Voyageur Mutual Funds Ii NCSR Certified annual shareholder report (management investment company)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES

Investment Company Act file number:		811-04989

Exact name of registrant as specified in charter:		Voyageur Mutual Funds II

Address of principal executive offices:		2005 Market Street
		Philadelphia, PA 19103

Name and address of agent for service:		David F. Connor, Esq.
		2005 Market Street
		Philadelphia, PA 19103

Registrant’s telephone number, including area code:		(800) 523-1918

Date of fiscal year end:		August 31

Date of reporting period:		August 31, 2012

Item 1. Reports to Stockholders

Annual report

Delaware Tax-Free Arizona Fund
Delaware Tax-Free California Fund
Delaware Tax-Free Colorado Fund
Delaware Tax-Free Idaho Fund
Delaware Tax-Free New York Fund

August 31, 2012

Fixed income mutual funds

Carefully consider the Funds’ investment objectives, risk factors, charges, and expenses before investing. This and other information can be found in the Funds’ prospectuses and, if available, their summary prospectuses, which may be obtained by visiting delawareinvestments.com or calling 800 523-1918. Investors should read the prospectus and, if available, the summary prospectus carefully before investing.

You can obtain shareholder reports and prospectuses online instead of in the mail.
Visit delawareinvestments.com/edelivery.

Experience Delaware Investments

Delaware Investments is committed to the pursuit of consistently superior asset management and unparalleled client service. We believe in our investment processes, which seek to deliver consistent results, and in convenient services that help add value for our clients.

If you are interested in learning more about creating an investment plan, contact your financial advisor.

You can learn more about Delaware Investments or obtain a prospectus for Delaware Tax-Free Arizona Fund, Delaware Tax-Free California Fund, Delaware Tax-Free Colorado Fund, Delaware Tax-Free Idaho Fund, and Delaware Tax-Free New York Fund at delawareinvestments.com.

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Delaware Management Holdings, Inc. and its subsidiaries (collectively known by the marketing name of Delaware Investments) are wholly owned subsidiaries of Macquarie Group Limited, a global provider of banking, financial, advisory, investment and funds management services.

Investments in Delaware Tax-Free Arizona Fund, Delaware Tax-Free California Fund, Delaware Tax-Free Colorado Fund, Delaware Tax-Free Idaho Fund, and Delaware Tax-Free New York Fund are not and will not be deposits with or liabilities of Macquarie Bank Limited ABN 46 008 583 542 and its holding companies, including their subsidiaries or related companies (Macquarie Group), and are subject to investment risk, including possible delays in repayment and loss of income and capital invested. No Macquarie Group company guarantees or will guarantee the performance of the Funds, the repayment of capital from the Funds, or any particular rate of return.

Table of contents
Portfolio management review		1
Performance summaries		7
Disclosure of Fund expenses		22
Security type/sector allocations		25
Statements of net assets		30
Statements of operations		72
Statements of changes in net assets		74
Financial highlights		84
Notes to financial statements		114
Report of independent registered
public accounting firm		128
Other Fund information		129
Board of trustees/directors and
officers addendum		136
About the organization		146

Unless otherwise noted, views expressed herein are current as of Aug. 31, 2012, and subject to change.

Funds are not FDIC insured and are not guaranteed. It is possible to lose the principal amount invested.

Mutual fund advisory services provided by Delaware Management Company, a series of Delaware Management Business Trust, which is a registered investment advisor. Delaware Investments, a member of Macquarie Group, refers to Delaware Management Holdings, Inc. and its subsidiaries, including the Funds’ distributor, Delaware Distributors, L.P. Macquarie Group refers to Macquarie Group Limited and its subsidiaries and affiliates worldwide.

All third-party marks cited are the property of their respective owners.

Portfolio management review
Delaware Investments^® state tax-free funds	September 11, 2012

Performance preview (for the year ended August 31, 2012)
Delaware Tax-Free Arizona Fund (Class A shares)	1-year return	+10.15	%
Barclays Municipal Bond Index (benchmark)	1-year return	+8.78	%
Lipper Arizona Municipal Debt Funds Average	1-year return	+10.68	%

Past performance does not guarantee future results.

For complete, annualized performance for Delaware Tax-Free Arizona Fund, please see the table on page 7.

The performance of Class A shares excludes the applicable sales charge and reflects the reinvestment of all distributions.

Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.

The Lipper Arizona Municipal Debt Funds Average compares funds that limit assets to those securities that are exempt from taxation in Arizona (double tax-exempt) or a city in Arizona (triple tax-exempt).

Delaware Tax-Free California Fund (Class A shares)	1-year return	+13.90	%
Barclays Municipal Bond Index (benchmark)	1-year return	+8.78	%
Lipper California Municipal Debt Funds Average	1-year return	+12.44	%

Past performance does not guarantee future results.

For complete, annualized performance for Delaware Tax-Free California Fund, please see the table on page 10.

The performance of Class A shares excludes the applicable sales charge and reflects the reinvestment of all distributions.

Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.

The Lipper California Municipal Debt Funds Average compares funds that limit assets to those securities that are exempt from taxation in California (double tax-exempt) or a city in California (triple tax-exempt).

Delaware Tax-Free Colorado Fund (Class A shares)	1-year return	+11.23	%
Barclays Municipal Bond Index (benchmark)	1-year return	+8.78	%
Lipper Colorado Municipal Debt Funds Average	1-year return	+10.01	%

Past performance does not guarantee future results.

For complete, annualized performance for Delaware Tax-Free Colorado Fund, please see the table on page 13.

The performance of Class A shares excludes the applicable sales charge and reflects the reinvestment of all distributions.

Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.

The Lipper Colorado Municipal Debt Funds Average compares funds that limit assets to those securities that are exempt from taxation in Colorado (double tax-exempt) or a city in Colorado (triple tax-exempt).

Portfolio management review
Delaware Investments^® state tax-free funds

Delaware Tax-Free Idaho Fund (Class A shares)	1-year return	+8.21	%
Barclays Municipal Bond Index (benchmark)	1-year return	+8.78	%
Lipper Other States Municipal Debt Funds Average	1-year return	+9.03	%

Past performance does not guarantee future results.

For complete, annualized performance for Delaware Tax-Free Idaho Fund, please see the table on page 16.

The performance of Class A shares excludes the applicable sales charge and reflects the reinvestment of all distributions.

Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.

The Lipper Other States Municipal Debt Funds Average compares funds that limit assets to those securities that are exempt from taxation on a specified city or state basis.

Delaware Tax-Free New York Fund (Class A shares)	1-year return	+12.18	%
Barclays Municipal Bond Index (benchmark)	1-year return	+8.78	%
Lipper New York Municipal Debt Funds Average	1-year return	+10.06	%

Past performance does not guarantee future results.

For complete, annualized performance for Delaware Tax-Free New York Fund, please see the table on page 19.

The performance of Class A shares excludes the applicable sales charge and reflects the reinvestment of all distributions.

Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.

The Lipper New York Municipal Debt Funds Average compares funds that limit assets to those securities that are exempt from taxation in New York (double tax-exempt) or a city in New York (triple tax-exempt).

Economic backdrop

As the Funds’ fiscal year got under way in September 2011, signs were mounting that the U.S. economy was gradually improving. While this situation was interpreted positively for economically sensitive asset classes, it was also expected to lead to higher interest rates — a negative situation for most types of bonds.

By the second half of the Funds’ fiscal year, however, it became clear that the economy’s momentum was stalling:

U.S. gross domestic product (GDP) — a measure of the goods and services produced by the nation — grew at an annualized rate of just 2.0% in the first quarter of 2012, down from 4.1% in the previous three-month period. In the second quarter of 2012, the rate of GDP growth slowed further, to an estimated 1.7%.
Job creation remained persistently sluggish, as the unemployment rate fluctuated within a historically high range of 8.1% to 8.3% between January and August 2012.

(Data: U.S. Commerce Department; U.S. Labor Department)

Although individual localities around the country continued to experience fiscal struggles, we did not view this as an indication of deeply rooted risk in the municipal bond market as a whole. Instead, we saw isolated cases of municipalities dealing with specific challenges unique to their circumstances (such as underfunded pension plans or weak revenue streams).

Outside the United States, elevated debt levels in several European countries — most notably Greece, Spain, and Italy — continued to foster the region’s economic volatility. European policy makers hoped to avoid the worst-case scenario of a breakup of the shared euro currency, which would likely result in a massive disruption to the global economy. As the Funds’ fiscal year progressed, it appeared that a tentative framework for resolution was in place, but financial markets remained highly sensitive to the uncertainty of a successful ending to this fiscal crisis.

Economic conditions within each state, briefly noted

Arizona’s diverse economy is slowly recovering from the global financial crisis of 2008-2009 that has shaken economies for the past several years. Weakness remains likely in the short term, due largely to the damaging effects of a protracted housing bubble. Other notable developments:

July’s nonfarm employment reading of 2.39 million was up 2.4% from July 2011, higher than the nation’s 1.4% gain. Unemployment figures have begun to improve, with a July 2012 unemployment rate of 8.3% (compared to a rate of 9.4% one year earlier).
State revenues totaled $9.8 billion for fiscal 2011, an 18% increase from the year before. This was mostly accounted for by sales taxes and income taxes. Through the first 11 months of fiscal 2012, revenues are coming in 0.8% higher than expected and 6% higher than fiscal 2011.

(Data: U.S. Labor Department; Moody’s Investors Service)

California enjoys a large, diverse, and wealthy economy that accounts for 13% of U.S. gross domestic product. It shares much of the economic unsteadiness that has been felt nationwide. While the state’s unemployment rate has improved somewhat (from 12% in July 2011 to 10.7% in July 2012), it remains well above the national rate.

The governor signed a $91.3 billion 2013 General Fund budget that closed a $15.7 billion budget gap through revenue increases and expenditure cuts. In total, the budget reduces expenditures by $8.1 billion. The majority of the spending cuts are focused on health and human services, education, and the court system. If temporary taxes (which will be put to a popular vote in November 2012) are not approved, an additional $5.95 billion in cuts will be triggered. These cuts would be effective January 1, 2013.

(Data: U.S. Labor Department; California State Controller monthly financial reports; Moody’s Investors Service)

Colorado maintains a diverse economy, with a variety of strengths in the broad service sector. Generally speaking, Colorado remains a wealthy state, with per-capita income equal to 105% of the national average. The state’s nonfarm employment reading for July 2012 came in at 2.3 million, up by 1.6% from July 2011. Total revenues for fiscal 2012 are estimated to increase by 7.8% over fiscal 2011. For fiscal 2013, the state’s budget of $7.4 billion represents a 5.8% increase over fiscal 2012.

(Data: U.S. Labor Department; Colorado Office of State Planning and Budgeting; Moody’s Investors Service)

Portfolio management review
Delaware Investments^® state tax-free funds

In Idaho, July 2012 nonfarm employment came in at 619,000, up 1.3% from July 2011. Idaho’s economy continued to grow more diversified; however, it still has an above-average dependence on the natural resource sector.

Idaho’s governor signed a $2.7 billion 2013 General Fund budget in April 2012, representing a 6.8% increase over fiscal 2012. The budget includes $36 million in tax relief that reduces the top corporate and individual tax rates from 7.6% and 7.8%, respectively, to 7.4% each.

(Data: U.S. Labor Department; Idaho Division of Financial Management; www.sco.idaho.gov)

New York continued to exhibit a mature, broad-based, and wealthy economy that typically attracts a highly educated and global workforce. July 2012 readings for nonfarm employment came in at 8.84 million, up 1.3% from July 2011. Other notable circumstances:

The state’s unemployment rate in July 2012 was 9.1%, higher than the national rate and above the state’s July 2011 rate of 8%.
Revenues for the state’s 2012 fiscal year totaled $56.9 billion, 4.6% higher than fiscal 2011 but $314 million lower than projections.
The state ended fiscal 2012 with a General Fund balance of $1.79 billion, an increase over fiscal 2011.
Lawmakers signed off on a $132.6 billion budget that cuts spending by $135 million and includes no new taxes.
The budget closes what was once a $3.5 billion deficit, a process made easier when lawmakers in December approved a tax increase on joint earners earning at least $2 million annually.

(Data: U.S. Labor Department; New York State Division of the Budget; Moody’s Investors Service; New York State Comptroller)

Municipal bond market conditions

The Funds’ fiscal year coincided with a beneficial environment for many municipal bond investors. Amid the sluggish U.S. economic backdrop and potential fallout from the European debt situation, yields on U.S. Treasury debt stayed dramatically low. Investors therefore looked elsewhere for sources of competitive yield, and municipal bonds benefited from this attention.

Another factor helping to lift municipal bond prices was a favorable relationship between supply and demand. The relatively limited supply of tax-exempt bonds, paired with extremely strong demand from some investors, provided support for the asset class. Several factors fueled the demand side of the equation. First, there were heavy flows back into investors’ hands through bond redemptions. Second, new inflows into municipal bond mutual funds remained high, as did demand from institutional investors. Institutional investors don’t often purchase municipal securities and don’t traditionally drive the market, but in this case they likely saw certain municipal bonds offering unusually attractive values relative to comparable opportunities among taxable bonds.

Another factor underlying the demand for municipal securities was investors’ search for higher yield in a low interest rate environment. Accordingly, bonds that exhibited higher yields, including those with longer maturities and lower credit ratings, generally outperformed their

counterparts. In fact, the best-performing maturity range of the municipal bond market (as measured by the Barclays Municipal Bond Index) was 22 years and longer, which gained 14.52%, compared with an advance of just 0.89% for bonds with maturities of less than two years. Similarly, BBB-rated bonds were up 15.40% for the same time period, compared with a gain of just 6.07% for the AAA segment within that index.

Maintaining a consistent strategy

Across the Funds, we maintained a consistent management approach, emphasizing bottom-up security selection. We made investment decisions based on our research on individual bonds, instead of reacting to macroeconomic trends or trying to predict interest rate movements.

The Funds’ portfolios regularly emphasize A-rated and BBB-rated bonds and also maintain some allocation to bonds rated below investment grade. Simultaneously, they tend to underweight AAA-rated and AA-rated securities, as these higher-quality bonds generally offer fewer prospects to uncover hidden value.

Our comfort level with the Funds’ elevated weighting in relatively credit-sensitive securities stems from the thoroughness of our credit research process and our confidence in its ability to identify tax-exempt securities that offer a positive risk-versus-reward tradeoff.

The Funds entered the fiscal year well positioned in our view, given the income being generated by certain holdings acquired in a higher interest rate environment during 2009 and 2010. We did not make major changes to the Funds’ portfolio holdings during the fiscal year. The majority of activity focused on investing new cash that came into the Funds. We invested opportunistically, taking advantage of individual securities that we believed fit into each portfolio’s respective structure.

One noteworthy source of bond supply during the Funds’ fiscal year was Puerto Rico, and in late 2011 we added a number of Puerto Rican bonds that we believed were priced attractively. With a large amount of Puerto Rican issuance coming to market in a relatively short time period, we followed our rigorous research process in identifying what we believed to be meaningful additions to each Fund’s portfolio.

Notable sectors and securities

As mentioned earlier, bonds with longer maturity dates and relatively lower credit ratings generally performed better, a phenomenon reflected in breakdowns of market performance by maturity and by credit rating.

The outperformance of lower-rated bonds proved favorable for our style of investing. The strongest individual contributors to each of the Funds’ total-return results were notable for being representative of the trend in which long-dated, lower-credit-quality issues enjoyed a performance advantage.

The two strongest-performing individual contributors in Delaware Tax-Free Arizona Fund included healthcare bonds for the John C. Lincoln Hospital in Glendale, maturing in 2042 and rated BBB by Standard & Poor’s (S&P). Outperformers also included education bonds for Tucson Country Day School in Pima County, maturing in 2037 and rated BBB- by S&P. Among the Fund’s weakest contributors were AA-rated civic improvement bonds for a Phoenix light-rail transit project

Portfolio management review
Delaware Investments^® state tax-free funds

and AAA-rated Arizona State Transportation Board highway revenue bonds. Both bonds struggled as their higher quality ratings made them less desirable to increasingly risk-tolerant investors. These securities contributed relatively weakly to the Fund’s overall return but nevertheless recorded positive gains.

Within Delaware Tax-Free California Fund, lower-rated, longer-dated securities once again provided the biggest support to Fund returns. The strongest contributors included nonrated Modesto County special tax bonds maturing in 2036 and Golden State tobacco securitization bonds maturing in 2047. To highlight the importance of maturity date on bond performance during the fiscal year, we note that the Fund’s positions in other Golden State tobacco securitization bonds, which were scheduled to mature in 2013, achieved very modest returns.

Within Delaware Tax-Free Colorado Fund, the strongest performers included Denver Health & Hospital Authority healthcare bonds, which were rated BBB by S&P and scheduled to mature in 2036. In addition, Denver Convention Center Hotel Authority revenue bonds, rated BBB- by S&P and maturing in 2035, made a significant contribution to performance. In contrast, notably weaker performers included two school district bonds, both of which carried near-term maturity dates that may have limited their attractiveness to many investors.

Within Delaware Tax-Free Idaho Fund, the strongest contributors included Virgin Islands Public Finance Authority revenue bonds (rated BBB by S&P and maturing in 2029), as well as nonrated developmental district bonds maturing in 2034. In both cases, relatively low ratings and long maturity dates helped performance. On the other hand, the Fund’s weakest-performing bonds included revenue bonds for Idaho State University (rated AA+ by S&P and maturing in 2020), and Bannock County school district bonds (rated Aaa by Moody’s Investors Service (Moody’s) and maturing in 2015). We believe both issues were held back by their high credit quality and near-term maturity dates.

Finally, the strongest-performing bonds within Delaware Tax-Free New York Fund included nonrated bonds issued by the East Rochester Housing Authority for Woodland Village (a continuing care retirement community), and industrial development bonds for Brighter Choice Charter School in Albany (rated BBB- by Fitch and maturing in 2037). Relatively weaker performers, meanwhile, included Battery Park City municipal lease bonds (with a 2014 call date and AAA rating by S&P) and Puerto Rico highway general obligation bonds (with a 2016 call date and Aaa rating by Moody’s). These securities appeared to be out of favor in the marketplace, given their high credit ratings and short maturity dates.

Performance summaries
Delaware Tax-Free Arizona Fund	August 31, 2012

The performance data quoted represent past performance; past performance does not guarantee future results. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost. Please obtain the performance data current for the most recent month end by calling 800 523-1918 or visiting our website at delawareinvestments.com/performance. Current performance may be lower or higher than the performance data quoted.

Fund performance^1,2	Average annual total returns through Aug. 31, 2012
		1 year		5 years		10 years
Class A (Est. April 1, 1991)
Excluding sales charge		+10.15	%	+5.81	%	+4.78	%
Including sales charge		+5.23	%	+4.84	%	+4.30	%
Class B (Est. March 10, 1995)
Excluding sales charge		+9.42	%	+5.04	%	+4.15	%
Including sales charge		+5.42	%	+4.79	%	+4.15	%
Class C (Est. May 26, 1994)
Excluding sales charge		+9.31	%	+5.03	%	+4.00	%
Including sales charge		+8.31	%	+5.03	%	+4.00	%

¹ Returns reflect the reinvestment of all distributions and are presented both with and without the applicable sales charges described below. Returns do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares.

Expense limitations were in effect for certain classes during some or all of the periods shown in the “Fund performance” chart. The current expenses for each class are listed on the “Fund expense ratios” table on page 8. Performance would have been lower had expense limitations not been in effect.

Class A shares are sold with a maximum front-end sales charge of 4.50%, and have an annual distribution and service fee of 0.25% of average daily net assets. Performance for Class A shares, excluding sales charges, assumes that no front-end sales charge applied.

Class B shares may be purchased only through dividend reinvestment and certain permitted exchanges as described in the prospectus. Please see the prospectus for additional information on Class B shares. Class B shares have a contingent deferred sales charge that declines from 4.00% to zero depending on the period of time the shares are held. They are also subject to an annual distribution and service fee of 1.00% of average daily net assets. Class B shares will automatically convert to Class A shares on a quarterly basis approximately eight years after purchase. Ten-year performance figures for Class B shares reflect conversion to Class A shares after approximately eight years.

Class C shares are sold with a contingent deferred sales charge of 1.00% if redeemed during the first 12 months. They are also subject to an annual distribution and service fee of 1.00% of average daily net assets.

Performance summaries
Delaware Tax-Free Arizona Fund

Performance for Class B and C shares, excluding sales charges, assumes either that contingent deferred sales charges did not apply or that the investment was not redeemed.

The “Fund performance” table and the “Performance of a $10,000 investment” graph do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares.

Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt.

The Fund may also be subject to prepayment risk, the risk that the principal of a fixed income security that is held by the Fund may be prepaid prior to maturity, potentially forcing the Fund to reinvest that money at a lower interest rate.

Funds that invest primarily in one state may be more susceptible to the economic, regulatory, and other factors of that state than funds that invest more broadly.

Substantially all dividend income derived from tax-free funds is exempt from federal income tax. Some income may be subject to the federal alternative minimum tax (AMT) that applies to certain investors. Capital gains, if any, are taxable.

Bond ratings are determined by a nationally recognized statistical rating organization.

² The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. Delaware Investments has agreed to reimburse certain expenses and/or waive certain fees in order to prevent total fund operating expenses (excluding certain fees and expenses) from exceeding 0.59% of the Fund’s average daily net assets from Dec. 29, 2011, through Dec. 28, 2012. Please see the most recent prospectus and any applicable supplement(s) for additional information on these fee waivers and/ or reimbursements.

Fund expense ratios	Class A	Class B	Class C
Total annual operating expenses	0.93%	1.68%	1.68%
(without fee waivers)
Net expenses	0.84%	1.59%	1.59%
(including fee waivers, if any)
Type of waiver	Contractual	Contractual	Contractual

Performance of a $10,000 investment¹Average annual total returns from Aug. 31, 2002, through Aug. 31, 2012

For period beginning Aug. 31, 2002, through Aug. 31, 2012		Starting value	Ending value
	Barclays Municipal Bond Index	$10,000	$16,596
	Delaware Tax-Free Arizona Fund — Class A shares	$9,550	$15,239

¹ The “Performance of a $10,000 investment” graph assumes $10,000 invested in Class A shares of the Fund on Aug. 31, 2002, and includes the effect of a 4.50% front-end sales charge and the reinvestment of all distributions. The graph does not reflect the deduction of taxes the shareholders would pay on Fund distributions or redemptions of Fund shares. Expense limitations were in effect for some or all of the periods shown. Performance would have been lower had expense limitations not been in effect. Current expenses are listed in the “Fund expense ratios” table on page 8. Please note additional details on pages 7 through 9.

The chart also assumes $10,000 invested in the Barclays Municipal Bond Index as of Aug. 31, 2002. The Barclays Municipal Bond Index measures the total return performance of the long-term, investment grade tax-exempt bond market.

Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance is not a guarantee of future results.

Performance of other Fund classes will vary due to different charges and expenses.

	Nasdaq symbols		CUSIPs
Class A		VAZIX	928916204
Class B		DVABX	928928639
Class C		DVACX	928916501

Performance summaries
Delaware Tax-Free California Fund	August 31, 2012

Fund performance^1,2	Average annual total returns through Aug. 31, 2012
		1 year	5 years	10 years
Class A (Est. March 2, 1995)
Excluding sales charge		+13.90%	+6.56%	+5.48%
Including sales charge		+8.73%	+5.58%	+5.00%
Class B (Est. Aug. 23, 1995)
Excluding sales charge		+13.10%	+5.75%	+4.84%
Including sales charge		+9.10%	+5.51%	+4.84%
Class C (Est. April 9, 1996)
Excluding sales charge		+13.13%	+5.76%	+4.70%
Including sales charge		+12.13%	+5.76%	+4.70%

Expense limitations were in effect for certain classes during some or all of the periods shown in the “Fund performance” chart. The current expenses for each class are listed on the “Fund expense ratios” table on page 11. Performance would have been lower had expense limitations not been in effect.

Performance for Class B and C shares, excluding sales charges, assumes either that contingent deferred sales charges did not apply or that the investment was not redeemed.

Funds that invest primarily in one state may be more susceptible to the economic, regulatory, and other factors of that state than funds that invest more broadly.

Bond ratings are determined by a nationally recognized statistical rating organization.

² The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. Delaware Investments has agreed to reimburse certain expenses and/or waive certain fees in order to prevent total fund operating expenses (excluding certain fees and expenses) from exceeding 0.57% of the Fund’s average daily net assets from Dec. 29, 2011, through Dec. 28, 2012. Please see the most recent prospectus and any applicable supplement(s) for additional information on these fee waivers and/ or reimbursements.

Fund expense ratios	Class A	Class B	Class C
Total annual operating expenses	0.98%	1.73%	1.73%
(without fee waivers)
Net expenses	0.82%	1.57%	1.57%
(including fee waivers, if any)
Type of waiver	Contractual	Contractual	Contractual

Performance summaries
Delaware Tax-Free California Fund

Performance of a $10,000 investment¹Average annual total returns from Aug. 31, 2002, through Aug. 31, 2012

For period beginning Aug. 31, 2002, through Aug. 31, 2012		Starting value	Ending value
	Barclays Municipal Bond Index	$10,000	$16,596
	Delaware Tax-Free California Fund — Class A shares	$9,550	$16,282

¹The “Performance of a $10,000 investment” graph assumes $10,000 invested in Class A shares of the Fund on Aug. 31, 2002, and includes the effect of a 4.50% front-end sales charge and the reinvestment of all distributions. The graph does not reflect the deduction of taxes the shareholders would pay on Fund distributions or redemptions of Fund shares. Expense limitations were in effect for some or all of the periods shown. Performance would have been lower had expense limitations not been in effect. Current expenses are listed in the “Fund expense ratios” table on page 11. Please note additional details on pages 10 through 12.

Performance of other Fund classes will vary due to different charges and expenses.

	Nasdaq symbols		CUSIPs
Class A		DVTAX	928928829
Class B		DVTFX	928928811
Class C		DVFTX	928928795

Delaware Tax-Free Colorado Fund

August 31, 2012

Fund performance^1,2	Average annual total returns through Aug. 31, 2012
		1 year	5 years	10 years
Class A (Est. April 23, 1987)
Excluding sales charge		+11.23%	+5.95%	+4.93%
Including sales charge		+6.25%	+4.97%	+4.45%
Class B (Est. March 22, 1995)
Excluding sales charge		+10.41%	+5.18%	+4.30%
Including sales charge		+6.41%	+4.93%	+4.30%
Class C (Est. May 6, 1994)
Excluding sales charge		+10.39%	+5.17%	+4.15%
Including sales charge		+9.39%	+5.17%	+4.15%

Expense limitations were in effect for certain classes during some or all of the periods shown in the “Fund performance” chart. The current expenses for each class are listed on the “Fund expense ratios” table on page 14. Performance would have been lower had expense limitations not been in effect.

Performance summaries
Delaware Tax-Free Colorado Fund

Performance for Class B and C shares, excluding sales charges, assumes either that contingent deferred sales charges did not apply or that the investment was not redeemed.

Funds that invest primarily in one state may be more susceptible to the economic, regulatory, and other factors of that state than funds that invest more broadly.

Bond ratings are determined by a nationally recognized statistical rating organization.

Fund expense ratios	Class A	Class B	Class C
Total annual operating expenses	0.95%	1.70%	1.70%
(without fee waivers)
Net expenses	0.84%	1.59%	1.59%
(including fee waivers, if any)
Type of waiver	Contractual	Contractual	Contractual

Performance of a $10,000 investment¹Average annual total returns from Aug. 31, 2002, through Aug. 31, 2012

For period beginning Aug. 31, 2002, through Aug. 31, 2012		Starting value	Ending value
	Barclays Municipal Bond Index	$10,000	$16,596
	Delaware Tax-Free Colorado Fund — Class A shares	$9,550	$15,461

¹The “Performance of a $10,000 investment” graph assumes $10,000 invested in Class A shares of the Fund on Aug. 31, 2002, and includes the effect of a 4.50% front-end sales charge and the reinvestment of all distributions. The graph does not reflect the deduction of taxes the shareholders would pay on Fund distributions or redemptions of Fund shares. Expense limitations were in effect for some or all of the periods shown. Performance would have been lower had expense limitations not been in effect. Current expenses are listed in the “Fund expense ratios” table on page 14. Please note additional details on pages 13 through 15.

Performance of other Fund classes will vary due to different charges and expenses.

	Nasdaq symbols		CUSIPs
Class A		VCTFX	928920107
Class B		DVBTX	928928787
Class C		DVCTX	92907R101

Performance summaries
Delaware Tax-Free Idaho Fund	August 31, 2012

Fund performance^1,2	Average annual total returns through Aug. 31, 2012
		1 year	5 years	10 years
Class A (Est. Jan. 4, 1995)
Excluding sales charge		+8.21%	+5.60%	+4.82%
Including sales charge		+3.36%	+4.64%	+4.34%
Class B (Est. March 16, 1995)
Excluding sales charge		+7.41%	+4.83%	+4.19%
Including sales charge		+3.41%	+4.58%	+4.19%
Class C (Est. Jan. 11, 1995)
Excluding sales charge		+7.41%	+4.82%	+4.04%
Including sales charge		+6.41%	+4.82%	+4.04%

Expense limitations were in effect for certain classes during some or all of the periods shown in the “Fund performance” chart. The current expenses for each class are listed on the “Fund expense ratios” table on page 17. Performance would have been lower had expense limitations not been in effect.

Performance for Class B and C shares, excluding sales charges, assumes either that contingent deferred sales charges did not apply or that the investment was not redeemed.

Funds that invest primarily in one state may be more susceptible to the economic, regulatory, and other factors of that state than funds that invest more broadly.

Bond ratings are determined by a nationally recognized statistical rating organization.

² The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. Delaware Investments has agreed to reimburse certain expenses and/or waive certain fees in order to prevent total fund operating expenses (excluding certain fees and expenses) from exceeding 0.63% of the Fund’s average daily net assets from Dec. 29, 2011, through Dec. 28, 2012. Please see the most recent prospectus and any applicable supplement(s) for additional information on these fee waivers and/or reimbursements.

Fund expense ratios	Class A	Class B	Class C
Total annual operating expenses	0.96%	1.71%	1.71%
(without fee waivers)
Net expenses	0.88%	1.63%	1.63%
(including fee waivers, if any)
Type of waiver	Contractual	Contractual	Contractual

Performance summaries
Delaware Tax-Free Idaho Fund

Performance of a $10,000 investment¹Average annual total returns from Aug. 31, 2002, through Aug. 31, 2012

For period beginning Aug. 31, 2002, through Aug. 31, 2012		Starting value	Ending value
	Barclays Municipal Bond Index	$10,000	$16,596
	Delaware Tax-Free Idaho Fund — Class A shares	$9,550	$15,295

¹ The “Performance of a $10,000 investment” graph assumes $10,000 invested in Class A shares of the Fund on Aug. 31, 2002, and includes the effect of a 4.50% front-end sales charge and the reinvestment of all distributions. The graph does not reflect the deduction of taxes the shareholders would pay on Fund distributions or redemptions of Fund shares. Expense limitations were in effect for some or all of the periods shown. Performance would have been lower had expense limitations not been in effect. Current expenses are listed in the “Fund expense ratios” table on page 17. Please note additional details on pages 16 through 18.

Performance of other Fund classes will vary due to different charges and expenses.

	Nasdaq symbols		CUSIPs
Class A		VIDAX	928928704
Class B		DVTIX	928928746
Class C		DVICX	928928803

Delaware Tax-Free New York Fund

August 31, 2012

Fund performance^1,2	Average annual total returns through Aug. 31, 2012
		1 year	5 years	10 years
Class A (Est. Nov. 6, 1987)
Excluding sales charge		+12.18%	+6.62%	+5.50%
Including sales charge		+7.12%	+5.63%	+5.01%
Class B (Est. Nov. 14, 1994)
Excluding sales charge		+11.36%	+5.83%	+4.86%
Including sales charge		+7.36%	+5.59%	+4.86%
Class C (Est. April 26, 1995)
Excluding sales charge		+11.26%	+5.81%	+4.72%
Including sales charge		+10.26%	+5.81%	+4.72%

Expense limitations were in effect for certain classes during some or all of the periods shown in the “Fund performance” chart. The current expenses for each class are listed on the “Fund expense ratios” table on page 20. Performance would have been lower had expense limitations not been in effect.

Performance summaries
Delaware Tax-Free New York Fund

Performance for Class B and C shares, excluding sales charges, assumes either that contingent deferred sales charges did not apply or that the investment was not redeemed.

Funds that invest primarily in one state may be more susceptible to the economic, regulatory, and other factors of that state than funds that invest more broadly.

Bond ratings are determined by a nationally recognized statistical rating organization.

² The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. Delaware Investments has agreed to reimburse certain expenses and/or waive certain fees in order to prevent total fund operating expenses (excluding certain fees and expenses) from exceeding 0.55% of the Fund’s average daily net assets from Dec. 29, 2011, through Dec. 28, 2012. Please see the most recent prospectus and any applicable supplement(s) for additional information on these fee waivers and/or reimbursements.

Fund expense ratios	Class A	Class B	Class C
Total annual operating expenses	1.05%	1.80%	1.80%
(without fee waivers)
Net expenses	0.80%	1.55%	1.55%
(including fee waivers, if any)
Type of waiver	Contractual	Contractual	Contractual

Performance of a $10,000 investment¹Average annual total returns from Aug. 31, 2002, through Aug. 31, 2012

For period beginning Aug. 31, 2002, through Aug. 31, 2012		Starting value	Ending value
	Barclays Municipal Bond Index	$10,000	$16,596
	Delaware Tax-Free New York Fund — Class A shares	$9,550	$16,311

¹ The “Performance of a $10,000 investment” graph assumes $10,000 invested in Class A shares of the Fund on Aug. 31, 2002, and includes the effect of a 4.50% front-end sales charge and the reinvestment of all distributions. The graph does not reflect the deduction of taxes the shareholders would pay on Fund distributions or redemptions of Fund shares. Expense limitations were in effect for some or all of the periods shown. Performance would have been lower had expense limitations not been in effect. Current expenses are listed in the “Fund expense ratios” table on page 20. Please note additional details on pages 19 through 21.

Performance of other Fund classes will vary due to different charges and expenses.

	Nasdaq symbols		CUSIPs
Class A		FTNYX	928928274
Class B		DVTNX	928928266
Class C		DVFNX	928928258

Disclosure of Fund expenses
For the six-month period from March 1, 2012 to August 31, 2012 (Unaudited)

As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; and exchange fees; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Fund expenses. These following examples are intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire six-month period from March 1, 2012 to August 31, 2012.

Actual expenses

The first section of the tables shown, “Actual Fund return,” provides information about actual account values and actual expenses. You may use the information in this section of the table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical example for comparison purposes

The second section of the tables shown, “Hypothetical 5% return,” provides information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratios and an assumed rate of return of 5% per year before expenses, which is not the Funds’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in each Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second section of each table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. The Funds’ expenses shown in the tables reflect fee waivers in effect. The expenses shown in each table assume reinvestment of all dividends and distributions.

Delaware Tax-Free Arizona Fund
Expense analysis of an investment of $1,000

	Beginning			Ending						Expenses
	Account Value			Account Value			Annualized			Paid During Period
	3/1/12			8/31/12			Expense Ratio			3/1/12 to 8/31/12*
Actual Fund return
Class A		$	1,000.00		$	1,037.10		0.84	%		$	4.30
Class B			1,000.00			1,034.10		1.59	%			8.13
Class C			1,000.00			1,033.10		1.59	%			8.13
Hypothetical 5% return (5% return before expenses)
Class A		$	1,000.00		$	1,020.91		0.84	%		$	4.27
Class B			1,000.00			1,017.14		1.59	%			8.06
Class C			1,000.00			1,017.14		1.59	%			8.06

Delaware Tax-Free California Fund
Expense analysis of an investment of $1,000

	Beginning			Ending						Expenses
	Account Value			Account Value			Annualized			Paid During Period
	3/1/12			8/31/12			Expense Ratio			3/1/12 to 8/31/12*
Actual Fund return
Class A		$	1,000.00		$	1,050.30		0.82	%		$	4.23
Class B			1,000.00			1,047.10		1.57	%			8.08
Class C			1,000.00			1,047.20		1.57	%			8.08
Hypothetical 5% return (5% return before expenses)
Class A		$	1,000.00		$	1,021.01		0.82	%		$	4.17
Class B			1,000.00			1,017.24		1.57	%			7.96
Class C			1,000.00			1,017.24		1.57	%			7.96

Delaware Tax-Free Colorado Fund
Expense analysis of an investment of $1,000

	Beginning			Ending						Expenses
	Account Value			Account Value			Annualized			Paid During Period
	3/1/12			8/31/12			Expense Ratio			3/1/12 to 8/31/12*
Actual Fund return
Class A		$	1,000.00		$	1,033.30		0.84	%		$	4.29
Class B			1,000.00			1,029.50		1.59	%			8.11
Class C			1,000.00			1,028.50		1.59	%			8.11
Hypothetical 5% return (5% return before expenses)
Class A		$	1,000.00		$	1,020.91		0.84	%		$	4.27
Class B			1,000.00			1,017.14		1.59	%			8.06
Class C			1,000.00			1,017.14		1.59	%			8.06

Disclosure of Fund expenses

Delaware Tax-Free Idaho Fund
Expense analysis of an investment of $1,000

	Beginning			Ending						Expenses
	Account Value			Account Value			Annualized			Paid During Period
	3/1/12			8/31/12			Expense Ratio			3/1/12 to 8/31/12*
Actual Fund return
Class A		$	1,000.00		$	1,027.60		0.88	%		$	4.49
Class B			1,000.00			1,024.60		1.63	%			8.30
Class C			1,000.00			1,023.80		1.63	%			8.29
Hypothetical 5% return (5% return before expenses)
Class A		$	1,000.00		$	1,020.71		0.88	%		$	4.47
Class B			1,000.00			1,016.94		1.63	%			8.26
Class C			1,000.00			1,016.94		1.63	%			8.26

Delaware Tax-Free New York Fund
Expense analysis of an investment of $1,000

	Beginning			Ending						Expenses
	Account Value			Account Value			Annualized			Paid During Period
	3/1/12			8/31/12			Expense Ratio			3/1/12 to 8/31/12*
Actual Fund return
Class A		$	1,000.00		$	1,044.60		0.80	%		$	4.11
Class B			1,000.00			1,040.70		1.55	%			7.95
Class C			1,000.00			1,039.80		1.55	%			7.95
Hypothetical 5% return (5% return before expenses)
Class A		$	1,000.00		$	1,021.11		0.80	%		$	4.06
Class B			1,000.00			1,017.34		1.55	%			7.86
Class C			1,000.00			1,017.34		1.55	%			7.86

*“Expenses Paid During Period” are equal to the relevant Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period).

Security type/sector allocations
Delaware Tax-Free Arizona Fund	As of August 31, 2012 (Unaudited)

Sector designations may be different than the sector designations presented in other Fund materials.

Security type/sector	Percentage of net assets
Municipal Bonds	100.64	%
Corporate Revenue Bonds	12.95	%
Education Revenue Bonds	15.09	%
Electric Revenue Bonds	7.28	%
Healthcare Revenue Bonds	18.96	%
Lease Revenue Bonds	12.39	%
Local General Obligation Bonds	3.43	%
Pre-Refunded Bond	0.00	%
Special Tax Revenue Bonds	20.27	%
State & Territory General Obligation Bonds	2.59	%
Transportation Revenue Bonds	6.07	%
Water & Sewer Revenue Bonds	1.61	%
Total Value of Securities	100.64	%
Liabilities Net of Receivables and Other Assets	(0.64	%)
Total Net Assets	100.00	%

Security type/sector allocations
Delaware Tax-Free California Fund	As of August 31, 2012 (Unaudited)

Sector designations may be different than the sector designations presented in other Fund materials.

Security type/sector	Percentage of net assets
Municipal Bonds	98.35	%
Corporate Revenue Bonds	7.75	%
Education Revenue Bonds	7.78	%
Electric Revenue Bonds	4.92	%
Healthcare Revenue Bonds	18.56	%
Housing Revenue Bonds	3.50	%
Lease Revenue Bonds	5.80	%
Local General Obligation Bonds	7.37	%
Pre-Refunded Bonds	3.10	%
Resource Recovery Revenue Bond	0.95	%
Special Tax Revenue Bonds	15.36	%
State & Territory General Obligation Bonds	11.81	%
Transportation Revenue Bonds	6.46	%
Water & Sewer Revenue Bonds	4.99	%
Short-Term Investment	0.85	%
Total Value of Securities	99.20	%
Receivables and Other Assets Net of Liabilities	0.80	%
Total Net Assets	100.00	%

Delaware Tax-Free Colorado Fund

As of August 31, 2012 (Unaudited)

Sector designations may be different than the sector designations presented in other Fund materials.

Security type/sector	Percentage of net assets
Municipal Bonds	99.84	%
Corporate Revenue Bond	1.26	%
Education Revenue Bonds	6.19	%
Electric Revenue Bonds	6.53	%
Healthcare Revenue Bonds	28.77	%
Housing Revenue Bonds	2.74	%
Lease Revenue Bonds	3.89	%
Local General Obligation Bonds	12.90	%
Pre-Refunded Bonds	8.19	%
Special Tax Revenue Bonds	15.90	%
State & Territory General Obligation Bonds	5.01	%
Transportation Revenue Bonds	7.88	%
Water & Sewer Revenue Bonds	0.58	%
Short-Term Investments	0.28	%
Total Value of Securities	100.12	%
Liabilities Net of Receivables and Other Assets	(0.12	%)
Total Net Assets	100.00	%

Security type/sector allocations
Delaware Tax-Free Idaho Fund	As of August 31, 2012 (Unaudited)

Sector designations may be different than the sector designations presented in other Fund materials.

Security type/sector	Percentage of net assets
Municipal Bonds	98.07	%
Corporate Revenue Bonds	5.93	%
Education Revenue Bonds	8.39	%
Electric Revenue Bonds	4.89	%
Healthcare Revenue Bonds	7.95	%
Housing Revenue Bonds	2.87	%
Lease Revenue Bonds	2.66	%
Local General Obligation Bonds	21.58	%
Pre-Refunded Bonds	8.88	%
Special Tax Revenue Bonds	22.74	%
State & Territory General Obligation Bonds	3.43	%
Transportation Revenue Bonds	6.69	%
Water & Sewer Revenue Bonds	2.06	%
Short-Term Investments	1.04	%
Total Value of Securities	99.11	%
Receivables and Other Assets Net of Liabilities	0.89	%
Total Net Assets	100.00	%

Delaware Tax-Free New York Fund

As of August 31, 2012 (Unaudited)

Sector designations may be different than the sector designations presented in other Fund materials.

Security type/sector	Percentage of net assets
Municipal Bonds	98.31	%
Corporate Revenue Bonds	9.48	%
Education Revenue Bonds	16.99	%
Electric Revenue Bonds	3.50	%
Healthcare Revenue Bonds	15.41	%
Housing Revenue Bonds	1.04	%
Lease Revenue Bonds	14.15	%
Local General Obligation Bonds	4.88	%
Pre-Refunded Bonds	2.15	%
Special Tax Revenue Bonds	12.91	%
State & Territory General Obligation Bonds	5.55	%
Transportation Revenue Bonds	9.15	%
Water & Sewer Revenue Bonds	3.10	%
Short-Term Investments	2.02	%
Total Value of Securities	100.33	%
Liabilities Net of Receivables and Other Assets	(0.33	%)
Total Net Assets	100.00	%

Statements of net assets
Delaware Tax-Free Arizona Fund	August 31, 2012

		Principal amount		Value
Municipal Bonds – 100.64%
Corporate Revenue Bonds – 12.95%
	Maricopa County Pollution Control (Palo Verde Project)
	Series A 5.05% 5/1/29 (AMBAC)		$2,000,000	$	2,004,680
	•Series B 5.20% 6/1/43		1,500,000		1,692,315
•	Navajo County Pollution Control Revenue
	(Arizona Public Services-Cholla)
	Series D 5.75% 6/1/34		1,500,000		1,695,810
	Pima County Industrial Development Authority Pollution
	Control Revenue (Tucson Electric Power San Juan)
	5.75% 9/1/29		750,000		801,218
	Series A 4.95% 10/1/20		1,450,000		1,610,892
	Series A 5.25% 10/1/40		3,400,000		3,682,403
	Salt Verde Financial Senior Gas Revenue 5.00% 12/1/37		2,250,000		2,404,283
					13,891,601
Education Revenue Bonds – 15.09%
	Arizona Health Facilities Authority
	Healthcare Education Revenue (Kirksville College)
	5.125% 1/1/30		1,500,000		1,638,630
	Arizona State University Certificates of Participation
	(Research Infrastructure Project)
	5.00% 9/1/30 (AMBAC)		2,000,000		2,131,080
	Arizona State University Energy Management Revenue
	(Arizona State University Tempe
	Campus II Project) 4.50% 7/1/24		1,000,000		1,106,670
	Arizona State University Series C 5.50% 7/1/25		330,000		403,570
	Glendale Industrial Development Authority Revenue
	(Midwestern University) 5.125% 5/15/40		1,305,000		1,391,208
	Northern Arizona University
	5.00% 6/1/36		475,000		527,331
	5.00% 6/1/41		1,240,000		1,366,802
	Phoenix Industrial Development Authority
	(Great Hearts Academic Project)
	6.30% 7/1/42		500,000		534,715
	6.40% 7/1/47		500,000		535,005
	(Rowan University Project) 5.00% 6/1/42		2,000,000		2,157,521
	Pima County Industrial Development Authority
	Educational Revenue (Tucson Country Day
	School Project) 5.00% 6/1/37		1,500,000		1,368,900

		Principal amount		Value
Municipal Bonds (continued)
Education Revenue Bonds (continued)
	South Campus Group Student Housing Revenue
	(Arizona State University-South Campus
	Project) 5.625% 9/1/35 (NATL-RE)		$2,000,000	$	2,027,140
	Tucson Industrial Development Authority Lease Revenue
	(University of Arizona-Marshall Foundation)
	Series A 5.00% 7/15/27 (AMBAC)		1,000,000		1,001,540
					16,190,112
Electric Revenue Bonds – 7.28%
	Maricopa County Pollution Control Revenue
	Refunding (El Paso Electric Palo Verde Project)
	Series A 4.50% 8/1/42		2,500,000		2,557,175
	Mesa Utilities System Revenue 5.00% 7/1/18
	(NATL-RE) (FGIC)		1,500,000		1,809,375
	Pinal County Electric District #3 Refunding 5.25% 7/1/41		2,000,000		2,238,060
	Salt River Project Agricultural Improvement &
	Power District Electric Revenue System
	Series A 5.00% 12/1/30		1,000,000		1,203,910
					7,808,520
Healthcare Revenue Bonds – 18.96%
	Arizona State Health Facilities Authority Hospital System
	Revenue (Phoenix Children’s Hospital)
	Series A 5.00% 2/1/42		1,600,000		1,684,016
	Glendale Industrial Development Authority Hospital
	Revenue (John C. Lincoln Health) 5.00% 12/1/42		2,205,000		2,272,010
	Maricopa County Industrial Development Authority Health
	Facilities Revenue (Catholic Healthcare West) Series A
	5.25% 7/1/32		1,250,000		1,354,238
	5.50% 7/1/26		1,000,000		1,046,780
	6.00% 7/1/39		2,500,000		2,871,075
	Puerto Rico Industrial Tourist Educational Medical &
	Environmental Control Facilities Financing Authority
	(Auxilio Mutuo) Series A 6.00% 7/1/33		1,615,000		1,841,019
	Scottsdale Industrial Development Authority
	Hospital Revenue (Scottsdale Healthcare)
	Series A 5.25% 9/1/30		1,250,000		1,266,575
	Tempe Industrial Development Authority Revenue
	(Friendship Village) Series A 6.25% 12/1/42		1,200,000		1,297,428

Statements of net assets
Delaware Tax-Free Arizona Fund

		Principal amount		Value
Municipal Bonds (continued)
Healthcare Revenue Bonds (continued)
	University of Arizona Medical Center Hospital Revenue
	6.00% 7/1/39		$1,500,000	$	1,733,985
	6.50% 7/1/39		2,500,000		2,900,274
	Yavapai County Industrial Development Authority
	Revenue (Yavapai Regional Medical Center)
	Series A 5.25% 8/1/21 (RADIAN)		2,000,000		2,075,220
					20,342,620
Lease Revenue Bonds – 12.39%
	Arizona Game & Fish Department & Community
	Beneficial Interest Certificates
	(Administration Building Project) 5.00% 7/1/32		1,000,000		1,054,610
	Arizona State Certificates of Participation Department
	Administration Series A 5.25% 10/1/25 (AGM)		1,500,000		1,748,745
	Arizona State Sports & Tourism Authority Senior Revenue
	(Multipurpose Stadium Facility) Series A 5.00% 7/1/36		1,000,000		1,104,130
	Marana Municipal Property Facilities Revenue
	5.00% 7/1/28 (AMBAC)		575,000		585,396
	Maricopa County Industrial Development Authority
	Correctional Contract Revenue (Phoenix West Prison)
	Series B 5.375% 7/1/22 (ACA)		1,000,000		1,002,670
	Phoenix Industrial Development Authority Lease Revenue
	(Capitol Mall II, LLC Project) 5.00% 9/15/28 (AMBAC)		2,000,000		2,002,060
	Pima County Industrial Development Authority Lease
	Revenue Metro Police Facility (Nevada Project) Series A
	5.25% 7/1/31		1,500,000		1,633,980
	5.375% 7/1/39		1,500,000		1,646,130
	6.00% 7/1/41		1,000,000		1,148,430
	Pinal County Certificates of Participation 5.00% 12/1/29		1,300,000		1,362,036
					13,288,187
Local General Obligation Bonds – 3.43%
	Coconino & Yavapai Counties Joint Unified School
	District #9 (Sedona Oak Creek Project of 2007)
	Series B 5.375% 7/1/28		1,350,000		1,557,077
	DC Ranch Community Facilities 5.00% 7/15/27 (AMBAC)		1,000,000		1,014,670
•	Gila County Unified School District #10
	(Payson School Improvement Project of 2006)
	Series A 5.25% 7/1/27 (AMBAC)		1,000,000		1,111,670
					3,683,417

		Principal amount		Value
Municipal Bonds (continued)
§Pre-Refunded Bond – 0.00%
	Puerto Rico Public Buildings Authority Revenue
	(Guaranteed Government Facilities) Series I
	5.25% 7/1/33-14	$	5,000	$	5,443
					5,443
Special Tax Revenue Bonds – 20.27%
	Arizona Transportation Board
	(Maricopa County Regional Area Road) 5.00% 7/1/25		1,000,000		1,182,980
	Series A 5.00% 7/1/29		1,115,000		1,287,647
	Flagstaff Aspen Place Sawmill Improvement District
	Revenue 5.00% 1/1/32		875,000		876,181
	Gilbert Public Facilities Municipal Property Revenue
	5.00% 7/1/25		1,250,000		1,425,325
	Guam Government Business Privilege Tax Revenue Series A
	5.125% 1/1/42		545,000		606,476
	5.25% 1/1/36		705,000		796,185
	Marana Tangerine Farm Road Improvement District
	Revenue 4.60% 1/1/26		818,000		847,219
	Phoenix Civic Improvement Excise Tax Revenue
	(Solid Waste Improvements)
	Series A 5.00% 7/1/19 (NATL-RE)		1,000,000		1,120,040
	Phoenix Civic Improvement Transition Excise Tax
	Revenue (Light Rail Project)
	5.00% 7/1/20 (AMBAC)		1,570,000		1,697,405
	Puerto Rico Commonwealth Infrastructure Financing
	Authority Special Tax Revenue Series C
	5.50% 7/1/25 (AMBAC)		455,000		507,202
	Puerto Rico Sales Tax Financing Corporation Revenue
	First Subordinate
	Ω(Convertible Capital Appreciation Bonds) Series A
	6.75% 8/1/32		960,000		994,176
	Series A 5.00% 8/1/26		1,100,000		1,223,332
	Series A 5.00% 8/1/46		1,500,000		1,618,994
	^Series A 5.03% 8/1/44 (NATL-RE)		3,885,000		667,987
	^Series A 5.04% 8/1/45 (NATL-RE)		3,980,000		641,616
	Series A 5.375% 8/1/39		850,000		909,976
	Series A 5.50% 8/1/42		1,000,000		1,081,080
	Series A 5.75% 8/1/37		580,000		647,645
	Series A 6.50% 8/1/44		1,250,000		1,492,538
	Series A-1 5.00% 8/1/43		1,060,000		1,114,039

Statements of net assets
Delaware Tax-Free Arizona Fund

		Principal amount		Value
Municipal Bonds (continued)
Special Tax Revenue Bonds (continued)
	Queen Creek Improvement District #1 5.00% 1/1/32	$	1,000,000	$	1,005,660
					21,743,703
State & Territory General Obligation Bonds – 2.59%
	Puerto Rico Commonwealth Public Improvement
	Series A 5.75% 7/1/41		2,000,000		2,139,060
	Series E 5.375% 7/1/30		600,000		640,362
					2,779,422
Transportation Revenue Bonds – 6.07%
	Arizona State Transportation Board Highway Revenue
	Subordinated Series A 5.00% 7/1/23		1,000,000		1,075,610
	Phoenix Civic Improvement Airport Revenue
	(Junior Lien) Series A 5.25% 7/1/33		1,250,000		1,430,438
	(Senior Lien) Series B
	5.25% 7/1/27 (NATL-RE) (FGIC) (AMT)		1,000,000		1,001,500
	5.25% 7/1/32 (NATL-RE) (FGIC) (AMT)		3,000,000		3,003,930
					6,511,478
Water & Sewer Revenue Bonds – 1.61%
	Phoenix Civic Improvement Wastewater Corporation
	Systems Revenue (Junior Lien)
	5.00% 7/1/19 (NATL-RE)		1,000,000		1,173,380
	Puerto Rico Commonwealth Aqueduct & Sewer Authority
	(Senior Lien) Series A
	5.25% 7/1/42		220,000		221,412
	6.00% 7/1/47		305,000		334,024
					1,728,816
Total Municipal Bonds (cost $99,564,815)					107,973,319

Total Value of Securities – 100.64%
	(cost $99,564,815)				107,973,319
Liabilities Net of Receivables and
	Other Assets – (0.64%)				(687,929	)
Net Assets Applicable to 8,929,906
	Shares Outstanding – 100.00%			$	107,285,390


Net Asset Value – Delaware Tax-Free Arizona Fund
Class A ($99,952,950 / 8,321,078 Shares)		$12.01
Net Asset Value – Delaware Tax-Free Arizona Fund
Class B ($224,654 / 18,688 Shares)		$12.02
Net Asset Value – Delaware Tax-Free Arizona Fund
Class C ($7,107,786 / 590,140 Shares)		$12.04

Components of Net Assets at August 31, 2012:
Shares of beneficial interest (unlimited authorization – no par)	$	98,005,801
Undistributed net investment income		25,309
Accumulated net realized gain on investments		845,776
Net unrealized appreciation of investments		8,408,504
Total net assets	$	107,285,390

•	Variable rate security. The rate shown is the rate as of August 31, 2012. Interest rates reset periodically.
§	Pre-refunded bonds. Municipal bonds that are generally backed or secured by U.S. Treasury bonds. For pre-refunded bonds, the stated maturity is followed by the year in which the bond is pre-refunded. See Note 8 in “Notes to financial statements.”
Ω	Step coupon bond. Indicates security that has a zero coupon that remains in effect until a predetermined date at which time the stated interest rate becomes effective.
^	Zero coupon security. The rate shown is the yield at the time of purchase.

Statements of net assets
Delaware Tax-Free Arizona Fund


Net Asset Value and Offering Price Per Share –
Delaware Tax-Free Arizona Fund
Net asset value Class A (A)	$	12.01
Sales charge (4.50% of offering price) (B)		0.57
Offering price	$	12.58

(A)	Net asset value per share, as illustrated, is the amount which would be paid upon redemption or repurchase of shares.
(B)	See the current prospectus for purchases of $100,000 or more.

Summary of abbreviations:
ACA — Insured by American Capital Access
AGM — Insured by Assured Guaranty Municipal Corporation
AMBAC — Insured by AMBAC Assurance Corporation
AMT — Subject to Alternative Minimum Tax
FGIC — Insured by Financial Guaranty Insurance Company
NATL-RE — Insured by National Public Finance Guarantee Corporation
RADIAN — Insured by Radian Asset Assurance

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

Delaware Tax-Free California Fund

August 31, 2012

		Principal amount		Value
Municipal Bonds – 98.35%
Corporate Revenue Bonds – 7.75%
•	California Pollution Control Financing Authority
	Environmental Improvement Revenue
	(BP West Coast Products, LLC) 2.60% 12/1/46	$	500,000	$	519,245
	Chula Vista Industrial Development Revenue
	(San Diego Gas & Electric) Series D 5.875% 1/1/34		1,000,000		1,175,440
	Golden State Tobacco Securitization Corporate
	Settlement Revenue
	5.00% 6/1/45 (AMBAC) (TCRS)		950,000		969,855
	(Asset-Backed Senior Notes) Series A-1
	5.125% 6/1/47		2,000,000		1,542,480
	5.75% 6/1/47		3,500,000		2,980,705
	M-S-R Energy Authority Gas Revenue
	Series A 6.50% 11/1/39		1,000,000		1,285,140
	Series C 6.50% 11/1/39		500,000		642,570
					9,115,435
Education Revenue Bonds – 7.78%
	California Educational Facilities Authority Revenue
	(Chapman University) 5.00% 4/1/31		500,000		560,490
	(University of Southern California)
	Series A 5.00% 10/1/23		1,000,000		1,290,330
	(Woodbury University) 5.00% 1/1/36		1,000,000		1,002,330
	California Municipal Finance Authority Educational Revenue
	(American Heritage Education Foundation Project)
	Series A 5.25% 6/1/36		1,000,000		929,470
	California Municipal Finance Authority Revenue
	(Southwestern Law School) 6.50% 11/1/41		1,140,000		1,336,479
	California Statewide Communities Development Authority
	Charter School Revenue
	(Green Dot Public Schools) Series A 7.25% 8/1/41		800,000		883,040
	California Statewide Communities Development
	Authority Revenue
	(California Baptist University Project)
	Series A 5.50% 11/1/38		1,000,000		1,039,500
	(Irvine Campus) 5.375% 5/15/38		1,000,000		1,069,070
	California Statewide Communities Development Authority
	School Facility Revenue (Aspire Public Schools Project)
	6.00% 7/1/40		1,000,000		1,030,660
					9,141,369

Statements of net assets
Delaware Tax-Free California Fund

		Principal amount		Value
Municipal Bonds (continued)
Electric Revenue Bonds – 4.92%
	Anaheim Public Financing Authority Electric System District
	Facilities Series A 5.00% 10/1/25	$	800,000	$	953,080
	Imperial Irrigation District Electric System Revenue
	Series A 5.25% 11/1/24		500,000		594,560
	Series B 5.00% 11/1/36		250,000		276,708
	Series C 5.25% 11/1/31		1,175,000		1,367,500
	Puerto Rico Electric Power Authority Revenue
	Series A 5.00% 7/1/42		500,000		511,870
	Southern California Public Power Authority Revenue
	(Transmission Project) Series A 5.00% 7/1/22		1,000,000		1,162,580
	Turlock Irrigation District Revenue Series A 5.00% 1/1/30		830,000		919,781
					5,786,079
Healthcare Revenue Bonds – 18.56%
	Abag Finance Authority for Nonprofit
	Corporations Refunding
	(Episcopal Senior Communities)
	6.125% 7/1/41		850,000		964,623
	(Sharp Health Care)
	6.25% 8/1/39		1,000,000		1,190,260
	Series A 5.00% 8/1/26		300,000		341,115
	Series A 5.00% 8/1/27		300,000		339,402
	Series A 5.00% 8/1/28		250,000		281,243
	California Health Facilities Financing Authority Revenue
	(Catholic Health Care West)
	Series A 6.00% 7/1/39		855,000		1,009,764
	Series E 5.625% 7/1/25		1,000,000		1,151,710
	Series G 5.25% 7/1/23		1,000,000		1,062,760
	(Children’s Hospital of Los Angeles)
	Series A 5.00% 11/15/34		1,000,000		1,069,640
	(Lucile Packard Children’s Hospital)
	Series A 5.00% 8/15/51		630,000		683,733
	(Scripps Health Care)
	Series A 5.00% 11/15/32		1,000,000		1,125,930
	Series A 5.00% 11/15/40		850,000		935,153
	(St. Joseph Health System) Series A 5.75% 7/1/39		1,000,000		1,154,360
	(Stanford Hospital) Series A-2 5.25% 11/15/40		600,000		684,780
	(Sutter Health Care) Series D 5.25% 8/15/31		1,000,000		1,148,020
	(The Episcopal Home) Series A 5.30% 2/1/32
	(RADIAN) (IBC)		475,000		475,432

		Principal amount		Value
Municipal Bonds (continued)
Healthcare Revenue Bonds (continued)
	California Statewide Communities Development
	Authority Revenue
	(Kaiser Permanente)
	Series A 5.00% 4/1/19	$	1,000,000	$	1,187,570
	Series A 5.00% 4/1/42		2,085,000		2,278,195
	Series B 5.25% 3/1/45		1,000,000		1,062,770
	(Southern California Senior Living) 7.25% 11/15/41		500,000		570,400
	(Trinity Health) 5.00% 12/1/41		1,000,000		1,116,350
	(Valleycare Health Systems) Series A 5.125% 7/15/31		1,000,000		1,029,580
	San Buenaventura Community Memorial Health Systems
	7.50%12/1/41		785,000		953,540
					21,816,330
Housing Revenue Bonds – 3.50%
	California Municipal Finance Authority Mobile Home Park
	Revenue (Caritas Projects) Series A 6.40% 8/15/45		995,000		1,089,445
•	California Statewide Communities Development
	Multifamily Housing Authority Revenue
	(Silver Ridge Apartments)
	Series H 5.80% 8/1/33 (FNMA) (AMT)		1,000,000		1,011,630
	Independent Cities Finance Authority Mobile Home Park
	Revenue (Sahar Mobile Home Park)
	Series A 5.00% 6/15/47		1,000,000		1,012,670
	Santa Clara County Multifamily Housing Authority Revenue
	(Rivertown Apartments Project)
	Series A 5.85% 8/1/31 (AMT)		1,000,000		1,003,870
					4,117,615
Lease Revenue Bonds – 5.80%
	California State Public Works Board Lease Revenue
	(California State Prisons Los Angeles)
	Series C 5.00% 10/1/26		1,000,000		1,133,720
	(General Services) Series A 6.25% 4/1/34		1,000,000		1,189,200
	Elsinore Valley Municipal Water District Certificates of
	Participation Series A 5.00% 7/1/24 (BHAC)		1,000,000		1,166,890
	Franklin-McKinley School District Certificates of
	Participation (Financing Project)
	Series B 5.00% 9/1/27 (AMBAC)		1,060,000		1,068,968
	San Diego Public Facilities Financing Authority Lease
	Revenue (Master Project) Series A 5.25% 3/1/40		1,000,000		1,078,820

Statements of net assets
Delaware Tax-Free California Fund

		Principal amount		Value
Municipal Bonds (continued)
Lease Revenue Bonds (continued)
	San Mateo Joint Powers Financing Authority Lease
	Revenue (Capital Projects) Series A 5.25% 7/15/26	$	1,000,000	$	1,175,900
					6,813,498
Local General Obligation Bonds – 7.37%
^	Anaheim School District Election 2002
	4.58% 8/1/25 (NATL-RE)		1,000,000		556,730
	Bonita Unified School District Election 2008
	Series B 5.25% 8/1/28		800,000		963,144
	Central Unified School District Election 2008
	Series A 5.625% 8/1/33 (ASSURED GTY)		1,000,000		1,154,400
	Fairfield-Suisun Unified School District Election 2002
	5.50% 8/1/28 (NATL-RE)		500,000		537,820
	Grossmont Union High School District Election 2004
	5.00% 8/1/33		1,000,000		1,107,380
	Long Beach Unified School District Refinancing
	5.00% 8/1/29		1,000,000		1,181,250
	Pittsburg Unified School District Financing Authority
	Revenue (Pittsburg Unified School District Building
	Program) 5.50% 9/1/46 (AGM)		800,000		905,648
	Santa Barbara Community College District Election 2008
	Series A 5.25% 8/1/33		1,000,000		1,170,620
	Sierra Joint Community College District #2
	(Western Nevada) Series A 5.25% 8/1/21 (BHAC) (FGIC)		1,000,000		1,090,450
					8,667,442
§Pre-Refunded Bonds – 3.10%
	California Department of Water Resources
	(Central Valley Project) Series X
	5.00% 12/1/29-12 (NATL-RE) (FGIC)		5,000		5,060
	California State Department of Water Resources
	Un-Refunded 2010 (Central Valley Project) Series X
	5.00% 12/1/29-12 (NATL-RE) (FGIC)		740,000		747,881
	California Statewide Communities Development Authority
	Revenue (Viewpoint School Project)
	5.75% 10/1/33-14 (ACA)		1,000,000		1,110,660
	Commerce Joint Powers Financing Authority Revenue
	(Redevelopment Projects) Series A
	5.00% 8/1/28-13 (RADIAN)		60,000		62,632

		Principal amount		Value
Municipal Bonds (continued)
§Pre-Refunded Bonds (continued)
	Golden State Tobacco Securitization Corporation
	Settlement Revenue (Asset-Backed Senior Notes)
	Series B 5.625% 6/1/33-13	$	1,000,000	$	1,040,670
	Grossmont Union High School District Election 2004
	5.00% 8/1/23-15 (NATL-RE)		500,000		568,000
	Port Oakland Revenue Series L 5.375% 11/1/27-12
	(NATL-RE) (FGIC) (AMT)		110,000		110,938
					3,645,841
Resource Recovery Revenue Bond – 0.95%
	South Bayside Waste Management Authority Revenue
	(Shoreway Environmental Center)
	Series A 6.00% 9/1/36		1,000,000		1,113,640
					1,113,640
Special Tax Revenue Bonds – 15.36%
	Bonita Canyon Public Facilities Financing Authority Revenue
	(Community Facilities District #98-1) 5.00% 9/1/28		800,000		827,088
	California Statewide Communities Development Authority
	Revenue (Inland Regional Center Project)
	5.375% 12/1/37		1,350,000		1,375,502
	Commerce Joint Powers Financing Authority Revenue
	Un-Refunded Balance (Redevelopment Projects)
	Series A 5.00% 8/1/28 (RADIAN)		940,000		943,234
	Fremont Community Facilities District #1
	(Special Tax Pacific Commons) 5.375% 9/1/36		1,000,000		1,003,980
	Glendale Redevelopment Agency Tax Allocation Revenue
	(Central Glendale Redevelopment Project)
	5.50% 12/1/24		1,000,000		1,053,790
	Lammersville School District Community Facilities
	District #2002 (Mountain House) 5.125% 9/1/35		500,000		500,985
	Lancaster Redevelopment Agency Tax Allocation Revenue
	(Combined Redevelopment Project Areas)
	6.875% 8/1/39		500,000		569,380
@	Modesto Special Tax Community Facilities
	District #4-1 (Village 2) 5.15% 9/1/36		1,000,000		1,001,070
	Poway Redevelopment Agency Tax Allocation Revenue
	5.75% 6/15/33 (NATL-RE)		270,000		270,894

Statements of net assets
Delaware Tax-Free California Fund

		Principal amount		Value
Municipal Bonds (continued)
Special Tax Revenue Bonds (continued)
	Puerto Rico Sales Tax Financing Corporation Revenue
	First Subordinate Series A
	5.25% 8/1/27	$	1,000,000	$	1,135,230
	5.50% 8/1/37		835,000		904,363
	Ω(Convertible Capital Appreciation) 6.75% 8/1/32		660,000		683,496
	Rancho Santa Fe Community Services District Financing
	Authority Revenue Superior Lien Series A 5.75% 9/1/30		800,000		879,552
	Riverside County Redevelopment Agency Tax Allocation
	Housing Series A 6.00% 10/1/39		1,000,000		1,091,110
	Roseville Westpark Special Tax Public Community Facilities
	District #1 5.25% 9/1/37		500,000		501,070
	San Bernardino County Special Tax Community Facilities
	District #2002-1 5.90% 9/1/33		2,000,000		2,041,479
	San Diego Redevelopment Agency Tax Allocation Revenue
	(Naval Training Center) Series A 5.75% 9/1/40		1,000,000		1,073,140
	San Mateo Special Tax Revenue
	(Community Facilities District #200) 6.00% 9/1/42		800,000		870,896
	Virgin Islands Public Finance Authority Revenue
	(Senior Lien-Matching Fund Loan Note)
	Series A 5.00% 10/1/29		715,000		781,238
	Yucaipa Special Tax Refunding Community Facilities
	District #98-1 (Chapman Heights) 5.375% 9/1/30		500,000		543,655
					18,051,152
State & Territory General Obligation Bonds – 11.81%
	California State Various Purposes
	5.00% 9/1/41		750,000		823,755
	5.00% 10/1/41		225,000		247,293
	5.00% 4/1/42		1,000,000		1,101,940
	5.25% 3/1/30		1,000,000		1,151,200
	5.25% 4/1/35		2,000,000		2,283,700
	5.25% 11/1/40		1,000,000		1,132,810
	6.00% 3/1/33		1,000,000		1,231,470
	6.00% 4/1/38		515,000		607,504
	Puerto Rico Commonwealth Public Improvement Series A
	5.00% 7/1/41		2,900,000		2,888,835
	5.50% 7/1/39		1,500,000		1,562,910
	5.75% 7/1/41		800,000		855,624
					13,887,041

		Principal amount		Value
Municipal Bonds (continued)
Transportation Revenue Bonds – 6.46%
	Bay Area Toll Authority Bridge Revenue
	(San Francisco Bay Area) Series F-1 5.25% 4/1/27	$	800,000	$	965,264
	Los Angeles Department of Airports Subordinate
	(Los Angeles International) Series B 5.00% 5/15/33		1,690,000		1,898,056
	Port Oakland Revenue Un-Refunded Series L 5.375%
	11/1/27 (NATL-RE) (FGIC) (AMT)		890,000		894,503
	San Diego Redevelopment Agency (Centre City
	Redevelopment Project) Series A 6.40% 9/1/25		1,000,000		1,001,190
	San Francisco Municipal Transportation Agency Revenue
	Series B 5.00% 3/1/37		2,500,000		2,830,025
					7,589,038
Water & Sewer Revenue Bonds – 4.99%
	California State Department of Water Resources Systems
	Revenue (Central Valley Project)
	Series AG 5.00% 12/1/28		815,000		968,628
	San Diego Public Facilities Financing Authority Water
	Revenue Subordinate Series A 5.00% 8/1/29		1,000,000		1,194,590
	San Francisco City & County Public Utilities Commission
	Water & Sewer Improvement Subordinate Series A
	5.00% 11/1/32		1,015,000		1,191,255
	5.00% 11/1/41		1,380,000		1,574,165
	San Francisco City & County Public Utilities Commission
	Water Revenue Series B 5.00% 11/1/26		800,000		941,768
					5,870,406
Total Municipal Bonds (cost $106,603,032)					115,614,886

Short-Term Investment – 0.85%
¤Variable Rate Demand Note – 0.85%
	California State Health Facilities Financing Authority
	Revenue (Adventist Health System) Series A
	0.15% 9/1/2025 (LOC-Wells Fargo Bank, N.A.)		1,000,000		1,000,000
Total Short-Term Investment (cost $1,000,000)					1,000,000

Statements of net assets
Delaware Tax-Free California Fund


Total Value of Securities – 99.20%
(cost $107,603,032)	$	116,614,886
Receivables and Other Assets
Net of Liabilities – 0.80%		941,038
Net Assets Applicable to 9,625,858
Shares Outstanding – 100.00%	$	117,555,924

Net Asset Value – Delaware Tax-Free California Fund
Class A ($97,820,923 / 8,012,316 Shares)		$12.21
Net Asset Value – Delaware Tax-Free California Fund
Class B ($905,199 / 73,836 Shares)		$12.26
Net Asset Value – Delaware Tax-Free California Fund
Class C ($18,829,802 / 1,539,706 Shares)		$12.23

Components of Net Assets at August 31, 2012:
Shares of beneficial interest (unlimited authorization – no par)	$	108,881,968
Undistributed net investment income		18,763
Accumulated net realized loss on investments		(356,661	)
Net unrealized appreciation of investments		9,011,854
Total net assets	$	117,555,924

•	Variable rate security. The rate shown is the rate as of August 31, 2012. Interest rates reset periodically.
^	Zero coupon security. The rate shown is the yield at the time of purchase.
§	Pre-refunded bonds. Municipal bonds that are generally backed or secured by U.S. Treasury bonds. For pre-refunded bonds, the stated maturity is followed by the year in which the bond is pre-refunded. See Note 8 in “Notes to financial statements.”
@	Illiquid security. At August 31 2012, the aggregate value of illiquid securities was $1,001,070, which represented 0.85% of the Fund’s net assets. See Note 8 in “Notes to financial statements.”
Ω	Step coupon bond. Indicates security that has a zero coupon that remains in effect until a predetermined date at which time the stated interest rate becomes effective.
¤	Tax-exempt obligations that contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the unpaid principal balance plus accrued interest upon a short notice period (generally up to 30 days) prior to specified dates either from the issuer or by drawing on a bank letter of credit, a guarantee or insurance issued with respect to such instrument. The rate shown is the rate as of August 31, 2012.


Net Asset Value and Offering Price Per Share –
Delaware Tax-Free California Fund
Net asset value Class A (A)	$	12.21
Sales charge (4.50% of offering price) (B)		0.58
Offering price	$	12.79

(A)		Net asset value per share, as illustrated, is the amount which would be paid upon redemption or repurchase of shares.
(B)		See the current prospectus for purchases of $100,000 or more.

Summary of abbreviations:
ACA — Insured by American Capital Access
AGM — Insured by Assured Guaranty Municipal Corporation
AMBAC — Insured by AMBAC Assurance Corporation
AMT — Subject to Alternative Minimum Tax
ASSURED GTY — Insured by Assured Guaranty Corporation
BHAC — Insured by Berkshire Hathaway Assurance Company
FGIC — Insured by Financial Guaranty Insurance Company
FNMA — Federal National Mortgage Association collateral
IBC — Insured Bond Certificate
LOC — Letter of Credit
NATL-RE — Insured by National Public Finance Guarantee Corporation
RADIAN — Insured by Radian Asset Assurance
TCRS — Temporary Custodial Receipts

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

Statements of net assets
Delaware Tax-Free Colorado Fund		August 31, 2012

		Principal amount		Value
Municipal Bonds – 99.84%
Corporate Revenue Bond – 1.26%
	Public Authority Energy Natural Gas Revenue
	Series 2008 6.50% 11/15/38	$	2,500,000	$	3,087,825
					3,087,825
Education Revenue Bonds – 6.19%
	Boulder County Development Revenue
	(University Corporation for Atmospheric Research)
	5.00% 9/1/35 (AMBAC)		1,000,000		1,016,740
	Colorado Educational & Cultural Facilities
	Authority Revenue
	(Charter School Project)
	5.00% 7/15/37		1,150,000		1,203,303
	5.50% 5/1/36 (SGI)		2,280,000		2,322,476
	(Johnson & Wales University Project)
	Series A 5.00% 4/1/28 (SGI)		1,000,000		1,003,920
	(Liberty Common Charter School Project)
	5.125% 12/1/33 (SGI)		2,740,000		2,767,208
	(Pinnacle Charter School Project) 5.00% 6/1/33 (SGI)		2,170,000		2,182,456
	(Woodrow Wilson Charter School Project)
	5.25% 12/1/34 (SGI)		1,960,000		2,017,271
	Colorado School Mines Auxiliary Facilities
	5.00% 12/1/37 (AMBAC)		425,000		426,539
	University of Colorado Enterprise System Revenue
	Series A 5.00% 6/1/30 (AMBAC)		2,000,000		2,229,020
					15,168,933
Electric Revenue Bonds – 6.53%
	Colorado Springs Utilities System Improvement Revenue
	Series C 5.50% 11/15/48		3,250,000		3,682,380
	Platte River Power Authority Revenue Series HH
	5.00% 6/1/27		2,795,000		3,253,017
	5.00% 6/1/29		2,355,000		2,720,873
	Puerto Rico Electric Power Authority Revenue
	Series WW 5.00% 7/1/28		2,400,000		2,512,824
	Series ZZ 5.25% 7/1/26		3,500,000		3,834,669
					16,003,763

			Principal amount		Value
Municipal Bonds (continued)
Healthcare Revenue Bonds – 28.77%
	Aspen Valley Hospital District Revenue
		5.00% 10/15/30	$	1,250,000	$	1,372,263
		5.00% 10/15/33		600,000		654,996
	Aurora Hospital Revenue
		(Children’s Hospital Association Project)
		Series A 5.00% 12/1/40		1,900,000		2,084,452
		Series D 5.00% 12/1/23 (AGM)		2,775,000		3,103,448
	Colorado Health Facilities Authority Revenue
	•	(Adventist Health/Sunbelt) 5.125% 11/15/24		1,375,000		1,512,129
		(Boulder Community Hospital Project)
		5.00% 10/1/42		2,000,000		2,170,600
		(Catholic Health Initiatives)
		Series A 4.75% 9/1/40		1,000,000		1,053,340
		Series A 5.00% 7/1/39		1,540,000		1,656,455
		Series A 5.00% 2/1/41		2,250,000		2,455,560
		Series A 5.25% 2/1/33		1,000,000		1,152,980
		Series C-1 5.10% 10/1/41 (AGM)		2,000,000		2,138,040
		Series D 6.25% 10/1/33		2,000,000		2,370,520
		(Christian Living Community Project)
		6.375% 1/1/41		1,000,000		1,103,980
		Series A 5.75% 1/1/37		1,500,000		1,546,170
		(Covenant Retirement Communities) Series A
		5.00% 12/1/33		4,000,000		4,174,199
		5.50% 12/1/33 (RADIAN)		5,000,000		5,044,399
		(Evangelical Lutheran)
		5.00% 6/1/35		2,000,000		2,074,180
		5.00% 12/1/42		2,500,000		2,647,200
		Series A 5.25% 6/1/34		2,750,000		2,813,223
		(National Jewish Health Project) 5.00% 1/1/27		550,000		585,184
		(Parkview Medical Center) 5.00% 9/1/25		1,000,000		1,034,640
		(Sisters Leavenworth)
		Series A 5.00% 1/1/40		1,000,000		1,085,790
		Series B 5.25% 1/1/25		2,500,000		2,886,400
		(Total Long-Term Care) Series A
		6.00% 11/15/30		2,365,000		2,656,865
		6.25% 11/15/40		750,000		840,525
		(Valley View Hospital Association) 5.50% 5/15/28		1,000,000		1,069,200

Statements of net assets
Delaware Tax-Free Colorado Fund

		Principal amount		Value
Municipal Bonds (continued)
Healthcare Revenue Bonds (continued)
	Colorado Springs Hospital Revenue 6.25% 12/15/33	$	2,500,000	$	2,838,050
	Delta County Memorial Hospital District Enterprise
	Revenue 5.35% 9/1/17		4,000,000		4,085,239
	Denver Health & Hospital Authority Health Care Revenue
	(Recovery Zone Facilities) 5.625% 12/1/40		2,500,000		2,716,075
	Series A 4.75% 12/1/36		1,500,000		1,519,770
	Puerto Rico Industrial Tourist Educational Medical &
	Environmental Control Facilities Financing Authority
	Auxilio Mutuo Series A 6.00% 7/1/33		2,120,000		2,416,694
	University of Colorado Hospital Authority Revenue Series A
	5.00% 11/15/37		2,690,000		2,847,661
	6.00% 11/15/29		2,460,000		2,854,486
					70,564,713
Housing Revenue Bonds – 2.74%
	Colorado Housing & Finance Authority
	(Multifamily Housing Insured Mortgage)
	Series C3 6.15% 10/1/41		1,590,000		1,592,798
	(Single Family Mortgage) Series A 5.50% 11/1/29
	(FHA) (VA) (HUD)		1,195,000		1,240,159
	(Single Family Program) Series AA
	4.50% 5/1/23 (FHLMC)		720,000		809,460
	4.50% 11/1/23 (FHLMC)		740,000		831,945
	Puerto Rico Housing Finance Authority
	Subordinate (Capital Fund Modernization)
	5.125% 12/1/27		2,040,000		2,254,302
					6,728,664
Lease Revenue Bonds – 3.89%
	Aurora Certificates of Participation Refunding
	Series A 5.00% 12/1/30		2,370,000		2,677,508
	Colorado Building Excellent Schools Today Certificates of
	Participation Series G 5.00% 3/15/32		2,000,000		2,282,340
	Pueblo County Certificates of Participation
	(County Judicial Complex Project)
	5.00% 9/15/42 (AGM)		2,500,000		2,820,750
	Regional Transportation District Certificates of
	Participation Series A 5.375% 6/1/31		1,540,000		1,760,836
					9,541,434

		Principal amount		Value
Municipal Bonds (continued)
Local General Obligation Bonds – 12.90%
	Arapahoe County Water & Wastewater Public
	Improvement District
	Series A 5.125% 12/1/32 (NATL-RE)	$	2,555,000	$	2,569,947
	Denver City & County
	(Better Denver & Zoo) Series A 5.00% 8/1/25		3,215,000		3,841,506
	(Justice System Facilities & Zoo) 5.00% 8/1/19		1,020,000		1,143,002
	Denver City & County School Refunding District #1
	4.00% 12/1/28		2,500,000		2,771,925
	Denver International Business Center Metropolitan
	District #1 5.00% 12/1/30		350,000		367,213
	Douglas County School District #1
	(Douglas & Elbert Counties) 5.00% 12/15/22		1,175,000		1,471,077
	Garfield County School District #2
	5.00% 12/1/25 (AGM)		2,280,000		2,615,935
	Grand County School District #2 (East Grand)
	5.25% 12/1/25 (AGM)		2,485,000		2,846,418
	Gunnison Watershed School District #1J
	Series 2009 5.25% 12/1/33		1,400,000		1,617,490
	Ignacio School District #11JT
	5.00% 12/1/28		1,420,000		1,697,894
	5.00% 12/1/31		835,000		983,380
	Jefferson County School District #1 5.25% 12/15/24		2,500,000		3,290,825
@	North Range Metropolitan
	District #1 4.50% 12/15/31 (ACA)		1,500,000		1,305,975
	District #2 5.50% 12/15/37		1,200,000		1,169,508
	Rangely Hospital District 6.00% 11/1/26		2,250,000		2,665,418
	Weld County School District #4 5.00% 12/1/19 (AGM)		1,085,000		1,279,909
					31,637,422
§Pre-Refunded Bonds – 8.19%
	Adams & Arapahoe Counties Joint School
	District #28J (Aurora) 6.00% 12/1/28-18		2,500,000		3,249,300
	Colorado Health Facilities Authority Revenue
	(Adventist Health) 5.125% 11/15/24-16		75,000		89,531
	(Evangelical Lutheran) Series A 6.125% 6/1/38-14		5,250,000		5,776,786
	Denver West Metropolitan District
	5.00% 12/1/33-13 (RADIAN)		1,400,000		1,413,580

Statements of net assets
Delaware Tax-Free Colorado Fund

		Principal amount		Value
Municipal Bonds (continued)
§Pre-Refunded Bonds (continued)
	Douglas County School District #1
	(Douglas & Elbert Counties)
	Series B 5.00% 12/15/24-16	$	2,355,000	$	2,794,278
	El Paso County Certificates of Participation
	(Detention Facilities Project)
	Series B 5.00% 12/1/27-12 (AMBAC)		1,500,000		1,517,880
	Fremont County School District #1 (Canon City)
	5.00% 12/1/24-13 (NATL-RE)		1,000,000		1,059,790
	Garfield Pitkin & Eagle Counties School District #1
	(Roaring Fork)
	Series A 5.00% 12/15/27-14 (AGM)		1,500,000		1,660,245
	La Plata County School District #9 (Durango)
	5.125% 11/1/24-13 (NATL-RE)		1,000,000		1,057,340
	Puerto Rico Commonwealth Public Improvement
	Series A 5.25% 7/1/21-13		1,250,000		1,302,800
	Puerto Rico Public Buildings Authority Revenue
	(Guaranteed Government Facilities)
	Series I 5.25% 7/1/33-14		25,000		27,215
	Sand Creek Metropolitan District
	5.00% 12/1/31-13 (SGI)		135,000		142,808
					20,091,553
Special Tax Revenue Bonds – 15.90%
	Aspen Sales Tax Revenue (Parks & Open Spaces)
	Series B 5.25% 11/1/23 (AGM)		2,040,000		2,298,101
@	Baptist Road Rural Transportation Authority Sales &
	Use Tax Revenue 5.00% 12/1/26		1,575,000		1,224,437
	Denver City & County Justice System Facilities
	5.00% 8/1/21		1,500,000		1,733,265
	Denver Convention Center Hotel Authority Revenue
	5.00% 12/1/35 (SGI)		3,495,000		3,584,541
	Denver International Business Center Metropolitan
	District #1 5.375% 12/1/35		1,750,000		1,837,815
	Guam Government Business Privilege Tax Revenue
	Series A
	5.125% 1/1/42		1,250,000		1,391,000
	5.25% 1/1/36		1,675,000		1,891,645

		Principal amount		Value
Municipal Bonds (continued)
Special Tax Revenue Bonds (continued)
	Park Meadows Business Improvement District Shared
	Sales Tax Revenue
	5.30% 12/1/27	$	950,000	$	1,008,359
	5.35% 12/1/31		720,000		757,217
	Puerto Rico Sales Tax Financing Corporation Revenue
	First Subordinate
	Ω(Convertible Capital Appreciation) Series A
	6.75% 8/1/32		1,345,000		1,392,882
	Series A 5.25% 8/1/27		1,100,000		1,248,753
	Series A 5.50% 8/1/42		1,500,000		1,621,620
	Series A 5.75% 8/1/37		2,620,000		2,925,571
	Series A-1 5.00% 8/1/43		1,770,000		1,860,235
	Series C 5.00% 8/1/40		2,500,000		2,710,250
	Series C 5.00% 8/1/46		5,500,000		5,936,314
	Series C 5.50% 8/1/40		1,000,000		1,087,100
	Regional Transportation District Sales Tax Revenue
	(FasTracks Project) Series A
	5.00% 11/1/28 (AMBAC)		2,500,000		2,870,975
	5.25% 11/1/18		1,000,000		1,243,790
	Sand Creek Metropolitan District 5.00% 12/1/31 (SGI)		365,000		367,675
					38,991,545
State & Territory General Obligation Bonds – 5.01%
	Puerto Rico Commonwealth Public Improvement
	Series A 5.00% 7/1/41		5,500,000		5,478,824
	Series A 5.50% 7/1/19 (NATL-RE) (IBC)		1,220,000		1,367,169
	Series A 5.75% 7/1/41		3,850,000		4,117,691
	Series E 5.375% 7/1/30		1,250,000		1,334,088
					12,297,772
Transportation Revenue Bonds – 7.88%
	Denver City & County Airport System Revenue
	Series A 5.00% 11/15/25 (NATL-RE) (FGIC)		2,000,000		2,265,780
	Series A 5.25% 11/15/36		2,500,000		2,812,800
	Series B 5.00% 11/15/33 (SGI)		2,000,000		2,084,140
	E-470 Public Highway Authority Series C
	5.25% 9/1/25		690,000		751,514
	5.375% 9/1/26		2,000,000		2,180,980
	Puerto Rico Commonwealth Highway & Transportation
	Authority Revenue Series K 5.00% 7/1/30		4,700,000		4,768,431

Statements of net assets
Delaware Tax-Free Colorado Fund

		Principal amount		Value
Municipal Bonds (continued)
Transportation Revenue Bonds (continued)
	Regional Transportation District Revenue
	(Denver Transit Partners)
	6.00% 1/15/34	$	1,450,000	$	1,689,352
	6.00% 1/15/41		2,400,000		2,778,312
					19,331,309
Water & Sewer Revenue Bonds – 0.58%
	Eagle River Water & Sanitation District Enterprise Revenue
	5.00% 12/1/29 (ASSURED GTY)		250,000		290,390
	Pueblo Board Waterworks Revenue
	5.00% 11/1/21 (AGM)		1,000,000		1,127,100
					1,417,490
Total Municipal Bonds (cost $226,052,599)					244,862,423

		Number of shares
Short-Term Investments – 0.28%
Money Market Mutual Fund – 0.16%
	Dreyfus Cash Management Fund		376,500		376,500
					376,500

		Principal amount
¤Variable Rate Demand Note – 0.12%
	Colorado Educational & Cultural Facilities Authority
	(National Jewish Federation Bond Program)
	Series D-7 0.19% 2/1/35
	(LOC-JPMorgan Chase Bank N.A.)	$	300,000		300,000
					300,000
Total Short-Term Investments (cost $676,500)					676,500

Total Value of Securities – 100.12%
	(cost $226,729,099)				245,538,923
Liabilities Net of Receivables and
	Other Assets – (0.12%)				(296,449	)
Net Assets Applicable to 21,065,629
	Shares Outstanding – 100.00%			$	245,242,474


Net Asset Value – Delaware Tax-Free Colorado Fund
Class A ($230,787,672 / 19,827,117 Shares)			$11.64
Net Asset Value – Delaware Tax-Free Colorado Fund
Class B ($173,092 / 14,857 Shares)			$11.65
Net Asset Value – Delaware Tax-Free Colorado Fund
Class C ($14,281,710 / 1,223,655 Shares)			$11.67

Components of Net Assets at August 31, 2012:
Shares of beneficial interest (unlimited authorization – no par)	$	227,706,481
Undistributed net investment income		352,562
Accumulated net realized loss on investments		(1,626,393		)
Net unrealized appreciation of investments		18,809,824
Total net assets	$	245,242,474

•	Variable rate security. The rate shown is the rate as of August 31, 2012. Interest rates reset periodically.
@	Illiquid security. At August 31, 2012, the aggregate value of illiquid securities was $3,699,920, which represented 1.51% of the Fund’s net assets. See Note 8 in “Notes to financial statements.”
§	Pre-refunded bonds. Municipal bonds that are generally backed or secured by U.S. Treasury bonds. For pre-refunded bonds, the stated maturity is followed by the year in which the bond is pre-refunded. See Note 8 in “Notes to financial statements.”
Ω	Step coupon bond. Indicates security that has a zero coupon that remains in effect until a predetermined date at which time the stated interest rate becomes effective.
¤	Tax-exempt obligations that contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the unpaid principal balance plus accrued interest upon a short notice period (generally up to 30 days) prior to specified dates either from the issuer or by drawing on a bank letter of credit, a guarantee or insurance issued with respect to such instrument. The rate shown is the rate as of August 31, 2012.

Statements of net assets
Delaware Tax-Free Colorado Fund


Net Asset Value and Offering Price Per Share –
Delaware Tax-Free Colorado Fund
Net asset value Class A (A)	$	11.64
Sales charge (4.50% of offering price) (B)		0.55
Offering price	$	12.19

(A)		Net asset value per share, as illustrated, is the amount which would be paid upon redemption or repurchase of shares.
(B)		See the current prospectus for purchases of $100,000 or more.

Summary of abbreviations:
ACA — Insured by American Capital Access
AGM — Insured by Assured Guaranty Municipal Corporation
AMBAC — Insured by AMBAC Assurance Corporation
ASSURED GTY — Insured by Assured Guaranty Corporation
FGIC — Insured by Financial Guaranty Insurance Company
FHA — Federal Housing Administration
FHLMC — Federal Home Loan Mortgage Corporation collateral
HUD — Housing and Urban Development Section 8
IBC — Insured Bond Certificate
LOC — Letter of Credit
NATL-RE — Insured by National Public Finance Guarantee Corporation
RADIAN — Insured by Radian Asset Assurance
SGI — Insured by Syncora Guarantee Inc.
VA — Veterans Administration collateral

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

Delaware Tax-Free Idaho Fund

August 31, 2012

		Principal amount		Value
Municipal Bonds – 98.07%
Corporate Revenue Bonds – 5.93%
	Nez Perce County Pollution Control Revenue
	(Potlatch Project) 6.00% 10/1/24	$	5,035,000	$	5,034,647
	Power County Industrial Development Revenue
	(FMC Project) 6.45% 8/1/32 (AMT)		2,000,000		2,003,420
	Power County Pollution Control Revenue
	(FMC Project) 5.625% 10/1/14		2,475,000		2,477,228
					9,515,295
Education Revenue Bonds – 8.39%
	Boise State University
	(General Project) Series A
	4.00% 4/1/37		1,250,000		1,303,075
	5.00% 4/1/42		1,350,000		1,543,765
	(General Refunding) Series A
	4.25% 4/1/32 (NATL-RE)		750,000		789,293
	5.00% 4/1/39		1,000,000		1,111,390
	Idaho Housing & Financing Association Nonprofit
	Facilities Revenue (North Star Charter School Project)
	Series A 9.50% 7/1/39		1,000,000		1,111,440
	Idaho State University Revenue 5.00% 4/1/20 (AGM)		1,130,000		1,158,657
	University of Idaho (General Refunding)
	•Series 2011 5.25% 4/1/41		1,970,000		2,327,692
	Series A 5.00% 4/1/21 (AMBAC)		1,150,000		1,266,553
	•Series B 4.50% 4/1/41 (AGM)		1,000,000		1,135,280
	Series B 5.00% 4/1/28		1,000,000		1,145,310
	Series B 5.00% 4/1/32		500,000		563,930
					13,456,385
Electric Revenue Bonds – 4.89%
	Boise-Kuna Idaho Irrigation District Revenue
	(Arrowrock Hydroelectric Project) 6.30% 6/1/31		1,000,000		1,144,350
	Puerto Rico Electric Power Authority Revenue
	Series A 5.00% 7/1/42		1,000,000		1,023,740
	Series TT 5.00% 7/1/32		3,170,000		3,270,616
	Series TT 5.00% 7/1/37		210,000		214,183
	Series ZZ 5.25% 7/1/26		2,000,000		2,191,240
					7,844,129

Statements of net assets
Delaware Tax-Free Idaho Fund

		Principal amount		Value
Municipal Bonds (continued)
Healthcare Revenue Bonds – 7.95%
	Idaho Health Facilities Authority Revenue
	(St. Luke’s Health System Project) Series A
	4.50% 3/1/47	$	1,500,000	$	1,537,560
	5.00% 3/1/47		1,500,000		1,615,380
	6.50% 11/1/23		250,000		296,485
	6.75% 11/1/37		1,250,000		1,483,025
	(St. Luke’s Regional Medical Center Project)
	5.00% 7/1/35 (AGM)		2,500,000		2,764,799
	(Trinity Health Center Group)
	Series B 6.125% 12/1/28		1,000,000		1,194,760
	Series D 4.50% 12/1/37		1,205,000		1,296,460
	Puerto Rico Industrial Tourist Educational Medical &
	Environmental Control Facilities Financing Authority
	(Auxilio Mutuo) Series A 6.00% 7/1/33		2,245,000		2,559,188
					12,747,657
Housing Revenue Bonds – 2.87%
	Idaho Housing & Finance Association Single Family
	Mortgage Revenue
	Series A 6.05% 7/1/13 (AMBAC) (FHA) (VA) (AMT)		5,000		5,014
	Series A 6.10% 7/1/16 (FHA) (VA) (AMT)		5,000		5,013
	Series A Class II 4.375% 7/1/32		1,000,000		1,066,870
	Series B 6.45% 7/1/15 (AMT)		5,000		5,015
	Series B Class I 5.00% 7/1/37 (AMT)		435,000		444,331
	Series B Class I 5.50% 7/1/38		10,000		10,042
	Series C Class II 4.95% 7/1/31		1,000,000		1,089,050
	Series G-2 6.15% 7/1/15 (FHA) (VA) (AMT)		15,000		15,043
	Series I-1 Class I 5.45% 1/1/39 (AMT)		825,000		854,304
	Puerto Rico Housing Finance Authority Subordinated-
	Capital Fund Modernization 5.125% 12/1/27		1,000,000		1,105,050
					4,599,732
Lease Revenue Bonds – 2.66%
	Idaho Housing & Finance Association Revenue
	(TDF Facilities PJ-Recovery Zone) Series A
	6.50% 2/1/26		1,370,000		1,535,688
	7.00% 2/1/36		1,500,000		1,672,335
	Puerto Rico Public Buildings Authority Revenue
	(Government Facilities) Series U 5.25% 7/1/42		1,035,000		1,052,823
					4,260,846

		Principal amount		Value
Municipal Bonds (continued)
Local General Obligation Bonds – 21.58%
	Ada & Canyon Counties Joint School District #2 Meridian
	(School Board Guaranteed Program)
	4.50% 7/30/22	$	1,500,000	$	1,786,950
	4.75% 2/15/20		1,000,000		1,092,780
	5.50% 7/30/16		1,305,000		1,547,365
	Bannock County School District #25 Pocatello/Chubbuck
	(School Board Guaranteed Program)
	5.00% 8/15/15		1,040,000		1,133,163
	5.00% 8/15/16		1,100,000		1,194,963
	Boise City Independent School District
	5.00% 8/1/24 (AGM)		1,500,000		1,733,820
	Bonneville Joint School District #93
	(School Board Guaranteed program)
	5.00% 9/15/30		1,515,000		1,857,708
	5.00% 9/15/31		870,000		1,060,739
	Canyon County School District #131 Nampa
	(School Board Guaranteed Program)
	Series B 5.00% 8/15/23		1,295,000		1,630,755
	Canyon County School District #132 Caldwell
	5.00% 7/30/15 (NATL-RE) (FGIC)		2,000,000		2,232,760
	Series A 5.00% 9/15/22 (AGM)		1,725,000		2,024,788
	Series A 5.00% 9/15/23 (AGM)		1,810,000		2,124,560
	Idaho Board Bank Authority Revenue
	Series A 5.00% 9/15/28		1,250,000		1,445,175
	Series A 5.00% 9/15/31		1,025,000		1,231,148
	Series A 5.00% 9/15/33		1,125,000		1,335,578
	Series A 5.25% 9/15/26		2,000,000		2,366,660
	Series C 4.00% 9/15/29		1,320,000		1,459,181
	Lemhi County 5.20% 8/1/27 (AGM)		2,145,000		2,180,221
	Nampa City Series B 5.00% 8/1/21 (NATL-RE) (FGIC)		2,475,000		2,756,728
	Twin Falls County School District #413 Filer
	(School Board Guaranteed Program) 5.25% 9/15/25		2,000,000		2,398,840
					34,593,882
§Pre-Refunded Bonds – 8.88%
	Ada & Canyon Counties Joint School District #3 Kuna
	(School Board Guaranteed Program) 4.75% 8/15/22-14		600,000		651,996
	Boise State University Revenue
	(General Refunding) Series A
	5.00% 4/1/18-14 (NATL-RE) (FGIC)		1,500,000		1,611,270

Statements of net assets
Delaware Tax-Free Idaho Fund

		Principal amount		Value
Municipal Bonds (continued)
§Pre-Refunded Bonds (continued)
	Boise State University Revenue
	(Student Union & Housing System)
	5.00% 4/1/17-13 (AMBAC)	$	500,000	$	513,970
	Idaho State Building Authority Revenue Series A
	5.00% 9/1/33-13 (SGI)		1,000,000		1,047,800
	5.00% 9/1/43-13 (SGI)		5,750,000		6,024,849
	Idaho State University Revenue
	5.00% 4/1/23-13 (AGM)		2,115,000		2,174,093
	Moscow Sewer Revenue 5.00% 11/1/22-12 (AGM)		2,175,000		2,191,661
	Puerto Rico Sales Tax Financing Revenue First
	Subordinate Series A 5.50% 8/1/28-19		15,000		19,443
					14,235,082
Special Tax Revenue Bonds – 22.74%
	Coeur d’Alene Local Improvement District #6
	6.10% 7/1/14		45,000		45,597
	Guam Government Business Privilege Tax Revenue Series A
	5.125% 1/1/42		545,000		606,476
	5.25% 1/1/36		705,000		796,185
	Idaho Board Bank Authority Revenue Series B
	5.00% 9/15/30 (NATL-RE)		725,000		822,252
	Idaho Water Resource Board
	(Ground Water Rights Mitigation)
	Series A 5.00% 9/1/32		3,565,000		3,897,970
	Ketchum Urban Renewal Agency 5.50% 10/15/34		1,500,000		1,614,240
	Nampa Development Revenue 5.90% 3/1/30		3,000,000		3,238,110
	Puerto Rico Sales Tax Financing Revenue First Subordinate
	^(Capital Appreciation) Series A
	5.03% 8/1/44 (NATL-RE)		5,125,000		881,193
	5.04% 8/1/45 (NATL-RE)		5,280,000		851,189
	Ω(Convertible Capital Appreciation) Series A 6.75% 8/1/32		735,000		761,166
	Series A 5.00% 8/1/26		1,300,000		1,445,756
	Series A 5.25% 8/1/27		3,000,000		3,405,689
	Series A 5.50% 8/1/42		3,500,000		3,783,779
	Series A-1 5.00% 8/1/43		1,060,000		1,114,039
	Series B 5.75% 8/1/37		2,660,000		2,970,236
	Series C 5.00% 8/1/40		2,500,000		2,710,250
	Series C 5.50% 8/1/40		1,960,000		2,130,716
	(Un-Refunded) Series A 5.50% 8/1/28		1,385,000		1,589,080

		Principal amount		Value
Municipal Bonds (continued)
Special Tax Revenue Bonds (continued)
	Virgin Islands Public Finance Authority Revenue
	(Senior Lien-Matching Fund Loan Note) Series A
	5.00% 10/1/29	$	2,220,000	$	2,425,661
	5.25% 10/1/20		500,000		532,620
	5.25% 10/1/24		800,000		843,288
					36,465,492
State & Territory General Obligation Bonds – 3.43%
	Puerto Rico Commonwealth Public Improvement
	Series A 5.00% 7/1/41		750,000		747,113
	Series A 5.75% 7/1/41		3,850,000		4,117,690
	Series E 5.375% 7/1/30		600,000		640,362
					5,505,165
Transportation Revenue Bonds – 6.69%
	Boise Airport Revenue (Air Terminal Facilities Project)
	5.75% 9/1/19 (AGM) (AMT)		1,000,000		1,215,540
	5.75% 9/1/20 (AGM) (AMT)		1,000,000		1,226,040
	Idaho Housing & Finance Association Grant Revenue
	(Anticipated Federal Highway Trust)
	5.00% 7/15/24 (NATL-RE)		2,000,000		2,254,140
	Series A 5.25% 7/15/20 (ASSURED GTY)		2,750,000		3,281,466
	Series A 5.25% 7/15/25 (ASSURED GTY)		1,500,000		1,779,210
	Puerto Rico Highway & Transportation Authority Revenue
	Series K 5.00% 7/1/30		890,000		902,958
	Un-Refunded Series W 5.50% 7/1/15		55,000		60,125
					10,719,479
Water & Sewer Revenue Bonds – 2.06%
	Idaho Board Bank Authority Revenue
	Series C 5.375% 9/15/38		1,000,000		1,133,530
	Puerto Rico Commonwealth Aqueduct &
	Sewer Authority Revenue Senior Lien Series A
	5.125% 7/1/37		1,500,000		1,504,486
	5.25% 7/1/42		265,000		266,701
	6.00% 7/1/47		365,000		399,733
					3,304,450
Total Municipal Bonds (cost $145,107,302)					157,247,594

Statements of net assets
Delaware Tax-Free Idaho Fund

		Number of shares		Value
Short-Term Investments – 1.04%
Money Market Mutual Fund – 0.78%
	Dreyfus Cash Management Fund	1,249,307	$	1,249,307
				1,249,307

		Principal amount
¤Variable Rate Demand Note – 0.26%
	Idaho State University Foundation Revenue
	(L.E. & Thelma Stephens Project)
	0.17% 5/1/21 (LOC-Wells Fargo Bank, N.A.)	$420,000		420,000
				420,000
Total Short-Term Investments (cost $1,669,307)				1,669,307

Total Value of Securities – 99.11%
	(cost $146,776,609)			158,916,901
Receivables and Other Assets
	Net of Liabilities – 0.89%			1,428,313
Net Assets Applicable to 13,099,210
	Shares Outstanding – 100.00%		$	160,345,214

Net Asset Value – Delaware Tax-Free Idaho Fund
	Class A ($119,025,624 / 9,721,698 Shares)			$12.24
Net Asset Value – Delaware Tax-Free Idaho Fund
	Class B ($581,681 / 47,596 Shares)			$12.22
Net Asset Value – Delaware Tax-Free Idaho Fund
	Class C ($40,737,909 / 3,329,916 Shares)			$12.23

Components of Net Assets at August 31, 2012:
Shares of beneficial interest (unlimited authorization – no par)			$	149,358,034
Distributions in excess of net investment income				(16,644	)
Accumulated net realized loss on investments				(1,136,468	)
Net unrealized appreciation of investments				12,140,292
Total net assets			$	160,345,214


•	Variable rate security. The rate shown is the rate as of August 31, 2012. Interest rates reset periodically.
§	Pre-refunded bonds. Municipal bonds that are generally backed or secured by U.S. Treasury bonds. For pre-refunded bonds, the stated maturity is followed by the year in which the bond is pre-refunded. See Note 8 in “Notes to financial statements.”
^	Zero coupon security. The rate shown is the yield at the time of purchase.
Ω	Step coupon bond. Indicates security that has a zero coupon that remains in effect until a predetermined date at which time the stated interest rate becomes effective.
¤	Tax-exempt obligations that contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the unpaid principal balance plus accrued interest upon a short notice period (generally up to 30 days) prior to specified dates either from the issuer or by drawing on a bank letter of credit, a guarantee or insurance issued with respect to such instrument. The rate shown is the rate as of August 31, 2012.

Net Asset Value and Offering Price Per Share –
Delaware Tax-Free Idaho Fund
Net asset value Class A (A)	$	12.24
Sales charge (4.50% of offering price) (B)		0.58
Offering price	$	12.82

(A)	Net asset value per share, as illustrated, is the amount which would be paid upon redemption or repurchase of shares.
(B)	See the current prospectus for purchases of $100,000 or more.

Summary of abbreviations:
AGM — Insured by Assured Guaranty Municipal Corporation
AMBAC — Insured by AMBAC Assurance Corporation
AMT — Subject to Alternative Minimum Tax
ASSURED GTY — Insured by Assured Guaranty Corporation
FGIC — Insured by Financial Guaranty Insurance Company
FHA — Federal Housing Administration
LOC — Letter of Credit
NATL-RE — Insured by National Public Finance Guarantee Corporation
SGI — Insured by Syncora Guarantee Inc.
VA — Veterans Administration collateral

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

Statements of net assets
Delaware Tax-Free New York Fund	August 31, 2012

		Principal amount		Value
Municipal Bonds – 98.31%
Corporate Revenue Bonds – 9.48%
	Chautauqua County Industrial Development Agency
	Exempt Facilities Revenue (NRG Dunkirk Power Project)
	5.875% 4/1/42	$	1,000,000	$	1,126,030
	Jefferson County Industrial Development Agency
	Solid Waste Disposal (International Paper)
	Series A 5.20% 12/1/20 (AMT)		350,000		364,322
	Nassau County Tobacco Settlement Revenue
	(Asset-Backed) Series A-3 5.125% 6/1/46		600,000		421,110
•	New York City Industrial Development
	Agency Special Facilities Revenue
	(American Airlines-JFK International Airport)
	7.75% 8/1/31 (AMT)		250,000		262,915
	New York Liberty Development Revenue
	(Goldman Sachs Headquarters) 5.25% 10/1/35		625,000		729,013
	(Second Priority-Bank of America Tower)
	5.625% 7/15/47		500,000		561,415
	6.375% 7/15/49		1,265,000		1,453,800
	Suffolk County Industrial Development Agency Revenue
	(Keyspan-Port Jefferson Energy Center)
	5.25% 6/1/27 (AMT)		250,000		257,083
	Suffolk Tobacco Asset Securitization Series B 5.25% 6/1/37		700,000		747,572
	TSASC Revenue (Asset-Backed) Series 1
	5.00% 6/1/34		500,000		381,405
	5.125% 6/1/42		1,000,000		736,760
					7,041,425
Education Revenue Bonds – 16.99%
	Albany Industrial Development Agency Civic Facilities
	Revenue (Brighter Choice Charter School)
	Series A 5.00% 4/1/37		250,000		241,080
	Buffalo & Erie County Industrial Land Development
	(Buffalo State College Foundation Housing) 6.00% 10/1/31		525,000		642,279
	Hempstead Town Local Development Revenue
	(Molloy College Project) 5.75% 7/1/23		400,000		473,320
	Madison County Capital Resource Revenue
	(Colgate University Project) Series A 5.00% 7/1/28		400,000		467,472
	Monroe County Industrial Development Revenue
	(Nazareth College Rochester Project)
	5.25% 10/1/31		500,000		561,980
	5.50% 10/1/41		500,000		555,630

		Principal amount		Value
Municipal Bonds (continued)
Education Revenue Bonds (continued)
	New York City Trust for Cultural Resources
	(Whitney Museum of American Art) 5.00% 7/1/31	$	500,000	$	564,380
	New York State Dormitory Authority Revenue
	(Brooklyn Law School) 5.75% 7/1/33		340,000		391,357
	(Cornell University) Series A
	4.75% 7/1/29		100,000		114,625
	5.00% 7/1/34		170,000		195,422
	(Manhattan Marymount) 5.00% 7/1/24		350,000		380,870
	(Mt. Sinai School of Medicine) 5.125% 7/1/39		500,000		552,015
	(New York University) Series A 5.25% 7/1/34		500,000		598,630
	(Rockefeller University) Series A 5.00% 7/1/27		250,000		303,258
	(Skidmore College) Series A 5.00% 7/1/21		325,000		394,485
	(St. Joseph’s College) 5.25% 7/1/25		500,000		540,770
	(Teachers College) 5.50% 3/1/39		250,000		282,330
	(University of Rochester)
	Series A 5.125% 7/1/39		250,000		281,033
	Series A-2 4.375% 7/1/20		225,000		244,485
	(Yeshiva University) Series A 5.00% 11/1/40		1,000,000		1,112,979
	Onondaga Civic Development Revenue
	(Le Moyne College Project) 5.20% 7/1/29		500,000		545,070
	Onondaga County Trust for Cultural Research Revenue
	(Syracuse University Project) Series B 5.00% 12/1/19		350,000		427,553
	St. Lawrence County Industrial Development Agency Civic
	Facility Revenue (St. Lawrence University)
	Series A 5.00% 10/1/16		500,000		574,515
	Suffolk County Industrial Development Agency Civic Facility
	Revenue (New York Institute of Technology Project)
	5.00% 3/1/26		600,000		620,622
	Troy Industrial Development Authority Civic Facility Revenue
	(Rensselaer Polytechnic) Series E 5.20% 4/1/37		500,000		557,170
	Yonkers Economic Development Education Revenue
	(Charter School Educational Excellence)
	Series A 6.25% 10/15/40		600,000		627,516
	Yonkers Industrial Development Agency Civic Facility
	Revenue (Sarah Lawrence College Project)
	Series A 6.00% 6/1/29		325,000		372,925
					12,623,771

Statements of net assets
Delaware Tax-Free New York Fund

		Principal amount		Value
Municipal Bonds (continued)
Electric Revenue Bonds – 3.50%
	Long Island Power Authority Electric System Revenue
	Series A 5.00% 9/1/37	$	500,000	$	561,700
	Series A 5.75% 4/1/39		350,000		418,856
	Series B 5.75% 4/1/33		250,000		297,445
	New York Power Authority Series A 5.00% 11/15/38		500,000		579,239
	Puerto Rico Electric Power Authority Revenue
	Series WW 5.00% 7/1/28		190,000		198,932
	Series ZZ 5.25% 7/1/26		500,000		547,810
					2,603,982
Healthcare Revenue Bonds – 15.41%
	Albany Industrial Development Agency Civic Facility
	Revenue (St. Peter’s Hospital Project)
	Series A 5.25% 11/15/32		800,000		861,912
	East Rochester Housing Authority Revenue
	(Senior Living-Woodland Village Project) 5.50% 8/1/33		500,000		498,130
	Monroe County Industrial Development Insured Mortgage
	Revenue (University Hospital of Rochester Project)
	5.50% 8/15/40 (FHA)		585,000		675,774
	New York City Health & Hospital Revenue (Health System)
	Series A 5.00% 2/15/30		500,000		565,110
	New York Dormitory Authority Revenue
	(Catholic Health Long Island Obligation Group)
	5.00% 7/1/27		400,000		409,760
	(Chapel Oaks) 5.45% 7/1/26 (LOC-Allied Irish Bank)		450,000		451,058
	(Winthrop South Nassau Hospital) Series B 5.50% 7/1/23		500,000		508,200
	New York Dormitory Authority Revenue
	Non-State Supported Debt
	(Memorial Sloan-Kettering)
	5.00% 7/1/41		180,000		206,347
	Series 1 4.375% 7/1/34		600,000		652,182
	Series 1 5.00% 7/1/23		600,000		737,052
	Series 1 5.00% 7/1/35		225,000		248,661
	Series B 5.00% 5/1/39		500,000		548,350
	Subordinate Series A2 5.00% 7/1/26		500,000		566,860
	(Mt. Sinai Hospital) Series A 5.00% 7/1/26		600,000		674,946
	(North Shore Long Island Jewish Group) Series A
	5.00% 5/1/41		500,000		549,155
	5.50% 5/1/37		500,000		569,330

		Principal amount		Value
Municipal Bonds (continued)
Healthcare Revenue Bonds (continued)
	New York Dormitory Authority Revenue
	Non-State Supported Debt
	(Orange Regional Medical Center)
	6.125% 12/1/29	$	540,000	$	593,465
	6.25% 12/1/37		250,000		272,165
	Suffolk County Economic Development Revenue
	(Catholic Health Services) 5.00% 7/1/28		1,000,000		1,138,750
	(Peconic Landing Southland) 6.00% 12/1/40		650,000		721,487
					11,448,694
Housing Revenue Bonds – 1.04%
	New York City Housing Development Multifamily Housing
	Revenue Series G-1 4.875% 11/1/39 (AMT)		250,000		257,483
	New York Mortgage Agency Revenue 44th Series
	4.35% 10/1/24 (AMT)		485,000		514,560
					772,043
Lease Revenue Bonds – 14.15%
	Battery Park City Authority Revenue
	Series A 5.00% 11/1/26		250,000		262,543
	Erie County Industrial Development Agency School Facility
	Revenue (Buffalo City School District)
	Series A 5.25% 5/1/25		500,000		580,670
	Hudson Yards Infrastructure Revenue Series A
	5.00% 2/15/47		500,000		529,730
	5.25% 2/15/47		600,000		676,500
	5.75% 2/15/47		1,000,000		1,175,030
	New York City Industrial Development Agency
	Special Airport Facility Revenue
	(Airis JFK I Project) Series A 5.50% 7/1/28 (AMT)		500,000		501,445
	(Senior Trips) Series A 5.00% 7/1/28 (AMT)		1,500,000		1,588,949
	New York Liberty Development (World Trade Center Project)
	5.00% 11/15/31		500,000		574,475
	5.00% 3/15/44		600,000		646,440
	5.75% 11/15/51		1,055,000		1,250,871
	Onondaga County Industrial Development Agency Revenue
	(Air Cargo) 7.25% 1/1/32 (AMT)		500,000		506,990
	Puerto Rico Public Finance (Commonwealth Appropriation)
	Series B 5.50% 8/1/31		870,000		923,114

Statements of net assets
Delaware Tax-Free New York Fund

		Principal amount		Value
Municipal Bonds (continued)
Lease Revenue Bonds (continued)
	Tobacco Settlement Financing Authority Revenue
	(Asset-Backed) Series B-1C
	5.50% 6/1/20	$	200,000	$	207,636
	5.50% 6/1/21		500,000		519,090
	United Nations Development Revenue
	Series A 5.00% 7/1/26		500,000		568,465
					10,511,948
Local General Obligation Bonds – 4.88%
	New York City
	Series C-1 5.00% 10/1/19		500,000		588,285
	Series D 5.00% 11/1/34		125,000		134,401
	Series D-1 5.00% 10/1/36		1,000,000		1,142,160
	Series I-1 5.375% 4/1/36		500,000		578,695
	New York State Dormitory Authority
	Revenue Non-State Supported Debt
	(School Districts-Financing Program) Series A
	5.00% 10/1/23		500,000		600,685
	5.00% 10/1/25 (AGM)		500,000		581,230
					3,625,456
§Pre-Refunded Bonds – 2.15%
	New York State Dormitory Authority Revenue
	(Columbia University) Series A 5.00% 7/1/23-13		500,000		520,035
	Puerto Rico Commonwealth Highway & Transportation
	Authority Revenue Series Y 5.50% 7/1/36-16		475,000		568,566
	Schenectady Metroplex Development Authority Revenue
	Series A 5.375% 12/15/21-12		500,000		507,455
					1,596,056
Special Tax Revenue Bonds – 12.91%
	Brooklyn Arena Local Development Revenue
	(Barclays Center Project)
	6.25% 7/15/40		500,000		581,585
	6.375% 7/15/43		500,000		584,530
	6.50% 7/15/30		500,000		599,215
	Guam Government Business Privilege Tax Revenue Series A
	5.125% 1/1/42		185,000		205,868
	5.25% 1/1/36		240,000		271,042
	Metropolitan Transportation Authority Revenue
	Series B 5.00% 11/15/34		500,000		565,555

		Principal amount		Value
Municipal Bonds (continued)
Special Tax Revenue Bonds (continued)
	New York City Industrial Development Agency
	(YMCA of Greater New York Project) 5.00% 8/1/36	$	1,000,000	$	1,048,270
	New York City Transitional Finance Authority Revenue
	(Building Aid) Series S-1A 5.25% 7/15/37		1,000,000		1,159,310
	(Future Tax Secured)
	Fiscal 2011 5.00% 2/1/26		250,000		299,770
	Fiscal 2011 5.25% 2/1/29		500,000		602,300
	Series B 5.00% 11/1/18		500,000		593,425
	Series C 5.25% 11/1/25		500,000		609,360
	New York City Trust for Cultural Resources Revenue
	(Museum Modern Art) Series A1 5.00% 4/1/31		250,000		288,910
	New York Dormitory Authority State Personal Income Tax
	Revenue Series C 5.00% 3/15/34		500,000		578,295
	New York Dormitory Authority State Supported Debt
	Revenue (Consolidated Services Contract)
	5.00% 7/1/17 (AGM)		500,000		592,700
	New York Sales Tax Asset Receivables
	Series A 5.25% 10/15/27 (AMBAC)		500,000		546,625
Ω	Puerto Rico Sales Tax Financing Revenue First Subordinate
	(Convertible Capital Appreciation) Series A 6.75% 8/1/32		185,000		191,586
	Virgin Islands Public Finance Authority Revenue
	(Matching Fund Loan Note-Senior Lien)
	Series A 5.00% 10/1/29		250,000		273,160
					9,591,506
State & Territory General Obligation Bonds – 5.55%
	New York City Series E 5.00% 8/1/28		125,000		146,680
	New York State Series A 5.00% 3/1/38		500,000		573,185
	Puerto Rico Commonwealth Government Development
	Bank Refunding Remarketed
	4.75% 12/1/15 (NATL-RE)		230,000		234,402
	Puerto Rico Commonwealth Public Improvement Series A
	5.00% 7/1/41		1,000,000		996,150
	5.50% 7/1/19 (NATL-RE) (IBC)		520,000		582,728
	5.50% 7/1/39		500,000		520,970
	5.75% 7/1/41		1,000,000		1,069,530
					4,123,645

Statements of net assets
Delaware Tax-Free New York Fund

		Principal amount		Value
Municipal Bonds (continued)
Transportation Revenue Bonds – 9.15%
	Metropolitan Transportation Authority Revenue
	Series 2008C 6.50% 11/15/28	$	200,000	$	256,646
	Series A 5.00% 11/15/41		500,000		556,275
	Series C 5.00% 11/15/32		500,000		577,575
	Series C 5.00% 11/15/41		200,000		224,544
	Series D 5.00% 11/15/32		500,000		577,575
	Series D 5.25% 11/15/27		500,000		585,830
	Series E 4.00% 11/15/38		535,000		542,554
	Series F 5.00% 11/15/15		150,000		170,378
	New York State Thruway Authority General Revenue Series I
	5.00% 1/1/32		700,000		807,968
	5.00% 1/1/42		500,000		562,435
	Port Authority New York & New Jersey
	(Consolidated-One Hundred Fifty-Third) 5.00% 7/15/35		250,000		278,510
	(JFK International Air Terminal)
	6.00% 12/1/42		700,000		813,525
	6.50% 12/1/28		550,000		602,894
	Triborough Bridge & Tunnel Authority Revenue
	Series C 5.00% 11/15/24		200,000		240,144
					6,796,853
Water & Sewer Revenue Bonds – 3.10%
	New York City Municipal Water Finance Authority
	Water & Sewer System Revenue
	(Second General Resolution)
	Series A 5.75% 6/15/40		200,000		241,296
	Series BB 5.25% 6/15/44		500,000		585,505
	Series FF 5.50% 6/15/40		250,000		294,078
	Series HH 5.00% 6/15/32		500,000		584,095
	New York State Environmental Facilities Revenue
	Clean Water & Drinking Revolving Funds 5.00% 6/15/30		500,000		600,465
					2,305,439
Total Municipal Bonds (cost $66,742,050)					73,040,818

		Principal amount		Value
Short-Term Investments – 2.02%
¤Variable Rate Demand Notes – 2.02%
	City of New York Various Subordinate Series A-7
	0.16% 8/1/20 (LOC-JPMorgan Chase Bank, N.A.)	$	500,000	$	500,000
	New York City Adjusted Series C
	0.16% 10/1/23 (LOC-JPMorgan Chase Bank, N.A.)		500,000		500,000
	New York City Industrial Development Agency Civic Facility
	Revenue (American Civil Project)
	0.16% 6/1/35 (LOC-JPMorgan Chase Bank, N.A.)		500,000		500,000
Total Short-Term Investments (cost $1,500,000)					1,500,000

Total Value of Securities – 100.33%
	(cost $68,242,050)				74,540,818
Liabilities Net of Receivables
	and Other Assets – (0.33%)				(242,867		)
Net Assets Applicable to 6,370,019
	Shares Outstanding – 100.00%			$	74,297,951

Net Asset Value – Delaware Tax-Free New York Fund
	Class A ($53,456,479 / 4,580,046 Shares)					$11.67
Net Asset Value – Delaware Tax-Free New York Fund
	Class B ($317,614 / 27,270 Shares)					$11.65
Net Asset Value – Delaware Tax-Free New York Fund
	Class C ($20,523,858 / 1,762,703 Shares)					$11.64

Components of Net Assets at August 31, 2012:
Shares of beneficial interest (unlimited authorization – no par)				$	67,851,237
Undistributed net investment income					7,099
Accumulated net realized gain on investments					140,847
Net unrealized appreciation of investments					6,298,768
Total net assets				$	74,297,951

Statements of net assets
Delaware Tax-Free New York Fund

•Variable rate security. The rate shown is the rate as of August 31, 2012. Interest rates reset periodically.

§Pre-refunded bonds. Municipal bonds that are generally backed or secured by U.S. Treasury bonds. For pre-refunded bonds, the stated maturity is followed by the year in which the bond is pre-refunded. See Note 8 in “Notes to financial statements.”

ΩStep coupon bond. Indicates security that has a zero coupon that remains in effect until a predetermined date at which time the stated interest rate becomes effective.

¤Tax-exempt obligations that contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the unpaid principal balance plus accrued interest upon a short notice period (generally up to 30 days) prior to specified dates either from the issuer or by drawing on a bank letter of credit, a guarantee or insurance issued with respect to such instrument. The rate shown is the rate as of August 31, 2012.

Net Asset Value and Offering Price Per Share –
Delaware Tax-Free New York Fund
Net asset value Class A (A)	$	11.67
Sales charge (4.50% of offering price) (B)		0.55
Offering price	$	12.22

(A)	Net asset value per share, as illustrated, is the amount which would be paid upon redemption or repurchase of shares.
(B)	See the current prospectus for purchases of $100,000 or more.

Summary of abbreviations:
AGM — Insured by Assured Guaranty Municipal Corporation
AMBAC — Insured by AMBAC Assurance Corporation
AMT — Subject to Alternative Minimum Tax
FHA — Federal Housing Administration
IBC — Insured Bond Certificate
LOC — Letter of Credit
NATL-RE — Insured by National Public Finance Guarantee Corporation

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

Statements of operations
	Year Ended August 31, 2012

	Delaware Tax-Free				Delaware Tax-Free				Delaware Tax-Free
	Arizona Fund				California Fund				Colorado Fund
Investment Income:
Interest		$	5,037,632			$	4,712,205			$	11,307,123

Expenses:
Management fees			527,114				526,572				1,307,764
Distribution expenses – Class A			245,223				194,314				559,912
Distribution expenses – Class B			5,040				9,485				3,132
Distribution expenses – Class C			68,467				167,318				134,732
Dividend disbursing and transfer agent
fees and expenses			52,026				63,602				117,387
Accounting and administration expenses			41,305				37,498				93,158
Audit and tax			12,983				13,052				16,033
Reports and statements to shareholders			12,411				10,837				21,783
Registration fees			12,146				11,324				7,785
Legal fees			10,284				8,915				23,372
Pricing fees			7,908				9,965				10,853
Trustees’ fees			5,095				4,581				11,476
Insurance fees			2,392				1,565				4,725
Custodian fees			2,181				2,565				5,280
Dues and services			1,978				1,362				1,214
Consulting fees			927				906				2,122
Trustees’ expenses			314				262				698
			1,007,794				1,064,123				2,321,426
Less fees waived			(66,858	)			(148,126	)			(220,336	)
Less expense paid indirectly			(42	)			(30	)			(92	)
Total operating expenses			940,894				915,967				2,100,998
Net Investment Income			4,096,738				3,796,238				9,206,125

Net Realized and Unrealized Gain:
Net realized gain on investments			1,052,973				845,787				2,424,292
Net change in unrealized appreciation
(depreciation) of investments			5,070,394				7,598,268				13,431,285
Net Realized and Unrealized Gain			6,123,367				8,444,055				15,855,577

Net Increase in Net Assets
Resulting from Operations		$	10,220,105			$	12,240,293			$	25,061,702

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

	Delaware Tax-Free				Delaware Tax-Free
	Idaho Fund				New York Fund
Investment Income:
Interest		$	6,688,128			$	2,869,196

Expenses:
Management fees			811,685				345,491
Distribution expenses – Class A			273,081				112,089
Distribution expenses – Class B			6,319				4,602
Distribution expenses – Class C			375,835				173,367
Dividend disbursing and transfer agent
fees and expenses			75,387				50,422
Accounting and administration expenses			57,813				24,603
Reports and statements to shareholders			14,759				8,493
Audit and tax			14,503				12,509
Legal fees			13,581				5,826
Registration fees			9,739				13,980
Pricing fees			9,667				11,619
Trustees’ fees			7,087				2,982
Custodian fees			3,400				1,448
Insurance fees			2,536				1,013
Dues and services			1,440				1,325
Consulting fees			1,310				575
Trustees’ expenses			421				168
			1,678,563				770,512
Less fees waived			(93,710	)			(135,258	)
Less expense paid indirectly			(56	)			(20	)
Total operating expenses			1,584,797				635,234
Net Investment Income			5,103,331				2,233,962

Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investments			(134,746	)			621,955
Net change in unrealized appreciation
(depreciation) of investments			6,365,479				4,168,664
Net Realized and Unrealized Gain			6,230,733				4,790,619

Net Increase in Net Assets
Resulting from Operations		$	11,334,064			$	7,024,581

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

Statements of changes in net assets
Delaware Tax-Free Arizona Fund

	Year Ended
	8/31/12			8/31/11
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	4,096,738		$	4,224,609
Net realized gain		1,052,973			26,324
Net change in unrealized appreciation (depreciation)		5,070,394			(4,245,010	)
Net increase in net assets resulting from operations		10,220,105			5,923

Dividends and Distributions to Shareholders from:
Net investment income:
Class A		(3,838,812	)		(3,935,696	)
Class B		(15,982	)		(48,023	)
Class C		(216,639	)		(229,913	)

Net realized gain:
Class A		(25,133	)		(250,507	)
Class B		(172	)		(5,139	)
Class C		(1,765	)		(18,335	)
		(4,098,503	)		(4,487,613	)

Capital Share Transactions:
Proceeds from shares sold:
Class A		5,094,394			9,590,092
Class B		—			468
Class C		840,858			802,573

Net asset value of shares issued upon reinvestment
of dividends and distributions:
Class A		2,768,726			2,229,671
Class B		14,153			31,965
Class C		177,549			152,719
		8,895,680			12,807,488

	Year Ended
	8/31/12			8/31/11
Capital Share Transactions (continued):
Cost of shares redeemed:
Class A	$	(9,093,206	)	$	(20,506,737	)
Class B		(574,575	)		(2,067,231	)
Class C		(1,109,478	)		(1,832,935	)
		(10,777,259	)		(24,406,903	)
Decrease in net assets derived from
capital share transactions		(1,881,579	)		(11,599,415	)
Net Increase (Decrease) in Net Assets		4,240,023			(16,081,105	)

Net Assets:
Beginning of year		103,045,367			119,126,472
End of year	$	107,285,390		$	103,045,367

Undistributed net investment income	$	25,309		$	25,309

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

Statements of changes in net assets
Delaware Tax-Free California Fund

	Year Ended
	8/31/12			8/31/11
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	3,796,238		$	3,588,094
Net realized gain (loss)		845,787			(718,355	)
Net change in unrealized appreciation (depreciation)		7,598,268			(2,957,481	)
Net increase (decrease) in net assets
resulting from operations		12,240,293			(87,742	)

Dividends and Distributions to Shareholders from:
Net investment income:
Class A		(3,189,609	)		(2,970,212	)
Class B		(32,159	)		(71,308	)
Class C		(563,689	)		(536,304	)
		(3,785,457	)		(3,577,824	)

Capital Share Transactions:
Proceeds from shares sold:
Class A		34,582,426			13,966,047
Class B		30,390			446
Class C		4,936,706			3,882,265

Net asset value of shares issued upon reinvestment
of dividends and distributions:
Class A		2,265,497			1,792,877
Class B		22,982			53,523
Class C		454,958			389,108
		42,292,959			20,084,266

	Year Ended
	8/31/12			8/31/11
Capital Share Transactions (continued):
Cost of shares redeemed:
Class A	$	(12,958,552	)	$	(18,652,984	)
Class B		(539,530	)		(1,868,698	)
Class C		(2,910,386	)		(4,362,004	)
		(16,408,468	)		(24,883,686	)
Increase (decrease) in net assets derived from
capital share transactions		25,884,491			(4,799,420	)
Net Increase (Decrease) in Net Assets		34,339,327			(8,464,986	)

Net Assets:
Beginning of year		83,216,597			91,681,583
End of year	$	117,555,924		$	83,216,597

Undistributed net investment income	$	18,763		$	18,763

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

Statements of changes in net assets
Delaware Tax-Free Colorado Fund

	Year Ended
	8/31/12			8/31/11
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	9,206,125		$	9,935,304
Net realized gain (loss)		2,424,292			(1,090,497	)
Net change in unrealized appreciation (depreciation)		13,431,285			(8,167,863	)
Net increase in net assets resulting from operations		25,061,702			676,944

Dividends and Distributions to Shareholders from:
Net investment income:
Class A		(8,749,124	)		(9,065,106	)
Class B		(10,110	)		(32,264	)
Class C		(425,246	)		(473,556	)
		(9,184,480	)		(9,570,926	)

Capital Share Transactions:
Proceeds from shares sold:
Class A		10,143,467			9,661,260
Class B		12			304
Class C		1,744,888			1,768,344

Net asset value of shares issued upon reinvestment
of dividends and distributions:
Class A		6,567,239			5,999,728
Class B		5,937			21,271
Class C		360,117			348,473
		18,821,660			17,799,380

	Year Ended
	8/31/12			8/31/11
Capital Share Transactions (continued):
Cost of shares redeemed:
Class A	$	(17,038,942	)	$	(28,796,246	)
Class B		(463,156	)		(776,210	)
Class C		(1,967,053	)		(3,449,371	)
		(19,469,151	)		(33,021,827	)
Decrease in net assets derived from
capital share transactions		(647,491	)		(15,222,447	)
Net Increase (Decrease) in Net Assets		15,229,731			(24,116,429	)

Net Assets:
Beginning of year		230,012,743			254,129,172
End of year	$	245,242,474		$	230,012,743

Undistributed net investment income	$	352,562		$	352,563

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

Statements of changes in net assets
Delaware Tax-Free Idaho Fund

	Year Ended
	8/31/12			8/31/11
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	5,103,331		$	4,747,970
Net realized loss		(134,746	)		(974,509	)
Net change in unrealized appreciation (depreciation)		6,365,479			(3,975,375	)
Net increase (decrease) in net assets
resulting from operations		11,334,064			(201,914	)

Dividends and Distributions to Shareholders from:
Net investment income:
Class A		(3,979,888	)		(3,594,235	)
Class B		(18,318	)		(47,733	)
Class C		(1,087,724	)		(1,085,338	)

Net realized gain:
Class A		—			(58,688	)
Class B		—			(1,213	)
Class C		—			(22,123	)
		(5,085,930	)		(4,809,330	)

Capital Share Transactions:
Proceeds from shares sold:
Class A		27,230,993			22,046,186
Class B		133			—
Class C		9,308,402			9,226,467

Net asset value of shares issued upon reinvestment
of dividends and distributions:
Class A		2,829,553			2,621,700
Class B		16,152			38,486
Class C		937,685			841,625
		40,322,918			34,774,464

	Year Ended
	8/31/12			8/31/11
Capital Share Transactions (continued):
Cost of shares redeemed:
Class A	$	(14,499,061	)	$	(26,491,952	)
Class B		(374,954	)		(1,483,183	)
Class C		(6,882,006	)		(8,585,502	)
		(21,756,021	)		(36,560,637	)
Increase (decrease) in net assets derived from
capital share transactions		18,566,897			(1,786,173	)
Net Increase (Decrease) in Net Assets		24,815,031			(6,797,417	)

Net Assets:
Beginning of year		135,530,183			142,327,600
End of year	$	160,345,214		$	135,530,183

Distributions in excess of net investment income	$	(16,644	)	$	(16,644	)

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

Statements of changes in net assets
Delaware Tax-Free New York Fund

	Year Ended
	8/31/12			8/31/11
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	2,233,962		$	1,848,243
Net realized gain (loss)		621,955			(461,636	)
Net change in unrealized appreciation (depreciation)		4,168,664			(1,450,553	)
Net increase (decrease) in net assets
resulting from operations		7,024,581			(63,946	)

Dividends and Distributions to Shareholders from:
Net investment income:
Class A		(1,681,430	)		(1,400,126	)
Class B		(13,909	)		(17,505	)
Class C		(520,282	)		(425,309	)
		(2,215,621	)		(1,842,940	)

Capital Share Transactions:
Proceeds from shares sold:
Class A		18,938,318			10,714,054
Class B		37,194			—
Class C		6,044,733			3,902,137

Net asset value of shares issued upon reinvestment
of dividends and distributions:
Class A		1,394,783			1,022,817
Class B		10,269			12,841
Class C		397,016			315,491
		26,822,313			15,967,340

	Year Ended
	8/31/12			8/31/11
Capital Share Transactions (continued):
Cost of shares redeemed:
Class A	$	(7,361,248	)	$	(10,992,437	)
Class B		(240,795	)		(243,301	)
Class C		(1,493,916	)		(2,976,393	)
		(9,095,959	)		(14,212,131	)
Increase in net assets derived from
capital share transactions		17,726,354			1,755,209
Net Increase (Decrease) in Net Assets		22,535,314			(151,677	)

Net Assets:
Beginning of year		51,762,637			51,914,314
End of year	$	74,297,951		$	51,762,637

Undistributed (distributions in excess of)
net investment income	$	7,099		$	(657	)

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

Financial highlights
Delaware Tax-Free Arizona Fund Class A

Selected data for each share of the Fund outstanding throughout each period were as follows:

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income

Net realized and unrealized gain (loss)

Total from investment operations

Less dividends and distributions from:

Net investment income

Net realized gain

Total dividends and distributions

Net asset value, end of period

Total return¹

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

prior to fees waived

Ratio of net investment income to average net assets

prior to fees waived

Portfolio turnover

¹Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

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

Year Ended
8/31/12		8/31/11		8/31/10		8/31/09		8/31/08
$11.340		$11.760		$11.090		$10.930		$11.070


0.460		0.445		0.447		0.431		0.444
0.670		(0.394	)	0.668		0.158		(0.140	)
1.130		0.051		1.115		0.589		0.304


(0.457	)	(0.444	)	(0.445	)	(0.429	)	(0.444	)
(0.003	)	(0.027	)	—		—		—
(0.460	)	(0.471	)	(0.445	)	(0.429	)	(0.444	)

$12.010		$11.340		$11.760		$11.090		$10.930

10.15%		0.57%		10.27%		5.64%		2.78%


$99,953		$95,487		$108,214		$113,689		$122,027
0.84%		0.87%		0.86%		0.75%		0.75%

0.90%		0.93%		0.92%		0.91%		0.91%
3.94%		3.98%		3.94%		4.07%		4.02%

3.88%		3.92%		3.88%		3.91%		3.86%
34%		32%		15%		27%		29%

Financial highlights
Delaware Tax-Free Arizona Fund Class B

Selected data for each share of the Fund outstanding throughout each period were as follows:

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income

Net realized and unrealized gain (loss)

Total from investment operations

Less dividends and distributions from:

Net investment income

Net realized gain

Total dividends and distributions

Net asset value, end of period

Total return¹

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

prior to fees waived

Ratio of net investment income to average net assets

prior to fees waived

Portfolio turnover

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

Year Ended
8/31/12		8/31/11		8/31/10		8/31/09		8/31/08
$11.340		$11.760		$11.100		$10.940		$11.070


0.373		0.361		0.362		0.352		0.361
0.680		(0.394	)	0.658		0.158		(0.130	)
1.053		(0.033	)	1.020		0.510		0.231


(0.370	)	(0.360	)	(0.360	)	(0.350	)	(0.361	)
(0.003	)	(0.027	)	—		—		—
(0.373	)	(0.387	)	(0.360	)	(0.350	)	(0.361	)

$12.020		$11.340		$11.760		$11.100		$10.940

9.42%		(0.18%	)	9.35%		4.85%		2.10%


$224		$757		$2,917		$6,509		$9,620
1.59%		1.62%		1.61%		1.50%		1.50%

1.65%		1.68%		1.67%		1.66%		1.66%
3.19%		3.23%		3.19%		3.32%		3.27%

3.13%		3.17%		3.13%		3.16%		3.11%
34%		32%		15%		27%		29%

Financial highlights
Delaware Tax-Free Arizona Fund Class C

Selected data for each share of the Fund outstanding throughout each period were as follows:

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income

Net realized and unrealized gain (loss)

Total from investment operations

Less dividends and distributions from:

Net investment income

Net realized gain

Total dividends and distributions

Net asset value, end of period

Total return¹

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

prior to fees waived

Ratio of net investment income to average net assets

prior to fees waived

Portfolio turnover

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

Year Ended
8/31/12		8/31/11		8/31/10		8/31/09		8/31/08
$11.370		$11.790		$11.120		$10.960		$11.090


0.373		0.362		0.363		0.352		0.361
0.670		(0.394	)	0.668		0.158		(0.130	)
1.043		(0.032	)	1.031		0.510		0.231


(0.370	)	(0.361	)	(0.361	)	(0.350	)	(0.361	)
(0.003	)	(0.027	)	—		—		—
(0.373	)	(0.388	)	(0.361	)	(0.350	)	(0.361	)

$12.040		$11.370		$11.790		$11.120		$10.960

9.31%		(0.17%	)	9.43%		4.84%		2.09%


$7,108		$6,801		$7,995		$7,257		$8,806
1.59%		1.62%		1.61%		1.50%		1.50%

1.65%		1.68%		1.67%		1.66%		1.66%
3.19%		3.23%		3.19%		3.32%		3.27%

3.13%		3.17%		3.13%		3.16%		3.11%
34%		32%		15%		27%		29%

Financial highlights
Delaware Tax-Free California Fund Class A

Selected data for each share of the Fund outstanding throughout each period were as follows:

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income

Net realized and unrealized gain (loss)

Total from investment operations

Less dividends and distributions from:

Net investment income

Total dividends and distributions

Net asset value, end of period

Total return¹

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

prior to fees waived

Ratio of net investment income to average net assets

prior to fees waived

Portfolio turnover

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

Year Ended
8/31/12		8/31/11		8/31/10		8/31/09		8/31/08
$11.170		$11.570		$10.620		$10.800		$11.010


0.484		0.476		0.497		0.448		0.449
1.039		(0.401	)	0.950		(0.182	)	(0.210	)
1.523		0.075		1.447		0.266		0.239


(0.483	)	(0.475	)	(0.497	)	(0.446	)	(0.449	)
(0.483	)	(0.475	)	(0.497	)	(0.446	)	(0.449	)

$12.210		$11.170		$11.570		$10.620		$10.800

13.90%		0.83%		13.92%		2.74%		2.21%


$97,821		$67,047		$72,902		$61,132		$67,174
0.82%		0.82%		0.82%		0.88%		0.88%

0.97%		0.98%		0.98%		0.97%		0.97%
4.10%		4.36%		4.48%		4.42%		4.11%

3.95%		4.20%		4.32%		4.33%		4.02%
32%		44%		35%		59%		34%

Financial highlights
Delaware Tax-Free California Fund Class B

Selected data for each share of the Fund outstanding throughout each period were as follows:

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income

Net realized and unrealized gain (loss)

Total from investment operations

Less dividends and distributions from:

Net investment income

Total dividends and distributions

Net asset value, end of period

Total return¹

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

prior to fees waived

Ratio of net investment income to average net assets

prior to fees waived

Portfolio turnover

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

Year Ended
8/31/12		8/31/11		8/31/10		8/31/09		8/31/08
$11.210		$11.610		$10.670		$10.840		$11.060


0.398		0.395		0.416		0.373		0.367
1.049		(0.401	)	0.940		(0.172	)	(0.220	)
1.447		(0.006	)	1.356		0.201		0.147


(0.397	)	(0.394	)	(0.416	)	(0.371	)	(0.367	)
(0.397	)	(0.394	)	(0.416	)	(0.371	)	(0.367	)

$12.260		$11.210		$11.610		$10.670		$10.840

13.10%		0.09%		12.93%		2.07%		1.34%


$905		$1,307		$3,254		$4,938		$6,589
1.57%		1.57%		1.57%		1.63%		1.63%

1.72%		1.73%		1.73%		1.72%		1.72%
3.35%		3.61%		3.73%		3.67%		3.36%

3.20%		3.45%		3.57%		3.58%		3.27%
32%		44%		35%		59%		34%

Financial highlights
Delaware Tax-Free California Fund Class C

Selected data for each share of the Fund outstanding throughout each period were as follows:

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income

Net realized and unrealized gain (loss)

Total from investment operations

Less dividends and distributions from:

Net investment income

Total dividends and distributions

Net asset value, end of period

Total return¹

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

prior to fees waived

Ratio of net investment income to average net assets

prior to fees waived

Portfolio turnover

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

Year Ended
8/31/12		8/31/11		8/31/10		8/31/09		8/31/08
$11.180		$11.590		$10.640		$10.810		$11.030


0.397		0.394		0.415		0.373		0.367
1.049		(0.411	)	0.950		(0.172	)	(0.220	)
1.446		(0.017	)	1.365		0.201		0.147


(0.396	)	(0.393	)	(0.415	)	(0.371	)	(0.367	)
(0.396	)	(0.393	)	(0.415	)	(0.371	)	(0.367	)

$12.230		$11.180		$11.590		$10.640		$10.810

13.13%		(0.01%	)	13.06%		2.07%		1.35%


$18,830		$14,863		$15,526		$13,530		$14,991
1.57%		1.57%		1.57%		1.63%		1.63%

1.72%		1.73%		1.73%		1.72%		1.72%
3.35%		3.61%		3.73%		3.67%		3.36%

3.20%		3.45%		3.57%		3.58%		3.27%
32%		44%		35%		59%		34%

Financial highlights
Delaware Tax-Free Colorado Fund Class A

Selected data for each share of the Fund outstanding throughout each period were as follows:

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income

Net realized and unrealized gain (loss)

Total from investment operations

Less dividends and distributions from:

Net investment income

Total dividends and distributions

Net asset value, end of period

Total return¹

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

prior to fees waived

Ratio of net investment income to average net assets

prior to fees waived

Portfolio turnover

1 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

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

Year Ended
8/31/12		8/31/11		8/31/10		8/31/09		8/31/08
$10.880		$11.260		$10.600		$10.640		$10.730


0.444		0.460		0.455		0.452		0.448
0.758		(0.397	)	0.661		(0.041	)	(0.089	)
1.202		0.063		1.116		0.411		0.359


(0.442	)	(0.443	)	(0.456	)	(0.451	)	(0.449	)
(0.442	)	(0.443	)	(0.456	)	(0.451	)	(0.449	)

$11.640		$10.880		$11.260		$10.600		$10.640

11.23%		0.71%		10.74%		4.11%		3.38%


$230,787		$216,151		$237,545		$226,393		$234,630
0.84%		0.88%		0.93%		0.90%		0.93%

0.93%		0.95%		0.95%		0.95%		0.95%
3.91%		4.30%		4.16%		4.43%		4.16%

3.82%		4.23%		4.14%		4.38%		4.14%
24%		26%		17%		27%		15%

Financial highlights
Delaware Tax-Free Colorado Fund Class B

Selected data for each share of the Fund outstanding throughout each period were as follows:

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income

Net realized and unrealized gain (loss)

Total from investment operations

Less dividends and distributions from:

Net investment income

Total dividends and distributions

Net asset value, end of period

Total return¹

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

prior to fees waived

Ratio of net investment income to average net assets

prior to fees waived

Portfolio turnover

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

Year Ended
8/31/12		8/31/11		8/31/10		8/31/09		8/31/08
$10.890		$11.270		$10.610		$10.640		$10.730


0.360		0.380		0.373		0.375		0.367
0.758		(0.397	)	0.661		(0.031	)	(0.089	)
1.118		(0.017	)	1.034		0.344		0.278


(0.358	)	(0.363	)	(0.374	)	(0.374	)	(0.368	)
(0.358	)	(0.363	)	(0.374	)	(0.374	)	(0.368	)

$11.650		$10.890		$11.270		$10.610		$10.640

10.41%		(0.04%	)	9.91%		3.43%		2.60%


$173		$609		$1,429		$2,693		$3,961
1.59%		1.63%		1.68%		1.65%		1.68%

1.68%		1.70%		1.70%		1.70%		1.70%
3.16%		3.55%		3.41%		3.68%		3.41%

3.07%		3.48%		3.39%		3.63%		3.39%
24%		26%		17%		27%		15%

Financial highlights
Delaware Tax-Free Colorado Fund Class C

Selected data for each share of the Fund outstanding throughout each period were as follows:

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income

Net realized and unrealized gain (loss)

Total from investment operations

Less dividends and distributions from:

Net investment income

Total dividends and distributions

Net asset value, end of period

Total return¹

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

prior to fees waived

Ratio of net investment income to average net assets

prior to fees waived

Portfolio turnover

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

100

Year Ended
8/31/12		8/31/11		8/31/10		8/31/09		8/31/08
$10.910		$11.290		$10.630		$10.660		$10.750


0.360		0.381		0.374		0.375		0.367
0.758		(0.397	)	0.661		(0.031	)	(0.089	)
1.118		(0.016	)	1.035		0.344		0.278


(0.358	)	(0.364	)	(0.375	)	(0.374	)	(0.368	)
(0.358	)	(0.364	)	(0.375	)	(0.374	)	(0.368	)

$11.670		$10.910		$11.290		$10.630		$10.660

10.39%		(0.03%)		9.90%		3.43%		2.60%


$14,282		$13,253		$15,155		$11,542		$9,836
1.59%		1.63%		1.68%		1.65%		1.68%

1.68%		1.70%		1.70%		1.70%		1.70%
3.16%		3.55%		3.41%		3.68%		3.41%

3.07%		3.48%		3.39%		3.63%		3.39%
24%		26%		17%		27%		15%

101

Financial highlights
Delaware Tax-Free Idaho Fund Class A

Selected data for each share of the Fund outstanding throughout each period were as follows:

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income

Net realized and unrealized gain (loss)

Total from investment operations

Less dividends and distributions from:

Net investment income

Net realized gain

Total dividends and distributions

Net asset value, end of period

Total return¹

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

prior to fees waived

Ratio of net investment income to average net assets

prior to fees waived

Portfolio turnover

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

102

Year Ended
8/31/12		8/31/11		8/31/10		8/31/09		8/31/08
$11.730		$12.120		$11.490		$11.260		$11.260


0.438		0.438		0.431		0.436		0.437
0.509		(0.385	)	0.633		0.228		—
0.947		0.053		1.064		0.664		0.437


(0.437	)	(0.436	)	(0.434	)	(0.434	)	(0.437	)
—		(0.007	)	—		—		—
(0.437	)	(0.443	)	(0.434	)	(0.434	)	(0.437	)

$12.240		$11.730		$12.120		$11.490		$11.260

8.21%		0.56%		9.44%		6.12%		3.93%


$119,025		$98,821		$104,287		$86,445		$72,237
0.88%		0.90%		0.94%		0.88%		0.85%

0.94%		0.96%		0.96%		0.96%		0.96%
3.65%		3.78%		3.66%		3.94%		3.87%

3.59%		3.72%		3.64%		3.86%		3.76%
17%		32%		7%		10%		11%

103

Financial highlights
Delaware Tax-Free Idaho Fund Class B

Selected data for each share of the Fund outstanding throughout each period were as follows:

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income

Net realized and unrealized gain (loss)

Total from investment operations

Less dividends and distributions from:

Net investment income

Net realized gain

Total dividends and distributions

Net asset value, end of period

Total return¹

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

prior to fees waived

Ratio of net investment income to average net assets

prior to fees waived

Portfolio turnover

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

104

Year Ended
8/31/12		8/31/11		8/31/10		8/31/09		8/31/08
$11.710		$12.100		$11.470		$11.240		$11.240


0.348		0.350		0.343		0.353		0.353
0.509		(0.385	)	0.633		0.228		—
0.857		(0.035	)	0.976		0.581		0.353


(0.347	)	(0.348	)	(0.346	)	(0.351	)	(0.353	)
—		(0.007	)	—		—		—
(0.347	)	(0.355	)	(0.346	)	(0.351	)	(0.353	)

$12.220		$11.710		$12.100		$11.470		$11.240

7.41%		(0.19%	)	8.64%		5.34%		3.17%


$582		$912		$2,450		$3,359		$5,123
1.63%		1.65%		1.69%		1.63%		1.60%

1.69%		1.71%		1.71%		1.71%		1.71%
2.90%		3.03%		2.91%		3.19%		3.12%

2.84%		2.97%		2.89%		3.11%		3.01%
17%		32%		7%		10%		11%

105

Financial highlights
Delaware Tax-Free Idaho Fund Class C

Selected data for each share of the Fund outstanding throughout each period were as follows:

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income

Net realized and unrealized gain (loss)

Total from investment operations

Less dividends and distributions from:

Net investment income

Net realized gain

Total dividends and distributions

Net asset value, end of period

Total return¹

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

prior to fees waived

Ratio of net investment income to average net assets

prior to fees waived

Portfolio turnover

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

106

Year Ended
8/31/12		8/31/11		8/31/10		8/31/09		8/31/08
$11.720		$12.110		$11.480		$11.250		$11.250


0.348		0.351		0.342		0.353		0.352
0.509		(0.385	)	0.633		0.228		—
0.857		(0.034	)	0.975		0.581		0.352


(0.347	)	(0.349	)	(0.345	)	(0.351	)	(0.352	)
—		(0.007	)	—		—		—
(0.347	)	(0.356	)	(0.345	)	(0.351	)	(0.352	)

$12.230		$11.720		$12.110		$11.480		$11.250

7.41%		(0.20%	)	8.63%		5.34%		3.16%


$40,738		$35,797		$35,591		$19,176		$11,490
1.63%		1.65%		1.69%		1.63%		1.60%

1.69%		1.71%		1.71%		1.71%		1.71%
2.90%		3.03%		2.91%		3.19%		3.12%

2.84%		2.97%		2.89%		3.11%		3.01%
17%		32%		7%		10%		11%

107

Financial highlights
Delaware Tax-Free New York Fund Class A

Selected data for each share of the Fund outstanding throughout each period were as follows:

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income

Net realized and unrealized gain (loss)

Total from investment operations

Less dividends and distributions from:

Net investment income

Total dividends and distributions

Net asset value, end of period

Total return¹

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

prior to fees waived

Ratio of net investment income to average net assets

prior to fees waived

Portfolio turnover

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

108

Year Ended
8/31/12		8/31/11		8/31/10		8/31/09		8/31/08
$10.800		$11.150		$10.450		$10.300		$10.300


0.426		0.406		0.429		0.409		0.411
0.867		(0.351	)	0.700		0.148		—
1.293		0.055		1.129		0.557		0.411


(0.423	)	(0.405	)	(0.429	)	(0.407	)	(0.411	)
(0.423	)	(0.405	)	(0.429	)	(0.407	)	(0.411	)

$11.670		$10.800		$11.150		$10.450		$10.300

12.18%		0.63%		11.02%		5.65%		4.04%


$53,456		$37,051		$37,716		$22,780		$15,340
0.80%		0.80%		0.80%		0.85%		0.85%

1.01%		1.05%		1.07%		1.10%		1.09%
3.77%		3.82%		3.94%		4.10%		3.97%

3.56%		3.57%		3.67%		3.85%		3.73%
28%		54%		15%		36%		28%

109

Financial highlights
Delaware Tax-Free New York Fund Class B

Selected data for each share of the Fund outstanding throughout each period were as follows:

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income

Net realized and unrealized gain (loss)

Total from investment operations

Less dividends and distributions from:

Net investment income

Total dividends and distributions

Net asset value, end of period

Total return¹

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

prior to fees waived

Ratio of net investment income to average net assets

prior to fees waived

Portfolio turnover

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

110

Year Ended
8/31/12		8/31/11		8/31/10		8/31/09		8/31/08
$10.780		$11.120		$10.420		$10.270		$10.280


0.341		0.326		0.347		0.334		0.333
0.867		(0.341	)	0.700		0.148		(0.010	)
1.208		(0.015	)	1.047		0.482		0.323


(0.338	)	(0.325	)	(0.347	)	(0.332	)	(0.333	)
(0.338	)	(0.325	)	(0.347	)	(0.332	)	(0.333	)

$11.650		$10.780		$11.120		$10.420		$10.270

11.36%		(0.04%	)	10.21%		4.88%		3.17%


$318		$477		$736		$1,018		$1,549
1.55%		1.55%		1.55%		1.60%		1.60%

1.76%		1.80%		1.82%		1.85%		1.84%
3.02%		3.07%		3.19%		3.35%		3.22%

2.81%		2.82%		2.92%		3.10%		2.98%
28%		54%		15%		36%		28%

111

Financial highlights
Delaware Tax-Free New York Fund Class C

Selected data for each share of the Fund outstanding throughout each period were as follows:

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income

Net realized and unrealized gain (loss)

Total from investment operations

Less dividends and distributions from:

Net investment income

Total dividends and distributions

Net asset value, end of period

Total return¹

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

prior to fees waived

Ratio of net investment income to average net assets

prior to fees waived

Portfolio turnover

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

112

Year Ended
8/31/12		8/31/11		8/31/10		8/31/09		8/31/08
$10.780		$11.120		$10.420		$10.270		$10.280


0.340		0.326		0.346		0.333		0.333
0.857		(0.341	)	0.700		0.148		(0.010	)
1.197		(0.015	)	1.046		0.481		0.323


(0.337	)	(0.325	)	(0.346	)	(0.331	)	(0.333	)
(0.337	)	(0.325	)	(0.346	)	(0.331	)	(0.333	)

$11.640		$10.780		$11.120		$10.420		$10.270

11.26%		(0.04%	)	10.20%		4.88%		3.17%


$20,524		$14,235		$13,462		$5,651		$2,049
1.55%		1.55%		1.55%		1.60%		1.60%

1.76%		1.80%		1.82%		1.85%		1.84%
3.02%		3.07%		3.19%		3.35%		3.22%

2.81%		2.82%		2.92%		3.10%		2.98%
28%		54%		15%		36%		28%

113

Notes to financial statements
Delaware Investments^® state tax-free funds	August 31, 2012

Voyageur Mutual Funds is organized as a Delaware statutory trust and offers five series: Delaware Minnesota High-Yield Municipal Bond Fund, Delaware National High-Yield Municipal Bond Fund, Delaware Tax-Free California Fund, Delaware Tax-Free Idaho Fund, and Delaware Tax-Free New York Fund. Voyageur Mutual Funds II is organized as a Delaware statutory trust and offers one series: Delaware Tax-Free Colorado Fund. Voyageur Insured Funds is organized as a Delaware statutory trust and offers one series: Delaware Tax-Free Arizona Fund. Voyageur Mutual Funds, Voyageur Mutual Funds II, and Voyageur Insured Funds are each individually referred to as a Trust and collectively as the Trusts. These financial statements and related notes pertain to Delaware Tax-Free Arizona Fund, Delaware Tax-Free California Fund, Delaware Tax-Free Colorado Fund, Delaware Tax-Free Idaho Fund, and Delaware Tax-Free New York Fund (each, a Fund or, collectively, the Funds). The above Trusts are open-end investment companies. The Funds are considered diversified under the Investment Company Act of 1940, as amended, and offer Class A, Class B, and Class C shares. Class A shares are sold with a maximum front-end sales charge of 4.50%. Class A share purchases of $1,000,000 or more will incur a contingent deferred sales charge (CDSC) of 1% if redeemed during the first year and 0.50% during the second year, provided that Delaware Distributors, L.P. (DDLP) paid a financial advisor a commission on the purchase of those shares. Class B shares may be purchased only through dividend reinvestment and certain permitted exchanges. Prior to June 1, 2007, Class B shares were sold with a CDSC that declined from 4% to zero depending upon the period of time the shares were held. Class B shares will automatically convert to Class A shares on a quarterly basis approximately eight years after purchase. Class C shares are sold with a CDSC of 1%, if redeemed during the first twelve months.

The investment objective of each Fund is to seek as high a level of current income exempt from federal income tax and from personal income tax in its respective state, as is consistent with preservation of capital.

1. Significant Accounting Policies

The following accounting policies are in accordance with U.S. generally accepted accounting principles (U.S. GAAP) and are consistently followed by the Funds.

Security Valuation — Debt securities are valued based upon valuations provided by an independent pricing service or broker and reviewed by management. To the extent current market prices are not available, the pricing service may take into account developments related to the specific security, as well as transactions in comparable securities. Valuations for fixed income securities utilize matrix systems, which reflect such factors as security prices, yields, maturities, and ratings, and are supplemented by dealer and exchange quotations. Open-end investment companies are valued at their published net asset value. Generally, other securities and assets for which market quotations are not readily available are valued at fair value as determined in good faith under the direction of each Fund’s Board of Trustees (each, a Board or, collectively, the Boards). In determining whether market quotations are readily available or fair valuation will be used, various factors will be taken into consideration, such as market closures or suspension of trading in a security.

114

Federal Income Taxes — No provision for federal income taxes has been made as each Fund intends to continue to qualify for federal income tax purposes as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended, and make the requisite distributions to shareholders. The Funds evaluate tax positions taken or expected to be taken in the course of preparing the Funds’ tax returns to determine whether the tax positions are “more likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold are recorded as a tax benefit or expense in the current year. Management has analyzed the Funds’ tax positions taken on federal income tax returns for all open tax years (August 31, 2009–August 31, 2012), and has concluded that no provision for federal income tax is required in the Funds’ financial statements.

Class Accounting — Investment income and common expenses are allocated to the various classes of each Fund on the basis of “settled shares” of each class in relation to the net assets of each Fund. Realized and unrealized gain (loss) on investments are allocated to the various classes of each Fund on the basis of daily net assets of each class. Distribution expenses relating to a specific class are charged directly to that class.

Use of Estimates — The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the fair value of investments, the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and the differences could be material.

Other — Expenses directly attributable to the Funds are charged directly to the Funds. Other expenses common to various funds within the Delaware Investments^® Family of Funds are generally allocated amongst such funds on the basis of average net assets. Management fees and some other expenses are paid monthly. Security transactions are recorded on the date the securities are purchased or sold (trade date) for financial reporting purposes. Costs used in calculating realized gains and losses on the sale of investment securities are those of the specific securities sold. Interest income is recorded on the accrual basis. Discounts and premiums are amortized to interest income over the lives of the respective securities using the effective interest method. The Funds declare dividends daily from net investment income and pay the dividends monthly and declare and pay distributions from net realized gain on investments, if any, annually. The Funds may distribute income dividends and capital gains more frequently, if necessary for tax purposes. Dividends and distributions, if any, are recorded on the ex-dividend date.

The Funds may receive earnings credits from their custodian when positive cash balances are maintained, which are used to offset custody fees. There were no earnings credits for the year ended August 31, 2012.

115

Notes to financial statements
Delaware Investments^® state tax-free funds

1. Significant Accounting Policies (continued)

The Funds receive earnings credits from their transfer agent when positive cash balances are maintained, which are used to offset transfer agent fees. The expense paid under this arrangement is included in dividend disbursing and transfer agent fees and expenses on the statements of operations with the corresponding expense offset shown as “expense paid indirectly.” For the year ended August 31, 2012, the Funds earned the following amounts under this agreement:

Delaware	Delaware	Delaware	Delaware	Delaware
Tax-Free	Tax-Free	Tax-Free	Tax-Free	Tax-Free
Arizona Fund	California Fund	Colorado Fund	Idaho Fund	New York Fund
$42	$30	$92	$56	$20

2. Investment Management, Administration Agreements and Other Transactions with Affiliates

In accordance with the terms of its respective investment management agreement, each Fund pays Delaware Management Company (DMC), a series of Delaware Management Business Trust and the investment manager, an annual fee, which is calculated based on each Fund’s average daily net assets as follows:

	Delaware	Delaware	Delaware	Delaware	Delaware
	Tax-Free	Tax-Free	Tax-Free	Tax-Free	Tax-Free
	Arizona Fund	California Fund	Colorado Fund	Idaho Fund	New York Fund
On the first $500 million	0.500%	0.550%	0.550%	0.550%	0.550%
On the next $500 million	0.475%	0.500%	0.500%	0.500%	0.500%
On the next $1.5 billion	0.450%	0.450%	0.450%	0.450%	0.450%
In excess of $2.5 billion	0.425%	0.425%	0.425%	0.425%	0.425%

DMC has contractually agreed to waive that portion, if any, of its management fee and reimburse the Funds to the extent necessary to prevent total annual fund operating expenses (excluding any 12b-1 plan expenses, taxes, interest, inverse floater program expenses, short sale and dividend interest expenses, brokerage fees, certain insurance costs, and nonroutine expenses or costs, including, but not limited to, those relating to reorganizations, litigation, conducting shareholder meetings, and liquidations) from exceeding the following percentages of each Fund’s average daily net assets through December 28, 2012. These waivers and reimbursements may only be terminated by agreement of DMC and the Funds.

	Delaware	Delaware	Delaware	Delaware	Delaware
	Tax-Free	Tax-Free	Tax-Free	Tax-Free	Tax-Free
	Arizona Fund	California Fund	Colorado Fund	Idaho Fund	New York Fund
Operating expense
limitation as a percentage
of average daily net assets
(per annum)	0.59%	0.57%	0.59%	0.63%	0.55%

116

Delaware Service Company, Inc. (DSC), an affiliate of DMC, provides fund accounting and financial administration oversight services to the Funds. For these services, the Funds pay DSC fees based on the aggregate daily net assets of the Delaware Investments^® Family of Funds at the following annual rate: 0.0050% of the first $30 billion; 0.0045% of the next $10 billion; 0.0040% of the next $10 billion; and 0.0025% of aggregate average daily net assets in excess of $50 billion. The fees payable to DSC under the service agreement described above are allocated among all Funds in the Delaware Investments Family of Funds on a relative net asset value basis. For the year ended August 31, 2012, each Fund was charged for these services as follows:

Delaware	Delaware	Delaware	Delaware	Delaware
Tax-Free	Tax-Free	Tax-Free	Tax-Free	Tax-Free
Arizona Fund	California Fund	Colorado Fund	Idaho Fund	New York Fund
$5,186	$4,708	$11,697	$7,259	$3,089

DSC also provides dividend disbursing and transfer agency services. The Funds pay DSC a monthly asset-based fee for these services.

Pursuant to a distribution agreement and distribution plan, each Fund pays DDLP, the distributor and an affiliate of DMC, an annual distribution and service fee of 0.25% of the average daily net assets of the Class A shares and 1.00% of the average daily net assets of the Class B and Class C shares.

At August 31, 2012, each Fund had liabilities payable to affiliates as follows:

	Delaware			Delaware			Delaware			Delaware			Delaware
	Tax-Free			Tax-Free			Tax-Free			Tax-Free			Tax-Free
	Arizona Fund			California Fund			Colorado Fund			Idaho Fund			New York Fund
Investment management
fees payable to DMC		$	46,493		$	34,716		$	102,953		$	70,872		$	24,246
Dividend disbursing,
transfer agent and fund
accounting oversight
fees and other expenses
payable to DSC			2,496			2,714			5,723			3,705			1,702
Distribution fees
payable to DDLP			27,224			36,873			60,947			59,308			28,361
Other expenses payable to
DMC and affiliates*			1,653			1,949			4,129			2,356			1,370

*DMC, as part of its administrative services, pays operating expenses on behalf of each Fund and is reimbursed on a periodic basis. Expenses include items such as printing of shareholder reports, fees for audit, legal and tax services, registration fees and trustees’ fees.

117

Notes to financial statements
Delaware Investments^® state tax-free funds

2.	Investment Management, Administration Agreements and Other Transactions with Affiliates (continued)

As provided in the investment management agreement, each Fund bears the cost of certain legal and tax services, including internal legal and tax services provided to each Fund by DMC and/or its affiliates’ employees. For the year ended August 31, 2012, each Fund was charged for internal legal and tax services provided by DMC and/or its affiliates’ employees as follows:

Delaware	Delaware	Delaware	Delaware	Delaware
Tax-Free	Tax-Free	Tax-Free	Tax-Free	Tax-Free
Arizona Fund	California Fund	Colorado Fund	Idaho Fund	New York Fund
$2,924	$2,609	$6,590	$4,074	$1,721

For the year ended August 31, 2012, DDLP earned commissions on sales of Class A shares for each Fund as follows:

Delaware	Delaware	Delaware	Delaware	Delaware
Tax-Free	Tax-Free	Tax-Free	Tax-Free	Tax-Free
Arizona Fund	California Fund	Colorado Fund	Idaho Fund	New York Fund
$8,117	$11,226	$22,464	$55,839	$26,059

For the year ended August 31, 2012, DDLP received gross CDSC commissions on redemptions of each Fund’s Class A, Class B and Class C shares, and these commissions were entirely used to offset up-front commissions previously paid by DDLP to broker/dealers on sales of those shares. The amounts received were as follows:

	Delaware			Delaware			Delaware			Delaware			Delaware
	Tax-Free			Tax-Free			Tax-Free			Tax-Free			Tax-Free
	Arizona Fund			California Fund			Colorado Fund			Idaho Fund			New York Fund
Class A		$	0		$	2,717		$	0		$	31		$	0
Class B			53			26			0			0			0
Class C			0			25			0			3,304			240

Trustees’ fees include expenses accrued by the Funds for each Trustee’s retainer and meeting fees. Certain officers of DMC, DSC and DDLP are officers and/or Trustees of the Trusts. These officers and Trustees are paid no compensation by the Funds.

118

3. Investments

For the year ended August 31, 2012, the Funds made purchases and sales of investment securities other than short-term investments as follows:

	Delaware		Delaware		Delaware		Delaware		Delaware
	Tax-Free		Tax-Free		Tax-Free		Tax-Free		Tax-Free
	Arizona Fund		California Fund		Colorado Fund		Idaho Fund		New York Fund
Purchases	$	36,253,950	$	56,058,490	$	57,102,138	$	41,707,441	$	34,884,546
Sales		35,771,298		30,709,115		55,608,165		24,117,863		17,251,986

At August 31, 2012, the cost of investments and unrealized appreciation (depreciation) for federal income tax purposes for each Fund were as follows:

	Delaware			Delaware			Delaware			Delaware		Delaware
	Tax-Free			Tax-Free			Tax-Free			Tax-Free		Tax-Free
	Arizona Fund			California Fund			Colorado Fund			Idaho Fund		New York Fund
Cost of
investments	$	99,481,065		$	107,589,705		$	226,684,169		$	146,750,941	$	68,218,269
Aggregate
unrealized
appreciation	$	8,508,341		$	9,100,551		$	19,386,384		$	12,165,960	$	6,333,856
Aggregate
unrealized
(depreciation)		(16,087	)		(75,370	)		(531,630	)		—		(11,307	)
Net unrealized
appreciation	$	8,492,254		$	9,025,181		$	18,854,754		$	12,165,960	$	6,322,549

U.S. GAAP defines fair value as the price that the Funds would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. A three level hierarchy for fair value measurements has been established based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability developed based on the best information available under the circumstances. Each Fund’s investment in its entirety is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three level hierarchy of inputs is summarized below.

Level 1 –

inputs are quoted prices in active markets for identical investments (e.g., equity securities, open-end investment companies, futures contracts, exchange-traded options contracts)

119

Notes to financial statements
Delaware Investments^® state tax-free funds

3. Investments (continued)

Level 2 –	other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs) (e.g., debt securities, government securities, swap contracts, foreign currency exchange contracts, foreign securities utilizing international fair value pricing, broker-quoted securities, fair valued securities)

Level 3 –	inputs are significant unobservable inputs (including the Funds’ own assumptions used to determine the fair value of investments) (e.g., broker-quoted securities, fair valued securities)

Level 3 investments are valued using significant unobservable inputs, including related or comparable assets or liabilities, book values, and other relevant information for the investment to determine the fair value of the investment. The Funds may also use an income-based valuation approach in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Valuations may also be based upon current market prices of securities that are comparable in coupon, rating, maturity and industry. The derived value of a Level 3 investment may not represent the value which is received upon disposition and this could impact the results of operations.

The following tables summarize the valuation of each Fund’s investments by fair value hierarchy levels as of August 31, 2012:

	Delaware Tax-Free Arizona Fund
			Level 2
Municipal Bonds			$	107,973,319

	Delaware Tax-Free California Fund
			Level 2
Municipal Bonds			$	115,614,886
Short-Term Investment				1,000,000
Total			$	116,614,886

	Delaware Tax-Free Colorado Fund
	Level 1		Level 2		Total
Municipal Bonds	$	—	$	244,862,423	$	244,862,423
Short-Term Investments		376,500		300,000		676,500
Total	$	376,500	$	245,162,423	$	245,538,923

120

	Delaware Tax-Free Idaho Fund
	Level 1		Level 2		Total
Municipal Bonds	$	—	$	157,247,594	$	157,247,594
Short-Term Investments		1,249,307		420,000		1,669,307
Total	$	1,249,307	$	157,667,594	$	158,916,901

	Delaware Tax-Free New York Fund
			Level 2
Municipal Bonds			$	73,040,818
Short-Term Investments				1,500,000
Total			$	74,540,818

During the year ended August 31, 2012, there were no transfers between Level 1 investments, Level 2 investments or Level 3 investments that had a material impact to the Funds. Each Fund’s policy is to recognize transfers between levels at the beginning of the reporting period.

4. Dividend and Distribution Information

Income and long-term capital gain distributions are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP. Additionally, distributions from net short-term gains on sales of investment securities are treated as ordinary income for federal income tax purposes. The tax character of dividends and distributions paid during the years ended August 31, 2012 and 2011 was as follows:

	Delaware			Delaware			Delaware			Delaware		Delaware
	Tax-Free			Tax-Free			Tax-Free			Tax-Free		Tax-Free
	Arizona Fund			California Fund			Colorado Fund			Idaho Fund		New York Fund
Year Ended 8/31/12
Tax-exempt income		$	4,071,429		$	3,785,457		$	9,184,480	$	5,085,903		$	2,214,770
Ordinary income			4			—			—		27			851
Long-term capital gains			27,070			—			—		—			—
Total		$	4,098,503		$	3,785,457		$	9,184,480	$	5,085,930		$	2,215,621

Year Ended 8/31/11
Tax-exempt income		$	4,112,014		$	3,499,954		$	9,447,544	$	4,647,399		$	1,826,536
Ordinary income			101,505			77,870			123,382		137,722			16,404
Long-term capital gains			273,094			—			—		24,209			—
Total		$	4,486,613		$	3,577,824		$	9,570,926	$	4,809,330		$	1,842,940

121

Notes to financial statements
Delaware Investments^® state tax-free funds

5. Components of Net Assets on a Tax Basis

As of August 31, 2012, the components of net assets on a tax basis were as follows:

	Delaware			Delaware			Delaware			Delaware			Delaware
	Tax-Free			Tax-Free			Tax-Free			Tax-Free			Tax-Free
	Arizona Fund			California Fund			Colorado Fund			Idaho Fund			New York Fund
Shares of beneficial
interest	$	98,005,801		$	108,881,968		$	227,706,481		$	149,358,034		$	67,851,237
Undistributed tax-
exempt income		125,060			123,583			568,497			115,520			67,040
Undistributed
long-term
capital gains		762,026			—			—			—			117,066
Distributions
payable		(99,751	)		(104,820	)		(215,935	)		(132,164	)		(59,941	)
Qualified late year
long-term capital
losses deferred		—			—			—			(298,353	)		—
Capital loss
carryforwards		—			(369,988	)		(1,671,323	)		(863,783	)		—
Unrealized
appreciation
of investments		8,492,254			9,025,181			18,854,754			12,165,960			6,322,549
Net assets	$	107,285,390		$	117,555,924		$	245,242,474		$	160,345,214		$	74,297,951

The differences between book basis and tax basis components of net assets are primarily attributable to tax deferral of losses of wash sales, tax treatment of market discount and premium on debt instruments and distributions payable.

Qualified late year losses represent losses realized on investment transactions from November 1, 2011 through August 31, 2012 that, in accordance with federal income tax regulation, Delaware Tax-Free Idaho Fund has elected to defer and treat as having arisen in the following fiscal year.

122

For financial reporting purposes, capital accounts are adjusted to reflect the tax character of permanent book/tax differences. Reclassifications are primarily due to tax treatment of market discount and premium on debt instruments. Results of operations and net assets were not affected by these reclassifications. For the year ended August 31, 2012, the Funds recorded the following reclassifications:

	Delaware				Delaware				Delaware				Delaware				Delaware
	Tax-Free				Tax-Free				Tax-Free				Tax-Free				Tax-Free
	Arizona Fund				California Fund				Colorado Fund				Idaho Fund				New York Fund
Undistributed
(distributions in excess of)
net investment income		$	(25,305	)		$	(10,781	)		$	(21,646	)		$	(17,401	)		$	(10,585	)
Accumulated net realized
gain (loss)			25,305				10,781				21,646				17,401				10,585

For federal income tax purposes, capital loss carryforwards may be carried forward and applied against future capital gains. In 2012, the Funds utilized capital loss carryforwards as follows:

Delaware	Delaware	Delaware
Tax-Free	Tax-Free	Tax-Free
California Fund	Colorado Fund	New York Fund
$139,322	$1,141,379	$28,006

Capital loss carryforwards remaining at August 31, 2012 will expire as follows:

	Delaware		Delaware			Delaware			Delaware		Delaware
Year of	Tax-Free		Tax-Free			Tax-Free			Tax-Free		Tax-Free
Expiration	Arizona Fund		California Fund			Colorado Fund			Idaho Fund		New York Fund
2014		$—		$	—		$	1,627,145		$—		$—
2016		—			—			44,178		—		—
2019		—			369,988			—		—		—
Total		$—		$	369,988		$	1,671,323		$—		$—

On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (Act) was enacted, which changed various technical rules governing the tax treatment of regulated investment companies. The changes are generally effective for taxable years beginning after the date of enactment. Under the Act, the Funds are permitted to carry forward capital losses incurred in taxable years beginning after the date of enactment for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years, which carry an expiration date. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital loss carryforwards will retain their character as either short-term or long-term capital losses rather than being considered all short-term as permitted under previous regulation.

Losses incurred that will be carried forward under the Act are as follows:

	Loss carryforward character
	Short-term	Long-term
Delaware Tax-Free Idaho Fund	$863,783	$—

123

Notes to financial statements
Delaware Investments^® state tax-free funds

6. Capital Shares

Transactions in capital shares were as follows:

	Delaware Tax-Free				Delaware Tax-Free				Delaware Tax-Free
	Arizona Fund				California Fund				Colorado Fund
	Year Ended				Year Ended				Year Ended
	8/31/12		8/31/11		8/31/12		8/31/11		8/31/12		8/31/11
Shares sold:
Class A	439,537		866,329		2,916,355		1,260,131		895,891		905,561
Class B	—		40		2,492		41		—		27
Class C	71,479		71,073		415,741		355,660		151,986		162,405

Shares issued upon reinvestment of dividends and distributions:
Class A	236,927		199,470		192,283		164,198		580,278		560,364
Class B	1,218		2,852		1,958		4,880		529		1,985
Class C	15,162		13,627		38,704		35,603		31,740		32,471
	764,323		1,153,391		3,567,533		1,820,513		1,660,424		1,662,813
Shares redeemed:
Class A	(779,149	)	(1,847,336	)	(1,100,987	)	(1,722,598	)	(1,507,938	)	(2,700,759	)
Class B	(49,279	)	(184,115	)	(47,147	)	(168,581	)	(41,596	)	(72,932	)
Class C	(94,840	)	(164,691	)	(243,641	)	(402,444	)	(174,363	)	(322,740	)
	(923,268	)	(2,196,142	)	(1,391,775	)	(2,293,623	)	(1,723,897	)	(3,096,431	)
Net increase
(decrease)	(158,945	)	(1,042,751	)	2,175,758		(473,110	)	(63,473	)	(1,433,618	)

	Delaware Tax-Free				Delaware Tax-Free
	Idaho Fund				New York Fund
	Year Ended				Year Ended
	8/31/12		8/31/11		8/31/12		8/31/11
Shares sold:
Class A	2,264,249		1,900,076		1,677,664		1,003,049
Class B	11		—		3,300		—
Class C	773,648		788,345		538,503		364,898

Shares issued upon reinvestment of dividends and distributions:
Class A	235,429		226,583		123,671		96,410
Class B	1,347		3,332		917		1,212
Class C	78,088		72,898		35,307		29,809
	3,352,772		2,991,234		2,379,362		1,495,378
Shares redeemed:
Class A	(1,203,335	)	(2,303,200	)	(651,615	)	(1,052,715	)
Class B	(31,696	)	(127,823	)	(21,163	)	(23,226	)
Class C	(576,195	)	(744,786	)	(132,201	)	(284,284	)
	(1,811,226	)	(3,175,809	)	(804,979	)	(1,360,225	)
Net increase (decrease)	1,541,546		(184,575	)	1,574,383		135,153

124

For the years ended August 31, 2012 and 2011, the following shares and values were converted from Class B to Class A shares. The amounts are included in Class B redemptions and Class A subscriptions in the tables above and the statements of changes in net assets.

	Year Ended				Year Ended
	8/31/12				8/31/11
	Class B	Class A			Class B	Class A
	Shares	Shares	Value		Shares	Shares	Value
Delaware Tax-Free
Arizona Fund	9,844	9,861	$	115,358	114,565	114,667	$	1,289,672
Delaware Tax-Free
California Fund	25,311	25,461		290,956	111,060	111,540		1,237,217
Delaware Tax-Free
Colorado Fund	19,768	19,816		221,534	53,647	53,698		571,670
Delaware Tax-Free
Idaho Fund	11,453	11,457		135,471	92,109	91,931		1,068,723
Delaware Tax-Free
New York Fund	1,349	1,349		14,846	12,407	12,373		130,210

7. Line of Credit

Each Fund, along with certain other funds in the Delaware Investments^® Family of Funds (Participants), was a participant in a $100,000,000 revolving line of credit to be used for temporary or emergency purposes as an additional source of liquidity to fund redemptions of investor shares. Under the agreement, the Participants were charged an annual commitment fee, which was allocated across the Participants on the basis of each Participant’s allocation of the entire facility. The Participants were permitted to borrow up to a maximum of one third of their net assets under the agreement. The line of credit under the agreement expired on November 15, 2011.

On November 15, 2011, the Funds, along with the other Participants, entered into an amendment to the agreement for a $125,000,000 revolving line of credit. The agreement is to be used as described above and operates in substantially the same manner as the original agreement. The agreement expires on November 13, 2012. The Funds had no amounts outstanding as of August 31, 2012 or at any time during the year then ended.

8. Credit and Market Risk

The Funds concentrate their investments in securities issued by municipalities. The values of these investments may be adversely affected by new legislation within the states, regional or local economic conditions, as applicable, and differing levels of supply and demand for municipal bonds. Many municipalities insure repayment for their obligations. Although bond insurance reduces the risk of loss due to default by an issuer, such bonds remain subject to the risk that value may fluctuate for other reasons and there is no assurance that the insurance company will meet its obligations. A real or perceived decline in creditworthiness of a bond insurer can have an adverse

125

Notes to financial statements
Delaware Investments^® state tax-free funds

8. Credit and Market Risk (continued)

impact on the value of insured bonds held in each Fund. At August 31, 2012, the percentages of each Fund’s net assets insured by bond insurers are listed below and these securities have been identified in the statements of net assets.

Delaware	Delaware	Delaware	Delaware	Delaware
Tax-Free	Tax-Free	Tax-Free	Tax-Free	Tax-Free
Arizona Fund	California Fund	Colorado Fund	Idaho Fund	New York Fund
26.40%	8.54%	23.17%	20.27%	4.33%

The Funds may invest in advance refunded bonds, escrow secured bonds or defeased bonds. Under current federal tax laws and regulations, state and local government borrowers are permitted to refinance outstanding bonds by issuing new bonds. The issuer refinances the outstanding debt to either reduce interest costs or to remove or alter restrictive covenants imposed by the bonds being refinanced. A refunding transaction where the municipal securities are being refunded within 90 days from the issuance of the refunding issue is known as a “current refunding.” Advance refunded bonds are bonds in which the refunded bond issue remains outstanding for more than 90 days following the issuance of the refunding issue. In an advance refunding, the issuer will use the proceeds of a new bond issue to purchase high grade interest bearing debt securities, which are then deposited in an irrevocable escrow account held by an escrow agent to secure all future payments of principal and interest and bond premium of the advance refunded bond. Bonds are “escrowed to maturity” when the proceeds of the refunding issue are deposited in an escrow account for investment sufficient to pay all of the principal and interest on the original interest payment and maturity dates.

Bonds are considered “pre-refunded” when the refunding issue’s proceeds are escrowed only until a permitted call date or dates on the refunded issue with the refunded issue being redeemed at the time, including any required premium. Bonds become “defeased” when the rights and interests of the bondholders and of their lien on the pledged revenues or other security under the terms of the bond contract and are substituted with an alternative source of revenues (the escrow securities) sufficient to meet payments of principal and interest to maturity or to the first call dates. Escrowed secured bonds will often receive a rating of AAA from Moody’s Investors Service, Standard & Poor’s, and/or Fitch Ratings due to the strong credit quality of the escrow securities and the irrevocable nature of the escrow deposit agreement.

Each Fund may invest up to 15% of its net assets in illiquid securities, which may include securities with contractual restrictions on resale, securities exempt from registration under Rule 144A of the Securities Act of 1933, as amended, and other securities which may not be readily marketable. The relative illiquidity of these securities may impair each Fund from disposing of them in a timely manner and at a fair price when it is necessary or desirable to do so. While maintaining oversight, each Fund’s Board has delegated to DMC the day-to-day functions of determining whether individual securities are liquid for purposes of each Fund’s limitation on investments in illiquid

126

securities. Securities eligible for resale pursuant to Rule 144A, which are determined to be liquid, are not subject to the Funds’ 15% limit on investments in illiquid securities. As of August 31, 2012, there were no Rule 144A securities. Illiquid securities have been identified on the statements of net assets.

9. Contractual Obligations

The Funds enter into contracts in the normal course of business that contain a variety of indemnifications. The Funds’ maximum exposure under these arrangements is unknown. However, the Funds have not had prior claims or losses pursuant to these contracts. Management has reviewed each Fund’s existing contracts and expects the risk of loss to be remote.

10. Subsequent Events

Management has determined that no material events or transactions occurred subsequent to August 31, 2012 that would require recognition or disclosure in the Funds’ financial statements.

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Report of independent
registered public accounting firm

To the Board of Trustees of Voyageur Insured Funds, Voyageur Mutual Funds and Voyageur Mutual Funds II and the Shareholders of Delaware Tax-Free Arizona Fund, Delaware Tax-Free California Fund, Delaware Tax-Free Idaho Fund, Delaware Tax-Free New York Fund and Delaware Tax-Free Colorado Fund:

In our opinion, the accompanying statements of net assets and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Delaware Tax-Free Arizona Fund (constituting Voyageur Insured Funds), Delaware Tax-Free California Fund, Delaware Tax-Free Idaho Fund and Delaware Tax-Free New York Fund (three of the series constituting Voyageur Mutual Funds) and Delaware Tax-Free Colorado Fund (constituting Voyageur Mutual Funds II) (hereafter collectively referred to as the “Funds”) at August 31, 2012, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the three years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2012 by correspondence with the custodian, provide a reasonable basis for our opinion. The financial highlights for each of the two years in the period ended August 31, 2009 were audited by other independent accountants whose report dated October 19, 2009 expressed an unqualified opinion on those statements.

PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
October 18, 2012

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Other Fund information
(Unaudited)
Delaware Investments^® state tax-free funds

Board Consideration of Delaware Tax-Free Arizona Fund, Delaware Tax-Free California Fund, Delaware Tax-Free Colorado Fund, Delaware Tax-Free Idaho Fund and Delaware Tax-Free New York Fund Investment Advisory Agreements

At a meeting held on August 21–23, 2012 (the “Annual Meeting”), the Board of Trustees (the “Board”), including a majority of disinterested or independent Trustees, approved the renewal of the Investment Advisory Agreements for each of the Delaware Tax-Free Arizona Fund, Delaware Tax-Free California Fund, Delaware Tax-Free Colorado Fund, Delaware Tax-Free Idaho Fund and Delaware Tax-Free New York Fund (each, a “Fund” and together, the “Funds”). In making its decision, the Board considered information furnished at regular quarterly Board meetings, including reports detailing Fund performance, investment strategies and expenses, as well as information prepared specifically in connection with the renewal of the investment advisory and sub-advisory contracts. Information furnished specifically in connection with the renewal of the Investment Advisory Agreements with Delaware Management Company (“DMC”) included materials provided by DMC and its affiliates (“Delaware Investments”) concerning, among other things, the nature, extent and quality of services provided to the Funds, the costs of such services to the Funds, economies of scale and the financial condition and profitability of Delaware Investments. In addition, in connection with the Annual Meeting, reports were provided in May 2012 and included independent historical and comparative reports provided by Lipper, Inc., an independent statistical compilation organization (“Lipper”). The Lipper reports compared each Fund’s investment performance and expenses with those of other comparable mutual funds. The Independent Trustees reviewed and discussed the Lipper reports with independent legal counsel to the Independent Trustees. The Board requested and received information regarding DMC’s policy with respect to advisory fee levels and its breakpoint philosophy; the structure of portfolio manager compensation; the investment manager’s profitability; comparative client fee information; and any constraints or limitations on the availability of securities in certain investment styles, which had in the past year inhibited, or which were likely in the future to inhibit, DMC’s ability to invest fully in accordance with Fund policies.

In considering information relating to the approval of each Fund’s advisory agreement, the Independent Trustees received assistance and advice from and met separately with independent legal counsel to the Independent Trustees. Although the Board gave attention to all information furnished, the following discussion identifies, under separate headings, the primary factors taken into account by the Board during its contract renewal considerations.

Nature, Extent and Quality of Service. The Board considered the services provided by Delaware Investments to the Funds and their shareholders. In reviewing the nature, extent and quality of services, the Board considered reports furnished to it throughout the year, which covered matters such as the relative performance of the Funds, compliance of portfolio managers with the investment policies, strategies and restrictions for the Funds, compliance by DMC and Delaware Distributors, L.P. (together, “Management”) personnel with the Code of Ethics adopted throughout the Delaware Investments Family of Funds complex and adherence to fair value pricing procedures as established by the Board. The Board was pleased with the current staffing of

129

Other Fund information
(Unaudited)
Delaware Investments^® state tax-free funds

the Funds’ investment advisor and the emphasis placed on research in the investment process. The Board recognized DMC’s receipt of several industry awards, including being named best fund family for 2011 by Barron’s and best mixed asset small company by Lipper for the second year in a row. The Board gave favorable consideration to DMC’s efforts to control expenditures while maintaining service levels committed to fund matters. The Board noted that in July 2011 Management implemented measures to reduce overall costs and improve transfer agent and shareholder servicing functions through outsourcing. The Board noted the benefits provided to Fund shareholders through each shareholder’s ability to exchange an investment in one Delaware Investments fund for the same class of shares in another Delaware Investments fund without a sales charge, to reinvest Fund dividends into additional shares of the same Fund or into additional shares of other Delaware Investments funds and the privilege to combine holdings in other Delaware Investments funds to obtain a reduced sales charge. The Board was satisfied with the nature, extent and quality of the overall services provided by Delaware Investments.

Investment Performance. The Board placed significant emphasis on the investment performance of the Funds in view of the importance of investment performance to shareholders. Although the Board gave appropriate consideration to performance reports and discussions with portfolio managers at Investment Committee meetings throughout the year, the Board gave particular weight to the Lipper reports furnished for the Annual Meeting. The Lipper reports prepared for each Fund showed the investment performance of its Class A shares in comparison to a group of similar funds as selected by Lipper (the “Performance Universe”). A fund with the best performance ranked first, and a fund with the poorest performance ranked last. The highest/best performing 25% of funds in the Performance Universe make up the first quartile; the next 25%, the second quartile; the next 25%, the third quartile; and the poorest/ worst performing 25% of funds in the Performance Universe make up the fourth quartile. Comparative annualized performance for each Fund was shown for the past one-, three-, five- and ten-year periods, as applicable, ended March 31, 2012. The Board’s objective is that each Fund’s performance for the periods considered be at or above the median of its Performance Universe. The following paragraphs summarize the performance results for the Funds and the Board’s view of such performance.

Delaware Tax-Free Arizona Fund — The Performance Universe for the Fund consisted of the Fund and all retail and institutional Arizona municipal debt funds as selected by Lipper. The Lipper report comparison showed that the Fund’s total return for the one-year period was in the third quartile of its Performance Universe. The report further showed that the Fund’s total return for the three- and five-year periods was in the second quartile and the Fund’s total return for the ten-year period was in the first quartile. The Fund’s performance results were mixed but tended toward median, which was acceptable.

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Delaware Tax-Free California Fund — The Performance Universe for the Fund consisted of the Fund and all retail and institutional California municipal debt funds as selected by Lipper. The Lipper report comparison showed that the Fund’s total return for the one-year period was in the second quartile of its Performance Universe. The report further showed that the Fund’s total return for the three-, five- and ten-year periods was in the first quartile. The Board was satisfied with performance.

Delaware Tax-Free Colorado Fund — The Performance Universe for the Fund consisted of the Fund and all retail and institutional Colorado municipal debt funds as selected by Lipper. The Lipper report comparison showed that the Fund’s total return for the one-, five- and ten-year periods was in the first quartile of its Performance Universe. The report further showed that the Fund’s total return for the three-year period was in the second quartile. The Board was satisfied with performance.

Delaware Tax-Free Idaho Fund — The Performance Universe for the Fund consisted of the Fund and all retail and institutional other state municipal debt funds as selected by Lipper. The Lipper report comparison showed that the Fund’s total return for the one- and three-year periods was in the third quartile of its Performance Universe. The report further showed that the Fund’s total return for the five- and ten-year periods was in the first quartile. The Board determined that the Fund’s performance results were mixed. In evaluating the Fund’s performance, the Board considered the numerous investment and performance reports delivered by Management personnel to the Board’s Investments Committee. The Board was satisfied that Management was taking effective action to improve Fund performance and meet the Board’s performance objective.

Delaware Tax-Free New York Fund — The Performance Universe for the Fund consisted of the Fund and all retail and institutional New York municipal debt funds as selected by Lipper. The Lipper report comparison showed that the Fund’s total return for the one-, five- and ten-year periods was in the first quartile of its Performance Universe. The report further showed that the Fund’s total return for the three-year period was in the second quartile. The Board was satisfied with performance.

Comparative Expenses. The Board considered expense comparison data for the Delaware Investments Family of Funds. Management provided the Board with information on pricing levels and fee structures for each Fund as of its most recently completed fiscal year. The Board also focused on the comparative analysis of effective management fees and total expense ratios of each Fund versus effective management fees and expense ratios of a group of similar funds as selected by Lipper (the “Expense Group”). In reviewing comparative costs, each Fund’s contractual management fee and the actual management fee incurred by the Fund were compared with the contractual management fees (assuming all funds in the Expense Group were similar in size to the Fund) and actual management fees (as reported by each fund) within the Expense Group, taking into account any applicable breakpoints and fee waivers. Each Fund’s total expenses were also compared with those of its Expense Group. The Lipper total expenses, for comparative consistency, were shown by Lipper for Class A shares and comparative total expenses including 12b-1 and non

131

Other Fund information
(Unaudited)
Delaware Investments^® state tax-free funds

12b-1 service fees. The Board considered fees paid to Delaware Investments for non-management services. The Board’s objective is to limit each Fund’s total expense ratio to be competitive with that of the Expense Group. The following paragraphs summarize the expense results for the Funds and the Board’s view of such expenses.

Delaware Tax-Free Arizona Fund — The expense comparisons for the Fund showed that its actual management fee was in the quartile with the second lowest expenses of its Expense Group and its total expenses were in the quartile with the second highest expenses of its Expense Group. The Board gave favorable consideration to the Fund’s management fee, but noted that the Fund’s total expenses were not in line with the Board’s objective. In evaluating the total expenses, the Board considered fee waivers in place through December 2012 and various initiatives implemented by Management, such as the outsourcing of certain transfer agency services, creating an opportunity for a reduction in expenses. The Board was satisfied with Management’s efforts to improve the Fund’s total expense ratio and bring it in line with the Board’s objective.

Delaware Tax-Free California Fund — The expense comparisons for the Fund showed that its actual management fee was in the quartile with the lowest expenses of its Expense Group and its total expenses were in the quartile with the second lowest expenses of its Expense Group. The Board was satisfied with the management fee and total expenses of the Fund in comparison to those of its Expense Group as shown in the Lipper report.

Delaware Tax-Free Colorado Fund — The expense comparisons for the Fund showed that its actual management fee was in the quartile with the second highest expenses of its Expense Group and its total expenses were in the quartile with the highest expenses of its Expense Group. The Board noted that the Fund’s total expenses were not in line with the Board’s objective. In evaluating the total expenses, the Board considered fee waivers in place through December 2012 and various initiatives implemented by Management, such as the outsourcing of certain transfer agency services, creating an opportunity for a reduction in expenses. Consequently, the Board was satisfied with Management’s efforts to improve the Fund’s total expense ratio and bring it in line with the Board’s objective.

Delaware Tax-Free Idaho Fund — The expense comparisons for the Fund showed that its actual management fee and total expenses were in the quartile with the highest expenses of its Expense Group. The Board noted that the Fund’s total expenses were not in line with the Board’s objective. In evaluating the total expenses, the Board considered waivers in place through December 2012 and various initiatives implemented by Management, such as the outsourcing of certain transfer agency services, creating an opportunity for a reduction in expenses. The Board was satisfied with Management’s efforts to improve the Fund’s total expense ratio and bring it in line with the Board’s objective.

132

Delaware Tax-Free New York Fund — The expense comparisons for the Fund showed that its actual management fee was in the quartile with the lowest expenses of its Expense Group and its total expenses were in the quartile with the second lowest expenses of its Expense Group. The Board was satisfied with the management fee and total expenses of the Fund in comparison to those of its Expense Group as shown in the Lipper report.

Management Profitability. The Board considered the level of profits realized by Delaware Investments in connection with the operation of the Funds. In this respect, the Board reviewed the Investment Management Profitability Analysis that addressed the overall profitability of Delaware Investments’ business in providing management and other services to each of the individual funds and the Delaware Investments Family of Funds as a whole. Specific attention was given to the methodology followed in allocating costs for the purpose of determining profitability. Management stated that the level of profits of Delaware Investments, to a certain extent, reflects recent operational cost savings and efficiencies initiated by Delaware Investments. The Board considered Delaware Investments’ efforts to improve services provided to fund shareholders and to meet additional regulatory and compliance requirements resulting from recent industry-wide Securities and Exchange Commission initiatives. The Board also considered the extent to which Delaware Investments might derive ancillary benefits from fund operations, including the potential for procuring additional business as a result of the prestige and visibility associated with its role as service provider to the Delaware Investments Family of Funds and the benefits from allocation of fund brokerage to improve trading efficiencies. The Board found that the management fees were reasonable in light of the services rendered and the level of profitability of Delaware Investments.

Economies of Scale. The Trustees considered whether economies of scale are realized by Delaware Investments as each Fund’s assets increase and the extent to which any economies of scale are reflected in the level of management fees charged. The Trustees reviewed the standardized advisory fee pricing and structure, approved by the Board and shareholders, which includes breakpoints. Breakpoints in the advisory fee occur when the advisory fee rate is reduced on assets in excess of specified levels. Breakpoints result in a lower advisory fee than would otherwise be the case on all assets when the asset levels specified are exceeded. The Board noted that the fee under each Fund’s management contract fell within the standard structure. Although the Funds have not reached a size at which they can take advantage of breakpoints, the Board recognized that each Fund’s fee was structured so that when the Fund grows, economies of scale may be shared.

133

Other Fund information
(Unaudited)
Delaware Investments^® state tax-free funds

Tax Information

The information set forth below is for the Funds’ fiscal year as required by federal income tax laws. Shareholders, however, must report distributions on a calendar year basis for income tax purposes, which may include distributions for portions of two fiscal years of a fund. Accordingly, the information needed by shareholders for income tax purposes will be sent to them in January of each year. Please consult your tax advisor for proper treatment of this information.

All designations are based on financial information available as of the date of this annual report and, accordingly are subject to change. For any and all items requiring designation, it is the intention of each Fund to designate the maximum amount permitted under the Internal Revenue Code and the regulations thereunder.

For the fiscal year ended August 31, 2012, each Fund designates distributions paid during the year as follows:

	(A)		(B)		(C)
	Long-Term		Ordinary		Tax-Exempt
	Capital Gains		Income		Income			Total
	Distributions		Distributions		Distributions			Distributions
	(Tax Basis)		(Tax Basis)		(Tax Basis)			(Tax Basis)
Delaware Tax-Free Arizona Fund		0.66%		—		99.34	%		100.00	%
Delaware Tax-Free California Fund		—		—		100.00	%		100.00	%
Delaware Tax-Free Colorado Fund		—		—		100.00	%		100.00	%
Delaware Tax-Free Idaho Fund		—		—		100.00	%		100.00	%
Delaware Tax-Free New York Fund		—		0.04%		99.96	%		100.00	%

(A), (B) and (C) are based on a percentage of each Fund’s total distributions.

134

Board of trustees/directors and officers addendum
Delaware Investments^® Family of Funds

A mutual fund is governed by a Board of Trustees/Directors (“Trustees”), which has oversight responsibility for the management of a fund’s business affairs. Trustees establish procedures and oversee and review the performance of the investment manager, the distributor, and others who perform services for the fund. The independent fund trustees, in particular, are advocates

Name, Address,	Position(s)	Length of
and Birth Date	Held with Fund(s)	Time Served
Interested Trustees

Patrick P. Coyne1	Chairman, President,	Chairman and Trustee
2005 Market Street	Chief Executive Officer,	since August 16, 2006
Philadelphia, PA 19103	and Trustee
April 1963		President and
		Chief Executive Officer
		since August 1, 2006

¹Patrick P. Coyne is considered to be an “Interested Trustee” because he is an executive officer of the Fund’s(s’) investment advisor.

136

for shareholder interests. Each trustee has served in that capacity since he or she was elected to or appointed to the Board of Trustees, and will continue to serve until his or her retirement or the election of a new trustee in his or her place. The following is a list of the Trustees and Officers with certain background and related information.

	Number of Portfolios in
Principal Occupation(s)	Fund Complex Overseen	Other Directorships
During Past 5 Years	by Trustee or Officer	Held by Trustee or Officer


Patrick P. Coyne has served in	71	Director and Audit
various executive capacities		Committee Member
at different times at		Kaydon Corp.
Delaware Investments.²
		Board of Governors Member
		Investment Company
		Institute (ICI)

²Delaware Investments is the marketing name for Delaware Management Holdings, Inc. and its subsidiaries, including the Fund’s(s’) investment advisor, principal underwriter, and its transfer agent.

137

Board of trustees/directors and officers addendum
Delaware Investments^® Family of Funds

Name, Address,	Position(s)	Length of
and Birth Date	Held with Fund(s)	Time Served
Independent Trustees

Thomas L. Bennett	Trustee	Since March 2005
2005 Market Street
Philadelphia, PA 19103
October 1947

John A. Fry	Trustee	Since January 2001
2005 Market Street
Philadelphia, PA 19103
May 1960











Anthony D. Knerr	Trustee	Since April 1990
2005 Market Street
Philadelphia, PA 19103
December 1938

Lucinda S. Landreth	Trustee	Since March 2005
2005 Market Street
Philadelphia, PA 19103
June 1947

138

	Number of Portfolios in
Principal Occupation(s)	Fund Complex Overseen	Other Directorships
During Past 5 Years	by Trustee or Officer	Held by Trustee or Officer


Private Investor	71	Director
(March 2004–Present)		Bryn Mawr Bank Corp. (BMTC)
		(2007–2011)


President	71	Board of Governors Member —
Drexel University		NASDAQ OMX PHLX LLC
(August 2010–Present)
		Director and Audit
President		Committee Member
Franklin & Marshall College		Community Health Systems
(July 2002–July 2010)
		Director — Ecore
		International
		(2009–2010)

		Director — Allied
		Barton Securities Holdings
		(2005–2008)

Managing Director	71	None
Anthony Knerr & Associates
(Strategic Consulting)
(1990–Present)

Private Investor	71	None
(2004–Present)

139

Board of trustees/directors and officers addendum
Delaware Investments^® Family of Funds

Name, Address,	Position(s)	Length of
and Birth Date	Held with Fund(s)	Time Served
Independent Trustees (continued)

Frances A. Sevilla-Sacasa	Trustee	Since September 2011
2005 Market Street
Philadelphia, PA 19103
January 1956

140

	Number of Portfolios in
Principal Occupation(s)	Fund Complex Overseen	Other Directorships
During Past 5 Years	by Trustee or Officer	Held by Trustee or Officer


Chief Executive Officer —	71	Trust Manager — Camden
Banco Itaú Europa		Property Trust
International		(since August 2011)
(since April 2012)

Executive Advisor to Dean
(August 2011–March 2012)
and Interim Dean
(January 2011–July 2011) —
University of Miami School of
Business Administration

President — U.S. Trust,
Bank of America Private
Wealth Management
(Private Banking)
(July 2007–December 2008)

141

Board of trustees/directors and officers addendum
Delaware Investments^® Family of Funds

Name, Address,	Position(s)	Length of
and Birth Date	Held with Fund(s)	Time Served
Independent Trustees (continued)

Janet L. Yeomans	Trustee	Since April 1999
2005 Market Street
Philadelphia, PA 19103
July 1948







J. Richard Zecher	Trustee	Since March 2005
2005 Market Street
Philadelphia, PA 19103
July 1940

142

	Number of Portfolios in
Principal Occupation(s)	Fund Complex Overseen	Other Directorships
During Past 5 Years	by Trustee or Officer	Held by Trustee or Officer


Vice President and Treasurer	71	Director, Audit
(January 2006–July 2012)		Committee Member and
Vice President — Mergers & Acquisitions		Investment Committee
(January 2003–January 2006), and		Member
Vice President and Treasurer		Okabena Company
(July 1995–January 2003)
3M Corporation		Chair — 3M
		Investment Management
		Company
		(January 2005–July 2012)

Founder	71	Director and Compensation
Investor Analytics		Committee Member
(Risk Management)		Investor Analytics
(May 1999–Present)
		Director
Founder		Oxigene, Inc.
P/E Investments		(2003–2008)
(Hedge Fund)
(September 1996–Present)

143

Board of trustees/directors and officers addendum
Delaware Investments^® Family of Funds

Name, Address,	Position(s)	Length of
and Birth Date	Held with Fund(s)	Time Served
Officers

David F. Connor	Vice President,	Vice President since
2005 Market Street	Deputy General	September 2000
Philadelphia, PA 19103	Counsel, and Secretary	and Secretary since
December 1963		October 2005


Daniel V. Geatens	Vice President	Treasurer
2005 Market Street	and Treasurer	since October 2007
Philadelphia, PA 19103
October 1972

David P. O’Connor	Executive Vice President,	Executive Vice President
2005 Market Street	General Counsel	since February 2012;
Philadelphia, PA 19103	and Chief Legal Officer	Senior Vice President
February 1966		October 2005–
		February 2012;
		General Counsel and
		Chief Legal Officer
		since October 2005

Richard Salus	Senior Vice President	Chief Financial Officer
2005 Market Street	and Chief Financial Officer	since November 2006
Philadelphia, PA 19103
October 1963

The Statement of Additional Information for the Fund(s) includes additional information about the Trustees and Officers and is available, without charge, upon request by calling 800 523-1918.

144

	Number of Portfolios in
Principal Occupation(s)	Fund Complex Overseen	Other Directorships
During Past 5 Years	by Trustee or Officer	Held by Trustee or Officer


David F. Connor has served as	71	None³
Vice President and Deputy
General Counsel of
Delaware Investments
since 2000.

Daniel V. Geatens has served	71	None³
in various capacities at
different times at
Delaware Investments.

David P. O’Connor has served in	71	None³
various executive and legal
capacities at different times
at Delaware Investments.





Richard Salus has served in	71	None³
various executive capacities
at different times at
Delaware Investments.

³David F. Connor, Daniel V. Geatens, David P. O’Connor, and Richard Salus serve in similar capacities for the six portfolios of the Optimum Fund Trust, which have the same investment advisor, principal underwriter, and transfer agent as the registrant.

145

About the organization

Board of trustees
Patrick P. Coyne Chairman, President, and Chief Executive Officer Delaware Investments® Family of Funds Philadelphia, PA Thomas L. Bennett Private Investor Rosemont, PA	John A. Fry President Drexel University Philadelphia, PA Anthony D. Knerr Founder and Managing Director Anthony Knerr & Associates New York, NY	Lucinda S. Landreth Former Chief Investment Officer Assurant, Inc. Philadelphia, PA Frances A. Sevilla-Sacasa Chief Executive Officer Banco Itaú Europa International Miami, FL	Janet L. Yeomans Former Vice President and Treasurer 3M Corporation St. Paul, MN J. Richard Zecher Founder Investor Analytics Scottsdale, AZ

Affiliated officers
David F. Connor Vice President, Deputy General Counsel, and Secretary Delaware Investments Family of Funds Philadelphia, PA	Daniel V. Geatens Vice President and Treasurer Delaware Investments Family of Funds Philadelphia, PA	David P. O’Connor Executive Vice President, General Counsel, and Chief Legal Officer Delaware Investments Family of Funds Philadelphia, PA	Richard Salus Senior Vice President and Chief Financial Officer Delaware Investments Family of Funds Philadelphia, PA

This annual report is for the information of Delaware Tax-Free Arizona Fund, Delaware Tax-Free California Fund, Delaware Tax-Free Colorado Fund, Delaware Tax-Free Idaho Fund, and Delaware Tax-Free New York Fund shareholders, but it may be used with prospective investors when preceded or accompanied by the Delaware Investments Fund fact sheet for the most recently completed calendar quarter. These documents are available at delawareinvestments.com.

Delaware Investments is the marketing name of Delaware Management Holdings, Inc. and its subsidiaries.

Each Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. Each Fund’s Forms N-Q, as well as a description of the policies and procedures that each Fund uses to determine how to vote proxies (if any) relating to portfolio securities are available without charge (i) upon request, by calling 800 523-1918; and (ii) on the SEC’s website at sec.gov. In addition, a description of the policies and procedures that each Fund uses to determine how to vote proxies (if any) relating to portfolio securities and each Fund’s Schedule of Investments are available without charge on the Funds’ website at delawareinvestments.com. Each Fund’s Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C.; information on the operation of the Public Reference Room may be obtained by calling 800 SEC-0330.

Information (if any) regarding how each Fund voted proxies relating to portfolio securities during the most recently disclosed 12-month period ended June 30 is available without charge (i) through the Funds’ website at delawareinvestments.com; and (ii) on the SEC’s website at sec.gov.

146

Item 2. Code of Ethics

The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. A copy of the registrant’s Code of Business Ethics has been posted on the Delaware Investments Internet Web site at www.delawareinvestments.com. Any amendments to the Code of Business Ethics, and information on any waiver from its provisions granted by the registrant, will also be posted on this Web site within five business days of such amendment or waiver and will remain on the Web site for at least 12 months.

Item 3. Audit Committee Financial Expert

The registrant’s Board of Trustees/Directors has determined that certain members of the registrant’s Audit Committee are audit committee financial experts, as defined below. For purposes of this item, an “audit committee financial expert” is a person who has the following attributes:

a. An understanding of generally accepted accounting principles and financial statements;

b. The ability to assess the general application of such principles in connection with the accounting for estimates, accruals, and reserves;

c. Experience preparing, auditing, analyzing, or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the registrant’s financial statements, or experience actively supervising one or more persons engaged in such activities;

d. An understanding of internal controls and procedures for financial reporting; and

e. An understanding of audit committee functions.

An “audit committee financial expert” shall have acquired such attributes through:

a. Education and experience as a principal financial officer, principal accounting officer, controller, public accountant, or auditor or experience in one or more positions that involve the performance of similar functions;

b. Experience actively supervising a principal financial officer, principal accounting officer, controller, public accountant, auditor, or person performing similar functions;

c. Experience overseeing or assessing the performance of companies or public accountants with respect to the preparation, auditing, or evaluation of financial statements; or

d. Other relevant experience.

The registrant’s Board of Trustees/Directors has also determined that each member of the registrant’s Audit Committee is independent. In order to be “independent” for purposes of this item, the Audit Committee member may not: (i) other than in his or her capacity as a member of the Board of Trustees/Directors or any committee thereof, accept directly or indirectly any consulting, advisory or other compensatory fee from the issuer; or (ii) be an “interested person” of the registrant as defined in Section 2(a)(19) of the Investment Company Act of 1940.

The names of the audit committee financial experts on the registrant’s Audit Committee are set forth below:

     Thomas L. Bennett¹     John A. Fry
     Frances A. Sevilla-Sacasa
     Janet L. Yeomans

Item 4. Principal Accountant Fees and Services

(a) Audit fees.

The aggregate fees billed for services provided to the registrant by its independent auditors for the audit of the registrant’s annual financial statements and for services normally provided by the independent auditors in connection with statutory and regulatory filings or engagements were $15,900 for the fiscal year ended August 31, 2012.

____________________

¹ The instructions to Form N-CSR require disclosure on the relevant experience of persons who qualify as audit committee financial experts based on “other relevant experience.” The Board of Trustees/Directors has determined that Mr. Bennett qualifies as an audit committee financial expert by virtue of: his education and Chartered Financial Analyst designation; his experience as a credit analyst, portfolio manager and the manager of other credit analysts and portfolio managers; and his prior service on the audit committees of public companies.

(b) Audit-related fees.

The aggregate fees billed by the registrant’s independent auditors for services relating to the performance of the audit of the registrant’s financial statements and not reported under paragraph (a) of this Item were $0 for the fiscal year ended August 31, 2012.

The aggregate fees billed by the registrant’s independent auditors for services relating to the performance of the audit of the financial statements of the registrant’s investment adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $565,000 for the registrant’s fiscal year ended August 31, 2012. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%. These audit-related services were as follows: year end audit procedures; group reporting and subsidiary statutory audits.

The aggregate fees billed by the registrant’s independent auditors for services relating to the performance of the audit of the financial statements of the registrant’s investment adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $593,000 for the registrant’s fiscal year ended August 31, 2011. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%. These audit-related services were as follows: year end audit procedures; reporting up and subsidiary statutory audits.

The aggregate fees billed by the registrant’s independent auditors for tax-related services provided to the registrant were $3,050 for the fiscal year ended August 31, 2012. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%. These tax-related services were as follows: review of income tax returns and review of annual excise distribution calculations.

The aggregate fees billed by the registrant’s independent auditors for tax-related services provided to the registrant were $0 for the fiscal year ended August 31, 2011.

The aggregate fees billed by the registrant’s independent auditors for tax-related services provided to the registrant’s investment adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $10,000 for the registrant’s fiscal year ended August 31, 2011. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%. These tax-related services were as follows: state and local tax review.

(d) All other fees.

The aggregate fees billed for all services provided by the independent auditors to the registrant other than those set forth in paragraphs (a), (b) and (c) of this Item were $0 for the fiscal year ended August 31, 2012.

The aggregate fees billed for all services other than those set forth in paragraphs (b) and (c) of this Item provided by the registrant’s independent auditors to the registrant’s adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $0 for the registrant’s fiscal year ended August 31, 2012. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%.

The aggregate fees billed for all services other than those set forth in paragraphs (b) and (c) of this Item provided by the registrant’s independent auditors to the registrant’s adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $25,000 for the registrant’s fiscal year ended August 31, 2011. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%. These other services were as follows: attest examination of management's assertion to the controls in place at the transfer agent to be in compliance with Rule 17ad-13(a)(3) of the Securities Exchange Act of 1934.

(e) The registrant’s Audit Committee has established pre-approval policies and procedures as permitted by Rule 2-01(c)(7)(i)(B) of Regulation S-X (the “Pre-Approval Policy”) with respect to services provided by the registrant’s independent auditors. Pursuant to the Pre-Approval Policy, the Audit Committee has pre-approved the services set forth in the table below with respect to the registrant up to the specified fee limits. Certain fee limits are based on aggregate fees to the registrant and other registrants within the Delaware Investments Family of Funds.

Service	Range of Fees
Audit Services
Statutory audits or financial audits for new Funds	up to $25,000 per Fund
Services associated with SEC registration statements (e.g., Form N-1A, Form N-14, etc.), periodic reports and other documents filed with the SEC or other documents issued in connection with securities offerings (e.g., comfort letters for closed-end Fund offerings, consents), and assistance in responding to SEC comment letters	up to $10,000 per Fund
Consultations by Fund management as to the accounting or disclosure treatment of transactions or events and/or the actual or potential impact of final or proposed rules, standards or interpretations by the SEC, FASB, or other regulatory or standard-setting bodies (Note: Under SEC rules, some consultations may be considered “audit-related services” rather than “audit services”)	up to $25,000 in the aggregate
Audit-Related Services
Consultations by Fund management as to the accounting or disclosure treatment of transactions or events and /or the actual or potential impact of final or proposed rules, standards or interpretations by the SEC, FASB, or other regulatory or standard-setting bodies (Note: Under SEC rules, some consultations may be considered “audit services” rather than “audit-related services”)	up to $25,000 in the aggregate
Tax Services
U.S. federal, state and local and international tax planning and advice (e.g., consulting on statutory, regulatory or administrative developments, evaluation of Funds’ tax compliance function, etc.)	up to $25,000 in the aggregate
U.S. federal, state and local tax compliance (e.g., excise distribution reviews, etc.)	up to $5,000 per Fund
Review of federal, state, local and international income, franchise and other tax returns	up to $5,000 per Fund

Under the Pre-Approval Policy, the Audit Committee has also pre-approved the services set forth in the table below with respect to the registrant’s investment adviser and other entities controlling, controlled by or under common control with the investment adviser that provide ongoing services to the registrant (the “Control Affiliates”) up to the specified fee limit. This fee limit is based on aggregate fees to the investment adviser and its Control Affiliates.

Service	Range of Fees
Non-Audit Services
Services associated with periodic reports and other documents filed with the SEC and assistance in responding to SEC comment letters	up to $10,000 in the aggregate

The Pre-Approval Policy requires the registrant’s independent auditors to report to the Audit Committee at each of its regular meetings regarding all services initiated since the last such report was rendered, including those services authorized by the Pre-Approval Policy.

(f) Not applicable.

(g) The aggregate non-audit fees billed by the registrant’s independent auditors for services rendered to the registrant and to its investment adviser and other service providers under common control with the adviser were $10,092,966 and $0 for the registrant’s fiscal years ended August 31, 2012 and August 31, 2011, respectively.

(h) In connection with its selection of the independent auditors, the registrant’s Audit Committee has considered the independent auditors’ provision of non-audit services to the registrant’s investment adviser and other service providers under common control with the adviser that were not required to be pre-approved pursuant to Rule 2-01(c)(7)(ii) of Regulation S-X. The Audit Committee has determined that the independent auditors’ provision of these services is compatible with maintaining the auditors’ independence.

Item 5. Audit Committee of Listed Registrants

Not applicable.

Item 6. Investments

(a) Included as part of report to shareholders filed under Item 1 of this Form N-CSR.

(b) Divestment of securities in accordance with Section 13(c) of the Investment Company Act of 1940.

Not applicable.

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

Not applicable.

Item 8. Portfolio Managers of Closed-End Management Investment Companies

Not applicable.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers

Not applicable.

Item 10. Submission of Matters to a Vote of Security Holders

Not applicable.

Item 11. Controls and Procedures

The registrant’s principal executive officer and principal financial officer have evaluated the registrant’s disclosure controls and procedures within 90 days of the filing of this report and have concluded that they are effective in providing reasonable assurance that the information required to be disclosed by the registrant in its reports or statements filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.

There were no significant changes in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by the report to stockholders included herein (i.e., the registrant’s fourth fiscal quarter) that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12. Exhibits

(a) (1) Code of Ethics

Not applicable.

(2) Certifications of Principal Executive Officer and Principal Financial Officer pursuant to Rule 30a-2 under the Investment Company Act of 1940 are attached hereto as Exhibit 99.CERT.

(3) Written solicitations to purchase securities pursuant to Rule 23c-1 under the Securities Exchange Act of 1934.

Not applicable.

(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 are furnished herewith as Exhibit 99.906CERT.

SIGNATURES

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

Name of Registrant: VOYAGEUR MUTUAL FUNDS II

/s/ PATRICK P. COYNE
By:	Patrick P. Coyne
Title:	Chief Executive Officer
Date:	November 2, 2012

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.

/s/ PATRICK P. COYNE
By:	Patrick P. Coyne
Title:	Chief Executive Officer
Date:	November 2, 2012

/s/ RICHARD SALUS
By:	Richard Salus
Title:	Chief Financial Officer
Date:	November 2, 2012

Voyageur Mutual Funds Ii N-CSRCertified annual shareholder report (management investment company)