Vanguard Pennsylvania Tax-free Funds N-CSRS Certified semi-annual shareholder report (management investment company)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT
OF
REGISTERED MANAGEMENT COMPANY

Investment Company Act file number: 811-4571

Name of Registrant: Vanguard Pennsylvania Tax-Free Funds

Address of Registrant: P.O. Box 2600
Valley Forge, PA 19482

Name and address of agent for service: Heidi Stam, Esquire
P.O. Box 876
Valley Forge, PA 19482

Registrant’s telephone number, including area code: (610) 669-1000

Date of fiscal year end: November 30

Date of reporting period: December 1, 2005—May 31, 2006

Item 1: Reports to Shareholders

Vanguard® Pennsylvania Tax-Exempt Funds
> Semiannual Report
May 31, 2006
Vanguard Pennsylvania Tax-Exempt Money Market Fund
Vanguard Pennsylvania Long-Term Tax-Exempt Fund

 > During the six months ended May 31, 2006, the Vanguard Pennsylvania Tax-Exempt Money Market Fund returned 1.5%, and the Vanguard Pennsylvania Long-Term Tax-Exempt Fund returned 1.3%.

 > Interest rates climbed throughout the half-year, led by increases at the shortest end of the maturity spectrum.

 > The difference in yields of the shortest- and longest-term municipal bonds remained small by historical standards.

Contents
Your Fund's Total Returns	1
Chairman's Letter	2
Advisor's Report	6
Pennsylvania Tax-Exempt Money Market Fund	9
Pennsylvania Long-Term Tax-Exempt Fund	26
About Your Fund's Expenses	50
Trustees Approve Advisory Arrangement	52
Glossary	53

Please note: The opinions expressed in this report are just that—informed opinions. They should not be considered promises or advice. Also, please keep in mind that the information and opinions cover the period through the date on the cover of this report. Of course, the risks of investing in your fund are spelled out in the prospectus.

Your Fund’s Total Returns

Six Months Ended May 31, 2006
Total Return
Vanguard Pennsylvania Tax-Exempt Money Market Fund	1.5%
SEC 7-Day Annualized Yield: 3.30%
Taxable-Equivalent Yield: 5.24%1
Average Pennsylvania Tax-Exempt Money Market Fund2	1.3
Vanguard Pennsylvania Long-Term Tax-Exempt Fund
Investor Shares	1.3%
SEC 30-Day Annualized Yield: 4.14%
Taxable-Equivalent Yield: 6.57%1
Admiral™Shares3	1.3
SEC 30-Day Annualized Yield: 4.22%
Taxable-Equivalent Yield: 6.70%1
Lehman 10 Year Municipal Bond Index	1.3
Average Pennsylvania Municipal Debt Fund2	1.4
Lehman Municipal Bond Index	1.5

Your Fund’s Performance at a Glance November 30, 2005–May 31, 2006

			Distributions Per Share
	Starting Share Price	Ending Share Price	Income Dividends	Capital Gains
Vanguard Pennsylvania Tax-Exempt Fund
Money Market	$1.00	$1.00	$0.015	$0.000
Long-Term
Investor Shares	11.32	11.18	0.257	0.029
Admiral Shares	11.32	11.18	0.261	0.029

1	This calculation, which assumes a typical itemized tax return, is based on the maximum federal income tax rate of 35% and the maximum Commonwealth Pennsylvania income tax rate. Local taxes were not considered. Please see the prospectus for a detailed explanation of the calculation.
2	Derived from data provided by Lipper Inc.
3	A lower-cost class of shares available to many longtime shareholders and to those with significant investments in the fund.

1

Chairman’s Letter

Dear Shareholder,

During the six months ended May 31, 2006, the Federal Reserve Board’s inflation-fighting campaign pushed short-term interest rates higher. Longer-term rates also increased, though at a more moderate pace.

Vanguard Pennsylvania Long-Term Tax-Exempt Fund returned 1.3%, matching the result of the benchmark index, but slightly trailing the average return of competing Pennsylvania municipal bond funds. The income portion of the fund’s return more than offset its modest decline in share price. The fund’s 4.14% yield for Investor Shares at the end of May represented a slight increase versus six months ago. For investors in the highest income tax bracket, the taxable-equivalent yield was 6.57%.

The Pennsylvania Tax-Exempt Money Market Fund posted a 1.5% result and surpassed the average return of its peers. The fund’s yield increased to 3.30%; the taxable equivalent would be 5.24% for investors in the highest income tax bracket. The fund maintained a net asset value of $1 per share, as is expected but not guaranteed.

Please note: Although the funds’ income distributions are expected to be exempt from federal and Pennsylvania commonwealth income taxes, a portion of these distributions may be subject to the alternative minimum tax.

2

Bonds treaded water as rates continued to rise

Bond market returns were flat during the past six months, as rising interest rates put pressure on prices. The Federal Reserve Board raised its target for the federal funds rate from 4.00% to 5.00% in four separate actions as part of its efforts to rein in inflationary pressures. Yields generally moved higher across the maturity spectrum, a change from the pattern in prior months when yields rose at the shorter end but fell at the longer end.

In general, short-term and municipal securities outperformed long-term taxable bonds. High-yield bonds, which are less sensitive to changes in interest rates, turned in impressive relative results.

Stocks gained ground, then stumbled late in the period

The U.S. stock market advanced through much of the fiscal half-year, with some indexes approaching a five-year high in early May. Despite ongoing concerns about high energy costs and the possibility of inflation, investors generally remained positive about the economy. In mid-May, however, worries over whether the Fed would continue to raise interest rates gave some investors pause, leading to a decline in the major indexes.

In the U.S. market, small-capitalization stocks once again outperformed their large-cap counterparts, a persistent trend over the past few years. Returns of international stocks, aided by a weak dollar, continued to surpass those of

Market Barometer
	Total Returns Periods Ended May 31, 2006
	Six Months	One Year	Five Years1
Bonds
Lehman Aggregate Bond Index (Broad taxable market)	0.0%	-0.5%	5.0%
Lehman Municipal Bond Index	1.5	1.9	5.3
Citigroup 3-Month Treasury Bill Index	2.1	3.8	2.1
Stocks
Russell 1000 Index (Large-caps)	2.8%	9.4%	2.6%
Russell 2000 Index (Small-caps)	7.0	18.2	9.1
Dow Jones Wilshire 5000 Index (Entire market)	3.4	10.8	3.7
MSCI All Country World Index ex USA (International)	15.4	30.9	11.0
CPI
Consumer Price Index	2.5%	4.2%	2.6%
1 Annualized.

3

U.S. stocks. Although emerging markets experienced noteworthy losses in May, they were strong performers in the international arena for the fiscal half-year.

Your fund remained consistent in a challenging rate environment

Over the past six months, the relatively attractive yields available for municipal bonds resulted in increased demand for these securities. This increase, coupled with a decrease in the supply of municipal bonds, placed a slight upward pressure on municipal bond prices and a slight downward pressure on the resultant yields, particularly among long-term bonds.

While yields at the longest end of the maturity spectrum generally remained stable, the Fed’s rate-tightening actions helped to push municipal bond yields higher for shorter-term issues. This “flattening” of the municipal bond yield curve presented a challenging investment environment for your fund’s advisor, the Vanguard Fixed Income Group. Against this backdrop, the advisor steered the Pennsylvania Long-Term Tax-Exempt Fund to a 1.3% return, reflecting an income return that more than offset a slight decline in the fund’s net asset value (NAV). The fund met the result of its benchmark index, but narrowly lagged the average return of competing Pennsylvania municipal debt funds. During the past six months, the advisor kept the fund’s duration, a measure of interest rate sensitivity, near the short end of its typical range—a strategy that offered some protection from the negative impact of rising interest rates.

The Pennsylvania Tax-Exempt Money Market Fund benefited from the increase in short-term rates. Its short average maturity enabled it to quickly translate rising rates into higher income. The fund’s return of 1.5% was higher than the average return for its peers, largely because of its lower expense ratio.

Maintaining low investment costs is always important, but can be especially important during periods of modest total returns—

Annualized Expense Ratios1 Your fund compared with its peer group
Pennsylvania Tax-Exempt Fund	Investor Shares	Admiral Shares	Peer Group
Money Market	0.13%	—	0.64%
Long-Term	0.17	0.09%	1.20

1  Fund expense ratios reflect the six months ended May 31, 2006. Peer groups are: for the Pennsylvania Tax-Exempt Money Market Fund, the Average Pennsylvania Tax-Exempt Money Market Fund; and for the Pennsylvania Long-Term Tax-Exempt Fund, the Average Pennsylvania Municipal Debt Fund. Peer-group expense ratios are derived from data provided by Lipper Inc. and capture information through year-end 2005.

4

which are not atypical in the fixed income market. The less you pay in expenses, the greater is your portion of the portfolio’s total return. In addition, Vanguard’s low expenses provide the advisor with flexibility that other portfolio managers don’t have: The advisor doesn’t have to take extra risks to deliver competitive returns.

Your muni fund’s dual role: Providing income and stability

If you own shares of an equity fund, you probably enjoyed the fund’s strong performance in the first four months of calendar-year 2006. From January through April, the broad U.S. stock market returned more than 6.5%. Nearly half of that return was ceded, however, during a disappointing May. This abrupt turnabout reminds us of a fundamental principle in investing: balance.

A portfolio balanced among stock, bond, and money market funds, in levels appropriate to your goals, risk tolerance, and time horizon, can provide stability in a choppy market.

As a shareholder in a Pennsylvania Tax-Exempt Fund, you’re aware of your fund’s ability to generate income that is free of Pennsylvania and federal taxes. But don’t overlook the role it can play as a stabilizing counterweight to the more volatile segments of your portfolio.

Thank you for entrusting your assets to Vanguard.

Sincerely,

John J. Brennan
Chairman and Chief Executive Officer
June 13, 2006

5

Advisor’s Report

During the six months ended May 31, 2006, Vanguard Pennsylvania Long-Term Tax-Exempt Fund returned 1.3%, trailing a bit the average result of its peers. Vanguard Pennsylvania Tax-Exempt Money Market Fund returned 1.5%, which outpaced its peer-group average.

The investment environment

Over the fiscal half-year, the U.S. economy showed signs of being squarely in expansion mode. At the end of May, the Commerce Department estimated that real gross domestic product had expanded by 3.6% for the 12 months ended March 31, a pace slightly above the economy’s potential long-term growth rate. Much of the economy’s growth was spurred by strong exports, construction, and business investment spending. Personal consumption also expanded briskly, buoyed by rising incomes and improved job prospects. During the funds’ fiscal half-year ended May 31, U.S. employment levels also improved. The nation’s unemployment rate stood at 4.6% on May 31—the lowest level in five years—and anecdotal reports pointed to shortages of skilled workers in select industries.

At the same time, inflation remained a concern. Rising energy prices contributed to increased rates of consumer and wholesale inflation in the first half of 2006. Through May, the consumer price index (CPI), which tracks prices at the consumer level, was 4.2% higher than its year-ago level. Increases in the core CPI, which excludes volatile food and energy prices, have also accelerated recently. The Federal Reserve Board continued its “measured” pace of tightening, raising the target for the federal funds rate four times during the six months, to 5.00%. The Fed has noted that long-run inflation expectations, as implied by the difference between nominal and inflation-adjusted interest rates, remain contained, but recent economic reports have prompted some concern. The financial markets anticipated that the Fed would raise the federal funds rate to 5.25% at its June 28–29 meeting.

Municipal bonds outperformed Treasuries

In the U.S. Treasury market, yields rose by similar amounts across the maturity spectrum. Increases during the six months ranged from 52 basis points (0.52 percentage point) for the 30-year note to 63 basis points for the 10-year note. Treasury yields also rose over the last 12 months, but the increases were much more pronounced among shorter issues than longer ones.

For municipal bonds, yields increased over the last six months for all but the longest-dated issues, though increases were generally more modest than those of Treasury yields—a relationship that also characterized the rate changes in the Treasury and municipal money markets. The pronounced increase in short-term municipal yields created a relatively flat municipal yield curve, with only 94 basis points separating the yield of the 30-year bond (4.53%) from that of the 2-year bond (3.59%) as of May 31.

6

For the fiscal half-year, new tax-exempt issuance declined by 17% nationwide, compared with year-ago levels. With the exception of California, in fact, all states issued lower volumes of tax-exempt securities. Much of the decrease was attributable to a substantial slowdown in bond “refunding” activity. The rise in interest rates meant that many state and local governments could no longer issue new, lower-coupon bonds and use the proceeds to offset their existing, higher-yield obligations.

At the same time, the demand for municipal bonds increased. The municipal bond market’s recent attractiveness relative to Treasuries drew institutional investors such as banks and insurance firms, as well as investors from outside the United States. These supply-and-demand dynamics supported bond prices (thus limiting yield increases), which helped municipal bonds to outperform their taxable brethren.

Management of the funds

The rising interest rate environment of the past six months had varying effects on the Vanguard Pennsylvania Tax-Exempt Funds. At the shortest end of the spectrum, we maintained a short average maturity in the Tax-Exempt Money Market Fund, which allowed us to accelerate the reinvestment of maturing issues in new, higher-yielding securities. The fund returned 1.5% during its fiscal half-year, besting the return of its peer-group average.

The Pennsylvania Long-Term Tax-Exempt Fund returned 1.3%, as a modest decline in the fund’s share price was more than

Yields of Municipal Securities (AAA-Rated General-Obligation Issues)
Maturity	Nov. 30, 2005	May 31, 2006	Change (basis points)1
2 years	3.24%	3.59%	+35
5 years	3.43	3.66	+23
10 years	3.87	4.02	+15
30 years	4.55	4.53	-2

Yields of U.S. Treasury Securities
Maturity	Nov. 30, 2005	May 31, 2006	Change (basis points)1
2 years	4.41%	5.03%	+62
5 years	4.41	5.03	+62
10 years	4.48	5.11	+63
30 years	4.69	5.21	+52

1 One basis point equals ¹/100 of a percentage point.
   Source: Vanguard.

7

offset by its income return. During the fund’s fiscal half-year, we kept the fund’s average duration at the short end of its typical range, a strategy that afforded some protection from rising interest rates. A decline in bond issuance also provided some support for tax-exempt securities. During the past six months, the Commonwealth of Pennsylvania and its municipalities issued $7.6 billion in new securities, a 22.7% drop from a year ago.

Expense ratios are critical in a low-yield environment

Shareholder returns depend not only on portfolio management decisions but also on investment costs. The Vanguard Pennsylvania Tax-Exempt Funds’ low expense ratios are important in any environment, but especially during periods of relatively low yields. Our cost advantage enables us to generate highly competitive total returns while keeping our focus on higher-quality investments. Over time, this disciplined, conservative approach has generated strong returns, while also reaffirming that we will not take needless risks with your investment.

Kathryn T. Allen, Principal
John M. Carbone, Principal
Vanguard Fixed Income Group
June 16, 2006

8

Pennsylvania Tax-Exempt Money Market Fund

Fund Profile
As of May 31, 2006

Financial Attributes
Yield	3.3%
Average Weighted Maturity	17 days
Average Quality1	MIG-1
Expense Ratio	0.13%2

Distribution by Credit Quality3 (% of portfolio)
MIG-1/A-1+/SP-1+/F-1+	87%
P-1/A-1/SP-1/F-1	12
AAA/AA	1

1 Moody's Investors Service.
2 Annualized.
3 Ratings: Moody's Investors Service, Standard & Poor's, Fitch.
   See page 53 for a glossary of investment terms.

9

Pennsylvania Tax-Exempt Money Market Fund

Performance Summary

Investment returns will fluctuate. All of the returns in this report represent past performance, which is not a guarantee of future results that may be achieved by the fund. (Current performance may be lower or higher than the performance data cited. For performance data current to the most recent month-end, visit our website at www.vanguard.com.) The returns shown do not reflect taxes that a shareholder would pay on fund distributions or on the sale of fund shares. An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in the fund. The annualized yield shown for this fund reflects current earnings more closely than do the average annual returns.

Fiscal-Year Total Returns (%): November 30, 1995-May 31, 2006
Fiscal Year	Total Return	Average Fund1 Total Return
1996	3.4%	3.1%
1997	3.5	3.2
1998	3.3	3.0
1999	3.1	2.7
2000	3.9	3.6
2001	2.9	2.5
2002	1.3	1.0
2003	0.9	0.6
2004	1.0	0.6
2005	2.2	1.7
20062	1.5	1.3
SEC 7-Day Annualized Yield (5/31/2006): 3.30%

Average Annual Total Returns: Periods Ended March 31, 2006 This table presents average annual total returns through the latest calendar quarter—rather than through the end of the fiscal period. Securities and Exchange Commission rules require that we provide this information.

	Inception Date	One Year	Five Years	Ten Years
Pennsylvania Tax-Exempt
Money Market Fund	6/13/1988	2.63%	1.64%	2.53%

1	Returns for the Average Pennsylvania Tax-Exempt Money Market Fund are derived from data provided by Lipper Inc.
2	Six months ended May 31, 2006.
	Note: See Financial Highlights table on page 24 for dividend and capital gains information.

10

Pennsylvania Tax-Exempt Money Market Fund

Financial Statements (unaudited)

Statement of Net Assets
As of May 31, 2006

The fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth fiscal quarters, the lists appear in the fund’s semiannual and annual reports to shareholders. For the first and third fiscal quarters, the fund files the lists with the Securities and Exchange Commission on Form N-Q. Shareholders can look up the fund’s Forms N-Q on the SEC’s website at www.sec.gov. Forms N-Q may also be reviewed and copied at the SEC’s Public Reference Room (see the back cover of this report for further information).

	Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)
Municipal Bonds (98.2%)
Allegheny County PA Higher Educ. Auth. Rev.
(Washington & Jefferson College) VRDO	3.530%	6/7/06 LOC	9,855	9,855
Allegheny County PA Higher Educ. Building Auth.
(Carnegie Mellon Univ.) VRDO	3.540%	6/1/06	10,250	10,250
Allegheny County PA Hosp. Dev. Auth. Rev.
(Presbyterian Univ. Health System) VRDO	3.540%	6/7/06 LOC	7,640	7,640
Allegheny County PA Hosp. Dev. Auth. Rev.
(Presbyterian Univ. Health System) VRDO	3.540%	6/7/06 (1)	11,945	11,945
Allegheny County PA Hosp. Dev. Auth. Rev.
(Presbyterian Univ. Health System) VRDO	3.540%	6/7/06 (1)	12,900	12,900
1 Allegheny County PA Hosp. Dev. Auth. Rev.
(Univ. of Pittsburgh Medical Center) TOB VRDO	3.500%	6/7/06 (1)	4,995	4,995
Allegheny County PA IDA Rev.
(Carnegie Museum of Pittsburgh) VRDO	3.500%	6/7/06 LOC	5,070	5,070
Allegheny County PA IDA Rev.
(Western PA School for Blind Children) PUT	2.750%	7/1/06	9,000	9,000
1 Allegheny County PA Sanitation Auth.
Sewer Rev. TOB VRDO	3.510%	6/7/06 (1)	30,005	30,005
Beaver County PA IDA PCR (First Energy) VRDO	3.510%	6/1/06 LOC	16,000	16,000
Beaver County PA IDA PCR (First Energy) VRDO	3.590%	6/1/06 LOC	25,000	25,000
Beaver County PA IDA PCR (First Energy) VRDO	3.230%	6/7/06 LOC	52,250	52,250
Berks County PA GO VRDO	3.460%	6/7/06 (1)	12,595	12,595
Berks County PA IDA (Lutheran Health Care) VRDO	3.240%	6/7/06 (2)	16,200	16,200
1 Bethlehem PA Area School Dist. GO TOB VRDO	3.240%	6/7/06 (3)	19,800	19,800
Bucks County PA TRAN	4.500%	12/28/06	25,000	25,172
Central Bucks PA School Dist. VRDO	3.520%	6/7/06 (3)	11,070	11,070
Chester County PA Health & Educ. Fac. Auth. Rev.
(Jefferson Health System) VRDO	3.160%	6/7/06	20,000	20,000
Chester County PA Health & Educ. Fac. Auth. Rev.
(Jefferson Health System) VRDO	3.230%	6/7/06	26,070	26,070
Chester County PA IDA Student Housing Rev. VRDO	3.280%	6/7/06 LOC	12,000	12,000
Cumberland County PA Muni. Auth. College Rev.
(Dickinson College) PUT	3.200%	11/1/06 LOC	12,330	12,330

11

Pennsylvania Tax-Exempt Money Market Fund
	Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)
Cumberland County PA Muni. Auth. College Rev.
(Messiah Village Program) VRDO	3.240%	6/7/06 LOC	3,900	3,900
Dallastown Area School Dist. York County PA
GO VRDO	3.490%	6/7/06 (3)	19,515	19,515
Daniel Boone PA Area School Dist. GO VRDO	3.480%	6/7/06 (2)	9,985	9,985
Dauphin County PA General Auth. Hosp. Rev.
(Reading Hosp. & Medical Center) VRDO	3.210%	6/7/06	10,040	10,040
Delaware County PA Auth. Rev.
(White Horse Village Project) VRDO	3.600%	6/1/06 LOC	14,995	14,995
Delaware County PA Auth. Univ. Rev.
(Villanova Univ.) VRDO	3.420%	6/7/06 LOC	12,525	12,525
Delaware County PA Auth. Univ. Rev.
(Villanova Univ.) VRDO	3.420%	6/7/06 LOC	11,750	11,750
Delaware County PA Hosp. Auth. Rev.
(Crozer-Chester Medical Center) VRDO	3.480%	6/7/06 LOC	17,095	17,095
Delaware County PA Hosp. Auth. Rev.
(Crozer-Chester Medical Center) VRDO	3.570%	6/7/06 LOC	4,200	4,200
Delaware County PA IDA Airport Fac
(United Parcel Service) VRDO	3.450%	6/1/06	17,755	17,755
Delaware County PA IDA PCR
(BP Exploration & Oil) VRDO	3.560%	6/1/06	27,450	27,450
Delaware County PA IDA PCR
(BP Exploration & Oil) VRDO	3.560%	6/1/06	11,700	11,700
Delaware County PA IDA PCR
(PECO) CP	3.530%	8/16/06 LOC	15,500	15,500
Delaware County PA IDA Refunding Resource
Recovery Fac. (General Electric Capital Corp.) VRDO	3.180%	6/7/06	42,600	42,600
Delaware County PA IDA Refunding Resource
Recovery Fac. (General Electric Capital Corp.) VRDO	3.180%	6/7/06	8,375	8,375
Delaware County PA IDA Refunding Resource
Recovery Fac. (General Electric Capital Corp.) VRDO	3.180%	6/7/06	8,235	8,235
Delaware County PA IDA Refunding Resource
Recovery Fac. (General Electric Capital Corp.) VRDO	3.180%	6/7/06	8,595	8,595
Delaware County PA IDA Refunding Resource
Recovery Fac. (General Electric Capital Corp.) VRDO	3.180%	6/7/06	7,640	7,640
Delaware County PA IDA Solid Waste Rev.
(Scott Paper Co.) VRDO	3.240%	6/7/06	8,700	8,700
Delaware County PA IDA Solid Waste Rev.
(Scott Paper Co.) VRDO	3.240%	6/7/06	10,000	10,000
Delaware County PA IDA Solid Waste Rev.
(Scott Paper Co.) VRDO	3.240%	6/7/06	17,000	17,000
Delaware County PA IDA Solid Waste Rev.
(Scott Paper Co.) VRDO	3.240%	6/7/06	17,600	17,600
Delaware County PA IDA Solid Waste Rev.
(Scott Paper Co.) VRDO	3.240%	6/7/06	23,005	23,005

12

Pennsylvania Tax-Exempt Money Market Fund
	Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)
Exeter Township PA VRDO	3.480%	6/7/06 (10)	5,000	5,000
Franklin County PA IDA Healthcare Rev.
(Chambersburg Hosp.) VRDO	3.570%	6/7/06 (2)	6,200	6,200
Geisinger Health System Auth. of Pennsylvania Rev.
(Penn State Geisinger Health System) VRDO	3.560%	6/1/06	33,000	33,000
Geisinger Health System Auth. of Pennsylvania Rev.
(Penn State Geisinger Health System) VRDO	3.560%	6/1/06	15,850	15,850
Geisinger Health System Auth. of Pennsylvania Rev.
(Penn State Geisinger Health System) VRDO	3.560%	6/1/06	16,750	16,750
Geisinger Health System Auth. of Pennsylvania Rev.
(Penn State Geisinger Health System) VRDO	3.450%	6/7/06	55,500	55,500
Hamburg PA Area School Dist. GO VRDO	3.470%	6/7/06 (4)	17,000	17,000
Lancaster County PA Hosp. Auth. Rev.
(Masonic Homes) VRDO	3.240%	6/7/06 LOC	10,100	10,100
Lancaster County PA Hosp. Auth. Rev.
(Masonic Homes) VRDO	3.240%	6/7/06 (2)	6,145	6,145
Lancaster PA School Dist. GO	5.375%	2/15/07 (3)(Prere.)	5,590	5,668
1 Lehigh County PA IDA PCR TOB VRDO	3.500%	6/7/06 (3)	13,005	13,005
1 Lehigh County PA IDA PCR TOB VRDO	3.500%	6/7/06 (3)	3,290	3,290
Manheim Township PA School Dist. VRDO	3.470%	6/7/06 (4)	12,000	12,000
Manheim Township PA School Dist. VRDO	3.490%	6/7/06 (4)	9,000	9,000
Mercersburg Borough PA General Purpose Auth.
(Mercersburg College) VRDO	3.220%	6/7/06 LOC	10,000	10,000
Mercersburg Borough PA General Purpose Auth.
(Mercersburg College) VRDO	3.470%	6/7/06 LOC	12,200	12,200
Mercersburg Borough PA General Purpose Auth.
(Mercersburg College) VRDO	3.470%	6/7/06 LOC	18,715	18,715
Montgomery County PA IDA PCR
(Exelon Generation Co.) CP	3.440%	7/11/06 LOC	37,800	37,800
Montgomery County PA IDA PCR
(Exelon Generation Co.) CP	3.490%	7/11/06 LOC	5,000	5,000
Montgomery County PA IDA Rev.
(Gloria Dei Project) VRDO	3.480%	6/7/06 LOC	11,600	11,600
North Penn PA Water Auth. Rev. VRDO	3.490%	6/7/06 (3)	24,000	24,000
Northampton County PA General Purpose Auth.
Univ. Rev. (Lafayette College)	4.500%	11/16/06	5,000	5,031
Northampton County PA General Purpose Auth.
Univ. Rev. (Lehigh Univ.) VRDO	3.450%	6/7/06	21,035	21,035
Northampton County PA General Purpose Auth.
Univ. Rev. (Lehigh Univ.) VRDO	3.450%	6/7/06	12,880	12,880
Northampton County PA General Purpose Auth.
Univ. Rev. (Lehigh Univ.) VRDO	3.570%	6/7/06	30,600	30,600
Northampton County PA Higher Educ. Auth.
Rev. (Lehigh Univ.) VRDO	3.450%	6/7/06	16,935	16,935

13

Pennsylvania Tax-Exempt Money Market Fund
	Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)
Northeastern PA Hosp. & Educ. Auth. Rev.
(Wilkes Univ.) VRDO	3.450%	6/7/06 LOC	12,110	12,110
Northeastern PA Hosp. & Educ. Auth. Rev.
(Wilkes Univ.) VRDO	3.450%	6/7/06 LOC	4,995	4,995
Owen J. Roberts School Dist. Pennsylvania
GO VRDO	3.480%	6/7/06 (4)	46,000	46,000
Parkland PA School Dist. VRDO	3.470%	6/7/06 (4)	10,000	10,000
1 Pennsbury PA School Dist. TOB VRDO	3.500%	6/7/06 (3)	5,095	5,095
Pennsbury PA School Dist. VRDO	3.490%	6/7/06 (4)	12,570	12,570
Pennsylvania Econ. Dev. Financing Auth. Fac.
Rev. (Jefferson Health) VRDO	3.170%	6/7/06	20,220	20,220
Pennsylvania Econ. Dev. Financing Auth. Fac.
Rev. (Jefferson Health) VRDO	3.220%	6/7/06	19,700	19,700
Pennsylvania GO	5.000%	1/1/07 (1)	9,320	9,414
Pennsylvania GO	5.250%	1/1/07	16,915	17,108
Pennsylvania GO	5.125%	3/15/07 (2)(Prere.)	7,990	8,218
1 Pennsylvania GO TOB PUT	3.450%	6/15/06 (1)	20,000	20,000
1 Pennsylvania GO TOB VRDO	3.250%	6/7/06 (3)	5,735	5,735
1 Pennsylvania GO TOB VRDO	3.270%	6/7/06 (4)	11,740	11,740
1 Pennsylvania GO TOB VRDO	3.500%	6/7/06 (1)	5,140	5,140
1 Pennsylvania GO TOB VRDO	3.500%	6/7/06	10,650	10,650
1 Pennsylvania GO TOB VRDO	3.500%	6/7/06 (1)	14,775	14,775
1 Pennsylvania GO TOB VRDO	3.510%	6/7/06	8,750	8,750
1 Pennsylvania GO TOB VRDO	3.510%	6/7/06 (1)	4,260	4,260
Pennsylvania Higher Educ. Assistance Agency
Student Loan Rev. VRDO	3.230%	6/7/06 (2)	6,900	6,900
Pennsylvania Higher Educ. Assistance Agency
Student Loan Rev. VRDO	3.230%	6/7/06 (2)	34,200	34,200
Pennsylvania Higher Educ. Assistance Agency
Student Loan Rev. VRDO	3.270%	6/7/06 (2)	35,700	35,700
Pennsylvania Higher Educ. Assistance Agency
Student Loan Rev. VRDO	3.320%	6/7/06 (2)	27,500	27,500
Pennsylvania Higher Educ. Assistance Agency
Student Loan Rev. VRDO	3.320%	6/7/06 (2)	13,500	13,500
Pennsylvania Higher Educ. Assistance Agency
Student Loan Rev. VRDO	3.520%	6/7/06 (4)	12,900	12,900
Pennsylvania Higher Educ. Assistance Agency
Student Loan Rev. VRDO	3.530%	6/7/06 (4)	43,500	43,500
Pennsylvania Higher Educ. Fac. Auth. Rev.
(California Univ. of Pennsylvania) VRDO	3.460%	6/7/06 LOC	38,820	38,820
Pennsylvania Higher Educ. Fac. Auth. Rev.
(Carnegie Mellon Univ.) VRDO	3.510%	6/1/06	25,500	25,500

14

Pennsylvania Tax-Exempt Money Market Fund
	Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)
Pennsylvania Higher Educ. Fac. Auth. Rev.
(Carnegie Mellon Univ.) VRDO	3.510%	6/1/06	15,175	15,175
Pennsylvania Higher Educ. Fac. Auth. Rev.
(Carnegie Mellon Univ.) VRDO	3.510%	6/1/06	4,100	4,100
Pennsylvania Higher Educ. Fac. Auth. Rev.
(Drexel Univ.) VRDO	3.460%	6/7/06 LOC	10,940	10,940
Pennsylvania Higher Educ. Fac. Auth. Rev.
(Drexel Univ.) VRDO	3.470%	6/7/06 LOC	22,500	22,500
Pennsylvania Higher Educ. Fac. Auth. Rev.
(Drexel Univ.) VRDO	3.480%	6/7/06 (1)	25,525	25,525
Pennsylvania Higher Educ. Fac. Auth. Rev.
(Gannon Univ.) VRDO	3.490%	6/7/06 LOC	4,000	4,000
Pennsylvania Higher Educ. Fac. Auth. Rev.
(Kings College) VRDO	3.490%	6/7/06 LOC	5,000	5,000
Pennsylvania Higher Educ. Fac. Auth. Rev.
(Philadelphia Univ.) VRDO	3.420%	6/7/06 LOC	4,200	4,200
1 Pennsylvania Higher Educ. Fac. Auth. Rev.
TOB VRDO	3.270%	6/7/06 (10)	4,370	4,370
1 Pennsylvania Higher Educ. Fac. Auth. Rev.
TOB VRDO	3.510%	6/7/06	4,875	4,875
Pennsylvania Housing Finance Agency Rev.
(Single Family Mortgage) VRDO	3.220%	6/7/06	23,905	23,905
Pennsylvania Housing Finance Agency Rev.
(Single Family Mortgage) VRDO	3.220%	6/7/06	31,250	31,250
Pennsylvania Housing Finance Agency Rev.
(Single Family Mortgage) VRDO	3.230%	6/7/06	41,010	41,010
Pennsylvania Housing Finance Agency Rev.
(Single Family Mortgage) VRDO	3.230%	6/7/06	15,690	15,690
Pennsylvania Housing Finance Agency Rev.
(Single Family Mortgage) VRDO	3.300%	6/7/06	31,930	31,930
1 Pennsylvania Housing Finance Agency Rev.
TOB VRDO	3.520%	6/7/06	8,545	8,545
1 Pennsylvania Housing Finance Agency Rev.
TOB VRDO	3.520%	6/7/06	7,495	7,495
1 Pennsylvania Housing Finance Agency Rev.
TOB VRDO	3.540%	6/7/06	4,410	4,410
1 Pennsylvania Housing Finance Agency Rev.
TOB VRDO	3.540%	6/7/06	19,400	19,400
1 Pennsylvania Housing Finance Agency Rev.
TOB VRDO	3.540%	6/7/06 (4)	3,500	3,500
1 Pennsylvania Housing Finance Agency Rev.
TOB VRDO	3.540%	6/7/06	3,800	3,800
1 Pennsylvania Housing Finance Agency Rev.
TOB VRDO	3.540%	6/7/06	2,375	2,375
Pennsylvania Housing Finance Agency Rev. VRDO	3.220%	6/7/06	10,800	10,800

15

Pennsylvania Tax-Exempt Money Market Fund
	Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)
Pennsylvania Housing Finance Agency Rev. VRDO	3.220%	6/7/06	20,000	20,000
Pennsylvania Housing Finance Agency Rev. VRDO	3.230%	6/7/06	15,000	15,000
Pennsylvania Housing Finance Agency Rev. VRDO	3.300%	6/7/06	35,220	35,220
1 Pennsylvania Intergovernmental Cooperation Auth.
Rev. TOB VRDO	3.510%	6/7/06 (3)	6,300	6,300
Pennsylvania State Univ. Rev.	5.000%	8/15/06	7,775	7,810
Pennsylvania State Univ. Rev. VRDO	3.460%	6/7/06	4,700	4,700
Pennsylvania State Univ. Rev. VRDO	3.460%	6/7/06	73,275	73,275
1 Pennsylvania Turnpike Comm. Oil Franchise Tax
Rev. TOB VRDO	3.510%	6/7/06 (1)	2,590	2,590
1 Pennsylvania Turnpike Comm. Registration Fee
Rev. TOB VRDO	3.510%	6/7/06 (4)	27,815	27,815
1 Pennsylvania Turnpike Comm. Registration Fee
Rev. TOB VRDO	3.510%	6/7/06 (4)	2,355	2,355
Pennsylvania Turnpike Comm. Rev.	3.750%	7/15/06 (4)	4,060	4,065
1 Pennsylvania Turnpike Comm. Rev. TOB VRDO	3.510%	6/7/06 (2)	17,000	17,000
Pennsylvania Turnpike Comm. Rev. VRDO	3.230%	6/7/06	5,500	5,500
Pennsylvania Turnpike Comm. Rev. VRDO	3.230%	6/7/06	19,460	19,460
Pennsylvania Turnpike Comm. Rev. VRDO	3.230%	6/7/06	8,600	8,600
Pennsylvania Turnpike Comm. Rev. VRDO	3.440%	6/7/06	65,720	65,720
Pennsylvania Turnpike Comm. Rev. VRDO	3.470%	6/7/06	32,875	32,875
Philadelphia PA Airport Rev. VRDO	3.250%	6/7/06 (1)	15,000	15,000
Philadelphia PA Airport Rev. VRDO	3.300%	6/7/06 (1)	10,800	10,800
Philadelphia PA Auth. IDR
(Institute for Cancer Research) VRDO	3.570%	6/1/06 LOC	3,300	3,300
Philadelphia PA Auth. IDR
(PA Academy of Fine Arts) VRDO	3.480%	6/7/06 LOC	11,275	11,275
Philadelphia PA Auth. IDR
(Regional Performing Arts Center Project) VRDO	3.200%	6/7/06 LOC	14,200	14,200
1 Philadelphia PA GO TOB VRDO	3.500%	6/7/06 (4)	5,970	5,970
Philadelphia PA Hosp. & Higher Educ. Fac.
Auth. Rev. (Children's Hosp. of Philadelphia) VRDO	3.520%	6/1/06	30,000	30,000
Philadelphia PA Hosp. & Higher Educ. Fac.
Auth. Rev. (Children's Hosp. of Philadelphia) VRDO	3.520%	6/1/06 (1)	15,320	15,320
Philadelphia PA Hosp. & Higher Educ. Fac.
Auth. Rev. (Children's Hosp. of Philadelphia) VRDO	3.520%	6/1/06	12,815	12,815
Philadelphia PA Hosp. & Higher Educ. Fac.
Auth. Rev. (Children's Hosp. of Philadelphia) VRDO	3.520%	6/1/06	39,955	39,955
Philadelphia PA Hosp. & Higher Educ. Fac.
Auth. Rev. (Jefferson Health System) PUT	3.600%	2/4/07	16,900	16,900
Philadelphia PA Hosp. & Higher Educ. Fac.
Auth. Rev (Wills Eye Hosp.) VRDO	3.500%	6/7/06 LOC	9,755	9,755

16

Pennsylvania Tax-Exempt Money Market Fund
	Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)
1 Philadelphia PA IDA Rev. (Philadelphia Airport
TOB VRDO System)	3.550%	6/7/06 (1)	2,000	2,000
1 Philadelphia PA IDA Rev. TOB VRDO	3.500%	6/7/06 (4)	10,275	10,275
1 Philadelphia PA Redev. Auth. Rev. TOB VRDO	3.510%	6/7/06 (3)	18,100	18,100
1 Philadelphia PA School Dist. TOB VRDO	3.250%	6/7/06 (4)	8,795	8,795
1 Philadelphia PA School Dist. TOB VRDO	3.500%	6/7/06 (3)	5,995	5,995
1 Philadelphia PA School Dist. TOB VRDO	3.500%	6/7/06 (3)	4,995	4,995
1 Philadelphia PA School Dist. TOB VRDO	3.500%	6/7/06 (3)	6,610	6,610
1 Philadelphia PA School Dist. TOB VRDO	3.500%	6/7/06 (2)	15,320	15,320
1 Philadelphia PA School Dist. TOB VRDO	3.510%	6/7/06 (2)	17,300	17,300
1 Philadelphia PA Water & Waste Water Rev.
TOB VRDO	3.500%	6/7/06 (4)	3,515	3,515
1 Philadelphia PA Water & Waste Water Rev
TOB VRDO	3.500%	6/7/06 (4)	7,285	7,285
1 Philadelphia PA Water & Waste Water Rev.
TOB VRDO	3.510%	6/7/06 (4)	9,900	9,900
1 Philadelphia PA Water & Waste Water Rev.
TOB VRDO	3.510%	6/7/06 (4)	5,290	5,290
1 Philadelphia PA Water & Waste Water Rev.
TOB VRDO	3.510%	6/7/06 (4)	17,605	17,605
Philadelphia PA Water & Waste Water Rev. VRDO	3.210%	6/7/06 (2)	11,390	11,390
Philadelphia PA Water & Waste Water Rev. VRDO	3.210%	6/7/06 (4)	1,725	1,725
Philadelphia PA Water & Waste Water Rev. VRDO	3.220%	6/7/06 (4)	38,490	38,490
Pine-Richland School Dist. Pennsylvania GO	5.500%	9/1/06 (4)(Prere.)	3,430	3,450
Sayre PA Health Care Fac. Auth. Rev.
(VHA of Pennsylvania, Pooled Capital
Asset Financial Program) VRDO	3.230%	6/7/06 (2)	6,600	6,600
Sayre PA Health Care Fac. Auth. Rev.
(VHA of Pennsylvania, Pooled Capital
Asset Financial Program) VRDO	3.230%	6/7/06 (2)	3,955	3,955
Sayre PA Health Care Fac. Auth. Rev.
(VHA of Pennsylvania, Pooled Capital
Asset Financial Program) VRDO	3.230%	6/7/06 (2)	2,150	2,150
Sayre PA Health Care Fac. Auth. Rev.
(VHA of Pennsylvania, Pooled Capital
Asset Financial Program) VRDO	3.230%	6/7/06 (2)	4,000	4,000
Sayre PA Health Care Fac. Auth. Rev.
(VHA of Pennsylvania, Pooled Capital
Asset Financial Program) VRDO	3.230%	6/7/06 (2)	4,600	4,600
Sayre PA Health Care Fac. Auth. Rev.
(VHA of Pennsylvania, Pooled Capital
Asset Financial Program) VRDO	3.270%	6/7/06 (2)	2,800	2,800

17

Pennsylvania Tax-Exempt Money Market Fund
	Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)
Sayre PA Health Care Fac. Auth. Rev.
(VHA of Pennsylvania, Pooled Capital
Asset Financial Program) VRDO	3.270%	6/7/06 (2)	3,000	3,000
Sayre PA Health Care Fac. Auth. Rev.
(VHA of Pennsylvania, Pooled Capital
Asset Financial Program) VRDO	3.270%	6/7/06 (2)	700	700
1 Seneca Valley PA School Dist. GO TOB VRDO	3.240%	6/7/06 (1)	23,320	23,320
1 Souderton PA School Dist. GO TOB VRDO	3.500%	6/7/06 (3)	9,970	9,970
South Fork PA Hosp. Auth. Rev.
(Conemaugh Valley Hosp.) VRDO	3.560%	6/1/06 (1)	6,425	6,425
Southcentral Pennsylvania General Auth. Rev.
(Wellspan Health) VRDO	3.210%	6/7/06 (2)	25,000	25,000
Southcentral Pennsylvania General Auth. Rev.
(Wellspan Health) VRDO	3.210%	6/7/06 (2)	15,175	15,175
St. Mary's Hosp. Auth. Bucks County PA Rev.
(Catholic Health Initiatives) VRDO	3.180%	6/7/06	33,000	33,000
St. Mary's Hosp. Auth. Bucks County PA Rev.
(Catholic Health Initiatives) VRDO	3.230%	6/7/06	10,900	10,900
1 State Public School Building Auth. Pennsylvania
School Rev. (Philadelphia School Dist.) TOB VRDO	3.250%	6/7/06 (4)	6,960	6,960
1 State Public School Building Auth. Pennsylvania
School Rev. (Philadelphia School Dist.) TOB VRDO	3.500%	6/7/06 (4)	4,568	4,568
1 State Public School Building Auth. Pennsylvania
School Rev. (Philadelphia School Dist.) TOB VRDO	3.510%	6/7/06 (4)	5,895	5,895
1 Tredyffrin-Easttown PA School Dist. GO TOB VRDO	3.500%	6/7/06	8,225	8,225
Union County PA Higher Educ. Auth. Rev.
(Bucknell Univ.) VRDO	3.450%	6/7/06	6,655	6,655
Univ. of Pittsburgh of the Commonwealth
System of Higher Educ. Pennsylvania
(Univ. Capital Project) VRDO	3.150%	6/7/06	30,000	30,000
Univ. of Pittsburgh of the Commonwealth
System of Higher Educ. Pennsylvania
(Univ. Capital Project) VRDO	3.200%	6/7/06	24,230	24,230
Univ. of Pittsburgh of the Commonwealth
System of Higher Educ. Pennsylvania
(Univ. Capital Project) VRDO	3.200%	6/7/06	24,650	24,650
Univ. of Pittsburgh of the Commonwealth
System of Higher Educ. Pennsylvania
(Univ. Capital Project) VRDO	3.250%	6/7/06	400	400
Univ. of Pittsburgh of the Commonwealth
System of Higher Educ. Pennsylvania
(Univ. Capital Project) VRDO	3.250%	6/7/06	3,800	3,800
Univ. of Pittsburgh of the Commonwealth
System of Higher Educ. Pennsylvania
(Univ. Capital Project) VRDO	3.250%	6/7/06	8,400	8,400

18

Pennsylvania Tax-Exempt Money Market Fund
	Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)
Univ. of Pittsburgh of the Commonwealth
System of Higher Educ. Pennsylvania
(Univ. Capital Project) VRDO	3.250%	6/7/06	8,000	8,000
Univ. of Pittsburgh of the Commonwealth
System of Higher Educ. Pennsylvania
(Univ. Capital Project) VRDO	3.250%	6/7/06	12,900	12,900
Univ. of Pittsburgh of the Commonwealth
System of Higher Educ. Pennsylvania
(Univ. Capital Project) VRDO	3.250%	6/7/06	13,600	13,600
Univ. of Pittsburgh of the Commonwealth
System of Higher Educ. Pennsylvania
(Univ. Capital Project) VRDO	3.250%	6/7/06	4,700	4,700
Univ. of Pittsburgh of the Commonwealth
System of Higher Educ. Pennsylvania
(Univ. Capital Project) VRDO	3.250%	6/7/06	5,000	5,000
Univ. of Pittsburgh of the Commonwealth
System of Higher Educ. Pennsylvania
(Univ. Capital Project) VRDO	3.250%	6/7/06	10,000	10,000
Univ. of Pittsburgh of the Commonwealth
System of Higher Educ. Pennsylvania Asset Notes	4.000%	8/11/06	60,000	60,137
Westmoreland County PA IDA Rev.
(Excela Project) VRDO	3.460%	6/7/06 LOC	3,255	3,255
1 Westmoreland County PA Muni. Auth.
Service Water Rev. TOB VRDO	3.510%	6/7/06 (4)	3,090	3,090
York County PA IDA (PECO) CP	3.530%	8/16/06 LOC	16,440	16,440
York County PA TRAN	4.000%	6/30/06	5,000	5,003
Outside Pennsylvania
1 Puerto Rico Electric Power Auth. Rev. TOB VRDO	3.240%	6/7/06 (1)	9,985	9,985
1 Puerto Rico Electric Power Auth. Rev. TOB VRDO	3.460%	6/7/06 (10)	12,555	12,555
1 Puerto Rico Govt. Dev. Bank CP	3.250%	7/24/06 LOC	5,000	5,000
1 Puerto Rico Highway & Transp. Auth. Rev.
TOB VRDO	3.460%	6/7/06 (1)	7,740	7,740
1 Puerto Rico Highway & Transp. Auth. Rev.
TOB VRDO	3.470%	6/7/06 (1)	1,340	1,340
1 Puerto Rico Highway & Transp. Auth. Rev.
TOB VRDO	3.480%	6/7/06 (1)	2,830	2,830
Puerto Rico Highway & Transp. Auth. Rev. VRDO	3.130%	6/7/06 (2)	1,500	1,500
1 Puerto Rico Ind. Medical & Environmental Fac.
Finance Auth. Rev. PCR (Abbott Laboratories) PUT	3.550%	3/1/07	6,000	6,001
1 Puerto Rico Infrastructure Financing Auth. Special
Obligation Bonds TOB VRDO	3.460%	6/7/06	20,700	20,700
1 Puerto Rico Public Buildings Auth. Govt. Fac. Rev.
TOB VRDO	3.470%	6/7/06 (10)	11,320	11,320
1 Puerto Rico Public Finance Corp. TOB VRDO	3.460%	6/7/06 (2)	7,015	7,015

19

Pennsylvania Tax-Exempt Money Market Fund
	Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)
1 Puerto Rico Public Finance Corp. TOB VRDO	3.520%	6/7/06 LOC	11,995	11,995
Puerto Rico TRAN	4.500%	7/28/06 LOC	17,000	17,033
Total Municipal Bonds
(Cost $3,136,538)				3,136,538
Other Assets and Liabilities (1.8%)
Other Assets—Note B				68,560
Liabilities				(9,812)
				58,748
Net Assets (100%)
Applicable to 3,195,256,455 outstanding $.001 par value shares of beneficial interest (unlimited authorization)				3,195,286
Net Asset Value Per Share				$1.00

At May 31, 2006, net assets consisted of:
	Amount ($000)	Per Share
Paid-in Capital	3,195,265	$1.00
Undistributed Net Investment Income	—	—
Accumulated Net Realized Gains	21	—
Unrealized Appreciation	—	—
Net Assets	3,195,286	$1.00
• See Note A in Notes to Financial Statements. 1 Security exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be sold in transactions exempt from    registration, normally to qualified institutional buyers. At May 31, 2006, the aggregate value of these securities was $569,534,000, representing    17.8% of net assets.

20

Pennsylvania Tax-Exempt Money Market Fund

Key to Abbreviations

ARS—Auction Rate Security

BAN—Bond Anticipation Note

COP—Certificate of Participation

CP—Commercial Paper

FR—Floating Rate

GAN—Grant Anticipation Note

GO—General Obligation Bond

IDA—Industrial Development Authority Bond

IDR—Industrial Development Revenue Bond

PCR—Pollution Control Revenue Bond

PUT—Put Option Obligation

RAN—Revenue Anticipation Note

TAN—Tax Anticipation Note

TOB—Tender Option Bond

TRAN—Tax Revenue Anticipation Note

UFSD—Union Free School District

USD—United School District

VRDO—Variable Rate Demand Obligation

(ETM)—Escrowed to Maturity

(Prere.)—Prerefunded

Scheduled principal and interest payments are guaranteed by:

(1) MBIA (Municipal Bond Insurance Association)

(2) AMBAC (Ambac Assurance Corporation)

(3) FGIC (Financial Guaranty Insurance Company)

(4) FSA (Financial Security Assurance)

(5) BIGI (Bond Investors Guaranty Insurance)

(6) Connie Lee Inc.

(7) FHA (Federal Housing Authority)

(8) CapMAC (Capital Markets Assurance Corporation)

(9) American Capital Access Financial Guaranty Corporation

(10) XL Capital Assurance Inc.

(11) CIFG (CDC IXIS Financial Guaranty)

The insurance does not guarantee the market value of the municipal bonds

LOC—Scheduled principal and interest payments are guaranteed by bank letter of credit

21

Pennsylvania Tax-Exempt Money Market Fund Statement of Operations
Six Months Ended May 31, 2006 ($000)
Investment Income
Income
Interest	49,291
Total Income	49,291
Expenses
The Vanguard Group—Note B
Investment Advisory Services	137
Management and Administrative	1,385
Marketing and Distribution	461
Custodian Fees	10
Shareholders' Reports	9
Trustees' Fees and Expenses	1
Total Expenses	2,003
Net Investment Income	47,288
Realized Net Gain (Loss) on Investment Securities Sold	24
Change in Unrealized Appreciation (Depreciation) of Investment Securities	—
Net Increase (Decrease) in Net Assets Resulting from Operations	47,312

22

Pennsylvania Tax-Exempt Money Market Fund
Statement of Changes in Net Assets
	Six Months Ended May 31, 2006 ($000)	Year Ended Nov. 30, 2005 ($000)
Increase (Decrease) in Net Assets
Operations
Net Investment Income	47,288	60,570
Realized Net Gain (Loss)	24	10
Change in Unrealized Appreciation (Depreciation)	—	—
Net Increase (Decrease) in Net Assets Resulting from Operations	47,312	60,580
Distributions
Net Investment Income	(47,288)	(60,570)
Realized Capital Gain	—	—
Total Distributions	(47,288)	(60,570)
Capital Share Transactions (at $1.00)
Issued	1,701,302	2,630,430
Issued in Lieu of Cash Distributions	44,896	57,583
Redeemed	(1,502,600)	(2,394,869)
Net Increase (Decrease) from Capital Share Transactions	243,598	293,144
Total Increase (Decrease)	243,622	293,154
Net Assets
Beginning of Period	2,951,664	2,658,510
End of Period	3,195,286	2,951,664

23

Pennsylvania Tax-Exempt Money Market Fund
Financial Highlights
For a Share Outstanding	Six Months Ended May 31,	Year Ended November 30,
Throughout Each Period	2006	2005	2004	2003	2002	2001
Net Asset Value,
Beginning of Period	$1.00	$1.00	$1.00	$1.00	$1.00	$1.00
Investment Operations
Net Investment Income	.015	.022	.010	.009	.013	.028
Net Realized and Unrealized
Gain (Loss) on Investments	—	—	—	—	—	—
Total from Investment Operations	.015	.022	.010	.009	.013	.028
Distributions
Dividends from Net Investment Income	(.015)	(.022)	(.010)	(.009)	(.013)	(.028)
Distributions from Realized Capital Gains	—	—	—	—	—	—
Total Distributions	(.015)	(.022)	(.010)	(.009)	(.013)	(.028)
Net Asset Value, End of Period	$1.00	$1.00	$1.00	$1.00	$1.00	$1.00
Total Return	1.54%	2.19%	1.05%	0.91%	1.32%	2.89%
Ratios/Supplemental Data
Net Assets, End of Period (Millions)	$3,195	$2,952	$2,659	$2,514	$2,448	$2,427
Ratio of Total Expenses to
Average Net Assets	0.13%1	0.13%	0.13%	0.17%	0.17%	0.18%
Ratio of Net Investment Income to
Average Net Assets	3.07%1	2.18%	1.04%	0.90%	1.32%	2.82%

1 Annualized.
   See accompanying Notes, which are an integral part of the Financial Statements.

24

Pennsylvania Tax-Exempt Money Market Fund

Notes to Financial Statements

Vanguard Pennsylvania Tax-Exempt Money Market Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund. The fund invests in debt instruments of municipal issuers whose ability to meet their obligations may be affected by economic and political developments in the Commonwealth of Pennsylvania.

A. The following significant accounting policies conform to generally accepted accounting principles for U.S. mutual funds. The fund consistently follows such policies in preparing its financial statements. 1. Security Valuation: Investment securities are valued at amortized cost, which approximates market value.

2.     Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute all of its income. Accordingly, no provision for federal income taxes is required in the financial statements.

3.     Distributions: Distributions from net investment income are declared daily and paid on the first business day of the following month.

4.     Other: Interest income is accrued daily. Premiums and discounts are amortized and accreted, respectively, to interest income over the lives of the respective securities. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold.

B. The Vanguard Group furnishes at cost investment advisory, corporate management, administrative, marketing, and distribution services. The costs of such services are allocated to the fund under methods approved by the board of trustees. The fund has committed to provide up to 0.40% of its net assets in capital contributions to Vanguard. At May 31, 2006, the fund had contributed capital of $338,000 to Vanguard (included in Other Assets), representing 0.01% of the fund’s net assets and 0.34% of Vanguard’s capitalization. The fund’s trustees and officers are also directors and officers of Vanguard.

25

Pennsylvania Long-Term Tax-Exempt Fund

Fund Profile
As of May 31, 2006

Financial Attributes
	Fund	Comparative Index1	Broad Index2
Number of Issues	393	6,505	37,743
Yield	—	—
Investor Shares	4.1%
Admiral Shares	4.2%
Yield to Maturity	4.3%3	4.1%	4.2%
Average Coupon	4.8%	5.1%	5.1%
Average Effective
Maturity	8.1 years	7.3 years	6.9 years
Average Quality	AA+	AAA	AA+
Average Duration	6.2 years	5.8 years	5.4 years
Expense Ratio	—	—
Investor Shares	0.17%4
Admiral Shares	0.09%4
Short-Term Reserves	0%	—	—

Volatility Measures
	Fund	Comparative Index1	Fund	Broad Index2
R-Squared	0.98	1.00	0.98	1.00
Beta	0.92	1.00	1.08	1.00

Distribution by Maturity (% of portfolio)
Under 1 Year	8%
1-5 Years	27
5-10 Years	45
10-20 Years	18
20-30 Years	2

Distribution by Credit Quality (% of portfolio)
AAA	81%
AA	11
A	3
BBB	5

Investment Focus

1 Lehman 10 Year Municipal Bond Index.
2 Lehman Municipal Bond Index.
3 Before expenses.
4 Annualized.
   See page 53 for a glossary of investment terms.

26

Pennsylvania Long-Term Tax-Exempt Fund

Performance Summary

All of the returns in this report represent past performance, which is not a guarantee of future results that may be achieved by the fund. (Current performance may be lower or higher than the performance data cited. For performance data current to the most recent month-end, visit our website at www.vanguard.com.) Note, too, that both investment returns and principal value can fluctuate widely, so an investor’s shares, when sold, could be worth more or less than their original cost. The returns shown do not reflect taxes that a shareholder would pay on fund distributions or on the sale of fund shares.

Fiscal-Year Total Returns (%): November 30, 1995-May 31, 2006
	Investor Shares			Lehman1
Fiscal Year	Capital Return	Income Return	Total Return	Total Return
1996	0.2%	5.6%	5.8%	5.7%
1997	0.7	5.5	6.2	7.1
1998	2.1	5.5	7.6	8.1
1999	-6.7	5.0	-1.7	-0.4
2000	3.1	5.8	8.9	7.7
2001	3.5	5.3	8.8	8.2
2002	1.5	5.0	6.5	6.7
2003	2.7	4.6	7.3	6.9
2004	-1.3	4.6	3.3	4.0
2005	-1.4	4.5	3.1	3.0
20062	-1.0	2.3	1.3	1.3

Average Annual Total Returns: Periods Ended March 31, 2006 This table presents average annual total returns through the latest calendar quarter—rather than through the end of the fiscal period. Securities and Exchange Commission rules require that we provide this information.

				Ten Years
	Inception Date	One Year	Five Years	Capital	Income	Total
Investor Shares	4/7/1986	3.41%	4.98%	0.55%	5.11%	5.66%

1 Lehman 10 Year Municipal Bond Index.
2 Six months ended May 31, 2006.
3 Return since inception.
   Note: See Financial Highlights tables on pages 45 and 46 for dividend and capital gains information.

27

Pennsylvania Long-Term Tax-Exempt Fund

Financial Statements (unaudited)

Statement of Net Assets
As of May 31, 2006

The fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth fiscal quarters, the lists appear in the fund’s semiannual and annual reports to shareholders. For the first and third fiscal quarters, the fund files the lists with the Securities and Exchange Commission on Form N-Q. Shareholders can look up the fund’s Forms N-Q on the SEC’s website at www.sec.gov. Forms N-Q may also be reviewed and copied at the SEC’s Public Reference Room (see the back cover of this report for further information).

	Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)
Municipal Bonds (99.7%)
Abington PA School Dist. GO	5.000%	4/1/32 (4)	6,495	6,705
Adams County PA GO	5.300%	5/15/11 (3)(Prere.)	10,240	10,944
Allegheny County PA Airport Rev.
(Pittsburgh International Airport)	6.000%	1/1/14 (3)	4,295	4,579
Allegheny County PA GO	0.000%	4/1/10 (1)	2,000	1,722
Allegheny County PA GO	5.250%	5/1/11 (3)(Prere.)	3,000	3,198
Allegheny County PA GO	5.500%	5/1/11 (3)(Prere.)	445	479
Allegheny County PA GO	5.750%	5/1/11 (3)(Prere.)	730	795
Allegheny County PA GO	5.750%	11/1/11 (3)	995	1,082
Allegheny County PA GO	5.375%	11/1/12 (1)(Prere.)	3,725	4,042
Allegheny County PA GO	5.375%	11/1/12 (1)(Prere.)	2,880	3,125
Allegheny County PA GO	5.375%	11/1/12 (1)(Prere.)	2,000	2,170
Allegheny County PA GO	5.375%	11/1/12 (1)(Prere.)	2,645	2,870
Allegheny County PA GO	5.500%	11/1/14 (3)	605	649
Allegheny County PA GO	5.375%	11/1/16 (1)	4,100	4,415
Allegheny County PA GO	5.375%	11/1/17 (1)	3,600	3,867
Allegheny County PA GO	6.000%	7/1/23 (1)	5,745	6,764
Allegheny County PA Higher Educ. Building Auth.
(Carnegie Mellon Univ.)	5.125%	3/1/32	3,000	3,082
Allegheny County PA Hosp. Dev. Auth. Rev.
(Catholic Health East)	5.250%	11/15/13 (2)	1,000	1,049
Allegheny County PA Hosp. Dev. Auth. Rev.
(Magee Women's Hosp.)	6.000%	10/1/10 (3)	4,235	4,535
Allegheny County PA Hosp. Dev. Auth. Rev.
(Univ. of Pittsburgh)	5.600%	4/1/17 (1)	2,000	2,064
Allegheny County PA Hosp. Dev. Auth. Rev.
(Univ. of Pittsburgh)	6.000%	7/1/26 (1)	4,625	5,502
Allegheny County PA Hosp. Dev. Auth. Rev.
(Univ. of Pittsburgh)	6.000%	7/1/27 (1)	9,325	11,089
Allegheny County PA Port Auth. Rev.	6.000%	3/1/09 (1)(Prere.)	2,565	2,741
Allegheny County PA Port Auth. Rev.	6.000%	3/1/09 (1)(Prere.)	4,310	4,606

28

Pennsylvania Long-Term Tax-Exempt
	Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)
Allegheny County PA Port Auth. Rev.	6.250%	3/1/09 (1)(Prere.)	3,740	4,021
Allegheny County PA Port Auth. Rev.	5.375%	3/1/12 (3)	4,965	5,333
Allegheny County PA Port Auth. Rev.	5.500%	3/1/14 (3)	2,355	2,539
Allegheny County PA Port Auth. Rev.	5.500%	3/1/16 (3)	1,500	1,619
Allegheny County PA Port Auth. Rev.	5.500%	3/1/17 (3)	2,750	2,955
Allegheny County PA Sanitation Auth. Sewer Rev.	5.500%	12/1/10 (1)(Prere.)	11,880	12,769
Allegheny County PA Sanitation Auth. Sewer Rev.	6.000%	12/1/10 (1)	1,500	1,639
Allegheny County PA Sanitation Auth. Sewer Rev.	6.000%	12/1/11 (1)	1,490	1,638
Allegheny County PA Sanitation Auth. Sewer Rev.	5.750%	12/1/12 (1)	1,180	1,283
Allegheny County PA Sanitation Auth. Sewer Rev.	5.375%	12/1/16 (1)	3,545	3,832
Allegheny County PA Sanitation Auth. Sewer Rev.	5.500%	12/1/16 (3)(ETM)	11,295	11,281
Allegheny County PA Sanitation Auth. Sewer Rev.	5.375%	12/1/18 (1)	15,000	16,139
Allegheny County PA Sanitation Auth. Sewer Rev.	5.500%	12/1/30 (1)	2,150	2,297
Annville Cleona PA School Dist.	6.000%	3/1/28 (4)	1,500	1,703
Annville Cleona PA School Dist.	6.000%	3/1/31 (4)	2,475	2,800
Berks County PA GO	0.000%	11/15/13 (3)	7,250	5,297
Berks County PA GO	0.000%	11/15/14 (3)	8,615	5,975
Berks County PA GO	0.000%	11/15/15 (3)	6,250	4,124
Berks County PA Hosp. Rev. (Reading Hosp.)	5.700%	10/1/14 (1)	4,500	4,983
Bethlehem PA Area School Dist.	5.375%	3/15/12 (3)(Prere.)	7,500	8,094
Blair County PA Hosp. Auth. Rev. (Altoona Hosp.)	5.500%	7/1/16 (2)	4,480	4,851
Bristol Borough PA School Dist. GO	5.250%	3/1/25 (4)	3,635	3,890
Bucks County PA IDA (Pennswood Village Project)	6.000%	10/1/34	2,600	2,724
Bucks County PA IDA Solid Waste Rev.
(Waste Management Project) PUT	4.900%	2/1/08	6,400	6,472
Carlisle PA Area School Dist. GO	5.375%	3/1/12 (1)(Prere.)	1,550	1,672
Carlisle PA Area School Dist. GO	5.375%	3/1/12 (1)(Prere.)	1,635	1,764
Carlisle PA Area School Dist. GO	5.375%	3/1/12 (1)(Prere.)	1,725	1,861
Carlisle PA Area School Dist. GO	5.375%	3/1/12 (1)(Prere.)	1,820	1,963
Catholic Health East Pennsylvania
Health Systems Rev.	5.500%	11/15/24	1,400	1,467
Catholic Health East Pennsylvania
Health Systems Rev.	5.375%	11/15/34	3,000	3,114
Central Bucks PA School Dist.	5.500%	5/15/15 (3)	5,540	5,991
Central Bucks PA School Dist.	5.500%	5/15/17 (3)	3,785	4,077
Central Bucks PA School Dist.	5.500%	5/15/18 (3)	2,400	2,585
Central Bucks PA School Dist.	5.500%	5/15/19 (3)	1,500	1,616
Chester County PA GO	5.000%	11/15/23	13,355	13,953
Chester County PA Health & Educ. Fac. Auth. Rev.
(Jefferson Health System)	5.125%	5/15/18 (2)	12,445	12,782

29

Pennsylvania Long-Term Tax-Exempt
	Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)
Chester County PA Health & Educ. Fac. Auth. Rev.
(Jefferson Health System)	5.250%	5/15/22 (2)	36,580	37,637
Chester County PA School Auth. Rev.	5.000%	4/1/23 (2)	2,670	2,777
Chester County PA School Auth. Rev.	5.000%	4/1/24 (2)	1,000	1,038
Chester County PA School Auth. Rev.	5.000%	4/1/26 (2)	1,575	1,630
Coatesville PA School Dist. GO	5.250%	8/15/14 (4)(Prere.)	6,645	7,213
Commonwealth Financing Auth. Pennsylvania Rev.	5.250%	6/1/23 (1)	13,535	14,528
Cumberland County PA Muni. Auth. College Rev.
(Dickinson College)	5.500%	11/1/10 (2)(Prere.)	3,230	3,459
Dauphin County PA General Auth. Hosp. Rev.
(West Pennsylvania Hosp.)	5.500%	7/1/13 (1)(ETM)	5,000	5,322
Delaware County PA Auth. Rev.
(Catholic Health East)	5.250%	11/15/12 (2)	3,300	3,460
Delaware County PA Auth. Rev.
(Catholic Health East)	5.250%	11/15/13 (2)	4,665	4,891
Delaware County PA Auth. Univ. Rev.
(Villanova Univ.)	5.000%	8/1/24 (1)	4,000	4,167
Delaware County PA Hosp. Auth. Rev.
(Crozer-Chester Medical Center)	5.300%	12/1/27	8,905	8,867
Delaware County PA Hosp. Auth. Rev.
(Delaware County Memorial Hosp.)	5.500%	8/15/13 (1)	12,000	12,214
Delaware County PA IDA Rev.
(Suburban Water Co. Project)	5.150%	9/1/32 (2)	5,500	5,623
Delaware County PA Regional Water Quality
Control Auth. Rev.	5.500%	5/1/14 (3)	2,405	2,593
Delaware County PA Regional Water Quality
Control Auth. Rev.	5.500%	5/1/16 (3)	2,685	2,897
Delaware River Joint Toll Bridge Comm.
Pennsylvania & New Jersey Rev.	5.250%	7/1/19 (1)	1,645	1,770
Delaware River Joint Toll Bridge Comm.
Pennsylvania & New Jersey Rev.	5.500%	7/1/19 (1)	4,835	5,473
Delaware River Joint Toll Bridge Comm.
Pennsylvania & New Jersey Rev.	5.250%	7/1/20 (1)	1,735	1,865
Delaware River Joint Toll Bridge Comm.
Pennsylvania & New Jersey Rev.	5.500%	7/1/20 (1)	5,105	5,817
Delaware River Joint Toll Bridge Comm.
Pennsylvania & New Jersey Rev.	5.250%	7/1/21 (1)	1,825	1,960
Delaware River Joint Toll Bridge Comm.
Pennsylvania & New Jersey Rev.	5.250%	7/1/22 (1)	1,920	2,063
Delaware River Joint Toll Bridge Comm.
Pennsylvania & New Jersey Rev.	5.250%	7/1/23 (1)	2,020	2,172
Delaware River Port Auth.
Pennsylvania & New Jersey Rev.	5.700%	1/1/23 (4)	8,345	8,841
Erie County PA GO	5.000%	9/1/25 (3)	5,525	5,757

30

Pennsylvania Long-Term Tax-Exempt
	Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)
Erie County PA Hosp. Auth. Rev.
(Hamot Health Foundation)	5.000%	11/1/35 (11)	5,000	5,126
Erie PA School Dist. GO	0.000%	9/1/10 (4)	5,665	4,793
Erie PA School Dist. GO	5.800%	9/1/10 (2)(Prere.)	4,500	4,861
Erie PA School Dist. GO	0.000%	9/1/11 (4)	5,780	4,688
Erie PA School Dist. GO	0.000%	5/1/16 (1)(ETM)	3,175	2,051
Erie PA School Dist. GO	0.000%	9/1/18 (4)	830	470
Hazleton PA Area School Dist. GO	5.500%	3/1/11 (3)	3,740	3,982
Hazleton PA Area School Dist. GO	5.750%	3/1/12 (3)	1,420	1,542
Hazleton PA Area School Dist. GO	6.000%	3/1/16 (3)	18,245	19,441
Hazleton PA Area School Dist. GO	0.000%	3/1/17 (3)	4,425	2,710
Hazleton PA Area School Dist. GO	0.000%	3/1/22 (3)	5,265	2,479
Lake Lehman PA School Dist. GO	0.000%	4/1/14 (1)	1,290	922
Lake Lehman PA School Dist. GO	0.000%	4/1/15 (1)	1,295	879
Lake Lehman PA School Dist. GO	0.000%	4/1/16 (1)	1,310	844
Lake Lehman PA School Dist. GO	0.000%	4/1/17 (1)	1,315	802
Lake Lehman PA School Dist. GO	0.000%	4/1/18 (1)	1,000	578
Lancaster County PA GO	6.250%	5/1/10 (3)(Prere.)	4,370	4,767
Lancaster County PA GO	6.250%	5/1/10 (3)(Prere.)	4,605	5,024
Lancaster County PA GO	5.500%	11/1/16 (3)	1,025	1,107
Lancaster County PA GO	5.500%	11/1/17 (3)	1,060	1,141
Lancaster County PA GO	5.500%	11/1/18 (3)	1,120	1,206
Lancaster County PA GO	5.500%	11/1/19 (3)	1,175	1,265
Lancaster County PA GO VRDO	3.480%	6/7/06 (4)	16,285	16,285
Lancaster County PA Hosp. Auth. Rev.
(Willow Valley Retirement Project)	5.875%	6/1/21	1,000	1,048
Lancaster County PA Hosp. Auth. Rev.
(Willow Valley Retirement Project)	5.875%	6/1/31	6,000	6,248
Lancaster PA Higher Educ. Auth. Rev.
(Franklin & Marshall College)	5.000%	4/15/22	1,135	1,177
Lancaster PA Higher Educ. Auth. Rev.
(Franklin & Marshall College)	5.000%	4/15/27	2,775	2,855
Latrobe PA IDA (Saint Vincent College)	5.600%	5/1/21	1,635	1,698
Latrobe PA IDA (Saint Vincent College)	5.700%	5/1/31	2,165	2,246
Lebanon County Health Fac. Auth. Rev.
(Good Samaritan)	6.000%	11/15/35	10,500	11,127
Lehigh County PA General Purpose Hosp. Auth. Rev.
(Lehigh Valley Health Network)	5.375%	7/1/14 (4)	900	957
Lehigh County PA General Purpose Hosp. Auth. Rev.
(Lehigh Valley Health Network)	7.000%	7/1/16 (1)	4,415	5,181
Luzerne County PA GO	0.000%	11/15/16 (1)	2,360	1,412

31

Pennsylvania Long-Term Tax-Exempt
	Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)
Luzerne County PA GO	0.000%	11/15/17 (1)	2,390	1,332
Luzerne County PA GO	5.250%	12/15/21 (3)	5,320	5,857
McKeesport PA Area School Dist. GO	0.000%	10/1/06 (1)	2,015	1,991
McKeesport PA Area School Dist. GO	0.000%	10/1/07 (1)	2,080	1,978
McKeesport PA Area School Dist. GO	0.000%	10/1/08 (1)	2,270	2,074
McKeesport PA Area School Dist. GO	0.000%	10/1/09 (1)	2,020	1,772
McKeesport PA Area School Dist. GO	0.000%	10/1/10 (1)	1,840	1,550
McKeesport PA Area School Dist. GO	0.000%	10/1/11 (1)	1,835	1,482
McKeesport PA Area School Dist. GO	0.000%	10/1/14 (1)	2,040	1,419
McKeesport PA Area School Dist. GO	0.000%	10/1/15 (1)	2,040	1,351
McKeesport PA Area School Dist. GO	0.000%	10/1/16 (1)	4,655	2,923
McKeesport PA Area School Dist. GO	0.000%	10/1/18 (2)(ETM)	425	243
McKeesport PA Area School Dist. GO	0.000%	10/1/18 (2)	2,650	1,489
McKeesport PA Area School Dist. GO	0.000%	10/1/24 (2)(ETM)	2,480	1,041
McKeesport PA Area School Dist. GO	0.000%	10/1/24 (2)	520	214
McKeesport PA Area School Dist. GO	0.000%	10/1/28 (2)	2,340	787
Montgomery County PA GO	5.000%	7/15/19	8,800	9,076
Montgomery County PA GO	5.375%	10/15/25	7,930	7,972
Montgomery County PA Higher Educ. & Health Auth.
Auth.Rev. (Catholic Health East)	5.375%	11/15/34	2,175	2,253
Montgomery County PA Higher Educ. & Health Auth.
Auth.Rev. (Holy Redeemer Health System)	5.250%	1/1/36	17,500	17,063
Mount Lebanon PA Hosp. Dev. Auth. Rev.
(St. Clair Memorial Hosp.)	6.250%	7/1/06 (3)	2,530	2,536
Neshaminy PA School Dist. GO	5.700%	2/15/14 (3)	8,795	8,988
North Hills PA School Dist. GO	5.250%	11/15/07 (3)(Prere.)	7,440	7,610
North Hills PA School Dist. GO	5.250%	12/15/29 (4)	5,030	5,352
North Pocono PA School Dist. GO	5.000%	3/15/26 (3)	4,035	4,199
Northeastern PA Hosp. & Educ. Health Rev.
(Wyoming Valley Health)	5.250%	1/1/16 (2)	5,910	6,070
Northeastern PA Hosp. & Educ. Health Rev.
(Wyoming Valley Health)	5.250%	1/1/26 (2)	2,850	2,922
Norwin PA School Dist. GO	5.000%	4/1/35 (4)	7,000	7,219
Owen J. Roberts School Dist. Pennsylvania GO	5.375%	5/15/07 (1)(Prere.)	1,635	1,662
Owen J. Roberts School Dist. Pennsylvania GO	5.500%	8/15/17 (4)	1,495	1,615
1 Owen J. Roberts School Dist. Pennsylvania GO	5.000%	5/15/31 (4)	5,000	5,174
1 Owen J. Roberts School Dist. Pennsylvania GO	5.000%	5/15/35 (4)	5,000	5,158
Parkland PA School Dist. GO	5.375%	9/1/15 (3)	3,050	3,347
Parkland PA School Dist. GO	5.375%	9/1/16 (3)	2,000	2,200
Pennsbury PA School Dist. GO	5.250%	8/1/24 (4)	9,135	9,767

32

Pennsylvania Long-Term Tax-Exempt
	Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)
Pennsylvania Convention Center Auth. Rev.	6.700%	9/1/16 (3)(ETM)	25,150	29,287
Pennsylvania Convention Center Auth. Rev.	6.000%	9/1/19 (3)(ETM)	14,275	16,587
Pennsylvania GO	5.750%	10/1/09 (3)(Prere.)	19,850	21,290
Pennsylvania GO	5.250%	10/15/10 (Prere.)	11,300	12,077
Pennsylvania GO	5.250%	10/15/10 (Prere.)	8,850	9,459
Pennsylvania GO	6.000%	1/15/11	3,000	3,250
Pennsylvania GO	5.250%	10/15/11	11,200	11,950
Pennsylvania GO	5.250%	2/1/14 (1)	20,000	21,673
Pennsylvania GO	5.375%	7/1/21	26,785	29,860
Pennsylvania GO	5.000%	1/1/26	40,450	42,169
Pennsylvania Higher Educ. Assistance Agency Rev.	6.125%	12/15/10 (1)(Prere.)	2,000	2,196
Pennsylvania Higher Educ. Assistance Agency
Student Loan Rev. VRDO	3.230%	6/7/06 (2)	4,100	4,100
Pennsylvania Higher Educ. Fac. Auth.
Health Services Rev.
(Allegheny/Delaware Valley Obligated Group)	5.875%	11/15/16 (1)	19,900	20,479
Pennsylvania Higher Educ. Fac. Auth.
Health Services Rev.
(Allegheny/Delaware Valley Obligated Group)	5.875%	11/15/21 (1)	3,040	3,127
Pennsylvania Higher Educ. Fac. Auth.
Health Services Rev.
(Allegheny/Delaware Valley Obligated Group)	5.875%	11/15/21 (1)	6,505	6,694
Pennsylvania Higher Educ. Fac. Auth. Rev.	5.500%	6/15/17 (2)	935	989
Pennsylvania Higher Educ. Fac. Auth. Rev.	5.625%	6/15/19 (2)	1,160	1,234
Pennsylvania Higher Educ. Fac. Auth. Rev.
(Bryn Mawr College)	5.250%	12/1/12 (2)	11,120	11,998
Pennsylvania Higher Educ. Fac. Auth. Rev.
(Bryn Mawr College)	5.625%	12/1/14 (1)	2,200	2,281
Pennsylvania Higher Educ. Fac. Auth. Rev.
(Indiana Univ. of Pennsylvania Housing)	5.125%	7/1/39 (10)	17,130	17,813
Pennsylvania Higher Educ. Fac. Auth. Rev.
(Philadelphia Univ.)	5.125%	6/1/25	3,500	3,538
Pennsylvania Higher Educ. Fac. Auth. Rev.
(Philadelphia Univ.)	5.250%	6/1/32	6,350	6,429
Pennsylvania Higher Educ. Fac. Auth. Rev.
(Rosemont College) PUT	3.200%	11/1/06 LOC	5,800	5,800
Pennsylvania Higher Educ. Fac. Auth. Rev
(Slippery Rock Univ.)	5.000%	7/1/37 (10)	2,500	2,557
Pennsylvania Higher Educ. Fac. Auth. Rev.
(Temple Univ.)	5.250%	4/1/11 (1)	3,545	3,668
Pennsylvania Higher Educ. Fac. Auth. Rev.
(Univ. of Pennsylvania)	5.000%	7/15/38	15,625	16,050

33

Pennsylvania Long-Term Tax-Exempt
	Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)
Pennsylvania Higher Educ. Fac. Auth. Rev.
(Univ. of Scranton)	5.000%	11/1/28 (10)	4,080	4,215
Pennsylvania Higher Educ. Fac. Auth. Rev.
(UPMC Health Systems)	6.250%	1/15/16	3,120	3,416
Pennsylvania Higher Educ. Fac. Auth. Rev.
(UPMC Health Systems)	6.000%	1/15/22	5,000	5,411
Pennsylvania Higher Educ. Fac. Auth. Rev.
(UPMC Health Systems)	6.000%	1/15/31	5,000	5,411
Pennsylvania Higher Educ. Fac. Auth. Rev. (Widener)	5.000%	7/15/20	2,360	2,408
Pennsylvania Higher Educ. Fac. Auth. Rev. (Widener)	5.000%	7/15/26	1,200	1,213
Pennsylvania Higher Educ. Fac. Auth. Rev. (Widener)	5.000%	7/15/31	1,605	1,610
Pennsylvania Higher Educ. Fac. Auth. Rev. (Widener)	5.400%	7/15/36	3,000	3,101
Pennsylvania Higher Educ. Fac. Auth. Rev. (Widener)	5.000%	7/15/39	3,000	2,994
Pennsylvania Higher Educ. Fac. Auth. Rev. PUT	5.000%	5/1/11 LOC	9,215	9,492
Pennsylvania Housing Finance Agency Rev.	5.250%	4/1/21	5,000	5,106
Pennsylvania Housing Finance Agency Rev.	5.400%	10/1/24	2,545	2,555
Pennsylvania Housing Finance Agency Rev.	5.350%	10/1/31	13,000	13,201
Pennsylvania IDA Rev. (Econ. Dev.)	5.500%	7/1/16 (2)	14,865	16,185
Pennsylvania IDA Rev. (Econ. Dev.)	5.500%	7/1/17 (2)	7,000	7,597
Pennsylvania IDA Rev. (Econ. Dev.)	5.500%	7/1/18 (2)	7,630	8,281
Pennsylvania IDA Rev. (Econ. Dev.)	5.500%	7/1/19 (2)	6,340	6,881
Pennsylvania IDA Rev. (Econ. Dev.)	5.500%	7/1/20 (2)	4,495	4,878
Pennsylvania IDA Rev. (Econ. Dev.)	5.500%	7/1/21 (2)	8,130	8,792
Pennsylvania Intergovernmental
Cooperation Auth. Rev.	5.250%	6/15/17 (3)	7,830	8,121
Pennsylvania State Univ. Rev.	5.000%	9/1/24	10,625	11,046
Pennsylvania State Univ. Rev.	5.000%	9/1/24	3,000	3,131
Pennsylvania State Univ. Rev.	5.000%	9/1/29	7,625	7,864
Pennsylvania State Univ. Rev.	5.000%	9/1/34	16,700	17,188
Pennsylvania State Univ. Rev.	5.000%	9/1/35	7,000	7,219
Pennsylvania Turnpike Comm. Oil Franchise Tax Rev.	5.000%	12/1/31 (1)	6,000	6,185
Rev.Pennsylvania Turnpike Comm. Rev.	5.375%	7/15/11 (2)(Prere.)	7,550	8,171
Pennsylvania Turnpike Comm. Rev.	5.375%	7/15/11 (2)(Prere.)	1,000	1,082
Pennsylvania Turnpike Comm. Rev.	5.375%	7/15/11 (2)(Prere.)	1,505	1,629
Pennsylvania Turnpike Comm. Rev.	5.375%	7/15/11 (2)(Prere.)	2,500	2,706
Pennsylvania Turnpike Comm. Rev.	5.375%	7/15/11 (2)(Prere.)	6,370	6,894
Pennsylvania Turnpike Comm. Rev.	5.500%	7/15/11 (2)(Prere.)	12,010	13,067
Pennsylvania Turnpike Comm. Rev.	5.625%	6/1/12 (3)	9,000	9,794
Pennsylvania Turnpike Comm. Rev.	5.250%	7/15/27 (4)	4,000	4,435
Pennsylvania Turnpike Comm. Rev.	5.250%	7/15/28 (4)	9,375	10,395

34

Pennsylvania Long-Term Tax-Exempt
	Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)
Pennsylvania Turnpike Comm. Rev	5.250%	7/15/30 (4)	10,925	12,106
Pennsylvania Turnpike Comm. Rev.	5.500%	12/1/31 (2)	17,610	19,101
Pennsylvania Turnpike Comm. Rev.	5.250%	12/1/32 (2)	15,000	15,907
Pennsylvania Turnpike Comm. Rev. VRDO	3.440%	6/7/06	4,900	4,900
Philadelphia PA Airport Parking Auth.	5.400%	9/1/11 (2)	4,520	4,638
Philadelphia PA Airport Parking Auth.	5.400%	9/1/12 (2)	5,990	6,147
Philadelphia PA Airport Parking Auth.	5.400%	9/1/15 (2)	6,350	6,520
Philadelphia PA Airport Parking Auth.	5.500%	9/1/18 (2)	4,250	4,370
Philadelphia PA Airport Parking Auth.	5.125%	2/15/24 (2)	1,045	1,080
Philadelphia PA Airport Parking Auth.	5.250%	9/1/29 (4)	3,530	3,676
Philadelphia PA Gas Works Rev.	5.250%	7/1/11 (4)	3,965	4,071
Philadelphia PA Gas Works Rev.	5.375%	7/1/12 (4)	4,000	4,114
Philadelphia PA Gas Works Rev.	5.375%	7/1/14 (4)	4,310	4,432
Philadelphia PA Gas Works Rev.	5.375%	7/1/16 (4)	13,280	14,421
Philadelphia PA Gas Works Rev.	5.375%	7/1/18 (4)	11,555	12,613
Philadelphia PA GO	6.000%	11/15/10 (3)	1,065	1,076
Philadelphia PA GO	6.000%	11/15/11 (3)	1,145	1,156
Philadelphia PA GO	6.000%	11/15/12 (3)	1,270	1,283
Philadelphia PA GO	6.000%	11/15/13 (3)	715	722
Philadelphia PA GO	5.250%	3/15/14 (4)	1,750	1,827
Philadelphia PA GO	5.250%	9/15/14 (4)	7,460	7,881
Philadelphia PA GO	5.250%	3/15/15 (4)	2,600	2,714
Philadelphia PA GO	5.250%	9/15/15 (4)	4,775	5,044
Philadelphia PA GO	5.250%	9/15/17 (4)	9,155	9,631
Philadelphia PA GO	5.250%	9/15/18 (4)	2,135	2,246
Philadelphia PA Hosp. & Higher Educ. Fac. Auth. Rev.
(Children's Hosp. of Philadelphia) VRDO	3.520%	6/1/06 (1)	3,800	3,800
Philadelphia PA Hosp. & Higher Educ. Fac. Auth. Rev.
(Jefferson Health System)	5.125%	5/15/18 (2)	5,700	5,854
Philadelphia PA IDA Rev.
(Philadelphia Airport System)	5.750%	6/15/10 (3)	4,440	4,604
Philadelphia PA IDA Rev.
(Philadelphia Airport System)	5.375%	6/15/12 (3)	1,000	1,041
Philadelphia PA IDA Rev.
(Philadelphia Airport System)	5.500%	7/1/12 (3)	5,505	5,916
Philadelphia PA IDA Rev.
(Philadelphia Airport System)	5.500%	6/15/13 (3)	1,030	1,098
Philadelphia PA IDA Rev.
(Philadelphia Airport System)	5.375%	7/1/13 (3)	10,000	10,327
Philadelphia PA IDA Rev.
(Philadelphia Airport System)	5.500%	7/1/13 (3)	5,825	6,235

35

Pennsylvania Long-Term Tax-Exempt
	Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)
Philadelphia PA IDA Rev.
(Philadelphia Airport System)	5.500%	6/15/14 (3)	1,090	1,159
Philadelphia PA IDA Rev.
(Philadelphia Airport System)	5.500%	7/1/14 (3)	6,155	6,528
Philadelphia PA IDA Rev.
(Philadelphia Airport System)	5.250%	6/15/15 (3)	5,695	5,878
Philadelphia PA IDA Rev.
(Philadelphia Airport System)	5.500%	6/15/15 (3)	1,150	1,219
Philadelphia PA IDA Rev.
(Philadelphia Airport System)	5.500%	7/1/15 (3)	6,435	6,823
Philadelphia PA IDA Rev.
(Philadelphia Airport System)	5.500%	6/15/16 (3)	1,210	1,283
Philadelphia PA IDA Rev.
(Philadelphia Airport System)	5.500%	7/1/16 (3)	5,000	5,302
Philadelphia PA IDA Rev.
(Philadelphia Airport System)	5.500%	6/15/17 (3)	1,280	1,357
Philadelphia PA IDA Rev.
(Philadelphia Airport System)	5.500%	6/15/18 (3)	1,350	1,431
Philadelphia PA IDA Rev.
(Philadelphia Airport System)	5.500%	7/1/18 (3)	4,000	4,241
Philadelphia PA Redev. Auth. Rev.	5.500%	4/15/15 (3)	3,000	3,227
Philadelphia PA Redev. Auth. Rev.	5.500%	4/15/17 (3)	2,255	2,419
Philadelphia PA Redev. Auth. Rev.	5.500%	4/15/19 (3)	2,815	3,020
Philadelphia PA Redev. Auth. Rev.	5.500%	4/15/20 (3)	2,000	2,146
Philadelphia PA Redev. Auth. Rev.	5.500%	4/15/22 (3)	5,275	5,640
Philadelphia PA School Dist. GO	5.375%	4/1/07 (2)(Prere.)	1,490	1,512
Philadelphia PA School Dist. GO	5.250%	4/1/09 (1)(Prere.)	3,000	3,125
Philadelphia PA School Dist. GO	5.750%	2/1/11 (4)(Prere.)	7,420	8,046
Philadelphia PA School Dist. GO	5.750%	2/1/11 (4)(Prere.)	6,415	6,956
Philadelphia PA School Dist. GO	5.250%	2/1/12 (4)	1,000	1,070
Philadelphia PA School Dist. GO	5.500%	2/1/12 (4)(Prere.)	1,800	1,952
Philadelphia PA School Dist. GO	5.500%	2/1/12 (4)(Prere.)	2,500	2,711
Philadelphia PA School Dist. GO	5.500%	2/1/12 (4)(Prere.)	2,000	2,169
Philadelphia PA School Dist. GO	5.500%	2/1/12 (4)(Prere.)	2,000	2,169
Philadelphia PA School Dist. GO	5.500%	2/1/12 (4)(Prere.)	1,000	1,084
Philadelphia PA School Dist. GO	5.500%	2/1/12 (4)(Prere.)	6,200	6,724
Philadelphia PA School Dist. GO	5.625%	8/1/12 (3)(Prere.)	1,000	1,096
Philadelphia PA School Dist. GO	5.625%	8/1/12 (3)(Prere.)	6,500	7,126
Philadelphia PA School Dist. GO	5.625%	8/1/12 (3)(Prere.)	6,000	6,578
Philadelphia PA School Dist. GO	5.625%	8/1/12 (3)(Prere.)	1,000	1,096
Philadelphia PA Water & Waste Water Rev.	7.000%	6/15/10 (3)	33,865	37,873
Philadelphia PA Water & Waste Water Rev.	7.000%	6/15/11 (3)	35,685	40,774

36

Pennsylvania Long-Term Tax-Exempt
	Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)
Philadelphia PA Water & Waste Water Rev.	6.250%	8/1/11 (1)	3,750	4,173
Philadelphia PA Water & Waste Water Rev.	5.250%	12/15/14 (2)	7,100	7,656
Philadelphia PA Water & Waste Water Rev.	5.250%	11/1/16 (3)	5,040	5,386
Philadelphia PA Water & Waste Water Rev.	5.250%	11/1/17 (3)	5,460	5,827
Philadelphia PA Water & Waste Water Rev.	5.600%	8/1/18 (1)(ETM)	925	983
Philadelphia PA Water & Waste Water Rev.	5.375%	11/1/19 (3)	4,155	4,463
Pittsburgh PA GO	5.750%	9/1/09 (3)(Prere.)	4,505	4,774
Pittsburgh PA GO	6.000%	9/1/09 (3)(Prere.)	4,450	4,748
Pittsburgh PA GO	5.500%	9/1/13 (2)	10,965	11,821
Pittsburgh PA GO	5.125%	9/1/14 (3)	8,435	8,613
Pittsburgh PA GO	5.500%	9/1/14 (2)	12,000	12,798
Pittsburgh PA GO	5.125%	9/1/15 (3)	6,395	6,512
Pittsburgh PA GO	5.500%	9/1/15 (2)	4,140	4,468
Pittsburgh PA GO	5.250%	9/1/17 (3)	4,980	5,081
Pittsburgh PA School Dist. GO	5.250%	3/1/08 (3)(Prere.)	7,000	7,187
Pittsburgh PA School Dist. GO	5.250%	3/1/08 (3)(Prere.)	5,200	5,339
Pittsburgh PA School Dist. GO	5.350%	3/1/08 (3)(Prere.)	3,510	3,610
Pittsburgh PA School Dist. GO	0.000%	8/1/09 (2)	4,000	3,536
Pittsburgh PA School Dist. GO	5.500%	9/1/09 (4)(Prere.)	2,680	2,827
Pittsburgh PA School Dist. GO	5.500%	9/1/09 (4)(Prere.)	2,985	3,148
Pittsburgh PA School Dist. GO	5.375%	9/1/14 (4)	1,755	1,913
Pittsburgh PA School Dist. GO	5.500%	9/1/16 (4)	4,000	4,427
Pittsburgh PA School Dist. GO	5.500%	9/1/18 (4)	2,880	3,212
Pittsburgh PA Water & Sewer Auth. Rev.	7.250%	9/1/14 (3)(ETM)	23,405	26,615
Pittsburgh PA Water & Sewer Auth. Rev.	0.000%	9/1/27 (3)	12,765	4,535
Pittsburgh PA Water & Sewer Auth. Rev.	0.000%	9/1/28 (3)	8,965	3,027
Pittsburgh PA Water & Sewer Auth. Rev.	0.000%	9/1/29 (3)	31,755	10,188
Radnor Township PA School Dist.	5.000%	2/15/35 (4)	2,500	2,574
Reading PA School Dist. GO	0.000%	1/15/15 (3)	9,260	6,133
Reading PA School Dist. GO	0.000%	1/15/16 (3)	9,270	5,792
Reading PA School Dist. GO	0.000%	1/15/28 (3)	10,000	3,465
Reading PA School Dist. GO	5.000%	1/15/29 (4)	6,120	6,337
Red Lion PA School Dist. VRDO	3.470%	6/7/06 (4)	15,000	15,000
Sayre PA Health Care Fac. Auth. Rev.
(Guthrie Health Care System)	6.250%	12/1/13	2,000	2,200
Sayre PA Health Care Fac. Auth. Rev.
(Guthrie Health Care System)	6.250%	12/1/14	1,925	2,110
Sayre PA Health Care Fac. Auth. Rev.
(Guthrie Health Care System)	6.250%	12/1/15	2,045	2,239

37

Pennsylvania Long-Term Tax-Exempt
	Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)
Sayre PA Health Care Fac. Auth. Rev.
(Guthrie Health Care System)	6.250%	12/1/16	3,225	3,526
Sayre PA Health Care Fac. Auth. Rev.
(Guthrie Health Care System)	6.250%	12/1/17	6,640	7,240
Sayre PA Health Care Fac. Auth. Rev.
(Guthrie Health Care System)	6.250%	12/1/18	2,500	2,722
Sayre PA Health Care Fac. Auth. Rev.
(Guthrie Health Care System)	5.750%	12/1/21	3,000	3,179
Sayre PA Health Care Fac. Auth. Rev.
(Guthrie Health Care System)	5.875%	12/1/31	12,500	13,267
Sayre PA Health Care Fac. Auth. Rev.
(VHA of Pennsylvania, Pooled Capital
Asset Financial Program) VRDO	3.230%	6/7/06 (2)	500	500
Sayre PA Health Care Fac. Auth. Rev.
(VHA of Pennsylvania, Pooled Capital
Asset Financial Program) VRDO	3.270%	6/7/06 (2)	700	700
1 Scranton PA School Dist. GO	5.250%	6/15/27 (10)	2,750	2,947
1 Scranton PA School Dist. GO	5.250%	6/15/31 (10)	2,375	2,531
Scranton-Lackawanna PA Health & Welfare Auth. Rev.
(Mercy Health System)	5.625%	1/1/16 (1)	5,490	5,651
Scranton-Lackawanna PA Health & Welfare Auth. Rev.
(Mercy Health System)	5.700%	1/1/23 (1)	9,205	9,478
Snyder County PA Higher Educ. Auth. Univ. Rev.
(Susquehanna Univ. Project)	5.000%	1/1/30 (11)	3,000	3,092
South Fork PA Hosp. Auth. Rev.
(Conemaugh Valley Hosp.)	5.625%	7/1/10 (6)	1,640	1,701
South Fork PA Hosp. Auth. Rev.
(Conemaugh Valley Hosp.)	5.750%	7/1/18 (6)	7,000	7,836
1 Southcentral Pennsylvania General Auth. Rev.
(Wellspan Health) VRDO	3.210%	6/7/06 (2)	6,500	6,500
Southeastern Pennsylvania Transp. Auth. Rev.	5.450%	3/1/11 (3)	3,730	3,848
Southeastern Pennsylvania Transp. Auth. Rev.	5.375%	3/1/17 (3)	2,500	2,577
St. Mary's Hosp. Auth. Bucks County PA Rev.
(Catholic Health Initiatives)	5.375%	6/1/08 (Prere.)	2,525	2,627
St. Mary's Hosp. Auth. Bucks County PA Rev.
(Catholic Health Initiatives)	5.375%	6/1/08 (Prere.)	2,340	2,435
St. Mary's Hosp. Auth. Bucks County PA Rev.
(Catholic Health Initiatives) VRDO	3.180%	6/7/06	5,400	5,400
Uniontown PA Area School Dist. GO	5.500%	10/1/12 (4)(Prere.)	9,950	10,859
Univ. of Pittsburgh of the Commonwealth
System of Higher Educ. Pennsylvania
(Univ. Capital Project)	5.250%	6/1/17 (3)	6,995	7,223
Univ. of Pittsburgh of the Commonwealth
System of Higher Educ. Pennsylvania
(Univ. Capital Project) VRDO	3.250%	6/7/06	7,000	7,000

38

Pennsylvania Long-Term Tax-Exempt
	Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)
Univ. of Pittsburgh PA Rev.	5.500%	6/1/10 (1)	5,285	5,476
Univ. of Pittsburgh PA Rev.	5.500%	6/1/14 (1)	11,780	12,200
Warwick PA School Dist. GO	5.375%	8/15/11 (3)(Prere.)	2,435	2,617
Warwick PA School Dist. GO	5.375%	8/15/11 (3)(Prere.)	2,570	2,763
Washington County PA Hosp. Auth. Rev.
(Washington Hosp.)	5.250%	7/1/10 (2)	1,750	1,832
Washington County PA Hosp. Auth. Rev.
(Washington Hosp.)	5.125%	7/1/11 (2)(ETM)	330	351
Washington County PA Hosp. Auth. Rev.
(Washington Hosp.)	5.125%	7/1/11 (2)	1,510	1,585
Washington County PA Hosp. Auth. Rev.
(Washington Hosp.)	5.125%	7/1/12 (2)	1,935	2,053
Washington County PA Hosp. Auth. Rev.
(Washington Hosp.)	5.250%	7/1/13 (2)	2,035	2,179
Washington County PA Hosp. Auth. Rev.
(Washington Hosp.)	5.375%	7/1/14 (2)	1,640	1,777
Washington County PA Hosp. Auth. Rev.
(Washington Hosp.)	5.375%	7/1/15 (2)	2,250	2,435
Washington County PA Hosp. Auth. Rev.
(Washington Hosp.)	5.500%	7/1/16 (2)	2,375	2,593
West Chester PA Area School Dist. GO	5.000%	5/15/28 (1)	7,480	7,754
West Chester PA Area School Dist. GO	5.000%	5/15/29 (1)	7,855	8,130
West Cornwall Township PA Muni. Auth. College Rev.
(Elizabethtown College)	6.000%	12/15/22	2,650	2,811
West Cornwall Township PA Muni. Auth. College Rev.
(Elizabethtown College)	6.000%	12/15/27	2,000	2,109
West Jefferson Hills PA School Dist. GO	5.200%	8/1/11 (4)(Prere.)	1,020	1,088
West Jefferson Hills PA School Dist. GO	5.200%	8/1/11 (4)(Prere.)	1,080	1,152
West Jefferson Hills PA School Dist. GO	5.200%	8/1/17 (4)	935	986
West Jefferson Hills PA School Dist. GO	5.200%	8/1/18 (4)	980	1,033
Westmoreland County PA Muni. Auth. Rev.	6.125%	7/1/17 (1)(ETM)	8,205	9,326
Westmoreland County PA Muni. Auth.
Service Water Rev.	0.000%	8/15/15 (3)	5,000	3,337
Westmoreland County PA Muni. Auth.
Service Water Rev.	0.000%	8/15/23 (1)	5,000	2,181
Westmoreland County PA Muni. Auth.
Service Water Rev.	0.000%	8/15/24 (3)	4,000	1,660
Wyoming PA Area School Dist.	5.000%	9/1/26 (1)	2,000	2,085
Wyoming PA Area School Dist.	5.000%	9/1/29 (1)	5,125	5,309
York County PA	5.000%	6/1/33 (1)	5,000	5,160
York County PA Hosp. Auth. Rev. (York Hosp.)	5.250%	7/1/07 (2)(Prere.)	3,500	3,593
York County PA Hosp. Auth. Rev. (York Hosp.)	5.250%	7/1/07 (2)(Prere.)	8,675	8,906

39

Pennsylvania Long-Term Tax-Exempt
	Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)
York County PA Solid Waste & Refuse Auth. Rev.	5.500%	12/1/13 (3)	6,750	7,416
York County PA Solid Waste & Refuse Auth. Rev.	5.500%	12/1/14 (3)	4,050	4,470
Outside Pennsylvania
Puerto Rico Electric Power Auth. Rev.	5.500%	7/1/20	5,300	5,790
Puerto Rico Electric Power Auth. Rev.	5.250%	7/1/21 (1)	5,000	5,482
Puerto Rico Electric Power Auth. Rev.	5.250%	7/1/23 (1)	15,500	17,031
Puerto Rico Electric Power Auth. Rev.	5.000%	7/1/24 (1)	12,710	13,285
Puerto Rico Electric Power Auth. Rev.	5.000%	7/1/30 (4)	10,900	11,310
Puerto Rico GO	5.500%	7/1/18 (1)	10,000	11,131
Puerto Rico GO	5.500%	7/1/20 (3)	6,000	6,722
Puerto Rico GO	5.500%	7/1/22 (3)	8,960	10,098
Puerto Rico GO	5.500%	7/1/29 (1)	10,000	11,318
Puerto Rico Highway & Transp. Auth. Rev.	5.500%	7/1/19 (1)	17,000	19,006
Puerto Rico Highway & Transp. Auth. Rev.	5.500%	7/1/20 (1)	14,610	16,365
Puerto Rico Highway & Transp. Auth. Rev.	5.500%	7/1/20 (4)	14,155	15,855
Puerto Rico Infrastructure Financing Auth.
Special Tax Rev	5.500%	7/1/23 (2)	10,000	11,285
Puerto Rico Infrastructure Financing Auth.
Special Tax Rev	5.500%	7/1/25 (2)	15,000	17,011
Puerto Rico Infrastructure Financing Auth.
Special Tax Rev	5.500%	7/1/26 (2)	10,000	11,356
Puerto Rico Infrastructure Financing Auth.
Special Tax Rev	0.000%	7/1/29 (2)	12,150	4,014
Puerto Rico Infrastructure Financing Auth.
Special Tax Rev	0.000%	7/1/30 (3)	14,905	4,678
Puerto Rico Infrastructure Financing Auth.
Special Tax Rev	0.000%	7/1/31 (3)	28,695	8,600
Puerto Rico Infrastructure Financing Auth.
Special Tax Rev	0.000%	7/1/32 (3)	25,000	7,132
Puerto Rico Public Buildings Auth. Govt. Fac. Rev.	5.750%	7/1/22	5,000	5,546
Puerto Rico Public Finance Corp.	6.000%	8/1/26	10,875	12,441
Puerto Rico Public Finance Corp.	6.000%	8/1/26 (4)	25,000	30,047
Virgin Islands Public Finance Auth. Rev.	5.000%	10/1/12	2,000	2,072
Virgin Islands Public Finance Auth. Rev.	5.250%	10/1/20	1,750	1,815
Total Municipal Bonds
(Cost $2,223,154)				2,289,636

40

Pennsylvania Long-Term Tax-Exempt Fund
Market Value• ($000)
Other Assets and Liabilities (0.3%)
Other Assets—Note B	36,101
Liabilities	(29,701)
	6,400
Net Assets (100%)	2,296,036

At May 31, 2006, net assets consisted of: 2
Amount ($000)
Paid-in Capital	2,222,797
Undistributed Net Investment Income	—
Accumulated Net Realized Gains	6,757
Unrealized Appreciation	66,482
Net Assets	2,296,036
Investor Shares—Net Assets
Applicable to 59,611,441 outstanding $.001
par value shares of beneficial interest (unlimited authorization)	666,648
Net Asset Value Per Share—Investor Shares	$11.18
Admiral Shares-Net Assets
Applicable to 145,699,341 outstanding $.001
par value shares of beneficial interest (unlimited authorization)	1,629,388
Net Asset Value Per Share—Admiral Shares	$11.18
• See Note A in Notes to Financial Statements. 1 Securities purchased on a when-issued or delayed-delivery basis for which the fund has not taken delivery as of May 31,    2006. 2 See Note D in Notes to Financial Statements for the tax-basis components of net assets.

41

Pennsylvania Long-Term Tax-Exempt Fund

Key to Abbreviations

ARS—Auction Rate Security

BAN—Bond Anticipation Note

COP—Certificate of Participation

CP—Commercial Paper

FR—Floating Rate

GAN—Grant Anticipation Note

GO—General Obligation Bond

IDA—Industrial Development Authority Bond

IDR—Industrial Development Revenue Bond

PCR—Pollution Control Revenue Bond

PUT—Put Option Obligation

RAN—Revenue Anticipation Note

TAN—Tax Anticipation Note

TOB—Tender Option Bond

TRAN—Tax Revenue Anticipation Note

UFSD—Union Free School District

USD—United School District

VRDO—Variable Rate Demand Obligation

(ETM)—Escrowed to Maturity

(Prere.)—Prerefunded

Scheduled principal and interest payments are guaranteed by:

(1) MBIA (Municipal Bond Insurance Association)

(2) AMBAC (Ambac Assurance Corporation)

(3) FGIC (Financial Guaranty Insurance Company)

(4) FSA (Financial Security Assurance)

(5) BIGI (Bond Investors Guaranty Insurance)

(6) Connie Lee Inc.

(7) FHA (Federal Housing Authority)

(8) CapMAC (Capital Markets Assurance Corporation)

(9) American Capital Access Financial Guaranty Corporation

(10) XL Capital Assurance Inc.

(11) CIFG (CDC IXIS Financial Guaranty)

The insurance does not guarantee the market value of the municipal bonds

LOC—Scheduled principal and interest payments are guaranteed by bank letter of credit

42

Pennsylvania Long-Term Tax-Exempt Fund
Statement of Operations
	Six Months Ended May 31, 2006
($000)
Investment Income
Income
Interest	54,078
Total Income	54,078
Expenses
The Vanguard Group—Note B
Investment Advisory Services	104
Management and Administrative
Investor Shares	423
Admiral Shares	488
Marketing and Distribution
Investor Shares	113
Admiral Shares	151
Custodian Fees	6
Shareholders' Reports
Investor Shares	7
Admiral Shares	3
Trustees' Fees and Expenses	1
Total Expenses	1,296
Expenses Paid Indirectly—Note C	(15)
Net Expenses	1,281
Net Investment Income	52,797
Realized Net Gain (Loss)
Investment Securities Sold	9,169
Futures Contracts	(835)
Realized Net Gain (Loss)	8,334
Change in Unrealized Appreciation (Depreciation)
Investment Securities	(29,892)
Futures Contracts	—
Change in Unrealized Appreciation (Depreciation)	(29,892)
Net Increase (Decrease) in Net Assets Resulting from Operations	31,239

43

Pennsylvania Long-Term Tax-Exempt Fund Statement of Changes in Net Assets
	Six Months Ended May 31, 2006 ($000)	Year Ended Nov. 30, 2005 ($000)
Increase (Decrease) in Net Assets
Operations
Net Investment Income	52,797	104,383
Realized Net Gain (Loss)	8,334	5,560
Change in Unrealized Appreciation (Depreciation)	(29,892)	(39,003)
Net Increase (Decrease) in Net Assets Resulting from Operations	31,239	70,940
Distributions
Net Investment Income
Investor Shares	(15,763)	(54,938)
Admiral Shares	(37,034)	(49,445)
Realized Capital Gain
Investor Shares	(1,764)	(5,631)
Admiral Shares	(3,991)	(3,239)
Total Distributions	(58,552)	(113,253)
Capital Share Transactions—Note F
Investor Shares	(29,751)	(724,794)
Admiral Shares	71,972	776,818
Net Increase (Decrease) from Capital Share Transactions	42,221	52,024
Total Increase (Decrease)	14,908	9,711
Net Assets
Beginning of Period	2,281,128	2,271,417
End of Period	2,296,036	2,281,128

44

Pennsylvania Long-Term Tax-Exempt Fund
Financial Highlights Investor Shares
For a Share Outstanding	Six Months Ended May 31,	Year Ended November 30,
Throughout Each Period	2006	2005	2004	2003	2002	2001
Net Asset Value,
Beginning of Period	$11.32	$11.53	$11.74	$11.49	$11.36	$10.98
Investment Operations
Net Investment Income	.257	.520	.528	.516	.550	.570
Net Realized and Unrealized
Gain (Loss) on Investments	(.111)	(.165)	(.148)	.307	.170	.380
Total from Investment Operations	.146	.355	.380	.823	.720	.950
Distributions
Dividends from
Net Investment Income	(.257)	(.520)	(.528)	(.516)	(.550)	(.570)
Distributions from
Realized Capital Gains	(.029)	(.045)	(.062)	(.057)	(.040)	—
Total Distributions	(.286)	(.565)	(.590)	(.573)	(.590)	(.570)
Net Asset Value, End of Period	$11.18	$11.32	$11.53	$11.74	$11.49	$11.36
Total Return	1.29%	3.10%	3.32%	7.30%	6.49%	8.79%
Ratios/Supplemental Data
Net Assets, End of Period (Millions)	$667	$705	$1,444	$1,523	$1,598	$1,543
Ratio of Total Expenses to
Average Net Assets	0.17%1	0.16%	0.14%	0.17%	0.18%	0.20%
Ratio of Net Investment Income to
Average Net Assets	4.55%1	4.51%	4.54%	4.42%	4.81%	5.04%
Portfolio Turnover Rate	17%1	14%	12%	11%	15%	13%
1 Annualized.

45

Pennsylvania Long-Term Tax-Exempt Fund     Admiral Shares
For a Share Outstanding	Six Months Ended May 31,	Year Ended November 30,				May 141 to Nov. 30,
Throughout Each Period	2006	2005	2004	2003	2002	2001
Net Asset Value,
Beginning of Period	$11.32	$11.53	$11.74	$11.49	$11.36	$11.18
Investment Operations
Net Investment Income	.261	.528	.534	.523	.556	.312
Net Realized and Unrealized
Gain (Loss) on Investments	(.111)	(.165)	(.148)	.307	.170	.180
Total from Investment Operations	.150	.363	.386	.830	.726	.492
Distributions
Dividends from
Net Investment Income	(.261)	(.528)	(.534)	(.523)	(.556)	(.312)
Distributions from
Realized Capital Gains	(.029)	(.045)	(.062)	(.057)	(.040)	—
Total Distributions	(.290)	(.573)	(.596)	(.580)	(.596)	(.312)
Net Asset Value, End of Period	$11.18	$11.32	$11.53	$11.74	$11.49	$11.36
Total Return	1.32%	3.18%	3.37%	7.36%	6.54%	4.43%
Ratios/Supplemental Data
Net Assets,
End of Period (Millions)	$1,629	$1,577	$828	$850	$827	$729
Ratio of Total Expenses to
Average Net Assets	0.09%2	0.09%	0.09%	0.11%	0.12%	0.15%2
Ratio of Net Investment Income to
Average Net Assets	4.63%2	4.58%	4.60%	4.48%	4.86%	4.98%2
Portfolio Turnover Rate	17%2	14%	12%	11%	15%	13%
1 Inception.
2 Annualized.
See accompanying Notes, which are an integral part of the Financial Statements.

46

Pennsylvania Long-Term Tax-Exempt Fund

Notes to Financial Statements

Vanguard Pennsylvania Long-Term Tax-Exempt Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund. The fund invests in debt instruments of municipal issuers whose ability to meet their obligations may be affected by economic and political developments in the Commonwealth of Pennsylvania. The fund offers two classes of shares, Investor Shares and Admiral Shares. Investor Shares are available to any investor who meets the fund’s minimum purchase requirements. Admiral Shares are designed for investors who meet certain administrative, servicing, tenure, and account-size criteria.

A.     The following significant accounting policies conform to generally accepted accounting principles for U.S. mutual funds. The fund consistently follows such policies in preparing its financial statements.

1.     Security Valuation: Bonds, and temporary cash investments acquired over 60 days to maturity, are valued using the latest bid prices or using valuations based on a matrix system (which considers such factors as security prices, yields, maturities, and ratings), both as furnished by independent pricing services. Other temporary cash investments are valued at amortized cost, which approximates market value. Securities for which market quotations are not readily available, or whose values have been materially affected by events occurring before the fund’s pricing time but after the close of the securities’ primary markets, are valued by methods deemed by the board of trustees to represent fair value.

2.     Futures Contracts: The fund may use Municipal Bond Index, U.S. Treasury Bond, and U.S. Treasury Note futures contracts, with the objectives of enhancing returns, managing interest rate risk, maintaining liquidity, diversifying credit risk, and minimizing transaction costs. The fund may purchase or sell futures contracts instead of bonds to take advantage of pricing differentials between the futures contracts and the underlying bonds. The fund may also seek to take advantage of price differences among bond market sectors by simultaneously buying futures (or bonds) of one market sector and selling futures (or bonds) of another sector. Futures contracts may also be used to simulate a fully invested position in the underlying bonds while maintaining a cash balance for liquidity. The primary risks associated with the use of futures contracts are imperfect correlation between changes in market values of bonds held by the fund and the prices of futures contracts, and the possibility of an illiquid market.

Futures contracts are valued based upon their quoted daily settlement prices. The aggregate principal amounts of the contracts are not recorded in the financial statements. Fluctuations in the value of the contracts are recorded in the Statement of Net Assets as an asset (liability) and in the Statement of Operations as unrealized appreciation (depreciation) until the contracts are closed, when they are recorded as realized futures gains (losses).

3.     Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute all of its income. Accordingly, no provision for federal income taxes is required in the financial statements.

4.     Distributions: Distributions from net investment income are declared daily and paid on the first business day of the following month. Annual distributions from realized capital gains, if any, are recorded on the ex-dividend date.

5.     Other: Interest income is accrued daily. Premiums and discounts on debt securities purchased are amortized and accreted, respectively, to interest income over the lives of the respective securities. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold.

47

Pennsylvania Long-Term Tax-Exempt Fund

Each class of shares has equal rights as to assets and earnings, except that each class separately bears certain class-specific expenses related to maintenance of shareholder accounts (included in Management and Administrative expenses) and shareholder reporting. Marketing and distribution expenses are allocated to each class of shares based on a method approved by the board of trustees. Income, other non-class-specific expenses, and gains and losses on investments are allocated to each class of shares based on its relative net assets.

B.     The Vanguard Group furnishes at cost investment advisory, corporate management, administrative, marketing, and distribution services. The costs of such services are allocated to the fund under methods approved by the board of trustees. The fund has committed to provide up to 0.40% of its net assets in capital contributions to Vanguard. At May 31, 2006, the fund had contributed capital of $247,000 to Vanguard (included in Other Assets), representing 0.01% of the fund’s net assets and 0.25% of Vanguard’s capitalization. The fund’s trustees and officers are also directors and officers of Vanguard.

C. The fund’s investment advisor may direct new issue purchases, subject to obtaining the best price and execution, to underwriters who have agreed to rebate or credit to the fund part of the underwriting fees generated. Such rebates or credits are used solely to reduce the fund’s management and administrative expenses. For the six months ended May 31, 2006, these arrangements reduced the fund’s expenses by $15,000.

D.     Capital gain distributions are determined on a tax basis and may differ from realized capital gains for financial reporting purposes. Differences may be permanent or temporary. Permanent differences are reclassified among capital accounts in the financial statements to reflect their tax character. Temporary differences arise when gains or losses are recognized in different periods for financial statement and tax purposes; these differences will reverse at some time in the future. The fund’s tax-basis capital gains and losses are determined only at the end of each fiscal year. The fund had realized losses totaling $1,558,000 through November 30, 2005, which are deferred for tax purposes and reduce the amount of unrealized appreciation of investment securities for tax purposes.

At May 31, 2006, net unrealized appreciation of investment securities for tax purposes was $64,924,000, consisting of unrealized gains of $77,072,000 on securities that had risen in value since their purchase and $12,148,000 in unrealized losses on securities that had fallen in value since their purchase.

E.     During the six months ended May 31, 2006, the fund purchased $186,042,000 of investment securities and sold $199,356,000 of investment securities, other than temporary cash investments.

48

Pennsylvania Long-Term Tax-Exempt Fund

F.     Capital share transactions for each class of shares were:

	Six Months Ended May 31, 2006		Year Ended November 30, 2005
	Amount ($000)	Shares (000)	Amount ($000)	Shares (000
Investor Shares
Issued	70,102	6,204	206,250	17,882
Issued in Lieu of Cash Distributions	12,804	1,135	43,175	3,743
Redeemed	(112,657)	(9,992)	(974,219)	(84,641)
Net Increase (Decrease)—Investor Shares	(29,751)	(2,653)	(724,794)	(63,016)
Admiral Shares
Issued	155,648	13,800	868,235	75,468
Issued in Lieu of Cash Distributions	28,864	2,558	35,711	3,108
Redeemed	(112,540)	(9,975)	(127,128)	(11,058)
Net Increase (Decrease)—Admiral Shares	71,972	6,383	776,818	67,518

49

About Your Fund’s Expenses

As a shareholder of the fund, you incur ongoing costs, which include costs for portfolio management, administrative services, and shareholder reports (like this one), among others. Operating expenses, which are deducted from a fund’s gross income, directly reduce the investment return of the fund. A fund’s expenses are expressed as a percentage of its average net assets. This figure is known as the expense ratio. The following examples are intended to help you understand the ongoing costs (in dollars) of investing in your fund and to compare these costs with those of other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period.

The table below illustrates your fund’s costs in two ways:

• Based on actual fund return. This section helps you to estimate the actual expenses that you paid over the period. The “Ending Account Value” shown is derived from the fund’s actual return, and the third column shows the dollar amount that would have been paid by an investor who started with $1,000 in the fund. You may use the information here, together with the amount you invested, to estimate the expenses that you paid over the period.

To do so, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number given for your fund under the heading “Expenses Paid During Period.”

• Based on hypothetical 5% yearly return. This section is intended to help you compare your fund’s costs with those of other mutual funds. It assumes that the fund had a yearly return of 5% before expenses, but that the expense ratio is unchanged. In this case—because the return used is not the fund’s actual return—the results do not apply to your investment. The example is useful in making comparisons because the Securities and Exchange Commission requires all mutual funds to calculate expenses based on a 5% return. You can assess your fund’s costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other funds.

Six Months Ended May 31, 2006
Pennsylvania Tax-Exempt Fund	Beginning Account Value 11/30/2005	Ending Account Value 5/31/2006	Expenses Paid During Period1
Based on Actual Fund Return
Money Market	$1,000.00	$1,015.42	$0.65
Long-Term
Investor Shares	1,000.00	1,012.86	0.85
Admiral Shares	1,000.00	1,013.24	0.45
Based on Hypothetical 5% Yearly Return
Money Market	$1,000.00	$1,024.28	$0.66
Long-Term
Investor Shares	1,000.00	1,024.08	0.86
Admiral Shares	1,000.00	1,024.48	0.45
1 These calculations expenses incurred in the most recent six-month period. The funds' annualized six-month expense ratios for that period are: for the Pennsylvania Tax-Exempt Money Market Fund, 0.13%; for the Pennsylvania Long-Term Tax-Exempt Fund Investor Shares, 0.17%, and Admiral Shares, 0.09%. The dollar amounts shown as "Expenses Paid" are equal to the annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent six-month period, then divided by the number of days in the most recent 12-month period.

50

Note that the expenses shown in the table are meant to highlight and help you compare ongoing costs only and do not reflect any transactional costs or account maintenance fees. They do not include your fund’s low-balance fee, which is described in the prospectus. If this fee were applied to your account, your costs would be higher. Your fund does not charge transaction fees, such as purchase or redemption fees, nor does it carry a “sales load.”

The calculations assume no shares were bought or sold during the period. Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions.

You can find more information about the fund’s expenses, including annual expense ratios, in the Financial Statements section of this report. For additional information on operating expenses and other shareholder costs, please refer to the appropriate fund prospectus.

51

Trustees Approve Advisory Arrangement

The board of trustees of the Vanguard Pennsylvania Tax-Exempt Funds has renewed the funds’ investment advisory arrangement with The Vanguard Group, Inc. Vanguard—through its Fixed Income Group—serves as the investment advisor for each of the funds. The board determined that continuing the funds’ internalized management structure was in the best interests of the funds and their shareholders.

The board based its decision upon its most recent evaluation of the advisor’s investment staff, portfolio management process, and performance. The trustees considered the factors discussed below, among others. However, no single factor determined whether the board approved the arrangement. Rather, it was the totality of the circumstances that drove the board’s decision.

Nature, extent, and quality of services

The board considered the quality of the funds’ investment management over both short- and long-term periods, and took into account the organizational depth and stability of the advisor. Vanguard has been managing investments for more than two decades. George U. Sauter, Vanguard managing director and chief investment officer, has been in the investment management business since 1985. Robert F. Auwaerter, principal in charge of the Fixed Income Group, has been in the investment management business since 1978. The Fixed Income Group adheres to a sound, disciplined investment management process; the team has considerable experience, stability, and depth.

The board concluded that Vanguard’s experience, stability, depth, and performance, among other factors, warranted continuation of the advisory arrangement.

Investment performance

The board considered the short- and long-term performance of the funds, including any periods of outperformance or underperformance of relevant benchmarks and peer groups. The board noted that the funds have performed in line with expectations, and that their results have been consistent with their investment strategies. Information about the funds’ performance, including some of the data considered by the board, can be found in the Performance Summary sections of this report.

Cost

The funds’ expense ratios were far below the average expense ratios charged by funds in their respective peer groups. Each fund’s advisory expense ratio was also well below its peer-group average. Information about the funds’ expense ratios appears in the About Your Fund’s Expenses section of this report as well as in the Financial Statements sections.

The board does not conduct a profitability analysis of Vanguard, because of Vanguard’s unique “at-cost” structure. Unlike most other mutual fund management companies, Vanguard is owned by the funds it oversees, and produces “profits” only in the form of reduced expenses for fund shareholders.

The benefit of economies of scale

The board of trustees concluded that the Vanguard Pennsylvania Tax-Exempt Funds’ low-cost arrangement with Vanguard ensures that the funds will realize economies of scale as they grow, with the cost to shareholders declining as fund assets increase.

The board will consider whether to renew the advisory arrangement again after a one-year period.

52

Glossary

Average Coupon. The average interest rate paid on the fixed income securities held by a fund. It is expressed as a percentage of face value.

Average Duration. An estimate of how much the value of the bonds held by a fund will fluctuate in response to a change in interest rates. To see how the value could change, multiply the average duration by the change in rates. If interest rates rise by 1 percentage point, the value of the bonds in a fund with an average duration of five years would decline by about 5%. If rates decrease by a percentage point, the value would rise by 5%.

Average Effective Maturity. The average length of time until fixed income securities held by a fund reach maturity and are repaid, taking into consideration the possibility that the issuer may call the bond before its maturity date. The figure reflects the proportion of fund assets represented by each security; it also reflects any futures contracts held. In general, the longer the average effective maturity, the more a fund’s share price will fluctuate in response to changes in market interest rates.

Average Quality. An indicator of credit risk, this figure is the average of the ratings assigned to a fund’s holdings by credit-rating agencies. The agencies make their judgment after appraising an issuer’s ability to meet its obligations. Quality is graded on a scale, with AAA indicating the most creditworthy bond issuers and MIG-1, A-1+, SP-1+, and F-1+ indicating the most creditworthy issuers of money market securities.

Average Weighted Maturity. The average length of time until fixed income securities held by a fund reach maturity and are repaid. The figure reflects the proportion of fund assets represented by each security.

Beta. A measure of the magnitude of a fund’s past share-price fluctuations in relation to the ups and downs of a given market index. The index is assigned a beta of 1.00. Compared with a given index, a fund with a beta of 1.20 typically would have seen its share price rise or fall by 12% when the index rose or fell by 10%. A fund’s beta should be reviewed in conjunction with its R-squared (see definition below). The lower the R-squared, the less correlation there is between the fund and the index, and the less reliable beta is as an indicator of volatility.

Expense Ratio. The percentage of a fund’s average net assets used to pay its annual administrative and advisory expenses. These expenses directly reduce returns to investors.

R-Squared. A measure of how much of a fund’s past returns can be explained by the returns from the market in general, as measured by a given index. If a fund’s total returns were precisely synchronized with an index’s returns, its R-squared would be 1.00. If the fund’s returns bore no relationship to the index’s returns, its R-squared would be 0.

Short-Term Reserves. The percentage of a fund invested in highly liquid, short-term securities that can be readily converted to cash.

Yield. A snapshot of a fund’s interest income. The yield, expressed as a percentage of the fund’s net asset value, is based on income earned over the past 30 days (7 days for money market funds) and is annualized, or projected forward for the coming year.

Yield to Maturity. The rate of return an investor would receive if the fixed income securities held by a fund were held to their maturity dates.

53

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The People Who Govern Your Fund

The trustees of your mutual fund are there to see that the fund is operated and managed in your best interests since, as a shareholder, you are a part owner of the fund. Your fund trustees also serve on the board of directors of The Vanguard Group, Inc., which is owned by the Vanguard funds and provides services to them on an at-cost basis.

A majority of Vanguard’s board members are independent, meaning that they have no affiliation with Vanguard or the funds they oversee, apart from the sizable personal investments they have made as private individuals.

Our independent board members bring distinguished backgrounds in business, academia, and public service to their task of working with Vanguard officers to establish the policies and oversee the activities of the funds. Among board members’ responsibilities are selecting investment advisors for the funds; monitoring fund operations, performance, and costs; reviewing contracts; nominating and selecting new trustees/directors; and electing Vanguard officers.

Each trustee serves a fund until its termination; or until the trustee’s retirement, resignation, or death; or otherwise as specified in the fund’s organizational documents. Any trustee may be removed at a shareholders’ meeting by a vote representing two-thirds of the net asset value of all shares of the fund together with shares of other Vanguard funds organized within the same trust. The table on these two pages shows information for each trustee and executive officer of the fund. The mailing address of the trustees and officers is P.O. Box 876, Valley Forge, PA 19482.

Chairman of the Board, Chief Executive Officer, and Trustee
John J. Brennan1
Born 1954	Principal Occupation(s) During the Past Five Years: Chairman of
Trustee since May 1987;	the Board, Chief Executive Officer, and Director/Trustee of The
Chairman of the Board and	Vanguard Group, Inc., and of each of the investment companies
Chief Executive Officer	served by The Vanguard Group.
136 Vanguard Funds Overseen
Independent Trustees
Charles D. Ellis
Born 1937	Principal Occupation(s) During the Past Five Years: Applecore
Trustee since January 2001	Partners (pro bono ventures in education); Senior Advisor to
136 Vanguard Funds Overseen	Greenwich Associates (international business strategy consulting);
	Successor Trustee of Yale University; Overseer of the Stern School
	of Business at New York University; Trustee of the Whitehead
	Institute for Biomedical Research.
Rajiv L. Gupta
Born 1945	Principal Occupation(s) During the Past Five Years: Chairman and
Trustee since December 20012	Chief Executive Officer of Rohm and Haas Co. (chemicals); Board
136 Vanguard Funds Overseen	Member of the American Chemistry Council; Director of Tyco
	International, Ltd. (diversified manufacturing and services) (since
	2005);Trustee of Drexel University and of the Chemical Heritage
	Foundation.
JoAnn Heffernan Heisen
Born 1950	Principal Occupation(s) During the Past Five Years: Corporate Vice
Trustee since July 1998	President and Chief Global Diversity Officer (since January 2006),
136 Vanguard Funds Overseen	Vice President and Chief Information Officer (1997–2005), and
	Member of the Executive Committee of Johnson & Johnson
	(pharmaceuticals/consumer products); Director of the University
	Medical Center at Princeton and Women’s Research and Education
	Institute.

André F. Perold
Born 1952	Principal Occupation(s) During the Past Five Years: George Gund
Trustee since December 2004	Professor of Finance and Banking, Harvard Business School
136 Vanguard Funds Overseen	(since 2000); Senior Associate Dean, Director of Faculty
	Recruiting, and Chair of Finance Faculty, Harvard Business
	School; Director and Chairman of UNX, Inc. (equities trading firm)
	(since 2003); Director of registered investment companies advised
	by Merrill Lynch Investment Managers and affiliates (1985–2004),
	Genbel Securities Limited (South African financial services firm)
	(1999–2003), Gensec Bank (1999–2003), Sanlam, Ltd. (South
	African insurance company) (2001–2003), and Stockback, Inc.
	(credit card firm) (2000–2002).
Alfred M. Rankin, Jr.
Born 1941	Principal Occupation(s) During the Past Five Years: Chairman,
Trustee since January 1993	President, Chief Executive Officer, and Director of NACCO
136 Vanguard Funds Overseen	Industries, Inc. (forklift trucks/housewares/lignite); Director of
	Goodrich Corporation (industrial products/aircraft systems and
	services); Director of Standard Products Company (supplier for the
	automotive industry) until 1998.
J. Lawrence Wilson
Born 1936	Principal Occupation(s) During the Past Five Years: Retired
Trustee since April 1985	Chairman and Chief Executive Officer of Rohm and Haas Co.
136 Vanguard Funds Overseen	(chemicals); Director of Cummins Inc. (diesel engines),
	MeadWestvaco Corp. (packaging products), and
	AmerisourceBergen Corp. (pharmaceutical distribution); Trustee of
	Vanderbilt University and of Culver Educational Foundation.
Executive Officers1
Heidi Stam
Born 1956	Principal Occupation(s) During the Past Five Years: Principal of The
Secretary since July 2005	Vanguard Group, Inc.,since November 1997; General Counsel of
136 Vanguard Funds Overseen	The Vanguard Group since July 2005;Secretary of The Vanguard
	Group and of each of the investment companies served by The
	Vanguard Group since July 2005.
Thomas J. Higgins
Born 1957	Principal Occupation(s) During the Past Five Years: Principal of The
Treasurer since July 1998	Vanguard Group, Inc.;Treasurer of each of the investment
136 Vanguard Funds Overseen	companies served by The Vanguard Group.
Vanguard Senior Management Team
R. Gregory Barton
Mortimer J. Buckley
James H. Gately
Kathleen C. Gubanich
F. William McNabb, III
Michael S. Miller
Ralph K. Packard
George U. Sauter
Founder
John C. Bogle
Chairman and Chief Executive Officer, 1974–1996

1 Officers of the funds are “interested persons” as defined in the Investment Company Act of 1940.

2 December 2002 for Vanguard Equity Income Fund, Vanguard Growth Equity Fund, the Vanguard Municipal Bond Funds, and the Vanguard State
   Tax-ExemptFunds.

   More information about the trustees is in the Statement of Additional Information, available from The Vanguard Group.

P.O. Box 2600

Valley Forge, PA 19482-2600

Connect with Vanguard™ > www.vanguard.com

Fund Information > 800-662-7447	Vanguard, Admiral, Connect with Vanguard, and the ship
	logo are trademarks of The Vanguard Group, Inc.
Direct Investor Account Services > 800-662-2739
	All other marks are the exclusive property of their
Institutional Investor Services > 800-523-1036	respective owners.
Text Telephone > 800-952-3335	All comparative mutual fund data are from Lipper Inc.
	or Morningstar, Inc., unless otherwise noted.
	You can obtain a free copy of Vanguard’s proxy voting
This material may be used in conjunction	guidelines by visiting our website, www.vanguard.com,
with the offering of shares of any Vanguard	and searching for “proxy voting guidelines,” or by calling
fund only if preceded or accompanied by	Vanguard at 800-662-2739. They are also available from
the fund’s current prospectus.	the SEC’s website, www.sec.gov. In addition, you may
	obtain a free report on how your fund voted the proxies for
	securities it owned during the 12 months ended June 30.
	To get the report, visit either www.vanguard.com
	or www.sec.gov.
	You can review and copy information about your fund
	at the SEC’s Public Reference Room in Washington, D.C.
	To find out more about this public service, call the SEC
	at 202-551-8090. Information about your fund is also
	available on the SEC’s website, and you can receive
	copies of this information, for a fee, by sending a
	request in either of two ways: via e-mail addressed to
	publicinfo@sec.gov or via regular mail addressed to the
	Public Reference Section, Securities and Exchange
	Commission, Washington, DC 20549-0102.
	© 2006 The Vanguard Group, Inc.
	All rights reserved.
	Vanguard Marketing Corporation, Distributor.
	Q772 072006

Item 2: Not Applicable

Item 3: Not Applicable

Item 4: Not Applicable

Item 5: Not applicable.

Item 6: Not applicable.

Item 7: Not applicable.

Item 8: Not applicable.

Item 9: Not applicable.

Item 10: Not applicable.

Item 11: Controls and Procedures

        (a) Disclosure Controls and Procedures. The Principal Executive and Financial Officers concluded that the Registrant's Disclosure Controls and Procedures are effective based on their evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report.

        (b) Internal Control Over Financial Reporting. There were no significant changes in Registrant‘s Internal Control Over Financial Reporting or in other factors that could significantly affect this control subsequent to the date of the evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Item 12: Exhibits.

        Certifications.

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.

	VANGUARD PENNSYLVANIA TAX-FREE FUNDS
BY:	(signature)
	(HEIDI STAM) JOHN J. BRENNAN* CHIEF EXECUTIVE OFFICER

Date:   July 20, 2006

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.

	VANGUARD PENNSYLVANIA TAX-FREE FUNDS
BY:	(signature)
	(HEIDI STAM) JOHN J. BRENNAN* CHIEF EXECUTIVE OFFICER

Date:   July 20, 2006

	VANGUARD PENNSYLVANIA TAX-FREE FUNDS
BY:	(signature)
	(HEIDI STAM) THOMAS J. HIGGINS* TREASURER

Date:   July 20, 2006

*By Power of Attorney. See File Number 2-31333, filed on January 23, 2006. Incorporated by Reference.