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, 2018

Date of reporting period: December 31, 2017

Item 1. Report to Stockholders

December 31, 2017

SEMI ANNUAL REPORT

TO SHAREHOLDERS

(Unaudited)

ABOUT DUPREE MUTUAL FUNDS

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

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

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

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

Intermediate Government Bond Series in 1992;

Tennessee Tax-Free Income Series in 1993;

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

North Carolina Tax-Free Income Series in 1995;

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

Alabama Tax-Free Income Series in 2000;

Mississippi Tax-Free Income Series in 2000; and

Taxable Municipal Bond Series in 2010.

Today, after more than 60 years in business, Dupree continues to be a pioneer in the industry. Our Kentucky, Tennessee, and Mississippi Series are currently the ONLY 100% “no-load” municipal bond funds available in those states. No-load means simply that 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 that typically carry sales charges.

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

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	23
North Carolina Tax-Free Short-to-Medium Series	29
Tennessee Tax-Free Income Series	34
Tennessee Tax-Free Short-to-Medium Series	40
Intermediate Government Bond Series	44
Taxable Municipal Bond Series	47
Notes to Financial Statements	51
Other Unaudited Information	60
Renewal of Advisory Agreements	61
Schedule of Shareholder Expenses	63
Shareholder Meeting	64

Management’s Discussion of Fund Performance: (Unaudited)

Six Months Ended December 31, 2017

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. 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, the performance of a government bond fund may be influenced by a number of factors 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, 2017 (the “reporting period”), the pace of economic activity picked up. Real gross domestic product (GDP) increased at an annual rate of 3.2 percent in the third quarter. Real GDP increased at a 2.6 percent (advance estimate) annual rate in the fourth quarter of the year. Economic growth has been driven by consumer spending which has been supported by substantial gains in household income and wealth.

The labor market continued to firm up during the reporting period. The seasonally adjusted national unemployment rate was 4.1 percent in December. The labor market is now close to or at a full employment level. Both the labor force participation rate and employment-to-population ratio remain at levels lower than they were a decade ago. Wage growth has continued to be relatively subdued with average hourly earnings increasing at a 2.7 percent annual rate in December.

Most key measures of inflation continued to run below the Federal Reserve Board’s (“Fed”) 2 percent inflation target during the reporting period. The Consumer Price Index (CPI) increased at an annual rate of 2.1 percent in December. The core CPI, which excludes food and energy prices, increased at an annual rate of 1.8 percent in December. The Fed’s preferred inflation gauge, the core Personal Consumption Expenditures Index (“PCE”), increased by 0.2 percent on a year-over-year basis in December. Despite a firmer labor market, inflation readings have continued to be persistently low which has caused a number of Fed Governors to question whether additional interest rate hikes are warranted.

The Fed increased the federal funds target rate range once during the reporting period by 25 basis points in December to 1.25 to 1.50 percent. In its policy statement issued in December, the Fed reiterated that “it expects that economic conditions will evolve in a manner that will warrant gradual increases in the federal funds rate” and that “the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run.”

In October, the Fed implemented its balance sheet normalization program. Under this program, the Fed will gradually reduce its securities holdings by decreasing its reinvestment of the principal payments it receives from securities held on its balance sheet. The goal of the program is to gradually reduce the quantity of reserve balances to a more normal level, albeit to a level that will likely remain elevated above historical levels.

The yield curve continued to flatten throughout the reporting period with yields on the short end moving sharply higher and yields on the long end moving lower. The spread between 2-year and 10-year Treasuries narrowed to 53 basis points at the end of the review period. Yields on benchmark 10-year and 30-year AAA rated municipal securities declined by 1 basis and 25 basis points, respectively, during the reporting period. Credit conditions in the municipal bond market remained relatively stable during the reporting period, and default rates of investment grade municipal bonds remained at very low levels.

Starting in November, municipal bond prices broadly declined as tax reform uncertainty took hold. The proposed elimination of the tax exemption for advanced refunding bonds and private activity bonds caused issuers to rush to bring to market bonds that were scheduled to be issued in 2018. This “pull forward” effect resulted in a huge surge in supply, with issuers bringing to market a record breaking $55.6 billion in new bonds. The resulting supply-and-demand imbalance caused municipal bond prices to decline towards the end of the reporting period.

The Tax Cuts and Jobs Act (“Tax Act”) was signed into law in late December. Under the Tax Act, individual and corporate tax rates were reduced. It is widely anticipated that the recently enacted corporate tax rate reductions will lead to increased capital investment and economic activity. Accelerating economic growth, combined with robust equity market appreciation, create an opportunity for states to potentially receive a tax (income and capital gains) revenue windfall in 2018.

i

Preliminary data collected by the Rockefeller Institute of Government (“RIG”) for the third quarter of 2017 showed stronger growth in overall state tax collections, as well as in personal income and sales tax collections. RIG estimates that total tax collections increased by 4.5 percent in the third quarter compared to the same quarter in 2016. Personal income tax collections grew 4.5 percent, sales tax collections increased 2.7 percent, and corporate income tax collections increased 7.4 percent.

Unfunded pension and healthcare obligations still present significant challenges for a number of states. The Commonwealth of Kentucky’s unfunded pension obligations are among the worst in the country. Increased state Medicaid spending also continues to be a source of budget pressure for many states.

A discussion of the performance of each of our funds for the six month period ended December 31, 2017 follows:

During the reporting period, municipal bonds provided positive total returns with the Bloomberg Barclays Municipal Bond Index (“BBMBI”) returning 1.82 percent. Taxable municipal bonds also provided positive total returns with the Bloomberg Barclays Taxable Municipal Bond Index (“BBTMBI”) returning 3.71 percent during the reporting period. The Bloomberg Barclays U.S. Intermediate Government Bond Index (“BBIGBI”) had a slightly negative total return of -0.06 percent during the reporting period.

All five of our tax-exempt Income Series performed roughly in line with the BBMBI during the reporting period, especially when taking into consideration that the index does not take into account any operating expenses or transaction costs. All three of our tax-exempt Short-to-Medium Series underperformed the index during the reporting period. Longer-dated, lower-rated bonds generally performed better than shorter-dated, higher-rated bonds during the reporting period. The duration of each of the Short-to-Medium Series (Kentucky Tax-Free Short-to-Medium Series, 3.96 years; Tennessee Tax-Free Short-to-Medium Series, 2.69 years; and North Carolina Tax-Free Short-to-Medium Series, 3.80 years) were significantly shorter than the duration of the BBMBI (5.63 years).

The Kentucky Tax-Free Income Series provided a total return of 1.52 percent during the reporting period compared to 1.82 percent for the BBMBI. The Kentucky Tax-Free Short-to-Medium Series provided a total return of -0.07 percent during the reporting period compared to 1.82 percent for the BBMBI.

The Tennessee Tax-Free Income Series provided a total return of 1.64 percent during the reporting period compared to 1.82 percent for the BBMBI. The Tennessee Tax-Free Short-to-Medium Series provided a total return of 0.06 percent during the reporting period compared to 1.82 percent for the BBMBI.

The North Carolina Tax-Free Income Series provided a total return of 2.23 percent during the reporting period compared to 1.82 percent for the BBMBI. The North Carolina Tax-Free Short-to-Medium Series provided a total return of 0.22 percent during the reporting period compared to 1.82 percent for the BBMBI.

The Alabama Tax-Free Income Series provided a total a total return of 1.74 percent during the reporting period compared to 1.82 percent for the BBMBI.

The Mississippi Tax-Free Income Series provided a total return of 1.78 percent during the reporting period compared to 1.82 percent for the BBMBI.

The Intermediate Government Bond Series provided a total return of 0.09 percent during the reporting period compared to -0.06 percent for the BBIGBI. The fund slightly outperformed the index during the reporting period.

The Taxable Municipal Bond Series provided a total return of 2.29 percent during the reporting period compared to 3.70 percent for the BBTMBI. Longer-dated, lower-rated bonds generally performed better than shorter-dated, higher-rated bonds during the review period. The duration of the Taxable Municipal Bond Series was 4.60 years compared to 9.14 years for the BBTMBI.

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

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, 2017. 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
summarize key information about each Fund’s investments. Unaudited

Kentucky Tax-Free Income Series
CREDIT QUALITY*	% of Net Assets at Fair Value
Aaa/AAA		0.49%
Aa/AA		42.78%
A		51.84%
Baa/BBB		0.22%
B		0.31%
Not Rated		4.36%
		100.00%
COMPOSITION
	% of Net Assets
Miscellaneous Public Improvement		24.16%
Prerefunded		18.11%
School Improvements		9.46%
University Consolidated Education and Building Revenue		9.22%
Refunded		8.85%
Municipal Utility Revenue		8.73%
Turnpikes and Toll Roads Revenue		8.01%
Hospital and Healthcare Revenue		6.87%
Public Facilities Revenue		4.06%
Airport Revenue		1.09%
Miscellaneous Revenue		0.23%
Ad Valorem Property		0.13%
State and Local Mortgage Revenue		0.13%
Other Assets Less Liabilities		0.95%
		100.00%

Kentucky Tax-Free Short-to-Medium Series
CREDIT QUALITY*	% of Net Assets at Fair Value
Aaa/AAA		0.30%
Aa/AA		23.84%
A		75.86%
		100.00%
COMPOSITION
	% of Net Assets
Miscellaneous Public Improvement		21.05%
School Improvements		17.81%
Public Facilities Revenue		13.47%
Refunded		10.98%
University Consolidated Education and Building Revenue		8.54%
Turnpikes and Toll Roads Revenue		8.04%
Municipal Utility Revenue		6.57%
Hospital and Healthcare Revenue		5.96%
Prerefunded		5.86%
Other Assets Less Liabilities		1.72%
		100.00%

Alabama Tax-Free Income Series
CREDIT QUALITY*	% of Net Assets at Fair Value
Aaa/AAA		1.85%
Aa/AA		83.96%
A		5.62%
Not Rated		8.57%
		100.00%
COMPOSITION
	% of Net Assets
Prerefunded		26.73%
Municipal Utility Revenue		22.31%
School Improvement Revenue		21.27%
Public Facilities Revenue		9.08%
Refunded		6.08%
Miscellaneous Public Improvement		5.66%
Hospital and Healthcare Revenue		3.45%
University Consolidated Education and Building Revenue		2.04%
Turnpikes and Toll Roads Revenue		1.02%
State and Local Mortgage Revenue		0.32%
Industrial Revenue		0.04%
Other Assets Less Liabilities		2.00%
		100.00%

Mississippi Tax-Free Income Series
CREDIT QUALITY*	% of Net Assets at Fair Value
Aa/AA		89.53%
A		10.47%
		100.00%
COMPOSITION
	% of Net Assets
Prerefunded		40.70%
University Consolidated Education and Building Revenue		18.37%
Municipal Utility Revenue		10.53%
Turnpikes and Toll Roads Revenue		8.34%
Public Facilities Revenue		7.95%
Refunded		4.67%
School Improvement Revenue		4.53%
Hospital and Healthcare Revenue		1.87%
Miscellaneous Public Improvement		1.23%
Other Assets Less Liabilities		1.81%
		100.00%

iii

The illustrations below provide each Fund’s sector allocation and
summarize key information about each Fund’s investments. Unaudited

North Carolina Tax-Free Income Series
CREDIT QUALITY*	% of Net Assets at Fair Value
Aaa/AAA		4.07%
Aa/AA		79.72%
A		15.65%
Not Rated		0.56%
		100.00%
COMPOSITION
	% of Net Assets
Prerefunded		19.06%
University Consolidated Education and Building Revenue		16.77%
Hospital and Healthcare		12.88%
Refunded		11.05%
School Improvement Revenue		9.87%
Municipal Utility Revenue		9.83%
Public Facilities Revenue		5.59%
Airport Revenue		4.92%
Miscellaneous Public Improvement		4.87%
Turnpikes and Toll Roads Revenue		1.66%
Lease Revenue		1.25%
Escrowed to Maturity		0.77%
Miscellaneous Revenue		0.42%
Other Assets Less Liabilities		1.06%
		100.00%

North Carolina Tax-Free Short-to-Medium Series
CREDIT QUALITY*	% of Net Assets at Fair Value
Aaa/AAA		4.35%
Aa/AA		80.64%
A		15.01%
		100.00%
COMPOSITION
	% of Net Assets
Refunded		24.60%
Prerefunded		15.63%
Municipal Utility Revenue		12.67%
School Improvement Revenue		10.13%
Public Facilities Revenue		8.02%
Hospital and Healthcare Revenue		7.66%
University Consolidated Education and Building Revenue		7.10%
Miscellaneous Public Improvement		3.92%
Escrowed to Maturity		3.17%
Turnpikes and Toll Roads Revenue		2.17%
Ad Valorem Property		1.39%
Lease Revenue		1.28%
Other Assets Less Liabilities		2.26%
		100.00%

Tennessee Tax-Free Income Series
CREDIT QUALITY*	% of Net Assets at Fair Value
Aaa/AAA		1.97%
Aa/AA		83.38%
A		12.39%
Baa/BBB		0.48%
Not Rated		1.78%
		100.00%
COMPOSITION
	% of Net Assets
Municipal Utility Revenue		35.11%
Prerefunded		15.60%
Public Facilities Revenue		11.04%
Hospital and Healthcare Revenue		8.96%
University Consolidated Education and Building Revenue		8.29%
Refunded		5.98%
School Improvement Revenue		5.19%
Miscellaneous Revenue		3.92%
Airport Revenue		2.30%
State and Local Mortgage Revenue		1.62%
Industrial Revenue		0.82%
Escrowed to Maturity		0.01%
Other Assets Less Liabilities		1.16%
		100.00%

Tennessee Tax-Free Short-to-Medium Series
CREDIT QUALITY*	% of Net Assets at Fair Value
Aa/AA		74.56%
A		20.94%
Baa/BBB		2.78%
Not Rated		1.72%
		100.00%
COMPOSITION
	% of Net Assets
Prerefunded		22.37%
Public Facilities Revenue		18.98%
Municipal Utility Revenue		12.14%
Refunded		11.90%
School Improvement Revenue		10.70%
University Consolidated Education and Building Revenue		9.91%
Miscellaneous Revenue		4.89%
Hospital and Healthcare Revenue		2.70%
State and Local Mortgage Revenue		2.56%
Airport Revenue		1.08%
Other Assets Less Liabilities		2.77%
		100.00%

iv

The illustrations below provide each Fund’s sector allocation and
summarize key information about each Fund’s investments. Unaudited

Intermediate Government Bond Series
CREDIT QUALITY*	% of Net Assets at Fair Value
Aaa/AAA		100.00%
COMPOSITION
	% of Net Assets
Federal Farm Credit		62.51%
Federal Home Loan Bank		34.95%
Federal National Mortgage Association		1.60%
Other Assets Less Liabilities		0.94%
		100.00%

Taxable Municipal Bond Series
CREDIT QUALITY*	% of Net Assets at Fair Value
Aa/AA		83.62%
A		16.38%
		100.00%
COMPOSITION
	% of Net Assets
Public Facilities Revenue		30.82%
Municipal Utility Revenue		28.36%
School Improvement Revenue		14.18%
Miscellaneous Public Improvement		9.93%
Hospital and Healthcare Revenue		4.55%
University Consolidated Education and Building Revenue		3.51%
Turnpikes and Toll Roads Revenue		2.87%
Marina and Port Authority Revenue		2.49%
Other Assets Less Liabilities		3.29%
		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, 2017

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
PREREFUNDED BONDS
26.73% of Net Assets
AL State Public School & College Authority Refinancing		5.000	%		05/01/2024	Aa1	$	125,000	$	130,588
Albertville AL Warrants		5.000			02/01/2035	AA*		110,000		114,154
Auburn University AL General Fee Revenue		5.000			06/01/2022	Aa2		50,000		50,720
Auburn University AL General Fee Revenue		5.000			06/01/2036	Aa2		150,000		166,388
Birmingham AL Waterworks Board Water Revenue		4.750			01/01/2036	Aa2		215,000		234,531
Fort Payne AL Waterworks Board Water Revenue		4.750			07/01/2034	AA-*		100,000		104,637
Huntsville AL Water System Revenue		5.000			11/01/2033	Aa1		175,000		177,011
Jacksonville AL State University		5.125			12/01/2033	AA*		235,000		242,837
Jacksonville AL State University		5.125			12/01/2033	AA*		215,000		222,170
Madison County AL Board of Education Capital Outlay Tax		4.950			09/01/2025	Aa3		100,000		102,331
Madison County AL Board of Education Capital Outlay Tax		5.100			09/01/2028	Aa3		285,000		291,928
Madison County AL Board of Education Capital Outlay Tax**		5.125			09/01/2034	Aa3		505,000		517,357
Morgan County AL Board of Education Capital Outlay Warrants		5.000			03/01/2035	NR		155,000		177,191
Morgan County AL Board of Education Capital Outlay Warrants**		5.000			03/01/2035	NR		490,000		560,153
Muscle Shoals AL Utilities Board Water & Sewer		5.750			12/01/2033	NR		330,000		342,639
Muscle Shoals AL Utilities Board Water & Sewer		5.750			12/01/2033	AA-*		100,000		103,820
North Marshall AL Utilities Board Water Revenue		5.100			10/01/2030	AA*		375,000		385,181
Opelika AL Water Board Revenue		5.000			06/01/2037	Aa3		250,000		265,828
Opelika AL Water Board Revenue		5.250			06/01/2036	Aa3		70,000		75,941
Phenix City AL Water & Sewer		5.000			08/15/2034	A3		75,000		79,043
Tallassee AL Water Gas & Sewer Warrants		5.125			05/01/2036	A2		65,000		70,144
Troy AL Public Educational Building Authority		5.250			12/01/2036	A2		195,000		214,650
Trussville AL Warrants**		5.000			10/01/2039	NR		445,000		522,780
Tuscaloosa AL Public Education Building Authority Student Housing		6.375			07/01/2028	AA*		250,000		256,025
Tuscaloosa AL Public Education Building Authority Student Housing		6.750			07/01/2033	AA*		495,000		507,860
Tuscaloosa AL Warrants		5.000			10/15/2034	Aa1		175,000		181,144
Tuscaloosa AL Warrants		5.125			01/01/2039	Aa1		150,000		156,129
University of Alabama General Revenue		5.000			07/01/2034	Aa2		250,000		254,415
University of South AL University Revenues Facilities		5.000			08/01/2029	Aa1		550,000		561,435
University of South AL University Revenues Facilities		4.750			08/01/2033	Aa1		100,000		101,933
										7,170,963
MUNICIPAL UTILITY REVENUE BONDS
22.31% of Net Assets
Auburn AL Waterworks Board Water Revenue		5.000			09/01/2036	Aa2		250,000		293,953
Birmingham AL Waterworks		4.000			01/01/2037	Aa2		360,000		388,220
Birmingham AL Waterworks		4.000			01/01/2038	Aa2		205,000		220,236
Birmingham AL Waterworks		5.000			01/01/2026	Aa2		80,000		87,433
Birmingham AL Waterworks		5.000			01/01/2038	Aa2		550,000		614,042
Birmingham AL Waterworks		5.000			01/01/2040	Aa2		150,000		172,817
Chatom AL Industrial Board Gulf Opportunity Zone		5.000			08/01/2037	A3		150,000		159,653
Cullman AL Utility Board Water Revenue		4.750			09/01/2037	A1		400,000		424,604
Gadsden AL Waterworks & Sewer Board		4.000			06/01/2034	A1		120,000		128,950
Huntsville AL Water System Revenue		5.000			11/01/2033	Aa1		125,000		126,629
Jasper AL Waterworks and Sewer Board Utility Revenue		5.000			06/01/2030	A+*		455,000		485,885
Limestone County AL Water & Sewer Authority		5.000			12/01/2034	A*		250,000		285,978
Limestone County AL Water & Sewer Authority		5.000			12/01/2033	A*		300,000		342,840
Limestone County AL Water & Sewer Authority		4.750			12/01/2035	AA*		400,000		446,632
Limestone County AL Water & Sewer Authority		4.750			12/01/2034	AA*		375,000		430,358
Limestone County AL Water & Sewer Authority		4.750			12/01/2033	AA*		290,000		333,874
Opelika AL Utilities Board		4.000			06/01/2039	Aa3		250,000		268,470
Phenix City AL Water & Sewer		5.000			08/15/2034	A3		15,000		15,665
Prattville AL Sewer Warrants		4.000			11/01/2042	AA-*		375,000		404,741
Tallassee AL Water Gas & Sewer Warrants		5.125			05/01/2036	A2		10,000		10,649
West Morgan East Lawrence AL Water & Sewer		4.750			08/15/2030	AA*		75,000		79,638
West Morgan East Lawrence AL Water & Sewer		4.850			08/15/2035	AA*		250,000		265,108
										5,986,375

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, 2017

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
SCHOOL IMPROVEMENT BONDS
21.27% of Net Assets
Alabaster AL Board of Education Special Tax Warrants**		5.000	%		09/01/2039	A1	$	600,000	$	689,250
Decatur City AL Board of Education Special Tax		5.000			02/01/2040	Aa2		225,000		256,001
Etowah County AL Board of Education Capital Outlay Tax		5.000			09/01/2037	A+*		200,000		220,150
Jasper AL Warrants		5.000			03/01/2032	A2		450,000		512,302
Limestone County AL Board of Education		5.000			07/01/2033	AA*		255,000		293,885
Madison AL School Warrants		4.000			02/01/2034	Aa2		350,000		375,487
Madison County AL Board of Education Capital Outlay**		5.000			09/01/2031	Aa3		660,000		771,685
Marshall County AL Board of Education Special Tax School Warrants		4.000			03/01/2033	A2		250,000		267,243
Montgomery AL Warrants		5.000			03/01/2028	Aa1		35,000		35,057
Montgomery County AL Board of Education Capital Outlay School Warrants		5.000			09/01/2039	AA*		150,000		171,690
Morgan County AL Board of Education Capital Outlay Warrants**		5.000			03/01/2035	NR		405,000		453,855
Opelika AL Warrants		5.000			11/01/2031	Aa2		150,000		166,898
Shelby County AL Board of Education Capital Outlay Warrants**		5.000			02/01/2031	Aa2		615,000		672,115
Shelby County AL Board of Education Special Tax School Warrants		5.000			02/01/2025	Aa3		5,000		5,013
Sumter County AL Limited Obligation School Warrants		5.100			02/01/2034	NR		100,000		101,402
Sumter County AL Limited Obligation School Warrants		5.200			02/01/2039	NR		95,000		96,301
Troy AL Public Educational Building Authority		5.250			12/01/2036	A2		30,000		32,549
Tuscaloosa County AL Board of Education Special Tax School Warrants		5.000			02/01/2036	Aa3		250,000		293,860
Tuscaloosa County AL Board of Education Special Tax School Warrants		5.000			02/01/2037	Aa3		250,000		292,985
										5,707,728
PUBLIC FACILITIES REVENUE BONDS
9.08% of Net Assets
Anniston AL Public Building Authority		5.000			03/01/2032	A2		400,000		433,354
Anniston AL Public Building Authority DHR Project		5.250			05/01/2030	AA-*		50,000		53,885
Anniston AL Public Building Authority DHR Project		5.500			05/01/2033	AA-*		200,000		216,820
Bessemer AL Public EducationalBuilding Authority Revenue		5.000			07/01/2030	AA*		250,000		268,493
Lowndes County AL Warrants		5.250			02/01/2037	A2		250,000		269,768
Montgomery AL Warrants		5.000			02/01/2030	A1		300,000		318,825
Trussville AL Warrants**		5.000			10/01/2039	Aa2		775,000		875,130
										2,436,275
REFUNDING BONDS
6.08% of Net Assets
Enterprise AL Warrants		4.500			11/01/2032	Aa3		115,000		124,272
Northport AL Warrants**		5.000			08/01/2040	AA-*		735,000		838,304
Shelby County Alabama		4.000			08/15/2038	AA+*		250,000		264,555
Tuscaloosa AL Warrants		5.000			01/01/2032	Aa1		350,000		404,212
										1,631,343
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS
5.66% of Net Assets
AL Incentives Financing Authority Special Obligation		5.000			09/01/2029	A*		125,000		131,600
Jasper AL Warrants		5.000			03/01/2031	A2		250,000		285,072
Madison AL Warrants		5.000			04/01/2035	Aa2		350,000		405,958
Mobile AL Refunding Warrants		5.000			02/15/2027	Aa2		335,000		348,290
Tuscaloosa AL Warrants		5.000			07/01/2034	Aa1		300,000		347,898
										1,518,818
HOSPITAL AND HEALTHCARE BONDS
3.45% of Net Assets
Chilton County AL Health Care Authority Chilton County Hospital**		5.000			11/01/2035	AA-@		550,000		596,684
Chilton County AL Health Care Authority Limited Obligation Sales Tax		5.000			11/01/2032	AA-@		300,000		328,020
										924,704
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS
2.04% of Net Assets
Troy University AL Facilities Revenue		5.000			11/01/2028	A1		250,000		291,660
University of AL Birmingham		5.000			10/01/2037	Aa2		225,000		256,266
										547,926

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, 2017

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
TURNPIKES/TOLLROAD/HIGHWAY BONDS
1.02% of Net Assets
AL Federal Aid Highway Finance Authority		4.000	%		06/01/2037	Aa1	$	250,000	$	274,148
STATE AND LOCAL MORTGAGE/HOUSING BONDS
.32% of Net Assets
AL Housing Finance Authority Single Family Mortgage Revenue		5.375			10/01/2033	Aaa		85,000		85,611
INDUSTRIAL REVENUE/POLLUTION CONTROL BONDS
.04% of Net Assets
Auburn AL Industrial Development Board Facilities Revenue		6.200			11/01/2020	A*		10,000		10,003
Total Investments 98.00% of Net Assets (cost $25,366,985) (See (a) below for further explanation)									$	26,293,894
Other assets in excess of liabilities 2.00%										537,634
Net Assets 100%									$	26,831,528

# 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

@ Rated by Fitch’s Investors Service

NR Not Rated

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

(a) Cost for federal income tax purposes is $25,366,985 and net unrealized appreciation of investments is as follows:

Unrealized appreciation	$	1,031,605
Unrealized depreciation		(104,696	)
Net unrealized appreciation	$	926,909

Other Information

The following is a summary of the inputs used, as of December 31, 2017, 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		26,293,894
Level 3	Significant Unobservable Inputs		—
		$	26,293,894

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

3

ALABAMA TAX-FREE INCOME SERIES

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2017 UNAUDITED

ASSETS:
Investments in securities, at fair value (Cost: $25,366,985)		$	26,293,894
Cash			314,845
Interest receivable			367,132
Total assets			26,975,871
LIABILITIES:
Payable for:
Distributions to shareholders	106,934
Fund shares redeemed	6,766
Investment advisory fee	5,693
Transfer agent fee	7,163
Insurance expense	3,431
Audit fees	2,638
Legal fees	2,019
Pricing expense	1,586
Accrued expenses	8,113
Total liabilities			144,343
NET ASSETS:
Capital			25,932,634
Accumulated net realized loss on investment transactions			(28,015	)
Net unrealized appreciation in value of investments			926,909
Net assets at value		$	26,831,528
NET ASSET VALUE, offering price and redemption price per share (2,178,747 shares outstanding; unlimited number of shares authorized no par value)		$	12.32

STATEMENT OF OPERATIONS

For the six months ended December 31, 2017

Net investment income:
Interest income	$	487,835
Expenses:
Investment advisory fee		67,093
Transfer agent fee		19,127
Custodian expense		4,710
Pricing expense		3,025
Audit fees		1,997
Trustees fees		1,428
Professional fees		1,284
Other expenses		10,673
Total expenses		109,337
Fees waived by Adviser		(15,237	)
Custodian expense reduction		(126	)
Net expenses		93,974
Net investment income		393,861
Realized and unrealized gain on investments:
Net realized gain		6,847
Net change in unrealized appreciation/depreciation		47,066
Net realized and unrealized gain on investments		53,913
Net increase in net assets resulting from operations	$	447,774

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, 2017 and the year ended June 30, 2017 UNAUDITED

	Six Months Ended 12/31/2017			Year Ended 06/30/2017
Operations:
Net investment income	$	393,861		$	839,476
Net realized gain on investments		6,847			1,274
Net change in unrealized appreciation/depreciation		47,066			(1,149,505	)
Net increase/(decrease) in net assets resulting from operations		447,774			(308,755	)
Distributions from net investment income		(393,861	)		(839,451	)
Net fund share transactions (Note 4)		222,606			(1,675,263	)
Total increase/(decrease)		276,519			(2,823,469	)
Net assets:
Beginning of year		26,555,009			29,378,478
End of period	$	26,831,528		$	26,555,009
Accumulated Net Investment Income	$	—		$	181

FINANCIAL HIGHLIGHTS

Selected data for a share outstanding:	Six Months Ended 12/31/2017			For the years ended June 30,
				2017			2016			2015			2014			2013
Net asset value, beginning of year	$	12.29		$	12.77		$	12.36		$	12.32		$	12.10		$	12.41
Income from investment operations:
Net investment income		0.18			0.37			0.39			0.41			0.42			0.43
Net gains/(losses) on securities		0.03			(0.48	)		0.41			0.04			0.23			(0.30	)
Total from investment operations		0.21			(0.11	)		0.80			0.45			0.65			0.13
Less distributions:
Distributions from net investment income		(0.18	)		(0.37	)		(0.39	)		(0.41	)		(0.42	)		(0.43	)
Distributions from capital gains		0.00			0.00			0.00			0.00			(0.01	)		(0.01	)
Total distributions		(0.18	)		(0.37	)		(0.39	)		(0.41	)		(0.43	)		(0.44	)
Net asset value, end of period	$	12.32		$	12.29		$	12.77		$	12.36		$	12.32		$	12.10
Total return		1.74%	(b)		(0.82	)%		6.61%			3.64%			5.56%			0.94%
Net assets, end of period (in thousands)	$	26,832		$	26,555		$	29,378		$	25,511		$	23,358		$	24,300
Ratio of net expenses to average net assets (a)		0.71%	(c)		0.70%			0.71%			0.71%			0.72%			0.70%
Ratio of gross expenses to average net assets		0.82%	(c)		0.78%			0.78%			0.79%			0.81%			0.78%
Ratio of net investment income to average net assets		2.96%	(c)		3.00%			3.14%			3.26%			3.48%			3.40%
Portfolio turnover		6.01%	(b)		6.95%			5.37%			9.65%			10.48%			6.46%

(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, 2017

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS
24.16% of Net Assets
KY Association of Counties		4.000	%		02/01/2033	AA-*	$	420,000	$	454,894
KY Association of Counties		4.000			02/01/2034	AA-*		435,000		468,056
KY Association of Counties		4.000			02/01/2035	AA-*		460,000		494,233
KY Bond Corporation Finance Program		5.500			02/01/2031	AA-*		1,115,000		1,240,170
KY State Association of Counties Finance Corporation		5.000			02/01/2030	AA-*		100,000		107,741
KY State Association of Counties Finance Corporation		5.000			02/01/2032	AA-*		165,000		177,555
KY State Association of Counties Finance Corporation		5.000			02/01/2035	AA-*		120,000		128,597
KY State Property & Building #76		5.500			08/01/2021	A1		1,400,000		1,563,702
KY State Property & Building #93		5.250			02/01/2025	AA*		825,000		858,000
KY State Property & Building #93		4.875			02/01/2028	AA*		60,000		62,125
KY State Property & Building #93		5.250			02/01/2028	AA*		1,195,000		1,238,713
KY State Property & Building #93		5.000			02/01/2029	AA*		55,000		56,750
KY State Property & Building #93		5.250			02/01/2029	AA*		2,580,000		2,674,660
KY State Property & Building #98		5.000			08/01/2021	A1		2,505,000		2,702,219
KY State Property & Building #100		5.000			08/01/2026	A1		2,000,000		2,209,680
KY State Property & Building #100		5.000			08/01/2027	A1		1,710,000		1,882,402
KY State Property & Building #100		5.000			08/01/2028	A1		4,000,000		4,410,600
KY State Property & Building #100		5.000			08/01/2029	A1		2,500,000		2,755,700
KY State Property & Building #100		5.000			08/01/2030	A1		9,980,000		10,942,671
KY State Property & Building #100		5.000			08/01/2031	A1		5,100,000		5,582,715
KY State Property & Building #105		4.750			04/01/2031	A2		2,110,000		2,318,363
KY State Property & Building #105		4.750			04/01/2032	A2		2,205,000		2,417,077
KY State Property & Building #105		4.750			04/01/2033	A2		2,310,000		2,527,440
KY State Property & Building #106		5.000			10/01/2029	A1		4,130,000		4,665,950
KY State Property & Building #106		5.000			10/01/2030	A1		7,165,000		8,082,550
KY State Property & Building #106		5.000			10/01/2031	A1		4,910,000		5,530,379
KY State Property & Building #106		5.000			10/01/2032	A1		6,275,000		7,082,153
KY State Property & Building #106		5.000			10/01/2033	A1		4,870,000		5,479,773
KY State Property & Building #108		5.000			08/01/2026	A1		955,000		1,126,308
KY State Property & Building #108		5.000			08/01/2031	A1		8,290,000		9,565,665
KY State Property & Building #108		5.000			08/01/2032	A1		8,820,000		10,131,622
KY State Property & Building #108		5.000			08/01/2033	A1		5,270,000		6,022,767
KY State Property & Building #108		5.000			08/01/2034	A1		4,900,000		5,592,713
KY State Property & Building #108		5.000			08/01/2030	A1		5,000,000		5,780,500
KY State Property & Building #108		5.000			08/01/2028	A1		2,670,000		3,120,696
KY State Property & Building #110		5.000			08/01/2029	A1		4,200,000		4,883,802
KY State Property & Building #110		5.000			08/01/2032	A1		1,515,000		1,736,948
KY State Property & Building #110		5.000			08/01/2033	A1		1,000,000		1,142,840
KY State Property & Building #110		5.000			08/01/2034	A1		1,900,000		2,165,829
KY State Property & Building #110		5.000			08/01/2035	A1		3,030,000		3,445,110
KY State Property & Building #112		5.000			02/01/2035	A1		8,325,000		9,493,497
KY State Property & Building #112		5.000			02/01/2036	A1		7,920,000		9,025,553
KY State Property & Building #112		5.000			11/01/2028	A1		2,500,000		2,936,475
KY State Property & Building #115		5.000			04/01/2033	A1		4,565,000		5,301,882
KY State Property & Building #115		5.000			04/01/2034	A1		13,975,000		16,181,932
KY State Property & Building #115		5.000			04/01/2036	A1		14,460,000		16,680,333
KY State Property & Building #115		5.000			04/01/2037	A1		5,000,000		5,750,400
KY State Property & Building #117		5.000			05/01/2031	A1		5,055,000		5,922,337
KY State Property & Building #117		5.000			05/01/2032	A1		3,680,000		4,295,038
KY State Property & Building #117		5.000			05/01/2033	A1		3,550,000		4,130,709
KY State Property & Building #117		5.000			05/01/2034	A1		5,825,000		6,757,233
KY State Property & Building #117		5.000			05/01/2035	A1		5,065,000		5,848,859
KY State Property & Building #117		5.000			05/01/2036	A1		5,275,000		6,091,358
Lexington Fayette Urban County Government		5.000			01/01/2028	Aa2		820,000		972,405
Lexington Fayette Urban County Government		5.000			01/01/2029	Aa2		345,000		408,135
Lexington Fayette Urban County Government		5.000			01/01/2033	Aa2		1,685,000		1,963,580
Pendleton County KY Multi-County Lease Revenue		6.400			03/01/2019	B*		3,000,000		3,065,160
										237,654,554

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, 2017

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
PREREFUNDED BONDS
18.11% of Net Assets
Kenton County KY School District Finance Corporation		5.000	%		02/01/2029	A1	$	3,270,000	$	3,392,396
KY Development Finance Authority — St. Elizabeth		5.125			05/01/2029	AA@		2,750,000		2,877,463
KY Development Finance Authority — St. Elizabeth		5.375			05/01/2034	AA@		2,560,000		2,687,104
KY Development Finance Authority — St. Elizabeth		5.500			05/01/2039	AA@		1,000,000		1,051,300
KY Infrastructure Authority Wastewater and Drinking Water		5.000			02/01/2027	Aaa		2,500,000		2,673,375
KY Infrastructure Authority Wastewater and Drinking Water		5.000			02/01/2028	Aaa		2,000,000		2,138,700
KY State Association of Counties Finance Corporation		5.000			02/01/2030	NR		525,000		567,163
KY State Association of Counties Finance Corporation		5.000			02/01/2032	NR		835,000		902,059
KY State Association of Counties Finance Corporation		5.000			02/01/2035	NR		875,000		945,271
KY State Property & Building #89		5.000			11/01/2025	A1		5,000,000		5,143,550
KY State Property & Building #89		5.000			11/01/2026	A1		5,390,000		5,544,747
KY State Property & Building #89		5.000			11/01/2027	A1		4,900,000		5,040,679
KY State Property & Building #90		5.375			11/01/2023	NR		1,060,000		1,094,270
KY State Property & Building #90		5.500			11/01/2028	NR		21,955,000		22,674,465
KY State Property & Building #90		5.375			11/01/2023	A1		140,000		144,479
KY State Property & Building #90		5.500			11/01/2028	A1		2,850,000		2,944,620
KY State Property & Building #91		5.750			04/01/2029	A2		210,000		212,255
KY State Property & Building #93		5.250			02/01/2025	AA*		6,425,000		6,681,293
KY State Property & Building #93		4.875			02/01/2028	AA*		440,000		455,778
KY State Property & Building #93		5.250			02/01/2028	AA*		9,305,000		9,676,177
KY State Property & Building #93		5.000			02/01/2029	AA*		445,000		461,559
KY State Property & Building #93		5.250			02/01/2029	AA*		20,060,000		20,860,193
KY State Property & Building #96		5.000			11/01/2029	A1		5,000,000		5,301,100
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2025	Aa3		3,225,000		3,279,503
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2027	Aa3		6,080,000		6,182,752
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2028	Aa3		2,460,000		2,501,574
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2026	Aa3		4,440,000		4,663,687
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2027	Aa3		3,080,000		3,234,216
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2029	Aa3		10,035,000		10,537,453
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2025	Aa3		3,775,000		4,199,914
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2024	Aa3		1,500,000		1,711,725
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2028	Aa3		4,930,000		5,625,870
Louisville & Jefferson County Catholic Health Initiatives**		5.000			12/01/2035	NR		11,290,000		12,880,874
Louisville & Jefferson County Metropolitan Parking		5.000			12/01/2022	Aa3		625,000		664,325
Louisville & Jefferson County Metropolitan Parking		5.750			12/01/2034	Aa3		2,750,000		2,962,438
Louisville & Jefferson County Metropolitan Sewer		5.000			05/15/2021	NR		1,690,000		1,794,222
Louisville & Jefferson County Metropolitan Sewer		5.000			05/15/2023	NR		1,480,000		1,571,272
Louisville & Jefferson County Metropolitan Sewer		5.000			05/15/2025	Aa3		5,185,000		5,251,627
Northern KY Water District		6.000			02/01/2028	Aa3		1,010,000		1,035,927
Northern KY Water District		6.000			02/01/2031	Aa3		1,000,000		1,025,670
Northern KY Water District		6.500			02/01/2033	Aa3		1,585,000		1,630,315
Owensboro KY Water Revenue		5.000			09/15/2025	A1		175,000		179,414
Shelby County KY School District Finance Corporation		5.000			02/01/2028	A1		500,000		518,605
Wolfe County KY Public Property		5.000			04/01/2030	A1		2,855,000		3,064,525
										177,985,904
SCHOOL IMPROVEMENT BONDS
9.46% of Net Assets
Bullitt County KY School District Finance Corporation		4.000			10/01/2035	A1		1,820,000		1,946,126
Bullitt County KY School District Finance Corporation		4.000			10/01/2036	A1		2,985,000		3,187,144
Bullitt County KY School District Finance Corporation		4.000			10/01/2037	A1		3,075,000		3,273,522
Fayette County KY School District Finance Corporation		5.000			06/01/2031	A1		3,705,000		4,042,563
Fayette County KY School District Finance Corporation		5.000			10/01/2028	A1		2,875,000		3,309,528
Fayette County KY School District Finance Corporation		5.000			10/01/2029	A1		3,660,000		4,202,522
Fayette County KY School District Finance Corporation		5.000			10/01/2032	A1		3,615,000		4,123,594
Fayette County KY School District Finance Corporation		5.000			10/01/2033	A1		4,385,000		5,001,926
Fayette County KY School District Finance Corporation		4.750			11/01/2031	A1		1,730,000		1,955,817

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, 2017

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
Fayette County KY School District Finance Corporation		5.000	%		08/01/2028	A1	$	1,330,000	$	1,554,504
Fayette County KY School District Finance Corporation		5.000			08/01/2032	A1		10,600,000		12,215,440
Fayette County KY School District Finance Corporation		5.000			08/01/2034	A1		9,750,000		11,178,375
Hardin County KY School District Finance Corporation		5.000			05/01/2030	A1		450,000		500,630
Hardin County KY School District Finance Corporation		5.000			05/01/2031	A1		470,000		521,258
Jefferson County KY School District Finance Corporation		5.000			05/01/2032	Aa3		4,230,000		4,843,562
Jefferson County KY School District Finance Corporation		5.000			05/01/2033	Aa3		5,145,000		5,868,644
Jefferson County KY School District Finance Corporation		5.000			05/01/2034	Aa3		5,405,000		6,148,242
Jefferson County KY School District Finance Corporation		5.000			04/01/2030	Aa3		975,000		1,135,085
Jefferson County KY School District Finance Corporation		5.000			04/01/2031	Aa3		1,025,000		1,188,877
Jefferson County KY School District Finance Corporation		4.750			04/01/2034	Aa3		1,165,000		1,311,557
Jefferson County KY School District Finance Corporation		4.750			04/01/2035	Aa3		1,220,000		1,370,914
Morgan County KY School District Finance Corporation		4.000			08/01/2029	A1		960,000		1,059,667
Oldham KY School District Finance Corporation		4.000			10/01/2034	A1		1,560,000		1,670,588
Scott County KY School District Finance Corporation		4.500			01/01/2025	A1		4,890,000		5,609,661
Scott County School District Finance Corporation		4.000			02/01/2029	Aa3		5,040,000		5,726,246
										92,945,992
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS
9.22% of Net Assets
Boyle County Centre College		5.000			06/01/2037	A3		2,865,000		3,294,148
Eastern KY University		5.000			04/01/2033	A1		910,000		1,047,037
KY State Property & Building #114		5.000			10/01/2032	Aa3		2,795,000		3,262,324
KY State Property & Building #114		5.000			10/01/2033	Aa3		2,940,000		3,419,191
KY State Property & Building #114		5.000			10/01/2034	Aa3		3,090,000		3,588,448
KY State Property & Building #114		5.000			10/01/2035	Aa3		1,945,000		2,252,232
KY State Property & Building #116		5.000			10/01/2035	Aa3		4,165,000		4,903,370
KY State Property & Building #116		5.000			10/01/2036	Aa3		2,725,000		3,200,513
Morehead State University		5.000			04/01/2028	A1		1,780,000		2,067,132
Morehead State University		5.000			04/01/2029	A1		870,000		1,007,216
Murray State University		5.000			03/01/2032	A1		2,220,000		2,561,791
University of Kentucky General Receipts		5.000			04/01/2036	Aa2		4,820,000		5,555,821
University of Kentucky General Receipts		5.000			04/01/2037	Aa2		7,180,000		8,258,077
University of Kentucky General Receipts		5.000			04/01/2038	Aa2		7,395,000		8,491,457
University of Kentucky General Receipts		5.000			04/01/2030	Aa2		5,490,000		6,515,477
University of Kentucky Higher Educational		4.750			04/01/2034	Aa2		5,435,000		6,257,207
University of Louisville		4.500			03/01/2035	A1		5,600,000		6,277,936
University of Louisville		4.500			03/01/2036	A1		5,845,000		6,538,334
University of Louisville General Receipts		5.000			09/01/2029	A3		2,280,000		2,515,000
University of Louisville General Receipts		5.000			09/01/2030	A3		440,000		484,695
University of Louisville General Receipts		5.000			09/01/2031	A3		2,580,000		2,836,297
Western KY University		4.750			09/01/2033	A1		2,505,000		2,759,458
Western KY University		4.000			09/01/2034	A1		575,000		614,520
Western KY University		4.000			09/01/2035	A1		595,000		634,960
Western KY University		4.000			09/01/2036	A1		620,000		659,699
Western KY University		5.000			05/01/2032	A1		1,500,000		1,655,190
										90,657,530
REFUNDING BONDS
8.85% of Net Assets
KY State Property & Building #80		5.250			05/01/2018	A1		2,940,000		2,975,545
KY State Property & Building #80		5.250			05/01/2020	A1		1,000,000		1,073,160
KY State Property & Building #83		5.000			10/01/2018	A1		17,750,000		18,206,353
KY State Property & Building #83		5.250			10/01/2020	A1		24,220,000		26,305,826
KY State Property & Building #84		5.000			08/01/2019	A1		10,000,000		10,492,400
KY State Property & Building #84		5.000			08/01/2021	A1		310,000		340,578
KY State Property & Building #84		5.000			08/01/2022	A1		18,000,000		20,238,300
KY State Property & Building #102		5.000			05/01/2024	Aa3		405,000		455,585
KY State Property & Building #104		5.000			11/01/2021	A2		2,085,000		2,310,076
KY State Property & Building #104		5.000			11/01/2022	A2		1,290,000		1,458,706
KY State Property & Building #108		5.000			08/01/2025	A2		2,690,000		3,172,532
										87,029,061

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, 2017

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
MUNICIPAL UTILITY REVENUE BONDS
8.73% of Net Assets
Cambell & Kenton County Sanitation District #1		4.000	%		08/01/2032	Aa3	$	6,100,000	$	6,645,523
Frankfort KY Electric & Water		4.750			12/01/2034	AA*		695,000		784,391
Frankfort KY Electric & Water		4.750			12/01/2035	AA*		725,000		815,814
Frankfort KY Electric & Water		4.750			12/01/2038	AA*		835,000		934,014
Frankfort KY Electric & Water		4.750			12/01/2036	AA*		760,000		853,161
Frankfort KY Electric & Water		4.750			12/01/2037	AA*		800,000		896,464
KY Rural Water Financing Corporation		5.375			02/01/2020	A+*		190,000		190,479
KY Rural Water Financing Corporation		4.500			02/01/2023	A+*		1,085,000		1,212,260
KY Rural Water Financing Corporation		4.500			02/01/2024	A+*		880,000		978,270
KY Rural Water Financing Corporation		5.125			02/01/2035	A+*		525,000		554,405
Louisville & Jefferson County Metropolitan Sewer		5.000			05/15/2021	Aa3		1,175,000		1,247,462
Louisville & Jefferson County Metropolitan Sewer		5.000			05/15/2023	Aa3		1,020,000		1,084,474
Louisville & Jefferson County Metropolitan Sewer		4.000			05/15/2030	Aa3		3,120,000		3,477,302
Louisville & Jefferson County Metropolitan Sewer**		5.000			05/15/2034	Aa3		27,730,000		30,818,567
Louisville & Jefferson County Metropolitan Sewer		5.000			05/15/2031	Aa3		2,465,000		2,828,021
Louisville & Jefferson County Metropolitan Sewer		4.000			05/15/2033	Aa3		1,000,000		1,072,630
Louisville & Jefferson County Metropolitan Sewer		4.750			05/15/2034	Aa3		2,230,000		2,545,188
Louisville & Jefferson County Metropolitan Sewer		4.750			05/15/2035	Aa3		2,245,000		2,559,278
Louisville & Jefferson County Metropolitan Sewer		4.750			05/15/2036	Aa3		2,795,000		3,176,797
Louisville & Jefferson County Metropolitan Sewer		5.000			05/15/2034	Aa3		4,595,000		5,404,501
Louisville & Jefferson County Metropolitan Sewer		5.000			05/15/2035	Aa3		4,825,000		5,671,255
Northern KY Water District		5.000			02/01/2033	Aa3		3,580,000		3,912,475
Northern KY Water District		5.000			02/01/2026	Aa3		1,000,000		1,118,880
Northern KY Water District		5.000			02/01/2027	Aa3		4,315,000		4,818,949
Owensboro KY Electric Light &Power		4.000			01/01/2031	A3		245,000		263,208
Owensboro KY Electric Light &Power		4.000			01/01/2033	A3		275,000		292,537
Owensboro KY Electric Light &Power		4.000			01/01/2034	A3		305,000		323,224
Owensboro KY Electric Light &Power		4.000			01/01/2035	A3		200,000		211,630
Owensboro KY Electric Light &Power		4.000			01/01/2036	A3		325,000		343,119
Owensboro KY Electric Light &Power		4.000			01/01/2037	A3		410,000		431,874
Owensboro KY Water Revenue		5.000			09/15/2025	A1		370,000		379,276
										85,845,428
TURNPIKES/TOLLROAD/HIGHWAY BONDS
8.01% of Net Assets
KY Asset Liability Commission Federal Highway		5.250			09/01/2019	A2		1,765,000		1,867,829
KY Asset Liability Commission Federal Highway		5.000			09/01/2021	A2		1,570,000		1,697,468
KY Asset Liability Commission Federal Highway		5.000			09/01/2022	A2		3,500,000		3,786,055
KY Asset Liability Commission Federal Highway		5.250			09/01/2025	A2		3,400,000		3,961,884
KY Asset Liability Commission Federal Highway		5.000			09/01/2027	A2		9,760,000		11,595,855
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2032	Aa3		1,315,000		1,533,816
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2032	Aa3		1,765,000		2,108,240
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2036	Aa3		400,000		472,264
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2037	Aa3		500,000		588,960
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2029	Aa3		5,165,000		5,703,658
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2030	Aa3		1,845,000		2,034,777
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2030	Aa3		1,465,000		1,649,414
KY State Turnpike Economic Development Road Revenue**		5.000			07/01/2031	Aa3		9,350,000		10,509,868
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2029	Aa3		7,235,000		8,155,726
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2032	Aa3		8,755,000		9,813,042
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2033	Aa3		5,000,000		5,669,450
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2029	Aa3		4,000,000		4,778,840
KY State Turnpike Economic Development Road Revenue		5.000			07/01/2034	Aa3		2,370,000		2,793,614
										78,720,760
HOSPITAL AND HEALTHCARE BONDS
6.87% of Net Assets
KY Development Corporation Hospital Facilities — St. Elizabeth		4.000			05/01/2035	AA*		1,390,000		1,481,265
KY Development Corporation Hospital Facilities — St. Elizabeth		5.000			05/01/2039	AA*		7,185,000		8,335,677

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, 2017

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
KY Development Corporation Hospital Facilities — St. Elizabeth		4.000	%		05/01/2036	AA*	$	1,200,000	$	1,272,444
KY Development Finance Authority — Baptist Healthcare		5.625			08/15/2027	Baa2		4,855,000		4,972,443
KY Development Finance Authority — Baptist Heathcare		5.375			08/15/2024	Baa2		1,205,000		1,233,812
Lexington Fayette Urban County Government		5.250			06/01/2032	A1		1,500,000		1,652,730
Lexington Fayette Urban County Government Healthcare		5.250			06/01/2028	A1		1,000,000		1,105,570
Lexington-Fayette Urban County Government Public Facilities		5.000			06/01/2033	A1		5,260,000		5,717,462
Louisville & Jefferson County Catholic Health Initiatives		5.000			12/01/2030	Baa1		2,000,000		2,161,020
Louisville & Jefferson County Norton Healthcare		4.000			10/01/2035	A-*		10,850,000		11,380,891
Louisville & Jefferson County Norton Healthcare		4.000			10/01/2036	A-*		9,005,000		9,417,789
Louisville & Jefferson County Norton Healthcare		5.500			10/01/2033	A-*		2,000,000		2,309,260
Louisville & Jefferson County Norton Healthcare		5.000			10/01/2033	A-*		8,110,000		9,425,037
Warren County KY Hospital		5.000			04/01/2028	A+*		6,225,000		7,026,033
										67,491,433
PUBLIC FACILITIES REVENUE BONDS
4.06% of Net Assets
Bracken County KY Public Property		5.000			08/01/2029	A1		840,000		937,658
Bracken County KY Public Property		5.000			08/01/2030	A1		1,110,000		1,239,048
Franklin County KY Public Properties Justice Center		5.000			04/01/2029	A1		2,630,000		2,859,178
KY State Certificates of Participation		5.000			06/15/2034	A1		1,640,000		1,857,792
KY State Certificates of Participation		5.000			06/15/2038	A1		7,535,000		8,476,649
Laurel County General Obligation		4.000			05/01/2031	A2		1,295,000		1,425,238
Laurel County General Obligation		4.000			05/01/2034	A2		1,440,000		1,551,614
Laurel County General Obligation		4.000			05/01/2035	A2		1,495,000		1,608,351
Laurel County General Obligation		4.000			05/01/2036	A2		1,555,000		1,670,288
Laurel County General Obligation		4.000			05/01/2037	A2		1,620,000		1,734,664
Laurel County General Obligation		4.000			05/01/2038	A2		1,680,000		1,796,105
Owensboro KY Public Property		4.500			04/01/2034	A2		1,165,000		1,228,027
River City, Inc. Parking Authority		4.750			06/01/2029	Aa3		1,160,000		1,296,555
River City, Inc. Parking Authority		4.750			06/01/2031	Aa3		1,270,000		1,410,627
River City, Inc. Parking Authority		5.000			06/01/2033	Aa3		1,395,000		1,571,551
River City, Inc. Parking Authority		4.750			06/01/2027	Aa3		750,000		843,158
River City, Inc. Parking Authority		4.750			06/01/2028	Aa3		940,000		1,056,240
River City, Inc. Parking Authority		4.750			06/01/2029	Aa3		980,000		1,095,366
River City, Inc. Parking Authority		4.750			06/01/2030	Aa3		1,025,000		1,145,663
River City, Inc. Parking Authority		5.000			06/01/2031	Aa3		1,080,000		1,224,299
River City, Inc. Parking Authority		5.000			06/01/2032	Aa3		1,130,000		1,276,674
Warren County KY Downtown Economic Development Authority		5.000			06/01/2038	AA-*		2,345,000		2,581,118
										39,885,863
AIRPORT BONDS
1.09% of Net Assets
Kenton County Airport		5.000			01/01/2031	A2		425,000		489,662
Kenton County Airport		5.000			01/01/2032	A2		750,000		860,648
Kenton County Airport		5.000			01/01/2033	A2		1,210,000		1,399,728
Lexington Fayette Urban County Airport Board		5.000			07/01/2030	Aa2		1,250,000		1,401,625
Lexington Fayette Urban County Airport Board		5.000			07/01/2032	Aa2		1,430,000		1,596,953
Lexington Fayette Urban County Airport Board		5.000			07/01/2033	Aa2		1,520,000		1,694,010
Lexington Fayette Urban County Airport Board		5.000			07/01/2038	Aa2		1,720,000		1,923,149
Lexington-Fayette Urban County Airport Board		5.000			07/01/2028	Aa2		1,170,000		1,320,509
										10,686,284
MISCELLANEOUS REVENUE BONDS
.23% of Net Assets
KY State Property & Building #106		5.000			10/01/2028	A1		2,030,000		2,302,731
AD VALOREM PROPERTY BONDS
.13% of Net Assets
Warren County General Obligation		4.000			06/01/2035	Aa2		1,175,000		1,278,847

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, 2017

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
STATE AND LOCAL MORTGAGE/HOUSING BONDS
.13% of Net Assets
Greater KY Housing Assistance Corporation-Chenowith Woods		6.100	%		01/01/2024	A3	$	265,000	$	265,684
KY Housing Corporation Country Place Apartments		4.750			04/20/2031	AA+*		935,000		978,655
										1,244,339
Total Investments 99.05% of Net Assets (cost $935,317,628) (See (a) below for further explanation)									$	973,728,726
Other assets in excess of liabilities .95%										9,303,512
Net Assets 100%									$	983,032,238

# 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

@ Rated by Fitch’s Investors Service

NR Not Rated

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

(a) Cost for federal income tax purposes is $935,272,222 and net unrealized appreciation of investments is as follows:

Unrealized appreciation	$	39,192,939
Unrealized depreciation		(736,435	)
Net unrealized appreciation	$	38,456,504

Other Information

The following is a summary of the inputs used, as of December 31, 2017, 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		973,728,726
Level 3	Significant Unobservable Inputs		—
		$	973,728,726

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

11

KENTUCKY TAX-FREE INCOME SERIES

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2017 UNAUDITED

ASSETS:
Investments in securities, at fair value (Cost: $935,317,628)		$	973,728,726
Cash			352,323
Receivable for fund shares sold			105,918
Interest receivable			12,944,711
Total assets			987,131,678
LIABILITIES:
Payable for:
Distributions to shareholders	3,092,592
Fund shares redeemed	401,158
Investment advisory fee	313,433
Transfer agent fee	100,355
Audit fees	54,184
Trustees fees	50,103
Legal fees	41,015
Registration expense	39,054
Accrued expenses	7,546
Total liabilities			4,099,440
NET ASSETS:
Capital			944,306,192
Accumulated net investment income			45,406
Accumulated net realized gain on investment transactions			269,542
Net unrealized appreciation in value of investments			38,411,098
Net assets at value		$	983,032,238
NET ASSET VALUE, offering price and redemption price per share (126,727,498 shares outstanding; unlimited number of shares authorized no par value)		$	7.76

STATEMENT OF OPERATIONS

For the six months ended December 31, 2017

Net investment income:
Interest income	$	17,688,836
Expenses:
Investment advisory fee		1,886,126
Transfer agent fee		606,477
Custodian expense		50,006
Professional fees		136,376
Trustees fees		53,584
Other expenses		55,233
Total expenses		2,787,802
Custodian expense reduction		(1,333	)
Net expenses		2,786,469
Net investment income		14,902,367
Realized and unrealized gain/(loss) on investments:
Net realized gain		446,997
Net change in unrealized appreciation/depreciation		(363,516	)
Net realized and unrealized gain on investments		83,481
Net increase in net assets resulting from operations	$	14,985,848

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, 2017 and the year ended June 30, 2017 UNAUDITED

	Six Months Ended 12/31/2017			Year Ended 06/30/2017
Operations:
Net investment income	$	14,902,367		$	30,399,742
Net realized gain on investments		446,997			193,268
Net change in unrealized appreciation/depreciation		(363,516	)		(39,252,919	)
Net increase/(decrease) in net assets resulting from operations		14,985,848			(8,659,909	)
Distributions from net investment income		(14,899,173	)		(30,392,350	)
Distributions from capital gains		(173,172	)		(393,040	)
Net fund share transactions (Note 4)		(7,094,740	)		5,914,230
Total decrease		(7,181,237	)		(33,531,069	)
Net assets:
Beginning of year		990,213,475			1,023,744,544
End of period	$	983,032,238		$	990,213,475
Accumulated Net Investment Income	$	45,406		$	45,781

FINANCIAL HIGHLIGHTS

Selected data for a share outstanding:	Six Months Ended 12/31/2017			For the years ended June 30,
				2017			2016			2015			2014			2013
Net asset value, beginning of year		$7.76			$8.06			$7.83			$7.89			$7.74			$7.99
Income from investment operations:
Net investment income		0.12			0.24			0.25			0.26			0.27			0.27
Net gains/(losses) on securities		0.00			(0.30	)		0.23			(0.06	)		0.16			(0.25	)
Total from investment operations		0.12			(0.06	)		0.48			0.20			0.43			0.02
Less distributions:
Distributions from net investment income		(0.12	)		(0.24	)		(0.25	)		(0.26	)		(0.27	)		(0.27	)
Distributions from capital gains		(0.00	)(b)		(0.00	)(b)		(0.00	)(b)		0.00	(b)		(0.01	)		0.00
Total distributions		(0.12	)		(0.24	)		(0.25	)		(0.26	)		(0.28	)		(0.27	)
Net asset value, end of period		$7.76			$7.76			$8.06			$7.83			$7.89			$7.74
Total return		1.52%	(c)		(0.70)%			6.25%			2.60%			5.65%			0.17%
Net assets, end of period (in thousands)		$983,032			$990,213			$1,023,745			$989,630			$969,549			$948,276
Ratio of net expenses to average net assets (a)		0.56%	(d)		0.55%			0.55%			0.55%			0.57%			0.57%
Ratio of gross expenses to average net assets		0.56%	(d)		0.55%			0.55%			0.55%			0.57%			0.57%
Ratio of net investment income to average net assets		2.97%	(d)		3.05%			3.15%			3.29%			3.45%			3.35%
Portfolio turnover		7.09%	(c)		10.44%			11.53%			7.80%			9.43%			7.02%

(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, 2017

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS
21.05% of Net Assets
KY Association of Counties		4.000	%		02/01/2018	AA-*	$	115,000	$	115,247
KY Association of Counties		4.250			02/01/2019	AA-*		255,000		262,206
KY State Property & Building #76		5.500			08/01/2018	A1		1,415,000		1,447,276
KY State Property & Building #90		5.000			11/01/2018	A1		250,000		257,113
KY State Property & Building #93		5.250			02/01/2021	AA*		25,000		25,967
KY State Property & Building #100		5.000			08/01/2019	A1		100,000		105,005
KY State Property & Building #100		5.000			08/01/2025	A1		500,000		552,055
KY State Property & Building #100		5.000			08/01/2024	A1		750,000		823,980
KY State Property & Building #106		5.000			10/01/2021	A1		750,000		828,413
KY State Property & Building #106		5.000			10/01/2023	A1		540,000		621,934
KY State Property & Building #106		5.000			10/01/2024	A1		750,000		860,348
KY State Property & Building #106		5.000			10/01/2025	A1		2,365,000		2,715,562
KY State Property & Building #108		5.000			08/01/2023	A1		2,000,000		2,297,480
KY State Property & Building #108		5.000			08/01/2023	A1		875,000		1,004,658
KY State Property & Building #108		5.000			08/01/2028	A1		150,000		175,320
KY State Property & Building #110		5.000			08/01/2023	A1		1,750,000		2,010,295
										14,102,859
SCHOOL IMPROVEMENT BONDS
17.81% of Net Assets
Barren County KY School District Finance Corporation**		5.000			08/01/2022	A1		1,055,000		1,195,071
Barren County KY School District Finance Corporation		5.000			08/01/2023	A1		500,000		579,510
Bullitt County KY School District Finance Corporation		5.000			09/01/2022	A1		300,000		339,660
Fayette County KY School District Finance Corporation**		5.000			08/01/2023	A1		1,000,000		1,151,590
Fayette County KY School District Finance Corporation**		4.000			06/01/2022	A1		1,000,000		1,067,880
Fayette County KY School District Finance Corporation		5.000			06/01/2023	A1		500,000		574,215
Hardin County KY School District		5.000			03/01/2023	A1		770,000		880,102
Jefferson County KY School District Finance Corporation**		4.000			12/01/2023	Aa3		1,000,000		1,108,800
Jessamine County KY School District Finance Corporation		5.000			02/01/2023	A1		575,000		656,265
Johnson County KY School District Finance Corporation		3.000			12/01/2019	A1		180,000		183,548
Laurel County KY School District Finance Corporation		4.000			06/01/2022	A1		890,000		964,965
Laurel County KY School District Finance Corporation		4.000			06/01/2024	A1		465,000		513,402
Pendleton County KY School District Finance Corporation		4.000			02/01/2020	A1		450,000		451,008
Pike County School District Finance Corporation		5.000			02/01/2025	A1		900,000		1,063,260
Pike County School District Finance Corporation		5.000			08/01/2024	A1		250,000		291,710
Warren County KY School District Finance Corporation		4.000			04/01/2018	A1		125,000		125,759
Warren County KY School District Finance Corporation		4.000			06/01/2022	A1		725,000		784,472
										11,931,217
PUBLIC FACILITIES REVENUE BONDS
13.47% of Net Assets
KY State Certificate of Participation		4.000			06/15/2023	A1		940,000		1,029,657
KY State Certificate of Participation**		4.000			06/15/2022	A1		1,000,000		1,081,390
KY State Certificate of Participation		4.000			06/15/2024	A1		300,000		329,700
KY State Property & Building #109**		5.000			10/01/2022	A1		1,000,000		1,127,670
Laurel County KY Justice Center		5.000			03/01/2023	A1		600,000		680,118
Lexington Fayette Urban CountyGovernment — Court Facilities		5.000			10/01/2024	Aa3		700,000		819,035
Livingston County KY Public Properties		5.000			08/01/2022	A1		500,000		561,945
Livingston County KY Public Properties		5.000			08/01/2023	A1		525,000		602,495
Livingston County KY Public Properties		5.000			08/01/2024	A1		555,000		645,016
River City Parking Authority		5.000			12/01/2024	Aa3		340,000		402,009
Todd County KY Public Properties Court House		3.250			06/01/2019	A1		100,000		101,998
Warren County KY Justice Center Expansion Corporation**		5.000			09/01/2023	A1		1,250,000		1,438,525
Whitley County KY Public Properties — Justice Center		3.375			09/01/2019	A1		200,000		204,830
										9,024,388

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, 2017

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
REFUNDING BONDS
10.98% of Net Assets
KY State Property & Building #83		5.000	%		10/01/2019	A1	$	1,750,000	$	1,846,618
KY State Property & Building #84**		5.000			08/01/2019	A1		1,000,000		1,049,240
KY State Property & Building #101		5.000			10/01/2019	A1		1,050,000		1,107,214
KY State Property & Building #104**		5.000			11/01/2021	A2		1,000,000		1,107,950
KY State Property & Building #106**		5.000			10/01/2026	A1		1,000,000		1,143,580
KY State Property & Building #108		5.000			08/01/2022	A1		200,000		224,870
KY State Property & Building #112		5.000			11/01/2024	A1		750,000		873,833
										7,353,305
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS
8.54% of Net Assets
KY State Property & Building #114		5.000			10/01/2024	Aa3		1,415,000		1,647,923
Morehead State University		5.000			10/01/2022	A1		310,000		351,075
Northern Ky University General Receipts		4.000			09/01/2018	A1		150,000		152,313
University of Kentucky General Receipts		4.000			04/01/2028	Aa2		750,000		830,325
University of Louisville		5.000			03/01/2024	A1		350,000		407,579
University of Louisville**		5.000			03/01/2024	A1		2,000,000		2,329,020
										5,718,235
TURNPIKES/TOLLROAD/HIGHWAY BONDS
8.04% of Net Assets
KY Asset Liability Commission Federal Highway		5.000			09/01/2026	A2		2,015,000		2,359,202
KY Asset Liability Commission Federal Highway		5.250			09/01/2025	A2		675,000		786,551
KY Asset Liability Commission Federal Highway		5.000			09/01/2024	A2		500,000		586,760
KY Asset Liability Project Notes		4.000			09/01/2023	A2		250,000		276,680
KY State Turnpike Authority Economic Development		5.000			07/01/2024	Aa3		1,175,000		1,378,075
										5,387,268
MUNICIPAL UTILITY REVENUE BONDS
6.57% of Net Assets
Frankfort Electric & Water		4.000			12/01/2023	AA*		440,000		486,317
KY Rural Water Finance Corporation		3.000			02/01/2018	A+*		530,000		530,652
KY Rural Water Finance Corporation		3.000			08/01/2019	A+*		545,000		554,761
KY Rural Water Finance Corporation		3.000			02/01/2018	A+*		300,000		300,369
KY Rural Water Finance Corporation		3.000			02/01/2019	A+*		250,000		253,165
KY Rural Water Finance Corporation		4.500			08/01/2021	A3		100,000		100,156
Lawrenceburg KY Water and Sewer		3.000			10/01/2018	A2		375,000		378,668
Lexington Fayette Urban County Government		4.000			09/01/2027	Aa2		435,000		483,333
Northern KY Water		5.000			02/01/2026	Aa3		815,000		942,262
Owensboro KY Electric Light & Power		5.000			01/01/2024	A2		350,000		372,894
										4,402,577
HOSPITAL AND HEALTHCARE BONDS
5.96% of Net Assets
KY Asset Liability CommissionGeneral Receipts		4.000			10/01/2018	Aa2		105,000		105,167
KY Economic Development — Baptist Health Care System		4.750			08/15/2019	Baa2		110,000		111,785
Lexington-Fayette Urban County Government		5.000			06/01/2024	A1		2,800,000		3,065,776
Warren County Hospital		4.000			04/01/2020	A+*		150,000		153,705
Warren County Hospital		5.000			04/01/2023	A+*		500,000		558,310
										3,994,743
PREREFUNDED BONDS
5.86% of Net Assets
KY Infrastructure Authority Wastewater & Drinking Water		5.000			02/01/2025	Aaa		175,000		198,235
KY State Property & Building #89		5.000			11/01/2020	A1		200,000		205,724
KY State Property & Building #90		5.750			11/01/2019	A1		200,000		207,004
KY State Property & Building #90		5.000			11/01/2020	A1		495,000		509,212
KY State Property & Building #93		5.250			02/01/2021	AA*		175,000		181,827
KY Turnpike Economic Development Road Revenue		5.000			07/01/2024	Aa3		85,000		96,998

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, 2017

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
KY Turnpike Ecomonic Development Road Revenue**		5.000	%		07/01/2024	Aa3	$	1,000,000	$	1,111,480
KY Turnpike Economic Development Road Revenue		4.125			07/01/2019	Aa3		105,000		106,324
KY Turnpike Economic Development Road Revenue		5.000			07/01/2023	Aa3		600,000		684,690
Louisville & Jefferson County University of Louisville		4.000			03/01/2020	A+*		300,000		301,332
Owensboro KY Electric Light & Power System		5.000			01/01/2024	A2		300,000		320,115
										3,922,941
Total Investments 98.28% of Net Assets (cost $65,003,921) (See (a) below for further explanation)									$	65,837,533
Other assets in excess of liabilities 1.72%										1,151,425
Net Assets 100%									$	66,988,958

# 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

@ Rated by Fitch’s Investors Service

NR Not Rated

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

(a) Cost for federal income tax purposes is $65,003,921and net unrealized appreciation of investments is as follows:

Unrealized appreciation	$	918,612
Unrealized depreciation		(85,000	)
Net unrealized appreciation	$	833,612

Other Information

The following is a summary of the inputs used, as of December 31, 2017, 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		65,837,533
Level 3	Significant Unobservable Inputs		—
		$	65,837,533

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, 2017 UNAUDITED

ASSETS:
Investments in securities, at fair value (Cost: $65,003,921)		$	65,837,533
Cash			415,237
Interest receivable			848,047
Total assets			67,100,817
LIABILITIES:
Payable for:
Distributions to shareholders	39,746
Fund shares redeemed	8,060
Investment advisory fee	25,907
Transfer agent fee	13,995
Trustees fees	2,290
Audit fees	7,322
Insurance expense	5,022
Legal fees	4,789
Accrued expenses	4,728
Total liabilities			111,859
NET ASSETS:
Capital			66,335,850
Accumulated net realized loss on investment transactions			(180,504	)
Net unrealized appreciation in value of investments			833,612
Net assets at value		$	66,988,958
NET ASSET VALUE, offering price and redemption price per share (12,681,362 shares outstanding; unlimited number of shares authorized no par value)		$	5.28

STATEMENT OF OPERATIONS

For the six months ended December 31, 2017

Net investment income:
Interest income	$	850,099
Expenses:
Investment advisory fee		175,049
Transfer agent fee		45,037
Professional fees		17,007
Custodian expense		8,035
Trustees fees		3,528
Other expenses		10,777
Total expenses		259,433
Fees waived by Adviser (Note 2)		(14,236	)
Custodian expense reduction		(214	)
Net expenses		244,983
Net investment income		605,116
Realized and unrealized gain/(loss) on investments:
Net realized gain		4,287
Net change in unrealized appreciation/depreciation		(639,184	)
Net realized and unrealized loss on investments		(634,897	)
Net decrease in net assets resulting from operations	$	(29,781	)

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, 2017 and the year ended June 30, 2017 UNAUDITED

	Six Months Ended 12/31/2017			Year Ended 06/30/2017
Operations:
Net investment income	$	605,116		$	1,410,940
Net realized gain/(loss) on investments		4,287			(156,332	)
Net change in unrealized appreciation/depreciation		(639,184	)		(1,737,572	)
Net increase/(decrease) in net assets resulting from operations		(29,781	)		(482,964	)
Distributions from net investment income		(605,116	)		(1,410,940	)
Net fund share transactions (Note 4)		(4,548,410	)		(11,102,514	)
Total decrease		(5,183,307	)		(12,996,418	)
Net assets:
Beginning of year		72,172,265			85,168,683
End of period	$	66,988,958		$	72,172,265

FINANCIAL HIGHLIGHTS

Selected data for a share outstanding:	Six Months Ended 12/31/2017			For the years ended June 30,
				2017			2016			2015			2014			2013
Net asset value, beginning of year		$5.33			$5.45			$5.35			$5.44			$5.43			$5.54
Income from investment operations:
Net investment income		0.05			0.10			0.11			0.12			0.12			0.12
Net gains/(losses) on securities		(0.05	)		(0.12	)		0.10			(0.09	)		0.01			(0.11	)
Total from investment operations		0.00			(0.02	)		0.21			0.03			0.13			0.01
Less distributions:
Distributions from net investment income		(0.05	)		(0.10	)		(0.11	)		(0.12	)		(0.12	)		(0.12	)
Net asset value, end of period		$5.28			$5.33			$5.45			$5.35			$5.44			$5.43
Total return		(0.07)%	(b)		(0.44)%			3.88%			0.50%			2.35%			0.11%
Net assets, end of period (in thousands)		$66,989			$72,172			$85,169			$80,055			$82,218			$89,403
Ratio of net expenses to average net assets (a)		0.71%	(c)		0.71%			0.72%			0.73%			0.74%			0.72%
Ratio of gross expenses to average net assets		0.75%	(c)		0.73%			0.72%			0.73%			0.74%			0.72%
Ratio of net investment income to average net assets		1.74%	(c)		1.79%			1.96%			2.17%			2.14%			2.12%
Portfolio turnover		0.00%	(b)		14.84%			26.49%			20.19%			9.06%			6.63%

(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, 2017

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
PREREFUNDED BONDS
40.70% of Net Assets
Alcorn State University Educational Building		5.125	%		09/01/2034	Aa2	$	95,000	$	100,405
Jackson State University Educational Building		5.000			03/01/2034	Aa2		175,000		187,378
MS Development Bank Special Obligation Alcorn County		4.750			07/01/2031	AA*		100,000		104,606
MS Development Bank Special Obligation Canton		5.750			10/01/2031	A2		370,000		424,283
MS Development Bank Special Obligation Department of Corrections		5.250			08/01/2027	AA-*		50,000		54,516
MS Development Bank Special Obligation Department of Corrections		5.250			08/01/2027	AA-*		305,000		332,544
MS Development Bank Special Obligation Hinds College		5.000			10/01/2026	Aa2		85,000		89,936
MS Development Bank Special Obligation Hinds College		5.125			10/01/2028	Aa2		100,000		106,022
MS Development Bank Special Obligation Hinds College		5.375			10/01/2033	Aa2		60,000		63,861
MS Development Bank Special Obligation Hinds College		5.000			04/01/2036	A2		250,000		276,265
MS Development Bank Special Obligation Jones County Junior College		5.100			03/01/2028	AA*		55,000		57,200
MS Development Bank Special Obligation Jones County Junior College**		5.000			03/01/2033	AA*		150,000		155,825
MS Development Bank Special Obligation Jones County Junior College		5.125			03/01/2039	AA*		45,000		46,812
MS Development Bank Special Obligation Jones County Rest Home		5.250			04/01/2028	A2		120,000		133,595
MS Development Bank Special Obligation Lowndes County		5.125			12/01/2027	AA*		135,000		148,165
MS Development Bank Special Obligation Marshall County		5.000			01/01/2028	Aa3		200,000		225,618
MS State Capital Improvement Projects		5.000			10/01/2029	Aa2		145,000		162,222
MS State Capital Improvement Projects		5.000			10/01/2036	Aa2		480,000		537,010
MS State University Educational Building Corporation Revenue		5.250			08/01/2033	Aa2		50,000		52,811
MS State University Educational Building Corporation Revenue		5.000			08/01/2036	Aa2		175,000		194,957
MS State University Educational Building Corporation Revenue**		5.250			08/01/2038	Aa2		300,000		355,143
Southern Mississippi Educational Building Corporation		5.000			03/01/2038	Aa2		600,000		696,660
University of Mississippi Educational Building Corporation		5.000			10/01/2028	Aa2		200,000		224,218
University Southern MS Educational Building Corporation		5.125			09/01/2029	Aa2		100,000		105,723
										4,835,775
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS
18.37% of Net Assets
Jackson State University Educational Building		5.000			03/01/2034	Aa2		250,000		289,908
MS Development Bank Special Obligation Gulf Coast Community Project**		4.000			12/01/2034	AA-*		300,000		323,325
Mississippi State University Educational Building		5.000			11/01/2032	Aa2		125,000		146,728
MS State University Educational Building Corporation Revenue		5.000			08/01/2033	Aa2		225,000		270,776
MS State University Educational Building Corporation Revenue		4.000			08/01/2036	Aa2		250,000		269,180
University of Mississippi Educational Building Corporation		4.000			11/01/2039	Aa2		200,000		211,136
University of Mississippi Educational Building Corporation		5.000			10/01/2031	Aa2		205,000		244,891
University Southern MS Educational Building Corporation		5.000			09/01/2033	Aa2		360,000		427,604
										2,183,548
MUNICIPAL UTILITY REVENUE BONDS
10.53% of Net Assets
MS Development Bank Special Obligation Hattiesburg Water & Sewer		4.750			12/01/2038	AA*		700,000		777,230
MS Development Bank Special Obligation Jackson Water & Sewer		4.500			09/01/2034	A2		100,000		106,285
MS Development Bank Special Obligation Jackson Water & Sewer		5.000			12/01/2033	A*		50,000		55,733
MS Development Bank Special Obligation Jackson Water & Sewer		6.875			12/01/2040	Baa3		250,000		311,883
										1,251,131
TURNPIKES/TOLLROAD/HIGHWAY BONDS
8.34% of Net Assets
MS Development Bank Desoto County Highway		5.000			01/01/2030	Aa3		100,000		112,395
MS Development Bank Special Obligation Highway Construction		5.000			01/01/2025	Aa3		200,000		236,458
MS Development Bank Special Obligation Highway Construction		5.000			01/01/2029	Aa3		300,000		362,292
MS Development Bank Special Obligation Highway Construction		4.000			01/01/2030	Aa3		175,000		192,491
MS Development Bank Special Obligation Marshall County		5.000			01/01/2030	Aa3		75,000		87,716
										991,352

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, 2017

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
PUBLIC FACILITIES REVENUE BONDS
7.95% of Net Assets
MS Development Bank Special Obligation Brandon Public Improvement		5.000	%		11/01/2033	Aa3	$	150,000	$	174,150
MS Development Bank Special Obligation Brandon Public Improvement**		4.000			08/01/2033	AA*		300,000		326,591
MS Development Bank Special Obligation Brandon Public Improvement		4.000			08/01/2035	AA*		150,000		162,107
MS Development Bank Special Obligation Hinds County		4.000			11/01/2035	Aa3		100,000		107,403
MS Development Bank Special Obligation Meridian Arts Center		5.000			03/01/2034	A2		150,000		174,941
										945,192
REFUNDED BONDS
4.67% of Net Assets
MS State Refunding		5.250			11/01/2019	Aa2		50,000		53,350
MS State Refunding		5.000			10/01/2033	Aa2		150,000		183,152
MS State Refunding		4.000			10/01/2036	Aa2		290,000		318,738
										555,240
SCHOOL IMPROVEMENT BONDS
4.53% of Net Assets
MS Development Bank Special Obligation Canton School District		5.000			12/01/2033	A1		100,000		117,159
MS Development Bank Special Obligation Jackson Schools		5.000			04/01/2028	A+*		375,000		421,478
										538,637
HOSPITAL AND HEALTHCARE BONDS
1.87% of Net Assets
Medical Center Educational Building Corporation University of Mississippi		5.000			06/01/2034	Aa2		100,000		104,891
Medical Center Educational Building Corporation MS Revenue		5.500			12/01/2023	Aa2		105,000		117,865
										222,756
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS
1.23% of Net Assets
Mississippi State Gaming Tax Revenue		5.000			10/15/2035	A3		125,000		145,750
Total Investments 98.19% of Net Assets (cost $11,074,398) (See (a) below for further explanation)									$	11,669,381
Other assets in excess of liabilities 1.81%										215,343
Net Assets 100%									$	11,884,724

# 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

@ Rated by Fitch’s Investors Service

NR Not Rated

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

(a) Cost for federal income tax purposes is $11,074,397 and net unrealized appreciation of investments is as follows:

Unrealized appreciation	$	603,098
Unrealized depreciation		(8,050	)
Net unrealized appreciation	$	595,048

Other Information

The following is a summary of the inputs used, as of December 31, 2017, 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		11,669,381
Level 3	Significant Unobservable Inputs		—
		$	11,669,381

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

20

MISSISSIPPI TAX-FREE INCOME SERIES

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2017 UNAUDITED

ASSETS:
Investments in securities, at fair value (Cost: $11,074,398)		$	11,669,381
Cash			150,388
Interest receivable			141,797
Total assets			11,961,566
LIABILITIES:
Payable for:
Distributions to shareholders	58,649
Investment advisory fee	2,928
Transfer agent fee	3,183
Custodian expense	3,421
Professional fees	3,406
Insurance expense	1,134
Pricing fees	1,039
Trustees fees	961
Accrued expenses	2,121
Total liabilities			76,842
NET ASSETS:
Capital			11,294,122
Accumulated net investment income			1
Accumulated net realized loss on investment transactions			(4,382	)
Net unrealized appreciation in value of investments			594,983
Net assets at value		$	11,884,724
NET ASSET VALUE, offering price and redemption price per share (975,676 shares outstanding; unlimited number of shares authorized; no par value)		$	12.18

STATEMENT OF OPERATIONS

For the six months ended December 31, 2017

Net investment income:
Interest income	$	207,822
Expenses:
Investment advisory fee		30,486
Transfer agent fee		9,146
Professional fees		4,574
Custodian expense		3,853
Registration expense		2,954
Pricing fees		2,267
Trustees fees		659
Other expenses		1,347
Total expenses		55,286
Fees waived by Adviser		(12,518	)
Custodian expense reduction		(103	)
Net expenses		42,665
Net investment income		165,157
Realized and unrealized gain on investments:
Net realized gain		1,732
Net change in unrealized appreciation/depreciation		49,877
Net realized and unrealized gain on investments		51,609
Net increase in net assets resulting from operations	$	216,766

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

21

MISSISSIPPI TAX-FREE INCOME SERIES

STATEMENTS OF CHANGES IN NET ASSETS

For the six months ended December 31, 2017 and the year ended June 30, 2017 UNAUDITED

	Six Months Ended 12/31/2017			Year Ended 06/30/2017
Operations:
Net investment income	$	165,157		$	336,460
Net realized gain on investments		1,732			1,670
Net change in unrealized appreciation/depreciation		49,877			(387,693	)
Net increase/(decrease) in net assets resulting from operations		216,766			(49,563	)
Distributions from net investment income		(165,148	)		(336,322	)
Distributions from capital gains		(8,238	)		(4,362	)
Net fund share transactions (Note 4)		(606,708	)		1,333,277
Total increase/(decrease)		(563,328	)		943,030
Net assets:
Beginning of year		12,448,052			11,505,022
End of period	$	11,884,724		$	12,448,052
Accumulated Net Investment Income	$	1		$	(8	)

FINANCIAL HIGHLIGHTS

Selected data for a share outstanding:	Six Months Ended 12/31/2017			For the years ended June 30,
				2017			2016			2015			2014			2013
Net asset value, beginning of year		$12.14			$12.55			$12.03			$11.95			$11.65			$12.01
Income from investment operations:
Net investment income		0.17			0.34			0.36			0.37			0.38			0.39
Net gains/(losses) on securities		0.04			(0.41	)		0.52			0.08			0.31			(0.33	)
Total from investment operations		0.21			(0.07	)		0.88			0.45			0.69			0.06
Less distributions:
Distributions from net investment income		(0.17	)		(0.34	)		(0.36	)		(0.37	)		(0.38	)		(0.42	)
Distributions from capital gains		0.00	(b)		0.00	(b)		0.00			0.00			(0.01	)		0.00
Total distributions		(0.17	)		(0.34	)		(0.36	)		(0.37	)		(0.39	)		(0.42	)
Net asset value, end of period		$12.18			$12.14			$12.55			$12.03			$11.95			$11.65
Total return		1.78%	(c)		(0.48)%			7.49%			3.80%			6.08%			0.38%
Net assets, end of period (in thousands)		$11,885			$12,448			$11,505			$10,916			$10,450			$8,309
Ratio of net expenses to average net assets (a)		0.71%	(d)		0.70%			0.70%			0.69%			0.69%			0.66%
Ratio of gross expenses to average net assets		0.91%	(d)		0.85%			0.88%			0.86%			0.90%			0.89%
Ratio of net investment income to average net assets		2.73%	(d)		2.80%			2.97%			3.07%			3.26%			3.22%
Portfolio turnover		3.91%	(c)		14.06%			3.26%			6.47%			1.96%			13.81%

(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.

22

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

SCHEDULE OF PORTFOLIO INVESTMENTS

North Carolina Municipal Bonds

December 31, 2017

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
PREREFUNDED BONDS
19.06% of Net Assets
Cabarrus County NC Certificates of Participation		5.000	%		06/01/2025	Aa2	$	1,000,000	$	1,014,530
Cabarrus County NC Certificates of Participation		5.000			01/01/2029	Aa2		750,000		776,333
Harnett County NC Certificates of Participation		5.000			06/01/2027	Aa3		300,000		314,412
Johnston County NC Installment Financing Contract		5.000			10/15/2027	Aa2		570,000		621,272
Johnston NC Memorial Hospital Authority		5.250			10/01/2028	A2		490,000		494,488
Mecklenburg County NC Certificates of Participation		5.000			02/01/2028	Aa1		415,000		430,301
Mecklenburg County NC Certificates of Participation		5.000			02/01/2026	NR		450,000		451,332
Moore County NC**		5.000			06/01/2031	Aa3		2,750,000		2,966,475
Nash County NC Limited Obligation**		5.000			10/01/2030	Aa3		2,045,000		2,228,764
NC Capital Facilities Financial Agency Education Duke University		5.000			10/01/2038	Aa1		500,000		521,610
NC Capital FacilitIes Financial Agency Education Wake Forest		5.000			01/01/2031	Aa3		500,000		517,605
NC Capital Facilities Financial Agency Education Wake Forest		5.000			01/01/2038	Aa3		1,250,000		1,294,013
NC Eastern Municipal Power Agency		6.000			01/01/2025	A3		1,150,000		1,464,836
NC Eastern Municipal Power Agency		6.000			01/01/2026	NR		275,000		321,415
NC Municipal Power Agency #1 Catawba Electric Revenue		4.750			01/01/2030	AAA@		210,000		216,850
NC Municipal Power Agency #1 Catawba Electric Revenue		5.000			01/01/2030	AAA@		1,815,000		1,878,725
NC State Medical Care Commission Health Care Facilities		5.000			06/01/2034	Aa2		1,670,000		1,748,774
Orange County NC Public Facilities Company Limited Obligation		4.750			10/01/2032	Aa1		750,000		854,063
Pitt County NC Limited Obligation		5.000			04/01/2035	Aa2		105,000		112,730
Rockingham County NC Certificates of Participation		5.000			04/01/2032	Aa3		1,325,000		1,336,329
University of NC Greensboro		5.000			04/01/2031	Aa3		500,000		568,770
University of NC Greensboro		5.000			04/01/2036	Aa3		500,000		568,770
University of NC System Pool Revenue		5.000			10/01/2026	A1		1,000,000		1,026,170
University of NC System Pool Revenue		5.000			10/01/2034	Aa2		1,950,000		2,062,535
University of North Carolina		5.000			10/01/2033	A1		340,000		348,898
University of North Carolina		5.000			10/01/2033	A1		515,000		528,478
University of North Carolina		5.000			10/01/2033	A1		115,000		118,063
Wake County NC Limited Obligation		5.000			06/01/2032	Aa1		1,500,000		1,571,850
Wilmington NC Certificates of Participation		5.000			06/01/2038	Aa1		250,000		253,590
										26,611,981
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS
16.77% of Net Assets
Iredell County NC Community College		5.000			04/01/2026	Aa1		225,000		227,252
Iredell County NC Community College		5.000			04/01/2027	Aa1		325,000		328,237
NC State Capital Facilities Davidson College		5.000			03/01/2032	AA+*		310,000		348,099
NC State Capital Facilities Duke University		5.000			10/01/2041	Aa1		2,000,000		2,335,100
NC State Capital Facilities Finance Agency Davidson College		4.750			03/01/2035	AA+*		1,000,000		1,092,740
NC State Capital Facilities Wake Forest University		4.000			01/01/2036	Aa3		750,000		821,265
NC State University at Raleigh		5.000			10/01/2042	Aa1		750,000		858,555
Scotland County NC		5.000			12/01/2033	A*		250,000		299,993
University of NC at Charlotte Board of Governors		4.000			10/01/2037	Aa3		750,000		811,020
University of NC at Charlotte Board of Governors		5.000			10/01/2042	Aa3		250,000		296,658
University of NC Charlotte		5.000			04/01/2035	Aa3		595,000		691,093
University of NC Charlotte		5.000			04/01/2043	Aa3		1,500,000		1,728,060
University of NC Charlotte		5.000			04/01/2040	Aa3		2,650,000		3,079,380
University of NC Charlotte		5.000			04/01/2031	Aa3		750,000		843,615
University of NC Charlottte		5.000			04/01/2038	Aa3		1,000,000		1,157,070
University of NC Greensboro		5.000			04/01/2033	Aa3		900,000		1,053,378
University of NC Greensboro		5.000			04/01/2039	Aa3		2,870,000		3,331,693
University of NC at Greensboro		4.000			04/01/2035	Aa3		750,000		824,108
University of NC Greensboro		4.000			04/01/2036	Aa3		500,000		548,470
University of NC Wilmington Limited Obligation		5.000			06/01/2033	A1		550,000		641,801
University of NC Wilmington Limited Obligation		4.000			06/01/2034	A1		500,000		539,275
University of North Carolina		5.000			10/01/2033	A1		30,000		30,769
University of North Carolina Charlotte		4.000			10/01/2035	Aa3		250,000		273,435
University of North Carolina Charlotte		4.000			10/01/2036	Aa3		250,000		271,883
Western Carolina University		5.000			10/01/2045	Aa3		825,000		961,967
										23,394,916

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, 2017

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
HOSPITAL AND HEALTHCARE BONDS
12.88% of Net Assets
Charlotte Mecklenburg NC Hospital Health Care System		5.250	%		01/15/2039	Aa3	$	750,000	$	779,670
Charlotte Mecklenburg NC Hospital Health Care System		5.000			01/15/2039	Aa3		1,500,000		1,686,510
NC State Medical Care Commission Duke University Health		5.000			06/01/2035	Aa2		500,000		561,820
NC State Medical Care Commission Health Care Duke University		4.000			06/01/2034	Aa2		200,000		218,678
NC State Medical Care Commission Health Care Facilities		5.000			07/01/2030	A2		500,000		535,845
NC State Medical Care Commission Health Care Facilities Duke University		4.000			06/01/2035	Aa2		250,000		272,758
NC State Medical Care Commission Health Care Facilities Mission Health**		5.000			10/01/2036	Aa3		3,045,000		3,529,670
NC State Medical Care Commission Health Care Facilities Rex Hospital		5.000			07/01/2032	A2		615,000		713,234
NC State Medical Care Commission Health Care Facilities Rex Hospital		5.000			07/01/2033	A2		750,000		867,038
NC State Medical Care Commission Health Care Facilities Vidant Health		5.000			06/01/2036	A1		1,000,000		1,116,020
NC State Medical Care Commission Health Care Facilities Vidant Health		5.000			06/01/2040	A1		1,885,000		2,143,547
NC State Medical Care Commission Health Care Facilities Wake Medical		5.000			10/01/2038	A2		200,000		226,306
NC State Medical Care Commission Hospital Revenue NC Baptist Hospital		5.250			06/01/2029	A2		645,000		701,509
NC State Medical Care Commission Wake Forest Baptist Hospital		5.000			12/01/2033	A2		1,000,000		1,135,930
NC State Medical Care Commission Wake Medical		5.000			10/01/2031	A2		1,000,000		1,136,880
NC State Medical Care Community Hospital Revenue NC Baptist Hospital		5.000			06/01/2034	A2		1,225,000		1,323,858
NC State Medical Care Community Hospital Revenue NC Baptist Hospital		4.750			06/01/2030	A2		405,000		426,866
New Hanover County NC Hospital New Hanover Regional Medical Center		5.000			10/01/2034	A1		500,000		590,505
										17,966,644
REFUNDING BONDS
11.05% of Net Assets
Buncombe County NC Limited Obligation**		5.000			06/01/2035	Aa1		2,000,000		2,339,720
Charlotte NC Certificates of Participation		5.000			06/01/2033	Aa1		840,000		964,680
Charlotte NC Certificates of Participation		5.000			06/01/2034	Aa1		750,000		877,950
Charlotte NC Certificates of Participation		5.000			06/01/2026	Aa1		1,455,000		1,478,193
Charlotte NC Certificates of Participation		5.000			06/01/2027	Aa1		775,000		787,524
Chatham County NC		5.000			11/01/2032	Aa2		825,000		978,714
Dare County NC Limited Obligation Refunding		5.000			06/01/2029	Aa3		100,000		111,870
Durham Capital Financing Corporation Limited Obligation		5.000			06/01/2034	Aa1		500,000		575,320
Monroe NC Limited Obligation		5.000			03/01/2035	Aa3		390,000		456,308
Monroe NC Limited Obligation**		5.000			03/01/2039	Aa3		1,715,000		1,994,271
New Hanover County NC Limited Obligation		5.000			12/01/2027	Aa1		505,000		580,018
Pitt County NC Certificates of Participation		5.000			04/01/2027	Aa2		500,000		565,470
Rockingham County NC Limited Obligation		5.000			04/01/2027	Aa3		250,000		297,435
Rockingham County NC Limited Obligation		4.500			04/01/2032	Aa3		500,000		565,610
Sampson County NC Limited Obligation		4.000			09/01/2036	A1		1,000,000		1,081,640
Sampson County NC Limited Obligation		4.000			09/01/2037	A1		500,000		539,510
Thomasville NC Combined Enterprise System Revenue		4.750			05/01/2028	A1		435,000		481,984
Union County NC Limited Obligation Refunding		5.000			12/01/2024	Aa1		125,000		149,574
Wake County NC Limited Obligation		5.000			12/01/2035	Aa1		500,000		597,635
										15,423,426
SCHOOL IMPROVEMENT BONDS
9.87% of Net Assets
Brunswick County NC Limited Obligation		5.000			06/01/2030	Aa3		250,000		295,998
Brunswick County NC Limited Obligation		5.000			06/01/2031	Aa3		250,000		294,878
Cabarrus County NC Limited Obligation		5.000			04/01/2035	Aa2		1,435,000		1,691,679
Cabarrus County NC Limited Obligation		4.000			06/01/2035	Aa2		1,500,000		1,649,445
Davidson County NC Limited Obligation		5.000			06/01/2032	Aa3		500,000		598,590

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, 2017

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
Duplin County NC Limited Obligation		5.000	%		04/01/2032	A2	$	750,000	$	879,285
Duplin County NC Limited Obligation		5.000			04/01/2034	A2		235,000		272,861
Onslow County NC Limited Obligation		5.000			06/01/2033	Aa3		500,000		587,895
Onslow County NC Limited Obligation		4.000			10/01/2034	Aa3		500,000		543,855
Onslow County NC Limited Obligation		4.000			10/01/2035	Aa3		500,000		541,435
Pitt County NC Limited Obligation		4.000			04/01/2031	Aa2		500,000		551,185
Pitt County NC Limited Obligation		4.000			04/01/2034	Aa2		550,000		594,699
Sampson County NC Limited Obligation		5.000			12/01/2033	A1		1,975,000		2,324,733
Sampson County NC Limited Obligation		5.000			09/01/2040	A1		750,000		884,063
Wayne County NC		4.000			06/01/2034	Aa3		1,500,000		1,644,240
Wilkes County NC Limited Obligation		5.000			06/01/2031	A1		350,000		414,132
										13,768,973
MUNICIPAL UTILITIES
9.83% of Net Assets
Brunswick County NC Enterprise System Revenue		5.000			04/01/2031	Aa3		500,000		587,530
Buncombe County NC Metropolitan Sewerage District		5.000			07/01/2039	Aaa		550,000		631,730
Concord NC Utilities System Revenue		4.500			12/01/2034	Aa2		1,000,000		1,138,810
Fuquay-Varina NC Combined Utilities Revenue		5.000			04/01/2040	Aa2		1,000,000		1,177,240
Gastonia NC Combined Utilities System Revenue		5.000			05/01/2034	Aa2		570,000		663,742
Gastonia NC Combined Utilities System Revenue		5.000			05/01/2035	Aa2		250,000		290,933
Greenville NC Combined Enterprise System Revenue		5.000			04/01/2034	Aa2		500,000		592,700
High Point NC Combined Enterprise		5.000			11/01/2039	Aa2		750,000		873,323
Martin County NC Limited Obligation Water and Sewer District		4.750			06/01/2034	A2		1,150,000		1,286,689
Mooresville NC Limited Obligation**		5.000			11/01/2031	AA-*		1,250,000		1,484,100
NC Eastern Municipal Power Agency #1 Catawba Electric Revenue		5.000			01/01/2031	A2		500,000		554,815
NC Eastern Municipal Power Agency #1 Catawba Electric Revenue		5.000			01/01/2030	A*		500,000		596,935
NC Eastern Municipal Power Agency #1 Catawba Electric Revenue		4.750			01/01/2030	A2		80,000		82,463
NC Eastern Municipal Power Agency #1 Catawba Electric Revenue		5.000			01/01/2030	A2		730,000		754,433
NC Eastern Municipal Power Agency #1 Catawba Electric Revenue		5.000			01/01/2032	A*		500,000		588,595
Sampson County NC Water & Sewer District		5.000			06/01/2037	A1		920,000		1,067,476
Wake County NC Industrial Facilities & Pollution Control Duke Energy		4.000			06/01/2041	Aa3		1,160,000		1,225,969
Wilmington NC Storm Water Fee Revenue		5.000			06/01/2028	AA+*		115,000		115,208
										13,712,691
PUBLIC FACILITIES REVENUE BONDS
5.59% of Net Assets
Charlotte NC Certificates of Participation Convention Facilities		5.000			06/01/2034	Aa2		900,000		942,849
Forsyth County NC Limited Tax		5.000			04/01/2031	Aa1		335,000		378,423
Henderson County NC Limited Obligation		5.000			10/01/2030	Aa3		250,000		297,298
Henderson County NC Limited Obligation		5.000			10/01/2031	Aa3		500,000		592,645
Jacksonville Public Facilities Corporation Limited Obligation		5.000			04/01/2031	Aa3		265,000		297,269
Jacksonville Public Facilities Corporation Limited Obligation		5.000			04/01/2032	Aa3		100,000		112,177
Kannapolis NC Limited Obligation		5.000			04/01/2032	Aa3		500,000		579,485
Onslow County NC Limited Obligation		5.000			06/01/2032	Aa3		500,000		591,995
Raleigh NC Limited Obligation		5.000			10/01/2038	Aa1		500,000		572,660
Raleigh NC Limited Obligation		5.000			10/01/2034	Aa1		1,420,000		1,672,177
Watauga NC Public Facilities Corporation Limited Obligation		5.000			06/01/2027	Aa3		750,000		842,055
Winston Salem NC Limited Obligation		5.000			06/01/2031	Aa1		800,000		921,840
										7,800,873
AIRPORT BONDS
4.92% of Net Assets
Charlotte NC Airport Revenue		5.000			07/01/2036	Aa3		250,000		299,545
Charlotte NC Airport Revenue		5.000			07/01/2037	Aa3		700,000		838,075
Charlotte NC Airport Revenue		5.000			07/01/2042	Aa3		1,325,000		1,581,441
Charlotte NC Airport Revenue		4.000			07/01/2036	Aa3		500,000		544,975
Charlotte NC Douglas International Airport		5.000			07/01/2030	Aa3		1,095,000		1,295,920
Raleigh Durham NC Airport		5.000			05/01/2029	Aa3		235,000		253,492
Raleigh Durham NC Airport		5.000			05/01/2036	Aa3		1,480,000		1,578,820
Raleigh Durham NC Airport		5.000			05/01/2032	Aa3		440,000		473,251
										6,865,519

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, 2017

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS
4.87% of Net Assets
Buncombe County NC Limited Obligation		5.000	%		06/01/2030	Aa1	$	250,000	$	282,153
Buncombe County NC Limited Obligation		5.000			06/01/2032	Aa1		250,000		283,060
Buncombe County NC Limited Obligation		5.000			06/01/2034	Aa1		1,100,000		1,280,642
Buncombe County NC Limited Obligation		5.000			06/01/2033	Aa1		600,000		704,580
Buncombe County NC Limited Obligation		5.000			06/01/2034	Aa1		365,000		427,269
Charlotte NC Certificates of Participation		5.000			12/01/2029	Aa1		340,000		382,255
Johnston County NC Limited Obligation		4.750			06/01/2033	Aa2		500,000		561,560
Rocky Mount NC Special Obligation		4.500			05/01/2032	Aa3		1,500,000		1,697,955
Winston Salem NC Certificatesof Participation		4.750			06/01/2031	Aa1		620,000		621,283
Winston Salem NC Limited Obligation		4.500			06/01/2034	Aa1		500,000		555,845
										6,796,602
TURNPIKES/TOLLROAD/HIGHWAY BONDS
1.66% of Net Assets
NC State Grant Anticipation Revenue Vehicle Garvee		5.000			03/01/2030	A2		200,000		235,654
NC State Turnpike Authority Monroe Connector System		5.000			07/01/2029	Aa2		500,000		554,120
NC State Turnpike Authority Monroe Connector System		5.000			07/01/2031	Aa2		1,385,000		1,532,918
										2,322,692
LEASE REVENUE BONDS
1.25% of Net Assets
Buncombe County NC Limited Obligation		5.000			06/01/2032	Aa1		1,500,000		1,743,405
ESCROWED TO MATURITY BONDS
.77% of Net Assets
NC Eastern Municipal Power Agency		6.000			01/01/2022	A3		915,000		1,068,272
MISCELLANEOUS REVENUE BONDS
.42% of Net Assets
Wilmington NC Storm Water Revenue		5.000			06/01/2035	Aa2		500,000		584,930
Total Investments 98.94% of Net Assets (cost $133,053,852) (See (a) below for further explanation)									$	138,060,924
Other assets in excess of liabilities 1.06%										1,482,050
Net Assets 100%									$	139,542,974

# 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

@ Rated by Fitch’s Investors Service

NR Not Rated

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

(a) Cost for federal income tax purposes is $133,051,943 and net unrealized appreciation of investments is as follows:

Unrealized appreciation	$	5,125,081
Unrealized depreciation		(116,100	)
Net unrealized appreciation	$	5,008,981

Other Information

The following is a summary of the inputs used, as of December 31, 2017, 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		138,060,924
Level 3	Significant Unobservable Inputs		—
		$	138,060,924

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

26

NORTH CAROLINA TAX-FREE INCOME SERIES

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2017 UNAUDITED

ASSETS:
Investments in securities, at fair value (Cost: $133,053,852)		$	138,060,924
Cash			547,194
Receivable for fund shares sold			77,201
Interest receivable			1,406,386
Total assets			140,091,705
LIABILITIES:
Payable for:
Distributions to shareholders	369,175
Fund shares redeemed	69,088
Investment advisory fee	58,728
Transfer agent fee	25,399
Printing expense	4,521
Audit fees	3,515
Postage expense	3,327
Miscellaneous expense	3,091
Trustees fees	3,005
Registration expense	2,745
Accrued expenses	6,137
Total liabilities			548,731
NET ASSETS:
Capital			135,740,788
Accumulated net investment income			1,909
Accumulated net realized loss on investment transactions			(1,206,795	)
Net unrealized appreciation in value of investments			5,007,072
Net assets at value		$	139,542,974
NET ASSET VALUE, offering price and redemption price per share (12,025,928 shares outstanding; unlimited number of shares authorized; no par value)		$	11.60

STATEMENT OF OPERATIONS

For the six months ended December 31, 2017

Net investment income:
Interest income	$	2,363,845
Expenses:
Investment advisory fee		341,507
Transfer agent fee		87,372
Professional fees		17,193
Trustees fees		9,359
Custodian expense		9,358
Other expenses		28,736
Total expenses		493,525
Fees waived by Adviser		(2,231	)
Custodian expense reduction		(250	)
Net expenses		491,044
Net investment income		1,872,801
Realized and unrealized gain on investments:
Net realized gain		26,173
Net change in unrealized appreciation/depreciation		1,193,919
Net realized and unrealized gain on investments		1,220,092
Net increase in net assets resulting from operations	$	3,092,893

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

27

NORTH CAROLINA TAX-FREE INCOME SERIES

STATEMENTS OF CHANGES IN NET ASSETS

For the six months ended December 31, 2017 and the year ended June 30, 2017 UNAUDITED

	Six Months Ended 12/31/2017			Year Ended 06/30/2017
Operations:
Net investment income	$	1,872,801		$	3,995,410
Net realized gain/(loss) on investments		26,173			(670,190	)
Net change in unrealized appreciation/depreciation		1,193,919			(6,216,146	)
Net increase/(decrease) in net assets resulting from operations		3,092,893			(2,890,926	)
Distributions from net investment income		(1,872,636	)		(3,995,046	)
Net fund share transactions (Note 4)		(949,395	)		(4,188,962	)
Total increase/(decrease)		270,862			(11,074,934	)
Net assets:
Beginning of year		139,272,112			150,347,046
End of period	$	139,542,974		$	139,272,112
Accumulated Net Investment Income	$	1,909		$	1,744

FINANCIAL HIGHLIGHTS

Selected data for a share outstanding:	Six Months Ended 12/31/2017			For the years ended June 30,
				2017			2016			2015			2014			2013
Net asset value, beginning of year		$11.50			$12.02			$11.53			$11.54			$11.31			$11.59
Income from investment operations:
Net investment income		0.16			0.32			0.34			0.36			0.37			0.36
Net gains/(losses) on securities		0.10			(0.52	)		0.49			(0.01	)		0.24			(0.26	)
Total from investment operations		0.26			(0.20	)		0.83			0.35			0.61			0.10
Less distributions:
Distributions from net investment income		(0.16	)		(0.32	)		(0.34	)		(0.36	)		(0.37	)		(0.36	)
Distributions from capital gains		0.00			0.00			0.00			0.00			(0.01	)		(0.02	)
Total distributions		(0.16	)		(0.32	)		(0.34	)		(0.36	)		(0.38	)		(0.38	)
Net asset value, end of period		$11.60			$11.50			$12.02			$11.53			$11.54			$11.31
Total return		2.23%	(b)		(1.68)%			7.28%			3.00%			5.57%			0.76%
Net assets, end of period (in thousands)		$139,543			$139,272			$150,347			$123,717			$98,879			$95,127
Ratio of net expenses to average net assets (a)		0.70%	(c)		0.69%			0.70%			0.71%			0.72%			0.71%
Ratio of gross expenses to average net assets		0.71%	(c)		0.69%			0.70%			0.71%			0.72%			0.71%
Ratio of net investment income to average net assets		2.69%	(c)		2.73%			2.87%			3.04%			3.29%			3.07%
Portfolio turnover		7.81%	(b)		11.50%			6.09%			4.56%			9.73%			3.59%

(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.

28

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

SCHEDULE OF PORTFOLIO INVESTMENTS

North Carolina Municipal Bonds

December 31, 2017

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
REFUNDING BONDS
24.60% of Net Assets
Bertie County Limited Obligation		4.000	%		06/01/2022	A1	$	200,000	$	216,402
Cabarrus County NC Certificates of Participation		5.000			04/01/2021	AA*		150,000		160,940
Charlotte NC Certificates of Participation		4.000			06/01/2022	Aa1		125,000		136,750
Charlotte NC Certificates of Participation		4.000			06/01/2025	Aa1		300,000		331,983
Charlotte NC Certificates of Participation		5.000			06/01/2023	Aa1		625,000		727,169
Charlotte NC Certificates of Participation		5.000			12/01/2024	Aa2		250,000		299,148
Charlotte NC Certificates of Participation		5.000			12/01/2025	Aa2		100,000		121,550
Cumberland County NC Certificates of Participation		3.500			12/01/2020	Aa2		185,000		191,412
Dare County NC Limited Obligation		4.000			06/01/2019	Aa3		100,000		103,346
Dare County NC Limited Obligation		5.000			06/01/2024	Aa3		335,000		377,177
Durham NC Refunding		5.000			09/01/2022	Aaa		125,000		143,570
Jacksonville Public Facilities Corp Limited Obligation		5.000			04/01/2025	Aa3		100,000		120,090
Johnston County NC Limited Obligation		5.000			06/01/2029	Aa2		350,000		408,846
Pender County NC Limited Obligation		3.000			06/01/2019	Aa3		220,000		224,250
Raleigh NC Limited Obligation Refunding		5.000			10/01/2023	Aa2		250,000		292,950
Richmond County NC Limited Obligation Refunding		4.000			04/01/2019	A1		225,000		231,568
Rockingham County Limited Obligation**		5.000			04/01/2023	Aa3		250,000		289,530
Rockingham County NC Limited Obligation		4.000			04/01/2024	Aa3		105,000		115,857
Sampson County NC Limited Obligation		5.000			12/01/2023	A1		165,000		193,116
Sampson County NC Limited Obligation		5.000			09/01/2024	A1		125,000		147,455
Sampson County NC Limited Obligation		5.000			09/01/2025	A1		125,000		150,364
Union County NC Limited Obligation		3.000			12/01/2018	Aa1		100,000		101,497
Warren County NC Limited Obligation**		5.000			06/01/2023	A1		100,000		115,286
										5,200,256
PREREFUNDED BONDS
15.63% of Net Assets
Cabarrus County NC Certificates of Participation		5.000			06/01/2019	Aa2		420,000		426,069
Cabarrus County NC Certificates of Participation		5.000			01/01/2021	Aa2		200,000		207,022
Charlotte-Mecklenburg Hospital		4.375			01/15/2019	Aa3		150,000		150,185
Durham County NC Certificates of Participation		5.000			06/01/2020	Aa1		435,000		455,897
Durham County NC Certificates of Participation		5.000			06/01/2021	Aa1		240,000		251,530
Johnston NC Memorial Hospital Authority Mortgage Revenue		5.000			10/01/2018	A2		175,000		176,493
Moore County NC		5.000			06/01/2021	Aa3		200,000		215,892
NC Medical Care Duke University Health Systems		3.000			06/01/2019	Aa2		150,000		152,919
NC Municipal Power Agency #1 Catawba Electric		5.000			01/01/2021	AAA@		45,000		46,580
NC State Capital Improvement Obligation		4.000			05/01/2020	Aa1		120,000		120,991
NC State Capital Improvement Obligation		5.000			05/01/2022	Aa1		100,000		101,162
NC State Capital Improvement Obligation		5.000			05/01/2022	Aa1		155,000		162,056
NC State Capital Improvement Obligation		4.000			05/01/2025	Aa1		105,000		110,538
NC State Grant Anticipation Revenue Vehicle		5.000			03/01/2021	A2		310,000		322,223
Onslow NC Water & Sewer**		4.250			06/01/2022	A3		150,000		151,677
Rockingham County NC Certificates of Participation		4.000			04/01/2019	Aa3		100,000		100,599
University of North Carolina		4.250			10/01/2021	A1		20,000		20,422
University of North Carolina		4.250			10/01/2021	A1		20,000		20,422
University of North Carolina		4.250			10/01/2021	A1		10,000		10,213
Wilmington NC Certificates of Participation		4.200			06/01/2019	Aa1		100,000		101,100
										3,303,990
MUNICIPAL UTILITY REVENUE BONDS
12.67% of Net Assets
Brunswick County NC Enterprise System Revenue		5.000			04/01/2027	Aa3		600,000		717,407
Cary NC Combined Enterprise Systems		4.000			12/01/2028	Aaa		250,000		283,910
Columbus County NC Limited Obligation		5.000			06/01/2023	A1		355,000		409,265
Gastonia NC Combined Utilities System		4.000			05/01/2023	Aa2		150,000		166,562
Monroe NC Certificates of Participation		4.000			03/01/2019	Aa3		100,000		102,774
Mooresville NC Limited Obligation		5.000			11/01/2021	AA-*		350,000		390,527

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

29

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

SCHEDULE OF PORTFOLIO INVESTMENTS

North Carolina Municipal Bonds

December 31, 2017

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
NC Municipal Power Agency #1 Catawba Electric		5.000	%		01/01/2021	A2	$	205,000	$	212,071
NC Municipal Power Agency #1 Catawba Electric		5.250			01/01/2018	A2		95,000		95,018
Union County NC Enterprise System Revenue		4.000			12/01/2022	Aa1		100,000		108,650
Warren County NC Limited Obligation		5.000			06/01/2027	A1		160,000		190,280
										2,676,464
SCHOOL IMPROVEMENT BONDS
10.13% of Net Assets
Cabarrus County NC Certificates of Participation		5.000			01/01/2019	Aa2		100,000		103,408
Cabarrus County NC Limited Obligation		5.000			04/01/2024	Aa2		350,000		413,928
Cabarrus County NC Limited Obligation		5.000			06/01/2025	Aa2		200,000		241,038
Davidson County NC Limited Obligation		5.000			06/01/2024	Aa3		200,000		237,182
Nash County NC Limited Obligation		5.000			10/01/2018	Aa3		150,000		154,076
New Hanover County NC		4.000			02/01/2028	Aaa		100,000		112,382
Onslow County NC Limited Obligation**		4.000			10/01/2024	Aa3		350,000		393,785
Onslow County NC Limted Obligation		5.000			06/01/2023	Aa3		250,000		289,190
Wilkes County NC Limited Obligation		5.000			06/01/2024	A1		165,000		194,583
										2,139,572
PUBLIC FACILITIES REVENUE BONDS
8.02% of Net Assets
Buncombe County NC Limited Obligation		5.000			06/01/2028	Aa1		500,000		600,685
Charlotte NC Certificates of Participation		4.000			12/01/2022	Aa1		170,000		184,234
Chatham County NC Limited Obligation**		5.000			11/01/2025	Aa2		500,000		598,950
Watauga NC Public Facillities Corporation Limited Obligation		5.000			06/01/2023	Aa3		275,000		310,368
										1,694,237
HOSPITAL AND HEALTHCARE BONDS
7.66% of Net Assets
Charlotte-Mecklenburg NC Hospital Authority Health Care System		5.000			01/15/2028	Aa3		225,000		269,563
NC Medical Care Caromont Health		3.250			02/15/2018	A1		370,000		370,740
NC Medical Care Duke University		5.000			06/01/2026	Aa2		165,000		187,572
NC State Medical Care Commission Health Care Facilities**		4.000			06/01/2025	Aa2		250,000		284,880
North Carolina State Medical Care Commission Mission Health System		5.000			10/01/2024	Aa3		250,000		294,915
North Carolina State Medical Care Commission Vidant Health		5.000			06/01/2028	A1		180,000		211,108
										1,618,778
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS
7.10% of Net Assets
Appalachian NC State University		5.000			10/01/2025	Aa3		235,000		285,784
East Carolina University		5.000			10/01/2027	Aa2		250,000		303,835
University of NC at Greensboro		5.000			04/01/2025	Aa3		100,000		110,606
University of NC Wilmington Limited Obligation		5.000			06/01/2024	A1		265,000		311,465
University of North Carolina		4.250			10/01/2021	A1		50,000		50,983
University of North Carolina Charlotte		5.000			10/01/2025	Aa3		110,000		133,243
University of North Carolinaat Greensboro		5.000			04/01/2026	Aa3		250,000		305,105
										1,501,021
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS
3.92% of Net Assets
Johnston County NC Limited Obligation		4.000			06/01/2019	Aa2		150,000		154,997
NC State Capital Improvement Obligation**		5.000			05/01/2021	Aa1		350,000		377,038
Salisbury NC Certificates of Participation		5.000			03/01/2019	A3		145,000		150,475
Winston Salem NC Limited Obligation		5.000			06/01/2023	Aa1		125,000		145,294
										827,804
ESCROWED TO MATURITY BONDS
3.17% of Net Assets
NC Eastern Municipal Power Agency		5.000			01/01/2021	AAA@		125,000		137,153

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, 2017

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
NC Eastern Municipal Power Agency		6.000	%		01/01/2022	AAA@	$	125,000	$	145,728
NC Eastern Municipal Power Agency		6.000			01/01/2022	A3		220,000		256,852
NC Eastern Municipal Power Agency		6.500			01/01/2018	A3		100,000		100,026
NC Municipal Power Agency #1 Catawba Electric		5.250			01/01/2018	AAA@		30,000		30,006
										669,765
TURNPIKES/TOLLROAD/HIGHWAY BONDS
2.17% of Net Assets
NC State Grant Anticipation Revenue Vehicle		5.000			03/01/2025	A2		265,000		316,887
NC State Grant Anticipation Revenue Vehicle		5.000			03/01/2029	A2		120,000		141,654
										458,541
AD VALOREM PROPERTY BONDS
1.39% of Net Assets
Smithville Township NC**		5.000			06/01/2024	A1		250,000		293,013
LEASE REVENUE BONDS
1.28% of Net Assets
Edgecombe County NC Limited Obligation**		4.000			06/01/2022	A2		250,000		270,178
Total Investments 97.74% of Net Assets (cost $20,514,668) (See (a) below for further explanation)									$	20,653,619
Other assets in excess of liabilities 2.26%										476,883
Net Assets 100%									$	21,130,502

# 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

@ Rated by Fitch’s Investors Service

NR Not Rated

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

(a) Cost for federal income tax purposes is $20,514,668 and net unrealized depreciation of investments is as follows:

Unrealized appreciation	$	216,005
Unrealized depreciation		(77,054	)
Net unrealized appreciation	$	138,951

Other Information

The following is a summary of the inputs used, as of December 31, 2017, 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		20,653,619
Level 3	Significant Unobservable Inputs		—
		$	20,653,619

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

31

NORTH CAROLINA TAX-FREE SHORT-TO-MEDIUM SERIES

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2017 UNAUDITED

ASSETS:
Investments in securities, at fair value (Cost: $20,514,668)		$	20,653,619
Cash			350,283
Interest receivable			165,707
Total assets			21,169,609
LIABILITIES:
Payable for:
Distributions to shareholders	5,696
Fund shares redeemed	3,962
Investment advisory fee	6,027
Transfer agent fee	2,632
Professional fees	9,413
Pricing fees	3,422
Insurance expense	2,662
Printing expense	2,049
Trustees fees	636
Accrued expenses	2,608
Total liabilities			39,107
NET ASSETS:
Capital			21,011,310
Accumulated net realized loss on investment transactions			(19,759	)
Net unrealized appreciation in value of investments			138,951
Net assets at value		$	21,130,502
NET ASSET VALUE, offering price and redemption price per share (1,958,050 shares outstanding; unlimited number of shares authorized; no par value)		$	10.79

STATEMENT OF OPERATIONS

For the six months ended December 31, 2017

Net investment income:
Interest income	$	243,895
Expenses:
Investment advisory fee		54,458
Transfer agent fee		16,095
Professional fees		5,758
Custodian expense		4,637
Pricing fees		4,033
Registration expense		3,172
Trustees fees		1,174
Other expenses		3,895
Total expenses		93,222
Fees waived by Adviser		(16,553	)
Custodian expense reduction		(124	)
Net expenses		76,545
Net investment income		167,350
Realized and unrealized gain/(loss) on investments:
Net realized gain		3,670
Net change in unrealized appreciation/depreciation		(114,943	)
Net realized and unrealized loss on investments		(111,273	)
Net increase in net assets resulting from operations	$	56,077

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

32

NORTH CAROLINA TAX-FREE SHORT-TO-MEDIUM SERIES

STATEMENTS OF CHANGES IN NET ASSETS

For the six months ended December 31, 2017 and the year ended June 30, 2017 UNAUDITED

	Six Months Ended 12/31/2017			Year Ended 06/30/2017
Operations:
Net investment income	$	167,350		$	346,639
Net realized gain/(loss) on investments		3,670			(21,849	)
Net change in unrealized appreciation/depreciation		(114,943	)		(475,251	)
Net increase/(decrease) in net assets resulting from operations		56,077			(150,461	)
Distributions from net investment income		(167,350	)		(346,639	)
Net fund share transactions (Note 4)		(688,039	)		(2,707,103	)
Total decrease		(799,312	)		(3,204,203	)
Net assets:
Beginning of year		21,929,814			25,134,017
End of period	$	21,130,502		$	21,929,814

FINANCIAL HIGHLIGHTS

Selected data for a share outstanding:	Six Months Ended 12/31/2017			For the years ended June 30,
				2017			2016			2015			2014			2013
Net asset value, beginning of year		$10.85			$11.05			$10.94			$11.06			$11.00			$11.23
Income from investment operations:
Net investment income		0.08			0.16			0.17			0.19			0.20			0.21
Net gains/(losses) on securities		(0.06	)		(0.20	)		0.11			(0.12	)		0.08			(0.21	)
Total from investment operations		0.02			(0.04	)		0.28			0.07			0.28			0.00
Less distributions:
Distributions from net investment income		(0.08	)		(0.16	)		(0.17	)		(0.19	)		(0.20	)		(0.21	)
Distributions from capital gains		0.00			0.00			0.00			0.00			(0.02	)		(0.02	)
Total distributions		(0.08	)		(0.16	)		(0.17	)		(0.19	)		(0.22	)		(0.23	)
Net asset value, end of period		$10.79			$10.85			$11.05			$10.94			$11.06			$11.00
Total return		0.22%	(b)		(0.33)%			2.59%			0.60%			2.53%			(0.06)%
Net assets, end of period (in thousands)		$21,131			$21,930			$25,134			$24,463			$25,952			$26,333
Ratio of net expenses to average net assets (a)		0.71%	(c)		0.73%			0.83%			0.83%			0.81%			0.78%
Ratio of gross expenses to average net assets		0.86%	(c)		0.82%			0.83%			0.83%			0.81%			0.78%
Ratio of net investment income to average net assets		1.55%	(c)		1.49%			1.56%			1.69%			1.80%			1.87%
Portfolio turnover		9.39%	(b)		11.15%			24.05%			9.79%			7.10%			10.19%

(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.

33

DUPREE MUTUAL FUNDS — TENNESSEE TAX-FREE INCOME SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

Tennessee Municipal Bonds

December 31, 2017

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
MUNICIPAL UTILITY REVENUE BONDS
35.11% of Net Assets
Bristol TN Electric Revenue		5.000	%		09/01/2038	AA-*	$	1,525,000	$	1,724,546
Chattanooga TN Electric Revenue		5.000			09/01/2035	AA+*		250,000		295,100
Chattanooga TN Electric Revenue		5.000			09/01/2040	AA+*		2,325,000		2,723,110
Citizens Gas Utility District TN Gas Revenue		5.000			05/01/2029	A*		110,000		114,469
Clarksville TN Electric System Revenue		4.000			09/01/2034	Aa2		500,000		554,095
Clarksville TN Water Sewer & Gas Revenue		5.000			02/01/2034	Aa2		500,000		592,225
Clarksville TN Water Sewer & Gas Revenue		5.000			02/01/2036	Aa2		500,000		589,815
Clarksville TN Water Sewer & Gas Revenue		5.000			02/01/2041	Aa2		2,750,000		3,219,865
Clarksville TN Water Sewer & Gas Revenue		4.000			02/01/2036	Aa2		1,475,000		1,624,152
Clarksville TN Water Sewer & Gas Revenue		4.000			02/01/2038	Aa2		820,000		901,410
Columbia TN Waterworks Revenue		5.000			12/01/2032	Aa3		885,000		985,014
Franklin TN Water & Sewer Revenue and Tax Authority		5.000			04/01/2024	Aaa		750,000		893,813
Franklin TN Water & Sewer System Revenue		4.000			02/01/2036	Aa3		250,000		272,038
Hallsdale-Powell Utility District Knox County Water & Sewer		5.000			04/01/2026	A3		1,000,000		1,002,210
Hallsdale-Powell Utility District Knox County Water & Sewer		5.000			04/01/2031	A3		740,000		741,547
Harpeth Valley TN Utilities District		5.000			09/01/2040	AA*		1,000,000		1,123,170
Harpeth Valley TN Utilities District		5.000			09/01/2034	AA*		500,000		586,760
Knox Chapman TN Utility District		4.500			01/01/2027	AA-*		1,000,000		1,116,490
Knox Chapman TN Utility District		5.000			01/01/2031	AA-*		250,000		292,740
Knox Chapman TN Utility District		5.000			01/01/2033	AA-*		250,000		291,685
Memphis TN Electric System Revenue		5.000			12/01/2031	Aa2		225,000		264,611
Memphis TN Electric System Revenue		5.000			12/01/2034	Aa2		1,250,000		1,463,938
Memphis TN Electric System Revenue		4.000			12/01/2036	Aa2		230,000		249,948
Memphis TN Gas**		4.000			12/01/2037	Aa1		1,310,000		1,428,725
Memphis TN Gas System Revenue		4.000			12/01/2033	Aa1		500,000		552,115
Memphis TN Gas System Revenue		4.000			12/01/2036	Aa1		800,000		874,672
Metropolitan Government Nashville & Davidson County Electric		5.000			05/15/2036	AA+*		500,000		583,520
Metropolitan Government Nashville & Davidson County Electric		5.000			05/15/2039	AA+*		500,000		581,900
Metropolitan Government Nashville & Davidson County Electric		5.000			05/15/2033	AA+*		500,000		589,260
Metropolitan Government Nashville & Davidson County Electric**		5.000			05/15/2036	AA+*		3,085,000		3,388,931
Metropolitan Government Nashville & Davidson County Water & Sewer		5.000			07/01/2037	Aa3		250,000		299,778
Metropolitan Government Nashville & Davidson County Water & Sewer		5.000			07/01/2030	Aa3		3,250,000		3,757,748
Metropolitan Government Nashville & Davidson County Water & Sewer		5.000			07/01/2031	Aa3		500,000		576,420
Metropolitan Government Nashville & Davidson County Water & Sewer		5.000			07/01/2033	Aa3		575,000		660,301
Metropolitan Government Nashville & Davidson County Water & Sewer**		5.000			07/01/2040	Aa3		2,265,000		2,570,775
South Blount County TN Utility District Waterworks		5.000			12/01/2028	A2		765,000		815,383
Watauga River Regional Water Authority TN Waterworks		4.000			07/01/2037	A*		270,000		297,586
White House TN Utility District Robertson & Sumner Counties Water & Sewer		4.000			01/01/2030	AA+*		1,000,000		1,114,360
										39,714,225
PREREFUNDED BONDS
15.60% of Net Assets
Blount County TN Public Building Authority Local Government		5.000			06/01/2025	Aa2		100,000		104,746
Blount County TN Public Building Authority Local Government		5.000			06/01/2027	Aa2		1,500,000		1,571,190
Blount County TN Public Building Authority Local Government		4.750			06/01/2031	Aa2		750,000		782,970
Citizens Gas Utility District TN Gas Revenue		5.000			05/01/2029	NR		140,000		146,240
Clarksville TN Electric Systems Revenue		5.000			09/01/2028	Aa2		1,000,000		1,086,650
Clarksville TN Electric Systems Revenue		5.000			09/01/2032	Aa2		480,000		521,592
Clarksville TN Electric Systems Revenue		5.000			09/01/2033	Aa2		2,000,000		2,173,300
Clarksville TN Water Sewer & Gas Revenue		5.000			02/01/2033	Aa2		500,000		580,105
Clarksville TN Water Sewer & Gas Revenue		5.000			02/01/2038	Aa2		1,000,000		1,160,210
Gallatin TN Water & Sewer Revenue		5.000			01/01/2032	AA*		235,000		274,844
Johnson City TN Health & Educational Facilities Escrowed		5.125			07/01/2025	NR		70,000		70,148
Knox Chapman TN Utility District		5.250			01/01/2036	AA-*		700,000		774,249
Manchester TN		5.000			06/01/2038	A2		20,000		21,589

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

34

DUPREE MUTUAL FUNDS — TENNESSEE TAX-FREE INCOME SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

Tennessee Municipal Bonds

December 31, 2017

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
Metropolitan Government Nashville & Davidson County TN		4.750	%		05/15/2028	AA+*	$	460,000	$	465,479
Metropolitan Government Nashville & Davidson County TN Vanderbilt University		5.000			10/01/2034	NR		210,000		222,195
Pigeon Forge TN		4.900			06/01/2028	Aa3		725,000		735,107
Pigeon Forge TN		4.900			06/01/2028	Aa3		275,000		278,941
Shelby County TN Health Education & Housing Facilities Board Rhodes College		5.000			08/01/2030	A1		500,000		557,575
Shelby County TN Health Education and Housing Facilities		5.250			09/01/2027	A1		1,000,000		1,006,260
South Blount County TN Utility District Waterworks		5.000			12/01/2028	A2		360,000		382,651
TN State School Board Authority Higher Education Facilities		5.000			05/01/2028	Aa1		1,000,000		1,011,310
TN State School Board Authority Higher Education Facilities		5.000			05/01/2034	Aa1		500,000		522,760
TN State School Board Authority Higher Education Facilities		5.125			05/01/2033	NR		235,000		237,766
TN State School Board Authority Higher Education Facilities		5.125			05/01/2033	Aa1		1,065,000		1,077,823
Watauga River Tn Regional Water Authority Waterworks		5.000			07/01/2034	A*		500,000		571,040
West Wilson Utility District TN Waterworks		5.000			06/01/2033	NR		1,170,000		1,298,230
										17,634,970
PUBLIC FACILITIES REVENUE BONDS
11.04% of Net Assets
Memphis Shelby County Sports Authority		5.250			11/01/2026	Aa3		500,000		531,800
Memphis Shelby County Sports Authority		5.250			11/01/2027	Aa3		750,000		797,700
Memphis Shelby County TN Industrial Development Board		5.000			11/01/2030	Aa3		1,250,000		1,499,700
Memphis TN Refunding General Improvement		5.000			04/01/2031	Aa2		800,000		931,232
Metropolitan Government Nashville & Davidson County Convention Center		5.000			07/01/2026	A1		630,000		676,444
Metropolitan Government Nashville & Davidson County Sports Authority		5.000			08/01/2031	Aa3		1,500,000		1,712,925
Metropolitan Government Nashville & Davidson County Sports Authority		5.000			08/01/2038	Aa3		755,000		855,392
Pigeon Forge Industrial Development Board		5.000			06/01/2024	AA*		600,000		663,438
Pigeon Forge Industrial Development Board		5.000			06/01/2027	AA*		1,400,000		1,545,081
Pigeon Forge Industrial Development Board**		5.000			06/01/2029	AA*		2,120,000		2,333,760
Pigeon Forge Industrial Development Board		5.000			06/01/2034	AA*		850,000		933,632
										12,481,104
HOSPITAL AND HEALTHCARE BONDS
8.96% of Net Assets
Chattanooga TN Health Educational and Housing Facilities Board		5.000			01/01/2033	Baa1		500,000		541,565
Jackson TN Hospital Jackson Madison County Hospital		5.000			04/01/2036	A1		995,000		1,136,380
Metropolitan Government Nashville & Davidson County TN Health		5.000			07/01/2035	A3		2,205,000		2,539,255
Metropolitan Government Nashville & Davidson County TN Health		5.000			07/01/2040	A3		950,000		1,086,335
Rutherford County TN Health &Educational Facilities Ascension Health		5.000			11/15/2040	Aa2		1,500,000		1,585,065
Shelby County TN Health Education & Housing Facilities		5.000			05/01/2027	A1		750,000		836,430
Shelby County TN Health Education & Housing Facilities		5.000			05/01/2036	A1		1,535,000		1,812,144
Shelby County TN Health Education & Housing Facilities		5.000			05/01/2035	A1		500,000		591,630
										10,128,804
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS
8.29% of Net Assets
Franklin County TN Health & Education Facilities Board Revenue		5.000			09/01/2030	A+*		200,000		225,108
Metropolitan Government Nashville & Davidson County Vanderbilt University		5.000			10/01/2028	Aa2		1,150,000		1,312,460
Metropolitan Government Nashville & Davidson County Vanderbilt University		5.000			10/01/2034	Aa2		790,000		837,993
Shelby County TN Health Education & Housing Facilities Board Rhodes College		5.000			08/01/2040	A1		650,000		754,371
Shelby County TN Health Educational & Housing Facilities Board Rhodes College		4.000			08/01/2037	A1		1,030,000		1,111,617
TN State School Bond Authority		5.000			11/01/2043	Aa1		1,000,000		1,129,790
TN State School Bond AuthorityHigher Educational Facilities		5.000			11/01/2037	Aa1		1,400,000		1,635,970
TN State School Bond AuthorityHigher Educational Facilities		5.000			11/01/2040	Aa1		2,000,000		2,367,920
										9,375,229

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, 2017

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
REFUNDING BONDS
5.98% of Net Assets
Blount County TN		5.000	%		06/01/2037	Aa2	$	200,000	$	236,424
Chattanooga TN Industrial Development Board Lease Rent Revenue		5.000			10/01/2027	A2		1,000,000		1,002,830
Manchester TN		5.000			06/01/2038	A2		80,000		85,606
Memphis TN General Improvement		5.000			04/01/2034	Aa2		500,000		576,960
Memphis TN General Improvement		5.000			04/01/2039	Aa2		250,000		287,695
Memphis TN Refunding		5.000			04/01/2030	Aa2		1,000,000		1,167,220
Memphis TN Refunding		5.000			04/01/2033	Aa2		250,000		289,743
Memphis TN Refunding		5.000			04/01/2035	Aa2		250,000		288,638
Memphis TN Refunding		5.000			04/01/2040	Aa2		500,000		575,705
Metropolitan Government Nashville & Davidson County TN		5.000			01/01/2033	Aa2		750,000		903,060
Shelby County TN Refunding Series A		5.000			03/01/2026	Aa1		1,200,000		1,353,131
										6,767,012
SCHOOL IMPROVEMENT BONDS
5.19% of Net Assets
Montgomery City TN		4.000			04/01/2037	AA+*		1,920,000		2,100,096
Rhea County TN**		5.000			04/01/2029	A1		1,385,000		1,548,846
Shelby County TN		5.000			04/01/2037	Aa1		500,000		599,495
Wilson County TN		4.000			04/01/2039	AA+*		1,495,000		1,625,215
										5,873,652
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS
3.92% of Net Assets
Memphis Shelby County TN PortAuthority Community Development		5.000			04/01/2035	Aa3		625,000		686,075
Memphis TN Refunding and General Impact General Obligation		5.000			05/01/2036	Aa2		850,000		935,128
Metropolitan Government Nashville & Davidson Counties TN		4.000			07/01/2033	Aa2		1,470,000		1,625,379
Metropolitan Government Nashville & Davidson County TN		4.000			07/01/2034	Aa2		500,000		550,650
Springfield TN Public Improvement		4.500			03/01/2024	A1		565,000		634,359
										4,431,591
AIRPORT BONDS
2.30% of Net Assets
Metropolitan Nashville Airport Authority		5.000			07/01/2034	A1		800,000		943,288
Metropolitan Nashville Airport Authority		5.000			07/01/2035	A1		250,000		294,403
Metropolitan Nashville Airport Authority		5.000			07/01/2040	A1		1,160,000		1,359,067
										2,596,758
STATE AND LOCAL MORTGAGE/HOUSING BONDS
1.62% of Net Assets
TN Housing Development Agency		5.000			07/01/2029	Aa1		315,000		315,173
TN Housing Development Agency Homeownership Program		5.000			07/01/2029	Aa1		350,000		353,574
TN Housing Development Agency Homeownership Program		4.700			07/01/2027	Aa1		655,000		668,434
TN Housing Development Agency Homeownership Program		4.850			01/01/2025	Aa2		465,000		491,612
										1,828,793
INDUSTRIAL REVENUE BONDS
0.82% of Net Assets
Industrial Development Board TN Blount County		5.000			06/01/2027	Aa3		850,000		930,385
ESCROWED TO MATURITY BONDS
.01% of Net Assets
Johnson City TN Health & Educational Facilities Medical Center		5.000			07/01/2018	NR		10,000		10,017
Total Investments 98.84% of Net Assets (cost $107,429,233) (See (a) below for further explanation)									$	111,772,540
Other assets in excess of liabilities 1.16%										1,306,445
Net Assets 100%									$	113,078,985

# 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

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, 2017

@ Rated by Fitch’s Investors Service

NR Not Rated

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

(a) Cost for federal income tax purposes is $107,429,233 and net unrealized appreciation of investments is as follows:

Unrealized appreciation	$	4,466,649
Unrealized depreciation		(123,342	)
Net unrealized appreciation	$	4,343,307

Other Information

The following is a summary of the inputs used, as of December 31, 2017, 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		111,772,540
Level 3	Significant Unobservable Inputs		—
		$	111,772,540

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

37

TENNESSEE TAX-FREE INCOME SERIES

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2017

UNAUDITED

ASSETS:
Investments in securities, at fair value (Cost: $107,429,233)		$	111,772,540
Cash			435,939
Receivable for fund shares sold			15,649
Interest receivable			1,345,111
Total assets			113,569,239
LIABILITIES:
Payable for:
Distributions to shareholders	229,155
Fund shares redeemed	139,265
Investment advisory fee	48,707
Transfer agent fee	12,216
Insurance expense	11,141
Registration expense	11,030
Audit fees	11,014
Legal fees	6,999
Pricing expense	5,792
Printing expense	4,449
Accrued expenses	10,486
Total liabilities			490,254
NET ASSETS:
Capital			109,366,204
Accumulated net realized loss on investment transactions			(630,526	)
Net unrealized appreciation in value of investments			4,343,307
Net assets at value		$	113,078,985
NET ASSET VALUE, offering price and redemption price per share (9,861,930 shares outstanding; unlimited number of shares authorized; no par value)		$	11.47

STATEMENT OF OPERATIONS

For the six months ended December 31, 2017

Net investment income:
Interest income	$	1,913,397
Expenses:
Investment advisory fee		277,872
Transfer agent fee		70,402
Professional fees		13,815
Custodian expense		10,369
Trustees fees		5,903
Other expenses		21,369
Total expenses		399,730
Fees waived by Adviser		(6,405	)
Custodian expense reduction		(276	)
Net expenses		393,049
Net investment income		1,520,348
Realized and unrealized gain on investments:
Net realized gain		18,812
Net change in unrealized appreciation/depreciation		213,754
Net realized and unrealized gain on investments		232,566
Net increase in net assets resulting from operations	$	1,752,914

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

38

TENNESSEE TAX-FREE INCOME SERIES

STATEMENTS OF CHANGES IN NET ASSETS

For the six months ended December 31, 2017 and the year ended June 30, 2017 UNAUDITED

	Six Months Ended 12/31/2017			Year Ended 06/30/2017
Operations:
Net investment income	$	1,520,348		$	3,107,543
Net realized gain/(loss) on investments		18,812			(63,537	)
Net change in unrealized appreciation/depreciation		213,754			(4,362,020	)
Net increase/(decrease) in net assets resulting from operations		1,752,914			(1,318,014	)
Distributions from net investment income		(1,520,348	)		(3,107,543	)
Net fund share transactions (Note 4)		4,586,817			(4,145,515	)
Total increase/(decrease)		4,819,383			(8,571,072	)
Net assets:
Beginning of year		108,259,602			116,830,674
End of period	$	113,078,985		$	108,259,602

FINANCIAL HIGHLIGHTS

Selected data for a share outstanding:	Six Months Ended 12/31/2017			For the years ended June 30,
				2017			2016			2015			2014			2013
Net asset value, beginning of year		$11.44			$11.89			$11.51			$11.55			$11.27			$11.56
Income from investment operations:
Net investment income		0.16			0.33			0.34			0.36			0.37			0.36
Net gains/(losses) on securities		0.03			(0.45	)		0.38			(0.04	)		0.28			(0.29	)
Total from investment operations		0.19			(0.12	)		0.72			0.32			0.65			0.07
Less distributions:
Distributions from net investment income		(0.16	)		(0.33	)		(0.34	)		(0.36	)		(0.37	)		(0.36	)
Net asset value, end of period		$11.47			$11.44	��		$11.89			$11.51			$11.55			$11.27
Total return		1.64%	(b)		(1.03)%			6.40%			2.77%			5.86%			0.56%
Net assets, end of period (in thousands)		$113,079			$108,260			$116,831			$109,672			$104,894			$105,696
Ratio of net expenses to average net assets (a)		0.71%	(c)		0.70%			0.71%			0.70%			0.71%			0.65%
Ratio of gross expenses to average net assets		0.72%	(c)		0.71%			0.71%			0.70%			0.71%			0.69%
Ratio of net investment income to average net assets		2.73%	(c)		2.82%			2.96%			3.08%			3.25%			3.10%
Portfolio turnover		8.46%	(b)		9.27%			9.67%			7.01%			14.44%			7.37%

(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.

39

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

SCHEDULE OF PORTFOLIO INVESTMENTS

Tennessee Municipal Bonds

December 31, 2017

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
PREREFUNDED BONDS
22.37% of Net Assets
Blount County TN Public Building Authority		4.000	%		06/01/2020	Aa2	$	150,000	$	155,060
Blount County TN Public Building Authority		5.000			06/01/2021	Aa2		175,000		183,407
Chattanooga TN Electric Revenue**		5.000			09/01/2021	AA+*		400,000		402,352
Columbia TN Electric System Revenue		5.000			09/01/2021	Aa3		165,000		168,957
Johnson City TN Electric Revenue		4.500			05/01/2021	Aa2		50,000		50,502
Memphis TN Center City Revenue Finance Corporation		5.250			11/01/2025	Aa3		100,000		113,017
Memphis TN General Improvement		5.000			04/01/2022	Aa2		185,000		193,044
Memphis TN General Obligation		5.000			05/01/2020	Aa2		175,000		182,823
Metropolitan Government Nashville & Davidson County TN		4.000			07/01/2023	NR		140,000		148,007
Metropolitan Government Nashville & Davidson County TN		4.000			07/01/2024	NR		20,000		21,996
Robertson County TN School		4.000			06/01/2020	Aa3		250,000		252,533
Shelby County TN Health Educational & Housing Facilities		5.250			09/01/2020	A1		400,000		402,504
										2,274,202
PUBLIC FACILITIES REVENUE BONDS
18.98% of Net Assets
Memphis TN Center City Revenue Finance Corporation Sports Facility		4.000			02/01/2021	Aa3		100,000		106,362
Memphis TN Center City Revenue Finance Corporation Sports Facility		4.000			02/01/2022	Aa3		220,000		238,180
Memphis TN Center City Revenue Finance Corporation Sports Facility		5.000			02/01/2026	Aa3		100,000		116,430
Memphis-Shelby County TN Industrial Development Board		5.000			11/01/2024	Aa3		250,000		297,358
Metropolitan Government Nashville & Davidson County TN Convention Center		3.750			07/01/2018	A1		100,000		101,170
Metropolitan Government Nashville & Davidson County TN Sports Authority		5.250			08/01/2024	Aa3		190,000		222,057
Metropolitan Government Nashville & Davidson County TN Sports Authority		5.250			08/01/2025	Aa3		195,000		227,789
Metropolitan Government Nashville & Davidson County TN Sports Authority		5.250			08/01/2026	Aa3		100,000		116,700
Metropolitan Government Nashville & Davidson County TN Sports Authority		5.000			07/01/2023	Aa3		125,000		144,670
Pigeon Forge Industrial Development Board		5.000			06/01/2024	AA*		175,000		193,503
Pigeon Forge Public Facilities**		5.000			06/01/2023	AA*		150,000		165,965
										1,930,184
MUNICIPAL UTILITY REVENUE BONDS
12.14% of Net Assets
Castalian Springs Bethpage TN Waterworks		3.000			01/01/2019	A+*		175,000		176,194
Chattanooga TN Electric Revenue**		5.000			09/01/2023	AA+*		250,000		292,803
Harpeth Valley TN Utilities District Davidson & Williamson Counties		4.000			09/01/2024	AA*		225,000		254,473
Knoxville TN Gas Revenue		4.000			03/01/2025	Aa2		240,000		264,835
Metropolitan Government Nashville & Davidson County TN Water & Sewer		5.250			01/01/2019	Aa2		125,000		129,559
Metropolitan Government Nashville & Davidson County TN Water & Sewer		5.000			07/01/2026	Aa3		100,000		116,303
										1,234,167
REFUNDING BONDS
11.90% of Net Assets
Memphis TN General Improvement**		5.000			11/01/2023	Aa2		350,000		410,323
Metropolitan Government Nashville & Davidson County TN		5.000			07/01/2021	Aa2		175,000		189,422
Metropolitan Government Nashville & Davidson County TN		4.000			07/01/2023	Aa2		110,000		116,458
Metropolitan Government Nashville & Davidson County TN		4.000			07/01/2024	Aa2		80,000		87,766
Rhea County TN		3.000			04/01/2018	A1		200,000		200,692
Unicoi County TN Refunding		5.250			04/01/2019	A1		200,000		205,494
										1,210,155
SCHOOL IMPROVEMENT BONDS
10.70% of Net Assets
Gibson County Special School District		5.000			04/01/2021	AA*		250,000		275,512
Kingsport TN General Obligation Unlimited		4.000			09/01/2028	Aa2		100,000		111,571

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

40

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

SCHEDULE OF PORTFOLIO INVESTMENTS

Tennessee Municipal Bonds

December 31, 2017

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
Lincoln County TN		5.250	%		04/01/2019	Aa3	$	200,000	$	209,034
Rhea County TN		4.000			04/01/2025	A1		250,000		268,285
Robertson County TN School and Public Improvement		4.000			06/01/2019	AA*		100,000		103,375
Sumner County TN		5.000			12/01/2025	AA+*		100,000		119,874
										1,087,651
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS
9.91% of Net Assets
Franklin County TN Health & Educational Facilities Board**		4.000			09/01/2019	A+*		350,000		363,093
Franklin County TN Health & Educational Facilities Board		4.000			09/01/2024	A+*		135,000		146,480
Shelby County TN Health Educational & Housing Facilities Board		4.000			08/01/2027	A1		225,000		249,343
Shelby County TN Health Educational & Housing Facilities Rhodes College		4.000			08/01/2025	A1		100,000		112,889
Shelby County TN Health Educational & Housing Facilities Rhodes College		5.000			08/01/2022	A1		120,000		135,989
										1,007,794
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS
4.89% of Net Assets
Gallatin County Capital Outlay Notes		4.625			01/01/2019	AA+*		100,000		103,107
Metropolitan Government Nashville & Davidson County TN		5.000			07/01/2027	Aa2		200,000		241,624
Sevier County TN Public Building Authority		5.000			06/01/2018	AA-*		150,000		152,154
										496,885
HOSPITAL AND HEALTHCARE BONDS
2.70% of Net Assets
Shelby County TN Health Educational & Housing Facilities		4.250			09/01/2020	BBB+*		265,000		274,529
STATE AND LOCAL MORTGAGE/HOUSING BONDS
2.56% of Net Assets
TN Housing Development Agency		4.800			07/01/2024	Aa1		95,000		95,015
TN Housing Development Agency Homeownership Program		1.900			07/01/2019	Aa1		165,000		165,464
										260,479
AIRPORT BONDS
1.08% of Net Assets
Metropolitan Nashville Airport Authority		4.000			07/01/2023	A1		100,000		110,268
Total Investments 97.23% of Net Assets (cost $9,806,945) (See (a) below for further explanation)									$	9,886,314
Other assets in excess of liabilities 2.77%										281,398
Net Assets 100%									$	10,167,712

# 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

@ Rated by Fitch’s Investors Service

NR Not Rated

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

(a) Cost for federal income tax purposes is $9,806,945 and net unrealized appreciation of investments is as follows:

Unrealized appreciation	$	100,496
Unrealized depreciation		(21,127	)
Net unrealized appreciation	$	79,369

Other Information

The following is a summary of the inputs used, as of December 31, 2017, 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		9,886,314
Level 3	Significant Unobservable Inputs		—
		$	9,886,314

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

41

TENNESSEE TAX-FREE SHORT-TO-MEDIUM SERIES

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2017 UNAUDITED

ASSETS:
Investments in securities, at fair value (Cost: $9,806,945)		$	9,886,314
Cash			172,782
Interest receivable			128,581
Total assets			10,187,677
LIABILITIES:
Payable for:
Distributions to shareholders	2,438
Fund shares redeemed	3,498
Investment advisory fee	2,360
Custodian expense	2,357
Insurance expense	1,904
Pricing fees	1,586
Printing expense	1,434
Transfer agent fee	1,417
Trustees fees	219
Accrued expenses	2,752
Total liabilities			19,965
NET ASSETS:
Capital			10,316,294
Accumulated net realized loss on investment transactions			(227,951	)
Net unrealized appreciation in value of investments			79,369
Net assets at value		$	10,167,712
NET ASSET VALUE, offering price and redemption price per share (957,658 shares outstanding; unlimited number of shares authorized; no par value)		$	10.62

STATEMENT OF OPERATIONS

For the six months ended December 31, 2017

Net investment income:
Interest income	$	119,278
Expenses:
Investment advisory fee		25,939
Transfer agent fee		7,782
Professional fees		4,350
Custodian expense		3,822
Registration fees		2,996
Pricing fees		2,520
Trustees fees		562
Other expenses		1,823
Total expenses		49,794
Fees waived by Adviser		(13,302	)
Custodian expense reduction		(65	)
Net expenses		36,427
Net investment income		82,851
Realized and unrealized gain/(loss) on investments:
Net realized gain		469
Net change in unrealized appreciation/depreciation		(76,824	)
Net realized and unrealized loss on investments		(76,355	)
Net increase in net assets resulting from operations	$	6,496

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

42

TENNESSEE TAX-FREE SHORT-TO-MEDIUM SERIES

STATEMENTS OF CHANGES IN NET ASSETS

For the six months ended December 31, 2017 and the year ended June 30, 2017 UNAUDITED

	Six Months Ended 12/31/2017			Year Ended 06/30/2017
Operations:
Net investment income	$	82,851		$	176,516
Net realized gain/(loss) on investments		469			(716	)
Net change in unrealized appreciation/depreciation		(76,824	)		(238,149	)
Net increase/(decrease) in net assets resulting from operations		6,496			(62,349	)
Distributions from net investment income		(82,851	)		(176,516	)
Net fund share transactions (Note 4)		(254,461	)		(603,058	)
Total decrease		(330,816	)		(841,923	)
Net assets:
Beginning of year		10,498,528			11,340,451
End of period	$	10,167,712		$	10,498,528

FINANCIAL HIGHLIGHTS

Selected data for a share outstanding:	Six Months Ended 12/31/2017			For the years ended June 30,
				2017			2016			2015			2014			2013
Net asset value, beginning of year		$10.70			$10.93			$10.74			$10.81			$10.75			$11.01
Income from investment operations:
Net investment income		0.09			0.17			0.16			0.18			0.19			0.20
Net gains/(losses) on securities both realized and unrealized		(0.08	)		(0.23	)		0.19			(0.07	)		0.06			(0.26	)
Total from investment operations		0.01			(0.06	)		0.35			0.11			0.25			(0.06	)
Less distributions:
Distributions from net investment income		(0.09	)		(0.17	)		(0.16	)		(0.18	)		(0.19	)		(0.20	)
Net asset value, end of period		$10.62			$10.70			$10.93			$10.74			$10.81			$10.75
Total return		0.06%	(b)		(0.54)%			3.28%			0.99%			2.36%			(0.53)%
Net assets, end of period (in thousands)		$10,168			$10,499			$11,340			$11,033			$10,785			$11,021
Ratio of net expenses to average net assets (a)		0.71%	(c)		0.75%			0.86%			0.85%			0.86%			0.86%
Ratio of gross expenses to average net assets		0.97%	(c)		0.88%			0.86%			0.85%			0.86%			0.86%
Ratio of net investment income to average net assets		1.61%	(c)		1.59%			1.47%			1.64%			1.78%			1.86%
Portfolio turnover		3.53%	(b)		10.95%			7.37%			14.32%			11.38%			20.56%

(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.

43

DUPREE MUTUAL FUNDS — INTERMEDIATE GOVERNMENT BOND SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

U.S. Government Securities and Agencies

December 31, 2017

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
FEDERAL FARM CREDIT
62.51% of Net Assets
Federal Farm Credit Bank**		5.250	%		10/25/2022	Aaa	$	1,500,000	$	1,700,855
Federal Farm Credit Bank		5.050			12/21/2021	Aaa		370,000		410,095
Federal Farm Credit Bank**		5.840			07/20/2022	Aaa		2,650,000		3,056,268
Federal Farm Credit Bank**		5.250			05/10/2022	Aaa		2,000,000		2,250,010
Federal Farm Credit Bank		5.125			11/28/2022	Aaa		2,000,000		2,260,372
										9,677,600
FEDERAL HOME LOAN BANK
34.95% of Net Assets
Federal Home Loan Bank		2.970			08/02/2027	Aaa		500,000		491,639
Federal Home Loan Bank		5.365			09/09/2024	Aaa		1,750,000		2,066,920
Federal Home Loan Bank		5.000			12/10/2021	Aaa		500,000		553,970
Federal Home Loan Bank		5.750			06/10/2022	Aaa		2,000,000		2,297,890
										5,410,419
FEDERAL NATIONAL MORTGAGE ASSOCIATION
1.60% of Net Assets
Federal National Mortgage Association		8.100			08/12/2019	Aaa		225,000		246,986
Total Investments 99.06% of Net Assets (cost $14,702,208) (See (a) below for further explanation)									$	15,335,005
Other assets in excess of liabilities .94%										145,355
Net Assets 100%									$	15,480,360

# 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

@ Rated by Fitch’s Investors Service

NR Not Rated

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

(a) Cost for federal income tax purposes is $14,702,208 and net unrealized appreciation of investments is as follows:

Unrealized appreciation	$	640,315
Unrealized depreciation		(7,518	)
Net unrealized appreciation	$	632,797

Other Information

The following is a summary of the inputs used, as of December 31, 2017, 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	$	15,335,005
Level 3	Significant Unobservable Inputs		—
		$	15,335,005

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

44

INTERMEDIATE GOVERNMENT BOND SERIES

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2017 UNAUDITED

ASSETS:
Investments in securities, at fair value (Cost: $14,702,208)		$	15,335,005
Cash			9,062
Interest receivable			160,570
Total assets			15,504,637
LIABILITIES:
Payable for:
Distributions to shareholders	6,422
Fund shares redeemed	4,179
Investment advisory fee	2,639
Transfer agent fee	4,410
Trustees fees	922
Accrued expenses	5,705
Total liabilities			24,277
NET ASSETS:
Capital			15,003,013
Accumulated net realized loss on investment transactions			(155,450	)
Net unrealized appreciation in value of investments			632,797
Net assets at value		$	15,480,360
NET ASSET VALUE, offering price and redemption price per share (1,530,600 shares outstanding; unlimited number of shares authorized; no par value)		$	10.11

STATEMENT OF OPERATIONS

For the six months ended December 31, 2017

Net investment income:
Interest income	$	247,357
Expenses:
Investment advisory fee		15,971
Transfer agent fee		11,978
Custodian expense		4,519
Compliance fees		3,200
Registration expense		2,527
Pricing fees		2,521
Professional fees		1,956
Trustees fees		851
Other expenses		3,747
Total expenses		47,270
Custodian expense reduction		(120	)
Net expenses		47,150
Net investment income		200,207
Realized and unrealized gain/(loss) on investments:
Net realized gain		3,617
Net change in unrealized appreciation/depreciation		(180,459	)
Net realized and unrealized loss on investments		(176,842	)
Net increase in net assets resulting from operations	$	23,365

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

45

INTERMEDIATE GOVERNMENT BOND SERIES

STATEMENTS OF CHANGES IN NET ASSETS

For the six months ended December 31, 2017 and the year ended June 30, 2017 UNAUDITED

	Six Months Ended 12/31/2017			Year Ended 06/30/2017
Operations:
Net investment income	$	200,207		$	405,344
Net realized gain on investments		3,617			31,817
Net change in unrealized appreciation/depreciation		(180,459	)		(778,271	)
Net increase/(decrease) in net assets resulting from operations		23,365			(341,110	)
Distributions from net investment income		(200,207	)		(405,344	)
Net fund share transactions (Note 4)		50,757			(1,123,583	)
Total decrease		(126,085	)		(1,870,037	)
Net assets:
Beginning of year		15,606,445			17,476,482
End of period	$	15,480,360		$	15,606,445

FINANCIAL HIGHLIGHTS

Selected data for a share outstanding:	Six Months Ended 12/31/2017			For the years ended June 30,
				2017			2016			2015			2014			2013
Net asset value, beginning of year		$10.23			$10.70			$10.29			$10.25			$10.05			$10.58
Income from investment operations:
Net investment income		0.13			0.26			0.26			0.26			0.28			0.30
Net gains/(losses) on securities		(0.12	)		(0.47	)		0.41			0.04			0.20			(0.53	)
Total from investment operations		0.01			(0.21	)		0.67			0.30			0.48			(0.23	)
Less distributions:
Distributions from net investment income		(0.13	)		(0.26	)		(0.26	)		(0.26	)		(0.28	)		(0.30	)
Net asset value, end of period		$10.11			$10.23			$10.70			$10.29			$10.25			$10.05
Total return		0.09%	(b)		(1.99)%			6.57%			2.96%			4.89%			(2.34)%
Net assets, end of period (in thousands)		$15,480			$15,606			$17,476			$18,728			$21,224			$23,395
Ratio of net expenses to average net assets (a)		0.60%	(c)		0.58%			0.53%			0.51%			0.56%			0.48%
Ratio of gross expenses to average net assets		0.60%	(c)		0.58%			0.53%			0.51%			0.56%			0.54%
Ratio of net investment income to average net assets		2.53%	(c)		2.49%			2.47%			2.54%			2.81%			2.77%
Portfolio turnover		1.06%	(b)		0.00%			0.00%			2.44%			15.33%			16.02%

(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.

46

DUPREE MUTUAL FUNDS — TAXABLE MUNICIPAL BOND SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

Taxable Municipal Bonds

December 31, 2017

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
PUBLIC FACILITIES REVENUE BONDS
30.82% of Net Assets
Buncombe County NC Limited Obligation Build America		6.800	%		06/01/2030	Aa1	$	250,000	$	271,600
Decatur GA Urban Redevelopment Agency Revenue Build America		6.920			01/01/2038	Aa1		150,000		166,142
Franklin County OH ConventionFacilities Authority		6.640			12/01/2042	Aa2		240,000		309,190
Grand Junction CO Certificates of Participation Build America		7.500			12/01/2030	A+*		425,000		472,566
Metropolitan Government Nashville & Davidson County TN		7.431			07/01/2043	A1		190,000		265,566
Pennington County SD Certificates of Participation Build America		7.200			06/01/2037	Aa1		750,000		831,045
Pompano Beach FL Certificates of Participation		5.579			01/01/2040	A1		225,000		240,703
Rhode Island Convention Center		6.060			05/15/2035	Aa3		70,000		82,783
Sarasota County FL Capital Improvement Revenue Build America		7.016			10/01/2040	AA+*		710,000		800,092
										3,439,687
MUNICIPAL UTILITY REVENUE BONDS
28.36% of Net Assets
Altoona PA Water Authority Sewer Revenue Build America		7.064			12/01/2040	AA*		425,000		469,825
Davie FL Water & Sewer Revenue Build America		6.849			10/01/2040	Aa3		40,000		44,286
FL State Utility Revenue		6.548			10/01/2040	A2		60,000		66,307
Heber UT Light & Power Build America		7.000			12/15/2030	A2		375,000		420,248
Louisville & Jefferson County KY Sewer District BABS		5.980			05/15/2040	Aa3		60,000		76,933
Metropolitan Government Nashville & Davidson County TN Recovery Zone		6.693			07/01/2041	Aa3		200,000		283,116
OK State Municipal Power Authority		6.310			01/01/2040	A2		195,000		246,520
Pigeon Forge TN Build America Recovery Zone		7.125			06/01/2040	AA*		300,000		381,786
Sedalia MO Certificates of Participation Build America**		7.300			06/01/2035	AA*		500,000		540,350
West Knox Utilities District Knox County TN Water and Sewer**		6.900			06/01/2040	AA+*		400,000		464,504
Williamsport PA Municipal Water Authority Build America		6.100			01/01/2040	A2		60,000		63,709
York County VA Sewer Revenue Build America		6.607			06/01/2040	Aa3		100,000		107,925
										3,165,509
SCHOOL IMPROVEMENT BONDS
14.18% of Net Assets
Armstrong School District PA Build America**		7.000			03/15/2041	AA*		750,000		842,857
CO State Building Excellent Schools Today Certificates of Participation**		7.017			03/15/2031	Aa2		400,000		451,696
Jefferson County TN Build America Bonds		6.625			06/01/2040	Aa3		250,000		288,138
										1,582,691
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS
9.93% of Net Assets
KY State Property & Buildings Build America**		5.921			11/01/2030	A1		250,000		296,733
Lincoln AL Build America Recovery Zone		6.800			06/01/2040	AA*		425,000		466,735
Scottsboro AL Build America Bonds		6.400			11/01/2040	A2		250,000		274,170
Utah County UT Excise Tax Revenue		7.130			12/01/2039	AA-*		65,000		70,497
										1,108,135
HOSPITAL AND HEALTHCARE BONDS
4.55% of Net Assets
Midland County TX Hospital District		6.440			05/15/2039	Aa3		185,000		228,682
University NC Chapel Hill Hospital Revenue Build America		6.329			02/01/2031	Aa3		250,000		278,910
										507,592
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS
3.51% of Net Assets
Mesa State College CO Auxiliary Facilities Build America		6.746			05/15/2042	Aa2		100,000		132,497
OK Development Finance Authority Lease Revenue		4.350			06/01/2047	AA-*		250,000		259,193
										391,690
TURNPIKES/TOLLROAD/HIGHWAY BONDS
2.87% of Net Assets
FL State Turnpike Authority Turnpike Revenue Build America		6.800			07/01/2039	Aa2		300,000		320,373

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

47

DUPREE MUTUAL FUNDS — TAXABLE MUNICIPAL BOND SERIES UNAUDITED

SCHEDULE OF PORTFOLIO INVESTMENTS

Taxable Municipal Bonds

December 31, 2017

Bond Description	Coupon			Maturity Date		Rating#	Par Value		Fair Value
MARINA/PORT AUTHORITY BONDS
2.49% of Net Assets
Miami Dade County FL Special Obligation		7.500	%		04/01/2040	Aa3	$	200,000	$	277,448
Total Investments 96.71% of Net Assets (cost $9,679,520) (See (a) below for further explanation)									$	10,793,125
Other assets in excess of liabilities 3.29%										367,097
Net Assets 100%									$	11,160,222

# 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

@ Rated by Fitch’s Investors Service

NR Not Rated

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

(a) Cost for federal income tax purposes is $9,679,520 and net unrealized appreciation of investments is as follows:

Unrealized appreciation	$	1,113,605
Unrealized depreciation		—
Net unrealized appreciation	$	1,113,605

Other Information

The following is a summary of the inputs used, as of December 31, 2017, 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		10,793,125
Level 3	Significant Unobservable Inputs		—
		$	10,793,125

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

48

TAXABLE MUNICIPAL BOND SERIES

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2017 UNAUDITED

ASSETS:
Investments in securities, at fair value (Cost: $9,679,520)		$	10,793,125
Cash			262,137
Interest receivable			127,650
Total assets			11,182,912
LIABILITIES:
Payable for:
Distributions to shareholders	12,888
Fund shares redeemed	121
Investment advisory fee	2,710
Transfer agent fee	1,376
Pricing expense	1,236
Trustees fees	990
Audit fees	881
Accrued expenses	2,488
Total liabilities			22,690
NET ASSETS:
Capital			10,086,066
Accumulated net realized loss on investment transactions			(39,449	)
Net unrealized appreciation in value of investments			1,113,605
Net assets at value		$	11,160,222
NET ASSET VALUE, offering price and redemption price per share (1,066,764 shares outstanding; unlimited number of shares authorized; no par value)		$	10.46

STATEMENT OF OPERATIONS

For the six months ended December 31, 2017

Net investment income:
Interest income	$	311,313
Expenses:
Investment advisory fee		27,959
Transfer agent fee		8,388
Custodian expense		4,033
Professional fees		3,124
Registration expense		2,505
Trustees fees		591
Miscellaneous expense		253
Other expenses		4,304
Total expenses		51,157
Fees waived by Adviser		(11,902	)
Custodian expense reduction		(108	)
Net expenses		39,147
Net investment income		272,166
Realized and unrealized gain/(loss) on investments:
Net realized gain		—
Net change in unrealized appreciation/depreciation		(19,196	)
Net realized and unrealized loss on investments		(19,196	)
Net increase in net assets resulting from operations	$	252,970

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

49

TAXABLE MUNICIPAL BOND SERIES

STATEMENT OF CHANGES IN NET ASSETS

For the six months ended December 31, 2017 and the year ended June 30, 2017 UNAUDITED

	Six Months Ended 12/31/2017			Year Ended 06/30/2017
Operations:
Net investment income	$	272,166		$	544,940
Net realized loss on investments		—			(4,449	)
Net change in unrealized appreciation/depreciation		(19,196	)		(462,915	)
Net increase in net assets resulting from operations		252,970			77,576
Distributions from net investment income		(272,166	)		(544,940	)
Distributions from capital gains		—			(74,266	)
Net fund share transactions (Note 4)		142,463			(601,874	)
Total increase/(decrease)		123,267			(1,143,504	)
Net assets:
Beginning of year		11,036,955			12,180,459
End of period	$	11,160,222		$	11,036,955

FINANCIAL HIGHLIGHTS

Selected data for a share outstanding:	Six Months Ended 12/31/2017			For the years ended June 30,
				2017			2016			2015			2014			2013
Net asset value, beginning of period		$10.48			$10.98			$10.53			$10.57			$10.45			$10.82
Income from investment operations:
Net investment income		0.26			0.47			0.50			0.52			0.51			0.51
Net gains/(losses) on securities		(0.02	)		(0.43	)		0.45			(0.04	)		0.18			(0.36	)
Total from investment operations		0.24			0.04			0.95			0.48			0.69			0.15
Less distributions:
Distributions from net investment income		(0.26	)		(0.47	)		(0.50	)		(0.52	)		(0.51	)		(0.51	)
Distributions from capital gains		0.00			(0.07	)		0.00			0.00			(0.06	)		(0.01	)
Total distributions		(0.26	)		(0.54	)		(0.50	)		(0.52	)		(0.57	)		(0.52	)
Net asset value, end of period		$10.46			$10.48			$10.98			$10.53			$10.57			$10.45
Total return		2.29%	(b)		0.78%			9.29%			4.49%			6.90%			1.35%
Net assets, end of period (in thousands)		$11,160			$11,037			$12,180			$11,303			$12,369			$16,006
Ratio of net expenses to average net assets (a)		0.71%	(c)		0.62%			0.86%			0.83%			0.89%			0.83%
Ratio of gross expenses to average net assets		0.92%	(c)		0.74%			0.86%			0.83%			0.89%			0.83%
Ratio of net investment income to average net assets		4.91%	(c)		4.79%			4.71%			4.80%			4.95%			4.71%
Portfolio turnover		0.00%	(b)		11.04%			10.55%			8.45%			9.71%			9.57%

(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.

50

DUPREE MUTUAL FUNDS UNAUDITED

NOTES TO FINANCIAL STATEMENTS

December 31, 2017

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.

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 (“ASC”) Topic 946 Financial Services — Investment Companies including FASB Accounting Standard Update ASU 2013-08.

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 (the “Board”). These procedures involve the use of matrix pricing models which take into consideration price quotations or appraisals for these securities, yield, stability, risk, quality, coupon rate, maturity, type of issue, trading characteristics, special circumstances of a security or trading market, and any other factors or market data considered relevant in determining the value. The procedures also include weekly verification of market quotations provided by two independent pricing services. A bond valuation that is not supported by a valuation source requires management to fair value the security in consultation with the Board’s Valuation Committee. The Board has adopted policies and procedures for the valuation of the Trust’s investments (the “Valuation Procedures”). Pursuant to the Valuation Procedures, the Valuation Committee, consisting of all of the Trustees, has 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 FASB 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

51

DUPREE MUTUAL FUNDS UNAUDITED

NOTES TO FINANCIAL STATEMENTS

December 31, 2017

1. Organization and Significant Accounting Policies, continued

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 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 Funds’ 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, 2017, 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 six months ended December 31, 2017.

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 six months ended December 31, 2017. 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, 2017, 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 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. GAAP.

52

DUPREE MUTUAL FUNDS UNAUDITED

NOTES TO FINANCIAL STATEMENTS

December 31, 2017

1. Organization and Significant Accounting Policies, continued

Distributions are payable:

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

G. Estimates

The preparation of 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, 2017 have been evaluated by the Funds’ adviser for potential impact to this report through the date the financial statements were issued. The Funds’ 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.

For the six months ended December 31, 2017, fees voluntarily waived by the Adviser were as follows:

	Fees waived by Adviser
Alabama Tax-Free Income Series	$	15,237
Kentucky Tax-Free Short-to-Medium Series		14,236
Mississippi Tax-Free Income Series		12,518
North Carolina Tax-Free Income Series		2,231
North Carolina Tax-Free Short-to-Medium Series		16,553
Tennessee Tax-Free Income Series		6,405
Tennessee Tax-Free Short-to-Medium Series		13,302
Taxable Municipal Bond Series		11,902

53

DUPREE MUTUAL FUNDS UNAUDITED

NOTES TO FINANCIAL STATEMENTS

December 31, 2017

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

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 0.15% on the first $20,000,000 of average net assets and 0.12% of all amounts in excess of $20,000,000 of average net assets for each Fund.

For the six months ended December 31, 2017, each member of the Board of Trustees received a fee of $28,000 per year plus $2,000 for each Audit Committee meeting attended. In addition, all 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 monthly net asset basis for each Fund. The 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, 2017, 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 Fund were as follows:

	Purchases		Sales/Calls
Alabama Tax-Free Income Series	$	1,621,316	$	1,573,079
Kentucky Tax-Free Income Series		69,748,007		71,255,468
Kentucky Tax-Free Short-to-Medium Series		-0-		4,113,650
Mississippi Tax-Free Income Series		466,540		1,135,702
North Carolina Tax-Free Income Series		10,755,613		11,142,505
North Carolina Tax-Free Short-to-Medium Series		1,999,066		2,582,515
Tennessee Tax-Free Income Series		14,215,650		9,295,007
Tennessee Tax-Free Short-to-Medium Series		355,942		605,969
Intermediate Government Bond Series		499,125		165,492-
Taxable Municipal Bond Series		184,431		-0-

4. Capital Shares

As of December 31, 2017 and June 30, 2017, 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, 2017						Year Ended June 30, 2017
	SHARES			AMOUNT			SHARES			AMOUNT
Shares sold		119,940		$	1,476,517			211,677		$	2,648,793
Shares reinvested		14,572			179,376			32,007			394,549
Shares redeemed		(116,353	)		(1,433,287	)		(383,910	)		(4,718,605	)
Net increase/(decrease)		18,159		$	222,606			(140,226	)	$	(1,675,263	)
KENTUCKY TAX-FREE INCOME SERIES	Six Months Ended December 31, 2017						Year Ended June 30, 2017
	SHARES			AMOUNT			SHARES			AMOUNT
Shares sold		6,059,060		$	47,080,792			13,833,178		$	108,064,745
Shares reinvested		1,092,110			8,474,772			2,206,512			17,150,787
Shares redeemed		(8,088,524	)		(62,650,304	)		(15,318,951	)		(119,301,302	)
Net increase/(decrease)		(937,354	)	$	(7,094,740	)		720,739		$	5,914,230

54

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NOTES TO FINANCIAL STATEMENTS

December 31, 2017

4. Capital Shares, continued

KENTUCKY TAX-FREE SHORT-TO-MEDIUM SERIES	Six Months Ended December 31, 2017						Year Ended June 30, 2017
	SHARES			AMOUNT			SHARES			AMOUNT
Shares sold		641,160		$	3,423,657			4,743,042		$	25,162,542
Shares reinvested		64,098			341,040			137,343			732,089
Shares redeemed		(1,555,456	)		(8,313,107	)		(6,971,396	)		(36,997,145	)
Net decrease		(850,198	)	$	(4,548,410	)		(2,091,011	)	$	(11,102,514	)
MISSISSIPPI TAX-FREE INCOME SERIES	Six Months Ended December 31, 2017						Year Ended June 30, 2017
	SHARES			AMOUNT			SHARES			AMOUNT
Shares sold		24,573		$	299,748			256,134		$	3,117,575
Shares reinvested		4,922			59,956			9,232			111,987
Shares redeemed		(79,376	)		(966,412	)		(156,182	)		(1,896,285	)
Net increase/(decrease)		(49,881	)	$	(606,708	)		109,184		$	1,333,277
NORTH CAROLINA TAX-FREE INCOME SERIES	Six Months Ended December 31, 2017						Year Ended June 30, 2017
	SHARES			AMOUNT			SHARES			AMOUNT
Shares sold		702,213		$	8,125,213			2,229,529		$	25,899,779
Shares reinvested		97,765			1,131,628			220,270			2,540,985
Shares redeemed		(882,679	)		(10,206,236	)		(2,852,231	)		(32,629,726	)
Net decrease		(82,701	)	$	(949,395	)		(402,432	)	$	(4,188,962	)
NORTH CAROLINA TAX-FREE SHORT-TO-MEDIUM SERIES	Six Months Ended December 31, 2017						Year Ended June 30, 2017
	SHARES			AMOUNT			SHARES			AMOUNT
Shares sold		133,554		$	1,449,467			408,759		$	4,423,829
Shares reinvested		11,784			127,730			23,993			260,185
Shares redeemed		(208,646	)		(2,265,236	)		(685,824	)		(7,391,117	)
Net decrease		(63,308	)	$	(688,039	)		(253,072	)	$	(2,707,103	)
TENNESSEE TAX-FREE INCOME SERIES	Six Months Ended December 31, 2017						Year Ended June 30, 2017
	SHARES			AMOUNT			SHARES			AMOUNT
Shares sold		779,575		$	8,938,475			1,098,763		$	12,594,742
Shares reinvested		92,862			1,064,663			187,564			2,150,826
Shares redeemed		(472,675	)		(5,416,321	)		(1,647,646	)		(18,891,083	)
Net increase/(decrease)		399,762		$	4,586,817			(361,319	)	$	(4,145,515	)
TENNESSEE TAX-FREE SHORT-TO-MEDIUM SERIES	Six Months Ended December 31, 2017						Year Ended June 30, 2017
	SHARES			AMOUNT			SHARES			AMOUNT
Shares sold		29,880		$	319,674			139,038		$	1,488,371
Shares reinvested		6,338			67,685			13,251			142,143
Shares redeemed		(59,834	)		(641,820	)		(208,786	)		(2,233,572	)
Net decrease		(23,616	)	$	(254,461	)		(56,497	)	$	(603,058	)

55

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NOTES TO FINANCIAL STATEMENTS

December 31, 2017

4. Capital Shares, continued

INTERMEDIATE GOVERNMENT BOND SERIES	Six Months Ended December 31, 2017						Year Ended June 30, 2017
	SHARES			AMOUNT			SHARES			AMOUNT
Shares sold		123,754		$	1,262,845			81,769		$	844,522
Shares reinvested		15,918			162,193			31,200			323,505
Shares redeemed		(135,059	)		(1,374,281	)		(220,899	)		(2,291,610	)
Net increase/(decrease)		4,613		$	50,757			(107,930	)	$	(1,123,583	)
TAXABLE MUNICIPAL BOND SERIES	Six Months Ended December 31, 2017						Year Ended June 30, 2017
	SHARES			AMOUNT			SHARES			AMOUNT
Shares sold		37,060		$	388,524			238,038		$	2,532,827
Shares reinvested		18,691			195,449			40,541			430,059
Shares redeemed		(42,152	)		(441,510	)		(335,074	)		(3,564,760	)
Net increase/(decrease)		13,599		$	142,463			(56,495	)	$	(601,874	)

5. Concentration of Credit Risk

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

6. Federal Income Taxes

At June 30, 2017, the Funds’ capital loss carry-forwards expire as follows:

					No Expiration
	2018		2019		Short-term		Long-term		Total
Alabama Tax Free Income Series	$	—	$	—	$	35,043	$	—	$	35,043
North Carolina Tax-Free Income Series		—		—		1,232,968		—		1,232,968
North Carolina Tax-Free Short-to-Medium Series		—		—		23,429		—		23,429
Tennessee Tax-Free Income Series		371,142		—		278,197		—		649,339
Tennessee Tax-Free Short-to-Medium Series		—		—		—		228,420		228,420
Intermediate Government Bond Series		—		—		120,261		38,806		159,067

During the year ended June 30, 2017, the following Funds utilized capital loss carry-forwards as follows:

	Amount
Alabama Tax-Free Income Series	$	1,271
Kentucky Tax-Free Short-to-Medium Series		26,089
Intermediate Government Bond Series		31,817

During the year ended June 30, 2017, the following Funds had capital losses expire:

	Amount
Kentucky Tax-Free Short-to-Medium Series	$	197,887

56

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NOTES TO FINANCIAL STATEMENTS

December 31, 2017

6. Federal Income Taxes, continued

Capital losses incurred after October 31 (“Post-October” losses) within the taxable year are deemed to arise on the first business day of the Fund’s next taxable year. The following Funds incurred and will elect to defer net capital losses during the fiscal year 2017 as follows:

	Post October Losses
Kentucky Tax-Free Income Series	$	(7,852	)
Kentucky Tax-Free Short-to-Medium Series		(184,790	)
Taxable Municipal Bond Series		(39,449	)

During the year ended June 30, 2017, 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 and sales of market discount bonds. Net assets were not affected by these reclassifications.

	Accumulated Net Realized Gain/(Loss)		Paid In Capital			Accumulated Net Investment Income/(Loss)
Kentucky Tax-Free Income Series	$	17,591	$	—		$	(17,591	)
Kentucky Tax-Free Short-to-Medium Series		197,887		(197,887	)		—
Mississippi Tax-Free Income Series		452		—			(452	)
North Carolina Tax-Free Income Series		1,763		—			(1,763	)

The tax character of distributions paid for the years ended June 30, 2017 and 2016 were as follows:

	2017						2016
	Tax Exempt Income		Ordinary Income		Long-Term Capital Gain		Tax Exempt Income		Ordinary Income		Long-Term Capital Gain
Alabama Tax-Free Income Series	$	839,451	$	—	$	—	$	839,350	$	—	$	—
Kentucky Tax-Free Income Series		30,392,350		—		393,040		31,348,902		—		258,021
Kentucky Tax-Free Short-to-Medium Series		1,410,940		—		—		1,645,818		—		—
Mississippi Tax-Free Income Series		336,322		—		4,362		331,306		—		2,937
North Carolina Tax-Free Income Series		3,995,046		—		—		3,858,780		—		—
North Carolina Tax-Free Short-to-Medium Series		346,639		—		—		372,463		—		—
Tennessee Tax-Free Income Series		3,107,543		—		—		3,322,990		—		—
Tennessee Tax-Free Short-to-Medium Series		176,516		—		—		166,771		—		—
Intermediate Government Bond Series		—		405,344		—		—		445,511		—
Taxable Municipal Bond Series		—		544,940		74,266		—		545,161		—

At June 30, 2017, 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	$	—	$	102,109	$	—	$	880,024
Kentucky Tax-Free Income		—		3,249,237		—		38,820,395
Kentucky Tax-Free Short-to-Medium		—		48,843		—		1,472,796
Mississippi Tax-Free Income		—		59,600		2,124		545,163
North Carolina Tax-Free Income		—		369,490		—		3,814,897
North Carolina Tax-Free Short-to-Medium		—		6,765		—		253,894
Tennessee Tax-Free Income		—		214,141		—		4,129,553

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6. Federal Income Taxes, continued

	Undistributed Ordinary Income		Undistributed Tax Exempt Income		Undistributed Net Long-term Capital Gain		Net Unrealized Appreciation on Investments
Tennessee Tax-Free Short-to-Medium	$	—	$	2,593	$	—	$	156,193
Intermediate Government Bond		6,384		—		—		813,256
Taxable Municipal Bond Series		12,851		—		—		1,132,801

	Accumulated Capital and Other Losses			Other Temporary Differences			Total Accumulated Earnings
Alabama Tax-Free Income	$	(35,043	)	$	(102,109	)	$	844,981
Kentucky Tax-Free Income		(7,852	)		(3,249,237	)		38,812,543
Kentucky Tax-Free Short-to-Medium		(184,790	)		(48,843	)		1,288,006
Mississippi Tax-Free Income		—			(59,665	)		547,222
North Carolina Tax-Free Income		(1,232,968	)		(369,490	)		2,581,929
North Carolina Tax-Free Short-to-Medium		(23,429	)		(6,765	)		230,465
Tennessee Tax-Free Income		(649,338	)		(214,141	)		3,480,215
Tennessee Tax-Free Short-to-Medium		(228,420	)		(2,593	)		(72,227	)
Intermediate Government Bond		(159,067	)		(6,384	)		654,189
Taxable Municipal Bond Series		(39,449	)		(12,851	)		1,093,352

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.

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, 2018, 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, 2017, the Funds had an aggregate unused line of credit amount of $25,000,000. During the six months ended December 31, 2017, the average interest rate on borrowings was 4.27% and the daily weighted average borrowings for each Fund with borrowings were as follows:

	Weighted Average Borrowings
Alabama Tax-Free Income Series	$	-0-
Kentucky Tax Free Income Series		14,043
Kentucky Tax-Free Short-to-Medium Series		5,685
Mississippi Tax-Free Income Series		1,886
North Carolina Tax-Free Income Series		5,103
North Carolina Tax-Free Short-to-Medium Series		9,283
Tennessee Tax-Free Income Series		1,391
Tennessee Short-to-Medium Tax-Free Series		3,022
Intermediate Government Bond Series		9,652
Taxable Municipal Bond Series		-0-

58

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December 31, 2017

8. Line of Credit Agreement and Custodian Agreement, continued

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

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OTHER UNAUDITED INFORMATION

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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: 87	President	Annual Term; 38 years of service	Chairman of the Board of Dupree & Company, Inc.	N/A	N/A
Allen E. Grimes, III 125 South Mill Street Lexington, KY 40507 Age: 55	Executive Vice President	Annual Term; 12 years of service	President, Dupree & Company, Inc.	N/A	N/A
Michelle M. Dragoo 125 South Mill Street Lexington, KY 40507 Age: 56	Vice President, Secretary, Treasurer	Annual Term; 19 years of service as Vice President, 17 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: 46	Assistant Secretary, Assistant Treasurer	Annual Term; 2 years of service	Vice President Dupree & Company, Inc.	N/A	N/A
Martin Dean Ultimus Fund Solutions 225 Pictoria Drive Suite 450 Cincinnati, OH 45246 Age: 53	Compliance Officer	Annual Term; First year of service	Vice President, Director of Fund Compliance Ultimus Fund Solutions, LLC (January 2016-present); Senior Vice President, Huntington Asset Services (July 2013-December 2015); Director of Fund Accounting and Fund Administration Product, Citi Fund Services (January 2008-June 2013)	N/A	N/A
Trustees:
C. Timothy Cone 201 West Short Street Lexington, KY 40507 Age: 73	Trustee, Chairman	Annual Term; 15 years of service	Of Counsel (2016 to present) prior, President, Gess, Mattingly & Atchison, P.S.C. (law firm)	10	N/A
James C. Baughman, Jr. 1999 Richmond Road Suite 2A Lexington, KY 40502 Age: 55	Trustee Chair, Nominating Committee	Annual Term 10 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
William A. Combs, Jr.* 111 Woodland Ave., #510 Lexington, KY 40502 Age: 77	Trustee	Annual Term; 28 years of service as Trustee	Officer, Director: Mercedes-Benz of Cincinnati, Ohio; Mercedes-Benz of West Chester, Ohio (until 2016)	10	N/A
Ann Rosenstein Giles 343 Waller Avenue Suite 100 Lexington, KY 40504 Age: 66	Trustee Chair, Valuation Committee	Annual Term; 6 years of service	AJ Marketing Partners (self-employed marketing consultant)	10	N/A
Marc A. Mathews 2104 Lakeside Drive Lexington, KY 40502 Age: 59	Trustee Chair, Audit Committee	Annual Term; 6 years of service	Vice President for Finance and Business, Transylvania University	10	Director, Bank of the Bluegrass

* As of July 3, 2017 William A. Combs, Jr. is an affiliated person of Dupree & Company, Inc., the Trust’s investment adviser, and is considered an “interested person” of the Trust within the meaning of section 2(a)(1a) of the 1940 Act.

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Trustee and officer information, continued

As of December 31, 2017, 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 and information regarding how the Funds voted those proxies during the most recent twelve months ended June 30, 2017, 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 ended December 31, 2017, 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 SEC’s Office of Investor Education and Advocacy (previously referred to as “SEC Public Reference Room”) may be obtained by calling 1-800-SEC-0330.

Renewal of Advisory Agreements:

In connection with a meeting held on August 23, 2017, the Board, including a majority of the Trustees who are not “interested persons,” as that term is defined in the Investment Company Act of 1940, as amended, discussed the renewal of the investment advisory agreements (the “Advisory Agreements”) between Dupree & Co. (the “Adviser”) and the Trust with respect to each of the Funds. In considering the renewal of the Advisory Agreements, the Board received materials specifically relating to each Fund and its respective Advisory Agreement.

The Board relied upon the advice of independent legal counsel and their own business judgment in determining the material factors to be considered in evaluating the Advisory Agreements and the weight to be given to each such factor. The Board’s conclusions were based on an evaluation of all the information provided and were not the result of any one factor. Moreover, each Trustee may have afforded different weight to the various factors in reaching conclusions with respect to the Advisory Agreements.

Nature, Quality and Extent of Services. The Board reviewed the Adviser’s experience and the capabilities of its personnel. The Board reviewed personnel changes at the Adviser. The Adviser discussed its compliance program and its business continuity and disaster recovery plans. Taking into account the personnel involved in servicing the Funds, as well as the materials and services described above, the Board expressed satisfaction with the quality of the services received from the Adviser.

Performance. The Board reviewed the performance of the Funds for the last 10 years, comparing the performance to various indices, peer groups and Morningstar categories. The Board and the Adviser discussed the methodology used to select the peer groups. The Board noted that each of the Alabama Tax-Free Income Series, Kentucky Tax-Free Income Series, Kentucky Tax-Free Short-to-Medium Series, Mississippi Tax-Free Income Series and Tennessee Tax-Free Income Series outperformed its benchmark index, peer group and Morningstar category for the 1-Year, 5-Years and 10-Years periods. The North Carolina Tax-Free Income Series and the North Carolina Tax-Free Short-to-Medium Series each outperformed its benchmark index, peer group and Morningstar category for all periods other than the 1-Year and 5–Years periods, respectively. Likewise, the Board noted that the Tennessee Tax-Free Short-to-Medium Series outperformed its benchmark index, peer group and Morningstar category for the 10-Years period, while the Intermediate Government Bond Series outperformed its benchmark index, peer group and Morningstar category for the 5–Years and 10-Years periods. The Adviser said that the Taxable Municipal Bond Series underperformed its peer group for the 1-Year period and its benchmark index and peer group for the 5-Years period, but outperformed its benchmark index for the 1-Year period and its Morningstar category for all periods. The Adviser stated that the North Carolina Tax-Free Short-to-Medium Series and Tennessee Tax-Free Short-to-Medium Series underperformed their benchmark, the Bloomberg

61

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OTHER UNAUDITED INFORMATION

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Renewal of Advisory Agreements, continued

Barclays Municipal Bond Index, primarily because the modified adjusted duration of each Fund is significantly shorter than the index. The Adviser said that the Taxable Municipal Bond Series and the Intermediate Government Bond Series performed in line with expectations. The Board concluded that Fund performance was satisfactory.

Fees and Expenses. The Board reviewed the range of advisory fees paid by the Funds to Dupree and the total operating expenses of each Fund. The Board turned its attention to materials previously provided by the Adviser that compared the investment advisory fees assessed the Funds with each Fund’s peer group and the appropriate Morningstar category averages. The Board noted that the advisory fees for the Kentucky Tax-Free Income Series and the Intermediate Government Bond Series were below the peer group and Morningstar category averages. The Board also noted that the advisory fees for the other Funds were higher than the peer group and Morningstar category averages, but were within the range of fees charged by the peer groups and Morningstar category. The Adviser stated that the slightly higher fees were due to the smaller size of the Funds as compared to the size of the funds comprising the peer group and Morningstar categories. Turning to total operating expenses, the Board observed that the average expense ratios for 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 and Tennessee Tax-Free Income Series were equal to or lower than the average expense ratios of the peer group and Morningstar category averages. The expense ratios of the North Carolina Tax-Free Short-to-Medium Series, Tennessee Tax-Free Short-to-Medium Series, and Taxable Municipal Bond Series were within 0.01%-0.04% of the peer group and Morningstar category averages and within the range of net expenses. The expense ratio of the Intermediate Government Bond Series was within 0.01% of the peer group average and lower than the Morningstar category average. After considering the comparative data as described above, the Board concluded that the advisory fees and expense ratios were reasonable.

Economies of Scale. In reviewing the costs of the services to be provided and the profits to be realized by the Adviser, the Board reviewed the Adviser’s unaudited income statement and balance sheet for the seven-months ending July 31, 2017, as well as the net profit margins realized on each Fund. The Adviser discussed the allocation of revenues and expenses, noting 75% of its revenues were related to its advisory work (the remaining 25% is transfer agent related). The Board noted that the existing Advisory Agreements provided for breakpoints at specified asset levels.

Profitability. Finally, the Board discussed the transfer agency fees earned by the Adviser for services provided to the Funds pursuant to the Transfer Agent and Dividend Disbursing Agent Services Agreement. The Adviser stated that the transfer agency fees it earned reflected its service to the Funds’ direct shareholders and the coordination of trading and settlement issues for all shareholders. The Board discussed the level and quality of services provided to shareholders by the Adviser. The Board also discussed the net profit margins realized by the Adviser on each Fund under the Transfer Agent and Dividend Disbursing Agent Services Agreement. After further discussion, the Board concluded the level of profit realized by the Adviser in connection with its advisory services provided to the Funds was not excessive.

Conclusion. Having requested and received such information from the Adviser as the Board believed to be reasonably necessary to evaluate the terms of the Advisory Agreements, and as assisted by the advice of independent counsel, the Board concluded that the advisory fee structure was reasonable and that renewal of the Advisory Agreements was in the best interests of the shareholders of the Funds.

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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, 2017” 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, 2017			Beginning Account Value July 1, 2017*		Ending Account Value December 31, 2017**		Expenses Paid During the Six Months Ended December 31, 2017
Alabama Tax-Free Income Series
Actual		.71	%	$	1,000.00	$	1,004.39	$	3.57
Hypothetical		.71			1,000.00		1,025.21		3.60
Kentucky Tax-Free Income Series
Actual		.56			1,000.00		1,007.66		2.81
Hypothetical		.56			1,000.00		1,025.21		2.84
Kentucky Tax-Free Short-to-Medium Series
Actual		.71			1,000.00		999.65		3.56
Hypothetical		.71			1,000.00		1,025.21		3.60
Mississippi Tax-Free Income Series
Actual		.71			1,000.00		1,008.97		3.57
Hypothetical		.71			1,000.00		1,025.21		3.60
North Carolina Tax-Free Income Series
Actual		.70			1,000.00		1,011.24		3.57
Hypothetical		.70			1,000.00		1,025.21		3.60
North Carolina Tax-Free Short-to-Medium Series
Actual		.71			1,000.00		1,000.56		3.58
Hypothetical		.71			1,000.00		1,025.21		3.62
Tennessee Tax-Free Income Series
Actual		.71			1,000.00		1,008.27		3.57
Hypothetical		.71			1,000.00		1,025.21		3.60
Tennessee Tax-Free Short-to-Medium Series
Actual		.71			1,000.00		1,000.30		3.57
Hypothetical		.71			1,000.00		1,025.21		3.61

63

DUPREE MUTUAL FUNDS UNAUDITED

OTHER UNAUDITED INFORMATION

December 31, 2017

Schedule of Shareholder Expenses, continued

	Net Expense Ratio Annualized December 31, 2017			Beginning Account Value July 1, 2017*		Ending Account Value December 31, 2017**		Expenses Paid During the Six Months Ended December 31, 2017
Intermediate Government Bond Series
Actual		.60	%	$	1,000.00	$	1,000.23	$	3.00
Hypothetical		.60			1,000.00		1,025.21		3.04
Taxable Municipal Bond Series
Actual		.71			1,000.00		1,011.54		3.58
Hypothetical		.71			1,000.00		1,025.21		3.60

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

** Expenses are equal to the Funds’ 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 24, 2017. 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 approve an amendment to the Trust’s Agreement and Declaration of Trust. The results of all matters voted on by shareholders at the Shareholder Meeting held October 24, 2017 were as follows:

A. Election of Trustees:

	FOR		WITHHELD		TOTAL
James C. Baughman		110,723,642.213		1,395,133.589		112,118,775.802
William A. Combs		122,608,400.411		1,395,133.589		124,003,534.000
C. Timothy Cone		122,813,607.866		1,395,133.589		124,208,741.455
Ann Rosenstein Giles		124,014,053.144		1,395,133.589		125,409,186.733
Marc A. Mathews		112,395,877.011		1,395,133.589		113,791,010.600

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

B. To approve an Amendment to the Trust’s Agreement and Declaration of Trust:

	FOR		AGAINST		ABSTAIN		BROKER NON-VOTE		TOTAL
Amendment:		90,016,577.844		12,313,582.388		3,627,937.321		13,948,152.158		119,906,249.711

C. Other business:

	FOR		AGAINST		ABSTAIN		BROKER NON-VOTE		TOTAL
Other business		89,785,630.376		12,974,880.025		3,197,587.152		13,948,152.158		119,906,249.711

64

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 22, 2018

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 22, 2018
By:	/s/    Michelle M. Dragoo
	Michelle M. Dragoo, Vice President, Secretary, Treasurer
Date: February 22, 2018