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- 4085

Fidelity Income Fund
(Exact name of registrant as specified in charter)

82 Devonshire St., Boston, Massachusetts 02109
(Address of principal executive offices) (Zip code)

Eric D. Roiter, Secretary

82 Devonshire St.

Boston, Massachusetts 02109
(Name and address of agent for service)

Registrant's telephone number, including area code: 617-563-7000

Date of fiscal year end:	July 31

Date of reporting period:	January 31, 2004

Item 1. Reports to Stockholders

Fidelity®

Total Bond

Fund

Semiannual Report

January 31, 2004

(2_fidelity_logos) (Registered_Trademark)

Chairman's Message	<Click Here>	Ned Johnson's message to shareholders.
Investment Changes	<Click Here>	A summary of major shifts in the fund's investments over the past six months.
Investments	<Click Here>	A complete list of the fund's investments with their market values.
Financial Statements	<Click Here>	Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights.
Notes	<Click Here>	Notes to the financial statements.

For a free copy of the fund's proxy voting guidelines visit www.fidelity.com/goto/proxyguidelines, call 1-800-544-8544, or visit the Securities and Exchange Commission (SEC)'s web site at www.sec.gov.

Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.

Other third party marks appearing herein are the property of their respective owners.

All other marks appearing herein are registered or unregistered trademarks or service marks of FMR Corp. or an affiliated company.

(Recycle graphic) This report is printed on recycled paper using soy-based inks.

This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.

Mutual fund shares are not deposits or obligations of, or guaranteed by, any depository institution. Shares are not insured by the FDIC, Federal Reserve Board or any other agency, and are subject to investment risks, including possible loss of principal amount invested.

Neither the fund nor Fidelity Distributors Corporation is a bank.

For more information on any Fidelity fund, including charges and expenses, call 1-800-544-6666 for a free prospectus. Read it carefully before you invest or send money.

Semiannual Report

Chairman's Message

(photo_of_Edward_C_Johnson_3d)

Dear Shareholder:

Many of you have read or heard news stories recently that were critical of mutual funds and made allegations that the mutual fund industry has been less than forthright. I find these reports unsettling and not necessarily an accurate picture of the overall industry, and I would like you to know where we at Fidelity stand.

With specific regard to allegations that certain mutual fund companies were violating the Securities and Exchange Commission's forward pricing rules or were involved in so-called "market timing" activities, I want to say two things:

First, Fidelity does not have agreements that permit customers who buy fund shares after 4 p.m. to obtain the 4 p.m. price. This is not to say that someone could not deceive the company through fraudulent acts. But I underscore that we have no so-called "agreements" which would permit this illegal practice.

Second, Fidelity has been on record for years opposing predatory short-term trading which adversely affects other shareholders in a mutual fund. In fact, in the 1980s, we began charging a fee - which is returned to the fund and, therefore, to investors - to discourage this activity. What's more, several years ago we took the industry lead in developing a Fair Value Pricing Policy to prevent market timing on foreign securities in our funds. It is reasonable to assume that another structure can be developed that would alter the system to make it much more difficult for predatory traders to operate. This, however, will only be achieved through close cooperation among regulators, legislators and the industry.

Certainly no industry is perfect, and there have been instances of unethical and illegal activity from time to time within the mutual fund industry. When this occurs, confessed or convicted offenders should be dealt with appropriately. Clearly, every system can be improved. We applaud well thought out improvements by regulators, legislators and industry representatives that achieve the common goal of building and protecting the value of investors' holdings. But we remain concerned about the risk of over-regulation and the quick application of simplistic solutions to intricate problems.

For more than 57 years, Fidelity Investments has worked very hard to improve its products and service to justify your trust. When our family founded this company in 1946, we had only a few hundred customers. Many of them were family and friends. Today, we serve more than 18 million customers including individual investors and participants in retirement plans across America.

Let me close by saying that we do not take your trust in us for granted, and we realize that we must always work to improve all aspects of our service to you. In turn, we urge you to continue your active participation with your financial matters, so that your interests can be well served.

Best regards,

/s/Edward C. Johnson 3d

Edward C. Johnson 3d

Semiannual Report

Investment Changes

Quality Diversification (% of fund's net assets)
As of January 31, 2004		As of July 31, 2003
	U.S. Government and U.S. Government Agency Obligations 63.0%		U.S. Government and U.S. Government Agency Obligations 70.2%
	AAA 3.8%		AAA 2.3%
	AA 3.4%		AA 1.9%
	A 6.2%		A 7.9%
	BBB 11.1%		BBB 12.4%
	BB and Below 8.5%		BB and Below 10.2%
	Not Rated 1.3%		Not Rated 1.2%
	Equities 0.1%		Equities 0.1%
	Short-Term Investments and Net Other Assets 2.6%		Short-Term Investments and Net Other Assets^A (6.2)%

^A Short-Term Investments and Net Other Assets are not included in the pie chart.

We have used ratings from Moody's® Investors Services, Inc. Where Moody's ratings are not available, we have used S&P® ratings. Securities rated BB or below were rated investment grade at the time of acquisition.

Average Years to Maturity as of January 31, 2004
		6 months ago
Years	5.1	4.9

Average years to maturity is based on the average time remaining until principal payments are expected from each of the fund's bonds, weighted by dollar amount.

Duration as of January 31, 2004
		6 months ago
Years	4.5	4.9

Duration shows how much a bond fund's price fluctuates with changes in comparable interest rates. If rates rise 1%, for example, a fund with a five-year duration is likely to lose about 5% of its value. Other factors also can influence a bond fund's performance and share price. Accordingly, a bond fund's actual performance may differ from this example.

Asset Allocation (% of fund's net assets)
As of January 31, 2004 *			As of July 31, 2003 **
	Corporate Bonds 23.2%			Corporate Bonds 25.8%
	U.S. Government and U.S. Government Agency Obligations 63.0%			U.S. Government and U.S. Government Agency Obligations 70.2%
	Asset-Backed Securities 5.5%			Asset-Backed Securities 5.8%
	CMOs and Other Mortgage Related Securities 4.2%			CMOs and Other Mortgage Related Securities 1.9%
	Municipal Bonds 0.0%			Municipal Bonds 0.3%
	Stocks 0.1%			Stocks 0.1%
	Other Investments 1.4%			Other Investments 2.1%
	Short-Term Investments and Net Other Assets 2.6%			Short-Term Investments and Net Other Assets^A (6.2)%
* Foreign investments		6.5%	** Foreign investments		6.8%
* Futures and Swaps		1.8%	** Futures and Swaps		(0.0)%

^A Short-Term Investments and Net Other Assets are not included in the pie chart.

The information in the above table is based on the combined investments of the fund and its pro-rata share of the investments of Fidelity's fixed-income central fund.

Semiannual Report

Investments January 31, 2004 (Unaudited)

Showing Percentage of Net Assets

Nonconvertible Bonds - 22.6%
	Principal Amount		Value (Note 1)
CONSUMER DISCRETIONARY - 3.4%
Auto Components - 0.1%
DaimlerChrysler NA Holding Corp.:
3.4% 12/15/04	$ 100,000		$ 100,946
4.75% 1/15/08	200,000		205,307
Dana Corp. 6.25% 3/1/04	15,000		15,000
Navistar International Corp. 8% 2/1/08	65,000		66,138
United Components, Inc. 9.375% 6/15/13	10,000		10,950
			398,341
Hotels, Restaurants & Leisure - 1.0%
Bally Total Fitness Holding Corp.:
9.875% 10/15/07	80,000		69,200
10.5% 7/15/11	125,000		122,500
Capstar Hotel Co. 8.75% 8/15/07	45,000		46,406
Extended Stay America, Inc. 9.875% 6/15/11	200,000		221,000
Friendly Ice Cream Corp. 10.5% 12/1/07	20,000		20,750
Gaylord Entertainment Co. 8% 11/15/13 (e)	60,000		64,350
Herbst Gaming, Inc. 10.75% 9/1/08	25,000		28,125
Host Marriott LP:
7.125% 11/1/13 (e)	35,000		36,575
8.375% 2/15/06	200,000		213,000
Mandalay Resort Group 6.375% 12/15/11 (e)	150,000		155,250
MGM MIRAGE:
6% 10/1/09	20,000		20,700
8.375% 2/1/11	40,000		45,800
9.75% 6/1/07	40,000		46,100
Mohegan Tribal Gaming Authority 8.375% 7/1/11	35,000		38,325
MTR Gaming Group, Inc. 9.75% 4/1/10	95,000		103,550
Park Place Entertainment Corp. 7.875% 12/15/05	50,000		55,250
Penn National Gaming, Inc.:
6.875% 12/1/11 (e)	80,000		80,600
8.875% 3/15/10	100,000		108,250
Premier Entertainment Biloxi LLC 10.75% 2/1/12 (e)	20,000		21,300
Resorts International Hotel & Casino, Inc. 11.5% 3/15/09	225,000		248,625
Six Flags, Inc.:
9.5% 2/1/09	145,000		150,800
9.625% 6/1/14 (e)	100,000		106,000
Station Casinos, Inc. 6.5% 2/1/14 (e)	40,000		41,100
Sun International Hotels Ltd./Sun International North America, Inc. 8.875% 8/15/11	235,000		256,738
Town Sports International, Inc. 9.625% 4/15/11	20,000		21,300
Nonconvertible Bonds - continued
	Principal Amount		Value (Note 1)
CONSUMER DISCRETIONARY - continued
Hotels, Restaurants & Leisure - continued
Venetian Casino Resort LLC/Las Vegas Sands, Inc. 11% 6/15/10	$ 100,000		$ 115,250
Waterford Gaming LLC/Waterford Gaming Finance Corp. 8.625% 9/15/12 (e)	10,000		10,575
Wheeling Island Gaming, Inc. 10.125% 12/15/09	160,000		173,600
Wynn Las Vegas LLC/ Wynn Las Vegas Capital Corp. 12% 11/1/10	250,000		297,500
			2,918,519
Household Durables - 0.1%
Beazer Homes USA, Inc. 6.5% 11/15/13 (e)	100,000		101,500
D.R. Horton, Inc. 8.5% 4/15/12	30,000		33,900
Juno Lighting, Inc. 11.875% 7/1/09	30,000		32,475
K. Hovnanian Enterprises, Inc. 8.875% 4/1/12	10,000		10,900
Sealy Mattress Co. 9.875% 12/15/07	30,000		30,900
Simmons Co. 7.875% 1/15/14 (e)	20,000		20,300
WCI Communities, Inc. 9.125% 5/1/12	35,000		38,675
William Lyon Homes, Inc. 10.75% 4/1/13	40,000		46,800
			315,450
Internet & Catalog Retail - 0.1%
USA Interactive 7% 1/15/13	300,000		327,000
Leisure Equipment & Products - 0.0%
The Hockey Co. 11.25% 4/15/09	15,000		17,100
Media - 2.0%
AMC Entertainment, Inc.:
9.5% 3/15/09	50,000		51,500
9.875% 2/1/12	60,000		66,300
AOL Time Warner, Inc. 7.625% 4/15/31	1,000,000		1,148,907
Azteca Holdings SA de CV 12.5% 6/15/05	25,000		24,500
British Sky Broadcasting Group PLC (BSkyB) yankee 8.2% 7/15/09	1,000,000		1,192,763
Carmike Cinemas, Inc. 7.5% 2/15/14 (e)	60,000		60,450
CBD Media LLC/ CBD Finance, Inc. 8.625% 6/1/11	10,000		10,950
Clear Channel Communications, Inc. 6.625% 6/15/08	200,000		222,656
Comcast Corp. 5.85% 1/15/10	500,000		535,215
Comcast UK Cable Partners Ltd. yankee 11.2% 11/15/07	200,000		200,000
Cox Communications, Inc.:
4.625% 6/1/13	90,000		87,438
7.125% 10/1/12	355,000		410,974
Nonconvertible Bonds - continued
	Principal Amount		Value (Note 1)
CONSUMER DISCRETIONARY - continued
Media - continued
CSC Holdings, Inc.:
7.875% 2/15/18	$ 50,000		$ 55,000
9.875% 2/15/13	150,000		155,625
EchoStar DBS Corp.:
6.375% 10/1/11 (e)	150,000		156,750
9.125% 1/15/09	72,000		80,280
Granite Broadcasting Corp. 9.75% 12/1/10 (e)	40,000		39,700
Innova S. de R.L. 9.375% 9/19/13 (e)	15,000		15,975
Liberty Media Corp. 5.7% 5/15/13	100,000		101,241
LodgeNet Entertainment Corp. 9.5% 6/15/13	130,000		144,950
Medianews Group, Inc.:
6.375% 4/1/14 (e)	200,000		200,500
6.875% 10/1/13 (e)	250,000		255,625
News America, Inc. 6.55% 3/15/33	500,000		521,417
PEI Holdings, Inc. 11% 3/15/10	15,000		17,400
PRIMEDIA, Inc.:
7.625% 4/1/08	80,000		80,400
8.875% 5/15/11	25,000		26,000
Radio One, Inc. 8.875% 7/1/11	100,000		111,000
Rogers Cablesystems Ltd. yankee 11% 12/1/15	5,000		5,825
TV Azteca SA de CV yankee 10.5% 2/15/07	25,000		24,625
Walt Disney Co. 5.375% 6/1/07	100,000		107,172
			6,111,138
Multiline Retail - 0.0%
Barneys, Inc. 9% 4/1/08	20,000		20,400
Specialty Retail - 0.1%
Asbury Automotive Group, Inc.:
8% 3/15/14 (e)	60,000		60,900
9% 6/15/12	15,000		15,900
Boise Cascade Corp. 7.5% 2/1/08	40,000		43,278
General Nutrition Centers, Inc. 8.5% 12/1/10 (e)	20,000		20,750
Grupo Elektra SA de CV yankee 12% 4/1/08	70,000		73,850
Hollywood Entertainment Corp. 9.625% 3/15/11	50,000		53,500
Sonic Automotive, Inc. 8.625% 8/15/13 (e)	50,000		53,000
Toys 'R' US, Inc. 7.875% 4/15/13	20,000		21,688
United Auto Group, Inc. 9.625% 3/15/12	50,000		55,500
			398,366
Nonconvertible Bonds - continued
	Principal Amount		Value (Note 1)
CONSUMER DISCRETIONARY - continued
Textiles Apparel & Luxury Goods - 0.0%
Levi Strauss & Co.:
7% 11/1/06	$ 10,000		$ 6,700
11.625% 1/15/08	10,000		6,550
12.25% 12/15/12	65,000		42,250
			55,500
TOTAL CONSUMER DISCRETIONARY			10,561,814
CONSUMER STAPLES - 0.7%
Food & Staples Retailing - 0.4%
Kroger Co. 6.8% 4/1/11	1,000,000		1,124,666
Rite Aid Corp.:
6% 12/15/05 (e)	20,000		20,000
7.625% 4/15/05	15,000		15,225
The Great Atlantic & Pacific Tea Co.:
7.75% 4/15/07	45,000		40,275
9.125% 12/15/11	10,000		8,950
			1,209,116
Food Products - 0.0%
Corn Products International, Inc. 8.25% 7/15/07	5,000		5,550
Del Monte Corp. 9.25% 5/15/11	50,000		55,500
Doane Pet Care Co. 9.75% 5/15/07	50,000		47,750
Kraft Foods, Inc. 5.25% 6/1/07	20,000		21,328
United Agriculture Products, Inc. 8.25% 12/15/11 (e)	30,000		31,500
			161,628
Household Products - 0.1%
Fort James Corp. 6.875% 9/15/07	150,000		156,750
Johnsondiversey Holdings, Inc. 0% 5/15/13 (c)(e)	55,000		44,550
			201,300
Personal Products - 0.0%
Elizabeth Arden, Inc. 7.75% 1/15/14 (e)	20,000		20,500
Revlon Consumer Products Corp. 9% 11/1/06	45,000		31,838
			52,338
Tobacco - 0.2%
Altria Group, Inc. 7% 11/4/13	440,000		478,748
TOTAL CONSUMER STAPLES			2,103,130
Nonconvertible Bonds - continued
	Principal Amount		Value (Note 1)
ENERGY - 0.6%
Energy Equipment & Services - 0.0%
Grant Prideco, Inc. 9% 12/15/09	$ 10,000		$ 11,200
Hanover Compressor Co. 8.625% 12/15/10	20,000		21,150
Universal Compression, Inc. 7.25% 5/15/10	40,000		42,600
Weatherford International Ltd. 4.95% 10/15/13	100,000		99,308
			174,258
Oil & Gas - 0.6%
Amerada Hess Corp.:
6.65% 8/15/11	70,000		76,358
7.125% 3/15/33	185,000		192,080
7.375% 10/1/09	160,000		181,285
Chesapeake Energy Corp.:
6.875% 1/15/16 (e)	50,000		52,375
7.75% 1/15/15	30,000		32,400
8.375% 11/1/08	50,000		55,000
El Paso Production Holding Co. 7.75% 6/1/13	40,000		39,400
EXCO Resources, Inc. 7.25% 1/15/11 (e)	30,000		30,750
General Maritime Corp. 10% 3/15/13	195,000		216,450
GulfTerra Energy Partners LP/GulfTerra Energy Finance Corp. 10.625% 12/1/12	40,000		49,200
Nuevo Energy Co.:
9.375% 10/1/10	10,000		11,000
9.5% 6/1/08	3,000		3,150
OAO Gazprom 9.625% 3/1/13	130,000		144,625
Overseas Shipholding Group, Inc. 8.25% 3/15/13	40,000		44,000
Pecom Energia SA:
8.125% 7/15/10 (Reg. S)	75,000		74,625
9% 1/30/07 (e)	70,000		72,800
9% 5/1/09 (Reg. S)	45,000		46,575
Teekay Shipping Corp. 8.875% 7/15/11	30,000		34,500
The Coastal Corp.:
6.375% 2/1/09	5,000		4,494
6.5% 5/15/06	65,000		63,538
6.5% 6/1/08	100,000		91,375
7.5% 8/15/06	50,000		49,625
YPF SA yankee 9.125% 2/24/09	160,000		176,800
			1,742,405
TOTAL ENERGY			1,916,663
Nonconvertible Bonds - continued
	Principal Amount		Value (Note 1)
FINANCIALS - 9.0%
Capital Markets - 2.0%
Amvescap PLC 5.9% 1/15/07	$ 35,000		$ 37,856
Bank of New York Co., Inc.:
3.4% 3/15/13 (g)	100,000		98,289
4.25% 9/4/12 (g)	205,000		209,070
Equinox Holdings Ltd. 9% 12/15/09 (e)	20,000		20,800
Franklin Resources, Inc. 3.7% 4/15/08	1,020,000		1,019,288
Goldman Sachs Group, Inc. 5.7% 9/1/12	1,100,000		1,165,373
Legg Mason, Inc. 6.75% 7/2/08	30,000		33,514
Lehman Brothers Holdings, Inc. 4% 1/22/08	1,100,000		1,127,221
Merrill Lynch & Co., Inc. 4% 11/15/07	1,250,000		1,286,635
Morgan Stanley 6.6% 4/1/12	1,100,000		1,239,902
			6,237,948
Commercial Banks - 1.1%
Bank of America Corp. 7.4% 1/15/11	1,000,000		1,178,452
Corporacion Andina de Fomento 5.2% 5/21/13	35,000		35,151
Korea Development Bank 5.75% 9/10/13	350,000		365,112
National Westminster Bank PLC yankee 7.375% 10/1/09	1,500,000		1,762,958
			3,341,673
Consumer Finance - 1.4%
American General Finance Corp. 4.5% 11/15/07	200,000		207,583
Capital One Bank:
4.875% 5/15/08	1,075,000		1,121,215
6.5% 6/13/13	90,000		97,349
Ford Motor Credit Co. 7.875% 6/15/10	250,000		280,719
General Motors Acceptance Corp. 6.875% 9/15/11	525,000		565,233
Household Finance Corp.:
6.375% 11/27/12	30,000		33,269
6.5% 1/24/06	100,000		107,957
6.75% 5/15/11	40,000		45,443
SLM Corp. 4% 1/15/09	2,000,000		2,023,270
			4,482,038
Diversified Financial Services - 2.8%
Ahold Finance USA, Inc.:
6.25% 5/1/09	40,000		41,000
6.875% 5/1/29	170,000		156,400
8.25% 7/15/10	40,000		44,000
American Airlines, Inc. pass thru trust certificates:
6.817% 5/23/11	50,000		48,000
Nonconvertible Bonds - continued
	Principal Amount		Value (Note 1)
FINANCIALS - continued
Diversified Financial Services - continued
American Airlines, Inc. pass thru trust certificates: - continued
6.977% 11/23/22	$ 12,066		$ 11,583
7.377% 5/23/19	54,250		42,857
7.379% 5/23/16	58,017		45,253
Ameritech Capital Funding Corp. euro 6.25% 5/18/09	35,000		38,453
Arch Western Finance LLC 6.75% 7/1/13 (e)	100,000		105,000
BRL Universal Equipment 2001 A LP/BRL Universal Equipment Corp. 8.875% 2/15/08	30,000		32,700
Cadbury Schweppes U.S. Finance LLC:
3.875% 10/1/08 (e)	90,000		90,320
5.125% 10/1/13 (e)	1,060,000		1,069,978
CCO Holdings LLC/CCO Holdings Capital Corp. 8.75% 11/15/13 (e)	70,000		72,188
Charter Communications Holding II LLC/Charter Communications Holdings II Capital Corp. 10.25% 9/15/10 (e)	115,000		121,038
Charter Communications Holdings LLC/Charter Communications Holdings Capital Corp. 10% 4/1/09	90,000		81,900
CMS Energy X-TRAS pass thru trust certificates 7% 1/15/05	10,000		10,000
Continental Airlines, Inc. pass thru trust certificates:
6.748% 9/15/18	3,963		3,567
6.9% 1/2/17	4,746		4,177
7.73% 9/15/12	4,680		4,072
8.321% 11/1/06	5,000		4,900
Delta Air Lines, Inc. pass thru trust certificates:
7.299% 9/18/06	15,000		13,800
7.57% 11/18/10	5,000		5,143
7.779% 11/18/05	50,000		46,500
7.779% 1/2/12	27,657		24,062
7.92% 5/18/12	100,000		92,641
Deutsche Telekom International Finance BV:
5.25% 7/22/13	85,000		85,908
8.5% 6/15/10	1,200,000		1,449,379
Devon Financing Corp. U.L.C. 7.875% 9/30/31	100,000		121,858
El Paso Energy Partners LP/El Paso Energy Partners Finance Corp. 8.5% 6/1/11	10,000		11,200
Entercom Radio LLC/Entercom Capital, Inc. 7.625% 3/1/14	50,000		53,875
FIMEP SA 10.5% 2/15/13	20,000		23,250
Nonconvertible Bonds - continued
	Principal Amount		Value (Note 1)
FINANCIALS - continued
Diversified Financial Services - continued
Gerdau AmeriSteel Corp./GUSAP Partners 10.375% 7/15/11	$ 205,000		$ 229,600
Graham Packaging Co./GPC Capital Corp., Inc. 8.75% 1/15/08	25,000		25,813
Hurricane Finance BV 9.625% 2/12/10 (e)	60,000		67,206
Indosat Finance Co. BV 7.75% 11/5/10 (e)	50,000		50,750
Inmarsat Finance PLC 7.625% 6/30/12 (e)	30,000		31,200
IOS Capital LLC 7.25% 6/30/08	15,000		15,938
Kraton Polymers LLC/Kraton Polymers Capital Corp. 8.125% 1/15/14 (e)	20,000		21,200
Level 3 Financing, Inc. 10.75% 10/15/11 (e)	85,000		91,800
MEI Euro Finance Ltd. 8.75% 5/22/10 (e)	50,000		50,625
Mobile Telesystems Finance SA:
9.75% 1/30/08 (e)	135,000		146,306
9.75% 1/30/08 (Reg. S)	50,000		54,188
Moore North America Finance, Inc. 7.875% 1/15/11	20,000		22,550
MSW Energy Holding LLC/MSW Energy Finance Co., Inc. 8.5% 9/1/10	10,000		11,000
MSW Energy Holdings II LLC/MSW Finance Co. II, Inc. 7.375% 9/1/10 (e)	40,000		42,000
New Asat Finance Ltd. 9.25% 2/1/11 (e)	20,000		20,850
Nexstar Finance, Inc. 7% 1/15/14 (e)	30,000		29,700
NiSource Finance Corp. 3.2% 11/1/06	225,000		227,248
Norcraft Companies LP/Norcraft Finance Corp. 9% 11/1/11 (e)	10,000		10,700
Northern Telecom Capital Corp. 7.875% 6/15/26	25,000		26,500
Northwest Airlines, Inc. pass thru trust certificates:
7.068% 7/2/17	8,252		7,427
7.67% 1/2/15	8,597		7,824
PDVSA Finance Ltd.:
8.5% 11/16/12	50,000		47,500
9.75% 2/15/10	65,000		67,113
yankee 7.4% 8/15/16	50,000		42,500
Pemex Project Funding Master Trust:
6.125% 8/15/08	250,000		263,750
7.375% 12/15/14	500,000		535,000
Petronas Capital Ltd. 7% 5/22/12 (e)	5,000		5,712
Qwest Capital Funding, Inc.:
7% 8/3/09	50,000		48,000
7.25% 2/15/11	35,000		33,600
7.625% 8/3/21	20,000		18,600
Nonconvertible Bonds - continued
	Principal Amount		Value (Note 1)
FINANCIALS - continued
Diversified Financial Services - continued
Sensus Metering Systems, Inc. 8.625% 12/15/13 (e)	$ 20,000		$ 20,500
Ship Finance International Ltd. 8.5% 12/15/13 (e)	210,000		210,000
Sprint Capital Corp. 6.125% 11/15/08	500,000		534,271
Telecom Italia Capital 4% 11/15/08 (e)	500,000		498,619
Tom Brown, Inc./Tom Brown Resources Funding Corp. 7.25% 9/15/13	20,000		21,000
TRW Automotive Acquisition Corp. 9.375% 2/15/13	100,000		113,250
U.S. West Capital Funding, Inc. 6.375% 7/15/08	125,000		120,000
Universal City Development Partners Ltd./UCDP Finance, Inc. 11.75% 4/1/10 (e)	285,000		334,875
Verizon Global Funding Corp.:
7.25% 12/1/10	30,000		34,582
7.375% 9/1/12	465,000		542,074
Western Financial Bank 9.625% 5/15/12	15,000		17,325
Xerox Capital Trust I 8% 2/1/27	130,000		131,300
			8,784,998
Insurance - 0.5%
Aegon NV 4.75% 6/1/13	500,000		491,960
Prudential Financial, Inc. 3.75% 5/1/08	1,055,000		1,063,919
Travelers Property Casualty Corp.:
5% 3/15/13	25,000		25,217
6.375% 3/15/33	35,000		37,094
			1,618,190
Real Estate - 0.8%
Boston Properties, Inc. 6.25% 1/15/13	100,000		109,030
Camden Property Trust 5.875% 11/30/12	200,000		211,005
CarrAmerica Realty Corp. 5.25% 11/30/07	200,000		211,532
CB Richard Ellis Services, Inc. 9.75% 5/15/10	15,000		16,950
Dominion Resources, Inc. 5.125% 12/15/09	500,000		521,233
EOP Operating LP 7% 7/15/11	500,000		571,200
Gables Realty LP 5.75% 7/15/07	585,000		626,251
MeriStar Hospitality Corp. 8.75% 8/15/07	50,000		51,125
Senior Housing Properties Trust 7.875% 4/15/15	20,000		21,600
			2,339,926
Nonconvertible Bonds - continued
	Principal Amount		Value (Note 1)
FINANCIALS - continued
Thrifts & Mortgage Finance - 0.4%
Washington Mutual, Inc.:
4.375% 1/15/08	$ 1,200,000		$ 1,241,927
5.625% 1/15/07	100,000		107,541
			1,349,468
TOTAL FINANCIALS			28,154,241
HEALTH CARE - 0.2%
Health Care Equipment & Supplies - 0.0%
Fisher Scientific International, Inc. 8% 9/1/13 (e)	125,000		136,563
Health Care Providers & Services - 0.2%
AmeriPath, Inc. 10.5% 4/1/13	150,000		165,750
Fountain View, Inc. 9.25% 8/19/08 (d)	110,000		109,588
Mariner Health Care, Inc. 8.25% 12/15/13 (e)	30,000		30,300
National Nephrology Associates, Inc. 9% 11/1/11 (e)	20,000		21,100
PacifiCare Health Systems, Inc. 10.75% 6/1/09	82,000		96,760
Psychiatric Solutions, Inc. 10.625% 6/15/13	105,000		119,175
Tenet Healthcare Corp.:
6.375% 12/1/11	45,000		41,175
6.5% 6/1/12	5,000		4,563
			588,411
Pharmaceuticals - 0.0%
Biovail Corp. yankee 7.875% 4/1/10	105,000		107,100
TOTAL HEALTH CARE			832,074
INDUSTRIALS - 1.6%
Aerospace & Defense - 0.6%
BE Aerospace, Inc.:
8.5% 10/1/10	100,000		108,000
9.5% 11/1/08	55,000		55,000
DRS Technologies, Inc. 6.875% 11/1/13 (e)	20,000		20,600
Orbital Sciences Corp. 9% 7/15/11	50,000		54,500
Raytheon Co.:
5.5% 11/15/12	1,550,000		1,599,891
6.75% 8/15/07	20,000		22,480
Transdigm, Inc. 8.375% 7/15/11	20,000		21,200
			1,881,671
Nonconvertible Bonds - continued
	Principal Amount		Value (Note 1)
INDUSTRIALS - continued
Airlines - 0.1%
AMR Corp. 9% 8/1/12	$ 85,000		$ 75,650
Delta Air Lines, Inc. 7.9% 12/15/09	50,000		40,500
Northwest Airlines, Inc.:
7.875% 3/15/08	25,000		21,625
9.875% 3/15/07	60,000		57,000
			194,775
Building Products - 0.0%
Jacuzzi Brands, Inc. 9.625% 7/1/10 (e)	20,000		21,900
Nortek, Inc. 9.125% 9/1/07	15,000		15,488
			37,388
Commercial Services & Supplies - 0.3%
Allied Waste North America, Inc.:
7.875% 1/1/09	30,000		31,275
7.875% 4/15/13	20,000		21,650
10% 8/1/09	60,000		64,800
American Color Graphics, Inc. 10% 6/15/10	230,000		227,700
Boise Cascade Office Products Corp. 7.05% 5/15/05	140,000		146,477
Mail-Well I Corp.:
7.875% 12/1/13 (e)(f)	60,000		57,600
8.75% 12/15/08	100,000		104,250
Worldspan LP 9.625% 6/15/11 (e)	185,000		196,100
			849,852
Electrical Equipment - 0.0%
General Cable Corp. 9.5% 11/15/10 (e)	20,000		21,750
Industrial Conglomerates - 0.4%
Koppers, Inc. 9.875% 10/15/13 (e)	50,000		55,500
North American Energy Partners, Inc. 8.75% 12/1/11 (e)	20,000		21,450
Textron Financial Corp. 2.75% 6/1/06	55,000		55,001
Tyco International Group SA yankee:
6.375% 6/15/05	5,000		5,255
6.375% 2/15/06	20,000		21,293
6.75% 2/15/11	1,070,000		1,173,500
			1,331,999
Machinery - 0.1%
Columbus McKinnon Corp. 10% 8/1/10	10,000		11,075
Cummins, Inc.:
5.65% 3/1/98	15,000		10,800
9.5% 12/1/10 (e)	20,000		23,400
Nonconvertible Bonds - continued
	Principal Amount		Value (Note 1)
INDUSTRIALS - continued
Machinery - continued
Dresser, Inc. 9.375% 4/15/11	$ 15,000		$ 16,200
Dunlop Standard Aerospace Holdings PLC yankee 11.875% 5/15/09	100,000		106,500
Manitowoc Co., Inc. 7.125% 11/1/13	50,000		53,250
Terex Corp. 7.375% 1/15/14 (e)	100,000		105,000
			326,225
Marine - 0.0%
OMI Corp. 7.625% 12/1/13	50,000		51,750
Road & Rail - 0.1%
CSX Corp. 7.45% 5/1/07	100,000		113,410
Kansas City Southern Railway Co. 7.5% 6/15/09	100,000		103,000
Quality Distribution LLC/QD Capital Corp. 9% 11/15/10 (e)	40,000		42,000
TFM SA de CV yankee 11.75% 6/15/09	90,000		91,575
			349,985
TOTAL INDUSTRIALS			5,045,395
INFORMATION TECHNOLOGY - 0.5%
Communications Equipment - 0.2%
Motorola, Inc.:
7.625% 11/15/10	200,000		233,687
8% 11/1/11	200,000		239,723
Nortel Networks Corp. 6.125% 2/15/06	50,000		52,000
Northern Telecom Ltd. yankee 6.875% 9/1/23	30,000		29,400
Stratus Technologies, Inc. 10.375% 12/1/08 (e)	80,000		84,800
			639,610
Electronic Equipment & Instruments - 0.0%
Jabil Circuit, Inc. 5.875% 7/15/10	20,000		21,050
PerkinElmer, Inc. 8.875% 1/15/13	20,000		23,100
Solectron Corp. 7.375% 3/1/06	55,000		57,200
			101,350
IT Services - 0.1%
Dex Media, Inc.:
0% 11/15/13 (c)(e)(f)	100,000		68,750
8% 11/15/13 (e)	10,000		10,250
Iron Mountain, Inc. 6.625% 1/1/16	70,000		67,900
			146,900
Nonconvertible Bonds - continued
	Principal Amount		Value (Note 1)
INFORMATION TECHNOLOGY - continued
Office Electronics - 0.1%
Xerox Corp.:
7.125% 6/15/10	$ 20,000		$ 21,200
7.2% 4/1/16	165,000		170,775
7.625% 6/15/13	60,000		63,750
			255,725
Semiconductors & Semiconductor Equipment - 0.1%
AMI Semiconductor, Inc. 10.75% 2/1/13	28,000		33,040
Amkor Technology, Inc. 7.75% 5/15/13	30,000		31,950
ChipPAC International Ltd. 12.75% 8/1/09	150,000		166,125
SCG Holding Corp./Semiconductor Components Industries LLC 12% 8/1/09	85,000		91,800
Viasystems, Inc. 10.5% 1/15/11 (e)	50,000		54,250
			377,165
TOTAL INFORMATION TECHNOLOGY			1,520,750
MATERIALS - 2.0%
Chemicals - 0.2%
Avecia Group PLC 11% 7/1/09	30,000		27,900
Berry Plastics Corp.:
10.75% 7/15/12	30,000		34,800
10.75% 7/15/12 (e)	50,000		58,000
Equistar Chemicals LP 6.5% 2/15/06	75,000		75,000
Equistar Chemicals LP/Equistar Funding Corp.:
10.625% 5/1/11 (e)	70,000		76,300
10.625% 5/1/11	75,000		81,375
Georgia Gulf Corp. 7.125% 12/15/13 (e)	30,000		30,600
Huntsman International LLC 9.875% 3/1/09	115,000		126,500
Millennium America, Inc.:
9.25% 6/15/08	20,000		21,850
9.25% 6/15/08 (e)	10,000		10,925
Nalco Co. 7.75% 11/15/11 (e)	130,000		136,825
OMNOVA Solutions, Inc. 11.25% 6/1/10	20,000		21,700
Resolution Performance Products LLC:
9.5% 4/15/10	20,000		20,500
13.5% 11/15/10	10,000		8,800
Solutia, Inc. 7.375% 10/15/27 (b)	20,000		9,400
			740,475
Nonconvertible Bonds - continued
	Principal Amount		Value (Note 1)
MATERIALS - continued
Construction Materials - 0.1%
Texas Industries, Inc. 10.25% 6/15/11	$ 200,000		$ 230,000
Containers & Packaging - 0.4%
Anchor Glass Container Corp. 11% 2/15/13	50,000		58,500
Blue Ridge Paper Products, Inc. 9.5% 12/15/08 (e)	20,000		20,550
BWAY Corp. 10% 10/15/10	10,000		11,000
Crown Cork & Seal, Inc. 8% 4/15/23	50,000		48,250
Graphic Packaging International, Inc.:
8.5% 8/15/11	220,000		240,900
9.5% 8/15/13	120,000		132,600
Jefferson Smurfit Corp. U.S. 7.5% 6/1/13	30,000		31,875
Owens-Brockway Glass Container, Inc.:
8.25% 5/15/13	15,000		16,050
8.875% 2/15/09	50,000		54,250
Owens-Illinois, Inc.:
7.15% 5/15/05	60,000		61,500
7.35% 5/15/08	50,000		49,500
7.5% 5/15/10	95,000		97,375
7.8% 5/15/18	45,000		45,675
8.1% 5/15/07	110,000		115,500
Sealed Air Corp.:
5.625% 7/15/13 (e)	25,000		25,879
6.875% 7/15/33 (e)	55,000		59,054
Silgan Holdings, Inc. 6.75% 11/15/13 (e)	100,000		104,000
Tekni-Plex, Inc. 8.75% 11/15/13 (e)	50,000		53,625
			1,226,083
Metals & Mining - 0.2%
Corporacion Nacional del Cobre (Codelco):
5.5% 10/15/13 (e)	165,000		168,140
6.375% 11/30/12 (e)	335,000		369,013
Freeport-McMoRan Copper & Gold, Inc.:
6.875% 2/1/14 (e)	75,000		75,000
10.125% 2/1/10	80,000		92,200
Massey Energy Co. 6.625% 11/15/10 (e)	40,000		41,400
Peabody Energy Corp. 6.875% 3/15/13	20,000		21,450
Phelps Dodge Corp. 8.75% 6/1/11	40,000		48,600
Steel Dynamics, Inc. 9.5% 3/15/09	10,000		11,050
			826,853
Paper & Forest Products - 1.1%
Boise Cascade Corp. 8% 2/24/06	25,000		26,656
Nonconvertible Bonds - continued
	Principal Amount		Value (Note 1)
MATERIALS - continued
Paper & Forest Products - continued
Buckeye Technologies, Inc. 8.5% 10/1/13	$ 200,000		$ 216,000
Georgia-Pacific Corp.:
7.375% 12/1/25	15,000		14,438
7.5% 5/15/06	50,000		52,500
8% 1/15/24 (e)	130,000		131,950
8.125% 5/15/11	5,000		5,438
8.875% 5/15/31	10,000		10,850
9.625% 3/15/22	235,000		244,400
International Paper Co.:
4.25% 1/15/09	95,000		95,964
5.5% 1/15/14	235,000		238,965
5.85% 10/30/12	1,000,000		1,058,046
Millar Western Forest Products Ltd. 7.75% 11/15/13 (e)	20,000		21,100
Stone Container Corp.:
8.375% 7/1/12	200,000		218,000
9.75% 2/1/11	30,000		33,150
Weyerhaeuser Co. 5.25% 12/15/09	1,000,000		1,059,148
			3,426,605
TOTAL MATERIALS			6,450,016
TELECOMMUNICATION SERVICES - 2.6%
Diversified Telecommunication Services - 1.7%
AT&T Corp.:
7% 11/15/06	45,000		50,004
8.75% 11/15/31	105,000		122,779
British Telecommunications PLC:
8.375% 12/15/10	190,000		230,246
8.875% 12/15/30	145,000		189,249
Cincinnati Bell, Inc. 8.375% 1/15/14	30,000		32,100
Empresa Brasil de Telecomm SA 11% 12/15/08 (e)	115,000		112,700
France Telecom SA 9% 3/1/11	1,200,000		1,444,432
Koninklijke KPN NV yankee 8% 10/1/10	500,000		599,233
Level 3 Communications, Inc. 10.5% 12/1/08	255,000		252,450
MCI Communications Corp.:
6.95% 8/15/06 (b)	100,000		81,000
7.75% 3/23/25 (b)	30,000		24,450
Primus Telecom Holding, Inc. 8% 1/15/14 (e)	30,000		29,700
Qwest Communications International, Inc.:
4.63% 2/15/09 (g)	40,000		40,000
Nonconvertible Bonds - continued
	Principal Amount		Value (Note 1)
TELECOMMUNICATION SERVICES - continued
Diversified Telecommunication Services - continued
Qwest Communications International, Inc.: - continued
7.5% 2/15/14	$ 40,000		$ 39,310
Qwest Services Corp.:
13% 12/15/07 (e)	220,000		257,400
13.5% 12/15/10 (e)	20,000		24,000
14% 12/15/14 (e)	30,000		37,650
Rogers Cantel, Inc. yankee:
8.8% 10/1/07	90,000		92,700
9.375% 6/1/08	5,000		5,225
Telefonica de Argentina SA:
9.125% 11/7/10	25,000		25,063
11.875% 11/1/07	33,000		36,135
Telenet Group Holding NV 0% 6/15/14 (c)(e)	80,000		50,200
TELUS Corp. yankee:
7.5% 6/1/07	200,000		223,970
8% 6/1/11	1,100,000		1,297,552
Triton PCS, Inc.:
8.75% 11/15/11	65,000		67,600
9.375% 2/1/11	5,000		5,288
U.S. West Communications 6.875% 9/15/33	15,000		14,025
			5,384,461
Wireless Telecommunication Services - 0.9%
American Tower Corp. 9.375% 2/1/09	135,000		143,775
AT&T Wireless Services, Inc. 8.75% 3/1/31	740,000		937,761
Centennial Communications Crop./Centennial Cellular Operating Co. LLC/Centennial Puerto Rico Operations Corp. 8.125% 2/1/14 (e)(f)	60,000		58,500
Cingular Wireless LLC 7.125% 12/15/31	500,000		547,489
Crown Castle International Corp.:
7.5% 12/1/13 (e)	50,000		51,000
9.375% 8/1/11	65,000		71,825
DirecTV Holdings LLC/DirecTV Financing, Inc. 8.375% 3/15/13	50,000		57,000
Dobson Communications Corp. 8.875% 10/1/13	20,000		20,700
Globe Telecom, Inc. 9.75% 4/15/12	10,000		11,050
Kyivstar GSM 12.75% 11/21/05 (Reg. S)	50,000		54,750
Millicom International Cellular SA 10% 12/1/13 (e)	80,000		84,400
Nextel Communications, Inc.:
7.375% 8/1/15	150,000		161,625
9.375% 11/15/09	140,000		151,900
Nonconvertible Bonds - continued
	Principal Amount		Value (Note 1)
TELECOMMUNICATION SERVICES - continued
Wireless Telecommunication Services - continued
Nextel Communications, Inc.: - continued
9.5% 2/1/11	$ 60,000		$ 68,100
Nextel Partners, Inc. 8.125% 7/1/11	85,000		91,375
Rogers Wireless, Inc. 9.625% 5/1/11	56,000		68,040
SBA Communications Corp.:
10.25% 2/1/09	35,000		35,000
12% 3/1/08	8,000		8,660
Telemig Cellular SA/Amazonia Cellular SA 8.75% 1/20/09 (e)	45,000		42,975
Western Wireless Corp. 9.25% 7/15/13	80,000		86,400
			2,752,325
TOTAL TELECOMMUNICATION SERVICES			8,136,786
UTILITIES - 2.0%
Electric Utilities - 1.2%
Allegheny Energy Supply Co. LLC:
7.8% 3/15/11	20,000		19,800
8.75% 4/15/12 (e)	90,000		91,175
10.25% 11/15/07 (e)	26,657		28,790
13% 11/15/07 (e)(g)	3,339		3,372
CMS Energy Corp.:
8.5% 4/15/11	45,000		48,656
9.875% 10/15/07	45,000		50,119
Dominion Resources, Inc. 8.125% 6/15/10	45,000		53,953
DTE Energy Co.:
6.375% 4/15/33	250,000		250,300
7.05% 6/1/11	50,000		56,657
Duke Capital Corp. 6.75% 2/15/32	1,400,000		1,405,148
Edison International 6.875% 9/15/04	15,000		15,330
FirstEnergy Corp.:
6.45% 11/15/11	80,000		83,791
7.375% 11/15/31	330,000		344,389
FPL Group Capital, Inc. 3.25% 4/11/06	30,000		30,499
Illinois Power Co. 11.5% 12/15/10	55,000		65,450
Oncor Electric Delivery Co.:
6.375% 5/1/12	45,000		49,709
6.375% 1/15/15	1,000,000		1,093,609
Nonconvertible Bonds - continued
	Principal Amount		Value (Note 1)
UTILITIES - continued
Electric Utilities - continued
Pacific Gas & Electric Co. 10.375% 11/1/05 (e)(g)	$ 50,000		$ 50,500
Southern California Edison Co. 8% 2/15/07	30,000		34,388
			3,775,635
Gas Utilities - 0.1%
ANR Pipeline, Inc. 9.625% 11/1/21	100,000		120,000
El Paso Energy Corp.:
6.75% 5/15/09	25,000		23,313
7.375% 12/15/12	5,000		4,600
7.75% 1/15/32	15,000		12,750
8.05% 10/15/30	95,000		82,294
Sonat, Inc.:
6.625% 2/1/08	20,000		18,525
6.75% 10/1/07	15,000		14,194
6.875% 6/1/05	85,000		86,169
Williams Holdings of Delaware, Inc. 6.25% 2/1/06	30,000		30,600
			392,445
Multi-Utilities & Unregulated Power - 0.7%
AES Corp.:
8.375% 8/15/07	85,000		86,700
8.5% 11/1/07	40,000		40,800
8.75% 6/15/08	2,000		2,165
8.75% 5/15/13 (e)	30,000		33,525
8.875% 2/15/11	82,000		89,893
9% 5/15/15 (e)	30,000		33,825
9.375% 9/15/10	7,000		7,831
9.5% 6/1/09	19,000		21,209
10% 12/12/05 (e)	7,364		7,548
Calpine Corp. 8.5% 7/15/10 (e)	40,000		38,400
Constellation Energy Group, Inc. 7.6% 4/1/32	1,000,000		1,182,953
NRG Energy, Inc. 8% 12/15/13 (e)	70,000		73,325
Western Resources, Inc. 9.75% 5/1/07	30,000		34,350
Williams Companies, Inc.:
6.5% 8/1/06	10,000		10,313
6.75% 1/15/06	175,000		179,375
7.125% 9/1/11	5,000		5,200
7.625% 7/15/19	30,000		31,200
7.875% 9/1/21	35,000		36,663
8.125% 3/15/12	30,000		33,000
Nonconvertible Bonds - continued
	Principal Amount		Value (Note 1)
UTILITIES - continued
Multi-Utilities & Unregulated Power - continued
Williams Companies, Inc.: - continued
8.625% 6/1/10	$ 30,000		$ 33,600
8.75% 3/15/32	15,000		16,650
			1,998,525
TOTAL UTILITIES			6,166,605
TOTAL NONCONVERTIBLE BONDS (Cost $68,990,275)		70,887,474
U.S. Government and Government Agency Obligations - 23.6%

U.S. Government Agency Obligations - 5.5%
Fannie Mae:
4.625% 10/15/13	3,000,000		3,008,469
5.125% 1/2/14	2,000,000		2,032,342
5.5% 7/18/12	500,000		514,417
6.25% 3/22/12	300,000		313,922
Federal Home Loan Bank 5.8% 9/2/08	3,910,000		4,300,015
Freddie Mac:
3.625% 9/15/08	4,090,000		4,137,514
5.25% 11/5/12	280,000		284,043
5.875% 3/21/11	2,095,000		2,285,381
6% 5/25/12	400,000		405,844
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS			17,281,947
U.S. Treasury Obligations - 18.1%
U.S. Treasury Bonds:
6.125% 8/15/29	3,845,000		4,428,210
6.375% 8/15/27	210,000		247,693
8% 11/15/21	6,000,000		8,208,048
9% 11/15/18	200,000		291,602
U.S. Treasury Notes:
2.375% 8/15/06	3,000,000		3,019,452
2.625% 11/15/06	10,000,000		10,101,560
3.25% 1/15/09	8,000,000		8,035,312
4% 11/15/12	8,840,000		8,833,096
5% 2/15/11	405,000		437,526
5% 8/15/11	4,100,000		4,417,110
U.S. Government and Government Agency Obligations - continued
	Principal Amount		Value (Note 1)
U.S. Treasury Obligations - continued
U.S. Treasury Notes: - continued
6% 8/15/09	$ 3,000,000		$ 3,407,109
6.5% 2/15/10	4,500,000		5,245,488
TOTAL U.S. TREASURY OBLIGATIONS			56,672,206
TOTAL U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS (Cost $73,477,380)		73,954,153
U.S. Government Agency - Mortgage Securities - 37.7%

Fannie Mae - 37.5%
4% 2/1/19 (f)	5,895,592		5,781,365
4.5% 5/1/18 to 9/1/33	21,877,481		21,715,717
4.5% 2/1/19 (f)	2,000,000		2,003,750
5% 1/1/33 to 12/1/33	23,808,700		23,670,736
5% 2/1/34 (f)	4,000,000		3,968,750
5.5% 11/1/16 to 10/1/17	666,284		692,038
5.5% 2/1/34 (f)	997,798		1,013,700
6.5% 6/1/15 to 2/1/33	3,630,904		3,846,813
6.5% 2/1/19 (f)	12,000,000		12,735,000
7% 8/1/31 to 11/1/32	3,696,686		3,921,032
7% 2/1/34 (f)	36,000,000		38,159,975
TOTAL FANNIE MAE			117,508,876
Government National Mortgage Association - 0.2%
7% 12/15/32	373,661		398,444
7% 2/1/34 (f)	177,954		189,688
TOTAL GOVERNMENT NATIONAL MORTGAGE ASSOCIATION			588,132
TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES (Cost $117,731,196)		118,097,008
Asset-Backed Securities - 1.3%

ACE Securities Corp. Series 2003-FM1 Class M2, 2.9913% 11/25/32 (g)	40,000		40,706
Asset Backed Securities Corp. Home Equity Loan Trust:
Series 2003-HE2 Class A2, 1.48% 4/15/33 (g)	74,813		74,952
Asset-Backed Securities - continued
	Principal Amount		Value (Note 1)
Asset Backed Securities Corp. Home Equity Loan Trust: - continued
Series 2003-HE7 Class A3, 1.53% 12/15/33 (g)	$ 225,114		$ 225,465
Capital One Multi-Asset Execution Trust:
Series 2003-2B Class B2, 3.5% 2/17/09	60,000		61,054
Series 2003-A1 Class A1, 1.49% 1/15/09 (g)	200,000		200,891
Series 2003-B1 Class B1, 2.27% 2/17/09 (g)	120,000		121,825
Series 2003-B4 Class B4, 1.9% 7/15/11 (g)	90,000		90,405
CDC Mortgage Capital Trust Series 2003-HE2 Class M2, 3% 10/25/33 (g)	30,000		30,948
Chase Credit Card Master Trust Series 2003-6 Class B, 1.45% 2/15/11 (g)	230,000		230,975
Citibank Credit Card Issuance Trust Series 2000-C2 Class C2, 1.77% 10/15/07 (g)	1,000,000		1,001,021
GSAMP NIMS Trust Series 2002-HE2N Class NOTE, 8.25% 10/20/32 (e)	174,028		174,620
Home Equity Asset Trust:
Series 2003-2:
Class A2, 1.48% 8/25/33 (g)	15,070		15,100
Class M1, 1.98% 8/25/33 (g)	25,000		25,311
Series 2003-4:
Class M1, 1.9413% 10/25/33 (g)	40,000		40,439
Class M2, 3% 10/25/33 (g)	45,000		45,803
Series 2003-5N Class A, 7.5% 1/27/34 (e)	22,161		21,939
Home Equity Asset Trust NIMS Trust:
Series 2002-4N Class A, 8% 5/27/33 (e)	80,984		79,972
Series 2003-2N Class A, 8% 9/27/33 (e)	24,671		24,178
Long Beach Mortgage Loan Trust Series 2003-3 Class M2, 2.95% 7/25/33 (g)	45,000		46,354
MBNA Credit Card Master Note Trust:
Series 2003-B3 Class B3, 1.475% 1/18/11 (g)	285,000		285,190
Series 2003-B5 Class B5, 1.47% 2/15/11 (g)	200,000		201,000
Morgan Stanley ABS Capital I, Inc.:
Series 2002-HE3 Class M1, 2.2% 12/27/32 (g)	90,000		91,869
Series 2002-NC6N Class NOTE, 9.5% 9/25/32 (e)	35,862		35,940
Series 2003-HE1 Class M2, 3% 5/25/33 (g)	55,000		55,541
Series 2003-NC8 Class M1, 1.8% 9/25/33 (g)	35,000		34,924
Morgan Stanley Dean Witter Capital I Trust:
Series 2001-NC4 Class M1, 2.1% 1/25/32 (g)	40,000		40,561
Series 2002-NC1 Class M1, 1.9% 2/25/32 (e)(g)	170,000		171,305
Series 2002-NC3 Class M1, 1.82% 8/25/32 (g)	75,000		75,557
Series 2002-NC5N Class NOTE, 9.5% 9/25/32 (e)	11,990		12,012
Series 2003-NC2 Class M2, 3.1% 2/25/33 (g)	40,000		41,340
Asset-Backed Securities - continued
	Principal Amount		Value (Note 1)
Morgan Stanley Dean Witter Capital I, Inc.:
Series 2002-AM3N Class NOTE, 9.5% 2/25/33 (e)	$ 8,606		$ 8,618
Series 2003-NC2N Class NOTE, 9.5% 12/25/32 (e)	167,605		167,829
New Century Home Equity Loan Trust Series 2003-2 Class A2, 1.53% 1/25/33 (g)	60,593		60,757
Sears Credit Account Master Trust II Series 2002-4 Class A, 1.23% 8/18/09 (g)	100,000		99,892
TOTAL ASSET-BACKED SECURITIES (Cost $3,920,654)		3,934,293
Collateralized Mortgage Obligations - 2.2%

Private Sponsor - 2.0%
Bank of America Mortgage Securities, Inc.:
Series 2003-K:
Class 1A1, 3.4191% 12/25/33 (g)	479,610		481,521
Class 2A1, 4.2507% 12/25/33 (g)	490,396		492,714
Series 2003-L Class 2A1, 4.0796% 1/25/34 (g)	2,787,209		2,793,089
Merrill Lynch Mortgage Investors, Inc.:
Series 2003-E Class XA1, 0% 10/25/28 (g)(i)	2,566,051		32,137
Series 2003-G Class XA1, 1% 1/25/29 (i)	3,611,878		62,361
Series 2003-H Class XA1, 1% 11/25/28 (e)(i)	2,900,466		49,625
Residential Asset Mortgage Products, Inc. sequential pay Series 2003-SL1 Class A31, 7.125% 4/25/31	1,456,757		1,495,814
Residential Finance LP/Residential Finance Development Corp. floater:
Series 2003-B Class B8, 7.81% 7/10/35 (e)(g)	495,589		517,639
Series 2003-CB1:
Class B3, 2.56% 6/10/35 (e)(g)	44,581		44,938
Class B4, 2.76% 6/10/35 (e)(g)	39,628		39,942
Class B5, 3.36% 6/10/35 (e)(g)	29,721		29,949
Class B6, 3.86% 6/10/35 (e)(g)	14,860		14,972
Sequoia Mortgage Funding Trust Series 2003-A Class AX1, 0.8% 10/21/08 (e)(i)	7,319,403		83,487
Washington Mutual Mortgage Securities Corp. sequential pay Series 2003-MS9 Class 2A1, 7.5% 12/25/33	131,831		136,274
TOTAL PRIVATE SPONSOR			6,274,462
Collateralized Mortgage Obligations - continued
	Principal Amount		Value (Note 1)
U.S. Government Agency - 0.2%
Fannie Mae guaranteed REMIC pass thru certificates planned amortization class Series 2001-53 Class OH, 6.5% 6/25/30	$ 17,026		$ 17,301
Freddie Mac planned amortization class Series 2355 Class CD, 6.5% 6/15/30	19,547		19,865
Ginnie Mae guaranteed Multi-family pass thru securities sequential pay Series 2002-35 Class C, 5.8638% 10/16/23 (g)	25,000		27,062
Ginnie Mae guaranteed REMIC pass thru securities:
planned amortization class Series 2003-75 Class LI, 5.5% 10/20/21 (i)	7,572,628		355,041
sequential pay Series 2003-59 Class D, 3.654% 10/16/27	115,000		109,151
TOTAL U.S. GOVERNMENT AGENCY			528,420
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $6,778,406)		6,802,882
Commercial Mortgage Securities - 1.0%

Banc of America Large Loan, Inc.:
floater Series 2003-BBA2:
Class C, 1.57% 11/15/15 (e)(g)	50,000		50,057
Class D, 1.65% 11/15/15 (e)(g)	80,000		80,122
Series 2003-BBA2:
Class F, 2% 11/15/15 (e)(g)	60,000		60,162
Class H, 2.5% 11/15/15 (e)(g)	50,000		50,168
Class J, 3.05% 11/15/15 (e)(g)	55,000		55,183
Class K, 3.7% 11/15/15 (e)(g)	50,000		49,756
Bear Stearns Commercial Mortgage Securities, Inc. floater Series 2003-BA1A Class A1, 1.38% 4/14/15 (e)(g)	294,856		294,719
COMM floater:
Series 2001-FL5A Class A2, 1.65% 11/15/13 (e)(g)	15,995		15,998
Series 2002-FL7 Class A2, 1.45% 11/15/14 (e)(g)	55,000		54,989
Ginnie Mae guaranteed REMIC pass thru securities:
sequential pay:
Series 2003-22 Class B, 3.963% 5/16/32	60,000		59,263
Series 2003-36 Class C, 4.254% 2/16/31	55,000		54,732
Series 2003-47 Class C, 4.227% 10/16/27	105,000		104,537
Series 2003-47 Class XA, 0.0211% 6/16/43 (g)(i)	6,666,379		316,653
Commercial Mortgage Securities - continued
	Principal Amount		Value (Note 1)
GS Mortgage Securities Corp. II Series 2003-C1 Class A2A, 3.59% 1/10/40	$ 65,000		$ 65,480
Leafs CMBS I Ltd./Leafs CMBS I Corp. Series 2002-1A Class C, 4.13% 11/20/37 (e)	200,000		184,438
Trizechahn Office Properties Trust Series 2001-TZHA:
Class C3, 6.522% 3/15/13 (e)	25,000		26,682
Class C4, 6.893% 5/15/16 (e)	500,000		557,199
Class E3, 7.253% 3/15/13 (e)	235,000		246,588
Wachovia Bank Commercial Mortgage Trust Series 2003-C8 Class A3, 4.445% 11/15/35	785,000		791,139
TOTAL COMMERCIAL MORTGAGE SECURITIES (Cost $3,307,661)		3,117,865
Foreign Government and Government Agency Obligations - 1.4%

Argentinian Republic 1.162% 8/3/12 (g)	55,000		35,255
Bogota Distrito Capital 9.5% 12/12/06 (Reg. S)	15,000		16,200
Brazilian Federative Republic:
Brady:
capitalization bond 8% 4/15/14	529,507		515,607
par Z-L 6% 4/15/24	25,000		21,625
10% 8/7/11	120,000		130,200
11% 8/17/40	260,000		283,660
12% 4/15/10	15,000		17,700
12.25% 3/6/30	75,000		91,500
12.75% 1/15/20	15,000		18,750
Central Bank of Nigeria promissory note 5.092% 1/5/10	51,422		48,125
Chilean Republic:
5.5% 1/15/13	250,000		258,150
5.625% 7/23/07	100,000		107,375
Colombian Republic:
8.125% 5/21/24	35,000		31,719
10.5% 7/9/10	117,000		134,111
11.75% 2/25/20	55,000		66,688
Dominican Republic 9.5% 9/27/06 (Reg. S)	85,000		68,000
Ecuador Republic:
7% 8/15/30 (Reg. S) (d)	25,000		21,313
12% 11/15/12 (Reg. S)	125,000		123,750
euro par 4.75% 2/28/25 (d)	5,000		2,981
Lebanese Republic:
10.125% 8/6/08	10,000		11,150
11.625% 5/11/16 (Reg. S)	20,000		23,000
Foreign Government and Government Agency Obligations - continued
	Principal Amount		Value (Note 1)
Ontario Province 5.125% 7/17/12	$ 100,000		$ 105,532
Panamanian Republic:
Brady par 4.75% 7/17/26 (d)	10,000		8,300
9.625% 2/8/11	25,000		29,000
10.75% 5/15/20	80,000		96,400
Philippine Republic:
Brady principal collateralized interest reduction bond 6.5% 12/1/17	25,000		23,750
9.875% 1/15/19	190,000		196,650
Quebec Province 7.5% 9/15/29	100,000		127,213
Russian Federation 5% 3/31/30 (Reg. S) (d)	507,000		493,058
State of Israel 4.625% 6/15/13	20,000		19,238
Turkish Republic:
11% 1/14/13	110,000		136,813
11.75% 6/15/10	105,000		130,988
11.875% 1/15/30	15,000		20,963
United Mexican States:
4.625% 10/8/08	75,000		75,938
6.375% 1/16/13	85,000		88,953
7.5% 1/14/12	100,000		112,750
Uruguay Republic 7.25% 2/15/11	100,000		90,750
Venezuelan Republic:
10.75% 9/19/13 (e)	95,000		97,850
10.75% 9/19/13 (e)	105,000		108,150
13.625% 8/15/18	50,000		58,250
euro Brady par W-B 6.75% 3/31/20	250,000		230,625
Vietnamese Socialist Republic Brady par 3.5% 3/12/28 (d)	15,000		10,688
TOTAL FOREIGN GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS (Cost $4,067,123)		4,288,718

Common Stocks - 0.0%
	Shares
CONSUMER DISCRETIONARY - 0.0%
Multiline Retail - 0.0%
Barneys, Inc. warrants 4/1/08 (a)	20		400
TOTAL COMMON STOCKS (Cost $0)		400
Nonconvertible Preferred Stocks - 0.1%
	Shares		Value (Note 1)
CONSUMER DISCRETIONARY - 0.1%
Media - 0.1%
CSC Holdings, Inc.:
(depositary shares) Series M, 11.125%	530		$ 55,915
Series H, 11.75%	530		55,650
PRIMEDIA, Inc.:
Series D, 10.00%	425		41,650
Series H, 8.625%	1,000		92,500
			245,715
TOTAL NONCONVERTIBLE PREFERRED STOCKS (Cost $239,269)		245,715

Sovereign Loan Participations - 0.0%
	Principal Amount
Indonesian Republic loan participation:
Barclays Bank PLC 1.8125% 1/25/06 (g)	$ 50,000		46,750
Credit Suisse First Boston 2.125% 3/28/13 (g)	25,000		22,125
Deutsche Bank:
1.8125% 3/21/05 (g)	15,000		14,325
1.8125% 1/25/06 (g)	15,000		14,025
2.125% 3/28/13 (f)(g)	15,000		13,275
TOTAL SOVEREIGN LOAN PARTICIPATIONS (Cost $107,279)		110,500

Fixed-Income Funds - 10.9%
	Shares
Fidelity Ultra-Short Central Fund (h) (Cost $33,999,988)	341,900		34,056,659
Cash Equivalents - 18.9%
	Maturity Amount		Value (Note 1)
Investments in repurchase agreements (Collateralized by U.S. Government Obligations, in a joint trading account at 1.04%, dated 1/30/04 due 2/2/04) (Cost $59,131,000)	$ 59,136,131		$ 59,131,000
TOTAL INVESTMENT PORTFOLIO - 119.7% (Cost $371,750,231)			374,626,667
NET OTHER ASSETS - (19.7)%			(61,758,272)
NET ASSETS - 100%		$ 312,868,395

Swap Agreements
	Expiration Date	Notional Amount	Unrealized Appreciation/ (Depreciation)
Credit Default Swap
Receive quarterly a notional amount multiplied by .53% and pay Lehman Brothers, Inc., upon default event of SBC Communications, Inc., par value of the notional amount of SBC Communciations, Inc. 6.25% 3/15/11	March 2009	$ 200,000	$ 297
Receive quarterly notional amount multiplied by .44% and pay JPMorgan Chase, Inc. upon default event of Lockheed Martin Corp., par value of the notional amount of Lockheed Martin Corp. 8.2% 12/1/09	Dec. 2008	1,000,000	(1,762)
Receive quarterly notional amount multiplied by .53% and pay Deutsche Bank upon default event of SBC Communications, Inc., par value of the notional amount of SBC Communications, Inc. 6.25% 3/15/11	March 2009	300,000	(142)
Receive quarterly notional amount multiplied by .62% and pay Goldman Sachs upon default of SLM Corp., par value of the notional amount of SLM Corp. 1.07% 7/25/35	August 2007	25,000	250
TOTAL CREDIT DEFAULT SWAP		1,525,000	(1,357)
Swap Agreements - continued
	Expiration Date	Notional Amount	Unrealized Appreciation/ (Depreciation)
Total Return Swap
Receive monthly a return equal to Lehman Brothers CMBS AAA 8.5+ and pay monthly a floating rate based on 1-month LIBOR minus 65 basis points with Lehman Brothers, Inc.	Oct. 2004	$ 1,000,000	$ 14,950
Receive monthly a return equal to Lehman Brothers CMBS AAA 8.5+ and pay monthly a floating rate based on 1-month LIBOR minus 70 basis points with Lehman Brothers, Inc.	Feb. 2004	1,000,000	14,992
Receive quarterly a return equal to Banc of America Securities LLC AAA 10Yr Commercial Mortgage-Backed Securities Daily Index and pay quarterly a floating rate based on 3-month LIBOR minus 75 basis points with Bank of America	May 2004	1,000,000	16,457
Receive quarterly a return equal to Banc of America Securities LLC AAA 10Yr Commercial Mortgage-Backed Securities Daily Index and pay quarterly a floating rate based on 3-month LIBOR minus 80 basis points with Bank of America	April 2004	1,000,000	31,875
TOTAL TOTAL RETURN SWAP		4,000,000	78,274
		$ 5,525,000	$ 76,917

Legend

(a) Non-income producing

(b) Non-income producing - issuer filed for bankruptcy or is in default of interest payments.

(c) Debt obligation initially issued in zero coupon form which converts to coupon form at a specified rate and date. The rate shown is the rate at period end.

(d) Debt obligation initially issued at one coupon which converts to a higher coupon at a specified date. The rate shown is the rate at period end.

(e) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the period end, the value of these securities amounted to $11,756,727 or 3.8% of net assets.

(f) Security or a portion of the security purchased on a delayed delivery or when-issued basis.

(g) The coupon rate shown on floating or adjustable rate securities represents the rate at period end.

(h) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. A complete listing of the fund's holdings as of its most recent fiscal year end is available upon request.

(i) Security represents right to receive monthly interest payments on an underlying pool of mortgages. Principal shown is the par amount of the mortgage pool.

Other Information

The fund invested in loans and loan participations, trade claims or other receivables. At period end the value of these investments amounted to $110,500 or 0.0% of net assets.

Purchases and sales of securities, other than short-term securities, aggregated $565,326,955 and $341,942,826, respectively, of which long-term U.S. government and government agency obligations aggregated $458,545,757 and $321,378,170, respectively.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements

Statement of Assets and Liabilities

	January 31, 2004 (Unaudited)

Assets
Investment in securities, at value (including repurchase agreements of $59,131,000) (cost $371,750,231) - See accompanying schedule		$ 374,626,667
Cash		2,970
Receivable for investments sold		289,190
Receivable for fund shares sold		604,412
Dividends receivable		1,062
Interest receivable		2,689,446
Unrealized gain on swap agreements		76,917
Prepaid expenses		712
Receivable from investment adviser for expense reductions		713
Total assets		378,292,089

Liabilities
Payable for investments purchased Regular delivery	$ 900,319
Delayed delivery	64,242,821
Payable for fund shares redeemed	74,339
Distributions payable	15,313
Accrued management fee	109,310
Other affiliated payables	61,604
Other payables and accrued expenses	19,988
Total liabilities		65,423,694

Net Assets		$ 312,868,395
Net Assets consist of:
Paid in capital		$ 309,231,525
Undistributed net investment income		88,187
Accumulated undistributed net realized gain (loss) on investments		595,330
Net unrealized appreciation (depreciation) on investments		2,953,353
Net Assets, for 29,594,002 shares outstanding		$ 312,868,395
Net Asset Value, offering price and redemption price per share ($312,868,395 ÷ 29,594,002 shares)		$ 10.57

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Operations

	Six months ended January 31, 2004 (Unaudited)

Investment Income
Dividends		$ 6,996
Interest		3,558,839
Total income		3,565,835

Expenses
Management fee	$ 413,406
Transfer agent fees	233,428
Accounting fees and expenses	38,803
Non-interested trustees' compensation	348
Custodian fees and expenses	10,065
Registration fees	69,201
Audit	18,343
Legal	3,112
Miscellaneous	167
Total expenses before reductions	786,873
Expense reductions	(157,159)	629,714
Net investment income (loss)		2,936,121
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investment securities	612,335
Swap agreements	(1,337)
Total net realized gain (loss)		610,998
Change in net unrealized appreciation (depreciation) on: Investment securities	4,965,347
Swap agreements	78,161
Delayed delivery commitments	(138,750)
Total change in net unrealized appreciation (depreciation)		4,904,758
Net gain (loss)		5,515,756
Net increase (decrease) in net assets resulting from operations		$ 8,451,877

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Statement of Changes in Net Assets

	Six months ended January 31, 2004	October 15, 2002 (commencement of operations) to
	(Unaudited)	July 31, 2003
Increase (Decrease) in Net Assets
Operations
Net investment income (loss)	$ 2,936,121	$ 1,155,369
Net realized gain (loss)	610,998	1,196,805
Change in net unrealized appreciation (depreciation)	4,904,758	(1,951,405)
Net increase (decrease) in net assets resulting from operations	8,451,877	400,769
Distributions to shareholders from net investment income	(2,896,111)	(1,105,904)
Distributions to shareholders from net realized gain	(461,703)	-
Total distributions	(3,357,814)	(1,105,904)
Share transactions Net proceeds from sales of shares	259,849,411	153,496,596
Reinvestment of distributions	3,262,189	1,022,553
Cost of shares redeemed	(36,152,841)	(72,998,441)
Net increase (decrease) in net assets resulting from share transactions	226,958,759	81,520,708
Total increase (decrease) in net assets	232,052,822	80,815,573

Net Assets
Beginning of period	80,815,573	-
End of period (including undistributed net investment income of $88,187 and undistributed net investment income of $48,177, respectively)	$ 312,868,395	$ 80,815,573
Other Information Shares
Sold	24,882,707	14,730,271
Issued in reinvestment of distributions	311,360	98,006
Redeemed	(3,462,279)	(6,966,063)
Net increase (decrease)	21,731,788	7,862,214

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights

	Six months ended January 31, 2004
	(Unaudited)	2003^F
Selected Per-Share Data
Net asset value, beginning of period	$ 10.28	$ 10.00
Income from Investment Operations
Net investment income (loss)^D	.160	.232
Net realized and unrealized gain (loss)	.353	.269^E
Total from investment operations	.513	.501
Distributions from net investment income	(.163)	(.221)
Distributions from net realized gain	(.060)	-
Total distributions	(.223)	(.221)
Net asset value, end of period	$ 10.57	$ 10.28
Total Return^B,C	5.04%	5.01%
Ratios to Average Net Assets^G
Expenses before expense reductions	.81%^A	1.01%^A
Expenses net of voluntary waivers, if any	.65%^A	.65%^A
Expenses net of all reductions	.65%^A	.65%^A
Net investment income (loss)	3.02%^A	2.83%^A
Supplemental Data
Net assets, end of period (000 omitted)	$ 312,868	$ 80,816
Portfolio turnover rate	329%^A	423%^A

^A Annualized

^B Total returns for periods of less than one year are not annualized.

^C Total returns would have been lower had certain expenses not been reduced during the periods shown.

^D Calculated based on average shares outstanding during the period.

^E The amount shown for a share outstanding does not correspond with the aggregate net gain (loss) on investments for the period due to the timing of sales and repurchases of shares in relation to fluctuating market values of the investments of the fund.

^F For the period October 15, 2002 (commencement of operations) to July 31, 2003.

^G Expense ratios reflect operating expenses of the fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the fund during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the fund.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Notes to Financial Statements

For the period ended January 31, 2004 (Unaudited)

1. Significant Accounting Policies.

Fidelity® Total Bond Fund (the fund) is a fund of Fidelity Income Fund (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:

Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Debt securities for which quotations are readily available are valued at their most recent bid prices (sales prices if the principal market is an exchange) in the principal market in which such securities are normally traded, as determined by recognized dealers in such securities, or securities are valued on the basis of information provided by a pricing service. Pricing services use valuation matrices that incorporate both dealer-supplied valuations and valuation models. Equity securities for which market quotations are available are valued at the last sale price or official closing price (closing bid price or last evaluated quote if no sale has occurred) on the primary market or exchange on which they trade.If an event that is expected to materially affect the value of a security occurs after the close of an exchange or market on which that security trades, but prior to the NAV calculation, then that security will be fair valued taking the event into account. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value as determined in good faith under consistently applied procedures under the general supervision of the Board of Trustees. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.

Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities, which is accrued using the interest method. Debt obligations may be placed on non-accrual status and

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

1. Significant Accounting Policies - continued

Investment Transactions and Income - continued

related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectibility of interest is reasonably assured.

Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among the funds in the trust.

Income Tax Information and Distributions to Shareholders. Each year, the fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. Dividends are declared daily and paid monthly from net investment income. Distributions from realized gains, if any, are recorded on the ex-dividend date.

Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Capital accounts within the financial statements are adjusted for permanent and temporary book and tax differences. These adjustments have no impact on net assets or the results of operations. Temporary differences will reverse in a subsequent period. These differences are primarily due to market discount, non-taxable dividends, financing transactions and losses deferred due to wash sales.

The federal tax cost of investments including unrealized appreciation (depreciation) as of period end was as follows:

Unrealized appreciation	$ 3,749,990	\|
Unrealized depreciation	(866,222)
Net unrealized appreciation (depreciation)	$ 2,883,768
Cost for federal income tax purposes	$ 371,742,899

2. Operating Policies.

Semiannual Report

2. Operating Policies - continued

Repurchase Agreements - continued

segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. Collateral is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).

Delayed Delivery Transactions and When-Issued Securities. The fund may purchase or sell securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. During the time a delayed delivery sell is outstanding, the contract is marked-to-market daily and equivalent deliverable securities are held for the transaction. The value of the securities purchased on a delayed delivery or when-issued basis are identified as such in the fund's Schedule of Investments. The fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, the fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract's terms, or if the issuer does not issue the securities due to political, economic, or other factors.

Restricted Securities. The fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the fund's Schedule of Investments.

Loans and Other Direct Debt Instruments. The fund may invest in loans and loan participations, trade claims or other receivables. These investments may include standby financing commitments that obligate the fund to supply additional cash to the borrower on demand. Loan participations involve a risk of insolvency of the lending bank or other financial intermediary. Information regarding loans and other direct debt instruments is included under the caption "Other Information" at the end of the fund's Schedule of Investments.

Swap Agreements. The fund may invest in swaps for the purpose of managing its exposure to interest rate, credit or market risk.

Total return swaps are agreements to exchange the return generated by one instrument for the return generated by another instrument, for example, the agreement to pay interest in exchange for a market-linked return based on a notional amount. To the

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

2. Operating Policies - continued

Swap Agreements - continued

extent the total return of the index exceeds the offsetting interest obligation, the fund will receive a payment from the counterparty. To the extent it is less, the fund will make a payment to the counterparty. Periodic payments received or made by the fund are recorded in the accompanying Statement of Operations as realized gains or losses, respectively.

Credit default swaps involve the exchange of a fixed rate premium for protection against the loss in value of an underlying debt instrument in the event of a defined credit event (such as payment default or bankruptcy). Under the terms of the swap, one party acts as a "guarantor" receiving a periodic payment that is a fixed percentage applied to a notional principal amount. In return the party agrees to purchase the notional amount of the underlying instrument, at par, if a credit event occurs during the term of the swap. The fund may enter into credit default swaps in which the fund or its counterparty act as guarantors. By acting as the guarantor of a swap, the fund assumes the market and credit risk of the underlying instrument including liquidity and loss of value. Premiums received or made by the fund are recorded in the accompanying Statement of Operations as realized gains or losses, respectively.

Swaps are marked-to-market daily based on dealer-supplied valuations and changes in value are recorded as unrealized appreciation (depreciation). Gains or losses are realized upon early termination of the swap agreement. Collateral, in the form of cash or securities, may be required to be held in segregated accounts with the fund's custodian in compliance with swap contracts. Risks may exceed amounts recognized on the Statement of Assets and Liabilities. These risks include changes in the returns of the underlying instruments, failure of the counterparties to perform under the contracts' terms and the possible lack of liquidity with respect to the swap agreements. Details of swap agreements open at period end are included in the fund's Schedule of Investments under the caption "Swap Agreements."

Semiannual Report

2. Operating Policies - continued

Financing Transactions - continued

transaction a fund is entitled to interest and principal payments on the securities purchased. The price differential between the purchase and sale is recorded as an adjustment to investment income. Losses may arise due to changes in the value of the securities or if the counterparty does not perform under the terms of the agreement. If the counterparty files for bankruptcy or becomes insolvent, the fund's right to repurchase or sell securities may be limited.

3. Purchases and Sales of Investments.

Information regarding purchases and sales of securities is included under the caption "Other Information" at the end of the fund's Schedule of Investments.

4. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the fund with investment management related services for which the fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the fund's average net assets and a group fee rate that averaged .13% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .43% of the fund's average net assets.

Transfer Agent Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, is the fund's transfer, dividend disbursing and shareholder servicing agent. FSC receives account fees and asset-based fees that vary according to account size and type of account. FSC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, the transfer agent fees were equivalent to an annualized rate of .24% of average net assets.

Accounting Fees. FSC maintains the fund's accounting records. The fee is based on the level of average net assets for the month.

Central Funds. The fund may invest in affiliated Central Funds managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR. The Central Funds are open-end investment companies available only to investment companies and other accounts managed by FMR and its affiliates. The Central Funds seek preservation of capital and current income and do not pay a management fee. Income distributions earned by the fund are recorded as income in the accompanying financial statements and totaled $148,097 for the period.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

5. Expense Reductions.

FMR agreed to reimburse the fund to the extent operating expenses exceeded .65% of average net assets. Some expenses, for example interest expense, are excluded from this reimbursement. During the period, this reimbursement reduced the fund's expenses by $155,858.

In addition, through arrangements with the fund's custodian, credits realized as a result of uninvested cash balances were used to reduce the fund's expenses. During the period, these credits reduced the fund's custody expenses by $1,301.

Semiannual Report

Managing Your Investments

Fidelity offers several ways to conveniently manage your personal investments via your telephone or PC. You can access your account information, conduct trades and research your investments 24 hours a day.

By Phone

Fidelity Automated Service Telephone provides a single toll-free number to access account balances, positions, quotes and trading. It's easy to navigate the service, and on your first call, the system will help you create a personal identification number (PIN) for security.

(phone_graphic)Fidelity Automated
Service Telephone (FAST®)
1-800-544-5555

Press

1 For mutual fund and brokerage trading.

2 For quotes.*

3 For account balances and holdings.

4 To review orders and mutual
fund activity.

5 To change your PIN.

*0 To speak to a Fidelity representative.

By PC

Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.

(computer_graphic)Fidelity's Web Site
www.fidelity.com

* When you call the quotes line, please remember that a fund's yield and return will vary and, except for money market funds, share price will also vary. This means that you may have a gain or loss when you sell your shares. There is no assurance that money market funds will be able to maintain a stable $1 share price; an investment in a money market fund is not insured or guaranteed by the U.S. government. Total returns are historical and include changes in share price, reinvestment of dividends and capital gains, and the effects of any sales charges.

Semiannual Report

Investment Adviser

Fidelity Management & Research Company

Boston, MA

Investment Sub-Advisers

FMR Co., Inc.

Fidelity Management & Research
(U.K.) Inc.

Fidelity Management & Research
(Far East) Inc.

Fidelity Investments
Money Management, Inc.

Fidelity Investments Japan Limited

Fidelity International
Investment Advisors

Fidelity International
Investment Advisors (U.K.) Limited

General Distributor

Fidelity Distributors Corporation

Boston, MA

Transfer and Shareholder
Servicing Agent

Fidelity Service Company, Inc.

Boston, MA

Custodian

Citibank, N.A.

New York, NY

Fidelity's Taxable Bond Funds

Capital & Income

Floating Rate High Income

Ginnie Mae

Government Income

High Income

Inflation-Protected Bond

Intermediate Bond

Intermediate Government Income

Investment Grade Bond

Mortgage Securities

New Markets Income

Short-Term Bond

Spartan® Government Income

Spartan Investment Grade Bond

Strategic Income

Total Bond

Ultra-Short Bond

U.S. Bond Index

The Fidelity Telephone Connection

Mutual Fund 24-Hour Service

Exchanges/Redemptions
and Account Assistance 1-800-544-6666

Product Information 1-800-544-6666

Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)

TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)

Fidelity Automated Service
Telephone (FAST®) (automated graphic) 1-800-544-5555

(automated graphic) Automated line for quickest service

(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com

TBD-USAN-0304
1.789737.100

Fidelity®

Ultra-Short Bond

Fund

Semiannual Report

January 31, 2004

(2_fidelity_logos) (Registered_Trademark)

Chairman's Message	<Click Here>	Ned Johnson's message to shareholders.
Investment Changes	<Click Here>	A summary of major shifts in the fund's investments over the past six months.
Investments	<Click Here>	A complete list of the fund's investments with their market values.
Financial Statements	<Click Here>	Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights.
Notes	<Click Here>	Notes to the financial statements.

Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.

Other third party marks appearing herein are the property of their respective owners.

All other marks appearing herein are registered or unregistered trademarks or service marks of FMR Corp. or an affiliated company.

(Recycle graphic) This report is printed on recycled paper using soy-based inks.

Neither the fund nor Fidelity Distributors Corporation is a bank.

For more information on any Fidelity fund, including charges and expenses, call 1-800-544-6666 for a free prospectus. Read it carefully before you invest or send money.

Semiannual Report

Chairman's Message

(photo_of_Edward_C_Johnson_3d)

Dear Shareholder:

Best regards,

/s/Edward C. Johnson 3d

Edward C. Johnson 3d

Semiannual Report

Investment Changes

Quality Diversification (% of fund's net assets)
As of January 31, 2004		As of July 31, 2003
	U.S. Government and U.S. Government Agency Obligations 13.8%		U.S. Government and U.S. Government Agency Obligations 18.8%
	AAA 21.6%		AAA 26.3%
	AA 8.2%		AA 9.8%
	A 15.4%		A 18.9%
	BBB 8.4%		BBB 8.8%
	BB and Below 0.6%		BB and Below 0.8%
	Not Rated 1.8%		Not Rated 2.0%
	Short-Term Investments and Net Other Assets 30.2%		Short-Term Investments and Net Other Assets 14.6%

Average Years to Maturity as of January 31, 2004
		6 months ago
Years	1.6	1.8

Average years to maturity is based on the average time remaining until principal payments are expected from each of the fund's bonds, weighted by dollar amount.

Duration as of January 31, 2004
		6 months ago
Years	0.5	0.7

Asset Allocation (% of fund's net assets)
As of January 31, 2004*		As of July 31, 2003**
	Corporate Bonds 7.8%		Corporate Bonds 11.3%
	U.S. Government and U.S. Government Agency Obligations 13.8%		U.S. Government and U.S. Government Agency Obligations 18.8%
	Asset-Backed Securities 35.7%		Asset-Backed Securities 42.0%
	CMOs and Other Mortgage Related Securities 12.5%		CMOs and Other Mortgage Related Securities 13.3%
	Short-Term Investments and Net Other Assets 30.2%		Short-Term Investments and Net Other Assets 14.6%

* Foreign investments		2.9%		** Foreign investments		2.6%
* Futures and Swaps		15.0%		** Futures and Swaps		17.2%

The information in the above tables is based on the combined investments of the fund and its pro-rata share of the investments of Fidelity's fixed-income central fund.

Semiannual Report

Investments January 31, 2004 (Unaudited)

Showing Percentage of Net Assets

Nonconvertible Bonds - 5.6%
	Principal Amount		Value (Note 1)
CONSUMER DISCRETIONARY - 1.3%
Auto Components - 0.1%
DaimlerChrysler NA Holding Corp. 2.17% 8/8/06 (d)	$ 600,000		$ 607,408
Media - 1.2%
British Sky Broadcasting Group PLC (BSkyB) yankee 7.3% 10/15/06	900,000		1,002,073
Continental Cablevision, Inc. 8.3% 5/15/06	450,000		502,764
Cox Communications, Inc. 7.5% 8/15/04	500,000		514,719
Liberty Media Corp. 2.67% 9/17/06 (d)	1,000,000		1,011,998
Time Warner, Inc. 7.75% 6/15/05	1,000,000		1,075,184
Walt Disney Co. 4.875% 7/2/04	300,000		304,488
			4,411,226
TOTAL CONSUMER DISCRETIONARY			5,018,634
CONSUMER STAPLES - 0.3%
Food & Staples Retailing - 0.2%
Fred Meyer, Inc. 7.375% 3/1/05	900,000		950,099
Tobacco - 0.1%
Philip Morris Companies, Inc. 7% 7/15/05	300,000		316,817
TOTAL CONSUMER STAPLES			1,266,916
ENERGY - 0.1%
Oil & Gas - 0.1%
Canada Occidental Petroleum Ltd. yankee 7.125% 2/4/04	50,000		50,000
Pemex Project Funding Master Trust 2.65% 1/7/05 (a)(d)	150,000		150,689
			200,689
FINANCIALS - 1.5%
Capital Markets - 0.1%
State Street Capital Trust II 1.68% 2/15/08 (d)	300,000		302,239
Consumer Finance - 0.3%
General Motors Acceptance Corp. 2.37% 10/20/05 (d)	1,000,000		1,009,248
John Deere Capital Corp. 1.77% 9/17/04 (d)	50,000		50,155
			1,059,403
Diversified Financial Services - 0.4%
Deutsche Telekom International Finance BV 8.25% 6/15/05	500,000		541,005
Nonconvertible Bonds - continued
	Principal Amount		Value (Note 1)
FINANCIALS - continued
Diversified Financial Services - continued
Powergen US Funding LLC 4.5% 10/15/04	$ 335,000		$ 340,561
Sprint Capital Corp. 7.125% 1/30/06	500,000		539,884
			1,421,450
Insurance - 0.1%
St. Paul Companies, Inc. 7.875% 4/15/05	405,000		432,936
Real Estate - 0.5%
Arden Realty LP 8.875% 3/1/05	500,000		535,168
Duke Realty LP 6.875% 3/15/05	300,000		316,580
Mack-Cali Realty LP 7% 3/15/04	580,000		583,830
Regency Centers LP 7.125% 7/15/05	400,000		428,037
			1,863,615
Thrifts & Mortgage Finance - 0.1%
Countrywide Home Loans, Inc. 1.6519% 6/2/06 (d)	500,000		503,598
TOTAL FINANCIALS			5,583,241
INDUSTRIALS - 0.6%
Aerospace & Defense - 0.3%
Bombardier Capital, Inc. 7.5% 10/17/05 (a)	1,000,000		1,082,221
Air Freight & Logistics - 0.1%
FedEx Corp. 6.625% 2/12/04	200,000		200,226
Industrial Conglomerates - 0.2%
Tyco International Group SA yankee 6.375% 6/15/05	800,000		840,814
TOTAL INDUSTRIALS			2,123,261
MATERIALS - 0.1%
Paper & Forest Products - 0.1%
Boise Cascade Corp. 7.35% 10/11/04	270,000		276,041
TELECOMMUNICATION SERVICES - 1.1%
Diversified Telecommunication Services - 1.0%
British Telecommunications PLC 7.875% 12/15/05	500,000		550,020
France Telecom SA 8.45% 3/1/06	800,000		886,450
GTE Corp. 6.36% 4/15/06	1,000,000		1,082,137
Telefonica Europe BV 7.35% 9/15/05	500,000		541,133
TELUS Corp. yankee 7.5% 6/1/07	500,000		559,925
			3,619,665
Nonconvertible Bonds - continued
	Principal Amount		Value (Note 1)
TELECOMMUNICATION SERVICES - continued
Wireless Telecommunication Services - 0.1%
AT&T Wireless Services, Inc. 7.35% 3/1/06	$ 500,000		$ 547,415
TOTAL TELECOMMUNICATION SERVICES			4,167,080
UTILITIES - 0.6%
Electric Utilities - 0.6%
Cleveland Electric Illuminating Co./Toledo Edison Co. 7.67% 7/1/04	1,075,000		1,100,880
DTE Energy Co. 6% 6/1/04	435,000		441,217
Progress Energy, Inc. 6.75% 3/1/06	605,000		655,472
			2,197,569
TOTAL NONCONVERTIBLE BONDS (Cost $20,569,061)		20,833,431
U.S. Government Agency Obligations - 0.2%

Fannie Mae 0% 4/21/04 (c) (Cost $698,220)	700,000		698,449
U.S. Government Agency - Mortgage Securities - 3.5%

Fannie Mae - 3.5%
6.5% 10/1/07 to 9/1/32	6,900,989		7,324,479
6.5% 2/1/19 to 2/1/34 (b)	2,312,473		2,435,930
7% 8/1/17 to 5/1/32	3,127,422		3,337,969
TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES (Cost $12,994,580)		13,098,378
Asset-Backed Securities - 20.3%

ACE Securities Corp.:
Series 2002-HE2 Class M1, 1.95% 8/25/32 (d)	50,000		50,347
Series 2003-FM1 Class M2, 2.9913% 11/25/32 (d)	145,000		147,560
Series 2003-HE1:
Class A2, 1.51% 11/25/33 (d)	913,686		914,543
Class M1 1.75% 11/25/33 (d)	120,000		120,315
Class M2, 2.8% 11/25/33 (d)	75,000		75,000
Series 2003-HS1:
Class M1, 1.85% 6/25/33 (d)	50,000		50,000
Class M2, 2.85% 6/25/33 (d)	50,000		50,063
Asset-Backed Securities - continued
	Principal Amount		Value (Note 1)
ACE Securities Corp.: - continued
Series 2003-NC1 Class M1, 1.88% 7/25/33 (d)	$ 100,000		$ 100,000
Series 2003-TC1 Class A2, 1.49% 6/25/33 (d)	123,907		124,221
AmeriCredit Automobile Receivables Trust:
Series 2000-D Class A4, 1.33% 9/12/07 (d)	416,617		416,965
Series 2001-C Class A3, 1.27% 4/12/06 (d)	161,198		161,280
Series 2001-D Class A3, 1.42% 9/12/06 (d)	382,110		382,315
Series 2002-A Class A3, 1.32% 10/12/06 (d)	222,500		222,473
Series 2003-AM Class A4B, 1.59% 11/6/09 (d)	600,000		603,006
Series 2003-BX Class A4B, 1.5% 1/6/10 (d)	140,000		141,216
Series 2003-CF Class A3, 2.75% 10/9/07	1,000,000		1,011,803
Ameriquest Mortgage Securities, Inc.:
Series 2002-4:
Class A2, 1.54% 2/25/33 (d)	111,586		111,934
Class M1, 2.1% 2/25/33 (d)	105,000		105,678
Series 2002-AR1:
Class A2, 1.42% 9/25/32 (d)	165,429		165,575
Class M2, 2.4% 9/25/32 (d)	90,000		90,376
Series 2003-1:
Class A2, 1.51% 2/25/33 (d)	186,104		186,585
Class M1, 2% 2/25/33 (d)	100,000		101,250
Series 2003-3 Class M1, 1.9% 3/25/33 (d)	75,000		75,469
Series 2003-6:
Class AV3, 1.42% 8/25/33 (d)	500,083		500,348
Class S, 5% 11/25/05 (g)	7,000,000		354,101
Series 2003-7 Class M1, 1.95% 8/25/33 (d)	140,000		141,631
Series 2003-AR1 Class M1, 2.25% 1/25/33 (d)	500,000		507,871
Amortizing Residential Collateral Trust:
Series 2000-BC3 Class M1, 1.7% 9/25/30 (d)	1,000,000		1,000,969
Series 2002-BC6 Class M1, 1.85% 8/25/32 (d)	100,000		99,000
Series 2002-BC7:
Class M1, 1.9% 10/25/32 (d)	100,000		100,000
Class M2, 2% 10/25/32 (d)	300,000		302,042
Series 2002-BC9 Class A2, 1.58% 12/25/32 (d)	165,801		166,511
AQ Finance NIMS Trust:
Series 2002-N5A Class NOTE, 1.53% 10/25/09 (a)(d)	17,044		17,052
Series 2003-N6A Class NOTE, 1.4413% 5/25/10 (a)(d)	252,950		252,950
Arc Net Interest Margin Trust Series 2002-5A Class A, 7.75% 7/27/32 (a)	61,146		61,299
Asset-Backed Securities - continued
	Principal Amount		Value (Note 1)
Argent Securities, Inc.:
Series 2003-W3 Class M2, 2.9% 9/25/33 (d)	$ 800,000		$ 821,413
Series 2003-W6 Class AV2, 1.47% 1/25/34 (d)	975,183		976,947
Asset Backed Securities Corp. Home Equity Loan Trust:
Series 2002-HE3 Class 2A, 1.5% 10/15/32 (d)	92,472		92,910
Series 2003-HE2:
Class A2, 1.48% 4/15/33 (d)	246,884		247,341
Class M1, 2% 4/15/33 (d)	1,000,000		1,013,334
Series 2003-HE3 Class A2, 1.45% 6/15/33 (d)	84,812		84,906
Series 2003-HE4:
Class A3, 1.32% 8/15/33 (d)	229,441		229,302
Class M2, 3.1% 8/15/33 (d)	285,000		291,407
Series 2003-HE5 Class A2A, 1.46% 8/15/33 (d)	435,118		435,707
Series 2003-HE6 Class M1, 1.7913% 11/25/33 (d)	215,000		215,595
Series 2003-HE7 Class A3, 1.53% 12/15/33 (d)	738,961		740,114
Associates Automobile Receivables Trust Series 2000-1 Class B, 7.83% 8/15/07	285,000		292,431
Bank One Issuance Trust:
Series 2002-B2 Class B2, 1.44% 5/15/08 (d)	100,000		100,179
Series 2002-B3 Class B, 1.46% 8/15/08 (d)	500,000		501,126
Bayview Commercial Asset Trust Series 2003-2 Class A, 1.7213% 12/25/33 (a)(d)	1,149,445		1,149,445
Bayview Financial Asset Trust Series 2000-F Class A, 1.6% 9/28/43 (d)	472,989		472,989
Capital Auto Receivables Asset Trust Series 2003-1 Class B1B, 1.57% 6/15/10 (a)(d)	383,232		380,642
Capital One Auto Finance Trust Series 2003-A Class A4B, 1.38% 1/15/10 (d)	425,000		424,873
Capital One Master Trust:
Series 2001-1 Class B, 1.61% 12/15/10 (d)	500,000		501,875
Series 2001-4 Class B, 1.47% 4/16/07 (d)	500,000		500,265
Series 2001-8A Class B, 1.65% 8/17/09 (d)	405,000		408,388
Capital One Multi-Asset Execution Trust:
Series 2002-B1 Class B1, 1.78% 7/15/08 (d)	1,035,000		1,040,227
Series 2003-B1 Class B1, 2.27% 2/17/09 (d)	1,135,000		1,152,257
CDC Mortgage Capital Trust:
Series 2001-HE1 Class A, 1.44% 1/25/32 (d)	149,020		148,830
Series 2002-HE3:
Class M1, 2.2% 3/25/33 (d)	299,999		305,982
Class M2, 3.35% 3/25/33 (d)	489,999		497,505
Series 2003-HE1 Class M2, 3.05% 8/25/33 (d)	215,000		219,455
Series 2003-HE2 Class A, 1.45% 10/25/33 (d)	592,552		593,323
Asset-Backed Securities - continued
	Principal Amount		Value (Note 1)
CDC Mortgage Capital Trust: - continued
Series 2003-HE3:
Class M1, 1.8% 11/25/33 (d)	$ 104,999		$ 105,664
Class M2, 2.85% 11/25/33 (d)	80,000		80,493
Series 2003-HE4 Class A2, 1.33% 3/25/34 (d)	1,364,228		1,364,228
Chase Credit Card Owner Trust:
Series 2001-6 Class B, 1.58% 3/16/09 (d)	200,000		201,372
Series 2002-6 Class B, 1.45% 1/15/08 (d)	150,000		150,283
CIT Home Equity Loan Trust Series 2003-1 Class AIO, 5% 3/1/04 (g)	1,634,875		6,098
Citibank Credit Card Issuance Trust:
Series 2000-C2 Class C2, 1.77% 10/15/07 (d)	900,000		900,919
Series 2001-B2 Class B2, 1.6413% 12/10/08 (d)	615,000		619,070
Series 2002-C1 Class C1, 2.16% 2/9/09 (d)	900,000		910,502
Countrywide Home Loans, Inc.:
Series 2002-6 Class AV1, 1.53% 5/25/33 (d)	310,812		311,300
Series 2003-SD3 Class A1, 1.5613% 12/25/32 (a)(d)	221,909		222,645
Discover Card Master Trust I Series 2003-4 Class B1, 1.47% 5/16/11 (d)	550,000		550,000
Fannie Mae guaranteed REMIC pass thru certificates Series 2002-T15 Class S1, 5.25% 4/25/05 (g)	773,535		40,490
Fieldstone Mortgage Investment Corp.:
Series 2003-1 Class M1, 1.78% 11/25/33 (d)	100,000		100,000
Series 2004-1 Class M2, 0% 1/25/35 (b)(d)	250,000		250,000
First Security Auto Owner Trust Series 2000-1 Class A4, 7.4% 10/17/05	107,556		107,813
First USA Credit Card Master Trust:
Series 1997-2 Class B, 1.43% 1/17/07 (d)	150,000		150,063
Series 2001-2 Class B, 1.46% 11/20/06 (d)	100,000		100,026
First USA Secured Note Trust Series 2001-3 Class C, 2.15% 11/19/08 (a)(d)	785,000		793,617
Fleet Credit Card Master Trust II Series 2001-C Class A, 3.86% 3/15/07	270,000		274,050
Ford Credit Auto Owner Trust Series 2003-B Class B2, 1.53% 10/15/07 (d)	650,000		653,079
GE Business Loan Trust Series 2003-1 Class A, 1.53% 4/15/31 (a)(d)	329,991		330,610
Gracechurch Card Funding #5 PLC Series 5:
Class B, 1.3925% 8/15/08 (d)	80,000		80,025
Class C, 2.0925% 8/15/08 (d)	295,000		295,738
GS Mortgage Securities Corp.:
Series 2003-FM1 Class M1, 1.92% 3/20/33 (d)	750,000		757,654
Asset-Backed Securities - continued
	Principal Amount		Value (Note 1)
GS Mortgage Securities Corp.: - continued
Series 2004-FM1:
Class M1, 1.76% 11/25/33 (d)	$ 195,000		$ 195,183
Class M2, 2.51% 11/25/33 (d)	135,000		135,422
GSAMP NIMS Trust Series 2002-HE2N Class NOTE, 8.25% 10/20/32 (a)	199,189		199,866
GSAMP Trust Series 2002-NC1 Class A2, 1.42% 7/25/32 (d)	409,701		410,485
Home Equity Asset Trust:
Series 2002-3 Class A5, 1.54% 2/25/33 (d)	58,594		58,570
Series 2002-4 Class A3, 1.58% 3/25/33 (d)	495,461		497,831
Series 2002-5:
Class A3, 1.62% 5/25/33 (d)	613,702		616,998
Class M1, 2.3% 5/25/33 (d)	200,000		204,823
Series 2003-1:
Class A2, 1.57% 6/25/33 (d)	1,155,361		1,156,259
Class M1, 2.1413% 6/25/33 (d)	300,000		303,564
Series 2003-2:
Class A2, 1.48% 8/25/33 (d)	48,979		49,076
Class M1, 1.98% 8/25/33 (d)	80,000		80,994
Series 2003-3:
Class A2, 1.46% 8/25/33 (d)	321,763		322,267
Class M1, 1.96% 8/25/33 (d)	330,000		333,907
Series 2003-4:
Class M1, 1.9413% 10/25/33 (d)	170,000		171,867
Class M2, 3% 10/25/33 (d)	200,000		203,569
Series 2003-5:
Class M1, 1.8% 12/25/33 (d)	160,000		160,000
Class M2, 2.83% 12/25/33 (d)	70,000		70,749
Series 2003-7 Class A2, 1.5213% 3/25/34 (d)	831,086		832,920
Series 2003-8 Class M1, 1.87% 4/25/34 (d)	260,000		260,260
Home Equity Asset Trust NIMS Trust Series 2002-4N Class A, 8% 5/27/33 (a)	80,984		79,972
Household Affinity Credit Card Master Note Trust I Series 2003-3 Class B, 1.39% 8/15/08 (d)	500,000		500,000
Household Credit Card Master Trust I Series 2002-1 Class B, 1.75% 7/15/08 (d)	300,000		302,113
Household Home Equity Loan Trust:
Series 2002-3 Class A, 1.55% 7/20/32 (d)	158,538		158,707
Series 2003-1 Class M, 1.73% 10/20/32 (d)	129,378		129,701
Series 2003-2:
Class A, 1.43% 9/20/33 (d)	602,571		602,524
Class M, 1.68% 9/20/33 (d)	285,785		286,187
Asset-Backed Securities - continued
	Principal Amount		Value (Note 1)
Household Mortgage Loan Trust:
Series 2002-HC1:
Class A, 1.4% 5/20/32 (d)	$ 292,645		$ 293,231
Class M, 1.75% 5/20/32 (d)	139,771		140,183
Series 2003-HC1:
Class A, 1.45% 2/20/33 (d)	489,090		489,695
Class M, 1.75% 2/20/33 (d)	258,519		259,284
Series 2003-HC2:
Class A2, 1.43% 6/20/33 (d)	536,511		537,139
Class M, 1.7% 6/20/33 (d)	443,381		446,626
Household Private Label Credit Card Master Note Trust I:
Series 2002-2 Class A, 1.27% 1/18/11 (d)	1,000,000		1,001,552
Series 2002-3 Class B, 2.35% 9/15/09 (d)	50,000		50,232
Ikon Receivables Funding LLC Series 2003-1 Class A3A, 1.34% 12/17/07 (d)	500,000		499,938
Keycorp Student Loan Trust Series 1999-A Class A2, 1.5% 12/27/09 (d)	397,474		398,419
Long Beach Asset Holdings Corp. NIMS Trust Series 2002-4 Class NOTE, 1.8% 10/26/09 (a)(d)	53,254		53,254
Long Beach Mortgage Loan Trust:
Series 2001-4:
Class 2M1, 2.05% 3/25/32 (d)	765,000		771,944
Class M2, 2.75% 3/25/32 (d)	215,000		216,883
Series 2003-1:
Class A2, 1.5% 3/25/33 (d)	206,741		207,260
Class M1, 2.02% 3/25/33 (d)	300,000		304,289
Series 2003-2 Class M1, 1.92% 6/25/33 (d)	500,000		502,531
Series 2003-3:
Class A, 1.42% 7/25/33 (d)	749,004		749,394
Class M1, 1.85% 7/25/33 (d)	340,000		342,376
MASTR ABS NIMS Trust:
Series 2002-OPT1 Class NOTE, 1.6913% 11/26/07 (a)(d)	43,029		43,070
Series 2003-OPT1 Class NOTE, 1.5213% 2/26/08 (a)(d)	151,304		151,351
MBNA Asset Backed Note Trust:
Series 1999-C Class C, 1.9% 10/16/06 (a)(d)	250,000		250,224
Series 1999-G Class C, 1.9% 12/15/06 (a)(d)	250,000		250,283
Series 2000-K Class C, 1.9% 3/17/08 (a)(d)	1,000,000		1,002,500
MBNA Credit Card Master Note Trust:
Series 2001-B1 Class B1, 1.475% 10/15/08 (d)	1,250,000		1,251,855
Series 2001-B2 Class B2, 1.46% 1/15/09 (d)	1,000,000		1,003,038
Series 2002-B2 Class B2, 1.48% 10/15/09 (d)	1,034,000		1,038,382
Asset-Backed Securities - continued
	Principal Amount		Value (Note 1)
MBNA Credit Card Master Note Trust: - continued
Series 2002-B4 Class B4, 1.6% 3/15/10 (d)	$ 200,000		$ 201,685
Series 2003-B3 Class B3, 1.475% 1/18/11 (d)	75,000		75,050
Series 2003-B5 Class B5, 1.47% 2/15/11 (d)	420,000		422,100
MBNA Master Credit Card Trust II:
Series 1997-J Class B, 1.4% 2/15/07 (d)	500,000		500,348
Series 1998-E Class B, 1.45% 9/15/10 (d)	200,000		200,667
Series 1998-G Class B, 1.5% 2/17/09 (d)	500,000		500,914
Series 1999-C Class B, 1.56% 10/16/06 (a)(d)	1,000,000		999,680
Merrill Lynch Mortgage Investors, Inc.:
Series 2002-HE1N Class N1, 1.7% 11/25/09 (a)(d)	93,483		93,699
Series 2003-HE1 Class A1, 1.5913% 7/25/34 (d)	1,121,982		1,123,121
Morgan Stanley ABS Capital I, Inc.:
Series 2002-HE3 Class M1, 2.2% 12/27/32 (d)	125,000		127,596
Series 2002-NC6N Class NOTE, 9.5% 9/25/32 (a)	35,862		35,940
Series 2003-HE1 Class M2, 3% 5/25/33 (d)	225,000		227,212
Series 2003-NC10 Class M1, 1.78% 9/26/33 (d)	330,000		329,709
Series 2003-NC6 Class M2, 3.05% 6/27/33 (d)	630,000		643,795
Series 2003-NC8 Class M1, 1.8% 9/25/33 (d)	120,000		119,739
Morgan Stanley Dean Witter Capital I Trust:
Series 2001-AM1:
Class M1, 1.95% 2/25/32 (d)	800,000		810,551
Class M2, 2.5% 2/25/32 (d)	500,000		503,223
Series 2001-NC3 Class M2, 2.6% 10/25/31 (d)	225,000		227,090
Series 2001-NC4:
Class M1, 2.1% 1/25/32 (d)	140,000		141,963
Class M2, 2.75% 1/25/32 (d)	105,000		106,412
Series 2002-AM3:
Class A3, 1.59% 2/25/33 (d)	166,806		167,614
Class M1, 2.05% 2/25/33 (d)	150,000		152,142
Series 2002-HE1 Class M1, 1.7% 7/25/32 (d)	145,000		145,369
Series 2002-HE2 Class M2, 2.35% 8/25/32 (d)	100,000		100,287
Series 2002-NC3 Class M1, 1.82% 8/25/32 (d)	100,000		100,743
Series 2002-NC5N Class NOTE, 9.5% 9/25/32 (a)	42,822		42,902
Series 2002-OP1 Class M1, 1.85% 9/25/32 (d)	95,000		95,551
Series 2003-NC1 Class M2, 3.15% 11/25/32 (d)	130,000		133,323
Series 2003-NC2 Class M2, 3.1% 2/25/33 (d)	165,000		170,526
Navistar Financial Corp. Owner Trust Series 2001-B Class B, 4.83% 11/17/08	725,470		740,913
New Century Home Equity Loan Trust:
Series 2000-NC1 Class M3, 3.2% 4/25/30 (d)	460,000		440,450
Asset-Backed Securities - continued
	Principal Amount		Value (Note 1)
New Century Home Equity Loan Trust: - continued
Series 2003-2:
Class A2, 1.53% 1/25/33 (d)	$ 213,671		$ 214,248
Class AIO, 5.5% 3/25/05 (g)	13,302,840		585,325
Nissan Auto Lease Trust Series 2003-A Class A3A, 1.29% 6/15/09 (d)	1,000,000		1,001,383
NovaStar CAPS Trust Series 2002-C1 Class A, 7.15% 9/25/31 (a)	8,291		8,291
Novastar Mortgage Funding Trust Series 2003-3 Class A3, 1.55% 12/25/33 (d)	898,985		901,232
Onyx Acceptance Owner Trust Series 2003-D Class A3, 2.4% 12/15/07	470,000		472,895
Option One Mortgage Loan Trust Series 2003-6 Class M1, 1.7913% 11/25/33 (d)	1,025,000		1,031,286
Providian Gateway Master Trust Series 2002-B Class A, 1.8% 6/15/09 (a)(d)	400,000		401,198
Residential Asset Mortgage Products, Inc. Series 2003-RP2 Class A1, 1.55% 9/25/33 (a)(d)	450,813		451,236
Salomon Brothers Mortgage Securities VII, Inc. Series 2003-HE1 Class A, 1.5% 4/25/33 (d)	170,946		171,391
Sears Credit Account Master Trust II:
Series 1995-5 Class A, 6.05% 1/15/08	62,500		62,622
Series 1998-2 Class A, 5.25% 10/16/08	187,500		190,313
Series 2001-2 Class B, 1.39% 6/16/08 (d)	300,000		299,667
Series 2002-4:
Class A, 1.23% 8/18/09 (d)	800,000		799,133
Class B, 1.525% 8/18/09 (d)	1,080,000		1,078,155
Series 2002-5 Class B, 2.35% 11/17/09 (d)	500,000		500,979
Specialty Underwriting & Residential Finance Series 2003-BC3 Class M1, 1.75% 8/25/34 (d)	1,000,000		1,007,506
Superior Wholesale Inventory Financing Trust VII Series 2003-A8 Class CTFS, 1.55% 3/15/11 (a)(d)	675,000		675,000
Terwin Mortgage Trust:
Series 2003 8HE, Class A, 1.61% 12/25/34 (d)	466,353		466,991
Series 2003-4HE Class A1, 1.5713% 9/25/34 (d)	1,044,272		1,045,658
Series 2003-6HE Class A1, 1.57% 11/25/33 (d)	374,713		374,713
Series 2004-1HE Class A, 0% 2/25/35 (b)(d)	445,000		445,000
Triad Auto Receivables Owner Trust Series 2002-A Class A3, 2.62% 2/12/07	500,000		504,923
WFS Financial Owner Trust Series 2000-B Class A4, 7.84% 2/20/06	1,043,822		1,047,723
TOTAL ASSET-BACKED SECURITIES (Cost $75,686,826)		76,102,184
Collateralized Mortgage Obligations - 8.4%
	Principal Amount		Value (Note 1)
Private Sponsor - 3.2%
Countrywide Home Loans, Inc. sequential pay Series 2002-5 Class 2A1, 6% 4/25/17	$ 247,814		$ 249,500
CS First Boston Mortgage Securities Corp. Series 2003-TFLA Class F, 1.9433% 4/15/13 (a)(d)	235,000		231,470
Granite Mortgages 2004-1 PLC floater Series 2004-1:
Class 1B, 1.3175% 3/20/44 (d)	95,000		95,000
Class 1C, 2.0075% 3/20/44 (d)	280,000		280,000
Class 1M, 1.5175% 3/20/44 (d)	130,000		130,000
Merrill Lynch Mortgage Investors, Inc.:
floater:
Series 2003-A:
Class 2A1, 1.5313% 3/25/28 (d)	493,293		494,028
Class 2A2, 1.7494% 3/25/28 (d)	176,176		177,224
Series 2003-B Class A1, 1.4813% 4/25/28 (d)	457,408		458,437
Series 2003-E Class A2, 1.5313% 10/25/28 (d)	946,684		950,900
Series 2003-F Class A2, 1.5525% 10/25/28 (d)	969,442		971,108
Series 2003-G Class XA1, 1% 1/25/29 (g)	5,018,561		86,648
Permanent Financing PLC floater Series 3 Class 1C, 2.1297% 6/10/42 (d)	1,000,000		1,000,467
Residential Asset Mortgage Products, Inc.:
sequential pay Series 2003-SL1 Class A31, 7.125% 4/25/31	839,778		862,293
Series 2003-RP1 Class A, 1.6% 4/25/34 (d)	408,733		410,323
Residential Finance LP/Residential Finance Development Corp. floater:
Series 2002-A:
Class B4, 2.91% 10/10/34 (a)(d)	98,679		99,850
Class B5, 3.46% 10/10/34 (a)(d)	98,679		99,918
Class B6, 3.96% 10/10/34 (a)(d)	98,679		100,098
Series 2003-A:
Class B4, 2.91% 3/10/35 (a)(d)	98,827		100,433
Class B5, 3.46% 3/10/35 (a)(d)	98,827		100,410
Residential Funding Mortgage Securities I, Inc. floater Series 2002-S15 Class A3, 1.7% 9/25/32 (d)	8,196		8,202
Sequoia Mortgage Funding Trust Series 2003-A Class AX1, 0.8% 10/21/08 (a)(g)	19,252,833		219,604
Sequoia Mortgage Trust floater:
Series 2003-5 Class A2, 1.53% 9/20/33 (d)	950,203		950,828
Series 2004-1 Class A, 1.47% 2/20/34 (d)	665,000		665,000
WAMU Mortgage pass thru certificates Series 2002-S6 Class A25, 6% 10/25/32	559,309		568,275
Collateralized Mortgage Obligations - continued
	Principal Amount		Value (Note 1)
Private Sponsor - continued
Washington Mutual Mortgage Securities Corp. sequential pay Series 2003-MS9 Class 2A1, 7.5% 12/25/33	$ 175,939		$ 181,868
Wells Fargo Mortgage Backed Securities Trust Series 2001-30 Class A1, 6% 12/25/31	2,530,812		2,558,054
TOTAL PRIVATE SPONSOR			12,049,938
U.S. Government Agency - 5.2%
Fannie Mae:
floater Series 2002-89 Class F, 1.4413% 1/25/33 (d)	364,798		365,168
planned amortization class Series 1994-81 Class PJ, 8% 7/25/23	355,295		362,526
Fannie Mae guaranteed REMIC pass thru certificates:
floater:
Series 2002-11 Class QF, 1.6413% 3/25/32 (d)	408,997		410,896
Series 2002-36 Class FT, 1.6413% 6/25/32 (d)	366,214		368,416
Series 2002-64 Class FE, 1.5% 10/18/32 (d)	216,159		215,267
Series 2002-74 Class FV, 1.5913% 11/25/32 (d)	238,024		239,193
Series 2003-11:
Class DF, 1.5913% 2/25/33 (d)	399,767		401,394
Class EF, 1.5913% 2/25/33 (d)	400,850		399,417
planned amortization class:
Series 2001-62 Class PG, 6.5% 10/25/30	353,347		364,275
Series 2001-68 Class PE, 6% 6/25/27	804,791		808,179
Series 2001-76 Class UG, 5% 11/25/10	48,092		48,062
Series 2002-52 Class PA, 6% 4/25/31	71,213		72,955
Series 2002-55 Class QB, 5.5% 8/25/12	152,224		153,586
Series 2002-9 Class PB, 6% 11/25/14	620,157		629,076
Series 2002-38 Class QB, 5.75% 7/25/13	5,508		5,504
Series 2002-50 Class LE, 7% 12/25/29	119,715		123,498
Series 2003-71 Class Z, 4.5% 8/25/18	141,959		140,539
Series 2003-76 Class GZ, 4.5% 8/25/18	74,297		74,272
Series 2003-88 Class WZ, 4.5% 9/25/18	94,903		95,110
Freddie Mac planned amortization class:
Series 2256 Class MB, 7.25% 5/15/30	711,768		730,350
Series 2517 Class TL, 4.5% 4/15/26	1,000,000		1,005,555
Freddie Mac Multi-class participation certificates guaranteed:
floater:
Series 2526 Class FC, 1.5% 11/15/32 (d)	106,526		106,066
Series 2538 Class FB, 1.5% 12/15/32 (d)	436,327		436,908
Collateralized Mortgage Obligations - continued
	Principal Amount		Value (Note 1)
U.S. Government Agency - continued
Freddie Mac Multi-class participation certificates guaranteed: - continued
floater:
Series 2551 Class FH, 1.55% 1/15/33 (d)	$ 257,051		$ 257,970
planned amortization class:
Series 1610 Class PL, 6.5% 4/15/22	211,862		212,991
Series 1675 Class H, 6.375% 10/15/22	155,892		157,431
Series 1732 Class H, 6.5% 11/15/22	218,784		220,395
Series 2376 Class JC, 5.5% 2/15/14	1,153,822		1,166,073
Series 2398 Class DK, 6.5% 1/15/31	686,892		702,227
Series 2430 Class OB, 6% 10/15/26	463,530		467,728
Series 2435 Class EL, 6% 9/15/27	1,501,700		1,514,682
Series 2439 Class LU, 5.5% 6/15/25	595,673		599,279
Series 2478 Class ES, 5.5% 3/15/26	386,516		387,780
sequential pay:
Series 2303 Class VT, 6% 2/15/12	199,634		201,111
Series 2447 Class LG, 5.5% 12/15/13	23,289		23,324
Series 2448 Class D, 5.5% 5/15/12	377,866		380,443
Series 2474:
Class EC, 5.5% 1/15/28	49,291		49,340
Class ED, 5.5% 1/15/28	73,857		73,929
Series 2489 Class MA, 5% 12/15/12	167,192		167,649
Series 1803 Class A, 6% 12/15/08	424,916		440,401
Series 2473 Class JB, 5.5% 2/15/29	870,821		879,600
Series 2496 Class OC, 5.5% 9/15/14	2,740,000		2,824,397
Series 2617 Class AZ, 4.5% 5/15/18	66,890		66,858
Ginnie Mae guaranteed REMIC pass thru securities:
floater Series 2001-21 Class FB, 1.5% 1/16/27 (d)	245,861		246,906
planned amortization class:
Series 1999-17 Class PC, 6.5% 10/16/27	173,219		174,885
Series 2001-5 Class PT, 6.5% 9/20/27	274,933		276,625
Series 2002-49 Class BC, 5.5% 5/20/26	147,153		147,507
Series 2002-57 Class PJ, 6% 1/20/29	113,856		115,535
TOTAL U.S. GOVERNMENT AGENCY			19,311,278
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $31,454,416)		31,361,216
Commercial Mortgage Securities - 4.4%
	Principal Amount		Value (Note 1)
Banc of America Large Loan, Inc.:
floater:
Series 2002-FL2A Class A2, 1.44% 9/8/14 (a)(d)	$ 200,000		$ 200,016
Series 2003-BBA2:
Class C, 1.57% 11/15/15 (a)(d)	70,000		70,079
Class D, 1.65% 11/15/15 (a)(d)	110,000		110,168
Series 2003-BBA2:
Class A3, 1.42% 11/15/15 (a)(d)	340,000		340,173
Class F, 2% 11/15/15 (a)(d)	80,000		80,216
Class H, 2.5% 11/15/15 (a)(d)	70,000		70,235
Class J, 3.05% 11/15/15 (a)(d)	70,000		70,232
Class K, 3.7% 11/15/15 (a)(d)	65,000		64,683
Bayview Commercial Asset Trust floater Series 2003-1 Class A, 1.7213% 8/25/33 (a)(d)	464,921		464,921
Bear Stearns Commercial Mortgage Securities, Inc. floater:
Series 2003-BA1A Class A1, 1.38% 4/14/15 (a)(d)	687,997		687,677
Series 2003-WEST Class A, 1.72% 1/3/15 (a)(d)	380,620		380,620
Calwest Industrial Trust floater Series 2002-CALW Class AFL, 1.48% 2/15/12 (a)(d)	800,000		800,966
COMM floater:
Series 2000-FL3A:
Class B, 1.47% 11/15/12 (a)(d)	799,826		799,108
Class C, 1.86% 11/15/12 (a)(d)	700,000		697,661
Series 2001-FL5A:
Class A2, 1.65% 11/15/13 (a)(d)	52,782		52,794
Class B, 2% 11/15/13 (a)(d)	700,000		701,481
Series 2002-FL6:
Class K4M, 3.1% 6/14/14 (a)(d)	100,000		99,952
Class L4M, 3.4% 6/14/14 (a)(d)	100,000		100,096
Class M4M, 3.85% 6/14/14 (a)(d)	100,000		100,020
Series 2002-FL7:
Class A2, 1.45% 11/15/14 (a)(d)	185,000		184,962
Class C, 1.6% 11/15/14 (a)(d)	555,000		553,937
Class F, 2.4% 11/15/14 (a)(d)	1,000,000		1,003,663
Class H, 3.35% 11/15/14 (a)(d)	150,000		148,336
Series 2003-FL9 Class B, 1.6% 11/15/15 (a)(d)	1,195,000		1,195,359
CS First Boston Mortgage Securities Corp.:
floater Series 2001-TFLA:
Class A2, 1.7% 12/15/11 (a)(d)	483,763		483,593
Class B, 2% 12/15/11 (a)(d)	345,000		344,586
Series 2002-TFLA Class C, 1.66% 11/18/12 (a)(d)	255,000		254,841
Series 2003-TF2A Class A2, 1.42% 11/15/14 (a)(d)	700,000		700,000
Commercial Mortgage Securities - continued
	Principal Amount		Value (Note 1)
GGP Mall Properties Trust floater Series 2001-C1A Class A1, 1.7% 11/15/11 (a)(d)	$ 200,428		$ 200,843
Greenwich Capital Commercial Funding Corp. Series 2003-FL1 Class MCH, 4.37% 7/5/18 (a)(d)	140,761		140,761
GS Mortgage Securities Corp. II Series 2000-GSFL Class A, 1.4425% 8/15/12 (a)(d)	274,884		274,891
GS Mortgage Trust II floater Series 2001-FL4A:
Class A, 1.36% 12/15/10 (a)(d)	96,189		96,165
Class B, 1.46% 12/15/10 (a)(d)	113,425		113,398
John Hancock Tower Mortgage Trust Series 2003-C5A Class B, 3.6585% 4/10/15 (a)(d)	420,000		415,178
KSL Resorts Series 2003-1A:
Class A, 1.65% 5/15/13 (a)(d)	200,000		200,000
Class B, 1.8% 5/15/13 (a)(d)	200,000		200,000
Class K, 3.75% 5/15/13 (a)(d)	200,000		200,510
Class L, 3.95% 5/15/13 (a)(d)	200,000		200,509
Lehman Brothers Floating Rate Commercial Mortgage Trust:
floater:
Series 2001-LLFA Class A, 1.34% 8/16/13 (a)(d)	664,920		664,892
Series 2003-LLFA Class C, 1.8% 12/16/14 (a)(d)	110,000		110,000
Series 2001-LLFA Class C, 1.45% 8/16/13 (a)(d)	300,000		299,983
Series 2003-C4A Class H, 4.11% 7/11/15 (a)(d)	940,424		940,424
Series 2003-LLFA Class A2, 1.49% 12/16/14 (a)(d)	490,000		490,000
Morgan Stanley Dean Witter Capital I Trust floater Series 2001-XLF Class A2, 1.67% 10/7/13 (a)(d)	410,145		410,211
Salomon Brothers Mortgage Securities VII, Inc. floater Series 2003-CDCA:
Class HBST, 2.7% 2/15/15 (a)(d)	80,000		80,000
Class HEXB, 3% 2/15/15 (a)(d)	30,000		30,000
Class JBST, 2.9% 2/15/15 (a)(d)	60,000		60,000
Class JEXB, 3.2% 2/15/15 (a)(d)	50,000		50,000
Class KBST, 3.25% 2/15/15 (a)(d)	35,000		35,000
Class KEXB, 3.6% 2/15/15 (a)(d)	40,000		40,000
SDG Macerich Properties LP floater Series 2000-1 Class A3, 1.5025% 5/15/09 (a)(d)	500,000		499,773
TOTAL COMMERCIAL MORTGAGE SECURITIES (Cost $16,491,452)		16,512,913

Municipal Securities - 0.3%
	Principal Amount		Value (Note 1)
Lowndes County Solid Waste Disp. Rev. (Weyerhaeuser Co. Proj.) Series 1999, 1.9%, VRDN (d)(f) (Cost $1,000,000)	$ 1,000,000		$ 1,000,000
Commercial Paper - 0.2%

Motorola, Inc. 1.38% 2/26/04 (Cost $899,103)	900,000		899,214
Fixed-Income Funds - 39.9%
	Shares
Fidelity Ultra-Short Central Fund (e) (Cost $149,099,489)	1,501,320		149,546,525
Cash Equivalents - 13.8%
	Maturity Amount
Investments in repurchase agreements (Collateralized by U.S. Government Obligations, in a joint trading account at 1.04%, dated 1/30/04 due 2/2/04) (Cost $51,591,000)	$ 51,595,477		51,591,000
TOTAL INVESTMENT PORTFOLIO - 96.6% (Cost $360,484,147)			361,643,310
NET OTHER ASSETS - 3.4%			12,769,025
NET ASSETS - 100%		$ 374,412,335

Futures Contracts
	Expiration Date	Underlying Face Amount at Value	Unrealized Appreciation/ (Depreciation)
Purchased
Eurodollar Contracts
63 Eurodollar 90 Day Index Contracts	June 2004	$ 62,785,800	$ 34,922
66 Eurodollar 90 Day Index Contracts	Sept. 2004	65,727,750	28,817
65 Eurodollar 90 Day Index Contracts	Dec. 2004	64,666,875	42,793
59 Eurodollar 90 Day Index Contracts	March 2004	58,825,950	80,093
22 Eurodollar 90 Day Index Contracts	March 2005	21,863,875	4,313
			190,938
Futures Contracts - continued
	Expiration Date	Underlying Face Amount at Value	Unrealized Appreciation/ (Depreciation)
Sold
Eurodollar Contracts
6 Eurodollar 90 Day Index Contracts	June 2005	$ 5,956,725	$ (7,257)
3 Eurodollar 90 Day Index Contracts	Sept. 2005	2,975,663	(2,266)
2 Eurodollar 90 Day Index Contracts	Dec. 2005	1,982,225	(1,985)
1 Eurodollar 90 Day Index Contracts	March 2006	990,538	(1,819)
1 Eurodollar 90 Day Index Contracts	June 2006	990,013	(1,944)
1 Eurodollar 90 Day Index Contracts	Sept. 2006	989,513	(2,044)
			(17,315)
TOTAL EURODOLLAR CONTRACTS			$ 173,623
Swap Agreements
	Expiration Date	Notional Amount	Unrealized Appreciation/ (Depreciation)
Credit Default Swap
Receive quarterly notional amount multiplied by 1.12% and pay Morgan Stanley, Inc. upon default of Comcast Cable Communications, Inc., par value of the notional amount of Comcast Cable Communications, Inc. 6.75% 1/30/11	June 2006	$ 400,000	$ 7,010

Legend

(a) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the period end, the value of these securities amounted to $26,644,332 or 7.1% of net assets.

(b) Security or a portion of the security purchased on a delayed delivery or when-issued basis.

(c) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At the period end, the value of securities pledged amounted to $698,449.

(d) The coupon rate shown on floating or adjustable rate securities represents the rate at period end.

(e) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. A complete listing of the fund's holdings as of its most recent fiscal year end is available upon request.

(f) Private activity obligations whose interest is subject to the federal alternative minimum tax for individuals.

(g) Security represents right to receive monthly interest payments on an underlying pool of mortgages. Principal shown is the par amount of the mortgage pool.

Other Information

Purchases and sales of securities, other than short-term securities, aggregated $164,011,772 and $74,397,295, respectively, of which long-term U.S. government and government agency obligations aggregated $57,451,189 and $54,243,247, respectively.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements

Statement of Assets and Liabilities

	January 31, 2004 (Unaudited)

Assets
Investment in securities, at value (including repurchase agreements of $51,591,000) (cost $360,484,147) - See accompanying schedule		$ 361,643,310
Cash		22
Receivable for investments sold		14,943,335
Receivable for fund shares sold		2,747,399
Interest receivable		928,912
Receivable for daily variation on futures contracts		21,237
Unrealized gain on swap agreements		7,010
Prepaid expenses		1,384
Receivable from investment adviser for expense reductions		8,009
Other affiliated receivables		729
Other receivables		1,080
Total assets		380,302,427

Liabilities
Payable for investments purchased Regular delivery	$ 1,303,249
Delayed delivery	3,135,899
Payable for fund shares redeemed	1,214,356
Distributions payable	43,217
Accrued management fee	129,839
Other affiliated payables	48,535
Other payables and accrued expenses	14,997
Total liabilities		5,890,092

Net Assets		$ 374,412,335
Net Assets consist of:
Paid in capital		$ 373,097,348
Distributions in excess of net investment income		(5,175)
Accumulated undistributed net realized gain (loss) on investments		(19,634)
Net unrealized appreciation (depreciation) on investments		1,339,796
Net Assets, for 37,202,795 shares outstanding		$ 374,412,335
Net Asset Value, offering price and redemption price per share ($374,412,335 ÷ 37,202,795 shares)		$ 10.06

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Operations

	Six months ended January 31, 2004 (Unaudited)

Investment Income
Interest		$ 2,858,273

Expenses
Management fee	$ 682,744
Transfer agent fees	223,166
Accounting fees and expenses	43,443
Non-interested trustees' compensation	655
Custodian fees and expenses	3,692
Registration fees	45,492
Audit	14,349
Legal	2,572
Miscellaneous	360
Total expenses before reductions	1,016,473
Expense reductions	(137,049)	879,424
Net investment income (loss)		1,978,849
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investment securities	(33,759)
Futures contracts	85,631
Swap agreements	1,792
Total net realized gain (loss)		53,664
Change in net unrealized appreciation (depreciation) on: Investment securities	1,017,620
Futures contracts	100,325
Swap agreements	3,815
Total change in net unrealized appreciation (depreciation)		1,121,760
Net gain (loss)		1,175,424
Net increase (decrease) in net assets resulting from operations		$ 3,154,273

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Statement of Changes in Net Assets

	Six months ended January 31, 2004 (Unaudited)	August 29, 2002 (commencement of operations) to July 31, 2003
Increase (Decrease) in Net Assets
Operations
Net investment income (loss)	$ 1,978,849	$ 1,708,506
Net realized gain (loss)	53,664	61,931
Change in net unrealized appreciation (depreciation)	1,121,760	218,036
Net increase (decrease) in net assets resulting from operations	3,154,273	1,988,473
Distributions to shareholders from net investment income	(1,914,682)	(1,913,077)
Share transactions Net proceeds from sales of shares	260,779,229	330,589,127
Reinvestment of distributions	1,722,053	1,643,470
Cost of shares redeemed	(114,565,082)	(107,155,542)
Net increase (decrease) in net assets resulting from share transactions	147,936,200	225,077,055
Redemption fees	33,673	50,420
Total increase (decrease) in net assets	149,209,464	225,202,871

Net Assets
Beginning of period	225,202,871	-
End of period (including distributions in excess of net investment income of $5,175 and distributions in excess of net investment income of $69,342, respectively)	$ 374,412,335	$ 225,202,871
Other Information Shares
Sold	25,966,657	32,991,854
Issued in reinvestment of distributions	171,356	163,959
Redeemed	(11,404,430)	(10,686,601)
Net increase (decrease)	14,733,583	22,469,212

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights

	Six months ended January 31, 2004
	(Unaudited)	2003^E
Selected Per-Share Data
Net asset value, beginning of period	$ 10.02	$ 10.00
Income from Investment Operations
Net investment income (loss)^D	.062	.137
Net realized and unrealized gain (loss)	.037	.052
Total from investment operations	.099	.189
Distributions from net investment income	(.060)	(.173)
Redemption fees added to paid in capital	.001	.004
Net asset value, end of period	$ 10.06	$ 10.02
Total Return^{B, C}	1.00%	1.94%
Ratios to Average Net Assets^F
Expenses before expense reductions	.63%^A	.70%^A
Expenses net of voluntary waivers, if any	.55%^A	.55%^A
Expenses net of all reductions	.55%^A	.55%^A
Net investment income (loss)	1.24%^A	1.50%^A
Supplemental Data
Net assets, end of period (000 omitted)	$ 374,412	$ 225,203
Portfolio turnover rate	55%^A	39%^A

^A Annualized

^B Total returns for periods of less than one year are not annualized.

^C Total returns would have been lower had certain expenses not been reduced during the periods shown.

^D Calculated based on average shares outstanding during the period.

^E For the period August 29, 2002 (commencement of operations) to July 31, 2003.

^F Expense ratios reflect operating expenses of the fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the fund during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the fund.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Notes to Financial Statements

For the period ended January 31, 2004 (Unaudited)

1. Significant Accounting Policies.

Fidelity Ultra-Short Bond Fund (the fund) is a fund of Fidelity Income Fund (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:

Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Debt securities for which quotations are readily available are valued at their most recent bid prices (sales prices if the principal market is an exchange) in the principal market in which such securities are normally traded, as determined by recognized dealers in such securities, or securities are valued on the basis of information provided by a pricing service. Pricing services use valuation matrices that incorporate both dealer-supplied valuations and valuation models. If an event that is expected to materially affect the value of a security occurs after the close of an exchange or market on which that security trades, but prior to the NAV calculation, then that security will be fair valued taking the event into account. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value as determined in good faith under consistently applied procedures under the general supervision of the Board of Trustees. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.

Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities, which is accrued using the interest method.

Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among the funds in the trust.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

1. Significant Accounting Policies - continued

Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Capital accounts within the financial statements are adjusted for permanent and temporary book and tax differences. These adjustments have no impact on net assets or the results of operations. Temporary differences will reverse in a subsequent period. These differences are primarily due to futures transactions, market discount and financing transactions.

The federal tax cost of investments including unrealized appreciation (depreciation) as of period end was as follows:

Unrealized appreciation	$ 1,311,930	\|
Unrealized depreciation	(201,647)
Net unrealized appreciation (depreciation)	$ 1,110,283
Cost for federal income tax purposes	$ 360,533,027

Short-Term Trading (Redemption) Fees. Shares held in the fund less than 60 days are subject to a short-term trading fee equal to .25% of the proceeds of the redeemed shares. The fee, which is retained by the fund, is accounted for as an addition to paid in capital.

2. Operating Policies.

Repurchase Agreements. Fidelity Management & Research Company (FMR) has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. Collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. Collateral is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).

Semiannual Report

2. Operating Policies - continued

Futures Contracts. The fund may use futures contracts to manage its exposure to the bond markets and to fluctuations in interest rates. Buying futures tends to increase the fund's exposure to the underlying instrument, while selling futures tends to decrease the fund's exposure to the underlying instrument or hedge other fund investments. Futures contracts involve, to varying degrees, risk of loss in excess of any futures variation margin reflected in the Statement of Assets and Liabilities. The underlying face amount at value of any open futures contracts at period end is shown in the Schedule of Investments under the caption "Futures Contracts." This amount reflects each contract's exposure to the underlying instrument at period end. Losses may arise from changes in the value of the underlying instruments or if the counter-parties do not perform under the contracts' terms. Gains (losses) are realized upon the expiration or closing of the futures contracts. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.

Swap Agreements. The fund may invest in swaps for the purpose of managing its exposure to interest rate, credit or market risk.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

2. Operating Policies - continued

Swap Agreements - continued

a "guarantor" receiving a periodic payment that is a fixed percentage applied to a notional principal amount. In return the party agrees to purchase the notional amount of the underlying instrument, at par, if a credit event occurs during the term of the swap. The fund may enter into credit default swaps in which the fund or its counterparty act as guarantors. By acting as the guarantor of a swap, the fund assumes the market and credit risk of the underlying instrument including liquidity and loss of value. Premiums received or made by the fund are recorded in the accompanying Statement of Operations as realized gains or losses, respectively

Financing Transactions. To earn additional income, the fund may employ trading strategies which involve the sale and simultaneous agreement to repurchase similar securities ("mortgage dollar rolls") or the purchase and simultaneous agreement to sell similar securities ("reverse mortgage dollar rolls"). The securities traded are mortgage securities and bear the same interest rate but will be collateralized by different pools of mortgages. During the period between the sale and repurchase in a mortgage dollar roll transaction, a fund will not be entitled to receive interest and principal payments on the securities sold but will invest the proceeds of the sale in other securities which may enhance the yield and total return. In addition, the difference between the sale price and the future purchase price is recorded as an adjustment to investment income. During the period between the purchase and subsequent sale in a reverse mortgage dollar roll transaction a fund is entitled to interest and principal payments on the securities purchased. The price differential between the purchase and sale is recorded as an adjustment to investment income. Losses may arise due to changes in the value of the securities or if the counterparty does not perform under the terms of the agreement. If the counterparty files for bankruptcy or becomes insolvent, the fund's right to repurchase or sell securities may be limited.

Semiannual Report

3. Purchases and Sales of Investments.

Information regarding purchases and sales of securities is included under the caption "Other Information" at the end of the fund's Schedule of Investments.

4. Fees and Other Transactions with Affiliates.

Accounting Fees. FSC maintains the fund's accounting records. The fee is based on the level of average net assets for the month.

5. Expense Reductions.

FMR agreed to reimburse the fund to the extent operating expenses exceeded .55% of average net assets. Some expenses, for example interest expense, are excluded from this reimbursement. During the period, this reimbursement reduced the fund's expenses by $135,974.

Semiannual Report

Managing Your Investments

By Phone

(phone_graphic)Fidelity Automated
Service Telephone (FAST®)
1-800-544-5555

Press

1 For mutual fund and brokerage trading.

2 For quotes.*

3 For account balances and holdings.

4 To review orders and mutual
fund activity.

5 To change your PIN.

*0 To speak to a Fidelity representative.

By PC

Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.

(computer_graphic)Fidelity's Web Site
www.fidelity.com

Semiannual Report

To Write Fidelity

We'll give your correspondence immediate attention and send you written confirmation upon completion of your request.

(letter_graphic)Making Changes
To Your Account

(such as changing name, address, bank, etc.)

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002

(letter_graphic)For Non-Retirement
Accounts

Buying shares

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003

Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015

Selling shares

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035

Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015

General Correspondence

Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500

(letter_graphic)For Retirement
Accounts

Buying shares

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003

Selling shares

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035

Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015

General Correspondence

Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500

Semiannual Report

To Visit Fidelity

For directions and hours,
please call 1-800-544-9797.

Arizona

7001 West Ray Road
Chandler, AZ

7373 N. Scottsdale Road
Scottsdale, AZ

California

815 East Birch Street
Brea, CA

1411 Chapin Avenue
Burlingame, CA

851 East Hamilton Avenue
Campbell, CA

123 South Lake Avenue
Pasadena, CA

19200 Von Karman Avenue
Irvine, CA

601 Larkspur Landing Circle
Larkspur, CA

10100 Santa Monica Blvd.
Los Angeles, CA

27101 Puerta Real
Mission Viejo, CA

73-575 El Paseo
Palm Desert, CA

251 University Avenue
Palo Alto, CA

1760 Challenge Way
Sacramento, CA

7676 Hazard Center Drive
San Diego, CA

8 Montgomery Street
San Francisco, CA

21701 Hawthorne Boulevard
Torrance, CA

2001 North Main Street
Walnut Creek, CA

6300 Canoga Avenue
Woodland Hills, CA

Colorado

1625 Broadway
Denver, CO

9185 East Westview Road
Littleton, CO

Connecticut

48 West Putnam Avenue
Greenwich, CT

265 Church Street
New Haven, CT

300 Atlantic Street
Stamford, CT

29 South Main Street
West Hartford, CT

Delaware

222 Delaware Avenue
Wilmington, DE

Florida

4400 N. Federal Highway
Boca Raton, FL

121 Alhambra Plaza
Coral Gables, FL

2948 N. Federal Highway
Ft. Lauderdale, FL

1907 West State Road 434
Longwood, FL

8880 Tamiami Trail, North
Naples, FL

3501 PGA Boulevard
West Palm Beach, FL

8065 Beneva Road
Sarasota, FL

1502 N. Westshore Blvd.
Tampa, FL

Georgia

3445 Peachtree Road, N.E.
Atlanta, GA

1000 Abernathy Road
Atlanta, GA

Illinois

One North LaSalle Street
Chicago, IL

1415 West 22nd Street
Oak Brook, IL

1700 East Golf Road
Schaumburg, IL

3232 Lake Avenue
Wilmette, IL

Indiana

4729 East 82nd Street
Indianapolis, IN

Kansas

5400 College Boulevard
Overland Park, KS

Maine

Three Canal Plaza
Portland, ME

Maryland

7401 Wisconsin Avenue
Bethesda, MD

One W. Pennsylvania Ave.
Towson, MD

Massachusetts

801 Boylston Street
Boston, MA

155 Congress Street
Boston, MA

300 Granite Street
Braintree, MA

44 Mall Road
Burlington, MA

405 Cochituate Road
Framingham, MA

416 Belmont Street
Worcester, MA

Semiannual Report

Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC

Michigan

280 Old N. Woodward Ave.
Birmingham, MI

43420 Grand River Avenue
Novi, MI

29155 Northwestern Hwy.
Southfield, MI

Minnesota

7600 France Avenue South
Edina, MN

Missouri

8885 Ladue Road
Ladue, MO

New Jersey

150 Essex Street
Millburn, NJ

56 South Street
Morristown, NJ

501 Route 17, South
Paramus, NJ

3518 Route 1 North
Princeton, NJ

New York

1055 Franklin Avenue
Garden City, NY

37 West Jericho Turnpike
Huntington Station, NY

1271 Avenue of the Americas
New York, NY

61 Broadway
New York, NY

350 Park Avenue
New York, NY

North Carolina

4611 Sharon Road
Charlotte, NC

Ohio

3805 Edwards Road
Cincinnati, OH

28699 Chagrin Boulevard
Woodmere Village, OH

1324 Polaris Parkway
Columbus, OH

Oregon

16850 SW 72nd Avenue
Tigard, OR

Pennsylvania

600 West DeKalb Pike
King of Prussia, PA

1735 Market Street
Philadelphia, PA

12001 Perry Highway
Wexford, PA

Rhode Island

47 Providence Place
Providence, RI

Tennessee

6150 Poplar Avenue
Memphis, TN

Texas

10000 Research Boulevard
Austin, TX

4017 Northwest Parkway
Dallas, TX

12532 Memorial Drive
Houston, TX

2701 Drexel Drive
Houston, TX

400 East Las Colinas Blvd.
Irving, TX

14100 San Pedro
San Antonio, TX

19740 IH 45 North
Spring, TX

6005 West Park Boulevard
Plano, TX

Utah

215 South State Street
Salt Lake City, UT

Virginia

1861 International Drive
McLean, VA

Washington

411 108th Avenue, N.E.
Bellevue, WA

1518 6th Avenue
Seattle, WA

Washington, DC

1900 K Street, N.W.
Washington, DC

Wisconsin

595 North Barker Road
Brookfield, WI

Semiannual Report

Investment Adviser

Fidelity Management & Research Company

Boston, MA

Investment Sub-Advisers

Fidelity Investments
Money Management, Inc.

Fidelity International Investment Advisors

Fidelity International Investment Advisors
(U.K.) Limited

General Distributor

Fidelity Distributors Corporation

Boston, MA

Transfer and Shareholder
Servicing Agent

Fidelity Service Company, Inc.

Boston, MA

Custodian

Citibank, N.A.

New York, NY

Fidelity's Taxable Bond Funds

Capital & Income

Floating Rate High Income

Ginnie Mae

Government Income

High Income

Inflation-Protected Bond

Intermediate Bond

Intermediate Government Income

Investment Grade Bond

Mortgage Securities

New Markets Income

Short-Term Bond

Spartan® Government Income

Spartan Investment Grade Bond

Strategic Income

Total Bond

Ultra-Short Bond

U.S. Bond Index

The Fidelity Telephone Connection

Mutual Fund 24-Hour Service

Exchanges/Redemptions
and Account Assistance 1-800-544-6666

Product Information 1-800-544-6666

Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)

TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)

Fidelity Automated Service
Telephone (FAST®) (automated graphic) 1-800-544-5555

(automated graphic) Automated line for quickest service

(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com

ULB-USAN-0304
1.789738.100

Fidelity® Ginnie Mae Fund

Fidelity Government
Income Fund

Fidelity Intermediate
Government Income Fund

Semiannual Report

January 31, 2004

(2_fidelity_logos) (Registered_Trademark)

Chairman's Message	<Click Here>	Ned Johnson's message to shareholders.
Fidelity Ginnie Mae Fund
	<Click Here>	Investment Changes
	<Click Here>	Investments
	<Click Here>	Financial Statements
Fidelity Government Income Fund
	<Click Here>	Investment Changes
	<Click Here>	Investments
	<Click Here>	Financial Statements
Fidelity Intermediate Government Income Fund
	<Click Here>	Investment Changes
	<Click Here>	Investments
	<Click Here>	Financial Statements
Notes	<Click Here>	Notes to the financial statements

For a free copy of the funds' proxy voting guidelines visit www.fidelity.com/goto/proxyguidelines, call 1-800-544-8544, or visit the Securities and Exchange Commission (SEC)'s web site at www.sec.gov.

Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.

Other third party marks appearing herein are the property of their respective owners.

All other marks appearing herein are registered or unregistered trademarks or service marks of FMR Corp. or an affiliated company.

(Recycle graphic) This report is printed on recycled paper using soy-based inks.

This report and the financial statements contained herein are submitted for the general information of the shareholders of the funds. This report is not authorized for distribution to prospective investors in the funds unless preceded or accompanied by an effective prospectus.

Neither the funds nor Fidelity Distributors Corporation is a bank.

For more information on any Fidelity fund, including charges and expenses, call 1-800-544-6666 for a free prospectus. Read it carefully before you invest or send money.

Semiannual Report

Chairman's Message

(photo_of_Edward_C_Johnson_3d)

Dear Shareholder:

Best regards,

/s/Edward C. Johnson 3d

Edward C. Johnson 3d

Semiannual Report

Fidelity Ginnie Mae Fund

Investment Changes

Coupon Distribution as of January 31, 2004
	% of fund's investments	% of fund's investments 6 months ago
Zero coupon bonds	0.3	0.0
Less than 4%	2.2	4.2
4 - 4.99%	6.1	0.0
5 - 5.99%	33.7	17.5
6 - 6.99%	36.3	38.6
7 - 7.99%	15.5	24.2
8% and over	2.1	2.2

Coupon distribution shows the range of stated interest rates on the fund's investments, excluding short-term investments.

Average Years to Maturity as of January 31, 2004
		6 months ago
Years	4.0	2.7

Average years to maturity is based on the average time remaining until principal payments are expected from each of the fund's bonds, weighted by dollar amount.

Duration as of January 31, 2004
		6 months ago
Years	3.3	3.6

Asset Allocation (% of fund's net assets)
As of January 31, 2004			As of July 31, 2003
	Mortgage Securities* 90.8%			Mortgage Securities** 94.2%
	CMOs and Other Mortgage Related Securities 12.1%			CMOs and Other Mortgage Related Securities 13.2%
	Short-Term Investments and Net Other Assets*** (2.9)%			Short-Term Investments and Net Other Assets***(7.4)%
* GNMA Securities		83.1%	** GNMA Securities		85.0%

***Short-Term Investments and Net Other Assets are not included in the pie chart.

Semiannual Report

Fidelity Ginnie Mae Fund

Investments January 31, 2004 (Unaudited)

Showing Percentage of Net Assets

U.S. Government Agency - Mortgage Securities - 90.8%
	Principal Amount (000s)		Value (Note 1) (000s)
Fannie Mae - 7.6%
4.5% 8/1/33	$ 41,668		$ 40,123
5% 10/1/17 to 12/1/18	62,244		63,730
5.5% 11/1/32 to 1/1/34	183,361		186,703
6.5% 9/1/17 to 12/1/24	20,684		21,852
7% 11/1/16 to 3/1/17	4,470		4,792
7.5% 1/1/07 to 4/1/17	12,030		12,878
8.5% 12/1/27	1,222		1,343
9.5% 9/1/30	742		811
10.25% 10/1/18	83		93
11.5% 5/1/14 to 9/1/15	65		73
12.5% 11/1/13 to 7/1/16	199		228
13.25% 9/1/11	110		129
			332,755
Freddie Mac - 0.1%
8.5% 2/1/04 to 6/1/25	146		158
9% 7/1/08 to 7/1/21	795		859
9.5% 7/1/30 to 8/1/30	499		544
9.75% 12/1/08 to 4/1/13	46		51
10% 10/1/04 to 11/1/20	1,452		1,611
10.25% 2/1/09 to 11/1/16	677		748
10.5% 5/1/10	14		15
11.25% 2/1/10	41		46
11.75% 11/1/11	20		23
12% 5/1/10 to 2/1/17	179		204
12.5% 11/1/12 to 5/1/15	228		261
13% 5/1/14 to 11/1/14	34		39
13.5% 1/1/13 to 12/1/14	17		19
			4,578
Government National Mortgage Association - 83.1%
4.5% 7/20/33 to 12/20/33	175,162		168,423
4.5% 2/1/34 (a)	80,000		76,600
5% 6/20/32 to 10/15/33	859,312		854,254
5.5% 12/20/18 to 12/20/33	303,874		310,013
5.5% 2/1/34 (a)	79,571		81,137
6% 12/20/23 to 1/20/34 (a)	504,570		523,932
6.5% 4/15/23 to 11/20/33 (b)	862,202		910,011
7% 3/15/22 to 11/15/33 (b)	392,994		419,411
7% 2/1/34 (a)	77,377		82,479
7.25% 4/15/05 to 12/15/30	1,483		1,588
7.5% 4/15/06 to 9/20/32	120,289		129,339
8% 2/15/05 to 7/15/32	42,111		45,843
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (Note 1) (000s)
Government National Mortgage Association - continued
8.5% 2/15/05 to 2/15/31	$ 12,689		$ 13,992
9% 10/15/04 to 6/15/30	5,381		6,002
9.5% 12/20/15 to 8/20/17	1,706		1,892
10% 6/15/05	1		1
10.5% 1/15/14 to 9/15/19	1,365		1,541
13% 2/15/11 to 5/15/15	304		352
13.5% 5/15/10 to 1/15/15	92		106
			3,626,916
TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES (Cost $3,900,450)		3,964,249
Collateralized Mortgage Obligations - 8.9%

Private Sponsor - 0.2%
United States Department of Veterans Affairs guaranteed REMIC pass thru certificates Series 1997-1 Class 2K, 7.5% 10/15/09	10,212		10,512
U.S. Government Agency - 8.7%
Fannie Mae target amortization class Series G94-2 Class D, 6.45% 1/25/24	13,401		14,051
Fannie Mae guaranteed REMIC pass thru certificates Series 2003-122:
Class ZG, 5% 12/25/23	7,047		7,118
Class ZK, 5.5% 12/25/33	3,452		3,474
Freddie Mac Multi-class participation certificates guaranteed:
planned amortization class Series 2220 Class PD, 8% 3/15/30	15,765		16,639
Series 2691:
Class ZE, 5.5% 5/15/33	2,246		2,263
Class ZV, 5.5% 12/15/32	6,859		6,730
Ginnie Mae guaranteed REMIC pass thru securities:
planned amortization class:
Series 1999-17 Class PC, 6.5% 10/16/27	2,717		2,743
Series 2000-26 Class PK, 7.5% 9/20/30	13,786		14,504
Series 2000-5 Class PD, 7.5% 4/16/29	8,577		8,826
Series 2001-13 Class PC, 6.5% 12/20/28	14,697		15,098
Series 2001-21 Class PH, 6.5% 9/16/28	4,758		4,779
Series 2001-60 Class PD, 6% 10/20/30	15,041		15,696
Series 2002-19 Class PE, 6% 10/20/30	40,280		41,603
Series 2002-4 Class TB, 6.5% 3/20/31	3,250		3,333
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (Note 1) (000s)
U.S. Government Agency - continued
Ginnie Mae guaranteed REMIC pass thru securities: - continued
planned amortization class:
Series 2002-49 Class BC, 5.5% 5/20/26	$ 2,400		$ 2,406
Series 2003-12 Class IO, 5.5% 11/16/25 (d)	32,220		3,202
Series 2003-19:
Class IG, 5.5% 1/16/24 (d)	3,216		210
Class IL, 5.5% 12/16/25 (d)	3,318		447
Series 2003-20:
Class AI, 5.5% 6/16/22 (d)	16,876		796
Class BI, 5.5% 5/16/27 (d)	22,423		2,889
Series 2003-26 Class PI, 5.5% 1/16/32 (d)	63,843		11,432
Series 2003-29:
Class IB, 5.5% 11/16/24 (d)	50,357		3,336
Class IG, 5.5% 11/16/24 (d)	3,682		381
Series 2003-31 Class PI, 5.5% 4/16/30 (d)	62,706		7,100
Series 2003-33 Class NI, 5.5% 2/16/26 (d)	80,423		7,524
Series 2003-34 Class IO, 5.5% 4/16/28 (d)	58,420		7,722
Series 2003-4 Class LI, 5.5% 7/16/27 (d)	25,277		2,527
Series 2003-7:
Class IN, 5.5% 1/16/28 (d)	45,003		5,822
Class IP, 5.5% 10/16/25 (d)	7,206		611
Series 2003-8 Class QI, 5.5% 1/16/27 (d)	6,376		620
sequential pay:
Series 1995-4 Class CQ, 8% 6/20/25	2,999		3,181
Series 2000-12 Class B, 7.5% 12/16/28	2,873		2,918
Series 2001-15 Class VB, 6.5% 4/20/19	14,104		15,040
Series 2002-29 Class SK, 8.25% 5/20/32 (c)	2,210		2,323
Series 2002-33 Class CN, 6.5% 7/20/29	19,939		20,149
Series 2002-41:
Class HB, 6% 8/16/27	5,000		5,126
Class VD, 6% 4/16/13	9,029		9,535
Series 2002-42 Class AD, 6% 12/20/28	10,000		10,208
Series 2002-54 Class GA, 6.5% 7/20/31	19,680		20,390
Series 2003-7 Class VP, 6% 11/20/13	7,063		7,621
Series 1994-4 Class KQ, 7.9875% 7/16/24	3,100		3,370
Series 1995-6 Class Z, 7% 9/20/25	8,692		9,204
Series 2001-45 Class GC, 6.5% 10/20/30	10,867		11,181
Series 2001-53:
Class PB, 6.5% 11/20/31	10,000		10,507
Class TA, 6% 12/20/30	6,536		6,671
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (Note 1) (000s)
U.S. Government Agency - continued
Ginnie Mae guaranteed REMIC pass thru securities: - continued
Series 2002-41 Class PD, 6.5% 7/20/30	$ 21,122		$ 21,462
Series 2003-86 Class ZE, 5% 8/20/32	5,157		5,028
Series 2003-98 Class ZU, 6% 11/20/33	3,476		3,497
TOTAL U.S. GOVERNMENT AGENCY			381,293
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $395,448)		391,805
Commercial Mortgage Securities - 3.2%

Fannie Mae:
sequential pay Series 2000-7 Class MB, 7.5024% 2/17/24 (c)	21,437		23,665
Series 1997-M1 Class N, 0.445% 10/17/36 (c)(d)	81,253		1,473
Fannie Mae guaranteed REMIC pass thru certificates:
Series 1998-M3 Class IB, 0.8707% 1/17/38 (c)(d)	62,398		2,669
Series 1998-M4 Class N, 1.5762% 2/25/35 (c)(d)	48,308		2,046
Ginnie Mae guaranteed Multi-family pass thru securities:
sequential pay Series 2001-58 Class X, 1.6852% 9/16/41 (c)(d)	247,073		16,870
Series 2001-12 Class X, 1.2874% 7/16/40 (c)(d)	103,251		5,743
Ginnie Mae guaranteed REMIC pass thru securities:
sequential pay Series 2002-81 Class IO, 2.1102% 9/16/42 (c)(d)	150,325		14,516
Series 2002-62 Class IO, 0% 8/16/42 (c)(d)	128,610		13,343
Series 2002-85 Class X, 2.5774% 3/16/42 (c)(d)	127,266		16,052
Series 2003-22 Class XA, 0.2007% 2/16/43 (c)(d)	286,361		17,126
Series 2003-36 Class XA, 0.2815% 3/16/43 (d)	335,229		22,837
Series 2003-47 Class XA, 0.0211% 6/16/43 (c)(d)	45,944		2,182
TOTAL COMMERCIAL MORTGAGE SECURITIES (Cost $148,868)		138,522

Cash Equivalents - 4.1%
	Maturity Amount (000s)		Value (Note 1) (000s)
Investments in repurchase agreements (Collateralized by U.S. Government Obligations, in a joint trading account at 1.04%, dated 1/30/04 due 2/2/04) (Cost $179,815)	$ 179,831		$ 179,815
TOTAL INVESTMENT PORTFOLIO - 107.0% (Cost $4,624,581)			4,674,391
NET OTHER ASSETS - (7.0)%			(307,280)
NET ASSETS - 100%		$ 4,367,111

Legend

(a) Security or a portion of the security purchased on a delayed delivery or when-issued basis.

(b) A portion of the security is subject to a forward commitment to sell.

(d) Security represents right to receive monthly interest payments on an underlying pool of mortgages. Principal shown is the par amount of the mortgage pool.

Other Information

Purchases and sales of long-term U.S. government and government agency obligations aggregated $3,758,605,000 and $5,013,142,000, respectively.

The fund participated in the bank borrowing program. The average daily loan balance during the period for which the loan was outstanding amounted to $22,436,000. The weighted average interest rate was 1.56%. At period end, there were no bank borrowings outstanding.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Fidelity Ginnie Mae Fund

Financial Statements

Statement of Assets and Liabilities

Amounts in thousands (except per-share amount)	January 31, 2004 (Unaudited)

Assets
Investment in securities, at value (including repurchase agreements of $179,815) (cost $4,624,581) - See accompanying schedule		$ 4,674,391
Commitment to sell securities on a delayed delivery basis	$ (123,479)
Receivable for securities sold on a delayed delivery basis	123,502	23
Receivable for investments sold, regular delivery		24,645
Receivable for fund shares sold		4,500
Interest receivable		23,126
Prepaid expenses		30
Other receivables		8
Total assets		4,726,723

Liabilities
Payable to custodian bank	135
Payable for investments purchased Regular delivery	102,250
Delayed delivery	245,513
Payable for fund shares redeemed	7,533
Distributions payable	1,827
Accrued management fee	1,577
Other affiliated payables	642
Other payables and accrued expenses	135
Total liabilities		359,612

Net Assets		$ 4,367,111
Net Assets consist of:
Paid in capital		$ 4,325,370
Undistributed net investment income		61
Accumulated undistributed net realized gain (loss) on investments		(8,154)
Net unrealized appreciation (depreciation) on investments		49,834
Net Assets, for 393,046 shares outstanding		$ 4,367,111
Net Asset Value, offering price and redemption price per share ($4,367,111 ÷ 393,046 shares)		$ 11.11

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Fidelity Ginnie Mae Fund
Financial Statements - continued

Statement of Operations

Amounts in thousands	Six months ended January 31, 2004 (Unaudited)

Investment Income
Interest		$ 93,150

Expenses
Management fee	$ 10,229
Transfer agent fees	3,275
Accounting fees and expenses	435
Non-interested trustees' compensation	15
Custodian fees and expenses	270
Registration fees	31
Audit	41
Legal	9
Interest	1
Miscellaneous	11
Total expenses before reductions	14,317
Expense reductions	(2)	14,315
Net investment income (loss)		78,835
Realized and Unrealized Gain (Loss) Net realized gain (loss) on investment securities		(1,336)
Change in net unrealized appreciation (depreciation) on: Investment securities	65,670
Delayed delivery commitments	(3,273)
Total change in net unrealized appreciation (depreciation)		62,397
Net gain (loss)		61,061
Net increase (decrease) in net assets resulting from operations		$ 139,896

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Statement of Changes in Net Assets

Amounts in thousands	Six months ended January 31, 2004 (Unaudited)	Year ended July 31, 2003
Increase (Decrease) in Net Assets
Operations
Net investment income (loss)	$ 78,835	$ 212,645
Net realized gain (loss)	(1,336)	80,749
Change in net unrealized appreciation (depreciation)	62,397	(96,615)
Net increase (decrease) in net assets resulting from operations	139,896	196,779
Distributions to shareholders from net investment income	(71,814)	(231,003)
Distributions to shareholders from net realized gain	(36,640)	-
Total distributions	(108,454)	(231,003)
Share transactions Net proceeds from sales of shares	270,386	3,242,020
Reinvestment of distributions	96,750	204,093
Cost of shares redeemed	(1,637,917)	(3,548,331)
Net increase (decrease) in net assets resulting from share transactions	(1,270,781)	(102,218)
Total increase (decrease) in net assets	(1,239,339)	(136,442)

Net Assets
Beginning of period	5,606,450	5,742,892
End of period (including undistributed net investment income of $61 and distributions in excess of net investment income of $6,960, respectively)	$ 4,367,111	$ 5,606,450
Other Information Shares
Sold	24,275	289,678
Issued in reinvestment of distributions	8,696	18,225
Redeemed	(147,445)	(317,081)
Net increase (decrease)	(114,474)	(9,178)

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights

	Six months ended January 31, 2004	Years ended July 31,
	(Unaudited)	2003	2002	2001	2000	1999
Selected Per-Share Data
Net asset value, beginning of period	$ 11.05	$ 11.11	$ 10.91	$ 10.42	$ 10.46	$ 10.87
Income from Investment Operations
Net investment income (loss)^D	.184	.364	.563^F	.684	.691	.689
Net realized and unrealized gain (loss)	.135	(.029)	.225^F	.487	(.043)	(.460)
Total from investment operations	.319	.335	.788	1.171	.648	.229
Distributions from net investment income	(.169)	(.395)	(.588)	(.681)	(.688)	(.639)
Distributions from net realized gain	(.090)	-	-	-	-	-
Total distributions	(.259)	(.395)	(.588)	(.681)	(.688)	(.639)
Net asset value, end of period	$ 11.11	$ 11.05	$ 11.11	$ 10.91	$ 10.42	$ 10.46
Total Return^{B, C}	2.90%	3.02%	7.42%	11.55%	6.42%	2.08%
Ratios to Average Net Assets^E
Expenses before expense reductions	.59%^A	.57%	.60%	.63%	.63%	.71%
Expenses net of voluntary waivers, if any	.59%^A	.57%	.60%	.62%	.63%	.64%
Expenses net of all reductions	.59%^A	.57%	.60%	.62%	.63%	.64%
Net investment income (loss)	3.28%^A	3.25%	5.15%^F	6.40%	6.67%	6.43%
Supplemental Data
Net assets, end of period (in millions)	$ 4,367	$ 5,606	$ 5,743	$ 2,836	$ 1,706	$ 1,841
Portfolio turnover rate	155%^A	262%	327%	120%	75%	73%

^A Annualized

^B Total returns for periods of less than one year are not annualized.

^C Total returns would have been lower had certain expenses not been reduced during the periods shown.

^D Calculated based on average shares outstanding during the period.

^E Expense ratios reflect operating expenses of the fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the fund during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the fund.

^F Effective August 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and discount on all debt securities. Per-share data and ratios for periods prior to adoption have not been restated to reflect this change.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Fidelity Government Income Fund

Investment Changes

Coupon Distribution as of January 31, 2004
	% of fund's investments	% of fund's investments 6 months ago
Zero coupon bonds	0.0	0.0
1 - 1.99%	5.1	0.8
2 - 2.99%	10.7	3.6
3 - 3.99%	25.6	5.7
4 - 4.99%	4.8	4.9
5 - 5.99%	19.1	13.3
6 - 6.99%	11.5	22.4
7 - 7.99%	2.5	5.1
8 - 8.99%	5.5	10.8
9% and over	0.8	6.8

Coupon distribution shows the range of stated interest rates on the fund's investments, excluding short-term investments.

Average Years to Maturity as of January 31, 2004
		6 months ago
Years	7.5	7.9

Average years to maturity is based on the average time remaining until principal payments are expected from each of the fund's bonds, weighted by dollar amount.

Duration as of January 31, 2004
		6 months ago
Years	4.8	5.0

Asset Allocation (% of fund's net assets)
As of January 31, 2004			As of July 31, 2003
	Mortgage Securities 11.5%			Mortgage Securities 11.5%
	CMOs and Other Mortgage Related Securities 8.3%			CMOs and Other Mortgage Related Securities 12.0%
	U.S. Treasury Obligations 32.2%			U.S. Treasury Obligations 30.3%
	U.S. Government Agency Obligations 39.0%			U.S. Government Agency Obligations 23.9%
	Short-Term Investments and Net Other Assets 9.0%			Short-Term Investments and Net Other Assets 22.3%
* Futures and Swaps		8.1%	** Futures and Swaps		0.4%

Semiannual Report

Fidelity Government Income Fund

Investments January 31, 2004 (Unaudited)

Showing Percentage of Net Assets

U.S. Government and Government Agency Obligations - 71.2%
	Principal Amount (000s)		Value (Note 1) (000s)
U.S. Government Agency Obligations - 39.0%
Fannie Mae:
1.875% 9/15/05	$ 70,000		$ 70,143
2.625% 11/15/06	119,600		120,093
3.25% 2/15/09	164,430		162,583
3.375% 12/15/08	85,885		85,661
5.125% 1/2/14	35,000		35,566
5.5% 3/15/11	6,695		7,267
6.125% 3/15/12	20,150		22,634
6.25% 2/1/11	19,445		21,664
Farm Credit Systems Financial Assistance Corp. 8.8% 6/10/05	22,233		24,362
Federal Home Loan Bank:
1.625% 6/15/05	70,000		70,054
5.8% 9/2/08	13,440		14,781
9.5% 2/25/04	2,355		2,367
Financing Corp. - coupon STRIPS 0% 8/3/05	1,989		1,936
Freddie Mac:
2.375% 2/15/07	106,000		105,185
2.875% 9/15/05	129,009		131,272
2.875% 12/15/06	95,600		96,438
3.625% 9/15/08	14,060		14,223
4.5% 1/15/14	73,400		72,568
5.125% 8/20/12	73,640		74,152
5.5% 9/15/11	1,240		1,341
5.875% 3/21/11	34,550		37,690
Government Loan Trusts (assets of Trust guaranteed by U.S. Government through Agency for International Development) Series 1-B, 8.5% 4/1/06	4,113		4,446
Guaranteed Export Trust Certificates (assets of Trust guaranteed by U.S. Government through Export-Import Bank):
Series 1994-A, 7.12% 4/15/06	4,369		4,643
Series 1994-F, 8.187% 12/15/04	207		215
Series 1995-A, 6.28% 6/15/04	985		1,005
Series 1995-B, 6.13% 6/15/04	2,152		2,223
Series 1996-A, 6.55% 6/15/04	1,310		1,335
Guaranteed Trade Trust Certificates (assets of Trust guaranteed by U.S. Government through Export-Import Bank) Series 1994-B, 7.5% 1/26/06	2,647		2,848
Overseas Private Investment Corp. U.S. Government guaranteed participation certificates:
Series 1998-196A, 5.926% 6/15/05	3,823		4,050
U.S. Government and Government Agency Obligations - continued
	Principal Amount (000s)		Value (Note 1) (000s)
U.S. Government Agency Obligations - continued
Overseas Private Investment Corp. U.S. Government guaranteed participation certificates: - continued
Series 2000-016, 6.07% 12/15/14	$ 17,500		$ 18,955
6.77% 11/15/13	6,385		7,107
6.99% 5/21/16	19,041		22,231
Private Export Funding Corp. secured:
5.34% 3/15/06	21,700		23,123
5.66% 9/15/11 (a)	11,160		12,147
5.8% 2/1/04	171		171
6.49% 7/15/07	5,000		5,590
6.67% 9/15/09	2,120		2,432
7.17% 5/15/07	8,500		9,642
Small Business Administration guaranteed development participation certificates:
Series 2002-20J Class 1, 4.75% 10/1/22	9,623		9,661
Series 2002-20K Class 1, 5.08% 11/1/22	4,746		4,841
5.136% 8/10/13	15,000		15,134
State of Israel (guaranteed by U.S. Government through Agency for International Development):
5.5% 9/18/23	110,500		113,373
5.89% 8/15/05	29,600		31,160
6.6% 2/15/08	35,170		37,925
6.8% 2/15/12	18,000		20,639
U.S. Department of Housing and Urban Development Government guaranteed participation certificates Series 1999-A:
5.75% 8/1/06	9,300		10,076
5.96% 8/1/09	9,930		10,656
U.S. Trade Trust Certificates (assets of Trust guaranteed by U.S. Government through Export-Import Bank) 8.17% 1/15/07	1,869		2,035
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS			1,549,643
U.S. Treasury Inflation Protected Obligations - 8.1%
U.S. Treasury Inflation-Indexed Bonds 3.625% 4/15/28	196,221		247,322
U.S. Treasury Inflation-Indexed Notes 1.875% 7/15/13	75,348		75,825
TOTAL U.S. TREASURY INFLATION PROTECTED OBLIGATIONS			323,147
U.S. Government and Government Agency Obligations - continued
	Principal Amount (000s)		Value (Note 1) (000s)
U.S. Treasury Obligations - 24.1%
U.S. Treasury Bonds:
8% 11/15/21	$ 142,000		$ 194,257
13.25% 5/15/14	15,000		22,300
U.S. Treasury Notes:
3.25% 1/15/09	568,200		570,707
4.25% 8/15/13	70,000		70,777
5% 2/15/11	36,000		38,891
5.75% 8/15/10	53,000		59,700
TOTAL U.S. TREASURY OBLIGATIONS			956,632
TOTAL U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS (Cost $2,798,461)		2,829,422
U.S. Government Agency - Mortgage Securities - 11.5%

Fannie Mae - 10.5%
4% 2/1/19 (b)	37,804		37,072
5% 2/12/34 (b)	185,000		183,786
5.5% 5/1/09 to 3/1/24	2,937		3,020
5.5% 2/12/34 (b)	95,000		96,692
6% 9/1/17 to 7/1/20	31,576		33,240
6.5% 8/1/04 to 12/1/32	38,359		40,621
6.5% 2/1/34 (b)	4,587		4,809
7% 7/1/13 to 6/1/32	7,867		8,360
7.5% 8/1/10 to 10/1/15	503		540
8% 1/1/22	240		257
8.5% 1/1/15 to 4/1/16	1,761		1,940
9% 5/1/14	1,538		1,706
9.5% 11/15/09 to 10/1/20	2,582		2,868
10% 8/1/10	94		103
11% 3/1/10	19		20
11.5% 6/15/19 to 1/15/21	3,768		4,294
			419,328
Freddie Mac - 0.5%
5% 1/1/09 to 8/1/33	11,402		11,376
7% 4/1/11	7		7
7.5% 7/1/10 to 5/1/16	5,215		5,599
8% 1/1/10 to 6/1/11	139		147
8.5% 8/1/08 to 12/1/25	557		602
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (Note 1) (000s)
Freddie Mac - continued
9% 8/1/09 to 12/1/10	$ 178		$ 193
9.75% 8/1/14	404		449
			18,373
Government National Mortgage Association - 0.5%
6% 7/15/08 to 12/15/10 (b)	11,279		11,951
6.5% 5/15/28 to 11/15/32	4,072		4,297
7% 10/15/26 to 8/15/32	183		195
7.5% 3/15/28 to 8/15/28	272		292
8% 11/15/06 to 12/15/23	2,874		3,152
8.5% 10/15/08 to 2/15/31	324		349
9.5% 2/15/25	4		5
			20,241
TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES (Cost $453,013)		457,942
Collateralized Mortgage Obligations - 8.3%

U.S. Government Agency - 8.3%
Fannie Mae:
planned amortization class:
Series 1993-160 Class PK, 6.5% 11/25/22	12,595		12,847
Series 1993-207 Class H, 6.5% 11/25/23	18,360		19,811
Series 1993-56 Class PH, 6.75% 6/25/22	185		185
Series 1994-23 Class PG, 6% 4/25/23	9,565		10,080
Series 1994-27 Class PJ, 6.5% 6/25/23	6,430		6,708
Series 1994-50 Class PJ, 6.5% 8/25/23	17,000		17,970
sequential pay Series 1997-41 Class J, 7.5% 6/18/27	9,765		10,290
Series 1993-109 Class NZ, 6% 7/25/08	11,298		11,733
Series 2003-28 Class KQ, 5% 4/25/23	5,188		5,215
Fannie Mae guaranteed REMIC pass thru certificates:
planned amortization class:
Series 2002-25 Class PD, 6.5% 4/25/31	35,000		36,412
Series 2002-9 Class PB, 6% 11/25/14	6,786		6,884
Series 2003-122:
Class ZG, 5% 12/25/23	6,065		6,125
Class ZK, 5.5% 12/25/33	2,968		2,986
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (Note 1) (000s)
U.S. Government Agency - continued
Freddie Mac:
planned amortization class:
Series 1413 Class J, 4% 11/15/07	$ 5,925		$ 6,016
Series 2351 Class PX, 6.5% 7/15/30	1,770		1,820
sequential pay Series 2355 Class AE, 6% 9/15/31	26,636		27,653
Freddie Mac Manufactured Housing participation certificates guaranteed:
planned amortization class:
Series 1681 Class PJ, 7% 12/15/23	9,200		9,892
Series 1697 Class G, 6% 3/15/09	101		101
Series 1560 Class PN, 7% 12/15/12	15,000		16,104
Freddie Mac Multi-class participation certificates guaranteed:
Class 2325 Class PL, 7% 1/15/31	15,422		15,955
planned amortization class:
Series 1727 Class H, 6.5% 8/15/23	12,200		12,768
Series 2295 Class PE, 6.5% 2/15/30	9,294		9,397
Series 2690 Class TB, 4.5% 12/15/17	8,366		8,656
sequential pay:
Series 2303 Class VT, 6% 2/15/12	3,993		4,023
Series 2448 Class XB, 6.5% 10/15/29	15,000		15,247
Series 1614 Class L, 6.5% 7/15/23	8,138		8,700
Series 2473 Class JB, 5.5% 2/15/29	3,327		3,360
target amortization class Series 2156 Class TC, 6.25% 5/15/29	19,575		20,403
Ginnie Mae guaranteed REMIC pass thru securities:
planned amortization class Series 1997-8 Class PE, 7.5% 5/16/27	18,568		19,633
Series 2001-53 Class TA, 6% 12/20/30	3,460		3,531
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $326,901)		330,505

Cash Equivalents - 15.2%
	Maturity Amount (000s)		Value (Note 1) (000s)
Investments in repurchase agreements (Collateralized by U.S. Government Obligations, in a joint trading account at 1.04%, dated 1/30/04 due 2/2/04) (Cost $605,601)	$ 605,654		$ 605,601
TOTAL INVESTMENT PORTFOLIO - 106.2% (Cost $4,183,976)			4,223,470
NET OTHER ASSETS - (6.2)%			(246,306)
NET ASSETS - 100%		$ 3,977,164

Swap Agreements
	Expiration Date	Notional Amount (000s)	Unrealized Appreciation/ (Depreciation) (000s)
Interest Rate Swap
Receive quarterly a fixed rate equal to 2.1905% and pay quarterly a floating rate based on 3-month LIBOR with Merrill Lynch, Inc.	May 2006	$ 140,780	$ (461)
Receive quarterly a fixed rate equal to 2.3192% and pay quarterly a floating rate based on 3-month LIBOR with Lehman Brothers, Inc.	April 2006	6,900	7
Receive quarterly a fixed rate equal to 2.6165% and pay quarterly a floating rate based on 3-month LIBOR with Merrill Lynch, Inc.	Oct. 2006	176,000	243
		$ 323,680	$ (211)

Legend

(b) Security or a portion of the security purchased on a delayed delivery or when-issued basis.

Other Information

Purchases and sales of long-term U.S. government and government agency obligations aggregated $6,469,642,000 and $5,753,820,000, respectively.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Fidelity Government Income Fund

Financial Statements

Statement of Assets and Liabilities

Amounts in thousands (except per-share amount)	January 31, 2004 (Unaudited)

Assets
Investment in securities, at value (including securities loaned of $381,140 and repurchase agreements of $605,601)(cost $4,183,976) - See accompanying schedule		$ 4,223,470
Cash		317
Receivable for investments sold Regular delivery		291,111
Delayed delivery		149,345
Receivable for fund shares sold		8,077
Interest receivable		28,621
Prepaid expenses		20
Total assets		4,700,961

Liabilities
Payable for investments purchased on a delayed delivery basis	$ 330,295
Payable for fund shares redeemed	2,140
Distributions payable	276
Unrealized loss on swap agreements	211
Accrued management fee	1,404
Other affiliated payables	650
Other payables and accrued expenses	58
Collateral on securities loaned, at value	388,763
Total liabilities		723,797

Net Assets		$ 3,977,164
Net Assets consist of:
Paid in capital		$ 3,929,827
Distributions in excess of net investment income		(425)
Accumulated undistributed net realized gain (loss) on investments		8,479
Net unrealized appreciation (depreciation) on investments		39,283
Net Assets, for 387,415 shares outstanding		$ 3,977,164
Net Asset Value, offering price and redemption price per share ($3,977,164 ÷ 387,415 shares)		$ 10.27

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Fidelity Government Income Fund
Financial Statements - continued

Statement of Operations

Amounts in thousands	Six months ended January 31, 2004 (Unaudited)

Investment Income
Interest		$ 67,555
Security lending		555
Total income		68,110

Expenses
Management fee	$ 8,065
Transfer agent fees	3,230
Accounting and security lending fees	355
Non-interested trustees' compensation	11
Custodian fees and expenses	55
Registration fees	16
Audit	29
Legal	8
Miscellaneous	8
Total expenses before reductions	11,777
Expense reductions	(18)	11,759
Net investment income (loss)		56,351
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investment securities	20,041
Swap agreements	(263)
Total net realized gain (loss)		19,778
Change in net unrealized appreciation (depreciation) on: Investment securities	80,062
Swap agreements	527
Total change in net unrealized appreciation (depreciation)		80,589
Net gain (loss)		100,367
Net increase (decrease) in net assets resulting from operations		$ 156,718

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Statement of Changes in Net Assets

Amounts in thousands	Six months ended January 31, 2004 (Unaudited)	Year ended July 31, 2003
Increase (Decrease) in Net Assets
Operations
Net investment income (loss)	$ 56,351	$ 123,105
Net realized gain (loss)	19,778	105,749
Change in net unrealized appreciation (depreciation)	80,589	(135,914)
Net increase (decrease) in net assets resulting from operations	156,718	92,940
Distributions to shareholders from net investment income	(57,938)	(120,943)
Distributions to shareholders from net realized gain	(56,842)	(41,172)
Total distributions	(114,780)	(162,115)
Share transactions Net proceeds from sales of shares	688,706	1,675,499
Reinvestment of distributions	111,717	156,422
Cost of shares redeemed	(486,850)	(1,060,935)
Net increase (decrease) in net assets resulting from share transactions	313,573	770,986
Total increase (decrease) in net assets	355,511	701,811

Net Assets
Beginning of period	3,621,653	2,919,842
End of period (including distributions in excess of net investment income of $425 and undistributed net investment income of $1,162, respectively)	$ 3,977,164	$ 3,621,653
Other Information Shares
Sold	67,573	159,482
Issued in reinvestment of distributions	10,961	14,923
Redeemed	(47,702)	(101,206)
Net increase (decrease)	30,832	73,199

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights

	Six months ended January 31, 2004	Years ended July 31,
	(Unaudited)	2003	2002	2001	2000	1999
Selected Per-Share Data
Net asset value, beginning of period	$ 10.16	$ 10.30	$ 9.98	$ 9.49	$ 9.54	$ 9.98
Income from Investment Operations
Net investment income (loss)^D	.153	.374	.452^F	.577	.592	.588
Net realized and unrealized gain (loss)	.273	(.014)	.335^F	.525	(.059)	(.429)
Total from investment operations	.426	.360	.787	1.102	.533	.159
Distributions from net investment income	(.156)	(.370)	(.467)	(.612)	(.583)	(.599)
Distributions from net realized gain	(.160)	(.130)	-	-	-	-
Total distributions	(.316)	(.500)	(.467)	(.612)	(.583)	(.599)
Net asset value, end of period	$ 10.27	$ 10.16	$ 10.30	$ 9.98	$ 9.49	$ 9.54
Total Return^{B, C}	4.26%	3.45%	8.08%	11.92%	5.81%	1.48%
Ratios to Average Net Assets^E
Expenses before expense reductions	.62%^A	.65%	.69%	.61%	.66%	.68%
Expenses net of voluntary waivers, if any	.62%^A	.65%	.69%	.61%	.66%	.68%
Expenses net of all reductions	.62%^A	.65%	.68%	.60%	.65%	.67%
Net investment income (loss)	2.97%^A	3.56%	4.50%^F	5.91%	6.27%	5.91%
Supplemental Data
Net assets, end of period (in millions)	$ 3,977	$ 3,622	$ 2,920	$ 2,154	$ 1,421	$ 1,580
Portfolio turnover rate	347%^A	253%	284%	214%	131%	168%

^A Annualized

^B Total returns for periods of less than one year are not annualized.

^C Total returns would have been lower had certain expenses not been reduced during the periods shown.

^D Calculated based on average shares outstanding during the period.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Fidelity Intermediate Government Income Fund

Investment Changes

Coupon Distribution as of January 31, 2004
	% of fund's investments	% of fund's investments 6 months ago
1 - 1.99%	15.8	3.5
2 - 2.99%	21.0	6.2
3 - 3.99%	4.6	4.8
4 - 4.99%	2.4	3.5
5 - 5.99%	19.2	26.1
6 - 6.99%	26.7	29.3
7% and over	4.4	10.6

Coupon distribution shows the range of stated interest rates on the fund's investments, excluding short-term investments.

Average Years to Maturity as of January 31, 2004
		6 months ago
Years	4.0	4.3

Average years to maturity is based on the average time remaining until principal payments are expected from each of the fund's bonds, weighted by dollar amount.

Duration as of January 31, 2004
		6 months ago
Years	3.4	3.4

Asset Allocation (% of fund's net assets)
As of January 31, 2004			As of July 31, 2003
	Mortgage Securities 5.5%			Mortgage Securities 10.1%
	CMOs and Other Mortgage Related Securities 6.7%			CMOs and Other Mortgage Related Securities 7.7%
	U.S. Treasury Obligations 33.9%			U.S. Treasury Obligations 29.7%
	U.S. Government Agency Obligations 48.4%			U.S. Government Agency Obligations 42.1%
	Short-Term Investments and Net Other Assets 5.5%			Short-Term Investments and Net Other Assets 10.4%
* Futures and Swaps		9.0%	** Futures and Swaps		0.3%

Semiannual Report

Fidelity Intermediate Government Income Fund

Investments January 31, 2004 (Unaudited)

Showing Percentage of Net Assets

U.S. Government and Government Agency Obligations - 82.3%
	Principal Amount (000s)		Value (Note 1) (000s)
U.S. Government Agency Obligations - 48.4%
Fannie Mae:
2.625% 11/15/06	$ 31,400		$ 31,530
2.875% 5/19/08	2,100		2,057
3.25% 1/15/08	11,570		11,647
5.125% 1/2/14	16,000		16,259
5.5% 3/15/11	33,295		36,137
6% 5/15/11	62,860		70,113
6.25% 2/1/11	1,285		1,432
6.25% 7/19/11	40,000		40,902
Farm Credit Systems Financial Assistance Corp. 8.8% 6/10/05	7,000		7,670
Federal Farm Credit Bank 9.15% 2/14/05	500		540
Federal Home Loan Bank:
2.5% 3/15/06	8,300		8,369
5.8% 9/2/08	16,625		18,283
6.75% 4/10/06	1,000		1,098
Freddie Mac:
1.5% 8/15/05	84,190		83,915
2.875% 9/15/05	22,750		23,149
2.875% 12/15/06	31,645		31,922
3.625% 9/15/08	17,391		17,593
4.375% 2/4/10	25,560		25,690
5.125% 8/20/12	9,600		9,667
5.5% 9/15/11	1,000		1,082
5.875% 3/21/11	1,075		1,173
Government Loan Trusts (assets of Trust guaranteed by U.S. Government through Agency for International Development) Series 1-B, 8.5% 4/1/06	4,839		5,230
Guaranteed Export Trust Certificates (assets of Trust guaranteed by U.S. Government through Export-Import Bank):
Series 1993-C, 5.2% 10/15/04	164		169
Series 1993-D, 5.23% 5/15/05	221		225
Series 1994-F, 8.187% 12/15/04	110		114
Series 1995-A, 6.28% 6/15/04	424		432
Series 1996-A, 6.55% 6/15/04	772		787
Guaranteed Trade Trust Certificates (assets of Trust guaranteed by U.S. Government through Export-Import Bank):
Series 1992-A, 7.02% 9/1/04	1,043		1,064
Series 1994-A, 7.39% 6/26/06	2,500		2,686
Series 1994-B, 7.5% 1/26/06	262		282
U.S. Government and Government Agency Obligations - continued
	Principal Amount (000s)		Value (Note 1) (000s)
U.S. Government Agency Obligations - continued
Overseas Private Investment Corp. U.S. Government guaranteed participation certificates Series 1996-A1, 6.726% 9/15/10	$ 2,435		$ 2,722
Private Export Funding Corp. secured:
5.66% 9/15/11 (a)	9,000		9,796
5.8% 2/1/04	559		559
6.86% 4/30/04	208		211
State of Israel (guaranteed by U.S. Government through Agency for International Development):
5.89% 8/15/05	5,815		6,121
6.6% 2/15/08	20,670		22,289
6.8% 2/15/12	7,500		8,600
U.S. Department of Housing and Urban Development Government guaranteed participation certificates Series 1999-A:
5.75% 8/1/06	10,000		10,835
6.06% 8/1/10	10,000		10,771
U.S. Trade Trust Certificates (assets of Trust guaranteed by U.S. Government through Export-Import Bank) 8.17% 1/15/07	1,930		2,102
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS			525,223
U.S. Treasury Obligations - 33.9%
U.S. Treasury Notes:
1.875% 12/31/05	70,473		70,591
2.625% 5/15/08	133,064		131,567
3.25% 1/15/09	14,000		14,062
5.75% 8/15/10	70,000		78,848
6% 8/15/09	64,000		72,685
TOTAL U.S. TREASURY OBLIGATIONS			367,753
TOTAL U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS (Cost $884,933)		892,976
U.S. Government Agency - Mortgage Securities - 5.5%

Fannie Mae - 4.0%
5.5% 1/1/09 to 11/1/17	12,286		12,776
6% 10/1/08 to 11/1/17	8,014		8,450
6.5% 4/1/16 to 12/1/32	14,988		15,865
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (Note 1) (000s)
Fannie Mae - continued
6.5% 2/1/34 (b)	$ 81		$ 84
7% 7/1/10 to 9/1/31	1,506		1,612
9% 2/1/13	411		455
9.5% 11/15/09	591		651
10% 1/1/20	15		17
10.25% 10/1/09 to 10/1/18	56		62
11% 8/1/10 to 1/1/16	1,079		1,223
11.25% 5/1/14 to 1/1/16	110		126
11.5% 9/1/11 to 6/15/19	717		818
12.25% 12/1/10 to 5/1/15	149		170
12.5% 3/1/12 to 7/1/16	534		612
12.75% 10/1/11 to 6/1/15	291		338
13% 7/1/13 to 7/1/15	217		249
13.25% 9/1/11	179		210
13.5% 11/1/14 to 12/1/14	20		23
14% 10/1/14	43		51
14.5% 7/1/14	17		20
15% 4/1/12	7		9
			43,821
Freddie Mac - 1.1%
5% 11/1/33	2,994		2,974
6.5% 5/1/08	279		298
8.5% 6/1/14 to 6/1/17	362		387
9% 11/1/09 to 8/1/16	147		157
9.5% 7/1/16 to 8/1/21	974		1,086
10% 7/1/09 to 3/1/21	1,968		2,185
10.5% 9/1/09 to 5/1/21	259		289
11% 2/1/11 to 9/1/20	115		130
11.25% 2/1/10 to 10/1/14	188		212
11.5% 10/1/15 to 8/1/19	185		210
11.75% 11/1/11 to 7/1/15	38		43
12% 10/1/09 to 11/1/19	456		518
12.25% 8/1/11 to 8/1/15	186		212
12.5% 10/1/09 to 6/1/19	2,055		2,350
12.75% 2/1/10 to 10/1/10	17		20
13% 9/1/10 to 5/1/17	321		370
13.25% 11/1/10 to 12/1/14	59		68
13.5% 11/1/10 to 10/1/14	99		113
14% 11/1/12 to 4/1/16	12		14
14.5% 12/1/10	3		4
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (Note 1) (000s)
Freddie Mac - continued
14.75% 3/1/10	$ 5		$ 6
16.25% 7/1/11	3		4
			11,650
Government National Mortgage Association - 0.4%
8% 9/15/06 to 12/15/23	1,589		1,736
8.5% 6/15/16 to 2/15/17	17		19
10.5% 9/15/15 to 10/15/21	1,850		2,091
10.75% 12/15/09 to 3/15/10	32		36
11% 9/20/14 to 1/20/21	91		103
12.5% 12/15/10	6		6
13% 1/15/11 to 12/15/14	214		249
13.25% 8/15/14	12		14
13.5% 5/15/10 to 12/15/14	120		140
14% 6/15/11	9		11
16% 4/15/13	30		36
17% 12/15/11	3		3
			4,444
TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES (Cost $57,899)		59,915
Collateralized Mortgage Obligations - 6.7%

U.S. Government Agency - 6.7%
Fannie Mae:
floater Series 1994-42 Class FK, 3.71% 4/25/24 (c)	7,000		7,240
planned amortization class Series 1988-21 Class G, 9.5% 8/25/18	227		261
sequential pay Series 1993-238 Class C, 6.5% 12/25/08	11,275		11,976
Series 1994-12 Class PH, 6.25% 1/25/09	3,892		4,119
Fannie Mae guaranteed REMIC pass thru certificates:
floater Series 2002-74 Class FV, 1.5913% 11/25/32 (c)	11,685		11,742
planned amortization class:
Series 2001-80 Class PH, 6% 12/25/27	1,130		1,139
Series 2002-55 Class PA, 5.5% 3/25/18	773		776
Series 2002-9 Class PB, 6% 11/25/14	1,944		1,972
Series 2003-122:
Class ZG, 5% 12/25/23	1,743		1,761
Class ZK, 5.5% 12/25/33	854		859
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (Note 1) (000s)
U.S. Government Agency - continued
Freddie Mac planned amortization class Series 1995 Class PB, 6.5% 9/20/25	$ 347		$ 348
Freddie Mac Multi-class participation certificates guaranteed:
floater Series 2526 Class FC, 1.5% 11/15/32 (c)	6,392		6,364
planned amortization class Series 2435 Class EL, 6% 9/15/27	1,367		1,379
sequential pay:
Series 1929 Class EZ, 7.5% 2/17/27	7,873		8,374
Series 2303 Class VT, 6% 2/15/12	1,538		1,549
Series 1543 Class VK, 6.7% 1/15/23	9,854		10,222
Series 2473 Class JB, 5.5% 2/15/29	1,267		1,280
Ginnie Mae guaranteed REMIC pass thru securities Series 2001-53 Class TA, 6% 12/20/30	1,349		1,377
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $72,968)		72,738

Cash Equivalents - 5.9%
	Maturity Amount (000s)
Investments in repurchase agreements (Collateralized by U.S. Government Obligations, in a joint trading account at 1.04%, dated 1/30/04 due 2/2/04) (Cost $64,115)	$ 64,121		64,115
TOTAL INVESTMENT PORTFOLIO - 100.4% (Cost $1,079,915)			1,089,744
NET OTHER ASSETS - (0.4)%			(4,585)
NET ASSETS - 100%		$ 1,085,159

Swap Agreements
	Expiration Date	Notional Amount (000s)	Unrealized Appreciation/ (Depreciation) (000s)
Interest Rate Swap
Receive quarterly a fixed rate equal to 2.1905% and pay quarterly a floating rate based on 3-month LIBOR with Merrill Lynch, Inc.	May 2006	$ 37,050	$ (121)
Receive quarterly a fixed rate equal to 2.369% and pay quarterly a floating rate based on 3-month LIBOR with Goldman Sachs	May 2006	37,000	116
Receive quarterly a fixed rate equal to 2.6165% and pay quarterly a floating rate based on 3-month LIBOR with Merrill Lynch, Inc.	Oct. 2006	23,000	31
		$ 97,050	$ 26

Legend

(b) Security or a portion of the security purchased on a delayed delivery or when-issued basis.

Other Information

Purchases and sales of long-term U.S. government and government agency obligations aggregated $1,047,828,000 and $1,181,275,000, respectively.

Income Tax Information

At July 31, 2003, the fund had a capital loss carryforward of approximately $25,365,000 of which $1,973,000, $3,975,000, $11,910,000 and $7,507,000 will expire on July 31, 2004, 2005, 2008 and 2009, respectively. Of the loss carryforwards expiring on July 31, 2005, $702,000 was acquired in the merger and is available to offset future capital gains of the fund to the extent provided by regulations.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Fidelity Intermediate Government Income Fund

Financial Statements

Statement of Assets and Liabilities

Amounts in thousands (except per-share amount)	January 31, 2004 (Unaudited)

Assets
Investment in securities, at value (including securities loaned of $14,042 and repurchase agreements of $64,115)(cost $1,079,915) - See accompanying schedule		$ 1,089,744
Cash		37
Receivable for investments sold		135
Receivable for fund shares sold		556
Interest receivable		11,862
Unrealized gain on swap agreements		26
Prepaid expenses		7
Other receivables		334
Total assets		1,102,701

Liabilities
Payable for investments purchased on a delayed delivery basis	$ 85
Payable for fund shares redeemed	2,191
Distributions payable	349
Accrued management fee	393
Other affiliated payables	158
Other payables and accrued expenses	43
Collateral on securities loaned, at value	14,323
Total liabilities		17,542

Net Assets		$ 1,085,159
Net Assets consist of:
Paid in capital		$ 1,100,465
Undistributed net investment income		430
Accumulated undistributed net realized gain (loss) on investments		(25,591)
Net unrealized appreciation (depreciation) on investments		9,855
Net Assets, for 105,120 shares outstanding		$ 1,085,159
Net Asset Value, offering price and redemption price per share ($1,085,159 ÷ 105,120 shares)		$ 10.32

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Fidelity Intermediate Government Income Fund
Financial Statements - continued

Statement of Operations

Amounts in thousands	Six months ended January 31, 2004 (Unaudited)

Investment Income
Interest		$ 18,720
Security lending		83
Total income		18,803

Expenses
Management fee	$ 2,484
Transfer agent fees	849
Accounting and security lending fees	136
Non-interested trustees' compensation	4
Custodian fees and expenses	31
Registration fees	33
Audit	27
Legal	3
Miscellaneous	3
Total expenses before reductions	3,570
Expense reductions	(1)	3,569
Net investment income (loss)		15,234
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investment securities	705
Swap agreements	(160)
Total net realized gain (loss)		545
Change in net unrealized appreciation (depreciation) on: Investment securities	16,751
Swap agreements	269
Total change in net unrealized appreciation (depreciation)		17,020
Net gain (loss)		17,565
Net increase (decrease) in net assets resulting from operations		$ 32,799

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Statement of Changes in Net Assets

Amounts in thousands	Six months ended January 31, 2004 (Unaudited)	Year ended July 31, 2003
Increase (Decrease) in Net Assets
Operations
Net investment income (loss)	$ 15,234	$ 43,060
Net realized gain (loss)	545	52,507
Change in net unrealized appreciation (depreciation)	17,020	(47,827)
Net increase (decrease) in net assets resulting from operations	32,799	47,740
Distributions to shareholders from net investment income	(15,599)	(42,381)
Share transactions Net proceeds from sales of shares	92,620	755,118
Reinvestment of distributions	13,592	37,055
Cost of shares redeemed	(321,573)	(621,342)
Net increase (decrease) in net assets resulting from share transactions	(215,361)	170,831
Total increase (decrease) in net assets	(198,161)	176,190

Net Assets
Beginning of period	1,283,320	1,107,130
End of period (including undistributed net investment income of $430 and undistributed net investment income of $795, respectively)	$ 1,085,159	$ 1,283,320
Other Information Shares
Sold	9,011	73,202
Issued in reinvestment of distributions	1,323	3,579
Redeemed	(31,372)	(60,120)
Net increase (decrease)	(21,038)	16,661

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights

	Six months ended January 31, 2004	Years ended July 31,
	(Unaudited)	2003	2002	2001	2000	1999
Selected Per-Share Data
Net asset value, beginning of period	$ 10.17	$ 10.11	$ 9.77	$ 9.32	$ 9.46	$ 9.78
Income from Investment Operations
Net investment income (loss)^D	.135	.329	.457^F	.607	.616	.640
Net realized and unrealized gain (loss)	.153	.056	.353^F	.452	(.151)	(.326)
Total from investment operations	.288	.385	.810	1.059	.465	.314
Distributions from net investment income	(.138)	(.325)	(.470)	(.609)	(.605)	(.634)
Net asset value, end of period	$ 10.32	$ 10.17	$ 10.11	$ 9.77	$ 9.32	$ 9.46
Total Return^{B, C}	2.84%	3.80%	8.51%	11.68%	5.11%	3.20%
Ratios to Average Net Assets^E
Expenses before expense reductions	.61%^A	.60%	.59%	.64%	.65%	.65%
Expenses net of voluntary waivers, if any	.61%^A	.60%	.59%	.61%	.63%	.53%
Expenses net of all reductions	.61%^A	.60%	.59%	.60%	.63%	.53%
Net investment income (loss)	2.61%^A	3.18%	4.63%^F	6.34%	6.59%	6.58%
Supplemental Data
Net assets, end of period (in millions)	$ 1,085	$ 1,283	$ 1,107	$ 844	$ 728	$ 874
Portfolio turnover rate	192%^A	229%	145%	114%	66%	117%

^A Annualized

^B Total returns for periods of less than one year are not annualized.

^C Total returns would have been lower had certain expenses not been reduced during the periods shown.

^D Calculated based on average shares outstanding during the period.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Notes to Financial Statements

For the period ended January 31, 2004 (Unaudited)

(Amounts in thousands except ratios)

1. Significant Accounting Policies.

Fidelity Ginnie Mae Fund, Fidelity Government Income Fund and Fidelity Intermediate Government Income Fund (the funds) are funds of Fidelity Income Fund (the trust). The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. Each fund is authorized to issue an unlimited number of shares. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the funds:

Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Debt securities are valued on the basis of information provided by a pricing service. Pricing services use valuation matrices that incorporate both dealer-supplied valuations and valuation models. If an event that is expected to materially affect the value of a security occurs after the close of an exchange or market on which that security trades, but prior to the NAV calculation, then that security will be fair valued taking the event into account. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value as determined in good faith under consistently applied procedures under the general supervision of the Board of Trustees. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.

Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities, which is accrued using the interest method.

Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among the funds in the trust.

Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan) for Fidelity Ginnie Mae Fund, non-interested Trustees must defer receipt of a portion of, and may elect to defer receipt of an additional portion of, their annual compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of each applicable fund or are invested in a cross-section of other Fidelity funds, and are marked-to-market. Deferred amounts remain in the fund until distributed in accordance with the Plan.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except ratios)

1. Significant Accounting Policies - continued

Income Tax Information and Distributions to Shareholders. Each year, each fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. Dividends are declared daily and paid monthly from net investment income. Distributions from realized gains, if any, are recorded on the ex-dividend date.

Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Capital accounts within the financial statements are adjusted for permanent and temporary book and tax differences. These adjustments have no impact on net assets or the results of operations. Temporary differences will reverse in a subsequent period. These differences are primarily due to prior period premium and discount on debt securities, market discount, financing transactions, capital loss carryforwards and losses deferred due to wash sales.

The federal tax cost of investments including unrealized appreciation (depreciation) as of period end was as follows for each fund:

	Cost for Federal Income Tax Purposes	Unrealized Appreciation	Unrealized Depreciation	Net Unrealized Appreciation/ (Depreciation)
Ginnie Mae Fund	$ 4,631,054	$ 64,710	$ (21,373)	$ 43,337
Government Income Fund	4,187,376	47,232	(11,138)	36,094
Intermediate Government Income Fund	1,080,171	11,931	(2,358)	9,573

2. Operating Policies.

Repurchase Agreements. Fidelity Management & Research Company (FMR) has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the funds and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. Certain funds may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. Collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. Collateral is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).

Semiannual Report

2. Operating Policies - continued

Delayed Delivery Transactions and When-Issued Securities. Each fund may purchase or sell securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. During the time a delayed delivery sell is outstanding, the contract is marked-to-market daily and equivalent deliverable securities are held for the transaction. The value of the securities purchased on a delayed delivery or when-issued basis are identified as such in each applicable fund's Schedule of Investments. Each fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, each fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. The payables and receivables associated with the purchases and sales of delayed delivery securities having the same coupon, settlement date and broker are offset. Delayed delivery or when-issued securities that have been purchased from and sold to different brokers are reflected as both payables and receivables in each applicable fund's Statement of Assets and Liabilities under the caption "Delayed delivery." Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract's terms, or if the issuer does not issue the securities due to political, economic, or other factors.

Restricted Securities. Certain funds may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of each applicable fund's Schedule of Investments.

Swap Agreements. Certain funds may invest in swaps for the purpose of managing their exposure to interest rate, credit or market risk.

Interest rate swaps are agreements to exchange cash flows periodically based on a notional principal amount, for example, the exchange of fixed rate interest payments for floating rate interest payments. Periodic payments received or made by each applicable fund are recorded in the accompanying Statement of Operations as realized gains or losses, respectively. The primary risk associated with interest rate swaps is that unfavorable changes in the fluctuation of interest rates could adversely impact each applicable fund.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except ratios)

2. Operating Policies - continued

Swap Agreements - continued

securities, may be required to be held in segregated accounts with each applicable fund's custodian in compliance with swap contracts. Risks may exceed amounts recognized on the Statement of Assets and Liabilities. These risks include changes in the returns of the underlying instruments, failure of the counterparties to perform under the contracts' terms and the possible lack of liquidity with respect to the swap agreements. Details of swap agreements open at period end are included in each applicable fund's Schedule of Investments under the caption "Swap Agreements".

Financing Transactions. To earn additional income, certain funds may employ trading strategies which involve the sale and simultaneous agreement to repurchase similar securities ("mortgage dollar rolls") or the purchase and simultaneous agreement to sell similar securities ("reverse mortgage dollar rolls"). The securities traded are mortgage securities and bear the same interest rate but will be collateralized by different pools of mortgages. During the period between the sale and repurchase in a mortgage dollar roll transaction, a fund will not be entitled to receive interest and principal payments on the securities sold but will invest the proceeds of the sale in other securities which may enhance the yield and total return. In addition, the difference between the sale price and the future purchase price is recorded as an adjustment to investment income. During the period between the purchase and subsequent sale in a reverse mortgage dollar roll transaction a fund is entitled to interest and principal payments on the securities purchased. The price differential between the purchase and sale is recorded as an adjustment to investment income. Losses may arise due to changes in the value of the securities or if the counterparty does not perform under the terms of the agreement. If the counterparty files for bankruptcy or becomes insolvent, the fund's right to repurchase or sell securities may be limited.

3. Purchases and Sales of Investments.

Information regarding purchases and sales of securities is included under the caption "Other Information" at the end of each applicable fund's Schedule of Investments.

4. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the funds with investment management related services for which the funds pay a monthly management fee. The management fee is the sum of an individual fund fee rate and a group fee rate. The individual fund fee rate is applied to each fund's average net assets. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate

Semiannual Report

4. Fees and Other Transactions with Affiliates - continued

Management Fee - continued

decreases as assets under management increase and increases as assets under management decrease. For the period, each fund's annualized management fee rate expressed as a percentage of each fund's average net assets was as follows:

	Individual Rate	Group Rate	Total
Ginnie Mae Fund	.30%	.13%	.43%
Government Income Fund	.30%	.13%	.43%
Intermediate Government Income Fund	.30%	.13%	.43%

Transfer Agent Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, is the funds' transfer, dividend disbursing and shareholder servicing agent. FSC receives account fees and asset-based fees that vary according to account size and type of account. FSC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, the transfer agent fees were equivalent to the following annualized rates expressed as a percentage of average net assets:

Ginnie Mae Fund	.14%	\|
Government Income Fund	.17%
Intermediate Government Income Fund	.15%

Accounting and Security Lending Fees. FSC maintains each fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.

5. Security Lending.

Certain funds lend portfolio securities from time to time in order to earn additional income. Each applicable fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the funds and any additional required collateral is delivered to the funds on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Cash collateral is invested in cash equivalents. The value of loaned securities and cash collateral at period end are disclosed on each applicable fund's Statement of Assets and Liabilities.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except ratios)

6. Bank Borrowings.

Each fund is permitted to have bank borrowings for temporary or emergency purposes to fund shareholder redemptions. Each fund has established borrowing arrangements with certain banks. The interest rate on the borrowings is the bank's base rate, as revised from time to time. Information regarding each applicable fund's participation in the program is included under the caption "Other Information" at the end of each applicable fund's Schedule of Investments.

7. Expense Reductions.

Through arrangements with each applicable fund's custodian and transfer agent, credits realized as a result of uninvested cash balances were used to reduce each applicable fund's expenses. All of the applicable expense reductions are noted in the table below.

	Custody expense reduction	Transfer Agent expense reduction

Ginnie Mae Fund	$ 2	$ -
Government Income Fund	4	14
Intermediate Government Income Fund	1	-

8. Other Information.

At the end of the period, Fidelity Freedom 2010 Fund and Fidelity Freedom 2020 Fund were the owners of record of approximately 25% and 14%, respectively, of the total outstanding shares of the Fidelity Government Income Fund. The Fidelity Freedom Funds were the owners of record, in the aggregate, of approximately 55% of the total outstanding shares of the Fidelity Government Income Fund.

Semiannual Report

Investment Adviser

Fidelity Management & Research Company

Boston, MA

Investment Sub-Advisers

Fidelity Management & Research
(U.K.) Inc.; Ginnie Mae and
Intermediate Government Income

Fidelity Management & Research
(Far East) Inc.; Ginnie Mae and
Intermediate Government Income

Fidelity Investments
Money Management, Inc.

Fidelity Investments Japan Limited;
Ginnie Mae and Intermediate
Government Income

Fidelity International Investment Advisors

Fidelity International Investment Advisors
(U.K.) Limited

General Distributor

Fidelity Distributors Corporation

Boston, MA

Transfer and Shareholder
Servicing Agent

Fidelity Service Company, Inc.

Boston, MA

Custodian

The Bank of New York

New York, NY

Fidelity's Taxable Bond Funds

Capital & Income

Floating Rate High Income

Ginnie Mae

Government Income

High Income

Inflation-Protected Bond

Intermediate Bond

Intermediate Government Income

Investment Grade Bond

Mortgage Securities

New Markets Income

Real Estate Income

Short-Term Bond

Spartan® Government Income

Spartan Investment Grade Bond

Strategic Income

Total Bond

Ultra-Short Bond

U.S. Bond Index

The Fidelity Telephone Connection

Mutual Fund 24-Hour Service

Exchanges/Redemptions
and Account Assistance 1-800-544-6666

Product Information 1-800-544-6666

Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)

TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)

Fidelity Automated Service
Telephone (FAST®) (automated graphic) 1-800-544-5555

(automated graphic) Automated line for quickest service

GVT-USAN-0304
1.789284.100

(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com

Item 2. Code of Ethics

Not applicable.

Item 3. Audit Committee Financial Expert

Not applicable.

Item 4. Principal Accountant Fees and Services

Not applicable.

Item 5. Audit Committee of Listed Registrants

Not applicable.

Item 6. Reserved

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies

Not applicable.

Item 8. Reserved

Item 9. Submission of Matters to a Vote of Security Holders

There were no material changes to the procedures by which shareholders may recommend nominees to Fidelity Income Fund's Board of Trustees.

Item 10. Controls and Procedures

(a)(i) The President and Treasurer and the Chief Financial Officer have concluded that the Fidelity Income Fund's (the "Trust") disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act) provide reasonable assurances that material information relating to the Trust is made known to them by the appropriate persons, based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.

(a)(ii) There was no change in the Trust's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act) that occurred during the Trust's last fiscal half-year that has materially affected, or is reasonably likely to materially affect, the Trust's internal control over financial reporting.

Item 11. Exhibits

(a)	(1)	Not applicable.
(a)	(2)	Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT.
(b)		Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as Exhibit 99.906CERT.

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.

Fidelity Income Fund

By:	/s/Christine Reynolds
	Christine Reynolds
	President and Treasurer

Date:	March 29, 2004

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/Christine Reynolds
	Christine Reynolds
	President and Treasurer

Date:	March 29, 2004

By:	/s/Timothy F. Hayes
	Timothy F. Hayes
	Chief Financial Officer

Date:	March 29, 2004

Fidelity Government Income Fund (FGOVX) N-CSRSCertified semi-annual shareholder report (management investment company)

Total Bond

Contents

Chairman's Message

Investment Changes

Investments January 31, 2004 (Unaudited)

Financial Statements

Notes to Financial Statements

Managing Your Investments

Ultra-Short Bond

Contents

Chairman's Message

Investment Changes

Investments January 31, 2004 (Unaudited)

Financial Statements

Notes to Financial Statements

Managing Your Investments

To Write Fidelity

To Visit Fidelity

Fidelity Government
Income Fund

Fidelity Intermediate
Government Income Fund

Contents

Chairman's Message

Investment Changes

Investments January 31, 2004 (Unaudited)

Financial Statements

Investment Changes

Investments January 31, 2004 (Unaudited)

Financial Statements

Investment Changes

Investments January 31, 2004 (Unaudited)

Financial Statements

Notes to Financial Statements

Fidelity Government Income Fund (FGOVX) N-CSRSCertified semi-annual shareholder report (management investment company)

Total Bond

Contents

Chairman's Message

Investment Changes

Investments January 31, 2004 (Unaudited)

Financial Statements

Notes to Financial Statements

Managing Your Investments

Ultra-Short Bond

Contents

Chairman's Message

Investment Changes

Investments January 31, 2004 (Unaudited)

Financial Statements

Notes to Financial Statements

Managing Your Investments

To Write Fidelity

To Visit Fidelity

Fidelity GovernmentIncome Fund

Fidelity IntermediateGovernment Income Fund

Contents

Chairman's Message

Investment Changes

Investments January 31, 2004 (Unaudited)

Financial Statements

Investment Changes

Investments January 31, 2004 (Unaudited)

Financial Statements

Investment Changes

Investments January 31, 2004 (Unaudited)

Financial Statements

Notes to Financial Statements

Fidelity Government
Income Fund

Fidelity Intermediate
Government Income Fund