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

UNITED STATES

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, 2017

Date of reporting period: December 31, 2016

Item 1. Report to Stockholders

December 31, 2016

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. All of our single state municipal bond funds are 100% “no-load”. 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	31
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	63
Board of Trustee Approval of Existing Advisory Agreements	65
Schedule of Shareholder Expenses	70
Shareholder Meeting	71

Management’s Discussion of Fund Performance: (Unaudited)

Six Months Ended December 31, 2016

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, 2016 (the “reporting period”), economic activity expanded at a moderate pace. Real gross domestic product (GDP) increased at an annual rate of 3.5 percent in the third quarter. Economic growth in the fourth quarter slowed significantly with real GDP increasing at only a 1.9 percent (advance estimate) annual rate. Economic growth has continued to fall below the trend rate of growth (real GDP rose just 1.6 percent for 2016 as a whole), which is partially the result of lingering headwinds from the financial crisis.

Conditions in the labor market continued to improve during the reporting period. The seasonally adjusted national unemployment rate was 4.7 percent in December. For all of 2016, job gains averaged about 180,000 per month. The unemployment rate is now close to estimates of its longer-run normal level. Both the labor force participation rate and the employment-to-population ratio are still much lower than historical averages. However, this appears to mostly reflect the aging of the population and other secular trends. Average hourly earnings increased at a 2.9 percent annual rate in December which is the highest level since 2009.

Key measures of inflation continued to move higher during the second half of the year and are now at levels closer to the Federal Open Market Committee’s 2 percent objective. The rise in inflation was largely anticipated and mainly reflected increases in energy prices and prices of non-energy imports. The Consumer Price Index (CPI) increased at a 2.1 percent annual rate in December. The core CPI, which excludes food and energy prices, increased at a 2.2 percent annual rate in December. The Fed’s preferred inflation gauge, the core Personal Consumption Expenditures Index (“PCE”), increased by 1.7 percent on a year-over-year basis in December. Longer run inflation expectations have remained relatively stable.

In response to a firmer labor market and a pickup in the rate of inflation, the Federal Reserve Board (“Fed”) increased the federal funds target rate range by 25 basis points in December to 0.50 to 0.75 percent. The statement issued by the Fed in December reiterated that “it expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate.” The Fed also maintained its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities and rolling over maturing Treasury securities at auction.

Treasury and tax-exempt bond yields moved higher during the reporting period. Yields spiked higher after the Presidential election on November 8. The sudden jump in yields was precipitated by market concerns that a new Trump administration would add a significant fiscal boost to the economy which, in turn, would lead to higher growth rates, higher inflation, and larger budget deficits. Tax-exempt yields on benchmark 10-year and 30-year AAA rated municipal securities increased by 102 and 96 basis points, respectively, during the reporting period. As bond yields increased, the prices of bonds decreased. Credit conditions in the municipal bond market remained stable during the reporting period and default rates of investment grade municipal bonds remained at historically low levels.

There is evidence that many states are seeing softening state tax collections. According to data compiled by the Rockefeller Institute of Government, state and local government revenue from major taxes declined by 0.5 percent in the second quarter of 2016 compared to a year earlier, a substantial deterioration from the 5.0 percent average growth for the four previous quarters. The recent state tax revenue weakness has been driven by a number of factors. Personal income tax collections were negatively impacted by weakness in the stock market and corporate income tax collections experienced outright declines. Sales tax growth was also weak due to slower growth in consumption of taxable goods and services.

i

Most states expect that weak revenue conditions will carry into fiscal 2017, which ends in summer 2017 for most states. A number of states are already seeing general fund revenues coming in below original budget projections for fiscal 2017, and some states may have to resort to mid-year spending reductions to address these shortfalls. State budgets will also likely be impacted in fiscal 2017 by federal tax reform that is currently being considered by Congress. Unfunded pension and healthcare obligations still present challenges for a number of states, with the Commonwealth of Kentucky being a notable example of a state that is faced with large unfunded pension obligations.

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

During the reporting period, bonds experienced negative total returns as price declines exceeded income earned from coupon payments. Shorter-dated bonds generally outperformed longer-dated bonds during the reporting period. This resulted in all of our Tax-Free Short-to-Medium Series having total returns that were slightly better than those generated by our Tax-Free Income Series. Due to their shorter duration, all eight of our single-state municipal bond funds performed either in line with or better than the Barclays Capital Municipal Bond Index (“BCMBI”) during the reporting period.

The Kentucky Tax-Free Income Series achieved a total return of -3.21 percent during the reporting period compared to a total return of -3.91 percent for the BCMBI. The Kentucky Tax-Free Short-to-Medium Series achieved a total return of -2.99 percent during the reporting period compared to a total return of -3.91 percent for the BCMBI.

The Tennessee Tax-Free Income Series achieved a total return of -3.27 percent during the reporting period compared to a total return of -3.91 percent for the BCMBI. The Tennessee Tax-Free Short-to-Medium Series achieved a total return of -2.17 percent during the reporting period compared to -3.91 percent for the BCMBI.

The North Carolina Tax-Free Income Series achieved a total return of -3.95 percent during the reporting period compared to -3.91 percent for the BCMBI. The North Carolina Tax-Free Short-to-Medium Series achieved a total return of -2.55 percent during the reporting period compared to -3.91 percent for the BCMBI.

The Alabama Tax-Free Income Series achieved a total a total return of -3.09 percent during the reporting period compared to -3.91 percent for the BCMBI.

The Mississippi Tax-Free Income Series achieved a total return of -3.15 percent during the reporting period compared to -3.91 percent for the BCMBI.

The Intermediate Government Bond Series achieved a total return of -3.21 percent during the reporting period compared to -2.42 percent for the Barclays Capital U.S. Government Intermediate Bond Index. The longer duration of the fund compared with the index (5.38 v. 3.90 years) caused it to underperform the index.

The Taxable Municipal Bond Series achieved a total return of -1.92 percent during the reporting period compared to -4.68 percent for the Barclays Capital Taxable Municipal Bond Index. The shorter duration of the fund compared with the index (7.45 v. 9.31 years) caused it to outperform the index.

It should be noted that the 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 the confidence you have placed in us. Thank you for investing with Dupree Mutual Funds.

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, 2016. 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.

Kentucky Tax-Free Income Series
CREDIT QUALITY*	% of Net Assets at Fair Value
Aaa/AAA		1.31%
Aa/AA		85.17%
A		8.76%
B		0.32%
Not Rated		4.44%
		100.00%
COMPOSITION
	% of Net Assets
Prerefunded		23.98%
Miscellaneous Public Improvement		17.96%
Refunded		9.05%
Turnpikes and Toll Roads Revenue		8.84%
Municipal Utility Revenue		8.77%
University Consolidated Education and Building Revenue		8.77%
School Improvements		8.38%
Hospital and Healthcare Revenue		6.52%
Public Facilities Revenue		3.36%
Airport Revenue		1.09%
State and Local Mortgage Revenue		0.91%
Miscellaneous Revenue		0.23%
Other Assets Less Liabilities		2.14%
		100.00%

Alabama Tax-Free Income Series
CREDIT QUALITY*	% of Net Assets at Fair Value
Aaa/AAA		1.55%
Aa/AA		90.50%
A		5.88%
Not Rated		2.07%
		100.00%
COMPOSITION
	% of Net Assets
Prerefunded		23.43%
School Improvement Revenue		21.29%
Municipal Utility Revenue		18.82%
Public Facilities Revenue		12.04%
Miscellaneous Public Improvement		6.79%
University Consolidated Education and Building Revenue		6.40%
Refunded		5.85%
Hospital and Healthcare Revenue		3.35%
State and Local Mortgage Revenue		0.38%
Industrial Revenue		0.05%
Other Assets Less Liabilities		1.60%
		100.00%

Kentucky Tax-Free Short-to-Medium Series
CREDIT QUALITY*	% of Net Assets at Fair Value
Aaa/AAA		0.26%
Aa/AA		92.75%
A		6.99%
		100.00%
COMPOSITION
	% of Net Assets
Miscellaneous Public Improvement		21.89%
School Improvements		18.73%
University Consolidated Education and Building Revenue		12.34%
Public Facilities Revenue		12.15%
Turnpikes and Toll Roads Revenue		10.31%
Refunding		9.04%
Municipal Utility Revenue		5.75%
Hospital and Healthcare Revenue		5.19%
Prerefunded		2.19%
Other Assets Less Liabilities		2.41%
		100.00%

Mississippi Tax-Free Income Series
CREDIT QUALITY*	% of Net Assets at Fair Value
Aaa/AAA		0.22%
Aa/AA		83.93%
A		15.76%
Not Rated		0.09%
		100.00%
COMPOSITION
	% of Net Assets
Prerefunded		27.79%
University Consolidated Education and Building Revenue		26.26%
Public Facilities Revenue		14.84%
Municipal Utility Revenue		11.60%
Turnpikes and Toll Roads Revenue		5.51%
School Improvement Revenue		4.49%
Hospital and Healthcare Revenue		3.16%
Refunded		1.72%
Miscellaneous Public Improvement		1.26%
State and Local Mortgage Revenue		0.21%
Other Assets Less Liabilities		3.16%
		100.00%

iii

The illustrations below provide each Fund’s sector allocation and

summarize key information about each Fund’s investments.

Tennessee Tax-Free Income Series
CREDIT QUALITY*	% of Net Assets at Fair Value
Aaa/AAA		2.11%
Aa/AA		84.43%
A		10.48%
Not Rated		2.98%
		100.00%
COMPOSITION
	% of Net Assets
Municipal Utility Revenue		38.69%
Prerefunded		19.94%
Public Facilities Revenue		10.32%
University Consolidated Education and Building Revenue		8.13%
Refunded		6.58%
Hospital and Healthcare Revenue		6.03%
Miscellaneous Public Improvement		2.11%
State and Local Mortgage Revenue		2.07%
Airport Revenue		1.83%
School Improvement Revenue		1.45%
Industrial Revenue		0.88%
Escrowed to Maturity		0.05%
Other Assets Less Liabilities		1.92%
		100.00%

North Carolina Tax-Free Income Series
CREDIT QUALITY*	% of Net Assets at Fair Value
Aaa/AAA		5.58%
Aa/AA		78.25%
A		15.36%
Not Rated		0.81%
		100.00%
COMPOSITION
	% of Net Assets
Prefunded		19.00%
University Consolidated Education and Building Revenue		17.28%
Municipal Utility Revenue		13.50%
Hospital and Healthcare		12.46%
Refunded		9.63%
School Improvement Revenue		8.52%
Public Facilities Revenue		5.59%
Miscellaneous Public Improvement		5.06%
Airport Revenue		3.12%
Turnpikes and Toll Roads Revenue		1.58%
Escrowed to Maturity		1.45%
Lease Revenue		1.16%
Miscellaneous Revenue		0.38%
Other Assets Less Liabilities		1.27%
		100.00%

Tennessee Tax-Free Short-to-Medium Series
CREDIT QUALITY*	% of Net Assets at Fair Value
Aa/AA		77.64%
A		18.84%
Not Rated		3.52%
		100.00%
COMPOSITION
	% of Net Assets
Prerefunded		24.77%
Public Facilities Revenue		17.30%
Municipal Utility Revenue		15.77%
Refunded		12.40%
School Improvement Revenue		9.88%
University Consolidated Education and Building Revenue		5.89%
Miscellaneous Public Improvement		4.62%
State and Local Mortgage Revenue		2.78%
Hospital and Healthcare Revenue		2.52%
Airport Revenue		0.99%
Escrowed to Maturity		0.23%
Other Assets Less Liabilities		2.85%
		100.00%

North Carolina Tax-Free Short-to-Medium Series
CREDIT QUALITY*	% of Net Assets at Fair Value
Aaa/AAA		5.83%
Aa/AA		81.87%
A		12.08%
Not Rated		0.22%
		100.00%
COMPOSITION
	% of Net Assets
Refunded		23.77%
Prerefunded		21.30%
Municipal Utility Revenue		11.47%
School Improvement Revenue		10.91%
Public Facilities Revenue		6.82%
Hospiptal and Healthcare Revenue		5.37%
Miscellaneous Public Improvement		5.10%
Escrowed to Maturity		3.95%
University Consolidated Education and Building Revenue		3.62%
Turnpikes and Toll Roads Revenue		1.57%
Ad Valorem Property		1.39%
Lease Revenue		1.26%
Airport Revenue		0.51%
Other Assets Less Liabilities		2.96%
		100.00%

iv

The illustrations below provide each Fund’s sector allocation and

summarize key information about each Fund’s investments.

Intermediate Government Bond Series
CREDIT QUALITY*	% of Net Assets at Fair Value
Aaa/AAA		100.00%
COMPOSITION
	% of Net Assets
Federal Farm Credit		62.11%
Federal Home Loan Bank		31.47%
Federal National Mortgage Association		5.48%
Other Assets Less Liabilities		0.94%
		100.00%

Taxable Municipal Bond Series
CREDIT QUALITY*	% of Net Assets at Fair Value
Aa/AA		88.52%
A		11.48%
		100.00%
COMPOSITION
	% of Net Assets
Public Facilities Revenue		30.38%
Municipal Utility Revenue		27.38%
School Improvement Revenue		14.62%
Miscellaneous Public Improvement		11.81%
Hospital and Healthcare Revenue		4.53%
Turnpikes and Toll Roads Revenue		3.77%
Marina and Port Authority Revenue		2.47%
Sales Tax Revenue		2.24%
University Consolidated Education and Building Revenue		1.13%
Other Assets Less Liabilities		1.67%
		100.00%

* Ratings by Moody’s Investors Services, Inc. unless noted otherwise. See Schedule of Portfolio Investments for individual bond ratings.

v

DUPREE MUTUAL FUNDS — ALABAMA TAX-FREE INCOME SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

Alabama Municipal Bonds

December 31, 2016

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
PREREFUNDED BONDS
23.43% of Net Assets
AL State Public School & College Authority Capital Improvement		5.000	%		12/01/2024	Aa1	$	100,000	$	103,647
AL State Public School & College Authority Capital Improvement		5.000			12/01/2025	Aa1		640,000		663,366
AL State Public School & College Authority Refinancing		5.000			05/01/2024	Aa1		125,000		135,034
Albertville AL Warrants		5.000			02/01/2035	AA*		110,000		118,207
Auburn University AL General Fee Revenue		5.000			06/01/2033	Aa2		420,000		427,081
Auburn University AL General Fee Revenue		5.000			06/01/2022	Aa2		50,000		52,637
Auburn University AL General Fee Revenue		5.000			06/01/2036	Aa2		150,000		170,234
Birmingham AL Waterworks Board Water Revenue		4.750			01/01/2036	Aa2		215,000		239,390
Elmore County AL Public Education Cooperative		5.000			08/01/2032	Aa3		50,000		51,133
Fort Payne AL Waterworks Board Water Revenue		4.750			07/01/2034	AA-*		100,000		107,928
Huntsville AL Public Building Authority Lease Revenue		5.000			10/01/2027	Aa1		130,000		131,323
Huntsville AL Public Building Authority Lease Revenue		5.000			10/01/2033	Aa1		65,000		65,662
Jacksonville AL State University		5.125			12/01/2033	AA*		235,000		251,984
Madison County AL Board of Education Capital Outlay Tax		4.950			09/01/2025	Aa3		100,000		106,075
Madison County AL Board of Education Capital Outlay Tax		5.100			09/01/2028	Aa3		285,000		303,018
Madison County AL Board of Education Capital Outlay Tax		5.125			09/01/2034	Aa3		505,000		537,133
Mobile AL Public Education Building Authority		5.000			03/01/2033	A3		200,000		208,940
Muscle Shoals AL Utilities Board Water & Sewer		5.750			12/01/2033	NR		330,000		357,746
Muscle Shoals AL Utilities Board Water & Sewer		5.750			12/01/2033	AA-*		100,000		108,428
North Marshall AL Utilities Board Water Revenue		5.100			10/01/2030	AA*		375,000		399,743
Phenix City AL Water & Sewer		5.000			08/15/2034	A3		75,000		81,670
Tallassee AL Water Gas & Sewer Warrants		5.125			05/01/2036	A2		65,000		72,324
Troy AL Public Educational Building Authority		5.250			12/01/2036	A2		195,000		220,742
Tuscaloosa AL Public Education Building Authority Student Housing		6.375			07/01/2028	AA*		250,000		268,898
Tuscaloosa AL Public Education Building Authority Student Housing		6.750			07/01/2033	AA*		495,000		535,174
University of South AL University Revenues Facilities		5.000			08/01/2029	Aa1		550,000		582,016
University of South AL University Revenues Facilities		4.750			08/01/2033	Aa1		100,000		105,430
										6,404,963
SCHOOL IMPROVEMENT BONDS
21.29% of Net Assets
Alabaster AL Board of Education Special Tax Warrants		5.000			09/01/2039	A1		600,000		664,302
Decatur City AL Board of Education Special Tax		5.000			02/01/2040	Aa3		225,000		248,581
Etowah County AL Board of Education Capital Outlay Tax		5.000			09/01/2037	A+*		200,000		220,484
Jasper AL Warrants		5.000			03/01/2032	A2		450,000		503,037
Limestone County AL Board of Education		5.000			07/01/2033	AA*		255,000		283,246
Madison AL School Warrants		4.000			02/01/2034	Aa2		350,000		363,234
Madison County AL Board of Education Capital Outlay		5.000			09/01/2031	Aa3		660,000		750,361
Marshall County AL Board of Education Special Tax School Warrants		4.000			03/01/2033	A2		250,000		258,533
Montgomery AL Warrants		5.000			03/01/2028	Aa1		35,000		35,228
Montgomery County AL Board of Education Capital Outlay School Warrants		5.000			09/01/2039	AA*		150,000		165,551
Morgan County AL Board of Education Capital Outlay Warrants		5.000			03/01/2035	AA-*		1,050,000		1,170,960
Opelika AL Warrants		5.000			11/01/2031	Aa2		150,000		168,651
Phenix City AL School Warrants		5.000			08/01/2024	AA-*		80,000		80,248
Shelby County AL Board of Education Capital Outlay Warrants		5.000			02/01/2031	Aa2		615,000		673,856
Shelby County AL Board of Education Special Tax School Warrants		5.000			02/01/2025	Aa3		5,000		5,008
Sumter County AL Limited Obligation School Warrants		5.100			02/01/2034	NR		100,000		101,536
Sumter County AL Limited Obligation School Warrants		5.200			02/01/2039	NR		95,000		96,382
Troy AL Public Educational Building Authority		5.250			12/01/2036	A2		30,000		33,050
										5,822,248
MUNICIPAL UTILITY REVENUE BONDS
18.82% of Net Assets
Auburn AL Waterworks Board Water Revenue		5.000			09/01/2036	Aa2		250,000		281,201
Bessemer AL Governmental Utility Services Water Supply		4.750			06/01/2033	A2		100,000		101,213
Birmingham AL Waterworks Board Water Revenue		5.000			01/01/2026	Aa2		80,000		88,894
Birmingham AL Waterworks Board Water Revenue		5.000			01/01/2038	Aa2		550,000		607,789

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, 2016

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
Birmingham AL Waterworks Board Water Revenue		5.000	%		01/01/2040	Aa2	$	150,000	$	167,360
Birmingham AL Waterworks		4.000			01/01/2037	Aa2		110,000		113,388
Birmingham AL Waterworks Board		4.000			01/01/2038	Aa2		205,000		210,968
Chatom AL Industrial Board Gulf Opportunity Zone		5.000			08/01/2037	A3		150,000		162,408
Cullman AL Utility Board Water Revenue		4.750			09/01/2037	A1		400,000		419,028
Huntsville AL Water Systems Revenue Bonds		5.000			11/01/2033	Aa1		300,000		313,179
Jasper AL Waterworks and Sewer Board Utility Revenue		5.000			06/01/2030	A+*		455,000		497,206
Limestone County AL Water & Sewer Authority		5.000			12/01/2034	A*		250,000		283,870
Limestone County AL Water & Sewer Authority		5.000			12/01/2033	A*		300,000		330,390
Limestone County AL Water & Sewer Authority		4.750			12/01/2035	AA*		400,000		430,584
Limestone County AL Water & Sewer Authority		4.750			12/01/2034	AA*		375,000		420,401
Opelika AL Water Board Revenue		5.000			06/01/2037	Aa3		250,000		268,655
Opelika AL Water Board Revenue		5.250			06/01/2036	Aa3		70,000		76,366
Phenix City AL Water & Sewer		5.000			08/15/2034	A3		15,000		16,045
Tallassee AL Water Gas & Sewer Warrants		5.125			05/01/2036	A2		10,000		10,822
West Morgan East Lawrence AL Water & Sewer		4.750			08/15/2030	AA*		75,000		79,766
West Morgan East Lawrence AL Water & Sewer		4.850			08/15/2035	AA*		250,000		265,148
										5,144,681
PUBLIC FACILITIES REVENUE BONDS
12.04% of Net Assets
Montgomery AL Warrants		5.000			02/01/2030	A1		300,000		326,048
Anniston AL Public Building Authority DHR Project		5.250			05/01/2030	AA-*		50,000		54,946
Anniston AL Public Building Authority DHR Project		5.500			05/01/2033	AA-*		200,000		221,180
Anniston AL Public Building Authority		5.000			03/01/2032	A2		400,000		435,376
Bessemer AL Public Educational Building Authority Revenue		5.000			07/01/2030	AA*		250,000		270,575
Huntsville AL Public Building Authority Lease Revenue		5.000			10/01/2027	Aa1		245,000		247,217
Huntsville AL Public Building Authority Lease Revenue		5.000			10/01/2033	Aa1		110,000		110,970
Lowndes County AL Warrants		5.250			02/01/2037	A2		250,000		268,188
Trussville AL Warrants		5.000			10/01/2039	Aa2		1,220,000		1,358,629
										3,293,129
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS
6.79% of Net Assets
AL Incentives Financing Authority Special Obligation		5.000			09/01/2029	A+*		125,000		134,935
Jasper AL Warrants		5.000			03/01/2031	A2		250,000		280,488
Madison AL Warrants		5.000			04/01/2035	Aa2		350,000		392,931
Mobile AL Refunding Warrants		5.000			02/15/2027	Aa2		335,000		357,971
Tuscaloosa AL Warrants		5.000			10/15/2034	Aa1		175,000		187,724
Tuscaloosa AL Warrants		5.125			01/01/2039	Aa1		150,000		161,244
Tuscaloosa AL Warrants		5.000			07/01/2034	Aa1		300,000		341,772
										1,857,065
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS
6.40% of Net Assets
AL State Private Colleges & Universities Tuskegee University		4.750			09/01/2026	AA*		460,000		460,867
Auburn University AL General Fee Revenue		4.000			06/01/2041	Aa2		250,000		256,113
Jacksonville AL State University		5.125			12/01/2033	AA*		215,000		231,048
Troy University AL Facilities Revenue		5.000			11/01/2028	A1		250,000		285,833
University of Alabama General Revenue		5.000			07/01/2034	Aa2		250,000		262,458
University of AL Birmingham		5.000			10/01/2037	Aa2		225,000		252,898
										1,749,217
REFUNDING BONDS
5.85% of Net Assets
Enterprise AL Warrants		4.500			11/01/2032	Aa3		115,000		123,276
Northport AL Warrants		5.000			08/01/2040	AA-*		735,000		819,797
Shelby County Alabama		4.000			08/15/2038	AA+*		250,000		259,453
Tuscaloosa AL Warrants		5.000			01/01/2032	Aa1		350,000		397,467
										1,599,993

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, 2016

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
HOSPITAL AND HEALTHCARE BONDS
3.35% of Net Assets
Chilton County AL Health Care Authority Limited Obligation		5.000	%		11/01/2032	AA-@	$	300,000	$	324,684
Chilton County AL Health Care Authority Chilton County Hospital		5.000			11/01/2035	AA-@		550,000		590,997
										915,681
STATE AND LOCAL MORTGAGE/HOUSING BONDS
.38% of Net Assets
AL Housing Finance Authority Single Family Mortgage Revenue		5.375			10/01/2033	Aaa		100,000		102,981
INDUSTRIAL REVENUE/POLLUTION CONTROL BONDS
.05% of Net Assets
Auburn AL Industrial Development Board Facilities Revenue		6.200			11/01/2020	A*		15,000		15,000
Total Investments 98.40% of Net Assets (cost $26,251,846) (See (a) below for further explanation)									$	26,904,958
Other assets in excess of liabilities 1.60%										437,213
Net Assets 100%									$	27,342,171

# Ratings by Moody’s Investors Services, Inc. unless noted otherwise.

All ratings are as of the date indicated and do not reflect subsequent changes.

* Rated by Standard & Poor’s Corporation

@ Fitch’s Investors Service

NR Not Rated

(a) Cost for federal income tax purposes is $26,251,677 and net unrealized appreciation of investments is as follows:

Unrealized appreciation	$	935,209
Unrealized depreciation		(281,928	)
Net unrealized appreciation	$	653,281

Other Information

The following is a summary of the inputs used, as of December 31, 2016, 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		26,904,958
Level 3	Significant Unobservable Inputs		—
		$	26,904,958

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

3

ALABAMA TAX-FREE INCOME SERIES

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2016 UNAUDITED

ASSETS:
Investments in securities, at fair value (Cost: $ 26,251,846)		$	26,904,958
Cash			223,414
Interest receivable			364,139
Total assets			27,492,511
LIABILITIES:
Payable for:
Distributions to shareholders	113,261
Fund shares redeemed	10,570
Investment advisory fee	9,860
Transfer agent fee	3,908
Trustee fees	1,434
Accrued expenses	11,307
Total liabilities			150,340
NET ASSETS:
Capital			26,718,622
Accumulated net investment income			169
Accumulated net realized loss on investment transactions			(29,732	)
Net unrealized appreciation in value of investments			653,112
Net assets at value		$	27,342,171
NET ASSET VALUE, offering price and redemption price per share (2,243,198 shares outstanding; unlimited number of shares authorized no par value)		$	12.19

STATEMENT OF OPERATIONS

For the six months ended December 31, 2016

Net investment income:
Interest income	$	538,324
Expenses:
Investment advisory fee		73,234
Transfer agent fee		20,584
Custodian expense		4,820
Professional fees		6,321
Trustees fees		1,434
Other expenses		6,760
Total expenses		113,153
Fees waived by Adviser		(10,152	)
Custodian expense reduction		(37	)
Net expenses		102,964
Net investment income		435,360
Realized and unrealized gain/(loss) on investments:
Net realized gain		6,585
Net change in unrealized appreciation/depreciation		(1,376,236	)
Net realized and unrealized loss on investments		(1,369,651	)
Net decrease in net assets resulting from operations	$	(934,291	)

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, 2016 and the year ended June 30, 2016 UNAUDITED

	Six Months Ended 12/31/2016			Year Ended 06/30/2016
Operations:
Net investment income	$	435,360		$	839,374
Net realized gain on investments		6,585			7,105
Net change in unrealized appreciation/depreciation		(1,376,236	)		879,042
Net increase/(decrease) in net assets resulting from operations		(934,291	)		1,725,521
Distributions from net investment income		(435,347	)		(839,350	)
Net fund share transactions (Note 4)		(666,669	)		2,981,730
Total increase/(decrease)		(2,036,307	)		3,867,901
Net assets:
Beginning of year		29,378,478			25,510,577
End of period	$	27,342,171		$	29,378,478
Accumulated Net Investment Income	$	169		$	156

FINANCIAL HIGHLIGHTS

Selected data for a share outstanding:	Six Months Ended 12/31/2016			For the years ended June 30,
				2016			2015			2014			2013			2012
Net asset value, beginning of year		$12.77			$12.36			$12.32			$12.10			$12.41			$11.72
Income from investment operations:
Net investment income		0.19			0.39			0.41			0.42			0.43			0.44
Net gains/(losses) on securities		(0.58	)		0.41			0.04			0.23			(0.30	)		0.70
Total from investment operations		(0.39	)		0.80			0.45			0.65			0.13			1.14
Less distributions:
Distributions from net investment income		(0.19	)		(0.39	)		(0.41	)		(0.42	)		(0.43	)		(0.44	)
Distributions from capital gains		0.00			0.00			0.00			(0.01	)		(0.01	)		(0.01	)
Total distributions		(0.19	)		(0.39	)		(0.41	)		(0.43	)		(0.44	)		(0.45	)
Net asset value, end of period		$12.19			$12.77			$12.36			$12.32			$12.10			$12.41
Total return		(3.09)%	(b)		6.61%			3.64%			5.56%			0.94%			9.81%
Net assets, end of period (in thousands)		$27,342			$29,378			$25,511			$23,358			$24,300			$22,911
Ratio of net expenses to average net assets (a)		0.71%	(c)		0.71%			0.71%			0.72%			0.70%			0.68%
Ratio of gross expenses to average net assets		0.78%	(c)		0.78%			0.79%			0.81%			0.78%			0.78%
Ratio of net investment income to average net assets		3.00%	(c)		3.14%			3.26%			3.48%			3.40%			3.59%
Portfolio turnover		4.55%	(b)		5.37%			9.65%			10.48%			6.46%			7.80%

(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, 2016

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
PREREFUNDED BONDS
23.98% of Net Assets
Jefferson County KY School District Finance Corporation		4.750	%		06/01/2027	Aa3	$	3,000,000	$	3,045,780
Campbell and Kenton Counties Sanitary Sewer		5.000			08/01/2025	Aa3		2,395,000		2,450,828
Campbell and Kenton Counties Sanitary Sewer		5.000			08/01/2026	Aa3		4,175,000		4,272,314
Campbell and Kenton Counties Sanitary Sewer		5.000			08/01/2027	Aa3		4,385,000		4,487,214
Campbell and Kenton Counties Sanitary Sewer		5.000			08/01/2037	Aa3		11,220,000		11,481,538
Franklin County KY School Building Revenue		4.750			05/01/2027	Aa3		3,570,000		3,613,768
Hardin County KY School District Finance Corporation		4.750			06/01/2027	Aa3		1,250,000		1,269,938
Kenton County KY School District Finance Corporation		5.000			02/01/2029	Aa3		3,270,000		3,513,975
KY Asset Liability Commission University of KY Project		5.000			10/01/2024	Aa2		5,445,000		5,610,365
KY Asset Liability Commission University of KY Project		5.000			10/01/2026	Aa2		6,090,000		6,274,953
KY Development Finance Authority — St. Elizabeth		5.125			05/01/2029	AA*		2,750,000		2,979,928
KY Development Finance Authority — St. Elizabeth		5.375			05/01/2034	AA*		2,560,000		2,788,685
KY Development Finance Authority — St. Elizabeth		5.500			05/01/2039	AA*		1,000,000		1,092,190
KY Infrastructure Authority Wastewater and Drinking Water		5.000			02/01/2027	Aaa		2,500,000		2,750,950
KY Infrastructure Authority Wastewater and Drinking Water		5.000			02/01/2028	Aaa		2,000,000		2,200,760
KY State Property & Building #88		5.000			11/01/2024	Aa3		1,355,000		1,399,078
KY State Property & Building #88		4.750			11/01/2027	Aa3		5,800,000		5,976,146
KY State Property & Building #89		5.000			11/01/2025	Aa3		5,000,000		5,340,150
KY State Property & Building #89		5.000			11/01/2026	Aa3		13,390,000		14,300,922
KY State Property & Building #89		5.000			11/01/2027	Aa3		4,900,000		5,233,347
KY State Property & Building #91		5.750			04/01/2029	A1		210,000		221,922
KY State Property & Building #87		5.000			03/01/2019	Aa3		2,965,000		2,984,510
KY State Property & Building #87		5.000			03/01/2022	Aa3		1,635,000		1,645,758
KY State Property & Building #87		5.000			03/01/2023	Aa3		5,080,000		5,113,426
KY State Property & Building #87		5.000			03/01/2026	AA-*		3,060,000		3,080,135
KY State Property & Building #87		5.000			03/01/2027	AA-*		125,000		125,823
KY State Property & Building #90		5.375			11/01/2023	NR		1,060,000		1,137,094
KY State Property & Building #90		5.500			11/01/2028	NR		21,955,000		23,630,606
KY State Property & Building #93		5.250			02/01/2025	AA*		6,425,000		6,930,326
KY State Property & Building #93		4.875			02/01/2028	AA*		440,000		471,227
KY State Property & Building #93		5.250			02/01/2028	AA*		9,305,000		10,036,838
KY State Property & Building #93		5.000			02/01/2029	AA*		445,000		477,721
KY State Property & Building #93		5.250			02/01/2029	AA*		20,060,000		21,637,719
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2025	Aa2		3,225,000		3,403,988
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2027	Aa2		9,530,000		10,058,915
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2028	Aa2		2,460,000		2,596,530
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2026	Aa2		4,440,000		4,814,603
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2027	Aa2		3,080,000		3,343,833
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2029	Aa2		10,035,000		10,894,598
Laurel County School District Finance Corporation		4.750			06/01/2026	Aa3		1,000,000		1,015,090
Louisville & Jefferson County Metropolitan Sewer		5.000			05/15/2021	NR		1,690,000		1,853,305
Louisville & Jefferson County Metropolitan Sewer		5.000			05/15/2023	NR		1,480,000		1,623,012
Louisville & Jefferson County Metropolitan Sewer		5.000			05/15/2025	Aa3		5,185,000		5,449,176
Louisville & Jefferson County Metropolitan Health — St. Marys		6.125			02/01/2037	AAA		1,300,000		1,370,317
Louisville & Jefferson County Catholic Health Initiatives		5.000			12/01/2035	NR		11,290,000		13,033,741
Louisville & Jefferson County Metropolitan Parking		5.000			12/01/2022	Aa3		625,000		686,119
Louisville & Jefferson County Metropolitan Parking		5.750			12/01/2034	Aa3		2,750,000		3,077,553
Northern KY Water District		6.000			02/01/2028	Aa3		1,010,000		1,084,932
Northern KY Water District		6.000			02/01/2031	Aa3		1,000,000		1,074,190
Northern KY Water District		6.500			02/01/2033	Aa3		1,585,000		1,715,002
Owensboro KY Water Revenue		5.000			09/15/2025	A1		175,000		185,994
Shelby County KY School District Finance Corporation		5.000			02/01/2028	Aa3		500,000		536,765
										235,393,597
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS
17.96% of Net Assets
KY Association of Counties		5.000			02/01/2030	AA-*		625,000		681,181

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, 2016

Bond Description	Coupon			Maturity Date			Rating#	Par Value		Fair Value
KY Association of Counties		5.000	%		02/01/2032		AA-*	$	1,000,000	$	1,085,940
KY Association of Counties		5.000			02/01/2035		AA-*		995,000		1,070,926
KY Association of Counties Finance Program		4.000			02/01/2033		AA-*		420,000		444,339
KY Association of Counties Finance Corporation		4.000			02/01/2034		AA-*		435,000		457,646
KY Association of Counties Finance Corporation		4.000			02/01/2035		AA-*		460,000		481,638
KY Bond Corporation Finance Program		5.500			02/01/2031		AA-*		1,115,000		1,257,553
KY State Property & Building #96		5.000			11/01/2029		Aa3		5,000,000		5,385,600
KY State Property & Building #98		5.000			08/01/2021		Aa3		2,505,000		2,760,109
KY State Property & Building #100		5.000			08/01/2026		Aa3		2,000,000		2,230,960
KY State Property & Building #100		5.000			08/01/2027		Aa3		1,710,000		1,901,161
KY State Property & Building #100		5.000			08/01/2028		Aa3		4,000,000		4,447,160
KY State Property & Building #100		5.000			08/01/2029		Aa3		2,500,000		2,771,450
KY State Property & Building #100		5.000			08/01/2030		Aa3		9,980,000		11,045,365
KY State Property & Building #100		5.000			08/01/2031		Aa3		5,100,000		5,639,784
KY State Property & Building #76		5.500			08/01/2021		Aa3		1,400,000		1,593,900
KY State Property & Building #83		5.000			10/01/2017		Aa3		5,000,000		5,146,450
KY State Property & Building #105		4.750			04/01/2031		A1		2,110,000		2,298,908
KY State Property & Building #105		4.750			04/01/2032		A1		2,205,000		2,394,586
KY State Property & Building #105		4.750			04/01/2033		A1		2,310,000		2,504,525
KY State Property & Building #106		5.000			10/01/2029		Aa3		4,130,000		4,671,773
KY State Property & Building #106		5.000			10/01/2030		Aa3		7,165,000		8,100,176
KY State Property & Building #106		5.000			10/01/2031		Aa3		4,910,000		5,537,989
KY State Property & Building #106		5.000			10/01/2032		Aa3		6,275,000		7,069,415
KY State Property & Building #106		5.000			10/01/2033		Aa3		4,870,000		5,470,666
KY State Property & Building #108		5.000			08/01/2026		Aa3		955,000		1,102,519
KY State Property & Building #108		5.000			08/01/2028		Aa3		2,670,000		3,049,781
KY State Property & Building #108		5.000			08/01/2031		Aa3		8,290,000		9,362,477
KY State Property & Building #108		5.000			08/01/2032		Aa3		8,820,000		9,918,884
KY State Property & Building #108		5.000			08/01/2033		Aa3		5,270,000		5,880,688
KY State Property & Building #108		5.000			08/01/2034		Aa3		4,900,000		5,456,248
KY State Property & Building #108		5.000			08/01/2030		Aa3		5,000,000		5,674,900
KY State Property & Building #87		5.000			03/01/2019		Aa3		35,000		35,203
KY State Property & Building #87		5.000			03/01/2022		Aa3		30,000		30,192
KY State Property & Building #87		5.000			03/01/2023		Aa3		95,000		95,580
KY State Property & Building #87		5.000			03/01/2025		Aa3		270,000		271,706
KY State Property & Building #87		5.000			03/01/2026		Aa3		170,000		171,073
KY State Property & Building #87		5.000			03/01/2027		Aa3		165,000		166,038
KY State Property & Building #110		5.000			08/01/2029		Aa3		4,200,000		4,787,244
KY State Property & Building #110		5.000			08/01/2032		Aa3		1,515,000		1,703,754
KY State Property & Building #110		5.000			08/01/2033		Aa3		1,000,000		1,115,880
KY State Property & Building #110		5.000			08/01/2034		Aa3		1,900,000		2,115,688
KY State Property & Building #110		5.000			08/01/2035		Aa3		3,030,000		3,362,088
KY State Property & Building #112		5.000			02/01/2035		Aa3		8,325,000		9,255,236
KT State Property & Building #112		5.000			02/01/2036		Aa3		7,920,000		8,785,498
KY State Property & Building #112		5.000			11/01/2028	��	Aa3		2,500,000		2,886,200
KY State Property & Building #90		5.375			11/01/2023		Aa3		140,000		150,077
KY State Property & Building #90		5.500			11/01/2028		Aa3		2,850,000		3,056,169
KY State Property & Building #93		5.250			02/01/2025		AA*		825,000		886,001
KY State Property & Building #93		4.875			02/01/2028		AA*		60,000		63,709
KY State Property & Building #93		5.250			02/01/2028		AA*		1,195,000		1,278,507
KY State Property & Building #93		5.000			02/01/2029		AA*		55,000		58,622
KY State Property & Building #93		5.250			02/01/2029		AA*		2,580,000		2,759,207
Lexington Fayette Urban County Government		5.000			01/01/2028		Aa2		820,000		959,425
Lexington Fayette Urban County Government		5.000			01/01/2029		Aa2		345,000		401,497
Lexington Fayette Urban County Government		5.000			01/01/2033		Aa2		1,685,000		1,923,192
Pendleton County KY Multi-County Lease Revenue		6.400			03/01/2019		B*		3,000,000		3,104,400
											176,316,883

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, 2016

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
REFUNDING BONDS
9.05% of Net Assets
KY State Property & Building #80		5.250	%		05/01/2018	Aa3	$	2,940,000	$	3,086,851
KY State Property & Building #80		5.250			05/01/2020	Aa3		1,000,000		1,104,010
KY State Property & Building #83		5.000			10/01/2018	Aa3		17,750,000		18,794,943
KY State Property & Building #83		5.250			10/01/2020	Aa3		24,220,000		26,949,352
KY State Property & Building #84		5.000			08/01/2019	Aa3		10,000,000		10,810,200
KY State Property & Building #84		5.000			08/01/2021	Aa3		310,000		346,227
KY State Property & Building #84		5.000			08/01/2022	Aa3		18,000,000		20,402,460
KY State Property & Building #104		5.000			11/01/2021	A1		2,085,000		2,342,206
KY State Property & Building #104		5.000			11/01/2022	A1		1,290,000		1,467,827
KY State Property & Building #102		5.000			05/01/2024	Aa3		405,000		463,911
KY State Property & Building #108		5.000			08/01/2025	Aa3		2,690,000		3,107,730
										88,875,717
TURNPIKES/TOLLROAD/HIGHWAY BONDS
8.84% of Net Assets
KY Asset Liability Commission Federal Highway		5.250			09/01/2019	A2		1,765,000		1,923,445
KY Asset Liability Commission Federal Highway		5.000			09/01/2021	A2		1,570,000		1,733,453
KY Asset Liability Commission Federal Highway		5.000			09/01/2022	A2		3,500,000		3,857,875
KY Asset Liability Commission Federal Highway		5.250			09/01/2025	A2		3,400,000		3,939,274
KY Asset Liability Commission Federal Highway		5.000			09/01/2027	A2		9,760,000		11,345,122
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2032	Aa2		1,315,000		1,487,896
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2029	Aa2		4,000,000		4,632,120
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2034	Aa2		2,370,000		2,671,630
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2025	Aa2		3,775,000		4,236,116
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2029	Aa2		5,165,000		5,746,579
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2030	Aa2		1,845,000		2,047,747
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2024	Aa2		1,500,000		1,716,555
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2028	Aa2		4,930,000		5,592,493
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2030	Aa2		1,465,000		1,654,615
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2031	Aa2		9,350,000		10,529,409
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2029	Aa2		7,235,000		8,187,343
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2032	Aa2		8,755,000		9,821,096
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2033	Aa2		5,000,000		5,659,350
										86,782,118
MUNICIPAL UTILITY REVENUE BONDS
8.77% of Net Assets
Cambell & Kenton County Sanitation District #1		4.000			08/01/2032	Aa3		6,100,000		6,412,443
Frankfort KY Electric & Water		4.750			12/01/2034	AA*		695,000		775,481
Frankfort KY Electric & Water		4.750			12/01/2035	AA*		725,000		806,265
Frankfort KY Electric & Water		4.750			12/01/2038	AA*		835,000		916,922
Frankfort KY Electric & Water		4.750			12/01/2036	AA*		760,000		843,501
Frankfort KY Electric & Water		4.750			12/01/2037	AA*		800,000		879,656
KY Rural Water Financing Corporation		5.375			02/01/2020	A+*		245,000		245,733
KY Rural Water Financing Corporation		4.500			02/01/2023	A+*		1,085,000		1,214,592
KY Rural Water Financing Corporation		4.500			02/01/2024	A+*		880,000		981,939
KY Rural Water Financing Corporation		5.125			02/01/2035	A+*		525,000		558,915
Louisville & Jefferson County Metropolitan Sewer		5.000			05/15/2021	Aa3		1,175,000		1,284,710
Louisville & Jefferson County Metropolitan Sewer		5.000			05/15/2023	Aa3		1,020,000		1,115,237
Louisville & Jefferson County Metropolitan Sewer		5.000			05/15/2024	Aa3		7,000,000		7,237,020
Louisville & Jefferson County Metropolitan Sewer		5.000			05/15/2034	Aa3		27,730,000		30,986,889
Louisville & Jefferson County Metropolitan Sewer		5.000			05/15/2031	Aa3		2,465,000		2,818,185
Louisville & Jefferson County Metropolitan Sewer		4.750			05/15/2034	Aa3		2,230,000		2,485,290
Louisville & Jefferson County Metropolitan Sewer		4.750			05/15/2035	Aa3		2,245,000		2,502,008
Louisville & Jefferson County Metropolitan Sewer		4.750			05/15/2036	Aa3		2,795,000		3,098,481
Louisville & Jefferson County Metropolitan Sewer		5.000			05/15/2034	Aa3		4,595,000		5,237,105
Louisville & Jefferson County Metropolitan Sewer		5.000			05/15/2035	Aa3		4,825,000		5,471,309
Northern KY Water District		5.000			02/01/2033	Aa3		3,580,000		3,916,771

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, 2016

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
Northern KY Water District		5.000	%		02/01/2026	Aa3	$	1,000,000	$	1,127,340
Northern KY Water District		5.000			02/01/2027	Aa3		4,315,000		4,838,064
Owensboro KY Water Revenue		5.000			09/15/2025	A1		370,000		391,948
										86,145,804
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS
8.77% of Net Assets
Boyle County KY College Improvement — Centre College — A		4.750			06/01/2032	A3		5,330,000		5,400,515
Eastern KY University		5.000			04/01/2033	Aa3		910,000		1,033,587
KY State Property & Building #114		5.000			10/01/2032	Aa3		2,795,000		3,168,384
KY State Property & Building #114		5.000			10/01/2033	Aa3		2,940,000		3,317,114
KY State Property & Building #114		5.000			10/01/2034	Aa3		3,090,000		3,475,447
KY State Property & Building #114		5.000			10/01/2035	Aa3		1,945,000		2,175,677
Louisville & Jefferson County Univeristy of Louisville		4.750			03/01/2028	A3		3,250,000		3,390,530
Morehead State University		5.000			04/01/2028	Aa3		1,780,000		2,068,129
Morehead State University		5.000			04/01/2029	Aa3		870,000		1,005,276
Murray State University		5.000			03/01/2032	Aa3		2,220,000		2,506,891
University of Kentucky General Receipts		5.000			04/01/2036	Aa2		4,820,000		5,410,546
University of Kentucky General Receipts		5.000			04/01/2037	Aa2		7,180,000		8,044,831
University of Kentucky General Receipts		5.000			04/01/2038	Aa2		7,395,000		8,250,158
University of Kentucky General Receipts		5.000			04/01/2030	Aa2		5,490,000		6,361,098
University of Kentucky Higher Educational		4.750			04/01/2034	Aa2		5,435,000		6,066,601
University of Louisville General Receipts		5.000			09/01/2029	A1		2,280,000		2,531,780
University of Louisville General Receipts		5.000			09/01/2030	A1		440,000		490,028
University of Louisville General Receipts		5.000			09/01/2031	A1		2,580,000		2,870,947
University of Louisville		4.500			03/01/2035	Aa3		5,600,000		6,017,704
University of Louisville		4.500			03/01/2036	Aa3		5,845,000		6,266,191
Western KY University		4.750			09/01/2033	Aa3		2,505,000		2,763,316
Western KY University		4.000			09/01/2034	Aa3		575,000		594,567
Western KY University		4.000			09/01/2035	Aa3		595,000		612,303
Western KY University		4.000			09/01/2036	Aa3		620,000		637,521
Western KY University		5.000			05/01/2032	Aa3		1,500,000		1,658,535
										86,117,676
SCHOOL IMPROVEMENT BONDS
8.38% of Net Assets
Fayette County KY School District Finance Corporation		5.000			06/01/2031	A1		3,705,000		4,091,837
Fayette County KY School District Finance Corporation		5.000			10/01/2028	A1		2,875,000		3,267,265
Fayette County KY School District Finance Corporation		5.000			10/01/2029	A1		3,660,000		4,173,902
Fayette County KY School District Finance Corporation		5.000			10/01/2032	A1		3,615,000		4,096,337
Fayette County KY School District Finance Corporation		5.000			10/01/2033	A1		4,385,000		4,954,480
Fayette County KY School District Finance Corporation		4.750			11/01/2031	Aa3		1,730,000		1,930,991
Fayette County KY School District Finance Corporation		5.000			08/01/2028	Aa3		1,330,000		1,543,106
Fayette County KY School District Finance Corporation		5.000			08/01/2032	Aa3		10,600,000		12,056,440
Fayette County KY School District Finance Corporation		5.000			08/01/2034	Aa3		9,750,000		10,926,045
Hardin County KY School District Finance Corporation		5.000			05/01/2030	Aa3		450,000		497,700
Hardin County KY School District Finance Corporation		5.000			05/01/2031	Aa3		470,000		517,987
Jefferson County KY School District Finance Corporation		5.000			05/01/2032	Aa3		4,230,000		4,792,125
Jefferson County KY School District Finance Corporation		5.000			05/01/2033	Aa3		5,145,000		5,807,059
Jefferson County KY School District Finance Corporation		5.000			05/01/2034	Aa3		5,405,000		6,081,544
Jefferson County KY School District Finance Corporation		5.000			04/01/2030	Aa3		975,000		1,115,810
Jefferson County KY School District Finance Corporation		5.000			04/01/2031	Aa3		1,025,000		1,165,804
Jefferson County KY School District Finance Corporation		4.750			04/01/2034	Aa3		1,165,000		1,285,228
Jefferson County KY School District Finance Corporation		4.750			04/01/2035	Aa3		1,220,000		1,342,207
Oldham KY School District Finance Corporation		4.000			10/01/2034	Aa3		1,560,000		1,625,224
Scott County KY School District Finance Corporation		4.500			01/01/2025	Aa3		4,890,000		5,542,277
Scott County School District Finance Corporation		4.000			02/01/2029	Aa3		5,040,000		5,451,919
										82,265,287

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, 2016

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
HOSPITAL AND HEALTHCARE BONDS
6.52% of Net Assets
KY Bond Development Corporation — St. Elizabeth Med Center		4.000	%		05/01/2035	AA*	$	1,390,000	$	1,425,930
KY Development Corporation Hospital Facilities		4.000			05/01/2036	AA*		1,200,000		1,232,928
KY Development Corporation Hospital Facilities		5.000			05/01/2039	AA*		7,185,000		8,054,960
KY Development Finance Authority — Baptist Heathcare		5.375			08/15/2024	A3		1,205,000		1,267,299
KY Development Finance Authority — Baptist Healthcare		5.625			08/15/2027	A3		4,855,000		5,118,869
KY Development Finance Authority — Catholic Health		5.000			05/01/2029	A3		2,410,000		2,510,666
KY Development Finance Authority — Catholic Health		5.375			01/01/2040	A3		300,000		328,518
Lexington Fayette Urban County Government Healthcare		5.250			06/01/2028	Aa3		1,000,000		1,108,620
Lexington Fayette Urban County Government		5.250			06/01/2032	Aa3		1,500,000		1,643,325
Lexington-Fayette Urban County Government Public Facilities		5.000			06/01/2033	Aa3		5,260,000		5,671,911
Louisville & Jefferson County Norton Healthcare		5.500			10/01/2033	A-*		2,000,000		2,298,220
Louisville & Jefferson County Norton Healthcare		5.000			10/01/2033	A-*		5,360,000		5,884,369
Louisville & Jefferson County Norton Healthcare		4.000			10/01/2035	A-*		2,850,000		2,849,858
Louisville & Jefferson County Norton Healthcare		4.000			10/01/2036	A-*		9,005,000		8,883,433
Louisville & Jefferson County Catholic Health Initiatives		5.000			12/01/2030	A3		2,000,000		2,157,120
Louisville & Jefferson County Catholic Health Initiatives		5.000			12/01/2031	A3		2,750,000		2,957,570
Louisville & Jefferson County Catholic Health Initiatives		5.000			12/01/2035	A3		3,495,000		3,719,694
Warren County KY Hospital		5.000			04/01/2028	A+*		6,225,000		6,884,850
										63,998,140
PUBLIC FACILITIES REVENUE BONDS
3.36% of Net Assets
Bracken County KY Public Property		5.000			08/01/2029	Aa3		840,000		931,592
Bracken County KY Public Property		5.000			08/01/2030	Aa3		1,110,000		1,233,576
Franklin County KY Public Properties Justice Center		5.000			04/01/2029	Aa3		2,630,000		2,880,245
KY State Certificates of Participation		5.000			06/15/2034	Aa3		1,640,000		1,832,733
KY State Certificates of Participation		5.000			06/15/2038	Aa3		7,535,000		8,321,353
Owensboro KY Public Property		4.500			04/01/2034	A2		1,165,000		1,234,236
River City, Inc. Parking Authority		4.750			06/01/2029	Aa3		1,160,000		1,286,289
River City, Inc. Parking Authority		4.750			06/01/2031	Aa3		1,270,000		1,400,429
River City, Inc. Parking Authority		5.000			06/01/2033	Aa3		1,395,000		1,557,643
River City, Inc. Parking Authority		4.750			06/01/2027	Aa3		750,000		840,990
River City, Inc. Parking Authority		4.750			06/01/2028	Aa3		940,000		1,049,341
River City, Inc. Parking Authority		4.750			06/01/2029	Aa3		980,000		1,086,693
River City, Inc. Parking Authority		4.750			06/01/2030	Aa3		1,025,000		1,137,853
River City, Inc. Parking Authority		5.000			06/01/2031	Aa3		1,080,000		1,210,604
River City, Inc. Parking Authority		5.000			06/01/2032	Aa3		1,130,000		1,264,549
Warren County KY Downtown Economic Development		5.000			06/01/2038	AA-*		2,345,000		2,595,282
Wolfe County KY Public Property		5.000			04/01/2030	Aa3		2,855,000		3,158,544
										33,021,952
AIRPORT BONDS
1.09% of Net Assets
Kenton County Airport		5.000			01/01/2031	A2		425,000		478,761
Kenton County Airport		5.000			01/01/2032	A2		750,000		841,778
Kenton County Airport		5.000			01/01/2033	A2		1,210,000		1,359,060
Lexington-Fayette Urban County Airport Board		5.000			07/01/2028	Aa2		1,170,000		1,325,294
Lexington-Fayette Urban County Airport Board		5.000			07/01/2030	Aa2		1,250,000		1,414,538
Lexington-Fayette Urban County Airport Board		5.000			07/01/2032	Aa2		1,430,000		1,611,167
Lexington-Fayette Urban County Airport Board		5.000			07/01/2033	Aa2		1,520,000		1,710,061
Lexington-Fayette Urban County Airport Board		5.000			07/01/2038	Aa2		1,720,000		1,913,586
										10,654,245
STATE AND LOCAL MORTGAGE/HOUSING BONDS
.91% of Net Assets
Greater KY Housing Assistance Corporation-Chenowith		6.100			01/01/2024	A3		295,000		295,667
KY Housing Corporation Country Place Apartments		4.750			04/20/2031	AA+*		935,000		977,981
KY Housing Corporation		4.750			07/01/2032	Aaa		1,265,000		1,265,152
KY Housing Corporation		4.850			07/01/2029	Aaa		2,965,000		3,055,106

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, 2016

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
KY Housing Corporation		4.750	%		07/01/2035	Aaa	$	3,190,000	$	3,299,033
										8,892,939
MISCELLANEOUS REVENUE BONDS
.23% of Net Assets
KY State Property & Building #106		5.000			10/01/2028	Aa3		2,030,000		2,305,633
Total Investments 97.86% of Net Assets (cost $930,807,711) (See (a) below for further explanation)									$	960,769,991
Other assets in excess of liabilities 2.14%										20,996,490
Net Assets 100%									$	981,766,481

# Ratings by Moody’s Investors Services, Inc. unless noted otherwise.

All ratings are as of the date indicated and do not reflect subsequent changes.

* Rated by Standard & Poor’s Corporation

@ Fitch’s Investors Service

NR Not Rated

(a) Cost for federal income tax purposes is $930,765,259 and net unrealized appreciation of investments is as follows:

Unrealized appreciation	$	35,870,509
Unrealized depreciation		(5,865,777	)
Net unrealized appreciation	$	30,004,732

Other Information

The following is a summary of the inputs used, as of December 31, 2016, 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		960,769,991
Level 3	Significant Unobservable Inputs		—
		$	960,769,991

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

11

KENTUCKY TAX-FREE INCOME SERIES

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2016 UNAUDITED

ASSETS:
Investments in securities, at fair value (Cost: $930,807,711)		$	960,769,991
Cash			12,394,484
Receivable for fund shares sold			20,450
Interest receivable			12,928,676
Total assets			986,113,601
LIABILITIES:
Payable for:
Distributions to shareholders	3,384,023
Fund shares redeemed	289,853
Investment advisory fee	300,492
Transfer agent fee	95,985
Trustees fees	51,757
Legal fee	80,662
Audit fee	64,913
Accrued expenses	79,435
Total liabilities			4,347,120
NET ASSETS:
Capital			952,072,201
Accumulated net investment income			42,452
Accumulated net realized loss on investment transactions			(310,452	)
Net unrealized appreciation in value of investments			29,962,280
Net assets at value		$	981,766,481
NET ASSET VALUE, offering price and redemption price per share (127,759,570 shares outstanding; unlimited number of shares authorized no par value)		$	7.68

STATEMENT OF OPERATIONS

For the six months ended December 31, 2016

Net investment income:
Interest income	$	18,050,376
Expenses:
Investment advisory fee		1,886,486
Transfer agent fee		608,537
Custodian expense		47,408
Professional fees		116,842
Trustees fees		49,749
Other expenses		63,232
Total expenses		2,772,254
Custodian expense reduction		(361	)
Net expenses		2,771,893
Net investment income		15,278,483
Realized and unrealized loss on investments:
Net realized loss		(109,333	)
Net change in unrealized appreciation/depreciation		(48,065,253	)
Net realized and unrealized loss on investments		(48,174,586	)
Net decrease in net assets resulting from operations	$	(32,896,103	)

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, 2016 and the year ended June 30, 2016 UNAUDITED

	Six Months Ended 12/31/2016			Year Ended 06/30/2016
Operations:
Net investment income	$	15,278,483		$	31,358,338
Net realized gain/(loss) on investments		(109,333	)		239,102
Net change in unrealized appreciation/depreciation		(48,065,253	)		29,781,496
Net increase/(decrease) in net assets resulting from operations		(32,896,103	)		61,378,936
Distributions from net investment income		(15,274,420	)		(31,348,902	)
Distributions from capital gains		(393,039	)		(258,021	)
Net fund share transactions (Note 4)		6,585,499			4,342,562
Total increase/(decrease)		(41,978,063	)		34,114,575
Net assets:
Beginning of year		1,023,744,544			989,629,969
End of period	$	981,766,481		$	1,023,744,544
Accumulated Net Investment Income	$	42,452		$	55,980

FINANCIAL HIGHLIGHTS

Selected data for a share outstanding:	Six Months Ended 12/31/2016			For the years ended June 30,
				2016			2015			2014			2013			2012
Net asset value, beginning of year		$8.06			$7.83			$7.89			$7.74			$7.99			$7.63
Income from investment operations:
Net investment income		0.12			0.25			0.26			0.27			0.27			0.28
Net gains/(losses) on securities		(0.38	)		0.23			(0.06	)		0.16			(0.25	)		0.39
Total from investment operations		(0.26	)		0.48			0.20			0.43			0.02			0.67
Less distributions:
Distributions from net investment income		(0.12	)		(0.25	)		(0.26	)		(0.27	)		(0.27	)		(0.28	)
Distributions from capital gains		(0.00	)(b)		(0.00	)(b)		(0.00	)(b)		(0.01	)(b)		(0.00	)		(0.03	)
Total distributions		(0.12	)		(0.25	)		(0.26	)		(0.28	)		(0.27	)		(0.31	)
Net asset value, end of period		$7.68			$8.06			$7.83			$7.89			$7.74			$7.99
Total return		(3.21)%	(c)		6.25%			2.60%			5.65%			0.17%			8.97%
Net assets, end of period (in thousands)		$981,766			$1,023,745			$989,630			$969,549			$948,276			$989,404
Ratio of net expenses to average net assets (a)		0.55%	(d)		0.55%			0.55%			0.57%			0.57%			0.57%
Ratio of gross expenses to average net assets		0.55%	(d)		0.55%			0.55%			0.57%			0.57%			0.57%
Ratio of net investment income to average net assets		3.05%	(d)		3.15%			3.29%			3.45%			3.35%			3.60%
Portfolio turnover		5.87%	(c)		11.53%			7.80%			9.43%			7.02%			8.39%

(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, 2016

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS
21.89% of Net Assets
KY Association of Counties		4.250	%		02/01/2017	AA-*	$	250,000	$	250,618
KY Association of Counties		4.000			02/01/2018	AA-*		115,000		118,148
KY Association of Counties		4.250			02/01/2019	AA-*		255,000		268,321
KY State Property & Building #94		5.000			05/01/2017	Aa2		500,000		506,295
KY State Property & Building #95		5.000			08/01/2017	Aa3		200,000		204,482
KY State Property & Building #100		5.000			08/01/2019	Aa3		100,000		107,917
KY State Property & Building #100		5.000			08/01/2017	Aa3		500,000		511,205
KY State Property & Building #100		5.000			08/01/2024	Aa3		750,000		838,343
KY State Property & Building #100		5.000			08/01/2025	Aa3		500,000		558,660
KY State Property & Building #89		3.750			11/01/2017	Aa3		100,000		102,139
KY State Property & Building #76		5.500			08/01/2017	Aa3		190,000		194,970
KY State Property & Building #76		5.500			08/01/2018	Aa3		1,415,000		1,502,673
KY State Property & Building #90		5.000			11/01/2018	Aa3		250,000		265,080
KY State Property & Building #90		5.750			11/01/2019	Aa3		200,000		215,636
KY State Property & Building #90		5.000			11/01/2020	Aa3		495,000		526,343
KY State Property & Building #83		5.000			10/01/2017	Aa3		100,000		102,929
KY State Property & Building #93		5.250			02/01/2018	Aa3		510,000		531,140
KY State Property & Building #106		5.000			10/01/2021	Aa3		750,000		842,085
KY State Property & Building #106		5.000			10/01/2023	Aa3		540,000		618,327
KY State Property & Building #106		5.000			10/01/2024	Aa3		750,000		866,865
KY State Property & Building #106		5.000			10/01/2025	Aa3		2,365,000		2,725,426
KY State Property & Building #108		5.000			08/01/2023	Aa3		2,000,000		2,287,480
KY State Property & Building #108		5.000			08/01/2023	Aa3		875,000		1,000,204
KY State Property & Building #87		5.000			03/01/2020	Aa3		95,000		95,568
KY State Property & Building #110		5.000			08/01/2023	Aa3		1,750,000		2,001,545
KY State Property & Building #93		5.250			02/01/2021	AA*		25,000		26,806
										17,269,205
SCHOOL IMPROVEMENT BONDS
18.73% of Net Assets
Fayette County School District Finance Corporation		5.000			08/01/2028	Aa3		515,000		606,088
Barren County KY School District Finance Corporation		5.000			08/01/2022	Aa3		1,055,000		1,202,310
Barren County KY School District Finance Corporation		5.000			08/01/2023	Aa3		500,000		576,445
Bullitt County KY School District Finance Corporation		5.000			09/01/2022	Aa3		300,000		340,935
Fayette County KY School District Finance Corporation		5.000			08/01/2023	Aa3		1,000,000		1,156,180
Fayette County KY School District Finance Corporation		4.000			06/01/2022	A1		1,000,000		1,073,650
Fayette County KY School District Finance Corporation		5.000			06/01/2023	Aa3		500,000		576,905
Grant County KY School District Finance Corporation		3.750			06/01/2017	Aa3		95,000		95,183
Hardin County KY School District		5.000			03/01/2023	Aa3		770,000		885,100
Jefferson County KY School District Finance Corporation		4.000			12/01/2023	Aa3		1,000,000		1,103,450
Jessamine County KY School District Finance Corporation		5.000			02/01/2023	Aa3		575,000		657,076
Johnson County KY School District Finance Corporation		3.000			12/01/2019	Aa3		180,000		186,741
Laurel County KY School District Finance Corporation		4.000			06/01/2022	Aa3		890,000		968,089
Laurel County KY School District Finance Corporation		4.000			06/01/2024	Aa3		465,000		510,640
Oldham County KY School Building Corporation		4.375			06/01/2018	Aa3		1,730,000		1,753,407
Pendleton County KY School District Finance Corporation		4.000			02/01/2020	Aa3		450,000		450,833
Pike County School District Finance Corporation		5.000			02/01/2025	Aa3		900,000		1,047,321
Pike County School District Finance Corporation		5.000			08/01/2024	Aa3		585,000		677,594
Warren County KY School District Finance Corporation		4.000			04/01/2018	Aa3		125,000		129,036
Warren County KY School District Finance Corporation		4.000			06/01/2022	Aa3		725,000		782,841
										14,779,824
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS
12.34% of Net Assets
Boyle County KY Centre College		5.000			06/01/2018	A3		200,000		203,048
Boyle County KY Centre College		5.000			06/01/2020	A3		150,000		151,937
KY Asset Liability — University of Kentucky		4.000			10/01/2019	Aa2		100,000		100,206
KY State Property & Building #114		5.000			10/01/2024	Aa3		1,415,000		1,632,670

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, 2016

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
Louisville & Jefferson County University of Louisville		4.000	%		03/01/2020	A3	$	300,000	$	310,041
Morehead State University		5.000			10/01/2022	Aa3		310,000		355,570
Northern Ky University General Receipts		4.000			09/01/2018	Aa3		150,000		156,158
University of Kentucky General Receipts		4.000			04/01/2028	Aa2		750,000		805,620
University of Louisville		5.000			03/01/2024	Aa3		350,000		408,093
University of Louisville		5.000			03/01/2024	Aa3		2,000,000		2,336,260
Western Ky University		4.000			09/01/2024	Aa3		1,000,000		1,092,380
Western KY University		4.000			09/01/2017	Aa3		2,145,000		2,183,310
										9,735,293
PUBLIC FACILITIES REVENUE BONDS
12.15% of Net Assets
KY State Certificate of Participation		4.000			06/15/2022	Aa3		1,000,000		1,085,660
KY State Certificate of Participation		4.000			06/15/2023	Aa3		940,000		1,024,769
KY State Certificates of Participation		4.000			06/15/2024	Aa3		300,000		327,456
KY State Property & Building #109		5.000			10/01/2022	Aa3		1,000,000		1,136,590
Laurel County KY Justice Center		5.000			03/01/2023	Aa3		600,000		685,248
Lexington Fayette Urban County Government — Court Facilities		5.000			10/01/2024	Aa3		700,000		817,243
Livingston County KY Public Properties		5.000			08/01/2022	Aa3		500,000		571,790
Livingston County KY Public Properties		5.000			08/01/2023	Aa3		525,000		607,688
Livingston County KY Public Properties		5.000			08/01/2024	Aa3		555,000		646,991
River City Parking Authority		5.000			12/01/2024	Aa3		340,000		398,058
Todd County KY Public Properties Court House		3.250			06/01/2019	Aa3		100,000		103,033
Warren County KY Justice Center Expansion Corporation		5.000			09/01/2023	Aa3		1,250,000		1,425,988
Whitley County KY Public Properties — Justice Center		3.375			09/01/2019	Aa3		200,000		208,118
Wolfe County Public Properties		4.000			04/01/2024	Aa3		500,000		543,915
										9,582,547
TURNPIKES/TOLL ROAD/HIGHWAY BONDS
10.31% of Net Assets
KY Asset Liability Project Notes		5.000			09/01/2017	A2		1,500,000		1,538,580
KY Asset Liability Project Notes		4.000			09/01/2023	A2		250,000		271,938
KY Asset Liability Commission Federal Highway		5.250			09/01/2025	A2		675,000		782,062
Kentucky Asset Liability Commission Federal Highway		5.000			09/01/2026	A2		1,450,000		1,680,666
KY Asset Liability Commission Federal Highway		5.000			09/01/2024	A2		500,000		582,180
KY State Turnpike Authority Economic Development		5.000			07/01/2024	Aa2		1,175,000		1,368,711
KY Turnpike Ecomonic Development Road Revenue		5.000			07/01/2024	Aa2		1,000,000		1,125,350
KY Turnpike Economic Development Road Revenue		5.000			07/01/2023	Aa2		600,000		690,312
KY Turpnike Economic Development Road Revenue		5.000			07/01/2024	Aa2		85,000		97,272
										8,137,071
REFUNDING BONDS
9.04% of Net Assets
KY State Property & Building #82		5.250			10/01/2017	Aa3		510,000		525,698
KY State Property & Building #83		5.000			10/01/2019	Aa3		1,750,000		1,897,718
KY State Property & Building #84		5.000			08/01/2019	Aa3		1,000,000		1,081,020
KY State Property & Building #101		5.000			10/01/2019	Aa3		1,050,000		1,138,631
KY State Property & Building #104		5.000			11/01/2021	A1		1,000,000		1,123,360
KY State Property & Building #106		5.000			10/01/2026	Aa3		1,000,000		1,144,380
KY State Property & Building #108		5.000			08/01/2022	Aa3		200,000		226,694
										7,137,501
MUNICIPAL UTILITY REVENUE BONDS
5.75% of Net Assets
Bourbon County KY Public Project		3.800			02/01/2019	A2		260,000		260,629
Frankfort Electric & Water		4.000			12/01/2023	AA*		440,000		483,745
KY Rural Water Finance Corporation		3.000			02/01/2018	A+*		530,000		538,872
KY Rural Water Finance Corporation		3.000			08/01/2019	A+*		545,000		561,170
KY Rural Water Finance Corporation		3.000			02/01/2018	A+*		300,000		305,022
KY Rural Water Finance Corporation		3.000			02/01/2019	A+*		250,000		256,683
KY Rural Water Finance Corporation		4.500			08/01/2021	A3		100,000		101,861

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, 2016

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
Lawrenceburg KY Water and Sewer		3.000	%		10/01/2018	A1	$	375,000	$	384,623
Northern KY Water		5.000			02/01/2026	Aa3		815,000		935,335
Owensboro KY Electric Light & Power		5.000			01/01/2024	A2		650,000		705,367
										4,533,307
HOSPITAL AND HEALTHCARE BONDS
5.19% of Net Assets
KY Asset Liability Commission General Receipts		4.000			10/01/2018	Aa2		105,000		107,259
KY Economic Development — Baptist Health Care System		4.750			08/15/2019	A3		110,000		114,810
Lexington-Fayette Urban County Government		5.000			06/01/2024	Aa3		2,800,000		3,108,448
Warren County Hospital		4.000			04/01/2020	A+*		195,000		201,913
Warren County Hospital		5.000			04/01/2023	A+*		500,000		561,455
										4,093,885
PREREFUNDED BONDS
2.19% of Net Assets
Adair County KY Public Properties		4.0			12/01/2022	Aa3		170,000		174,512
Daviess Co KY School District Finance Corporation		4.250			08/01/2019	Aa3		100,000		101,941
KY Asset Liability University of Kentucky Project Notes		5.000			10/01/2019	Aa2		320,000		329,818
KY Asset Liability Commission Revenue University of Kentucky		4.125			10/01/2019	Aa2		150,000		153,459
KY Asset Liability Commission University of Kentucky		5.000			10/01/2020	Aa2		150,000		154,428
KY Infrastructure Authority Wastewater & Drinking Water		5.000			02/01/2025	Aaa		175,000		200,814
KY State Property & Building #89		5.000			11/01/2020	Aa3		200,000		213,456
KY State Property & Building #87		5.000			03/01/2018	AA-*		100,000		100,663
KY State Property & Building #93		5.250			02/01/2021	AA*		175,000		188,802
KY Turnpike Economic Development Road Revenue		4.125			07/01/2019	Aa2		105,000		109,512
										1,727,405
Total Investments 97.59% of Net Assets (cost $76,973,817) (See (a) below for further explanation)									$	76,996,038
Other assets in excess of liabilities 2.41%										1,898,137
Net Assets 100%									$	78,894,175

# Ratings by Moody’s Investors Services, Inc. unless noted otherwise.

All ratings are as of the date indicated and do not reflect subsequent changes.

* Rated by Standard & Poor’s Corporation

@ Fitch’s Investors Service

NR Not Rated

(a) Cost for federal income tax purposes is $76,973,817 and net unrealized appreciation of investments is as follows:

Unrealized appreciation	$	689,244.0
Unrealized depreciation		(667,023	)
Net unrealized appreciation	$	22,221

Other Information

The following is a summary of the inputs used, as of December 31, 2016, 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		76,996,038
Level 3	Significant Unobservable Inputs		—
		$	76,996,038

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, 2016 UNAUDITED

ASSETS:
Investments in securities, at fair value (Cost: $76,973,817)		$	76,996,038
Cash			1,099,389
Interest receivable			934,986
Total assets			79,030,413
LIABILITIES:
Payable for:
Distributions to shareholders	59,128
Fund shares redeemed	7,889
Investment advisory fee	32,255
Transfer agent fee	15,313
Trustees fees	2,691
Accrued expenses	18,962
Total liabilities			136,238
NET ASSETS:
Capital			79,141,988
Accumulated net realized loss on investment transactions			(270,034	)
Net unrealized appreciation in value of investments			22,221
Net assets at value		$	78,894,175
NET ASSET VALUE, offering price and redemption price per share (15,059,267 shares outstanding; unlimited number of shares authorized no par value)		$	5.24

STATEMENT OF OPERATIONS

For the six months ended December 31, 2016

Net investment income:
Interest income	$	1,043,886
Expenses:
Investment advisory fee		209,964
Transfer agent fee		53,400
Custodian expense		9,732
Professional fees		16,938
Trustees fees		4,168
Other expenses		12,528
Total expenses		306,730
Fees waived by Adviser (Note 2)		(6,201	)
Custodian expense reduction		(74	)
Net expenses		300,455
Net investment income		743,431
Realized and unrealized loss on investments:
Net realized loss		(43,688	)
Net change in unrealized appreciation/depreciation		(3,188,147	)
Net realized and unrealized loss on investments		(3,231,835	)
Net decrease in net assets resulting from operations	$	(2,488,404	)

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, 2016 and the year ended June 30, 2016 UNAUDITED

	Six Months Ended 12/31/2016			Year Ended 06/30/2016
Operations:
Net investment income	$	743,431		$	1,645,818
Net realized gain/(loss) on investments		(43,688	)		57,349
Net change in unrealized appreciation/depreciation		(3,188,147	)		1,482,281
Net increase/(decrease) in net assets resulting from operations		(2,488,404	)		3,185,448
Distributions from net investment income		(743,431	)		(1,645,818	)
Net fund share transactions (Note 4)		(3,042,673	)		3,574,000
Total increase/(decrease)		(6,274,508	)		5,113,630
Net assets:
Beginning of year		85,168,683			80,055,053
End of period	$	78,894,175		$	85,168,683

FINANCIAL HIGHLIGHTS

Selected data for a share outstanding:	Six Months Ended 12/31/2016			For the years ended June 30,
				2016			2015			2014			2013			2012
Net asset value, beginning of year		$5.45			$5.35			$5.44			$5.43			$5.54			$5.39
Income from investment operations:
Net investment income		0.05			0.11			0.12			0.12			0.12			0.12
Net gains/(losses) on securities		(0.21	)		0.10			(0.09	)		0.01			(0.11	)		0.15
Total from investment operations		(0.16	)		0.21			0.03			0.13			0.01			0.27
Less distributions:
Distributions from net investment income		(0.05	)		(0.11	)		(0.12	)		(0.12	)		(0.12	)		(0.12	)
Net asset value, end of period		$5.24			$5.45			$5.35			$5.44			$5.43			$5.54
Total return		(2.99)%	(b)		3.88%			0.50%			2.35%			0.11%			5.10%
Net assets, end of period (in thousands)		$78,894			$85,169			$80,055			$82,218			$89,403			$89,528
Ratio of net expenses to average net assets (a)		0.72%	(c)		0.72%			0.73%			0.74%			0.72%			0.73%
Ratio of gross expenses to average net assets		0.73%	(c)		0.72%			0.73%			0.74%			0.72%			0.73%
Ratio of net investment income to average net assets		1.79%	(c)		1.96%			2.17%			2.14%			2.12%			2.22%
Portfolio turnover		11.40%	(b)		26.49%			20.19%			9.06%			6.63%			4.73%

(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.

18

DUPREE MUTUAL FUNDS — MISSISSIPPI TAX-FREE INCOME SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

Mississippi Municipal Bonds

December 31, 2016

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
PREREFUNDED BONDS
27.79% of Net Assets
Alcorn State University Educational Building		5.125	%		09/01/2034	Aa2	$	95,000	$	103,924
MS Development Bank Special Obligation Rankin Utilities		5.000			01/01/2028	A2		55,000		57,139
MS Development Bank Special Obligation Jackson Public		5.375			04/01/2028	A2		70,000		73,595
MS Development Bank Special Obligation Highway Construction		5.000			01/01/2027	Aa3		125,000		129,759
MS Development Bank Special Obligation Desoto County		4.750			01/01/2035	Aa3		225,000		232,983
MS Development Bank Special Obligation Desoto County		5.000			07/01/2032	A*		45,000		45,907
MS Development Bank Special Obligation Southaven Water		5.000			03/01/2025	A+*		325,000		327,051
MS Development Bank Special Obligation Lowndes County		5.000			07/01/2022	A2		80,000		81,613
MS Development Bank Special Obligation Lowndes County		5.000			07/01/2027	A2		150,000		153,024
MS Development Bank Special Obligation Capital Improvement		5.250			07/01/2026	A2		125,000		127,676
MS Development Bank Special Obligation Highway Construction		5.000			01/01/2027	Aa3		245,000		254,327
MS Development Bank Special Obligation Highway Construction		4.750			01/01/2031	Aa3		125,000		129,435
MS Development Bank Special Obligation Canton		5.750			10/01/2031	A2		370,000		434,616
MS Development Bank Special Obligation Hinds College		5.000			10/01/2026	Aa2		85,000		92,846
MS Development Bank Special Obligation Hinds College		5.125			10/01/2028	Aa2		100,000		109,567
MS Development Bank Special Obligation Hinds College		5.375			10/01/2033	Aa2		60,000		66,143
MS Development Bank Special Obligation Jones County Junior College		5.100			03/01/2028	AA*		55,000		59,345
MS Development Bank Special Obligation Jones County Junior College		5.000			03/01/2033	AA*		150,000		161,531
MS Development Bank Special Obligation Jones County Junior College		5.125			03/01/2039	AA*		45,000		48,579
MS Development Bank Special Obligation Department of Corrections		5.250			08/01/2027	AA-*		50,000		56,131
MS Development Bank Special Obligation Department of Corrections		5.250			08/01/2027	AA-*		305,000		342,396
University Southern MS Educational Building Athletics		5.000			03/01/2034	Aa2		105,000		105,638
University Southern MS Educational Building Corporation		5.125			09/01/2029	Aa2		100,000		109,421
										3,302,646
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS
26.26% of Net Assets
Jackson State University Educational Building		5.000			03/01/2034	Aa2		175,000		188,578
Jackson State University Educational Building		5.000			03/01/2034	Aa2		250,000		280,395
MS Development Bank Special Obligation Hinds College		5.000			04/01/2036	A2		250,000		269,605
Mississippi State Development Bank Special Obligation Gulf Coast Community Project		4.000			12/01/2034	AA-*		300,000		311,450
MS State University Educational Building Corporation Revenue		5.250			08/01/2033	Aa2		50,000		54,207
MS State University Educational Building Corporation Revenue		5.000			08/01/2036	Aa2		175,000		193,522
MS State University Educational Building Corporation Revenue		5.250			08/01/2038	Aa2		300,000		342,756
Mississippi State University Educational Building		5.000			11/01/2032	Aa2		125,000		143,229
Southern Mississippi Educational Building Corporation		5.000			03/01/2038	Aa2		600,000		664,608
University of Mississippi Educational Building Corporation		5.000			10/01/2028	Aa2		200,000		223,886
University of Mississippi Educational Building Corporation		4.000			11/01/2039	Aa2		200,000		209,450
University of Mississippi Educational Building Corporation		5.000			10/01/2031	Aa2		205,000		239,625
										3,121,311
PUBLIC FACILITIES REVENUE BONDS
14.84% of Net Assets
MS State Development Bank Special Obligation Alcorn County		4.750			07/01/2031	AA*		100,000		108,134
MS State Development Bank Special Obligation City of Jackson Convention Center		5.000			03/01/2027	Baa2		125,000		145,338
MS State Development Bank Special Obligation Refunding — City of Jackson		5.000			03/01/2036	Baa2		150,000		172,781
MS State Development Bank Special Obligation Brandon Public Improvement		5.000			11/01/2033	Aa3		150,000		168,135
MS State Development Bank Special Obligation Brandon Public Improvement		4.000			08/01/2033	AA*		300,000		313,863
MS Development Bank Special Obligation Brandon Public Improvement		4.000			08/01/2035	AA*		150,000		155,318
MS State Capital Improvement Projects		5.000			10/01/2029	Aa2		145,000		163,711
MS State Capital Improvement Projects		5.000			10/01/2036	Aa2		480,000		536,638
										1,763,918

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, 2016

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
MUNICIPAL UTILITY REVENUE BONDS
11.60% of Net Assets
MS State Development Bank Special Obligation Jackson Water & Sewer		4.500	%		09/01/2034	A2/AA*	$	100,000	$	104,929
MS State Development Bank Special Obligation Jackson Water & Sewer		5.000			09/01/2030	A2/AA*		125,000		140,085
MS State Development Bank Special Obligation Jackson Water & Sewer		5.000			12/01/2033	A*		50,000		55,121
MS State Development Bank Special Obligation Jackson Water & Sewer		6.875			12/01/2040	Baa3		250,000		315,108
MS Development Bank Special Obligation Hattiesburg Water & Sewer		4.750			12/01/2038	AA*		700,000		762,769
										1,378,012
TURNPIKES/TOLLROAD/HIGHWAY BONDS
5.51% of Net Assets
MS Development Bank Special Obligation Highway		5.000			01/01/2025	Aa3		200,000		235,268
MS Development Bank Special Obligation Marshall County		5.000			01/01/2028	Aa3		200,000		223,176
MS Development Bank Special Obligation Marshall County		5.000			01/01/2030	Aa3		75,000		84,861
MS Development Bank Desoto County Highway		5.000			01/01/2030	Aa3		100,000		111,903
										655,208
SCHOOL IMPROVEMENT BONDS
4.49% of Net Assets
MS State Development Bank Special Obligation — Jackson Schools		5.000			04/01/2028	A+*		375,000		420,634
MississippI State Development Bank Special Obligation Canton School District		5.000			12/01/2033	A1		100,000		112,382
										533,016
HOSPITAL AND HEALTHCARE BONDS
3.16% of Net Assets
Medical Center Educational Building Corporation MS Revenue		5.500			12/01/2023	Aa2		120,000		135,137
Medical Center Educational Building Corporation — University of Mississippi		5.000			06/01/2034	Aa2		100,000		106,366
MS Development Bank Special Obligation Jones County Rest Home		5.250			04/01/2028	A2		120,000		133,590
										375,093
REFUNDED BONDS
1.72% of Net Assets
MS State Development Bank Special Obligation Lowndes County		5.125			12/01/2027	AA*		135,000		149,748
MS State Refunding		5.250			11/01/2019	Aa2		50,000		55,216
										204,964
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS
1.26% of Net Assets
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
Mississippi State Gaming Tax Revenue		5.000			10/15/2035	A3		125,000		138,579
										148,979
STATE AND LOCAL MORTGAGE/HOUSING BONDS
.21% of Net Assets
MS Home Corporation Single Family Mortgage		5.050			12/01/2028	Aaa		25,000		25,217
Total Investments 96.84% of Net Assets (cost $11,126,976) (See (a) below for further explanation)									$	11,508,364
Other assets in excess of liabilities 3.16%										376,010
Net Assets 100%									$	11,884,374

# Ratings by Moody’s Investors Services, Inc. unless noted otherwise.

All ratings are as of the date indicated and do not reflect subsequent changes.

* Rated by Standard & Poor’s Corporation

@ Fitch’s Investors Service

NR Not Rated

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, 2016

(a) Cost for federal income tax purposes is $11,126,630 and net unrealized appreciation of investments is as follows:

Unrealized appreciation	$	434,138
Unrealized depreciation		(52,340	)
Net unrealized appreciation	$	381,798

Other Information

The following is a summary of the inputs used, as of December 31, 2016, 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		11,508,364
Level 3 Significant Unobservable Inputs		—
	$	11,508,364

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

21

MISSISSIPPI TAX-FREE INCOME SERIES UNAUDITED

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2016

ASSETS:
Investments in securities, at fair value (Cost: $11,126,976)		$	11,508,364
Cash			293,960
Interest receivable			155,889
Total assets			11,958,213
LIABILITIES:
Payable for:
Distributions to shareholders	58,213
Investment advisory fee	3,527
Transfer agent fee	3,119
Trustee fees	309
Accrued expenses	8,671
Total liabilities			73,839
NET ASSETS:
Capital			11,503,466
Accumulated net investment income			346
Accumulated net realized loss on investment transactions			(826	)
Net unrealized appreciation in value of investments			381,388
Net assets at value		$	11,884,374
NET ASSET VALUE, offering price and redemption price per share
(992,360 shares outstanding; unlimited number of shares authorized; no par value)		$	11.98

STATEMENT OF OPERATIONS

For the six months ended December 31, 2016

Net investment income:
Interest income	$	202,644
Expenses:
Investment advisory fee		29,116
Transfer agent fee		8,735
Custodian expense		3,164
Professional fees		1,191
Trustees fees		1,310
Pricing		2,507
Other expenses		3,582
Total expenses		49,605
Fees waived by Adviser		(9,283	)
Custodian expense reduction		(24	)
Net expenses		40,298
Net investment income		162,346
Realized and unrealized loss on investments:
Net realized loss		(829	)
Net change in unrealized appreciation/depreciation		(551,411	)
Net realized and unrealized loss on investments		(552,240	)
Net decrease in net assets resulting from operations	$	(389,894	)

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

22

MISSISSIPPI TAX-FREE INCOME SERIES UNAUDITED

STATEMENTS OF CHANGES IN NET ASSETS

For the six months ended December 31, 2016 and the year ended June 30, 2016

	Six Months Ended 12/31/2016			Year Ended 06/30/2016
Operations:
Net investment income	$	162,346		$	331,382
Net realized gain/(loss) on investments		(829	)		4,364
Net change in unrealized appreciation/depreciation		(551,411	)		473,931
Net increase/(decrease) in net assets resulting from operations		(389,894	)		809,677
Distributions from net investment income		(162,306	)		(331,306	)
Distributions from capital gains		(4,361	)		(2,937	)
Net fund share transactions (Note 4)		935,913			113,758
Total increase		379,352			589,192
Net assets:
Beginning of year		11,505,022			10,915,830
End of period	$	11,884,374		$	11,505,022
Accumulated Net Investment Income	$	346		$	306

FINANCIAL HIGHLIGHTS

Selected data for a share outstanding:	Six Months  Ended 12/31/2016			For the years ended June 30,
				2016			2015			2014			2013			2012
Net asset value, beginning of year		$12.55			$12.03			$11.95			$11.65			$12.01			$11.33
Income from investment operations:
Net investment income		0.17			0.36			0.37			0.38			0.39			0.42
Net gains/(losses) on securities		(0.57	)		0.52			0.08			0.31			(0.33	)		0.68
Total from investment operations		(0.40	)		0.88			0.45			0.69			0.06			1.10
Less distributions:
Distributions from net investment income		(0.17	)		(0.36	)		(0.37	)		(0.38	)		(0.42	)		(0.42	)
Distributions from capital gains		0.00	(b)		0.00	(b)		0.00			(0.01	)		0.00			0.00
Total distributions		(0.17	)		(0.36	)		(0.37	)		(0.39	)		(0.42	)		(0.42	)
Net asset value, end of period		$11.98			$12.55			$12.03			$11.95			$11.65			$12.01
Total return		(3.15)%	(c)		7.49%			3.80%			6.08%			0.38%			9.87%
Net assets, end of period (in thousands)		$11,884			$11,505			$10,916			$10,450			$8,309			$7,712
Ratio of net expenses to average net assets (a)		0.69%	(d)		0.70%			0.69%			0.69%			0.66%			0.65%
Ratio of gross expenses to average net assets		0.85%	(d)		0.88%			0.86%			0.90%			0.89%			0.92%
Ratio of net investment income to average net assets		2.81%	(d)		2.97%			3.07%			3.26%			3.22%			3.59%
Portfolio turnover		5.26%	(c)		3.26%			6.47%			1.96%			13.81%			9.99%

(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, 2016

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
PREREFUNDED BONDS
19.00% of Net Assets
Asheville NC Water System Revenue		4.750	%		08/01/2027	Aa2	$	1,000,000	$	1,021,952
Cabarrus County NC Certificates of Participation		5.000			06/01/2025	Aa2		1,000,000		1,052,730
Cabarrus County NC Certificates of Participation		5.000			01/01/2029	Aa2		750,000		803,910
Charlotte Mecklenburg NC Hospital Healthcare System		5.000			01/15/2027	Aa3		1,090,000		1,133,786
Harnett County NC Certificates of Participation		5.000			06/01/2027	A1		300,000		324,927
Johnston NC Memorial Hospital Authority		5.250			10/01/2028	A2		490,000		514,843
Lee County NC Certificates of Participation		5.000			04/01/2025	Aa3		550,000		555,599
Mecklenburg County NC Certificates of Participation		5.000			02/01/2028	Aa1		415,000		445,963
Mecklenburg County NC Certificates of Participation		5.000			02/01/2026	NR		450,000		468,594
Mooresville NC Certificates of Participation		5.000			09/01/2032	AA-*		1,890,000		1,939,008
NC Capital Facilities Financial Agency Education Duke University		5.000			10/01/2038	Aa1		500,000		539,655
NC Capital FacilitIes Financial Agency Education Wake Forest		5.000			01/01/2031	Aa3		500,000		536,045
NC Capital Facilities Financial Agency Education Wake Forest		5.000			01/01/2038	Aa3		1,250,000		1,340,113
NC Eastern Municipal Power Agency		6.000			01/01/2025	A3		1,150,000		1,466,158
NC Eastern Municipal Power Agency		6.000			01/01/2026	Aaa		275,000		328,130
NC Infrastructure Finance Corporation Certificates of Participation		5.000			02/01/2024	Aa1		250,000		250,798
NC Municipal Power Agency #1 Catawba Electric Revenue		4.750			01/01/2030	AAA@		210,000		223,759
NC Municipal Power Agency #1 Catawba Electric Revenue		5.000			01/01/2030	AAA@		1,815,000		1,942,849
NC State Medical Care Commission Health Care Facilities		5.000			06/01/2034	Aa2		1,670,000		1,808,360
Pitt County NC Limited Obligation		5.000			04/01/2035	Aa2		105,000		115,987
Rockingham County NC Certificates of Participation		5.000			04/01/2032	Aa3		1,325,000		1,388,242
Sampson County NC Certificates of Participation		5.000			06/01/2022	A2		1,250,000		1,271,075
Sampson County NC Certificates of Participation		5.000			06/01/2026	A2		1,000,000		1,016,860
University of NC Chapel Hill		5.000			12/01/2031	Aaa		1,215,000		1,258,218
University of NC System Pool Revenue		5.000			10/01/2026	A1		1,000,000		1,064,250
University of NC System Pool Revenue		5.000			10/01/2034	Aa2		1,950,000		2,130,005
University of North Carolina		5.000			10/01/2033	A1		340,000		361,845
University of North Carolina		5.000			10/01/2033	A1		515,000		548,089
Wake County NC Limited Obligation		5.000			06/01/2032	Aa1		1,500,000		1,624,635
Wilmington NC Certificates of Participation		5.000			06/01/2038	Aa2		250,000		263,183
Wilmington NC Storm Water Fee Revenue		5.000			06/01/2028	NR		385,000		391,410
										28,130,978
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS
17.28% of Net Assets
Iredell County NC Community College		5.000			04/01/2026	Aa1		225,000		235,134
Iredell County NC Community College		5.000			04/01/2027	Aa1		325,000		339,638
NC State Capital Facilities Davidson College		5.000			03/01/2032	AA+*		310,000		351,376
NC State Capital Facilities Duke University		5.000			10/01/2041	Aa1		2,000,000		2,295,860
NC State Capital Facilities Finance Agency Davidson College		4.750			03/01/2035	AA+*		1,000,000		1,078,710
NC State Capital Facilities Finance Agency Wake Forest University		4.000			01/01/2037	Aa3		2,170,000		2,239,332
NC State Capital Facilities Wake Forest University		4.000			01/01/2036	Aa3		750,000		773,963
NC State University at Raleigh		5.000			10/01/2042	Aa1		750,000		856,298
University of NC Charlotte		5.000			04/01/2035	Aa3		595,000		666,668
University of NC Charlotte		5.000			04/01/2043	Aa3		1,500,000		1,668,330
University of NC Charlotte		5.000			04/01/2040	Aa3		2,650,000		2,964,900
University of NC Charlotte		5.000			04/01/2031	Aa3		750,000		831,210
University of NC Charlottte		5.000			04/01/2038	Aa3		1,000,000		1,117,010
University of NC Greensboro		5.000			04/01/2031	Aa3		500,000		561,155
University of NC Greensboro		5.000			04/01/2036	Aa3		500,000		555,430
University of NC Greensboro		5.000			04/01/2033	Aa3		900,000		1,016,505
University of NC Greensboro		5.000			04/01/2039	Aa3		2,870,000		3,186,188
University of NC Wilmington Limited Obligation		5.000			06/01/2033	A1		550,000		612,667
University of NC Wilmington Limited Obligation		4.000			06/01/2034	A1		500,000		519,090
University of North Carolina		5.000			10/01/2033	A1		145,000		152,837
University of North Carolina Wilmington Limited Obligation		4.000			06/01/2033	A1		1,700,000		1,776,007
Western Carolina NC University		4.000			10/01/2039	Aa3		840,000		867,552

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, 2016

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
Western Carolina University		5.000	%		10/01/2045	Aa3	$	825,000	$	926,822
										25,592,682
MUNICIPAL UTILITY REVENUE BONDS
13.50% of Net Assets
Brunswick County NC Enterprise System Revenue		5.000			04/01/2031	Aa3		500,000		581,735
Buncombe County NC Metropolitan Sewerage District		5.000			07/01/2039	Aa1		550,000		620,263
Concord NC Utilities System Revenue		4.500			12/01/2034	Aa2		1,000,000		1,110,990
Durham NC Utility System Revenue		4.000			08/01/2036	Aa1		745,000		791,950
Fuquay-Varina NC Combined Utilities Revenue		5.000			04/01/2040	Aa2		1,000,000		1,142,260
Gastonia NC Combined Utilities System Revenue		5.000			05/01/2034	Aa2		570,000		651,248
Gastonia NC Combined Utilities System Revenue		5.000			05/01/2035	Aa2		250,000		284,453
Greenville NC Combined Enterprise System Revenue		5.000			04/01/2034	Aa2		500,000		578,065
High Point NC Combined Enterprise		5.000			11/01/2039	Aa2		750,000		850,665
Jacksonville NC Enterprise System Revenue		5.250			05/01/2030	Aa3		300,000		368,895
Jacksonville NC Enterprise System Revenue		5.250			05/01/2031	Aa3		225,000		277,985
Martin County NC Limited Obligation Water and Sewer District		4.750			06/01/2034	A2		1,150,000		1,259,710
Monroe NC Enterprise System Revenue		4.000			03/01/2033	A2		355,000		372,218
Moore County NC		5.000			06/01/2031	Aa3		2,750,000		3,059,898
Mooresville NC Limited Obligation		5.000			11/01/2031	AA-*		1,250,000		1,407,588
NC Eastern Municipal Power Agency #1 Catawba Electric Revenue		5.000			01/01/2031	A2		500,000		559,190
NC Municipal Power Agency #1 Catawba Electric Revenue		5.000			01/01/2030	A*		500,000		584,405
NC Municipal Power Agency #1 Catawba Electric Revenue		4.750			01/01/2030	A2		80,000		84,104
NC Municipal Power Agency #1 Catawba Electric Revenue		5.000			01/01/2030	A2		730,000		773,231
NC Municipal Power Agency #1 Catawba Electric Revenue		5.000			01/01/2032	A*		500,000		575,405
Sampson County NC Water & Sewer District		5.000			06/01/2037	A1		920,000		1,026,968
Wilmington NC Storm Water Fee Revenue		5.000			06/01/2028	AA+*		115,000		116,733
Wilson NC Certificates of Participation Public Facilities		5.000			05/01/2021	A1		780,000		789,415
Wilson NC Certificates of Participation Public Facilities		5.000			05/01/2025	A1		750,000		758,288
Wilson NC Certificates of Participation Public Facilities		5.000			05/01/2029	A1		1,355,000		1,369,553
										19,995,215
HOSPITAL AND HEALTHCARE BONDS
12.46% of Net Assets
Charlotte Mecklenburg NC Hospital Healthcare System		5.000			01/15/2031	Aa3		450,000		450,756
Charlotte Mecklenburg NC Hospital Healthcare System		5.250			01/15/2039	Aa3		750,000		798,518
Charlotte Mecklenburg NC Hospital Healthcare System		5.000			01/15/2039	Aa3		1,500,000		1,681,350
NC State Medical Care Commission Health Care Facilities		5.000			06/01/2035	Aa2		500,000		555,740
NC State Medical Care Commission Health Care Facilities		4.000			06/01/2034	Aa2		200,000		206,338
NC State Medical Care Commission Health Care Facilities		5.000			07/01/2030	A2		500,000		540,275
NC State Medical Care Commission Health Care Facilities		4.000			06/01/2036	Aa2		1,000,000		1,023,650
NC State Medical Care Commission Health Care Facilities		4.000			06/01/2035	Aa2		250,000		256,715
NC State Medical Care Commission Health Care Facilities		5.000			10/01/2036	Aa3		3,045,000		3,391,491
NC State Medical Care Commission Health Care Facilities		5.000			07/01/2032	A2		615,000		697,816
NC State Medical Care Commission Health Care Facilities		5.000			07/01/2033	A2		750,000		847,418
NC State Medical Care Commission Health Care Facilities		5.000			06/01/2036	A1		1,000,000		1,086,810
NC State Medical Care Commission Health Care Facilities		5.000			06/01/2040	A1		1,885,000		2,035,348
NC State Medical Care Commission Health Care Facilities		5.000			10/01/2038	A2		200,000		219,872
NC State Medical Care Commission Hospital Revenue NC Baptist Hospital		5.250			06/01/2029	A2		645,000		708,107
NC State Medical Care Commission Wake Forest Baptist Hospital		5.000			12/01/2033	A2		1,000,000		1,107,140
NC State Medical Care Commission Wake Medical		5.000			10/01/2031	A2		1,000,000		1,106,020
NC State Medical Care Community Hospital Revenue NC Baptist Hospital		5.000			06/01/2034	A2		1,225,000		1,318,076
NC State Medical Care Community Hospital Revenue NC Baptist Hospital		4.750			06/01/2030	A2		405,000		427,457
										18,458,897
REFUNDING BONDS
9.63% of Net Assets
Buncombe County NC Limited Obligation		5.000			06/01/2035	Aa2		2,000,000		2,276,480

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, 2016

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
Charlotte NC Certificates of Participation		5.000	%		06/01/2033	Aa1	$	840,000	$	950,510
Charlotte NC Certificates of Participation		5.000			06/01/2034	Aa1		750,000		848,933
Charlotte NC Certificates of Participation		5.000			06/01/2026	Aa1		1,455,000		1,524,142
Charlotte NC Certificates of Participation		5.000			06/01/2027	Aa1		775,000		811,379
Chatham County NC		5.000			11/01/2032	Aa2		825,000		948,065
Dare County NC Limited Obligation Refunding		5.000			06/01/2029	Aa3		100,000		112,272
Durham Capital Financing Corporation Limited Obligation		5.000			06/01/2034	Aa1		500,000		569,880
Johnston County NC Installment Financing Contract		5.000			10/15/2027	Aa2		570,000		628,174
Monroe NC Limited Obligation		5.000			03/01/2035	Aa3		390,000		446,055
Monroe NC Limited Obligation		5.000			03/01/2039	Aa3		1,715,000		1,946,885
New Hanover County NC Limited Obligation		5.000			12/01/2027	Aa1		505,000		581,255
Pitt County NC Certificates of Participation		5.000			04/01/2027	Aa2		500,000		561,415
Rockingham County NC Limited Obligation		5.000			04/01/2027	Aa3		250,000		293,688
Rockingham County NC Limited Obligation		4.500			04/01/2032	Aa3		500,000		552,525
Thomasville NC Combined Enterprise System Revenue		4.750			05/01/2028	A1		435,000		476,534
Union County NC Limited Obligation Refunding		5.000			12/01/2024	Aa1		125,000		148,708
Wake County NC Limited Obligation		5.000			12/01/2035	Aa1		500,000		580,580
										14,257,480
SCHOOL IMPROVEMENT BONDS
8.52% of Net Assets
Brunswick County NC Limited Obligation		5.000			06/01/2030	Aa3		250,000		288,158
Brunswick County NC Limited Obligation		5.000			06/01/2031	Aa3		250,000		286,753
Cabarrus County NC Limited Obligation		5.000			04/01/2035	Aa2		1,435,000		1,642,860
Davidson County NC Limited Obligation		5.000			06/01/2032	Aa3		500,000		581,515
Duplin County Limited Obligation		5.000			04/01/2034	A2		235,000		265,621
Duplin County NC Limited Obligation		5.000			04/01/2032	A2		750,000		859,935
Franklin County NC Certificates of Participation		5.000			09/01/2027	Aa3		750,000		770,828
Nash County NC Limited Obligation		5.000			10/01/2030	Aa3		2,045,000		2,250,093
Onslow County NC Limited Obligation		5.000			06/01/2033	Aa3		500,000		567,930
Onslow County NC Limited Obligation		4.000			10/01/2034	Aa3		500,000		525,555
Onslow County North Carolina Limited Obligation		4.000			10/01/2035	Aa3		500,000		522,170
Pitt County NC Limited Obligation		4.000			04/01/2035	Aa2		300,000		312,480
Pitt County NC Limited Obligation		4.000			04/01/2031	Aa2		500,000		526,405
Pitt County NC Limited Obligation		4.000			04/01/2034	Aa2		550,000		572,996
Sampson County NC Limited Obligation		5.000			12/01/2033	A1		1,975,000		2,243,975
Wilkes County NC Limited Obligation		5.000			06/01/2031	A1		350,000		398,661
										12,615,935
PUBLIC FACILITIES REVENUE BONDS
5.59% of Net Assets
Charlotte NC Certificates of Participation Convention Facilities		5.000			06/01/2034	Aa2		900,000		965,655
Forsyth County NC Limited Tax		5.000			04/01/2031	Aa1		335,000		381,816
Henderson County NC Limited Obligation		5.000			10/01/2030	Aa3		250,000		291,158
Henderson County NC Limited Obligation		5.000			10/01/2031	Aa3		500,000		579,795
Jacksonville Public Facilities Corporation Limited Obligation		5.000			04/01/2031	A1		265,000		294,240
Jacksonville Public Facilities Corporation Limited Obligation		5.000			04/01/2032	A1		100,000		110,673
Kannapolis NC Limited Obligation		5.000			04/01/2032	Aa3		500,000		562,640
Mecklenburg County NC Certificates Participation		5.000			02/01/2026	Aa1		550,000		570,774
Onslow County NC Limited Obligation		5.000			06/01/2032	Aa3		500,000		570,310
Raleigh NC Limited Obligation		5.000			10/01/2038	Aa1		500,000		565,915
Raleigh NC Limited Obligation		5.000			10/01/2034	Aa1		1,420,000		1,634,164
Watauga NC Public Facilities Corporation Limited Obligation		5.000			06/01/2027	Aa3		750,000		846,090
Winston Salem NC Limited Obligation		5.000			06/01/2031	Aa1		800,000		907,264
										8,280,494
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS
5.06% of Net Assets
Buncombe County NC Limited Obligation		5.000			06/01/2030	Aa2		250,000		282,843
Buncombe County NC Limited Obligation		5.000			06/01/2032	Aa2		250,000		282,708
Buncombe County NC Limited Obligation		5.000			06/01/2034	Aa2		1,100,000		1,248,467

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, 2016

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
Buncombe County NC Limited Obligation		5.000	%		06/01/2033	Aa2	$	600,000	$	690,612
Buncombe County NC Limited Obligation		5.000			06/01/2034	Aa2		365,000		415,166
Charlotte NC Certificates of Participation		5.000			12/01/2029	Aa1		340,000		382,633
Johnston County NC Limited Obligation		4.750			06/01/2033	Aa2		500,000		552,275
Orange County NC Public Facilities Company Limited Obligation		4.750			10/01/2032	Aa1		750,000		824,250
Rocky Mount NC Special Obligation		4.500			05/01/2032	Aa3		1,500,000		1,653,705
Winston Salem NC Certificates of Participation		4.750			06/01/2031	Aa1		620,000		621,184
Winston Salem NC Limited Obligation		4.500			06/01/2034	Aa1		500,000		544,685
										7,498,528
AIRPORT BONDS
3.12% of Net Assets
Charlotte NC Douglas International Airport		5.000			07/01/2025	Aa3		1,000,000		1,018,530
Charlotte NC Douglas International Airport		5.000			07/01/2030	Aa3		1,095,000		1,250,632
Raleigh Durham NC Airport		5.000			05/01/2029	Aa3		235,000		257,635
Raleigh Durham NC Airport		5.000			05/01/2036	Aa3		1,480,000		1,610,062
Raleigh Durham NC Airport		5.000			05/01/2032	Aa3		440,000		480,594
										4,617,453
TURNPIKES/TOLLROAD/HIGHWAY BONDS
1.58% of Net Assets
NC State Grant Anticipation Revenue Vehicle Garvee		5.000			03/01/2030	A2		200,000		228,472
NC State Turnpike Authority Monroe Connector System		5.000			07/01/2029	Aa2		500,000		561,075
NC State Turnpike Authority Monroe Connector System		5.000			07/01/2031	Aa2		1,385,000		1,548,485
										2,338,032
ESCROWED TO MATURITY BONDS
1.45% of Net Assets
NC Eastern Municipal Power Agency		6.000			01/01/2018	AAA@		1,000,000		1,048,010
NC Eastern Municipal Power Agency		6.000			01/01/2022	A3		915,000		1,094,679
										2,142,689
LEASE REVENUE BONDS
1.16% of Net Assets
Buncombe County NC Limited Obligation		5.000			06/01/2032	Aa2		1,500,000		1,717,500
MISCELLANEOUS REVENUE BONDS
.38% of Net Assets
Wilmington NC Storm Water Revenue		5.000			06/01/2035	Aa2		500,000		569,120
Total Investments 98.73% of Net Assets (cost $144,388,855) (See (a) below for further explanation)									$	146,215,003
Other assets in excess of liabilities 1.27%										1,886,558
Net Assets 100%									$	148,101,561

# Ratings by Moody’s Investors Services, Inc. unless noted otherwise.

All ratings are as of the date indicated and do not reflect subsequent changes.

* Rated by Standard & Poor’s Corporation

@ Fitch’s Investors Service

NR Not Rated

(a) Cost for federal income tax purposes is $144,388,855 and net unrealized appreciation of investments is as follows:

Unrealized appreciation	$	3,666,880
Unrealized depreciation		(1,840,732	)
Net unrealized appreciation	$	1,826,148

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

27

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

SCHEDULE OF PORTFOLIO INVESTMENTS

North Carolina Municipal Bonds

December 31, 2016

Other Information

The following is a summary of the inputs used, as of December 31, 2016, 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		146,215,003
Level 3	Significant Unobservable Inputs		—
		$	146,215,003

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

28

NORTH CAROLINA TAX-FREE INCOME SERIES

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2016 UNAUDITED

ASSETS:
Investments in securities, at fair value (Cost: $144,388,855)		$	146,215,003
Cash			1,127,142
Receivable for fund shares sold			111,950
Interest receivable			1,519,940
Total assets			148,974,035
LIABILITIES:
Payable for:
Distributions to shareholders	357,813
Fund shares redeemed	409,032
Investment advisory fee	59,753
Transfer agent fee	25,605
Accrued expenses	20,271
Total liabilities			872,474
NET ASSETS:
Capital			146,813,640
Accumulated net realized loss on investment transactions			(538,227	)
Net unrealized appreciation in value of investments			1,826,148
Net assets at value		$	148,101,561
NET ASSET VALUE, offering price and redemption price per share (12,998,561 shares outstanding; unlimited number of shares authorized; no par value)		$	11.39

STATEMENT OF OPERATIONS

For the six months ended December 31, 2016

Net investment income:
Interest income	$	2,552,863
Expenses:
Investment advisory fee		367,230
Transfer agent fee		94,427
Custodian expense		11,135
Professional fees		15,800
Trustees fees		7,398
Other expenses		25,944
Total expenses		521,934
Fees waived by Adviser		(95	)
Custodian expense reduction		(85	)
Net expenses		521,754
Net investment income		2,031,109
Realized and unrealized gain/(loss) on investments:
Net realized gain		25,657
Net change in unrealized appreciation/depreciation		(8,203,151	)
Net realized and unrealized loss on investments		(8,177,494	)
Net decrease in net assets resulting from operations	$	(6,146,385	)

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

29

NORTH CAROLINA TAX-FREE INCOME SERIES

STATEMENTS OF CHANGES IN NET ASSETS

For the six months ended December 31, 2016 and the year ended June 30, 2016 UNAUDITED

	Six Months Ended 12/31/2016			Year Ended 06/30/2016
Operations:
Net investment income	$	2,031,109		$	3,859,358
Net realized gain on investments		25,657			2,054
Net change in unrealized appreciation/depreciation		(8,203,151	)		5,728,384
Net increase/(decrease) in net assets resulting from operations		(6,146,385	)		9,589,796
Distributions from net investment income		(2,033,595	)		(3,858,780	)
Net fund share transactions (Note 4)		5,934,495			20,898,699
Total increase/(decrease)		(2,245,485	)		26,629,715
Net assets:
Beginning of year		150,347,046			123,717,331
End of period	$	148,101,561		$	150,347,046
Accumulated Net Investment Income	$	—		$	3,143

FINANCIAL HIGHLIGHTS

Selected data for a share outstanding:	Six Months Ended 12/31/2016			For the years ended June 30,
				2016			2015			2014			2013			2012
Net asset value, beginning of year		$12.02			$11.53			$11.54			$11.31			$11.59			$10.92
Income from investment operations:
Net investment income		0.16			0.34			0.36			0.37			0.36			0.39
Net gains/(losses) on securities		(0.63	)		0.49			(0.01	)		0.24			(0.26	)		0.67
Total from investment operations		(0.47	)		0.83			0.35			0.61			0.10			1.06
Less distributions:
Distributions from net investment income		(0.16	)		(0.34	)		(0.36	)		(0.37	)		(0.36	)		(0.39	)
Distributions from capital gains		0.00			0.00			0.00			(0.01	)		(0.02	)		0.00
Total distributions		(0.16	)		(0.34	)		(0.36	)		(0.38	)		(0.38	)		(0.39	)
Net asset value, end of period		$11.39			$12.02			$11.53			$11.54			$11.31			$11.59
Total return		(3.95)%	(b)		7.28%			3.00%			5.57%			0.76%			9.87%
Net assets, end of period (in thousands)		$148,102			$150,347			$123,717			$98,879			$95,127			$88,304
Ratio of net expenses to average net assets (a)		0.69%	(c)		0.70%			0.71%			0.72%			0.71%			0.71%
Ratio of gross expenses to average net assets		0.69%	(c)		0.70%			0.71%			0.72%			0.71%			0.71%
Ratio of net investment income to average net assets		2.69%	(c)		2.87%			3.04%			3.29%			3.07%			3.46%
Portfolio turnover		3.10%	(b)		6.09%			4.56%			9.73%			3.59%			5.94%

(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.

30

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

SCHEDULE OF PORTFOLIO INVESTMENTS

North Carolina Municipal Bonds

December 31, 2016

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
REFUNDING BONDS
23.77% of Net Assets
Bertie County Limited Obligation		4.000	%		06/01/2022	A1	$	200,000	$	215,524
Cabarrus County NC Certificates of Participation		5.000			04/01/2021	AA*		150,000		164,846
Charlotte NC Certificate of Participation		5.000			12/01/2024	Aa2		250,000		297,018
Charlotte NC Certificates of Participation		4.000			06/01/2022	Aa1		125,000		137,171
Charlotte NC Certificates of Participation		4.000			06/01/2025	Aa1		300,000		328,395
Charlotte NC Certificates of Participation		5.000			06/01/2023	Aa1		625,000		727,600
Cumberland County NC Certificates of Participation		3.500			12/01/2020	Aa2		185,000		193,366
Cumberland County NC Certificates of Participation		5.000			12/01/2017	Aa2		350,000		361,925
Dare County NC Limited Obligation		4.000			06/01/2019	Aa3		100,000		105,648
Dare County NC Limited Obligation		5.000			06/01/2024	Aa3		335,000		381,200
Durham NC Refunding		5.000			09/01/2022	Aaa		125,000		145,511
Johnston County NC Limited Obligation		5.000			06/01/2029	Aa2		350,000		404,807
Pender County NC Limited Obligation		3.000			06/01/2019	Aa3		220,000		226,750
Raleigh NC Limited Obligation Refunding		5.000			10/01/2023	Aa2		250,000		294,210
Richmond County NC Limited Obligation Refunding		4.000			04/01/2019	A1		225,000		235,874
Rockingham County NC Limited Obligation		5.000			04/01/2023	Aa3		250,000		290,043
Rockingham County NC Limited Obligation		4.000			04/01/2024	Aa3		105,000		115,020
Sampson County NC Limited Obligation		5.000			12/01/2023	A1		165,000		191,172
Union County NC Limited Obligation		3.000			12/01/2018	Aa1		100,000		102,981
Warren County NC Limited Obligation		5.000			06/01/2023	A1		100,000		115,188
										5,034,249
PREREFUNDED BONDS
21.30% of Net Assets
Brunswick County NC Community College		4.250			05/01/2022	Aa2		125,000		126,363
Cabarrus County NC Certificates of Participation		5.000			06/01/2019	Aa2		420,000		442,210
Cabarrus County NC Certificates of Participation		5.000			01/01/2021	Aa2		200,000		214,376
Charlotte-Mecklenburg Hospital		4.375			01/15/2019	Aa3		150,000		155,058
Durham County NC Certificates of Participation		5.000			06/01/2020	Aa1		435,000		471,253
Durham County NC Certificates of Participation		5.000			06/01/2021	Aa1		240,000		260,002
Harnett County NC Certificates of Participation		5.000			12/01/2021	A1		200,000		207,208
Johnston NC Memorial Hospital Authority Mortgage Revenue		5.000			10/01/2018	A2		175,000		183,330
Moore County NC		5.000			06/01/2021	Aa3		200,000		221,972
Mooreville NC Certificates of Participation		4.125			09/01/2018	AA-*		250,000		255,045
NC Eastern Municipal Power Agency		5.250			01/01/2019	A3		550,000		572,473
NC Medical Care Duke University Health Systems		3.000			06/01/2019	Aa2		150,000		155,181
NC Municipal Power Agency #1 Catawba Electric		5.000			01/01/2021	AAA@		45,000		48,170
NC State Capital Improvement Obligation		5.000			05/01/2022	Aa1		100,000		105,034
NC State Capital Improvement Obligation		5.000			05/01/2022	Aa1		155,000		167,368
Onslow NC Water & Sewer		4.250			06/01/2022	A3		150,000		156,419
Rockingham County NC Certificates of Participation		4.000			04/01/2019	Aa3		100,000		103,521
Rutherford County NC Certificates of Participation		5.000			12/01/2018	A1		205,000		212,388
Rutherford County NC Certificates of Participation		5.000			12/01/2020	A1		100,000		103,604
Rutherford NC Certificates of Participation		4.000			12/01/2019	A1		200,000		205,384
University of North Carolina		4.250			10/01/2021	A1		20,000		21,022
University of North Carolina		4.250			10/01/2021	A1		20,000		21,022
Wilmington NC Certificates of Participation		4.200			06/01/2019	Aa2		100,000		104,137
										4,512,540
MUNICIPAL UTILITY REVENUE BONDS
11.47% of Net Assets
Brunswick County NC Enterprise System Revenue		5.000			04/01/2027	Aa3		350,000		414,586
Columbus County NC Limited Obligation		5.000			06/01/2023	A1		355,000		407,100
Gastonia North Carolina Combined Utilities System		4.000			05/01/2023	Aa2		150,000		166,071
Monroe NC Certificates of Participation		4.000			03/01/2019	Aa3		100,000		104,986
Mooresville NC Limited Obligation		5.000			11/01/2021	AA-*		350,000		394,202
NC Municipal Power Agency #1 Catawba Electric		5.000			01/01/2021	A2		205,000		218,811
NC Municipal Power Agency #1 Catawba Electric		5.250			01/01/2018	A2		95,000		98,727

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, 2016

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
Union County NC Enterprise System Revenue		4.000	%		12/01/2022	Aa1	$	100,000	$	109,423
Wilson NC Certificates of Participation		5.000			05/01/2018	A1		160,000		161,910
Wilson NC Certificates of Participation		5.000			05/01/2022	A1		350,000		353,962
										2,429,778
SCHOOL IMPROVEMENT BONDS
10.91% of Net Assets
Cabarrus County NC Certificates of Participation		4.250			06/01/2017	Aa2		175,000		177,366
Cabarrus County NC Certificates of Participation		5.000			01/01/2019	Aa2		100,000		106,798
Cabarrus County NC Limited Obligation		5.000			04/01/2024	Aa2		350,000		413,553
Davidson County NC Limited Obligation		5.000			06/01/2024	Aa3		200,000		236,636
Montgomery County NC Certificates of Participation		5.000			02/01/2017	A*		125,000		125,371
Nash County NC Limited Obligation		5.000			10/01/2018	Aa3		150,000		159,449
New Hanover County North Carolina		4.000			02/01/2028	Aaa		100,000		110,302
Onslow County NC Limited Obligation		5.000			06/01/2023	Aa3		250,000		290,878
Onslow County NC Limited Obligation		4.000			10/01/2024	Aa3		350,000		389,389
Rutherford County NC Certificates of Participation		5.000			12/01/2017	A1		105,000		108,577
Wilkes County NC Limited Obligation		5.000			06/01/2024	A1		165,000		192,045
										2,310,364
PUBLIC FACILITIES REVENUE BONDS
6.82% of Net Assets
Charlotte NC Certificates of Participation		4.000			12/01/2022	Aa1		170,000		185,186
Chatham County NC Limited Obligation		5.000			11/01/2025	Aa2		500,000		594,705
Mecklenburg NC Certificate of Participation		5.000			02/01/2017	Aa1		60,000		60,187
Watauga NC Public Facillities Corporation Limited Obligation		5.000			06/01/2023	Aa3		275,000		312,774
Winston Salem NC Limited Obligation		5.000			06/01/2028	Aa1		250,000		290,793
										1,443,645
HOSPITAL AND HEALTHCARE BONDS
5.37% of Net Assets
NC Medical Care Caromont Health		3.250			02/15/2018	A1		370,000		378,406
NC Medical Care Duke University		5.000			06/01/2026	Aa2		165,000		187,485
NC State Medical Care Commission Health Care Facilities		4.000			06/01/2025	Aa2		250,000		278,308
North Carolina State Medical Care Commission — Mission Health System		5.000			10/01/2024	Aa3		250,000		293,598
										1,137,797
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS
5.10% of Net Assets
Johnston County NC Limited Obligation		4.000			06/01/2019	Aa2		150,000		158,693
NC State Capital Improvement Obligation		4.000			05/01/2020	Aa1		120,000		123,694
NC State Capital Improvement Obligation		5.000			05/01/2021	Aa1		350,000		386,460
NC State Capital Improvement Obligation		4.000			05/01/2025	Aa1		105,000		111,323
Salisbury NC Certificates of Participation		5.000			03/01/2019	A3		145,000		154,666
Winston Salem NC Limited Obligation		5.000			06/01/2023	Aa1		125,000		145,683
										1,080,519
ESCROWED TO MATURITY BONDS
3.95% of Net Assets
Mecklenburg NC Certificate of Participation		5.000			02/01/2017	NR		45,000		45,140
NC Eastern Municipal Power Agency		5.000			01/01/2021	AAA@		125,000		140,588
NC Eastern Municipal Power Agency		6.000			01/01/2022	AAA@		125,000		149,283
NC Eastern Municipal Power Agency		6.000			01/01/2022	A3		220,000		263,201
NC Eastern Municipal Power Agency		6.500			01/01/2018	A3		100,000		105,133
NC Municipal Power Agency #1 Catawba Electric		5.250			01/01/2018	AAA@		30,000		31,229
University NC Wilmington Certificates of Participation		4.000			06/01/2017	A1		100,000		101,264
										835,838
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS
3.62% of Net Assets
Appalachian NC State University		5.000			10/01/2025	Aa3		235,000		281,737
University of NC at Greensboro		5.000			04/01/2025	Aa3		100,000		111,736

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, 2016

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
University of NC Wilmington Limited Obligation		5.000	%		06/01/2024	A1	$	265,000	$	311,174
University of North Carolina		4.250			10/01/2021	A1		60,000		62,513
										767,160
TURNPIKES/TOLLROAD/HIGHWAY BONDS
1.57% of Net Assets
NC State Grant Anticipation Revenue Vehicle		5.000			03/01/2021	A2		310,000		332,311
AD VALOREM PROPERTY BONDS
1.39% of Net Assets
Smithville Township NC		5.000			06/01/2024	A1		250,000		293,375
LEASE REVENUE BONDS
1.26% of Net Assets
Edgecombe County NC Limited Obligation		4.000			06/01/2022	A2		250,000		267,320
AIRPORT BONDS
.51% of Net Assets
Raleigh Durham NC Airport Authority		5.000			11/01/2017	Aa3		105,000		108,398
Total Investments 97.04% of Net Assets (cost $20,629,450) (See (a) below for further explanation)									$	20,553,294
Other assets in excess of liabilities 2.96%										627,911
Net Assets 100%									$	21,181,205

# Ratings by Moody’s Investors Services, Inc. unless noted otherwise.

All ratings are as of the date indicated and do not reflect subsequent changes.

* Rated by Standard & Poor’s Corporation

@ Fitch’s Investors Service

NR Not Rated

(a) Cost for federal income tax purposes is $20,629,450 and net unrealized depreciation of investments is as follows:

Unrealized appreciation	$	182,522
Unrealized depreciation		(258,678	)
Net unrealized depreciation	$	(76,156	)

Other Information

The following is a summary of the inputs used, as of December 31, 2016, 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		20,553,294
Level 3	Significant Unobservable Inputs		—
		$	20,553,294

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, 2016

UNAUDITED

ASSETS:
Investments in securities, at fair value (Cost: $20,629,450)			$	20,553,294
Cash				356,939
Receivable for fund shares sold				138,723
Interest receivable				168,847
Total assets				21,217,803
LIABILITIES:
Payable for:
Distributions to shareholders	5,961
Fund shares redeemed	5,116
Investment advisory fee	7,394	��
Transfer agent fee	2,695
Trustees fees	712
Legal fee	6,403
Audit fee	3,168
Accrued expenses	5,149
Total liabilities				36,598
NET ASSETS:
Capital				21,264,801
Accumulated net realized loss on investment transactions				(7,440	)
Net unrealized depreciation in value of investments				(76,156	)
Net assets at value			$	21,181,205
NET ASSET VALUE, offering price and redemption price per share (1,980,976 shares outstanding; unlimited number of shares authorized; no par value)			$	10.69

STATEMENT OF OPERATIONS

For the six months ended December 31, 2016

Net investment income:
Interest income	$	270,588
Expenses:
Investment advisory fee		61,372
Transfer agent fee		17,359
Custodian expense		4,385
Professional fees		7,109
Trustees fees		1,215
Other expenses		7,003
Total expenses		98,443
Fees waived by Adviser		(5,848	)
Custodian expense reduction		(33	)
Net expenses		92,562
Net investment income		178,026
Realized and unrealized loss on investments:
Net realized loss		(5,860	)
Net change in unrealized appreciation/depreciation		(805,301	)
Net realized and unrealized loss on investments		(811,161	)
Net decrease in net assets resulting from operations	$	(633,135	)

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, 2016 and the year ended June 30, 2016

UNAUDITED

	Six Months Ended 12/31/2016			Year Ended 06/30/2016
Operations:
Net investment income	$	178,026		$	372,463
Net realized loss on investments		(5,860	)		(54	)
Net change in unrealized appreciation/depreciation		(805,301	)		243,375
Net increase/(decrease) in net assets resulting from operations		(633,135	)		615,784
Distributions from net investment income		(178,026	)		(372,463	)
Net fund share transactions (Note 4)		(3,141,651	)		427,588
Total increase/(decrease)		(3,952,812	)		670,909
Net assets:
Beginning of year		25,134,017			24,463,108
End of period	$	21,181,205		$	25,134,017

FINANCIAL HIGHLIGHTS

Selected data for a share outstanding:	Six Months Ended 12/31/2016			For the years ended June 30,
				2016			2015			2014			2013			2012
Net asset value, beginning of year		$11.05			$10.94			$11.06			$11.00			$11.23			$10.93
Income from investment operations:
Net investment income		0.08			0.17			0.19			0.20			0.21			0.24
Net gains/(losses) on securities		(0.36	)		0.11			(0.12	)		0.08			(0.21	)		0.30
Total from investment operations		(0.28	)		0.28			0.07			0.28			0.00			0.54
Less distributions:
Distributions from net investment income		(0.08	)		(0.17	)		(0.19	)		(0.20	)		(0.21	)		(0.24	)
Distributions from capital gains		0.00			0.00			0.00			(0.02	)		(0.02	)		0.00
Total distributions		(0.08	)		(0.17	)		(0.19	)		(0.22	)		(0.23	)		(0.24	)
Net asset value, end of period		$10.69			$11.05			$10.94			$11.06			$11.00			$11.23
Total return		(2.55)%	(b)		2.59%			0.60%			2.53%			(0.06)%			4.98%
Net assets, end of period (in thousands)		$21,181			$24,463			$24,463			$25,952			$26,333			$24,734
Ratio of net expenses to average net assets (a)		0.76%	(c)		0.83%			0.83%			0.81%			0.78%			0.78%
Ratio of gross expenses to average net assets		0.81%	(c)		0.83%			0.83%			0.81%			0.78%			0.78%
Ratio of net investment income to average net assets		1.46%	(c)		1.69%			1.69%			1.80%			1.87%			2.15%
Portfolio turnover		3.03%	(b)		9.79%			9.79%			7.10%			10.19%			12.31%

(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.

35

DUPREE MUTUAL FUNDS — TENNESSEE TAX-FREE INCOME SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

Tennessee Municipal Bonds

December 31, 2016

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
MUNICIPAL UTILITY REVENUE BONDS
38.69% of Net Assets
Bristol TN Electric Revenue		5.000	%		09/01/2038	AA-*	$	1,525,000	$	1,709,029
Chattanooga TN Electric Revenue		5.000			09/01/2035	AA+*		250,000		286,678
Chattanooga TN Electric Revenue		5.000			09/01/2040	AA+*		1,825,000		2,076,357
Citizens Gas Utility District TN Gas Revenue		5.000			05/01/2029	A*		110,000		116,122
Clarksville TN Electric Systems Revenue		5.000			09/01/2028	Aa2		1,000,000		1,109,730
Clarksville TN Electric Systems Revenue		5.000			09/01/2032	Aa2		480,000		528,005
Clarksville TN Electric Systems Revenue		5.000			09/01/2033	Aa2		2,000,000		2,194,840
Clarksville TN Water Sewer & Gas Revenue		5.000			02/01/2033	Aa2		500,000		559,665
Clarksville TN Water Sewer & Gas Revenue		5.000			02/01/2038	Aa2		1,000,000		1,109,890
Clarksville TN Water Sewer & Gas Revenue		5.000			02/01/2034	Aa2		500,000		582,460
Clarksville TN Water Sewer & Gas Revenue		5.000			02/01/2036	Aa2		500,000		577,280
Clarksville TN Water Sewer & Gas Revenue		5.000			02/01/2041	Aa2		2,750,000		3,160,933
Columbia TN Waterworks Revenue		5.000			12/01/2032	Aa3		885,000		981,173
Franklin TN Water & Sewer Revenue and Tax Authority		5.000			04/01/2024	Aaa		750,000		893,925
Hallsdale-Powell Utility District Knox County Water & Sewer		5.000			04/01/2026	A3		1,000,000		1,009,510
Hallsdale-Powell Utility District Knox County Water & Sewer		5.000			04/01/2031	A3		740,000		746,408
Harpeth Valley TN Utilities District		5.000			09/01/2040	AA*		1,000,000		1,120,680
Harpeth Valley TN Utilities District		5.000			09/01/2034	AA*		500,000		566,940
Knox Chapman TN Utility District		5.250			01/01/2036	AA-*		700,000		775,705
Knox Chapman TN Utility District		4.500			01/01/2027	AA-*		1,000,000		1,105,550
Knox Chapman TN Utility District		5.000			01/01/2031	AA-*		250,000		289,383
Knox Chapman TN Utility District		5.000			01/01/2033	AA-*		250,000		286,870
Memphis TN Electric System Revenue		5.000			12/01/2031	Aa2		225,000		260,975
Memphis TN Electric System Revenue		5.000			12/01/2034	Aa2		1,250,000		1,432,625
Memphis TN Electric System Revenue		4.000			12/01/2036	Aa2		230,000		240,546
Metropolitan Government Nashville & Davidson County Electric		5.000			05/15/2036	AA+*		500,000		569,250
Metropolitan Government Nashville & Davidson County Electric		5.000			05/15/2039	AA+*		500,000		564,295
Metropolitan Government Nashville & Davidson County Electric		5.000			05/15/2033	AA+*		500,000		573,155
Metropolitan Government Nashville & Davidson County Electric		5.000			05/15/2036	AA+*		3,085,000		3,413,460
Metropolitan Government Nashville & Davidson County Water & Sewer		5.000			07/01/2030	Aa3		3,250,000		3,747,510
Metropolitan Government Nashville & Davidson County Water & Sewer		5.000			07/01/2031	Aa3		500,000		576,215
Metropolitan Government Nashville & Davidson County Water & Sewer		5.000			07/01/2033	Aa3		575,000		659,295
Metropolitan Government Nashville & Davidson County Water & Sewer		5.000			07/01/2040	Aa3		2,265,000		2,566,562
South Blount County TN Utility District Waterworks		5.000			12/01/2028	A2		765,000		832,029
Watauga River Tn Regional Water Authority Waterworks		5.000			07/01/2034	A*		500,000		546,665
West Wilson TN Utility District Waterworks		4.750			06/01/2028	NR		1,165,000		1,181,893
West Wilson Utility District TN Waterworks		5.000			06/01/2033	Aa3		1,170,000		1,283,935
White House TN Utility District Robertson & Sumner Counties Water & Sewer		4.000			01/01/2030	AA+*		1,000,000		1,094,910
										41,330,453
PREREFUNDED BONDS
19.94% of Net Assets
Blount County TN Public Building Authority Local Government		5.000			06/01/2025	Aa2		100,000		108,309
Blount County TN Public Building Authority Local Government		5.000			06/01/2027	Aa2		1,500,000		1,624,635
Blount County TN Public Building Authority Local Government		4.750			06/01/2031	Aa2		750,000		807,698
Blount County TN Public Building Authority Local Government		5.000			06/01/2032	Aa3		750,000		762,645
Chattanooga TN Electric Revenue		5.000			09/01/2026	AA+*		250,000		261,145
Citizens Gas Utility District TN Gas Revenue		5.000			05/01/2029	NR		140,000		151,204
Clarksville TN Electric System Revenue Bonds		5.000			09/01/2032	Aa2		1,250,000		1,282,838
Gallatin TN Water & Sewer Revenue		5.000			01/01/2028	Aa3		2,540,000		2,638,781
Gallatin TN Water & Sewer Revenue		5.000			01/01/2032	AA*		235,000		270,020
Harpeth Valley TN Utilities District		5.000			09/01/2032	Aa3		1,420,000		1,457,786
Jackson TN Energy Authority Gas System Revenue Bonds		5.000			10/01/2028	Aa2		1,000,000		1,029,750
Johnson City TN Health & Educational Facilities Escrowed		5.125			07/01/2025	AA-*		145,000		145,247
Metropolitan Government Nashville & Davidson County TN		4.750			05/15/2028	AA+*		460,000		482,264
Metropolitan Government Nashville & Davidson County TN		5.000			01/01/2025	Aa2		3,000,000		3,116,670

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, 2016

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
Metropolitan Government Nashville & Davidson County TN		5.000	%		05/15/2017	Aa2	$	205,000	$	208,122
Metropolitan Government Nashville & Davidson County TN		5.000			05/15/2017	Aa2		35,000		35,533
Metropolitan Government Nashville & Davidson County TN		5.000			05/15/2028	Aa2		205,000		208,122
Metropolitan Government Nashville & Davidson County TN		5.000			10/01/2034	NR		210,000		229,148
Pigeon Forge TN		4.900			06/01/2028	Aa3		725,000		762,214
Shelby County TN Health Education and Housing Facilities		5.250			09/01/2027	A1		1,000,000		1,046,750
South Blount County TN Utility District Waterworks		5.000			12/01/2028	A2		360,000		395,096
TN State School Board Authority Higher Education Facilities		5.000			05/01/2028	Aa1		1,000,000		1,050,750
TN State School Board Authority Higher Education Facilities		5.000			05/01/2034	Aa1		500,000		540,855
TN State School Board Authority Higher Education Facilities		5.125			05/01/2033	NR		235,000		247,058
TN State School Board Authority Higher Education Facilities		5.125			05/01/2033	Aa1		1,065,000		1,120,519
West Wilson TN Utility District Waterworks		4.750			06/01/2028	NR		1,295,000		1,315,267
										21,298,426
PUBLIC FACILITIES REVENUE BONDS
10.32% of Net Assets
Memphis Shelby County Sports Authority		5.250			11/01/2026	Aa3		500,000		548,055
Memphis Shelby County Sports Authority		5.250			11/01/2027	Aa3		750,000		822,960
Memphis TN Refunding General Improvement		5.000			04/01/2031	Aa2		800,000		918,728
Metropolitan Government Nashville & Davidson County Convention		5.000			07/01/2026	A1		630,000		684,495
Metropolitan Government Nashville & Davidson County Sports Authority		5.000			08/01/2031	Aa3		1,500,000		1,703,955
Metropolitan Government Nashville & Davidson County Sports Authority		5.000			08/01/2038	Aa3		755,000		845,094
Pigeon Forge Industrial Development Board		5.000			06/01/2024	AA*		600,000		671,178
Pigeon Forge Industrial Development Board		5.000			06/01/2027	AA*		1,400,000		1,560,454
Pigeon Forge Industrial Development Board		5.000			06/01/2029	AA*		2,120,000		2,343,215
Pigeon Forge Industrial Development Board		5.000			06/01/2034	AA*		850,000		924,630
										11,022,764
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS
8.13% of Net Assets
Franklin County TN Health & Education Facilities Board Revenue		5.000			09/01/2030	A+*		200,000		224,136
Metropolitan Government Nashville & Davidson County Vanderbilt		5.000			10/01/2028	Aa2		1,150,000		1,312,380
Metropolitan Government Nashville & Davidson County Vanderbilt		5.000			10/01/2034	Aa2		790,000		863,604
Shelby County TN Health Education & Housing Facilities Board		5.000			08/01/2030	A1		500,000		556,585
Shelby County TN Health Education & Housing Facilities Board		5.000			08/01/2040	A1		650,000		729,437
TN State School Bond Authority		5.000			11/01/2043	Aa1		1,000,000		1,124,530
TN State School Bond Authority Higher Educational Facilities		5.000			11/01/2037	Aa1		1,400,000		1,604,708
TN State School Bond Authority Higher Educational Facilities		5.000			11/01/2040	Aa1		2,000,000		2,275,100
										8,690,480
REFUNDING BONDS
6.58% of Net Assets
Blount County TN		5.000			06/01/2037	Aa2		200,000		231,008
Chattanooga TN Industrial Development Board Lease Rent Revenue		5.000			10/01/2027	A2		1,000,000		1,029,060
Manchester TN Refunding General Obligation		5.000			06/01/2038	A2		100,000		108,691
Memphis TN General Improvement		5.000			04/01/2034	Aa2		500,000		567,165
Memphis TN General Improvement		5.000			04/01/2039	Aa2		250,000		281,668
Memphis TN Refunding		5.000			04/01/2030	Aa2		1,000,000		1,153,380
Memphis TN Refunding		5.000			04/01/2033	Aa2		250,000		284,808
Memphis TN Refunding		5.000			04/01/2035	Aa2		250,000		282,710
Memphis TN Refunding		5.000			04/01/2040	Aa2		500,000		561,260
Metropolitan Government Nashville & Davidson County TN		5.000			01/01/2033	Aa2		750,000		877,958
Pigeon Forge TN		4.900			06/01/2028	Aa3		275,000		287,207
Shelby County TN Refunding Series A		5.000			03/01/2026	Aa1		1,200,000		1,365,816
										7,030,731
HOSPITAL AND HEALTHCARE BONDS
6.03% of Net Assets
Chattanooga TN Health Educational and Housing Facilities Board		5.000			01/01/2033	A3		500,000		541,695

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, 2016

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
Jackson TN Hospital Revenue Jackson Madison County Hospital		5.000	%		04/01/2036	A1	$	500,000	$	544,725
Metropolitan Government Nashville & Davidson County TN Health		5.000			07/01/2035	A3		1,705,000		1,874,051
Metropolitan Government Nashville & Davidson County TN Health		5.000			07/01/2040	A3		950,000		1,030,750
Rutherford County TN Health & Educational Facilities Ascension Health		5.000			11/15/2040	Aa2		1,500,000		1,619,835
Shelby County TN Health Education and Housing Facilities		5.000			05/01/2027	A1		750,000		834,375
										6,445,431
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS
2.11% of Net Assets
Memphis Shelby County TN Port Authority Community Development		5.000			04/01/2035	Aa3		625,000		685,525
Memphis TN Refunding and General Impact General Obligation		5.000			05/01/2036	Aa2		850,000		939,361
Springfield TN Public Improvement		4.500			03/01/2024	A1		565,000		633,337
										2,258,223
STATE AND LOCAL MORTGAGE/HOUSING BONDS
2.07% of Net Assets
TN Housing Development Agency		5.000			07/01/2029	Aa1		350,000		355,751
TN Housing Development Agency Homeownership		5.000			07/01/2029	Aa1		455,000		466,047
TN Housing Development Agency Homeownership		4.700			07/01/2027	Aa1		855,000		879,188
TN Housing Development Agency Housing Finance Program		4.850			01/01/2025	Aa2		490,000		515,093
										2,216,079
AIRPORT BONDS
1.83% of Net Assets
Metropolitan Nashville Airport Authority		5.000			07/01/2034	A1		800,000		901,384
Metropolitan Nashville Airport Authority		5.000			07/01/2035	A1		250,000		280,105
Metropolitan Nashville Airport Authority		5.000			07/01/2040	A1		700,000		777,735
										1,959,224
SCHOOL IMPROVEMENT BONDS
1.45% of Net Assets
Rhea County TN		5.000			04/01/2029	A1		1,385,000		1,545,009
INDUSTRIAL REVENUE BONDS
0.88% of Net Assets
Industrial Development Board TN Blount County		5.000			06/01/2027	Aa3		850,000		938,375
ESCROWED TO MATURITY BONDS
.05% of Net Assets
Johnson City TN Health & Educational Facilities Medical Center		5.000			07/01/2018	AA-*		50,000		50,106
Total Investments 98.08% of Net Assets (cost $101,657,216) (See (a) below for further explanation)									$	104,785,301
Other assets in excess of liabilities 1.92%										2,047,724
Net Assets 100%									$	106,833,025

# Ratings by Moody’s Investors Services, Inc. unless noted otherwise.

All ratings are as of the date indicated and do not reflect subsequent changes.

* Rated by Standard & Poor’s Corporation

@ Fitch’s Investors Service

NR Not Rated

(a) Cost for federal income tax purposes is $101,657,216 and net unrealized appreciation of investments is as follows:

Unrealized appreciation	$	3,811,886
Unrealized depreciation		(683,801	)
Net unrealized appreciation	$	3,128,085

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, 2016

Other Information

The following is a summary of the inputs used, as of December 31, 2016, 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		104,785,301
Level 3	Significant Unobservable Inputs		—
		$	104,785,301

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

39

TENNESSEE TAX-FREE INCOME SERIES

STATEMENT OF ASSETS AND LIABILITIES UNAUDITED

December 31, 2016

ASSETS:
Investments in securities, at fair value (Cost: $101,657,216)		$	104,785,301
Cash			1,086,515
Receivable for fund shares sold			74,970
Interest receivable			1,374,997
Total assets			107,321,783
LIABILITIES:
Payable for:
Distributions to shareholders	241,126
Fund shares redeemed	137,789
Investment advisory fee	44,285
Transfer agent fee	11,272
Trustees fees	1,590
Audit fee	20,869
Legal fee	11,134
Accrued expenses	20,693
Total liabilities			488,758
NET ASSETS:
Capital			104,361,403
Accumulated net realized loss on investment transactions			(656,463	)
Net unrealized appreciation in value of investments			3,128,085
Net assets at value		$	106,833,025
NET ASSET VALUE, offering price and redemption price per share (9,425,034 shares outstanding; unlimited number of shares authorized; no par value)		$	11.34

STATEMENT OF OPERATIONS

For the six months ended December 31, 2016

Net investment income:
Interest income	$	1,971,941
Expenses:
Investment advisory fee		279,644
Transfer agent fee		70,895
Custodian expense		9,734
Professional fees		12,005
Trustees fees		5,621
Other expenses		19,096
Total expenses		396,995
Fees waived by Adviser		(1,618	)
Custodian expense reduction		(74	)
Net expenses		395,303
Net investment income		1,576,638
Realized and unrealized loss on investments:
Net realized loss		(70,662	)
Net change in unrealized appreciation/depreciation		(5,363,488	)
Net realized and unrealized loss on investments		(5,434,150	)
Net decrease in net assets resulting from operations	$	(3,857,512	)

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

40

TENNESSEE TAX-FREE INCOME SERIES

STATEMENTS OF CHANGES IN NET ASSETS UNAUDITED

For the six months ended December 31, 2016 and the year ended June 30, 2016

	Six Months Ended 12/31/2016			Year Ended 06/30/2016
Operations:
Net investment income	$	1,576,638		$	3,322,990
Net realized gain/(loss) on investments		(70,662	)		54,354
Net change in unrealized appreciation/depreciation		(5,363,488	)		3,628,186
Net increase/(decrease) in net assets resulting from operations		(3,857,512	)		7,005,530
Distributions from net investment income		(1,576,638	)		(3,322,990	)
Net fund share transactions (Note 4)		(4,563,499	)		3,475,886
Total increase/(decrease)		(9,997,649	)		7,158,426
Net assets:
Beginning of year		116,830,674			109,672,248
End of period	$	106,833,025		$	116,830,674

FINANCIAL HIGHLIGHTS

Selected data for a share outstanding:	Six Months  Ended 12/31/2016			For the years ended June 30,
				2016			2015			2014			2013			2012
Net asset value, beginning of year		$11.89			$11.51			$11.55			$11.27			$11.56			$11.04
Income from investment operations:
Net investment income		0.16			0.34			0.36			0.37			0.36			0.40
Net gains/(losses) on securities		(0.55	)		0.38			(0.04	)		0.28			(0.29	)		0.52
Total from investment operations		(0.39	)		0.72			0.32			0.65			0.07			0.92
Less distributions:
Distributions from net investment income		(0.16	)		(0.34	)		(0.36	)		(0.37	)		(0.36	)		(0.40	)
Net asset value, end of period		$11.34			$11.89			$11.51			$11.55			$11.27			$11.56
Total return		(3.27)%	(b)		6.40%			2.77%			5.86%			0.56%			8.44%
Net assets, end of period (in thousands)		$106,833			$116,831			$109,672			$104,894			$105,696			$100,583
Ratio of net expenses to average net assets (a)		0.70%	(c)		0.71%			0.70%			0.71%			0.65%			0.70%
Ratio of gross expenses to average net assets		0.70%	(c)		0.71%			0.70%			0.71%			0.69%			0.70%
Ratio of net investment income to average net assets		2.82%	(c)		2.96%			3.08%			3.25%			3.10%			3.50%
Portfolio turnover		3.57%	(b)		9.67%			7.01%			14.44%			7.37%			8.39%

(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.

41

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

SCHEDULE OF PORTFOLIO INVESTMENTS

Tennessee Municipal Bonds

December 31, 2016

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
PREREFUNDED BONDS
24.77% of Net Assets
Blount County TN Public Building Authority		4.000	%		06/01/2020	Aa2	$	150,000	$	158,835
Blount County TN Public Building Authority		5.000			06/01/2021	Aa2		175,000		189,541
Chattanooga TN Electric Revenue		5.000			09/01/2021	AA+*		400,000		417,640
Memphis TN		5.000			04/01/2024	Aa2		200,000		202,010
Memphis TN General Improvement		5.000			04/01/2022	Aa2		185,000		199,672
Memphis TN General Obligation		5.000			05/01/2020	Aa2		250,000		270,428
Metropolitan Government Nashville & Davidson County TN		5.000			01/01/2019	Aa2		200,000		207,778
Metropolitan Government Nashville & Davidson County TN		5.000			05/15/2017	NR		35,000		35,524
Metropolitan Government Nashville & Davidson County TN		5.000			05/15/2019	Aa2		215,000		218,275
Metropolitan Government Nashville & Davidson County TN		4.000			07/01/2023	NR		140,000		151,004
Metropolitan Government Nashville & Davidson County TN		4.000			07/01/2024	NR		20,000		22,096
Robertson County TN School		4.000			06/01/2020	Aa3		250,000		259,640
Shelby County TN Health Educational & Housing Facilities		5.250			09/01/2020	A1		400,000		418,700
										2,751,143
PUBLIC FACILITIES REVENUE BONDS
17.30% of Net Assets
Memphis TN Center City Revenue Finance Corporation		5.250			11/01/2025	Aa3		100,000		114,213
Memphis TN Center City Revenue Finance Corporation Sports Facility		4.000			02/01/2021	Aa3		100,000		107,158
Memphis TN Center City Revenue Finance Corporation Sports Facility		4.000			02/01/2022	Aa3		220,000		237,303
Memphis TN Center City Revenue Finance Corporation Sports Facility		5.000			02/01/2026	Aa3		100,000		114,672
Memphis-Shelby County TN Sports Authority Memphis Arena		5.000			11/01/2017	Aa3		275,000		283,429
Metropolitan Government Nashville & Davidson County TN Convention		3.750			07/01/2018	A1		100,000		103,301
Metropolitan Government Nashville & Davidson County TN Sports Authority		5.250			08/01/2024	Aa3		190,000		223,689
Metropolitan Government Nashville & Davidson County TN Sports Authority		5.250			08/01/2025	Aa3		195,000		228,277
Metropolitan Government Nashville & Davidson County TN Sports Authority		5.000			07/01/2023	Aa3		125,000		145,195
Pigeon Forge Industrial Development Board		5.000			06/01/2024	AA*		175,000		195,760
Pigeon Forge Public Facilities		5.000			06/01/2023	AA*		150,000		168,401
										1,921,398
MUNICIPAL UTILITY REVENUE BONDS
15.77% of Net Assets
Castalian Springs — Bethpage TN Waterworks		3.000			01/01/2019	A+*		260,000		263,286
Chattanooga TN Electric Revenue		5.000			09/01/2023	AA+*		250,000		294,213
Columbia TN Electric System Revenue		5.000			09/01/2021	Aa3		165,000		174,511
Harpeth Valley TN Utilities District Davidson & Williamson Counties		4.000			09/01/2024	AA*		225,000		251,579
Johnson City TN Electric Revenue		4.000			05/01/2022	Aa2		100,000		100,823
Johnson City TN Electric Revenue		4.500			05/01/2021	Aa2		50,000		51,895
Knoxville TN Gas Revenue		4.000			03/01/2025	Aa2		240,000		263,335
Metropolitan Government Nashville & Davidson County TN Water & Sewer		5.250			01/01/2019	Aa2		125,000		134,575
Metropolitan Government Nashville & Davidson County TN Water & Sewer		5.000			07/01/2026	Aa3		100,000		116,025
New Market Utility District Jefferson County TN Waterworks		4.000			06/01/2017	A3		100,000		101,171
										1,751,413
REFUNDING BONDS
12.40% of Net Assets
Memphis TN General Improvement		5.000			11/01/2023	Aa2		350,000		410,904
Metropolitan Government Nashville & Davidson County TN		5.000			07/01/2021	Aa2		175,000		193,991
Metropolitan Government Nashville & Davidson County TN		4.000			07/01/2023	Aa2		110,000		117,022
Metropolitan Government Nashville & Davidson County TN		4.000			07/01/2024	Aa2		80,000		87,425
Polk County TN Refinancing		5.000			05/01/2020	A2		150,000		151,796
Rhea County TN		3.000			04/01/2018	A1		200,000		203,858

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, 2016

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
Unicoi County TN Refunding		5.250	%		04/01/2019	A1	$	200,000	$	212,464
										1,377,460
SCHOOL IMPROVEMENT BONDS
9.88% of Net Assets
Gibson County Special School District		5.000			04/01/2021	AA*		250,000		281,293
Kingsport TN General Obligation Unlimited		4.000			09/01/2028	Aa2		100,000		108,948
Lincoln County TN		5.250			04/01/2019	Aa3		200,000		215,714
Rhea County TN		4.000			04/01/2025	A1		250,000		266,568
Robertson County TN School and Public Improvement		4.000			06/01/2019	AA*		100,000		106,089
Sumner County TN		5.000			12/01/2025	AA+*		100,000		119,046
										1,097,658
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS
5.89% of Net Assets
Franklin County TN Health & Educational Facilities Board		4.000			09/01/2019	A+*		350,000		371,105
Franklin County TN Health & Educational Facilities Board		4.000			09/01/2024	A+*		135,000		145,491
Shelby County TN Health Educational & Housing Facilities Rhodes College		5.000			08/01/2022	A1		120,000		137,909
										654,505
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS
4.62% of Net Assets
Claiborne County TN Public Improvement		5.000			04/01/2017	NR		145,000		146,431
Gallatin County Capital Outlay Notes		4.625			01/01/2019	AA+*		100,000		106,409
Memphis TN Refunding General Improvement		5.000			10/01/2017	Aa2		100,000		102,883
Sevier County TN Public Building Authority		5.000			06/01/2018	AA-*		150,000		157,692
										513,415
STATE AND LOCAL MORTGAGE/HOUSING BONDS
2.78% of Net Assets
TN Housing Development Agency		4.800			07/01/2024	Aa1		115,000		117,996
TN Housing Development Agency Homeownership Program		1.900			07/01/2019	Aa1		190,000		190,416
										308,412
HOSPITAL AND HEALTHCARE BONDS
2.52% of Net Assets
Shelby County TN Health Educational & Housing Facilities		4.250			09/01/2020	A-*		265,000		279,567
AIRPORT BONDS
.99% of Net Assets
Metropolitan Nashville Airport Authority		4.000			07/01/2023	A1		100,000		109,833
ESCROWED TO MATURITY BONDS
.23% of Net Assets
Claiborne County TN Public Improvement		5.000			04/01/2017	NR		25,000		25,251
Total Investments 97.15% of Net Assets (cost $10,731,127) (See (a) below for further explanation)									$	10,790,055
Other assets in excess of liabilities 2.85%										316,858
Net Assets 100%									$	11,106,913

# Ratings by Moody’s Investors Services, Inc. unless noted otherwise.

All ratings are as of the date indicated and do not reflect subsequent changes.

* Rated by Standard & Poor’s Corporation

@ Fitch’s Investors Service

NR Not Rated

(a) Cost for federal income tax purposes is $10,731,127 and net unrealized appreciation of investments is as follows:

Unrealized appreciation	$	115,039
Unrealized depreciation		(56,111	)
Net unrealized appreciation	$	58,928

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, 2016

Other Information

The following is a summary of the inputs used, as of December 31, 2016, 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		10,790,055
Level 3	Significant Unobservable Inputs		—
		$	10,790,055

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, 2016 UNAUDITED

ASSETS:
Investments in securities, at fair value (Cost: $10,731,127)		$	10,790,055
Cash			198,703
Interest receivable			134,660
Total assets			11,123,418
LIABILITIES:
Payable for:
Distributions to shareholders	2,892
Fund shares redeemed	3,035
Investment advisory fee	3,455
Transfer agent fee	1,500
Trustees fees	303
Accrued expenses	5,320
Total liabilities			16,505
NET ASSETS:
Capital			11,275,689
Accumulated net realized loss on investment transactions			(227,704	)
Net unrealized appreciation in value of investments			58,928
Net assets at value		$	11,106,913
NET ASSET VALUE, offering price and redemption price per share (1,047,190 shares outstanding; unlimited number of shares authorized; no par value)		$	10.61

STATEMENT OF OPERATIONS

For the six months ended December 31, 2016

Net investment income:
Interest income	$	132,759
Expenses:
Investment advisory fee		28,465
Transfer agent fee		8,540
Custodian expense		3,524
Professional fees		1,183
Trustees fees		554
Registration fees		2,518
Pricing		2,507
Other expenses		2,300
Total expenses		49,591
Fees waived by Adviser		(4,741	)
Custodian expense reduction		(27	)
Net expenses		44,823
Net investment income		87,936
Realized and unrealized loss on investments:
Net change in unrealized appreciation/depreciation		(335,414	)
Net realized and unrealized loss on investments		(335,414	)
Net decrease in net assets resulting from operations	$	(247,478	)

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, 2016 and the year ended June 30, 2016 UNAUDITED

	Six Months Ended 12/31/2016			Year Ended 06/30/2016
Operations:
Net investment income	$	87,936		$	166,771
Net realized gain on investments		—			6,408
Net change in unrealized appreciation/depreciation		(335,414	)		190,782
Net increase/(decrease) in net assets resulting from operations		(247,478	)		363,961
Distributions from net investment income		(87,936	)		(166,771	)
Net fund share transactions (Note 4)		101,876			109,789
Total increase/(decrease)		(233,538	)		306,979
Net assets:
Beginning of year		11,340,451			11,033,472
End of period	$	11,106,913		$	11,340,451

FINANCIAL HIGHLIGHTS

Selected data for a share outstanding:	Six Months  Ended 12/31/2016			For the years ended June 30,
				2016			2015			2014			2013			2012
Net asset value, beginning of year		$10.93			$10.74			$10.81			$10.75			$11.01			$10.85
Income from investment operations:
Net investment income		0.08			0.16			0.18			0.19			0.20			0.24
Net gains/(losses) on securities both realized and unrealized		(0.32	)		0.19			(0.07	)		0.06			(0.26	)		0.16
Total from investment operations		(0.24	)		0.35			0.11			0.25			(0.06	)		0.40
Less distributions:
Distributions from net investment income		(0.08	)		(0.16	)		(0.18	)		(0.19	)		(0.20	)		(0.24	)
Net asset value, end of period		$10.61			$10.93			$10.74			$10.81			$10.75			$11.01
Total return		(2.17)%	(b)		3.28%			0.99%			2.36%			(0.53)%			3.74%
Net assets, end of period (in thousands)		$11,107			$11,340			$11,033			$10,785			$11,021			$12,026
Ratio of net expenses to average net assets (a)		0.79%	(c)		0.86%			0.85%			0.86%			0.86%			0.87%
Ratio of gross expenses to average net assets		0.87%	(c)		0.86%			0.85%			0.86%			0.86%			0.87%
Ratio of net investment income to average net assets		1.56%	(c)		1.47%			1.64%			1.78%			1.86%			2.21%
Portfolio turnover		0.82%	(b)		7.37%			14.32%			11.38%			20.56%			1.86%

(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, 2016

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
FEDERAL FARM CREDIT
62.11% of Net Assets
Federal Farm Credit Bank		5.250	%		10/25/2022	Aaa	$	1,500,000	$	1,748,748
Federal Farm Credit Bank		5.050			12/21/2021	Aaa		370,000		421,629
Federal Farm Credit Bank		5.840			07/20/2022	Aaa		2,650,000		3,144,442
Federal Farm Credit Bank		5.250			05/10/2022	Aaa		2,000,000		2,300,634
Federal Farm Credit Bank		5.125			11/28/2022	Aaa		2,000,000		2,325,396
										9,940,849
FEDERAL HOME LOAN BANK
31.47% of Net Assets
Federal Home Loan Bank		5.365			09/09/2024	Aaa		1,750,000		2,098,822
Federal Home Loan Bank		5.000			12/10/2021	Aaa		500,000		569,733
Federal Home Loan Bank		5.750			06/10/2022	Aaa		2,000,000		2,369,390
										5,037,945
FEDERAL NATIONAL MORTGAGE ASSOCIATION
5.48% of Net Assets
Federal National Mortgage Association		8.100			08/12/2019	Aaa		750,000		877,166
Total Investments 99.06% of Net Assets (cost $15,026,174) (See (a) below for further explanation)									$	15,855,960
Other assets in excess of liabilities .94%										150,977
Net Assets 100%									$	16,006,937

# Ratings by Moody’s Investors Services, Inc. unless noted otherwise.

All ratings are as of the date indicated and do not reflect subsequent changes.

* Rated by Standard & Poor’s Corporation

@ Fitch’s Investors Service

NR Not Rated

(a) Cost for federal income tax purposes is $15,026,174 and net unrealized appreciation of investments is as follows:

Unrealized appreciation	$	829,786
Unrealized depreciation		—
Net unrealized appreciation	$	829,786

Other Information

The following is a summary of the inputs used, as of December 31, 2016, 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	$	15,855,960
Level 3	Significant Unobservable Inputs		—
		$	15,855,960

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

47

INTERMEDIATE GOVERNMENT BOND SERIES

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2016 UNAUDITED

ASSETS:
Investments in securities, at fair value (Cost: $15,026,174)		$	15,855,960
Cash			4,612
Interest receivable			168,775
Total assets			16,029,347
LIABILITIES:
Payable for:
Distributions to shareholders	6,458
Fund shares redeemed	360
Investment advisory fee	2,652
Transfer agent fee	4,419
Trustee fee	1,018
Accrued expenses	7,503
Total liabilities			22,410
NET ASSETS:
Capital			15,352,312
Accumulated net realized loss on investment transactions			(175,161	)
Net unrealized appreciation in value of investments			829,786
Net assets at value		$	16,006,937
NET ASSET VALUE, offering price and redemption price per share (1,565,110 shares outstanding; unlimited number of shares authorized; no par value)		$	10.23

STATEMENT OF OPERATIONS

For the six months ended December 31, 2016

Net investment income:
Interest income	$	254,191
Expenses:
Investment advisory fee		16,932
Transfer agent fee		12,699
Custodian expense		4,243
Professional fees		1,800
Printing expense		3,510
Pricing		2,507
Registration fees		2,436
Trustees fees		843
Other expenses		3,364
Total expenses		48,334
Custodian expense reduction		(33	)
Net expenses		48,301
Net investment income		205,890
Realized and unrealized gain/(loss) on investments:
Net realized gain		15,723
Net change in unrealized appreciation/depreciation		(761,741	)
Net realized and unrealized loss on investments		(746,018	)
Net decrease in net assets resulting from operations	$	(540,128	)

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, 2016 and the year ended June 30, 2016 UNAUDITED

	Six Months Ended 12/31/2016			Year Ended 06/30/2016
Operations:
Net investment income	$	205,890		$	445,511
Net realized gain on investments		15,723			93,021
Net change in unrealized appreciation/depreciation		(761,741	)		602,867
Net increase/(decrease) in net assets resulting from operations		(540,128	)		1,141,399
Distributions from net investment income		(205,890	)		(445,511	)
Net fund share transactions (Note 4)		(723,527	)		(1,947,283	)
Total decrease		(1,469,545	)		(1,251,395	)
Net assets:
Beginning of year		17,476,482			18,727,877
End of period	$	16,006,937		$	17,476,482

FINANCIAL HIGHLIGHTS

Selected data for a share outstanding:	Six Months Ended 12/31/2016			For the years ended June 30,
				2016			2015			2014			2013			2012
Net asset value, beginning of year	$	10.70		$	10.29		$	10.25		$	10.05		$	10.58		$	9.96
Income from investment operations:
Net investment income		0.13			0.26			0.26			0.28			0.30			0.34
Net gains/(losses) on securities		(0.47	)		0.41			0.04			0.20			(0.53	)		0.62
Total from investment operations		(0.34	)		0.67			0.30			0.48			(0.23	)		0.96
Less distributions:
Distributions from net investment income		(0.13	)		(0.26	)		(0.26	)		(0.28	)		(0.30	)		(0.34	)
Net asset value, end of period	$	10.23		$	10.70		$	10.29		$	10.25		$	10.05		$	10.58
Total return		(3.21)%	(b)		6.57%			2.96%			4.89%			(2.34)%			9.72%
Net assets, end of period (in thousands)	$	16,007		$	17,476		$	18,728		$	21,224		$	23,395		$	25,830
Ratio of net expenses to average net assets (a)		0.57%	(c)		0.53%			0.51%			0.56%			0.48%			0.52%
Ratio of gross expenses to average net assets		0.57%	(c)		0.53%			0.51%			0.56%			0.54%			0.52%
Ratio of net investment income to average net assets		2.45%	(c)		2.47%			2.54%			2.81%			2.77%			3.25%
Portfolio turnover		0.00%	(b)		0.00%			2.44%			15.33%			16.02%			8.94%

(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, 2016

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
PUBLIC FACILITIES REVENUE BONDS
30.38% of Net Assets
Buncombe County NC Limited Obligation Build America		6.800	%		06/01/2030	Aa2	$	250,000	$	278,236
Decatur GA Urban Redevelopment Agency Revenue Build America		6.920			01/01/2038	Aa2		150,000		169,185
Franklin County OH Convention Facilities Authority		6.640			12/01/2042	Aa2		240,000		291,624
Grand Junction CO Certificates of Participation Build America		7.500			12/01/2030	A+*		425,000		479,107
Metropolitan Government Nashville & Davidson County TN		7.431			07/01/2043	A1		90,000		117,140
Pennington County SD Certificates of Participation Build America		7.200			06/01/2037	Aa2		750,000		841,433
Pompano Beach FL Certificates of Participation		5.579			01/01/2040	A1		225,000		235,773
Rhode Island Convention Center		6.060			05/15/2035	Aa3		70,000		83,160
Sarasota County FL Capital Improvement Revenue Build America		7.016			10/01/2040	AA+*		710,000		828,853
										3,324,511
MUNICIPAL UTILITY REVENUE BONDS
27.38% of Net Assets
Altoona PA Water Authority Sewer Revenue Build America		7.064			12/01/2040	AA*		425,000		480,509
American Municipal Power OhioIncoporated		7.834			02/15/2041	A2		110,000		155,969
Davie FL Water & Sewer Revenue Build America		6.849			10/01/2040	Aa3		40,000		45,714
FL State Utility Revenue		6.548			10/01/2040	A2		60,000		66,419
Heber UT Light & Power Build America		7.000			12/15/2030	A2		375,000		416,959
Metrolpolitan Government Nashville & Davidson County TN Recovery Zone		6.693			07/01/2041	Aa3		200,000		262,916
Pigeon Forge TN Build America Recovery Zone		7.125			06/01/2040	AA*		300,000		382,476
Sedalia MO Certificates of Participation Build America		7.300			06/01/2035	AA*		500,000		543,395
West Knox Utilities District Knox County TN Water and Sewer		6.900			06/01/2040	AA+*		400,000		470,044
Williamsport PA Municipal Water Authority Build America		6.100			01/01/2040	A2		60,000		62,456
York County VA Sewer Revenue Build America		6.607			06/01/2040	Aa3		100,000		109,691
										2,996,548
SCHOOL IMPROVEMENT BONDS
14.62% of Net Assets
Armstrong School District PA Build America		7.000			03/15/2041	AA*		750,000		858,473
CO State Building Excellent Schools Today Certificates of Participation		7.017			03/15/2031	Aa2		400,000		457,608
Jefferson County TN Build America Bonds		6.625			06/01/2040	Aa3		250,000		283,943
										1,600,024
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS
11.81% of Net Assets
KY State Property & Buildings Build America		5.921			11/01/2030	Aa3		250,000		284,613
Lakeland FL Capital Improvement Revenue		6.029			10/01/2040	Aa3		160,000		186,419
Lincoln AL Build America Recovery Zone		6.800			06/01/2040	AA*		425,000		473,148
Scottsboro AL Build America Bonds		6.400			11/01/2040	A2		250,000		275,990
Utah County UT Excise Tax Revenue		7.130			12/01/2039	AA-*		65,000		72,487
										1,292,657
HOSPITAL AND HEALTHCARE BONDS
4.53% of Net Assets
Midland County TX Hospital District		6.440			05/15/2039	Aa2		185,000		220,339
University NC Chapel Hill Hospital Revenue Build America		6.329			02/01/2031	Aa3		250,000		275,500
										495,839
TURNPIKES/TOLLROAD/HIGHWAY BONDS
3.77% of Net Assets
FL State Turnpike Authority Turnpike Revenue Build America		6.800			07/01/2039	Aa2		300,000		332,187
MS Development Bank Special Obligation Build America		6.413			01/01/2040	Aa3		65,000		79,819
										412,006
MARINA/PORT AUTHORITY BONDS
2.47% of Net Assets
Miami Dade County FL Special Obligation		7.500			04/01/2040	Aa3		200,000		269,958

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, 2016

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
SALES TAX REVENUE
2.24% of Net Assets
Amarillo TX Hotel Occupancy Tax Revenue		4.250	%		08/15/2043	AA*	$	250,000	$	245,295
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS
1.13% of Net Assets
Mesa State College CO Auxiliary Facilities Build America		6.746			05/15/2042	Aa2		100,000		123,274
Total Investments 98.33% of Net Assets (cost $9,690,918) (See (a) below for further explanation)									$	10,760,112
Other assets in excess of liabilities 1.67%										182,236
Net Assets 100%									$	10,942,348

# Ratings by Moody’s Investors Services, Inc. unless noted otherwise.

All ratings are as of the date indicated and do not reflect subsequent changes.

* Rated by Standard & Poor’s Corporation

@ Fitch’s Investors Service

NR Not Rated

(a) Cost for federal income tax purposes is $9,690,918 and net unrealized appreciation of investments is as follows:

Unrealized appreciation	$	1,100,698
Unrealized depreciation		(31,504	)
Net unrealized appreciation	$	1,069,194

Other Information

The following is a summary of the inputs used, as of December 31, 2016, 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		10,760,112
Level 3	Significant Unobservable Inputs		—
		$	10,760,112

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

51

TAXABLE MUNICIPAL BOND SERIES

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2016 UNAUDITED

ASSETS:
Investments in securities, at fair value (Cost: $9,690,918)		$	10,760,112
Cash			96,797
Interest receivable			130,023
Total assets			10,986,932
LIABILITIES:
Payable for:
Distributions to shareholders	37,346
Fund shares redeemed	307
Investment advisory fee	3,022
Transfer agent fee	1,324
Trustees fees	77
Accrued expenses	2,508
Total liabilities			44,584
NET ASSETS:
Capital			9,878,167
Accumulated net realized loss on investment transactions			(5,013	)
Net unrealized appreciation in value of investments			1,069,194
Net assets at value		$	10,942,348
NET ASSET VALUE, offering price and redemption price per share (1,047,079 shares outstanding; unlimited number of shares authorized; no par value)		$	10.45

STATEMENT OF OPERATIONS

For the six months ended December 31, 2016

Net investment income:
Interest income	$	322,709
Expenses:
Investment advisory fee		29,582
Transfer agent fee		8,875
Custodian expense		4,377
Professional fees		2,253
Trustees fees		585
Other expenses		4,836
Total expenses		50,508
Fees waived by Adviser		(4,559	)
Custodian expense reduction		(33	)
Net expenses		45,916
Net investment income		276,793
Realized and unrealized gain/(loss) on investments:
Net realized gain		29,987
Net change in unrealized appreciation/depreciation		(526,522	)
Net realized and unrealized loss on investments		(496,535	)
Net decrease in net assets resulting from operations	$	(219,742	)

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, 2016 and the year ended June 30, 2016 UNAUDITED

	Six Months Ended 12/31/2016			Year Ended 06/30/2016
Operations:
Net investment income	$	276,793		$	545,161
Net realized gain on investments		29,987			66,135
Net change in unrealized appreciation/depreciation		(526,522	)		431,560
Net increase/(decrease) in net assets resulting from operations		(219,742	)		1,042,856
Distributions from net investment income		(276,793	)		(545,161	)
Distributions from capital gains		(74,266	)		—
Net fund share transactions (Note 4)		(667,310	)		380,217
Total increase/(decrease)		(1,238,111	)		877,912
Net assets:
Beginning of year		12,180,459			11,302,547
End of period	$	10,942,348		$	12,180,459

FINANCIAL HIGHLIGHTS

Selected data for a share outstanding:	Six Months Ended 12/31/2016			For the years ended June 30,
				2016			2015			2014			2013			2012
Net asset value, beginning of period		$10.98			$10.53			$10.57			$10.45			$10.82			$9.65
Income from investment operations:
Net investment income		0.26			0.50			0.52			0.51			0.51			0.52
Net gains/(losses) on securities		(0.53	)		0.45			(0.04	)		0.18			(0.36	)		1.17
Total from investment operations		(0.27	)		0.95			0.48			0.69			0.15			1.69
Less distributions:
Distributions from net investment income		(0.26	)		(0.50	)		(0.52	)		(0.51	)		(0.51	)		(0.52	)
Distributions from capital gains		0.00			0.00			0.00			(0.06	)		(0.01	)		0.00
Total distributions		(0.26	)		(0.50	)		(0.52	)		(0.57	)		(0.52	)		(0.52	)
Net asset value, end of period		$10.45			$10.98			$10.53			$10.57			$10.45			$10.82
Total return		(1.92)%	(b)		9.29%			4.49%			6.90%			1.35%			17.77%	(b)
Net assets, end of period (in thousands)		$10,942			$12,180			$11,303			$12,369			$16,006			$16,042
Ratio of net expenses to average net assets (a)		0.78%	(c)		0.86%			0.83%			0.89%			0.83%			0.85%	(c)
Ratio of gross expenses to average net assets		0.86%	(c)		0.86%			0.83%			0.89%			0.83%			0.86%	(c)
Ratio of net investment income to average net assets		4.73%	(c)		4.71%			4.80%			4.95%			4.71%			4.95%	(c)
Portfolio turnover		3.70%	(b)		10.55%			8.45%			9.71%			9.57%			0.00%	(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

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

53

DUPREE MUTUAL FUNDS UNAUDITED

NOTES TO FINANCIAL STATEMENTS

December 31, 2016

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.

In October 2016, the Securities and Exchange Commission (SEC) released its Final Rule on Investment Company Reporting Modernization (the “Rule”). The Rule which introduces two new regulatory reporting forms for investment companies — Form N-PORT and Form N-CEN — also contains amendments to Regulation S-X which impact financial statement presentation, particularly the presentation of derivative investments. Although still evaluating the impact of the Rule, management believes that many of the Regulation S-X amendments are consistent with the Funds’ current financial statement presentation and expects that the Funds will be able to comply with the Rule’s Regulation S-X amendments by the August 1, 2017 compliance date.

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 accounting principles generally accepted in the United States (“U.S. GAAP”). The Trust operates as an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946 Financial Services — Investment Companies.

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 Trust’s Board of Trustee’s Valuation Committee. The Board of Trustees of the Trust (the “Board”) has adopted policies and procedures for the valuation of the Trust’s investments (the “Valuation Procedures”). Pursuant to the Valuation

54

DUPREE MUTUAL FUNDS UNAUDITED

NOTES TO FINANCIAL STATEMENTS

December 31, 2016

1. Organization and Significant Accounting Policies, continued

Procedures, the Board has delegated to a valuation committee, consisting of all of the Trustees the day-to-day responsibility for implementing the Valuation Procedures, including, under most circumstances, the responsibility for determining the fair value of the Trust’s securities or other assets. The Valuation Committee convenes as needed and reviews the valuation of all assets which have been fair valued for reasonableness. Shares of open-end mutual funds in which the Funds invest, if any, are valued at their respective net asset values as reported by the underlying funds.

The Funds have adopted the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (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 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:	Unadjusted quoted prices in active markets for identical securities.
Level 2:	Prices determined using other significant observable inputs. Observable inputs, either directly or indirectly, 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:	Price 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 a security, and would be based on the best information available.

The aggregate value by input level, as of December 31, 2016, 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 period ended December 31, 2016.

B. Investment Transactions

Security transactions are accounted for on a trade date basis. Realized 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. Discounts or premiums on debt securities purchased are accreted or amortized to interest income over the lives of the respective securities using the effective interest method.

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 this type of transaction, they are required to segregate cash or other liquid assets equal to the value of the securities purchased. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.

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 December 31, 2016. Therefore, no federal income tax provision is required. Management has analyzed the Funds’ tax positions for all open tax years and all major jurisdictions, and has concluded that as of December 31, 2016, no provision for income taxes is required in the financial statements. Therefore, no additional tax expense, including any interest and penalties, was recorded in the current year and no adjustments were made to prior periods. To the extent the Funds recognize interest and penalties, they are included in interest expense and

55

DUPREE MUTUAL FUNDS UNAUDITED

NOTES TO FINANCIAL STATEMENTS

December 31, 2016

1. Organization and Significant Accounting Policies, continued

other expenses, respectively, in the Statement of operations. Open tax years are those that are open for examination by taxing authorities (i.e. generally the last three tax year ends and the interim tax period since then).

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. Any net realized long term capital gains are distributed annually to shareholders. 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, which may differ from U.S. GAPP.

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 these financial statements in conformity with generally accepted accounting principles in the United States 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, 2016 have been evaluated by the Adviser for potential impact to this report through the date the financial statements were issued. The Adviser has determined that there were no material subsequent events that require recognition or disclosure in 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; and .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.

56

DUPREE MUTUAL FUNDS UNAUDITED

NOTES TO FINANCIAL STATEMENTS

December 31, 2016

2. Investment Advisory Fee and Other Transactions with Affiliates, continued

For the six months ended December 31, 2016, fees voluntarily waived by the Adviser were as follows:

	Fees waived by Adviser
Alabama Tax-Free Income Series	$	10,152
Kentucky Tax-Free Short-to-Medium Series		6,201
Mississippi Tax-Free Income Series		9,283
North Carolina Tax-Free Income Series		95
North Carolina Tax-Free Short-to-Medium Series		5,848
Tennessee Tax-Free Income Series		1,618
Tennessee Tax-Free Short-to-Medium Series		4,741
Taxable Municipal Bond Series		4,559

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.

For the six months ended December 31, 2016, each member of the Board of Trustees who is not an “interested person” of the Funds (the “Independent Trustees”), as defined by the 1940 Act, received a fee of $25,000 per year plus $2,000 for each Audit Committee meeting attended. In addition, all Independent Trustees are reimbursed by the Funds for all reasonable out-of-pocket expenses incurred by them in performing their duties. The fees are allocated on an average net asset basis for each Fund. The Independent Trustees fees for each Fund are disclosed on the Funds’ Statement of Operations.

3. Purchases and Sales of Securities

During the six months ended December 31, 2016, 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	$	1,306,424	$	1,813,169
Kentucky Tax-Free Income Series		58,527,381		60,265,162
Kentucky Tax-Free Short-to-Medium Series		9,225,254		12,264,765
Mississippi Tax-Free Income Series		1,052,478		598,708
North Carolina Tax-Free Income Series		13,336,793		4,632,465
North Carolina Tax-Free Short-to-Medium Series		722,823		3,762,336
Tennessee Tax-Free Income Series		3,963,212		9,055,841
Tennessee Tax-Free Short-to-Medium Series		517,590		90,000
Intermediate Government Bond Series		-0-		297,686
Taxable Municipal Bond Series		422,522		536,460

4. Capital Shares

As of December 31, 2016 and June 30, 2016, there were an unlimited number of shares of beneficial interest authorized. Transactions in capital shares were as follows:

ALABAMA TAX-FREE INCOME SERIES	Six Months Ended December 31, 2016						Year Ended June 30, 2016
	SHARES			AMOUNT			SHARES			AMOUNT
Shares sold		163,972		$	2,064,136			330,008		$	4,138,437
Shares reinvested		16,595			205,770			32,626			409,976
Shares redeemed		(238,183	)		(2,936,575	)		(125,116	)		(1,566,683	)
Net increase/(decrease)		(57,616	)	$	(666,669	)		237,518		$	2,981,730

57

DUPREE MUTUAL FUNDS UNAUDITED

NOTES TO FINANCIAL STATEMENTS

December 31, 2016

4. Capital Shares, continued

KENTUCKY TAX-FREE INCOME SERIES	Six Months Ended December 31, 2016						Year Ended June 30, 2016
	SHARES			AMOUNT			SHARES			AMOUNT
Shares sold		7,667,672		$	60,479,880			8,721,953		$	69,077,836
Shares reinvested		1,121,160			8,761,090			2,313,486			18,380,958
Shares redeemed		(7,973,375	)		(62,655,471	)		(10,507,020	)		(83,116,232	)
Net increase		815,457		$	6,585,499			528,419		$	4,342,562
KENTUCKY TAX-FREE SHORT-TO-MEDIUM SERIES	Six Months Ended December 31, 2016						Year Ended June 30, 2016
	SHARES			AMOUNT			SHARES			AMOUNT
Shares sold		3,851,713		$	20,444,317			4,222,604		$	22,772,484
Shares reinvested		71,438			382,619			172,866			932,860
Shares redeemed		(4,486,455	)		(23,869,609	)		(3,727,024	)		(20,131,344	)
Net increase/(decrease)		(563,304	)	$	(3,042,673	)		668,446		$	3,574,000
MISSISSIPPI TAX-FREE INCOME SERIES	Six Months Ended December 31, 2016						Year Ended June 30, 2016
	SHARES			AMOUNT			SHARES			AMOUNT
Shares sold		121,566		$	1,498,929			65,087		$	797,613
Shares reinvested		4,666			56,853			9,347			115,180
Shares redeemed		(50,245	)		(619,869	)		(65,257	)		(799,035	)
Net increase		75,987		$	935,913			9,177		$	113,758
NORTH CAROLINA TAX-FREE INCOME SERIES	Six Months Ended December 31, 2016						Year Ended June 30, 2016
	SHARES			AMOUNT			SHARES			AMOUNT
Shares sold		1,498,090		$	17,534,944			2,991,113		$	35,075,635
Shares reinvested		114,795			1,332,915			215,757			2,542,539
Shares redeemed		(1,125,385	)		(12,933,364	)		(1,425,542	)		(16,719,475	)
Net increase		487,500		$	5,934,495			1,781,328		$	20,898,699
NORTH CAROLINA TAX-FREE SHORT-TO-MEDIUM SERIES	Six Months Ended December 31, 2016						Year Ended June 30, 2016
	SHARES			AMOUNT			SHARES			AMOUNT
Shares sold		156,245		$	1,704,280			317,756		$	3,497,671
Shares reinvested		12,098			131,621			26,967			296,253
Shares redeemed		(461,797	)		(4,977,552	)		(306,621	)		(3,366,336	)
Net increase/(decrease)		(293,454	)	$	(3,141,651	)		38,102		$	427,588

58

DUPREE MUTUAL FUNDS UNAUDITED

NOTES TO FINANCIAL STATEMENTS

December 31, 2016

4. Capital Shares, continued

TENNESSEE TAX-FREE INCOME SERIES	Six Months Ended December 31, 2016						Year Ended June 30, 2016
	SHARES			AMOUNT			SHARES			AMOUNT
Shares sold		553,985		$	6,398,406			1,554,220		$	18,100,583
Shares reinvested		93,068			1,074,009			194,475			2,276,847
Shares redeemed		(1,045,506	)		(12,035,914	)		(1,450,426	)		(16,901,544	)
Net increase/(decrease)		(398,453	)	$	(4,563,499	)		298,269		$	3,475,886
TENNESSEE TAX-FREE SHORT-TO-MEDIUM SERIES	Six Months Ended December 31, 2016						Year Ended June 30, 2016
	SHARES			AMOUNT			SHARES			AMOUNT
Shares sold		62,050		$	664,040			132,588		$	1,440,238
Shares reinvested		6,578			70,840			12,623			136,957
Shares redeemed		(59,209	)		(633,004	)		(134,818	)		(1,467,406	)
Net increase		9,419		$	101,876			10,393		$	109,789
INTERMEDIATE GOVERNMENT BOND SERIES	Six Months Ended December 31, 2016						Year Ended June 30, 2016
	SHARES			AMOUNT			SHARES			AMOUNT
Shares sold		44,387		$	462,010			84,097		$	878,394
Shares reinvested		15,606			163,750			33,468			350,358
Shares redeemed		(128,800	)		(1,349,287	)		(302,898	)		(3,176,035	)
Net decrease		(68,807	)	$	(723,527	)		(185,333	)	$	(1,947,283	)
TAXABLE MUNICIPAL BOND SERIES	Six Months Ended December 31, 2016						Year Ended June 30, 2016
	SHARES			AMOUNT			SHARES			AMOUNT
Shares sold		155,205		$	1,668,055			346,871		$	3,701,866
Shares reinvested		22,777			244,128			32,945			352,944
Shares redeemed		(240,563	)		(2,579,493	)		(343,782	)		(3,674,593	)
Net increase/(decrease)		(62,581	)	$	(667,310	)		36,034		$	380,217

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.

59

DUPREE MUTUAL FUNDS UNAUDITED

NOTES TO FINANCIAL STATEMENTS

December 31, 2016

6. Federal Income Taxes

At June 30, 2016, the Funds’ capital loss carry-forwards expire as follows:

	Short-Term Expiring						No Expiration
	2017		2018		2019		Short-term		Long-term		Total
Alabama Tax Free Income Series	$	—	$	—	$	—	$	36,314	$	—	$	36,314
Kentucky Tax-Free Short-to-Medium Series		223,976		—		—		—		—		223,976
North Carolina Tax-Free Income Series		—		—		—		564,541		—		564,541
North Carolina Tax-Free Short-to-Medium Series		—		—		—		—		1,580		1,580
Tennessee Tax-Free Income Series		—		371,142		—		214,659		—		585,801
Tennessee Tax-Free Short-to-Medium Series		—		—		—		—		227,704		227,704
Intermediate Government Bond Series		—		—		—		120,261		70,623		190,884

During the year ended June 30, 2016, the following Funds utilized capital loss carry-forwards as follows:

	Amount
Alabama Tax-Free Income Series	$	7,105
Kentucky Tax-Free Short-to-Medium Series		59,718
North Carolina Tax-Free Income Series		2,054
Tennessee Tax-Free Income Series		54,354
Tennessee Tax-Free Short-to-Medium Series		6,408
Intermediate Government Bond Series		69,993
Taxable Municipal Bond Series		14,681

During the year ended June 30, 2016, the following Funds had capital losses expire:

	Amount
Kentucky Tax-Free Short-to-Medium Series	$	168,214
Tennessee Tax-Free Short-to-Medium Series		23,418

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 Fund incurred and will elect to defer net capital losses during the fiscal year 2016 as follows:

	Post October Losses
Kentucky Tax-Free Short-to-Medium Series	$	(2,369	)

During the year ended June 30, 2016, as a result of permanent book to tax differences, the Funds’ incurred differences that affected 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 due to expiration of capital loss carryforwards. Net assets were not affected by these reclassifications.

	Accumulated Net Realized Gain/Loss		Paid in Capital
Kentucky Tax-Free Short-to-Medium Series	$	168,214	$	(168,214	)
Tennessee Tax-Free Short-to-Medium Series		23,418		(23,418	)

The tax character of distributions paid for the years ended June 30, 2016 and 2015 were as follows:

	2016						2015
	Tax Exempt Income		Ordinary Income		Long-Term Capital Gain		Tax Exempt Income		Ordinary Income		Long-Term Capital Gain
Alabama Tax-Free Income Series	$	839,350	$	—	$	—	$	825,972	$	—	$	—
Kentucky Tax-Free Income Series		31,348,902		—		258,021		32,463,029		—		402,816
Kentucky Tax-Free Short-to-Medium Series		1,645,818		—		—		1,726,545		—		—
Mississippi Tax-Free Income Series		331,306		—		2,937		337,157		—		—

60

DUPREE MUTUAL FUNDS UNAUDITED

NOTES TO FINANCIAL STATEMENTS

December 31, 2016

6. Federal Income Taxes, continued

	2016						2015
	Tax Exempt Income		Ordinary Income		Long-Term Capital Gain		Tax Exempt Income		Ordinary Income		Long-Term Capital Gain
North Carolina Tax-Free Income Series	$	3,858,780	$	—	$	—	$	3,362,896	$	—	$	—
North Carolina Tax-Free Short-to-Medium Series		372,463		—		—		427,514		—		—
Tennessee Tax-Free Income Series		3,322,990		—		—		3,376,320		—		—
Tennessee Tax-Free Short-to-Medium Series		166,771		—		—		178,683		—		—
Intermediate Government Bond Series		—		445,511		—		—		535,178		—
Taxable Municipal Bond Series		—		545,161		—		—		603,910		—

At June 30, 2016, 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 on Investments
Alabama Tax-Free Income	$	—	$	106,544	$	—	$	2,029,504
Kentucky Tax-Free Income		—		3,225,289		174,329		78,083,513
Kentucky Tax-Free Short-to-Medium		—		63,402		—		3,210,368
Mississippi Tax-Free Income		—		52,695		4,364		933,169
North Carolina Tax-Free Income		—		320,904		—		10,032,443
North Carolina Tax-Free Short-to-Medium		—		5,984		—		729,145
Tennessee Tax-Free Income		—		251,984		—		8,491,573
Tennessee Tax-Free Short-to-Medium		—		2,578		—		394,342
Intermediate Government Bond		7,449		—		—		1,591,527
Taxable Municipal Bond Series		12,944		—		39,266		1,595,716

	Accumulated Capital and Other Losses			Other Temporary Differences			Total Accumulated Earnings
Alabama Tax-Free Income	$	(36,317	)	$	(106,544	)	$	1,993,187
Kentucky Tax-Free Income					(3,225,289	)		78,257,842
Kentucky Tax-Free Short-to-Medium		(226,346	)		(63,402	)		2,984,022
Mississippi Tax-Free Income		—			(52,759	)		937,469
North Carolina Tax-Free Income		(564,541	)		(320,904	)		9,467,901
North Carolina Tax-Free Short-to-Medium		(1,580	)		(5,984	)		727,565
Tennessee Tax-Free Income		(585,801	)		(251,984	)		7,905,772
Tennessee Tax-Free Short-to-Medium		(227,704	)		(2,578	)		166,638
Intermediate Government Bond		(190,884	)		(7,449	)		1,400,643
Taxable Municipal Bond Series		—			(12,944	)		1,634,982

7. Contingencies and Commitments

The Funds indemnify the Trust’s officers and Trustees for certain liabilities that might arise from their 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.

61

DUPREE MUTUAL FUNDS UNAUDITED

NOTES TO FINANCIAL STATEMENTS

December 31, 2016

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, 2017, 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, 2016, the Funds had an aggregate unused line of credit amount of $25,000,000. During the six months ended December 31, 2016, the average interest rate on borrowings was 3.27% and the daily weighted average borrowings for each Fund with borrowings were as follows:

	Weighted Average Borrowings
Alabama Tax-Free Income Series	$	5,359
Kentucky Tax Free Income Series		105,533
Kentucky Tax-Free Short-to-Medium Series		40,141
Mississippi Tax-Free Income Series		6,777
North Carolina Tax-Free Income Series		25,842
North Carolina Tax-Free Short-to-Medium Series		12,929
Tennessee Tax-Free Income Series		4,717
Intermediate Government Bond Series		5,082

The Tennessee Tax-Free Short-to-Medium Series did not draw on the line of credit during the six months ended December 31, 2016.

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 year, these credits reduced each of the Fund’s expenses by the amount shown on the Statement of Operations as “Custodian expense reduction.”

62

DUPREE MUTUAL FUNDS UNAUDITED

OTHER UNAUDITED INFORMATION

December 31, 2016

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 in  Publicly Traded Companies
Officers:
Thomas P. Dupree Sr. 125 South Mill Street Lexington, KY 40507 Age: 86	President	Annual Term; 37 years of service	Chairman of the Board of Dupree & Company, Inc.	N/A	N/A
Gay M. Elste P.O. Box 28 Versailles, KY 40383 Age: 65	Compliance Officer	Annual Term; 12 years of service	Attorney at Law, Darsie & Elste. Anstruther Farm, beef cattle farming	N/A	N/A
Allen E. Grimes, III 125 South Mill Street Lexington, KY 40507 Age: 54	Executive Vice President	Annual Term; 11 years of service	President, Dupree & Company, Inc.	N/A	N/A
Michelle M. Dragoo 125 South Mill Street Lexington, KY 40507 Age: 55	Vice President, Secretary, Treasurer	Annual Term; 18 years of service as Vice President, 16 years of service as Secretary, Treasurer	Vice President, Secretary, Treasurer of Dupree & Company, Inc.	N/A	N/A
Vincent H. Harrison 125 South Mill Street Lexington, KY 40507 Age: 45	Assistant Secretary, Assistant Treasurer	Annual Term; 1 year of service	Vice President Dupree & Company, Inc.	N/A	N/A
Trustees:
William A. Combs, Jr. 111 Woodland Ave., #510 Lexington, KY 40502 Age: 76	Chairman, Trustee	Annual Term; 15 years of service as Chairman; 27 years of service as Trustee	Officer, Director: Mercedes-Benz of Cincinnati, Ohio; Mercedes-Benz of West Chester, Ohio (until 2016)	10	N/A
James C. Baughman, Jr. 1999 Richmond Road Suite 2A Lexington, KY 40502 Age: 54	Trustee	Annual Term 9 Years of Service	President, CJN Advisors, LLC (2013 – present; business consulting); President, Blue Horse Entries, LLC (2014 to 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
C. Timothy Cone 201 West Short Street Lexington, KY 40507 Age: 72	Trustee Chair, Nominating Committee	Annual Term; 14 years of service	Of Counsel, Gess, Mattingly & Atchison, P.S.C. (law firm)	10	N/A
Ann Rosenstein Giles 343 Waller Avenue Suite 100 Lexington, KY 40504 Age: 65	Trustee Chair, Valuation Committee	Annual Term; 5 years of service	AJ Marketing Partners (self-employed marketing consultant)	10	N/A
Marc A. Mathews 2104 Lakeside Drive Lexington, KY 40502 Age: 58	Trustee Chair, Audit Committee	Annual Term; 5 years of service	Vice President for Finance and Business, Transylvania University	10	Director, Bank of the Bluegrass

63

DUPREE MUTUAL FUNDS UNAUDITED

OTHER UNAUDITED INFORMATION

December 31, 2016

Trustee and officer information, continued

As of December 31, 2016, none of the Trustees or 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 six months ending December 31, 2016, 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.

Board of Trustees Approval of Investment Advisory Agreements

Dupree Mutual Fund’s Board of Trustees is responsible for overseeing the Trust’s corporate policies and adhering to fiduciary standards under the Investment Company Act of 1940 (“1940 Act). At a separate meeting of the Board of Trustees held on August 27, 2014 to consider net investment advisory agreements for each Series of the Trust, the Trustees considered the matter and voted unanimously to approve new investment advisory agreements for each Series and to place the proposal before the shareholders of each Series. Voting separately by Series at the Annual Shareholders meeting October 26, 2014, the shareholders for each Series of the Trust approved new two year investment advisory agreements for each Series.

At a separate meeting of the Board of Trustees held on August 29, 2016 the Trustees considered renewal of investment advisory agreements for each Series of the Trust. The Trustees considered the matter and voted unanimously to approve renewal of the investment advisory agreement for each Series for an additional year commencing November 1, 2016 and continuing in effect until October 31, 2017.

In preparation for the August 29, 2016 meeting, the Trustees requested and reviewed materials provided by Dupree & Company, Inc. These materials included the following: Dupree & Company, Inc. audited financial statements for the twelve month period ended December 31, 2015; unaudited financial statements for the six month period ended June 30, 2016; Dupree & Company’s, Inc. pre-tax profits from furnishing investment advisory services to each Series from November 1, 2014 through July 31, 2016; and each Series’ performance and portfolio characteristics since Dupree became the investment adviser pursuant to the current agreements. The Board also requested and reviewed reports prepared using data from Morningstar^® and Lipper, independent sources of investment company data, relating to each Series’ performance and expenses as compared to the performance and expenses of its peer group.

In considering whether to approve new investment advisory agreements for each of the tax-free municipal bond Series, the Intermediate Government Bond Series, and the Taxable Municipal Bond Series, the Trustees reviewed the following factors with respect to each Series: (1) the nature, extent and quality of services provided by Dupree & Co. to each Series; (2) the investment performance of each Series; (3) the costs of the services provided to each Series and the profits realized or to be realized by Dupree & Co. from its relationship with the Trust; (4) the extent to which economies of scale have been realized as each Series grows; (5) whether the level of fees reflects those economies of scale for the benefit of investors in the Series; (6) comparisons of services and fees with contracts entered into by Dupree & Co. with other clients; and (7) other benefits derived or anticipated to be derived by Dupree & Co. from its relationship as investment adviser to the Trust.

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Nature, Extent and Quality of Services

Pursuant to each agreement, Dupree & Company (hereinafter “Dupree”) provides investment supervisory services, office space and facilities and corporate administration. Pursuant to the terms of the Advisory Agreements, Dupree provides: (i) office space, telephone, office equipment and supplies for the Trust necessary or appropriate for the effective administration of the Trust; (ii) provides trading desk facilities for the Trust; (iii) obtains and evaluates information relating to the economy, industries, businesses, municipal issuers, securities markets and securities necessary to manage the Trust’s investment portfolios; (iv) formulates a continuing program for the management of the assets and resources of the Trust in a manner consistent with the investment objectives of the Trust; (v) determines the securities to be purchased and sold for the Trust and determines the portions of assets to be held in cash or cash equivalents by the Trust; (vi) authorizes expenditures and approves bills for payment on behalf of the Trust; (vii) supervises and prepares routine correspondence and other communications with shareholders of the Trust; (viii) monitors and coordinates, where appropriate, relationships with organizations serving the Trust, including the custodian, independent accountant, printers, pricing services, and other third-party service providers; (ix) supervises the Trust’s compliance with the recordkeeping requirements under the federal securities laws, including the 1940 Investment Company Act and the 1940 Investment Advisers Act and the rules and regulations thereunder; (x) maintains the Trust’s corporate existence; and (xi) maintains a review and certification program and internal controls and procedures in accordance with the relevant provisions of the Sarbanes Oxley Act of 2002 as applicable to investment companies.

In addition, Dupree & Company provides administrative and fund accounting services for each Series of the Trust. These services include, but are not limited to, the following: provides fund accounting services, including preparing and supervising publication of daily net asset value quotations and other financial data; (b) supervises and prepares periodic reports to shareholders of the Trust; (c) maintains books and records for the Trust; (d) prepares and files tax reports for shareholders of the Trust, including the Trust’s income tax returns, and monitoring the Trust’s compliance with subchapter M of the Internal Revenue Code and all other tax laws and regulations; (e) prepares and files regulatory reports, including without limitation, Forms N-SAR, N-CSR, N-PX, N-Q, and proxy statements; (f) arranges for the filing of such registration statements and other documents with the U.S. Securities & Exchange Commission and other federal or state regulatory authorities as may be required to register or otherwise qualify the shares of the Trust for sale and maintains any such registrations or qualifications; and (g) provides executive, clerical, secretarial and other personnel needed to carry out the above responsibilities.

Performance

The Trustees considered the performance of each Series during historical and recent periods and compared to (i) standardized industry performance data, (ii) the performance of comparable mutual funds and (iii) the performance of recognized indices.

The Trustees considered the comparative performance and expense data for each Series as of July 31, 2016 as prepared by Morningstar^®, Inc., an independent source of investment company data, annualized for 1, 3, 5 and 10 years as compared with other single state municipal bond funds, government bond funds, and taxable municipal bond funds. Morningstar^®, Inc. comparative performance and expense data was considered for 1, 3 and 5 year periods and since inception for the Taxable Municipal Bond Series since it has been in existence only since November 1, 2010.

The Morningstar^®, Inc. performance and expense data compared nine of the Trust Series to the Barclays Municipal TR Standard Index. The Intermediate Government Bond Series comparable index utilized was the Barclays US Agg Bond TR Standard Index.

The Morningstar^®, Inc. comparable Category Index for the five Tax Free Income Series was the Barclays Municipal 10 Year, 8-12 TR Index. The comparable Category Index for the Short to Medium Series was the Barclays Municipal 3 Year, 2-4 TR Index. The comparable Category Index for the Intermediate Government Bond Series was the Barclays US Government TR Index and the comparable Category Index for the Taxable Municipal Bond Series was the Barclays Municipal 20 Year, 17-22 TR Index.

The Trustees also considered “Lipper Leaders” comparative performance and expense data for each Series as prepared by Lipper^®, an independent source of investment company data. The Lipper^® data of July 14, 2016 included Fund performance relative to peers. The five Tax Free Income Series were compared with “Other States Municipal Debt Funds.” The three Short to Medium Series were compared with “Other States Short-Intermediate Municipal Debt Funds.” The Intermediate Government Bond Series was compared

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with “Intermediate U.S. Government Funds.” The Taxable Municipal Bond Series was compared with “General Bond Funds.” The “Lipper Leaders” report contained a Highest to Lowest rating system for Total Return, Consistent Return, Preservation, Tax Efficiency and Expense.

The Trustees reviewed the Morningstar^®, Inc. Net and Gross Expense Ratios and Rankings and the Management Fees

The Trustees reviewed the several Morningstar^®, Inc. reports based providing Total Return information for the 1, 3, 5 and 10 year periods (where applicable) for “peer group” funds with the Morningstar^®, Inc. “star” ratings.

Cost and Profitability

The Trustees reviewed the Dupree & Company, Inc. audited financial statement for the years ended December 31, 2015 and 2014 and the unaudited financial statement for the six month period ended June 30, 2016. In addition the Trustees reviewed the several methods of description concerning the profitability of Dupree & Company in its capacity as Investment Adviser for each of the ten (10) Series, which description covered a review period of November 1, 2014 through July 31, 2016, being the first 21 months of the existing 2 year investment advisory agreements. The Trustees were advised that the presentation of profitability by Series was a new request for the Investment Adviser. The revenue-based methodology, which is the traditional methodology of the Adviser, allocated expenses based on the relative percentage of total advisory revenues generated by each separate Series (Tab G). The time and efforts approach to quantify profitability compelled several assumptions and subjective estimations because the Investment Adviser does not maintain its books and records on a Series by Series basis. In the time and efforts approach to quantify Dupree’s profitability, the Dupree revenues and costs and profits from furnishing services to each Series were allocated based on identifiable cost for each Series, and where costs were not Series specific, said costs were allocated according to the relative Net Assets Under Management of each Series.

The Trustees considered the Investment Advisory fees paid to Dupree, expressed in dollar terms and as a percentage of total advisory fee revenue. The Trustees considered and reviewed information concerning the costs incurred and profits derived by Dupree & Co. for services rendered in its capacity as Investment Adviser to each Series.

Fees Charged by Other Advisers

The Trustees considered information regarding fees paid to other advisers for managing similar investment portfolios. The Trustees considered the expense ratios set forth in the 2016 Investment Company Fact Book and information provided through the Mutual Fund Directors Forum that addressed advisor profitability benchmarks. The Trustees discussed the advisory fees paid and to be paid in the future to Dupree for its advisory services to the several Series. In considering the advisory fees paid to Dupree, the fees were considered to be reasonable in relation to the reported maximum fees charged by comparable funds as set for the in the Morningstar^®, Inc. report. The Trustees considered that the proposed advisory fees to be paid to Dupree for its services to each Series are comparable to the advisory fees charged to other similar portfolios.

Economies of Scale

The Trustees considered the question of economies of scale which might inure to the benefit of shareholders. The Dupree booklet pointed to the advisory fee structure for the municipal bond Series that incorporates breakpoints as the net assets of each such Series increase in size. More specifically, as the net assets of a given municipal bond Series of the Trust increase in size, the management fee earned by Dupree decreases as a percentage of net assets. The advisory fee structure starts out as 0.50 of 1% for the first $100 million under management and progressively declines to a low of 0.25 of 1% once the net assets of a Series exceed $1 billion.

Fee Comparison with Other Clients

The only client served by Dupree is the Trust, so there are no applicable fee comparisons.

Other Benefits

In information provided by Dupree it stated that it derives no indirect benefits or other income attributable to management of the Trust, including, but limited to: 12b-1 fees, brokerage commissions, research or soft dollar arrangements. The sole benefit that

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accrues to Dupree is an increase in total fees received as each Series increases in net asset size. The benefit to the shareholders (except for shareholders of the Intermediate Government Bond Series) is that Dupree’s fees decrease on a percentage basis as total net assets under management increase.

Series-by-Series Factors

Alabama Tax-Free Income Series

• For the year ended June 30, 2016, the Investment Adviser processed 13 portfolio purchase transactions and 12 portfolio sale transactions.

• As of July 31, 2016, the ten year growth of $10,000 invested in the Series was $16,958 as compared to $16,377 for the Barclays Municipal TR USD. The Barclays Index reflects no deduction for fees or expenses.

• As of July 31, 2016, the Series received an overall Morningstar^® rating of five stars.

• As of June 30, 2015, the Series expense ratio was 0.71%. The average expense ratio calculated by Morningstar^® for Barclays Municipal TR USD in 2015 was .92%.

Kentucky Tax-Free Income Series

• For the year ended June 30, 2016, the Investment Adviser processed 36 portfolio purchase transactions and 40 portfolio sale transactions.

• As of July 31, 2016, the ten year growth of $10,000 invested in the Series was $15,726 as compared to $16,377 for the Barclays Municipal TR USD. The Barclays Index reflects no deduction for fees or expenses.

• As of July 31, 2016, the Series received an overall Morningstar^® rating of four stars.

• As of June 30, 2015, the Series expense ratio was 0.55%. The average expense ratio calculated by Morningstar^® for Barclays Municipal TR USD in 2015 was .92%.

Kentucky Tax-Free Short-to-Medium Series

• For the year ended June 30, 2016, the Investment Adviser processed 28 portfolio purchase transactions and 35 portfolio sale transactions.

• As of July 31, 2016, the ten year growth of $10,000 invested in the Series was $13,603 as compared to $16,377 for the Barclays Municipal TR USD. The Barclays Index reflects no deduction for fees or expenses.

• As of July 31, 2016, the Series received an overall Morningstar^® rating of three stars.

• As of June 30, 2015, the Series expense ratio was 0.73%. The average expense ratio calculated by Morningstar^® for Barclays Municipal TR USD in 2015 was .85%.

Mississippi Tax-Free Income Series

• For the year ended June 30, 2016 the Investment Adviser processed 5 portfolio purchase transactions and 5 portfolio sale transactions.

• As of July 31, 2016, the ten year growth of $10,000 invested in the Series was $15,958 as compared to $16,377 for the Barclays Municipal TR USD. The Barclays Index reflects no deduction for fees and expenses.

• As of July 31, 2016, the Series received an overall Morningstar^® rating of five stars.

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• As of June 30, 2015, the Series expense ratio was 0.69% (after waiver of fees). The average expense ratio calculated by Morningstar^® for Barclays Municipal TR USD in 2015 was .92%.

North Carolina Tax-Free Income Series

• For the year ended June 30, 2016, the Investment Adviser processed 42 portfolio purchase transactions and 11 portfolio sale transactions.

• As of July 31, 2016, the ten year growth of $10,000 invested in the Series was $15,703 as compared to $16,377 for the Barclays Municipal TR USD. The Barclays Index reflects no deduction for fees and expenses.

• As of July 31, 2016, the Series received an overall Morningstar^® rating of four stars.

• As of June 30, 2015, the Series expense ratio was 0.71%. The average expense ratio calculated by Morningstar^® for Barclays Municipal TR USD in 2015 was .92%.

North Carolina Tax-Free Short-to-Medium Series

• For the year ended June 30, 2016, the Investment Adviser processed 23 portfolio purchase transactions and 32 portfolio sale transactions.

• As of July 31, 2016, the ten year growth of $10,000 invested in the Series was $13,503 as compared to $16,377 for the Barclays Municipal TR USD. The Barclays Index reflects no deduction for fees and expenses.

• As of July 31, 2016, the Series received an overall Morningstar^® rating of three stars.

• As of June 30, 2015, the Series expense ratio was 0.83%. The average expense ratio calculated by Morningstar^® for Barclays Municipal TR USD in 2015 was .85%.

Tennessee Tax-Free Income Series

• For the year ended June 30, 2016, the Investment Adviser processed 21 portfolio purchase transactions and 59 portfolio sale transactions.

• As of July 31, 2016, the ten year growth of $10,000 invested in the Series was $15,365 as compared to $16,377 for the Barclays Municipal TR USD. The Barclays Index reflects no deduction for fees and expenses.

• As of July 31, 2016, the Series received an overall Morningstar^® rating of four stars.

• As of June 30, 2015, the Series expense ratio was 0.70%. The average expense ratio calculated by Morningstar^® for Barclays Municipal TR USD in 2015 was .92%.

Tennessee Tax-Free Short-to-Medium Series

• For the year ended June 30, 2016, the Investment Adviser processed 4 portfolio purchase transactions and 17 portfolio sale transactions.

• As of July 31, 2016, the ten year growth of $10,000 invested in the Series was $13,295 as compared to $16,377 for the Barclays Municipal TR USD. The Barclays Index reflects no deduction for fees and expenses.

• As of July 31, 2016, the Series received an overall Morningstar^® rating of three stars.

• As of June 30, 2015, the Series expense ratio was 0.85%. The average expense ratio calculated by Morningstar^® for Barclays Municipal TR USD in 2015 was .85%.

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Intermediate Government Bond Series

• For the year ended June 30, 2016, the Investment Adviser processed 0 portfolio purchase transactions and 3 portfolio sale transactions.

• As of July 31, 2016, the ten year growth of $10,000 invested in the Series was $15,884 as compared to $16,417 for the Barclays U.S Aggregate Bond TR USD. The Barclays Index reflects no deduction for fees and expenses.

• As of July 31, 2016, the Series received an overall Morningstar^® rating of four stars.

• As of June 30, 2015, the Series expense ratio was 0.51%. The average expense ratio calculated by Morningstar^® for Barclays US Aggregate Bond TR USD in 2015 was .92%

Taxable Municipal Bond Series

• For the year ended June 30, 2016, the Investment Adviser processed 8 portfolio purchase transactions and 6 portfolio sale transactions.

• As of July 31, 2016, the growth of $10,000 invested in the Series from November 1, 2010 through July 17, 2016 was $14,550 as compared to $12,988 for the Barclays Taxable Municipal TR USD. The Barclays Index reflects no deduction for fees and expenses.

• As of July 31, 2016, the Series had an overall Morningstar^® rating of five stars.

• As of June 30, 2015, the Series expense ratio was 0.83%. The average expense ratio calculated by Morningstar^® for Barclays Municipal TR USD in 2015 was .89%

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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, 2016” 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,  2016			Beginning Account Value July 1, 2016*		Ending Account Value December 31, 2016**		Expenses Paid During the Six Months Ended  December 31, 2016
Alabama Tax-Free Income Series
Actual		.71	%	$	1,000.00	$	984.42	$	3.53
Hypothetical		.71			1,000.00		1,025.21		3.60
Kentucky Tax-Free Income Series
Actual		.55			1,000.00		983.82		2.77
Hypothetical		.55			1,000.00		1,025.21		2.83
Kentucky Tax-Free Short-to-Medium Series
Actual		.72			1,000.00		986.19		3.61
Hypothetical		.72			1,000.00		1,025.21		3.68
Mississippi Tax-Free Income Series
Actual		.70			1,000.00		984.12		3.49
Hypothetical		.70			1,000.00		1,025.21		3.56
North Carolina Tax-Free Income Series
Actual		.69			1,000.00		980.09		3.43
Hypothetical		.69			1,000.00		1,025.21		3.51
North Carolina Tax-Free Short-to-Medium Series
Actual		.76			1,000.00		987.15		3.81
Hypothetical		.76			1,000.00		1,025.21		3.88
Tennessee Tax-Free Income Series
Actual		.70			1,000.00		983.52		3.52
Hypothetical		.70			1,000.00		1,025.21		3.58
Tennessee Tax-Free Short-to-Medium Series
Actual		.79			1,000.00		989.06		3.98
Hypothetical		.79			1,000.00		1,025.21		4.05

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	Net Expense Ratio Annualized December 31,  2016			Beginning Account Value July 1, 2016*		Ending Account Value December 31, 2016**		Expenses Paid During the Six Months Ended  December 31, 2016
Intermediate Government Bond Series
Actual		.57	%	$	1,000.00	$	983.82	$	2.85
Hypothetical		.57			1,000.00		1,025.21		2.91
Taxable Municipal Bond Series
Actual		.78			1,000.00		990.32		3.96
Hypothetical		.78			1,000.00		1,025.21		3.98

* 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 26, 2016. 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, 2017. The results of all matters voted on by shareholders at the Shareholder Meeting held October 26, 2016 were as follows:

A. Election of Trustees:

	FOR		WITHHELD		TOTAL
James C. Baughman		109,988,749.832		1,402,193.736		111,390,943.568
William A. Combs		109,346,212.120		1,402,193.736		110,748,405.856
C. Timothy Cone		110,095,787.566		1,402,193.736		111,497,981.302
Ann Rosenstein Giles		108,791,409.254		1,402,193.736		110,193,602.990
Marc A. Mathews		99,221,032.059		1,402,193.736		100,623,225.795

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 2017:

	FOR		AGAINST		ABSTAIN		TOTAL
Ernst & Young LLP		107,146,071.638		303,373.168		1,443,387.099		108,892,831.905

C. Other business:

	FOR		AGAINST		ABSTAIN		TOTAL
Other business		79,081,250.160		15,562,670.054		2,987,991.906		108,892,831.905

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.

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Item 2. Not applicable.

Item 3. Audit Committee Financial Expert: Not applicable.

Item 4. Not applicable.

Item 5. Not applicable.

Item 6.

(a) Included as part of item 1.

(b) Not applicable.

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:

(a) The registrant’s principal executive officer and principal financial officer have concluded, based on their evaluation of the registrant’s disclosure controls and procedures as conducted within 90 days of the filing date of this report, that these disclosure controls and procedures are adequately designed and are operating effectively to ensure that information required to be disclosed by the registrant 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.

(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

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 16, 2017

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 16, 2017
By:	/s/    Michelle M. Dragoo
	Michelle M. Dragoo,
	Vice President, Secretary, Treasurer
Date: February 16, 2017