Prudential National Muni Fund 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:	811-02992
Exact name of registrant as specified in charter:	Prudential National Muni Fund, Inc.
Address of principal executive offices:	Gateway Center 3,
	100 Mulberry Street,
	Newark, New Jersey 07102
Name and address of agent for service:	Deborah A. Docs
	Gateway Center 3,
	100 Mulberry Street,
	Newark, New Jersey 07102
Registrant’s telephone number, including area code:	800-225-1852
Date of fiscal year end:	8/31/2011
Date of reporting period:	2/28/2011

Item 1 – Reports to Stockholders

SEMIANNUAL REPORT FEBRUARY 28, 2011

Prudential National Muni Fund, Inc.

Fund Type Municipal bond   Objective High level of current income exempt from federal income taxes This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus.   The views expressed in this report and information about the Fund’s portfolio holdings are for the period covered by this report and are subject to change thereafter.   The accompanying financial statements as of February 28, 2011, were not audited and, accordingly, no auditor’s opinion is expressed on them.   Prudential Investments, Prudential, the Prudential logo and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.

To enroll in e-delivery, go to www.prudentialfunds.com/edelivery

April 15, 2011

Dear Shareholder:

On the following pages, you’ll find your Fund’s semiannual report, including a table showing fund performance over the first half of the fiscal year and for longer periods. The report also contains a listing of the Fund’s holdings at period-end. Semiannual reports are interim statements furnished between the Fund’s annual reports, which include an analysis of Fund performance over the fiscal year in addition to other data.

Mutual fund prices and returns will rise or fall over time, and asset managers tend to have periods when they perform better or worse than their long-term average. The best measures of a mutual fund’s quality are its return compared to that of similar investments and the variability of its return over the long term. We recommend that you review your portfolio regularly with your financial professional.

Thank you for choosing the Prudential Investments^® family of mutual funds.

Sincerely,

Judy A. Rice, President

Prudential National Muni Fund, Inc.

Prudential National Muni Fund, Inc. 1

Your Fund’s Performance

Performance data quoted represent past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate, so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the past performance data quoted. An investor may obtain performance data as of the most recent month-end by visiting our website at www.prudentialfunds.com or by calling (800) 225-1852. The maximum initial sales charge is 4.00% (Class A shares). Gross operating expenses: Class A, 0.88%; Class B, 1.08%; Class C, 1.58%; Class Z, 0.58%. Net operating expenses: Class A, 0.83%; Class B, 1.08%; Class C, 1.41%; Class Z, 0.58%, after contractual reduction through 12/31/2011 for Class A and 12/31/2010 for Class C.

Cumulative Total Returns (Without Sales Charges) as of 2/28/11
	Six Months			One Year			Five Years			Ten Years
Class A		–4.28	%		0.01	%		14.98	%		46.35	%
Class B		–4.38			–0.22			13.58			42.78
Class C		–4.54			–0.51			12.20			39.30
Class Z		–4.17			0.26			16.44			50.05
Barclays Capital Municipal Bond Index		–3.51			1.72			22.05			59.59
Lipper General Municipal Debt Funds Avg.		–4.37			0.75			13.22			43.22
Average Annual Total Returns (With Sales Charges) as of 3/31/11
				One Year			Five Years			Ten Years
Class A					–4.13	%		2.08	%		3.34	%
Class B					–5.16			2.50			3.51
Class C					–1.64			2.41			3.25
Class Z					0.11			3.18			4.02
Barclays Capital Municipal Bond Index					1.63			4.14			4.66
Lipper General Municipal Debt Funds Avg.					0.41			2.52			3.50

Source: Prudential Investments LLC and Lipper Inc. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

The average annual total returns take into account applicable sales charges. Class A shares are subject to a maximum front-end sales charge of 4.00% and a 12b-1 fee of up to 0.30% annually, and all investors who purchase Class A shares in an amount of $1 million or more and sell these shares within 12 months of purchase are subject to a contingent deferred sales charge (CDSC) of 1%. Under certain limited circumstances, an exchange may be made from Class A shares to Class Z shares of the Fund. Class B shares are subject to a declining CDSC of 5%, 4%, 3%, 2%, 1%, and 1%, respectively, for the first six years after purchase and a 12b-1 fee of 0.50% annually. Approximately seven years after purchase, Class B shares will automatically convert to Class A shares on a quarterly basis. Class C shares purchased are not subject to a front-end sales charge, but are subject to a CDSC of 1% for shares sold within 12 months from the date of purchase and an annual 12b-1 fee of 1%. Class Z shares are not subject to a sales charge or 12b-1 fees. The returns in the graph and tables reflect the share class expense structure in effect at the close of the fiscal period.

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Benchmark Definitions

Barclays Capital Municipal Bond Index

The Barclays Capital Municipal Bond Index is an unmanaged index of over 39,000 long-term investment-grade municipal bonds. It gives a broad look at how long-term investment-grade municipal bonds have performed.

Lipper General Municipal Debt Funds Average

The Lipper General Municipal Debt Funds Average (Lipper Average) represents returns based on an average return of all funds in the Lipper General Municipal Debt Funds category for the periods noted. Funds in the Lipper Average invest primarily in municipal debt issues in the top four credit ratings.

Investors cannot invest directly in an index or average. The returns for the Barclays Capital Municipal Bond Index would be lower if they included the effects of sales charges, operating expenses of a mutual fund, or taxes. Returns for the Lipper Average reflect the deduction of operating expenses, but not sales charges or taxes.

Five Largest Issues expressed as a percentage of net assets as of 2/28/11
Massachusetts St., GO, Ser. B, A.G.C., 5.25%, 09/01/24	1.3	%
Denver City & Cnty. Arpt. Rev. Sys., Ser. A, NATL 5.00%, 11/15/25	1.3
Pennsylvania St. Ind. Dev. Auth. Rev., Econ. Dev., A.M.B.A.C., 5.50%, 07/01/17	1.2
Metropolitan Pier & Exposition Auth. Dedicated St. Tax Rev., Cap. Apprec. McCormick Place Expansion, Ser. A, NATL, 5.25%, 06/15/42	1.0
Hawaii St. Dept. Budget & Fin. Spl. Purp. Rev., Hawaiian Elec. Co., Inc. Proj., Ser. C, A.M.B.A.C., A.M.T., 6.20%, 11/01/29	1.0

Issues are subject to change.

Distributions and Yields as of 2/28/11
	Total Dividends Paid for Six Months		30-Day SEC Yield			Taxable Equivalent 30-Day Yield* at Federal Tax Rates of
						33%			35%
Class A	$	0.30		3.76	%		5.61	%		5.78	%
Class B		0.28		3.66			5.46			5.63
Class C		0.26		3.17			4.73			4.88
Class Z		0.32		4.17			6.22			6.42

* Some investors may be subject to the federal alternative minimum tax (AMT) and/or state and local taxes. Taxable equivalent yields reflect federal taxes only.

Prudential National Muni Fund, Inc. 3

Your Fund’s Performance (continued)

Credit Quality* expressed as a percentage of net assets as of 2/28/11
Aaa	4.1	%
Aa	44.5
A	32.6
Baa	13.5
Ba	1.0
Less than Caa	0.1
Not Rated	3.2
Total Investments	99.0
Other assets in excess of liabilities	1.0
Net Assets	100.0	%

*Source: Moody’s rating, defaulting to S&P when not rated by Moody’s.

Credit Quality is subject to change.

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Fees and Expenses (Unaudited)

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemptions, as applicable, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses, as applicable. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The example is based on an investment of $1,000 invested on September 1, 2010, at the beginning of the period, and held through the six-month period ended February 28, 2011. The example is for illustrative purposes only; you should consult the Prospectus for information on initial and subsequent minimum investment requirements.

The Fund’s transfer agent may charge additional fees to holders of certain accounts that are not included in the expenses shown in the table on the following page. These fees apply to individual retirement accounts (IRAs) and Section 403(b) accounts. As of the close of the six-month period covered by the table, IRA fees included an annual maintenance fee of $15 per account (subject to a maximum annual maintenance fee of $25 for all accounts held by the same shareholder). Section 403(b) accounts are charged an annual $25 fiduciary maintenance fee. Some of the fees may vary in amount, or may be waived, based on your total account balance or the number of Prudential Investments funds, including the Fund, that you own. You should consider the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses paid over the period and the impact of these fees on your ending account value, as these additional expenses are not reflected in the information provided in the expense table. Additional fees have the effect of reducing investment returns.

Actual Expenses

The first line for each share class in the table on the following page provides information about actual account values and actual expenses. You may use the information on 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 ÷ $1,000 = 8.6), then multiply the result by the number on the first line under the heading “Expenses Paid During the Six-Month Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line for each share class in the table on the following page provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before

Prudential National Muni Fund, Inc. 5

Fees and Expenses (continued)

expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the 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 Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs such as sales charges (loads). Therefore, the second line for each share class in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Prudential National Muni Fund, Inc.		Beginning Account Value September 1, 2010		Ending Account Value February 28, 2011		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During the Six-Month Period*
Class A	Actual	$	1,000.00	$	957.20		0.83	%	$	4.03
	Hypothetical	$	1,000.00	$	1,020.68		0.83	%	$	4.16
Class B	Actual	$	1,000.00	$	956.20		1.08	%	$	5.24
	Hypothetical	$	1,000.00	$	1,019.44		1.08	%	$	5.41
Class C	Actual	$	1,000.00	$	954.60		1.41	%	$	6.83
	Hypothetical	$	1,000.00	$	1,017.80		1.41	%	$	7.05
Class Z	Actual	$	1,000.00	$	958.30		0.58	%	$	2.82
	Hypothetical	$	1,000.00	$	1,021.92		0.58	%	$	2.91

* Fund expenses (net of fee waivers or subsidies, if any) for each share class are equal to the annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by the 181 days in the six-month period ended February 28, 2011, and divided by the 365 days in the Fund’s fiscal year ending August 31, 2011 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Fund may invest.

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Portfolio of Investments

as of February 28, 2011 (Unaudited)

Description (a)	Moody’s Rating†*	Interest Rate	Maturity Date		Principal Amount (000)		Value (Note 1)
LONG-TERM INVESTMENTS    98.8%
Alaska    0.3%
Alaska Student Loan Corp. Ed. Ln. Rev., Ser. A-2, A.M.T.	AAA(b)	5.000%		06/01/18	$	2,000	$	2,088,960
Arizona     2.9%
Arizona Health Facs. Auth. Rev., Banner Health, Ser. D	A+(b)	5.500		01/01/38		2,500		2,411,525
Arizona St. Ctfs. Part. Dept. Admin., Ser. A, A.G.C.	Aa3	5.250		10/01/28		2,000		2,024,720
Arizona St. Trans. Brd. Excise Tax Rev., Maricopa Cnty. Regl. Area Rd.	Aa1	5.000		07/01/25		2,000		2,133,260
Maricopa Cnty. Indl. Dev. Auth. Health Facs. Rev., Catholic Healthcare West, Ser. A	A2	5.250		07/01/32		2,500		2,301,150
Maricopa Cnty. Poll. Ctl. Corp., Poll. Ctl. Rev., Rfdg. South Calif. Edl. Co., Rmkt., Ser. A	A1	5.000		06/01/35		1,250		1,202,338
Phoenix Civic Impt. Corp., Arpt. Rev., Jr. Lien., Ser. A	A1	5.000		07/01/40		1,500		1,347,165
Wtr. Sys. Rev., Jr. Lien, Ser. A	Aa2	5.000		07/01/39		5,000		5,003,050
Salt River Proj. Arizona Agric. Impt. & Pwr. Dist. Elec. Sys. Rev., Ser. A,	Aa1	5.000		01/01/39		5,000		4,969,900
Tucson Cnty., GO, Ser. A	Aa2	7.375		07/01/12		1,100		1,192,114
								22,585,222
California    8.6%
Anaheim Pub. Fin. Auth. Lease Rev., A.G.C., Sr. Pub. Impts. Proj., Ser. A	Aa3	6.000		09/01/24		5,500		6,038,450
Sub. Pub. Impts. Proj., Ser. C	Aa3	6.000		09/01/16		6,690		7,372,246
California Cnty. Tobacco Securitization Corp., Tobacco Conv. Bonds Asset Bk., Ser. B	NR	5.100		06/01/28		1,250		988,662
California Edl. Facs. Auth. Rev., Univ. Southern Calif., Ser. A	Aa1	5.250		10/01/38		1,000		1,011,180
California Health Facs. Fin. Auth. Rev., Rfdg., Scripps Health, Ser. A	Aa3	5.000		11/15/36		1,000		868,510
Stanford Hosp., Ser. B	Aa3	5.000		11/15/36		3,000		2,759,820

See Notes to Financial Statements.

Prudential National Muni Fund, Inc. 7

Portfolio of Investments

as of February 28, 2011 (Unaudited) continued

Description (a)	Moody’s Rating†*	Interest Rate	Maturity Date		Principal Amount (000)		Value (Note 1)
LONG-TERM INVESTMENTS (Continued)
California (cont’d.)
California Infrastructure & Econ. Dev. Bk. Rev. & Econ. Dev., Walt. Dis. Fam. Musm., Walt & Lilly Dis.	A1	5.250%		02/01/38	$	3,000	$	2,823,030
California Poll. Ctl. Fin. Auth. Wtr. Facs. Rev., Amern. Wtr.
Cap. Corp. Proj., 144A	Baa2	5.250		08/01/40		1,250		1,171,825
California St., GO, Econ. Recov. Rfdg., Ser. A
F.G.I.C., T.C.R.S.	A1	4.750		09/01/23		1,500		1,500,945
Var. Purp.	A1	5.000		10/01/29		2,000		1,971,340
Var. Purp.	A1	5.250		11/01/40		1,250		1,192,150
Var. Purp.	A1	5.500		11/01/39		1,000		989,950
Var. Purp.	A1	6.000		03/01/33		1,500		1,574,430
Var. Purp.	A1	6.000		04/01/38		3,500		3,612,840
Var. Purp.	A1	6.000		11/01/39		2,000		2,065,280
California Statewide Cmntys. Dev. Auth. Rev., Cottage Health	A+(b)	5.000		11/01/40		1,600		1,348,352
Sutter Health, Ser. A	Aa3	6.000		08/15/42		3,000		2,970,600
Chico Redev. Agcy. Tax Alloc., Chico Amended & Merged Redev., A.M.B.A.C.	A+(b)	5.000		04/01/30		1,000		853,770
Elsinore Valley Muni. Wtr. Dist. Ctfs. Part. Rfdg., Ser. A, B.H.A.C.	Aa1	5.000		07/01/29		1,500		1,531,305
Folsom Cordova Uni. Sch. Dist. Sch. Facs. Impvt. Dist., No. 2, GO, Ser. A, C.A.B.S., NATL	Aa2	6.110(c)		10/01/21		60		32,029
Fresno Calif. Swr. Rev., Ser. A, A.G.C.	Aa3	5.000		09/01/33		2,500		2,466,750
Golden St. Tobacco Securitization Corp., Tobacco Settlement Rev., Asset Bkd., Ser. A-1	Baa3	5.750		06/01/47		1,000		664,720
C.A.B.S. Asset Bkd., Ser. A-2 (Converts to 5.300% on 12/01/12)	Baa3	8.620(c)		06/01/37		5,000		2,860,250
C.A.B.S., Asset Bkd., Ser. A, A.M.B.A.C. (Converts to 4.600% on 06/01/10)	A2	4.600		06/01/23		2,000		1,827,820

See Notes to Financial Statements.

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Description (a)	Moody’s Rating†*	Interest Rate	Maturity Date		Principal Amount (000)		Value (Note 1)
LONG-TERM INVESTMENTS (Continued)
California (cont’d.)
Enhanced Asset Bkd., Ser. A	A2	5.000%		06/01/45	$	1,000	$	797,090
Los Angeles Calif. Cmnty. College Dist. 2008 Elec., Sec. C, GO	Aa1	5.250		08/01/39		1,250		1,231,788
M-S-R Energy Auth., Ser. A	A(b)	6.500		11/01/39		2,000		2,071,520
Pittsburg Redev. Agcy. Tax Alloc., Los Medanos Cmnty. Dev. Proj., C.A.B.S., A.M.B.A.C.	A+(b)	7.440(c)		08/01/25		2,000		710,780
San Francisco City & Cnty. Arpts. Commn. Int’l. Arpt. Rev., Second Ser., Ser. F	A1	5.000		05/01/40		1,250		1,118,050
San Joaquin Hills Trans. Corridor Agcy. Toll Road Rev., Ser. A, C.A.B.S., NATL	Baa1	9.230(c)		01/15/36		21,000		2,224,320
Santa Margarita Dana Point Auth. Impvt. Rev., Dists. 3, 3A, 4, 4A, Ser. B, NATL	Baa1	7.250		08/01/14		2,000		2,243,320
Tuolumne Wind Proj. Auth., Tuolumne Co. Proj., Ser. A	A1	5.625		01/01/29		1,000		1,046,660
University Calif. Rev.,
Ser. O	Aa1	5.750		05/15/34		750		786,420
Ser. Q	Aa1	5.000		05/15/34		1,000		962,710
Unrefunded Bal. U.C.L.A. Med. Center, Ser. A, A.M.B.A.C.	NR	5.250		05/15/30		850		799,000
Ventura Cnty. Cmnty. College Dist., Election 2002, Ser. C, GO	Aa2	5.500		08/01/33		2,000		2,062,560
								66,550,472
Colorado    2.0%
Denver City & Cnty. Arpt. Rev. Sys.,
Ser. A, NATL	A1	5.000		11/15/25		10,000		10,193,300
Ser. B, A.M.T., NATL	A1	5.000		11/15/15		2,500		2,718,500
Platte Riv. Pwr. Auth. Colo. Pwr. Rev., Ser. HH	Aa2	5.000		06/01/27		1,500		1,573,305
University Colo. Enterprise Sys. Rev., Ser. A	Aa2	5.375		06/01/32		1,000		1,033,240
								15,518,345

See Notes to Financial Statements.

Prudential National Muni Fund, Inc. 9

Portfolio of Investments

as of February 28, 2011 (Unaudited) continued

Description (a)	Moody’s Rating†*	Interest Rate	Maturity Date		Principal Amount (000)		Value (Note 1)
LONG-TERM INVESTMENTS (Continued)
District of Columbia    2.2%
District Columbia Rev., Brookings Inst.	Aa3	5.750%		10/01/39	$	5,000	$	5,182,850
Natl. Pub. Radio, Ser. A	Aa3	5.000		04/01/43		1,000		934,950
District of Columbia, GO, Ser. E, B.H.A.C.	Aa1	5.000		06/01/28		5,000		5,069,500
District of Columbia Wtr. & Swr. Auth., Pub. Util. Rev., Ser. A	Aa2	5.500		10/01/39		2,000		2,071,380
Metropolitan Washington DC Arpt. Auth. Sys.,
Ser. A, A.M.T.	Aa3	5.000		10/01/25		3,000		2,978,400
Ser. A, A.M.T.	Aa3	5.250		10/01/27		1,000		1,007,420
								17,244,500
Florida    9.0%
Bayside Impvt. Cmnty. Dev. Dist., Cap. Impvt. Rev., Ser. A	NR	6.300		05/01/18		370		331,823
Citizens Ppty. Ins. Corp., High Risk Sr. Secd.,
High Act-A-1	A2	6.000		06/01/16		1,500		1,625,280
Ser. A-1	A2	5.250		06/01/17		1,000		1,043,210
Florida St. Brd. Ed. Cap., Outlay, GO	Aa1	9.125		06/01/14		740		806,001
Florida St. Brd. Ed. Lottery Rev., Ser. B	A1	5.000		07/01/23		5,185		5,451,716
Florida St. Dept. Environ. Prot. Pres. Rev., Florida Forever,
Ser. A, NATL	Aa3	5.250		07/01/17		2,950		3,014,015
Greater Orlando Aviation Auth. Arpt. Facs. Rev.,
Ser. A, A.G.C., A.M.T.	Aa3	5.000		10/01/23		4,240		4,259,886
Halifax Hosp. Med. Ctr. Rev., Ser. B2, A.G.C.	AA+(b)	5.375		06/01/31		4,000		3,900,880
Highlands Cmnty. Dev. Dist. Rev.,
Spl. Assmt. (original cost $500,000; purchased 10/06/05)(e)(f)(g)	NR	5.550		05/01/36		500		252,920
Highlands Cnty. Health Facs. Auth. Rev., Adventist Health, Ser. B (Pre-refunded Date 11/15/15)(h)	Aa3	5.000		11/15/25		205		236,269

See Notes to Financial Statements.

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Description (a)	Moody’s Rating†*	Interest Rate	Maturity Date		Principal Amount (000)		Value (Note 1)
LONG-TERM INVESTMENTS (Continued)
Florida (cont’d.)
Adventist Health, Unrefunded Bal., Ser. B	Aa3	5.000%		11/15/25	$	1,410	$	1,396,859
Adventist Health/Sunbelt, Rmkt., Ser. B	Aa3	6.000		11/15/37		2,440		2,496,193
Hillsborough Cnty. Aviation Auth. Rev., Tampa Int’l. Arpt., Ser. A, A.M.T., NATL	Aa3	5.500		10/01/15		1,000		1,074,210
Jacksonville Econ. Dev. Cmnty., Anheuser Busch Proj., Ser. B, A.M.T.	Baa2	4.750		03/01/47		1,500		1,201,980
Miami Dade Cnty. Aviation Rev., Miami Int’l. Arpt., Ser. A, A.M.T., A.G.C.	Aa3	5.500		10/01/24		2,665		2,734,636
Ser. B	A2	5.000		10/01/41		2,500		2,182,900
Ser. C, A.M.T., A.G.C.	Aa3	5.250		10/01/26		5,000		4,926,550
Miami Dade Cnty. Expwy. Auth. Toll Sys. Rev., Ser. A	A3	5.000		07/01/40		1,000		905,990
Miami Dade Cnty. Wtr. & Swr. Rev., Rfdg. Sys., Ser. B, A.G.C.	Aa2	5.250		10/01/22		5,000		5,572,550
North Sumter Cnty. Util. Dependent Dist., Wtr. & Swr. Rev.	BBB(b)	5.750		10/01/43		1,500		1,413,885
Orlando Util. Commn. Sys. Rev., Ser. A	Aa1	5.250		10/01/39		5,000		5,062,200
Palm Beach Cnty. Arpt. Sys. Rev., Ser. A, A.M.T., NATL	A2	5.000		10/01/22		3,065		3,036,158
Ser. A, A.M.T., NATL	A2	5.000		10/01/23		2,350		2,294,141
Ser. A, A.M.T., NATL	A2	5.000		10/01/34		1,250		1,072,175
Paseo Cmnty. Dev. Dist. Cap. Impvt. Rev., Ser. A (original cost $300,000; purchased 06/17/05)(e)(f)(g)	NR	5.400		05/01/36		300		71,790
Polk Cnty. Sch. Dist. Sales Tax Rev., Sch. Impvt., A.G.C.	Aa3	5.250		10/01/17		2,580		2,793,108
Sch. Impvt., A.G.C.	Aa3	5.250		10/01/18		2,325		2,508,791
Reunion West Cmnty. Dev. Dist. Spl. Assmt. Rev.(f)	NR	3.125		05/01/36		985		502,094
South Lake Cnty. Hosp. Dist. Rev., South Lake Hosp. Inc.	A2	5.250		10/01/34		750		684,735

See Notes to Financial Statements.

Prudential National Muni Fund, Inc. 11

Portfolio of Investments

as of February 28, 2011 (Unaudited) continued

Description (a)	Moody’s Rating†*	Interest Rate	Maturity Date		Principal Amount (000)		Value (Note 1)
LONG-TERM INVESTMENTS (Continued)
Florida (cont’d.)
South Lake Hosp. Inc., Ser. A	Baa2	6.250%		04/01/39	$	2,500	$	2,447,375
South Miami Health Facs. Auth. Hosp. Rev., Baptist Health South Fl. Grp.	Aa3	5.000		08/15/27		3,750		3,627,375
West Palm Beach Cmnty. Redev. Agy., Northwood-Pleasant Cmnty. Redev., Tax Allocation Rev.	A(b)	5.000		03/01/35		1,000		846,730
								69,774,425
Georgia    2.6%
Athens Clarke Cnty. Univs., Govt. Wtr. & Swr. Rev.	Aa2	5.625		01/01/33		2,000		2,086,720
Atlanta Arpt. & Marina Rev., Rfdg., Gen., Ser. C	A1	6.000		01/01/30		3,250		3,534,212
Burke Cnty. Dev. Auth. Poll. Ctl. Rev., Oglethorpe Pwr. Vogtle.
Proj., Ser. B	Baa1	5.500		01/01/33		750		752,483
Forsyth Cnty. Sch. Dist. Dev., GO	Aa1	6.750		07/01/16		500		580,535
Fulton Cnty. Sch. Dist., GO	Aa1	6.375		05/01/17		750		913,920
Gwinnett Cnty. Hosp. Auth. Rev., Gwinnett Hosp. Sys., Ser. D, A.G.C.	Aa3	5.500		07/01/41		1,500		1,421,670
Newnan Hosp. Auth. Rev., Antic Ctfs. Newnan Hosp. Inc., NATL (Pre-refunded Date 01/01/13)(h)	Aa3	5.500		01/01/21		3,185		3,466,076
Private Colleges & Univs. Auth. Rev., Emory Univ., Ser. C	Aa2	5.250		09/01/39		5,000		5,047,800
Richmond Cnty. Hosp. Rev., Rev. Antic. Ctfs. Univ. Health Svcs. Inc., Proj.	A1	5.500		01/01/36		2,000		1,883,820
								19,687,236
Guam    0.1%
Guam Govt. Wtrwks. Auth., Wtr. & Wastewtr. Sys. Rev.	Ba2	6.000		07/01/25		500		484,410
Hawaii    1.2%
Hawaii Pac. Health Spl. Purp. Rev., Ser. A	A3	5.500		07/01/40		1,000		885,020
Ser. B	A3	5.750		07/01/40		500		459,015

See Notes to Financial Statements.

12 Visit our website at www.prudentialfunds.com

Description (a)	Moody’s Rating†*	Interest Rate	Maturity Date		Principal Amount (000)		Value (Note 1)
LONG-TERM INVESTMENTS (Continued)
Hawaii (cont’d.)
Hawaii St. Dept. Budget & Fin. Spl. Purp. Rev., Hawaiian
Elec. Co., Inc. Proj., Ser. C., A.M.B.A.C., A.M.T.	Baa1	6.200%		11/01/29	$	8,000	$	7,758,480
								9,102,515
Idaho    0.6%
Idaho Health Facs. Auth. Rev., St. Luke Reg. Med. Ctr., Rmkt.	Aa3	5.000		07/01/35		2,000		1,897,400
Trinity Health Grp., Ser. B, A.G.C.	Aa2	6.250		12/01/33		1,000		1,054,490
Idaho Hsg. & Fin. Assn., Grant & Rev., Antic. Fed. Hwy. Tran, Ser. A	Aa2	5.000		07/15/27		1,250		1,281,763
								4,233,653
Illinois    8.6%
Chicago Brd. Edu., Rfdg., Dedicated Rev., Ser. F, GO	Aa2	5.000		12/01/31		2,500		2,311,275
Chicago O’Hare Int’l. Arpt. Rev., Gen. Arpt., 3rd Lien,
Ser. A, NATL	A1	5.250		01/01/26		6,000		6,040,320
Ser. B, Rfdg., NATL	A1	5.250		01/01/15		1,000		1,073,130
Ser. B-1, X.L.C.A.	A1	5.250		01/01/34		1,975		1,883,913
Chicago Rfdg. Proj., GO, Ser. A, A.G.C.	Aa3	5.000		01/01/29		5,000		4,750,450
Illinois Fin. Auth. Rev.,
Advocate Healthcare, Ser. B	Aa2	5.375		04/01/44		2,000		1,869,880
Central DuPage Health, Ser. 09	AA(b)	5.250		11/01/39		2,000		1,857,500
Central DuPage Health, Ser. B	AA(b)	5.500		11/01/39		1,500		1,445,445
Northwestern Mem. Hosp., Ser. A (Pre-refunded Date 08/15/14)(h)	NR	5.250		08/15/34		5,000		5,666,800
Northwestern Mem. Hosp., Ser. A	Aa2	6.000		08/15/39		1,000		1,032,080
Provena Health, Ser. A	Baa1	6.000		05/01/28		1,500		1,456,080
Student Hsg. Rev., Ed. Advancement Fund, Ser. B	Baa3	5.000		05/01/30		4,000		3,331,960
Univ. of Chicago, Ser. B	Aa1	6.250		07/01/38		5,000		5,492,400
Illinois St., GO,
Rfdg., A.G.C.	Aa3	5.000		01/01/23		3,000		2,921,370
Ser. 1st, A.G.C.	Aa3	5.250		04/01/22		2,500		2,487,425

See Notes to Financial Statements.

Prudential National Muni Fund, Inc. 13

Portfolio of Investments

as of February 28, 2011 (Unaudited) continued

Description (a)		Moody’s Rating†*	Interest Rate	Maturity Date		Principal Amount (000)		Value (Note 1)
LONG-TERM INVESTMENTS (Continued)
Illinois (cont’d.)
Illinois St., Build Illinois Bonds		AAA(b)	5.000%		06/15/20	$	2,000	$	2,139,780
Illinois Toll Hwy. Auth. Rev., Ser. B		Aa3	5.500		01/01/33		2,000		2,006,620
Sr. Priority, Sr. A-1, A.G.C.		Aa3	5.000		01/01/24		5,000		5,034,600
Metropolitan Pier & Exposition Auth. Dedicated St. Tax Rev., Cap. Apprec. McCormick Place Expansion,
Ser. A, NATL		A2	5.250		06/15/42		8,500		7,839,295
Ser. A, NATL		A2	6.780(c)		12/15/34		10,000		2,046,000
Ser. A, NATL		A2	6.830(c)		06/15/37		7,500		1,282,500
Railsplitter Tobacco Settlement Auth., Rev.		A-(b)	6.000		06/01/28		2,250		2,197,823
									66,166,646
Indiana    0.8%	��
Indiana St. Fin. Auth., Var. Duke Energy Ind., Ser. B		A(b)	6.000		08/01/39		1,000		1,029,910
Indianapolis Loc. Pub. Impt. Bd. Bk. Wtr. Wks. Proj., Ser. A		A2	5.750		01/01/38		1,000		1,020,130
Indianapolis Loc. Pub. Impt. Arpt. Auth. Rev., Ser. F, A.M.B.A.C., A.M.T.		A1	5.000		01/01/36		5,000		4,335,000
									6,385,040
Kansas    1.2%
Kansas St. Dev. Fin. Auth. Hosp. Rev., Adventist Health		Aa3	5.750		11/15/38		1,000		1,013,570
Sedgwick & Shawnee Cnty. Sngl. Fam. Hsg. Rev.,
Ser. A, A.M.T., G.N.M.A., F.N.M.A.		Aaa	5.700		12/01/27		915		964,922
Ser. A, A.M.T., G.N.M.A., F.N.M.A.		Aaa	5.750		06/01/27		855		902,598
Ser. A, A.M.T., G.N.M.A., F.N.M.A.		Aaa	5.850		12/01/27		835		883,355
Wyandotte Cnty. Kansas City Unified Gov. Util. Sys. Rev., Rfdg., Ser. 2004, A.M.B.A.C.		A+(b)	5.650		09/01/19		5,000		5,588,500
									9,352,945

See Notes to Financial Statements.

14 Visit our website at www.prudentialfunds.com

Description (a)	Moody’s Rating†*	Interest Rate	Maturity Date		Principal Amount (000)		Value (Note 1)
LONG-TERM INVESTMENTS (Continued)
Kentucky    1.3%
Kentucky Econ. Dev. Fin. Auth. Hosp. Facs. Rev., Owensboro. Med. Health Sys., Ser. A	Baa2	6.375%		06/01/40	$	3,500	$	3,282,300
Kentucky St. Ppty. & Bldgs. Commn. Rev., Proj. No 93, Rfdg., A.G.C.	Aa2	5.250		02/01/28		5,500		5,694,315
Owen Cnty. Wtrwks. Sys. Rev.,
Amer. Wtr. Co. Proj., Ser. A	Baa2	6.250		06/01/39		500		512,895
Var. Amer. Wtr. Co., Ser. B	Baa2	5.625		09/01/39		500		485,155
								9,974,665
Louisiana    1.8%
Lafayette Utils. Rev., Ser. 2010	A1	5.000		11/01/33		1,500		1,446,660
Louisiana Loc. Govt. Environ. Facs. & Cmnty. Dev. Auth., Jefferson Parish, Ser. A	Aa2	5.375		04/01/31		1,000		1,021,320
Louisiana Pub. Facs. Auth. Hosp. Rev., Franciscan Missionaries	A2	6.750		07/01/39		1,000		1,040,570
Lafayette Gen. Med. Ctr., Rfdg.	A3	5.500		11/01/40		500		464,195
Louisiana St. Citizens Pty. Inc., Corp. Assmt. Rev., Rmkt., Ser. C-2, A.G.C.	Aa3	6.750		06/01/26		2,000		2,275,580
New Orleans, GO, Rfdg., NATL	A3	5.250		12/01/22		3,540		3,651,404
Tobacco Settlement Fin. Corp. Rev.,
Asset Bkd., Ser. 2001B	Baa3	5.500		05/15/30		2,955		2,866,143
Asset Bkd., Ser. 2001B	Baa3	5.875		05/15/39		1,000		929,270
								13,695,142
Maryland    0.4%
Frederick Cnty. Spl. Oblig., Urbana Cmnty. Dev. Auth. Rev., Ser. A	A-(b)	5.000		07/01/40		2,000		1,809,340
Maryland St. Indl. Dev. Fin. Auth., Synagro Baltimore, Ser. A, Rfdg., A.M.T.	NR	5.250		12/01/13		600		608,400
Takoma Park Hosp. Facs. Rev., Washington Adventist Hosp., E.T.M., A.G.C.(h)	Aa3	6.500		09/01/12		425		448,231
								2,865,971

See Notes to Financial Statements.

Prudential National Muni Fund, Inc. 15

Portfolio of Investments

as of February 28, 2011 (Unaudited) continued

Description (a)	Moody’s Rating†*	Interest Rate	Maturity Date		Principal Amount (000)		Value (Note 1)
LONG-TERM INVESTMENTS (Continued)
Massachusetts    5.5%
Boston Ind. Dev. Fin. Auth. Swr. Facs. Rev., Harbor Elec. Energy Co. Proj., A.M.T.	Aa3	7.375%		05/15/15	$	690	$	692,795
Massachusetts Bay Trans. Auth. Rev.,
Assmt., Ser. A	Aa1	5.250		07/01/34		2,000		2,062,500
Mass. Sales Tax, Ser. B, NATL	Aa1	5.500		07/01/27		1,325		1,523,697
Massachusetts Edl. Fin. Auth. Rev., Ser. B, A.M.T.	AA(b)	5.500		01/01/23		955		956,251
Massachusetts St., GO,
Cons. Ln., Ser. C, A.G.C.	Aa1	5.000		08/01/19		2,000		2,253,540
Fltg.-Cons. Ln., Ser. A, NATL	Aa1	0.774(d)		05/01/37		5,000		3,708,250
Ser. B, A.G.C.	Aa1	5.250		09/01/24		9,000		10,371,960
Massachusetts St. Dev. Fin. Agcy. Rev., Ser. K-6 Partners Healthcare	Aa2	5.375		07/01/41		5,000		4,988,450
Massachusetts St. Health & Edl. Facs. Auth. Rev.,
Harvard Univ., Ser. A	Aaa	5.500		11/15/36		3,500		3,718,680
Lowell Gen. Hosp., Ser. C	Baa1	5.125		07/01/35		2,000		1,718,080
Partners Healthcare, Ser. J1	Aa2	5.000		07/01/39		2,500		2,365,925
Tufts Univ., Ser. M	Aa2	5.500		02/15/28		3,000		3,391,500
Massachusetts St. Port Auth. Spl. Facs. Rev., Bosfuel Proj., A.M.T., NATL	A3	5.000		07/01/32		5,000		4,429,700
								42,181,328
Michigan    2.2%
Detroit District St. Aid, GO	Aa3	5.250		11/01/35		500		466,590
Detroit Sewer Disp. Rev., Sr. Lien-Rmkt., Ser. 2003B, A.G.C.	Aa3	7.500		07/01/33		1,000		1,181,450
Detroit Wtr. Supply Sys., Ser. B, NATL (Pre-refunded Date 07/01/13)(h)	A(b)	5.250		07/01/32		5,500		6,054,455
Michigan St. Hosp. Fin. Auth. Rev.,
Henry Ford Health, Ser. A	A1	5.250		11/15/46		2,000		1,668,180
McLaren Healthcare	Aa3	5.750		05/15/38		1,000		998,530
Michigan St. Strategic Fd. Ltd. Oblig. Rev., Adj. Rfdg. Dow. Chemical Rmkt., Ser. B	A-3	6.250		06/01/14		1,000		1,082,450

See Notes to Financial Statements.

16 Visit our website at www.prudentialfunds.com

Description (a)	Moody’s Rating†*	Interest Rate	Maturity Date		Principal Amount (000)		Value (Note 1)
LONG-TERM INVESTMENTS (Continued)
Michigan (cont’d.)
Okemos Pub. Sch. Dist., GO,
C.A.B.S., NATL	Aa3	1.630(c)%		05/01/12	$	1,100	$	1,079,430
C.A.B.S., NATL	Aa3	2.250(c)		05/01/13		1,000		952,850
Royal Oak Hosp. Fin. Auth. Rev., William Beaumont, Rfdg., Ser. W	A1	6.000		08/01/39		2,000		1,900,740
Wayne Cnty. Arpt. Auth. Rev., Det. Met. Arpt., Ser. A, Rfdg., A.M.T.	A2	5.000		12/01/18		1,500		1,502,565
								16,887,240
Nevada    0.4%
Clark Cnty. Passenger Facs. Charge Rev., Las Vegas McCarran Int’l. Arpt., Ser. A	Aa3	5.125		07/01/34		3,000		2,778,630
New Hampshire    0.4%
Manchester Hsg. & Redev. Auth. Rev., Ser. B, C.A.B.S., A.C.A.	Caa1	9.930(c)		01/01/24		4,740		1,406,168
New Hampshire Health & Edl. Facs. Auth. Rev., Dartmouth Hitchcock	A+(b)	6.000		08/01/38		1,750		1,821,435
								3,227,603
New Jersey    6.0%
Cape May Cnty. Ind. Poll. Ctrl., Fin. Auth. Rev., Atlantic City Elec. Co., Ser. A, NATL	Baa1	6.800		03/01/21		2,615		3,119,355
Clearview Reg. High Sch. Dist., GO, NATL	NR	5.375		08/01/15		1,205		1,315,077
Jackson Twnshp. Sch. Dist., GO, NATL	BBB(b)	6.600		06/01/11		1,600		1,624,640
Jersey City Sew. Auth., Swr. Rfdg., A.M.B.A.C.	NR	6.250		01/01/14		3,260		3,486,211
New Jersey Econ., Dev. Auth. Rev., Cigarette Tax	Baa3	5.500		06/15/24		1,000		921,800
Cigarette Tax	Baa3	5.625		06/15/19		1,750		1,749,860
Cigarette Tax	Baa3	5.750		06/15/34		1,750		1,501,990
First Mtge.-Franciscan Oaks	NR	5.700		10/01/17		2,040		1,973,598
First Mtge.-Keswick Pines	NR	5.750		01/01/24		1,750		1,487,903
Masonic Charity Fdn. Proj.	A-(b)	5.875		06/01/18		250		256,560
Masonic Charity Fdn. Proj.	A-(b)	6.000		06/01/25		1,150		1,164,133

See Notes to Financial Statements.

Prudential National Muni Fund, Inc. 17

Portfolio of Investments

as of February 28, 2011 (Unaudited) continued

Description (a)	Moody’s Rating†*	Interest Rate	Maturity Date		Principal Amount (000)		Value (Note 1)
LONG-TERM INVESTMENTS (Continued)
New Jersey (cont’d.)
New Jersey Healthcare Facs. Fin. Auth. Rev.,
Atlantic City Med. Ctr. (Pre- refunded Date 07/01/12)(h)	A+(b)	6.250%		07/01/17	$	1,740	$	1,867,977
Atlantic City Med. Ctr., Unrefunded Bal.	A1	6.250		07/01/17		2,185		2,263,987
Hackensack Univ. Med., Rfdg.	Baa1	5.000		01/01/34		500		429,355
Holy Name Med. Ctr., Rfdg.	Baa2	5.000		07/01/25		1,625		1,413,409
South Jersey Hosp. (Pre-refunded Date 07/01/12)(h)	A2	6.000		07/01/26		2,565		2,750,501
South Jersey Hosp. (Pre-refunded Date 07/01/12)(h)	A2	6.000		07/01/32		2,000		2,144,640
Virtua Health, A.G.C.	AA+(b)	5.500		07/01/38		2,000		2,031,920
New Jersey St. Tpke. Auth., Tpke. Rev.,
Growth & Income Secs., Ser. B, A.M.B.A.C., C.A.B.S. (Converts to 5.150% on 01/01/15)	A3	5.53(c)		01/01/35		3,000		2,321,790
New Jersey St. Trans. Trust Fund Auth. Rev., Ser. A	Aa3	5.500		12/15/23		3,000		3,155,670
Ser. A	Aa3	5.875		12/15/38		3,000		3,114,540
Rutgers-St. Univ. of NJ, Ser. A	Aa2	6.400		05/01/13		1,095		1,153,944
Tobacco Settlement Fin. Corp. Rev., Asset Bkd., (Pre-refunded Date 06/01/12)(h)	Aaa	6.000		06/01/37		400		427,260
(Pre-refunded Date 06/01/12)(h)	Aaa	6.125		06/01/42	��	2,000		2,139,420
Ser. 1A	Baa3	4.500		06/01/23		455		378,874
Ser. 1A	Baa3	4.625		06/01/26		1,000		708,940
Ser. 1A	Baa3	5.000		06/01/41		2,500		1,496,400
								46,399,754
New Mexico    0.3%
New Mexico Mtge. Fin. Auth. Rev., Sngl. Fam. Mtge., Ser. E, G.N.M.A., F.N.M.A., F.H.L.M.C., A.M.T.	AAA(b)	5.500		07/01/35		1,160		1,226,723
New Mexico St. Hosp. Equip. Ln. Council Hosp. Rev., Presbyterian Healthcare	Aa3	5.000		08/01/39		1,250		1,121,050
								2,347,773

See Notes to Financial Statements.

18 Visit our website at www.prudentialfunds.com

Description (a)	Moody’s Rating†*	Interest Rate	Maturity Date		Principal Amount (000)		Value (Note 1)
LONG-TERM INVESTMENTS (Continued)
New York    9.4%
Brooklyn Arena Loc. Dev. Corp., Barclays Ctr. Proj.	Baa3	6.375%		07/15/43	$	750	$	739,718
Long Island Pwr. Auth. Elec. Sys. Rev., Ser. A	A3	6.000		05/01/33		1,000		1,070,500
Ser. A	A3	6.250		04/01/33		500		549,875
Ser. A, B.H.A.C.	Aa1	5.500		05/01/33		2,000		2,066,280
Metropolitan Trans. Auth. Rev., Svc. Contract, Ser. A, NATL	Aa3	5.500		07/01/20		2,500		2,624,925
Ser. B, NATL	Aa3	5.500		07/01/19		5,000		5,256,350
Ser. B, NATL	Aa3	5.500		07/01/23		7,285		7,569,843
Ser. D	A2	5.250		11/15/40		2,000		1,907,380
Ser. 2008C	A2	6.500		11/15/28		2,500		2,784,700
Monroe Cnty. Ind. Dev. Agcy. Civic Fac. Rev., Rfdg., Highland Hosp. Rochester	A2	5.000		08/01/22		2,000		1,996,140
New York City, GO, Ser. E	Aa2	5.000		08/01/17		6,000		6,795,240
Ser. I-1	Aa2	5.250		04/01/28		2,000		2,081,440
New York City Ind. Dev. Agcy. Spl. Fac. Rev., Terminal One Group Assn. Proj., A.M.T.	A3	5.500(d)		01/01/24		1,500		1,497,150
New York City Mun. Wtr. Fin. Auth., Rev., Wtr. & Swr., Fiscal 2009, Ser. A	Aa1	5.750		06/15/40		1,000		1,055,310
New York City Trans. Fin. Auth. Bldg. Aid. Rev., Fiscal 2009, Ser. S-3	Aa3	5.250		01/15/39		1,500		1,510,485
New York St. Dorm. Auth. Lease Rev., Ser. B (Mandatory Put Date 07/01/13)	Aa2	5.250(d)		07/01/29		3,000		3,243,390
New York St. Dorm. Auth. Rev.,
City Univ. Sys. Cons., Ser. B	Aa3	6.000		07/01/14		2,070		2,216,018
Mental Health Svcs. Facs. Impvt., Ser. B	Aa3	6.500		08/15/11		3,000		3,082,950
Non St. Supported Debt Mount Sinai Sch. Med., Ser. A	A3	5.000		07/01/21		1,000		1,054,510
Rochester Inst. Tech.,
Ser. A, A.M.B.A.C.	A1	5.250		07/01/20		2,100		2,320,941
Ser. A, A.M.B.A.C.	A1	5.250		07/01/21		2,000		2,197,480

See Notes to Financial Statements.

Prudential National Muni Fund, Inc. 19

Portfolio of Investments

as of February 28, 2011 (Unaudited) continued

Description (a)	Moody’s Rating†*	Interest Rate	Maturity Date		Principal Amount (000)		Value (Note 1)
LONG-TERM INVESTMENTS (Continued)
New York (cont’d.)
New York St. Environ. Facs. Corp. Rev., Clean Wtr. & Drinking Revolving Fds. Pooled Fin., New York City Mun. Wtr. Proj.	Aaa	5.000%		06/15/34	$	2,000	$	2,005,880
Ser. B	Aaa	5.500		10/15/23		3,750		4,437,675
Ser. E	Aaa	6.500		06/15/14		35		35,183
New York St. Hsg. Fin. Agcy. Rev.,
St. Univ. Constr., Ser. A, E.T.M.(h)	Aa3	8.000		05/01/11		470		475,443
New York St. Local Gov’t. Assist. Corp. Rev., Ser. E	Aa2	6.000		04/01/14		2,945		3,201,215
New York St. Mun. Bond. Bank Agcy. Rev., Spl. Sch. Supply,
Ser. C	A+(b)	5.250		06/01/22		3,200		3,318,240
Ser. C	A+(b)	5.250		12/01/22		3,595		3,732,257
Port Auth. of NY & NJ, Spl. Oblig. Rev.,
JFK Int’l. Air Terminal	Baa3	5.000		12/01/20		500		486,380
Suffolk Cnty. Indl. Dev. Agy. Rev.,
Keyspan-Port Jefferson, A.M.T.	Baa1	5.250		06/01/27		1,000		951,400
								72,264,298
North Carolina    2.2%
North Carolina Eastern Mun. Powr. Agcy., Powr. Sys. Rev.,
A.G.C.	Aa3	6.000		01/01/19		500		551,775
A.M.B.A.C.	Baa1	6.000		01/01/18		1,000		1,147,610
Ser. A (Pre-refunded Date 01/01/22)(h)	Aaa	6.000		01/01/26		650		804,147
Ser. A, E.T.M.(h)	Baa1	6.400		01/01/21		1,000		1,207,230
Ser. A, E.T.M.(h)(i)	Aaa	6.500		01/01/18		2,635		3,312,801
Ser. A, NATL, Unrefunded Bal.	Baa1	6.500		01/01/18		1,005		1,183,629
North Carolina Med. Care Commn. Hosp. Rev.,
Baptist Hosp., Rfdg.	Aa3	5.000		06/01/34		5,285		4,973,132
North Carolina Med. Care Commn. Healthcare Facs. Rev.,
Novant Health Oblig., Ser. A	A1	4.750		11/01/43		3,000		2,544,360
Pitt Cnty. Rev., Mem. Hosp.,
E.T.M.(h)	Aaa	5.250		12/01/21		1,000		1,051,390
								16,776,074

See Notes to Financial Statements.

20 Visit our website at www.prudentialfunds.com

Description (a)	Moody’s Rating†*	Interest Rate	Maturity Date		Principal Amount (000)		Value (Note 1)
LONG-TERM INVESTMENTS (Continued)
North Dakota    1.0%
Mclean Cnty. Solid Wste. Facs. Rev.,
Great River Energy Proj., Ser. A	A3	4.875%		07/01/26	$	1,000	$	953,160
Mercer Cnty. Poll. Control Rev.,
Antelope Valley Station, A.M.B.A.C.	A+(b)	7.200		06/30/13		6,450		6,755,085
								7,708,245
Ohio    4.2%
American Mun. Pwr., Inc., Ser. A	Aa3	5.000		02/01/13		2,500		2,642,400
Buckeye Ohio Tob. Settlement, Asset Bkd. Sr. Turbo, Ser. A	Baa3	6.500		06/01/47		4,250		3,089,920
Ser. A-2	Baa3	5.125		06/01/24		5,690		4,253,161
Ser. A-2	Baa3	5.875		06/01/30		1,500		1,078,350
Ser. A-2	Baa3	5.875		06/01/47		1,000		663,180
Columbus Citation Hsg. Dev. Corp.,
Mtge. Rev., F.H.A. (Pre-refunded Date 01/01/15)(h)	NR	7.625		01/01/22		1,275		1,511,704
Cuyahoga Cnty. Hosp. Facs. Rev., Canton, Inc. Proj.	Baa1	7.500		01/01/30		4,885		4,901,511
Hamilton Cnty. Sales Tax Rev.,
Sub. Ser. B, A.M.B.A.C., C.A.B.S.	A1	5.030(c)		12/01/20		2,000		1,238,960
Hilliard Sch. Dist. Sch. Impvt.,
GO, C.A.B.S., NATL	Aa1	3.760(c)		12/01/19		1,720		1,245,039
Lucas Cnty. Healthcare Facs. Rev., Sunset Retirement Impvt., Ser. A, Rfdg.	NR	6.625		08/15/30		1,000		1,000,580
Lucas Cnty. Hosp. Rev., Rfdg.,
Promedica Healthcare, Ser. A,	Aa3	6.000		11/15/41		750		752,272
Promedica Healthcare, Ser. A,	Aa3	6.500		11/15/37		875		926,135
Promedica Healthcare Group, Ser. B, A.M.B.A.C.	Aa3	5.000		11/15/21		3,935		3,985,762
Montgomery Cnty. Rev.,
Miami Valley Hosp., Ser. A	Aa3	6.250		11/15/39		500		513,065
Ohio St. Air Quality Dev. Auth. Rev., Poll. Ctl. First Energy, Rfdg., Ser. C	Baa1	5.625		06/01/18		500		532,840
Ohio St. Higher Ed. Facs. Cmnty. Rev., Case Western Reserve Univ., Ser. B	A1	6.500		10/01/20		750		882,450

See Notes to Financial Statements.

Prudential National Muni Fund, Inc. 21

Portfolio of Investments

as of February 28, 2011 (Unaudited) continued

Description (a)	Moody’s Rating†*	Interest Rate	Maturity Date		Principal Amount (000)		Value (Note 1)
LONG-TERM INVESTMENTS (Continued)
Ohio (cont’d.)
Ohio St. Wtr. Dev. Auth. Rev.,
Poll. Ctl. First Energy, Rfdg., Ser. A (Mandatory Put Date 06/01/16)	Baa1	5.875%		06/01/33	$	500	$	537,720
Poll. Ctl. Ln. Fd. Wtr. Quality, Ser. A	Aaa	5.000		12/01/29		2,150		2,247,545
Ohio St. Wtr. Dev. Auth. Solid Wste. Rev., Allied Wste. N. A., Inc. Proj., Ser. A, A.M.T.	BBB(b)	5.150		07/15/15		750		767,243
								32,769,837
Oklahoma    0.1%
Tulsa Airpts. Impt. Tr. Gen. Rev., Ser. A	A3	5.375		06/01/24		1,000		1,007,020
Oregon    0.5%
Oregon St. Dept. Trans. Hwy. User Tax Rev., Sr. Lien., Ser. A	Aa1	5.000		11/15/33		3,500		3,570,630
Pennsylvania    5.5%
Berks Cnty. Mun. Auth. Hosp. Rev., Reading Hosp. Med. Ctr. Proj., NATL	Aa3	5.700		10/01/14		880		941,389
Bucks Cnty. Wtr. & Swr. Auth. Rev., Ser. A, A.M.B.A.C. (Pre- refunded Date 06/01/12)(h)	A+(b)	5.375		06/01/16		1,080		1,128,405
Delaware River Port Auth. Rev., PA & NJ Port Dist. Proj.,
Ser. B, A.G.C.	Aa3	5.625		01/01/26		5,000		5,003,450
Ser. B, A.G.C.	Aa3	5.700		01/01/22		1,000		1,001,280
Erie Parking Auth. Facs. Rev. Gtd., A.G.C. (Pre-refunded Date 09/01/13)(h)	Aa3	5.000		09/01/26		65		71,857
Monroe Cnty. Hosp. Auth. Rev., Pocono Med. Center (Pre- refunded Date 01/01/14)(h)	NR	6.000		01/01/43		2,500		2,844,025
Northampton Cnty. Higher Ed. Auth. Rev., Moravian Coll., A.M.B.A.C.	NR	6.250		07/01/11		590		598,980

See Notes to Financial Statements.

22 Visit our website at www.prudentialfunds.com

Description (a)	Moody’s Rating†*	Interest Rate	Maturity Date		Principal Amount (000)		Value (Note 1)
LONG-TERM INVESTMENTS (Continued)
Pennsylvania (cont’d.)
Pennsylvania Econ. Dev. Fin. Auth. Res. Recov. Rev., Rfdg., Colver Proj., Ser. F, A.M.B.A.C., A.M.T.	Ba1	4.625%		12/01/18	$	3,500	$	3,158,995
Ser. F, A.M.B.A.C., A.M.T.	Ba1	5.000		12/01/15		3,000		2,856,750
Pennsylvania Econ. Dev. Fin. Auth. Wtr. Rev., Aqua PA, Inc., Rfdg. Proj., Ser. A, A.M.T.	AA-(b)	5.000		12/01/34		2,000		1,845,700
Pennsylvania St. Ind. Dev. Auth. Rev., Econ. Dev.,
A.M.B.A.C.	A1	5.500		07/01/17		9,000		9,392,040
A.M.B.A.C.	A1	5.500		07/01/20		2,750		2,844,462
Philadelphia Auth. Indl. Dev. Rev., Please Touch Museum Proj. Ser. B	BBB-(b)	5.250		09/01/31		1,000		809,110
Philadelphia Gas Wks. Rev., Ser. 9	Baa2	5.250		08/01/40		500		454,845
Philadelphia GO, Ser. B, A.G.C.	Aa3	7.125		07/15/38		1,500		1,641,240
Philadelphia Hosps. & Higher Ed. Facs. Auth. Hosp. Rev., Grad. Health Sys., Oblig. Gp. (original cost $1,820,479; purchased 04/25/96-07/02/98)(e)(f)(g)	NR	7.250		07/01/18		1,803		18
Pittsburgh Urban Redev. Auth., Wtr. & Swr. Sys. Rev., Unrefunded Bal. Rfdg., Ser. A, NATL	Baa1	6.500		09/01/13		2,220		2,336,772
Pittsburgh Wtr. & Swr. Auth. Sys. Rev., Ser. A, F.G.I.C., E.T.M.(h)	BBB(b)	6.500		09/01/13		1,780		1,927,402
Unity Twnshp. Mun. Auth., Gtd. Swr. Rev., A.M.B.A.C., C.A.B.S., E.T.M.(h)	NR	0.960(c)		11/01/12		1,035		1,018,585
Washington Cnty. Hosp. Auth. Rev., Monongahela Valley
Hosp.	A3	6.250		06/01/22		2,400		2,454,096
								42,329,401
Puerto Rico    2.7%
Puerto Rico Comnwlth., GO	A3	6.000		07/01/39		800		776,608

See Notes to Financial Statements.

Prudential National Muni Fund, Inc. 23

Portfolio of Investments

as of February 28, 2011 (Unaudited) continued

Description (a)	Moody’s Rating†*	Interest Rate	Maturity Date		Principal Amount (000)		Value (Note 1)
LONG-TERM INVESTMENTS (Continued)
Puerto Rico (cont’d.)
Puerto Rico Comnwlth., Hwy. & Trans. Auth. Rev.,
Rfdg., Ser. CC	A2	5.500%		07/01/28	$	2,500	$	2,426,425
Ser. G, F.G.I.C.	A3	5.250		07/01/18		2,250		2,268,810
Ser. J (Pre-refunded Date 07/01/14)(h)	A3	5.500		07/01/23		1,320		1,503,955
Ser. K	A3	5.000		07/01/14		2,000		2,109,260
Puerto Rico Elec. Pwr. Auth. Rev., Ser. XX	A3	5.250		07/01/40		2,000		1,737,220
Puerto Rico Mun. Fin. Agcy., GO	A3	5.000		08/01/12		1,000		1,038,050
Puerto Rico Pub. Bldgs. Auth. Rev., Gtd. Govt. Facs., Rfdg., Ser. P	A3	6.750		07/01/36		1,000		1,057,960
Puerto Rico Sales Tax Fin. Corp. Sales Tax Rev.,
First Sub., Ser. A	A1	5.500		08/01/42		1,750		1,636,180
First Sub., Ser. A	A1	5.750		08/01/37		1,600		1,580,640
First Sub., Ser. A	A1	6.000		08/01/42		2,800		2,784,152
First Sub., Ser. C	A1	5.250		08/01/41		2,500		2,251,950
								21,171,210
Rhode Island    0.9%
Rhode Island Health & Ed. Bldg. Corp. Higher Ed. Fac. Rev., Brown Univ. Lifespan Oblig., Ser. A., A.G.C.	Aa1 Aa3	5.000 7.000		09/01/37 05/15/39		5,000 2,000		5,002,700 2,199,520
								7,202,220
South Carolina    0.9%
Florence Cnty. Hosp. Rev., McLeod Reg. Med. Ctr., Ser. A	A+(b)	5.000		11/01/37		1,500		1,345,470
South Carolina Jobs Econ. Dev. Auth. Hosp. Facs. Rev., Rfdg. & Impvt., Palmetto Health, Ser. C (Pre-refunded Date 08/01/13)(h)	Baa1	6.875		08/01/27		2,655		3,021,018
South Carolina Pub. Svc. Auth. Rev., Santee Cooper, Ser. A	Aa2	5.500		01/01/38		2,500		2,591,575
								6,958,063

See Notes to Financial Statements.

24 Visit our website at www.prudentialfunds.com

Description (a)	Moody’s Rating†*	Interest Rate	Maturity Date		Principal Amount (000)		Value (Note 1)
LONG-TERM INVESTMENTS (Continued)
South Dakota    0.1%
Ed. Enhancement Fin. Fdg. Corp. Rev., Tobacco, Ser. B	Baa3	6.500%		06/01/32	$	1,000	$	991,910
Tennessee    0.7%
Knox Cnty. Tenn. Health Edl. & Hsg. Facs. Brd. Hosp. Facs., Covenant Health Rev., Rfdg. & Impt. Ser. A, C.A.B.S.	A-(b)	6.690(c)		01/01/35		1,000		213,720
Memphis Shelby Cnty. Arpt. Auth. Rev., Rfdg., Ser. B, A.M.T.	A2	5.750		07/01/25		1,000		1,012,160
Tennessee Energy Acquisition Corp. Gas Rev.,
Ser. C	Baa3	5.000		02/01/18		2,000		1,992,640
Ser. C	Baa3	5.000		02/01/22		1,000		971,280
Ser. C	Baa3	5.000		02/01/25		1,000		945,060
								5,134,860
Texas    6.3%
Austin Elec. Util. Sys. Rev., Rfdg., Ser. A, A.M.B.A.C	A1	5.000		11/15/22		4,610		4,849,858
Austin Tex. Wtr. & Wstewtr. Sys. Rev., Austin Wtr. & Swr., Ser. A	Aa2	5.125		11/15/29		2,000		2,095,320
Brazos River Auth. Poll. Ctl. Rev., TXU Energy Co. LLC Proj., Ser. D (Mandatory put date 10/01/14)	Ca	5.400(d)		10/01/29		1,000		300,000
TXU Rmkt., A.M.T.	Ca	5.400		05/01/29		1,500		405,000
Harris Cnty. Cultural Edu. Facs. Fin. Corp. Rev.,
Childrens Hosp. Proj.	Aa2	5.000		10/01/29		1,500		1,441,980
Childrens Hosp. Proj.	Aa2	5.500		10/01/39		1,500		1,480,755
Methodist Hosp. Sys., Ser. B	AA(b)	5.500		12/01/18		1,000		1,126,980
Harris Cnty. Indl. Dev. Corp., Solid Wste. Disp. Rev., Deer Park Fing. Proj., LP	A2	5.000		02/01/23		750		752,318
Houston Arpt. Sys. Rev.,
E.T.M.(h)	Aaa	7.200		07/01/13		1,525		1,659,398
Sr. Lien, Rfdg., Ser. A	Aa3	5.500		07/01/39		1,000		1,000,520
Houston Util. Sys. Rev., Rfdg. Comb., 1st Lien, Ser. A, A.G.C.	Aa2	5.250		11/15/33		1,510		1,554,530

See Notes to Financial Statements.

Prudential National Muni Fund, Inc. 25

Portfolio of Investments

as of February 28, 2011 (Unaudited) continued

Description (a)	Moody’s Rating†*	Interest Rate	Maturity Date		Principal Amount (000)		Value (Note 1)
LONG-TERM INVESTMENTS (Continued)
Texas (cont’d.)
Lower Colo. Riv. Auth. Tex. Rev., L.C.R.A. Trans. Svcs.,
Rfdg., B.H.A.C.	Aa1	5.250%		05/15/28	$	2,000	$	2,071,440
Rfdg.	A1	5.750		05/15/28		3,205		3,327,079
North Tex. Twy. Auth. Rev.,
First Tier, Rfdg.	A2	6.000		01/01/38		1,000		993,310
First Tier, Rfdg., Ser. A	A2	5.750		01/01/40		1,500		1,432,920
First Tier, Rfdg., Ser. C	A2	5.250		01/01/44		2,250		1,982,745
First Tier, Ser. A	A2	6.250		01/01/39		1,500		1,517,430
Second Tier, Rfdg., Ser. F	A3	5.750		01/01/38		2,500		2,347,350
Sabine River Auth. Poll Ctl. Rev., TXU Energy Co. LLC Proj., Ser. B	Ca	6.150		08/01/22		1,000		270,000
San Antonio Elec. & Gas Sys., Ser. A	Aa1	5.000		02/01/21		5,000		5,466,150
Tarrant Cnty. Cultural Edu. Facs. Fin. Corp. Hosp. Rev., Scott & White Healthcare	A1	5.250		08/15/40		2,500		2,277,400
Texas Health Resources	Aa3	5.000		11/15/40		2,500		2,250,550
Texas Private Activity Surface Trans. Corp., Sr. Lien LBJ Infrastructure	Baa3	7.000		06/30/40		2,500		2,535,550
Texas St. Pub. Fin. Auth. Charter Sch. Fin. Corp. Rev., Edu.- Idea. Pub. Sch. Proj., Ser. A, A.C.A.	BBB(b)	5.000		08/15/30		1,000		827,000
Texas St. Pub. Fin. Auth. Rev., Southern Univ. Fin. Sys., NATL	Baa1	5.500		11/01/18		2,240		2,224,611
Texas St. Vets. Hsg. Assistance Proj. Fdg., Ser. II-A, GO	AA+(b)	5.250		12/01/23		2,500		2,785,475
								48,975,669
Utah    0.9%
Intermountain Power Agcy., Utah Pwr., Supply Rev., A.M.B.A.C.	A1	5.000		07/01/17		5,000		5,613,600
Riverton Hosp. Rev., I.H.C. Health Svcs. Inc.	Aa1	5.000		08/15/41		1,500		1,404,405
								7,018,005
Virgin Islands    0.2%
Virgin Islands Pub. Fin. Auth. Rev., Sr. Lien Matching Fund Loan, Note A	Baa2	5.250		10/01/21		1,500		1,518,405

See Notes to Financial Statements.

26 Visit our website at www.prudentialfunds.com

Description (a)	Moody’s Rating†*	Interest Rate	Maturity Date		Principal Amount (000)		Value (Note 1)
LONG-TERM INVESTMENTS (Continued)
Virginia    1.1%
Richmond Met. Auth. Expy. Rev., Rfdg., NATL	BBB(b)	5.250%		07/15/17	$	5,775	$	6,361,336
Roanoke Econ. Dev. Auth. Hosp. Rev., Carolina Clinic Oblig., Rfdg.	A1	5.000		07/01/33		1,000		932,420
Tobacco Settlement Fin. Corp. Rev., Asset Bkd. (Pre-refunded Date 06/01/15)(h)	Aaa	5.625		06/01/37		1,000		1,159,650
								8,453,406
Washington    3.0%
FYI Properties Lease Rev., Washington St. Dist. Proj.	AA(b)	5.500		06/01/39		1,000		988,600
Port Seattle Wash. Rev., Rfdg., Intermediate Lien, Ser. B	Aa3	5.000		06/01/40		2,000		1,896,920
Ser. B, A.M.T.	Aa3	5.000		02/01/24		2,500		2,462,500
X.L.C.A.	Aa3	5.000		02/01/28		3,000		3,045,630
Skagit Cnty. Skagit Hsp. Dist. No. 1 Rev., Ser. 2010	Baa2	5.750		12/01/35		625		571,906
Snohomish Cnty., Pre-refunded Ltd. Tax (Pre-refunded Date 12/01/11)(h)	Aa2	5.375		12/01/19		220		228,197
Tobacco Settlement Auth. Rev., Asset Bkd.	Baa3	6.500		06/01/26		1,635		1,646,249
Washington St. Economic Dev. Fin. Auth. Lease Rev., Biomedical Resh. Pptys. II,
NATL	Aa1	5.000		06/01/21		2,665		2,843,315
NATL	Aa1	5.000		06/01/22		2,570		2,712,455
Washington St. Healthcare Facs. Auth. Rev., Overlake Hosp. Med. Ctr.	A3	5.500		07/01/30		1,115		1,090,258
Providence Health & Svcs., Ser. A	Aa2	5.000		10/01/39		3,500		3,097,885
Providence Healthcare, Ser. A, F.G.I.C. (Pre-refunded Date 10/01/16)(h)	Aa2	5.000		10/01/36		85		99,604
Seattle Childrens Hospital	Aa3	5.625		10/01/38		1,250		1,255,413
Washington Healthcare Facs. Auth. Rev., Swedish Health Svcs., Ser. A	A2	6.250		11/15/41		1,500		1,491,705
								23,430,637

See Notes to Financial Statements.

Prudential National Muni Fund, Inc. 27

Portfolio of Investments

as of February 28, 2011 (Unaudited) continued

Description (a)	Moody’s Rating†*	Interest Rate	Maturity Date		Principal Amount (000)		Value (Note 1)
LONG-TERM INVESTMENTS (Continued)
West Virginia    0.1%
West Virginia St. Wtr. Dev. Auth., Loan Proj. III, Ser. B, A.M.B.A.C., A.M.T.	A(b)	5.875%		07/01/20	$	1,015	$	1,026,388
Wisconsin    0.5%
Wisconsin St. Gen. Rev., Ser. A, St. Approp.	Aa3	5.750		05/01/33		2,000		2,109,100
Wisconsin St. Health & Edl. Facs. Auth. Rev., Marshfield Clinic, Ser. B	BBB+(b)	6.000		02/15/25		2,000		2,003,600
								4,112,700
Wyoming    0.1%
Campbell Cnty. Solid Wst. Facs. Rev., Basin Elec. Pwr. Coop., Ser. A	A1	5.750		07/15/39		500		518,115
Total long-term investments (cost $773,448,719)								762,469,568
SHORT-TERM INVESTMENT    0.2%
California
Sacramento Cnty. Santn. Dist. Fin. Auth. Rev., Sub. Lien Santn. Dist., Rfdg., Ser. C, F.R.D.D. (cost $1,900,000)	VMIG1	0.240(d)		03/01/11		1,900		1,900,000
Total Investments    99.0% (cost $775,348,719; Note 5)								764,369,568
Other assets in excess of liabilities(j)    1.0%								7,623,746
Net Assets    100.0%							$	771,993,314

144A—Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may not be resold subject to that rule except to qualified institutional buyers. Unless otherwise noted, 144A securities are deemed to be liquid.

(a) The following abbreviations are used in portfolio descriptions:

A.C.A.—American Capital Access Corp.

A.G.C.—Assured Guaranty Corp.

A.M.B.A.C.—American Municipal Bond Assurance Corp.

See Notes to Financial Statements.

28 Visit our website at www.prudentialfunds.com

A.M.T.—Alternative Minimum Tax

B.H.A.C.—Berkshire Hathaway Assurance Corp.

C.A.B.S.—Capital Appreciation Bonds

E.T.M.—Escrowed to Maturity

F.H.A.—Federal Housing Administration

F.H.L.M.C.—Federal Home Loan Mortgage Corp.

F.G.I.C.—Financial Guaranty Insurance Co.

F.N.M.A.—Federal National Mortgage Association

F.R.D.D.—Floating Rate (Daily) Demand Note

G.N.M.A.—Government National Mortgage Association

GO—General Obligation

I.H.C. —Intermountain Healthcare

L.C.R.A. — Lower Colorado River Authority

NATL —National Public Finance Guarantee Corp.

NR — Not Rated by Moody’s or Standard and Poor’s ratings

T.C.R.S.—Transferable Custodial Receipts

U.C.L.A.— University of California, Los Angeles

X.L.C.A.—XL Capital Assurance

† The ratings reflected are as of February 28, 2011. Ratings of certain bonds may have changed subsequent to that date.

* The Fund’s current Statement of Additional Information contains a description of Moody’s and Standard & Poor’s ratings.

(b) Standard & Poor’s rating.

(c) Represents a zero coupon bond or step bond. Rate shown reflects the effective yield on February 28, 2011.

(d) Floating Rate Security. The interest rate shown reflects the rate in effect at February 28, 2011.

(e) Indicates a security that has been deemed illiquid.

(f) Represents issuer in default on interest payments and/or principal repayment; non-income producing security.

(g) Indicates a restricted security; the aggregate original cost of such securities is $2,620,479. The aggregate value of $324,728 is approximately 0.0% of net assets.

(h) All or partial escrowed to maturity and pre-refunded securities are secured by escrowed cash and/or U.S. guaranteed obligations.

(i) Represents security, or a portion thereof, segregated as collateral for futures contracts.

(j) Other assets in excess of liabilities include net unrealized depreciation on financial futures contracts as follows:

See Notes to Financial Statements.

Prudential National Muni Fund, Inc. 29

Portfolio of Investments

as of February 28, 2011 (Unaudited) continued

Open futures contracts outstanding at February 28, 2011:

Number of Contracts		Type	Expiration Date		Value at Trade Date		Value at February 28, 2011		Unrealized Depreciation
		Short Positions:
	43	5 Year U.S. Treasury Notes		Jun. 2011	$	4,972,391	$	5,028,313	$	(55,922	)
	80	10 Year U.S. Treasury Notes		Jun. 2011		9,393,563		9,523,750		(130,187	)
	98	U.S. Long Bond		Jun. 2011		11,530,039		11,793,687		(263,648	)
									$	(449,757	)

Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below.

Level 1—quoted prices generally for stocks, exchange traded funds, options and futures traded in active markets for identical securities, and mutual funds which trade at daily net asset value.

Level 2—other significant observable inputs (including, but not limited to, quoted prices for similar securities, interest rates, prepayment speeds, foreign currency exchange rates, and amortized cost) generally for debt securities, swaps, forward foreign currency contracts and for foreign stocks priced using vendor modeling tools.

Level 3—significant unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.

The following is a summary of the inputs used as of February 28, 2011 in valuing such portfolio securities:

	Level 1			Level 2		Level 3
Investments in Securities
Municipal Bonds	$	—		$	764,369,568	$	—
Other Financial Instruments*
Futures Contracts		(449,757	)		—		—
Total	$	(449,757	)	$	764,369,568	$	—

* Other financial instruments are derivative instruments not reflected in the Portfolio of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

See Notes to Financial Statements.

30 Visit our website at www.prudentialfunds.com

The industry classification of portfolio holdings and other assets in excess of liabilities shown as a percentage of net assets as of February 28, 2011 were as follows:

Transportation	18.7	%
Healthcare	16.4
General Obligation	10.2
Power	9.1
Special Tax/Assessment District	8.0
Education	6.8
Pre-Refunded	6.2
Water & Sewer	4.8
Other Muni	4.6
Lease Backed Certificate of Participation	4.2
Corporate Backed IDB & PCR	3.4
Tobacco	3.2
Other	1.4
Solid Waste/Resource Recovery	1.0
Housing	0.5
Tobacco Appropriated	0.3
Short-Term Investments	0.2
	99.0
Other assets in excess of liabilities	1.0
Net Assets	100.0	%

Industry classification is subject to change.

The Fund invested in derivative instruments during the reporting period. The primary types of risk associated with these derivative instruments are interest rate risk. The effect of such derivative instruments on the Fund’s financial position and financial performance as reflected in the Statement of Assets and Liabilities and Statement of Operations is presented in the summary below.

Fair values of derivative instruments as of February 28, 2011 as presented in the Statement of Assets and Liabilities:

Derivatives not designated as hedging instruments, carried at fair value	Asset Derivatives		Liability Derivatives
	Balance Sheet Location	Fair Value	Balance Sheet Location	Fair Value
Interest rate contracts	—	—	Due to broker— variation margin	$	449,757	*

* Includes cumulative appreciation/depreciation on futures contracts as reported in Portfolio of Investments. Only unsettled variation margin receivable (payable) is reported within the Statement of Assets and Liabilities.

See Notes to Financial Statements.

Prudential National Muni Fund, Inc. 31

Portfolio of Investments

as of February 28, 2011 (Unaudited) continued

The effects of derivative instruments on the Statement of Operations for the six months ended February 28, 2011 are as follows:

Amount of Realized Gain or (Loss) on Derivatives Recognized in Income
Derivatives not designated as hedging instruments, carried at fair value	Futures
Interest rate contracts	$	2,327,449
Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income
Derivatives not designated as hedging instruments, carried at fair value	Futures
Interest rate contracts	$	(286,160	)

For the six months ended February 28, 2011, the Fund’s average value at trade date for short positions on future contracts was $36,919,836.

See Notes to Financial Statements.

32 Visit our website at www.prudentialfunds.com

Financial Statements

(Unaudited)

FEBRUARY 28, 2011 SEMIANNUAL REPORT

Prudential National Muni Fund, Inc.

Statement of Assets and Liabilities

as of February 28, 2011 (Unaudited)

Assets
Unaffiliated investments at value (cost $775,348,719)	$	764,369,568
Cash		119,620
Interest receivable		9,809,754
Receivable for investments sold		953,932
Receivable for Fund shares sold		109,778
Prepaid expenses		9,778
Total assets		775,372,430
Liabilities
Payable for investments purchased		1,457,970
Payable for Fund shares reacquired		1,107,942
Management fee payable		279,357
Distribution fee payable		162,677
Accrued expenses		133,673
Dividends payable		91,112
Affiliated transfer agent fee payable		58,614
Deferred directors’ fees		52,583
Due to broker—variation margin		35,188
Total liabilities		3,379,116
Net Assets	$	771,993,314
Net assets were comprised of:
Common stock, at par	$	547,451
Paid-in capital in excess of par		784,143,009
		784,690,460
Undistributed net investment income		661,934
Accumulated net realized loss on investments and financial futures transactions		(1,930,172	)
Net unrealized depreciation on investments and financial futures		(11,428,908	)
Net assets, February 28, 2011	$	771,993,314

See Notes to Financial Statements.

34 Visit our website at www.prudentialfunds.com

Class A
Net asset value and redemption price per share ($709,327,051 ÷ 50,309,814 shares of common stock issued and outstanding)	$	14.10
Maximum sales charge (4% of offering price)		0.59
Maximum offering price to public	$	14.69
Class B
Net asset value, offering price and redemption price per share ($29,490,965 ÷ 2,085,767 shares of common stock issued and outstanding)	$	14.14
Class C
Net asset value, offering price and redemption price per share ($21,314,039 ÷ 1,507,696 shares of common stock issued and outstanding)	$	14.14
Class Z
Net asset value, offering price and redemption price per share ($11,861,259 ÷ 841,872 shares of common stock issued and outstanding)	$	14.09

See Notes to Financial Statements.

Prudential National Muni Fund, Inc. 35

Statement of Operations

Six Months Ended February 28, 2011 (Unaudited)

Net Investment Income
Income
Interest	$	20,405,332
Expenses
Management fee		1,922,493
Distribution fee—Class A		932,096
Distribution fee—Class B		77,676
Distribution fee—Class C		95,651
Transfer agent’s fees and expenses (including affiliated expense of $167,400)		243,000
Custodian’s fees and expenses		65,000
Registration fees		34,000
Reports to shareholders		29,000
Audit fee		16,000
Legal fees and expenses		16,000
Directors’ fees		12,000
Insurance expenses		11,000
Miscellaneous		9,560
Total expenses		3,463,476
Less: Custodian fee credit (Note 1)		(79	)
Net expenses		3,463,397
Net investment income		16,941,935
Realized And Unrealized Gain (Loss) On Investments
Net realized gain on:
Investment transactions		590,998
Financial futures transactions		2,327,449
		2,918,447
Net change in unrealized appreciation (depreciation) on:
Investments		(56,764,857	)
Financial futures contracts		(286,160	)
		(57,051,017	)
Net loss on investments		(54,132,570	)
Net Decrease In Net Assets Resulting From Operations	$	(37,190,635	)

See Notes to Financial Statements.

36 Visit our website at www.prudentialfunds.com

Statement of Changes in Net Assets

(Unaudited)

	Six Months Ended February 28, 2011			Year Ended August 31, 2010
Increase (Decrease) In Net Assets
Operations
Net investment income	$	16,941,935		$	34,973,972
Net realized gain (loss) on investments and financial futures transactions		2,918,447			(1,714,758	)
Net change in unrealized appreciation (depreciation) on investments and financial futures		(57,051,017	)		37,517,036
Net increase (decrease) in net assets resulting from operations		(37,190,635	)		70,776,250
Dividends (Note 1)
Dividends from net investment income
Class A		(15,610,252	)		(32,156,500	)
Class B		(611,835	)		(1,363,110	)
Class C		(417,945	)		(822,810	)
Class Z		(292,355	)		(548,084	)
		(16,932,387	)		(34,890,504	)
Fund share transactions (Net of share conversions) (Note 6)
Net proceeds from shares sold		16,648,590			49,349,233
Net asset value of shares issued in reinvestment of dividends and distributions		13,716,166			26,946,289
Cost of shares reacquired		(74,622,211	)		(88,958,063	)
Decrease in net assets from Fund share transactions		(44,257,455	)		(12,662,541	)
Capital Contributions (Note 6)
Proceeds from regulatory settlement		—			8,876
Total increase (decrease)		(98,380,477	)		23,232,081
Net Assets:
Beginning of period		870,373,791			847,141,710
End of period(a)	$	771,993,314		$	870,373,791
(a) Includes undistributed net investment income of:	$	661,934		$	652,386

See Notes to Financial Statements.

Prudential National Muni Fund, Inc. 37

Notes to Financial Statements

(Unaudited)

Prudential National Muni Fund, Inc. (the “Fund”), is registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. The investment objective of the Fund is to seek a high level of current income exempt from federal income taxes by investing substantially all of its total assets in carefully selected long-term municipal bonds of medium quality. The ability of the issuers of debt securities held by the Fund to meet their obligations may be affected by economic or political developments in a specific state, industry or region.

Note 1. Accounting Policies

The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements.

Securities Valuations: The Fund values municipal securities (including commitments to purchase such securities on a “when-issued” basis) as of the close of trading on the New York Stock Exchange, on the basis of prices provided by a pricing service which uses information with respect to transactions in comparable securities and various relationships between securities in determining values. Securities listed on a securities exchange (other than options on securities and indices) are valued at the last sale price on such exchange on the day of valuation or, if there was no sale on such day, at the mean between the last reported bid and asked prices, or at the last bid price on such day in the absence of an asked price. Securities that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed by Prudential Investments LLC (“PI” or “Manager”) in consultation with the subadvisor, to be over-the-counter, are valued at market value using prices provided, by an independent pricing agent or principal market maker. Futures contracts and options thereon traded on an exchange or board of trade are valued at the last sale price at the close of trading on such exchange or board of trade or, if there was no sale on the applicable exchange or board of trade on such day, at the mean between the most recently quoted prices on such exchange or board of trade or at the last bid price in the absence of an asked price. Securities for which reliable market quotations are not readily available or for which the pricing service does not provide a valuation methodology, or does not present fair value, are valued at fair value in accordance with Board of Directors’ approved fair valuation procedures. When determining the fair valuation of securities, some of the factors influencing the valuation include, the nature of any restrictions on disposition of the securities; assessment of the general

38 Visit our website at www.prudentialfunds.com

liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst media or other reports or information deemed reliable by the investment adviser regarding the issuer or the markets or industry in which it operates. Using fair value to price securities may result in a value that is different from a security’s most recent closing price and from the price used by other mutual funds to calculate their net asset values.

Investments in open end non-exchange-traded mutual funds are valued at their net asset value as of the close of the New York Stock Exchange on the date of valuation.

Short-term debt securities of sufficient credit quality which mature in sixty days or less are valued at amortized cost, which approximates fair value. The amortized cost method involves valuing a security at its cost on the date of purchase and thereafter assuming a constant amortization to maturity of the difference between the principal amount due at maturity and cost. Short-term debt securities which mature in more than sixty days are valued at fair value.

Floating-Rate Notes Issued in Conjunction with Securities Held: The fund invests in inverse floating rate securities (“inverse floaters”) that pay interest at a rate that varies inversely with short-term interest rates. Certain of these securities may be leveraged, whereby the interest rate varies inversely at a multiple of the change in short-term rates. As interest rates rise, inverse floaters produce less current income. The price of such securities is more volatile than comparable fixed rate securities.

When the Fund enters into agreements to create inverse floaters and floater note securities (also know as Tender Option Bond Transactions), the Fund transfers a fixed rate bond to a broker for cash. At the same time the Fund buys (receives) a residual interest in a trust (the “trust”) set up by the broker, often referred to as an inverse floating rate obligation (inverse floaters). Generally, the broker deposits a fixed rate bond (the “fixed rate bond”) into the trust with the same CUSIP number as the fixed rate bond sold to the broker by the Fund. The “trust” also issues floating rate notes (“floating rate notes”), which are sold to third parties. The floating rate notes have interest rates that reset weekly. The inverse floater held by the Fund gives the Fund the right (1) to cause the holders of the floating rate notes to tender their notes at par, and (2) to have the broker transfer the fixed rate bond held by the trust to the Fund thereby collapsing the trust. The Fund accounts for the transaction described above as funded leverage by including the fixed rate in its Portfolio of Investments, and accounts for the floating rate notes are as a liability under the bond caption “payable for floating rate notes issued” in the Fund’s “Statement of Assets and Liabilities.” Interest expense

Prudential National Muni Fund, Inc. 39

Notes to Financial Statements

(Unaudited) continued

related to the Fund’s liability in connection with the floating rate notes held by third parties is recorded as incurred. The interest expense is under the caption “interest expenses and fees related to inverse floaters” in the Fund’s “Statement of Operations” and is also included in the Fund’s expense ratio. For the six months ended February 28, 2011 the Fund did not enter into any Tender Option Bond Transactions.

The Fund may also invest in inverse floaters without transferring a fixed rate bond into a trust, which is not accounted for as funded leverage. The interest rates on these securities have an inverse relationship to the interest rate of other securities or the value of an index. Changes in interest rates on the other security or index inversely affect the rate paid on the inverse floater, and the inverse floater’s price will be more volatile than that of a fixed-rate bond. Additionally, some of these securities contain a “leverage factor” whereby the interest rate moves inversely by a “factor” to the benchmark rate. Certain interest rate movements and other market factors can substantially affect the liquidity of inverse floating rate notes.

The Fund’s investment policies and restrictions permit investments in inverse floating rate securities. Inverse floaters held by the Fund are securities exempt from registration under Rule 144A of the Securities Act of 1933.

Financial Futures Contracts: A financial futures contract is an agreement to purchase (long) or sell (short) an agreed amount of securities at a set price for delivery on a future date. Upon entering into a financial futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount. This amount is known as the “initial margin.” Subsequent payments, know as “variation margin,” are made or received by the Fund each day, depending on the daily fluctuations in the value of the underlying security. Such variation margin is recorded for financial statement purposes on a daily basis as unrealized gain or loss. When the contract expires or is closed, the gain or loss is realized and is presented in the statement of operations as net realized gain (loss) on financial futures contracts.

The Fund invests in financial futures contracts in order to hedge existing portfolio securities, or securities the Fund intends to purchase, against fluctuations in value caused by changes in prevailing interest rates, and manage yield curve and duration. The Fund may not achieve the anticipated benefits of the financial futures contracts and may realize a loss. The use of futures transactions involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates and the underlying hedged assets.

40 Visit our website at www.prudentialfunds.com

Financial future contracts involve elements of both market and credit risk in excess of the amounts reflected on the Statement of Assets and Liabilities.

With exchange-traded futures contracts, there is minimal counterparty credit risk to the Fund since the exchanges’ clearinghouse acts as counterparty to all exchange traded futures and guarantees the futures contracts against default.

Restricted Securities: The Fund may hold up to 15% of its net assets in illiquid securities, including those which are restricted as to disposition under securities law (“restricted securities”). Restricted securities held by the Fund at the end of the period may include registration rights under which the Fund may demand registration by the issuer, of which the Fund may bear the cost of such registration. Restricted securities are valued pursuant to the valuation procedures noted above.

Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized gains or losses on sales of portfolio securities are calculated on the identified cost basis. Interest income, including amortization of premium and accretion of discount on debt securities, as required, is recorded on the accrual basis. Expenses are recorded on the accrual basis which may require the use of certain estimates by management. The Fund amortizes premiums and accretes discounts on purchases of debt securities as adjustments to interest income. Net investment income or loss (other than distribution fees, which are charged directly to respective class) and unrealized and realized gains or losses, are allocated daily to each class of shares based upon the relative proportion of net assets of each class at the beginning of the day.

Taxes: For federal income tax purposes, it is the Fund’s policy to continue to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net income and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required.

Dividends and Distributions: The Fund declares daily dividends from net investment income. Payment of dividends is made monthly. Distributions of net realized capital gains, if any, are made annually. Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, are recorded on the ex-dividend date. Permanent book/tax differences relating to income and gains are reclassified amongst undistributed net investment income, accumulated net realized gain or loss and paid-in capital in excess of par, as appropriate.

Custody Fee Credits: The Fund has an arrangement with its custodian bank, whereby uninvested monies earn credits which reduce the fees charged by the custodian. Such

Prudential National Muni Fund, Inc. 41

Notes to Financial Statements

(Unaudited) continued

custody fee credits are presented as a reduction of gross expenses in the accompanying Statement of Operations.

Estimates: The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

Note 2. Agreements

The Fund has a management agreement with Prudential Investments LLC (“PI”). Pursuant to this agreement, PI has responsibility for all investment advisory services and supervises the subadvisor’s performance of such services. PI has entered into a subadvisory agreement with Prudential Investment Management, Inc. (“PIM”). The subadvisory agreement provides that PIM will furnish investment advisory services in connection with the management of the Fund. In connection therewith, PIM is obligated to keep certain books and records of the Fund. PI pays for the services of PIM, the cost of compensation of officers of the Fund, occupancy and certain clerical and bookkeeping costs of the Fund. The Fund bears all other costs and expenses.

The management fee paid to PI is computed daily and payable monthly at an annual rate of .50% of the Fund’s average daily net assets up to and including $250 million, .475% of the next $250 million, .45% of the next $500 million, .425% of the next $250 million, .40% of the next $250 million and .375% of the Fund’s average daily net assets in excess of $1.5 billion. The effective management fee rate was .47% of the Fund’s average daily net assets for the six months ended February 28, 2011.

The Fund has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”), which acts as the distributor of the Class A, B, C and Z shares of the Fund. The Fund compensates PIMS for distributing and servicing the Fund’s Class A, Class B and Class C shares, pursuant to plans of distribution (the “Class A, B and C Plans”), regardless of expenses actually incurred by it. The distribution fees are accrued daily and payable monthly. No distribution or service fees are paid to PIMS as distributor of the Class Z shares of the Fund.

Pursuant to the Class A, B and C Plans, the Fund compensates PIMS for distribution- related activities at an annual rate of up to .30%, .50% and 1%, of the average daily net assets of the Class A, B and C shares, respectively. For the six months ended

42 Visit our website at www.prudentialfunds.com

February 28, 2011 and period ended December 31, 2010, PIMS contractually agreed to limit such fees to .25% and .75% of the average daily net assets of the Class A and Class C shares, respectively. The effective distribution fee rate for Class C was .83% for the six months ended February 28, 2011.

PIMS has advised the Fund that it received $65,010 in front-end sales charges resulting from sales of Class A shares, for the six months ended February 28, 2011. From these fees, PIMS paid a substantial portion of such sales charges to dealers, which in turn paid commissions to salespersons and incurred other distribution costs.

PIMS has advised the Fund that for the six months ended February 28, 2011, it received $37,721 and $3,432 in contingent deferred sales charges imposed upon certain redemptions by Class B and Class C shareholders, respectively.

PI, PIM and PIMS are indirect, wholly owned subsidiaries of Prudential Financial, Inc. (“Prudential”).

Note 3. Other Transactions with Affiliates

Prudential Mutual Fund Services LLC (“PMFS”), an affiliate of PI and an indirect wholly-owned subsidiary of Prudential, serves as the Fund’s transfer agent. The transfer agent fees and expenses in the Statement of Operations include certain out-of-pocket expenses paid to non-affiliates, where applicable.

Note 4. Portfolio Securities

Purchases and sales of investment securities, other than short-term investments, for the six months ended February 28, 2011, aggregated $56,988,750 and $98,260,729, respectively.

Note 5. Tax Information

The United States federal income tax basis of the Fund’s investments and the net unrealized depreciation as of February 28, 2011 were as follows:

Tax Basis of Investments	Appreciation	Depreciation	Net Unrealized Depreciation
$774,514,278	$22,429,890	$(32,574,600)	$(10,144,710)

The differences between book and tax basis are primarily attributable to differences in the treatment of accreting market discount for book and tax purposes as of the most recent fiscal year end.

Prudential National Muni Fund, Inc. 43

Notes to Financial Statements

(Unaudited) continued

As of August 31, 2010, the Fund had a capital loss carryforward for tax purposes of approximately $3,588,000 of which $225,000 expires in 2016, $35,000 expires in 2017 and $3,328,000 expires in 2018. No capital gains distributions are expected to be paid to shareholders until net gains have been realized in excess of such carryforward. It is uncertain whether the Fund will be able to realize the full benefit prior to the expiration date. The Fund elected to treat post-October capital losses of approximately $2,241,000 as having been incurred in the fiscal year ending August 31, 2011.

Under the recently enacted Regulated Investment Company Modernization Act of 2010, the Fund will be permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 (“post-enactment losses”) for an unlimited period. However, any post-enactment losses incurred will be required to be utilized prior to the utilization of losses incurred in pre-enactment taxable years. As a result of this ordering rule, pre-enactment capital loss carryforward may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.

Management has analyzed the Fund’s tax positions taken on federal income tax returns for all open tax years and has concluded that no provision for income tax is required in the Fund’s financial statements. The Fund’s federal and state income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.

Note 6. Capital

The Fund offers Class A, Class B, Class C and Class Z shares. Class A shares are subject to a maximum front-end sales charge of 4%. All investors who purchase Class A shares in an amount of $1 million or more are not subject to a front-end sales charge but are subject to a contingent deferred sales charge (CDSC) of 1%, if they sell these shares within 12 months of purchase, including investors who purchase their shares through broker-dealers affiliated with Prudential. Class B shares are sold with a CDSC which declines from 5% to zero depending upon the period of time the shares are held. Class C shares are subject to a CDSC of 1% within 12 months from the date of purchase. Class B shares will automatically convert to Class A shares on a quarterly basis approximately seven years after purchase. In addition, under certain limited circumstances, an exchange may be made from Class A to Class Z shares of the Fund.

44 Visit our website at www.prudentialfunds.com

A special exchange privilege is also available for shareholders who qualify to purchase Class A shares at net asset value. Class Z shares are not subject to any sales or redemption charge and are offered exclusively for sale to a limited group of investors.

During the year ended August 31, 2010, the Fund received $8,876 related to settlement of regulatory proceedings involving allegations of improper trading in Fund shares. The amounts relating to a former affiliate and to an unaffiliated-third party were $5,607 and $3,269, respectively. The total amount is presented in the Fund’s Statement of Changes in Net Assets. The Fund was not involved in the proceedings or in the calculation of the amount of settlement.

There are 1 billion shares of common stock, $.01 par value per share, authorized and divided into four classes, designated Class A, Class B, Class C and Class Z common stock, each of which consists of 250 million authorized shares.

Transactions in shares of common stock were as follows:

Class A	Shares			Amount
Six months ended February 28, 2011:
Shares sold		601,554		$	8,710,492
Shares issued in reinvestment of dividends		876,572			12,633,820
Shares reacquired		(4,334,025	)		(62,060,998	)
Net increase (decrease) in shares outstanding before conversion		(2,855,899	)		(40,716,686	)
Shares issued upon conversion from Class B		207,823			3,049,537
Shares reacquired upon conversion into Class Z		(74,002	)		(1,057,499	)
Net increase (decrease) in shares outstanding		(2,722,078	)	$	(38,724,648	)
Year ended August 31, 2010:
Shares sold		1,845,214		$	27,141,383
Shares issued in reinvestment of dividends		1,688,194			24,827,905
Shares reacquired		(4,718,726	)		(69,292,671	)
Net increase (decrease) in shares outstanding before conversion		(1,185,318	)		(17,323,383	)
Shares issued upon conversion from Class B		534,405			7,839,631
Net increase (decrease) in shares outstanding		(650,913	)	$	(9,483,752	)
Class B
Six months ended February 28, 2011:
Shares sold		209,698		$	3,066,319
Shares issued in reinvestment of dividends		35,998			520,246
Shares reacquired		(200,230	)		(2,864,328	)
Net increase (decrease) in shares outstanding before conversion		45,466			722,237
Shares reacquired upon conversion into Class A		(207,193	)		(3,049,537	)
Net increase (decrease) in shares outstanding		(161,727	)	$	(2,327,300	)

Prudential National Muni Fund, Inc. 45

Notes to Financial Statements

(Unaudited) continued

Class B	Shares			Amount
Year ended August 31, 2010:
Shares sold		712,740		$	10,486,112
Shares issued in reinvestment of dividends		75,032			1,106,396
Shares reacquired		(731,674	)		(10,764,881	)
Net increase (decrease) in shares outstanding before conversion		56,098			827,627
Shares reacquired upon conversion into Class A		(532,573	)		(7,839,631	)
Net increase (decrease) in shares outstanding		(476,475	)	$	(7,012,004	)
Class C
Six months ended February 28, 2011:
Shares sold		180,114		$	2,620,834
Shares issued in reinvestment of dividends		23,187			335,473
Shares reacquired		(362,018	)		(5,220,225	)
Net increase (decrease) in shares outstanding		(158,717	)	$	(2,263,918	)
Year ended August 31, 2010:
Shares sold		434,272		$	6,394,284
Shares issued in reinvestment of dividends		41,070			605,725
Shares reacquired		(226,274	)		(3,334,877	)
Net increase (decrease) in shares outstanding		249,068		$	3,665,132
Class Z
Six months ended February 28, 2011:
Shares sold		154,566		$	2,250,945
Shares issued in reinvestment of dividends		15,746			226,627
Shares reacquired		(315,110	)		(4,476,660	)
Net increase (decrease) in shares outstanding before conversion		(144,798	)		(1,999,088	)
Shares issued upon conversion from Class A		74,054			1,057,499
Net increase (decrease) in shares outstanding		(70,744	)	$	(941,589	)
Year ended August 31, 2010:
Shares sold		363,351		$	5,327,454
Shares issued in reinvestment of dividends		27,624			406,263
Shares reacquired		(381,500	)		(5,565,634	)
Net increase (decrease) in shares outstanding		9,475		$	168,083

Note 7. Borrowings

The Fund, along with other affiliated registered investment companies (the “Funds”), is a party to a syndicated credit agreement (“SCA”) with a group of banks. The purpose of the SCA is to provide an alternative source of temporary funding for

46 Visit our website at www.prudentialfunds.com

capital share redemptions. The SCA provides for a commitment of $750 million for the period December��17, 2010 through December 16, 2011. The Funds pay an annualized commitment fee of 0.10% of the unused portion of the SCA. Prior to December 17, 2010, the Funds had another Syndicated Credit Agreement (the “Expired SCA”) of a $500 million commitment with an annualized commitment fee of 0.15% of the unused portion. Interest on any borrowings under these SCA’s is paid at contracted market rates. The commitment fee for the unused amount is accrued daily and paid quarterly. The Fund did not borrow any amounts pursuant to the SCA during the six months ended February 28, 2011.

Prudential National Muni Fund, Inc. 47

Financial Highlights

(Unaudited)

Class A Shares
	Six Months Ended February 28,			Year Ended August 31,									Eight-Month Period Ended August 31,			Year Ended December 31,
	2011			2010			2009			2008			2007(a)			2006			2005
Per Share Operating Performance:
Net Asset Value, Beginning Of Period		$15.04			$14.42			$14.41			$14.64			$15.12			$15.09			$15.32
Income (loss) from investment operations:
Net investment income		.30			.60			.60			.60			.40			.59			.60
Net realized and unrealized gain (loss) on investments and financial futures transactions		(.94	)		.62			.01			(.21	)		(.47	)		.10			(.15	)
Total from investment operations		(.64	)		1.22			.61			.39			(.07	)		.69			.45
Less Dividends and Distributions:
Dividends from net investment income		(.30	)		(.60	)		(.60	)		(.60	)		(.40	)		(.59	)		(.60	)
Distributions from net realized gains		-			-			-			(.02	)		(.01	)		(.07	)		(.08	)
Total dividends and distributions		(.30	)		(.60	)		(.60	)		(.62	)		(.41	)		(.66	)		(.68	)
Capital Contributions:		-			-	(b)		-			-			-			-			-
Net asset value, end of period		$14.10			$15.04			$14.42			$14.41			$14.64			$15.12			$15.09
Total Return(c):		(4.28)%			8.65%			4.46%			2.66%			(.47)%			4.68%			3.02%
Ratios/Supplemental Data:
Net assets, end of period (000)		$709,327			$797,627			$774,235			$643,186			$693,818			$769,525			$472,491
Average net assets (000)		$751,856			$783,622			$658,247			$670,723			$730,108			$466,577			$492,151
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees(d)		.83%	(f)		.82%			.84%	(e)		.91%	(e)		.96%	(e)(f)		.97%	(e)		.87%
Expenses, excluding distribution and service (12b-1) fees		.58%	(f)		.57%			.59%	(e)		.66%	(e)		.71%	(e)(f)		.72%	(e)		.62%
Net investment income		4.19%	(f)		4.11%			4.38%			4.13%			4.02%	(f)		3.96%			3.93%
For Class A, B, C and Z shares:
Portfolio turnover rate		7%	(g)(h)		30%	(h)		37%	(h)		42%			24%	(g)		45%			39%

(a) For the eight-month period ended August 31, 2007. The Fund changed its fiscal year end from December 31 to August 31.

(b) Less than $.005

(c) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized.

(d) The distributor of the Fund has contractually agreed to limit its distribution and service (12b-1) fees to .25% of the average daily net assets of the Class A shares.

(e) The expense ratio reflects the interest expense and fees related to the liability for the floating rate notes issued in conjunction with the inverse floater securities. The total expense ratio excluding interest expense and fees is .82%, .83%, .83% and .87% and the expense ratio excluding 12b-1 and interest expense and fees is .57%, .58%, .58% and .62% for the year ended August 31, 2009, the year ended August 31, 2008, the eight-month period ended August 31, 2007 and the year ended December 31, 2006, respectively.

(f) Annualized.

(g) Not annualized.

(h) The portfolio turnover rate including variable rate demand notes was 16% for the six months ended February 28, 2011, 50% for the year ended August 31, 2010 and 61% for the year ended August 31, 2009.

See Notes to Financial Statements.

48 Visit our website at www.prudentialfunds.com

Class B Shares
	Six Months Ended February 28,			Year Ended August 31,									Eight-Month Period Ended August 31,			Year Ended December 31,
	2011			2010			2009			2008			2007(a)			2006			2005
Per Share Operating Performance:
Net Asset Value, Beginning Of Period		$15.08			$14.46			$14.45			$14.68			$15.16			$15.13			$15.36
Income (loss) from investment operations:
Net investment income		.28			.57			.57			.57			.38			.55			.56
Net realized and unrealized gain (loss) on investments and financial futures transactions		(.94	)		.62			–	(b)		(.22	)		(.48	)		.10			(.15	)
Total from investment operations		(.66	)		1.19			.57			.35			(.10	)		.65			.41
Less Dividends and Distributions:
Dividends from net investment income		(.28	)		(.57	)		(.56	)		(.56	)		(.37	)		(.55	)		(.56	)
Distributions from net realized gains		-			-			-			(.02	)		(.01	)		(.07	)		(.08	)
Total dividends and distributions		(.28	)		(.57	)		(.56	)		(.58	)		(.38	)		(.62	)		(.64	)
Capital Contributions:		-			-	(b)		-			-			-			-
Net asset value, end of period		$14.14			$15.08			$14.46			$14.45			$14.68			$15.16			$15.13
Total Return(c):		(4.38)%			8.37%			4.20%			2.41%			(.62)%			4.42%			2.76%
Ratios/Supplemental Data:
Net assets, end of period (000)		$29,491			$33,899			$39,395			$34,787			$46,405			$53,763			$27,013
Average net assets (000)		$31,328			$35,348			$32,332			$40,259			$50,297			$25,361			$32,345
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees		1.08%	(e)		1.07%			1.09%	(d)		1.16%	(d)		1.21%	(d)(e)		1.22%	(d)		1.12%
Expenses, excluding distribution and service (12b-1) fees		.58%	(e)		.57%			.59%	(d)		.66%	(d)		.71%	(d)(e)		.72%	(d)		.62%
Net investment income		3.94%	(e)		3.86%			4.12%			3.87%			3.77%	(e)		3.72%			3.67%

(a) For the eight-month period ended August 31, 2007. The Fund changed its fiscal year end from December 31 to August 31.

(b) Less than $.005.

(c) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized.

(d) The expense ratio reflects the interest expense and fees related to the liability for the floating rate notes issued in conjunction with the inverse floater securities. The total expense ratio excluding interest expense and fees is 1.07%, 1.08%, 1.08% and 1.12% and the expense ratio excluding 12b-1 and interest expense and fees is .57%, .58%, .58% and .62% for the year ended August 31, 2009, the year ended August 31, 2008, the eight-month period ended August 31, 2007 and the year ended December 31, 2006, respectively.

(e) Annualized.

See Notes to Financial Statements.

Prudential National Muni Fund, Inc. 49

Financial Highlights

(Unaudited) continued

Class C Shares
	Six Months Ended February 28,			Year Ended August 31,									Eight-Month Period Ended August 31,			Year Ended December 31,
	2011			2010			2009			2008			2007(a)			2006			2005
Per Share Operating Performance:
Net Asset Value, Beginning Of Period		$15.08			$14.46			$14.44			$14.68			$15.16			$15.13			$15.36
Income (loss) from investment operations:
Net investment income		.26			.53			.53			.53			.35			.52			.52
Net realized and unrealized gain (loss) on investments and financial futures transactions		(.94	)		.62			.02			(.22	)		(.47	)		.10			(.15	)
Total from investment operations		(.68	)		1 .15			.55			.31			(.12	)		.62			.37
Less Dividends and Distributions:
Dividends from net investment income		(.26	)		(.53	)		(.53	)		(.53	)		(.35	)		(.52	)		(.52	)
Distributions from net realized gains		-			-			-			(.02	)		(.01	)		(.07	)		(.08	)
Total dividends and distributions		(.26	)		(.53	)		(. 53	)		(.55	)		(.36	)		(.59	)		(.60	)
Capital Contributions:		-			-	(b)		-			-			-			-			-
Net asset value, end of period		$14.14			$15.08			$14.46			$14.44			$14.68			$15.16			$15.13
Total Return(c):		(4.54)%			8.11%			4.02%			2.08%			(.74)%			4.16%			2.50%
Ratios/Supplemental Data:
Net assets, end of period (000)		$21,314			$25,131			$20,495			$10,912			$11,244			$12,255			$3,482
Average net assets (000)		$23,379			$22,839			$13,974			$11,228			$11,867			$ 3,884			$3,822
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees(d)		1.41%	(f)		1 .32%			1.34%	(e)		1.41%	(e)		1.46%	(e)(f)		1.47%	(e)		1.37%
Expenses, excluding distribution and service (12b-1) fees		.58%	(f)		.57%			.59%	(e)		.66%	(e)		.71%	(e)(f)		.72%	(e)		.62%
Net investment income		3.61%	(f)		3.61%			3.88%			3.63%			3.52%	(f)		3.49%			3.42%

(a) For the eight-month period ended August 31, 2007. The Fund changed its fiscal year end from December 31 to August 31.

(b) Less than $.005.

(c) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized.

(d) The distributor of the Fund had contractually agreed to limit its distribution and service (12b-1) fees to .75% of the average daily net assets of the Class C shares through December 31, 2010.

(e) The expense ratio reflects the interest expense and fees related to the liability for the floating rate notes issued in conjunction with the inverse floater securities. The total expense ratio excluding interest expense and fees is 1.32%, 1.33%, 1.33% and 1.37% and the expense ratio excluding 12b-1 and interest expense and fees is .57%, .58%, .58% and .62% for the year ended August 31, 2009, the year ended August 31, 2008, the eight-month period ended August 31, 2007 and the year ended December 31, 2006, respectively.

(f) Annualized.

See Notes to Financial Statements.

50 Visit our website at www.prudentialfunds.com

Class Z Shares
	Six Months Ended February 28,			Year Ended August 31,									Eight-Month Period Ended August 31,			Year Ended December 31,
	2011			2010			2009			2008			2007(a)			2006			2005
Per Share Operating Performance:
Net Asset Value, Beginning Of Period		$15.03			$14.41			$14.40			$14.63			$15.11			$15.08			$15.31
Income (loss) from investment operations:
Net investment income		.32			.64			.63			.64			.43			.63			.64
Net realized and unrealized gain (loss) on investments and financial futures transactions		(.94	)		.62			.01			(.22	)		(.48	)		.10			(.15	)
Total from investment operations		(.62	)		1.26			.64			.42			(.05	)		.73			.49
Less Dividends and Distributions:
Dividends from net investment income		(.32	)		(.64	)		(.63	)		(.63	)		(.42	)		(.63	)		(.64	)
Distributions from net realized gains		-			-			-			(.02	)		(.01	)		(.07	)		(.08	)
Total dividends and distributions		(.32	)		(.64	)		(.63	)		(.65	)		(.43	)		(.70	)		(.72	)
Capital Contributions:		-			-	(b)		-			-			-			-			-
Net asset value, end of period		$14.09			$15.03			$14.41			$14.40			$14.63			$15.11			$15.08
Total Return(c)		(4.17)%			8.93%			4.74%			2.91%			(.30)%			4.94%			3.27%
Ratios/Supplemental Data:
Net assets, end of period (000)		$11,861			$13,717			$13,016			$4,540			$4,742			$5,450			$3,166
Average net assets (000)		$13,292			$12,616			$7,357			$4,506			$5,089			$3,139			$3,785
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees		.58%	(e)		.57%			.59%	(d)		.66%	(d)		.71%	(d)(e)		.72%	(d)		.62%
Expenses, excluding distribution and service (12b-1) fees		.58%	(e)		.57%			.59%	(d)		.66%	(d)		.71%	(d)(e)		.72%	(d)		.62%
Net investment income		4.44%	(e)		4.36%			4.62%			4.38%			4.27%	(e)		4.13%			4.17%

(a) For the eight-month period ended August 31, 2007. The Fund changed its fiscal year end from December 31 to August 31.

(b) Less than $.005.

(c) Total investment return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions. Total investment returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods of less than one full year are not annualized.

(d) The expense ratio reflects the interest expense and fees related to the liability for the floating rate notes issued in conjunction with the inverse floater securities. The total expense ratio excluding interest expense and fees is .57%, .58%, .58% and .62% and the expense ratio excluding 12b-1 and interest expense and fees is .57%, .58%, .58% and .62% for the year ended August 31, 2009, the year ended August 31, 2008, the eight-month period ended August 31, 2007 and the year ended December 31, 2006, respectively.

(e) Annualized.

See Notes to Financial Statements.

Prudential National Muni Fund, Inc. 51

n   MAIL	n   TELEPHONE	n   WEBSITE
Gateway Center Three 100 Mulberry Street Newark, NJ 07102	(800) 225-1852	www.prudentialfunds.com

PROXY VOTING

The Board of Directors of the Fund has delegated to the Fund’s investment subadviser the responsibility for voting any proxies and maintaining proxy recordkeeping with respect to the Fund. A description of these proxy voting policies and procedures is available without charge, upon request, by calling (800) 225-1852 or by visiting the Securities and Exchange Commission’s website at www.sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the Fund’s website and on the Commission’s website.

DIRECTORS

Kevin J. Bannon • Scott E. Benjamin • Linda W. Bynoe • Michael S. Hyland • Douglas H. McCorkindale • Stephen P. Munn • Richard A. Redeker • Judy A. Rice • Robin B. Smith • Stephen G. Stoneburn

OFFICERS

Judy A. Rice, President • Scott E. Benjamin, Vice President • Grace C. Torres, Treasurer and Principal Financial and Accounting Officer • Kathryn L. Quirk, Chief Legal Officer • Deborah A. Docs, Secretary • Timothy J. Knierim, Chief Compliance Officer • Valerie M. Simpson, Deputy Chief Compliance Officer • Theresa C. Thompson, Deputy Chief Compliance Officer • Richard W. Kinville, Anti-Money Laundering Compliance Officer • Jonathan D. Shain, Assistant Secretary • Claudia DiGiacomo, Assistant Secretary • John P. Schwartz, Assistant Secretary • Andrew R. French, Assistant Secretary • M. Sadiq Peshimam, Assistant Treasurer • Peter Parrella, Assistant Treasurer

MANAGER	Prudential Investments LLC	Gateway Center Three 100 Mulberry Street Newark, NJ 07102
INVESTMENT SUBADVISER	Prudential Investment Management, Inc.	Gateway Center Two 100 Mulberry Street Newark, NJ 07102
DISTRIBUTOR	Prudential Investment Management Services LLC	Gateway Center Three 100 Mulberry Street Newark, NJ 07102
CUSTODIAN	The Bank of New York Mellon	One Wall Street New York, NY 10286
TRANSFER AGENT	Prudential Mutual Fund Services LLC	PO Box 9658 Providence, RI 02940
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	KPMG LLP	345 Park Avenue New York, NY 10154
FUND COUNSEL	Willkie Farr & Gallagher LLP	787 Seventh Avenue New York, NY 10019

An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. The prospectus and, if available, the summary prospectus, contain this and other information about the Fund. An investor may obtain a prospectus and, if available, the summary prospectus, by visiting our website at www.prudentialfunds.com or by calling (800) 225-1852. The prospectus and, if available, the summary prospectus, should be read carefully before investing.

E-DELIVERY

To receive your mutual fund documents online, go to www.prudentialfunds.com/edelivery and enroll. Instead of receiving printed documents by mail, you will receive notification via e-mail when new materials are available. You can cancel your enrollment or change your e-mail address at any time by visiting the website address above.

SHAREHOLDER COMMUNICATIONS WITH DIRECTORS

Shareholders can communicate directly with the Board of Directors by writing to the Chair of the Board, Prudential National Muni Fund, Inc., Prudential Investments, Attn: Board of Directors, 100 Mulberry Street, Gateway Center Three, Newark, NJ 07102. Shareholders can communicate directly with an individual Director by writing to the same address. Communications are not screened before being delivered to the addressee.

AVAILABILITY OF PORTFOLIO SCHEDULE

The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Forms N-Q are available on the Commission’s website at www.sec.gov. The Fund’s Forms N-Q may also be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation and location of the Public Reference Room may be obtained by calling (202) 551-8090. The Fund’s schedule of portfolio holdings as of the end of each calendar month is also available on the Fund’s website no sooner than approximately three business days prior to the end of the following month.

Mutual Funds:

ARE NOT INSURED BY THE FDIC OR ANY FEDERAL GOVERNMENT AGENCY MAY LOSE VALUE ARE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE

Prudential National Muni Fund, Inc.
Share Class	A	B	C	Z
NASDAQ	PRNMX	PBHMX	PNMCX	DNMZX
CUSIP	74441U105	74441U204	74441U303	74441U402

MF104E2    0199409-00001-00

Item 2 – Code of Ethics – Not required, as this is not an annual filing.

Item 3 – Audit Committee Financial Expert – Not required, as this is not an annual filing.

Item 4 – Principal Accountant Fees and Services – Not required, as this is not an annual filing.

Item 5 – Audit Committee of Listed Registrants – Not applicable.

Item 6 – Schedule of Investments – The schedule is included as part of the report to shareholders filed under Item 1 of this Form.

Item 7 – Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – Not applicable.

Item 8 – Portfolio Managers of Closed-End Management Investment Companies – Not applicable.

Item 9 – Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not applicable.

Item 10 – Submission of Matters to a Vote of Security Holders – Not applicable.

Item 11 – Controls and Procedures

(a) It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant has been recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms and that the information required to be disclosed by the registrant has been accumulated and communicated to the registrant’s principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure.

(b) There has been no significant change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter of the period covered by this report that has materially affected, or is likely to materially affect, the registrant’s internal control over financial reporting.

Item 12 – Exhibits

(a) (1) Code of Ethics – Not required, as this is not an annual filing.

(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act – Attached hereto as Exhibit EX-99.CERT.

(3) Any written solicitation to purchase securities under Rule 23c-1. – Not applicable.

(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act – Attached hereto as Exhibit EX-99.906CERT.

SIGNATURES

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

Registrant:	Prudential National Muni Fund, Inc.
By:	/s/ Deborah A. Docs
	Deborah A. Docs
	Secretary
Date:	April 19, 2011

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/ Judy A. Rice
	Judy A. Rice
	President and Principal Executive Officer
Date:	April 19, 2011
By:	/s/ Grace C. Torres
	Grace C. Torres
	Treasurer and Principal Financial Officer
Date:	April 19, 2011