION

December 31, 2015

Trustee and officer information

The following table sets forth information as to the Trustees and officers:

Name, Address and Age	Position(s) held with Funds	Term of Office and Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee	Other Directorships Held by  Trustee
Officers of the Trust
Thomas P. Dupree, Sr. 125 South Mill Street Lexington, KY 40507 Age: 85	President	Annual Term; 36 Years of Service	Chairman, Dupree & Company, Inc. (broker/dealer/investment adviser)	N/A	N/A
Allen E. Grimes, III 125 South Mill Street Lexington, KY 40507 Age: 53	Executive Vice President	Annual Term; 10 Years of Service	President, Dupree & Company, Inc. (broker/dealer/investment adviser);	N/A	N/A
Michelle M. Dragoo 125 South Mill Street Lexington, KY 40507 Age: 54	Vice President, Secretary, Treasurer	Annual Term; 17 Years of Service as Vice President, 15 years of service as Secretary, Treasurer	Vice President, Secretary, Treasurer of Dupree & Company, Inc. (broker/dealer/investment adviser)	N/A	N/A
Vince Harrison 125 South Mill Street Lexington, KY 40507 Age: 44	Assistant Secretary, Assistant Treasurer	Annual Term First Year of Service	Vice President, Dupree & Company, Inc. (broker/dealer/investment adviser).	N/A	N/A
Gay M. Elste P.O. Box 28 Versailles, KY 40383 Age: 64	Compliance Officer; elected by Trustees	Annual Term; 11 Years of Service	Attorney at Law, Darsie & Elste; Anstruther Farm (cattle farming)	N/A	N/A
Trustees:
William A. Combs, Jr. 111 Woodland Ave, #510 Lexington, KY 40502 Age: 75	Chairman, Trustee	Annual Term; 14 Years of Service as Chairman; 27 Years of Service as Trustee	Officer, Director: Mercedes-Benz of Cincinnati, Ohio (1988-present); Mercedes-Benz of West Chester, Ohio (2003-present)	10	N/A
James C. Baughman, Jr. 1999 Richmond Road Suite 2A Lexington, KY 40502 Age: 53	Trustee	Annual Term; 8 Years of Service	President, CJN Advisors, LLC (2013-present; business consulting); President, Blue Horse Entries, LLC (2014-present; online business support services for equestrian events); Chief Executive Officer, Secretary, Treasurer, Director Office Suites Plus, Inc. (1998-2013; executive office space rental)	10	Advisory Board, Community Trust Bank, Lexington, KY
C. Timothy Cone 201 West Short Street Lexington, KY 40507 Age: 71	Trustee Chair of Nominating Committee	Annual Term; 13 Years of Service	President, Gess, Mattingly & Atchison, P.S.C. (1994-present; law firm)	10	N/A
Ann Rosenstein Giles 343 Waller Avenue Suite 100 Lexington, KY 40504 Age: 64	Trustee Chair of Valuation Committee	Annual Term; 4 Years of Service	AJ Marketing Partners (self-employed marketing consultant; 1987-present)	10	N/A
Marc A. Mathews, CPA, CTP 2104 Lakeside Drive Lexington, KY 40502 Age: 57	Trustee Chair of Audit committee	Annual Term; 4 Years of Service	Vice President for Finance and Business, Transylvania University (2009-present)	10	Director, Bank of the Bluegrass

62

DUPREE MUTUAL FUNDS UNAUDITED

OTHER UNAUDITED INFORMATION

December 31, 2015

Trustee and officer information, continued

As of December 31, 2015, none of the Trustees nor members of their immediate family held any beneficial interest in the Trust’s Investment Adviser. Further, the Trust does not have an underwriter.

The Statement of Additional Information (“SAI”) includes additional information about Trustees and officers and is available upon request without charge. Please call (800) 866-0614 to request the SAI.

Proxy Voting Information

A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available without charge upon request by calling (800) 866-0614, or on the Securities and Exchange Commission’s website at http://www.sec.gov. For the year ending June 30, 2015, the Funds exercised no proxy votes due to the fact that the debt instruments in which the Funds invest carry no voting rights.

Quarterly Portfolio Disclosure

The Trust files with the Securities and Exchange Commission a complete listing of portfolio holdings for each Fund as of the end of the first and third quarters of each fiscal year on Form N-Q. The complete listing (i) is available on the commission’s website and (ii) will be made available to shareholders upon request by calling (800) 866-0614. Information on the operation of the S.E.C.’s Public Reference Room may be obtained by calling 1-800-SEC-0300.

63

DUPREE MUTUAL FUNDS UNAUDITED

OTHER UNAUDITED INFORMATION

December 31, 2015

Schedule of Shareholder Expenses

As a shareholder of the Funds, you incur transaction costs including investment advisory fees and other Fund expenses. The following examples are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds.

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that 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 first line under the heading entitled “Expenses Paid During the Six Months Ended December 31, 2015” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the table below provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses which is not the Funds’ actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

	Net Expense Ratio Annualized December 31, 2015			Beginning Account Value July 1, 2015*		Ending Account Value December 31, 2015**		Expenses Paid During the Six Months Ended December 31, 2015
Alabama Tax-Free Income Series
Actual		.72	%	$	1,000.00	$	1,013.96	$	3.64
Hypothetical		.72			1,000.00		1,025.21		3.66
Kentucky Tax-Free Income Series
Actual		.55			1,000.00		1,012.85		2.80
Hypothetical		.55			1,000.00		1,025.21		2.82
Kentucky Tax-Free Short-to-Medium Series
Actual		.73			1,000.00		1,007.95		3.69
Hypothetical		.73			1,000.00		1,025.21		3.72
Mississippi Tax-Free Income Series
Actual		.71			1,000.00		1,017.24		3.59
Hypothetical		.71			1,000.00		1,025.21		3.61
North Carolina Tax-Free Income Series
Actual		.70			1,000.00		1,015.12		3.58
Hypothetical		.70			1,000.00		1,025.21		3.59
North Carolina Tax-Free Short-to-Medium Series
Actual		.84			1,000.00		1,005.04		4.23
Hypothetical		.84			1,000.00		1,025.21		4.27
Tennessee Tax-Free Income Series
Actual		.71			1,000.00		1,013.86		3.61
Hypothetical		.71			1,000.00		1,025.21		3.63
Tennessee Tax-Free Short-to-Medium Series
Actual		.87			1,000.00		1,007.51		4.40
Hypothetical		.87			1,000.00		1,025.21		4.44

64

DUPREE MUTUAL FUNDS UNAUDITED

OTHER UNAUDITED INFORMATION

December 31, 2015

Schedule of Shareholder Expenses, continued

	Net Expense Ratio Annualized December 31, 2015			Beginning Account Value July 1, 2015*		Ending Account Value December 31, 2015**		Expenses Paid During the Six Months Ended December 31, 2015
Intermediate Government Bond Series
Actual		.53	%	$	1,000.00	$	1,013.43	$	2.67
Hypothetical		.53			1,000.00		1,025.21		2.70
Taxable Municipal Bond Series
Actual		.86			1,000.00		1,015.12		4.36
Hypothetical		.86			1,000.00		1,025.21		4.38

* The example is based on an investment of $1,000 invested at the beginning of the period.

** Expenses are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period multiplied by [184/365] (to reflect one-half year period).

Shareholder Meeting

A meeting of Shareholders was held on October 27, 2015. The purpose of the meeting was (i) to elect James C. Baughman, Jr., William Combs, Jr., C. Timothy Cone, Marc A. Mathews, and Ann Rosenstein Giles as Trustees and (ii) to ratify the selection of Ernst & Young LLP as the Trust’s independent auditors for the fiscal year ending June 30, 2016. The results of all matters voted on by shareholders at the Shareholder Meeting held October 27, 2015 were as follows:

A. Election of Trustees:

	FOR		WITHHELD		TOTAL
James C. Baughman		91,328,901.496		627,532.197		91,956,433.693
William A. Combs		103,080,041.930		627,532.197		103,707,574.127
C. Timothy Cone		103,237,163.418		627,532.197		103,864,695.615
Ann Rosenstein Giles		102,663,219.912		627,532.197		103,290,752.109
Marc A. Mathews		107,103,047.312		627,532.197		107,730,579.509

Cumulative voting rights were exercised in the election of Trustees. The total proxy votes are distributed among those individuals selected.

B. Ratification of Ernst & Young LLP as independent accountants for the fiscal year 2016:

	FOR		AGAINST		ABSTAIN		TOTAL
Ernst & Young LLP		99,249,611.415		1,809,191.608		1,051,204.117		102,110,007.140

C. Other business:

	FOR		AGAINST		ABSTAIN		TOTAL
Other business		80,712,178.966		17,687,360.412		3,710,467.762		102,110,007.140

A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available without charge upon request by calling (800) 866-0614, or on the Securities and Exchange Commission’s website at http://www.sec.gov.

65

Item 2. Not applicable.

Item 3. Audit Committee Financial Expert: Audit Committee Financial Expert: The board does not have a financial expert serving on the audit committee. The registrant’s audit committee is comprised of all Trustees all of whom are non-interested and independent. The audit committee believes that the collective experience and expertise of the members in assessing the performance of companies and the evaluation of financial statements is sufficient to assess the issues which can reasonably be expected to be raised by the Trust’s financial statements.

Item 4. Not applicable.

Item 5. Not applicable.

Item 6. Included as part of item 1.

Item 7. Not applicable

Item 8. Not applicable.

Item 9. Not applicable

Item 10. There have been no changes to the procedures by which shareholders may recommend nominees to the board of trustees nominating committee.

Item 11. Controls and Procedures:

On February 8, 2016 the Registrant’s Executive Vice President and Treasurer assessed the disclosure controls and procedures to evaluate the effectiveness of the Registrant’s disclosure controls and procedures designed to ensure that information required to be disclosed by the investment company on Form N-CSR is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an investment company in the reports that it files on Form N-CSR is accumulated and communicated to the investment company’s management, including its principal executive and principal financial officers or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Further, on February 8, 2016 the Registrant’s Executive Vice President and Treasurer assessed the internal control over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the investment company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the investment company are being made only in accordance with authorizations of management and trustees of the investment company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the investment company’s assets that could have a material effect on the financial statements.

The Registrant’s Executive Vice President and Treasurer have deemed the disclosure controls and procedures and the internal control over financial reporting effective. There were no changes in the Registrant’s disclosure controls and procedures or internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that materially affected or is reasonably likely to materially affect the Registrant’s financial statements.

Item 12. Exhibits

(a)

(1) Not applicable

(2) Certifications

(3) Not applicable

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.

Dupree Mutual Funds
By:	/s/    Michelle M. Dragoo
	Michelle M. Dragoo,
	Vice President, Secretary, Treasurer
Date: February 8, 2016

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/    Allen E. Grimes, III
	Allen E. Grimes, III
Date: February 8, 2016
By:	/s/    Michelle M. Dragoo
	Michelle M. Dragoo,
	Vice President, Secretary, Treasurer
Date: February 8, 2016