Delaware Vip Trust N-CSR 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			811-5162
Delaware VIP Trust
(Exact name of registrant as specified in charter)
2005 Market Street Philadelphia, PA					19103
(Address of principal executive offices)					(Zip code)
David F. Connor, Esq. 2005 Market Street Philadelphia, PA 19103
(Name and address of agent for service)
Registrant’s telephone number, including area code:				(800) 523-1918
Date of fiscal year end:	December 31
Date of reporting period:		December 31, 2006

Item 1.  Reports to Stockholders

Delaware VIP Trust — Delaware VIP Balanced Series

For the 12-month period ended December 31, 2006, the Delaware VIP Balanced Series showed a positive return of 16.20% for Standard Class shares with distributions reinvested, as Service Class shares gained 15.88% with distributions reinvested. The benchmarks for the Series are the Standard & Poor's 500 Index, which gained 15.78%, and the Lehman Brothers Aggregate Bond Index, which returned +4.33% (source: Lipper).

Expecting a slowdown in the economy and a reduced rate of corporate earnings growth during the fiscal year, we believed it was prudent to position the equity portion of the Series more defensively than usual. As a result, we had more holdings in less economically sensitive sectors, such as healthcare and consumer staples, than those reflected in the benchmark indices. The Series' equity allocation was underweight relative to the S&P 500 Index in the more economically sensitive areas, such as consumer discretionary.

We regularly looked to invest in undervalued companies with good business models and prices that we believed were well below their intrinsic value. During this recent period, we focused on companies that we believed to have particularly sound balance sheets, strong dividend yields, and the potential to continue generating relatively stable earnings, even in a weaker economy. This approach led us to hold smaller positions in the energy and industrial sectors relative to the benchmark indices, both of which tend to be relatively sensitive to economic changes.

Despite being faced with rising interest rates during the first half of the year, the fixed income markets had positive total returns for the year as measured by the 4.33% advance of the broad Lehman Brothers Aggregate Bond Index for 2006. While bond market returns trailed those of equities, the Series' fixed income allocation continued to provide an important counterweight to stock holdings. Throughout the year, we continued to hold a broad array of fixed income assets, with the largest holdings at year-end falling into the categories of government agency bonds and U.S. Treasury holdings.

The views expressed are current as of the date of this report and are subject to change.

The performance data quoted below and on the next page represent past performance; past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please obtain the performance data for the most recent month end by calling the number noted on the page related to this Series in the introductory section of this report.

You should consider the investment objectives, risks, charges, and expenses of the investment carefully before investing. The Delaware VIP Balanced Series prospectus contains this and other important information about the Series. To obtain a prospectus, contact the company noted on the page related to this Series in the introductory section of this report, either by phone or through the company Web site. We advise you to read the prospectus carefully before you invest.

Delaware VIP Balanced Series Average Annual Total Returns For the periods ending Dec. 31, 2006

1 Year

5 Years

10 Years

Lifetime

Standard Class Shares*

+16.20

%

+4.94

%

+4.64

%

+8.17

%

Service Class Shares**

+15.88

%

+4.71

%

NA

+2.55

%

  *  Commenced operations on July 28, 1988

  **  Commenced operations on May 1, 2000

Balanced Series- 1

Delaware VIP Trust — Delaware VIP Balanced Series (continued)

The chart shows a $10,000 investment in the Delaware VIP Balanced Series Standard Class shares for the period from Dec. 31, 1996 through Dec. 31, 2006. All distributions were reinvested. The chart also shows $10,000 invested in the Lehman Brothers Aggregate Bond Index and S&P 500 Index for the period from Dec. 31, 1996 through Dec. 31, 2006.

Lehman Brothers Aggregate Bond Index measures the performance of a large group of high quality, fixed income securities across the government, corporate, mortgage-backed, asset-backed, and commercial mortgage-backed markets. The S&P 500 Index measures the performance of mostly large-capitalization U.S. companies. An index is unmanaged and does not reflect the costs of operating a mutual fund, such as the costs of buying, selling, and holding securities. You cannot invest directly in an index.

Earnings from a variable annuity or variable life investment compound tax free until withdrawal, so no adjustments were made for income taxes.

An expense limitation was in effect for the Delaware VIP Balanced Series during the periods shown.

Performance of Service Class shares will vary due to different charges and expenses.

Performance does not reflect insurance fees related to a variable annuity or variable life investment or the deferred sales charge that would apply to certain withdrawals of investments held for fewer than eight years. Performance shown here would have been reduced if such fees were included and the expense limitation was removed. For more information about fees, consult your variable annuity or variable life prospectus.

Investments in variable products involve risk. A rise or fall in interest rates can have a significant impact on bond prices and the net asset value (NAV) of the Series. Series that invest in bonds may lose their value as interest rates rise, and an investor may lose principal. High yielding, noninvestment grade bonds involve higher risk than investment grade bonds. Adverse conditions may affect the issuer's ability to pay interest and principal on these securities. The Series may be invested in emerging markets and foreign high yield corporate bonds, which have special risks that include currency fluctuations, economic and political change, and different accounting standards. Some portfolios offer more risk than others. Please read both the contract and underlying prospectus for specific details regarding the product's risk profile.

Balanced Series- 2

Delaware VIP Trust — Delaware VIP Balanced Series
Disclosure of Series Expenses

For the Period July 1, 2006 to December 31, 2006

As a shareholder of the Series, you incur ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Series expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Series and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2006 to December 31, 2006.

Actual Expenses

The first section of the table shown, "Actual Series 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 the period.

Hypothetical Example for Comparison Purposes

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

Please note that the expenses shown in the table are meant to highlight your ongoing costs only. As a shareholder of the Series, you do not incur any transaction costs, such as sales charges (loads), redemption fees or exchange fees, but shareholders of other funds may incur such costs. Also, the fees related to the variable annuity investment or the deferred sales charge that could apply have not been included. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. The Series' actual expenses shown in the table reflect fee waivers in effect. The expenses shown in the table assume reinvestment of all dividends and distributions.

Expense Analysis of an Investment of $1,000

	Beginning Account Value 7/1/06		Ending Account Value 12/31/06		Annualized Expense Ratios			Expenses Paid During Period 7/1/06 to 12/31/06*
Actual Series Return
Standard Class	$	1,000.00	$	1,119.60		0.82	%	$	4.38
Service Class		1,000.00		1,118.10		1.07	%		5.71
Hypothetical 5% Return (5% return before expenses)
Standard Class	$	1,000.00	$	1,021.07		0.82	%	$	4.18
Service Class		1,000.00		1,019.81		1.07	%		5.45

*"Expenses Paid During Period" are equal to the Series' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

Balanced Series- 3

Delaware VIP Trust — Delaware VIP Balanced Series
Sector Allocation and Credit Rating Breakdown

As of December 31, 2006

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

Sector	Percentage of Net Assets
Common Stock		61.09	%
Consumer Discretionary		5.26	%
Consumer Staples		7.43	%
Energy		3.78	%
Financials		14.86	%
Health Care		11.05	%
Industrials		3.76	%
Information Technology		7.39	%
Materials		1.89	%
Telecommunications		3.82	%
Utilities		1.85	%
Preferred Stock		0.06	%
Agency Asset-Backed Securities		0.01	%
Agency Collateralized Mortgage Obligations		1.75	%
Agency Mortgage-Backed Securities		5.56	%
Agency Obligations		0.62	%
Commercial Mortgage-Backed Securities		2.26	%
Corporate Bonds		11.49	%
Banking		1.60	%
Basic Industry		0.27	%
Brokerage		0.78	%
Capital Goods		0.27	%
Communications		1.76	%
Consumer Cyclical		0.68	%
Consumer Non-Cyclical		0.53	%
Electric		1.25	%
Energy		0.53	%
Finance Companies		0.70	%
Industrial		0.01	%
Insurance		1.51	%
Natural Gas		0.94	%
Real Estate		0.21	%
Technology & Electronics		0.02	%
Transportation		0.43	%
Foreign Agencies		0.16	%
Municipal Bonds		0.95	%
Non-Agency Asset-Backed Securities		2.46	%
Non-Agency Collateralized Mortgage Obligations		8.47	%
U.S. Treasury Obligations		3.18	%
Repurchase Agreements		5.49	%
Securities Lending Collateral		6.57	%
Fixed Rate Note		1.24	%
Variable Rate Notes		5.33	%
Total Market Value of Securities		110.12	%
Obligation to Return Securities Lending Collateral		(6.57	%)
Liabilities Net of Receivables and Other Assets		(3.55	%)
Total Net Assets		100.00	%
Credit Rating Breakdown (as a % of fixed income investments)
AAA		66.85	%
AA		4.24	%
A		8.53	%
BBB		18.40	%
BB		0.56	%
B		1.13	%
CCC		0.21	%
Not Rated		0.08	%
Total		100.00	%

Balanced Series-4

Delaware VIP Trust — Delaware VIP Balanced Series
Statement of Net Assets

December 31, 2006

	Number of Shares		Market Value (U.S. $)
COMMON STOCK–61.09%
Consumer Discretionary–5.26%
Gap		33,800	$	659,100
† Idearc		860		24,639
Limited Brands		19,900		575,906
Mattel		27,200		616,352
				1,875,997
Consumer Staples–7.43%
ConAgra Foods		24,900		672,300
Heinz (H.J.)		14,400		648,144
Kimberly-Clark		9,800		665,910
Safeway		19,100		660,096
				2,646,450
Energy–3.78%
Chevron		9,400		691,182
ConocoPhillips		9,100		654,745
				1,345,927
Financials–14.86%
Allstate		10,100		657,611
* Aon		18,900		667,926
Chubb		12,000		634,920
Hartford Financial Services		7,300		681,163
Huntington Bancshares		26,700		634,125
Morgan Stanley		8,100		659,583
Wachovia		12,000		683,399
Washington Mutual		14,900		677,801
				5,296,528
Health Care–11.05%
Abbott Laboratories		13,900		677,069
Baxter International		14,100		654,099
Bristol-Myers Squibb		27,100		713,272
Merck & Co		14,200		619,120
Pfizer		23,800		616,420
Wyeth		12,900		656,868
				3,936,848
Industrials–3.76%
Donnelley (R.R.) & Sons		19,500		693,030
Waste Management		17,600		647,152
				1,340,182
Information Technology–7.39%
Hewlett-Packard		16,100		663,159
* Intel		31,000		627,750
International Business Machines		7,000		680,050
† Xerox		39,100		662,745
				2,633,704
Materials–1.89%
duPont (E.I.) deNemours		13,800		672,198
				672,198
Telecommunications–3.82%
AT&T		18,600		664,950
Verizon Communications		18,700		696,388
				1,361,338
Utilities–1.85%
* Progress Energy		13,400		657,672
				657,672
Total Common Stock (cost $17,866,449)				21,766,844

	Number of Shares		Market Value (U.S. $)
PREFERRED STOCK–0.06%
Nexen 7.35%		790	$	20,382
Total Preferred Stock (cost $19,750)				20,382
	Principal Amount (U.S. $)
AGENCY ASSET-BACKED SECURITIES–0.01%
• Fannie Mae Whole Loan Series 2002-W11 AV1 5.69% 11/25/32	$	3,677		3,676
Total Agency Asset-Backed Securities (cost $3,678)				3,676
AGENCY COLLATERALIZED MORTGAGE OBLIGATIONS–1.75%
Fannie Mae Series 1996-46 ZA 7.50% 11/25/26		20,341		21,010
Series 2003-122 AJ 4.50% 2/25/28		19,709		19,220
Series 2005-110 MB 5.50% 9/25/35		60,000		60,150
Series 2006-M2 A2F 5.259% 5/25/20		80,000		79,152
Fannie Mae Grantor Trust Series 2001-T8 A2 9.50% 7/25/41		17,166		18,486
Fannie Mae Whole Loan Series 2004-W9 2A1 6.50% 2/25/44		29,511		30,196
Series 2004-W11 1A2 6.50% 5/25/44		31,457		32,197
Freddie Mac Series 1730 Z 7.00% 5/15/24		16,934		17,651
Series 2326 ZQ 6.50% 6/15/31		79,706		82,521
Series 2480 EH 6.00% 11/15/31		1,468		1,467
Series 2662 MA 4.50% 10/15/31		37,418		36,648
Series 2872 GC 5.00% 11/15/29		40,000		39,136
Series 2890 PC 5.00% 7/15/30		65,000		63,550
Series 3022 MB 5.00% 12/15/28		30,000		29,561
Series 3063 PC 5.00% 2/15/29		60,000		59,071
t Freddie Mac Structured Pass Through Securities Series T-58 2A 6.50% 9/25/43		32,181		32,857
Total Agency Collateralized Mortgage Obligations (cost $633,928)				622,873
AGENCY MORTGAGE-BACKED SECURITIES–5.56%
Fannie Mae 6.50% 8/1/17		22,942		23,352
Fannie Mae Relocation 30 yr 5.00% 11/1/33		56,586		55,136
5.00% 11/1/34		36,530		35,570
Fannie Mae S.F. 15 yr TBA 6.00% 1/1/22		80,000		81,125
Fannie Mae S.F. 30 yr 5.50% 3/1/29		71,657		71,196
5.50% 4/1/29		78,647		78,141
7.50% 6/1/31		27,107		28,226
9.50% 6/1/19		7,363		7,774

Balanced Series- 5

Delaware VIP Balanced Series
Statement of Net Assets (continued)

	Principal Amount (U.S. $)		Market Value (U.S. $)
AGENCY MORTGAGE-BACKED SECURITIES (continued)
Fannie Mae S.F. 30 yr TBA 5.00% 1/1/37	$	330,000	$	318,656
5.50% 1/1/37		970,000		958,785
6.00% 1/25/37		40,000		40,275
6.50% 1/1/37		25,000		25,477
• Freddie Mac ARM 4.673% 4/1/34		21,293		21,588
Freddie Mac Relocation 30 yr 5.00% 9/1/33		96,530		94,225
Freddie Mac S.F. 15 yr 4.00% 2/1/14		58,171		56,243
Freddie Mac S.F. 30 yr 7.00% 11/1/33		14,648		15,067
Freddie Mac S.F. 30 yr TBA 6.00% 1/1/37		65,000		65,488
GNMA S.F. 30 yr 7.50% 1/15/32		6,303		6,578
Total Agency Mortgage-Backed Securities (cost $1,994,572)				1,982,902
AGENCY OBLIGATIONS–0.62%
^ Fannie Mae 5.377% 10/9/19		230,000		113,867
^ Resolution Funding Interest Strip 5.24% 10/15/25		275,000		106,671
Total Agency Obligations (cost $220,938)				220,538
COMMERCIAL MORTGAGE-BACKED SECURITIES–2.26%
Bank of America Commercial Mortgage Securities
• Series 2006-3 A4 5.889% 7/10/44		50,000		51,976
Series 2006-4 A4 5.634% 7/10/46		25,000		25,520
# Bear Stearns Commercial Mortgage Securities Series 2004-ESA E 144A 5.064% 5/14/16		40,000		39,845
t Commercial Mortgage Pass Through Certificates
# Series 2001-J1A A2 144A 6.457% 2/14/34		28,520		29,518
Series 2006-C7 A2 5.69% 6/10/46		25,000		25,429
• Credit Suisse Mortgage Capital Certificates Series 2006-C1 AAB 5.556% 2/15/39		15,000		15,192
# Crown Castle Towers Series 2005-1A C 144A 5.074% 6/15/35		25,000		24,676
Deutsche Mortgage and Asset Receiving Series 1998-C1 A2 6.538% 6/15/31		30,785		30,988
First Union-Lehman Brothers-Bank of America Series 1998-C2 A2 6.56% 11/18/35		26,637		26,914
General Electric Capital Commercial Mortgage Series 2002-1A A3 6.269% 12/10/35		75,000		78,359
GS Mortgage Securities II Series 2006-GG8 A4 5.56% 11/10/39		80,000		81,254

	Principal Amount (U.S. $)		Market Value (U.S. $)
COMMERCIAL MORTGAGE-BACKED SECURITIES (continued)
JPMorgan Chase Commercial Mortgage Securities Series 2002-C1 A3 5.376% 7/12/37	$	35,000	$	35,213
Series 2003-C1 A2 4.985% 1/12/37		68,000		66,980
•# Series 2006-RR1A A1 144A 5.456% 10/18/52		25,000		25,180
Lehman Brothers-UBS Commercial Mortgage Trust Series 2002-C1 A4 6.462% 3/15/31		55,000		57,929
• Merrill Lynch Mortgage Trust Series 2006-C1 ASB 5.66% 5/12/39		35,000		35,819
# SBA Commercial Mortgage Securities Trust Series 2006-1A B 144A 5.451% 11/15/36		60,000		60,153
# Tower 144A Series 2004-2A A 4.232% 12/15/14		45,000		43,801
Series 2006-1 B 5.588% 2/15/36		25,000		25,140
Series 2006-1 C 5.707% 2/15/36		25,000		25,158
Total Commercial Mortgage-Backed Securities (cost $815,102)				805,044
CORPORATE BONDS–11.49%
Banking–1.60%
•# Barclays Bank 144A 7.375% 6/29/49		20,000		21,622
Citigroup 5.875% 2/22/33		20,000		20,132
JP Morgan Chase Capital XX 6.55% 9/29/36		25,000		25,901
• MUFG Capital Finance 1 6.346% 7/29/49		100,000		101,669
Popular North America 4.25% 4/1/08		55,000		54,205
• 5.77% 4/6/09		25,000		25,084
Popular North America Capital Trust I 6.564% 9/15/34		15,000		15,006
•# Rabobank Capital Funding II 144A 5.26% 12/29/49		35,000		34,277
• RBS Capital Trust I 4.709% 12/29/49		60,000		57,115
•# Resona Preferred Global Securities Cayman 144A 7.191% 12/29/49		70,000		73,156
* Sovereign Capital Trust VI 7.908% 6/13/36		30,000		33,801
SunTrust Capital II 7.90% 6/15/27		35,000		36,503
# Wachovia Capital Trust I 144A 7.64% 1/15/27		40,000		41,558
• Wachovia Capital Trust III 5.80% 3/15/42		30,000		30,276
				570,305
Basic Industry–0.27%
* Abitibi-Consolidated 7.875% 8/1/09		5,000		4,900
Bowater 9.50% 10/15/12		5,000		5,200
Lubrizol 4.625% 10/1/09		30,000		29,447
* Norske Skog Canada 8.625% 6/15/11		2,000		2,035
Potlatch 13.00% 12/1/09		5,000		5,790
* Vale Overseas 6.25% 1/23/17		25,000		25,239
Weyerhaeuser 7.125% 7/15/23		25,000		25,053
				97,664

Balanced Series- 6

Delaware VIP Balanced Series
Statement of Net Assets (continued)

	Principal Amount (U.S. $)		Market Value (U.S. $)
CORPORATE BONDS (continued)
Brokerage–0.78%
• Ameriprise Financial 7.518% 6/1/66	$	80,000	$	88,004
Amvescap 4.50% 12/15/09		55,000		53,656
Goldman Sachs Group 6.345% 2/15/34		25,000		25,388
LaBranche & Co. 11.00% 5/15/12		5,000		5,413
Merrill Lynch 6.05% 5/16/16		100,000		103,688
				276,149
Capital Goods–0.27%
Casella Waste Systems 9.75% 2/1/13		5,000		5,263
Caterpillar 6.05% 8/15/36		15,000		15,494
General Electric 5.00% 2/1/13		40,000		39,607
* Geo Sub 11.00% 5/15/12		5,000		4,850
* Graham Packaging 9.875% 10/15/14		5,000		5,075
Interface 10.375% 2/1/10		5,000		5,550
Intertape Polymer 8.50% 8/1/14		5,000		4,538
United Technologies 6.05% 6/1/36		15,000		15,856
				96,233
Communications–1.76%
n Adelphia Communications 8.125% 4/1/07		5,000		4,613
* American Tower 7.125% 10/15/12		5,000		5,163
AT&T 7.30% 11/15/11		40,000		43,351
8.00% 11/15/31		15,000		18,666
BellSouth 4.20% 9/15/09		25,000		24,319
British Telecommunications 9.125% 12/15/30		15,000		20,577
n Century Communications 9.50% 4/1/07		5,000		6,075
Charter Communications 13.50% 1/15/11		5,000		4,975
Comcast
• 5.674% 7/14/09		15,000		15,044
6.45% 3/15/37		15,000		15,058
6.50% 11/15/35		15,000		15,155
Cox Communications 4.625% 1/15/10		25,000		24,488
Embarq 6.738% 6/1/13		20,000		20,497
o Inmarsat Finance 10.375% 11/15/12		5,000		4,631
Insight Communications 12.25% 2/15/11		5,000		5,250
Insight Midwest 9.75% 10/1/09		4,000		4,075
* Mediacom Capital 9.50% 1/15/13		7,000		7,245
News America Holdings 7.75% 12/1/45		20,000		22,928
* Rural Cellular 9.875% 2/1/10		5,000		5,344
Sprint Capital 6.875% 11/15/28		10,000		10,038
7.625% 1/30/11		35,000		37,507
8.75% 3/15/32		15,000		18,105
Telecom Italia Capital
*• 5.984% 7/18/11		40,000		39,988
7.20% 7/18/36		45,000		47,160
Telefonica Emisones 5.984% 6/20/11		75,000		76,418
* Telefonos de Mexico 4.50% 11/19/08		65,000		64,152
Thomson 5.75% 2/1/08		30,000		30,098
Time Warner 5.50% 11/15/11		20,000		19,970
Time Warner Entertainment 8.375% 3/15/23		10,000		11,759
• US LEC 13.87% 10/1/09		5,000		5,325
				627,974

	Principal Amount (U.S. $)		Market Value (U.S. $)
CORPORATE BONDS (continued)
Consumer Cyclical–0.68%
Caesars Entertainment 9.375% 2/15/07	$	5,000	$	5,019
• DaimlerChrysler Holdings 5.82% 8/3/09		50,000		50,116
General Motors Acceptance Corporation 6.875% 9/15/11		35,000		35,935
Harrah's Operating 6.50% 6/1/16		5,000		4,484
Home Depot 5.40% 3/1/16		10,000		9,798
5.875% 12/16/36		50,000		49,237
* Mandalay Resort Group 9.375% 2/15/10		5,000		5,375
Penney (JC) 7.625% 3/1/97		25,000		25,600
8.00% 3/1/10		15,000		15,982
* Playtex Products 9.375% 6/1/11		5,000		5,238
Viacom 5.75% 4/30/11		25,000		25,036
* WMG Acquisition 7.375% 4/15/14		5,000		4,975
Wheeling Island Gaming 10.125% 12/15/09		5,000		5,119
				241,914
Consumer Non-Cyclical–0.53%
Boston Scientific 6.40% 6/15/16		25,000		25,343
Cott Beverages 8.00% 12/15/11		5,000		5,125
CRC Health 10.75% 2/1/16		5,000		5,400
Gold Kist 10.25% 3/15/14		3,000		3,457
Kraft Foods 4.125% 11/12/09		15,000		14,559
Kroger 6.375% 3/1/08		30,000		30,227
Medco Health Solutions 7.25% 8/15/13		10,000		10,748
Medtronic 4.375% 9/15/10		5,000		4,855
Merck & Co. 5.75% 11/15/36		35,000		34,747
UST 6.625% 7/15/12		10,000		10,552
o Vanguard Health 11.25% 10/1/15		5,000		3,875
Warner Chilcott 8.75% 2/1/15		5,000		5,150
Wyeth 5.50% 2/1/14		35,000		35,232
				189,270
Electric–1.25%
• Alabama Power Capital Trust IV 4.75% 10/1/42		55,000		54,720
# Calpine 144A 8.496% 7/15/07		196		216
Commonweallth Edison 5.95% 8/15/16		45,000		45,578
Dominion Resources 5.687% 5/15/08		20,000		20,035
Duke Capital 5.668% 8/15/14		35,000		34,959
FPL Group Capital 5.625% 9/1/11		25,000		25,300
• 6.35% 10/1/66		35,000		35,547
Midamerican Energy 6.125% 4/1/36		20,000		20,230
* Midwest Generation 8.75% 5/1/34		5,000		5,450
• Nisource Finance 5.94% 11/23/09		20,000		20,022
Oncor Electric Delivery 7.00% 9/1/22		35,000		37,739
Orion Power 12.00% 5/1/10		5,000		5,700
Pepco 5.50% 8/15/07		40,000		39,974
• 5.994% 6/1/10		30,000		30,068
# Power Contract Financing 144A 6.256% 2/1/10		16,628		16,724

Balanced Series- 7

Delaware VIP Balanced Series
Statement of Net Assets (continued)

	Principal Amount (U.S. $)		Market Value (U.S. $)
CORPORATE BONDS (continued)
Electric (continued)
Puget Sound Energy 5.483% 6/1/35	$	15,000	$	13,719
Southwestern Public Service 6.00% 10/1/36		30,000		29,791
Xcel Energy 6.50% 7/1/36		10,000		10,601
				446,373
Energy–0.53%
Anadarko Petroleum 5.95% 9/15/16		15,000		15,059
* Bluewater Finance 10.25% 2/15/12		5,000		5,263
# Canadian Oil Sands 144A 4.80% 8/10/09		35,000		34,357
Kerr-McGee 7.125% 10/15/27		15,000		16,121
Nexen 5.875% 3/10/35		5,000		4,696
# Ras Laffan Liquiefied Natural Gas III 144A 5.832% 9/30/16		25,000		25,120
• Secunda International 13.374% 9/1/12		5,000		5,181
Valero Energy 6.125% 4/15/07		45,000		45,059
Weatherford International 4.95% 10/15/13		35,000		33,574
Whiting Petroleum 7.25% 5/1/13		5,000		5,038
				189,468
Finance Companies–0.70%
*• American Express 6.80% 9/1/66		20,000		21,365
American General Finance 4.875% 7/15/12		30,000		29,304
FTI Consulting 7.625% 6/15/13		5,000		5,188
Residential Capital
• 5.85% 6/9/08		25,000		24,958
6.00% 2/22/11		20,000		19,980
6.125% 11/21/08		30,000		30,162
6.375% 6/30/10		25,000		25,311
6.50% 4/17/13		50,000		50,736
6.875% 6/30/15		40,000		41,533
				248,537
Industrial–0.01%
# Mobile Services Group 144A 9.75% 8/1/14		5,000		5,250
				5,250
Insurance–1.51%
# Farmers Insurance Exchange 144A 6.00% 8/1/14		10,000		9,901
8.625% 5/1/24		70,000		84,165
•# Great West Life & Annuity Insurance 144A 7.153% 5/16/46		20,000		21,230
# Liberty Mutual 144A 6.70% 8/15/16		15,000		15,853
Marsh & McLennan 5.15% 9/15/10		35,000		34,415
* 5.375% 3/15/07		40,000		39,989
MetLife 5.00% 6/15/15		10,000		9,715
• 6.40% 12/15/36		30,000		30,239
Montpelier Re Holdings 6.125% 8/15/13		45,000		43,899
# Nationwide Mutual Insurance 144A 7.875% 4/1/33		45,000		53,541
*# Nippon Life Insurance 144A 4.875% 8/9/10		35,000		34,261

	Principal Amount (U.S. $)		Market Value (U.S. $)
CORPORATE BONDS (continued)
Insurance (continued)
PMI Group 5.568% 11/15/08	$	30,000	$	29,984
SAFECO Capital Trust I 8.072% 7/15/37		45,000		47,104
WellPoint 4.25% 12/15/09		25,000		24,318
5.85% 1/15/36		35,000		34,117
Willis Group 5.125% 7/15/10		15,000		14,636
5.625% 7/15/15		10,000		9,588
				536,955
Natural Gas–0.94%
Boardwalk Pipelines 5.875% 11/15/16		25,000		24,796
El Paso Natural Gas 7.625% 8/1/10		5,000		5,250
El Paso Production 7.75% 6/1/13		5,000		5,256
Enterprise Products Operating 4.00% 10/15/07		50,000		49,398
4.625% 10/15/09		40,000		39,189
Inergy Finance 6.875% 12/15/14		5,000		4,938
ONEOK 5.51% 2/16/08		25,000		24,989
• Sempra Energy 5.845% 5/21/08		50,000		50,022
Southern Union 6.15% 8/16/08		50,000		50,224
Valero Logistics Operations 6.05% 3/15/13		80,000		80,692
				334,754
Real Estate–0.21%
BF Saul REIT 7.50% 3/1/14		5,000		5,106
* Developers Diversified Realty 4.625% 8/1/10		50,000		48,718
HRPT Properties Trust 5.75% 2/15/14		20,000		20,042
				73,866
Technology & Electronics–0.02%
* MagnaChip Semiconductor 8.00% 12/15/14		5,000		3,375
# UGS Capital II PIK 144A 10.348% 6/1/11		5,000		5,038
				8,413
Transportation–0.43%
American Airlines 3.857% 7/9/10		40,429		39,236
Continental Airlines 6.503% 6/15/11		50,000		51,500
# Erac USA Finance 144A 7.35% 6/15/08		40,000		41,015
# Hertz 144A 8.875% 1/1/14		10,000		10,525
o H-Lines Finance Holdings 11.00% 4/1/13		5,000		4,675
Kansas City Southern de Mexico 12.50% 6/15/12		5,000		5,425
Kansas City Southern Railway 9.50% 10/1/08		1,000		1,050
				153,426
Total Corporate Bonds (cost $4,020,442)				4,096,551
FOREIGN AGENCIES–0.16%
Pemex Project Funding Master Trust 6.125% 8/15/08		35,000		35,368
6.625% 6/15/35		20,000		20,485
Total Foreign Agencies (cost $52,817)				55,853

Balanced Series- 8

Delaware VIP Balanced Series
Statement of Net Assets (continued)

	Principal Amount (U.S. $)		Market Value (U.S. $)
MUNICIPAL BONDS–0.95%
Augusta, Georgia Water & Sewer Revenue 5.25% 10/1/39 (FSA)	$	55,000	$	59,371
California State 5.00% 2/1/33		20,000		20,836
California State University Systemwide Revenue 5.00% 11/1/30 (AMBAC)		20,000		21,252
Colorado Department of Transportation Revenue 5.00% 12/15/12 (FGIC)		70,000		75,000
Illinois State Taxable Pension 5.10% 6/1/33		30,000		28,776
New Jersey Economic Development Authority Revenue Cigarette Tax 5.75% 6/15/29		40,000		43,318
New York State Urban Development Series A-1 5.25% 3/15/34 (FGIC)		35,000		37,629
Oregon State Taxable Pension 5.892% 6/1/27		35,000		36,713
West Virginia Economic Development Authority 5.37% 7/1/20 (MBIA)		15,000		14,959
Total Municipal Bonds (cost $329,637)				337,854
NON-AGENCY ASSET-BACKED SECURITIES–2.46%
Countrywide Asset-Backed Certificates Series 2004-S1 A2 3.872% 3/25/20		15,841		15,608
• Series 2006-3 2A2 5.53% 6/25/36		105,000		105,172
Series 2006-S3 A2 6.085% 6/25/21		40,000		40,359
• Series 2006-S6 A2 5.519% 3/25/34		40,000		39,881
• Series 2006-S7 A3 5.712% 11/25/35		75,000		74,821
• Series 2006-S9 A3 5.728% 8/25/36		35,000		34,786
• GMAC Mortgage Corporation Loan Trust Series 2006-HE3 A2 5.75% 10/25/36		25,000		24,993
GSAMP Series 2006-S3 A1 6.085% 5/25/36		15,162		15,129
•# MASTR Specialized Loan Trust Series 2005-2 A2 144A 5.006% 7/25/35		26,141		25,651
• Merrill Lynch Mortgage Investors Series 2005-NCB A1A 5.451% 7/25/36		6,343		6,317
Series 2006-AR1 A2C 5.51% 3/25/37		75,000		75,026
Mid-State Trust Series 11 A1 4.864% 7/15/38		18,944		18,222
Series 2004-1 A 6.005% 8/15/37		10,241		10,400
# Series 2006-1 A 144A 5.787% 10/15/40		24,247		24,254
• Option One Mortgage Loan Trust Series 2005-4 A3 5.61% 11/25/35		100,000		100,252
Renaissance Home Equity Loan Trust Series 2004-4 AF2 3.856% 2/25/35		37		37
Series 2005-4 A2 5.399% 2/25/36		35,000		34,833
• Residential Asset Securities Series 2006-KS3 AI3 5.52% 4/25/36		105,000		105,168
Structured Asset Securities Series 2001-SB1 A2 3.375% 8/25/31		32,618		29,305
Series 2004-16XS A2 4.91% 8/25/34		26,053		25,930

	Principal Amount (U.S. $)		Market Value (U.S. $)
NON-AGENCY ASSET-BACKED SECURITIES (continued)
Triad Auto Receivables Owner Trust Series 2006-C A4 5.31% 5/13/13	$	40,000	$	40,144
UPFC Auto Receivables Trust Series 2006-B A3 5.01% 8/15/12		30,000		29,933
Total Non-Agency Asset-Backed Securities (cost $878,565)				876,221
NON-AGENCY COLLATERALIZED MORTGAGE OBLIGATIONS–8.47%
American Home Mortgage Investment Trust Series 2005-2 5A1 5.064% 9/25/35		35,000		34,009
Bank of America Alternative Loan Trust Series 2003-10 2A1 6.00% 12/25/33		66,478		66,624
Series 2004-2 1A1 6.00% 3/25/34		36,810		36,891
Series 2005-3 2A1 5.50% 4/25/20		38,414		38,246
Series 2005-5 2CB1 6.00% 6/25/35		41,111		41,188	��
Series 2005-9 5A1 5.50% 10/25/20		25,449		25,306
• Bank of America Funding Securities Series 2006-F 1A2 5.172% 7/20/36		46,822		46,477
Bank of America Mortgage Securities
• Series 2003-D 1A2 6.114% 5/25/33		1,041		1,049
Series 2005-9 2A1 4.75% 10/25/20		44,530		43,574
• Bear Stearns Alternative A Trust Series 2006-3 33A1 6.189% 5/25/36		50,092		50,669
Series 2006-3 34A1 6.186% 5/25/36		51,109		51,697
Series 2006-4 23A5 6.242% 8/25/36		40,335		40,889
Chase Mortgage Finance Series 2003-S8 A2 5.00% 9/25/18		79,516		78,274
Countrywide Alternative Loan Trust Series 2004-28CB 6A1 6.00% 1/25/35		18,047		18,075
• Series 2004-J7 1A2 4.673% 8/25/34		19,493		19,337
• Series 2005-63 3A1 5.895% 11/25/35		50,151		50,164
Series 2006-2CB A3 5.50% 3/25/36		38,811		38,878
Series 2006-33CB M 6.00% 11/25/36		24,965		24,682
t Countrywide Home Loan Mortgage Pass Through Trust
• Series 2004-12 1M 4.564% 8/25/34		34,484		34,188
Series 2005-23 A1 5.50% 11/25/35		70,752		69,271
Series 2006-1 A2 6.00% 3/25/36		39,933		39,937
• Series 2006-HYB3 3A1A 6.113% 5/20/36		50,067		50,564
• Series 2006-HYB4 1A2 5.711% 6/20/36		38,131		38,298
Credit Suisse First Boston Mortgage Securities Series 2003-29 5A1 7.00% 12/25/33		15,131		15,415
Series 2004-1 3A1 7.00% 2/25/34		10,269		10,461
First Horizon Asset Securities Series 2003-5 1A17 8.00% 7/25/33		17,451		18,453
• Series 2004-AR5 4A1 5.682% 10/25/34		33,194		33,017
• GMAC Mortgage Loan Trust Series 2005-AR2 4A 5.188% 5/25/35		40,812		40,037
# GSMPS Mortgage Loan Trust 144A Series 1998-3 A 7.75% 9/19/27		31,719		33,254
Series 2005-RP1 1A3 8.00% 1/25/35		24,516		25,946
Series 2005-RP1 1A4 8.50% 1/25/35		14,230		15,195

Balanced Series- 9

Delaware VIP Balanced Series
Statement of Net Assets (continued)

	Principal Amount (U.S. $)		Market Value (U.S. $)
NON-AGENCY COLLATERALIZED MORTGAGE OBLIGATIONS (continued)
• Indymac Index Mortgage Loan Trust Series 2005-AR25 1A21 5.877% 12/25/35	$	42,268	$	42,300
Series 2006-AR2 1A1A 5.57% 4/25/46		61,093		61,141
• JPMorgan Mortgage Trust Series 2005-A4 1A1 5.406% 7/25/35		49,282		48,651
Series 2005-A6 1A2 5.152% 9/25/35		60,000		60,106
Lehman Mortgage Trust Series 2005-2 2A3 5.50% 12/25/35		40,758		40,729
Series 2006-1 3A3 5.50% 2/25/36		40,000		40,065
• MASTR Adjustable Rate Mortgages Trust Series 2003-6 1A2 5.883% 12/25/33		26,502		26,830
Series 2005-1 B1 5.346% 3/25/35		39,682		39,292
Series 2005-6 7A1 5.375% 6/25/35		29,730		29,313
MASTR Alternative Loans Trust Series 2003-6 3A1 8.00% 9/25/33		7,345		7,523
Series 2005-3 7A1 6.00% 4/25/35		45,228		45,245
# MASTR Reperforming Loan Trust 144A Series 2005-1 1A5 8.00% 8/25/34		38,128		40,253
Series 2005-2 1A4 8.00% 5/25/35		17,153		18,081
Morgan Stanley Mortgage Loan Trust Series 2006-2 6A 6.50% 2/25/36		23,039		23,370
Nomura Asset Acceptance Series 2005-WF1 2A2 4.786% 3/25/35		65,000		63,994
• Series 2006-AF1 1A2 6.159% 5/25/36		60,000		60,579
Prime Mortgage Trust Series 2004-CL1 1A1 6.00% 2/25/34		18,820		18,943
Residential Accredit Loans Series 2005-QS9 A6 5.50% 6/25/35		25,000		24,219
Residential Asset Mortgage Products Series 2004-SL1 A3 7.00% 11/25/31		16,729		16,986
Series 2004-SL4 A3 6.50% 7/25/32		28,572		29,043
Series 2005-SL1 A2 6.00% 5/25/32		31,928		32,629
• Residential Funding Mortgage Security I Series 2006-SA3 3A1 6.067% 9/25/36		46,483		46,816
• Structured Adjustable Rate Mortgage Loan Trust Series 2004-18 5A 5.50% 12/25/34		37,607		37,208
Series 2005-3XS A2 5.60% 1/25/35		33,926		33,954
Series 2006-5 5A4 5.582% 6/25/36		28,749		28,390
Structured Asset Securities
• Series 2002-22H 1A 6.96% 11/25/32		11,350		11,544
Series 2004-12H 1A 6.00% 5/25/34		39,720		39,795
Washington Mutual Series 2004-CB3 4A 6.00% 10/25/19		64,073		64,695
• Series 2006-AR7 1A 5.807% 7/25/46		26,607		26,612
• Series 2006-AR8 2A3 6.16% 8/25/36		22,243		22,468
• Series 2006-AR10 1A1 5.97% 9/25/36		45,732		46,126
• Series 2006-AR14 1A4 5.666% 11/25/36		33,459		33,515

	Principal Amount (U.S. $)		Market Value (U.S. $)
NON-AGENCY COLLATERALIZED MORTGAGE OBLIGATIONS (continued)
Washington Mutual Alternative Mortgage Pass Through Certificates Series 2005-6 3CB 5.50% 8/25/35	$	45,336	$	44,415
Series 2005-9 3CB 5.50% 10/25/20		52,890		52,665
Series 2006-2 2CB 6.50% 3/25/36		34,272		34,711
Series 2006-5 2CB3 6.00% 7/25/36		47,105		47,599
Series 2006-5 LB1 6.00% 7/25/36		24,882		24,688
• Series 2006-AR5 3A 5.767% 7/25/46		29,013		29,086
Wells Fargo Mortgage Backed Securities Trust
• Series 2004-T A1 4.382% 9/25/34		29,262		29,284
Series 2005-14 2A1 5.50% 12/25/35		66,087		64,703
Series 2005-17 1A1 5.50% 1/25/36		52,406		51,309
Series 2006-2 3A1 5.75% 3/25/36		52,965		52,436
Series 2006-7 2A1 6.00% 6/25/36		84,740		84,371
• Series 2006-AR4 1A1 5.865% 4/25/36		70,254		70,187
• Series 2006-AR4 2A1 5.787% 4/25/36		102,969		102,457
• Series 2006-AR10 5A1 5.605% 7/25/36		41,845		41,885
Total Non-Agency Collateralized Mortgage Obligations (cost $3,027,856)				3,020,276
U.S. TREASURY OBLIGATIONS–3.18%
* U.S. Treasury Bonds 4.50% 2/15/36		205,000		195,006
U.S. Treasury Inflation Index Notes 2.00% 1/15/26		45,761		43,052
2.375% 4/15/11		86,434		86,117
2.50% 7/15/16		304,823		307,229
m* 3.00% 7/15/12		101,030		104,002
* U.S. Treasury Notes 4.50% 11/30/11		30,000		29,742
4.625% 11/15/09		35,000		34,902
4.625% 10/31/11		220,000		219,270
4.875% 10/31/08		30,000		30,023
*^ U.S. Treasury Strip 4.293% 11/15/13		115,000		83,681
Total U.S. Treasury Obligations (cost $1,136,937)				1,133,024
REPURCHASE AGREEMENTS–5.49%
With BNP Paribas 4.80% 1/2/07 (dated 12/29/06, to be repurchased at $743,396, collateralized by $777,000 U.S. Treasury Bills due 6/28/07, market value $758,787)		743,000		743,000
With Cantor Fitzgerald 4.82% 1/2/07 (dated 12/29/06, to be repurchased at $893,478, collateralized by $77,000 U.S. Treasury Notes 4.00% due 6/15/09, market value $75,915, $478,000 U.S. Treasury Notes 6.125% due 8/15/07, market value $492,636 and $319,000 U.S. Treasury Notes 6.50% due 2/15/10, market value $343,030)		893,000		893,000

Balanced Series- 10

Delaware VIP Balanced Series
Statement of Net Assets (continued)

	Principal Amount (U.S. $)		Market Value (U.S. $)
REPURCHASE AGREEMENTS (continued)
With UBS Warburg 4.75% 1/2/07 (dated 12/29/06, to be repurchased at $319,168, collateralized by $329,000 U.S. Treasury Bills due 3/29/07, market value $325,559)	$	319,000	$	319,000
Total Repurchase Agreements (cost $1,955,000)				1,955,000
Total Market Value of Securities Before Securities Lending Collateral–103.55% (cost $32,955,671)				36,897,038
SECURITY LENDING COLLATERAL**–6.57%
Short-Term Investments–6.57%
Fixed Rate Note–1.24%
Citigroup Global Markets 5.32% 1/2/07		443,300		443,300
				443,300
• Variable Rate Notes–5.33%
American Honda Finance 5.32% 2/21/07		57,326		57,326
ANZ National 5.35% 1/29/08		12,739		12,739
Australia New Zealand 5.35% 1/29/08		63,696		63,696
Bank of America 5.32% 2/23/07		82,805		82,805
Bank of New York 5.34% 1/29/08		50,957		50,957
Barclays New York 5.31% 5/18/07		82,805		82,805

	Principal Amount (U.S. $)		Market Value (U.S. $)
SECURITY LENDING COLLATERAL (continued)
Short-Term Investments (continued)
• Variable Rate Notes (continued)
Bayerische Landesbank 5.40% 1/29/08	$	63,696	$	63,696
Bear Stearns 5.41% 6/29/07		76,435		76,435
BNP Paribas 5.35% 1/29/08		63,696		63,696
Canadian Imperial Bank 5.33% 1/29/09		44,587		44,587
CDC Financial 5.36% 1/29/07		82,805		82,805
Citigroup Global Markets 5.38% 1/5/07		82,805		82,805
Commonwealth Bank 5.35% 1/29/08		63,696		63,696
Deutsche Bank 5.34% 2/23/07		76,435		76,435
Dexia Bank 5.33% 9/28/07		89,174		89,161
Goldman Sachs 5.45% 12/28/07		82,805		82,805
Marshall & Ilsley Bank 5.33% 1/29/08		70,065		70,065
Merrill Lynch Mortgage Capital 5.41% 1/8/07		82,805		82,805
Morgan Stanley 5.49% 1/29/08		82,805		82,805
National Australia Bank 5.32% 3/7/07		78,983		78,983
National City Bank 5.32% 3/2/07		76,437		76,439
National Rural Utilities 5.34% 1/29/08		100,639		100,639
Nordea Bank New York 5.31% 5/16/07		31,848		31,847
Nordea Bank Norge 5.36% 1/29/08		63,696		63,696
Royal Bank of Scotland 5.34% 1/29/08		63,696		63,696
Societe Generale 5.32% 1/29/08		31,848		31,848
Toronto Dominion 5.32% 5/29/07		76,435		76,435
Wells Fargo 5.36% 1/29/08		63,696		63,696
				1,899,403
Total Securities Lending Collateral (cost $2,342,703)				2,342,703

Balanced Series- 11

Delaware VIP Balanced Series
Statement of Net Assets (continued)

TOTAL MARKET VALUE OF SECURITIES–110.12% (cost $35,298,374)	$	39,239,741	v
OBLIGATION TO RETURN SECURITIES LENDING COLLATERAL**–(6.57%)		(2,342,703	)
LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS–(3.55%)		(1,264,585	)
NET ASSETS APPLICABLE TO 2,335,350 SHARES OUTSTANDING–100.00%	$	35,632,453
NET ASSET VALUE-DELAWARE VIP BALANCED SERIES STANDARD CLASS ($35,626,540 / 2,334,962 Shares)	$	15.26
NET ASSET VALUE-DELAWARE VIP BALANCED SERIES SERVICE CLASS ($5,913 / 388 Shares)	$	15.24
COMPONENTS OF NET ASSETS AT DECEMBER 31, 2006:
Shares of beneficial interest (unlimited authorization–no par)	$	50,468,348
Undistributed net investment income		1,093,355
Accumulated net realized loss on investments		(19,871,505	)
Net unrealized appreciation of investments		3,942,255
Total net assets	$	35,632,453

  *  Fully or partially on loan.

  **  See Note 10 in "Notes to Financial Statements."

v  Includes $2,389,755 of securities loaned.

  †  Non-income producing security for the year ended December 31, 2006.

  •  Variable rate security. The interest rate shown is the rate as of December 31, 2006.

t  Pass Through Agreement. Security represents the contractual right to receive a proportionate amount of underlying payments due to the counterparty pursuant to various agreements related to the rescheduling of obligations and the exchange of certain notes.

  ^  Zero coupon security. The interest rate shown is the yield at the time of purchase.

  ‡  Non-income producing security. Security is currently in default.

n  Security is currently in default. The issue has missed the maturity date. Bankruptcy proceedings are in process to determine distribution of assets. The date listed is the estimate of when proceedings will be finalized.

o  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.

m  Fully or partially pledged as collateral for financial futures contracts.

  #  Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At December 31, 2006, the aggregate amount of Rule 144A securities equaled $983,914, which represented 2.76% of the Series' net assets. See Note 11 in "Notes to Financial Statements."

Summary of Abbreviations:

AMBAC – Insured by the AMBAC Assurance Corporation

ARM – Adjustable Rate Mortgage

FGIC – Insured by the Financial Guaranty Insurance Company

FSA – Insured by Financial Security Assurance

GNMA – Government National Mortgage Association

GSMPS – Goldman Sachs Reperforming Mortgage Securities

MBIA – Insured by the Municipal Bond Insurance Association

PIK – Pay-in-kind

REIT – Real Estate Investment Trust

S.F. – Single Family

TBA – To be announced

yr – Year

The following financial futures contracts and swap contracts were outstanding at December 31, 2006:

Futures Contracts¹

Contracts to Buy			Notional Cost		Notional Value		Expiration Date	Unrealized Depreciation
	3	U.S. Treasury 5 year Notes	$	317,923	$	315,188	3/31/07	$	(2,735	)
	1	U.S. Treasury Long Bond		113,607		111,438	3/31/07		(2,169	)
								$	(4,904	)

Swap Contracts²

Notional Amount		Expiration Date		Description	Unrealized Appreciation
$	405,000		2/1/07	Agreement with Goldman Sachs to receive the notional amount multiplied by the return on the Lehman Brothers Commercial MBS Index AAA and to pay the notional amount multiplied by the 1 month BBA LIBOR adjusted by a spread of plus 0.05%.	$	5,792

The use of financial futures contracts and swap contracts involves elements of market risk and risks in excess of the amount recognized in the financial statements. The notional amounts presented above represent the Series' total exposure in such contracts, whereas only the net unrealized appreciation (depreciation) is reflected in the Series' net assets.

¹See Note 8 in "Notes to Financial Statements."

²See Note 9 in "Notes to Financial Statements."

See accompanying notes

Balanced Series- 12

Delaware VIP Trust — Delaware VIP Balanced Series
Statement of Operations

Year Ended December 31, 2006

Delaware VIP Trust — Delaware VIP Balanced Series
Statements of Changes in Net Assets

INVESTMENT INCOME:
Interest	$	725,314
Dividends		609,208
Securities lending income		4,538
		1,339,060
EXPENSES:
Management fees		235,990
Accounting and administration expenses		14,523
Audit and tax		12,124
Pricing fees		10,828
Reports and statements to shareholders		8,893
Custodian fees		8,343
Trustees' fees and benefits		6,404
Dividend disbursing and transfer agent fees and expenses		3,631
Legal fees		3,230
Dues and services		1,164
Insurance fees		1,082
Consulting fees		480
Taxes (other than taxes on income)		239
Trustees' expenses		185
Registration fees		52
Distribution expenses – Service Class		16
Other		22
		307,206
Less expenses absorbed or waived		(11,104	)
Less waiver of distribution expenses – Service Class		(3	)
Less expense paid indirectly		(2,113	)
Total operating expenses		293,986
NET INVESTMENT INCOME		1,045,074
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on:
Investments		1,181,617
Futures contracts		13,452
Swap contracts		(8,985	)
Net realized gain		1,186,084
Net change in unrealized appreciation/depreciation of investments		3,149,987
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS		4,336,071
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	5,381,145

See accompanying notes

	Year Ended
	12/31/06			12/31/05
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income	$	1,045,074		$	1,063,172
Net realized gain on investments		1,186,084			3,661,335
Net change in unrealized appreciation/ depreciation of investments		3,149,987			(3,243,861	)
Net increase in net assets resulting from operations		5,381,145			1,480,646
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Standard Class		(1,122,023	)		(993,690	)
Service Class		(144	)		(102	)
		(1,122,167	)		(993,792	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Standard Class		35,103,629			672,726
Net asset value of shares issued upon reinvestment of dividends and distributions:
Standard Class		1,122,023			993,690
Service Class		144			102
		36,225,796			1,666,518
Cost of shares repurchased:
Standard Class		(43,084,571	)		(9,333,352	)
Decrease in net assets derived from capital share transactions		(6,858,775	)		(7,666,834	)
NET DECREASE IN NET ASSETS		(2,599,797	)		(7,179,980	)
NET ASSETS:
Beginning of year		38,232,250			45,412,230
End of year (including undistributed net investment income of $1,093,355 and $1,113,970, respectively)	$	35,632,453		$	38,232,250

See accompanying notes

Balanced Series-13

Delaware VIP Trust — Delaware VIP Balanced Series
Financial Highlights

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

	Delaware VIP Balanced Series Standard Class
	Year Ended
	12/31/06			12/31/05			12/31/04			12/31/03			12/31/02
Net asset value, beginning of period	$	13.530		$	13.360		$	12.890		$	11.170		$	13.730
Income (loss) from investment operations:
Net investment income1		0.405			0.341			0.245			0.211			0.258
Net realized and unrealized gain (loss) on investments and foreign currencies		1.739			0.135			0.493			1.872			(2.430	)
Total from investment operations		2.144			0.476			0.738			2.083			(2.172	)
Less dividends and distributions from:
Net investment income		(0.414	)		(0.306	)		(0.268	)		(0.363	)		(0.388	)
Total dividends and distributions		(0.414	)		(0.306	)		(0.268	)		(0.363	)		(0.388	)
Net asset value, end of period	$	15.260		$	13.530		$	13.360		$	12.890		$	11.170
Total return2		16.20	%		3.68	%		5.84	%		19.21	%		(16.27	%)
Ratios and supplemental data:
Net assets, end of period (000 omitted)	$	35,626		$	38,227		$	45,407		$	53,233		$	54,789
Ratio of expenses to average net assets		0.81	%		0.80	%		0.77	%		0.77	%		0.75	%
Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly		0.84	%		0.85	%		0.77	%		0.77	%		0.76	%
Ratio of net investment income to average net assets		2.88	%		2.57	%		1.91	%		1.80	%		2.10	%
Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly		2.85	%		2.52	%		1.91	%		1.80	%		2.09	%
Portfolio turnover		131	%		200	%		247	%		231	%		303	%

¹The average shares outstanding method has been applied for per share information.

²Total 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. Total investment return reflects waivers and payment of fees by the manager, as applicable. Performance would have been lower had the expense limitation not been in effect.

See accompanying notes

Balanced Series- 14

Delaware VIP Balanced Series
Financial Highlights (continued)

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

	Delaware VIP Balanced Series Service Class
	Year Ended
	12/31/06			12/31/05			12/31/04			12/31/03			12/31/02
Net asset value, beginning of period	$	13.520		$	13.340		$	12.880		$	11.170		$	13.720
Income (loss) from investment operations:
Net investment income1		0.371			0.310			0.214			0.186			0.238
Net realized and unrealized gain (loss) on investments and foreign currencies		1.732			0.145			0.488			1.867			(2.421	)
Total from investment operations		2.103			0.455			0.702			2.053			(2.183	)
Less dividends and distributions from:
Net investment income		(0.383	)		(0.275	)		(0.242	)		(0.343	)		(0.367	)
Total dividends and distributions		(0.383	)		(0.275	)		(0.242	)		(0.343	)		(0.367	)
Net asset value, end of period	$	15.240		$	13.520		$	13.340		$	12.880		$	11.170
Total return2		15.88	%		3.51	%		5.55	%		18.90	%		(16.40	%)
Ratios and supplemental data:
Net assets, end of period (000 omitted)	$	6		$	5		$	5		$	5		$	4
Ratio of expenses to average net assets		1.06	%		1.05	%		1.02	%		0.99	%		0.90	%
Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly		1.14	%		1.15	%		1.07	%		1.02	%		0.91	%
Ratio of net investment income to average net assets		2.63	%		2.32	%		1.66	%		1.58	%		1.95	%
Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly		2.55	%		2.22	%		1.61	%		1.55	%		1.94	%
Portfolio turnover		131	%		200	%		247	%		231	%		303	%

¹The average shares outstanding method has been applied for per share information.

²Total 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. Total investment return reflects waivers and payment of fees by the manager and distributor, as applicable. Performance would have been lower had the expense limitation not been in effect.

See accompanying notes

Balanced Series- 15

Delaware VIP Trust — Delaware VIP Balanced Series
Notes to Financial Statements

December 31, 2006

Delaware VIP Trust (the "Trust") is organized as a Delaware statutory trust and offers 15 series: Delaware VIP Balanced Series, Delaware VIP Capital Reserves Series, Delaware VIP Cash Reserve Series, Delaware VIP Diversified Income Series, Delaware VIP Emerging Markets Series, Delaware VIP Global Bond Series, Delaware VIP Growth Opportunities Series, Delaware VIP High Yield Series, Delaware VIP International Value Equity Series, Delaware VIP REIT Series, Delaware VIP Select Growth Series, Delaware VIP Small Cap Value Series, Delaware VIP Trend Series, Delaware VIP U.S. Growth Series and Delaware VIP Value Series. These financial statements and the related notes pertain to Delaware VIP Balanced Series (the "Series"). The Trust is an open-end investment company. The Series is considered diversified under the Investment Company Act of 1940, as amended, and offers Standard Class and Service Class shares. The Standard Class shares do not carry a 12b-1 fee and the Service Class shares carry a 12b-1 fee. The shares of the Series are sold only to separate accounts of life insurance companies.

The investment objective of the Series is to seek a balance of capital appreciation, income and preservation of capital.

1. Significant Accounting Policies

The following accounting policies are in accordance with U.S. generally accepted accounting principles and are consistently followed by the Series.

Security Valuation—Equity securities, except those traded on the Nasdaq Stock Market, Inc. (Nasdaq), are valued at the last quoted sales price as of the time of the regular close of the New York Stock Exchange (NYSE) on the valuation date. Securities traded on the Nasdaq are valued in accordance with the Nasdaq Official Closing Price, which may not be the last sales price. If on a particular day an equity security does not trade, then the mean between the bid and asked prices will be used. U.S. government and agency securities are valued at the mean between the bid and asked prices. Other long-term debt securities are valued by an independent pricing service and such prices are believed to reflect the fair value of such securities. Short-term debt securities having less than 60 days to maturity are valued at amortized cost, which approximates market value. Se curities lending collateral is valued at amortized cost, which approximates market value. Futures contracts and options on futures contracts are valued at the daily quoted settlement prices. Exchange-traded options are valued at the last reported sale price or, if no sales are reported, at the mean between the last reported bid and asked prices. Swap contracts and 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 the Series' Board of Trustees. 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 with respect to foreign securities, aftermarket trading, or significant events after local market trading (e.g., government actions or pronouncements, trading volume or volatility on markets, exchanges among dealers, or news events).

In September 2006, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 157 "Fair Value Measurements" (Statement 157). Statement 157 establishes a framework for measuring fair value in generally accepted accounting principles, clarifies the definition of fair value within that framework, and expands disclosures about the use of fair value measurements. Statement 157 is intended to increase consistency and comparability among fair value estimates used in financial reporting. Statement 157 is effective for fiscal years beginning after November 15, 2007. Management does not expect the adoption of Statement 157 to have an impact on the amounts reported in the financial statements.

Federal Income Taxes—The Series intends to continue to qualify for federal income tax purposes as a regulated investment company and make the requisite distributions to shareholders. Accordingly, no provision for federal income taxes has been made in the financial statements.

On July 13, 2006, FASB released FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Series' 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 would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. Recent SEC guidance allows implementing FIN 48 in Series net asset value calculations as late as the Series' last net asset value calculation in the first required fi nancial statement reporting period. As a result, the Series will incorporate FIN 48 in its semiannual report on June 30, 2007. Although the Series' tax positions are currently being evaluated, management does not expect the adoption of FIN 48 to have a material impact on the Series' financial statements.

Class Accounting—Investment income, common expenses and realized and unrealized gain (loss) on investments are allocated to the classes of the Series on the basis of daily net assets of each class. Distribution expenses relating to a specific class are charged directly to that class.

Repurchase Agreements—The Series may invest in a pooled cash account along with other members of the Delaware Investments^® Family of Funds pursuant to an exemptive order issued by the Securities and Exchange Commission. The aggregate daily balance of the pooled cash account is invested in repurchase agreements secured by obligations of the U.S. government. The respective collateral is held by the Series' custodian bank until the maturity of the respective repurchase agreements. Each repurchase agreement is at least 102% collateralized. However, in the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral may be subject to legal proceedings.

Use of Estimates—The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of 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.

Other—Expenses directly attributable to the Series are charged directly to the Series. 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. Dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis. Discounts and premiums are amortized to interest income over the lives of the respective securities. Realized gains (losses) on paydowns of mortgage- and asset-backed securiti es are classified as interest income.

Balanced Series- 16

Delaware VIP Balanced Series
Notes to Financial Statements (continued)

1. Significant Accounting Policies (continued)

The Series declares and pays dividends from net investment income and distributions from net realized gain on investments, if any, following the close of the fiscal year.

Subject to seeking best execution, the Series may direct certain security trades to brokers who have agreed to rebate a portion of the related brokerage commission to the Series in cash. There were no commission rebates during the year ended December 31, 2006. In general, best execution refers to many factors, including the price paid or received for a security, the commission charged, the promptness and reliability of execution, the confidentiality and placement accorded the order, and other factors affecting the overall benefit obtained by the Series on the transaction.

The Series receives earnings credits from its custodian when positive cash balances are maintained, which are used to offset custody fees. The expense paid under this arrangement is included in custodian fees on the Statement of Operations with the corresponding expense offset shown as "expense paid indirectly."

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

In accordance with the terms of its investment management agreement, the Series pays Delaware Management Company (DMC), a series of Delaware Management Business Trust and the investment manager, an annual fee which is calculated daily at the rate of 0.65% on the first $500 million of average daily net assets of the Series, 0.60% on the next $500 million, 0.55% on the next $1.5 billion, and 0.50% on average daily net assets in excess of $2.5 billion.

DMC has contractually agreed to waive that portion, if any, of its management fee and reimburse the Series to the extent necessary to ensure that annual operating expenses, exclusive of taxes, interest, brokerage commissions, distribution fees, certain insurance costs and extraordinary expenses, do not exceed 0.80% of average daily net assets of the Series through April 30, 2007.

Delaware Service Company, Inc. (DSC), an affiliate of DMC, provides accounting, administration, dividend disbursing and transfer agent services. The Series pays DSC a monthly fee computed at the annual rate of 0.04% of the Series' average daily net assets for accounting and administrative services. The Series pays DSC a monthly fee based on average net assets for dividend disbursing and transfer agent services.

Pursuant to a distribution agreement and distribution plan, the Series pays Delaware Distributors, L.P. (DDLP), the distributor and an affiliate of DMC, an annual distribution and service fee not to exceed 0.30% of the average daily net assets of the Service Class shares. DDLP has contracted to waive distribution and service fees through April 30, 2007 in order to prevent distribution and service fees of the Service Class shares from exceeding 0.25% of average daily net assets. Standard Class shares pay no distribution and service expenses.

At December 31, 2006, the Series had liabilities payable to affiliates as follows:

Investment Management Fee Payable to DMC		Dividend Disbursing, Transfer Agent, Accounting and Administration Fees and Other Expenses Payable to DSC		Distribution Fee Payable To DDLP		Other Expenses Payable to DMC and Affiliates*
$	18,654	$	1,702	$	1	$	2,236

*DMC, as part of its administrative services, pays operating expenses on behalf of the Series and is reimbursed on a periodic basis. Such expenses include items such as printing of shareholder reports, fees for audit, legal and tax services, custodian fees and trustees' fees.

As provided in the investment management agreement, the Series bears the cost of certain legal and tax services, including internal legal and tax services provided to the Series by DMC and/or its affiliates' employees. For the year ended December 31, 2006, the Series was charged $1,710 for internal legal and tax services provided by DMC and/or its affiliates' employees.

Trustees' fees and benefits include expenses accrued by the Series for each Trustee's retainer, per meeting fees and retirement benefits. Independent Trustees with over five years of uninterrupted service are eligible to participate in a retirement plan that provides for the payment of benefits upon retirement. The amount of the retirement benefit is based on factors set forth in the plan, including the number of years of service. On November 16, 2006, the Board of Trustees unanimously voted to terminate the retirement plan. Payments equal to the net present value of the earned benefits will be made in 2007 to those independent trustees so entitled. The retirement benefit payout for the Series is $4,392. Certain officers of DMC, DSC and DDLP are officers and/or trustees of the Trust. These officers and trustees are paid no compensation by the Series.

Balanced Series- 17

Delaware VIP Balanced Series
Notes to Financial Statements (continued)

3. Investments

For the year ended December 31, 2006, the Series made purchases and sales of investment securities other than short-term investments as follows:

Purchases other than U.S. government securities	$	36,420,339
Purchases of U.S. government securities		11,064,032
Sales other than U.S. government securities		43,632,479
Sales of U.S. government securities		11,348,001

At December 31, 2006, the cost of investments for federal income tax purposes and unrealized appreciation (depreciation) for the Series were as follows:

Cost of Investments		Aggregate Unrealized Appreciation		Aggregate Unrealized Depreciation			Net Unrealized Appreciation
$	35,347,853	$	4,027,820	$	(135,932	)	$	3,891,888

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. generally accepted accounting principles. Additionally, 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 December 31, 2006 and 2005 was as follows:

	Year Ended 12/31/06		Year Ended 12/31/05
Ordinary income	$	1,122,167	$	993,792

5. Components of Net Assets on a Tax Basis

As of December 31, 2006, the components of net assets on a tax basis were as follows:

Shares of beneficial interest	$	50,468,348
Undistributed ordinary income		1,093,483
Capital loss carryforwards		(19,827,058	)
Unrealized appreciation of investments and swap contracts		3,897,680
Net assets	$	35,632,453

The differences between book basis and tax basis components of net assets are primarily attributable to tax deferral of losses on wash sales, mark-to-market of futures contracts, tax treatment of market discount and premium on debt instruments, interest accrual on defaulted bonds, and contingent payment debt instruments.

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 gain (loss) on paydowns of mortgage- and asset-backed securities, contingent payment debt instruments, and market discount and premium on certain debt instruments. Results of operations and net assets were not affected by these reclassifications. For the year ended December 31, 2006, the Series recorded the following reclassifications:

Undistributed Net Investment Income		Accumulated Net Realized Gain (Loss)
$	56,478	$	(56,478	)

For federal income tax purposes, capital loss carryforwards may be carried forward and applied against future capital gains. $1,082,898 was utilized in 2006. Capital loss carryforwards remaining at December 31, 2006 will expire as follows: $1,748,728 expires in 2008, $8,028,969 expires in 2009, $9,576,012 expires in 2010 and $473,349 expires in 2011.

Balanced Series- 18

Delaware VIP Balanced Series
Notes to Financial Statements (continued)

6. Capital Shares

Transactions in capital shares were as follows:

	Year Ended 12/31/06			Year Ended 12/31/05
Shares sold:
Standard Class		2,599,584			51,036
Shares issued upon reinvestment of dividends and distributions:
Standard Class		82,019			77,210
Service Class		10			8
		2,681,613			128,254
Shares repurchased:
Standard Class		(3,171,452	)		(703,125	)
Net decrease		(489,839	)		(574,871	)

7. Line of Credit

The Series, along with certain other funds in the Delaware Investments^® Family of Funds (the "Participants"), participates in a $225,000,000 revolving line of credit facility to be used for temporary or emergency purposes as an additional source of liquidity to fund redemptions of investor shares. The Participants are charged an annual commitment fee, which is allocated across the Participants on the basis of each Participant's allocation of the entire facility. The Participants may borrow up to a maximum of one third of their net assets under the agreement. The Series had no amounts outstanding as of December 31, 2006, or at any time during the year then ended.

8. Futures Contracts

The Series may invest in financial futures contracts to hedge its existing portfolio securities against fluctuations in value caused by changes in prevailing market interest rates. Upon entering into a futures contract, the Series deposits cash or pledges U.S. government securities to a broker, equal to the minimum "initial margin" requirements of the exchange on which the contract is traded. Subsequent payments are received from the broker or paid to the broker each day, based on the daily fluctuation in the market value of the contract. These receipts or payments are known as "variation margin" and are recorded daily by the Series as unrealized gains or losses until the contracts are closed. When the contracts are closed, the Series records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Risks of entering into futures contracts include pote ntial imperfect correlation between the futures contracts and the underlying securities and the possibility of an illiquid secondary market for these instruments. The unrealized gain (loss) is included in liabilities net of receivables and other assets on the Statement of Net Assets.

9. Swap Contracts

The Series may enter into total return swap contracts in accordance with its investment objectives. A swap is a contract to exchange the return generated by one instrument for the return generated by another instrument. Total return swaps involve commitments to pay interest in exchange for a market linked return based on a notional amount. To the extent the total return of the security, instrument or basket of instruments underlying the transaction exceeds the offsetting interest obligation, the Series will receive a payment from the counterparty. To the extent the total return of the security, instrument or basket of instruments underlying the transaction falls short of the offsetting interest obligation, the Series will make a payment to the counterparty. The change in value of swap contracts outstanding, if any, is recorded as unrealized appreciation or depreciation daily. A realized gain or loss is recorded on maturity or termination of the swap contract.

Because there is no organized market for these swap contracts, the value of open swaps may differ from that which would be realized in the event the Series terminated its position in the contract. Risks of entering into these contracts include the potential inability of the counterparty to meet the terms of the contracts. This type of risk is generally limited to the amount of favorable movements in the value of the underlying security, instrument, or basket of instruments, if any, at the day of default. Risks also arise from potential losses from adverse market movements and such losses could exceed the related unrealized amounts shown on the Statement of Net Assets.

Balanced Series- 19

Delaware VIP Balanced Series
Notes to Financial Statements (continued)

10. Securities Lending

The Series, along with other funds in the Delaware Investments^® Family of Funds, may lend its securities pursuant to a security lending agreement (Lending Agreement) with JPMorgan Chase. Initial security loans made pursuant to the Lending Agreement are required to be secured by U.S. government obligations and/or cash collateral not less than 102% of the market value of the securities issued in the United States. With respect to each loan, if the aggregate market value of the collateral held on any business day is less than the aggregate market value of the securities which are the subject of such loan, the borrower will be notified to provide additional collateral not less than the applicable collateral requirements. Cash collateral received is invested in fixed income securities, with a weighted average maturity not to exceed 90 days, rated in one of the top two tiers by Standard & Poor's Ratings Group or Moody's Investor s Service, Inc. or repurchase agreements collateralized by such securities. However, in the event of default or bankruptcy by the lending agent, realization and/or retention of the collateral may be subject to legal proceedings. In the event the borrower fails to return loaned securities and the collateral received is insufficient to cover the value of the loaned securities and provided such collateral shortfall is not the result of investment losses, the lending agent has agreed to pay the amount of the shortfall to the Series, or at the discretion of the lending agent, replace the loaned securities. The Series continues to record dividends and interest on the securities loaned and is subject to change in value of the securities loaned that may occur during the term of the loan. The Series has the right under the Lending Agreement to recover the securities from the borrower on demand. With respect to security loans collateralized by U.S. Treasury obligations the Series receives a fee from the securities len ding agent. With respect to security loans collateralized by cash collateral, the earnings from the collateral investments are shared among the Series, the security lending agent and the borrower. The Series records securities lending income net of allocations to the security lending agent and the borrower.

At December 31, 2006, the market value of the securities on loan was $2,389,755, for which the Series received collateral, comprised of U.S. government obligations valued at $162,924, and cash collateral of $2,342,703. Investments purchased with cash collateral are presented on the Statement of Net Assets under the caption "Securities Lending Collateral."

11. Credit and Market Risk

The Series invests in fixed-income securities whose value is derived from an underlying pool of mortgages or consumer loans. Investors receive principal and interest payments as the underlying mortgages and consumer loans are paid back. Some of these securities are collateralized mortgage obligations (CMOs). CMOs are debt securities issued by U.S. government agencies or by financial institutions and other mortgage lenders, which are collateralized by a pool of mortgages held under an indenture. Prepayment of mortgages may shorten the stated maturity of the obligations and can result in a loss of premium, if any has been paid. Certain of these securities may be stripped (securities which provide only the principal or interest feature of the underlying security). The yield to maturity on an interest-only CMO is extremely sensitive not only to changes in prevailing interest rates, but also to the rate of principal payments (including prepayment s) on the related underlying mortgage assets. A rapid rate of principal payments may have a material adverse affect on the Series' yield to maturity. If the underlying mortgage assets experience greater than anticipated prepayments of principal, the Series may fail to fully recoup its initial investment in these securities even if the securities are rated in the highest rating categories.

The Series may invest up to 10% of its total 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 the Series 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, the Series' Board of Trustees has delegated to DMC the day-to-day functions of determining whether individual securities are liquid for purposes of the Series' limitation on investments in illiquid assets. At December 31, 2006, no securities have been determined to be illiquid under the Series' Liquidity Procedures. Rule 144A securities have been identified on the Statement of Net Assets.

12. Contractual Obligations

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

Balanced Series- 20

Delaware VIP Balanced Series
Notes to Financial Statements (continued)

13. Tax Information (Unaudited)

For the fiscal year ended December 31, 2006, the Series designates dividends and distributions paid during the year as follows:

(A) Long-Term Capital Gain Distributions (Tax Basis)		(B) Ordinary Income Distributions (Tax Basis)			Total Distributions (Tax Basis)			(C) Qualifying Dividends1
	–		100	%		100	%		50	%

(A) and (B) are based on a percentage of the Series' total distributions.

(C) is based on a percentage of the Series' ordinary income distributions.

¹ Qualifying dividends represent dividends which qualify for the corporate dividends received deduction.

Balanced Series- 21

Delaware VIP Trust — Delaware VIP Balanced Series
Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees
Delaware VIP Trust–Delaware VIP Balanced Series

We have audited the accompanying statement of net assets of the Delaware VIP Balanced Series (one of the series constituting Delaware VIP Trust) (the "Series") as of December 31, 2006, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Series' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits 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 and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Series' internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Series' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant es timates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2006, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Delaware VIP Balanced Series of Delaware VIP Trust at December 31, 2006, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

  

Philadelphia, Pennsylvania

February 14, 2007

The Series files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Series' Forms N-Q, as well as a description of the policies and procedures that the Series uses to determine how to vote proxies (if any) relating to portfolio securities is available without charge (i) upon request, by calling 800-523-1918; (ii) on the Series' website at http://www.delawareinvestments.com; and (iii) on the Commission's website at http://www.sec.gov. The Series' Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Information (if any) regarding how the Series voted proxies relating to portfolio securities during the most recently disclosed 12-month period ended June 30 is available without charge (i) through the Series' website at http://www.delawareinvestments.com; and (ii) on the Commission's website at http://www.sec.gov.

Balanced Series-22

Delaware Investments® Family of Funds

BOARD OF TRUSTEES/DIRECTORS AND OFFICERS ADDENDUM

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 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.

Name, Address, and Birth Date	Position(s) Held with Fund(s)	Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee or Officer		Other Directorships Held by Trustee or Officer
INTERESTED TRUSTEES
Patrick P. Coyne1 2005 Market Street Philadelphia, PA 19103 April 14, 1963	Chairman, President, Chief Executive Officer, and Trustee	Chairman and Trustee since August 16, 2006 President and Chief Executive Officer since August 1, 2006	Patrick P. Coyne has served in various executive capacities at different times at Delaware Investments.2		84	None
INDEPENDENT TRUSTEES
Thomas L. Bennett 2005 Market Street Philadelphia, PA 19103 October 4, 1947	Trustee	Since March 2005	Private Investor – (March 2004 – Present) Investment Manager – Morgan Stanley & Co. (January 1984 – March 2004)		84	None
John A. Fry 2005 Market Street Philadelphia, PA 19103 May 28, 1960	Trustee	Since January 2001	President – Franklin & Marshall College (June 2002 – Present) Executive Vice President – University of Pennsylvania (April 1995 – June 2002)		84	Director – Community Health Systems Director – Allied Barton Security Holdings
Anthony D. Knerr 2005 Market Street Philadelphia, PA 19103 December 7, 1938	Trustee	Since April 1990	Founder and Managing Director – Anthony Knerr & Associates (Strategic Consulting) (1990 – Present)		84	None
Lucinda S. Landreth 2005 Market Street Philadelphia, PA 19103 June 24, 1947	Trustee	Since March 2005	Chief Investment Officer – Assurant, Inc. (Insurance) (2002 – 2004)		84	None
Ann R. Leven 2005 Market Street Philadelphia, PA 19103 November 1, 1940	Trustee	Since September 1989	Consultant – ARL Associates (Financial Planning) (1983 – Present)		84	Director and Audit Committee Chairperson – Andy Warhol Foundation Director and Audit Committee Member – Systemax, Inc.

Balanced Series- 23

Name, Address, and Birth Date	Position(s) Held with Fund(s)	Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee or Officer		Other Directorships Held by Trustee or Officer
INDEPENDENT TRUSTEES (CONTINUED)
Thomas F. Madison 2005 Market Street Philadelphia, PA 19103 February 25, 1936	Trustee	Since May 1997	President and Chief Executive Officer – MLM Partners, Inc. (Small Business Investing and Consulting) (January 1993 – Present)		84	Director – Banner Health Director – CenterPoint Energy Director and Audit Committee Member – Digital River, Inc. Director and Audit Committee Member – Rimage Corporation Director – Valmont Industries, Inc.
Janet L. Yeomans 2005 Market Street Philadelphia, PA 19103 July 31, 1948	Trustee	Since April 1999	Vice President (January 2003 – Present) and Treasurer (January 2006 – Present) 3M Corporation Ms. Yeomans has held various management positions at 3M Corporation since 1983.		84	None
J. Richard Zecher 2005 Market Street Philadelphia, PA 19103 July 3, 1940	Trustee	Since March 2005	Founder – Investor Analytics (Risk Management) (May 1999 – Present) Founder – Sutton Asset Management (Hedge Fund) (September 1998 – Present)		84	Director and Audit Committee Member – Investor Analytics Director and Audit Committee Member – Oxigene, Inc.
OFFICERS
David F. Connor 2005 Market Street Philadelphia, PA 19103 December 2, 1963	Vice President, Deputy General Counsel, and Secretary	Vice President since September 21, 2000 and Secretary since October 2005	David F. Connor has served as Vice President and Deputy General Counsel of Delaware Investments since 2000.		84	None3
David P. O'Connor 2005 Market Street Philadelphia, PA 19103 February 21, 1966	Senior Vice President, General Counsel, and Chief Legal Officer	Senior Vice President, General Counsel, and Chief Legal Officer since October 2005	David P. O'Connor has served in various executive and legal capacities at different times at Delaware Investments.		84	None3
John J. O'Connor 2005 Market Street Philadelphia, PA 19103 June 16, 1957	Senior Vice President and Treasurer	Treasurer since February 2005	John J. O'Connor has served in various executive capacities at different times at Delaware Investments.		84	None3
Richard Salus 2005 Market Street Philadelphia, PA 19103 October 4, 1963	Senior Vice President and Chief Financial Officer	Chief Financial Officer since November 1, 2006	Richard Salus has served in various executive capacities at different times at Delaware Investments.		84	None3

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

² Delaware 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.

³ David F. Connor, David P. O'Connor, John J. 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. John J. O'Connor also serves in a similar capacity for Lincoln Variable Insurance Products Trust, which has the same investment advisor as the registrant.

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.

Balanced Series-24

Delaware VIP Trust — Delaware VIP Capital Reserves Series

For the 12-month period ended December 31, 2006, the Delaware VIP Capital Reserves Series showed a positive return of 4.57% for Standard Class shares with distributions reinvested, as Service Class shares returned +4.34% with distributions reinvested. The Series' benchmark, the Merrill Lynch 1-3 Year Treasury Index, gained 3.96%. The Series' former benchmark, the Lehman Brothers Intermediate Government/Credit Index, gained 3.78% (source: Lipper).

Our focus on credit research allowed the VIP Capital Reserves Series to invest in lower-rated credits during 2006, with results that exceeded those of our benchmark. Investments rated B returned +11.00% while those rated BB returned +9.63% (source: Bear Stearns). We believe that our ability to select the best securities in each of those ratings categories explains the Series' outperformance of the benchmark index.

Mortgage-backed securities and asset-backed securities were responsible for the majority of the Series' outperformance during the year. Non-agency hybrid securities outperformed and continued to provide attractive roll-down potential, as the steepness of the hybrid curve provided considerable opportunity for spread tightening as these securities season.

Other areas that were beneficial included corporate bonds and short-seasoned, discount balloon mortgages. The latter group continues to add yield to the front end of the investment portfolio. Among corporate bonds, our down-in-quality bias and security selection enabled the Series to outperform the index in this area of the market.

Additionally, we continued to add short, fixed-rate, home equity asset-backed securities to the Series, as the yields on short-structured spread product remained very attractive in our view verses other like-duration assets.

Treasury Inflation-Protected Securities added performance during the first half of the year as they outperformed nominal Treasuries, but were poor performers and detracted from performance during the second half as energy prices and inflation expectations fell.

The views expressed are current as of the date of this report and are subject to change.

The performance data quoted below and on the next page represent past performance; past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please obtain the performance data for the most recent month end by calling the number noted on the page related to this Series in the introductory section of this report.

You should consider the investment objectives, risks, charges, and expenses of the investment carefully before investing. The Delaware VIP Capital Reserves Series prospectus contains this and other important information about the Series. To obtain a prospectus, contact the company noted on the page related to this Series in the introductory section of this report, either by phone or through the company Web site. We advise you to read the prospectus carefully before you invest.

Delaware VIP Capital Reserves Series Average Annual Total Returns For the periods ending Dec. 31, 2006

1 Year

5 Years

10 Years

Lifetime

Standard Class Shares*

+4.57

%

+4.34

%

+5.28

%

+6.05

%

Service Class Shares**

+4.34

%

+3.98

%

NA

+5.38

%

  *  Commenced operations on July 28, 1988

  **  Commenced operations on May 1, 2000

Capital Reserves Series- 1

Delaware VIP Trust — Delaware VIP Capital Reserves Series (continued)

The chart shows a $10,000 investment in the Delaware VIP Capital Reserves Series Standard Class shares for the period from Dec. 31, 1996 through Dec. 31, 2006. All distributions were reinvested. The chart also shows $10,000 invested in the former benchmark Lehman Brothers Intermediate Government/Credit Index and in the current benchmark Merrill Lynch 1-3 Year Treasury Index for the period from Dec. 31, 1996 through Dec. 31, 2006. The investment manager believes the effective duration of the Merrill Lynch 1-3 Year Treasury Index better reflects the Series' investments.

The Merrill Lynch 1-3 Year Treasury Index is an unmanaged index of short-term U.S. Treasury obligations having maturities from 1 to 2.99 years. The Lehman Brothers Intermediate Government/Credit Index measures the performance of U.S. government and corporate bonds with an average daily maturity of four to five years. An index is unmanaged and does not reflect the costs of operating a mutual fund, such as the costs of buying, selling, and holding securities. You cannot invest directly in an index.

Earnings from a variable annuity or variable life investment compound tax free until withdrawal, so no adjustments were made for income taxes.

Performance of Service Class shares will vary due to charges and expenses.

Performance does not reflect insurance fees related to a variable annuity or variable life investment or the deferred sales charge that would apply to certain withdrawals of investments held for fewer than eight years. Performance shown here would have been reduced if such fees were included and the expense limitation was removed. For more information about fees, consult your variable annuity or variable life prospectus.

Investments in variable products involve risk. High yielding, non investment grade bonds involve higher risk than investment grade bonds. Adverse conditions may affect the issuer's ability to pay interest and principal on these securities. International and emerging market investments are subject to risks not ordinarily associated with domestic investments, such as currency, economic and political risks, and different accounting standards. Some portfolios offer more risk than others. Please read both the contract and underlying prospectus for specific details regarding the product's risk profile.

Capital Reserves Series- 2

Delaware VIP Trust — Delaware VIP Capital Reserves Series
Disclosure of Series Expenses

For the Period July 1, 2006 to December 31, 2006

As a shareholder of the Series, you incur ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Series expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Series and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2006 to December 31, 2006.

Actual Expenses

The first section of the table shown, "Actual Series 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 the period.

Hypothetical Example for Comparison Purposes

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

Please note that the expenses shown in the table are meant to highlight your ongoing costs only. As a shareholder of the Series, you do not incur any transaction costs, such as sales charges (loads), redemption fees or exchange fees, but shareholders of other funds may incur such costs. Also, the fees related to the variable annuity investment or the deferred sales charge that could apply have not been included. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. The Series' actual expenses shown in the table reflect fee waivers in effect for Service Class shares. The expenses shown in the table assume reinvestment of all dividends and distributions.

Expense Analysis of an Investment of $1,000

	Beginning Account Value 7/1/06		Ending Account Value 12/31/06		Annualized Expense Ratios			Expenses Paid During Period 7/1/06 to 12/31/06*
Actual Series Return
Standard Class	$	1,000.00	$	1,031.90		0.71	%	$	3.64
Service Class		1,000.00		1,029.70		0.96	%		4.91
Hypothetical 5% Return (5% return before expenses)
Standard Class	$	1,000.00	$	1,021.63		0.71	%	$	3.62
Service Class		1,000.00		1,020.37		0.96	%		4.89

*"Expenses Paid During Period" are equal to the Series' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

Capital Reserves Series- 3

Delaware VIP Trust — Delaware VIP Capital Reserves Series
Sector Allocation and Credit Rating Breakdown

As of December 31, 2006

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

Sector	Percentage of Net Assets
Agency Asset-Backed Securities		0.25	%
Agency Collateralized Mortgage Obligations		1.79	%
Agency Mortgage-Backed Securities		13.18	%
Agency Obligations		1.04	%
Commercial Mortgage-Backed Securities		2.22	%
Corporate Bonds		24.16	%
Banking		1.94	%
Basic Industry		1.69	%
Brokerage		0.80	%
Communications		4.04	%
Consumer Cyclical		3.20	%
Consumer Non-Cyclical		1.01	%
Electric		2.23	%
Energy		0.91	%
Finance Companies		2.91	%
Insurance		1.93	%
Natural Gas		0.54	%
Real Estate		1.58	%
Transportation		1.38	%
Foreign Agencies		0.37	%
Non-Agency Asset-Backed Securities		27.28	%
Non-Agency Collateralized Mortgage Obligations		16.24	%
Senior Secured Loans		0.29	%
U.S. Treasury Obligations		10.96	%
Repurchase Agreements		3.60	%
Total Market Value of Securities		101.38	%
Liabilities Net of Receivables and Other Assets		(1.38	%)
Total Net Assets		100.00	%
Credit Rating Breakdown (as a % of fixed income investments)
AAA		74.54	%
AA		2.30	%
A		6.03	%
BBB		14.12	%
BB		0.95	%
B		2.06	%
Total		100.00	%

Capital Reserves Series-4

Delaware VIP Trust — Delaware VIP Capital Reserves Series

Statement of Net Assets

December 31, 2006

	Principal Amountm		Market Value (U.S. $)
AGENCY ASSET-BACKED SECURITIES–0.25%
Fannie Mae Grantor Trust Series 2003-T4 2A5 4.907% 9/26/33	USD	53,643	$	53,516
• Series 2004-T4 A3 4.43% 8/25/24		2,093		2,086
t Freddie Mac Structured Pass Through Securities Series T-30 A5   8.61% 12/25/30		30,836		30,764
Total Agency Asset-Backed Securities (cost $86,061)				86,366
AGENCY COLLATERALIZED MORTGAGE OBLIGATIONS–1.79%
Fannie Mae Grantor Trust Series 2001-T8 A2 9.50% 7/25/41		26,529		28,569
Fannie Mae Series 2003-122 AJ 4.50% 2/25/28		29,564		28,831
Fannie Mae Whole Loan Series 2004-W9 2A1 6.50% 2/25/44		61,292		62,715
Freddie Mac Series 2326 ZQ 6.50% 6/15/31		128,756		133,301
Series 2662 MA 4.50% 10/15/31		57,566		56,381
Freddie Mac Stated Final Series 5 GC 2.95% 12/15/09		156,255		152,671
• Freddie Mac Strip Series 19 F 5.736% 6/1/28		26,170		26,061
t Freddie Mac Structured Pass Through Securities Series T-58 2A 6.50% 9/25/43		64,362		65,715
Government National Mortgage Association Series 2002-61 BA 4.648% 3/16/26		59,292		58,601
Total Agency Collateralized Mortgage Obligations (cost $621,180)				612,845
AGENCY MORTGAGE-BACKED SECURITIES–13.18%
Fannie Mae 6.50% 8/1/17		31,545		32,109
6.52% 1/1/08		7,721		7,733
7.00% 11/15/16		88,734		91,326
8.50% 9/20/10		6,080		6,299
9.00% 4/1/09		6,620		6,728
• Fannie Mae ARM 3.021% 6/1/34		97,979		98,304
3.772% 8/1/34		69,013		69,417
5.068% 8/1/35		68,207		66,893
5.256% 10/1/33		157,739		160,577
5.91% 12/1/33		64,127		65,444
6.186% 6/1/36		239,314		241,249
6.251% 7/1/36		214,922		216,904
6.329% 7/1/36		220,302		222,683
6.357% 8/1/36		216,242		218,568
6.367% 4/1/36		121,320		123,073
Fannie Mae FHAVA 9.00% 6/1/09		43,051		44,111

	Principal Amountm		Market Value (U.S. $)
AGENCY MORTGAGE-BACKED SECURITIES (continued)
Fannie Mae Relocation 30 yr Pool #763656 5.00% 1/1/34	USD	105,929	$	103,214
Pool #763742 5.00% 1/1/34		138,582		134,939
Fannie Mae S.F. 15 yr 7.50% 3/1/15		12,512		12,962
8.00% 10/1/14		14,690		14,909
8.00% 10/1/16		53,294		55,439
Fannie Mae S.F. 15 yr TBA 6.00% 1/1/22		410,000		415,765
Fannie Mae S.F. 30 yr 7.50% 12/1/10		6,208		6,268
7.50% 6/1/31		28,165		29,328
8.50% 5/1/11		3,817		3,903
8.50% 8/1/12		8,223		8,420
9.00% 7/1/20		49,089		52,450
10.00% 8/1/19		52,552		57,284
Fannie Mae S.F. 30 yr TBA 6.50% 1/1/37		380,000		387,244
• Freddie Mac ARM 4.673% 4/1/34		30,165		30,583
5.813% 4/1/33		52,842		54,184
Freddie Mac Balloon 5 yr 4.00% 6/1/08		18,058		17,821
4.00% 1/1/09		107,302		105,583
4.50% 1/1/10		200,295		198,252
Freddie Mac Balloon 7 yr 4.50% 10/1/09		119,079		117,425
5.00% 6/1/11		197,750		196,683
5.00% 11/1/11		214,301		213,189
Freddie Mac Relocation 15 yr 3.50% 9/1/18		85,385		79,002
3.50% 10/1/18		11,951		11,057
Freddie Mac S.F. 15 yr 4.00% 11/1/13		127,588		123,515
4.00% 3/1/14		154,331		149,175
8.00% 5/1/15		45,905		48,382
8.50% 10/1/15		6,052		6,377
Freddie Mac S.F. 30 yr 7.00% 11/1/33		29,296		30,134
9.25% 9/1/08		2,710		2,770
GNMA I S.F. 15 yr 6.00% 1/15/09		4,469		4,503
8.50% 8/15/10		2,892		2,921
GNMA I S.F. 30 yr 8.00% 5/15/08		12,398		12,428
11.00% 11/15/10		148,615		157,324
GNMA II S.F. 30 yr 12.00% 6/20/14		6,788		7,632
12.00% 3/20/15		693		767
12.00% 2/20/16		2,244		2,477
Total Agency Mortgage-Backed Securities (cost $4,565,392)				4,525,727

Capital Reserves Series- 5

Delaware VIP Capital Reserves Series
Statement of Net Assets (continued)

	Principal Amountm		Market Value (U.S. $)
AGENCY OBLIGATIONS–1.04%
Fannie Mae 5.25% 12/3/07	USD	35,000	$	35,010
Federal Home Loan Bank 4.25% 9/14/07		180,000		178,797
Freddie Mac 5.00% 9/16/08		65,000		64,965
7.00% 3/15/10		75,000		79,580
Total Agency Obligations (cost $357,787)				358,352
COMMERCIAL MORTGAGE-BACKED SECURITIES–2.22%
# Bear Stearns Commercial Mortgage Securities Series 2004-ESA E 144A 5.064% 5/14/16		65,000		64,748
t# Commercial Mortgage Pass Through Certificates Series 2001-J1A A2 144A 6.457% 2/14/34		47,533		49,196
# Crown Castle Towers Series 2006-1A B 144A 5.362% 11/15/36		40,000		39,950
Deutsche Mortgage and Asset Receiving Series 1998-C1 A2 6.538% 6/15/31		149,188		150,174
DLJ Commercial Mortgage Series 1998-CF1 A3 6.70% 2/18/31		150,000		151,780
First Union-Lehman Brothers-Bank of America Series 1998-C2 A2 6.56% 11/18/35		79,912		80,741
# SBA Commercial Mortgage Securities Trust Series 2006-1A B 144A 5.451% 11/15/36		150,000		150,383
# Tower 144A Series 2006-1 B 5.588% 2/15/36		30,000		30,168
Series 2006-1 C 5.707% 2/15/36		45,000		45,285
Total Commercial Mortgage-Backed Securities (cost $770,144)				762,425
CORPORATE BONDS–24.16%
Banking–1.94%
Marshall & Ilsley 3.95% 8/14/09		145,000		140,373
Popular North America 4.25% 4/1/08		295,000		290,733
•# Vneshtorgbank 144A 5.97% 8/1/08		100,000		100,175
• Wachovia Capital Trust III 5.80% 3/15/42		135,000		136,240
				667,521
Basic Industry–1.69%
Abitibi-Consolidated 7.875% 8/1/09		80,000		78,400
Bowater 9.00% 8/1/09		135,000		142,087
Norske Skog Canada 8.625% 6/15/11		65,000		66,138
Grupo Minero Mexico 8.25% 4/1/08		100,000		103,500
Lubrizol 4.625% 10/1/09		120,000		117,788
Weyerhaeuser 5.95% 11/1/08		70,000		70,590
				578,503
Brokerage–0.80%
Amvescap 4.50% 12/15/09		120,000		117,067
LaBranche 9.50% 5/15/09		75,000		79,125
Nuveen Investments 5.00% 9/15/10		80,000		78,767
				274,959

	Principal Amountm		Market Value (U.S. $)
CORPORATE BONDS (continued)
Communications–4.04%
AT&T 7.30% 11/15/11	USD	180,000	$	195,082
BellSouth 4.20% 9/15/09		90,000		87,547
Comcast Cable Communications 6.20% 11/15/08		235,000		238,824
Cox Communications 4.625% 1/15/10		60,000		58,771
GTE California 7.65% 3/15/07		105,000		105,377
News America 7.375% 10/17/08		70,000		72,267
Telecom Italia Capital 4.00% 1/15/10		130,000		124,223
• 5.984% 7/18/11		100,000		99,969
Telefonos de Mexico 4.50% 11/19/08		155,000		152,979
Time Warner 5.50% 11/15/11		80,000		79,879
Viacom
• 5.711% 6/16/09		120,000		120,284
5.75% 4/30/11		50,000		50,073
				1,385,275
Consumer Cyclical–3.20%
CVS 3.875% 11/1/07		155,000		153,053
• DaimlerChrysler 5.82% 8/3/09		135,000		135,315
Ford Motor Credit 5.80% 1/12/09		95,000		93,319
9.875% 8/10/11		150,000		160,578
Fortune Brands 5.125% 1/15/11		70,000		68,752
• General Motors Acceptance 6.324% 7/16/07		105,000		105,099
May Department Stores 3.95% 7/15/07		115,000		113,896
MGM MIRAGE 9.75% 6/1/07		50,000		50,875
Penney (J.C.) 7.375% 8/15/08		145,000		148,543
Wal-Mart Stores 6.875% 8/10/09		65,000		67,759
				1,097,189
Consumer Non-Cyclical–1.01%
Fred Meyer 7.45% 3/1/08		70,000		71,535
# HCA 144A 9.125% 11/15/14		40,000		42,850
Kraft Foods 4.125% 11/12/09		120,000		116,470
US Oncology 9.00% 8/15/12		110,000		116,600
				347,455
Electric–2.23%
Ameren 4.263% 5/15/07		80,000		79,591
America Electric Power 4.709% 8/16/07		95,000		94,548
CC Fund Trust I 6.90% 2/16/07		45,000		45,056
Dominion Resources 5.687% 5/15/08		75,000		75,133
FPL Group Capital 5.625% 9/1/11		70,000		70,839
Pacific Gas & Electric 4.20% 3/1/11		120,000		115,002
Potomac Electric Power 6.25% 10/15/07		75,000		75,387
# Power Contract Financing 144A 6.256% 2/1/10		49,884		50,172
# Power Receivables Finance 144A 6.29% 1/1/12		75,161		75,652
PSEG Funding Trust I 5.381% 11/16/07		60,000		59,887
Southern Capital Funding 5.30% 2/1/07		25,000		24,990
				766,257

Capital Reserves Series- 6

Delaware VIP Capital Reserves Series
Statement of Net Assets (continued)

	Principal Amountm		Market Value (U.S. $)
CORPORATE BONDS (continued)
Energy–0.91%
Talisman Energy 7.125% 6/1/07	USD	210,000	$	211,367
Valero Energy 6.125% 4/15/07		100,000		100,133
				311,500
Finance Companies–2.91%
General Electric Capital 6.50% 1/27/09	NZD	500,000		345,700
International Lease Finance 4.625% 6/2/08	USD	60,000		59,318
•# Mizuho JGB Investment Preferred 144A 9.87% 12/29/49		135,000		143,111
Residential Capital
• 5.85% 6/9/08		70,000		69,881
6.125% 11/21/08		215,000		216,160
6.375% 6/30/10		43,000		43,534
• 6.675% 11/21/08		45,000		45,586
•# Xtrata Finance 144A 5.724% 11/13/09		75,000		75,068
				998,358
Insurance–1.93%
Marsh & McLennan 5.15% 9/15/10		50,000		49,164
5.375% 3/15/07		95,000		94,973
• 5.513% 7/13/07		75,000		75,014
# Nippon Life Insurance 144A 4.875% 8/9/10		90,000		88,100
PMI Group 5.568% 11/15/08		85,000		84,955
SAFECO Capital Trust I 8.072% 7/15/37		100,000		104,675
St. Paul Travelers 5.01% 8/16/07		70,000		69,743
WellPoint 4.25% 12/15/09		35,000		34,045
Willis 5.125% 7/15/10		65,000		63,421
				664,090
Natural Gas–0.54%
• Sempra Energy 5.845% 5/21/08		50,000		50,022
Southern Union 6.15% 8/16/08		135,000		135,606
				185,628
Real Estate–1.58%
Developers Diversified Realty 4.625% 8/1/10		100,000		97,436
EOP Operating 7.00% 7/15/11		125,000		135,404
Simon Property Group 5.375% 8/28/08		130,000		129,483
7.125% 2/9/09		35,000		36,191
Tanger Properties 9.125% 2/15/08		140,000		145,035
				543,549
Transportation–1.38%
Continental Airlines 6.503% 6/15/11		245,000		252,350
# Erac USA Finance 144A 7.35% 6/15/08		215,000		220,457
				472,807
Total Corporate Bonds (cost $8,256,594)				8,293,091
FOREIGN AGENCIES–0.37%
Pemex Project Funding Master Trust 6.125% 8/15/08		125,000		126,313
Total Foreign Agencies (cost $125,338)				126,313

	Principal Amountm		Market Value (U.S. $)
NON-AGENCY ASSET-BACKED SECURITIES–27.28%
Ameriquest Mortgage Securities
Series 2003-5 A4 4.272% 4/25/33	USD	19,356	$	19,221
Series 2003-11 AF6 5.14% 1/25/34		65,000		64,290
Series 2004-FR1 A4 3.243% 5/25/34		36,149		35,887
• Series 2006-R1 A2C 5.54% 3/25/36		100,000		100,119
Argent Securities Series 2003-W5 AF4 4.66% 10/25/33		19,174		19,038
BMW Vehicle Owner Trust Series 2004-A A3 2.67% 3/25/08		4,803		4,794
Centex Home Equity Series 2005-D AF4 5.27% 10/25/35		155,000		154,154
Chase Funding Mortgage Loan Asset-Backed Certificates Series 2002-3 1A6 4.707% 9/25/13		188,583		186,328
Series 2003-2 1A4 3.986% 8/25/29		21,951		21,788
Series 2003-3 1A4 3.303% 11/25/29		160,521		158,250
CIT Equipment Collateral Series 2005-VT1 A3 4.12% 8/20/08		195,816		194,737
Series 2006-VT2 A3 5.07% 2/20/10		100,000		99,809
CitiFinancial Mortgage Securities Series 2003-2 AF4 4.098% 5/25/33		220,000		215,408
Series 2004-1 AF2 2.645% 4/25/34		212,078		207,254
Countrywide Asset-Backed Certificates
• Series 2004-13 AV2 5.61% 5/25/34		37,174		37,193
# Series 2004-BC1N 144A 5.50% 4/25/35		3,593		3,595
Series 2004-S1 A2 3.872% 3/25/20		174,250		171,684
• Series 2006-1 AF2 5.281% 7/25/36		410,000		408,217
• Series 2006-1 AF3 5.348% 7/25/36		280,000		278,967
• Series 2006-3 2A2 5.53% 6/25/36		135,000		135,223
Series 2006-9 1AF3 5.859% 10/25/46		160,000		160,750
• Series 2006-11 1AF3 6.05% 9/25/46		215,000		217,150
Series 2006-13 1AF3 5.944% 1/25/37		160,000		160,997
• Series 2006-15 A3 5.689% 10/25/46		115,000		115,278
Series 2006-S2 A2 5.627% 7/25/27		80,000		79,941
Series 2006-S3 A2 6.085% 6/25/21		250,000		252,242
Series 2006-S5 A3 5.762% 6/25/35		115,000		115,190
• Series 2006-S6 A2 5.519% 3/25/34		105,000		104,687
• Series 2006-S7 A3 5.712% 11/25/35		210,000		209,499
• Series 2006-S9 A3 5.728% 8/25/36		95,000		94,418
# Credit-Based Asset Servicing and Securitization Series 2006-SL1 A2 144A 5.556% 9/25/36		245,000		244,761
Credit Suisse First Boston Mortgage Securities Series 2005-AGE1 A2 4.64% 2/25/32		250,000		246,152
# Dunkin Securitization Series 2006-1 A2 144A 5.779% 6/20/31		100,000		101,343
• Equifirst Mortgage Loan Trust Series 2004-3 A2 5.68% 12/25/34		27,278		27,300
General Motors Acceptance Corporation Mortgage Loan Trust Series 2003-HE2 A3 4.12% 10/25/26		111,189		110,532
Series 2004-HLT1 A2 3.87% 5/25/25		6,119		6,096
• Series 2006-HE3 A2 5.75% 10/25/36		95,000		94,973

Capital Reserves Series- 7

Delaware VIP Capital Reserves Series
Statement of Net Assets (continued)

	Principal Amountm		Market Value (U.S. $)
NON-AGENCY ASSET-BACKED SECURITIES (continued)
GSAMP Trust Series 2006-S3 A1 6.085% 5/25/36	USD	115,231	$	114,982
Indymac Seconds Asset Backed Trust Series 2006-1 A2 5.767% 5/25/36		235,000		235,449
Long Beach Auto Receivables Trust Series 2006-B A3 5.17% 8/15/11		300,000		299,989
Long Beach Mortgage Loan Trust Series 2006-A A2 5.548% 5/25/36		205,000		205,330
•# MASTR Specialized Loan Trust Series 2005-2 A2 144A 5.006% 7/25/35		33,983		33,346
Merrill Lynch Mortgage Investors
• Series 2005-NCB A1A 5.451% 7/25/36		24,315		24,213
• Series 2006-AR1 A2C 5.51% 3/25/37		80,000		80,028
• Morgan Stanley Mortgage Loan Trust Series 2006-12XS A1 5.47% 10/25/36		158,109		158,125
New Century Home Equity Loan Trust Series 2003-5 AI4 4.76% 11/25/33		100,000		99,063
• Option One Mortgage Loan Trust Series 2005-4 A3 5.61% 11/25/35		125,000		125,315
Renaissance Home Equity Loan Trust Series 2004-2 AF3 4.464% 7/25/34		70,997		70,627
Series 2004-4 AF2 3.856% 2/25/35		211		210
Series 2005-1 AF2 4.263% 5/25/35		55,922		55,666
Series 2005-4 A2 5.399% 2/25/36		40,000		39,809
Series 2005-4 A3 5.565% 2/25/36		25,000		24,945
Series 2006-1 AF3 5.608% 5/25/36		210,000		209,860
Series 2006-2 AF3 5.797% 8/25/36		125,000		125,625
Series 2006-3 AF2 5.58% 11/25/36		90,000		89,935
Series 2006-3 AF3 5.586% 11/25/36		235,000		234,817
Series 2006-4 AF2 5.285% 1/25/37		225,000		224,719
Residential Asset Mortgage Products Series 2004-RS12 AI2 3.767% 2/25/27		35,579		35,450
Residential Asset Securities Series 2002-KS2 AI5 6.779% 4/25/32		48,013		48,366
• Series 2004-KS9 AI3 3.79% 8/25/29		122,379		120,823
• Series 2006-KS3 AI3 5.52% 4/25/36		270,000		270,431
Residential Funding Mortgage Securities II Series 2001-HS2 A5 6.92% 4/25/31		32,815		32,704
Series 2005-HI3 A2 5.09% 9/25/35		160,000		158,802
Series 2006-HI2 A3 5.79% 2/25/36		150,000		150,606
• Series 2006-HSA1 A2 5.19% 2/25/36		345,000		342,482
• Series 2006-HSA2 AI2 5.50% 3/25/36		190,000		189,467
# Silverleaf Finance Series 2005-A A 144A 4.857% 11/15/16		77,006		76,298
Structured Asset Securities Series 2001-SB1 A2 3.375% 8/25/31		44,267		39,771
Series 2005-4XS 1A2B 4.67% 3/25/35		110,000		108,780
Series 2005-9XS 1A2A 4.84% 6/25/35		95,000		93,824
Series 2005-NC1 A2 3.92% 2/25/35		26,312		26,189
• Series 2005-NC1 A7 5.58% 2/25/35		117,529		117,630
Triad Auto Receivables Owner Trust Series 2006-C A4 5.31% 5/13/13		160,000		160,578

	Principal Amountm		Market Value (U.S. $)
NON-AGENCY ASSET-BACKED SECURITIES (continued)
UPFC Auto Receivables Trust Series 2006-B A3 5.01% 8/15/12	USD	85,000	$	84,809
Total Non-Agency Asset-Backed Securities (cost $9,364,168)				9,366,328
NON-AGENCY COLLATERALIZED MORTGAGE OBLIGATIONS–16.24%
Bank of America Alternative Loan Trust Series 2003-10 2A1 6.00% 12/25/33		90,411		90,608
Series 2004-2 1A1 6.00% 3/25/34		73,621		73,782
Series 2004-11 1CB1 6.00% 12/25/34		39,738		39,909
Series 2005-9 5A1 5.50% 10/25/20		114,522		113,878
• Bank of America Funding Series 2006-H 1A2 5.691% 9/20/46		145,248		145,271
• Bank of America Mortgage Securities Series 2003-D 1A2 6.114% 5/25/33		2,343		2,361
• Bear Stearns Alternative A Trust Series 2006-3 33A1 6.189% 5/25/36		113,845		115,158
Series 2006-3 34A1 6.186% 5/25/36		119,254		120,626
Series 2006-4 23A5 6.241% 8/25/36		103,079		104,493
Bear Stearns Asset-Backed Securities Series 2005-AC8 A5 5.50% 11/25/35		88,184		87,974
Countrywide Alternative Loan Trust Series 2003-20CB 1A2 5.50% 10/25/33		161,528		160,338
Series 2004-28CB 6A1 6.00% 1/25/35		93,240		93,386
•Series 2004-J7 1A2 4.673% 8/25/34		25,990		25,783
Series 2005-1CB 2A2 5.50% 3/25/35		182,301		180,746
Series 2006-2CB A3 5.50% 3/25/36		77,622		77,757
•t Countrywide Home Loan Mortgage Pass Through Trust Series 2003-21 A1 4.077% 5/25/33		39,612		39,089
Series 2004-12 1M 4.564% 8/25/34		98,527		97,680
Series 2006-HYB4 1A2 5.711% 6/20/36		93,208		93,617
Credit Suisse First Boston Mortgage Securities Series 2002-5 1A4 6.50% 2/25/32		145,264		144,842
Series 2003-29 5A1 7.00% 12/25/33		30,263		30,830
Series 2004-1 3A1 7.00% 2/25/34		8,402		8,559
Deutsche Alternative A Securities Loan Trust Series 2003-4XS A6A 4.82% 10/25/33		65,000		63,529
• First Horizon Asset Securities Series 2004-AR5 4A1 5.682% 10/25/34		47,716		47,461
• General Motors Acceptance Corporation Mortgage Loan Trust Series 2005-AR2 4A 5.188% 5/25/35		89,786		88,082
# GSMPS Mortgage Loan Trust 144A Series 1998-3 A 7.75% 9/19/27		31,719		33,254
Series 2005-RP1 1A3 8.00% 1/25/35		36,773		38,919
Series 2005-RP1 1A4 8.50% 1/25/35		17,076		18,234
GSR Mortgage Home Loan Trust Series 2004-2F 9A1 6.00% 9/25/19		33,179		33,234
• Indymac Index Mortgage Loan Trust Series 2006-AR2 1A1A 5.57% 4/25/46		39,274		39,305

Capital Reserves Series-8

Delaware VIP Capital Reserves Series
Statement of Net Assets (continued)

	Principal Amountm		Market Value (U.S. $)
NON-AGENCY COLLATERALIZED MORTGAGE OBLIGATIONS (continued)
• JPMorgan Mortgage Trust
Series 2005-A4 1A1 5.406% 7/25/35	USD	134,406	$	132,685
Series 2005-A6 1A2 5.152% 9/25/35		105,000		105,186
Lehman Mortgage Trust Series 2005-2 2A3 5.50% 12/25/35		77,440		77,384
Series 2006-1 3A3 5.50% 2/25/36		100,000		100,162
• MASTR Adjustable Rate Mortgages Trust Series 2003-6 1A2 5.883% 12/25/33		48,927		49,532
Series 2005-1 B1 5.436% 3/25/35		114,087		112,966
Series 2005-6 7A1 5.375% 6/25/35		84,944		83,753
# MASTR Reperforming Loan Trust Series 2005-1 1A5 144A 8.00% 8/25/34		73,079		77,152
Nomura Asset Acceptance Series 2005-WF1 2A2 4.786% 3/25/35		100,000		98,452
• Series 2006-AF1 1A2 6.159% 5/25/36		125,000		126,205
Residential Asset Mortgage Products Series 2004-SL1 A3 7.00% 11/25/31		28,997		29,443
Series 2004-SL4 A3 6.50% 7/25/32		38,962		39,604
• Residential Funding Mortgage Security I Series 2006-SA3 3A1 6.079% 9/25/36		116,209		117,039
Series 2006-SA4 2A1 6.152% 11/25/36		261,293		264,642
• Structured Adjustable Rate Mortgage Loan Trust Series 2004-18 5A 5.50% 12/25/34		45,129		44,649
Series 2005-22 4A2 5.379% 12/25/35		23,281		22,982
Series 2005-3XS A2 5.60% 1/25/35		51,887		51,930
Series 2006-5 5A4 5.582% 6/25/36		47,916		47,317
Structured Asset Securities Series 2004-5H A2 4.43% 12/25/33		51,245		50,580
Series 2004-12H 1A 6.00% 5/25/34		35,047		35,113
Washington Mutual Series 2003-S10 A2 5.00% 10/25/18		183,765		180,822
• Series 2004-AR4 A2 2.98% 6/25/34		70,033		69,637
• Series 2006-AR7 1A 5.807% 7/25/46		57,015		57,026
• Series 2006-AR10 1A1 5.97% 9/25/36		128,051		129,153
• Series 2006-AR14 1A4 5.666% 11/25/36		119,495		119,697
t Washington Mutual Alternative Mortgage Pass Through Certificates
Series 2006-5 2CB3 6.00% 7/25/36		113,053		114,238
• Series 2006-AR5 3A 5.77% 7/25/46		82,202		82,411
• Wells Fargo Mortgage Backed Securities Trust Series 2004-EE 2A1 3.989% 12/25/34		191,512		187,583
Series 2004-T A1 4.382% 9/25/34		37,623		37,651
Series 2005-AR12 2A10 4.32% 7/25/35		191,407		188,822
Series 2006-AR4 2A1 5.787% 4/25/36		205,937		204,911
Series 2006-AR10 5A1 5.605% 7/25/36		111,586		111,695
Series 2006-AR11 A7 5.537% 8/25/36		126,615		126,042
Series 2006-AR12 1A2 6.045% 9/25/36		89,884		90,422
Total Non-Agency Collateralized Mortgage Obligations (cost $5,579,794)				5,575,591

	Principal Amountm		Market Value (U.S. $)
@«SENIOR SECURED LOANS–0.29%
Visteon 8.61% 6/13/13	USD	100,000	$	100,563
Total Senior Secured Loans (cost $100,000)				100,563
U.S. TREASURY OBLIGATIONS–10.96%
U.S. Treasury Inflation Index Notes 2.375% 4/15/11		132,193		131,708
2.50% 7/15/16		144,916		146,059
m 3.00% 7/15/12		763,341		785,794
3.375% 1/15/07		382,179		381,642
3.875% 1/15/09		307,675		316,232
U.S. Treasury Notes 4.50% 11/30/11		5,000		4,957
4.625% 11/15/09		735,000		732,933
4.625% 11/15/16		145,000		144,094
4.875% 8/15/09		1,115,000		1,118,704
Total U.S. Treasury Obligations (cost $3,776,640)				3,762,123
REPURCHASE AGREEMENTS–3.60%
With BNP Paribas 4.80% 1/2/07 (dated 12/29/06, to be repurchased at $469,250, collateralized by $491,000 U.S. Treasury Bills due 6/28/07, market value $478,948)		469,000		469,000
With Cantor Fitzgerald 4.82% 1/2/07 (dated 12/29/06, to be repurchased at $564,302, collateralized by $49,000 U.S. Treasury Notes 4.00% due 6/15/09, market value $47,918, $302,000 U.S. Treasury Notes 6.125% due 8/15/07, market value $310,953 and $201,000 U.S. Treasury Notes 6.50% due 2/15/10, market value $216,521)		564,000		564,000
With UBS Warburg 4.75% 1/2/07 (dated 12/29/06, to be repurchased at $201,106, collateralized by $208,000 U.S. Treasury Bills due 3/29/07, market value $205,493)		201,000		201,000
Total Repurchase Agreements (cost $1,234,000)				1,234,000

Capital Reserves Series-9

Delaware VIP Capital Reserves Series
Statement of Net Assets (continued)

TOTAL MARKET VALUE OF SECURITIES–101.38% (cost $34,837,098)	$	34,803,724
LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS–(1.38%)		(472,125	)
NET ASSETS APPLICABLE TO 3,543,373 SHARES OUTSTANDING–100.00%	$	34,331,599
NET ASSET VALUE–DELAWARE VIP CAPITAL RESERVES SERIES STANDARD CLASS ($22,625,369 / 2,330,258 Shares)	$	9.71
NET ASSET VALUE–DELAWARE VIP CAPITAL RESERVES SERIES SERVICES CLASS ($11,706,230 / 1,213,115 Shares)	$	9.65
COMPONENTS OF NET ASSETS AT DECEMBER 31, 2006:
Shares of beneficial interest (unlimited authorization-no par)	$	36,139,207
Undistributed net investment income		4,212
Accumulated net realized loss on investments		(1,800,452	)
Unrealized depreciation of investments and foreign currencies		(11,368	)
Total net assets	$	34,331,599

^m  Principal amount shown is stated in the currency in which each security is denominated.

    NZD – New Zealand Dollar

    USD – United States Dollar

  •  Variable rate security. The rate shown is the rate as of December 31, 2006.

  t  Pass Through Agreement. Security represents the contractual right to receive a proportionate amount of underlying payments due to the counterparty pursuant to various agreements related to the rescheduling of obligations and the exchange of certain notes.

m  Fully or partially pledged as collateral for financial futures contracts.

  «  Senior Secured Loans generally pay interest at rates which are periodically redetermined by reference to a base lending rate plus a premium. These base lending rates are generally (i) the prime rate offered by one or more United States banks, (ii) the lending rate offered by one or more European banks such as the London Inter-Bank Offered Rate ('LIBOR') and (iii) the certificate of deposit rate. Senior Secured Loans may be subject to restrictions on resale.

  @  Illiquid security. At December 31, 2006, the aggregate amount of illiquid securities equaled $100,563, which represented 0.29% of the Series' net assets. See Note 11 in "Notes to Financial Statements."

  #  Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At December 31, 2006, the aggregate amount of Rule 144A securities equaled $1,802,217, which represented 5.25% of the Series' net assets. See Note 11 in "Notes to Financial Statements."

Summary of Abbreviations:

ARM – Adjustable Rate Mortgage

FHAVA – Federal Housing Administration & Veterans Administration

GNMA – Government National Mortgage Association

S.F. – Single Family

TBA – To be announced

yr – Year

The following foreign currency exchange contracts, futures contracts and swap contracts were outstanding at December 31, 2006:

Foreign Currency Exchange Contracts¹

Contracts to Deliver			In Exchange For		Settlement Date		Unrealized Depreciation
NZD	(520,000	)	USD	360,854		2/2/07	$	(4,680	)

Futures Contracts²

Contracts to Buy (Sell)				Notional Cost (Proceeds)			Notional Value			Expiration Date	Unrealized Appreciation (Depreciation)
9			U.S. Treasury 2 year Notes	$	1,840,749		$	1,836,281		3/31/07	$	(4,468	)
	(28	)	U.S. Treasury 5 year Notes		(2,961,346	)		(2,941,750	)	3/31/07		19,596
3			U.S. Treasury 10 year Notes		326,542			322,406		3/31/07		(4,136	)
											$	10,992

Swap Contracts³

Notional Amount		Expiration Date		Description	Unrealized Appreciation
$	1,080,000		2/1/07	Agreement with Goldman Sachs to receive the notional amount multiplied by the return on the Lehman Brothers Commercial MBS Index Aaa and to pay the notional amount multiplied by the 1 month BBA LIBOR adjusted by a spread of plus 0.05%.	$	15,446

The use of foreign currency exchange contracts, futures contracts and swap contracts involves elements of market risk and risks in excess of the amount recognized in the financial statements. The notional amounts presented above represent the Series' total exposure in such contracts, whereas only the net unrealized appreciation (depreciation) is reflected in the Series' net assets.

¹See Note 8 in "Notes to Financial Statements."

²See Note 9 in "Notes to Financial Statements."

³See Note 10 in "Notes to Financial Statements."

See accompanying notes

Capital Reserves Series-10

Delaware VIP Trust — Delaware VIP Capital Reserves Series
Statement of Operations

Year Ended December 31, 2006

Delaware VIP Trust — Delaware VIP Capital Reserves Series
Statements of Changes in Net Assets

INVESTMENT INCOME:
Interest	$	1,588,988
EXPENSES:
Management fees		165,894
Distribution expenses – Service Class		26,331
Accounting and administration expenses		13,271
Reports and statements to shareholders		12,146
Audit and tax		11,835
Custodian fees		7,851
Pricing fees		7,582
Trustees' fees and benefits		6,438
Legal fees		3,688
Dividend disbursing and transfer agent fees and expenses		3,318
Insurance fees		1,234
Consulting fees		814
Registration fees		593
Trustees' expenses		195
Dues and services		125
Taxes (other than taxes on income)		3
Other		92
		261,410
Less waiver of distribution expenses – Service Class		(4,388	)
Less expense paid indirectly		(5,153	)
Total operating expenses		251,869
NET INVESTMENT INCOME		1,337,119
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on:
Investments		(79,933	)
Foreign currencies		364
Futures contracts		(15,928	)
Swap contracts		(18,310	)
Net realized loss		(113,807	)
Net change in unrealized appreciation/depreciation of investments and foreign currencies		275,106
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCIES		161,299
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	1,498,418

See accompanying notes

	Year Ended
	12/31/06			12/31/05
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income	$	1,337,119		$	917,619
Net realized loss on investments and foreign currencies		(113,807	)		(21,346	)
Net change in unrealized appreciation/ depreciation of investments and foreign currencies		275,106			(437,959	)
Net increase in net assets resulting from operations		1,498,418			458,314
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Standard Class		(1,090,179	)		(998,134	)
Service Class		(379,335	)		(50,338	)
		(1,469,514	)		(1,048,472	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Standard Class		30,958,997			3,108,074
Service Class		21,727,142			7,736,817
Net asset value of shares issued upon reinvestment of dividends and distributions:
Standard Class		1,087,085			1,000,606
Service Class		370,622			46,785
		54,143,846			11,892,282
Cost of shares repurchased:
Standard Class		(33,314,414	)		(5,608,419	)
Service Class		(14,914,594	)		(3,268,155	)
		(48,229,008	)		(8,876,574	)
Increase in net assets derived from capital share transactions		5,914,838			3,015,708
NET INCREASE IN NET ASSETS		5,943,742			2,425,550
NET ASSETS:
Beginning of year		28,387,857			25,962,307
End of year (including undistributed net investment income of $4,212 and $4,035, respectively)	$	34,331,599		$	28,387,857

See accompanying notes

Capital Reserves Series-11

Delaware VIP Trust — Delaware VIP Capital Reserves Series
Financial Highlights

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

	Delaware VIP Capital Reserves Series Standard Class
	Year Ended
	12/31/06			12/31/05			12/31/04			12/31/03			12/31/02
Net asset value, beginning of period	$	9.710		$	9.940		$	10.020		$	9.970		$	9.750
Income (loss) from investment operations:
Net investment income1		0.396			0.355			0.356			0.329			0.419
Net realized and unrealized gain (loss) on investments and foreign currencies		0.038			(0.180	)		0.004			0.125			0.253
Total from investment operations		0.434			0.175			0.360			0.454			0.672
Less dividends and distributions from:
Net investment income		(0.434	)		(0.405	)		(0.440	)		(0.404	)		(0.452	)
Total dividends and distributions		(0.434	)		(0.405	)		(0.440	)		(0.404	)		(0.452	)
Net asset value, end of period	$	9.710		$	9.710		$	9.940		$	10.020		$	9.970
Total return2		4.57	%		1.79	%		3.66	%		4.63	%		7.09	%
Ratios and supplemental data:
Net assets, end of period (000 omitted)	$	22,626		$	23,895		$	25,955		$	34,077		$	42,698
Ratio of expenses to average net assets		0.71	%		0.71	%		0.62	%		0.63	%		0.62	%
Ratio of net investment income to average net assets		4.10	%		3.61	%		3.57	%		3.36	%		4.21	%
Portfolio turnover		318	%		259	%		252	%		438	%		427	%

¹The average shares outstanding method has been applied for per share information.

²Total 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.

See accompanying notes

Capital Reserves Series- 12

Delaware VIP Capital Reserves Series
Financial Highlights (continued)

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

	Delaware VIP Capital Reserves Series Service Class
	Year Ended
	12/31/06			12/31/05			12/31/04			12/31/03			12/31/02
Net asset value, beginning of period	$	9.650		$	9.900		$	10.000		$	9.970		$	9.760
Income (loss) from investment operations:
Net investment income1		0.372			0.331			0.333			0.308			0.406
Net realized and unrealized gain (loss) on investments and foreign currencies		0.037			(0.200	)		(0.017	)		0.105			0.243
Total from investment operations		0.409			0.131			0.316			0.413			0.649
Less dividends and distributions from:
Net investment income		(0.409	)		(0.381	)		(0.416	)		(0.383	)		(0.439	)
Total dividends and distributions		(0.409	)		(0.381	)		(0.416	)		(0.383	)		(0.439	)
Net asset value, end of period	$	9.650		$	9.650		$	9.900		$	10.000		$	9.970
Total return2		4.34	%		1.35	%		3.23	%		4.21	%		6.84	%
Ratios and supplemental data:
Net assets, end of period (000 omitted)	$	11,706		$	4,493		$	7		$	6		$	6
Ratio of expenses to average net assets		0.96	%		0.96	%		0.87	%		0.85	%		0.77	%
Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly		1.01	%		1.01	%		0.92	%		0.88	%		0.77	%
Ratio of net investment income to average net assets		3.85	%		3.36	%		3.32	%		3.14	%		4.06	%
Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly		3.78	%		3.31	%		3.27	%		3.11	%		4.06	%
Portfolio turnover		318	%		259	%		252	%		438	%		427	%

¹The average shares outstanding method has been applied for per share information.

²Total 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. Total investment return reflects a waiver and payment of fees by the distributor, as applicable. Performance would have been lower had the waiver not been in effect.

See accompanying notes

Capital Reserves Series-13

Delaware VIP Trust — Delaware VIP Capital Reserves Series
Notes to Financial Statements

December 31, 2006

Delaware VIP Trust (the "Trust") is organized as a Delaware statutory trust and offers 15 series: Delaware VIP Balanced Series, Delaware VIP Capital Reserves Series, Delaware VIP Cash Reserve Series, Delaware VIP Diversified Income Series, Delaware VIP Emerging Markets Series, Delaware VIP Global Bond Series, Delaware VIP Growth Opportunities Series, Delaware VIP High Yield Series, Delaware VIP International Value Equity Series, Delaware VIP REIT Series, Delaware VIP Select Growth Series, Delaware VIP Small Cap Value Series, Delaware VIP Trend Series, Delaware VIP U.S. Growth Series and Delaware VIP Value Series. These financial statements and the related notes pertain to Delaware VIP Capital Reserves Series (the "Series"). The Trust is an open-end investment company. The Series is considered diversified under the Investment Company Act of 1940, as amended, and offers Standard Class and Service Class shares. The Standard Class shares do not carry a 12b-1 fee and the Service Class shares carry a 12b-1 fee. The shares of the Series are sold only to separate accounts of life insurance companies.

The investment objective of the Series is to seek a high, stable level of current income while attempting to minimize fluctuations in principal and provide maximum liquidity.

1. Significant Accounting Policies

The following accounting policies are in accordance with U.S. generally accepted accounting principles and are consistently followed by the Series.

Security Valuation—U.S. government and agency securities are valued at the mean between the bid and asked prices. Other long-term debt securities are valued by an independent pricing service and such prices are believed to reflect the fair value of such securities. Short-term debt securities having less than 60 days to maturity are valued at amortized cost, which approximates market value. Foreign currency exchange contracts are valued at the mean between the bid and asked prices of the contracts and are marked-to-market daily. Interpolated values are derived when the settlement date of the contract is an interim date for which quotations are not available. Futures contracts and options on futures contracts are valued at the daily quoted settlement prices. Swap contracts and 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 the Series' Board of Trustees. 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, aftermarket trading, or significant events after local market trading (e.g., government actions or pronouncements, trading volume or volatility on markets, exchanges among dealers, or news events).

In September 2006, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 157 "Fair Value Measurements" (Statement 157). Statement 157 establishes a framework for measuring fair value in generally accepted accounting principles, clarifies the definition of fair value within that framework, and expands disclosures about the use of fair value measurements. Statement 157 is intended to increase consistency and comparability among fair value estimates used in financial reporting. Statement 157 is effective for fiscal years beginning after November 15, 2007. Management does not expect the adoption of Statement 157 to have an impact on the amounts reported in the financial statements.

Federal Income Taxes—The Series intends to continue to qualify for federal income tax purposes as a regulated investment company and make the requisite distributions to shareholders. Accordingly, no provision for federal income taxes has been made in the financial statements.

On July 13, 2006, FASB released FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Series' 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 would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. Recent SEC guidance allows implementing FIN 48 in Series net asset value calculations as late as the Series' last net asset value calculation in the first required fi nancial statement reporting period. As a result, the Series will incorporate FIN 48 in its semiannual report on June 30, 2007.Although the Series' tax positions are currently being evaluated, management does not expect the adoption of FIN 48 to have a material impact on the Series' financial statements.

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

Repurchase Agreements—The Series may invest in a pooled cash account along with other members of the Delaware Investments^® Family of Funds pursuant to an exemptive order issued by the Securities and Exchange Commission. The aggregate daily balance of the pooled cash account is invested in repurchase agreements secured by obligations of the U.S. government. The respective collateral is held by the Series' custodian bank until the maturity of the respective repurchase agreements. Each repurchase agreement is at least 102% collateralized. However, in the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral may be subject to legal proceedings.

Use of Estimates—The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of 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.

Other—Expenses directly attributable to the Series are charged directly to the Series. 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. Realized gains (losses) on paydowns of mortgage- and asset-backed securities are classified as interest income.

The Series declares dividends daily from net investment income and pays such dividends monthly and declares and pays distributions from net realized gain on investments, if any, following the close of the fiscal year.

Capital Reserves Series- 14

Delaware VIP Capital Reserves Series
Notes to Financial Statements (continued)

1. Significant Accounting Policies (continued)

The Series may receive earnings credits from its custodian when positive cash balances are maintained, which are used to offset custody fees. The expense paid under this arrangement is included in custodian fees on the Statement of Operations with the corresponding expense offset shown as "expense paid indirectly."

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

In accordance with the terms of its investment management agreement, the Series pays Delaware Management Company (DMC), a series of Delaware Management Business Trust and the investment manager, an annual fee which is calculated daily at the rate of 0.50% on the first $500 million of average daily net assets of the Series, 0.475% on the next $500 million, 0.45% on the next $1.5 billion, and 0.425% on average daily net assets in excess of $2.5 billion.

DMC has contractually agreed to waive that portion, if any, of its management fee and reimburse the Series to the extent necessary to ensure that annual operating expenses, exclusive of taxes, interest, brokerage commissions, distribution fees, certain insurance costs and extraordinary expenses, do not exceed 0.70% of average daily net assets of the Series through April 30, 2007. Prior to May 1, 2006, the expense limitation was 0.80% of average daily net assets. No reimbursement was due for the year ended December 31, 2006.

Delaware Service Company, Inc. (DSC), an affiliate of DMC, provides accounting, administration, dividend disbursing and transfer agent services. The Series pays DSC a monthly fee computed at the annual rate of 0.04% of the Series' average daily net assets for accounting and administrative services. The Series pays DSC a monthly fee based on average net assets for dividend disbursing and transfer agent services.

Pursuant to a distribution agreement and distribution plan, the Series pays Delaware Distributors, L.P. (DDLP), the distributor and an affiliate of DMC, an annual distribution and service fee not to exceed 0.30% of the average daily net assets of the Service Class shares. DDLP has contracted to waive distribution and service fees through April 30, 2007 in order to prevent distribution and service fees of the Service Class shares from exceeding 0.25% of average daily net assets. Standard Class shares pay no distribution and service expenses.

At December 31, 2006, the Series had liabilities payable to affiliates as follows:

Investment Management Fee Payable to DMC		Dividend Disbursing, Transfer Agent, Accounting and Administrative Fees and Other Expenses Payable to DSC		Distribution Fee Payable To DDLP		Other Expenses Payable to DMC and Affiliates*
$	15,387	$	1,720	$	2,855	$	2,109

*DMC, as part of its administrative services, pays operating expenses on behalf of the Series and is reimbursed on a periodic basis. Such expenses include items such as printing of shareholder reports, fees for audit, legal and tax services, custodian fees and trustees' fees.

As provided in the investment management agreement, the Series bears the cost of certain legal and tax services, including internal legal and tax services provided to the Series by DMC and/or its affiliates' employees. For the year ended December 31, 2006, the Series was charged $1,597 for internal legal and tax services provided by DMC and/or its affiliates' employees.

Trustees' fees and benefits include expenses accrued by the Series for each Trustee's retainer, per meeting fees and retirement benefits. Independent Trustees with over five years of uninterrupted service are eligible to participate in a retirement plan that provides for the payment of benefits upon retirement. The amount of the retirement benefit is based on factors set forth in the plan, including the number of years of service. On November 16, 2006, the Board of Trustees unanimously voted to terminate the retirement plan. Payments equal to the net present value of the earned benefits will be made in 2007 to those independent trustees so entitled. The retirement benefit payout for the Series is $4,608. Certain officers of DMC, DSC and DDLP are officers and/or trustees of the Trust. These officers and trustees are paid no compensation by the Series.

Capital Reserves Series- 15

Delaware VIP Capital Reserves Series
Notes to Financial Statements (continued)

3. Investments

For the year ended December 31, 2006, the Series made purchases and sales of investment securities other than short-term investments as follows:

Purchases other than U.S. government securities	$	36,668,258
Purchases of U.S. government securities		69,797,993
Sales other than U.S. government securities		25,463,761
Sales of U.S. government securities		73,527,877

At December 31, 2006, the cost of investments for federal income tax purposes and unrealized appreciation (depreciation) for the Series were as follows:

Cost of Investments		Aggregate Unrealized Appreciation		Aggregate Unrealized Depreciation			Net Unrealized Depreciation
$	34,947,573	$	84,248	$	(228,097	)	$	(143,849	)

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. generally accepted accounting principles. Additionally, gains (losses) on foreign currency transactions and 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 December 31, 2006 and 2005 was as follows:

	Year Ended 12/31/06		Year Ended 12/31/05
Ordinary income	$	1,469,514	$	1,048,472

5. Components of Net Assets on a Tax Basis

As of December 31, 2006, the components of net assets on a tax basis were as follows:

Shares of beneficial interest	$	36,139,207
Undistributed ordinary income		15,830
Post-October losses		(11,406	)
Post-October currency losses		(4,316	)
Capital loss carryforwards		(1,679,561	)
Unrealized depreciation of investments, swap contracts, and foreign currencies		(128,155	)
Net assets	$	34,331,599

The differences between book basis and tax basis components of net assets are primarily attributable to tax deferral of losses on wash sales, mark-to-market of foreign currency contracts, mark-to-market of futures contracts, tax treatment of market discount and premium on debt instruments and contingent payment debt instruments.

Post-October losses and Post-October currency losses represent losses realized on investment and foreign currency transactions from November 1, 2006 through December 31, 2006 that, in accordance with federal income tax regulations, the Series has elected to defer and treat as having arisen in the following fiscal year.

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 gain (loss) on foreign currency transactions, paydown gains (losses) on mortgage- and asset-backed securities and market discount and premium on certain debt instruments. Results of operations and net assets were not affected by these reclassifications. For the year ended December 31, 2006, the Series recorded the following reclassifications:

Undistributed Net Investment Income		Accumulated Net Realized Gain (Loss)
$	132,572	$	(132,572	)

For federal income tax purposes, capital loss carryforwards may be carried forward and applied against future capital gains. Capital loss carryforwards remaining at December 31, 2006 will expire as follows: $1,132,035 expires in 2008, $82,894 expires in 2010, $226,584 expires in 2013 and $238,048 expires in 2014.

Capital Reserves Series- 16

Delaware VIP Capital Reserves Series
Notes to Financial Statements (continued)

6. Capital Shares

Transactions in capital shares were as follows:

	Year Ended 12/31/06			Year Ended 12/31/05
Shares sold:
Standard Class		3,206,194			317,536
Service Class		2,258,522			797,328
Shares issued upon reinvestment of dividends and distributions:
Standard Class		112,240			101,984
Service Class		38,492			4,829
		5,615,448			1,221,677
Shares repurchased:
Standard Class		(3,448,638	)		(570,499	)
Service Class		(1,549,400	)		(337,333	)
		(4,998,038	)		(907,832	)
Net increase		617,410			313,845

7. Line of Credit

The Series, along with certain other funds in the Delaware Investments^® Family of Funds (the "Participants"), participates in a $225,000,000 revolving line of credit facility to be used for temporary or emergency purposes as an additional source of liquidity to fund redemptions of investor shares. The Participants are charged an annual commitment fee, which is allocated across the Participants on the basis of each Participant's allocation of the entire facility. The Participants may borrow up to a maximum of one third of their net assets under the agreement. The Series had no amounts outstanding as of December 31, 2006, or at any time during the year then ended.

8. Foreign Currency Exchange Contracts

The Series may enter into foreign currency exchange contracts as a way of managing foreign exchange rate risk. The Series may enter into these contracts to fix the U.S. dollar value of a security that it has agreed to buy or sell for the period between the date the trade was entered into and the date the security is delivered and paid for. The Series may also use these contracts to hedge the U.S. dollar value of securities it already owns that are denominated in foreign currencies. The change in market value is recorded as an unrealized gain or loss. When the contract is closed, a realized gain or loss is recorded equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.

The use of foreign currency exchange contracts does not eliminate fluctuations in the underlying prices of the securities, but does establish a rate of exchange that can be achieved in the future. Although foreign currency exchange contracts limit the risk of loss due to a decline in the value of the hedged currency, they also limit any potential gain that might result should the value of the currency increase. In addition, the Series could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts. The unrealized gain (loss) is included in liabilities net of receivables and other assets on the Statement of Net Assets.

9. Futures Contracts

The Series may invest in financial futures contracts to hedge its existing portfolio securities against fluctuations in fair value caused by changes in prevailing market interest rates. Upon entering into a futures contract, the Series deposits cash or pledges U.S. government securities to a broker, equal to the minimum "initial margin" requirements of the exchange on which the contract is traded. Subsequent payments are received from the broker or paid to the broker each day, based on the daily fluctuation in the market value of the contract. These receipts or payments are known as "variation margin" and are recorded daily by the Series as unrealized gains or losses until the contracts are closed. When the contracts are closed, the Series records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Risks of entering into futures contracts include s potential imperfect correlation between the futures contracts and the underlying securities and the possibility of an illiquid secondary market for these instruments. The unrealized gain (loss) is included in liabilities net of receivables and other assets on the Statement of Net Assets.

10. Swap Contracts

The Series may enter into total return swap contracts in accordance with its investment objectives. A swap is a contract to exchange the return generated by one instrument for the return generated by another instrument. Total return swaps involve commitments to pay interest in exchange for a market linked return based on a notional amount. To the extent the total return of the security, instrument or basket of instruments underlying the transaction exceeds the offsetting interest obligation, the Series will receive a payment from the counterparty. To the extent the total return of the security, instrument or basket of instruments underlying the transaction falls short of the offsetting interest obligation, the Series will make a payment to the counterparty. The change in value of swap contracts outstanding, if any, is recorded as unrealized appreciation or depreciation daily. A realized gain or loss is recorded on maturity or termination of the swap contract.

Capital Reserves Series- 17

Delaware VIP Capital Reserves Series
Notes to Financial Statements (continued)

10. Swap Contracts (continued)

Because there is no organized market for these swap contracts, the value of open swaps may differ from that which would be realized in the event the Series terminated its position in the contract. Risks of entering into these contracts include the potential inability of the counterparty to meet the terms of the contracts. This type of risk is generally limited to the amount of favorable movements in the value of the underlying security, instrument, or basket of instruments, if any, at the day of default. Risks also arise from potential losses from adverse market movements and such losses could exceed the related unrealized amounts shown on the Statement of Net Assets.

11. Credit and Market Risk

The Series invests in fixed income securities whose value is derived from an underlying pool of mortgages or consumer loans. Investors receive principal and interest payments as the underlying mortgages and consumer loans are paid back. Some of these securities are collateralized mortgage obligations (CMOs). CMOs are debt securities issued by U.S. government agencies or by financial institutions and other mortgage lenders, which are collateralized by a pool of mortgages held under an indenture. Prepayment of mortgages may shorten the stated maturity of the obligations and can result in a loss of premium, if any has been paid. Certain of these securities may be stripped (securities which provide only the principal or interest feature of the underlying security). The yield to maturity on an interest-only CMO is extremely sensitive not only to changes in prevailing interest rates, but also to the rate of principal payments (including prepayment s) on the related underlying mortgage assets. A rapid rate of principal payments may have a material adverse affect on the Series' yield to maturity. If the underlying mortgage assets experience greater than anticipated prepayments of principal, the Series may fail to recoup its initial investment in these securities even if the securities are rated in the highest rating categories.

The Series may invest up to 10% of its total 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 the Series 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, the Series' Board of Trustees has delegated to DMC the day-to-day functions of determining whether individual securities are liquid for purposes of the Series' limitation on investments in illiquid assets. Rule 144A and illiquid securities have been identified on the Statement of Net Assets.

12. Contractual Obligations

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

13. Tax Information (Unaudited)

For the fiscal year ended December 31, 2006, the Series designates dividends and distributions paid during the year as follows:

(A) Long-Term Capital Gain Distributions (Tax Basis)		(B) Ordinary Income Distributions (Tax Basis)			Total Distributions (Tax Basis)
	–		100	%		100	%

(A) and (B) are based on a percentage of the Series' total distributions.

Capital Reserves Series- 18

Delaware VIP Trust — Delaware VIP Capital Reserves Series
Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees
Delaware VIP Trust — Delaware VIP Capital Reserves Series

We have audited the accompanying statement of net assets of the Delaware VIP Capital Reserves Series (one of the series constituting Delaware VIP Trust) (the "Series") as of December 31, 2006, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Series' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits 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 and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Series' internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Series' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant es timates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2006, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Delaware VIP Capital Reserves Series of Delaware VIP Trust at December 31, 2006, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

  

Philadelphia, Pennsylvania

February 14, 2007

The Series files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Series' Forms N-Q, as well as a description of the policies and procedures that the Series uses to determine how to vote proxies (if any) relating to portfolio securities is available without charge (i) upon request, by calling 800-523-1918; (ii) on the Series' website at http://www.delawareinvestments.com; and (iii) on the Commission's website at http://www.sec.gov. The Series' Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Information (if any) regarding how the Series voted proxies relating to portfolio securities during the most recently disclosed 12-month period ended June 30 is available without charge (i) through the Series' website at http://www.delawareinvestments.com; and (ii) on the Commission's website at http://www.sec.gov.

Capital Reserves Series- 19

Delaware Investments® Family of Funds

board of trustees/directors and officers addendum

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 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.

Name, Address, and Birth Date	Position(s) Held with Fund(s)	Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee or Officer		Other Directorships Held by Trustee or Officer
interested trustees
Patrick P. Coyne1 2005 Market Street Philadelphia, PA 19103 April 14, 1963	Chairman, President, Chief Executive Officer, and Trustee	Chairman and Trustee since August 16, 2006 President and Chief Executive Officer since August 1, 2006	Patrick P. Coyne has served in various executive capacities at different times at Delaware Investments.2		84	None
independent trustees
Thomas L. Bennett 2005 Market Street Philadelphia, PA 19103 October 4, 1947	Trustee	Since March 2005	Private Investor – (March 2004 – Present) Investment Manager – Morgan Stanley & Co. (January 1984 – March 2004)		84	None
John A. Fry 2005 Market Street Philadelphia, PA 19103 May 28, 1960	Trustee	Since January 2001	President – Franklin & Marshall College (June 2002 – Present) Executive Vice President – University of Pennsylvania (April 1995 – June 2002)		84	Director – Community Health Systems Director – Allied Barton Security Holdings
Anthony D. Knerr 2005 Market Street Philadelphia, PA 19103 December 7, 1938	Trustee	Since April 1990	Founder and Managing Director – Anthony Knerr & Associates (Strategic Consulting) (1990 – Present)		84	None
Lucinda S. Landreth 2005 Market Street Philadelphia, PA 19103 June 24, 1947	Trustee	Since March 2005	Chief Investment Officer – Assurant, Inc. (Insurance) (2002 – 2004)		84	None
Ann R. Leven 2005 Market Street Philadelphia, PA 19103 November 1, 1940	Trustee	Since September 1989	Consultant – ARL Associates (Financial Planning) (1983 – Present)		84	Director and Audit Committee Chairperson – Andy Warhol Foundation Director and Audit Committee Member – Systemax, Inc.

Capital Reserves Series- 20

Name, Address, and Birth Date	Position(s) Held with Fund(s)	Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee or Officer		Other Directorships Held by Trustee or Officer
independent trustees (continued)
Thomas F. Madison 2005 Market Street Philadelphia, PA 19103 February 25, 1936	Trustee	Since May 1997	President and Chief Executive Officer – MLM Partners, Inc. (Small Business Investing and Consulting) (January 1993 – Present)		84	Director – Banner Health Director – CenterPoint Energy Director and Audit Committee Member – Digital River, Inc. Director and Audit Committee Member – Rimage Corporation Director – Valmont Industries, Inc.
Janet L. Yeomans 2005 Market Street Philadelphia, PA 19103 July 31, 1948	Trustee	Since April 1999	Vice President (January 2003 – Present) and Treasurer (January 2006 – Present) 3M Corporation Ms. Yeomans has held various management positions at 3M Corporation since 1983.		84	None
J. Richard Zecher 2005 Market Street Philadelphia, PA 19103 July 3, 1940	Trustee	Since March 2005	Founder – Investor Analytics (Risk Management) (May 1999 – Present) Founder – Sutton Asset Management (Hedge Fund) (September 1998 – Present)		84	Director and Audit Committee Member – Investor Analytics Director and Audit Committee Member – Oxigene, Inc.
officers
David F. Connor 2005 Market Street Philadelphia, PA 19103 December 2, 1963	Vice President, Deputy General Counsel, and Secretary	Vice President since September 21, 2000 and Secretary since October 2005	David F. Connor has served as Vice President and Deputy General Counsel of Delaware Investments since 2000.		84	None3
David P. O'Connor 2005 Market Street Philadelphia, PA 19103 February 21, 1966	Senior Vice President, General Counsel, and Chief Legal Officer	Senior Vice President, General Counsel, and Chief Legal Officer since October 2005	David P. O'Connor has served in various executive and legal capacities at different times at Delaware Investments.		84	None3
John J. O'Connor 2005 Market Street Philadelphia, PA 19103 June 16, 1957	Senior Vice President and Treasurer	Treasurer since February 2005	John J. O'Connor has served in various executive capacities at different times at Delaware Investments.		84	None3
Richard Salus 2005 Market Street Philadelphia, PA 19103 October 4, 1963	Senior Vice President and Chief Financial Officer	Chief Financial Officer since November 1, 2006	Richard Salus has served in various executive capacities at different times at Delaware Investments.		84	None3

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

² Delaware 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.

³ David F. Connor, David P. O'Connor, John J. 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. John J. O'Connor also serves in a similar capacity for Lincoln Variable Insurance Products Trust, which has the same investment advisor as the registrant.

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.

Capital Reserves Series- 21

Delaware VIP Trust — Delaware VIP Cash Reserve Series

For the 12-month period ended Dec. 31, 2006, the Delaware VIP Cash Reserve Series showed a positive return of 4.49% for Standard Class shares, and Service Class shares gained 4.23% (both with distributions reinvested). By comparison, the U.S. Consumer Price Index, gained 2.54% (source: Lipper).

At its two fourth-quarter meetings, the Federal Open-Market Committee left rates unchanged, so that the June rate hike of 25 basis points to a target rate of 5.25% was the last rate hike of the series of 17 such actions that had begun exactly two years earlier. With the yields of money market funds being highly sensitive to movements in the federal funds rate, the Series' yield was stable from mid-summer 2006 through the end of the year.

The direction of any future movements continues to be dependent on the economy's performance, with attention focused on the balance between economic growth and inflation. In this vein, we believe recent economic releases have been filled with contradictions. Despite weakness in some sectors of the economy, notably the housing market, other indications have been relatively robust. Payroll employment rose unexpectedly in December, and there were upward revisions in the employment numbers for October and November. Gross domestic product (GDP) estimates have been raised as well. On balance, viewed from the final quarter of 2006, the economy appeared relatively healthy.

As the likelihood of further Federal Reserve Bank (Fed) rate hikes subsided over the course of the fourth quarter, and money market rates stabilized, the Series' average maturity was extended to 38 days, reflecting investment in higher yielding paper further out on the yield curve.

The views expressed are current as of the date of this report and are subject to change.

The performance data quoted below and on the next page represent past performance; past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please obtain the performance data for the most recent month end by calling the number noted on the page related to this Series in the introductory section of this report.

You should consider the investment objectives, risks, charges, and expenses of the investment carefully before investing. The Delaware VIP Cash Reserve Series prospectus contains this and other important information about the Series. To obtain a prospectus, contact the company noted on the page related to this Series in the introductory section of this report, either by phone or through the company Web site. We advise you to read the prospectus carefully before you invest.

Delaware VIP Cash Reserve Series Average Annual Total Returns For the periods ending Dec. 31, 2006

1 Year

5 Years

10 Years

Lifetime

Standard Class Shares*

+4.49

%

+1.97

%

+3.47

%

+4.30

%

Service Class Shares**

+4.23

%

+1.74

%

NA

+2.47

%

  *  Commenced operations on July 28, 1988

  **  Commenced operations on May 1, 2000

Cash Reserve Series- 1

Delaware VIP Trust — Delaware VIP Cash Reserve Series (continued)

The chart shows a $10,000 investment in the Delaware VIP Cash Reserve Series Standard Class shares for the period Dec. 31, 1996 through Dec. 31, 2006. All distributions were reinvested. The chart also shows $10,000 invested in the U.S. Consumer Price Index for the period from Dec. 31, 1996 through Dec. 31, 2006.

The U.S. Consumer Price Index is calculated by the U.S. Department of Labor and measures the rate of consumer price inflation in the U.S. The index represents the change in the price of goods and services for all urban consumers. An index is unmanaged and does not reflect the costs of operating a mutual fund, such as the costs of buying, selling, and holding securities. You cannot invest directly in an index.

Earnings from a variable annuity or variable life investment compound tax free until withdrawal, so no adjustments were made for income taxes.

An expense limitation was in effect for the Delaware VIP Cash Reserve Series during the periods shown.

Performance of Service Class shares will vary due to different charges and expenses.

Performance does not reflect insurance fees related to a variable annuity or variable life investment or the deferred sales charge that would apply to certain withdrawals of investments held for fewer than eight years. Performance shown here would have been reduced if such fees were included and the expense limitation was removed. For more information about fees, consult your variable annuity or variable life prospectus.

An investment in the Series is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Series seeks to preserve the value of an investment at $1.00 per share, it is possible to lose money by investing in the Series.

Investments in variable products involve risk. Some portfolios offer more risk than others. Please read both the contract and underlying prospectus for specific details regarding the product's risk profile.

Cash Reserve Series- 2

Delaware VIP Trust — Delaware VIP Cash Reserve Series

Disclosure of Series Expenses

For the Period July 1, 2006 to December 31, 2006

As a shareholder of the Series, you incur ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Series expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Series and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2006 to December 31, 2006.

Actual Expenses

The first section of the table shown, "Actual Series 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 the period.

Hypothetical Example for Comparison Purposes

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

Please note that the expenses shown in the table are meant to highlight your ongoing costs only. As a shareholder of the Series, you do not incur any transaction costs, such as sales charges (loads), redemption fees or exchange fees, but shareholders of other funds may incur such costs. Also, the fees related to the variable annuity investment or the deferred sales charge that could apply have not been included. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. The Series' actual expenses shown in the table reflect fee waivers in effect for Service Class shares. The expenses shown in the table assume reinvestment of all dividends and distributions.

Expense Analysis of an Investment of $1,000

	Beginning Account Value 7/1/06		Ending Account Value 12/31/06		Annualized Expense Ratios			Expenses Paid During Period 7/1/06 to 12/31/06*
Actual Series Return
Standard Class	$	1,000.00	$	1,023.90		0.66	%	$	3.37
Service Class		1,000.00		1,022.70		0.91	%		4.64
Hypothetical 5% Return (5% return before expenses)
Standard Class	$	1,000.00	$	1,021.88		0.66	%	$	3.36
Service Class		1,000.00		1,020.62		0.91	%		4.63

*"Expenses Paid During Period" are equal to the Series' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

Cash Reserve Series- 3

Delaware VIP Trust — Delaware VIP Cash Reserve Series
Sector Allocation

As of December 31, 2006

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

Sector	Percentage of Net Assets
Certificate of Deposit		2.38	%
Commercial Paper		82.01	%
Colleges & Universities		2.38	%
Financial Services		48.68	%
Industrial		3.33	%
Mortgage Bankers & Brokers		18.35	%
Pharmaceutical		2.85	%
Sovereign Agency		4.04	%
State Agency		2.38	%
Floating Rate Notes		9.54	%
Medium Term Note		2.38	%
Variable Rate Demand Note		3.81	%
Total Market Value of Securities		100.12	%
Liabilities Net of Receivables and Other Assets		(0.12	%)
Total Net Assets		100.00	%

Cash Reserve Series-4

Delaware VIP Trust — Delaware VIP Cash Reserve Series
Statement of Net Assets

December 31, 2006

	Principal Amount		Market Value
CERTIFICATE OF DEPOSIT–2.38%
Wilmington Trust 5.32% 4/5/07	$	500,000	$	500,013
Total Certificate of Deposit (cost $500,013)				500,013
d COMMERCIAL PAPER–82.01%
Colleges & Universities–2.38%
Leland Stanford Junior University 5.316% 1/16/07		250,000		249,449
University of California 5.349% 1/11/07		250,000		249,635
				499,084
Financial Services–48.68%
n Amstel Funding 5.345% 1/16/07		457,000		455,985
5.347% 4/13/07		350,000		344,833
n Aquinas Funding 5.314% 1/11/07		300,000		299,562
5.533% 1/29/07		250,000		248,954
Bank of America 5.295% 3/1/07		300,000		297,429
5.329% 1/24/07		219,000		218,258
n Barton Capital 5.37% 1/12/07		500,000		499,183
Beta Finance 5.331% 2/20/07		280,000		277,956
n Corporate Asset Funding 5.312% 1/30/07		500,000		497,877
CBA Delaware Finance 5.291% 1/16/07		500,000		498,903
5.573% 1/5/07		250,000		249,849
CDC Commercial Paper 5.356% 1/4/07		350,000		349,844
n Corporate Receivables 5.31% 1/23/07		250,000		249,199
Danske 5.287% 1/16/07		500,000		498,908
n Fountain Square Commercial Funding 5.313% 2/16/07		300,000		297,987
5.363% 1/3/07		300,000		299,912
HBOS Treasury Services 5.32% 1/22/07		500,000		498,469
JPMorgan Chase 5.302% 2/6/07		168,000		167,116
5.308% 3/28/07		188,000		185,674
5.546% 1/5/07		500,000		499,701
Metlife Funding 5.303% 1/2/07		635,000		634,908
Sanpaolo IMI 5.321% 1/30/07		500,000		497,885
n Sheffield Receivables 5.30% 1/22/07		250,000		249,232
# Sigma Finance 5.325% 2/13/07		250,000		248,438
n Starbird Funding 5.323% 1/17/07		650,000		648,473
Surrey Funding 5.324% 1/30/07		500,000		497,889
n Three Pillars 5.305% 1/8/07		500,000		499,488
				10,211,912
Industrial–3.33%
BASF AG 5.293% 2/14/07		300,000		298,079
5.31% 1/2/07		400,000		399,941
				698,020

	Principal Amount		Market Value
COMMERCIAL PAPER (continued)
Mortgage Bankers & Brokers–18.35%
Bear Stearns 5.511% 3/1/07	$	500,000	$	495,624
Goldman Sachs 5.324% 2/1/07		500,000		497,722
HSBC 5.299% 2/6/07		500,000		497,398
ING Funding 5.308% 1/16/07		750,000		748,364
Morgan Stanley 5.304% 3/7/07		600,000		594,323
Svenska Handelsbanken 5.306% 2/28/07		500,000		495,783
Westpac Banking 5.342% 3/7/07		525,000		519,995
				3,849,209
Pharmaceutical–2.85%
Abbott Laboratories 5.275% 1/16/07		600,000		598,688
				598,688
Sovereign Agency–4.04%
Swedish Housing Finance 5.306% 1/29/07		300,000		298,770
5.314% 1/22/07		250,000		249,239
5.364% 2/5/07		300,000		298,454
				846,463
State Agency–2.38%
City of Austin, Texas 5.37% 1/9/07		500,000		499,404
				499,404
Total Discounted Commercial Paper (cost $17,202,780)				17,202,780
• FLOATING RATE NOTES–9.54%
Credit Suisse New York 5.325% 7/26/07		500,000		500,000
# DNB NOR Bank 144A 5.34% 1/25/08		750,000		750,000
Washington Mutual Bank 5.35% 6/26/07		750,000		750,000
Total Floating Rate Notes (cost $2,000,000)				2,000,000
MEDIUM TERM NOTE–2.38%
Sigma Finance 4.83% 1/30/07		500,000		500,000
Total Medium Term Note (cost $500,000)				500,000
VARIABLE RATE DEMAND NOTE–3.81%
• North Texas Higher Education Authority Series B 5.35% 12/1/44 (AMBAC) (SPA–Depfa Bank)		800,000		800,000
Total Variable Rate Demand Note (cost $800,000)				800,000

Cash Reserve Series-5

Delaware VIP Cash Reserve Series
Statement of Net Assets (continued)

TOTAL MARKET VALUE OF SECURITIES–100.12% (cost $21,002,793)v	$	21,002,793
LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS–(0.12%)		(25,648	)
NET ASSETS APPLICABLE TO 20,977,043 SHARES OUTSTANDING–100.00%	$	20,977,145
NET ASSET VALUE-DELAWARE VIP CASH RESERVE SERIES STANDARD CLASS ($20,971,272 / 20,971,170 Shares)	$	1.00
NET ASSET VALUE-DELAWARE VIP CASH RESERVE SERIES SERVICE CLASS ($5,873 / 5,873 Shares)	$	1.00
COMPONENTS OF NET ASSETS AT DECEMBER 31, 2006:
Shares of beneficial interest (unlimited authorization-no par)	$	21,030,441
Accumulated net realized loss on investments		(53,296	)
Total net assets	$	20,977,145

  d  The interest rate shown is the effective yield as of the time of purchase.

n  Asset-backed Commercial Paper.

v  Also the cost for federal income tax purposes.

  •  Variable rate security. The interest rate shown is the rate as of December 31, 2006.

  #  Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At December 31, 2006, the aggregate amount of Rule 144A securities equaled $998,438, which represented 4.76% of the Series' net assets. See Note 5 in "Notes to Financial Statements."

Summary of Abbreviations:

AMBAC – Insured by the AMBAC Assurance Corporation

SPA – Stand-by Purchase Agreement

See accompanying notes

Cash Reserve Series- 6

Delaware VIP Trust — Delaware VIP Cash Reserve Series
Statement of Operations

Year Ended December 31, 2006

Delaware VIP Trust — Delaware VIP Cash Reserve Series
Statements of Changes in Net Assets

INVESTMENT INCOME:
Interest	$	1,105,882
EXPENSES:
Management fees		98,279
Reports and statements to shareholders		13,142
Audit and tax		11,471
Accounting and administration expenses		8,736
Custodian fees		5,203
Trustees' fees and benefits		3,860
Dividend disbursing and transfer agent fees and expenses		2,184
Legal fees		2,025
Pricing fees		1,161
Consulting fees		601
Insurance fees		274
Taxes (other than taxes on income)		176
Dues and services		95
Trustees' expenses		72
Registration fees		52
Distribution expenses – Service Class		18
		147,349
Less waiver of distribution expenses – Service Class		(3	)
Less expense paid indirectly		(397	)
Total operating expenses		146,949
NET INVESTMENT INCOME		958,933
NET REALIZED GAIN ON INVESTMENTS		20
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	958,953

See accompanying notes

	Year Ended
	12/31/06			12/31/05
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income	$	958,933		$	699,559
Net realized gain on investments		20			82
Net increase in net assets resulting from operations		958,953			699,641
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Standard Class		(958,694	)		(699,425	)
Service Class		(239	)		(134	)
		(958,933	)		(699,559	)
CAPITAL SHARE TRANSACTIONS (at $1.00 per share):
Proceeds from shares sold:
Standard Class		29,007,341			7,755,610
Net asset value of shares issued upon reinvestment of dividends and distributions:
Standard Class		954,586			690,782
Service Class		237			130
		29,962,164			8,446,522
Cost of shares repurchased:
Standard Class		(32,421,044	)		(14,846,540	)
Decrease in net assets derived from capital share transactions		(2,458,880	)		(6,400,018	)
NET DECREASE IN NET ASSETS		(2,458,860	)		(6,399,936	)
NET ASSETS:
Beginning of year		23,436,005			29,835,941
End of year (there was no undistributed net investment income at either year end)	$	20,977,145		$	23,436,005

See accompanying notes

Cash Reserve Series-7

Delaware VIP Trust — Delaware VIP Cash Reserve Series
Financial Highlights

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

	Delaware VIP Cash Reserve Series Standard Class
	Year Ended
	12/31/06			12/31/05			12/31/041			12/31/03			12/31/022
Net asset value, beginning of period	$	1.000		$	1.000		$	1.000		$	1.000		$	1.000
Income from investment operations:
Net investment income		0.044			0.027			0.009			0.006			0.013
Total from investment operations		0.044			0.027			0.009			0.006			0.013
Less dividends and distributions from:
Net investment income		(0.044	)		(0.027	)		(0.009	)		(0.006	)		(0.013	)
Total dividends and distributions		(0.044	)		(0.027	)		(0.009	)		(0.006	)		(0.013	)
Net asset value, end of period	$	1.000		$	1.000		$	1.000		$	1.000		$	1.000
Total return3		4.49	%		2.69	%		0.87	%		0.61	%		1.26	%
Ratios and supplemental data:
Net assets, end of period (000 omitted)	$	20,971		$	23,430		$	29,831		$	42,748		$	49,809
Ratio of expenses to average net assets		0.67	%		0.61	%		0.55	%		0.58	%		0.59	%
Ratio of net investment income to average net assets		4.39	%		2.62	%		0.82	%		0.60	%		1.26	%

¹On June 10, 2004, DMC voluntarily made a capital contribution of $0.001 per share to the Series in order to eliminate the potential deviation in the Series' net asset value of $1.00 per share caused by accumulated net realized losses. This contribution had no impact on the Series' total return.

²Effective December 20, 2002, the Series declared a 10 for 1 share split. Per share data for periods prior to this date have been restated to reflect this share split.

³Total 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.

See accompanying notes

Cash Reserve Series- 8

Delaware VIP Cash Reserve Series
Financial Highlights (continued)

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

	Delaware VIP Cash Reserve Series Service Class
	Year Ended
	12/31/06			12/31/05			12/31/041			12/31/03			12/31/022
Net asset value, beginning of period	$	1.000		$	1.000		$	1.000		$	1.000		$	1.000
Income from investment operations:
Net investment income		0.041			0.024			0.006			0.004			0.011
Total from investment operations		0.041			0.024			0.006			0.004			0.011
Less dividends and distributions from:
Net investment income		(0.041	)		(0.024	)		(0.006	)		(0.004	)		(0.011	)
Total dividends and distributions		(0.041	)		(0.024	)		(0.006	)		(0.004	)		(0.011	)
Net asset value, end of period	$	1.000		$	1.000		$	1.000		$	1.000		$	1.000
Total return3		4.23	%		2.43	%		0.60	%		0.40	%		1.13	%
Ratios and supplemental data:
Net assets, end of period (000 omitted)	$	6		$	6		$	5		$	5		$	5
Ratio of expenses to average net assets		0.92	%		0.86	%		0.80	%		0.80	%		0.74	%
Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly		0.97	%		0.91	%		0.85	%		0.83	%		0.74	%
Ratio of net investment income to average net assets		4.14	%		2.37	%		0.57	%		0.38	%		1.11	%
Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly		4.09	%		2.32	%		0.52	%		0.35	%		1.11	%

¹On June 10, 2004, DMC voluntarily made a capital contribution of $0.001 per share to the Series in order to eliminate the potential deviation in the Series' net asset value of $1.00 per share caused by accumulated net realized losses. This contribution had no impact on the Series' total return.

²Effective December 20, 2002, the Series declared a 10 for 1 share split. Per share data for periods prior to this date have been restated to reflect this share split.

³Total 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. Total investment return reflects a waiver and payment of fees by the distributor, as applicable. Performance would have been lower had the waiver not been in effect.

See accompanying notes

Cash Reserve Series- 9

Delaware VIP Trust — Delaware VIP Cash Reserve Series
Notes to Financial Statements

December 31, 2006

Delaware VIP Trust (the "Trust") is organized as a Delaware statutory trust and offers 15 series: Delaware VIP Balanced Series, Delaware VIP Capital Reserves Series, Delaware VIP Cash Reserve Series, Delaware VIP Diversified Income Series, Delaware VIP Emerging Markets Series, Delaware VIP Global Bond Series, Delaware VIP Growth Opportunities Series, Delaware VIP High Yield Series, Delaware VIP International Value Equity Series, Delaware VIP REIT Series, Delaware VIP Select Growth Series, Delaware VIP Small Cap Value Series, Delaware VIP Trend Series, Delaware VIP U.S. Growth Series and Delaware VIP Value Series. These financial statements and the related notes pertain to Delaware VIP Cash Reserve Series (the "Series"). The Trust is an open-end investment company. The Series is considered diversified under the Investment Company Act of 1940, as amended, and offers Standard Class and Service Class shares. The Standard Class shares do not carr y a 12b-1 fee and the Service Class shares carry a 12b-1 fee. The shares of the Series are sold only to separate accounts of life insurance companies.

The investment objective of the Series is to seek to provide maximum current income, while preserving principal and maintaining liquidity, by investing its assets in a diversified portfolio of money market securities and managing the portfolio to maintain a constant net asset value of $1 per share.

1. Significant Accounting Policies

The following accounting policies are in accordance with U.S. generally accepted accounting principles and are consistently followed by the Series.

Security Valuation—Securities are valued at amortized cost, which approximates market value.

In September 2006, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 157 "Fair Value Measurements" (Statement 157). Statement 157 establishes a framework for measuring fair value in generally accepted accounting principles, clarifies the definition of fair value within that framework, and expands disclosures about the use of fair value measurements. Statement 157 is intended to increase consistency and comparability among fair value estimates used in financial reporting. Statement 157 is effective for fiscal years beginning after November 15, 2007. Management does not expect the adoption of Statement 157 to have an impact on the amounts reported in the financial statements.

Federal Income Taxes—The Series intends to continue to qualify for federal income tax purposes as a regulated investment company and make the requisite distributions to shareholders. Accordingly, no provision for federal income taxes has been made in the financial statements.

On July 13, 2006, FASB released FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Series' 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 would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. Recent SEC guidance allows implementing FIN 48 in Series net asset value calculations as late as the Series' last net asset value calculation in the first required fi nancial statement reporting period. As a result, the Series will incorporate FIN 48 in its semiannual report on June 30, 2007. Although the Series' tax positions are currently being evaluated, management does not expect the adoption of FIN 48 to have a material impact on the Series' financial statements.

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

Repurchase Agreements—The Series may invest in a pooled cash account along with other members of the Delaware Investments^® Family of Funds pursuant to an exemptive order issued by the Securities and Exchange Commission. The aggregate daily balance of the pooled cash account is invested in repurchase agreements secured by obligations of the U.S. government. The respective collateral is held by the Series' custodian bank until the maturity of the respective repurchase agreements. Each repurchase agreement is at least 102% collateralized. However, in the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral may be subject to legal proceedings.

Use of Estimates—The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of 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.

Other—Expenses directly attributable to the Series are charged directly to the Series. 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.

The Series declares dividends daily from net investment income and pays such dividends monthly and declares and pays distributions from net realized gain on investments, if any, following the close of the fiscal year.

The Series may receive earnings credits from its custodian when positive cash balances are maintained, which are used to offset custody fees. The expense paid under this arrangement is included in custodian fees on the Statement of Operations with the corresponding expense offset shown as "expense paid indirectly."

Cash Reserve Series- 10

Delaware VIP Cash Reserve Series
Notes to Financial Statements (continued)

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

In accordance with the terms of its investment management agreement, the Series pays Delaware Management Company (DMC), a series of Delaware Management Business Trust and the investment manager, an annual fee which is calculated daily at the rate of 0.45% on the first $500 million of average daily net assets of the Series, 0.40% on the next $500 million, 0.35% on the next $1.5 billion, and 0.30% on average daily net assets in excess of $2.5 billion.

DMC has contractually agreed to waive that portion, if any, of its management fee and reimburse the Series to the extent necessary to ensure that annual operating expenses, exclusive of taxes, interest, brokerage commissions, distribution fees, certain insurance costs and extraordinary expenses, do not exceed 0.67% of average daily net assets of the Series through April 30, 2007. Prior to May 1, 2006, the expense limitation was 0.80% of average daily net assets. No reimbursement was due for the year ended December 31, 2006.

Delaware Service Company, Inc. (DSC), an affiliate of DMC, provides accounting, administration, dividend disbursing and transfer agent services. The Series pays DSC a monthly fee computed at the annual rate of 0.04% of the Series' average daily net assets for accounting and administrative services. The Series pays DSC a monthly fee based on average net assets for dividend disbursing and transfer agent services.

Pursuant to a distribution agreement and distribution plan, the Series pays Delaware Distributors, L.P. (DDLP), the distributor and an affiliate of DMC, an annual distribution and service fee not to exceed 0.30% of the average daily net assets of the Service Class shares. DDLP has contracted to waive distribution and service fees through April 30, 2007 in order to prevent distribution and service fees of the Service Class shares from exceeding 0.25% of average daily net assets. Standard Class shares pay no distribution and service expenses.

At December 31, 2006, the Series had liabilities payable to affiliates as follows:

Investment Management Fee Payable to DMC		Dividend Disbursing, Transfer Agent, Accounting and Administration Fees and Other Expenses Payable to DSC		Distribution Fees Payable To DDLP		Other Expenses Payable to DMC and Affiliates*
$	8,136	$	1,004	$	1	$	835

*DMC, as part of its administrative services, pays operating expenses on behalf of the Series and is reimbursed on a periodic basis. Such expenses include items such as printing of shareholder reports, fees for audit, legal and tax services, custodian fees and trustees' fees.

As provided in the investment management agreement, the Series bears the cost of certain legal and tax services, including internal legal and tax services provided to the Series by DMC and/or its affiliates' employees. For the year ended December 31, 2006, the Series was charged $1,022 for internal legal and tax services provided by DMC and/or its affiliates' employees.

Trustees' fees and benefits include expenses accrued by the Series for each Trustee's retainer, per meeting fees and retirement benefits. Independent Trustees with over five years of uninterrupted service are eligible to participate in a retirement plan that provides for the payment of benefits upon retirement. The amount of the retirement benefit is based on factors set forth in the plan, including the number of years of service. On November 16, 2006, the Board of Trustees unanimously voted to terminate the retirement plan. Payments equal to the net present value of the earned benefits will be made in 2007 to those independent trustees so entitled. The retirement benefit payout for the Series is $2,653. Certain officers of DMC, DSC and DDLP are officers and/or trustees of the Trust. These officers and trustees are paid no compensation by the Series.

3. 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. generally accepted accounting principles. Additionally, 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 December 31, 2006 and 2005 was as follows:

	Year Ended 12/31/06		Year Ended 12/31/05
Ordinary income	$	958,933	$	699,559

Cash Reserve Series- 11

Delaware VIP Cash Reserve Series
Notes to Financial Statements (continued)

4. Components of Net Assets on a Tax Basis

As of December 31, 2006, the components of net assets on a tax basis were as follows:

Shares of beneficial interest	$	21,030,441
Capital loss carryforwards		(53,296	)
Net assets	$	20,977,145

For federal income tax purposes, capital loss carryforwards may be carried forward and applied against future capital gains. $17 was utilized in 2006. Capital loss carryforwards of $53,296 remaining at December 31, 2006 will expire in 2010.

5. Credit and Market Risk

An investment in the Series is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Series seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Series.

The Series may invest up to 10% of its total 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 the Series 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, the Series' Board of Trustees has delegated to DMC the day-to-day functions of determining whether individual securities are liquid for purposes of the Series' limitation on investments in illiquid assets. At December 31, 2006, no securities have been determined to be illiquid under the Series' Liquidity Procedures. Rule 144A securities have been identified on the Statement of Net Assets.

6. Contractual Obligations

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

7. Tax Information (Unaudited)

For the fiscal year ended December 31, 2006, the Series designates dividends and distributions paid during the year as follows:

(A) Long-Term Capital Gain Distributions (Tax Basis)		(B) Ordinary Income Distributions (Tax Basis)			Total Distributions (Tax Basis)
	–		100	%		100	%

(A) and (B) are based on a percentage of the Series' total distributions.

Cash Reserve Series- 12

Delaware VIP Trust — Delaware VIP Cash Reserve Series
Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees
Delaware VIP Trust — Delaware VIP Cash Reserve Series

We have audited the accompanying statement of net assets of the Delaware VIP Cash Reserve Series (one of the series constituting Delaware VIP Trust) (the "Series") as of December 31, 2006, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Series' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits 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 and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Series' internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Series' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant es timates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2006, by correspondence with the custodian. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Delaware VIP Cash Reserve Series of Delaware VIP Trust at December 31, 2006, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

  

Philadelphia, Pennsylvania

February 14, 2007

The Series files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Series' Forms N-Q, as well as a description of the policies and procedures that the Series uses to determine how to vote proxies (if any) relating to portfolio securities is available without charge (i) upon request, by calling 800-523-1918; (ii) on the Series' website at http://www.delawareinvestments.com; and (iii) on the Commission's website at http://www.sec.gov. The Series' Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Information (if any) regarding how the Series voted proxies relating to portfolio securities during the most recently disclosed 12-month period ended June 30 is available without charge (i) through the Series' website at http://www.delawareinvestments.com; and (ii) on the Commission's website at http://www.sec.gov.

Cash Reserve Series-13

Delaware Investments® Family of Funds

board of trustees/directors and officers addendum

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 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.

Name, Address, and Birth Date	Position(s) Held with Fund(s)	Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee or Officer		Other Directorships Held by Trustee or Officer
interested trustees
Patrick P. Coyne1 2005 Market Street Philadelphia, PA 19103 April 14, 1963	Chairman, President, Chief Executive Officer, and Trustee	Chairman and Trustee since August 16, 2006 President and Chief Executive Officer since August 1, 2006	Patrick P. Coyne has served in various executive capacities at different times at Delaware Investments.2		84	None
independent trustees
Thomas L. Bennett 2005 Market Street Philadelphia, PA 19103 October 4, 1947	Trustee	Since March 2005	Private Investor – (March 2004 – Present) Investment Manager – Morgan Stanley & Co. (January 1984 – March 2004)		84	None
John A. Fry 2005 Market Street Philadelphia, PA 19103 May 28, 1960	Trustee	Since January 2001	President – Franklin & Marshall College (June 2002 – Present) Executive Vice President – University of Pennsylvania (April 1995 – June 2002)		84	Director – Community Health Systems Director – Allied Barton Security Holdings
Anthony D. Knerr 2005 Market Street Philadelphia, PA 19103 December 7, 1938	Trustee	Since April 1990	Founder and Managing Director – Anthony Knerr & Associates (Strategic Consulting) (1990 – Present)		84	None
Lucinda S. Landreth 2005 Market Street Philadelphia, PA 19103 June 24, 1947	Trustee	Since March 2005	Chief Investment Officer – Assurant, Inc. (Insurance) (2002 – 2004)		84	None
Ann R. Leven 2005 Market Street Philadelphia, PA 19103 November 1, 1940	Trustee	Since September 1989	Consultant – ARL Associates (Financial Planning) (1983 – Present)		84	Director and Audit Committee Chairperson – Andy Warhol Foundation Director and Audit Committee Member – Systemax, Inc.

Cash Reserve Series- 14

Name, Address, and Birth Date	Position(s) Held with Fund(s)	Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee or Officer		Other Directorships Held by Trustee or Officer
independent trustees (continued)
Thomas F. Madison 2005 Market Street Philadelphia, PA 19103 February 25, 1936	Trustee	Since May 1997	President and Chief Executive Officer – MLM Partners, Inc. (Small Business Investing and Consulting) (January 1993 – Present)		84	Director – Banner Health Director – CenterPoint Energy Director and Audit Committee Member – Digital River, Inc. Director and Audit Committee Member – Rimage Corporation Director – Valmont Industries, Inc.
Janet L. Yeomans 2005 Market Street Philadelphia, PA 19103 July 31, 1948	Trustee	Since April 1999	Vice President (January 2003 – Present) and Treasurer (January 2006 – Present) 3M Corporation Ms. Yeomans has held various management positions at 3M Corporation since 1983.		84	None
J. Richard Zecher 2005 Market Street Philadelphia, PA 19103 July 3, 1940	Trustee	Since March 2005	Founder – Investor Analytics (Risk Management) (May 1999 – Present) Founder – Sutton Asset Management (Hedge Fund) (September 1998 – Present)		84	Director and Audit Committee Member – Investor Analytics Director and Audit Committee Member – Oxigene, Inc.
officers
David F. Connor 2005 Market Street Philadelphia, PA 19103 December 2, 1963	Vice President, Deputy General Counsel, and Secretary	Vice President since September 21, 2000 and Secretary since October 2005	David F. Connor has served as Vice President and Deputy General Counsel of Delaware Investments since 2000.		84	None3
David P. O'Connor 2005 Market Street Philadelphia, PA 19103 February 21, 1966	Senior Vice President, General Counsel, and Chief Legal Officer	Senior Vice President, General Counsel, and Chief Legal Officer since October 2005	David P. O'Connor has served in various executive and legal capacities at different times at Delaware Investments.		84	None3
John J. O'Connor 2005 Market Street Philadelphia, PA 19103 June 16, 1957	Senior Vice President and Treasurer	Treasurer since February 2005	John J. O'Connor has served in various executive capacities at different times at Delaware Investments.		84	None3
Richard Salus 2005 Market Street Philadelphia, PA 19103 October 4, 1963	Senior Vice President and Chief Financial Officer	Chief Financial Officer since November 1, 2006	Richard Salus has served in various executive capacities at different times at Delaware Investments.		84	None3

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

² Delaware 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.

³ David F. Connor, David P. O'Connor, John J. 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. John J. O'Connor also serves in a similar capacity for Lincoln Variable Insurance Products Trust, which has the same investment advisor as the registrant.

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.

Cash Reserve Series- 15

Delaware VIP Trust — Delaware VIP Diversified Income Series

For the 12-month period ended Dec. 31, 2006, Delaware VIP Diversified Income Series returned +7.92% for Standard Class shares and +7.57% for Service Class shares (both figures reflect all distributions reinvested). During the same period, the Series' benchmark, the Lehman Brothers Aggregate Bond Index, underperformed compared to the Series with a return of 4.33% (source: Lipper).

The Series allocates its investments between the U.S. investment grade sector, the U.S. high yield sector, established market foreign bonds, and emerging markets.

In both the Series and the market in general, performance among investment grade bonds was generally not as strong as that of fixed income assets rated lower in credit quality. Our benchmark for the high yield portion of the market, the Bear Stearns High Yield Index, gained 11.64% for the year ended December 31, 2006, which was higher than the Series' performance benchmark.

When considering investment grade corporate bonds, we favored companies that we regard as having strong financial health, often selecting their higher yielding but subordinated debt securities. We generally avoided investments affected by leveraged buyouts, management buyouts, leveraged recapitalizations, and mergers, all of which generally tend to be unfriendly to bondholders.

Because the high yield and emerging market areas posted strong performance in recent quarters, we shifted focus somewhat to higher-quality domestic bonds and the established international markets late in the year.

The views expressed are current as of the date of this report and are subject to change.

The performance data quoted below and on the next page represent past performance; past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please obtain the performance data for the most recent month end by calling the number noted on the page related to this Series in the introductory section of this report.

You should consider the investment objectives, risks, charges, and expenses of the investment carefully before investing. The Delaware VIP Diversified Income Series prospectus contains this and other important information about the Series. To obtain a prospectus, contact the company noted on the page related to this Series in the introductory section of this report, either by phone or through the company Web site. We advise you to read the prospectus carefully before you invest.

Delaware VIP Diversified Income Series Average Annual Total Returns For the periods ending Dec. 31, 2006	1 Year			Lifetime
Standard Class Shares*		+7.92	%		+5.77	%
Service Class Shares*		+7.57	%		+5.46	%

  *  Commenced operations on May 16, 2003.

Diversified Income Series- 1

Delaware VIP Trust — Delaware VIP Diversified Income Series (continued)

The chart shows a $10,000 investment in the Delaware VIP Diversified Income Series Standard Class shares for the period from the Series inception May 16, 2003 through Dec. 31, 2006. All distributions were reinvested. The chart also shows $10,000 invested in the Lehman Brothers Aggregate Bond Index for the period from May 31, 2003 through Dec. 31, 2006.

Lehman Brothers Aggregate Bond Index measures the performance of a large group of high quality, fixed income securities across the government, corporate, mortgage-backed, asset-backed, and commercial mortgage-backed markets. An index is unmanaged and does not reflect the costs of operating a mutual fund, such as the costs of buying, selling, and holding securities. You cannot invest directly in an index.

Earnings from a variable annuity or variable life investment compound tax free until withdrawal, so no adjustments were made for income taxes.

An expense limitation was in effect for the Delaware VIP Diversified Income Series during the periods shown.

Performance of Service Class shares will vary due to different charges and expenses.

Performance does not reflect insurance fees related to a variable annuity or variable life investment or the deferred sales charge that would apply to certain withdrawals of investments held for fewer than eight years. Performance shown here would have been reduced if such fees were included and the expense limitation was removed. For more information about fees, consult your variable annuity or variable life prospectus.

Investments in variable products involve risk. High yielding, noninvestment grade bonds involve higher risk than investment grade bonds. Adverse conditions may affect the issuer's ability to pay interest and principal on these securities. International and emerging market investments are subject to risks not ordinarily associated with domestic investments, such as currency, economic and political risks, and different accounting standards. Some portfolios offer more risk than others. Please read both the contract and underlying prospectus for specific details regarding the product's risk profile.

Diversified Income Series- 2

Delaware VIP Trust — Delaware VIP Diversified Income Series
Disclosure of Series Expenses

For the Period July 1, 2006 to December 31, 2006

As a shareholder of the Series, you incur ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Series expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Series and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2006 to December 31, 2006.

Actual Expenses

The first section of the table shown, "Actual Series 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 the period.

Hypothetical Example for Comparison Purposes

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

Please note that the expenses shown in the table are meant to highlight your ongoing costs only. As a shareholder of the Series, you do not incur any transaction costs, such as sales charges (loads), redemption fees or exchange fees, but shareholders of other funds may incur such costs. Also, the fees related to the variable annuity investment or the deferred sales charge that could apply have not been included. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. The Series' actual expenses shown in the table reflect fee waivers in effect for Service Class shares. The expenses shown in the table assume reinvestment of all dividends and distributions.

Expense Analysis of an Investment of $1,000

	Beginning Account Value 7/1/06		Ending Account Value 12/31/06		Annualized Expense Ratios			Expenses Paid During Period 7/1/06 to 12/31/06*
Actual Series Return
Standard Class	$	1,000.00	$	1,068.50		0.81	%	$	4.22
Service Class		1,000.00		1,066.40		1.06	%		5.52
Hypothetical 5% Return (5% return before expenses)
Standard Class	$	1,000.00	$	1,021.12		0.81	%	$	4.13
Service Class		1,000.00		1,019.86		1.06	%		5.40

*"Expenses Paid During Period" are equal to the Series' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

Diversified Income Series- 3

Delaware VIP Trust — Delaware VIP Diversified Income Series
Sector Allocation and Credit Rating Breakdown

As of December 31, 2006

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

Sector	Percentage of Net Assets
Agency Asset-Backed Securities		0.04	%
Agency Collateralized Mortgage Obligations		0.68	%
Agency Mortgage-Backed Securities		8.28	%
Agency Obligations		2.71	%
Commercial Mortgage-Backed Securities		1.63	%
Convertible Bonds		0.22	%
Corporate Bonds		42.44	%
Banking		4.26	%
Basic Industry		4.08	%
Brokerage		0.82	%
Capital Goods		2.04	%
Communications		6.30	%
Consumer Cyclical		7.20	%
Consumer Non-Cyclical		3.07	%
Electric		2.00	%
Energy		2.21	%
Finance Companies		3.52	%
Industrial		0.52	%
Insurance		2.00	%
Natural Gas		0.99	%
Real Estate		0.72	%
Technology		1.22	%
Transportation		1.49	%
Foreign Agencies		1.69	%
Austria		0.34	%
Germany		1.06	%
Mexico		0.15	%
Ukraine		0.14	%
Municipal Bonds		0.11	%
Non-Agency Asset-Backed Securities		1.52	%
Non-Agency Collateralized Mortgage Obligations		5.08	%
Regional Agencies		3.23	%
Australia		3.23	%
Regional Authority		0.24	%
Canada		0.24	%
Senior Secured Loans		2.24	%
Sovereign Agencies		0.75	%
France		0.06	%
Japan		0.52	%
Norway		0.17	%
Sovereign Debt		14.04	%
Argentina		0.21	%
Austria		0.67	%
Brazil		1.56	%
Colombia		0.81	%
Dominican Republic		0.13	%
El Salvador		0.09	%
France		0.75	%
Germany		1.22	%
Indonesia		0.15	%
Japan		2.62	%
Malaysia		0.27	%
Mexico		0.62	%
Norway		1.18	%
Panama		0.10	%
Sector	Percentage of Net Assets
Philippines		0.39	%
Poland		0.50	%
Republic of Korea		0.23	%
Sweden		0.40	%
Turkey		0.24	%
United Kingdom		1.07	%
Uruguay		0.21	%
Venezuela		0.62	%
Supranational Banks		1.36	%
U.S. Treasury Obligations		5.90	%
Common Stock		0.05	%
Preferred Stock		0.00	%
Warrants		0.12	%
Repurchase Agreements		12.29	%
Total Market Value of Securities		104.62	%
Liabilities Net of Receivables and Other Assets		(4.62	%)
Total Net Assets		100.00	%
Credit Rating Breakdown (as a % of fixed income investments)
AAA		45.77	%
AA		5.43	%
A		5.55	%
BBB		9.27	%
BB		12.52	%
B		16.37	%
CCC		4.11	%
D		0.04	%
Not Rated		0.94	%
Total		100.00	%

Diversified Income Series-4

Delaware VIP Trust — Delaware VIP Diversified Income Series
Statement of Net Assets

December 31, 2006

	Principal Amountm		Market Value (U.S. $)
AGENCY ASSET-BACKED SECURITIES–0.04%
• Fannie Mae Whole Loan Series 2002-W11 AV1 5.69% 11/25/32	USD	21,807	$	21,803
t FHLMC Structured Pass Through Securities Series T-30 A5 8.61% 12/25/30		182,297		181,869
Total Agency Asset-Backed Securities (cost $203,648)				203,672
AGENCY COLLATERALIZED MORTGAGE OBLIGATIONS–0.68%
Fannie Mae Series 1996-46 ZA 7.50% 11/25/26		6,780		7,003
Series 2002-90 A1 6.50% 6/25/42		20,945		21,383
Series 2002-90 A2 6.50% 11/25/42		85,879		87,471
Series 2003-122 AJ 4.50% 2/25/28		101,010		98,505
Series 2005-110 MB 5.50% 9/25/35		730,000		731,825
Fannie Mae Grantor Trust Series 1999-T2 A1 7.50% 1/19/39		1,900		1,985
Series 2001-T8 A2 9.50% 7/25/41		17,166		18,486
Series 2002-T4 A3 7.50% 12/25/41		38,826		40,343
Series 2004-T1 1A2 6.50% 1/25/44		39,651		40,544
Fannie Mae Whole Loan Series 2002-W6 2A1 7.00% 6/25/42		67,845		69,897
Series 2004-W9 2A1 6.50% 2/25/44		11,350		11,614
Series 2004-W11 1A2 6.50% 5/25/44		125,827		128,788
t FHLMC Structured Pass Through Securities Series T-54 2A 6.50% 2/25/43		36,894		37,603
Series T-58 2A 6.50% 9/25/43		15,144		15,462
Freddie Mac Series 1730 Z 7.00% 5/15/24		165,956		172,981
Series 2326 ZQ 6.50% 6/15/31		257,512		266,602
Series 2480 EH 6.00% 11/15/31		163		163
Series 2552 KB 4.25% 6/15/27		120,593		119,499
Series 2662 MA 4.50% 10/15/31		264,804		259,353
Series 2872 GC 5.00% 11/15/29		220,000		215,250
Series 2890 PC 5.00% 7/15/30		105,000		102,657
Series 2915 KP 5.00% 11/15/29		265,000		259,321
Series 3022 MB 5.00% 12/15/28		165,000		162,583
Series 3063 PC 5.00% 2/15/29		540,000		531,642
Total Agency Collateralized Mortgage Obligations (cost $3,426,381)				3,400,960
AGENCY MORTGAGE-BACKED SECURITIES–8.28%
Fannie Mae 5.50% 1/1/13		226,180		226,160
6.171% 5/1/09		25,402		25,573
6.50% 8/1/17		68,826		70,056

	Principal Amountm		Market Value (U.S. $)
AGENCY MORTGAGE-BACKED SECURITIES (continued)
• Fannie Mae ARM 5.068% 8/1/35	USD	568,388	$	557,438
5.256% 10/1/33		328,746		334,661
Fannie Mae Relocation 15 yr 4.00% 9/1/20		546,942		513,686
Fannie Mae Relocation 30 yr 5.00% 11/1/33		10,610		10,338
5.00% 8/1/34		65,504		63,782
5.00% 11/1/34		95,866		93,346
5.00% 4/1/35		267,679		260,389
5.00% 10/1/35		448,064		435,862
5.00% 1/1/36		602,765		586,350
Fannie Mae S.F. 15 yr TBA 5.00% 1/1/22		350,000		344,094
5.50% 1/1/22		3,915,000		3,915,000
6.00% 1/1/22		4,420,000		4,482,154
Fannie Mae S.F. 30 yr 5.50% 3/1/29		3,583		3,560
5.50% 4/1/29		3,575		3,552
7.50% 3/1/32		1,520		1,580
7.50% 4/1/32		5,326		5,536
Fannie Mae S.F. 30 yr TBA 5.00% 1/1/37		7,020,000		6,778,687
5.50% 1/1/37		12,535,000		12,390,069
6.00% 1/25/37		6,000,000		6,041,250
6.50% 1/1/37		3,020,000		3,077,567
Freddie Mac 7.00% 1/1/08		35,074		35,140
• Freddie Mac ARM 3.019% 12/1/33		528,790		535,449
4.673% 4/1/34		10,647		10,794
Freddie Mac Relocation 30 yr 5.00% 9/1/33		19,306		18,845
Freddie Mac S.F. 30 yr TBA 6.00% 1/1/37		800,000		806,000
Total Agency Mortgage-Backed Securities (cost $41,862,379)				41,626,918
AGENCY OBLIGATIONS–2.71%
Fannie Mae 3.00% 8/15/07		40,000		39,462
5.00% 9/15/08		1,100,000		1,099,220
6.375% 8/15/07	AUD	965,000		760,831
Federal Farm Credit Bank 5.125% 8/25/16	USD	615,000		623,387
Federal Home Loan Bank 5.375% 8/19/11		1,920,000		1,954,827

Diversified Income Series- 5

Delaware VIP Diversified Income Series
Statement of Net Assets (continued)

	Principal Amountm		Market Value (U.S. $)
AGENCY OBLIGATIONS (continued)
^ Financing Corporation Interest Strip CPN 4.79% 4/6/12	USD	645,000	$	501,068
CPN 4.797% 5/2/12		125,000		96,989
CPN 4.901% 10/6/12		545,000		411,316
CPN 4.938% 10/6/13		109,000		78,269
CPN 4.948% 10/6/14		650,000		442,948
CPN 5.093% 4/6/14		135,000		94,402
CPN 5.101% 10/6/11		120,000		96,197
CPN 5.175% 3/26/12		200,000		155,431
CPN 5.213% 10/6/15		200,000		129,328
CPN 1 5.162% 5/11/12		330,000		255,948
CPN 1 5.283% 5/11/15		400,000		264,266
CPN 1 5.407% 11/11/17		700,000		403,006
CPN 4 5.213% 10/6/15		200,000		129,328
CPN 12 5.10% 12/6/11		638,000		509,263
CPN 13 5.161% 12/27/12		100,000		74,610
CPN 13 5.208% 6/27/13		400,000		291,138
CPN 13 5.366% 12/27/16		366,000		221,629
CPN 15 4.903% 9/7/13		860,000		620,358
CPN 15 5.252% 3/7/16		674,000		425,955
CPN A 5.098% 8/8/15		150,000		97,916
CPN A 5.099% 2/8/15		150,000		100,453
CPN D 5.112% 9/26/11		550,000		440,630
CPN D 5.119% 9/26/10		600,000		500,182
Freddie Mac 4.625% 12/19/08		525,000		521,369
5.50% 7/18/16		2,200,000		2,286,500
Total Agency Obligations (cost $13,375,896)				13,626,226
COMMERCIAL MORTGAGE-BACKED SECURITIES–1.63%
Bank of America Commercial Mortgage Securities
• Series 2006-3 A4 5.889% 7/10/44		1,410,000		1,465,723
Series 2006-4 A4 5.634% 7/10/46		315,000		321,552
# Bear Stearns Commercial Mortgage Securities Series 2004-ESA E 144A 5.064% 5/14/16		300,000		298,836
t Commercial Mortgage Pass Through Certificates
# Series 2001-J1A A2 144A 6.457% 2/14/34		185,380		191,865
Series 2006-C7 A2 5.69% 6/10/46		210,000		213,607
• Credit Suisse Mortgage Capital Certificates Series 2006-C1 AAB 5.556% 2/15/39		115,000		116,469
# Crown Castle Towers 144A Series 2005-1A C 5.074% 6/15/35		90,000		88,833
Series 2006-1A B 5.362% 11/15/36		830,000		828,954
# First Union National Bank Commercial Mortgage Trust Series 2001-C2 L 144A 6.46% 1/12/43		200,000		202,196

	Principal Amountm		Market Value (U.S. $)
COMMERCIAL MORTGAGE-BACKED SECURITIES (continued)
GE Capital Commercial Mortgage Trust Series 2002-1A A3 6.269% 12/10/35	USD	365,000	$	381,345
# Tower 144A Series 2004-2A A 4.232% 12/15/14		65,000		63,268
Series 2006-1 B 5.588% 2/15/36		120,000		120,673
Series 2006-1 C 5.707% 2/15/36		185,000		186,171
GS Mortgage Securities II Series 2006-GG8 A4 5.56% 11/10/39		440,000		446,903
•# Series 2006-RR2 A1 144A 5.689% 6/23/46		345,000		348,573
•# Series 2006-RR3 A1S 144A 5.659% 7/18/56		635,000		644,944
JPMorgan Chase Commercial Mortgage Securities
Series 2002-C1 A3 5.376% 7/12/37		290,000		291,761
Series 2002-C2 A2 5.05% 12/12/34		280,000		276,752
Series 2003-C1 A2 4.985% 1/12/37		20,000		19,700
• Series 2006-LDP7 AJ 5.876% 4/15/45		1,000,000		1,040,316
•# Series 2006-RR1A A1 144A 5.456% 10/18/52		305,000		307,193
LB-UBS Commercial Mortgage Trust Series 2002-C1 A4 6.462% 3/15/31		110,000		115,859
# Morgan Stanley Capital I Series 1999-FNV1 G 144A 6.12% 3/15/31		110,000		111,098
•# Morgan Stanley Dean Witter Capital I Series 2001-TOP1 E 144A 7.313% 2/15/33		100,000		105,991
Total Commercial Mortgage-Backed Securities (cost $8,099,080)				8,188,582
CONVERTIBLE BONDS–0.22%
Ford Motor 4.25% 12/15/36 exercise price $9.20, expiration date 12/15/36		1,035,000		1,111,331
Total Convertible Bonds (cost $1,060,182)				1,111,331
CORPORATE BONDS–42.44%
Banking–4.26%
BAC Capital Trust XI 6.625% 5/23/36		105,000		113,696
Banco BMG 8.75% 7/1/10		690,000		703,800
•# Banco Macro 144A 9.75% 12/18/36		560,000		574,000
•# Banco Mercantil 144A 6.862% 10/13/21		415,000		421,545
# Bank of Moscow 144A 7.335% 5/13/13		365,000		383,684
Barclays Bank 10.00% 1/6/10	BRL	5,980,000		2,633,830
•# 144A 7.375% 6/29/49	USD	330,000		356,766
Citigroup 0.80% 10/30/08	JPY	99,900,000		838,510
6.125% 8/25/36	USD	100,000		104,493
Credit Suisse First Boston USA 6.125% 11/15/11		115,000		119,202

Diversified Income Series-6

Delaware VIP Diversified Income Series
Statement of Net Assets (continued)

	Principal Amountm		Market Value (U.S. $)
CORPORATE BONDS (continued)
Banking (continued)
Depfa Bank 20.00% 11/19/07	TRY	3,554,000	$	2,503,994
First Union Institutional Capital II 7.85% 1/1/27	USD	950,000		988,459
Fortis Capital 6.25% 6/29/49	EUR	500,000		686,828
•# Glitnir Banki 144A 6.693% 6/15/16	USD	570,000		589,013
•# HBOS 144A 5.92% 9/29/49		300,000		294,781
Kazkommerts International 8.00% 11/3/15		288,000		298,541
# Majapahit Holding 144A 7.75% 10/17/16		210,000		223,388
• MUFG Capital Finance 1 6.346% 7/29/49		360,000		366,010
•# PNC Preferred Funding Trust I 144A 6.517% 12/31/49		400,000		407,398
Popular North America 4.25% 4/1/08		335,000		330,155
• 5.77% 4/6/09		290,000		290,979
Popular North America Capital Trust I 6.564% 9/15/34		260,000		260,099
•# Rabobank Capital Funding II 144A 5.26% 12/29/49		235,000		230,148
• RBS Capital Trust I 4.709% 12/29/49		180,000		171,344
• Resona Bank 4.125% 9/29/49	EUR	450,000		574,321
# 144A 5.85% 9/29/49	USD	605,000		591,798
•# Resona Preferred Global Securities 144A 7.191% 12/29/49		1,020,000		1,065,984
# Russian Standard Bank 144A 8.625% 5/5/11		265,000		266,246
•# Shinsei Finance 144A 6.418% 1/29/49		475,000		475,280
Sovereign Capital Trust VI 7.908% 6/13/36		510,000		574,620
# TuranAlem Finance 144A 7.75% 4/25/13		600,000		612,750
Vneshtorgbank 4.25% 2/15/16	EUR	570,000		739,008
•# 144A 5.97% 8/1/08	USD	260,000		260,455
• Wachovia Capital Trust III 5.80% 3/15/42		555,000		560,097
WM Covered Bond Program 3.875% 9/27/11	EUR	1,400,000		1,825,811
				21,437,033
Basic Industry–4.08%
Abitibi-Consolidated Finance 7.875% 8/1/09	USD	240,000		235,200
AK Steel 7.875% 2/15/09		450,000		452,250
Alrosa Finance 8.875% 11/17/14		222,000		257,299
@# 144A 8.875% 11/17/14		594,000		689,783
Barrick Gold Finance 7.50% 5/1/07		60,000		60,413
Bowater 9.00% 8/1/09		705,000		742,013
9.50% 10/15/12		650,000		676,000

	Principal Amountm		Market Value (U.S. $)
CORPORATE BONDS (continued)
Basic Industry (continued)
Donohue Forest Products 7.625% 5/15/07	USD	275,000	$	275,688
EvrazSecurities 10.875% 8/3/09		500,000		549,975
Georgia-Pacific 8.875% 5/15/31		355,000		377,188
9.50% 12/1/11		750,000		825,000
# 144A 7.00% 1/15/15		575,000		576,438
Ispat Inland 9.75% 4/1/14		65,000		72,734
Lubrizol 4.625% 10/1/09		725,000		711,635
Lyondell Chemical 8.00% 9/15/14		500,000		521,250
8.25% 9/15/16		500,000		527,500
10.50% 6/1/13		50,000		55,250
# Momentive Performance Materials 144A 9.75% 12/1/14		775,000		778,875
# Nell AF Sarl 144A 8.375% 8/15/15		525,000		542,063
NewPage 10.00% 5/1/12		600,000		636,000
Norske Skog Canada 8.625% 6/15/11		1,050,000		1,068,374
# Norske Skogindustrier 144A 7.125% 10/15/33		600,000		568,144
# Port Townsend Paper 144A 11.00% 4/15/11		685,000		606,225
Potlatch 13.00% 12/1/09		675,000		781,697
# Sappi Papier 144A 6.75% 6/15/12		415,000		414,362
7.50% 6/15/32		1,175,000		1,100,612
‡ Solutia 6.72% 10/15/37		615,000		601,931
Southern Copper 7.50% 7/27/35		125,000		136,161
# Stora Enso Oyj 144A 7.25% 4/15/36		345,000		362,741
Tembec Industries 8.625% 6/30/09		2,975,000		2,052,749
Vale Overseas 6.25% 1/23/17		990,000		999,451
6.875% 11/21/36		1,295,000		1,334,686
Weyerhaeuser 7.125% 7/15/23		525,000		526,121
Witco 6.875% 2/1/26		425,000		374,000
				20,489,808
Brokerage–0.82%
• Ameriprise Financial 7.518% 6/1/66		440,000		484,021
Amvescap 4.50% 12/15/09		150,000		146,334
E Trade Financial 8.00% 6/15/11		700,000		735,000
Goldman Sachs Group 6.345% 2/15/34		320,000		324,971
LaBranche 9.50% 5/15/09		560,000		590,800
11.00% 5/15/12		950,000		1,028,374
Merrill Lynch
• 2.86% 3/12/07		95,000		94,676
6.05% 5/16/16		325,000		336,989
6.22% 9/15/26		180,000		186,014
Morgan Stanley 6.25% 8/9/26		185,000		194,005
				4,121,184
Capital Goods–2.04%
# Aleris Intlernational 144A 10.00% 12/15/16		750,000		755,625

Diversified Income Series- 7

Delaware VIP Diversified Income Series
Statement of Net Assets (continued)

	Principal Amountm		Market Value (U.S. $)
CORPORATE BONDS (continued)
Capital Goods (continued)
Armor Holdings 8.25% 8/15/13	USD	525,000	$	548,625
# Berry Plastics 144A 8.875% 9/15/14		550,000		561,000
Building Materials 8.00% 10/15/07		475,000		483,930
Casella Waste Systems 9.75% 2/1/13		1,125,000		1,184,062
Caterpillar 6.05% 8/15/36		245,000		253,067
CPG International 10.50% 7/1/13		325,000		332,719
# Esco 144A 8.625% 12/15/13		350,000		361,375
General Electric 5.00% 2/1/13		365,000		361,416
Geo Sub 11.00% 5/15/12		625,000		606,250
Graham Packaging 9.875% 10/15/14		975,000		989,625
Interface 10.375% 2/1/10		725,000		804,750
Intertape Polymer 8.50% 8/1/14		485,000		440,138
o NTK Holdings 10.75% 3/1/14		575,000		405,375
# Penhall International 144A 12.00% 8/1/14		350,000		379,750
# Rental Service 144A 9.50% 12/1/14		800,000		830,000
# Siemens Finance 144A 6.125% 8/17/26		310,000		317,655
WCA Waste 9.25% 6/15/14		600,000		630,000
				10,245,362
Communications–6.30%
n Adelphia Communications 8.125% 4/1/07		280,000		258,300
America Movil 6.375% 3/1/35		370,000		362,838
American Tower 7.125% 10/15/12		660,000		681,450
American Towers 7.25% 12/1/11		175,000		182,000
AT&T 7.30% 11/15/11		325,000		352,231
8.00% 11/15/31		380,000		472,884
Bellsouth 4.20% 9/15/09		250,000		243,187
British Telecommunications 9.125% 12/15/30		295,000		404,690
# Broadview Networks 144A 11.375% 9/1/12		450,000		471,375
CCH I Holdings 13.50% 1/15/14		725,000		715,938
n Century Communications 9.50% 4/1/07		2,500,000		3,037,499
Charter Communication Holdings 13.50% 1/15/11		1,275,000		1,268,624
Cincinnati Bell 8.375% 1/15/14		325,000		335,563
# CMP Susquehanna 144A 9.875% 5/15/14		375,000		375,000
Comcast
• 5.674% 7/14/09		375,000		376,099
6.45% 3/15/37		240,000		240,926
6.50% 11/15/35		365,000		368,777
Cox Communications 4.625% 1/15/10		150,000		146,927
# Cricket Communications 144A 9.375% 11/1/14		550,000		583,000
Dex Media East 12.125% 11/15/12		350,000		386,313
# Digicel Limited 144A 9.25% 9/1/12		1,195,000		1,281,637
GTE California 7.65% 3/15/07		470,000		471,690
Hughes Network Systems/Finance 9.50% 4/15/14		2,025,000		2,123,718

	Principal Amountm		Market Value (U.S. $)
CORPORATE BONDS (continued)
Communications (continued)
o Inmarsat Finance 10.375% 11/15/12	USD	1,150,000	$	1,065,187
Insight Communications 12.25% 2/15/11		315,000		330,750
Insight Midwest 9.75% 10/1/09		160,000		163,001
• IWO Holdings 9.124% 1/15/12		40,000		41,000
Level 3 Communications 11.50% 3/1/10		600,000		639,000
# Level 3 Financing 144A 9.25% 11/1/14		300,000		307,500
Mediacom Broadband 8.50% 10/15/15		25,000		25,438
Mediacom Capital 9.50% 1/15/13		1,650,000		1,707,749
# MetroPCS Wireless 144A 9.25% 11/1/14		275,000		288,750
# Net Servicos 144A 9.25% 11/27/49		370,000		378,325
# Pakistan Mobile Communications 144A 8.625% 11/13/13		730,000		767,413
# Quebecor World 144A 9.75% 1/15/15		400,000		404,500
Qwest 7.50% 10/1/14		750,000		798,750
• 8.61% 6/15/13		125,000		135,938
Rural Cellular 9.875% 2/1/10		820,000		876,375
• 11.121% 11/1/12		230,000		240,925
Sprint Capital 6.875% 11/15/28		175,000		175,669
7.625% 1/30/11		370,000		396,506
8.75% 3/15/32		195,000		235,368
Telecom Italia Capital 4.00% 1/15/10		670,000		640,225
• 5.984% 7/18/11		445,000		444,863
7.20% 7/18/36		575,000		602,595
Telefonica Emisones
• 5.665% 6/19/09		265,000		265,504
5.984% 6/20/11		365,000		371,905
6.421% 6/20/16		310,000		320,367
7.045% 6/20/36		110,000		117,213
Telefonos de Mexico 4.50% 11/19/08		395,000		389,850
THOMSON 5.75% 2/1/08		100,000		100,325
Time Warner Entertainment 8.375% 3/15/23		210,000		246,943
Triton PCS 8.50% 6/1/13		710,000		683,375
9.375% 2/1/11		1,075,000		1,015,875
# True Move 144A 10.75% 12/16/13		740,000		725,200
• US LEC 13.87% 10/1/09		150,000		159,750
Vertis 10.875% 6/15/09		810,000		818,100
Vimpel Communication 8.25% 5/23/16		622,000		653,878
				31,674,778
Consumer Cyclical–7.20%
Accuride 8.50% 2/1/15		250,000		241,875
Boyd Gaming 8.75% 4/15/12		675,000		708,750
Brickman Group 11.75% 12/15/09		305,000		325,588
Carrols 9.00% 1/15/13		425,000		436,688
Centex 6.50% 5/1/16		650,000		666,123
Corrections Corporation of America 7.50% 5/1/11		525,000		543,375
• DaimlerChrysler 5.82% 8/3/09		940,000		942,195

Diversified Income Series- 8

Delaware VIP Diversified Income Series
Statement of Net Assets (continued)

	Principal Amountm		Market Value (U.S. $)
CORPORATE BONDS (continued)
Consumer Cyclical (continued)
Denny's 10.00% 10/1/12	USD	525,000	$	556,500
Ford Motor 7.45% 7/16/31		725,000		572,750
7.70% 5/15/97		230,000		168,475
Ford Motor Credit
5.75% 1/12/09	EUR	971,000		1,284,656
7.375% 10/28/09	USD	485,000		486,338
8.00% 12/15/16		565,000		559,248
• 8.11% 1/13/12		665,000		659,770
9.875% 8/10/11		1,730,000		1,851,986
# 144A 9.75% 9/15/10		380,000		404,561
# Galaxy Entertainment Finance 144A 9.875% 12/15/12		1,816,000		1,954,469
Gaylord Entertainment 8.00% 11/15/13		525,000		547,313
General Motors 8.375% 7/15/33		1,700,000		1,580,999
General Motors Acceptance Corporation 5.375% 6/6/11	EUR	610,000		814,002
6.125% 3/15/07	EUR	460,000		608,892
6.875% 9/15/11	USD	2,060,000		2,115,040
8.00% 11/1/31		735,000		846,280
General Motors Acceptance International Finance 4.125% 2/6/07	EUR	825,000		1,088,677
Harrah's Operating 5.625% 6/1/15	USD	215,000		184,690
6.50% 6/1/16		1,505,000		1,349,783
Home Depot 5.875% 12/16/36		625,000		615,461
Landry's Restaurant 7.50% 12/15/14		425,000		417,563
Lodgenet Entertainment 9.50% 6/15/13		905,000		979,663
Majestic Star Casino 9.50% 10/15/10		550,000		580,250
Mandalay Resorts 9.375% 2/15/10		750,000		806,250
9.50% 8/1/08		700,000		738,500
MGM Mirage 7.625% 1/15/17		475,000		478,563
# Micheals Stores 144A 11.375% 11/1/16		475,000		497,563
Neiman Marcus 9.00% 10/15/15		445,000		487,831
10.375% 10/15/15		970,000		1,083,975
NPC International 9.50% 5/1/14		525,000		540,750
O'Charleys 9.00% 11/1/13		425,000		448,375
Penney (J.C.) 7.375% 8/15/08		215,000		220,253
7.625% 3/1/97		65,000		66,560
8.125% 4/1/27		270,000		277,770
Playtex Products 9.375% 6/1/11		630,000		659,925
# Pokagon Gaming Authority 144A 10.375% 6/15/14		775,000		852,500
Procter & Gamble 2.00% 6/21/10	JPY	94,000,000		812,362
Time Warner 5.50% 11/15/11	USD	325,000		324,510
5.875% 11/15/16		215,000		214,854
6.50% 11/15/36		220,000		219,689

	Principal Amountm		Market Value (U.S. $)
CORPORATE BONDS (continued)
Consumer Cyclical (continued)
o Town Sports International 11.00% 2/1/14	USD	400,000	$	350,500
True Temper Sports 8.375% 9/15/11		250,000		218,750
Viacom
• 5.711% 6/16/09		275,000		275,652
5.75% 4/30/11		300,000		300,437
Visteon 8.25% 8/1/10		665,000		651,700
Wheeling Island Gaming 10.125% 12/15/09		950,000		972,563
WMG Acquisition 7.375% 4/15/14		625,000		621,875
				36,213,667
Consumer Non-Cyclical–3.07%
AmerisourceBergen 5.875% 9/15/15		470,000		461,905
Boston Scientific 6.40% 6/15/16		530,000		537,281
Constellation Brands 8.125% 1/15/12		675,000		705,375
Cott Beverages 8.00% 12/15/11		625,000		640,625
CRC Health 10.75% 2/1/16		715,000		772,200
# Elan Finance 144A 8.875% 12/1/13		650,000		653,250
Gold Kist 10.25% 3/15/14		450,000		518,585
HCA 6.50% 2/15/16		1,415,000		1,199,212
# 144A 9.125% 11/15/14		170,000		182,113
# 144A 9.25% 11/15/16		250,000		268,438
# Healthsouth 144A 10.75% 6/15/16		1,440,000		1,556,999
Ingles Markets 8.875% 12/1/11		750,000		785,625
Kraft Foods 6.50% 11/1/31		105,000		113,506
Medco Health Solutions 7.25% 8/15/13		480,000		515,900
# Miller Brewing 144A 4.25% 8/15/08		175,000		171,968
National Beef Packing 10.50% 8/1/11		850,000		901,000
Pilgrim's Pride 9.625% 9/15/11		320,000		336,000
Pinnacle Foods 8.25% 12/1/13		575,000		591,531
Reynolds American 6.50% 6/1/07		625,000		628,964
Swift 12.50% 1/1/10		425,000		436,688
US Oncology 9.00% 8/15/12		125,000		132,500
10.75% 8/15/14		750,000		832,500
UST 6.625% 7/15/12		85,000		89,695
o Vanguard Health 11.25% 10/1/15		1,375,000		1,065,625
Warner Chilcott 8.75% 2/1/15		550,000		566,500
# Wimar Opco 144A 9.625% 12/15/14		350,000		348,250
Wyeth 5.50% 2/1/14		410,000		412,702
				15,424,937
Electric–2.00%
# Abu Dhabi National Energy 144A 5.875% 10/27/16		330,000		332,954
6.50% 10/27/36		1,555,000		1,609,235
Avista 9.75% 6/1/08		415,000		437,157
# Calpine 144A 8.496% 7/15/07		180,838		199,825
Dominion Resources 5.687% 5/15/08		445,000		445,789
• 6.30% 9/30/66		380,000		382,127
Duke Capital 5.668% 8/15/14		360,000		359,575
Elwood Energy 8.159% 7/5/26		854,100		896,609
FPL Group Capital 5.625% 9/1/11		295,000		298,535

Diversified Income Series- 9

Delaware VIP Diversified Income Series
Statement of Net Assets (continued)

	Principal Amountm		Market Value (U.S. $)
CORPORATE BONDS (continued)
Electric (continued)
Hydro Quebec 10.50% 10/15/21	CAD	293,000	$	408,366
Midwest Generation 8.30% 7/2/09	USD	490,918		505,032
8.75% 5/1/34		850,000		926,500
Mirant Americas Generation 8.30% 5/1/11		725,000		746,750
Mirant North America 7.375% 12/31/13		375,000		382,500
Oncor Electric Delivery 7.00% 9/1/22		450,000		485,219
Orion Power 12.00% 5/1/10		575,000		655,500
Pepco Holdings 5.50% 8/15/07		470,000		469,693
• 5.994% 6/1/10		265,000		265,598
# Power Contract Financing 144A 6.256% 2/1/10		166,281		167,239
# Tenaska Alabama Partners 144A 7.00% 6/30/21		96,921		96,742
Xcel Energy 6.50% 7/1/36		10,000		10,601
				10,081,546
Energy–2.21%
Anadarko Petroleum 5.95% 9/15/16		190,000		190,745
Bluewater Finance 10.25% 2/15/12		480,000		505,200
# Canadian Oil Sands 144A 4.80% 8/10/09		115,000		112,891
Chesapeake Energy 6.625% 1/15/16		160,000		159,800
# Complete Production Services 144A 8.00% 12/15/16		450,000		463,500
Compton Petroleum Finance 7.625% 12/1/13		775,000		751,750
Gazprom 4.56% 12/9/12	EUR	1,050,000		1,369,056
# 144A 6.212% 11/22/16	USD	370,000		373,515
# Hilcorp Energy I 144A 7.75% 11/1/15		150,000		148,125
9.00% 6/1/16		750,000		796,875
10.50% 9/1/10		525,000		564,375
Mariner Energy 7.50% 4/15/13		400,000		390,000
Nexen 5.875% 3/10/35		95,000		89,222
# OPTI Canada 144A 8.25% 12/15/14		400,000		413,000
# Pan American Energy 144A 7.75% 2/9/12		445,000		460,575
Petrohawk Energy 9.125% 7/15/13		925,000		975,875
# Ras Laffan Liquefied Natural Gas III 144A
5.832% 9/30/16		425,000		427,034
5.838% 9/30/27		500,000		481,723
# Regency Energy Partners 144A 8.375% 12/15/13		950,000		957,125
• Secunda International 13.374% 9/1/12		390,000		404,138
# TNK-BP Finance 144A 7.50% 7/18/16		700,000		746,375
Weatherford International 4.95% 10/15/13		72,000		69,066
Whiting Petroleum 7.25% 5/1/13		275,000		277,063
				11,127,028

	Principal Amountm		Market Value (U.S. $)
CORPORATE BONDS (continued)
Finance Companies–3.52%
• American Express 6.80% 9/1/66	USD	210,000	$	224,330
American General Finance 4.875% 7/15/12		830,000		810,742
# Buffalo Thunder Development Authority 44A 9.375% 12/15/14		875,000		892,500
•# C10 Capital 144A 6.722% 12/31/49		310,000		309,058
# CFG Investment 144A 9.25% 12/19/13		465,000		466,163
FTI Consulting 7.625% 6/15/13		800,000		830,000
GE Capital UK Funding 4.625% 1/18/16	GBP	320,000		592,297
General Electric Capital 5.125% 1/28/14	SEK	6,500,000		1,001,185
•# Hellas Telecommunication II 144A 11.115% 1/15/15	USD	650,000		655,688
# Hexion Finance 144A 9.75% 11/15/14		600,000		611,250
HSBC Finance 4.625% 9/15/10		615,000		602,145
# Idearc 144A 8.00% 11/15/16		520,000		530,400
International Lease Finance 4.625% 6/2/08		130,000		128,523
JP Morgan Chase Capital XVIII 6.95% 8/17/36		330,000		358,123
XX 6.55% 9/29/36		85,000		88,063
• Lehman Brothers UK Capital Funding II 3.875% 2/28/49	EUR	450,000		576,265
• Nelnet 7.40% 9/29/36	USD	215,000		221,617
^t# Peru Enhanced Pass Through Finance 144A 3.936% 5/31/18		930,000		620,775
5.831% 5/31/25		1,115,000		415,338
Red Arrow International Leasing 8.375% 3/31/12	RUB	62,961,878		2,467,005
Residential Capital
• 5.85% 6/9/08	USD	390,000		389,339
6.00% 2/22/11		330,000		329,673
6.125% 11/21/08		615,000		618,318
6.375% 6/30/10		285,000		288,540
6.375% 5/17/13	GBP	312,000		612,086
6.50% 4/17/13	USD	1,205,000		1,222,750
6.875% 6/30/15		835,000		867,021
•# 144A 7.204% 4/17/09		345,000		346,906
•# SMFG Preferred Capital 1 144A 6.078% 12/29/49		345,000		341,022
•# Xstrata Finance 144A 5.724% 11/13/09		310,000		310,282
				17,727,404
Industrial–0.52%
Adesa 7.625% 6/15/12		700,000		726,250
# Knowledge Learning 144A 7.75% 2/1/15		200,000		192,500
# Mobile Services 144A 9.75% 8/1/14		375,000		393,750
Mueller 10.00% 5/1/12		324,000		353,970
# RBS Global & Rexnord 144A 11.75% 8/1/16		425,000		446,250
Trimas 9.875% 6/15/12		500,000		486,250
				2,598,970

Diversified Income Series-10

Delaware VIP Diversified Income Series
Statement of Net Assets (continued)

	Principal Amountm		Market Value (U.S. $)
CORPORATE BONDS (continued)
Insurance–2.00%
ASIF III 0.95% 7/15/09	JPY	100,000,000	$	837,766
# Farmers Exchange Capital 144A 7.05% 7/15/28	USD	650,000		680,204
# Farmers Insurance Exchange 144A 6.00% 8/1/14		70,000		69,310
8.625% 5/1/24		255,000		306,602
•# Financial Security Assurance 144A 6.40% 12/15/66		210,000		211,671
•# Great West Life & Annuity Insurance 144A 7.153% 5/16/46		205,000		217,608
# Liberty Mutual 144A 6.70% 8/15/16		265,000		280,066
Marsh & McLennan 5.15% 9/15/10		370,000		363,812
5.375% 3/15/07		370,000		369,896
• 5.513% 7/13/07		430,000		430,080
MetLife 5.00% 6/15/15		180,000		174,875
• 6.40% 12/15/36		440,000		443,500
# Metropolitan Life Global Funding I 144A 4.25% 7/30/09		450,000		439,488
Montpelier Re 6.125% 8/15/13		215,000		209,741
# Nationwide Mutual Insurance 144A 7.875% 4/1/33		375,000		446,178
# Nippon Life Insurance 144A 4.875% 8/9/10		535,000		523,707
•t# North Front Pass Through Trust 144A 5.81% 12/15/24		750,000		739,534
SAFECO Capital Trust I 8.072% 7/15/37		245,000		256,454
St. Paul Travelers 5.01% 8/16/07		290,000		288,934
•t# Twin Reefs Pass Through Trust 144A 6.35% 12/31/49		600,000		601,141
WellPoint
4.25% 12/15/09		130,000		126,451
5.85% 1/15/36		585,000		570,244
Willis North America
5.125% 7/15/10		270,000		263,440
5.625% 7/15/15		185,000		177,380
•# ZFS Finance USA Trust I 144A 6.45% 12/15/65		1,000,000		1,021,705
				10,049,787
Natural Gas–0.99%
El Paso Natural Gas 7.625% 8/1/10		715,000		750,749
# El Paso Performance-Linked Trust 144A 7.75% 7/15/11		325,000		345,313
El Paso Production 7.75% 6/1/13		300,000		315,375
Enterprise Products Operating 4.00% 10/15/07		110,000		108,675
4.625% 10/15/09		330,000		323,306
• 8.375% 8/1/66		730,000		792,056
Inergy Finance 6.875% 12/15/14		275,000		271,563
8.25% 3/1/16		75,000		79,125

	Principal Amountm		Market Value (U.S. $)
CORPORATE BONDS (continued)
Natural Gas (continued)
Kinder Morgan Finance 5.35% 1/5/11	USD	495,000	$	483,211
# Nakilat 144A 6.067% 12/31/33		215,000		214,078
6.267% 12/31/33		400,000		397,591
Oneok 5.51% 2/16/08		385,000		384,830
• Sempra Energy 5.845% 5/21/08		115,000		115,050
Valero Logistics Operations 6.05% 3/15/13		415,000		418,594
				4,999,516
Real Estate–0.72%
American Real Estate Partners 8.125% 6/1/12		500,000		518,750
BF Saul REIT 7.50% 3/1/14		585,000		597,431
Developers Diversified Realty 4.625% 8/1/10		90,000		87,692
5.25% 4/15/11		95,000		94,147
5.375% 10/15/12		415,000		411,522
# Greentown China 144A 9.00% 11/8/13		740,000		764,050
HRPT Properties Trust 5.75% 2/15/14		280,000		280,589
Rouse 7.20% 9/15/12		350,000		359,807
# Shimao Property 144A 8.00% 12/1/16		505,000		515,100
				3,629,088
Technology–1.22%
# Freescale Semiconductor 144A 9.125% 12/15/14		115,000		114,856
10.125% 12/15/16		1,290,000		1,298,063
International Business Machine 4.00% 11/11/11	EUR	1,000,000		1,308,028
iPayment 9.75% 5/15/14	USD	70,000		72,275
MagnaChip Semiconductor 8.00% 12/15/14		1,375,000		928,125
# NXP Funding 144A 9.50% 10/15/15		375,000		386,250
Solectron Global Finance 8.00% 3/15/16		475,000		483,313
Sungard Data Systems 10.25% 8/15/15		806,000		864,435
# Telcordia Technologies 144A 10.00% 3/15/13		330,000		292,050
# UGS Capital II PIK 144A 10.348% 6/1/11		400,830		403,836
				6,151,231
Transportation–1.49%
American Airlines 6.817% 5/23/11		305,000		309,862
6.977% 5/23/21		116,926		115,757
7.377% 5/23/19		534,823		522,789
Continental Airlines 6.503% 6/15/11		205,000		211,150
# Erac USA Finance 144A 5.30% 11/15/08		100,000		99,482
7.35% 6/15/08		505,000		517,817
# Hertz 144A 8.875% 1/1/14		475,000		499,938
o H-Lines Finance 11.00% 4/1/13		646,000		604,010
Horizon Lines 9.00% 11/1/12		354,000		373,470

Diversified Income Series- 11

Delaware VIP Diversified Income Series
Statement of Net Assets (continued)

	Principal Amountm		Market Value (U.S. $)
CORPORATE BONDS (continued)
Transportation (continued)
Kansas City Southern de Mexico 9.375% 5/1/12	USD	510,000	$	546,975
12.50% 6/15/12		200,000		217,000
# 144A 7.625% 12/1/13		1,130,000		1,132,824
Kansas City Southern Railway 9.50% 10/1/08		350,000		367,500
‡ Northwest Airlines 7.041% 4/1/22		101,919		102,747
OMI 7.625% 12/1/13		640,000		657,600
Seabulk International 9.50% 8/15/13		515,000		560,063
Stena 9.625% 12/1/12		600,000		642,000
				7,480,984
Total Corporate Bonds (cost $208,073,865)				213,452,323
FOREIGN AGENCIES–1.69% 5
Austria–0.34%
Oesterreichische Kontrollbank 1.80% 3/22/10	JPY	196,000,000		1,690,123
				1,690,123
Germany–1.06%
KFW 1.75% 3/23/10	JPY	95,000,000		817,937
3.50% 7/4/21	EUR	1,911,000		2,337,192
4.95% 10/14/14	CAD	424,000		377,668
8.25% 9/20/07	ISK	73,400,000		997,269
Rentenbank 1.375% 4/25/13	JPY	99,000,000		830,817
				5,360,883
Mexico–0.15%
Pemex Project Funding Master Trust 6.625% 6/15/35	USD	723,000		740,533
				740,533
Ukraine–0.14%
Exim of Ukraine 7.65% 9/7/11	USD	270,000		276,337
7.75% 9/23/09	USD	405,000		416,623
				692,960
Total Foreign Agencies (cost $8,530,042)				8,484,499
MUNICIPAL BONDS–0.11%
Augusta, Georgia Water & Sewer Revenue 5.25% 10/1/39 (FSA)		85,000		91,755
California State 5.00% 2/1/33		25,000		26,113
California State University Systemwide Revenue 5.00% 11/1/30 (AMBAC)		95,000		100,948
Colorado Department of Transportation Revenue 5.00% 12/15/12 (FGIC)		5,000		5,357
Illinois State Taxable Pension 5.10% 6/1/33		10,000		9,592
Massachusetts Health & Education Facilities Authority Revenue Series A 5.00% 7/15/36		220,000		234,392

	Principal Amountm		Market Value (U.S. $)
MUNICIPAL BONDS (continued)
New Jersey Economic Development Authority Revenue Cigarette Tax 5.75% 6/15/29	USD	25,000	$	27,074
New York State Urban Development Series A-1 5.25% 3/15/34 (FGIC)		40,000		43,004
Oregon State Taxable Pension 5.892% 6/1/27		5,000		5,245
Total Municipal Bonds (cost $525,272)				543,480
NON-AGENCY ASSET-BACKED SECURITIES–1.52%
Chase Funding Mortgage Loan Asset-Backed Certificates Series 2002-3 1A6 4.707% 9/25/13		719,246		710,647
Countrywide Asset-Backed Certificates
• Series 2006-4 2A2 5.53% 7/25/36		1,050,000		1,051,752
• Series 2006-11 1AF3 6.05% 9/25/46		735,000		742,350
• Series 2006-15 A3 5.689% 10/25/46		165,000		165,399
Series 2006-S3 A2 6.085% 6/25/21		475,000		479,261
• Series 2006-S7 A3 5.712% 11/25/35		1,115,000		1,112,337
• Series 2006-S9 A3 5.728% 8/25/36		745,000		740,437
# Credit-Based Asset Service and Securitization Series 2006-SL1 A2 144A 5.556% 9/25/36		450,000		449,561
# Dunkin Securitization Series 2006-1 A2 144A 5.779% 6/20/31		640,000		648,596
• GMAC Mortgage Loan Trust Series 2006-HE3 A2 5.75% 10/25/36		180,000		179,948
•# MASTR Specialized Loan Trust Series 2005-2 A2 144A 5.006% 7/25/35		243,110		238,552
MBNA Master Credit Card Trust Series 2000-D C 8.40% 9/15/09		25,000		25,205
Mid-State Trust
Series 11 A1 4.864% 7/15/38		18,944		18,222
Series 2004-1 A 6.005% 8/15/37		10,241		10,400
Series 2005-1 A 5.745% 1/15/40		225,120		224,838
# Series 2006-1 A 144A 5.787% 10/15/40		276,415		276,501
• Option One Mortgage Loan Trust Series 2005-4 A3 5.61% 11/25/35		230,000		230,580
Renaissance Home Equity Loan Trust Series 2005-4 A2 5.399% 2/25/36		170,000		169,187
Series 2005-4 A3 5.565% 2/25/36		110,000		109,757
Structured Asset Securities Series 2001-SB1 A2 3.375% 8/25/31		48,927		43,958
• Series 2005-NC1 A7 5.58% 2/25/35		39,840		39,875
Total Non-Agency Asset-Backed Securities (cost $7,667,092)				7,667,363

Diversified Income Series- 12

Delaware VIP Diversified Income Series
Statement of Net Assets (continued)

	Principal Amountm		Market Value (U.S. $)
NON-AGENCY COLLATERALIZED MORTGAGE OBLIGATIONS–5.08%
Bank of America Alternative Loan Trust Series 2003-10 2A1 6.00% 12/25/33	USD	10,637	$	10,660
Series 2004-2 1A1 6.00% 3/25/34		3,068		3,074
Series 2004-10 1CB1 6.00% 11/25/34		82,082		82,433
Series 2005-3 2A1 5.50% 4/25/20		103,719		103,265
Series 2005-5 2CB1 6.00% 6/25/35		194,342		194,707
Series 2005-6 7A1 5.50% 7/25/20		264,208		262,887
Series 2005-9 5A1 5.50% 10/25/20		521,711		518,777
Bank of America Funding Series 2005-8 1A1 5.50% 1/25/36		1,340,368		1,312,305
Bank of America Mortgage Securities
• Series 2003-D 1A2 6.114% 5/25/33		260		262
• Series 2004-G 2A3 4.232% 8/25/34		43,774		43,618
Series 2005-9 2A1 4.75% 10/25/20		360,697		352,950
• Series 2005-A 1A1 4.041% 2/25/35		112,815		111,546
• Bear Stearns Alternative-A Trust Series 2006-3 33A1 6.189% 5/25/36		455,381		460,631
Series 2006-4 23A5 6.242% 8/25/36		470,580		477,035
Bear Stearns Asset Backed Securities Series 2005-AC8 A5 5.50% 11/25/35		363,759		362,891
Chase Mortgage Finance Series 2003-S8 A2 5.00% 9/25/18		590,687		581,466
Countrywide Alternative Loan Trust Series 2004-28CB 6A1 6.00% 1/25/35		424,093		424,756
• Series 2004-J7 1A2 4.673% 8/25/34		32,488		32,228
• Series 2005-63 3A1 5.895% 11/25/35		359,417		359,507
Series 2006-2CB A3 5.50% 3/25/36		301,865		302,387
t Countrywide Home Loan Mortgage Pass Through Trust
• Series 2003-21 A1 4.077% 5/25/33		990		977
Series 2005-23 A1 5.50% 11/25/35		1,759,963		1,723,114
Series 2006-1 A2 6.00% 3/25/36		323,900		323,936
• Series 2006-HYB3 3A1A 6.113% 5/20/36		414,192		418,304
Credit Suisse First Boston Mortgage Securities Series 2003-29 5A1 7.00% 12/25/33		13,756		14,014
First Horizon Asset Securities Series 2003-5 1A17 8.00% 7/25/33		2,181		2,307
• Series 2004-AR5 4A1 5.682% 10/25/34		29,044		28,889
• General Motors Acceptance Corporation Mortgage Loan Trust Series 2005-AR2 4A 5.188% 5/25/35		350,981		344,322
# GSMPS Mortgage Loan Trust 144A Series 2005-RP1 1A3 8.00% 1/25/35		343,219		363,244
Series 2005-RP1 1A4 8.50% 1/25/35		281,761		300,863
Series 2006-RP1 1A2 7.50% 1/25/36		452,047		471,218
• Indymac Index Mortgage Loan Trust Series 2005-AR25 1A21 5.877% 12/25/35		376,185		376,467
Series 2006-AR2 1A1A 5.57% 4/25/46		480,019		480,390
• JPMorgan Mortgage Trust Series 2005-A4 1A1 5.406% 7/25/35		340,494		336,134
Series 2005-A6 1A2 5.152% 9/25/35		855,000		856,515

	Principal Amountm		Market Value (U.S. $)
NON-AGENCY COLLATERALIZED SECURITIES (continued)
Lehman Mortgage Trust Series 2005-2 2A3 5.50% 12/25/35	USD	305,684	$	305,465
• MASTR Adjustable Rate Mortgages Trust Series 2003-6 1A2 5.883% 12/25/33		6,116		6,191
Series 2005-6 7A1 5.375% 6/25/35		212,359		209,382
MASTR Alternative Loans Trust Series 2003-9 1A1 5.50% 12/25/18		60,552		60,249
Series 2005-3 7A1 6.00% 4/25/35		97,414		97,451
# MASTR Reperforming Loan Trust 144A Series 2005-1 1A5 8.00% 8/25/34		524,261		553,482
Series 2005-2 1A4 8.00% 5/25/35		315,619		332,682
Morgan Stanley Mortgage Loan Trust Series 2006-2 6A 6.50% 2/25/36		216,566		219,680
Nomura Asset Acceptance Series 2005-WF1 2A2 4.786% 3/25/35		275,000		270,742
• Series 2006-AF1 1A2 6.159% 5/25/36		400,000		403,857
Prime Mortgage Trust Series 2004-CL1 1A1 6.00% 2/25/34		11,292		11,366
Residential Accredit Loans Series 2005-QS9 A6 5.50% 6/25/35		150,000		145,313
Residential Asset Mortgage Products Series 2004-SL1 A3 7.00% 11/25/31		1,115		1,132
Series 2004-SL4 A3 6.50% 7/25/32		51,949		52,806
Series 2005-SL1 A2 6.00% 5/25/32		125,051		127,799
• Residential Funding Mortgage Security I Series 2006-SA3 3A1 6.06% 9/25/36		534,559		538,379
• Structured Adjustable Rate Mortgage Loan Trust Series 2004-18 5A 5.50% 12/25/34		37,607		37,208
Series 2005-3XS A2 5.60% 1/25/35		273,407		273,629
Structured Asset Securities
• Series 2002-22H 1A 6.958% 11/25/32		1,702		1,732
Series 2004-5H A2 4.43% 12/25/33		218,065		215,233
Series 2004-12H 1A 6.00% 5/25/34		39,720		39,795
Washington Mutual Series 2004-CB3 1A 6.00% 10/25/34		53,892		53,976
Series 2004-CB3 4A 6.00% 10/25/19		16,861		17,025
• Series 2006-AR7 1A 5.807% 7/25/46		247,064		247,113
• Series 2006-AR10 1A1 5.97% 9/25/36		557,935		562,737
t Washington Mutual Alternative Mortgage Pass Through Certificates Series 2005-1 5A2 6.00% 3/25/35		55,871		55,464
Series 2005-1 6A2 6.50% 3/25/35		12,238		12,309
Series 2005-9 3CB 5.50% 10/25/20		282,080		280,877
Series 2006-2 2CB 6.50% 3/25/36		287,024		290,702
Series 2006-5 2CB3 6.00% 7/25/36		518,158		523,590
Series 2006-5 LB1 6.00% 7/25/36		233,893		232,068
• Series 2006-AR5 3A 5.77% 7/25/46		362,658		363,578

Diversified Income Series-13

Delaware VIP Diversified Income Series
Statement of Net Assets (continued)

	Principal Amountm		Market Value (U.S. $)
NON-AGENCY COLLATERALIZED SECURITIES (continued)
Wells Fargo Mortgage Backed Securities Trust
• Series 2004-T A1 4.382% 9/25/34	USD	148,401	$	148,514
Series 2005-12 1A7 5.50% 11/25/35		488,900		474,844
Series 2005-14 2A1 5.50% 12/25/35		755,279		739,465
Series 2005-17 1A1 5.50% 1/25/36		424,016	��	415,138
Series 2005-17 1A2 5.50% 1/25/36		395,430		388,451
Series 2006-1 A3 5.00% 3/25/21		781,111		762,804
Series 2006-2 3A1 5.75% 3/25/36		452,612		448,086
• Series 2006-AR4 1A1 5.865% 4/25/36		604,181		603,607
• Series 2006-AR4 2A1 5.787% 4/25/36		421,235		419,137
• Series 2006-AR5 2A1 5.536% 4/25/36		526,489		525,045
• Series 2006-AR10 5A1 5.605% 7/25/36		497,490		497,972
• Series 2006-AR19 A1 5.69% 12/25/36		1,583,340		1,575,171
Total Non-Agency Collateralized Mortgage Obligations (cost $25,510,554)				25,579,325
REGIONAL AGENCIES–3.23%5
Australia–3.23%
New South Wales Treasury 5.50% 8/1/14	AUD	10,502,000		7,942,168
5.50% 3/1/17	AUD	2,600,000		1,950,214
6.00% 5/1/12	AUD	4,398,000		3,423,855
Queensland Treasury 6.00% 10/14/15	AUD	3,775,000		2,957,152
Total Regional Agencies (cost $15,934,738)				16,273,389
REGIONAL AUTHORITY–0.24%
Canada – 0.24%
Ontario Province 1.875% 1/25/10	JPY	48,000,000		414,258
4.50% 3/8/15	CAD	460,000		399,671
5.375% 12/2/12	CAD	418,000		380,858
Total Regional Authority (cost $1,216,501)				1,194,787
v SENIOR SECURED LOANS–2.24%
@ Avis Car Rental 6.35% 4/19/12	USD	124,429		123,962
@ AWAS 2nd Lien 11.00% 3/21/13		483,587		490,841
Ford Motor 8.36% 11/29/13		2,000,000		2,006,249
General Motors 7.745% 11/17/13		1,325,000		1,329,140
@ Georgia Pacific Term Tranche Loan B 6.661% 12/20/12		990,000		990,000
HCA 8.086% 11/17/13		1,000,000		1,013,438
@ Healthsouth 8.15% 3/10/13		1,194,000		1,204,447
Idearc 7.32% 11/17/14		300,000		301,688
LA Petite 2nd Lien 12.61% 2/17/13		200,000		202,000
Lyondell Chemical 7.11% 8/16/13		598,500		602,241
Talecris Biotherapeutics 2nd Lien 13.50% 12/6/14		600,000		605,250
@ United Airlines Bank Loan Tranche B 8.625% 2/1/12		781,075		786,933
9.188% 2/1/12		49,750		50,123

	Principal Amountm		Market Value (U.S. $)
v SENIOR SECURED LOANS (continued)
@ Visteon 8.18% 6/13/13	USD	200,000	$	201,125
Wind Acquisition PIK 12.54% 12/7/11		780,000		792,675
@ Windstream Term Loan B 7.26% 7/17/13		585,000		589,388
Total Senior Secured Loans (cost $11,232,567)				11,289,500
SOVEREIGN AGENCIES–0.75% 5
France – 0.06%
Caisse d'Amortissement de la Dette Sociale 3.625% 4/25/16	EUR	226,000		288,370
				288,370
Japan – 0.52%
Development Bank of Japan 1.70% 9/20/22	JPY	190,000,000		1,506,070
Japan Finance Corporation for Municipal Enterprises 2.00% 5/9/16	JPY	130,000,000		1,129,606
				2,635,676
Norway – 0.17%
Kommunalbanken 4.25% 10/24/11	NOK	5,340,000		845,595
				845,595
Total Sovereign Agencies (cost $3,868,671)				3,769,641
SOVEREIGN DEBT–14.04% 5
Argentina – 0.21%
Republic of Argentina
• 5.59% 8/3/12	USD	450,000		318,854
8.28% 12/31/33	USD	661,935		720,847
				1,039,701
Austria – 0.67%
Republic of Austria 5.25% 1/4/11	EUR	1,500,000		2,076,223
# 144A 4.00% 9/15/16	EUR	976,000		1,289,082
				3,365,305
Brazil – 1.56%
Federal Republic of Brazil 6.00% 1/17/17	USD	355,000		350,563
8.75% 2/4/25	USD	299,000		370,013
11.00% 8/17/40	USD	560,000		742,700
12.50% 1/5/16	BRL	350,000		186,344
12.50% 1/5/22	BRL	11,581,000		6,192,975
				7,842,595
Colombia – 0.81%
Republic of Colombia 7.375% 1/27/17	USD	785,000		845,838
7.375% 9/18/37	USD	870,000		936,120
12.00% 10/22/15	COP	4,290,000,000		2,279,240
				4,061,198
Dominican Republic–0.13%
# Dominican Republic 144A 8.625% 4/20/27	USD	554,000		639,593
				639,593
El Salvador–0.09%
Republic of El Salvador 7.65% 6/15/35	USD	385,000		438,900
				438,900

Diversified Income Series-14

Delaware VIP Diversified Income Series
Statement of Net Assets (continued)

	Principal Amountm		Market Value (U.S. $)
SOVEREIGN DEBT (continued)
France–0.75%
French Treasury Note 2.75% 3/12/08	EUR	643,000	$	837,837
Government of France 4.00% 4/25/55	EUR	2,264,000		2,949,674
				3,787,511
Germany–1.22%
Deutschland Republic 4.00% 1/4/37	EUR	640,000		833,499
4.75% 7/4/08	EUR	1,408,000		1,881,325
5.00% 1/4/12	EUR	299,000		413,510
6.25% 1/4/24	EUR	1,614,000		2,695,278
Deutschland Republic Inflation Linked 1.50% 4/15/16	EUR	241,777		308,993
				6,132,605
Indonesia–0.15%
# Republic of Indonesia 144A 6.875% 3/9/17	USD	700,000		745,500
				745,500
Japan–2.62%
Japan Government 2 yr Bond 0.70% 9/15/08	JPY	295,300,000		2,479,091
5 yr Bond 1.50% 6/20/11	JPY	311,650,000		2,657,246
10 yr Bond 1.90% 6/20/16	JPY	511,750,000		4,393,608
20 yr Bond 2.30% 6/20/26	JPY	298,300,000		2,605,842
Japanese Government CPI Linked Bond 0.80% 3/10/16	JPY	129,745,400		1,057,544
				13,193,331
Malaysia–0.27%
Malaysian Government 3.756% 4/28/11	MYR	2,763,000		784,614
7.00% 3/15/09	MYR	1,954,000		593,092
				1,377,706
Mexico–0.62%
Mexican Government 5.625% 1/15/17	USD	550,000		551,925
8.00% 12/17/15	MXN	5,860,000		561,997
9.00% 12/20/12	MXN	14,483,000		1,448,299
10.00% 12/5/24	MXN	5,005,000		575,184
				3,137,405
Norway–1.18%
Norwegian Government 5.00% 5/15/15	NOK	25,502,000		4,262,673
6.50% 5/15/13	NOK	9,481,000		1,693,962
				5,956,635
Panama–0.10%
Republic of Panama 7.25% 3/15/15	USD	480,000		522,000
				522,000
Philippines–0.39%
Republic of Philippines 7.75% 1/14/31	USD	365,000		416,100
8.25% 1/15/14	USD	855,000		969,356
# 144A 8.75% 10/7/16	USD	480,000		568,800
				1,954,256

	Principal Amountm		Market Value (U.S. $)
SOVEREIGN DEBT (continued)
Poland–0.50%
Poland Government 6.00% 11/24/10	PLN	4,721,000	$	1,688,351
6.25% 10/24/15	PLN	2,261,000		836,855
				2,525,206
Republic of Korea–0.23%
Government of South Korea 4.25% 12/7/21	EUR	900,000		1,153,172
				1,153,172
Sweden – 0.40%
Sweden Government 5.50% 10/8/12	SEK	12,770,000		2,023,689
				2,023,689
Turkey – 0.24%
Republic of Turkey 7.00% 9/26/16	USD	240,000		245,100
7.375% 2/5/25	USD	925,000		952,750
				1,197,850
United Kingdom – 1.07%
U.K. Treasury 4.25% 3/7/11	GBP	640,000		1,215,989
4.75% 9/7/15	GBP	322,000		628,889
4.75% 3/7/20	GBP	850,000		1,682,635
5.00% 3/7/12	GBP	153,000		300,223
8.00% 6/7/21	GBP	277,000		731,585
9.00% 7/12/11	GBP	364,000		825,974
				5,385,295
Uruguay – 0.21%
Uruguay 7.625% 3/21/36	USD	936,000		1,034,280
				1,034,280
Venezuela – 0.62%
Venezuela Government 5.75% 2/26/16	USD	1,036,000		984,200
6.00% 12/9/20	USD	1,947,000		1,824,339
9.375% 1/13/34	USD	235,000		310,788
				3,119,327
Total Sovereign Debt (cost $68,242,934)				70,633,060
SUPRANATIONAL BANKS–1.36%
Asia Development Bank 0.50% 10/9/12	AUD	759,000		432,738
European Investment Bank 1.40% 6/20/17	JPY	288,600,000		2,375,054
4.25% 12/7/10	GBP	616,000		1,160,544
Inter-American Development Bank 1.90% 7/8/09	JPY	287,000,000		2,472,483
^ International Bank for Reconstruction & Development 7.041% 8/20/07	NZD	565,000		379,676
Total Supranational Banks (cost $6,788,397)				6,820,495

Diversified Income Series- 15

Delaware VIP Diversified Income Series
Statement of Net Assets (continued)

	Principal Amountm		Market Value (U.S. $)
U.S. TREASURY OBLIGATIONS–5.90%
U.S. Treasury Bond 4.50% 2/15/36	USD	770,000	$	732,463
U.S. Treasury Inflation Index Notes 2.00% 1/15/26		513,545		483,134
2.375% 4/15/11		101,687		101,314
2.50% 7/15/16		1,239,281		1,249,060
* 3.00% 7/15/12		235,738		242,672
U.S. Treasury Notes 4.625% 9/30/08		670,000		667,723
4.625% 11/30/08		9,395,000		9,363,809
4.625% 10/31/11		4,205,000		4,191,039
4.625% 11/15/16		4,635,000		4,606,036
4.875% 10/31/08		1,665,000		1,666,302
* 4.875% 8/15/16		6,313,000		6,390,435
Total U.S. Treasury Obligations (cost $29,788,304)				29,693,987
	Number of Shares
COMMON STOCK–0.05%
† Charter Communications Class A		5,800		17,748
† Foster Wheeler		1,044		57,566
† Mirant		5,025		158,639
Total Common Stock (cost $131,043)				233,953
PREFERRED STOCK–0.00%
Nexen 7.35%		200		5,160
Total Preferred Stock (cost $5,290)				5,160
WARRANTS–0.12%
† Argentina GDP Linked, expiration date 12/15/35		4,642,000		619,707
Total Warrants (cost $413,595)				619,707

	Principal Amountm		Market Value (U.S. $)
REPURCHASE AGREEMENTS–12.29%
With BNP Paribas 4.80% 1/2/07 (dated 12/29/06, to be repurchased at $23,504,529, collateralized by $24,576,000 U.S. Treasury Bills due 6/28/07, market value $23,985,035)	USD	23,492,000	$	23,492,000
With Cantor Fitzgerald 4.82% 1/2/07 (dated 12/29/06, to be repurchased at $28,240,116, collateralized by $2,434,000 U.S. Treasury Notes 4.00% due 6/15/09, market value $2,399,662, $15,121,000 U.S. Treasury Notes 6.125% due 8/15/07, market value $15,572,091 and $10,080,000 U.S. Treasury Notes 6.50% due 2/15/10, market value $10,843,091)		28,225,000		28,225,000
With UBS Warburg 4.75% 1/2/07 (dated 12/29/06, to be repurchased at $10,085,320, collateralized by $10,412,000 U.S. Treasury Bills due 3/29/07, market value $10,290,815)		10,080,000		10,080,000
Total Repurchase Agreements (cost $61,797,000)				61,797,000

Diversified Income Series- 16

Delaware VIP Diversified Income Series
Statement of Net Assets (continued)

TOTAL MARKET VALUE OF SECURITIES–104.62% (cost $517,753,431)	$	526,215,358
LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS–(4.62%)		(23,243,376	)
NET ASSETS APPLICABLE TO 51,273,248 SHARES OUTSTANDING–100.00%	$	502,971,982
NET ASSET VALUE-DELAWARE VIP DIVERSIFIED INCOME SERIES STANDARD CLASS ($294,248,422 / 29,944,048 Shares)	$	9.83
NET ASSET VALUE-DELAWARE VIP DIVERSIFIED INCOME SERIES SERVICE CLASS ($208,723,560 / 21,329,200 Shares)	$	9.79
COMPONENTS OF NET ASSET AT DECEMBER 31, 2006:
Shares of beneficial interest (unlimited authorization–no par)	$	476,807,780
Undistributed net investment income		17,313,698
Accumulated net realized gain on investments		1,089,048
Net unrealized appreciation of investments and foreign currencies		7,761,456
Total net assets	$	502,971,982

  ^m  Principal amount shown is stated in the currency in which each security is denominated.

AUD – Australian Dollar

BRL – Brazilian Real

CAD – Canadian Dollar

COP – Colombian Peso

EUR – European Monetary Unit

GBP – British Pound Sterling

ISK – Iceland Krona

JPY – Japanese Yen

MXN – Mexican Peso

MYR – Malaysia Ringgit

NOK – Norwegian Kroner

NZD – New Zealand Dollar

PLN – Polish Zlotych

RUB – Russian Ruble

SEK – Swedish Krona

TRY – Turkish Lira

USD – United States Dollar

ZAR – South African Rand

  #  Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At December 31, 2006, the aggregate amount of Rule 144A securities equaled $65,848,416, which represented 13.09% of the Series' net assets. See Note 12 in "Notes to Financial Statements."

  •  Variable rate security. The rate shown is the rate as of December 31, 2006.

  ^  Zero coupon security. The interest rate shown is the yield at the time of purchase.

  ‡  Non-income producing security. Security is currently in default.

  @  Illiquid security. At December 31, 2006, the aggregate amount of illiquid securities equaled $5,126,602, which represented 1.02% of the Series' net assets. See Note 12 in "Notes to Financial Statements."

o  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.

  *  Fully or partially pledged as collateral for financial futures contracts.

n  Security is currently in default. The issue has missed the maturity date. Bankruptcy proceedings are in process to determine distribution of assets. The date listed is the estimate of when proceedings will be finalized.

t  Pass Through Agreement. Security represents the contractual right to receive a proportionate amount of underlying payments due to the counterparty pursuant to various agreements related to the rescheduling of obligations and the exchange of certain notes.

  †  Non-income producing security for the year ended December 31, 2006.

v  Senior Secured Loans generally pay interest at rates which are periodically redetermined by reference to a base lending rate plus a premium. These base lending rates are generally (i) the prime rate offered by one or more United States banks, (ii) the lending rate offered by one or more European banks such as the London Inter-Bank Offered Rate ('LIBOR') and (iii) the certificate of deposit rate. Senior Secured Loans may be subject to restrictions on resale.

5  Securities have been classified by country of origin.

Summary of Abbreviations:

AMBAC – Insured by the AMBAC Assurance Corporation

ARM – Adjustable Rate Mortgage

CPI – Consumer Price Index

CPN – Coupon

FGIC – Insured by the Financial Guaranty Insurance Company

FHLMC – Federal Home Loan Mortgage Corporation

FSA – Insured by Financial Security Assurance

GDP – Gross Domestic Product

PIK – Pay-in-Kind

REIT – Real Estate Investment Trust

S.F. – Single Family

TBA – To be Announced

yr – Year

Diversified Income Series- 17

Delaware VIP Diversified Income Series
Statement of Net Assets (continued)

The following foreign currency and foreign cross currency exchange contracts, futures contracts, and swap contracts were outstanding at December 31, 2006:

Foreign Currency Exchange Contracts¹

Contracts to Receive (Deliver)			In Exchange For			Settlement Date	Unrealized Appreciation (Depreciation)
AUD	(17,680,000	)	USD	13,759,654		1/11/07	$	(193,170	)
CAD	777,679		AUD	(862,000	)	2/22/07		(11,549	)
CAD	433,043		NZD	(543,000	)	2/22/07		(9,314	)
CAD	13,609		USD	(11,700	)	1/3/07		(29	)
EUR	1,871,588		GBP	(1,266,000	)	1/11/07		(7,301	)
EUR	(298,022	)	ISK	27,549,166		1/11/07		(7,183	)
EUR	1,277,430		PLN	(4,891,162	)	1/11/07		1,887
EUR	(628,454	)	USD	826,091		1/11/07		(3,097	)
EUR	2,000,000		USD	(2,641,360	)	2/22/07		5,684
GBP	415,598		USD	(813,700	)	1/3/07		206
ISK	30,245,000		EUR	(315,604	)	2/2/07		4,054
JPY	139,818,015		EUR	(920,837	)	1/11/07		(39,569	)
NOK	4,813,280		AUD	(1,000,000	)	1/11/07		(16,789	)
NOK	18,359,400		USD	(3,000,000	)	1/11/07		(53,833	)
NOK	791,998		USD	(127,100	)	1/3/07		(60	)
ZAR	6,111,315		USD	(870,000	)	1/29/07		351
							$	(329,712	)

Futures Contracts²

		Contracts To Buy (Sell)	Notional Cost (Proceeds)			Notional Value			Expiration Date	Unrealized Appreciation (Depreciation)
105		U.S. Treasury 2 year Notes	$	21,563,312		$	21,423,281		3/30/07	$	(140,031	)
414		U.S. Treasury 5 year Notes		43,873,340			43,495,875		3/30/07		(377,465	)
76		U.S. Treasury 10 year Notes		8,260,074			8,167,625		3/30/07		(92,449	)
(21	)	U.S. Treasury Long Bond		(2,381,186	)		(2,340,188	)	3/30/07		40,998
										$	(568,947	)

Swap Contracts³

Notional Amount		Expiration Date		Description	Unrealized Appreciation
$	2,380,000		2/1/07	Agreement with Goldman Sachs to receive the notional amount multiplied by the return on the Lehman Brothers Commercial MBS Index AAA and to pay the notional amount multiplied by the 1 month BBA LIBOR adjusted by a spread of plus 0.05%.	$	34,039

Credit Default Swap Contracts³

Swap Counterparty & Referenced Obligation	Notional Amount		Annual Protection Payments			Termination Date	Unrealized Appreciation
Protection Purchased: Goldman Sachs
CDS IndexCo ABX Home Equity BBB Index 06-1	$	6,000,000		1.54	%	7/25/45	$	24,376
Goldman Sachs
CDS IndexCo ABX Home Equity BBB-Index 06-1		7,000,000		2.67	%	7/25/45		55,820
Goldman Sachs
CDS IndexCo ABX Home Equity BBB-Index 06-2		3,000,000		2.42	%	5/25/46		10,000
Total							$	90,196

The use of foreign currency and foreign cross currency exchange contracts, futures contracts and swap contracts involves elements of market risk and risks in excess of the amount recognized in the financial statements. The notional amounts presented above represent the Series' total exposure in such contracts, whereas only the net unrealized appreciation (depreciation) is reflected in the Series' net assets.

¹See Note 8 in "Notes to Financial Statements."

²See Note 9 in "Notes to Financial Statements."

³See Note 11 in "Notes to Financial Statements."

See accompanying notes

Diversified Income Series-18

Delaware VIP Trust — Delaware VIP Diversified Income Series
Statement of Operations

Year Ended December 31, 2006

Delaware VIP Trust — Delaware VIP Diversified Income Series
Statements of Changes in Net Assets

INVESTMENT INCOME:
Interest	$	21,329,449
Dividends		3,937
Witholding tax expense		(2,089	)
		21,331,297
EXPENSES:
Management fees		2,293,852
Distribution expenses – Service Class		495,586
Accounting and administration expenses		141,160
Trustees' fees and benefits		68,414
Custodian fees		61,248
Reports and statements to shareholders		53,340
Legal fees		38,063
Dividend disbursing and transfer agent fees and expenses		35,290
Pricing fees		22,415
Insurance fees		19,404
Registration fees		17,766
Audit and tax		16,634
Consulting fees		9,245
Trustees' expenses		1,400
Dues and services		1,278
Taxes (other than taxes on income)		779
		3,275,874
Less waiver of distribution expenses – Service Class		(82,598	)
Total operating expenses		3,193,276
NET INVESTMENT INCOME		18,138,021
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on:
Investments		1,963,391
Futures contracts		719,059
Swap contracts		(117,678	)
Options written		3,614
Foreign currencies		(713,056	)
Net realized gain		1,855,330
Net change in unrealized appreciation/depreciation of investments and foreign currencies		9,416,957
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCIES		11,272,287
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	29,410,308

See accompanying notes

	Year Ended
	12/31/06			12/31/05
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income	$	18,138,021		$	5,255,909
Net realized gain (loss) on investments and foreign currencies		1,855,330			(2,817,864	)
Net change in unrealized appreciation/ depreciation of investments and foreign currencies		9,416,957			(3,080,673	)
Net increase (decrease) in net assets resulting from operations		29,410,308			(642,628	)
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Standard Class		(1,927,505	)		(257,955	)
Service Class		(2,054,268	)		(535,544	)
Net realized gain on investments:
Standard Class		–			(125,069	)
Service Class		–			(338,239	)
		(3,981,773	)		(1,256,807	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Standard Class		202,710,123			85,247,705
Service Class		95,407,632			99,383,381
Net asset value of shares issued upon reinvestment of dividends and distributions:
Standard Class		1,927,505			383,024
Service Class		2,054,268			873,783
		302,099,528			185,887,893
Cost of shares repurchased:
Standard Class		(15,934,779	)		(9,080,224	)
Service Class		(30,302,103	)		(15,414,593	)
		(46,236,882	)		(24,494,817	)
Increase in net assets derived from capital share transactions		255,862,646			161,393,076
NET INCREASE IN NET ASSETS		281,291,181			159,493,641
NET ASSETS:
Beginning of year		221,680,801			62,187,160
End of year (including undistributed net investment income of $17,313,698 and $3,793,628, respectively)	$	502,971,982		$	221,680,801

See accompanying notes

Diversified Income Series- 19

Delaware VIP Trust — Delaware VIP Diversified Income Series
Financial Highlights

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

Delaware VIP Diversified Income Series Standard Class

	Year Ended									5/16/031 to
	12/31/06			12/31/05			12/31/04			12/31/03
Net asset value, beginning of period	$	9.260		$	9.450		$	8.940		$	8.500
Income (loss) from investment operations:
Net investment income2		0.496			0.373			0.348			0.240
Net realized and unrealized gain (loss) on investments and foreign currencies		0.227			(0.416	)		0.395			0.200
Total from investment operations		0.723			(0.043	)		0.743			0.440
Less dividends and distributions from:
Net investment income		(0.153	)		(0.099	)		(0.233	)		–
Net realized gain on investments		–			(0.048	)		–			–
Total dividends and distributions		(0.153	)		(0.147	)		(0.233	)		–
Net asset value, end of period	$	9.830		$	9.260		$	9.450		$	8.940
Total return3		7.92	%		(0.45	%)		8.47	%		5.18	%
Ratios and supplemental data:
Net assets, end of period (000 omitted)	$	294,248		$	90,811		$	14,770		$	2,104
Ratio of expenses to average net assets		0.79	%		0.79	%		0.80	%		0.80	%
Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly		0.79	%		0.86	%		0.98	%		1.59	%
Ratio of net investment income to average net assets		5.26	%		4.02	%		3.82	%		4.43	%
Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly		5.26	%		3.95	%		3.64	%		3.64	%
Portfolio turnover		311	%		400	%		493	%		521	%

¹Commencement of operations; ratios and portfolio turnover have been annualized and total return has not been annualized.

²The average shares outstanding method has been applied for per share information.

³Total 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. Total investment return reflects waivers and payment of fees by the manager, as applicable. Performance would have been lower had the expense limitation not been in effect.

See accompanying notes

Diversified Income Series- 20

Delaware VIP Diversified Income Series
Financial Highlights (continued)

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

	Delaware VIP Diversified Income Series Service Class
	Year Ended									5/16/031 to
	12/31/06			12/31/05			12/31/04			12/31/03
Net asset value, beginning of period	$	9.230		$	9.410		$	8.930		$	8.500
Income (loss) from investment operations:
Net investment income2		0.472			0.350			0.326			0.216
Net realized and unrealized gain (loss) on investments and foreign currencies		0.218			(0.406	)		0.373			0.214
Total from investment operations		0.690			(0.056	)		0.699			0.430
Less dividends and distributions from:
Net investment income		(0.130	)		(0.076	)		(0.219	)		–
Net realized gain on investments		–			(0.048	)		–			–
Total dividends and distributions		(0.130	)		(0.124	)		(0.219	)		–
Net asset value, end of period	$	9.790		$	9.230		$	9.410		$	8.930
Total return3		7.57	%		(0.59	%)		7.85	%		5.06	%
Ratios and supplemental data:
Net assets, end of period (000 omitted)	$	208,724		$	130,870		$	47,417		$	-
Ratio of expenses to average net assets		1.04	%		1.04	%		1.05	%		1.05	%
Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly		1.09	%		1.16	%		1.28	%		1.89	%
Ratio of net investment income to average net assets		5.01	%		3.77	%		3.57	%		4.18	%
Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly		4.96	%		3.65	%		3.34	%		3.34	%
Portfolio turnover		311	%		400	%		493	%		521	%

¹Commencement of operations; ratios and portfolio turnover have been annualized and total return has not been annualized.

²The average shares outstanding method has been applied for per share information.

³Total 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. Total investment return reflects waivers and payment of fees by the manager and distributor, as applicable. Performance would have been lower had the expense limitation and waiver not been in effect.

See accompanying notes

Diversified Income Series- 21

Delaware VIP Trust — Delaware VIP Diversified Income Series
Notes to Financial Statements

December 31, 2006

Delaware VIP Trust (the "Trust") is organized as a Delaware statutory trust and offers 15 series: Delaware VIP Balanced Series, Delaware VIP Capital Reserves Series, Delaware VIP Cash Reserve Series, Delaware VIP Diversified Income Series, Delaware VIP Emerging Markets Series, Delaware VIP Global Bond Series, Delaware VIP Growth Opportunities Series, Delaware VIP High Yield Series, Delaware VIP International Value Equity Series, Delaware VIP REIT Series, Delaware VIP Select Growth Series, Delaware VIP Small Cap Value Series, Delaware VIP Trend Series, Delaware VIP U.S. Growth Series and Delaware VIP Value Series. These financial statements and the related notes pertain to Delaware VIP Diversified Income Series (the "Series"). The Trust is an open-end investment company. The Series is considered diversified under the Investment Company Act of 1940, as amended, and offers Standard Class and Service Class shares. The Standard Class shares do no t carry a 12b-1 fee and the Service Class shares carry a 12b-1 fee. The shares of the Series are sold only to separate accounts of life insurance companies.

The investment objective of the Series is to seek maximum long-term total return consistent with reasonable risk.

1. Significant Accounting Policies

The following accounting policies are in accordance with U.S. generally accepted accounting principles and are consistently followed by the Series.

Security Valuation—Equity securities, except those traded on the Nasdaq Stock Market, Inc. (Nasdaq), are valued at the last quoted sales price as of the time of the regular close of the New York Stock Exchange (NYSE) on the valuation date. Securities traded on the Nasdaq are valued in accordance with the Nasdaq Official Closing Price, which may not be the last sales price. If on a particular day an equity security does not trade, then the mean between the bid and asked prices will be used. Securities listed on a foreign exchange are valued at the last quoted sales price before the Series is valued. U.S. government and agency securities are valued at the mean between the bid and asked prices. Other long-term debt securities are valued by an independent pricing service and such prices are believed to reflect the fair value of such securities. Short-term debt se curities having less than 60 days to maturity are valued at amortized cost, which approximates market value. Forward foreign currency exchange contracts are valued at the mean between the bid and asked prices of the contracts and are marked-to-market daily. Interpolated values are derived when the settlement date of the contract is an interim date for which quotations are not available. Futures contracts are valued at the daily quoted settlement prices. Exchange-traded options are valued at the last reported sale price or, if no sales are reported, at the mean between the last reported bid and asked prices. Swap contracts and 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 the Series' Board of Trustees. 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 with respect to foreign sec urities, aftermarket trading, or significant events after local market trading (e.g., government actions or pronouncements, trading volume or volatility on markets, exchanges among dealers, or news events).

In September 2006, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 157 "Fair Value Measurements" (Statement 157). Statement 157 establishes a framework for measuring fair value in generally accepted accounting principles, clarifies the definition of fair value within that framework, and expands disclosures about the use of fair value measurements. Statement 157 is intended to increase consistency and comparability among fair value estimates used in financial reporting. Statement 157 is effective for fiscal years beginning after November 15, 2007. Management does not expect the adoption of Statement 157 to have an impact on the amounts reported in the financial statements.

Federal Income Taxes—The Series intends to continue to qualify for federal income tax purposes as a regulated investment company and make the requisite distributions to shareholders. Accordingly, no provision for federal income taxes has been made in the financial statements.

On July 13, 2006, FASB released FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Series' 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 would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. Recent SEC guidance allows implementing FIN 48 in Series net asset value calculations as late as the Series' last net asset value calculation in the first required fi nancial statement reporting period. As a result, the Series will incorporate FIN 48 in its semiannual report on June 30, 2007. Although the Series' tax positions are currently being evaluated, management does not expect the adoption of FIN 48 to have a material impact on the Series' financial statements.

Class Accounting—Investment income, common expenses and realized and unrealized gain (loss) on investments are allocated to the classes of the Series on the basis of daily net assets of each class. Distribution expenses relating to a specific class are charged directly to that class.

Repurchase Agreements—The Series may invest in a pooled cash account along with other members of the Delaware Investments^® Family of Funds pursuant to an exemptive order issued by the Securities and Exchange Commission. The aggregate daily balance of the pooled cash account is invested in repurchase agreements secured by obligations of the U.S. government. The respective collateral is held by the Series' custodian bank until the maturity of the respective repurchase agreements. Each repurchase agreement is at least 102% collateralized. However, in the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral may be subject to legal proceedings.

Foreign Currency Transactions—Transactions denominated in foreign currencies are recorded at the prevailing exchange rates on the valuation date. The value of all assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rate of such currencies against the U.S. dollar daily. Transaction gains or losses resulting from changes in exchange rates during the reporting period or upon settlement of the foreign currency transaction are reported in operations for the current period. The Series isolates that portion of realized gains and losses on investments in debt securities, which are due to changes in the foreign exchange rates from that which are due to changes in market prices of debt securities. The Series reports certain foreign currency related transactions as components of realized gains (losses) for financial reporting purposes, where such components are treated as ordinary income (loss) for federal income tax purposes.

Diversified Income Series- 22

Delaware VIP Diversified Income Series
Notes to Financial Statements (continued)

1. Significant Accounting Policies (continued)

Use of Estimates—The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of 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.

Other—Expenses directly attributable to the Series are charged directly to the Series. 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. Dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis. Withholding taxes have been provided for in accordance with the Series' understanding of the applicable country's tax rules and rates. Discounts and premiums on non-convertibl e bonds are amortized to interest income over the lives of the respective securities. Realized gains (losses) on paydowns of mortgage- and asset-backed securities are classified as interest income.

The Series declares and pays dividends from net investment income and distributions from net realized gain on investments, if any, following the close of the fiscal year.

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

In accordance with the terms of its investment management agreement, the Series pays Delaware Management Company (DMC), a series of Delaware Management Business Trust and the investment manager, an annual fee which is calculated daily at the rate of 0.65% on the first $500 million of average daily net assets of the Series, 0.60% on the next $500 million, 0.55% on the next $1.5 billion, and 0.50% on the average daily net assets in excess of $2.5 billion.

DMC has contractually agreed to waive that portion, if any, of its management fee and reimburse the Series to the extent necessary to ensure that annual operating expenses, exclusive of taxes, interest, brokerage commissions, distribution fees, certain insurance costs and extraordinary expenses, do not exceed 0.81% of average daily net assets of the Series through April 30, 2007. Prior to May 1, 2006, the expense limitation was 0.80% of average daily net assets. No reimbursement was due for the year ended December 31, 2006.

Delaware Service Company, Inc. (DSC), an affiliate of DMC, provides accounting, administration, dividend disbursing and transfer agent services. The Series pays DSC a monthly fee computed at the annual rate of 0.04% of the Series' average daily net assets for accounting and administrative services. The Series pays DSC a monthly fee based on average net assets for dividend disbursing and transfer agent services.

Pursuant to a distribution agreement and distribution plan, the Series pays Delaware Distributors, L.P. (DDLP), the distributor and an affiliate of DMC, an annual distribution and service fee not to exceed 0.30% of the average daily net assets of the Service Class shares. DDLP has contracted to waive distribution and service fees through April 30, 2007 in order to prevent distribution and service fees of the Service Class shares from exceeding 0.25% of average daily net assets. Standard Class shares pay no distribution and service expenses.

At December 31, 2006, the Series had liabilities payable to affiliates as follows:

Investment Management Fee Payable to DMC		Dividend Disbursing, Transfer Agent, Accounting and Administration Fees and Other Expenses Payable to DSC		Distribution Fees Payable to DDLP		Other Expenses Payable to DMC and Affiliates*
$	272,774	$	23,230	$	43,567	$	35,148

*DMC, as part of its administrative services, pays operating expenses on behalf of the Series and is reimbursed on a periodic basis. Such expenses include items such as printing of shareholder reports, fees for audit, legal and tax services, custodian fees and trustees' fees.

As provided in the investment management agreement, the Series bears the cost of certain legal and tax services, including internal legal and tax services provided to the Series by DMC and/or its affiliates' employees. For the year ended December 31, 2006, the Series was charged $17,674 for internal legal and tax services provided by DMC and/or its affiliates' employees.

Trustees' fees and benefits include expenses accrued by the Series for each Trustee's retainer, per meeting fees and retirement benefits. Independent Trustees with over five years of uninterrupted service are eligible to participate in a retirement plan that provides for the payment of benefits upon retirement. The amount of the retirement benefit is based on factors set forth in the plan, including the number of years of service. On November 16, 2006, the Board of Trustees unanimously voted to terminate the retirement plan. Payments equal to the net present value of the earned benefits will be made in 2007 to those independent trustees so entitled. The retirement benefit payout for the Series is $49,837. Certain officers of DMC, DSC and DDLP are officers and/or trustees of the Trust. These officers and trustees are paid no compensation by the Series.

Diversified Income Series- 23

Delaware VIP Diversified Income Series
Notes to Financial Statements (continued)

3. Investments

For the year ended December 31, 2006, the Series made purchases and sales of investment securities other than short-term investments as follows:

Purchases other than U.S. government securities	$	1,031,989,642
Purchases of U.S. government securities		215,187,130
Sales other than U.S. government securities		800,749,594
Sales of U.S. government securities		211,930,623

At December 31, 2006, the cost of investments for federal income tax purposes and unrealized appreciation (depreciation) for the Series were as follows:

Cost of Investments		Aggregate Unrealized Appreciation		Aggregate Unrealized Depreciation			Net Unrealized Appreciation
$	518,385,176	$	9,912,834	$	(2,082,652	)	$	7,830,182

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. generally accepted accounting principles. Additionally, gains (losses) on foreign currency transactions and 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 December 31, 2006 and 2005 was as follows:

	Year Ended 12/31/06		Year Ended 12/31/05
Ordinary income	$	3,981,773	$	1,201,382
Long-term capital gain		–		55,425
	$	3,981,773	$	1,256,807

5. Components of Net Assets on a Tax Basis

As of December 31, 2006, the components of net assets on a tax basis were as follows:

Shares of beneficial interest	$	476,807,780
Undistributed ordinary income		19,196,298
Undistributed long-term capital gains		61,136
Post-October losses		(378,676	)
Other temporary differences		(657,805	)
Unrealized appreciation of investments, swap contracts and foreign currencies		7,943,249
Net assets	$	502,971,982

The differences between book basis and tax basis components of net assets are primarily attributable to tax deferral of losses on wash sales, interest accrual on defaulted bonds, contingent payment debt instruments, mark-to-market of futures contracts, straddle deferrals, mark-to-market of foreign currency contracts and credit default swap contracts.

Post-October losses represent losses realized on investment transactions from November 1, 2006 through December 31, 2006 that, in accordance with federal income tax regulations, the Series has elected to defer and treat as having arisen in the following fiscal year.

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 paydowns of mortgage- and asset-backed securities, contingent payment debt instruments, credit default swap contracts and gain (loss) on foreign currency transactions. Results of operations and net assets were not affected by these reclassifications. For the year ended December 31, 2006, the Series recorded the following reclassifications:

Undistributed Net Investment Income			Accumulated Net Realized Gain (Loss)
$	(636,178	)	$	636,178

Capital loss carryforwards of $682,113 were utilized in 2006.

Diversified Income Series-24

Delaware VIP Diversified Income Series
Notes to Financial Statements (continued)

6. Capital Shares

Transactions in capital shares were as follows:

	Year Ended 12/31/06			Year Ended 12/31/05
Shares sold:
Standard Class		21,608,848			9,175,989
Service Class		10,150,801			10,713,809
Shares issued upon reinvestment of dividends and distributions:
Standard Class		209,284			41,588
Service Class		223,533			95,080
		32,192,466			20,026,466
Shares repurchased:
Standard Class		(1,676,554	)		(978,146	)
Service Class		(3,228,944	)		(1,663,091	)
		(4,905,498	)		(2,641,237	)
Net increase		27,286,968			17,385,229

7. Line of Credit

The Series, along with certain other funds in the Delaware Investments^® Family of Funds (the "Participants"), participates in a $225,000,000 revolving line of credit facility to be used for temporary or emergency purposes as an additional source of liquidity to fund redemptions of investor shares. The Participants are charged an annual commitment fee, which is allocated across the Participants on the basis of each Participant's allocation of the entire facility. The Participants may borrow up to a maximum of one third of their net assets under the agreement. The Series had no amounts outstanding as of December 31, 2006, or at any time during the year then ended.

8. Foreign Currency Exchange Contracts

The Series may enter into foreign currency exchange contracts as a way of managing foreign exchange rate risk. The Series may enter into these contracts to fix the U.S. dollar value of a security that it has agreed to buy or sell for the period between the date the trade was entered into and the date the security is delivered and paid for. The Series may also use these contracts to hedge the U.S. dollar value of securities it already owns that are denominated in foreign currencies. The change in market value is recorded as an unrealized gain or loss. When the contract is closed, a realized gain or loss is recorded equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.

The use of foreign currency exchange contracts does not eliminate fluctuations in the underlying prices of the securities, but does establish a rate of exchange that can be achieved in the future. Although foreign currency exchange contracts limit the risk of loss due to a decline in the value of the hedged currency, they also limit any potential gain that might result should the value of the currency increase. In addition, the Series could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts. The unrealized gain (loss) is included in liabilities net of receivables and other assets on the Statement of Net Assets.

9. Futures Contracts

The Series may invest in financial futures contracts to hedge its existing portfolio securities against fluctuations in fair value caused by changes in prevailing market interest rates. Upon entering into a futures contract, the Series deposits cash or pledges U.S. government securities to a broker, equal to the minimum "initial margin" requirements of the exchange on which the contract is traded. Subsequent payments are received from the broker or paid to the broker each day, based on the daily fluctuation in the market value of the contract. These receipts or payments are known as "variation margin" and are recorded daily by the Series as unrealized gains or losses until the contracts are closed. When the contracts are closed, the Series records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Risks of entering into futures contracts include potential imperfect correlation between the futures contracts and the underlying securities and the possibility of an illiquid secondary market for these instruments. The unrealized gain (loss) is included in liabilities net of receivables and other assets on the Statement of Net Assets.

10. Options Written

During the year ended December 31, 2006, the Series entered into options contracts in accordance with its investment objectives. When the Series writes an option, a premium is received and a liability is recorded and adjusted on a daily basis to reflect the current market value of the options written. Premiums received from writing options that expire unexercised are treated by the Series on the expiration date as realized gains. The difference between the premium received and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is treated as realized gain or loss. If a call option is exercised, the premium is added to the proceeds from the sale of the underlying security in determining whether the Series has a realized gain or loss. If a put option is exercised, the premium reduces the cost basis of the securities purchased by the Series. The Series, as writer of an option, bears the market risk of a n unfavorable change in the price of the security underlying the written option.

Diversified Income Series-25

Delaware VIP Diversified Income Series
Notes to Financial Statements (continued)

10. Options Written (continued)

Transactions in options written during the year ended December 31, 2006 for the Series were as follows:

	Number of contracts			Premiums
Options outstanding at December 31, 2005		–		$	–
Options written		1,680,000			3,614
Options expired		(1,680,000	)		(3,614	)
Options outstanding at December 31, 2006		–		$	–

11. Swap Contracts

The Series may enter into total return swap contracts in accordance with its investment objectives. A swap is a contract to exchange the return generated by one instrument for the return generated by another instrument. Total return swaps involve commitments to pay interest in exchange for a market-linked return based on a notional amount. To the extent the total return of the security, instrument or basket of instruments underlying the transaction exceeds the offsetting interest obligation, the Series will receive a payment from the counterparty. To the extent the total return of the security, instrument or basket of instruments underlying the transaction falls short of the offsetting interest obligation, the Series will make a payment to the counterparty. The change in value of swap contracts outstanding, if any, is recorded as unrealized appreciation or depreciation daily. A realized gain or loss is recorded on maturity or termination of the swap contract.

Because there is no organized market for these swap contracts, the value of open swaps may differ from that which would be realized in the event the Series terminated its position in the contract. Risks of entering into these contracts include the potential inability of the counterparty to meet the terms of the contracts. This type of risk is generally limited to the amount of favorable movements in the value of the underlying security, instrument, or basket of instruments, if any, at the day of default. Risks also arise from potential losses from adverse market movements and such losses could exceed the related unrealized amounts shown on the Statement of Net Assets.

The Series may also enter into credit default swap ("CDS") contracts in accordance with its investment objectives. A CDS contract is a risk-transfer instrument through which one party (the "purchaser of protection") transfers to another party (the "seller of protection") the financial risk of a Credit Event (as defined in the CDS agreement), as it relates to a particular reference security or basket of securities (such as an index). In exchange for the protection offered by the seller of protection, the purchaser of protection agrees to pay the seller of protection a periodic amount at a stated rate that is applied to the notional amount of the CDS contract. In addition, an upfront payment may be made or received by the Series in connection with an unwinding or assignment of a CDS contract. Upon the occurrence of a Credit Event, the seller of protection would pay the par (or other agreed-upon) value of the referenced security (or basket of s ecurities) to the counterparty.

During the year ended December 31, 2006, the Series entered into CDS contracts as a purchaser of protection. Periodic payments on such contracts are accrued daily and recorded as unrealized losses on swap agreements. Upon payment, such amounts are recorded as realized losses on swap agreements. Upfront payments made or received in connection with CDS contracts are amortized over the expected life of the CDS contracts as realized losses (gains) on swap agreements. The change in value of CDS contracts is recorded as unrealized appreciation or depreciation daily. A realized gain or loss is recorded upon a Credit Event or the maturity or termination of the agreement. For the year ended December 31, 2006, the Series did not enter into any CDS contracts as a seller of protection.

Credit default swaps may involve greater risks than if the Series had invested in the referenced obligation directly. Credit default swaps are subject to general market risk, liquidity risk, counterparty risk and credit risk. If the Series enters into a CDS contract as a purchaser of protection and no credit event occurs, its exposure is limited to the periodic payments previously made to the counterparty.

12. Credit and Market Risk

Some countries in which the Series may invest require governmental approval for the repatriation of investment income, capital or the proceeds of sales of securities by foreign investors. In addition, if there is deterioration in a country's balance of payments or for other reasons, a country may impose temporary restrictions on foreign capital remittances abroad.

The securities exchanges of certain foreign markets are substantially smaller, less liquid and more volatile than the major securities markets in the United States. Consequently, acquisition and disposition of securities by the Series may be inhibited. In addition, a significant portion of the aggregate market value of securities listed on the major securities exchanges in emerging markets are held by a smaller number of investors. This may limit the number of shares available for acquisition or disposition by the Series.

The Series invests in fixed income securities whose value is derived from underlying mortgages or consumer loans. Investors receive principal and interest payments as the underlying mortgages or consumer loans are paid back. Some of these securities are collateralized mortgage obligations (CMOs). CMOs are debt securities issued by U.S. government agencies or by financial institutions and other mortgage lenders, which are collateralized by a pool of mortgages held under an indenture. Prepayment of mortgages may shorten the stated maturity of the obligations and can result in a loss of premium, if any has been paid. Certain of these securities may be stripped (securities which provide only the principal or interest feature of the underlying security). The yield to maturity on an interest-only CMO is extremely sensitive not only to changes in prevailing interest rates, but also to the rate of principal payments (including prepayments) on the re lated underlying mortgage assets. A rapid rate of principal payments may have a material adverse affect on the Series' yield to maturity. If the underlying mortgage assets experience greater than anticipated prepayments of principal, the Series may fail to fully recoup its initial investment in these securities even if the securities are rated in the highest rating categories.

Diversified Income Series- 26

Delaware VIP Diversified Income Series
Notes to Financial Statements (continued)

12. Credit and Market Risk (continued)

The Series invests a portion of its assets in high yield fixed income securities, which carry ratings of BB or lower by Standard & Poor's Ratings Group and/or Ba or lower by Moody's Investors Service, Inc. Investments in these higher yielding securities are generally accompanied by a greater degree of credit risk than higher rated securities. Additionally, lower rated securities may be more susceptible to adverse economic and competitive industry conditions than investment grade securities.

The Series may invest up to 15% of its total 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 the Series 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, the Series' Board of Trustees has delegated to DMC the day-to-day functions of determining whether individual securities are liquid for purposes of the Series' limitation on investments in illiquid assets. Rule 144A and illiquid securities have been identified on the Statement of Net Assets.

13. Contractual Obligations

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

14. Tax Information (Unaudited)

For the fiscal year ended December 31, 2006, the Series designates dividends and distributions paid during the year as follows:

(A) Long-Term Capital Gain Distributions (Tax Basis)		(B) Ordinary Income Distributions (Tax Basis)			Total Distributions (Tax Basis)
	–		100	%		100	%

(A) and (B) are based on a percentage of the Series' total distributions.

Diversified Income Series- 27

Delaware VIP Trust — Delaware VIP Diversified Income Series
Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees
Delaware VIP Trust–Delaware VIP Diversified Income Series

We have audited the accompanying statement of net assets of the Delaware VIP Diversified Income Series (one of the series constituting Delaware VIP Trust) (the "Series") as of December 31, 2006, and the related statement of operations for the year then ended, the statements of changes in 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 and for the period May 16, 2003 (commencement of operations) through December 31, 2003. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits 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 and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Series' internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Series' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant es timates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2006, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Delaware VIP Diversified Income Series of Delaware VIP Trust at December 31, 2006, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and its financial highlights for each of the three years in the period then ended and for the period May 16, 2003 (commencement of operations) through December 31, 2003, in conformity with U.S. generally accepted accounting principles.

  

Philadelphia, Pennsylvania
February 14, 2007

The Series files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Series' Forms N-Q, as well as a description of the policies and procedures that the Series uses to determine how to vote proxies (if any) relating to portfolio securities is available without charge (i) upon request, by calling 800-523-1918; (ii) on the Series' website at http://www.delawareinvestments.com; and (iii) on the Commission's website at http://www.sec.gov. The Series' Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Information (if any) regarding how the Series voted proxies relating to portfolio securities during the most recently disclosed 12-month period ended June 30 is available without charge (i) through the Series' website at http://www.delawareinvestments.com; and (ii) on the Commission's website at http://www.sec.gov.

Diversified Income Series-28

Delaware Investments® Family of Funds

board of trustees/directors and officers addendum

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 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.

Name, Address, and Birth Date	Position(s) Held with Fund(s)	Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee or Officer		Other Directorships Held by Trustee or Officer
interested trustees
Patrick P. Coyne1 2005 Market Street Philadelphia, PA 19103 April 14, 1963	Chairman, President, Chief Executive Officer, and Trustee	Chairman and Trustee since August 16, 2006 President and Chief Executive Officer since August 1, 2006	Patrick P. Coyne has served in various executive capacities at different times at Delaware Investments.2		84	None
independent trustees
Thomas L. Bennett 2005 Market Street Philadelphia, PA 19103 October 4, 1947	Trustee	Since March 2005	Private Investor – (March 2004 – Present) Investment Manager – Morgan Stanley & Co. (January 1984 – March 2004)		84	None
John A. Fry 2005 Market Street Philadelphia, PA 19103 May 28, 1960	Trustee	Since January 2001	President – Franklin & Marshall College (June 2002 – Present) Executive Vice President – University of Pennsylvania (April 1995 – June 2002)		84	Director – Community Health Systems Director – Allied Barton Security Holdings
Anthony D. Knerr 2005 Market Street Philadelphia, PA 19103 December 7, 1938	Trustee	Since April 1990	Founder and Managing Director – Anthony Knerr & Associates (Strategic Consulting) (1990 – Present)		84	None
Lucinda S. Landreth 2005 Market Street Philadelphia, PA 19103 June 24, 1947	Trustee	Since March 2005	Chief Investment Officer – Assurant, Inc. (Insurance) (2002 – 2004)		84	None
Ann R. Leven 2005 Market Street Philadelphia, PA 19103 November 1, 1940	Trustee	Since September 1989	Consultant – ARL Associates (Financial Planning) (1983 – Present)		84	Director and Audit Committee Chairperson – Andy Warhol Foundation Director and Audit Committee Member – Systemax, Inc.

Diversified Income Series- 29

Name, Address, and Birth Date	Position(s) Held with Fund(s)	Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee or Officer		Other Directorships Held by Trustee or Officer
independent trustees (continued)
Thomas F. Madison 2005 Market Street Philadelphia, PA 19103 February 25, 1936	Trustee	Since May 1997	President and Chief Executive Officer – MLM Partners, Inc. (Small Business Investing and Consulting) (January 1993 – Present)		84	Director – Banner Health Director – CenterPoint Energy Director and Audit Committee Member – Digital River, Inc. Director and Audit Committee Member – Rimage Corporation Director – Valmont Industries, Inc.
Janet L. Yeomans 2005 Market Street Philadelphia, PA 19103 July 31, 1948	Trustee	Since April 1999	Vice President (January 2003 – Present) and Treasurer (January 2006 – Present) 3M Corporation Ms. Yeomans has held various management positions at 3M Corporation since 1983.		84	None
J. Richard Zecher 2005 Market Street Philadelphia, PA 19103 July 3, 1940	Trustee	Since March 2005	Founder – Investor Analytics (Risk Management) (May 1999 – Present) Founder – Sutton Asset Management (Hedge Fund) (September 1998 – Present)		84	Director and Audit Committee Member – Investor Analytics Director and Audit Committee Member – Oxigene, Inc.
officers
David F. Connor 2005 Market Street Philadelphia, PA 19103 December 2, 1963	Vice President, Deputy General Counsel, and Secretary	Vice President since September 21, 2000 and Secretary since October 2005	David F. Connor has served as Vice President and Deputy General Counsel of Delaware Investments since 2000.		84	None3
David P. O'Connor 2005 Market Street Philadelphia, PA 19103 February 21, 1966	Senior Vice President, General Counsel, and Chief Legal Officer	Senior Vice President, General Counsel, and Chief Legal Officer since October 2005	David P. O'Connor has served in various executive and legal capacities at different times at Delaware Investments.		84	None3
John J. O'Connor 2005 Market Street Philadelphia, PA 19103 June 16, 1957	Senior Vice President and Treasurer	Treasurer since February 2005	John J. O'Connor has served in various executive capacities at different times at Delaware Investments.		84	None3
Richard Salus 2005 Market Street Philadelphia, PA 19103 October 4, 1963	Senior Vice President and Chief Financial Officer	Chief Financial Officer since November 1, 2006	Richard Salus has served in various executive capacities at different times at Delaware Investments.		84	None3

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

² Delaware 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.

³ David F. Connor, David P. O'Connor, John J. 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. John J. O'Connor also serves in a similar capacity for Lincoln Variable Insurance Products Trust, which has the same investment advisor as the registrant.

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.

Diversified Income Series- 30

Delaware VIP Trust — Delaware VIP Emerging Markets Series

Delaware VIP Emerging Markets Series Standard Class shares returned +27.13%, and its Service Class shares returned +26.81% (both reflect all distributions reinvested) for the fiscal year ended Dec. 31, 2006. The Series performance lagged behind the 32.59% gain of its benchmark, the Morgan Stanley Capital International Emerging Markets Free Index (source: Lipper).

During the year, Liu-Er Chen of Delaware Investments assumed day-to-day management of the Series. The new investment strategy differs from that of the previous manager's and resulted in certain changes to the Series during the last quarter of the fiscal year. The Series' former manager followed a value-oriented stock selection process, focusing on stocks that offered attractive dividend yields. This was combined with defensive allocations within certain countries and economic sectors.

During the first three quarters of the year, the portfolio was characterized by several factors, including: a marked underweight in India, where stock valuations were viewed as unappealing; an overweight in the Brazilian market, based on attractive stock valuations; and an overweight in selected markets in southeast Asia, particularly in Thailand and Malaysia, where the managers believed that attractive stock prices would be supported by undervalued currencies.

As a result of the change in management of the Series, some positions have been reduced or eliminated while new positions have been added. The manager follows an approach based on — first and foremost — calculating a company's intrinsic value, seeking to determine its true worth in the marketplace.

The views expressed are current as of the date of this report and are subject to change.

The performance data quoted below and on the next page represent past performance; past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please obtain the performance data for the most recent month end by calling the number noted on the page related to this Series in the introductory section of this report.

You should consider the investment objectives, risks, charges, and expenses of the investment carefully before investing. The Delaware VIP Emerging Markets Series prospectus contains this and other important information about the Series. To obtain a prospectus, contact the company noted on the page related to this Series in the introductory section of this report, either by phone or through the company Web site. We advise you to read the prospectus carefully before you invest.

Instances of high double-digit returns are unusual, cannot be sustained, and were achieved primarily during favorable market conditions.

Delaware VIP Emerging Markets Series Average annual total returns For the periods ending Dec. 31, 2006	1 Year			5 Years			Lifetime
Standard Class Shares*		+27.13	%		+31.15	%		+11.13	%
Service Class Shares**		+26.81	%		+30.86	%		+20.02	%

  *  Commenced operations on May 1, 1997

  **  Commenced operations on May 1, 2000

Emerging Markets Series- 1

Delaware VIP Trust — Delaware VIP Emerging Markets Series (continued)

The chart shows a $10,000 investment in the Delaware VIP Emerging Markets Series Standard Class shares for the period from the Series inception May 1, 1997 through Dec. 31, 2006. All distributions were reinvested. The chart also shows $10,000 invested in the MSCI Emerging Markets Free Index for the period from May 31, 1997 through Dec. 31, 2006.

MSCI EM Index measures the equity market performance of 26 emerging market country indices located around the world. An index is unmanaged and does not reflect the costs of operating a mutual fund, such as the costs of buying, selling, and holding securities. You cannot invest directly in an index.

Earnings from a variable annuity or variable life investment compound tax free until withdrawal, so no adjustments were made for income taxes.

An expense limitation was in effect for the Delaware VIP Emerging Markets Series during the periods shown.

Performance of Service Class shares will vary due to different charges and expenses.

Performance does not reflect insurance fees related to a variable annuity or variable life investment or the deferred sales charge that would apply to certain withdrawals of investments held for fewer than eight years. Performance shown here would have been reduced if such fees were included and the expense limitation was removed. For more information about fees, consult your variable annuity or variable life prospectus.

Investments in variable products involve risk. Foreign investments are subject to risks not ordinarily associated with domestic investments, such as currency, economic and political risks, and different accounting standards. Investing in emerging markets can be riskier than investing in well-established foreign markets. Some portfolios offer more risk than others. Please read both the contract and underlying prospectus for specific details regarding the product's risk profile.

Emerging Markets Series- 2

Delaware VIP Trust — Delaware VIP Emerging Markets Series
Disclosure of Series Expenses

For the Period July 1, 2006 to December 31, 2006

As a shareholder of the Series, you incur ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Series expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Series and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2006 to December 31, 2006.

Actual Expenses

The first section of the table shown, "Actual Series 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 the period.

Hypothetical Example for Comparison Purposes

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

Please note that the expenses shown in the table are meant to highlight your ongoing costs only. As a shareholder of the Series, you do not incur any transaction costs, such as sales charges (loads), redemption fees or exchange fees, but shareholders of other funds may incur such costs. Also, the fees related to the variable annuity investment or the deferred sales charge that could apply have not been included. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. The Series' actual expenses shown in the table reflect fee waivers in effect. The expenses shown in the table assume reinvestment of all dividends and distributions.

Expense Analysis of an Investment of $1,000

	Beginning Account Value 7/1/06		Ending Account Value 12/31/06		Annualized Expense Ratios			Expenses Paid During Period 7/1/06 to 12/31/06*
Actual Series Return
Standard Class	$	1,000.00	$	1,238.30		1.52	%	$	8.58
Service Class		1,000.00		1,236.30		1.77	%		9.98
Hypothetical 5% Return (5% return before expenses)
Standard Class	$	1,000.00	$	1,017.54		1.52	%	$	7.73
Service Class		1,000.00		1,016.28		1.77	%		9.00

*"Expenses Paid During Period" are equal to the Series' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

Emerging Markets Series- 3

Delaware VIP Trust — Delaware VIP Emerging Markets SeriesCountry and Sector Allocations

As of December 31, 2006

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

Country	Percentage of Net Assets
Common Stock		90.03	%
Argentina		1.88	%
Brazil		11.17	%
Chile		1.26	%
China		10.51	%
Egypt		0.68	%
Hungary		2.00	%
Indonesia		1.95	%
Israel		1.94	%
Kazakhstan		1.00	%
Malaysia		5.32	%
Mexico		7.48	%
Pakistan		0.26	%
Panama		0.55	%
Peru		1.15	%
Philippines		0.39	%
Poland		1.03	%
Republic of Korea		11.99	%
Russia		6.44	%
South Africa		7.22	%
Taiwan		9.13	%
Thailand		2.70	%
Turkey		1.74	%
United Kingdom		0.41	%
United States		1.83	%
Preferred Stock		6.70	%
Brazil		3.89	%
Republic of Korea		2.81	%
Exchange Traded Funds		0.45	%
Repurchase Agreements		2.57	%
Total Market Value of Securities		99.75	%
Receivables and Other Assets Net of Liabilities		0.25	%
Total Net Assets		100.00	%
Sector	Percentage of Net Assets
Consumer Discretionary		6.77	%
Consumer Staples		7.88	%
Energy		12.53	%
Financials		20.33	%
Industrials		8.43	%
Information Technology		7.43	%
Materials		9.39	%
Telecommunication Services		15.45	%
Utilities		8.52	%
Total		96.73	%

Emerging Markets Series- 4

Delaware VIP Trust — Delaware VIP Emerging Markets Series

Statement of Net Assets

December 31, 2006

	Number of Shares		Market Value (U.S. $)
COMMON STOCK–90.03%Æ
Argentina–1.88%
Cresud ADR		87,700	$	1,534,750
† Grupo Financiero Galicia ADR		187,000		1,787,720
IRSA Inversiones y Representaciones GDR		96,700		1,635,197
† Petrobras Energia Participaciones ADR		128,500		1,566,415
				6,524,082
Brazil–11.17%
AES Tiete		42,200,000		1,224,620
Banco do Brasil		55,700		1,668,523
Centrais Eletricas Brasileiras		271,362,623		6,489,078
Companhia de Concessoes Rodoviarias		279,375		3,772,511
Companhia Siderurgica Nacional		53,148		1,604,515
Companhia Vale do Rio Doce ADR		66,051		1,733,839
CPFL Energia		101,100		1,419,612
† CPFL Energia ADR		33,700		1,381,026
Petroleo Brasileiro ADR		107,300		10,030,403
† Tim Participacoes ADR		35,100		1,215,162
Unibanco – Uniao de Bancos Brasileiros ADR		37,800		3,513,888
Votorantim Celulose e Papel ADR		241,300		4,731,892
				38,785,069
Chile–1.26%
Banco Santander ADR		58,500		2,817,360
† Inversiones Aguas Metropolitanas		237,618		292,419
†# Inversiones Aguas Metropolitanas 144A ADR		51,717		1,272,885
				4,382,664
China–10.51%o
China Merchants Holdings International		547,908		2,241,320
China Shipping Development		3,804,000		5,817,690
China Telecom		11,242,000		6,138,183
China Unicom		3,327,021		4,918,332
China Unicom ADR		16,000		238,240
CNOOC ADR		16,700		1,580,321
COSCO		4,344,333		2,827,999
Fountain Set		3,199,200		891,641
Guangshen Railway		3,020,000		2,041,370
Huaneng Power International		7,724,000		6,905,519
Texwinca		1,660,000		1,149,280
Zhejiang Expressway		2,268,117		1,734,063
				36,483,958
Egypt–0.68%
MobiNil-Egyptian Mobile Services		75,034		2,364,827
				2,364,827
Hungary–2.00%
Magyar Telekom Telecommunications		570,900		3,181,130
OTP Bank		82,031		3,762,372
				6,943,502

	Number of Shares		Market Value (U.S. $)
COMMON STOCK (continued)
Indonesia–1.95%
Bank Mandiri Persero		7,915,220	$	2,564,821
Bumi Resources		8,863,000		895,109
Gudang Garam		1,410,264		1,602,989
Telekomunikasi Indonesia		1,503,000		1,693,993
				6,756,912
Israel–1.94%
Bezeq Israeli Telecommunication		1,679,777		2,712,344
Israel Chemicals		642,438		4,008,588
				6,720,932
Kazakhstan–1.00%
† KazMunaiGas Exploration Production GDR		142,186		3,483,685
				3,483,685
Malaysia–5.32%
Eastern & Oriental		3,076,100		1,655,917
† Genting International		4,116,000		2,262,883
Hong Leong Bank		2,123,918		3,339,305
KLCC Property		71,000		57,122
Maxis Communications		1,038,607		3,000,815
MISC - Foreign		404,412		1,019,516
Oriental Holdings		1,305,900		1,649,947
PLUS Expressways		2,428,074		1,931,356
Public Bank		453,700		994,606
Public Bank - Foreign		425,251		944,306
Sime Darby		38,800		79,301
Tanjong		379,610		1,547,472
				18,482,546
Mexico–7.48%
America Movil Series L ADR		94,300		4,264,246
Controladora Comercial Mexicana		201,600		522,522
† Desarrolladora Homex ADR		14,600		862,422
Fomento Economico Mexicano ADR		24,100		2,789,816
† Grupo Aeroportuario del Pacifico ADR		20,900		819,071
Grupo Aeroportuario del Sureste ADR		43,000		1,826,640
Grupo Mexico Class B		454,389		1,665,630
Grupo Modelo Series C		583,265		3,228,663
Grupo Televisa ADR		277,200		7,487,172
Kimberly-Clark de Mexico Class A		356,362		1,646,067
Organizacion Soriana Class B		133,177		877,738
				25,989,987
Pakistan–0.26%
† Oil & Gas Development GDR		47,167		900,890
				900,890
Panama–0.55%
Banco Latinoamericano de Exportacions Class E		112,900		1,914,784
				1,914,784
Peru–1.15%
Cia de Minas Buenaventura ADR		142,400		3,995,744
				3,995,744

Emerging Markets Series- 5

Delaware VIP Emerging Markets Series

Statement of Net Assets (continued)

	Number of Shares		Market Value (U.S. $)
COMMON STOCK (continued)
Philippines–0.39%
Philippine Long Distance Telephone ADR		26,400	$	1,349,832
				1,349,832
Poland–1.03%
Telekomunikacja Polska		423,692		3,568,677
				3,568,677
Republic of Korea–11.99%
Cheil Industries		28,260		1,189,598
CJ		16,817		2,016,209
Daelim Industrial		50,201		4,070,388
Hana Financial		58,799		3,088,302
Kookmin Bank		61,489		4,943,845
Korea Electric Power		62,730		2,859,952
Korea Electric Power ADR		84,600		1,921,266
KT		112,200		5,610,005
KT ADR		105,727		2,680,179
KT&G		21,918		1,331,579
Lotte Confectionery		1,158		1,506,647
POSCO ADR		40,700		3,364,669
Samsung		42,000		1,375,214
Samsung Electronics		3,725		2,443,635
Shinsegae		2,555		1,591,447
SK Telecom ADR		62,700		1,660,296
				41,653,231
Russia–6.44%
Gazprom ADR		200,405		9,218,630
LUKOIL ADR (London International Exchange)		44,297		3,863,939
LUKOIL ADR		27,664		2,433,049
Mobile Telesystems ADR		35,500		1,781,745
NovaTek GDR		47,545		3,017,600
Unified Energy System GDR		18,787		2,050,601
				22,365,564
South Africa–7.22%
Alexander Forbes		1,003,787		2,241,363
Barloworld		117,710		2,755,450
Liberty Group		177,596		2,101,157
Mittal Steel South Africa		164,862		2,306,897
Remgro		136,101		3,453,063
Sasol		95,871		3,539,272
Standard Bank		256,893		3,460,200
Steinhoff International		418,714		1,481,171
Telkom		124,972		2,521,478
Tiger Brands		49,997		1,220,813
				25,080,864
Taiwan–9.13%
† Ase Test		144,100		1,453,969
Asustek Computer		1,526,346		4,169,347
Cathay Financial		1,034,188		2,344,985
† China Life Insurance		2,936,000		1,581,499
Chunghwa Telecom		1,615,394		3,001,676
Formosa Chemicals & Fibre		1,755,330		2,940,182
Lite-On Technology		1		1

	Number of Shares		Market Value (U.S. $)
COMMON STOCK (continued)
Taiwan (continued)
Mega Financial		3,646,556	$	2,677,187
President Chain Store		1,139,549		2,750,105
Synnex Technology International		977,160		1,231,966
Taiwan Semiconductor Manufacturing		3,516,028		7,219,045
† United Microelectronics		3,777,367		2,353,069
				31,723,031
Thailand–2.70%
Advanced Info Service Class F		804,800		1,770,787
Kasikornbank–Foreign		194,537		350,585
Kasikornbank NVDR		1,200,363		2,140,411
Land & Houses NVDR		6,629,101		1,209,488
Siam Cement NVDR		566,170		3,914,390
				9,385,661
Turkey–1.74%
Turk Sise ve Cam Fabrikalar		418,123		1,459,829
Turkiye Is Bankasi Class C		884,384		4,005,500
Yazicilar		22,733		572,660
				6,037,989
United Kingdom–0.41%
† Griffin Mining		677,756		1,426,830
				1,426,830
United States–1.83%
† Amkor Technology		167,800		1,567,252
ConocoPhillips		45,500		3,273,725
Freeport-McMoRan Copper & Gold Class B		27,000		1,504,710
				6,345,687
Total Common Stock (cost $259,442,648)				312,666,948
PREFERRED STOCK–6.70%
Brazil–3.89%
AES Tiete		54,200,000		1,580,463
Centrais Elecricas		97,749,366		2,191,526
Companhia Vale do Rio Doce Class A		163,840		4,148,722
Investimentos Itau		843,628		4,311,921
Ultrapar Participacoes		55,662		1,276,331
				13,508,963
Republic of Korea–2.81%
Hyundai Motor		108,292		4,407,058
Samsung Electronics		10,395		5,360,764
				9,767,822
Total Preferred Stock (cost $17,668,697)				23,276,785
EXCHANGE TRADED FUNDS–0.45%
iShares MSCI Taiwan Index Fund		107,700		1,562,727
Total Exchange Traded Funds (cost $1,602,576)				1,562,727

Emerging Markets Series- 6

Delaware VIP Emerging Markets Series

Statement of Net Assets (continued)

	Principal Amount		Market Value (U.S. $)
REPURCHASE AGREEMENTS–2.57%
With BNP Paribas 4.80% 1/2/07 (dated 12/29/06, to be repurchased at $3,400,813, collateralized by $3,556,000 U.S. Treasury Bills due 6/28/07, market value $3,470,236)	$	3,399,000	$	3,399,000
With Cantor Fitzgerald 4.82% 1/2/07 (dated 12/29/06, to be repurchased at $4,086,187, collateralized by $352,000 U.S. Treasury Notes 4.00% due 6/15/09, market value $347,191, $2,188,000 U.S. Treasury Notes 6.125% due 8/15/07, market value $2,253,023 and $1,458,000 U.S. Treasury Notes 6.50% due 2/15/10, market value $1,568,815)		4,084,000		4,084,000
With UBS Warburg 4.75% 1/2/07 (dated 12/29/06, to be repurchased at $1,458,770, collateralized by $1,506,000 U.S. Treasury Bills due 3/29/07, market value $1,488,910)		1,458,000		1,458,000
Total Repurchase Agreements (cost $8,941,000)				8,941,000

TOTAL MARKET VALUE OF SECURITIES–99.75% (cost $287,654,921)	$	346,447,460
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES–0.25%		861,943
NET ASSETS APPLICABLE TO 15,633,591 SHARES OUTSTANDING–100.00%	$	347,309,403
NET ASSET VALUE–DELAWARE VIP EMERGING MARKETS SERIES STANDARD CLASS ($189,572,589 / 8,523,032 Shares)	$	22.24
NET ASSET VALUE–DELAWARE VIP EMERGING MARKETS SERIES SERVICE CLASS ($157,736,814 / 7,110,559 Shares)	$	22.18
COMPONENTS OF NET ASSETS AT DECEMBER 31, 2006:
Shares of beneficial interest (unlimited authorization-no par)	$	253,246,168
Undistributed net investment income		5,402,981
Accumulated net realized gain on investments		29,867,080
Net unrealized appreciation of investments and foreign currencies		58,793,174
Total net assets	$	347,309,403

  †  Non-income producing security for the year ended December 31, 2006.

  #  Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At December 31, 2006, the aggregate amount of Rule 144A securities equaled $1,272,885, which represented 0.37% of Series' net assets. See Note 9 in "Notes to Financial Statements."

  Æ  Securities have been classified by country of origin.

o  Securities listed and traded on the Hong Kong Stock Exchange. These securities have significant business operations in China.

Summary of Abbreviations:

ADR – American Depositary Receipts

GDR – Global Depositary Receipts

NVDR – Non-Voting Depositary Receipts

See accompanying notes

Emerging Markets Series- 7

Delaware VIP Trust — Delaware VIP Emerging Markets Series

Statement of Operations

Year Ended December 31, 2006

INVESTMENT INCOME:
Dividends	$	11,255,632
Interest		392,498
Foreign tax withheld		(1,053,824	)
		10,594,306
EXPENSES:
Management fees		3,413,665
Custodian fees		518,264
Distribution expenses – Service Class		363,170
Accounting and administration expenses		109,237
Trustees' fees and benefits		50,799
Reports and statements to shareholders		32,961
Legal fees		28,682
Dividend disbursing and transfer agent fees and expenses		27,309
Audit and tax		22,555
Insurance fees		15,859
Consulting fees		8,245
Dues and services		7,250
Pricing fees		7,181
Taxes (other than taxes on income)		2,800
Trustees' expenses		1,570
Registration fees		534
		4,610,081
Less expenses absorbed or waived		(130,109	)
Less waiver of distribution expenses – Service Class		(60,528	)
Total operating expenses		4,419,444
NET INVESTMENT INCOME		6,174,862
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on:
Investments		30,022,641
Foreign currencies		(198,994	)
Net realized gain		29,823,647
Net change in unrealized appreciation/depreciation of investments and foreign currencies		30,008,281
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCIES		59,831,928
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	66,006,790

See accompanying notes

Delaware VIP Trust — Delaware VIP Emerging Markets Series

Statements of Changes in Net Assets

	Year Ended
	12/31/06			12/31/05
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income	$	6,174,862		$	2,705,766
Net realized gain on investments and foreign currencies		29,823,647			6,690,267
Net change in unrealized appreciation/ depreciation of investments and foreign currencies		30,008,281			19,673,561
Net increase in net assets resulting from operations		66,006,790			29,069,594
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Standard Class		(1,865,697	)		(185,268	)
Service Class		(1,148,824	)		(26,959	)
Net realized gain on investments:
Standard Class		(3,946,372	)		(653,887	)
Service Class		(2,908,845	)		(255,396	)
		(9,869,738	)		(1,121,510	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Standard Class		90,207,572			79,478,798
Service Class		89,316,167			66,615,479
Net asset value of shares issued upon reinvestment of dividends and distributions:
Standard Class		5,812,069			839,155
Service Class		4,057,669			282,355
		189,393,477			147,215,787
Cost of shares repurchased:
Standard Class		(58,049,374	)		(14,800,249	)
Service Class		(39,040,035	)		(10,506,016	)
		(97,089,409	)		(25,306,265	)
Increase in net assets derived from capital share transactions		92,304,068			121,909,522
NET INCREASE IN NET ASSETS		148,441,120			149,857,606
NET ASSETS:
Beginning of year		198,868,283			49,010,677
End of year (including undistributed net investment income of $5,402,981 and $2,425,952 , respectively)	$	347,309,403		$	198,868,283

See accompanying notes

Emerging Markets Series-8

Delaware VIP Trust — Delaware VIP Emerging Markets Series

Financial Highlights

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

	Delaware VIP Emerging Markets Series Standard Class
	Year Ended
	12/31/06			12/31/05			12/31/04			12/31/03			12/31/02
Net asset value, beginning of period	$	18.200		$	14.500		$	11.180		$	6.770		$	6.610
Income from investment operations:
Net investment income1		0.457			0.412			0.263			0.210			0.215
Net realized and unrealized gain on investments and foreign currencies		4.340			3.519			3.388			4.410			0.137
Total from investment operations		4.797			3.931			3.651			4.620			0.352
Less dividends and distributions from:
Net investment income		(0.243	)		(0.051	)		(0.331	)		(0.210	)		(0.192	)
Net realized gain on investments		(0.514	)		(0.180	)		–			–			–
Total dividends and distributions		(0.757	)		(0.231	)		(0.331	)		(0.210	)		(0.192	)
Net asset value, end of period	$	22.240		$	18.200		$	14.500		$	11.180		$	6.770
Total return2		27.13	%		27.49	%		33.47	%		70.54	%		5.17	%
Ratios and supplemental data:
Net assets, end of period (000 omitted)	$	189,572		$	120,292		$	36,966		$	14,304		$	12,651
Ratio of expenses to average net assets		1.51	%		1.47	%		1.50	%		1.49	%		1.43	%
Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly		1.56	%		1.57	%		1.63	%		1.58	%		1.46	%
Ratio of net investment income to average net assets		2.37	%		2.55	%		2.15	%		2.64	%		3.15	%
Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly		2.32	%		2.45	%		2.02	%		2.55	%		3.12	%
Portfolio turnover		67	%		18	%		34	%		71	%		39	%

¹The average shares outstanding method has been applied for per share information.

²Total 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. Total investment return reflects waivers and payment of fees by the manager. Performance would have been lower had the expense limitation not been in effect.

See accompanying notes

Emerging Markets Series- 9

Delaware VIP Emerging Markets Series

Financial Highlights (continued)

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

	Delaware VIP Emerging Markets Series Service Class
	Year Ended
	12/31/06			12/31/05			12/31/04			12/31/03			12/31/02
Net asset value, beginning of period	$	18.160		$	14.480		$	11.170		$	6.770		$	6.610
Income from investment operations:
Net investment income1		0.409			0.372			0.231			0.197			0.204
Net realized and unrealized gain on investments and foreign currencies		4.328			3.507			3.397			4.402			0.138
Total from investment operations		4.737			3.879			3.628			4.599			0.342
Less dividends and distributions from:
Net investment income		(0.203	)		(0.019	)		(0.318	)		(0.199	)		(0.182	)
Net realized gain on investments		(0.514	)		(0.180	)		–			–			–
Total dividends and distributions		(0.717	)		(0.199	)		(0.318	)		(0.199	)		(0.182	)
Net asset value, end of period	$	22.180		$	18.160		$	14.480		$	11.170		$	6.770
Total return2		26.81	%		27.11	%		33.26	%		70.10	%		5.03	%
Ratios and supplemental data:
Net assets, end of period (000 omitted)	$	157,737		$	78,576		$	12,045		$	144		$	652
Ratio of expenses to average net assets		1.76	%		1.72	%		1.75	%		1.71	%		1.58	%
Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly		1.86	%		1.87	%		1.93	%		1.83	%		1.61	%
Ratio of net investment income to average net assets		2.12	%		2.30	%		1.90	%		2.42	%		3.00	%
Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly		2.02	%		2.15	%		1.72	%		2.30	%		2.97	%
Portfolio turnover		67	%		18	%		34	%		71	%		39	%

¹The average shares outstanding method has been applied for per share information.

²Total 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. Total investment return reflects waivers and payment of fees by the manager and distributor, as applicable. Performance would have been lower had the expense limitation and waiver not been in effect.

See accompanying notes

Emerging Markets Series- 10

Delaware VIP Trust — Delaware VIP Emerging Markets Series
Notes to Financial Statements

December 31, 2006

Delaware VIP Trust (the "Trust") is organized as a Delaware statutory trust and offers 15 series: Delaware VIP Balanced Series, Delaware VIP Capital Reserves Series, Delaware VIP Cash Reserve Series, Delaware VIP Diversified Income Series, Delaware VIP Emerging Markets Series, Delaware VIP Global Bond Series, Delaware VIP Growth Opportunities Series, Delaware VIP High Yield Series, Delaware VIP International Value Equity Series, Delaware VIP REIT Series, Delaware VIP Select Growth Series, Delaware VIP Small Cap Value Series, Delaware VIP Trend Series, Delaware VIP U.S. Growth Series and Delaware VIP Value Series. These financial statements and the related notes pertain to Delaware VIP Emerging Markets Series (the "Series"). The Trust is an open-end investment company. The Series is considered non-diversified under the Investment Company Act of 1940, as amended, and offers Standard Class and Service Class shares. The Standard Class shares do not carry a 12b-1 fee and the Service Class shares carry a 12b-1 fee. The shares of the Series are sold only to separate accounts of life insurance companies.

The investment objective of the Series is to seek long-term capital appreciation.

1. Significant Accounting Policies

The following accounting policies are in accordance with U.S. generally accepted accounting principles and are consistently followed by the Series.

Security Valuation—Equity securities, except those traded on the Nasdaq Stock Market, Inc. (Nasdaq), are valued at the last quoted sales price as of the time of the regular close of the New York Stock Exchange (NYSE) on the valuation date. Securities traded on the Nasdaq are valued in accordance with the Nasdaq Official Closing Price, which may not be the last sales price. If on a particular day an equity security does not trade, then the mean between the bid and asked prices will be used. Securities listed on a foreign exchange are valued at the last quoted sales price before the Series is valued. Short-term debt securities having less than 60 days to maturity are valued at amortized cost, which approximates market value. Foreign currency exchange contracts are valued at the mean between the bid and asked prices of the contracts and are marked-to-market dail y. Interpolated values are derived when the settlement date of the contract is an interim date for which quotations are not available. 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 the Series' Board of Trustees. 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, aftermarket trading, or significant events after local market trading (e.g., government actions or pronouncements, trading volume or volatility on markets, exchanges among dealers, or news events).

In September 2006, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 157 "Fair Value Measurements" (Statement 157). Statement 157 establishes a framework for measuring fair value in generally accepted accounting principles, clarifies the definition of fair value within that framework, and expands disclosures about the use of fair value measurements. Statement 157 is intended to increase consistency and comparability among fair value estimates used in financial reporting. Statement 157 is effective for fiscal years beginning after November 15, 2007. Management does not expect the adoption of Statement 157 to have an impact on the amounts reported in the financial statements.

Federal Income Taxes—The Series intends to continue to qualify for federal income tax purposes as a regulated investment company and make the requisite distributions to shareholders. Accordingly, no provision for federal income taxes has been made in the financial statements.

On July 13, 2006, FASB released FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Series' 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 would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. Recent SEC guidance allows implementing FIN 48 in Series net asset value calculations as late as the Series' last net asset value calculation in the first required fi nancial statement reporting period. As a result, the Series will incorporate FIN 48 in its semiannual report on June 30, 2007. Although the Series' tax positions are currently being evaluated, management does not expect the adoption of FIN 48 to have a material impact on the Series' financial statements.

Class Accounting—Investment income, common expenses and realized and unrealized gain (loss) on investments are allocated to the classes of the Series on the basis of daily net assets of each class. Distribution expenses relating to a specific class are charged directly to that class.

Repurchase Agreements—The Series may invest in a pooled cash account along with other members of the Delaware Investments® Family of Funds pursuant to an exemptive order issued by the Securities and Exchange Commission. The aggregate daily balance of the pooled cash account is invested in repurchase agreements secured by obligations of the U.S. government. The respective collateral is held by the Series' custodian bank until the maturity of the respective repurchase agreements. Each repurchase agreement is at least 102% collateralized. However, in the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral may be subject to legal proceedings.

Foreign Currency Transactions—Transactions denominated in foreign currencies are recorded at the prevailing exchange rates on the valuation date. The value of all assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rate of such currencies against the U.S. dollar daily. Transaction gains or losses resulting from changes in exchange rates during the reporting period or upon settlement of the foreign currency transaction are reported in operations for the current period. The Series does not isolate that portion of realized gains and losses on investments which are due to changes in foreign exchange rates from that which are due to changes in market prices. The Series reports certain foreign currency related transactions as components of realized gains (losses) for financial reporting purposes, where such comp onents are treated as ordinary income (loss) for federal income tax purposes.

Use of Estimates—The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of 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.

Emerging Markets Series- 11

Delaware VIP Emerging Markets Series
Notes to Financial Statements (continued)

1. Significant Accounting Policies (continued)

Other—Expenses directly attributable to the Series are charged directly to the Series. 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. Dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis. Foreign dividends are also recorded on the ex-dividend date or as soon after the ex-dividend date that the Series is aware of such dividends, net of all non-rebatable tax withholdings. W ithholding taxes on foreign dividends have been recorded in accordance with the Series' understanding of the applicable country's tax rules and rates.

The Series declares and pays dividends from net investment income and distributions from net realized gain on investments, if any, following the close of the fiscal year.

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

In accordance with the terms of its investment management agreement, the Series pays Delaware Management Company (DMC), a series of Delaware Management Business Trust and the investment manager, an annual fee which is calculated daily at the rate of 1.25% on the first $500 million of average daily net assets of the Series, 1.20% on the next $500 million, 1.15% on the next $1.5 billion, and 1.10% on average daily net assets in excess of $2.5 billion.

Prior to September 25, 2006, Mondrian Investment Partners Ltd. ("Mondrian") (the "Sub-Advisor") was responsible for the day-to-day management of the Series' investment portfolio. For these services, DMC, not the Series, paid the Sub-Advisor 0.20% of the Series' average daily net assets. Mondrian resigned as sub-advisor to the Series effective September 25, 2006.

DMC has contractually agreed to waive that portion, if any, of its management fee and reimburse the Series to the extent necessary to ensure that annual operating expenses, exclusive of taxes, interest, brokerage commissions, distribution fees, certain insurance costs and extraordinary expenses, do not exceed 1.50% of average daily net assets of the Series through April 30, 2007.

Delaware Service Company, Inc. (DSC), an affiliate of DMC, provides accounting, administration, dividend disbursing and transfer agent services. The Series pays DSC a monthly fee computed at the annual rate of 0.04% of the Series' average daily net assets for accounting and administrative services. The Series pays DSC a monthly fee based on average net assets for dividend disbursing and transfer agent services.

Pursuant to a distribution agreement and distribution plan, the Series pays Delaware Distributors, L.P. (DDLP), the distributor and an affiliate of DMC, an annual distribution and service fee not to exceed 0.30% of the average daily net assets of the Service Class shares. DDLP has contracted to waive distribution and service fees through April 30, 2007 in order to prevent distribution and service fees of the Service Class shares from exceeding 0.25% of average daily net assets. Standard Class shares pay no distribution and service expenses.

At December 31, 2006, the Series had liabilities payable to affiliates as follows:

Investment Management Fee Payable to DMC		Dividend Disbursing, Transfer Agent, Accounting and Administration Fees and Other Expenses Payable to DSC		Distribution Fee Payable To DDLP		Other Expenses Payable to DMC and Affiliates*
$	336,441	$	15,664	$	32,075	$	21,756

*DMC as part of its administrative services, pays operating expenses on behalf of the Series and is reimbursed on a periodic basis. Such expenses include items such as printing of shareholder reports, fees for audit, legal and tax services, custodian fees and trustees' fees.

As provided in the investment management agreement, the Series bears the cost of certain legal and tax services, including internal legal and tax services provided to the Series by DMC and/or its affiliates' employees. For the year ended December 31, 2006, the Series was charged $13,230 for internal legal and tax services provided by DMC and/or its affiliates' employees.

Trustees' fees and benefits include expenses accrued by the Series for each Trustee's retainer, per meeting fees and retirement benefits. Independent Trustees with over five years of uninterrupted service are eligible to participate in a retirement plan that provides for the payment of benefits upon retirement. The amount of the retirement benefit is based on factors set forth in the plan, including the number of years of service. On November 16, 2006, the Board of Trustees unanimously voted to terminate the retirement plan. Payments equal to the net present value of the earned benefits will be made in 2007 to those independent trustees so entitled. The retirement benefit payout for the Series is $35,828. Certain officers of DMC, DSC and DDLP are officers and/or trustees of the Trust. These officers and trustees are paid no compensation by the Series.

Emerging Markets Series- 12

Delaware VIP Emerging Markets Series
Notes to Financial Statements (continued)

3. Investments

For the year ended December 31, 2006, the Series made purchases and sales of investment securities other than short-term investments as follows:

Purchases	$	265,914,820
Sales		175,365,177

At December 31, 2006, the cost of investments for federal income tax purposes and unrealized appreciation (depreciation) for the Series were as follows:

Cost of Investments		Aggregate Unrealized Appreciation		Aggregate Unrealized Depreciation			Net Unrealized Appreciation
$	288,969,245	$	60,468,479	$	(2,990,264	)	$	57,478,215

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. generally accepted accounting principles. Additionally, gains (losses) on foreign currency transactions and 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 December 31, 2006 and 2005 was as follows:

	Year Ended 12/31/06		Year Ended 12/31/05
Ordinary income	$	5,745,436	$	427,583
Long-term capital gain		4,124,302		693,927
	$	9,869,738	$	1,121,510

5. Components of Net Assets on a Tax Basis

As of December 31, 2006, the components of net assets on a tax basis were as follows:

Shares of beneficial interest	$	253,246,168
Undistributed ordinary income		13,343,257
Undistributed long-term capital gains		23,241,128
Unrealized appreciation of investments and foreign currencies		57,478,850
Net assets	$	347,309,403

The differences between book basis and tax basis components of net assets are primarily attributable to tax deferral of losses on wash sales and tax recognition of unrealized gain on investments in passive foreign investment companies.

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 gain (loss) on foreign currency transactions and capital gain tax. Results of operations and net assets were not affected by these reclassifications. For the year ended December 31, 2006, the Series recorded the following reclassifications:

Undistributed Net Investment Income			Accumulated Net Realized Gain (Loss)
$	(183,312	)	$	183,312

Emerging Markets Series-13

Delaware VIP Emerging Markets Series
Notes to Financial Statements (continued)

6. Capital Shares

Transactions in capital shares were as follows:

	Year Ended 12/31/06			Year Ended 12/31/05
Shares sold:
Standard Class		4,700,048			4,946,468
Service Class		4,637,136			4,136,774
Shares issued upon reinvestment of dividends and distributions:
Standard Class		310,143			56,969
Service Class		216,640			19,169
		9,863,967			9,159,380
Shares repurchased:
Standard Class		(3,097,082	)		(942,342	)
Service Class		(2,070,320	)		(660,948	)
		(5,167,402	)		(1,603,290	)
Net increase		4,696,565			7,556,090

7. Line of Credit

The Series, along with certain other funds in the Delaware Investments^® Family of Funds (the "Participants"), participates in a $225,000,000 revolving line of credit facility to be used for temporary or emergency purposes as an additional source of liquidity to fund redemptions of investor shares. The Participants are charged an annual commitment fee, which is allocated across the Participants on the basis of each Participant's allocation of the entire facility. The Participants may borrow up to a maximum of one third of their net assets under the agreement. The Series had no amounts outstanding as of December 31, 2006, or at any time during the year then ended.

8. Foreign Currency Exchange Contracts

The Series may enter into foreign currency exchange contracts as a way of managing foreign exchange rate risk. The Series may enter into these contracts to fix the U.S. dollar value of a security that it has agreed to buy or sell for the period between the date the trade was entered into and the date the security is delivered and paid for. The Series may also use these contracts to hedge the U.S. dollar value of securities it already owns that are denominated in foreign currencies. The change in market value is recorded as an unrealized gain or loss. When the contract is closed, a realized gain or loss is recorded equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.

The use of foreign currency exchange contracts does not eliminate fluctuations in the underlying prices of the securities, but does establish a rate of exchange that can be achieved in the future. Although foreign currency exchange contracts limit the risk of loss due to a decline in the value of the hedged currency, they also limit any potential gain that might result should the value of the currency increase. In addition, the Series could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts. There were no foreign currency exchange contracts outstanding at December 31, 2006.

9. Credit and Market Risk

Some countries in which the Series may invest require governmental approval for the repatriation of investment income, capital or the proceeds of sales of securities by foreign investors. In addition, if there is deterioration in a country's balance of payments or for other reasons, a country may impose temporary restrictions on foreign capital remittances abroad.

The securities exchanges of certain foreign markets are substantially smaller, less liquid and more volatile than the major securities markets in the United States. Consequently, acquisition and disposition of securities by the Series may be inhibited. In addition, a significant portion of the aggregate market value of equity securities listed on the major securities exchanges in emerging markets are held by a smaller number of investors. This may limit the number of shares available for acquisition or disposition by the Series.

The Series may invest up to 10% of its total 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 the Series 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, the Series' Board of Trustees has delegated to DMC the day-to-day functions of determining whether individual Rule 144A securities are liquid for purposes of the Series' limitation on investments in illiquid assets. At December 31, 2006, no securities have been determined to be illiquid under the Series' Liquidity Procedures. Rule 144A securities have been identified on the Statement of Net Assets.

Emerging Markets Series-14

Delaware VIP Emerging Markets Series
Notes to Financial Statements (continued)

10. Contractual Obligations

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

11. Tax Information (Unaudited)

For the fiscal year ended December 31, 2006, the Series designates dividends and distributions paid during the year as follows:

(A) Long-Term Capital Gain Distributions (Tax Basis)			(B) Ordinary Income Distributions (Tax Basis)			Total Distributions (Tax Basis)
	42	%		58	%		100	%

(A) and (B) are based on a percentage of the Series' total distributions.

The Delaware VIP Emerging Markets Series intends to pass through foreign tax credits in the maximum amount of $526,106. The gross foreign source income earned during the fiscal year 2006 by Delaware VIP Emerging Markets Series was $11,170,724.

Emerging Markets Series- 15

Delaware VIP Trust — Delaware VIP Emerging Markets Series
Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees
Delaware VIP Trust–Delaware VIP Emerging Markets Series

We have audited the accompanying statement of net assets of the Delaware VIP Emerging Markets Series (one of the series constituting Delaware VIP Trust) (the "Series") as of December 31, 2006, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Series' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits 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 and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Series' internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Series' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant es timates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2006, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Delaware VIP Emerging Markets Series of Delaware VIP Trust at December 31, 2006, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

  

Philadelphia, Pennsylvania

February 14, 2007

The Series files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Series' Forms N-Q, as well as a description of the policies and procedures that the Series uses to determine how to vote proxies (if any) relating to portfolio securities is available without charge (i) upon request, by calling 800-523-1918; (ii) on the Series' website at http://www.delawareinvestments.com; and (iii) on the Commission's website at http://www.sec.gov. The Series' Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Information (if any) regarding how the Series voted proxies relating to portfolio securities during the most recently disclosed 12-month period ended June 30 is available without charge (i) through the Series' website at http://www.delawareinvestments.com; and (ii) on the Commission's website at http://www.sec.gov.

Emerging Markets Series- 16

Delaware Investments® Family of Funds

board of trustees/directors and officers addendum

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 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.

Name, Address, and Birth Date	Position(s) Held with Fund(s)	Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee or Officer		Other Directorships Held by Trustee or Officer
interested trustees
Patrick P. Coyne1 2005 Market Street Philadelphia, PA 19103 April 14, 1963	Chairman, President, Chief Executive Officer, and Trustee	Chairman and Trustee since August 16, 2006 President and Chief Executive Officer since August 1, 2006	Patrick P. Coyne has served in various executive capacities at different times at Delaware Investments.2		84	None
independent trustees
Thomas L. Bennett 2005 Market Street Philadelphia, PA 19103 October 4, 1947	Trustee	Since March 2005	Private Investor – (March 2004 – Present) Investment Manager – Morgan Stanley & Co. (January 1984 – March 2004)		84	None
John A. Fry 2005 Market Street Philadelphia, PA 19103 May 28, 1960	Trustee	Since January 2001	President – Franklin & Marshall College (June 2002 – Present) Executive Vice President – University of Pennsylvania (April 1995 – June 2002)		84	Director – Community Health Systems Director – Allied Barton Security Holdings
Anthony D. Knerr 2005 Market Street Philadelphia, PA 19103 December 7, 1938	Trustee	Since April 1990	Founder and Managing Director – Anthony Knerr & Associates (Strategic Consulting) (1990 – Present)		84	None
Lucinda S. Landreth 2005 Market Street Philadelphia, PA 19103 June 24, 1947	Trustee	Since March 2005	Chief Investment Officer – Assurant, Inc. (Insurance) (2002 – 2004)		84	None
Ann R. Leven 2005 Market Street Philadelphia, PA 19103 November 1, 1940	Trustee	Since September 1989	Consultant – ARL Associates (Financial Planning) (1983 – Present)		84	Director and Audit Committee Chairperson – Andy Warhol Foundation Director and Audit Committee Member – Systemax, Inc.

Emerging Markets Series- 17

Name, Address, and Birth Date	Position(s) Held with Fund(s)	Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee or Officer		Other Directorships Held by Trustee or Officer
independent trustees (continued)
Thomas F. Madison 2005 Market Street Philadelphia, PA 19103 February 25, 1936	Trustee	Since May 1997	President and Chief Executive Officer – MLM Partners, Inc. (Small Business Investing and Consulting) (January 1993 – Present)		84	Director – Banner Health Director – CenterPoint Energy Director and Audit Committee Member – Digital River, Inc. Director and Audit Committee Member – Rimage Corporation Director – Valmont Industries, Inc.
Janet L. Yeomans 2005 Market Street Philadelphia, PA 19103 July 31, 1948	Trustee	Since April 1999	Vice President (January 2003 – Present) and Treasurer (January 2006 – Present) 3M Corporation Ms. Yeomans has held various management positions at 3M Corporation since 1983.		84	None
J. Richard Zecher 2005 Market Street Philadelphia, PA 19103 July 3, 1940	Trustee	Since March 2005	Founder – Investor Analytics (Risk Management) (May 1999 – Present) Founder – Sutton Asset Management (Hedge Fund) (September 1998 – Present)		84	Director and Audit Committee Member – Investor Analytics Director and Audit Committee Member – Oxigene, Inc.
officers
David F. Connor 2005 Market Street Philadelphia, PA 19103 December 2, 1963	Vice President, Deputy General Counsel, and Secretary	Vice President since September 21, 2000 and Secretary since October 2005	David F. Connor has served as Vice President and Deputy General Counsel of Delaware Investments since 2000.		84	None3
David P. O'Connor 2005 Market Street Philadelphia, PA 19103 February 21, 1966	Senior Vice President, General Counsel, and Chief Legal Officer	Senior Vice President, General Counsel, and Chief Legal Officer since October 2005	David P. O'Connor has served in various executive and legal capacities at different times at Delaware Investments.		84	None3
John J. O'Connor 2005 Market Street Philadelphia, PA 19103 June 16, 1957	Senior Vice President and Treasurer	Treasurer since February 2005	John J. O'Connor has served in various executive capacities at different times at Delaware Investments.		84	None3
Richard Salus 2005 Market Street Philadelphia, PA 19103 October 4, 1963	Senior Vice President and Chief Financial Officer	Chief Financial Officer since November 1, 2006	Richard Salus has served in various executive capacities at different times at Delaware Investments.		84	None3

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

² Delaware 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.

³ David F. Connor, David P. O'Connor, John J. 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. John J. O'Connor also serves in a similar capacity for Lincoln Variable Insurance Products Trust, which has the same investment advisor as the registrant.

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.

Emerging Markets Series- 18

Delaware VIP Trust — Delaware VIP Global Bond Series (closed to new investors)

On November 16, 2006, the Board of Trustees of the Delaware VIP Trust voted and approved a proposal to liquidate and dissolve the Delaware VIP Global Bond Series, subject to shareholder approval at a shareholder meeting scheduled for February 28, 2007.

For the fiscal year ended Dec. 31, 2006, Delaware VIP Global Bond Series Standard Class shares showed a return of +3.15% (at net asset value with all distributions reinvested). The Citigroup World Government Bond Index — the Series' benchmark — advanced 6.12% for the year (source: Lipper).

International fixed income assets continued to grow in popularity with investors, as the $9 trillion in global bond sales in 2006 surpassed the record set in 2003. By comparison, U.S. bond sales topped $500 million (source: Bloomberg).

Emerging market bonds especially remained in demand after several years of strong advances. In mid-year, emerging market bonds underwent a slump, but performed well again for the whole of 2006, as evidenced by the 11.14% advance made by the Lehman Brothers Global Emerging Market Bond Index.

Performance for the Series may have been limited by its positioning toward the low end of the Series' typical range for emerging markets, due to what we considered stretched valuations in U.S. dollar-denominated emerging market assets. In addition to its U.S. assets, the Series' largest country allocations at fiscal year end were in Germany, Norway, Canada, France, and Japan.

The Series maintains a general strategy that seeks current income consistent with preservation of principal. During the year, we continued our strategy of purchasing securities in countries where the currency appeared undervalued or fair-valued compared to other countries. The portfolio also continued to hold currency hedges, a strategy designed to limit the risks associated with exposure to certain currencies while preserving underlying bond exposure.

Our focus remains on currencies with improving economic fundamentals at a time when U.S. economic growth appears to be slowing a bit more than many other world economies. Near the end of the fiscal year, the euro, Norwegian krone, and Swedish krona were among our key selections. We believed these currencies were poised to benefit, where underlying economic fundamentals remain sound.

The views expressed are current as of the date of this report and are subject to change.

The performance data quoted below and on the next page represent past performance; past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please obtain the performance data for the most recent month end by calling the number noted on the page related to this Series in the introductory section of this report.

You should consider the investment objectives, risks, charges, and expenses of the investment carefully before investing. The Delaware VIP Global Bond Series prospectus contains this and other important information about the Series. To obtain a prospectus, contact the company noted on the page related to this Series in the introductory section of this report, either by phone or through the company Web site. We advise you to read the prospectus carefully before you invest.

Delaware VIP Global Bond Series Average annual total returns For the periods ending Dec. 31, 2006

1 Year

5 Years

10 Years

Lifetime

Standard Class Shares*

+3.15

%

+9.90

%

+5.37

%

+6.13

%

  *  Commenced operations on May 2, 1996

Global Bond Series- 1

Delaware VIP Trust — Delaware VIP Global Bond Series (continued)

The chart shows a $10,000 investment in the Delaware VIP Global Bond Series Standard Class shares for the period from Dec. 31, 1996 through Dec. 31, 2006. All distributions were reinvested. The chart also shows $10,000 invested in the Citigroup World Government Bond Index for the period from Dec. 31, 1996 through Dec. 31, 2006.

The Citigroup World Government Bond Index is an unmanaged composite and a theoretical measure of global bond market performance rather than an actual available investment. An index is unmanaged and does not reflect the costs of operating a mutual fund, such as the costs of buying, selling, and holding securities. You cannot invest directly in an index.

Earnings from a variable annuity or variable life investment compound tax free until withdrawal, so no adjustments were made for income taxes.

An expense limitation was in effect for the Delaware VIP Global Bond Series during the periods shown.

Performance does not reflect insurance fees related to a variable annuity or variable life investment or the deferred sales charge that would apply to certain withdrawals of investments held for fewer than eight years. Performance shown here would have been reduced if such fees were included and the expense limitation was removed. For more information about fees, consult your variable annuity or variable life prospectus.

Investments in variable products involve risk. International and emerging market investments are subject to risks not ordinarily associated with domestic investments, such as currency, economic and political risks, and different accounting standards. Some portfolios offer more risk than others. Please read both the contract and underlying prospectus for specific details regarding the product's risk profile.

Global Bond Series- 2

Delaware VIP Trust — Delaware VIP Global Bond Series

Disclosure of Series Expenses

For the Period July 1, 2006 to December 31, 2006

As a shareholder of the Series, you incur ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Series expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Series and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2006 to December 31, 2006.

Actual Expenses

The first section of the table shown, "Actual Series 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 the period.

Hypothetical Example for Comparison Purposes

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

Please note that the expenses shown in the table are meant to highlight your ongoing costs only. As a shareholder of the Series, you do not incur any transaction costs, such as sales charges (loads), redemption fees or exchange fees, but shareholders of other funds may incur such costs. Also, the fees related to the variable annuity investment or the deferred sales charge that could apply have not been included. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. The Series' actual expenses shown in the table reflect fee waivers in effect. The expenses shown in the table assume reinvestment of all dividends and distributions.

Expense Analysis of an Investment of $1,000

	Beginning Account Value 7/1/06		Ending Account Value 12/31/06		Annualized Expense Ratios			Expenses Paid During Period 7/1/06 to 12/31/06*
Actual Series Return
Standard Class	$	1,000.00	$	1,033.70		0.97	%	$	4.97
Hypothetical 5% Return (5% return before expenses)
Standard Class	$	1,000.00	$	1,020.32		0.97	%	$	4.94

*"Expenses Paid During Period" are equal to the Series' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

Global Bond Series- 3

Delaware VIP Trust — Delaware VIP Global Bond Series
Sector/Country Allocation and Credit Rating Breakdown

As of December 31, 2006

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

Sector/Country	Percentage of Net Assets
Corporate Bonds		10.96	%
Banking & Finance		9.88	%
Consumer Non-Cyclical		0.51	%
Utilities		0.57	%
Foreign Agencies		9.78	%
Austria		0.51	%
Germany		9.27	%
Regional Agency		1.44	%
Australia		1.44	%
Regional Authority		0.92	%
Canada		0.92	%
Sovereign Agencies		4.46	%
France		0.32	%
Japan		2.78	%
Norway		1.02	%
United States		0.34	%
Sovereign Debt		55.76	%
Austria		1.92	%
France		5.44	%
Germany		6.72	%
Japan		24.89	%
Norway		7.29	%
Poland		3.26	%
Republic of Korea		1.25	%
Sweden		2.33	%
United Kingdom		2.66	%
Supranational Banks		8.18	%
Total Market Value of Securities		91.50	%
Receivables and Other Assets Net of Liabilities		8.50	%
Total Net Assets		100.00	%
Credit Rating Breakdown (as a % of fixed income investments)
AAA		61.74	%
AA		28.09	%
A		4.51	%
BBB		1.91	%
BB		2.33	%
B		1.42	%
Total		100.00	%

Global Bond Series- 4

Delaware VIP Trust — Delaware VIP Global Bond Series
Statement of Net Assets

December 31, 2006

	Principal Amountm		Market Value (U.S $)
CORPORATE BONDS–10.96%
Banking & Finance–9.88%
ASIF III 0.95% 7/15/09	JPY	3,000,000	$	25,133
Citigroup 0.80% 10/30/08	JPY	1,000,000		8,393
Depfa Bank 20.00% 11/19/07	TRY	40,000		28,182
Ford Motor Credit 5.75% 1/12/09	EUR	55,000		72,766
GE Capital UK Funding 4.625% 1/18/16	GBP	20,000		37,019
General Motors Acceptance Corporation 5.375% 6/6/11	EUR	40,000		53,377
General Motors Acceptance International Finance 4.125% 2/6/07	EUR	50,000		65,980
Residential Capital 6.375% 5/17/13	GBP	50,000		98,091
WM Covered Bond 3.875% 9/27/11	EUR	90,000		117,375
				506,316
Consumer Non-Cyclical–0.51%
Procter & Gamble 2.00% 6/21/10	JPY	3,000,000		25,926
				25,926
Utilities–0.57%
Hydro Quebec 10.50% 10/15/21	CAD	21,000		29,269
				29,269
Total Corporate Bonds (cost $549,272)				561,511
FOREIGN AGENCIES–9.78%
Austria–0.51%
Oesterreichische Kontrollbank 1.80% 3/22/10	JPY	3,000,000		25,869
				25,869
Germany–9.27%
KFW 1.75% 3/23/10	JPY	5,000,000		43,049
3.50% 7/4/21	EUR	128,000		156,547
4.75% 12/7/10	GBP	22,000		42,193
4.95% 10/14/14	CAD	32,000		28,503
8.25% 9/20/07	ISK	12,000,000		163,042
Rentenbank 1.375% 4/25/13	JPY	5,000,000		41,960
				475,294
Total Foreign Agencies (cost $512,206)				501,163
REGIONAL AGENCY–1.44%
Australia–1.44%
New South Wales Treasury 6.00% 5/1/12	AUD	95,000		73,958
Total Regional Agency (cost $73,200)				73,958
REGIONAL AUTHORITY–0.92%
Canada–0.92%
Ontario Province 4.50% 3/8/15	CAD	28,000		24,327
5.375% 12/2/12	CAD	25,000		22,779
Total Regional Authority (cost $47,599)				47,106

	Principal Amountm		Market Value (U.S $)
SOVEREIGN AGENCIES–4.46%
France–0.32%
Caisse d'Amortissement de la Dette Sociale 3.625% 4/25/16	EUR	13,000	$	16,588
				16,588
Japan–2.78%
Development Bank of Japan 1.70% 9/20/22	JPY	7,000,000		55,487
Japan Finance Corporation for Municipal Enterprises 2.00% 5/9/16	JPY	10,000,000		86,892
				142,379
Norway–1.02%
Kommunalbanken 4.25% 10/24/11	NOK	330,000		52,256
				52,256
United States–0.34%
Fannie Mae 6.375% 8/15/07	AUD	22,000		17,345
				17,345
Total Sovereign Agencies (cost $236,843)				228,568
SOVEREIGN DEBT–55.76%
Austria–1.92%
Republic of Austria 5.25% 1/4/11	EUR	71,000		98,275
				98,275
France–5.44%
France Government O.A.T 4.00% 4/25/55	EUR	153,000		199,337
French Treasury Note 2.75% 3/12/08	EUR	61,000		79,484
				278,821
Germany–6.72%
Deutschland Republic 4.00% 1/4/37	EUR	35,000		45,582
4.75% 7/4/08	EUR	59,000		78,834
6.25% 1/4/24	EUR	117,000		195,383
Deutschland Republic Inflation Linked 1.50% 4/15/16	EUR	19,302		24,667
				344,466
Japan–24.89%
Japan Government 2 yr. Bond 0.70% 9/15/08	JPY	8,000,000		67,161
5 yr. Bond 1.50% 6/20/11	JPY	95,450,000		813,843
10 yr. Bond 1.90% 6/20/16	JPY	30,150,000		258,852
20 yr. Bond 2.30% 6/20/26	JPY	15,550,000		135,839
				1,275,695
Norway–7.29%
Norwegian Government 5.00% 5/15/15	NOK	1,727,000		288,668
6.50% 5/15/13	NOK	476,000		85,047
				373,715
Poland–3.26%
Poland Government 6.00% 11/24/10	PLN	304,000		108,718
6.25% 10/24/15	PLN	158,000		58,480
				167,198

Global Bond Series- 5

Delaware VIP Global Bond Series
Statement of Net Assets (continued)

	Principal Amountm		Market Value (U.S $)
SOVEREIGN DEBT (continued)
Republic of Korea–1.25%
Government of South Korea 4.25% 12/7/21	EUR	50,000	$	64,065
				64,065
Sweden–2.33%
Sweden Government 5.50% 10/8/12	SEK	755,000		119,646
				119,646
United Kingdom–2.66%
U.K. Treasury 4.75% 3/7/20	GBP	15,000		29,694
5.00% 3/7/12	GBP	15,000		29,434
8.00% 6/7/21	GBP	18,000		47,539
9.00% 7/12/11	GBP	13,000		29,499
				136,166
Total Sovereign Debt (cost $2,810,550)				2,858,047

	Principal Amountm		Market Value (U.S $)
SUPRANATIONAL BANKS–8.18%
Supranational–8.18%					��
Asia Development Bank 0.50% 10/9/12	AUD	30,000	$	17,104
European Investment Bank 1.40% 6/20/17	JPY	19,100,000		157,185
4.25% 12/7/10	GBP	58,000		109,272
Inter-American Development Bank 1.90% 7/8/09	JPY	13,000,000		111,994
^International Bank for Reconstruction & Development 7.122% 8/20/07	NZD	35,000		23,520
Total Supranational Banks (cost $417,012)				419,075

Global Bond Series- 6

Delaware VIP Global Bond Series
Statement of Net Assets (continued)

TOTAL MARKET VALUE OF SECURITIES–91.50% (cost $4,646,682)	$	4,689,428
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES–8.50%		435,678
NET ASSETS APPLICABLE TO 505,768 SHARES OUTSTANDING; EQUIVALENT TO $10.13 PER SHARE–100.00%	$	5,125,106
COMPONENTS OF NET ASSETS AT DECEMBER 31, 2006:
Shares of beneficial interest (unlimited authorization–no par)	$	6,296,037
Undistributed net investment income		381,679
Accumulated net realized loss on investments		(1,605,450	)
Net unrealized appreciation of investments and foreign currencies		52,840
Total net assets	$	5,125,106

^mPrincipal amount shown is stated in the currency in which each bond is denominated.

AUD – Australian Dollar

CAD – Canadian Dollar

EUR – European Monetary Unit

GBP – British Pound Sterling

ISK – Iceland Krona

JPY – Japanese Yen

NOK – Norwegian Kroner

NZD – New Zealand Dollar

PLN – Polish Zlotych

SEK – Swedish Krona

TRY – Turkish Lira

USD – United States Dollar

^Zero coupon security. The rate shown is the yield at the time of purchase.

Summary of Abbreviations:

O.A.T. – Obligation Assimilable au Tresor (Treasury Obligation)

yr. – year

The following foreign currency exchange contracts and foreign cross currency exchange contracts were outstanding at December 31, 2006:

Foreign Currency Exchange Contracts¹

Contracts to Receive (Deliver)			In Exchange For			Settlement Date	Unrealized Appreciation (Depreciation)
CAD	35,185		AUD	(39,000	)	2/22/07	$	(523	)
CAD	26,317		NZD	(33,000	)	2/22/07		(566	)
EUR	102,006		GBP	(69,000	)	1/11/07		(398	)
EUR	50,400		ISK	(4,659,000	)	1/11/07		1,215
EUR	112,407		PLN	(430,395	)	1/11/07		166
EUR	(39,400	)	USD	51,857		1/11/07		(186	)
JPY	67,540,210		EUR	(444,818	)	1/11/07		(19,093	)
JPY	(107,533,500	)	USD	931,905		1/11/07		26,802
							$	7,417

The use of foreign currency exchange contracts involves elements of market risk and risks in excess of the amount recognized in the financial statements. The notional amounts presented above represent the Series' total exposure in such contracts, whereas only the net unrealized appreciation (depreciation) is reflected in the Series' net assets.

¹See Note 8 in "Notes to Financial Statements."

See accompanying notes

Global Bond Series- 7

Delaware VIP Trust — Delaware VIP Global Bond Series
Statement of Assets and Liabilities

December 31, 2006

ASSETS:
Investments at market (cost $4,646,682)	$	4,689,428
Foreign currencies (cost $174,224)		174,939
Cash		192,491
Interest receivable		72,679
Receivable for securities sold		75,866
Due from manager		440
Foreign currency contracts, at value		7,417
Total assets		5,213,260
LIABILITIES:
Payable for securities purchased		60,898
Liquidations payable		584
Due to manager and affiliates		3,738
Other accrued expenses		22,934
Total liabilities		88,154
Total net assets	$	5,125,106

See accompanying notes

Global Bond Series- 8

Delaware VIP Trust — Delaware VIP Global Bond Series
Statement of Operations

Year Ended December 31, 2006

INVESTMENT INCOME:
Interest	$	1,038,195
EXPENSES:
Management fees		215,143
Custodian fees		25,952
Audit and tax		12,615
Accounting and administration expenses		11,474
Reports and statements to shareholders		9,912
Pricing fees		4,343
Legal fees		3,888
Dividend disbursing and transfer agent fees and expenses		2,869
Trustees' fees and benefits		2,359
Consulting fees		339
Dues and services		233
Insurance fees		149
Registration fees		53
Distribution expenses – Service Class		25
Trustees' expenses		24
		289,378
Less expenses absorbed or waived		(6,992	)
Less waiver of distribution expenses – Service Class		(4	)
Total operating expenses		282,382
NET INVESTMENT INCOME		755,813
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on:
Investments		(632,497	)
Options written		215
Foreign currencies		(604,827	)
Net realized loss		(1,237,109	)
Net change in unrealized appreciation/depreciation of investments and foreign currencies		1,570,227
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCIES		333,118
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	1,088,931

See accompanying notes

Delaware VIP Trust — Delaware VIP Global Bond Series
Statements of Changes in Net Assets

	Year Ended
	12/31/06			12/31/05
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income	$	755,813		$	1,451,016
Net realized gain (loss) on investments and foreign currencies		(1,237,109	)		938,859
Net change in unrealized appreciation/ depreciation on investments and foreign currencies		1,570,227			(9,350,986	)
Net increase (decrease) in net assets resulting from operations		1,088,931			(6,961,111	)
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Standard Class		(1,095,558	)		(12,177,352	)
Service Class		(135	)		(1,263	)
Net realized gain on investments:
Standard Class		(1,681,682	)		(1,441,808	)
Service Class		(242	)		(152	)
		(2,777,617	)		(13,620,575	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Standard Class		6,820,136			3,701,855
Net asset value of shares issued upon reinvestment of dividends and distributions:
Standard Class		2,777,240			13,619,160
Service Class		377			1,415
		9,597,753			17,322,430
Cost of shares repurchased:
Standard Class		(64,786,686	)		(21,110,123	)
Service Class		(8,396	)		—
		(64,795,082	)		(21,110,123	)
Decrease in net assets derived from capital share transactions		(55,197,329	)		(3,787,693	)
NET DECREASE IN NET ASSETS		(56,886,015	)		(24,369,379	)
NET ASSETS:
Beginning of year		62,011,121			86,380,500
End of year (including undistributed net investment income of $381,679 and $949,981, respectively)	$	5,125,106		$	62,011,121

See accompanying notes

Global Bond Series- 9

Delaware VIP Trust — Delaware VIP Global Bond Series
Financial Highlights

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

	Delaware VIP Global Bond Series Standard Class
	Year Ended
	12/31/06			12/31/05			12/31/04			12/31/03			12/31/02
Net asset value, beginning of period	$	10.330		$	13.560		$	13.940		$	11.770		$	9.470
Income (loss) from investment operations:
Net investment income1		0.267			0.217			0.316			0.356			0.404
Net realized and unrealized gain (loss) on investments and foreign currencies		0.040			(1.265	)		1.262			2.005			1.957
Total from investment operations		0.307			(1.048	)		1.578			2.361			2.361
Less dividends and distributions from:
Net investment income		(0.200	)		(1.951	)		(1.692	)		(0.191	)		(0.061	)
Net realized gain on investments		(0.307	)		(0.231	)		(0.266	)		—			—
Total dividends and distributions		(0.507	)		(2.182	)		(1.958	)		(0.191	)		(0.061	)
Net asset value, end of period	$	10.130		$	10.330		$	13.560		$	13.940		$	11.770
Total return2		3.15	%		(8.65	%)		13.00	%		20.36	%		25.09	%
Ratios and supplemental data:
Net assets, end of period (000 omitted)	$	5,125		$	62,003		$	86,372		$	105,463		$	91,945
Ratio of expenses to average net assets		0.98	%		0.97	%		0.93	%		0.87	%		0.81	%
Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly		1.01	%		1.09	%		0.93	%		0.91	%		0.81	%
Ratio of net investment income to average net assets		2.64	%		1.94	%		2.52	%		2.81	%		3.76	%
Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly		2.61	%		1.82	%		2.52	%		2.77	%		3.76	%
Portfolio turnover		200	%		188	%		117	%		111	%		49	%

¹The average shares outstanding method has been applied for per share information.

²Total 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. Total investment return reflects waivers and payment of fees by the manager, as applicable. Performance would have been lower had the expense limitation not been in effect.

See accompanying notes

Global Bond Series- 10

Delaware VIP Trust — Delaware VIP Global Bond Series
Notes to Financial Statements

December 31, 2006

Delaware VIP Trust (the "Trust") is organized as a Delaware statutory trust and offers 15 series: Delaware VIP Balanced Series, Delaware VIP Capital Reserves Series, Delaware VIP Cash Reserve Series, Delaware VIP Diversified Income Series, Delaware VIP Emerging Markets Series, Delaware VIP Global Bond Series, Delaware VIP Growth Opportunities Series, Delaware VIP High Yield Series, Delaware VIP International Value Equity Series, Delaware VIP REIT Series, Delaware VIP Select Growth Series, Delaware VIP Small Cap Value Series, Delaware VIP Trend Series, Delaware VIP U.S. Growth Series and Delaware VIP Value Series. These financial statements and the related notes pertain to Delaware VIP Global Bond Series (the "Series"). The Trust is an open-end investment company. The Series is considered non-diversified under the Investment Company Act of 1940, as amended, and offers Standard Class and Service Class shares. The sole shareholder of Service Cl ass shares liquidated its shares on December 21, 2006. The Service Class of the Series is no longer offered to new purchasers. The Standard Class shares do not carry a 12b-1 fee and the Service Class shares carry a 12b-1 fee. The shares of the Series are sold only to separate accounts of life insurance companies.

The investment objective of the Series is to seek current income consistent with the preservation of principal.

1. Significant Accounting Policies

The following accounting policies are in accordance with U.S. generally accepted accounting principles and are consistently followed by the Series.

Security Valuation—Securities listed on a foreign exchange are valued at the last quoted sales price before the Series is valued. U.S. government and agency securities are valued at the mean between the bid and asked prices. Other long-term debt securities are valued by an independent pricing service and such prices are believed to reflect the fair value of such securities. Short-term debt securities having less than 60 days to maturity are valued at amortized cost, which approximates market value. Foreign currency exchange contracts are valued at the mean between the bid and asked prices of the contracts and are marked-to-market daily. Interpolated values are derived when the settlement date of the contract is an interim date for which quotations are not available. Exchange-traded options are valued at the last reported sale price or, if no sales are reporte d, at the mean between the last reported bid and asked prices. 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 the Series' Board of Trustees. 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, aftermarket trading, or significant events after local market trading (e.g., government actions or pronouncements, trading volume or volatility on markets, exchanges among dealers, or news events).

In September 2006, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 157 "Fair Value Measurements" (Statement 157). Statement 157 establishes a framework for measuring fair value in generally accepted accounting principles, clarifies the definition of fair value within that framework, and expands disclosures about the use of fair value measurements. Statement 157 is intended to increase consistency and comparability among fair value estimates used in financial reporting. Statement 157 is effective for fiscal years beginning after November 15, 2007. Management does not expect the adoption of Statement 157 to have an impact on the amounts reported in the financial statements.

Federal Income Taxes—The Series intends to continue to qualify for federal income tax purposes as a regulated investment company and make the requisite distributions to shareholders. Accordingly, no provision for federal income taxes has been made in the financial statements.

On July 13, 2006, FASB released FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Series' 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 would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. Recent SEC guidance allows implementing FIN 48 in Series net asset value calculations as late as the Series' last net asset value calculation in the first required fi nancial statement reporting period. As a result, the Series will incorporate FIN 48 in its semiannual report on June 30, 2007. Although the Series' tax positions are currently being evaluated, management does not expect the adoption of FIN 48 to have a material impact on the Series' financial statements.

Class Accounting—Investment income, common expenses and realized and unrealized gain (loss) on investments are allocated to the classes of the Series on the basis of daily net assets of each class. Distribution expenses relating to a specific class are charged directly to that class.

Repurchase Agreements—The Series may invest in a pooled cash account along with other members of the Delaware Investments^® Family of Funds pursuant to an exemptive order issued by the Securities and Exchange Commission. The aggregate daily balance of the pooled cash account is invested in repurchase agreements secured by obligations of the U.S. government. The respective collateral is held by the Series' custodian bank until the maturity of the respective repurchase agreements. Each repurchase agreement is at least 102% collateralized. However, in the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral may be subject to legal proceedings.

Foreign Currency Transactions—Transactions denominated in foreign currencies are recorded at the prevailing exchange rates on the valuation date. The value of all assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rate of such currencies against the U.S. dollar daily. Transaction gains or losses resulting from changes in exchange rates during the reporting period or upon settlement of the foreign currency transaction are reported in operations for the current period. The Series isolates that portion of realized gains and losses on investments in debt securities, which are due to changes in foreign exchange rates from that which are due to changes in market prices of debt securities. The Series reports certain foreign currency related transactions as components of realized gains (losses) for financial repo rting purposes, where such components are treated as ordinary income (loss) for federal income tax purposes.

Global Bond Series- 11

Delaware VIP Global Bond Series
Notes to Financial Statements (continued)

1. Significant Accounting Policies (continued)

Use of Estimates—The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of 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.

Other—Expenses directly attributable to the Series are charged directly to the Series. 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. Premiums and discounts on all debt securities are amortized to interest income over the lives of the respective securities.

The Series declares and pays dividends from net investment income and distributions from net realized gain on investments, if any, following the close of the fiscal year.

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

In accordance with the terms of its investment management agreement, the Series pays Delaware Management Company (DMC), the investment manager, an annual fee which is calculated daily at the rate of 0.75% on the first $500 million of average daily net assets of the Series, 0.70% on the next $500 million, 0.65% on the next $1.5 billion, and 0.60% on average daily net assets in excess of $2.5 billion.

DMC has contractually agreed to waive that portion, if any, of its management fee and reimburse the Series to the extent necessary to ensure that annual operating expenses, exclusive of taxes, interest, brokerage commissions, distribution fees, certain insurance costs and extraordinary expenses, do not exceed 1.00% of average daily net assets of the Series through April 30, 2007.

Delaware Service Company, Inc. (DSC), an affiliate of DMC, provides accounting, administration, dividend disbursing and transfer agent services. The Series pays DSC a monthly fee computed at the annual rate of 0.04% of the Series' average daily net assets for accounting and administrative services. The Series pays DSC a monthly fee based on average net assets for dividend disbursing and transfer agent services.

Pursuant to a distribution agreement and distribution plan, the Series pays Delaware Distributors, L.P. (DDLP), the distributor and an affiliate of DMC, an annual distribution and service fee not to exceed 0.30% of the average daily net assets of the Service Class shares. DDLP has contracted to waive distribution and service fees through April 30, 2007 in order to prevent distribution and service fees of the Service Class shares from exceeding 0.25% of average daily net assets. Standard Class shares pay no distribution and service expenses.

At December 31, 2006, the Series had receivables due from or liabilities payable to affiliates as follows:

Dividend Disbursing, Transfer Agent, Accounting and Administration Fees and Other Expenses Payable to DSC			Distribution Fee Payable to DDLP			Other Expenses Payable to DMC and Affiliates*			Receivable from DMC Under Expense Limitation Agreement
$	(252	)	$	(1	)	$	(3,485	)	$	440

*DMC, as part of its administrative services, pays operating expenses on behalf of the Series and is reimbursed on a periodic basis. Such expenses include items such as printing of shareholder reports, fees for audit, legal and tax services, custodian fees and trustees' fees.

As provided in the investment management agreement, the Series bears the cost of certain legal and tax services, including internal legal and tax services provided to the Series by DMC and/or its affiliates' employees. For the year ended December 31, 2006, the Series was charged $1,158 for internal legal and tax services provided by DMC and/or its affiliates' employees.

Trustees' fees and benefits include expenses accrued by the Series for each Trustee's retainer, per meeting fees and retirement benefits. Independent Trustees with over five years of uninterrupted service are eligible to participate in a retirement plan that provides for the payment of benefits upon retirement. The amount of the retirement benefit is based on factors set forth in the plan, including the number of years of service. On November 16, 2006, the Board of Trustees unanimously voted to terminate the retirement plan. Payments equal to the net present value of the earned benefits will be made in 2007 to those independent trustees so entitled. The retirement benefit payout for the Series is $741. Certain officers of DMC, DSC and DDLP are officers and/or trustees of the Trust. These officers and trustees are paid no compensation by the Series.

Global Bond Series- 12

Delaware VIP Global Bond Series
Notes to Financial Statements (continued)

3. Investments

For the year ended December 31, 2006, the Series made purchases and sales of investment securities other than short-term investments as follows:

Purchases other than U.S. government securities	$	52,957,923
Purchases of U.S. government securities		2,641,531
Sales other than U.S. government securities		103,367,910
Sales of U.S. government securities		7,921,638

At December 31, 2006, the cost of investments for federal income tax purposes and unrealized appreciation (depreciation) for the Series were as follows:

Cost of Investments		Aggregate Unrealized Appreciation		Aggregate Unrealized Depreciation			Net Unrealized Appreciation
$	4,656,740	$	83,086	$	(50,398	)	$	32,688

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. generally accepted accounting principles. Additionally, gains (losses) on foreign currency transactions and 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 December 31, 2006 and 2005 was as follows:

	Year Ended 12/31/06		Year Ended 12/31/05
Ordinary income	$	2,440,216	$	12,733,806
Long-term capital gains		337,401		886,769
Total distribution	$	2,777,617	$	13,620,575

5. Components of Net Assets on a Tax Basis

As of December 31, 2006, the components of net assets on a tax basis were as follows:

Shares of beneficial interest	$	6,296,037
Undistributed ordinary income		807,129
Post-October currency losses		(385,043	)
Capital loss carryforwards		(1,595,392	)
Other temporary differences		(34,205	)
Unrealized appreciation of investments and foreign currencies		36,580
Net assets	$	5,125,106

The differences between book basis and tax basis components of net assets are primarily attributable to tax deferral of losses on wash sales, mark-to-market of forward foreign currency contracts, currency straddles, and tax treatment of market discount and premium on debt instruments.

Post-October currency losses represent losses realized on foreign currency transactions from November 1, 2006 through December 31, 2006 that, in accordance with federal income tax regulations, the Series has elected to defer and treat as having arisen in the following fiscal year.

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 gain (loss) on foreign currency transactions, dividends and distributions and market discount and premium on certain debt instruments. Results of operations and net assets were not affected by these reclassifications. For the year ended December 31, 2006, the Series recorded the following reclassifications:

Undistributed Net Investment Income			Accumulated Net Realized Gain (Loss)
$	(228,422	)	$	228,422

For federal income tax purposes, capital loss carryforwards may be carried forward and applied against future capital gains. Capital loss carryforwards of $1,595,392 remaining at December 31, 2006 will expire in 2014.

Global Bond Series-13

Delaware VIP Global Bond Series
Notes to Financial Statements (continued)

6. Capital Shares

Transactions in capital shares were as follows:

	Year Ended 12/31/06			Year Ended 12/31/05
Shares sold:
Standard Class		695,050			317,642
Shares issued upon reinvestment of dividends and distributions:
Standard Class		283,971			1,242,624
Service Class		38			129
		979,059			1,560,395
Shares repurchased:
Standard Class		(6,476,295	)		(1,928,903	)
Service Class		(825	)		—
		(6,477,120	)		(1,928,903	)
Net decrease		(5,498,061	)		(368,508	)

7. Line of Credit

The Series, along with certain other funds in the Delaware Investments^® Family of Funds (the "Participants"), participates in a $225,000,000 revolving line of credit facility to be used for temporary or emergency purposes as an additional source of liquidity to fund redemptions of investor shares. The Participants are charged an annual commitment fee, which is allocated across the Participants on the basis of each Participant's allocation of the entire facility. The Participants may borrow up to a maximum of one third of their net assets under the agreement. The Series had no amounts outstanding as of December 31, 2006, or at any time during the year then ended.

8. Foreign Currency Exchange Contracts

The Series may enter into foreign currency exchange contracts as a way of managing foreign exchange rate risk. The Series may enter into these contracts to fix the U.S. dollar value of a security that it has agreed to buy or sell for the period between the date the trade was entered into and the date the security is delivered and paid for. The Series may also use these contracts to hedge the U.S. dollar value of securities it already owns that are denominated in foreign currencies. The change in market value is recorded as an unrealized gain or loss. When the contract is closed, a realized gain or loss is recorded equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.

The use of foreign currency exchange contracts and foreign cross currency exchange contracts does not eliminate fluctuations in the underlying prices of the securities, but does establish a rate of exchange that can be achieved in the future. Although foreign currency exchange contracts limit the risk of loss due to a decline in the value of the hedged currency, they also limit any potential gain that might result should the value of the currency increase. In addition, the Series could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts. The unrealized gain (loss) is included in receivables and other assets net of liabilities on the Statement of Net Assets.

9. Options Written

During the year ended December 31, 2006, the Series entered into options contracts in accordance with its investment objectives. When the Series writes an option, a premium is received and a liability is recorded and adjusted on a daily basis to reflect the current market value of the options written. Premiums received from writing options that expire unexercised are treated by the Series on the expiration date as realized gains. The difference between the premium received and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is treated as realized gain or loss. If a call option is exercised, the premium is added to the proceeds from the sale of the underlying security in determining whether the Series has a realized gain or loss. If a put option is exercised, the premium reduces the cost basis of the securities purchased by the Series. The Series, as writer of an option, bears the market risk of a n unfavorable change in the price of the security underlying the written option.

Global Bond Series- 14

Delaware VIP Global Bond Series
Notes to Financial Statements (continued)

9. Options Written (continued)

Transactions in options written during the year ended December 31, 2006 for the Series were as follows:

	Number of contracts			Premiums
Options outstanding at December 31, 2005		—		$	—
Options written		100,000			215
Options expired		(100,000	)		(215	)
Options outstanding at December 31, 2006		—		$	—

10. Credit and Market Risk

Some countries in which the Series may invest require governmental approval for the repatriation of investment income, capital or the proceeds of sales of securities by foreign investors. In addition, if there is a deterioration in a country's balance of payments or for other reasons, a country may impose temporary restrictions on foreign capital remittances abroad.

The securities exchanges of certain foreign markets are substantially smaller, less liquid and more volatile than the major securities markets in the United States. Consequently, acquisition and disposition of securities by the Series may be inhibited.

The Series may invest up to 10% of its total 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 the Series 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, the Series' Board of Trustees has delegated to DMC the day-to-day functions of determining whether individual securities are liquid for purposes of the Series' limitation on investments in illiquid assets. At December 31, 2006, there were no Rule 144A securities and no securities have been determined to be illiquid under the Series' Liquidity Procedures.

11. Contractual Obligations

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

12. Tax Information (Unaudited)

For the fiscal year ended December 31, 2006, the Series designates dividends and distributions paid during the year as follows:

(A) Long-Term Capital Gain Distributions (Tax Basis)			(B) Ordinary Income Distributions (Tax Basis)			Total Distributions (Tax Basis)
	12	%		88	%		100	%

(A) and (B) are based on a percentage of the Series' total distributions.

13. Liquidation of Series

On November16, 2006, the Board of Trustees of the Delaware VIP Trust unanimously voted and approved a proposal to liquidate and dissolve the Delaware VIP Global Bond Series, subject to shareholder approval. Series shareholders will receive a proxy statement providing them with information about the distribution and requesting their votes on the proposed liquidation and dissolution of their Series at a special meeting of shareholders expected to be held February28, 2007. If approved, the liquidation and dissolution is expected to take place by the end of March2007.

Global Bond Series-15

Delaware VIP Trust — Delaware VIP Global Bond Series
Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees
Delaware VIP Trust – Delaware VIP Global Bond Series

We have audited the accompanying statement of net assets and statement of assets and liabilities of the Delaware VIP Global Bond Series (one of the series constituting Delaware VIP Trust) (the "Series") as of December 31, 2006, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Series' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits 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 and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Series' internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Series' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant es timates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2006, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Delaware VIP Global Bond Series of Delaware VIP Trust at December 31, 2006, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

  

Philadelphia, Pennsylvania

February 14, 2007

The Series files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Series' Forms N-Q, as well as a description of the policies and procedures that the Series uses to determine how to vote proxies (if any) relating to portfolio securities is available without charge (i) upon request, by calling 800-523-1918; (ii) on the Series' website at http://www.delawareinvestments.com; and (iii) on the Commission's website at http://www.sec.gov. The Series' Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Information (if any) regarding how the Series voted proxies relating to portfolio securities during the most recently disclosed 12-month period ended June 30 is available without charge (i) through the Series' website at http://www.delawareinvestments.com; and (ii) on the Commission's website at http://www.sec.gov.

Global Bond Series- 16

Delaware Investments® Family of Funds

board of trustees/directors and officers addendum

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 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.

Name, Address, and Birth Date	Position(s) Held with Fund(s)	Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee or Officer		Other Directorships Held by Trustee or Officer
interested trustees
Patrick P. Coyne1 2005 Market Street Philadelphia, PA 19103 April 14, 1963	Chairman, President, Chief Executive Officer, and Trustee	Chairman and Trustee since August 16, 2006 President and Chief Executive Officer since August 1, 2006	Patrick P. Coyne has served in various executive capacities at different times at Delaware Investments.2		84	None
independent trustees
Thomas L. Bennett 2005 Market Street Philadelphia, PA 19103 October 4, 1947	Trustee	Since March 2005	Private Investor – (March 2004 – Present) Investment Manager – Morgan Stanley & Co. (January 1984 – March 2004)		84	None
John A. Fry 2005 Market Street Philadelphia, PA 19103 May 28, 1960	Trustee	Since January 2001	President – Franklin & Marshall College (June 2002 – Present) Executive Vice President – University of Pennsylvania (April 1995 – June 2002)		84	Director – Community Health Systems Director – Allied Barton Security Holdings
Anthony D. Knerr 2005 Market Street Philadelphia, PA 19103 December 7, 1938	Trustee	Since April 1990	Founder and Managing Director – Anthony Knerr & Associates (Strategic Consulting) (1990 – Present)		84	None
Lucinda S. Landreth 2005 Market Street Philadelphia, PA 19103 June 24, 1947	Trustee	Since March 2005	Chief Investment Officer – Assurant, Inc. (Insurance) (2002 – 2004)		84	None
Ann R. Leven 2005 Market Street Philadelphia, PA 19103 November 1, 1940	Trustee	Since September 1989	Consultant – ARL Associates (Financial Planning) (1983 – Present)		84	Director and Audit Committee Chairperson – Andy Warhol Foundation Director and Audit Committee Member – Systemax, Inc.

Global Bond Series- 17

Name, Address, and Birth Date	Position(s) Held with Fund(s)	Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee or Officer		Other Directorships Held by Trustee or Officer
independent trustees (continued)
Thomas F. Madison 2005 Market Street Philadelphia, PA 19103 February 25, 1936	Trustee	Since May 1997	President and Chief Executive Officer – MLM Partners, Inc. (Small Business Investing and Consulting) (January 1993 – Present)		84	Director – Banner Health Director – CenterPoint Energy Director and Audit Committee Member – Digital River, Inc. Director and Audit Committee Member – Rimage Corporation Director – Valmont Industries, Inc.
Janet L. Yeomans 2005 Market Street Philadelphia, PA 19103 July 31, 1948	Trustee	Since April 1999	Vice President (January 2003 – Present) and Treasurer (January 2006 – Present) 3M Corporation Ms. Yeomans has held various management positions at 3M Corporation since 1983.		84	None
J. Richard Zecher 2005 Market Street Philadelphia, PA 19103 July 3, 1940	Trustee	Since March 2005	Founder – Investor Analytics (Risk Management) (May 1999 – Present) Founder – Sutton Asset Management (Hedge Fund) (September 1998 – Present)		84	Director and Audit Committee Member – Investor Analytics Director and Audit Committee Member – Oxigene, Inc.
officers
David F. Connor 2005 Market Street Philadelphia, PA 19103 December 2, 1963	Vice President, Deputy General Counsel, and Secretary	Vice President since September 21, 2000 and Secretary since October 2005	David F. Connor has served as Vice President and Deputy General Counsel of Delaware Investments since 2000.		84	None3
David P. O'Connor 2005 Market Street Philadelphia, PA 19103 February 21, 1966	Senior Vice President, General Counsel, and Chief Legal Officer	Senior Vice President, General Counsel, and Chief Legal Officer since October 2005	David P. O'Connor has served in various executive and legal capacities at different times at Delaware Investments.		84	None3
John J. O'Connor 2005 Market Street Philadelphia, PA 19103 June 16, 1957	Senior Vice President and Treasurer	Treasurer since February 2005	John J. O'Connor has served in various executive capacities at different times at Delaware Investments.		84	None3
Richard Salus 2005 Market Street Philadelphia, PA 19103 October 4, 1963	Senior Vice President and Chief Financial Officer	Chief Financial Officer since November 1, 2006	Richard Salus has served in various executive capacities at different times at Delaware Investments.		84	None3

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

² Delaware 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.

³ David F. Connor, David P. O'Connor, John J. 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. John J. O'Connor also serves in a similar capacity for Lincoln Variable Insurance Products Trust, which has the same investment advisor as the registrant.

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.

Global Bond Series- 18

Delaware VIP Trust — Delaware VIP Growth Opportunities Series

For the 12-month period ended Dec. 31, 2006, the Delaware VIP Growth Opportunities Series Standard Class shares had a positive return of 6.36%, and Service Class shares gained 6.03% (both figures with distributions reinvested). The Series benchmark, the Russell Midcap Growth Index, gained 10.66% (source: Lipper).

In general, value stocks strongly outperformed growth stocks during the fiscal year. This disparity reflected, in part, almost indiscriminate risk aversion by investors from late April to early August due to fears about inflation and rising interest rates. The attendant disconnect between price action and fundamentals hit smaller-cap growth stocks hard, and sectors and industries where we had a significant portion of the portfolio positioned — technology; biotech and medical tech; and consumer-related industries — were further punished.

This severe investor pessimism eventually gave way in August, as commodity prices dropped and the Federal Reserve finally paused its two-plus year regimen of successive rate hikes. Large-cap stocks were the initial beneficiaries, followed in the fourth quarter by a rally in mid- and small-cap stocks.

For the year, the Series received a strongly positive contribution from its industrial holdings, including specialty metals manufacturer, Allegheny Technologies, and mining equipment manufacturer, Joy Global. Stock selection in the business services and consumer services sectors also added value.

Unfortunately, these positive contributions were offset by the adverse impact of some problematic holdings in the Series' technology and healthcare holdings. FDA rejection of the Neurocrine Bioscience insomnia drug caught investors completely by surprise, sending the stock down considerably and providing evidence of an increasingly cautious FDA with respect to new drug approval. The Series' holdings in Neurocrine Bioscience were sold before Dec. 31, 2006.

Some nervousness in the technology sector was exacerbated by the SEC investigation into past options-granting practices. Some technology holdings were adversely affected by these events, though many later rebounded. Overall, sector selection for the year also hindered performance, primarily due to overweights in consumer non-durables and technology, along with underweights in energy and basic industry.

The views expressed are current as of the date of this report and are subject to change.

The performance data quoted below and on the next page represent past performance; past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please obtain the performance data for the most recent month end by calling the number noted on the page related to this Series in the introductory section of this report.

You should consider the investment objectives, risks, charges, and expenses of the investment carefully before investing. The Delaware VIP Growth Opportunities Series prospectus contains this and other important information about the Series. To obtain a prospectus, contact the company noted on the page related to this Series in the introductory section of this report, either by phone or through the company Web site. We advise you to read the prospectus carefully before you invest.

Delaware VIP Growth Opportunities Series Average Annual Total Returns For the periods ending Dec. 31, 2006

1 Year

5 Years

10 Years

Lifetime

Standard Class Shares*

+6.36

%

+7.13

%

+9.23

%

+9.95

%

Service Class Shares**

+6.03

%

+6.88

%

NA

+0.05

%

  *  Commenced operations on July 12, 1991

  **  Commenced operations on May 1, 2000

Growth Opportunities Series- 1

Delaware VIP Trust — Delaware VIP Growth Opportunities Series (continued)

The chart shows a $10,000 investment in the Delaware VIP Growth Opportunities Series Standard Class shares for the period from Dec. 31, 1996 through Dec. 31, 2006. All distributions were reinvested. The chart also shows $10,000 invested in the Russell Midcap Growth Index for the period from Dec. 31, 1996 through Dec. 31, 2006.

Russell Midcap Growth Index measures the performance of those Russell Midcap companies with higher price-to-book ratios and higher forecasted growth values. The stocks are also members of the Russell 1000 Growth Index. An index is unmanaged and does not reflect the costs of operating a mutual fund, such as the costs of buying, selling, and holding securities. You cannot invest directly in an index.

Earnings from a variable annuity investment or variable life compound tax free until withdrawal, so no adjustments were made for income taxes.

An expense limitation was in effect for the Delaware VIP Growth Opportunities Series during the periods shown.

Performance of Service Class shares will vary due to different charges and expenses.

Performance does not reflect insurance fees related to a variable annuity or variable life investment or the deferred sales charge that would apply to certain withdrawals of investments held for fewer than eight years. Performance shown here would have been reduced if such fees were included and the expense limitation was removed. For more information about fees, consult your variable annuity or variable life prospectus.

Investments in variable products involve risk. Series that invest in small and/or medium-sized companies typically involve greater risk, particularly in the short term, than those investing in larger, more established companies. Some portfolios offer more risk than others. Please read both the contract and underlying prospectus for specific details regarding the product's risk profile.

Growth Opportunities Series- 2

Delaware VIP Trust — Delaware VIP Growth Opportunities Series

Disclosure of Series Expenses

For the Period July 1, 2006 to December 31, 2006

As a shareholder of the Series, you incur ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Series expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Series and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2006 to December 31, 2006.

Actual Expenses

The first section of the table shown, "Actual Series 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 the period.

Hypothetical Example for Comparison Purposes

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

Please note that the expenses shown in the table are meant to highlight your ongoing costs only. As a shareholder of the Series, you do not incur any transaction costs, such as sales charges (loads), redemption fees or exchange fees, but shareholders of other funds may incur such costs. Also, the fees related to the variable annuity investment or the deferred sales charge that could apply have not been included. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. The Series' actual expenses shown in the table reflect fee waivers in effect for Service Class shares. The expenses shown in the table assume reinvestment of all dividends and distributions.

Expense Analysis of an Investment of $1,000

	Beginning Account Value 7/1/06		Ending Account Value 12/31/06		Annualized Expense Ratios			Expenses Paid During Period 7/1/06 to 12/31/06*
Actual Series Return
Standard Class	$	1,000.00	$	1,032.20		0.93	%	$	4.76
Service Class		1,000.00		1,030.40		1.18	%		6.04
Hypothetical 5% Return (5% return before expenses)
Standard Class	$	1,000.00	$	1,020.52		0.93	%	$	4.74
Service Class		1,000.00		1,019.26		1.18	%		6.01

*"Expenses Paid During Period" are equal to the Series' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

Growth Opportunities Series- 3

Delaware VIP Trust — Delaware VIP Growth Opportunities Series

Sector Allocation and Top 10 Holdings

As of December 31, 2006

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

Sector	Percentage of Net Assets
Common Stock		99.44	%
Basic Industry/Capital Goods		9.96	%
Business Services		10.59	%
Consumer Durables		2.07	%
Consumer Non-Durables		14.23	%
Consumer Services		6.66	%
Energy		6.65	%
Financials		9.99	%
Health Care		13.02	%
Technology		24.19	%
Transportation		2.08	%
Repurchase Agreements		0.04	%
Securities Lending Collateral		13.23	%
Fixed Rate Note		2.50	%
Variable Rate Notes		10.73	%
Total Market Value of Securities		112.71	%
Obligation to Return Securities Lending Collateral		(13.23	%)
Receivables and Other Assets Net of Liabilities		0.52	%
Total Net Assets		100.00	%

Holdings are for informational purposes only and are subject to change at any time. They are not a recommendation to buy, sell, or hold any security.

Top 10 Holdings	Percentage of Net Assets
Staples		3.08	%
Marriott International Class A		2.46	%
Coach		2.43	%
National Oilwell Varco		2.36	%
Hologic		2.09	%
Allegheny Technologies		2.08	%
Activision		2.07	%
Network Appliance		2.05	%
Starwood Hotels & Resorts Worldwide		2.04	%
Nordstrom		2.01	%

Growth Opportunities Series- 4

Delaware VIP Trust — Delaware VIP Growth Opportunities Series
Statement of Net Assets

December 31, 2006

	Number of Shares		Market Value
COMMON STOCK–99.44%
Basic Industry/Capital Goods–9.96%
Allegheny Technologies		11,700	$	1,060,956
* Graco		23,700		938,994
Joy Global		20,600		995,804
† Mettler-Toledo International		10,300		812,155
Oshkosh Truck		11,900		576,198
* Trinity Industries		19,900		700,480
				5,084,587
Business Services–10.59%
† Dun & Bradstreet		8,700		720,273
Expeditors International Washington		21,900		886,950
† Fiserv		14,300		749,606
Global Payments		15,200		703,760
Paychex		23,300		921,282
Robert Half International		16,400		608,768
† WESCO International		13,900		817,459
				5,408,098
Consumer Durables–2.07%
†��Activision		61,300		1,056,812
				1,056,812
Consumer Non-Durables–14.23%
American Eagle Outfitters		30,000		936,300
* Bebe Stores		26,300		520,477
† Coach		28,900		1,241,544
Family Dollar Stores		13,100		384,223
*† J. Crew		5,700		219,735
Nordstrom		20,800		1,026,272
Staples		58,900		1,572,630
† Starbucks		20,200		715,484
Whole Foods Market		13,800		647,634
				7,264,299
Consumer Services–6.66%
Host Hotels & Resorts		23,038		565,583
Marriott International Class A		26,300		1,255,036
Starwood Hotels & Resorts Worldwide		16,700		1,043,750
† Wynn Resorts		5,700		534,945
				3,399,314
Energy–6.65%
Chesapeake Energy		27,000		784,350
† Helix Energy Solutions		17,600		552,112
† National Oilwell Varco		19,700		1,205,246
Smith International		20,800		854,256
				3,395,964
Financials–9.99%
*† Affiliated Managers		8,900		935,657
Compass Bancshares		11,500		685,975
† E Trade Financial		23,200		520,144
Legg Mason		6,400		608,320
Lehman Brothers		13,000		1,015,560
Nuveen Investments Class A		15,600		809,328
Zions Bancorp		6,400		527,616
				5,102,600

	Number of Shares		Market Value
COMMON STOCK (continued)
Health Care–13.02%
Caremark Rx		12,000	$	685,320
Dade Behring		19,200		764,352
† Express Scripts		7,900		565,640
*† Hologic		22,700		1,073,256
*† Invitrogen		15,300		865,827
† Medco Health Solutions		16,700		892,448
*† MGI Pharma		29,600		544,936
Omnicare		12,000		463,560
*† PDL BioPharma		39,400		793,516
				6,648,855
Technology–24.19%
† Amdocs		16,700		647,125
† Broadcom Class A		26,850		867,524
† Ciena		19,685		545,471
† Citrix Systems		11,800		319,190
† F5 Networks		7,900		586,259
† Focus Media ADR		10,400		690,456
† Integrated Device Technology		15,900		246,132
Intersil Class A		22,800		545,376
L-3 Communications		9,400		768,732
† Marvell Technology		36,900		708,111
*† Microsemi		37,500		736,875
† Network Appliance		26,700		1,048,776
† NII Holdings		14,800		953,712
*† NutriSystem		9,700		614,883
*† Polycom		26,000		803,660
*† salesforce.com		15,700		572,265
† SanDisk		8,700		374,361
Satyam Computer Services ADR		28,000		672,280
† Tellabs		63,300		649,458
				12,350,646
Transportation–2.08%
* Hunt (J.B.) Transport Services		24,100		500,557
UTi Worldwide		18,700		559,130
				1,059,687
Total Common Stock (cost $39,818,926)				50,770,862
	Principal		Amount
REPURCHASE AGREEMENTS–0.04%
With BNP Paribas 4.80% 1/2/07 (dated 12/29/06, to be repurchased at $7,224, collateralized by $7,560 U.S. Treasury Bills due 6/28/07, market value $7,374)	$	7,220		7,220
With Cantor Fitzgerald 4.82% 1/2/07 (dated 12/29/06, to be repurchased at $8,685, collateralized by $750 U.S. Treasury Notes 4.00% due 6/15/09, market value $738, $4,650 U.S. Treasury Notes 6.125% due 8/15/07, market value $4,788 and $3,100 U.S. Treasury Notes 6.50% due 2/15/10, market value $3,334)		8,680		8,680

Growth Opportunities Series- 5

Delaware VIP Growth Opportunities Series
Statement of Net Assets (continued)

	Principal Amount		Market Value
REPURCHASE AGREEMENTS (continued)
With UBS Warburg 4.75% 1/2/07 (dated 12/29/06, to be repurchased at $3,102, collateralized by $3,200 U.S. Treasury Bills due 3/29/07, market value $3,164)	$	3,100	$	3,100
Total Repurchase Agreements (cost $19,000)				19,000
Total Market Value of Securities Before Securities Lending Collateral–99.48% (cost $39,837,926)				50,789,862
SECURITIES LENDING COLLATERAL**–13.23%
Short-Term Investments
Fixed Rate Note – 2.50%
Citigroup Global Markets 5.32% 1/2/07		1,277,883		1,277,883
				1,277,883
• Variable Rate Notes–10.73%
American Honda Finance 5.32% 2/21/07		165,252		165,252
ANZ National 5.35% 1/29/08		36,723		36,723
Australia New Zealand 5.35% 1/29/08		183,614		183,613
Bank of America 5.32% 2/23/07		238,698		238,698
Bank of New York 5.34% 1/29/08		146,891		146,891
Barclays New York 5.31% 5/18/07		238,698		238,698
Bayerische Landesbank 5.40% 1/29/08		183,614		183,614

	Principal Amount		Market Value
SECURITY LENDING COLLATERAL (continued)
Short-Term Investments (continued)
• Variable Rate Notes (continued)
Bear Stearns 5.41% 6/29/07	$	220,336	$	220,336
BNP Paribas 5.35% 1/29/08		183,614		183,613
Canadian Imperial Bank 5.33% 1/29/09		128,529		128,529
CDC Financial 5.36% 1/29/07		238,698		238,698
Citigroup Global Markets 5.38% 1/5/07		238,698		238,698
Commonwealth Bank 5.35% 1/29/08		183,614		183,613
Deutsche Bank 5.34% 2/23/07		220,336		220,336
Dexia Bank 5.33% 9/28/07		257,058		257,021
Goldman Sachs 5.45% 12/28/07		238,698		238,698
Marshall & Ilsley Bank 5.33% 1/29/08		201,975		201,975
Merrill Lynch Mortgage Capital 5.41% 1/8/07		238,698		238,698
Morgan Stanley 5.49% 1/29/08		238,698		238,698
National Australia Bank 5.32% 3/7/07		227,681		227,681
National City Bank 5.32% 3/2/07		220,343		220,356
National Rural Utilities 5.34% 1/29/08		290,109		290,109
Nordea Bank New York 5.31% 5/16/07		91,806		91,804
Nordea Bank Norge 5.36% 1/29/08		183,614		183,614
Royal Bank of Scotland 5.34% 1/29/08		183,614		183,614
Societe Generale 5.32% 1/29/08		91,807		91,807
Toronto Dominion 5.32% 5/29/07		220,336		220,336
Wells Fargo 5.36% 1/29/08		183,614		183,614
				5,475,337
Total Securities Lending Collateral (cost $6,753,220)				6,753,220

TOTAL MARKET VALUE OF SECURITIES – 112.71% (cost $46,591,146)		57,543,082	v
OBLIGATION TO RETURN SECURITIES LENDING COLLATERAL** – (13.23%)		(6,753,220	)
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES – 0.52%		265,501
NET ASSETS APPLICABLE TO 2,709,600 SHARES OUTSTANDING – 100.00%	$	51,055,363
NET ASSET VALUE – DELAWARE VIP GROWTH OPPORTUNITIES SERIES STANDARD CLASS ($38,858,902 / 2,055,403 Shares)	$	18.91
NET ASSET VALUE – DELAWARE VIP GROWTH OPPORTUNITIES SERIES SERVICE CLASS ($12,196,461 / 654,197 Shares)	$	18.64
COMPONENTS OF NET ASSETS AT DECEMBER 31, 2006:
Shares of beneficial interest (unlimited authorization–no par)	$	44,936,524
Accumulated net realized loss on investments		(4,833,097	)
Net unrealized appreciation of investments		10,951,936
Total net assets	$	51,055,363

  *  Fully or partially on loan.

  **  See Note 8 in "Notes to Financial Statements."

  v  Includes $6,632,572 of securities loaned.

  †  Non-income producing security for the year ended December 31, 2006.

  •  Variable rate security. The rate shown is the rate as of December 31, 2006.

ADR – American Depositary Receipts

See accompanying notes

Growth Opportunities Series-6

Delaware VIP Trust — Delaware VIP
Growth Opportunities Series
Statement of Operations

Year Ended December 31, 2006

Delaware VIP Trust — Delaware VIP
Growth Opportunities Series
Statements of Changes in Net Assets

INVESTMENT INCOME:
Dividends	$	321,123
Interest		107,756
Securities lending income		9,433
		438,312
EXPENSES:
Management fees		414,292
Distribution expenses - Service Class		39,051
Accounting and administration expenses		22,096
Reports and statements to shareholders		19,308
Audit and tax		13,136
Trustees' fees and benefits		9,378
Legal fees		6,038
Dividend disbursing and transfer agent fees and expenses		5,523
Custodian fees		4,228
Dues and services		1,933
Consulting fees		1,787
Insurance fees		1,672
Pricing fees		439
Trustees' expenses		269
Taxes (other than taxes on income)		84
Registration fees		52
Other		44
		539,330
Less waiver of distribution expenses - Service Class		(6,509	)
Less expense paid indirectly		(41	)
Total operating expenses		532,780
NET INVESTMENT LOSS		(94,468	)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments		6,652,389
Net change in unrealized appreciation/depreciation of investments		(3,075,782	)
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS		3,576,607
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	3,482,139

See accompanying notes

	Year Ended
	12/31/06			12/31/05
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment loss	$	(94,468	)	$	(256,753	)
Net realized gain on investments		6,652,389			7,465,944
Net change in unrealized appreciation/ depreciation of investments		(3,075,782	)		(732,587	)
Net increase in net assets resulting from operations		3,482,139			6,476,604
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Standard Class		38,229,325			1,424,558
Service Class		12,382,384			1,280,534
		50,611,709			2,705,092
Cost of shares repurchased:
Standard Class		(48,030,272	)		(17,343,946	)
Service Class		(15,056,667	)		(3,746,289	)
		(63,086,939	)		(21,090,235	)
Decrease in net assets derived from capital share transactions		(12,475,230	)		(18,385,143	)
NET DECREASE IN NET ASSETS		(8,993,091	)		(11,908,539	)
NET ASSETS:
Beginning of year		60,048,454			71,956,993
End of year (there was no undistributed net investment income at either year end)	$	51,055,363		$	60,048,454

See accompanying notes

Growth Opportunities Series-7

Delaware VIP Trust — Delaware VIP Growth Opportunities Series
Financial Highlights

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

	Delaware VIP Growth Opportunities Series Standard Class
	Year Ended
	12/31/06			12/31/05			12/31/04			12/31/03			12/31/02
Net asset value, beginning of period	$	17.780		$	15.960		$	14.190		$	10.060		$	15.010
Income (loss) from investment operations:
Net investment loss1		(0.021	)		(0.056	)		(0.031	)		(0.032	)		(0.025	)
Net realized and unrealized gain (loss) on investments		1.151			1.876			1.801			4.162			(3.351	)
Total from investment operations		1.130			1.820			1.770			4.130			(3.376	)
Less dividends and distributions from:
Return of capital		–			–			–			–			(1.574	)
Total dividends and distributions		–			–			–			–			(1.574	)
Net asset value, end of period	$	18.910		$	17.780		$	15.960		$	14.190		$	10.060
Total return2		6.36	%		11.40	%		12.47	%		41.05	%		(24.94	%)
Ratios and supplemental data:
Net assets, end of period (000 omitted)	$	38,859		$	46,000		$	56,875		$	65,368		$	60,964
Ratio of expenses to average net assets		0.91	%		0.90	%		0.84	%		0.85	%		0.87	%
Ratio of net investment loss to average net assets		(0.11	%)		(0.35	%)		(0.21	%)		(0.27	%)		(0.21	%)
Portfolio turnover		67	%		75	%		94	%		94	%		88	%

¹The average shares outstanding method has been applied for per share information.

²Total 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.

See accompanying notes

Growth Opportunities Series-8

Delaware VIP Growth Opportunities Series
Financial Highlights (continued)

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

	Delaware VIP Growth Opportunities Series Service Class
	Year Ended
	12/31/06			12/31/05			12/31/04			12/31/03			12/31/02
Net asset value, beginning of period	$	17.580		$	15.810		$	14.100		$	10.010		$	14.970
Income (loss) from investment operations:
Net investment loss1		(0.066	)		(0.096	)		(0.066	)		(0.058	)		(0.043	)
Net realized and unrealized gain (loss) on investments		1.126			1.866			1.776			4.148			(3.343	)
Total from investment operations		1.060			1.770			1.710			4.090			(3.386	)
Less dividends and distributions from:
Return of capital		–			–			–			–			(1.574	)
Total dividends and distributions		–			–			–			–			(1.574	)
Net asset value, end of period	$	18.640		$	17.580		$	15.810		$	14.100		$	10.010
Total return2		6.03	%		11.20	%		12.13	%		40.86	%		(25.09	%)
Ratios and supplemental data:
Net assets, end of period (000 omitted)	$	12,196		$	14,048		$	15,082		$	16,906		$	15,275
Ratio of expenses to average net assets		1.16	%		1.15	%		1.09	%		1.07	%		1.02	%
Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly		1.21	%		1.20	%		1.14	%		1.10	%		1.02	%
Ratio of net investment loss to average net assets		(0.36	%)		(0.60	%)		(0.46	%)		(0.49	%)		(0.36	%)
Ratio of net investment loss to average net assets prior to expense limitation and expenses paid indirectly		(0.41	%)		(0.65	%)		(0.51	%)		(0.52	%)		(0.36	%)
Portfolio turnover		67	%		75	%		94	%		94	%		88	%

¹The average shares outstanding method has been applied for per share information.

²Total 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. Total investment return reflects waivers and payment of fees by the distributor, as applicable. Performance would have been lower had the expense limitation and waiver not been in effect.

See accompanying notes

Growth Opportunities Series- 9

Delaware VIP Trust — Delaware VIP Growth Opportunities Series
Notes to Financial Statements

December 31, 2006

Delaware VIP Trust (the "Trust") is organized as a Delaware statutory trust and offers 15 series: Delaware VIP Balanced Series, Delaware VIP Capital Reserves Series, Delaware VIP Cash Reserve Series, Delaware VIP Diversified Income Series, Delaware VIP Emerging Markets Series, Delaware VIP Global Bond Series, Delaware VIP Growth Opportunities Series, Delaware VIP High Yield Series, Delaware VIP International Value Equity Series, Delaware VIP REIT Series, Delaware VIP Select Growth Series, Delaware VIP Small Cap Value Series, Delaware VIP Trend Series, Delaware VIP U.S. Growth Series and Delaware VIP Value Series. These financial statements and the related notes pertain to Delaware VIP Growth Opportunities Series (the "Series"). The Trust is an open-end investment company. The Series is considered diversified under the Investment Company Act of 1940, as amended, and offers Standard Class and Service Class shares. The Standard Class shares do not carry a 12b-1 fee and the Service Class shares carry a 12b-1 fee. The shares of the Series are sold only to separate accounts of life insurance companies.

The investment objective of the Series is to seek long-term capital appreciation.

1. Significant Accounting Policies

The following accounting policies are in accordance with U.S. generally accepted accounting principles and are consistently followed by the Series.

Security Valuation—Equity securities, except those traded on the Nasdaq Stock Market, Inc. (Nasdaq), are valued at the last quoted sales price as of the time of the regular close of the New York Stock Exchange (NYSE) on the valuation date. Securities traded on the Nasdaq are valued in accordance with the Nasdaq Official Closing Price, which may not be the last sales price. If on a particular day an equity security does not trade, then the mean between the bid and asked prices will be used. Short-term debt securities having less than 60 days to maturity are valued at amortized cost, which approximates market value. Securities lending collateral is valued at amortized cost, which approximates market value. 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 the Series' Board of Trustees. 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, aftermarket trading, or significant events after local market trading (e.g., government actions or pronouncements, trading volume or volatility on markets, exchanges among dealers, or news events).

In September 2006, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 157 "Fair Value Measurements" (Statement 157). Statement 157 establishes a framework for measuring fair value in generally accepted accounting principles, clarifies the definition of fair value within that framework, and expands disclosures about the use of fair value measurements. Statement 157 is intended to increase consistency and comparability among fair value estimates used in financial reporting. Statement 157 is effective for fiscal years beginning after November 15, 2007. Management does not expect the adoption of Statement 157 to have an impact on the amounts reported in the financial statements.

Federal Income Taxes—The Series intends to continue to qualify for federal income tax purposes as a regulated investment company and make the requisite distributions to shareholders. Accordingly, no provision for federal income taxes has been made in the financial statements.

On July 13, 2006, FASB released FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Series' 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 would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. Recent SEC guidance allows implementing FIN 48 in Series net asset value calculations as late as the Series' last net asset value calculation in the first required fi nancial statement reporting period. As a result, the Series will incorporate FIN 48 in its semiannual report on June 30, 2007. Although the Series' tax positions are currently being evaluated, management does not expect the adoption of FIN 48 to have a material impact on the Series' financial statements.

Class Accounting—Investment income, common expenses and realized and unrealized gain (loss) on investments are allocated to the classes of the Series on the basis of daily net assets of each class. Distribution expenses relating to a specific class are charged directly to that class.

Repurchase Agreements—The Series may invest in a pooled cash account along with other members of the Delaware Investments^® Family of Funds pursuant to an exemptive order issued by the Securities and Exchange Commission. The aggregate daily balance of the pooled cash account is invested in repurchase agreements secured by obligations of the U.S. government. The respective collateral is held by the Series' custodian bank until the maturity of the respective repurchase agreements. Each repurchase agreement is at least 102% collateralized. However, in the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral may be subject to legal proceedings.

Use of Estimates—The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of 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.

Other—Expenses directly attributable to the Series are charged directly to the Series. 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. Dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis.

The Series declares and pays dividends from net investment income and distributions from net realized gain on investments, if any, following the close of the fiscal year.

Growth Opportunities Series- 10

Delaware VIP Growth Opportunities Series
Notes to Financial Statements (continued)

1. Significant Accounting Policies (continued)

Subject to seeking best execution, the Series may direct certain security trades to brokers who have agreed to rebate a portion of the related brokerage commission to the Series in cash. Such commission rebates are included in realized gain on investments in the accompanying financial statements and totaled $12,381 for the year ended December 31, 2006. In general, best execution refers to many factors, including the price paid or received for a security, the commission charged, the promptness and reliability of execution, the confidentiality and placement accorded the order, and other factors affecting the overall benefit obtained by the Series on the transaction.

The Series may receive earnings credits from its custodian when positive cash balances are maintained, which are used to offset custody fees. The expense paid under this arrangement is included in custodian fees on the Statement of Operations with the corresponding expense offset shown as "expense paid indirectly."

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

In accordance with the terms of its investment management agreement, the Series pays Delaware Management Company (DMC), a series of Delaware Management Business Trust and the investment manager, an annual fee which is calculated daily at the rate of 0.75% on the first $500 million of average daily net assets of the Series, 0.70% on the next $500 million, 0.65% on the next $1.5 billion, and 0.60% on average daily net assets in excess of $2.5 billion.

DMC has contractually agreed to waive that portion, if any, of its management fee and reimburse the Series to the extent necessary to ensure that annual operating expenses, exclusive of taxes, interest, brokerage commissions, distribution fees, certain insurance costs and extraordinary expenses, do not exceed 0.95% of average daily net assets of the Series through April 30, 2007. Prior to May 1, 2006, the expense limitation was 0.90% of average daily net assets. No reimbursement was due for the year ended December 31, 2006.

Delaware Service Company, Inc. (DSC), an affiliate of DMC, provides accounting, administration, dividend disbursing and transfer agent services. The Series pays DSC a monthly fee computed at the annual rate of 0.04% of the Series' average daily net assets for accounting and administrative services. The Series pays DSC a monthly fee based on average net assets for dividend disbursing and transfer agent services.

Pursuant to a distribution agreement and distribution plan, the Series pays Delaware Distributors, L.P. (DDLP), the distributor and an affiliate of DMC, an annual distribution and service fee not to exceed 0.30% of the average daily net assets of the Service Class shares. DDLP has contracted to waive distribution and service fees through April 30, 2007 in order to prevent distribution and service fees of the Service Class shares from exceeding 0.25% of average daily net assets. Standard Class shares pay no distribution and service expenses.

At December 31, 2006, the Series had liabilities payable to affiliates as follows:

Investment Management Fee Payable to DMC		Dividend Disbursing, Transfer Agent, Accounting and Administration Fees and Other Expenses Payable to DSC		Distribution Fees Payable to DDLP		Other Expenses Payable to DMC and Affiliates*
$	33,083	$	2,462	$	2,640	$	1,881

*DMC, as part of its administrative services, pays operating expenses on behalf of the Series and is reimbursed on a periodic basis. Such expenses include items such as printing of shareholder reports, fees for audit, legal and tax services, custodian fees and trustees' fees.

As provided in the investment management agreement, the Series bears the cost of certain legal and tax services, including internal legal and tax services provided to the Series by DMC and/or its affiliates' employees. For the year ended December 31, 2006, the Series was charged $2,580 for internal legal and tax services provided by DMC and/or its affiliates' employees.

Trustees' fees and benefits include expenses accrued by the Series for each Trustee's retainer, per meeting fees and retirement benefits. Independent Trustees with over five years of uninterrupted service are eligible to participate in a retirement plan that provides for the payment of benefits upon retirement. The amount of the retirement benefit is based on factors set forth in the plan, including the number of years of service. On November 16, 2006, the Board of Trustees unanimously voted to terminate the retirement plan. Payments equal to the net present value of the earned benefits will be made in 2007 to those independent trustees so entitled. The retirement benefit payout for the Series is $6,312. Certain officers of DMC, DSC and DDLP are officers and/or trustees of the Trust. These officers and trustees are paid no compensation by the Series.

Growth Opportunities Series- 11

Delaware VIP Growth Opportunities Series
Notes to Financial Statements (continued)

3. Investments

For the year ended December 31, 2006, the Series made purchases and sales of investment securities other than short-term investments as follows:

Purchases	$	36,012,814
Sales		48,012,211

At December 31, 2006, the cost of investments for federal income tax purposes and unrealized appreciation (depreciation) for the Series were as follows:

Cost of Investments		Aggregate Unrealized Appreciation		Aggregate Unrealized Depreciation			Net Unrealized Appreciation
$	46,656,656	$	12,588,184	$	(1,701,758	)	$	10,886,426

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. generally accepted accounting principles. Additionally, net short-term gains on sales of investment securities are treated as ordinary income for federal income tax purposes. There were no dividends and distributions paid during the years ended December 31, 2006 and 2005.

5. Components of Net Assets on a Tax Basis

As of December 31, 2006, the components of net assets on a tax basis were as follows:

Shares of beneficial interest	$	44,936,524
Capital loss carryforwards		(4,767,587	)
Unrealized appreciation of investments		10,886,426
Net assets	$	51,055,363

The differences between book basis and tax basis components of net assets are primarily attributable to tax deferral of losses on wash sales.

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 net operating losses. Results of operations and net assets were not affected by these reclassifications. For the year ended December 31, 2006, the Series recorded the following reclassifications:

Accumulated Net Investment Loss		Paid-in Capital
$	94,468	$	(94,468	)

For federal income tax purposes, capital loss carryforwards may be carried forward and applied against future capital gains. $6,244,728 was utilized in 2006. Capital loss carryforwards of $4,767,587 remaining at December 31, 2006 will expire in 2010.

Growth Opportunities Series- 12

Delaware VIP Growth Opportunities Series
Notes to Financial Statements (continued)

6. Capital Shares

Transactions in capital shares were as follows:

	Year Ended 12/31/06			Year Ended 12/31/05
Shares sold:
Standard Class		2,215,596			86,824
Service Class		725,687			78,177
		2,941,283			165,001
Shares repurchased:
Standard Class		(2,747,292	)		(1,064,136	)
Service Class		(870,649	)		(232,719	)
		(3,617,941	)		(1,296,855	)
Net decrease		(676,658	)		(1,131,854	)

7. Line of Credit

The Series, along with certain other funds in the Delaware Investments^® Family of Funds (the "Participants"), participates in a $225,000,000 revolving line of credit facility to be used for temporary or emergency purposes as an additional source of liquidity to fund redemptions of investor shares. The Participants are charged an annual commitment fee, which is allocated across the Participants on the basis of each Participant's allocation of the entire facility. The Participants may borrow up to a maximum of one third of their net assets under the agreement. The Series had no amounts outstanding as of December 31, 2006, or at any time during the year then ended.

8. Securities Lending

The Series, along with other funds in the Delaware Investments^® Family of Funds, may lend its securities pursuant to a security lending agreement (Lending Agreement) with JPMorgan Chase. Initial security loans made pursuant to the Lending Agreement are required to be secured by U.S. government obligations and/or cash collateral not less than 102% of the market value of the securities issued in the United States. With respect to each loan, if the aggregate market value of the collateral held on any business day is less than the aggregate market value of the securities which are the subject of such loan, the borrower will be notified to provide additional collateral not less than the applicable collateral requirements. Cash collateral received is invested in fixed income securities, with a weighted average maturity not to exceed 90 days, rated in one of the top two tiers by Standard & Poor's Ratings Group or Moody's Investor s Service, Inc. or repurchase agreements collateralized by such securities. However, in the event of default or bankruptcy by the lending agent, realization and/or retention of the collateral may be subject to legal proceedings. In the event the borrower fails to return loaned securities and the collateral received is insufficient to cover the value of the loaned securities and provided such collateral shortfall is not the result of investment losses, the lending agent has agreed to pay the amount of the shortfall to the Series, or at the discretion of the lending agent, replace the loaned securities. The Series continues to record dividends on the securities loaned and is subject to change in value of the securities loaned that may occur during the term of the loan. The Series has the right under the Lending Agreement to recover the securities from the borrower on demand. The security lending agent and the borrower retain a portion of the earnings from the collateral investments. The Series records security lending income net of such allocation.

At December 31, 2006, the market value of securities on loan was $6,632,572, for which cash collateral was received and invested in accordance with the Lending Agreement. Such investments are presented on the Statement of Net Assets under the caption "Securities Lending Collateral."

9. Credit and Market Risk

The Series invests a significant portion of its assets in small- and mid-sized companies and may be subject to certain risks associated with ownership of securities of such companies. Investments in small- or mid-sized companies may be more volatile than investments in larger companies for a number of reasons, which include more limited financial resources or a dependence on narrow product lines.

The Series may invest up to 10% of its total 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 the Series 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, the Series' Board of Trustees has delegated to DMC the day-to-day functions of determining whether individual securities are liquid for purposes of the Series' limitation on investments in illiquid assets. At December 31, 2006, there were no Rule 144A securities and no securities have been determined to be illiquid under the Series' Liquidity Procedures.

10. Contractual Obligations

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

Growth Opportunities Series- 13

Delaware VIP Trust — Delaware VIP Growth Opportunities Series
Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees
Delaware VIP Trust–Delaware VIP Growth Opportunities Series

We have audited the accompanying statement of net assets of the Delaware VIP Growth Opportunities Series (one of the series constituting Delaware VIP Trust) (the "Series") as of December 31, 2006, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Series' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits 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 and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Series' internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Series' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant es timates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2006, by correspondence with the custodian and brokers. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Delaware VIP Growth Opportunities Series of Delaware VIP Trust at December 31, 2006, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

  

Philadelphia, Pennsylvania

February 14, 2007

The Series files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Series' Forms N-Q, as well as a description of the policies and procedures that the Series uses to determine how to vote proxies (if any) relating to portfolio securities is available without charge (i) upon request, by calling 800-523-1918; (ii) on the Series' website at http://www.delawareinvestments.com; and (iii) on the Commission's website at http://www.sec.gov. The Series' Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Information (if any) regarding how the Series voted proxies relating to portfolio securities during the most recently disclosed 12-month period ended June 30 is available without charge (i) through the Series' website at http://www.delawareinvestments.com; and (ii) on the Commission's website at http://www.sec.gov.

Growth Opportunities Series-14

Delaware Investments® Family of Funds

board of trustees/directors and officers addendum

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 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.

Name, Address, and Birth Date	Position(s) Held with Fund(s)	Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee or Officer		Other Directorships Held by Trustee or Officer
interested trustees
Patrick P. Coyne1 2005 Market Street Philadelphia, PA 19103 April 14, 1963	Chairman, President, Chief Executive Officer, and Trustee	Chairman and Trustee since August 16, 2006 President and Chief Executive Officer since August 1, 2006	Patrick P. Coyne has served in various executive capacities at different times at Delaware Investments.2		84	None
independent trustees
Thomas L. Bennett 2005 Market Street Philadelphia, PA 19103 October 4, 1947	Trustee	Since March 2005	Private Investor – (March 2004 – Present) Investment Manager – Morgan Stanley & Co. (January 1984 – March 2004)		84	None
John A. Fry 2005 Market Street Philadelphia, PA 19103 May 28, 1960	Trustee	Since January 2001	President – Franklin & Marshall College (June 2002 – Present) Executive Vice President – University of Pennsylvania (April 1995 – June 2002)		84	Director – Community Health Systems Director – Allied Barton Security Holdings
Anthony D. Knerr 2005 Market Street Philadelphia, PA 19103 December 7, 1938	Trustee	Since April 1990	Founder and Managing Director – Anthony Knerr & Associates (Strategic Consulting) (1990 – Present)		84	None
Lucinda S. Landreth 2005 Market Street Philadelphia, PA 19103 June 24, 1947	Trustee	Since March 2005	Chief Investment Officer – Assurant, Inc. (Insurance) (2002 – 2004)		84	None
Ann R. Leven 2005 Market Street Philadelphia, PA 19103 November 1, 1940	Trustee	Since September 1989	Consultant – ARL Associates (Financial Planning) (1983 – Present)		84	Director and Audit Committee Chairperson – Andy Warhol Foundation Director and Audit Committee Member – Systemax, Inc.

Growth Opportunities Series- 15

Name, Address, and Birth Date	Position(s) Held with Fund(s)	Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee or Officer		Other Directorships Held by Trustee or Officer
independent trustees (continued)
Thomas F. Madison 2005 Market Street Philadelphia, PA 19103 February 25, 1936	Trustee	Since May 1997	President and Chief Executive Officer – MLM Partners, Inc. (Small Business Investing and Consulting) (January 1993 – Present)		84	Director – Banner Health Director – CenterPoint Energy Director and Audit Committee Member – Digital River, Inc. Director and Audit Committee Member – Rimage Corporation Director – Valmont Industries, Inc.
Janet L. Yeomans 2005 Market Street Philadelphia, PA 19103 July 31, 1948	Trustee	Since April 1999	Vice President (January 2003 – Present) and Treasurer (January 2006 – Present) 3M Corporation Ms. Yeomans has held various management positions at 3M Corporation since 1983.		84	None
J. Richard Zecher 2005 Market Street Philadelphia, PA 19103 July 3, 1940	Trustee	Since March 2005	Founder – Investor Analytics (Risk Management) (May 1999 – Present) Founder – Sutton Asset Management (Hedge Fund) (September 1998 – Present)		84	Director and Audit Committee Member – Investor Analytics Director and Audit Committee Member – Oxigene, Inc.
officers
David F. Connor 2005 Market Street Philadelphia, PA 19103 December 2, 1963	Vice President, Deputy General Counsel, and Secretary	Vice President since September 21, 2000 and Secretary since October 2005	David F. Connor has served as Vice President and Deputy General Counsel of Delaware Investments since 2000.		84	None3
David P. O'Connor 2005 Market Street Philadelphia, PA 19103 February 21, 1966	Senior Vice President, General Counsel, and Chief Legal Officer	Senior Vice President, General Counsel, and Chief Legal Officer since October 2005	David P. O'Connor has served in various executive and legal capacities at different times at Delaware Investments.		84	None3
John J. O'Connor 2005 Market Street Philadelphia, PA 19103 June 16, 1957	Senior Vice President and Treasurer	Treasurer since February 2005	John J. O'Connor has served in various executive capacities at different times at Delaware Investments.		84	None3
Richard Salus 2005 Market Street Philadelphia, PA 19103 October 4, 1963	Senior Vice President and Chief Financial Officer	Chief Financial Officer since November 1, 2006	Richard Salus has served in various executive capacities at different times at Delaware Investments.		84	None3

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

² Delaware 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.

³ David F. Connor, David P. O'Connor, John J. 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. John J. O'Connor also serves in a similar capacity for Lincoln Variable Insurance Products Trust, which has the same investment advisor as the registrant.

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.

Growth Opportunities Series- 16

Delaware VIP Trust — Delaware VIP High Yield Series

Still-strong corporate balance sheets, combined with a general search for yield by investors in a low interest rate environment, helped high yield bond market performance in 2006. For the year ended Dec. 31, 2006, Delaware VIP High Yield Series returned +12.45% for Standard Class shares and +12.19% for Service Class shares (both figures reflect all distributions reinvested). During the same period, the Series' benchmark — the Bear Stearns High Yield Index — gained 11.64% (source: Bloomberg).

We continued to focus on security selection as the primary driver of the Series' performance. Although the economic climate and other big-picture factors were influential in the high yield market, company-specific characteristics and influences generally played larger roles in overall performance. As such, we avoided making significant sector bets, preferring instead to rely on in-depth research to uncover attractively valued securities throughout the high yield market.

During the year, the automotive industry continued to influence high yield market returns. Despite concerns surrounding the high cost of gasoline, automotive-industry bonds performed very well at times, as several companies made efforts to reduce legacy costs and bring production in line with demand. Our security-by-security analysis has led us to be cautious in this sector, and we were underweight versus the index in major automotive issues such as General Motors and Ford bonds, which together represent a significant portion of the index. We believe this was a prudent approach, and it reflects a belief that a single industry comprised of only two available bond issues should not represent such a large component of the Series.

The views expressed are current as of the date of this report and are subject to change.

The performance data quoted below and on the next page represent past performance; past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please obtain the performance data for the most recent month end by calling the number noted on the page related to this Series in the introductory section of this report.

You should consider the investment objectives, risks, charges, and expenses or the investment carefully before investing. The Delaware VIP High Yield Series prospectus contains this and other important information about the Series. To obtain a prospectus, contact the company noted on the page related to this Series in the introductory section of this report, either by phone or through the company Web site. We advise you to read the prospectus carefully before you invest.

Delaware VIP High Yield Series Average Annual Total Returns For the periods ending Dec. 31, 2006

1 Year

5 Years

10 Years

Lifetime

Standard Class Shares*

+12.45

%

+11.78

%

+4.29

%

+7.05

%

Service Class Shares**

+12.19

%

+11.56

%

NA

+6.08

%

  *  Commenced operations on July 28, 1988

  **  Commenced operations on May 1, 2000

High Yield Series- 1

Delaware VIP Trust — Delaware VIP High Yield Series (continued)

The chart shows a $10,000 investment in the Delaware VIP High Yield Series Standard Class shares for the period from Dec. 31, 1996 through Dec. 31, 2006. All distributions were reinvested. The chart also shows $10,000 invested in the Bear Stearns High Yield Index for the period from Dec. 31, 1996 through Dec. 31, 2006.

The Bear Stearns High Yield Index measures the performance of a large group of high yield securities across a wide spectrum of industries with at least one year to maturity. An index is unmanaged and does not reflect the costs of operating a mutual fund, such as the costs of buying, selling, and holding securities. You cannot invest directly in an index.

Earnings from a variable annuity or variable life investment compound tax free until withdrawal, so no adjustments were made for income taxes.

Performance of Service Class shares will vary due to different charges and expenses.

Performance does not reflect insurance fees related to a variable annuity or variable life investment or the deferred sales charge that would apply to certain withdrawals of investments held for fewer than eight years. Performance shown here would have been reduced if such fees were included and the expense limitation was removed. For more information about fees, consult your variable annuity or variable life prospectus.

Investments in variable products involve risk. High yielding noninvestment grade bonds involve higher risk than investment grade bonds. Adverse conditions may affect the issuer's ability to pay interest and principal on these securities. The Series may be invested in emerging markets and foreign high yield corporate bonds, which have special risks that include currency fluctuations, economic and political change, and different accounting standards. Some portfolios offer more risk than others. Please read both the contract and underlying prospectus for specific details regarding the product's risk profile.

High Yield Series- 2

Delaware VIP Trust — Delaware VIP High Yield Series
Disclosure of Series Expenses

For the Period July 1, 2006 to December 31, 2006

As a shareholder of the Series, you incur ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Series expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Series and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2006 to December 31, 2006.

Actual Expenses

The first section of the table shown, "Actual Series 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 the period.

Hypothetical Example for Comparison Purposes

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

Please note that the expenses shown in the table are meant to highlight your ongoing costs only. As a shareholder of the Series, you do not incur any transaction costs, such as sales charges (loads), redemption fees or exchange fees, but shareholders of other funds may incur such costs. Also, the fees related to the variable annuity investment or the deferred sales charge that could apply have not been included. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. The Series' actual expenses shown in the table reflect fee waivers in effect for Service Class shares. The expenses shown in the table assume reinvestment of all dividends and distributions.

Expense Analysis of an Investment of $1,000

	Beginning Account Value 7/1/06		Ending Account Value 12/31/06		Annualized Expense Ratios			Expenses Paid During Period 7/1/06 to 12/31/06*
Actual Series Return
Standard Class	$	1,000.00	$	1,080.10		0.80	%	$	4.19
Service Class		1,000.00		1,080.30		1.05	%		5.51
Hypothetical 5% Return (5% return before expenses)
Standard Class	$	1,000.00	$	1,021.17		0.80	%	$	4.08
Service Class		1,000.00		1,019.91		1.05	%		5.35

*"Expenses Paid During Period" are equal to the Series' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

High Yield Series- 3

Delaware VIP Trust — Delaware VIP High Yield Series
Sector Allocation and Credit Rating Breakdown

As of December 31, 2006

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

Sector		Percentage of Net Assets
Collateralized Bond Obligations			0.02	%
Commercial Mortgage-Backed Securities			0.45	%
Corporate Bonds			91.48	%
Basic Industry			12.07	%
Brokerage			2.07	%
Capital Goods			5.27	%
Consumer Cyclical	��		7.32	%
Consumer Non-Cyclical			6.20	%
Energy			7.24	%
Finance & Investments			0.06	%
Media			8.00	%
Real Estate			1.37	%
Services Cyclical			17.09	%
Services Non-Cyclical			8.00	%
Technology & Electronics			3.21	%
Telecommunications			9.55	%
Utilities			4.03	%
Convertible Bonds			0.53	%
Emerging Market Bonds			1.13	%
Senior Secured Loans			2.19	%
Common Stock			0.92	%
Warrants			0.00	%
Repurchase Agreements			0.08	%
Total Market Value of Securities			96.80	%
Receivables and Other Assets Net of Liabilities			3.20	%
Total Net Assets			100.00	%
Credit Rating Breakdown (as a % of fixed income investments)
AAA			2.69	%
BBB			1.02	%
BB			19.80	%
B			57.93	%
CCC			15.33	%
D			0.42	%
Not Rated			2.81	%
Total			100.00	%

High Yield Series- 4

Delaware VIP Trust — Delaware VIP High Yield Series
Statement of Net Assets

December 31, 2006

	Principal Amount (U.S.$)		Market Value (U.S.$)
@= COLLATERALIZED BOND OBLIGATIONS–0.02%
• Merrill Lynch CBO VII Series 1997-C3A A 5.741% 3/23/08	$	281,157	$	14,345
South Street CBO Series 1999-1A A1 7.16% 7/1/11		34,848		34,848
Total Collateralized Bond Obligations (cost $192,327)				49,193
COMMERCIAL MORTGAGE-BACKED SECURITIES–0.45%
# First Union National Bank Commercial Mortgage Series 2001-C2 L 144A 6.46% 1/12/43		1,375,000		1,390,099
Total Commercial Mortgage-Backed Securities (cost $1,395,571)				1,390,099
CORPORATE BONDS–91.48%
Basic Industry–12.07%
Abitibi-Consolidated 7.875% 8/1/09		425,000		416,500
AK Steel 7.875% 2/15/09		1,625,000		1,633,125
Bowater 9.00% 8/1/09		950,000		999,875
9.50% 10/15/12		2,200,000		2,288,000
Donohue Forest Products 7.625% 5/15/07		1,325,000		1,328,313
Georgia Pacific
# 144A 7.00% 1/15/15		1,325,000		1,328,313
9.50% 12/1/11		1,005,000		1,105,500
Gold Kist 10.25% 3/15/14		1,375,000		1,584,564
# Hexion US Finance 144A 9.75% 11/15/14		1,715,000		1,747,156
Lyondell Chemical 8.00% 9/15/14		1,425,000		1,485,563
8.25% 9/15/16		1,550,000		1,635,250
10.50% 6/1/13		190,000		209,950
# Momentive Performance Materials 144A 9.75% 12/1/14		2,175,000		2,185,875
# Nell AF SARL 144A 8.375% 8/15/15		1,650,000		1,703,625
NewPage 10.00% 5/1/12		1,700,000		1,802,000
Norske Skog Canada 8.625% 6/15/11		2,975,000		3,027,062
# Port Townsend Paper 144A 11.00% 4/15/11		1,905,000		1,685,925
Potlatch 13.00% 12/1/09		2,000,000		2,316,140
# Sappi Papier 144A 7.50% 6/15/32		2,575,000		2,411,981
‡ Solutia 6.72% 10/15/37		2,150,000		2,104,313
Tembec Industries 8.625% 6/30/09		4,525,000		3,122,249
Witco 6.875% 2/1/26		965,000		849,200
				36,970,479
Brokerage–2.07%
E Trade Financial 8.00% 6/15/11		2,000,000		2,100,000
LaBranche 9.50% 5/15/09		1,290,000		1,360,950
11.00% 5/15/12		2,650,000		2,868,625
				6,329,575
Capital Goods–5.27%
Armor Holdings 8.25% 8/15/13		1,075,000		1,123,375

	Principal Amount (U.S.$)		Market Value (U.S.$)
CORPORATE BONDS (continued)
Capital Goods (continued)
# Berry Plastics 144A 8.875% 9/15/14	$	1,400,000	$	1,428,000
Building Materials 8.00% 10/15/07		800,000		815,040
CPG International 10.50% 7/1/13		950,000		972,563
# Esco 144A 8.625% 12/15/13		950,000		980,875
Graham Packaging 9.875% 10/15/14		2,810,000		2,852,149
Interface 10.375% 2/1/10		2,125,000		2,358,750
Intertape Polymer 8.50% 8/1/14		1,510,000		1,370,325
Mueller Group 10.00% 5/1/12		405,000		442,463
o NTK Holdings 10.75% 3/1/14		1,625,000		1,145,625
# RBS Global & Rexnord 144A 11.75% 8/1/16		1,150,000		1,207,500
Trimas 9.875% 6/15/12		1,500,000		1,458,750
				16,155,415
Consumer Cyclical–7.32%
Accuride 8.50% 2/1/15		1,300,000		1,257,750
Carrols 9.00% 1/15/13		1,450,000		1,489,875
Denny's 10.00% 10/1/12		1,450,000		1,537,000
Ford Motor Credit 7.375% 10/28/09		1,450,000		1,453,999
8.00% 12/15/16		750,000		742,364
• 8.11% 1/13/12		750,000		744,101
9.875% 8/10/11		750,000		802,885
General Motors 8.375% 7/15/33		2,350,000		2,185,499
General Motors Acceptance Corporation 6.875% 9/15/11		1,855,000		1,904,564
8.00% 11/1/31		530,000		610,243
# Goodyear Tire & Rubber 144A 8.625% 12/1/11		1,975,000		2,049,062
Landry's Restaurant 7.50% 12/15/14		1,175,000		1,154,438
# Micheals Stores 144A 11.375% 11/1/16		1,475,000		1,545,063
Neiman Marcus 9.00% 10/15/15		1,165,000		1,277,131
NPC International 9.50% 5/1/14		1,500,000		1,545,000
O'Charleys 9.00% 11/1/13		1,225,000		1,292,375
Visteon 8.25% 8/1/10		850,000		833,000
				22,424,349
Consumer Non-Cyclical–6.20%
Constellation Brands 8.125% 1/15/12		1,950,000		2,037,750
Cott Beverages 8.00% 12/15/11		1,750,000		1,793,750
# Elan Finance 144A 8.875% 12/1/13		1,350,000		1,356,750
Ingles Markets 8.875% 12/1/11		2,125,000		2,225,938
National Beef Packing 10.50% 8/1/11		2,175,000		2,305,499
Pilgrim's Pride 9.625% 9/15/11		1,665,000		1,748,250
Pinnacle Foods 8.25% 12/1/13		1,550,000		1,594,563
Playtex Products 9.375% 6/1/11		2,255,000		2,362,112
Swift & Company 12.50% 1/1/10		1,225,000		1,258,688
True Temper Sports 8.375% 9/15/11		775,000		678,125
Warner Chilcott 8.75% 2/1/15		1,575,000		1,622,250
				18,983,675
Energy–7.24%
Bluewater Finance 10.25% 2/15/12		985,000		1,036,713
Chesapeake Energy 6.625% 1/15/16		445,000		444,444
# Complete Production Services 144A 8.00% 12/15/16		475,000		489,250
Compton Petroleum 7.625% 12/1/13		2,145,000		2,080,649

High Yield Series-5

Delaware VIP High Yield Series
Statement of Net Assets(continued)

	Principal Amount (U.S.$)		Market Value (U.S.$)
CORPORATE BONDS (continued)
Energy (continued)
El Paso Natural Gas 7.625% 8/1/10	$	1,240,000	$	1,302,000
# El Paso Performance-Linked Trust 144A 7.75% 7/15/11		975,000		1,035,938
El Paso Production 7.75% 6/1/13		875,000		919,844
# Hilcorp Energy 144A 7.75% 11/1/15		400,000		395,000
9.00% 6/1/16		1,475,000		1,567,188
10.50% 9/1/10		1,450,000		1,558,750
Inergy Finance 6.875% 12/15/14		810,000		799,875
8.25% 3/1/16		375,000		395,625
Mariner Energy 7.50% 4/15/13		1,200,000		1,170,000
# OPTI Canada 144A 8.25% 12/15/14		1,175,000		1,213,188
PetroHawk Energy 9.125% 7/15/13		2,845,000		3,001,474
# Regency Energy 144A 8.375% 12/15/13		2,650,000		2,669,874
• Secunda International 13.374% 9/1/12		1,125,000		1,165,781
Whiting Petroleum 7.25% 5/1/13		935,000		942,013
				22,187,606
Finance & Investments–0.06%
iPayment 9.75% 5/15/14		175,000		180,688
				180,688
Media–8.00%
CCH I Holdings 13.50% 1/15/14		1,635,000		1,614,563
‡ Century Communications 9.50% 9/1/07		2,820,000		3,426,300
Charter Communications 13.50% 1/15/11		4,275,000		4,253,624
# CMP Susquehanna 144A 9.875% 5/15/14		1,020,000		1,020,000
Dex Media East Finance 12.125% 11/15/12		1,780,000		1,964,675
# Idearc 144A 8.00% 11/15/16		800,000		816,000
Insight Communications 12.25% 2/15/11		275,000		288,750
Insight Midwest 9.75% 10/1/09		420,000		427,876
Lodgenet Entertainment 9.50% 6/15/13		2,555,000		2,765,788
Mediacom Capital 9.50% 1/15/13		4,325,000		4,476,375
# Quebecor World 144A 9.75% 1/15/15		1,100,000		1,112,375
Vertis 10.875% 6/15/09		550,000		555,500
WMG Acquisition 7.375% 4/15/14		1,800,000		1,791,000
				24,512,826
Real Estate–1.37%
American Real Estate Partners 8.125% 6/1/12		1,450,000		1,504,375
BF Saul REIT 7.50% 3/1/14		1,750,000		1,787,187
Rouse 7.20% 9/15/12		875,000		899,518
				4,191,080
Services Cyclical–17.09%
Adesa 7.625% 6/15/12		1,975,000		2,049,063
American Airlines 7.377% 5/23/19		1,106,320		1,081,427
Boyd Gaming 8.75% 4/15/12		1,925,000		2,021,250
Brickman 11.75% 12/15/09		580,000		619,150
# Buffalo Thunder Development Authority 144A 9.375% 12/15/14		1,650,000		1,683,000

	Principal Amount (U.S.$)		Market Value (U.S.$)
CORPORATE BONDS (continued)
Services Cyclical (continued)
Corrections Corporation of America 7.50% 5/1/11	$	1,625,000	$	1,681,875
FTI Consulting 7.625% 6/15/13		2,225,000		2,308,438
# Galaxy Entertainment Finance 144A 9.875% 12/15/12		3,125,000		3,363,280
Gaylord Entertainment 8.00% 11/15/13		1,500,000		1,563,750
Harrah's Operating 6.50% 6/1/16		2,125,000		1,905,840
# Hertz 144A 8.875% 1/1/14		1,350,000		1,420,875
o H-Lines Finance Holdings 11.00% 4/1/13		2,288,000		2,139,280
Horizon Lines 9.00% 11/1/12		935,000		986,425
Kansas City Southern de Mexico
# 144A 7.625% 12/1/13		1,650,000		1,654,125
9.375% 5/1/12		1,435,000		1,539,038
12.50% 6/15/12		500,000		542,500
Kansas City Southern Railway 9.50% 10/1/08		1,100,000		1,155,000
# Knowledge Learning 144A 7.75% 2/1/15		1,050,000		1,010,625
Majestic Star Casino 9.50% 10/15/10		1,575,000		1,661,625
Mandalay Resort 9.375% 2/15/10		1,650,000		1,773,750
9.50% 8/1/08		1,975,000		2,083,625
MGM Mirage 7.625% 1/15/17		900,000		906,750
# Mobile Services 144A 9.75% 8/1/14		1,150,000		1,207,500
OMI 7.625% 12/1/13		2,285,000		2,347,838
# Penhall International 144A 12.00% 8/1/14		1,025,000		1,112,125
# Pokagon Gaming Authority 144A 10.375% 6/15/14		2,350,000		2,585,000
# Rental Service 144A 9.50% 12/1/14		2,200,000		2,282,500
Seabulk International 9.50% 8/15/13		865,000		940,688
Stena 9.625% 12/1/12		1,800,000		1,926,000
o Town Sports International 11.00% 2/1/14		1,125,000		985,781
# Wimar Opco 144A 9.625% 12/15/14		975,000		970,125
Wheeling Island Gaming 10.125% 12/15/09		2,775,000		2,840,905
				52,349,153
Services Non-Cyclical–8.00%
# Aleris International 144A 10.00% 12/15/16		1,925,000		1,939,438
Casella Waste Systems 9.75% 2/1/13		3,450,000		3,631,125
CRC Health 10.75% 2/1/16		2,025,000		2,187,000
Geo Sub 11.00% 5/15/12		1,675,000		1,624,750
HCA 6.50% 2/15/16		3,675,000		3,114,563
# HCA 144A 9.25% 11/15/16		725,000		778,469
# HealthSouth 144A 10.75% 6/15/16		3,800,000		4,108,749
US Oncology 10.75% 8/15/14		2,100,000		2,331,000
o Vanguard Health 11.25% 10/1/15		3,825,000		2,964,375
WCA Waste 9.25% 6/15/14		1,750,000		1,837,500
				24,516,969
Technology & Electronics–3.21%
# Freescale Semiconductor 144A 10.125% 12/15/16		2,975,000		2,993,593

High Yield Series-6

Delaware VIP High Yield Series
Statement of Net Assets(continued)

	Principal Amount (U.S.$)		Market Value (U.S.$)
CORPORATE BONDS (continued)
Technology & Electronics (continued)
MagnaChip Semiconductor 8.00% 12/15/14	$	3,950,000	$	2,666,250
# NXP Funding 144A 9.50% 10/15/15		1,050,000		1,081,500
Solectron Global Finance 8.00% 3/15/16		550,000		559,625
Sungard Data Systems 10.25% 8/15/15		1,275,000		1,367,438
•# UGS Capital II PIK 144A 10.348% 6/1/11		1,150,059		1,158,685
				9,827,091
Telecommunications–9.55%
‡ Allegiance Telecom 11.75% 2/15/08		565,000		257,075
American Tower 7.125% 10/15/12		1,700,000		1,755,250
American Towers 7.25% 12/1/11		580,000		603,200
# Broadview Networks 144A 11.375% 9/1/12		1,275,000		1,335,563
Cincinnati Bell 8.375% 1/15/14		875,000		903,438
# Cricket Communications 144A 9.375% 11/1/14		1,675,000		1,775,500
# Digicel Limited 144A 9.25% 9/1/12		1,595,000		1,710,638
•# Hellas Telecommunications II 144A 11.115% 1/15/15		1,750,000		1,765,313
Hughes Network Systems 9.50% 4/15/14		3,475,000		3,644,405
o Inmarsat Finance 10.375% 11/15/12		2,925,000		2,709,280
• IWO Holdings 9.124% 1/15/12		265,000		271,625
Level 3 Communications 11.50% 3/1/10		1,550,000		1,650,750
# Level 3 Financing 144A 9.25% 11/1/14		825,000		845,625
# MetroPCS Wireless 144A 9.25% 11/1/14		800,000		840,000
Qwest 7.50% 10/1/14		2,200,000		2,343,000
• 8.61% 6/15/13		1,100,000		1,196,250
Rural Cellular 9.875% 2/1/10		1,685,000		1,800,844
• 11.121% 11/1/12		760,000		796,100
Triton CPCS 8.50% 6/1/13		850,000		818,125
8.75% 11/15/11		500,000		467,500
9.375% 2/1/11		1,115,000		1,053,675
• US LEC 13.87% 10/1/09		675,000		718,875
				29,262,031
Utilities–4.03%
Avista 9.75% 6/1/08		680,000		716,305
# Calpine 144A 8.496% 7/15/07		1,177,692		1,301,350
Elwood Energy 8.159% 7/5/26		2,028,488		2,129,445
Midwest Generation 8.30% 7/2/09		1,338,868		1,377,361
8.75% 5/1/34		2,200,000		2,398,000
Mirant Americas Generation 8.30% 5/1/11		2,300,000		2,369,000

	Principal Amount (U.S.$)		Market Value (U.S.$)
CORPORATE BONDS (continued)
Utilities (continued)
Mirant North America 7.375% 12/31/13	$	225,000	$	229,500
Orion Power 12.00% 5/1/10		1,440,000		1,641,600
# Tenaska Alabama Partners 144A 7.00% 6/30/21		174,458		174,136
				12,336,697
Total Corporate Bonds (cost $274,165,015)				280,227,634
CONVERTIBLE BONDS–0.53%
Ford Motor 4.25% 12/15/36 exercise price $9.20 expiration date 12/15/36		1,500,000		1,610,625
Total Convertible Bonds (cost $1,543,313)				1,610,625
EMERGING MARKET BONDS–1.13%
# C&M Finance 144A 8.10% 2/1/16		750,000		772,105
# True Move 144A 10.75% 12/16/13		1,700,000		1,666,000
Venezuela Government 6.00% 12/9/20		1,110,000		1,040,070
Total Emerging Market Bonds (cost $3,444,123)				3,478,175
« SENIOR SECURED LOANS–2.19%
Ford Motor Primary 1 8.36% 11/29/13		1,700,000		1,705,313
General Motors 7.745% 11/17/13		750,000		752,344
HCA Term Loan B 8.086% 11/18/13		900,000		912,094
Talecris Biotherapeutics 2nd Lien 13.50% 12/6/14		850,000		857,438
Wind Acquisition PIK 12.54% 12/7/11		2,445,000		2,484,730
Total Senior Secured Loans (cost $6,647,813)				6,711,919
	Number of Shares
COMMON STOCK–0.92%
d@†=Avado Brands		1,813		0
† Charter Communications Class A		58,900		180,234
† Foster Wheeler		24,215		1,335,208
† Mirant		34,864		1,100,656
† Petrojarl ADR		2,484		28,126
† Petroleum Geo-Services ADR		7,452		174,526
Total Common Stock (cost $1,266,455)				2,818,750
WARRANTS–0.00%
†# Solutia 144A, exercise price $7.59, expiration date 7/15/09		850		0
Total Warrants (cost $72,431)				0

High Yield Series-7

Delaware VIP High Yield Series
Statement of Net Assets(continued)

	Principal Amount (U.S.$)		Market Value (U.S.$)
REPURCHASE AGREEMENTS–0.08%
With BNP Paribas 4.80% 1/2/07 (dated 12/29/06, to be repurchased at $97,372, collateralized by $101,810 U.S. Treasury Bills due 6/28/07, market value $99,360)	$	97,320	$	97,320
With Cantor Fitzgerald 4.82% 1/2/07 (dated 12/29/06, to be repurchased at $116,983, collateralized by $10,090 U.S. Treasury Notes 4.00% due 6/15/09, market value $9,941, $62,640 U.S. Treasury Notes 6.125% due 8/15/07, market value $64,509 and $41,760 U.S. Treasury Notes 6.50% due 2/15/10, market value $44,919)		116,920		116,920
With UBS Warburg 4.75% 1/2/07 (dated 12/29/06, to be repurchased at $41,782, collateralized by $43,130 U.S. Treasury Bills due 3/29/07, market value $42,631)		41,760		41,760
Total Repurchase Agreements (cost $256,000)				256,000

High Yield Series- 8

Delaware VIP High Yield Series
Statement of Net Assets (continued)

TOTAL MARKET VALUE OF SECURITIES–96.80% (cost $288,983,048)	$	296,542,395
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES–3.20%		9,801,674
NET ASSETS APPLICABLE TO 49,477,216 SHARES OUTSTANDING–100.00%	$	306,344,069
NET ASSET VALUE–DELAWARE VIP HIGH YIELD SERIES STANDARD CLASS ($105,576,465 / 17,024,995 Shares)	$	6.20
NET ASSET VALUE–DELAWARE VIP HIGH YIELD SERIES SERVICE CLASS ($200,767,604 / 32,452,221 Shares)	$	6.19
COMPONENTS OF NET ASSETS AT DECEMBER 31, 2006:
Shares of beneficial interest (unlimited authorization - no par)	$	322,120,172
Undistributed net investment income		21,003,046
Accumulated net realized loss on investments		(44,338,496	)
Net unrealized appreciation of investments		7,559,347
Total net assets	$	306,344,069

  †  Non-income producing security for the year ended December 31, 2006.

  •  Variable rate security. The interest rate shown is the rate as of December 31, 2006.

d  Restricted Security. Investment in a security not registered under the Securities Act of 1933, as amended. This security has certain restrictions on resale which may limit its liquidity. At December 31, 2006, the aggregate amount of the restricted security equaled $0.00 or 0% of the Series' net assets. See Note 8 in "Notes to Financial Statements."

  ‡  Non-income producing security. Security is currently in default.

o  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.

  =  Security is being fair valued in accordance with the Series' fair valuation policy. At December 31, 2006, the aggregate amount of fair valued securities equaled $49,193, which represented 0.02% of the Series' net assets. See Note 1 in "Notes to Financial Statements."

  @  Illiquid security. At December 31, 2006, the aggregate amount of illiquid securities equaled $49,193, which represented 0.02% of the Series' net assets. See Note 8 in "Notes to Financial Statements."

  «  Senior Secured Loans generally pay interest at rates which are periodically redetermined by reference to a base lending rate plus a premium. These base lending rates are generally (i) the prime rate offered by one or more United States banks, (ii) the lending rate offered by one or more European banks such as the London Inter-Bank Offered Rate ('LIBOR') and (iii) the certificate of deposit rate. Senior Secured Loans may be subject to restrictions on resale.

  #  Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At December 31, 2006, the aggregate amount of Rule 144A securities equaled $74,433,606, which represented 24.30% of the Series' net assets. See Note 8 in "Notes to Financial Statements."

Summary of Abbreviations:

ADR – American Depositary Receipt

CBO – Collateralized Bond Obligation

PIK – Pay-in-kind

REIT – Real Estate Investment Trust

See accompanying notes

High Yield Series-9

Delaware VIP Trust — Delaware VIP High Yield Series
Statement of Operations

Year Ended December 31, 2006

INVESTMENT INCOME:
Interest	$	23,216,247
Dividends		16,601
		23,232,848
EXPENSES:
Management fees		1,718,135
Distribution expenses - Service Class		529,832
Accounting and administration expenses		105,731
Reports and statements to shareholders		60,451
Trustees' fees and benefits		49,447
Legal fees		31,271
Dividend disbursing and transfer agent fees and expenses		26,432
Audit and tax		21,069
Insurance fees		11,338
Custodian fees		11,034
Consulting fees		6,395
Pricing fees		5,369
Registration fees		3,252
Trustees' expenses		1,515
Dues and services		1,381
		2,582,652
Less waiver of distribution expenses - Service Class		(88,305	)
Total operating expenses		2,494,347
NET INVESTMENT INCOME		20,738,501
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments		342,427
Net change in unrealized appreciation/depreciation of investments		9,806,997
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS		10,149,424
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	30,887,925

See accompanying notes

Delaware VIP Trust — Delaware VIP High Yield Series
Statements of Changes in Net Assets

	Year Ended
	12/31/06			12/31/05
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income	$	20,738,501		$	15,193,441
Net realized gain on investments		342,427			1,807,494
Net change in unrealized appreciation/ depreciation of investments		9,806,997			(9,505,870	)
Net increase in net assets resulting from operations		30,887,925			7,495,065
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Standard Class		(5,223,811	)		(4,250,072	)
Service Class		(10,890,450	)		(8,789,319	)
		(16,114,261	)		(13,039,391	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Standard Class		65,283,017			33,815,940
Service Class		64,586,970			60,267,388
Net asset value of shares issued upon reinvestment of dividends and distributions:
Standard Class		5,223,811			4,250,072
Service Class		10,890,450			8,789,319
		145,984,248			107,122,719
Cost of shares repurchased:
Standard Class		(40,279,258	)		(31,558,451	)
Service Class		(46,658,029	)		(33,897,320	)
		(86,937,287	)		(65,455,771	)
Increase in net assets derived from capital share transactions		59,046,961			41,666,948
NET INCREASE IN NET ASSETS		73,820,625			36,122,622
NET ASSETS:
Beginning of year		232,523,444			196,400,822
End of year (including undistributed net investment income of $21,003,046 and $16,105,414, respectively)	$	306,344,069		$	232,523,444

See accompanying notes

High Yield Series-10

Delaware VIP Trust — Delaware VIP High Yield Series
Financial Highlights

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

	Delaware VIP High Yield Series Standard Class
	Year Ended
	12/31/06			12/31/05			12/31/04			12/31/03			12/31/02
Net asset value, beginning of period	$	5.910		$	6.110		$	5.690		$	4.790		$	5.220
Income (loss) from investment operations:
Net investment income1		0.473			0.434			0.437			0.489			0.517
Net realized and unrealized gain (loss) on investments and foreign currencies		0.226			(0.227	)		0.332			0.804			(0.413	)
Total from investment operations		0.699			0.207			0.769			1.293			0.104
Less dividends and distributions from:
Net investment income		(0.409	)		(0.407	)		(0.349	)		(0.393	)		(0.534	)
Total dividends and distributions		(0.409	)		(0.407	)		(0.349	)		(0.393	)		(0.534	)
Net asset value, end of period	$	6.200		$	5.910		$	6.110		$	5.690		$	4.790
Total return2		12.45	%		3.59	%		14.25	%		28.74	%		1.84	%
Ratios and supplemental data:
Net assets, end of period (000 omitted)	$	105,576		$	70,139		$	65,418		$	71,061		$	48,089
Ratio of expenses to average net assets		0.78	%		0.78	%		0.75	%		0.77	%		0.78	%
Ratio of net investment income to average net assets		8.01	%		7.39	%		7.66	%		9.33	%		10.96	%
Portfolio turnover		132	%		162	%		429	%		716	%		587	%

¹ The average shares outstanding method has been applied for per share information.

²Total 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.

See accompanying notes

High Yield Series- 11

Delaware VIP High Yield Series
Financial Highlights (continued)

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

	Delaware VIP High Yield Series Service Class
	Year Ended
	12/31/06			12/31/05			12/31/04			12/31/03			12/31/02
Net asset value, beginning of period	$	5.900		$	6.100		$	5.680		$	4.780		$	5.220
Income (loss) from investment operations:
Net investment income1		0.458			0.419			0.423			0.477			0.510
Net realized and unrealized gain (loss) on investments and foreign currencies		0.226			(0.226	)		0.334			0.809			(0.424	)
Total from investment operations		0.684			0.193			0.757			1.286			0.086
Less dividends and distributions from:
Net investment income		(0.394	)		(0.393	)		(0.337	)		(0.386	)		(0.526	)
Total dividends and distributions		(0.394	)		(0.393	)		(0.337	)		(0.386	)		(0.526	)
Net asset value, end of period	$	6.190		$	5.900		$	6.100		$	5.680		$	4.780
Total return2		12.19	%		3.34	%		14.02	%		28.61	%		1.65	%
Ratios and supplemental data:
Net assets, end of period (000 omitted)	$	200,768		$	162,384		$	130,983		$	68,295		$	13,529
Ratio of expenses to average net assets		1.03	%		1.03	%		1.00	%		0.99	%		0.93	%
Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly		1.08	%		1.08	%		1.05	%		1.02	%		0.93	%
Ratio of net investment income to average net assets		7.76	%		7.14	%		7.41	%		9.11	%		10.81	%
Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly		7.71	%		7.09	%		7.36	%		9.08	%		10.81	%
Portfolio turnover		132	%		162	%		429	%		716	%		587	%

¹The average shares outstanding method has been applied for per share information.

²Total 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. Total investment return reflects waivers and payment of fees by the distributor, as applicable. Performance would have been lower had the waiver not been in effect.

See accompanying notes

High Yield Series- 12

Delaware VIP Trust — Delaware VIP High Yield Series
Notes to Financial Statements

December 31, 2006

Delaware VIP Trust (the "Trust") is organized as a Delaware statutory trust and offers 15 series: Delaware VIP Balanced Series, Delaware VIP Capital Reserves Series, Delaware VIP Cash Reserve Series, Delaware VIP Diversified Income Series, Delaware VIP Emerging Markets Series, Delaware VIP Global Bond Series, Delaware VIP Growth Opportunities Series, Delaware VIP High Yield Series, Delaware VIP International Value Equity Series, Delaware VIP REIT Series, Delaware VIP Select Growth Series, Delaware VIP Small Cap Value Series, Delaware VIP Trend Series, Delaware VIP U.S. Growth Series and Delaware VIP Value Series. These financial statements and the related notes pertain to Delaware VIP High Yield Series (the "Series"). The Trust is an open-end investment company. The Series is considered diversified under the Investment Company Act of 1940, as amended, and offers Standard Class and Service Class shares. The Standard Class shares do not carry a 12b-1 fee and the Service Class shares carry a 12b-1 fee. The shares of the Series are sold only to separate accounts of life insurance companies.

The investment objective of the Series is to seek total return and, as a secondary objective, high current income.

1. Significant Accounting Policies

The following accounting policies are in accordance with U.S. generally accepted accounting principles and are consistently followed by the Series.

Security Valuation—Equity securities, except those traded on the Nasdaq Stock Market, Inc. (Nasdaq), are valued at the last quoted sales price as of the time of the regular close of the New York Stock Exchange (NYSE) on the valuation date. Securities traded on the Nasdaq are valued in accordance with the Nasdaq Official Closing Price, which may not be the last sales price. If on a particular day an equity security does not trade, then the mean between the bid and asked prices will be used. Long-term debt securities are valued by an independent pricing service and such prices are believed to reflect the fair value of such securities. Short-term debt securities having less than 60 days to maturity are valued at amortized cost, which approximates market value. Other securities and assets for which market quotations are not readily available are valued at fair va lue as determined in good faith under the direction of the Series' Board of Trustees. 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 with respect to foreign securities, aftermarket trading or significant events after local market trading (e.g., government actions or pronouncements, trading volume or volatility on markets, exchanges among dealers, or news events).

In September 2006, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 157 "Fair Value Measurements" (Statement 157). Statement 157 establishes a framework for measuring fair value in generally accepted accounting principles, clarifies the definition of fair value within that framework, and expands disclosures about the use of fair value measurements. Statement 157 is intended to increase consistency and comparability among fair value estimates used in financial reporting. Statement 157 is effective for fiscal years beginning after November 15, 2007. Management does not expect the adoption of Statement 157 to have an impact on the amounts reported in the financial statements.

Federal Income Taxes—The Series intends to continue to qualify for federal income tax purposes as a regulated investment company and make the requisite distributions to shareholders. Accordingly, no provision for federal income taxes has been made in the financial statements.

On July 13, 2006, FASB released FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Series' 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 would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. Recent SEC guidance allows implementing FIN 48 in Series net asset value calculations as late as the Series' last net asset value calculation in the first required fi nancial statement reporting period. As a result, the Series will incorporate FIN 48 in its semiannual report on June30,2007. Although the Series' tax positions are currently being evaluated, management does not expect the adoption of FIN 48 to have a material impact on the Series' financial statements.

Class Accounting—Investment income, common expenses and realized and unrealized gain (loss) on investments are allocated to the classes of the Series on the basis of daily net assets of each class. Distribution expenses relating to a specific class are charged directly to that class.

Repurchase Agreements—The Series may invest in a pooled cash account along with other members of the Delaware Investments^® Family of Funds pursuant to an exemptive order issued by the Securities and Exchange Commission. The aggregate daily balance of the pooled cash account is invested in repurchase agreements secured by obligations of the U.S. government. The respective collateral is held by the Series' custodian bank until the maturity of the respective repurchase agreements. Each repurchase agreement is at least 102% collateralized. However, in the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral may be subject to legal proceedings.

Use of Estimates—The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of 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.

High Yield Series-13

Delaware VIP High Yield Series
Notes to Financial Statements (continued)

1. Significant Accounting Policies (continued)

Other—Expenses directly attributable to the Series are charged directly to the Series. 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. Dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis. Discounts and premiums on non-convertible bonds are amortized to interest income over the lives of the respective securities. Realized gains (losses) on paydowns of mortgage- and asset-backed securities are classified as interest income.

The Series declares and pays dividends from net investment income and distributions from net realized gain on investments, if any, following the close of the fiscal year.

The Series receives earnings credits from its custodian when positive cash balances are maintained, which are used to offset custody fees. There were no earnings credits for the year ended December 31, 2006.

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

In accordance with the terms of its investment management agreement, the Series pays Delaware Management Company (DMC), a series of Delaware Management Business Trust and the investment manager, an annual fee which is calculated daily at the rate of 0.65% on the first $500 million of average daily net assets of the Series, 0.60% on the next $500 million, 0.55% on the next $1.5 billion, and 0.50% on average daily net assets in excess of $2.5 billion.

DMC has contractually agreed to waive that portion, if any, of its management fee and reimburse the Series to the extent necessary to ensure that annual operating expenses, exclusive of taxes, interest, brokerage commissions, distribution fees, certain insurance costs and extraordinary expenses, do not exceed 0.78% of average daily net assets of the Series through April 30, 2007. Prior to May 1, 2006, the expense limitation was 0.80% of average daily net assets. No reimbursement was due for the year ended December 31, 2006.

Delaware Service Company, Inc. (DSC), an affiliate of DMC, provides accounting, administration, dividend disbursing and transfer agent services. The Series pays DSC a monthly fee computed at the annual rate of 0.04% of the Series' average daily net assets for accounting and administrative services. The Series pays DSC a monthly fee based on average net assets for dividend disbursing and transfer agent services.

Pursuant to a distribution agreement and distribution plan, the Series pays Delaware Distributors, L.P. (DDLP), the distributor and an affiliate of DMC, an annual distribution and service fee not to exceed 0.30% of the average daily net assets of the Service Class shares. DDLP has contracted to waive distribution and service fees through April 30, 2007 in order to prevent distribution and service fees of the Service Class shares from exceeding 0.25% of average daily net assets. Standard Class shares pay no distribution and service expenses.

At December 31, 2006, the Series had liabilities payable to affiliates as follows:

Investment Management Fee Payable to DMC		Dividend Disbursing, Transfer Agent, Accounting and Administration Fees and Other Expenses Payable to DSC		Distribution Fees Payable to DDLP		Other Expenses Payable to DMC and Affiliates*
$	166,650	$	14,240	$	42,022	$	21,887

*DMC, as part of its administrative services, pays operating expenses on behalf of the Series and is reimbursed on a periodic basis. Such expenses include items such as printing of shareholder reports, fees for audit, legal and tax services, custodian fees and trustees' fees.

As provided in the investment management agreement, the Series bears the cost of certain legal and tax services, including internal legal and tax services provided to the Series by DMC and/or its affiliates' employees. For the year ended December 31, 2006, the Series was charged $12,712 for internal legal and tax services provided by DMC and/or its affiliates' employees.

Trustees' fees and benefits include expenses accrued by the Series for each Trustee's retainer, per meeting fees and retirement benefits. Independent Trustees with over five years of uninterrupted service are eligible to participate in a retirement plan that provides for the payment of benefits upon retirement. The amount of the retirement benefit is based on factors set forth in the plan, including the number of years of service. On November 16, 2006, the Board of Trustees unanimously voted to terminate the retirement plan. Payments equal to the net present value of the earned benefits will be made in 2007 to those independent trustees so entitled. The retirement benefit payout for the Series is $34,982. Certain officers of DMC, DSC and DDLP are officers and/or trustees of the Trust. These officers and trustees are paid no compensation by the Series.

High Yield Series- 14

Delaware VIP High Yield Series
Notes to Financial Statements (continued)

3. Investments

For the year ended December 31, 2006, the Series made purchases and sales of investment securities other than short-term investments as follows:

Purchases	$	400,396,024
Sales		330,530,919

At December 31, 2006, the cost of investments for federal income tax purposes and unrealized appreciation (depreciation) for the Series were as follows:

Cost of Investments		Aggregate Unrealized Appreciation		Aggregate Unrealized Depreciation			Net Unrealized Appreciation
$	290,114,974	$	9,443,994	$	(3,016,573	)	$	6,427,421

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. generally accepted accounting principles. Additionally, 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 December 31, 2006 and 2005 was as follows:

	Year Ended 12/31/06		Year Ended 12/31/05
Ordinary income	$	16,114,261	$	13,039,391

5. Components of Net Assets on a Tax Basis

As of December 31, 2006, the components of net assets on a tax basis were as follows:

Shares of beneficial interest	$	322,120,172
Undistributed ordinary income		21,053,074
Capital loss carryforwards		(42,615,340	)
Post-October losses		(641,258	)
Unrealized appreciation of investments		6,427,421
Net assets	$	306,344,069

The differences between book basis and tax basis components of net assets are primarily attributable to tax deferral of losses on wash sales and tax treatment of interest accrual on defaulted bonds and market discount and premium on debt instruments.

Post-October losses represent losses realized on investment transactions from November 1, 2006 through December 31, 2006 that, in accordance with federal income tax regulations, the Series has elected to defer and treat as having arisen in the following fiscal year.

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 paydown gain (loss) on mortgage- and asset-backed securities, contingent payment debt instruments and market discount and premium on certain debt instruments. Results of operations and net assets were not affected by these reclassifications. For the year ended December 31, 2006, the Series recorded the following reclassifications:

Undistributed Net Investment Income		Accumulated Net Realized Gain (Loss)
$	273,392	$	(273,392	)

For federal income tax purposes, capital loss carryforwards may be carried forward and applied against future capital gains. $832,780 was utilized in 2006. Capital loss carryforwards remaining at December 31, 2006 will expire as follows: $19,963,415 expires in 2008, $18,082,790 expires in 2009 and $4,569,135 expires in 2010.

High Yield Series-15

Delaware VIP High Yield Series
Notes to Financial Statements (continued)

6. Capital Shares

Transactions in capital shares were as follows:

	Year Ended 12/31/06			Year Ended 12/31/05
Shares sold:
Standard Class		11,147,480			5,762,942
Service Class		10,971,704			10,268,782
Shares issued upon reinvestment of dividends and distributions:
Standard Class		918,069			740,431
Service Class		1,917,333			1,531,240
		24,954,586			18,303,395
Shares repurchased:
Standard Class		(6,900,107	)		(5,350,215	)
Service Class		(7,953,893	)		(5,761,025	)
		(14,854,000	)		(11,111,240	)
Net increase		10,100,586			7,192,155

7. Line of Credit

The Series, along with certain other funds in the Delaware Investments^® Family of Funds (the "Participants"), participates in a $225,000,000 revolving line of credit facility to be used for temporary or emergency purposes as an additional source of liquidity to fund redemptions of investor shares. The Participants are charged an annual commitment fee, which is allocated across the Participants on the basis of each Participant's allocation of the entire facility. The Participants may borrow up to a maximum of one third of their net assets under the agreement. The Series had no amounts outstanding as of December 31, 2006, or at any time during the year then ended.

8. Credit and Market Risk

The Series invests a portion of its assets in high yield fixed income securities, which carry ratings of BB or lower by Standard & Poor's Ratings Group and/or Ba or lower by Moody's Investors Service, Inc. Investments in these higher yielding securities are generally accompanied by a greater degree of credit risk than higher rated securities. Additionally, lower rated securities may be more susceptible to adverse economic and competitive industry conditions than investment grade securities.

The Series may invest up to 15% of its total 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 the Series 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, the Series' Board of Trustees has delegated to DMC the day-to-day functions of determining whether individual securities are liquid for purposes of the Series' limitation on investments in illiquid assets. Rule 144A and illiquid securities have been identified on the Statement of Net Assets.

9. Contractual Obligations

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

10. Tax Information (Unaudited)

For the fiscal year ended December 31, 2006, the Series designates dividends and distributions paid during the year as follows:

(A) Long-Term Capital Gain Distributions (Tax Basis)		(B) Ordinary Income Distributions (Tax Basis)			Total Distributions (Tax Basis)
	–		100	%		100	%

(A) and (B) are based on a percentage of the Series' total distributions.

High Yield Series-16

Delaware VIP Trust — Delaware VIP High Yield Series
Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees
Delaware VIP Trust–Delaware VIP High Yield Series

We have audited the accompanying statement of net assets of the Delaware VIP High Yield Series (one of the series constituting Delaware VIP Trust) (the "Series") as of December 31, 2006, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Series' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits 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 and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Series' internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Series' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant es timates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2006, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Delaware VIP High Yield Series of Delaware VIP Trust at December 31, 2006, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

  

Philadelphia, Pennsylvania

February 14, 2007

The Series files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Series' Forms N-Q, as well as a description of the policies and procedures that the Series uses to determine how to vote proxies (if any) relating to portfolio securities is available without charge (i) upon request, by calling 800-523-1918; (ii) on the Series' website at http://www.delawareinvestments.com; and (iii) on the Commission's website at http://www.sec.gov. The Series' Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Information (if any) regarding how the Series voted proxies relating to portfolio securities during the most recently disclosed 12-month period ended June 30 is available without charge (i) through the Series' website at http://www.delawareinvestments.com; and (ii) on the Commission's website at http://www.sec.gov.

High Yield Series-17

Delaware Investments® Family of Funds

board of trustees/directors and officers addendum

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 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.

Name, Address, and Birth Date	Position(s) Held with Fund(s)	Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee or Officer		Other Directorships Held by Trustee or Officer
interested trustees
Patrick P. Coyne1 2005 Market Street Philadelphia, PA 19103 April 14, 1963	Chairman, President, Chief Executive Officer, and Trustee	Chairman and Trustee since August 16, 2006 President and Chief Executive Officer since August 1, 2006	Patrick P. Coyne has served in various executive capacities at different times at Delaware Investments.2		84	None
independent trustees
Thomas L. Bennett 2005 Market Street Philadelphia, PA 19103 October 4, 1947	Trustee	Since March 2005	Private Investor – (March 2004 – Present) Investment Manager – Morgan Stanley & Co. (January 1984 – March 2004)		84	None
John A. Fry 2005 Market Street Philadelphia, PA 19103 May 28, 1960	Trustee	Since January 2001	President – Franklin & Marshall College (June 2002 – Present) Executive Vice President – University of Pennsylvania (April 1995 – June 2002)		84	Director – Community Health Systems Director – Allied Barton Security Holdings
Anthony D. Knerr 2005 Market Street Philadelphia, PA 19103 December 7, 1938	Trustee	Since April 1990	Founder and Managing Director – Anthony Knerr & Associates (Strategic Consulting) (1990 – Present)		84	None
Lucinda S. Landreth 2005 Market Street Philadelphia, PA 19103 June 24, 1947	Trustee	Since March 2005	Chief Investment Officer – Assurant, Inc. (Insurance) (2002 – 2004)		84	None
Ann R. Leven 2005 Market Street Philadelphia, PA 19103 November 1, 1940	Trustee	Since September 1989	Consultant – ARL Associates (Financial Planning) (1983 – Present)		84	Director and Audit Committee Chairperson – Andy Warhol Foundation Director and Audit Committee Member – Systemax, Inc.

High Yield Series- 18

Name, Address, and Birth Date	Position(s) Held with Fund(s)	Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee or Officer		Other Directorships Held by Trustee or Officer
independent trustees (continued)
Thomas F. Madison 2005 Market Street Philadelphia, PA 19103 February 25, 1936	Trustee	Since May 1997	President and Chief Executive Officer – MLM Partners, Inc. (Small Business Investing and Consulting) (January 1993 – Present)		84	Director – Banner Health Director – CenterPoint Energy Director and Audit Committee Member – Digital River, Inc. Director and Audit Committee Member – Rimage Corporation Director – Valmont Industries, Inc.
Janet L. Yeomans 2005 Market Street Philadelphia, PA 19103 July 31, 1948	Trustee	Since April 1999	Vice President (January 2003 – Present) and Treasurer (January 2006 – Present) 3M Corporation Ms. Yeomans has held various management positions at 3M Corporation since 1983.		84	None
J. Richard Zecher 2005 Market Street Philadelphia, PA 19103 July 3, 1940	Trustee	Since March 2005	Founder – Investor Analytics (Risk Management) (May 1999 – Present) Founder – Sutton Asset Management (Hedge Fund) (September 1998 – Present)		84	Director and Audit Committee Member – Investor Analytics Director and Audit Committee Member – Oxigene, Inc.
officers
David F. Connor 2005 Market Street Philadelphia, PA 19103 December 2, 1963	Vice President, Deputy General Counsel, and Secretary	Vice President since September 21, 2000 and Secretary since October 2005	David F. Connor has served as Vice President and Deputy General Counsel of Delaware Investments since 2000.		84	None3
David P. O'Connor 2005 Market Street Philadelphia, PA 19103 February 21, 1966	Senior Vice President, General Counsel, and Chief Legal Officer	Senior Vice President, General Counsel, and Chief Legal Officer since October 2005	David P. O'Connor has served in various executive and legal capacities at different times at Delaware Investments.		84	None3
John J. O'Connor 2005 Market Street Philadelphia, PA 19103 June 16, 1957	Senior Vice President and Treasurer	Treasurer since February 2005	John J. O'Connor has served in various executive capacities at different times at Delaware Investments.		84	None3
Richard Salus 2005 Market Street Philadelphia, PA 19103 October 4, 1963	Senior Vice President and Chief Financial Officer	Chief Financial Officer since November 1, 2006	Richard Salus has served in various executive capacities at different times at Delaware Investments.		84	None3

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

² Delaware 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.

³ David F. Connor, David P. O'Connor, John J. 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. John J. O'Connor also serves in a similar capacity for Lincoln Variable Insurance Products Trust, which has the same investment advisor as the registrant.

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.

High Yield Series- 19

Delaware VIP Trust — Delaware VIP International Value Equity Series

Delaware VIP International Value Equity Series Standard Class shares returned +23.59%, and its Service Class shares returned +23.24% (both figures reflect all distributions reinvested) for the fiscal year ended Dec. 31, 2006. The Series benchmark, the MSCI EAFE Index, also rose sharply, gaining 32.59% for the same period (source: Lipper).

On May 1, 2006, day-to-day management of the Series was transitioned from subadvisor Mondrian Investment Partners Ltd. to the Delaware Investments International Equity team based in Boston.

The team's investment philosophy is that adversity creates opportunity. It believes that "efficient-opportunity-capture" by a collaborative, experienced team is critical to generating competitive long-term performance. The management team uses a bottom-up, contrarian investment style in seeking to identify mispriced securities, and prioritizes its research through a process aimed at creating efficient segmentation of this broad investment universe.

The Series' underperformance versus its benchmark for the year was primarily a result of sector allocation. Transition of management in May was coincident with the market's shift to a more defensive nature and negatively affected performance through adverse sector allocation as that market shift took place.

Prior to the management change, performance was characterized by a heavier weighting than the benchmark index in the weak telecommunications services sector. In the months following the change, the negative impact of sector allocation was felt in a lower exposure than the MSCI EAFE Index to the strong utilities sector. Management did, however, overweight consumer discretionary investments versus the index, which resulted in a measure of positive relative return.

We feel that success in a maturing market cycle such as this one requires particular attention to the specific drivers of company operating performance. Stocks whose performance has been leveraged by the benefits of accelerating economic growth may struggle to find new sources of outperformance. As always, we continue to seek stocks of companies whose prospects for success rely not on macroeconomic drivers but on their own inherent strengths.

The views expressed are current as of the date of this report and are subject to change.

The performance data quoted below and on the next page represent past performance; past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please obtain the performance data for the most recent month end by calling the number noted on the page related to this Series in the introductory section of this report.

You should consider the investment objectives, risks, charges, and expenses of the investment carefully before investing. The Delaware VIP International Value Equity Series prospectus contains this and other important information about the Series. To obtain a prospectus, contact the company noted on the page related to this Series in the introductory section of this report, either by phone or through the company Web site. We advise you to read the prospectus carefully before you invest.

Instances of high double-digit returns are unusual, cannot be sustained, and were achieved primarily during favorable market conditions.

Delaware VIP International Value Equity Series Average Annual Total Returns For the periods ending Dec. 31, 2006

1 Year

5 Years

10 Years

Lifetime

Standard Class Shares*

+23.59

%

+16.90

%

+10.05

%

+10.75

%

Service Class Shares**

+23.24

%

+16.63

%

NA

+11.03

%

  *  Commenced operations on Oct. 29, 1992

  **  Commenced operations on May 1, 2000

International Value Equity Series- 1

Delaware VIP Trust — Delaware VIP International Value Equity Series (continued)

The chart shows a $10,000 investment in the Delaware VIP International Value Equity Series Standard Class shares for the period from Dec. 31, 1996 through Dec. 31, 2006. All distributions were reinvested. The chart also shows $10,000 invested in the MSCI EAFE Index for the period from Dec. 31, 1996 through Dec. 31, 2006.

MSCI EAFE Index measures the equity market performance of 21 developed market countries in Europe, Australasia, and the Far East. An index is unmanaged and does not reflect the costs of operating a mutual fund, such as the costs of buying, selling, and holding securities. You cannot invest directly in an index.

Earnings from a variable annuity or variable life investment compound tax free until withdrawal, so no adjustments were made for income taxes.

An expense limitation was in effect for the Delaware VIP International Value Equity Series during the periods shown.

Performance of Service Class shares will vary due to different charges and expenses.

Performance does not reflect insurance fees related to a variable annuity or variable life investment or the deferred sales charge that would apply to certain withdrawals of investments held for fewer than eight years. Performance shown here would have been reduced if such fees were included and the expense limitation was removed. For more information about fees, consult your variable annuity or variable life prospectus.

Investments in variable products involve risk. Foreign investments are subject to risks not ordinarily associated with domestic investments, such as currency, economic and political risks, and different accounting standards. Some portfolios offer more risk than others. Please read both the contract and underlying prospectus for specific details regarding the product's risk profile.

International Value Equity Series- 2

Delaware VIP Trust — Delaware VIP International Value Equity Series
Disclosure of Series Expenses

For the Period July 1, 2006 to December 31, 2006

As a shareholder of the Series, you incur ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Series expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Series and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2006 to December 31, 2006.

Actual Expenses

The first section of the table shown, "Actual Series 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 the period.

Hypothetical Example for Comparison Purposes

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

Please note that the expenses shown in the table are meant to highlight your ongoing costs only. As a shareholder of the Series, you do not incur any transaction costs, such as sales charges (loads), redemption fees or exchange fees, but shareholders of other funds may incur such costs. Also, the fees related to the variable annuity investment or the deferred sales charge that could apply have not been included. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. The Series' actual expenses shown in the table reflect fee waivers in effect for Service Class shares. The expenses shown in the table assume reinvestment of all dividends and distributions.

Expense Analysis of an Investment of $1,000

	Beginning Account Value 7/1/06		Ending Account Value 12/31/06		Annualized Expense Ratios			Expenses Paid During Period 7/1/06 to 12/31/06*
Actual Series Return
Standard Class	$	1,000.00	$	1,154.40		1.04	%	$	5.65
Service Class		1,000.00		1,152.50		1.29	%		7.00
Hypothetical 5% Return (5% return before expenses)
Standard Class	$	1,000.00	$	1,019.96		1.04	%	$	5.30
Service Class		1,000.00		1,018.70		1.29	%		6.56

*"Expenses Paid During Period" are equal to the Series' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

International Value Equity Series- 3

Delaware VIP Trust — Delaware VIP International Value Equity Series
Country and Sector Allocations

As of December 31, 2006

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

Country	Percentage of Net Assets
Common Stock		98.05	%
Australia		5.76	%
Belgium		1.83	%
Canada		2.13	%
Denmark		2.00	%
Finland		4.13	%
France		15.49	%
Germany		4.91	%
Hong Kong		1.89	%
Japan		19.81	%
Mexico		3.82	%
Netherlands		4.77	%
Norway		0.76	%
Republic of Korea		1.96	%
Sweden		2.25	%
Switzerland		2.16	%
United Kingdom		24.38	%
Repurchase Agreements		1.07	%
Securities Lending Collateral		5.08	%
Fixed Rate Note		0.96	%
Variable Rate Notes		4.12	%
Total Market Value of Securities		104.20	%
Obligation to Return Securities Lending Collateral		(5.08	%)
Receivables and Other Assets Net of Liabilities		0.88	%
Total Net Assets		100.00	%
Sector	Percentage of Net Assets
Consumer Discretionary		21.63	%
Consumer Staples		5.41	%
Energy		4.30	%
Financials		21.00	%
Health Care		10.03	%
Industrials		10.57	%
Information Technology		11.29	%
Materials		5.70	%
Telecommunication Services		8.12	%
Total		98.05	%

International Value Equity Series-4

Delaware VIP Trust — Delaware VIP International Value Equity Series
Statement of Net Assets

December 31, 2006

	Number of Shares		Market Value (U.S. $)
COMMON STOCK–98.05%Æ
Australia–5.76%
Coca-Cola Amatil		643,391	$	3,933,445
Telstra		583,733		1,907,793
Telstra - Receipt		605,514		1,285,882
Westpac Banking		148,857		2,840,579
				9,967,699
Belgium–1.83%
Dexia		116,147		3,174,109
				3,174,109
Canada–2.13%
† CGI Class A		529,091		3,688,642
				3,688,642
Denmark–2.00%
Novo Nordisk Class B		41,556		3,460,410
				3,460,410
Finland–4.13%
Nokia		210,519		4,275,192
* TietoEnator		89,324		2,873,248
				7,148,440
France–15.49%
AXA		85,197		3,434,552
Compagnie de Saint-Gobain		45,736		3,832,443
Lafarge		24,775		3,682,838
* Lagardere		38,652		3,104,252
Publicis Groupe		87,000		3,664,891
Sanofi-Aventis		36,500		3,365,465
Total		79,434		5,716,103
				26,800,544
Germany–4.91%
Bayerische Motoren Werke		71,561		4,110,375
Metro		69,165		4,388,303
				8,498,678
Hong Kong–1.89%
Esprit Holdings		293,430		3,268,359
				3,268,359
Japan–19.81%
* Asahi Glass		297,000		3,559,238
Canon		72,281		4,069,432
* Don Quijote		214,000		4,085,136
* Fujitsu		422,000		3,306,571
Honda Motor		72,800		2,873,357
Mitsubishi UFJ Financial		235		2,915,363
Nissan Motor		268,800		3,243,530
NTT DoCoMo		2,163		3,422,581
Ono Pharmaceutical		67,100		3,539,949
Terumo		83,200		3,262,770
				34,277,927
Mexico–3.82%
Cemex S.A.B. ADR		92,598		3,132,590
Telefonos de Mexico ADR		123,116		3,476,796
				6,609,386
Netherlands–4.77%
ING Groep CVA		108,322		4,786,753
Koninklijke Philips Electronics		92,424		3,475,575
				8,262,328
Norway–0.76%
* Tandberg		87,637		1,314,760
				1,314,760

	Number of Shares		Market Value (U.S. $)
COMMON STOCK (continued)
Republic of Korea–1.96%
Kookmin Bank		42,225	$	3,394,979
				3,394,979
Sweden–2.25%
* Nordea Bank		253,611		3,899,017
				3,899,017
Switzerland–2.16%
Novartis		65,057		3,735,901
				3,735,901
United Kingdom–24.38%
		154,200		1,719,821
† British Airways		388,859		4,008,213
DSG International		445,322		1,662,854
Greggs		12,319		1,039,987
HBOS		144,429		3,196,230
Kesa Electricals		520,523		3,456,786
Rio Tinto		57,527		3,048,163
Royal & Sun Alliance Insurance Group		159,222		474,595
Royal Bank of Scotland		114,341		4,453,015
Standard Chartered		129,712		3,779,390
Tomkins		583,135		2,799,842
Travis Perkins		105,676		4,098,108
Vodafone		1,433,199		3,958,764
WPP Group		332,682		4,493,723
				42,189,491
Total Common Stock (cost $151,357,633)				169,690,670
	Principal Amount
REPURCHASE AGREEMENTS–1.07%
With BNP Paribas 4.80% 1/2/07 (dated 12/29/06, to be repurchased at $706,377, collateralized by $739,000 U.S. Treasury Bills due 6/28/07, market value $720,750)	$	706,000		706,000
With Cantor Fitzgerald 4.82% 1/2/07 (dated 12/29/06, to be repurchased at $848,454, collateralized by $73,000 U.S. Treasury Notes 4.00% due 6/15/09, market value $72,110, $454,000 U.S. Treasury Notes 6.125% due 8/15/07, market value $467,941 and $303,000 U.S. Treasury Notes 6.50% due 2/15/10, market value $325,835)		848,000		848,000
With UBS Warburg 4.75% 1/2/07 (dated 12/29/06, to be repurchased at $303,160, collateralized by $313,000 U.S. Treasury Bills due 3/29/07, market value $309,239)		303,000		303,000
Total Repurchase Agreements (cost $1,857,000)				1,857,000
Total Market Value of Securities Before Securities Lending Collateral–99.12% (cost $153,214,633)				171,547,670

International Value Equity Series- 5

Delaware VIP International Value Equity Series
Statement of Net Assets (continued)

	Principal Amount		Market Value (U.S. $)
SECURITIES LENDING COLLATERAL**–5.08%
Short-Term Investments–5.08%
Fixed Rate Note–0.96%
Citigroup Global Markets 5.32% 1/2/07	$	1,664,955	$	1,664,954
				1,664,954
• Variable Rate Notes–4.12%
American Honda Finance 5.32% 2/21/07		215,307		215,307
ANZ National 5.35% 1/29/08		47,846		47,846
Australia New Zealand 5.35% 1/29/08		239,230		239,230
Bank of America 5.32% 2/23/07		311,000		311,000
Bank of New York 5.34% 1/29/08		191,384		191,384
Barclays New York 5.31% 5/18/07		311,000		311,000
Bayerische Landesbank 5.40% 1/29/08		239,230		239,230
Bear Stearns 5.41% 6/29/07		287,076		287,076
BNP Paribas 5.35% 1/29/08		239,230		239,230
Canadian Imperial Bank 5.33% 1/29/09		167,461		167,461
CDC Financial Products 5.36% 1/29/07		311,000		311,000
Citigroup Global Markets 5.38% 1/5/07		311,000		311,000
Commonwealth Bank 5.35% 1/29/08		239,230		239,230
Deutsche Bank London 5.34% 2/23/07		287,076		287,076

	Principal Amount		Market Value (U.S. $)
SECURITY LENDING COLLATERAL (continued)
Short-Term Investments (continued)
• Variable Rate Notes (continued)
Dexia Bank 5.33% 9/28/07	$	334,921	$	334,873
Goldman Sachs 5.45% 12/28/07		311,000		311,000
Marshall & Ilsley Bank 5.33% 1/29/08		263,153		263,153
Merrill Lynch Mortgage Capital 5.41% 1/8/07		311,000		311,000
Morgan Stanley 5.49% 1/29/08		311,000		311,000
National Australia Bank 5.32% 3/7/07		296,645		296,645
National City Bank 5.32% 3/2/07		287,085		287,102
National Rural Utilities 5.34% 1/29/08		377,984		377,984
Nordea Bank New York 5.31% 5/16/07		119,614		119,612
Nordea Bank Norge 5.36% 1/29/08		239,230		239,230
Royal Bank of Scotland 5.34% 1/29/08		239,230		239,230
Societe Generale 5.32% 1/29/08		119,615		119,615
Toronto Dominion 5.32% 5/29/07		287,076		287,076
Wells Fargo 5.36% 1/29/08		239,230		239,230
				7,133,820
Total Securities Lending Collateral (cost $8,798,774)				8,798,774

International Value Equity Series- 6

Delaware VIP International Value Equity Series
Statement of Net Assets (continued)

TOTAL MARKET VALUE OF SECURITIES–104.20% (cost $162,013,407)	$	180,346,444	v
OBLIGATION TO RETURN SECURITIES LENDING COLLATERAL**–(5.08%)		(8,798,774	)
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES–0.88%		1,528,927
NET ASSETS APPLICABLE TO 7,491,657 SHARES OUTSTANDING–100.00%	$	173,076,597
NET ASSET VALUE–DELAWARE VIP INTERNATIONAL VALUE EQUITY SERIES STANDARD CLASS ($173,017,238 / 7,489,082 SHARES)	$	23.10
NET ASSET VALUE–DELAWARE VIP INTERNATIONAL VALUE EQUITY SERIES SERVICE CLASS ($59,359 / 2,575 SHARES)	$	23.05
COMPONENTS OF NET ASSETS AT DECEMBER 31, 2006:
Shares of beneficial interest (unlimited authorization–no par)	$	85,803,298
Undistributed net investment income		3,678,748
Accumulated net realized gain on investments		65,252,121
Net unrealized appreciation of investments and foreign currencies		18,342,430
Total net assets	$	173,076,597

  *  Fully or partially on loan.

  **  See Note 9 in "Notes to Financial Statements."

  †  Non-income producing security for the year ended December 31, 2006.

  •  Variable rate security. The interest rate shown is the rate as of December 31, 2006.

v  Includes $8,361,364 of securities loaned.

  Æ  Securities have been classified by country of origin. Classification by type of business has been presented on page 4 in "Country and Sector Allocations."

Summary of Abbreviations:

ADR – American Depositary Receipts

CVA – Dutch Certificate

GBP – British Pound Sterling

NOK – Norwegian Kroner

USD – United States Dollar

The following foreign currency exchange contracts were outstanding at December 31, 2006:

Foreign Currency Exchange Contracts¹

Contracts to Receive (Deliver)			In Exchange For			Settlement Date	Unrealized Appreciation (Depreciation)
GBP	(284,717	)	USD	558,074		1/02/07	$	490
GBP	445,099		USD	(872,439	)	1/02/07		(766	)
GBP	(261,956	)	USD	513,461		1/03/07		447
NOK	(994,993	)	USD	158,375		1/02/07		(1,218	)
NOK	(1,971,713	)	USD	313,882		1/03/07		(2,390	)
							$	(3,437	)

The use of foreign currency exchange contracts involves elements of market risk and risks in excess of the amount recognized in the financial statements. The notional amounts presented above represent the Series' total exposure in such contracts, whereas only the net unrealized appreciation (depreciation) is reflected in the Series' net assets.

¹See Note 8 in "Notes to Financial Statements."

See accompanying notes

International Value Equity Series- 7

Delaware VIP Trust —
Delaware VIP International Value Equity Series
Statement of Operations

Year Ended December 31, 2006

INVESTMENT INCOME:
Dividends	$	5,844,745
Interest		60,792
Securities lending income		120,169
Foreign tax withheld		(361,809	)
		5,663,897
EXPENSES:
Management fees		1,397,646
Custodian fees		80,843
Accounting and administration expenses		65,771
Trustees' fees and benefits		29,505
Audit and tax		17,707
Legal fees		17,246
Dividend disbursing and transfer agent fees and expenses		16,443
Reports and statements to shareholders		11,968
Insurance fees		6,178
Pricing fees		4,488
Consulting fees		4,135
Dues and services		2,216
Trustees' expenses		875
Taxes (other than taxes on income)		189
Distribution expenses - Service Class		177
Registration fees		49
		1,655,436
Less waiver of distribution expenses - Service Class		(30	)
Total operating expenses		1,655,406
NET INVESTMENT INCOME		4,008,491
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain on:
Investments		66,401,072
Foreign currencies		23,940
Net realized gain		66,425,012
Net change in unrealized appreciation/depreciation of investments and foreign currencies		(35,420,048	)
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCIES		31,004,964
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	35,013,455

See accompanying notes

Delaware VIP Trust —
Delaware VIP International Value Equity Series
Statements of Changes in Net Assets

	Year Ended
	12/31/06			12/31/05
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income	$	4,008,491		$	4,195,257
Net realized gain on investments and foreign currencies		66,425,012			9,604,540
Net change in unrealized appreciation/ depreciation of investments and foreign currencies		(35,420,048	)		5,525,580
Net increase in net assets resulting from operations		35,013,455			19,325,377
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Standard Class		(4,683,222	)		(2,493,989	)
Service Class		(1,608	)		(928	)
Net realized gain on investments:
Standard Class		(9,267,611	)		(1,825,497	)
Service Class		(3,444	)		(788	)
		(13,955,885	)		(4,321,202	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Standard Class		90,482,396			4,337,148
Service Class		336			3,501
Net asset value of shares issued upon reinvestment of dividends and distributions:
Standard Class		13,950,833			4,319,486
Service Class		5,052			1,716
		104,438,617			8,661,851
Cost of shares repurchased:
Standard Class		(113,759,501	)		(26,906,001	)
Service Class		(14,980	)		(44,213	)
		(113,774,481	)		(26,950,214	)
Decrease in net assets derived from capital share transactions		(9,335,864	)		(18,288,363	)
NET INCREASE (DECREASE) IN NET ASSETS		11,721,706			(3,284,188	)
NET ASSETS:
Beginning of year		161,354,891			164,639,079
End of year (including undistributed net investment income of $3,678,748 and $4,331,147, respectively)	$	173,076,597		$	161,354,891

See accompanying notes

International Value Equity Series- 8

Delaware VIP Trust — Delaware VIP International Value Equity Series
Financial Highlights

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

	Delaware VIP International Value Equity Series Standard Class
	Year Ended
	12/31/06			12/31/05			12/31/04			12/31/03			12/31/02
Net asset value, beginning of period	$	20.380		$	18.550		$	15.660		$	11.550		$	13.900
Income (loss) from investment operations:
Net investment income1		0.512			0.496			0.396			0.373			0.254
Net realized and unrealized gain (loss) on investments and foreign currencies		4.043			1.838			2.920			4.355			(1.556	)
Total from investment operations		4.555			2.334			3.316			4.728			(1.302	)
Less dividends and distributions from:
Net investment income		(0.616	)		(0.291	)		(0.426	)		(0.314	)		(0.284	)
Net realized gain on investments		(1.219	)		(0.213	)		—			(0.304	)		(0.764	)
Total dividends and distributions		(1.835	)		(0.504	)		(0.426	)		(0.618	)		(1.048	)
Net asset value, end of period	$	23.100		$	20.380		$	18.550		$	15.660		$	11.550
Total return2		23.59	%		12.87	%		21.79	%		43.44	%		(10.40	%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) $173,017	$	161,293		$	164,544		$	167,813		$	1			42,065
Ratio of expenses to average net assets		1.01	%		1.00	%		0.99	%		0.98	%		0.98	%
Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly		1.01	%		1.02	%		0.99	%		0.99	%		1.02	%
Ratio of net investment income to average net assets		2.44	%		2.63	%		2.46	%		2.96	%		1.99	%
Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly		2.44	%		2.61	%		2.46	%		2.95	%		1.95	%
Portfolio turnover		114	%		8	%		10	%		11	%		13	%

¹The average shares outstanding method has been applied for per share information.

²Total 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. Total investment return reflects waivers and payment of fees by the manager, as applicable. Performance would have been lower had the expense limitation not been in effect.

See accompanying notes

International Value Equity Series- 9

Delaware VIP International Value Equity Series
Financial Highlights (continued)

Selected data for each share of the Series outstanding throughout each period were as follows:
	Delaware VIP International Value Equity Series Service Class
	Year Ended
	12/31/06			12/31/05			12/31/04			12/31/03			12/31/02
Net asset value, beginning of period	$	20.350		$	18.520		$	15.650		$	11.550		$	13.900
Income (loss) from investment operations:
Net investment income1		0.459			0.449			0.356			0.345			0.236
Net realized and unrealized gain (loss) on investments and foreign currencies		4.029			1.845			2.911			4.355			(1.559	)
Total from investment operations		4.488			2.294			3.267			4.700			(1.323	)
Less dividends and distributions from:
Net investment income		(0.569	)		(0.251	)		(0.397	)		(0.296	)		(0.263	)
Net realized gain on investments		(1.219	)		(0.213	)		—			(0.304	)		(0.764	)
Total dividends and distributions		(1.788	)		(0.464	)		(0.397	)		(0.600	)		(1.027	)
Net asset value, end of period	$	23.050		$	20.350		$	18.520		$	15.650		$	11.550
Total return2		23.24	%		12.65	%		21.44	%		43.11	%		(10.54	%)
Ratios and supplemental data:
Net assets, end of period (000 omitted)	$	60		$	62		$	95		$	109		$	54
Ratio of expenses to average net assets		1.26	%		1.25	%		1.24	%		1.20	%		1.13	%
Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly		1.31	%		1.32	%		1.29	%		1.24	%		1.17	%
Ratio of net investment income to average net assets		2.19	%		2.38	%		2.21	%		2.74	%		1.84	%
Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly		2.14	%		2.31	%		2.16	%		2.70	%		1.80	%
Portfolio turnover		114	%		8	%		10	%		11	%		13	%

¹The average shares outstanding method has been applied for per share information.

²Total 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. Total investment return reflects waivers and payment of fees by the manager and distributor, as applicable. Performance would have been lower had the expense limitation and waiver not been in effect.

See accompanying notes

International Value Equity Series- 10

Delaware VIP Trust — Delaware VIP International Value Equity Series
Notes to Financial Statements

December 31, 2006

Delaware VIP Trust (the "Trust") is organized as a Delaware statutory trust and offers 15 series: Delaware VIP Balanced Series, Delaware VIP Capital Reserves Series, Delaware VIP Cash Reserve Series, Delaware VIP Diversified Income Series, Delaware VIP Emerging Markets Series, Delaware VIP Global Bond Series, Delaware VIP Growth Opportunities Series, Delaware VIP High Yield Series, Delaware VIP International Value Equity Series, Delaware VIP REIT Series, Delaware VIP Select Growth Series, Delaware VIP Small Cap Value Series, Delaware VIP Trend Series, Delaware VIP U.S. Growth Series and Delaware VIP Value Series. These financial statements and the related notes pertain to Delaware VIP International Value Equity Series (the "Series"). The Trust is an open-end investment company. The Series is considered diversified under the Investment Company Act of 1940, as amended, and offers Standard Class and Service Class shares. The Standard Class shar es do not carry a 12b-1 fee and the Service Class shares carry a 12b-1 fee. The shares of the Series are sold only to separate accounts of life insurance companies.

The investment objective of the Series is to seek long-term growth without undue risk to principal.

1. Significant Accounting Policies

The following accounting policies are in accordance with U.S. generally accepted accounting principles and are consistently followed by the Series.

Security Valuation—Equity securities, except those traded on the Nasdaq Stock Market, Inc. (Nasdaq), are valued at the last quoted sales price as of the time of the regular close of the New York Stock Exchange (NYSE) on the valuation date. Securities traded on the Nasdaq are valued in accordance with the Nasdaq Official Closing Price, which may not be the last sales price. If on a particular day an equity security does not trade, then the mean between the bid and asked prices will be used. Securities listed on a foreign exchange are valued at the last quoted sales price before the Series is valued. Short-term debt securities having less than 60 days to maturity are valued at amortized cost, which approximates market value. Securities lending collateral is valued at amortized cost, which approximates market value. Foreign currency exchange contracts are valued at the mean between the bid and asked prices of the contracts and are marked-to-market daily. Interpolated values are derived when the settlement date of the contract is an interim date for which quotations are not available. 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 the Series' Board of Trustees. 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 with respect to foreign securities, aftermarket trading, or significant events after local market trading (e.g., government actions or pronouncements, trading volume or volatility on markets, exchanges among dealers, or news events).

In September 2006, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 157 "Fair Value Measurements" (Statement 157). Statement 157 establishes a framework for measuring fair value in generally accepted accounting principles, clarifies the definition of fair value within that framework, and expands disclosures about the use of fair value measurements. Statement 157 is intended to increase consistency and comparability among fair value estimates used in financial reporting. Statement 157 is effective for fiscal years beginning after November 15, 2007. Management does not expect the adoption of Statement 157 to have an impact on the amounts reported in the financial statements.

Federal Income Taxes—The Series intends to continue to qualify for federal income tax purposes as a regulated investment company and make the requisite distributions to shareholders. Accordingly, no provision for federal income taxes has been made in the financial statements.

On July 13, 2006, FASB released FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Series' 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 would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. Recent SEC guidance allows implementing FIN 48 in Series net asset value calculations as late as the Series' last net asset value calculation in the first required fi nancial statement reporting period. As a result, the Series will incorporate FIN 48 in its semiannual report on June 30, 2007. Although the Series' tax positions are currently being evaluated, management does not expect the adoption of FIN 48 to have a material impact on the Series' financial statements.

Class Accounting—Investment income, common expenses and realized and unrealized gain (loss) on investments are allocated to the classes of the Series on the basis of daily net assets of each class. Distribution expenses relating to a specific class are charged directly to that class.

Repurchase Agreements—The Series may invest in a pooled cash account along with other members of the Delaware Investments^® Family of Funds pursuant to an exemptive order issued by the Securities and Exchange Commission. The aggregate daily balance of the pooled cash account is invested in repurchase agreements secured by obligations of the U.S. government. The respective collateral is held by the Series' custodian bank until the maturity of the respective repurchase agreements. Each repurchase agreement is at least 102% collateralized. However, in the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral may be subject to legal proceedings.

Foreign Currency Transactions—Transactions denominated in foreign currencies are recorded at the prevailing exchange rates on the valuation date. The value of all assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rate of such currencies against the U.S. dollar daily. Transaction gains or losses resulting from changes in exchange rates during the reporting period or upon settlement of the foreign currency transaction are reported in operations for the current period. The Series does not isolate that portion of realized gains and losses on investments which are due to changes in foreign exchange rates from that which are due to changes in market prices. The Series reports certain foreign currency related transactions as components of realized gains (losses) for financial reporting purposes, where such comp onents are treated as ordinary income (loss) for federal income tax purposes.

Use of Estimates—The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of 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.

International Value Equity Series- 11

Delaware VIP International Value Equity Series
Notes to Financial Statements (continued)

1. Significant Accounting Policies (continued)

Other—Expenses directly attributable to the Series are charged directly to the Series. 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. Dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis. Taxable non-cash dividends are recorded as dividend income. Foreign dividends are also recorded on the ex-dividend date or as soon after the ex-dividend date that the Series i s aware of such dividends, net of all non-rebatable tax withholdings. Withholding taxes on foreign dividends have been recorded in accordance with the Series' understanding of the applicable country's tax rules and rates.

The Series declares and pays dividends from net investment income and distributions from net realized gain on investments, if any, following the close of the fiscal year.

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

In accordance with the terms of its investment management agreement, the Series pays Delaware Management Company (DMC), a series of Delaware Management Business Trust and the investment manager, an annual fee which is calculated daily at the rate of 0.85% on the first $500 million of average daily net assets of the Series, 0.80% on the next $500 million, 0.75% on the next $1.5 billion, and 0.70% on average daily net assets in excess of $2.5 billion.

Prior to May 1, 2006, Mondrian Investment Partners Ltd. served as the Series' sub-advisor. For these services, DMC, not the Series, paid the Sub-Advisor 0.20% of the Series' average daily net assets. Beginning May 1, 2006, DMC is responsible for the day to day management of the Series.

DMC has contractually agreed to waive that portion, if any, of its management fee and reimburse the Series to the extent necessary to ensure that annual operating expenses, exclusive of taxes, interest, brokerage commissions, distribution fees, certain insurance costs and extraordinary expenses, do not exceed 1.08% of average daily net assets of the Series through April 30, 2007. Prior to May 1, 2006, the expense limitation was 1.00% of average daily net assets. No reimbursement was due for the year ended December 31, 2006.

Delaware Service Company, Inc. (DSC), an affiliate of DMC, provides accounting, administration, dividend disbursing and transfer agent services. The Series pays DSC a monthly fee computed at the annual rate of 0.04% of the Series' average daily net assets for accounting and administrative services. The Series pays DSC a monthly fee based on average net assets for dividend disbursing and transfer agent services.

Pursuant to a distribution agreement and distribution plan, the Series pays Delaware Distributors, L.P. (DDLP), the distributor and an affiliate of DMC, an annual distribution and service fee not to exceed 0.30% of the average daily net assets of the Service Class shares. DDLP has contracted to waive distribution and service fees through April 30, 2007 in order to prevent distribution and service fees of the Service Class shares from exceeding 0.25% of average daily net assets. Standard Class shares pay no distribution and service expenses.

At December 31, 2006, the Series had liabilities payable to affiliates as follows:

Investment Management Fee Payable to DMC		Dividend Disbursing, Transfer Agent, Accounting and Administration Fees and Other Expenses Payable to DSC		Distribution Fees Payable to DDLP		Other Expenses Payable to Affiliates*
$	123,778	$	8,113	$	13	$	6,504

*DMC, as part of its administrative services, pays operating expenses on behalf of the Series and is reimbursed on a periodic basis. Such expenses include items such as printing of shareholder reports, fees for audit, legal and tax services, custodian fees and trustees' fees.

As provided in the investment management agreement, the Series bears the cost of certain legal and tax services, including internal legal and tax services provided to the Series by DMC and/or its affiliates' employees. For the year ended December 31, 2006, the Series was charged $7,810 for internal legal and tax services provided by DMC and/or its affiliates' employees.

Trustees' fees and benefits include expenses accrued by the Series for each Trustee's retainer, per meeting fees and retirement benefits. Independent Trustees with over five years of uninterrupted service are eligible to participate in a retirement plan that provides for the payment of benefits upon retirement. The amount of the retirement benefit is based on factors set forth in the plan, including the number of years of service. On November 16, 2006, the Board of Trustees unanimously voted to terminate the retirement plan. Payments equal to the net present value of the earned benefits will be made in 2007 to those independent trustees so entitled. The retirement benefit payout for the Series is $20,374. Certain officers of DMC, DSC and DDLP are officers and/or trustees of the Trust. These officers and trustees are paid no compensation by the Series.

International Value Equity Series- 12

Delaware VIP International Value Equity Series
Notes to Financial Statements (continued)

3. Investments

For the year ended December 31, 2006, the Series made purchases and sales of investment securities other than short-term investments as follows:

Purchases	$	185,501,299
Sales		206,300,060

At December 31, 2006, the cost of investments for federal income tax purposes and unrealized appreciation (depreciation) for the Series were as follows:

Cost of Investments		Aggregate Unrealized Appreciation		Aggregate Unrealized Depreciation			Net Unrealized Appreciation
$	162,453,973	$	23,044,828	$	(5,152,357	)	$	17,892,471

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. generally accepted accounting principles. Additionally, gains (losses) on foreign currency transactions and 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 December 31, 2006 and 2005 was as follows:

	Year Ended 12/31/06		Year Ended 12/31/05
Ordinary income	$	4,773,624	$	2,563,510
Long-term capital gain		9,182,261		1,757,692
Total	$	13,955,885	$	4,321,202

5. Components of Net Assets on a Tax Basis

As of December 31, 2006, the components of net assets on a tax basis were as follows:

Shares of beneficial interest	$	85,803,298
Undistributed ordinary income		4,884,050
Undistributed long-term capital gain		64,502,538
Post-October currency losses		(18,590	)
Unrealized appreciation of investments
and foreign currencies		17,905,301
Net assets	$	173,076,597

The differences between book basis and tax basis components of net assets are primarily attributable to tax deferral of losses on wash sales and mark to market of foreign currency contracts.

Post-October currency losses represent losses realized on foreign currency transactions from November 1, 2006 through December 31, 2006 that, in accordance with federal income tax regulations, the Series has elected to defer and treat as having arisen in the following fiscal year.

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 gain (loss) on foreign currency transactions. Results of operations and net assets were not affected by these reclassifications. For the year ended December 31, 2006, the Series recorded the following reclassifications:

Undistributed Net Investment Income		Accumulated Net Realized Gain (Loss)
$	23,940	$	(23,940	)

International Value Equity Series- 13

Delaware VIP International Value Equity Series
Notes to Financial Statements (continued)

6. Capital Shares

Transactions in capital shares were as follows:

	Year Ended 12/31/06			Year Ended 12/31/05
Shares sold:
Standard Class		4,684,879			233,387
Service Class		15			191
Shares issued upon reinvestment of dividends and distributions:
Standard Class		686,895			234,882
Service Class		249			93
		5,372,038			468,553
Shares repurchased:
Standard Class		(5,796,253	)		(1,425,475	)
Service Class		(712	)		(2,381	)
		(5,796,965	)		(1,427,856	)
Net decrease		(424,927	)		(959,303	)

7. Line of Credit

The Series, along with certain other funds in the Delaware Investments^® Family of Funds (the "Participants"), participates in a $225,000,000 revolving line of credit facility to be used for temporary or emergency purposes as an additional source of liquidity to fund redemptions of investor shares. The Participants are charged an annual commitment fee, which is allocated across the Participants on the basis of each Participant's allocation of the entire facility. The Participants may borrow up to a maximum of one third of their net assets under the agreement. The Series had no amounts outstanding as of December 31, 2006, or at any time during the year then ended.

8. Foreign Currency Exchange Contracts

The Series may enter into foreign currency exchange contracts as a way of managing foreign exchange rate risk. The Series may enter into these contracts to fix the U.S. dollar value of a security that it has agreed to buy or sell for the period between the date the trade was entered into and the date the security is delivered and paid for. The Series may also use these contracts to hedge the U.S. dollar value of securities it already owns that are denominated in foreign currencies. The change in market value is recorded as an unrealized gain or loss. When the contract is closed, a realized gain or loss is recorded equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.

The use of foreign currency exchange contracts does not eliminate fluctuations in the underlying prices of the securities, but does establish a rate of exchange that can be achieved in the future. Although foreign currency exchange contracts limit the risk of loss due to a decline in the value of the hedged currency, they also limit any potential gain that might result should the value of the currency increase. In addition, the Series could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts. The unrealized gain (loss) is included in receivables and other assets net of liabilities on the Statement of Net Assets.

9. Securities Lending

The Series, along with other funds in the Delaware Investments^® Family of Funds, may lend its securities pursuant to a security lending agreement (Lending Agreement) with JPMorgan Chase. Initial security loans made pursuant to the Lending Agreement are required to be secured by U.S. government obligations and/or cash collateral not less than 102% of the market value of securities issued in the United States and 105% of the market value of the securities issued outside the United States. With respect to each loan, if the aggregate market value of the collateral held on any business day is less than the aggregate market value of the securities which are the subject of such loan, the borrower will be notified to provide additional collateral not less than the applicable collateral requirements. Cash collateral received is invested in fixed income securities, with a weighted average maturity not to exceed 90 days, rated in one of the top two tiers by Standard & Poor's Ratings Group or Moody's Investors Service, Inc. or repurchase agreements collateralized by such securities. However, in the event of default or bankruptcy by the lending agent, realization and/or retention of the collateral may be subject to legal proceedings. In the event the borrower fails to return loaned securities and the collateral received is insufficient to cover the value of the loaned securities and provided such collateral shortfall is not the result of investment losses, the lending agent has agreed to pay the amount of the shortfall to the Series, or at the discretion of the lending agent, replace the loaned securities. The Series continues to record dividends on the securities loaned and is subject to change in value of the securities loaned that may occur during the term of the loan. The Series has the right under the Lending Agreement to recover the securities from the borrower on demand. The security lending agent and the borrower retain a portion of the earnings from the collateral investments. The Series records security lending income net of such allocation.

At December 31, 2006, the market value of securities on loan was $8,361,364, for which cash collateral was received and invested in accordance with the Lending Agreement. Such investments are presented on the Statement of Net Assets under the caption "Securities Lending Collateral."

International Value Equity Series-14

Delaware VIP International Value Equity Series
Notes to Financial Statements (continued)

10. Credit and Market Risk

Some countries in which the Series may invest require governmental approval for the repatriation of investment income, capital or the proceeds of sales of securities by foreign investors. In addition, if there is deterioration in a country's balance of payments or for other reasons, a country may impose temporary restrictions on foreign capital remittances abroad.

The securities exchanges of certain foreign markets are substantially smaller, less liquid, and more volatile than the major securities markets in the United States. Consequently, acquisition and disposition of securities by the Series may be inhibited. In addition, a significant portion of the aggregate market value of equity securities listed on the major securities exchanges in emerging markets are held by a smaller number of investors. This may limit the number of shares available for acquisition or disposition by the Series.

The Series may invest up to 10% of its total 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 the Series 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, the Series' Board of Trustees has delegated to DMC the day-to-day functions of determining whether individual securities are liquid for purposes of the Series' limitation on investments in illiquid assets. At December 31, 2006, there were no Rule 144A securities and no securities have been determined to be illiquid under the Series' Liquidity Procedures.

11. Contractual Obligations

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

12. Tax Information (Unaudited)

For the fiscal year ended December 31, 2006, the Series designates dividends and distributions paid during the year as follows:

(A) Long-Term Capital Gain Distributions (Tax Basis)			(B) Ordinary Income Distributions (Tax Basis)			Total Distributions (Tax Basis)
	66	%		34	%		100	%

(A) and (B) are based on a percentage of the Series' total distributions.

The Delaware VIP International Value Equity Series intends to pass through foreign tax credits in the maximum amount of $246,256. The gross foreign source income earned during the fiscal year 2006 by the Delaware VIP International Value Equity Series was $5,844,855.

International Value Equity Series- 15

Delaware VIP Trust — Delaware VIP International Value Equity Series
Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees

Delaware VIP Trust–Delaware VIP International Value Equity Series

We have audited the accompanying statement of net assets of the Delaware VIP International Value Equity Series (one of the series constituting Delaware VIP Trust) (the "Series") as of December 31, 2006, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Series' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits 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 and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Series' internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Series' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant es timates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2006, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Delaware VIP International Value Equity Series of Delaware VIP Trust at December 31, 2006, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

  

Philadelphia, Pennsylvania

February 14, 2007

The Series files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Series' Forms N-Q, as well as a description of the policies and procedures that the Series uses to determine how to vote proxies (if any) relating to portfolio securities is available without charge (i) upon request, by calling 800-523-1918; (ii) on the Series' website at http://www.delawareinvestments.com; and (iii) on the Commission's website at http://www.sec.gov. The Series' Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Information (if any) regarding how the Series voted proxies relating to portfolio securities during the most recently disclosed 12-month period ended June 30 is available without charge (i) through the Series' website at http://www.delawareinvestments.com; and (ii) on the Commission's website at http://www.sec.gov.

International Value Equity Series- 16

Delaware Investments® Family of Funds

board of trustees/directors and officers addendum

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 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.

Name, Address, and Birth Date	Position(s) Held with Fund(s)	Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee or Officer		Other Directorships Held by Trustee or Officer
interested trustees
Patrick P. Coyne1 2005 Market Street Philadelphia, PA 19103 April 14, 1963	Chairman, President, Chief Executive Officer, and Trustee	Chairman and Trustee since August 16, 2006 President and Chief Executive Officer since August 1, 2006	Patrick P. Coyne has served in various executive capacities at different times at Delaware Investments.2		84	None
independent trustees
Thomas L. Bennett 2005 Market Street Philadelphia, PA 19103 October 4, 1947	Trustee	Since March 2005	Private Investor – (March 2004 – Present) Investment Manager – Morgan Stanley & Co. (January 1984 – March 2004)		84	None
John A. Fry 2005 Market Street Philadelphia, PA 19103 May 28, 1960	Trustee	Since January 2001	President – Franklin & Marshall College (June 2002 – Present) Executive Vice President – University of Pennsylvania (April 1995 – June 2002)		84	Director – Community Health Systems Director – Allied Barton Security Holdings
Anthony D. Knerr 2005 Market Street Philadelphia, PA 19103 December 7, 1938	Trustee	Since April 1990	Founder and Managing Director – Anthony Knerr & Associates (Strategic Consulting) (1990 – Present)		84	None
Lucinda S. Landreth 2005 Market Street Philadelphia, PA 19103 June 24, 1947	Trustee	Since March 2005	Chief Investment Officer – Assurant, Inc. (Insurance) (2002 – 2004)		84	None
Ann R. Leven 2005 Market Street Philadelphia, PA 19103 November 1, 1940	Trustee	Since September 1989	Consultant – ARL Associates (Financial Planning) (1983 – Present)		84	Director and Audit Committee Chairperson – Andy Warhol Foundation Director and Audit Committee Member – Systemax, Inc.

International Value Equity Series- 17

Name, Address, and Birth Date	Position(s) Held with Fund(s)	Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee or Officer		Other Directorships Held by Trustee or Officer
independent trustees (continued)
Thomas F. Madison 2005 Market Street Philadelphia, PA 19103 February 25, 1936	Trustee	Since May 1997	President and Chief Executive Officer – MLM Partners, Inc. (Small Business Investing and Consulting) (January 1993 – Present)		84	Director – Banner Health Director – CenterPoint Energy Director and Audit Committee Member – Digital River, Inc. Director and Audit Committee Member – Rimage Corporation Director – Valmont Industries, Inc.
Janet L. Yeomans 2005 Market Street Philadelphia, PA 19103 July 31, 1948	Trustee	Since April 1999	Vice President (January 2003 – Present) and Treasurer (January 2006 – Present) 3M Corporation Ms. Yeomans has held various management positions at 3M Corporation since 1983.		84	None
J. Richard Zecher 2005 Market Street Philadelphia, PA 19103 July 3, 1940	Trustee	Since March 2005	Founder – Investor Analytics (Risk Management) (May 1999 – Present) Founder – Sutton Asset Management (Hedge Fund) (September 1998 – Present)		84	Director and Audit Committee Member – Investor Analytics Director and Audit Committee Member – Oxigene, Inc.
officers
David F. Connor 2005 Market Street Philadelphia, PA 19103 December 2, 1963	Vice President, Deputy General Counsel, and Secretary	Vice President since September 21, 2000 and Secretary since October 2005	David F. Connor has served as Vice President and Deputy General Counsel of Delaware Investments since 2000.		84	None3
David P. O'Connor 2005 Market Street Philadelphia, PA 19103 February 21, 1966	Senior Vice President, General Counsel, and Chief Legal Officer	Senior Vice President, General Counsel, and Chief Legal Officer since October 2005	David P. O'Connor has served in various executive and legal capacities at different times at Delaware Investments.		84	None3
John J. O'Connor 2005 Market Street Philadelphia, PA 19103 June 16, 1957	Senior Vice President and Treasurer	Treasurer since February 2005	John J. O'Connor has served in various executive capacities at different times at Delaware Investments.		84	None3
Richard Salus 2005 Market Street Philadelphia, PA 19103 October 4, 1963	Senior Vice President and Chief Financial Officer	Chief Financial Officer since November 1, 2006	Richard Salus has served in various executive capacities at different times at Delaware Investments.		84	None3

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

² Delaware 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.

³ David F. Connor, David P. O'Connor, John J. 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. John J. O'Connor also serves in a similar capacity for Lincoln Variable Insurance Products Trust, which has the same investment advisor as the registrant.

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.

International Value Equity Series- 18

Delaware VIP Trust — Delaware VIP REIT Series

For the 12-month period ended Dec. 31, 2006, the Delaware VIP REIT Series showed a positive return of 32.63% for Standard Class shares with distributions reinvested, as Service Class shares gained 32.32% with distributions reinvested. The Series benchmark, the NAREIT Equity REIT Index, gained 35.06% (source: Lipper).

Although performance of real estate investment trusts (REITs) has been robust over several years, we continued to exercise caution during the period, emphasizing companies with strong or improving fundamentals and attractive valuations. We held overweight positions in several key areas, such as economically sensitive holdings like industrial REITs, which generally benefit from steady growth of gross domestic product (GDP). We were also more heavily weighted than the benchmark index in REITs with exposure to office property markets. In urban markets, certain office stocks benefited during the year as increased demand drove rental rates higher. Multi-family apartment REITs were also strong performers in the index during the period, also fueled by strong rent growth.

An example of significant growth from another category is Entertainment Properties Trust, which owns megaplex movie theatre properties, entertainment retail centers, and other specialty properties in urban areas.

The largest negative impact on performance was the Series exposure to mortgage REITs during the first half of the fiscal year. A poor performer was Education Realty Trust, a position that we sold in favor of other opportunities. Mills Corp. and American Financial Realty Trust were also among the negative contributors sold before fiscal year end to make room for more favorable opportunities.

The views expressed are current as of the date of this report and are subject to change.

The performance data quoted below and on the next page represent past performance; past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please obtain the performance data for the most recent month end by calling the number noted on the page related to this Series in the introductory section of this report.

You should consider the investment objectives, risks, charges, and expenses of the investment carefully before investing. The Delaware VIP REIT Series prospectus contains this and other important information about the Series. To obtain a prospectus, contact the company noted on the page related to this Series in the introductory section of this report, either by phone or through the company Web site. We advise you to read the prospectus carefully before you invest.

Instances of high double-digit returns are unusual, cannot be sustained, and were achieved primarily during favorable market conditions.

Delaware VIP REIT Series Average Annual Total Returns For the periods ending Dec. 31, 2006	1 Year			5 Years			Lifetime
Standard Class Shares*		+32.63	%		+21.21	%		+14.81	%
Service Class Shares**		+32.32	%		+20.94	%		+20.01	%

  *  Commenced operations on May 4, 1998

  **  Commenced operations on May 1, 2000

REIT Series- 1

Delaware VIP Trust — Delaware VIP REIT Series (continued)

The chart shows a $10,000 investment in the Delaware VIP REIT Series Standard Class shares for the period from the Series' inception May 4, 1998 through Dec. 31, 2006. All distributions were reinvested. The chart also shows a $10,000 investment in the NAREIT Equity REIT Index for the period from May 31, 1998 through Dec. 31, 2006.

The NAREIT Equity REIT Index is an unmanaged index of real estate investment trusts that invest in many types of U.S. property. An index does not reflect the costs of operating a mutual fund, such as the costs of buying, selling, and holding securities. You cannot invest directly in an index.

Earnings from a variable annuity or variable life investment compound tax free until withdrawal, so no adjustments were made for income taxes.

An expense limitation was in effect for the Delaware VIP REIT Series during the periods shown.

Performance of Service Class shares will vary due to different charges and expenses.

Performance does not reflect insurance fees related to a variable annuity or variable life investment or the deferred sales charge that would apply to certain withdrawals of investments held for fewer than eight years. Performance shown here would have been reduced if such fees were included and the expense limitation was removed. For more information about fees, consult your variable annuity or variable life prospectus.

Investments in variable products involve risk. Series that invest in REITs are subject to many of the risks associated with direct real estate ownership and, as such, may be adversely affected by declines in real estate values, and general and local economic conditions. Series that invest a significant portion of their assets in one industry or in related industries may involve greater risks than more diversified series, including greater potential for volatility. Some portfolios offer more risk than others. Please read both the contract and underlying prospectus for specific details regarding the product's risk profile.

REIT Series- 2

Delaware VIP Trust — Delaware VIP REIT Series
Disclosure of Series Expenses

For the Period July 1, 2006 to December 31, 2006

As a shareholder of the Series, you incur ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Series expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Series and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2006 to December 31, 2006.

Actual Expenses

The first section of the table shown, "Actual Series 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 the period.

Hypothetical Example for Comparison Purposes

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

Please note that the expenses shown in the table are meant to highlight your ongoing costs only. As a shareholder of the Series, you do not incur any transaction costs, such as sales charges (loads), redemption fees or exchange fees, but shareholders of other funds may incur such costs. Also, the fees related to the variable annuity investment or the deferred sales charge that could apply have not been included. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. The Series' actual expenses shown in the table reflect fee waivers in effect for Service Class shares. The expenses shown in the table assume reinvestment of all dividends and distributions.

Expense Analysis of an Investment of $1,000

	Beginning Account Value 7/1/06		Ending Account Value 12/31/06		Annualized Expense Ratios			Expenses Paid During Period 7/1/06 to 12/31/06*
Actual Series Return
Standard Class	$	1,000.00	$	1,196.20		0.85	%	$	4.71
Service Class		1,000.00		1,194.80		1.10	%		6.09
Hypothetical 5% Return (5% return before expenses)
Standard Class	$	1,000.00	$	1,020.92		0.85	%	$	4.33
Service Class		1,000.00		1,019.66		1.10	%		5.60

*"Expenses Paid During Period" are equal to the Series' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

REIT Series- 3

Delaware VIP Trust — Delaware VIP REIT Series
Sector Allocation and Top 10 Holdings

As of December 31, 2006

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

Sector	Percentage of Net Assets
Common Stock		97.84	%
Diversified REITs		7.21	%
Health Care REITs		5.65	%
Hotel REITs		6.07	%
Industrial REITs		7.02	%
Mall REITs		14.41	%
Manufactured Housing REITs		0.89	%
Multifamily REITs		16.71	%
Office REITs		18.01	%
Office/Industrial REITs		1.20	%
Real Estate Operating Companies		4.04	%
Self-Storage REITs		4.17	%
Shopping Center REITs		11.81	%
Specialty REITs		0.65	%
Repurchase Agreements		2.05	%
Total Market Value of Securities		99.89	%
Receivables and Other Assets Net of Liabilities		0.11	%
Total Net Assets		100.00	%

Holdings are for informational purposes only and are subject to change at any time. They are not a recommendation to buy, sell, or hold any security.

Top 10 Holdings	Percentage of Net Assets
Simon Property Group		7.35	%
Vornado Realty Trust		5.60	%
Boston Properties		4.73	%
ProLogis		4.40	%
Host Hotels & Resorts		4.32	%
Equity Office Properties Trust		4.21	%
Public Storage		4.17	%
Archstone-Smith Trust		3.99	%
AvalonBay Communities		3.75	%
General Growth Properties		3.66	%

REIT Series-4

Delaware VIP Trust — Delaware VIP REIT Series
Statement of Net Assets

December 31, 2006

	Number of Shares		Market Value
COMMON STOCK–97.84%
Diversified REITs–7.21%
Spirit Finance		404,500	$	5,044,115
Vornado Realty Trust		455,101		55,294,772
Washington Real Estate Investment Trust		271,300		10,852,000
				71,190,887
Health Care REITs–5.65%
Health Care Property Investors		549,100		20,217,862
Senior Housing Properties Trust		241,900		5,921,712
Ventas		700,500		29,645,160
				55,784,734
Hotel REITs–6.07%
Hersha Hospitality Trust		848,190		9,618,475
Host Hotels & Resorts		1,738,796		42,687,441
Marriott International Class A		159,400		7,606,568
				59,912,484
Industrial REITs–7.02%
AMB Property		276,455		16,203,028
First Potomac Realty Trust		331,247		9,642,600
ProLogis		715,293		43,468,355
				69,313,983
Mall REITs–14.41%
General Growth Properties		690,946		36,088,110
Macerich		388,200		33,606,474
Simon Property Group		716,899		72,614,699
				142,309,283
Manufactured Housing REITs–0.89%
Equity Lifestyle Properties		162,200		8,828,546
				8,828,546
Multifamily REITs–16.71%
American Campus Communities		188,700		5,372,289
Apartment Investment & Management		121,100		6,784,022
Archstone-Smith Trust		676,500		39,379,065
AvalonBay Communities		284,474		36,995,844
BRE Properties		315,600		20,520,312
Camden Property Trust		215,174		15,890,600
Equity Residential		654,000		33,190,500
Essex Property Trust		52,808		6,825,434
				164,958,066
Office REITs–18.01%
Alexandria Real Estate Equities		145,496		14,607,798
Boston Properties		417,400		46,698,713
Brandywine Realty Trust		375,700		12,492,025
Douglas Emmett		276,800		7,360,112
Equity Office Properties Trust		863,600		41,599,612
Highwoods Properties		301,600		12,293,216
Mack-Cali Realty		155,300		7,920,300
Maguire Properties		77,500		3,100,000
SL Green Realty		238,637		31,686,221
				177,757,997
Office/Industrial REITs–1.20%
Liberty Property Trust		134,900		6,628,986
PS Business Parks		73,700		5,211,327
				11,840,313

	Number of Shares		Market Value
COMMON STOCK (continued)
Real Estate Operating Companies–4.04%
Brookfield Properties		397,100	$	15,617,943
Starwood Hotels & Resorts Worldwide		388,550		24,284,375
				39,902,318
Self-Storage REITs–4.17%
Public Storage		422,500		41,193,750
				41,193,750
Shopping Center REITs–11.81%
Developers Diversified Realty		155,778		9,806,225
Federal Realty Investment Trust		249,189		21,181,065
Kimco Realty		692,100		31,109,894
Kite Realty Group Trust		686,096		12,775,108
New Plan Excel Realty Trust		567,000		15,581,160
Regency Centers		334,439		26,143,097
				116,596,549
Specialty REITs–0.65%
Entertainment Properties Trust		108,900		6,364,116
				6,364,116
Total Common Stock (cost $789,468,479)				965,953,026
	Principal Amount
REPURCHASE AGREEMENTS–2.05%
With BNP Paribas 4.80% 1/2/07 (dated 12/29/06, to be repurchased at $7,688,098, collateralized by $8,039,000 U.S. Treasury Bills due 6/28/07, market value $7,845,583)	$	7,684,000		7,684,000
With Cantor Fitzgerald 4.82% 1/2/07 (dated 12/29/06, to be repurchased at $9,237,945, collateralized by $796,000 U.S. Treasury Notes 4.00% due 6/15/09, market value $784,937, $4,946,000 U.S. Treasury Notes 6.125% due 8/15/07, market value $5,093,682 and $3,297,000 U.S. Treasury Notes 6.50% due 2/15/10, market value $3,546,810)		9,233,000		9,233,000
With UBS Warburg 4.75% 1/2/07 (dated 12/29/06, to be repurchased at $3,298,740, collateralized by $3,406,000 U.S. Treasury Bills due 3/29/07, market value $3,366,159)		3,297,000		3,297,000
Total Repurchase Agreements (cost $20,214,000)				20,214,000

REIT Series-5

Delaware VIP REIT Series
Statement of Net Assets (continued)

TOTAL MARKET VALUE OF SECURITIES–99.89% (cost $809,682,479)	$	986,167,026
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES–0.11%		1,121,931
NET ASSETS APPLICABLE TO 43,216,318 SHARES OUTSTANDING – 100.00%	$	987,288,957
NET ASSET VALUE–DELAWARE VIP REIT SERIES STANDARD CLASS ($672,738,260 / 29,429,468 Shares)	$	22.86
NET ASSET VALUE–DELAWARE VIP REIT SERIES SERVICE CLASS ($314,550,697 / 13,786,850 Shares)	$	22.82

COMPONENTS OF NET ASSETS AT DECEMBER 31, 2006:

Shares of beneficial interest (unlimited authorization–no par)	$	599,527,229
Undistributed net investment income		15,460,663
Accumulated net realized gain on investments		195,816,518
Net unrealized appreciation of investments		176,484,547
Total net assets	$	987,288,957

REIT – Real Estate Investment Trust

See accompanying notes

REIT Series-6

Delaware VIP Trust — Delaware VIP REIT Series

Statement of Operations

Year Ended December 31, 2006

INVESTMENT INCOME:
Dividends	$	21,430,536
Interest		1,913,814
Foreign Tax Withheld		(7,162	)
		23,337,188
EXPENSES:
Management fees		6,259,545
Distribution expenses – Service Class		747,412
Accounting and administration expenses		343,403
Reports and statements to shareholders		183,542
Trustees' fees and benefits		153,518
Legal fees		91,760
Dividend disbursing and transfer agent fees and expenses		85,851
Audit and tax		47,921
Insurance fees		30,052
Custodian fees		26,123
Consulting fees		25,785
Dues and services		5,689
Taxes (other than taxes on income)		4,120
Trustees' expenses		2,504
Pricing fees		419
		8,007,644
Less waiver of distribution expenses – Service Class		(124,569	)
Less expense paid indirectly		(6,550	)
Total operating expenses		7,876,525
NET INVESTMENT INCOME		15,460,663
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments		195,940,779
Net change in unrealized appreciation/depreciation of investments		30,768,216
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS		226,708,995
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	242,169,658

See accompanying notes

Delaware VIP Trust — Delaware VIP REIT Series
Statements of Changes in Net Assets

	Year Ended
	12/31/06			12/31/05
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income	$	15,460,663		$	22,994,249
Net realized gain on investments		195,940,779			52,767,407
Net change in unrealized appreciation/ depreciation of investments		30,768,216			(21,990,619	)
Net increase in net assets resulting from operations		242,169,658			53,771,037
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Standard Class		(13,253,838	)		(11,911,298	)
Service Class		(3,839,355	)		(2,802,570	)
Net realized gain on investments:
Standard Class		(44,190,646	)		(36,097,851	)
Service Class		(14,446,942	)		(9,584,965	)
		(75,730,781	)		(60,396,684	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Standard Class		141,651,178			111,459,280
Service Class		86,531,629			63,929,983
Net asset value of shares issued upon reinvestment of dividends and distributions:
Standard Class		57,444,484			48,009,149
Service Class		18,286,297			12,387,535
		303,913,588			235,785,947
Cost of shares repurchased:
Standard Class		(278,178,009	)		(139,035,302	)
Service Class		(44,657,293	)		(35,552,569	)
		(322,835,302	)		(174,587,871	)
Increase (decrease) in net assets derived from capital share transactions		(18,921,714	)		61,198,076
NET INCREASE IN NET ASSETS		147,517,163			54,572,429
NET ASSETS:
Beginning of year		839,771,794			785,199,365
End of year (including undistributed net investment income of $15,460,663 and $31,025,294, respectively)	$	987,288,957		$	839,771,794

See accompanying notes

REIT Series- 7

Delaware VIP Trust — Delaware VIP REIT Series
Financial Highlights

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

	Delaware VIP REIT Series Standard Class
	Year Ended
	12/31/06			12/31/05			12/31/04			12/31/03			12/31/02
Net asset value, beginning of period	$	18.770		$	19.080		$	15.140		$	11.730		$	11.700
Income from investment operations:
Net investment income1		0.378			0.523			0.504			0.586			0.534
Net realized and unrealized gain on investments		5.424			0.618			4.112			3.271			0.010
Total from investment operations		5.802			1.141			4.616			3.857			0.544
Less dividends and distributions from:
Net investment income		(0.395	)		(0.360	)		(0.332	)		(0.342	)		(0.317	)
Net realized gain on investments		(1.317	)		(1.091	)		(0.344	)		(0.105	)		(0.197	)
Total dividends and distributions		(1.712	)		(1.451	)		(0.676	)		(0.447	)		(0.514	)
Net asset value, end of period	$	22.860		$	18.770		$	19.080		$	15.140		$	11.730
Total return2		32.63	%		7.17	%		31.38	%		34.02	%		4.52	%
Ratios and supplemental data:
Net assets, end of period (000 omitted)	$	672,738		$	637,889		$	624,223		$	359,958		$	225,826
Ratio of expenses to average net assets		0.84	%		0.85	%		0.84	%		0.86	%		0.84	%
Ratio of net investment income to average net assets		1.87	%		2.89	%		3.11	%		4.51	%		4.52	%
Portfolio turnover		100	%		42	%		38	%		37	%		53	%

¹The average shares outstanding method has been applied for per share information.

²Total 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.

See accompanying notes

REIT Series-8

Delaware VIP REIT Series
Financial Highlights (continued)

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

	Delaware VIP REIT Series Service Class
	Year Ended
	12/31/06			12/31/05			12/31/04			12/31/03			12/31/02
Net asset value, beginning of period	$	18.740		$	19.050		$	15.130		$	11.720		$	11.700
Income from investment operations:
Net investment income1		0.327			0.478			0.464			0.556			0.517
Net realized and unrealized gain on investments		5.420			0.622			4.102			3.283			–
Total from investment operations		5.747			1.100			4.566			3.839			0.517
Less dividends and distributions from:
Net investment income		(0.350	)		(0.319	)		(0.302	)		(0.324	)		(0.300	)
Net realized gain on investments		(1.317	)		(1.091	)		(0.344	)		(0.105	)		(0.197	)
Total dividends and distributions		(1.667	)		(1.410	)		(0.646	)		(0.429	)		(0.497	)
Net asset value, end of period	$	22.820		$	18.740		$	19.050		$	15.130		$	11.720
Total return2		32.32	%		6.86	%		31.09	%		33.73	%		4.38	%
Ratios and supplemental data:
Net assets, end of period (000 omitted)	$	314,551		$	201,883		$	160,976		$	68,276		$	28,152
Ratio of expenses to average net assets		1.09	%		1.10	%		1.09	%		1.08	%		0.99	%
Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly		1.14	%		1.15	%		1.14	%		1.11	%		0.99	%
Ratio of net investment income to average net assets		1.62	%		2.64	%		2.86	%		4.29	%		4.37	%
Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly		1.57	%		2.59	%		2.81	%		4.26	%		4.37	%
Portfolio turnover		100	%		42	%		38	%		37	%		53	%

¹The average shares outstanding method has been applied for per share information.

²Total 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. Total investment return reflects waivers and payment of fees by the distributor, as applicable. Performance would have been lower had the expense limitation and waiver not been in effect.

See accompanying notes

REIT Series-9

Delaware VIP Trust — Delaware VIP REIT Series
Notes to Financial Statements

December 31, 2006

Delaware VIP Trust (the "Trust") is organized as a Delaware statutory trust and offers 15 series: Delaware VIP Balanced Series, Delaware VIP Capital Reserves Series, Delaware VIP Cash Reserve Series, Delaware VIP Diversified Income Series, Delaware VIP Emerging Markets Series, Delaware VIP Global Bond Series, Delaware VIP Growth Opportunities Series, Delaware VIP High Yield Series, Delaware VIP International Value Equity Series, Delaware VIP REIT Series, Delaware VIP Select Growth Series, Delaware VIP Small Cap Value Series, Delaware VIP Trend Series, Delaware VIP U.S. Growth Series and Delaware VIP Value Series. These financial statements and the related notes pertain to Delaware VIP REIT Series (the "Series"). The Trust is an open-end investment company. The Series is considered non-diversified under the Investment Company Act of 1940, as amended, and offers Standard Class and Service Class shares. The Standard Class shares do not carry a 12b-1 fee and the Service Class shares carry a 12b-1 fee. The shares of the Series are sold only to separate accounts of life insurance companies.

The investment objective of the Series is to seek maximum long-term total return, with capital appreciation as a secondary objective.

1. Significant Accounting Policies

The following accounting policies are in accordance with U.S. generally accepted accounting principles and are consistently followed by the Series.

Security Valuation—Equity securities, except those traded on the Nasdaq Stock Market, Inc. (Nasdaq), are valued at the last quoted sales price as of the time of the regular close of the New York Stock Exchange (NYSE) on the valuation date. Securities traded on the Nasdaq are valued in accordance with the Nasdaq Official Closing Price, which may not be the last sales price. If on a particular day an equity security does not trade, then the mean between the bid and asked prices will be used. Short-term debt securities having less than 60 days to maturity are valued at amortized cost, which approximates market value. 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 the Series' Board of Trustees. In determining whether market quotations are readily availab le or fair valuation will be used, various factors will be taken into consideration, such as market closures, or with respect to foreign securities, aftermarket trading, or significant events after local market trading (e.g., government actions or pronouncements, trading volume or volatility on markets, exchanges among dealers, or news events).

In September 2006, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 157 "Fair Value Measurements" (Statement 157). Statement 157 establishes a framework for measuring fair value in generally accepted accounting principles, clarifies the definition of fair value within that framework, and expands disclosures about the use of fair value measurements. Statement 157 is intended to increase consistency and comparability among fair value estimates used in financial reporting. Statement 157 is effective for fiscal years beginning after November 15, 2007. Management does not expect the adoption of Statement 157 to have an impact on the amounts reported in the financial statements.

Federal Income Taxes—The Series intends to continue to qualify for federal income tax purposes as a regulated investment company and make the requisite distributions to shareholders. Accordingly, no provision for federal income taxes has been made in the financial statements.

On July 13, 2006, FASB released FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Series' 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 would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. Recent SEC guidance allows implementing FIN 48 in Series net asset value calculations as late as the Series' last net asset value calculation in the first required fi nancial statement reporting period. As a result, the Series will incorporate FIN 48 in its semiannual report on June 30, 2007. Although the Series' tax positions are currently being evaluated, management does not expect the adoption of FIN 48 to have a material impact on the Series' financial statements.

Class Accounting—Investment income, common expenses and realized and unrealized gain (loss) on investments are allocated to the classes of the Series on the basis of daily net assets of each class. Distribution expenses relating to a specific class are charged directly to that class.

Repurchase Agreements—The Series may invest in a pooled cash account along with other members of the Delaware Investments^® Family of Funds pursuant to an exemptive order issued by the Securities and Exchange Commission. The aggregate daily balance of the pooled cash account is invested in repurchase agreements secured by obligations of the U.S. government. The respective collateral is held by the Series' custodian bank until the maturity of the respective repurchase agreements. Each repurchase agreement is at least 102% collateralized. However, in the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral may be subject to legal proceedings.

Use of Estimates—The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of 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.

Other—Expenses directly attributable to the Series are charged directly to the Series. 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. Dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis. Distributions received from investments in Real Estate Investment Trusts are recorded as dividend income on ex-dividend date, subject to reclassification upon notice of the ch aracter of such distributions by the issuer. The financial statements reflect an estimate of the reclassification of the distribution character.

REIT Series- 10

Delaware VIP REIT Series
Notes to Financial Statements (continued)

1. Significant Accounting Policies (continued)

The Series declares and pays dividends from net investment income and distributions from net realized gain on investments, if any, following the close of the fiscal year.

Subject to seeking best execution, the Series may direct certain security trades to brokers who have agreed to rebate a portion of the related brokerage commission to the Series in cash. Such commission rebates are included in realized gain on investments in the accompanying financial statements and totaled $9,502 for the year ended December 31, 2006. In general, best execution refers to many factors, including the price paid or received for a security, the commission charged, the promptness and reliability of execution, the confidentiality and placement accorded the order, and other factors affecting the overall benefit obtained by the Series on the transaction.

The Series receives earnings credits from its custodian when positive cash balances are maintained, which are used to offset custody fees. The expense paid under this arrangement is included in custodian fees on the Statement of Operations with the corresponding expense offset shown as "expense paid indirectly."

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

In accordance with the terms of its investment management agreement, the Series pays Delaware Management Company (DMC), a series of Delaware Management Business Trust and the investment manager, an annual fee which is calculated daily at the rate of 0.75% on the first $500 million of average daily net assets of the Series, 0.70% on the next $500 million, 0.65% on the next $1.5 billion, and 0.60% on average daily net assets in excess of $2.5 billion.

DMC has contractually agreed to waive that portion, if any, of its management fee and reimburse the Series to the extent necessary to ensure that annual operating expenses, exclusive of taxes, interest, brokerage commissions, distribution fees, certain insurance costs and extraordinary expenses, do not exceed 1.00% of average daily net assets of the Series through April 30, 2007. Prior to May 1, 2006 the expense limitation was 0.95% of average daily net assets. No reimbursement was due for the year ended December 31, 2006.

Delaware Service Company, Inc. (DSC), an affiliate of DMC, provides accounting, administration, dividend disbursing and transfer agent services. The Series pays DSC a monthly fee computed at the annual rate of 0.04% of the Series' average daily net assets for accounting and administrative services. The Series pays DSC a monthly fee based on average net assets for dividend disbursing and transfer agent services.

Pursuant to a distribution agreement and distribution plan, the Series pays Delaware Distributors, L.P. (DDLP), the distributor and an affiliate of DMC, an annual distribution and service fee not to exceed 0.30% of the average daily net assets of the Service Class shares. DDLP has contracted to waive distribution and service fees through April 30, 2007 in order to prevent distribution and service fees of the Service Class shares from exceeding 0.25% of average daily net assets. Standard Class shares pay no distribution and service expenses.

At December 31, 2006, the Series had liabilities payable to affiliates as follows:

Investment Management Fee Payable to DMC		Dividend Disbursing, Transfer Agent, Accounting and Administrative Fees and Other Expenses Payable to DSC		Distribution Fees Payable to DDLP		Other Expenses Payable to DMC and Affiliates*
$	606,857	$	46,319	$	66,115	$	77,214

*DMC, as part of its administrative services, pays operating expenses on behalf of the Series and is reimbursed on a periodic basis. Such expenses include items such as printing of shareholder reports, fees for audit, legal and tax services, custodian fees and trustees' fees.

As provided in the investment management agreement, the Series bears the cost of certain legal and tax services, including internal legal and tax services provided to the Series by DMC and/or its affiliates' employees. For the year ended December 31, 2006, the Series was charged $41,577 for internal legal and tax services provided by DMC and/or its affiliates' employees.

Trustees' fees and benefits include expenses accrued by the Series for each Trustee's retainer, per meeting fees and retirement benefits. Independent Trustees with over five years of uninterrupted service are eligible to participate in a retirement plan that provides for the payment of benefits upon retirement. The amount of the retirement benefit is based on factors set forth in the plan, including the number of years of service. On November 16, 2006, the Board of Trustees unanimously voted to terminate the retirement plan. Payments equal to the net present value of the earned benefits will be made in 2007 to those independent trustees so entitled. The retirement benefit payout for the Series is $106,750. Certain officers of DMC, DSC and DDLP are officers and/or trustees of the Trust. These officers and trustees are paid no compensation by the Series.

REIT Series- 11

Delaware VIP REIT Series
Notes to Financial Statements (continued)

3. Investments

For the year ended December 31, 2006, the Series made purchases and sales of investment securities other than short-term investments as follows:

Purchases	$	826,126,222
Sales		903,456,341

At December 31, 2006, the cost of investments for federal income tax purposes and unrealized appreciation (depreciation) for the Series were as follows:

Cost of Investments		Aggregate Unrealized Appreciation		Aggregate Unrealized Depreciation			Net Unrealized Appreciation
$	809,827,901	$	176,558,141	$	(219,016	)	$	176,339,125

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. generally accepted accounting principles. Additionally, 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 December 31, 2006 and 2005 was as follows:

	Year Ended 12/31/06		Year Ended 12/31/05
Ordinary income	$	17,111,655	$	21,957,797
Long-term capital gain		58,619,126		38,438,887
Total	$	75,730,781	$	60,396,684

5. Components of Net Assets on a Tax Basis

As of December 31, 2006, the components of net assets on a tax basis were as follows:

Shares of beneficial interest	$	599,527,229
Undistributed ordinary income		47,103,961
Undistributed long-term capital gain		164,318,642
Unrealized appreciation of investments		176,339,125
Net assets	$	987,288,957

The differences between book basis and tax basis components of net assets are primarily attributable to tax deferral of losses on wash sales.

The undistributed earnings for the Series may be subject to reclassification upon notice of the tax character of distributions received from investments in Real Estate Investment Trusts.

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 Real Estate Investment Trust dividends. Results of operations and net assets were not affected by these reclassifications. For the year ended December 31, 2006, the Series recorded the following reclassifications:

Undistributed Net Investment Income			Accumulated Net Realilzed Gain (Loss)		Unrealized Appreciation on Investments*
$	(13,932,101	)	$	9,999,320	$	3,932,781

*Adjustment to cost basis of securities.

REIT Series-12

Delaware VIP REIT Series
Notes to Financial Statements (continued)

6. Capital Shares

Transactions in capital shares were as follows:

	Year Ended 12/31/06			Year Ended 12/31/05
Shares sold:
Standard Class		6,992,847			6,092,744
Service Class		4,285,149			3,532,245
Shares issued upon reinvestment of dividends and distributions:
Standard Class		2,985,680			2,958,050
Service Class		950,431			762,779
		15,214,107			13,345,818
Shares repurchased:
Standard Class		(14,534,587	)		(7,785,003	)
Service Class		(2,221,709	)		(1,972,201	)
		(16,756,296	)		(9,757,204	)
Net increase (decrease)		(1,542,189	)		3,588,614

7. Line of Credit

The Series, along with certain other funds in the Delaware Investments^® Family of Funds (the "Participants"), participates in a $225,000,000 revolving line of credit facility to be used for temporary or emergency purposes as an additional source of liquidity to fund redemptions of investor shares. The Participants are charged an annual commitment fee, which is allocated across the Participants on the basis of each Participant's allocation of the entire facility. The Participants may borrow up to a maximum of one third of their net assets under the agreement. The Series had no amounts outstanding as of December 31, 2006, or at any time during the year then ended.

8. Credit and Market Risk

The Series concentrates its investments in the real estate industry and is subject to some of the risks associated with that industry. If the Series holds real estate directly as a result of defaults or receives rental income directly from real estate holdings, its tax status as a regulated investment company may be jeopardized. The Series is also affected by interest rate changes, particularly if the real estate investment trusts it holds use floating rate debt to finance their ongoing operations. Its investments may also tend to fluctuate more in value than a portfolio that invests in a broader range of industries.

The Series may invest up to 15% of its total 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 the Series 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, the Series' Board of Trustees has delegated to DMC the day-to-day functions of determining whether individual securities are liquid for purposes of the Series' limitation on investments in illiquid assets. At December 31, 2006, there were no Rule 144A securities and no securities have been determined to be illiquid under the Series' Liquidity Procedures.

9. Contractual Obligations

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

10. Tax Information (Unaudited)

For the fiscal year ended December 31, 2006, the Series designates dividends and distributions paid during the year as follows:

(A) Long-Term Capital Gain Distributions (Tax Basis)			(B) Ordinary Income Distributions (Tax Basis)			(C) Total Distributions (Tax Basis)
	77	%		23	%		100	%

(A) and (B) are based on a percentage of the Series' total distributions.

REIT Series- 13

Delaware VIP Trust — Delaware VIP REIT Series
Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees
Delaware VIP Trust–Delaware VIP REIT Series

We have audited the accompanying statement of net assets of the Delaware VIP REIT Series (one of the series constituting Delaware VIP Trust) (the "Series") as of December 31, 2006, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Series' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits 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 and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Series' internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Series' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant es timates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2006, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Delaware VIP REIT Series of Delaware VIP Trust at December 31, 2006, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

  

Philadelphia, Pennsylvania

February 14, 2007

The Series files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Series' Forms N-Q, as well as a description of the policies and procedures that the Series uses to determine how to vote proxies (if any) relating to portfolio securities is available without charge (i) upon request, by calling 800-523-1918; (ii) on the Series' website at http://www.delawareinvestments.com; and (iii) on the Commission's website at http://www.sec.gov. The Series' Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Information (if any) regarding how the Series voted proxies relating to portfolio securities during the most recently disclosed 12-month period ended June 30 is available without charge (i) through the Series' website at http://www.delawareinvestments.com; and (ii) on the Commission's website at http://www.sec.gov.

REIT Series- 14

Delaware Investments® Family of Funds

board of trustees/directors and officers addendum

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 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.

Name, Address, and Birth Date	Position(s) Held with Fund(s)	Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee or Officer		Other Directorships Held by Trustee or Officer
interested trustees
Patrick P. Coyne1 2005 Market Street Philadelphia, PA 19103 April 14, 1963	Chairman, President, Chief Executive Officer, and Trustee	Chairman and Trustee since August 16, 2006 President and Chief Executive Officer since August 1, 2006	Patrick P. Coyne has served in various executive capacities at different times at Delaware Investments.2		84	None
independent trustees
Thomas L. Bennett 2005 Market Street Philadelphia, PA 19103 October 4, 1947	Trustee	Since March 2005	Private Investor – (March 2004 – Present) Investment Manager – Morgan Stanley & Co. (January 1984 – March 2004)		84	None
John A. Fry 2005 Market Street Philadelphia, PA 19103 May 28, 1960	Trustee	Since January 2001	President – Franklin & Marshall College (June 2002 – Present) Executive Vice President – University of Pennsylvania (April 1995 – June 2002)		84	Director – Community Health Systems Director – Allied Barton Security Holdings
Anthony D. Knerr 2005 Market Street Philadelphia, PA 19103 December 7, 1938	Trustee	Since April 1990	Founder and Managing Director – Anthony Knerr & Associates (Strategic Consulting) (1990 – Present)		84	None
Lucinda S. Landreth 2005 Market Street Philadelphia, PA 19103 June 24, 1947	Trustee	Since March 2005	Chief Investment Officer – Assurant, Inc. (Insurance) (2002 – 2004)		84	None
Ann R. Leven 2005 Market Street Philadelphia, PA 19103 November 1, 1940	Trustee	Since September 1989	Consultant – ARL Associates (Financial Planning) (1983 – Present)		84	Director and Audit Committee Chairperson – Andy Warhol Foundation Director and Audit Committee Member – Systemax, Inc.

REIT Series- 15

Name, Address, and Birth Date	Position(s) Held with Fund(s)	Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee or Officer		Other Directorships Held by Trustee or Officer
independent trustees (continued)
Thomas F. Madison 2005 Market Street Philadelphia, PA 19103 February 25, 1936	Trustee	Since May 1997	President and Chief Executive Officer – MLM Partners, Inc. (Small Business Investing and Consulting) (January 1993 – Present)		84	Director – Banner Health Director – CenterPoint Energy Director and Audit Committee Member – Digital River, Inc. Director and Audit Committee Member – Rimage Corporation Director – Valmont Industries, Inc.
Janet L. Yeomans 2005 Market Street Philadelphia, PA 19103 July 31, 1948	Trustee	Since April 1999	Vice President (January 2003 – Present) and Treasurer (January 2006 – Present) 3M Corporation Ms. Yeomans has held various management positions at 3M Corporation since 1983.		84	None
J. Richard Zecher 2005 Market Street Philadelphia, PA 19103 July 3, 1940	Trustee	Since March 2005	Founder – Investor Analytics (Risk Management) (May 1999 – Present) Founder – Sutton Asset Management (Hedge Fund) (September 1998 – Present)		84	Director and Audit Committee Member – Investor Analytics Director and Audit Committee Member – Oxigene, Inc.
officers
David F. Connor 2005 Market Street Philadelphia, PA 19103 December 2, 1963	Vice President, Deputy General Counsel, and Secretary	Vice President since September 21, 2000 and Secretary since October 2005	David F. Connor has served as Vice President and Deputy General Counsel of Delaware Investments since 2000.		84	None3
David P. O'Connor 2005 Market Street Philadelphia, PA 19103 February 21, 1966	Senior Vice President, General Counsel, and Chief Legal Officer	Senior Vice President, General Counsel, and Chief Legal Officer since October 2005	David P. O'Connor has served in various executive and legal capacities at different times at Delaware Investments.		84	None3
John J. O'Connor 2005 Market Street Philadelphia, PA 19103 June 16, 1957	Senior Vice President and Treasurer	Treasurer since February 2005	John J. O'Connor has served in various executive capacities at different times at Delaware Investments.		84	None3
Richard Salus 2005 Market Street Philadelphia, PA 19103 October 4, 1963	Senior Vice President and Chief Financial Officer	Chief Financial Officer since November 1, 2006	Richard Salus has served in various executive capacities at different times at Delaware Investments.		84	None3

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

² Delaware 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.

³ David F. Connor, David P. O'Connor, John J. 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. John J. O'Connor also serves in a similar capacity for Lincoln Variable Insurance Products Trust, which has the same investment advisor as the registrant.

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.

REIT Series- 16

Delaware VIP Trust — Delaware VIP Select Growth Series

For the 12-month period ended Dec. 31, 2006, the Delaware VIP Select Growth Series Standard Class shares showed a positive return of 1.82%, and Service Class shares gained 1.53%, both with distributions reinvested. The Series performance lagged behind the 9.46% gain of its benchmark, the Russell 3000 Growth Index (source: Lipper).

Our broad investment approach focuses on individual companies that we believe have particularly good long-term growth prospects over the next five years or longer. The heaviest positions held in the Series were companies categorized as consumer discretionary and technology. The largest consumer discretionary holdings as of Dec. 31, 2006 were NetFlix, Weight Watchers International, and eBay. From the technology industry, we added to existing positions in Qualcomm and Seagate Technology.

As long-term investors, we typically seek to avoid large-scale changes as long as we remain confident in the names we own. Specific to the fiscal year 2006, we believe that a number of our more aggressive holdings were unreasonably penalized.

Positive contributors to the performance included IntercontinentalExchange and MGM Mirage. IntercontinentalExchange was a new position in the Series and is a play on the growth of electronic exchanges in the derivatives and futures markets, specifically in the energy industry. MGM Mirage performed well due to the increase of interest in the gaming companies from private equity investors, the market's growing appreciation for international expansion, and MGM's tender offer that gave the stock technical support and signaled that company fundamentals were strong.

Most of our underperformers during the period were among the Series' more aggressive holdings. For example, we were negatively affected by our positions in XM Satellite Radio and NetTeller PLC. By fiscal year end we had sold both of these positions. Another detractor was SanDisk, a leading maker of flash memory storage. However, we continued to have confidence in SanDisk's long-term growth potential and took advantage of recent price dips to add to our existing holdings in the stock. Also hindering our performance was Navteq, though we remain confident that the continued proliferation of navigation devices on mobile devices will continue to Navteq's benefit.

The views expressed are current as of the date of this report and are subject to change.

The performance data quoted below and on the next page represent past performance; past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please obtain the performance data for the most recent month end by calling the number noted on the page related to this Series in the introductory section of this report.

You should consider the investment objectives, risks, charges, and expenses of the investment carefully before investing. The Delaware VIP Select Growth Series prospectus contains this and other important information about the Series. To obtain a prospectus, contact the company noted on the page related to this Series in the introductory section of this report, either by phone or through the company Web site. We advise you to read the prospectus carefully before you invest.

Delaware VIP Select Growth Series Average Annual Total Returns For the periods ending Dec. 31, 2006	1 Year			5 Years			Lifetime
Standard Class Shares*		+1.82	%		+3.92	%		+0.30	%
Service Class Shares**		+1.53	%		+3.70	%		-4.13	%

  *  Commenced operations on May 3, 1999

  **  Commenced operations on May 1, 2000

Select Growth Series- 1

Delaware VIP Trust — Delaware VIP Select Growth Series (continued)

The chart shows a $10,000 investment in the Delaware VIP Select Growth Series Standard Class shares for the period from the Series' inception May 3, 1999 through Dec. 31, 2006. All distributions were reinvested. The chart also shows $10,000 invested in the Russell 3000 Growth Index and the S&P 500 Index for the period from May 3, 1999 through Dec. 31, 2006.

Russell 3000 Growth Index measures the performance of those Russell 3000 Index companies with higher price-to-book ratios and higher forecasted growth values. The S&P 500 Index measures mostly large-capitalization U.S. companies. An index is unmanaged and does not reflect the costs of operating a mutual fund, such as the costs of buying, selling, and holding securities. You cannot invest directly in an index.

Series that invest in small- and medium-sized companies typically involve greater risk, particularly in the short term, than those investing in larger, more established companies.

Earnings from a variable annuity or variable life investment compound tax free until withdrawal, so no adjustments were made for income taxes.

An expense limitation was in effect for the Delaware VIP Select Growth Series during the periods shown.

Performance of Service Class shares will vary due to different charges and expenses.

Performance does not reflect insurance fees related to a variable annuity or variable life investment or the deferred sales charge that would apply to certain withdrawals of investments held for fewer than eight years. Performance shown here would have been reduced if such fees were included and the expense limitation was removed. For more information about fees, consult your variable annuity or variable life prospectus.

Investments in variable products involve risk. Some portfolios offer more risk than others. Please read both the contract and underlying prospectus for specific details regarding the product's risk profile.

Select Growth Series- 2

Delaware VIP Trust — Delaware VIP Select Growth Series
Disclosure of Series Expenses

For the Period July 1, 2006 to December 31, 2006

As a shareholder of the Series, you incur ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Series expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Series and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2006 to December 31, 2006.

Actual Expenses

The first section of the table shown, "Actual Series 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 the period.

Hypothetical Example for Comparison Purposes

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

Please note that the expenses shown in the table are meant to highlight your ongoing costs only. As a shareholder of the Series, you do not incur any transaction costs, such as sales charges (loads), redemption fees or exchange fees, but shareholders of other funds may incur such costs. Also, the fees related to the variable annuity investment or the deferred sales charge that could apply have not been included. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. The Series' actual expenses shown in the table reflect fee waivers in effect. The expenses shown in the table assume reinvestment of all dividends and distributions.

Expense Analysis of an Investment of $1,000

	Beginning Account Value 7/1/06		Ending Account Value 12/31/06		Annualized Expense Ratios			Expenses Paid During Period 7/1/06 to 12/31/06*
Actual Series Return
Standard Class	$	1,000.00	$	1,058.90		0.92	%	$	4.77
Service Class		1,000.00		1,058.60		1.17	%		6.07
Hypothetical 5% Return (5% return before expenses)
Standard Class	$	1,000.00	$	1,020.57		0.92	%	$	4.69
Service Class		1,000.00		1,019.31		1.17	%		5.96

*"Expenses Paid During Period" are equal to the Series' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

Select Growth Series- 3

Delaware VIP Trust — Delaware VIP Select Growth Series
Sector Allocation and Top 10 Holdings

As of December 31, 2006

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

Sector	Percentage of Net Assets
Common Stock		100.07	%
Basic Industry/Capital Goods		1.29	%
Business Services		9.62	%
Consumer Durables		1.96	%
Consumer Non-Durables		13.05	%
Consumer Services		22.47	%
Energy		0.45	%
Financials		11.64	%
Health Care		16.47	%
Technology		23.12	%
Total Market Value of Securities		100.07	%
Liabilities Net of Receivables and Other Assets		(0.07	%)
Total Net Assets		100.00	%

Holdings are for informational purposes only and are subject to change at any time.

They are not a recommendation to buy, sell, or hold any security.

Top 10 Holdings

	Percentage of Net Assets
NetFlix		7.96	%
UnitedHealth Group		6.71	%
IntercontinentalExchange		5.87	%
Weight Watchers International		5.42	%
QUALCOMM		5.07	%
eBay		4.88	%
SanDisk		4.62	%
Allergan		4.43	%
Jackson Hewitt Tax Service		4.40	%
Seagate Technology		4.22	%

Select Growth Series- 4

Delaware VIP Trust — Delaware VIP Select Growth Series
Statement of Net Assets

December 31, 2006

	Number of Shares		Market Value
COMMON STOCK–100.07%
Basic Industry/Capital Goods–1.29%
Graco		1,100	$	43,582
Praxair		3,500		207,655
				251,237
Business Services–9.62%
Equifax		3,900		158,340
Expeditors International Washington		10,400		421,200
† Global Cash Access		38,300		621,609
Paychex		6,000		237,240
† Research in Motion		3,400		434,452
				1,872,841
Consumer Durables–1.96%
† Select Comfort		22,000		382,580
				382,580
Consumer Non-Durables–13.05%
† Blue Nile		10,600		391,034
† NetFlix		59,900		1,549,014
Staples		8,600		229,620
Walgreen		4,700		215,683
Whole Foods Market		3,300		154,869
				2,540,220
Consumer Services–22.47%
† eBay		31,600		950,212
IHOP		10,600		558,620
Jackson Hewitt Tax Service		25,200		856,044
† MGM MIRAGE		6,500		372,775
Strayer Education		4,100		434,805
Weight Watchers International		20,100		1,055,853
Western Union		6,600		147,972
				4,376,281

	Number of Shares		Market Value
COMMON STOCK (continued)
Energy–0.45%
EOG Resources		1,400	$	87,430
				87,430
Financials–11.64%
Chicago Mercantile Exchange Class A		900		458,775
† IntercontinentalExchange		10,600		1,143,740
† NYMEX		2,900		359,629
optionsXpress		13,400		304,046
				2,266,190
Health Care–16.47%
Allergan		7,200		862,128
† Genentech		7,300		592,249
UnitedHealth Group		24,300		1,305,639
† Zimmer		5,700		446,766
				3,206,782
Technology–23.12%
Blackbaud		7,000		182,000
† Google Class A		875		402,920
† Intuit		16,000		488,160
† j2 Global Communications		18,900		515,025
† NAVTEQ		5,900		206,323
QUALCOMM		26,100		986,319
† SanDisk		20,900		899,327
Seagate Technology		31,000		821,500
				4,501,574
Total Common Stock (cost $15,490,608)				19,485,135

TOTAL MARKET VALUE OF SECURITIES–100.07% (cost $15,490,608)		19,485,135
LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS–(0.07%)		(13,389	)
NET ASSETS APPLICABLE TO 1,940,899 SHARES OUTSTANDING–100.00%	$	19,471,746
NET ASSET VALUE-DELAWARE VIP SELECT GROWTH SERIES STANDARD CLASS ($14,901,337 / 1,480,596 Shares)	$	10.06
NET ASSET VALUE-DELAWARE VIP SELECT GROWTH SERIES SERVICE CLASS ($4,570,409 / 460,303 Shares)	$	9.93
COMPONENTS OF NET ASSETS AT DECEMBER 31, 2006:
Shares of beneficial interest (unlimited authorization–no par)	$	64,703,220
Accumulated net investment loss		(133	)
Accumulated net realized loss on investments		(49,225,868	)
Net unrealized appreciation of investments		3,994,527
Total net assets	$	19,471,746

  †  Non-income producing security for the year ended December 31, 2006.

See accompanying notes

Select Growth Series- 5

Delaware VIP Trust — Delaware VIP Select Growth Series
Statement of Operations

Year Ended December 31, 2006

INVESTMENT INCOME:
Dividends	$	104,500
Interest		11,954
		116,454
EXPENSES:
Management fees		158,216
Distribution expenses – Service Class		14,183
Audit and tax		11,071
Accounting and administration expenses		8,438
Reports and statements to shareholders		6,208
Trustees' fees and benefits		3,601
Custodian fees		3,175
Legal fees		2,499
Dividend disbursing and transfer agent fees and expenses		2,110
Dues and services		1,503
Insurance fees		477
Consulting fees		474
Pricing fees		360
Taxes (other than taxes on income)		222
Trustees' expenses		96
Registration fees		52
		212,685
Less expenses absorbed or waived		(6,430	)
Less waiver of distribution expenses – Service Class		(2,364	)
Less expense paid indirectly		(20	)
Total operating expenses		203,871
NET INVESTMENT LOSS		(87,417	)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on:
Investments		1,056,103
Foreign currencies		(903	)
Net realized gain		1,055,200
Net change in unrealized appreciation/depreciation of investments		(666,516	)
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS		388,684
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	301,267

See accompanying notes

Delaware VIP Trust — Delaware VIP Select Growth Series
Statements of Changes in Net Assets

	Year Ended
	12/31/06			12/31/05
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment loss	$	(87,417	)	$	(70,668	)
Net realized gain on investments and foreign currencies		1,055,200			3,605,727
Net change in unrealized appreciation/ depreciation of investments and foreign currencies		(666,516	)		(97,657	)
Net increase in net assets resulting from operations		301,267			3,437,402
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Standard Class		15,031,576			271,657
Service Class		4,970,607			245,554
		20,002,183			517,211
Cost of shares repurchased:
Standard Class		(18,980,519	)		(4,882,598	)
Service Class		(5,539,539	)		(1,024,469	)
		(24,520,058	)		(5,907,067	)
Decrease in net assets derived from capital share transactions		(4,517,875	)		(5,389,856	)
NET DECREASE IN NET ASSETS		(4,216,608	)		(1,952,454	)
NET ASSETS:
Beginning of year		23,688,354			25,640,808
End of year (including accumulated net investment loss of $(133) and $-, respectively)	$	19,471,746		$	23,688,354

See accompanying notes

Select Growth Series- 6

Delaware VIP Trust — Delaware VIP Select Growth Series
Financial Highlights

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

	Delaware VIP Select Growth Series Standard Class
	Year Ended
	12/31/06			12/31/05			12/31/04			12/31/03			12/31/02
Net asset value, beginning of period	$	9.880		$	8.460		$	7.810		$	5.600		$	8.300
Income (loss) from investment operations:
Net investment loss1		(0.035	)		(0.022	)		(0.011	)		(0.016	)		(0.024	)
Net realized and unrealized gain (loss) on investments and foreign currencies		0.215			1.442			0.661			2.226			(2.676	)
Total from investment operations		0.180			1.420			0.650			2.210			(2.700	)
Net asset value, end of period	$	10.060		$	9.880		$	8.460		$	7.810		$	5.600
Total return2		1.82	%		16.78	%		8.32	%		39.46	%		(32.53	%)
Ratios and supplemental data:
Net assets, end of period (000 omitted)	$	14,901		$	18,612		$	20,493		$	23,089		$	27,056
Ratio of expenses to average net assets		0.91	%		0.90	%		0.83	%		0.83	%		0.86	%
Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly		0.94	%		0.97	%		0.83	%		0.83	%		0.86	%
Ratio of net investment loss to average net assets		(0.36	%)		(0.26	%)		(0.14	%)		(0.24	%)		(0.35	%)
Ratio of net investment loss to average net assets prior to expense limitation and expenses paid indirectly		(0.39	%)		(0.33	%)		(0.14	%)		(0.24	%)		(0.35	%)
Portfolio turnover		50	%		133	%		86	%		72	%		106	%

¹The average shares outstanding method has been applied for per share information.

²Total 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. Total investment return reflects waivers and payment of fees by the manager, as applicable. Performance would have been lower had the expense limitation not been in effect.

See accompanying notes

Select Growth Series- 7

Delaware VIP Select Growth Series
Financial Highlights (continued)

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

	Delaware VIP Select Growth Series Service Class
	Year Ended
	12/31/06			12/31/05			12/31/04			12/31/03			12/31/02
Net asset value, beginning of period	$	9.780		$	8.390		$	7.760		$	5.580		$	8.280
Income (loss) from investment operations:
Net investment loss1		(0.059	)		(0.043	)		(0.030	)		(0.030	)		(0.034	)
Net realized and unrealized gain (loss) on investments and foreign currencies		0.209			1.433			0.660			2.210			(2.666	)
Total from investment operations		0.150			1.390			0.630			2.180			(2.700	)
Net asset value, end of period	$	9.930		$	9.780		$	8.390		$	7.760		$	5.580
Total return2		1.53	%		16.57	%		8.12	%		39.07	%		(32.61	%)
Ratios and supplemental data:
Net assets, end of period (000 omitted)	$	4,571		$	5,076		$	5,148		$	5,670		$	7,018
Ratio of expenses to average net assets		1.16	%		1.15	%		1.08	%		1.05	%		1.01	%
Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly		1.24	%		1.27	%		1.13	%		1.08	%		1.01	%
Ratio of net investment loss to average net assets		(0.61	%)		(0.51	%)		(0.39	%)		(0.46	%)		(0.50	%)
Ratio of net investment loss to average net assets prior to expense limitation and expenses paid indirectly		(0.69	%)		(0.63	%)		(0.44	%)		(0.49	%)		(0.50	%)
Portfolio turnover		50	%		133	%		86	%		72	%		106	%

¹The average shares outstanding method has been applied for per share information.

²Total 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. Total investment return reflects waivers and payment of fees by the manager and distributor, as applicable. Performance would have been lower had the expense limitation not been in effect.

See accompanying notes

Select Growth Series- 8

Delaware VIP Trust — Delaware VIP Select Growth Series
Notes to Financial Statements

December 31, 2006

Delaware VIP Trust (the "Trust") is organized as a Delaware statutory trust and offers 15 series: Delaware VIP Balanced Series, Delaware VIP Capital Reserves Series, Delaware VIP Cash Reserve Series, Delaware VIP Diversified Income Series, Delaware VIP Emerging Markets Series, Delaware VIP Global Bond Series, Delaware VIP Growth Opportunities Series, Delaware VIP High Yield Series, Delaware VIP International Value Equity Series, Delaware VIP REIT Series, Delaware VIP Select Growth Series, Delaware VIP Small Cap Value Series, Delaware VIP Trend Series, Delaware VIP U.S. Growth Series and Delaware VIP Value Series. These financial statements and the related notes pertain to Delaware VIP Select Growth Series (the "Series"). The Trust is an open-end investment company. The Series is considered diversified under the Investment Company Act of 1940, as amended, and offers Standard Class and Service Class shares. The Standard Class shares do not car ry a 12b-1 fee and the Service Class shares carry a 12b-1 fee. The shares of the Series are sold only to separate accounts of life insurance companies.

The investment objective of the Series is to seek long-term capital appreciation.

1. Significant Accounting Policies

The following accounting policies are in accordance with U.S. generally accepted accounting principles and are consistently followed by the Series.

Security Valuation—Equity securities, except those traded on the Nasdaq Stock Market, Inc. (Nasdaq), are valued at the last quoted sales price as of the time of the regular close of the New York Stock Exchange (NYSE) on the valuation date. Securities traded on the Nasdaq are valued in accordance with the Nasdaq Official Closing Price, which may not be the last sales price. If on a particular day an equity security does not trade, then the mean between the bid and asked prices will be used. Short-term debt securities having less than 60 days to maturity are valued at amortized cost, which approximates market value. 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 the Series' Board of Trustees. In determining whether market quotations are readily availab le or fair valuation will be used, various factors will be taken into consideration, such as market closures, or with respect to foreign securities, aftermarket trading, or significant events after local market trading (e.g., government actions or pronouncements, trading volume or volatility on markets, exchanges among dealers, or news events).

In September 2006, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 157 "Fair Value Measurements" (Statement 157). Statement 157 establishes a framework for measuring fair value in generally accepted accounting principles, clarifies the definition of fair value within that framework, and expands disclosures about the use of fair value measurements. Statement 157 is intended to increase consistency and comparability among fair value estimates used in financial reporting. Statement 157 is effective for fiscal years beginning after November 15, 2007. Management does not expect the adoption of Statement 157 to have an impact on the amounts reported in the financial statements.

Federal Income Taxes—The Series intends to continue to qualify for federal income tax purposes as a regulated investment company and make the requisite distributions to shareholders. Accordingly, no provision for federal income taxes has been made in the financial statements.

On July 13, 2006, FASB released FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented, and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Series' 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 would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. Recent SEC guidance allows implementing FIN 48 in Series net asset value calculations as late as the Series' last net asset value calculation in the first required f inancial statement reporting period. As a result, the Series will incorporate FIN 48 in its semiannual report on June 30,2007. Although the Serires' tax positions are currently being evaluated, management does not expect the adoption of FIN 48 to have a material impact on the Series' financial statements.

Class Accounting—Investment income, common expenses and realized and unrealized gain (loss) on investments are allocated to the classes of the Series on the basis of daily net assets of each class. Distribution expenses relating to a specific class are charged directly to that class.

Repurchase Agreements—The Series may invest in a pooled cash account along with other members of the Delaware Investments^® Family of Funds pursuant to an exemptive order issued by the Securities and Exchange Commission. The aggregate daily balance of the pooled cash account is invested in repurchase agreements secured by obligations of the U.S. government. The respective collateral is held by the Series' custodian bank until the maturity of the respective repurchase agreements. Each repurchase agreement is at least 102% collateralized. However, in the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral may be subject to legal proceedings.

Use of Estimates—The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of 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.

Other—Expenses directly attributable to the Series are charged directly to the Series. 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. Dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis.

The Series declares and pays dividends from net investment income and distributions from net realized gain on investments, if any, following the close of the fiscal year.

Select Growth Series- 9

Delaware VIP Select Growth Series
Notes to Financial Statements (continued)

1. Significant Accounting Policies (continued)

Subject to seeking best execution, the Series may direct certain security trades to brokers who have agreed to rebate a portion of the related brokerage commission to the Series in cash. Such commission rebates are included in realized gain on investments in the accompanying financial statements and totaled $2,897 for the year ended December 31, 2006. In general, best execution refers to many factors, including the price paid or received for a security, the commission charged, the promptness and reliability of execution, the confidentiality and placement accorded the order, and other factors affecting the overall benefit obtained by the Series on the transaction.

The Series may receive earnings credits from its custodian when positive cash balances are maintained, which are used to offset custody fees. The expense paid under this arrangement is included in custodian fees on the Statement of Operations with the corresponding expense offset shown as "expense paid indirectly."

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

In accordance with the terms of its investment management agreement, the Series pays Delaware Management Company (DMC), a series of Delaware Management Business Trust and the investment manager, an annual fee which is calculated daily at the rate of 0.75% on the first $500 million of average daily net assets of the Series, 0.70% on the next $500 million, 0.65% on the next $1.5 billion, and 0.60% on average daily net assets in excess of $2.5 billion.

DMC has contractually agreed to waive that portion, if any, of its management fee and reimburse the Series to the extent necessary to ensure that annual operating expenses, exclusive of taxes, interest, brokerage commissions, distribution fees, certain insurance costs and extraordinary expenses, do not exceed 0.90% of average daily net assets of the Series through April 30, 2007.

Delaware Service Company, Inc. (DSC), an affiliate of DMC, provides accounting, administration, dividend disbursing and transfer agent services. The Series pays DSC a monthly fee computed at the annual rate of 0.04% of the Series' average daily net assets for accounting and administrative services. The Series pays DSC a monthly fee based on average net assets for dividend disbursing and transfer agent services.

Pursuant to a distribution agreement and distribution plan, the Series pays Delaware Distributors, L.P. (DDLP), the distributor and an affiliate of DMC, an annual distribution and service fee not to exceed 0.30% of the average daily net assets of the Service Class shares. DDLP has contracted to waive distribution and service fees through April 30, 2007 in order to prevent distribution and service fees of the Service Class shares from exceeding 0.25% of average daily net assets. Standard Class shares pay no distribution and service expenses.

At December 31, 2006, the Series had liabilities payable to affiliates as follows:

Investment Management Fee Payable to DMC		Dividend Disbursing, Transfer Agent, Accounting and Administration Fees and Other Expenses Payable to DSC		Distribution Fees Payable to DDLP		Other Expenses Payable to DMC and Affiliates*
$	10,744	$	944	$	996	$	733

*DMC, as part of its administrative services, pays operating expenses on behalf of the Series and is reimbursed on a periodic basis. Such expenses include items such as printing of shareholder reports, fees for audit, legal and tax services, custodian fees and trustees' fees.

As provided in the investment management agreement, the Series bears the cost of certain legal and tax services, including internal legal and tax services provided to the Series by DMC and/or its affiliates' employees. For the year ended December 31, 2006, the Series was charged $984 for internal legal and tax services provided by DMC and/or its affiliates' employees.

Trustees' fees and benefits include expenses accrued by the Series for each Trustee's retainer, per meeting fees and retirement benefits. Independent Trustees with over five years of uninterrupted service are eligible to participate in a retirement plan that provides for the payment of benefits upon retirement. The amount of the retirement benefit is based on factors set forth in the plan, including the number of years of service. On November 16, 2006, the Board of Trustees unanimously voted to terminate the retirement plan. Payments equal to the net present value of the earned benefits will be made in 2007 to those independent trustees so entitled. The retirement benefit payout for the Series is $2,430. Certain officers of DMC, DSC and DDLP are officers and/or trustees of the Trust. These officers and trustees are paid no compensation by the Series.

3. Investments

For year ended December 31, 2006, the Series made purchases and sales of investment securities other than short-term investments as follows:

Purchases	$	10,407,364
Sales		14,893,136

Select Growth Series- 10

Delaware VIP Select Growth Series
Notes to Financial Statements (continued)

3. Investments (continued)

At December 31, 2006, the cost of investments for federal income tax purposes and unrealized appreciation (depreciation) for the Series were as follows:

Cost of Investments		Aggregate Unrealized Appreciation		Aggregate Unrealized Depreciation			Net Unrealized Appreciation
$	15,524,870	$	4,188,631	$	(228,366	)	$	3,960,265

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. generally accepted accounting principles. Additionally, gains (losses) on foreign currency transactions and net short-term gains on sales of investment securities are treated as ordinary income for federal income tax purposes. There were no dividends and distributions paid during the years ended December 31, 2006 and 2005.

5. Components of Net Assets on a Tax Basis

As of December 31, 2006, the components of net assets on a tax basis were as follows:

Shares of beneficial interest	$	64,703,220
Post-October losses		(82,285	)
Post-October currency losses		(133	)
Capital loss carryforwards		(49,109,321	)
Unrealized appreciation of investments		3,960,265
Net assets	$	19,471,746

The differences between book basis and tax basis components of net assets are primarily attributable to tax deferral of losses on wash sales.

Post-October losses represent losses realized on investment and foreign currency transactions from November 1, 2006 through December 31, 2006 that, in accordance with federal income tax regulations, the Series has elected to defer and treat as having arisen in the following fiscal year.

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 net operating losses and gain (loss) on foreign currency transactions. Results of operations and net assets were not affected by these reclassifications. For the year ended December 31, 2006, the Series recorded the following reclassifications:

Accumulated Net Investment Loss		Accumulated Net Realized Gain (Loss)		Paid-in Capital
$	87,284	$	903	$	(88,187	)

For federal income tax purposes, capital loss carryforwards may be carried forward and applied against future capital gains. $1,148,188 was utilized in 2006. Capital loss carryforwards remaining at December 31, 2006 will expire as follows: $4,054,443 expires in 2008, $30,958,389 expires in 2009, $10,812,739 expires in 2010 and $3,283,750 expires in 2011.

6. Capital Shares

Transactions in capital shares were as follows:

	Year Ended 12/31/06			Year Ended 12/31/05
Shares sold:
Standard Class		1,691,049			30,108
Service Class		560,656			25,633
		2,251,705			55,741
Shares repurchased:
Standard Class		(2,093,415	)		(569,367	)
Service Class		(619,563	)		(120,148	)
		(2,712,978	)		(689,515	)
Net decrease		(461,273	)		(633,774	)

Select Growth Series- 11

Delaware VIP Select Growth Series
Notes to Financial Statements (continued)

7. Line of Credit

The Series, along with certain other funds in the Delaware Investments^® Family of Funds (the "Participants"), participates in a $225,000,000 revolving line of credit facility to be used for temporary or emergency purposes as an additional source of liquidity to fund redemptions of investor shares. The Participants are charged an annual commitment fee, which is allocated across the Participants on the basis of each Participant's allocation of the entire facility. The Participants may borrow up to a maximum of one third of their net assets under the agreement. The Series had no amounts outstanding as of December 31, 2006, or at any time during the year then ended.

8. Credit and Market Risk

The Series invests a significant portion of its assets in small- and mid-sized companies and may be subject to certain risks associated with ownership of securities of such companies. Investments in small- or mid-sized companies may be more volatile than investments in larger companies for a number of reasons, which include more limited financial resources or a dependence on narrow product lines.

The Series may invest up to 15% of its total 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 the Series 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, the Series' Board of Trustees has delegated to DMC the day-to-day functions of determining whether individual securities are liquid for purposes of the Series' limitation on investments in illiquid assets. At December 31, 2006, there were no Rule 144A securities and no securities have been determined to be illiquid under the Series' Liquidity Procedures.

9. Contractual Obligations

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

Select Growth Series- 12

Delaware VIP Trust — Delaware VIP Select Growth Series
Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees
Delaware VIP Trust–Delaware VIP Select Growth Series

We have audited the accompanying statement of net assets of the Delaware VIP Select Growth Series (one of the series constituting Delaware VIP Trust) (the "Series") as of December 31, 2006, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Series' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits 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 and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Series' internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Series' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant es timates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2006, by correspondence with the custodian. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Delaware VIP Select Growth Series of Delaware VIP Trust at December 31, 2006, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

  

Philadelphia, Pennsylvania

February 14, 2007

The Series files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Series' Forms N-Q, as well as a description of the policies and procedures that the Series uses to determine how to vote proxies (if any) relating to portfolio securities is available without charge (i) upon request, by calling 800-523-1918; (ii) on the Series' website at http://www.delawareinvestments.com; and (iii) on the Commission's website at http://www.sec.gov. The Series' Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Information (if any) regarding how the Series voted proxies relating to portfolio securities during the most recently disclosed 12-month period ended December 31 is available without charge (i) through the Series' website at http://www.delawareinvestments.com; and (ii) on the Commission's website at http://www.sec.gov.

Select Growth Series- 13

Delaware Investments® Family of Funds

board of trustees/directors and officers addendum

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 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.

Name, Address, and Birth Date	Position(s) Held with Fund(s)	Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee or Officer		Other Directorships Held by Trustee or Officer
interested trustees
Patrick P. Coyne1 2005 Market Street Philadelphia, PA 19103 April 14, 1963	Chairman, President, Chief Executive Officer, and Trustee	Chairman and Trustee since August 16, 2006 President and Chief Executive Officer since August 1, 2006	Patrick P. Coyne has served in various executive capacities at different times at Delaware Investments.2		84	None
independent trustees
Thomas L. Bennett 2005 Market Street Philadelphia, PA 19103 October 4, 1947	Trustee	Since March 2005	Private Investor – (March 2004 – Present) Investment Manager – Morgan Stanley & Co. (January 1984 – March 2004)		84	None
John A. Fry 2005 Market Street Philadelphia, PA 19103 May 28, 1960	Trustee	Since January 2001	President – Franklin & Marshall College (June 2002 – Present) Executive Vice President – University of Pennsylvania (April 1995 – June 2002)		84	Director – Community Health Systems Director – Allied Barton Security Holdings
Anthony D. Knerr 2005 Market Street Philadelphia, PA 19103 December 7, 1938	Trustee	Since April 1990	Founder and Managing Director – Anthony Knerr & Associates (Strategic Consulting) (1990 – Present)		84	None
Lucinda S. Landreth 2005 Market Street Philadelphia, PA 19103 June 24, 1947	Trustee	Since March 2005	Chief Investment Officer – Assurant, Inc. (Insurance) (2002 – 2004)		84	None
Ann R. Leven 2005 Market Street Philadelphia, PA 19103 November 1, 1940	Trustee	Since September 1989	Consultant – ARL Associates (Financial Planning) (1983 – Present)		84	Director and Audit Committee Chairperson – Andy Warhol Foundation Director and Audit Committee Member – Systemax, Inc.

Select Growth Series- 14

Name, Address, and Birth Date	Position(s) Held with Fund(s)	Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee or Officer		Other Directorships Held by Trustee or Officer
independent trustees (continued)
Thomas F. Madison 2005 Market Street Philadelphia, PA 19103 February 25, 1936	Trustee	Since May 1997	President and Chief Executive Officer – MLM Partners, Inc. (Small Business Investing and Consulting) (January 1993 – Present)		84	Director – Banner Health Director – CenterPoint Energy Director and Audit Committee Member – Digital River, Inc. Director and Audit Committee Member – Rimage Corporation Director – Valmont Industries, Inc.
Janet L. Yeomans 2005 Market Street Philadelphia, PA 19103 July 31, 1948	Trustee	Since April 1999	Vice President (January 2003 – Present) and Treasurer (January 2006 – Present) 3M Corporation Ms. Yeomans has held various management positions at 3M Corporation since 1983.		84	None
J. Richard Zecher 2005 Market Street Philadelphia, PA 19103 July 3, 1940	Trustee	Since March 2005	Founder – Investor Analytics (Risk Management) (May 1999 – Present) Founder – Sutton Asset Management (Hedge Fund) (September 1998 – Present)		84	Director and Audit Committee Member – Investor Analytics Director and Audit Committee Member – Oxigene, Inc.
officers
David F. Connor 2005 Market Street Philadelphia, PA 19103 December 2, 1963	Vice President, Deputy General Counsel, and Secretary	Vice President since September 21, 2000 and Secretary since October 2005	David F. Connor has served as Vice President and Deputy General Counsel of Delaware Investments since 2000.		84	None3
David P. O'Connor 2005 Market Street Philadelphia, PA 19103 February 21, 1966	Senior Vice President, General Counsel, and Chief Legal Officer	Senior Vice President, General Counsel, and Chief Legal Officer since October 2005	David P. O'Connor has served in various executive and legal capacities at different times at Delaware Investments.		84	None3
John J. O'Connor 2005 Market Street Philadelphia, PA 19103 June 16, 1957	Senior Vice President and Treasurer	Treasurer since February 2005	John J. O'Connor has served in various executive capacities at different times at Delaware Investments.		84	None3
Richard Salus 2005 Market Street Philadelphia, PA 19103 October 4, 1963	Senior Vice President and Chief Financial Officer	Chief Financial Officer since November 1, 2006	Richard Salus has served in various executive capacities at different times at Delaware Investments.		84	None3

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

² Delaware 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.

³ David F. Connor, David P. O'Connor, John J. 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. John J. O'Connor also serves in a similar capacity for Lincoln Variable Insurance Products Trust, which has the same investment advisor as the registrant.

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.

Select Growth Series- 15

Delaware VIP Trust — Delaware VIP Small Cap Value Series (closed to new investors)

For the 12-month period, the Delaware VIP Small Cap Value Series had a positive return of 16.19% for Standard Class shares and 15.89% for Service Class shares, both with distributions reinvested. The benchmark, the Russell 2000 Value Index, gained 23.48% (source: Lipper).

Despite strong absolute returns, it was a challenging year overall for small-cap value managers, as lower-quality companies and real estate investment trusts (REITs) were often among the market's top performers. The Series held a smaller weighting in REIT investments than those reflected in the benchmark index, a choice based on our belief that the sector remains overpriced. Our smaller holdings compared to the benchmark index allocations had a negative impact on overall Series performance. We believe the generally better performance of companies with lower-quality financial health also had a negative impact on the performance of the Series. We remain committed to investing in high-quality, undervalued companies that are generating strong cash flows, and which we believe offer the potential for long-term appreciation.

Although sector weightings do influence performance, we are committed to conducting bottom-up research and choosing investments one stock at a time. The small-cap universe is comprised of more than 2,000 companies, many of these relatively new and unknown businesses. Therefore, uncovering quality investment opportunities requires a highly disciplined strategy.

To identify those companies with the most attractive growth prospects, we employ exhaustive fundamental research. We look for high-quality companies that generate sustainable revenues, maintain healthy balance sheets, and realize excess cash flow. We also evaluate each company's management, its product pipeline, and its competition. We aim to avoid large positions in any single company, thereby minimizing the effects of an underperformer on the portfolio.

The views expressed are current as of the date of this report and are subject to change.

The performance data quoted below and on the next page represent past performance; past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please obtain the performance data for the most recent month end by calling the number noted on the page related to this Series in the introductory section of this report.

You should consider the investment objectives, risks, charges, and expenses of the investment carefully before investing. The Delaware VIP Small Cap Value Series prospectus contains this and other important information about the Series. To obtain a prospectus, contact the company noted on the page related to this Series in the introductory section of this report, either by phone or through the company Web site. We advise you to read the prospectus carefully before you invest.

Delaware VIP Small Cap Value Series Average Annual Total Returns For the periods ending Dec. 31, 2006

1 Year

5 Years

10 Years

Lifetime

Standard Class Shares*

+16.19

%

+15.66

%

+12.66

%

+13.41

%

Service Class Shares**

+15.89

%

+15.40

%

NA

+16.15

%

  *  Commenced operations on Dec. 27, 1993

  **  Commenced operations on May 1, 2000

Small Cap Value Series- 1

Delaware VIP Trust — Delaware VIP Small Cap Value Series (continued)

The chart shows a $10,000 investment in the Delaware VIP Small Cap Value Series Standard Class shares for the period from Dec. 31, 1996 through Dec. 31, 2006. All distributions were reinvested. The chart also shows $10,000 invested in the Russell 2000 Value Index for the period from Dec. 31, 1996 through Dec. 31, 2006.

Russell 2000 Value Index measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values. An index is unmanaged and does not reflect the costs of operating a mutual fund, such as the costs of buying, selling, and holding securities. You cannot invest directly in an index.

Earnings from a variable annuity or variable life investment compound tax free until withdrawal, so no adjustments were made for income taxes.

An expense limitation was in effect for the Delaware VIP Small Cap Value Series during the periods shown.

Performance of Service Class shares will vary due to different charges and expenses.

Performance does not reflect insurance fees related to a variable annuity or variable life investment, or the deferred sales charge that would apply to certain withdrawals of investments held for fewer than eight years. Performance shown here would have been reduced if such fees were included and the expense limitation was removed. For more information about fees, consult your variable annuity or variable life prospectus.

Investments in variable products involve risk. Series that invest in small- and/or medium-sized companies typically involve greater risk, particularly in the short term, than those investing in larger, more established companies. Some portfolios offer more risk than others. Please read both the contract and underlying prospectus for specific details regarding the product's risk profile.

Small Cap Value Series- 2

Delaware VIP Trust — Delaware VIP Small Cap Value Series
Disclosure of Series Expenses

For the Period July 1, 2006 to December 31, 2006

As a shareholder of the Series, you incur ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Series expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Series and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2006 to December 31, 2006.

Actual Expenses

The first section of the table shown, "Actual Series 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 the period.

Hypothetical Example for Comparison Purposes

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

Please note that the expenses shown in the table are meant to highlight your ongoing costs only. As a shareholder of the Series, you do not incur any transaction costs, such as sales charges (loads), redemption fees or exchange fees, but shareholders of other funds may incur such costs. Also, the fees related to the variable annuity investment or the deferred sales charge that could apply have not been included. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. The Series' actual expenses shown in the table reflect fee waivers in effect for Service Class shares. The expenses shown in the table assume reinvestment of all dividends and distributions.

Expense Analysis of an Investment of $1,000

	Beginning Account Value 7/1/06		Ending Account Value 12/31/06		Annualized Expense Ratios			Expenses Paid During Period 7/1/06 to 12/31/06*
Actual Series Return
Standard Class	$	1,000.00	$	1,071.10		0.86	%	$	4.49
Service Class		1,000.00		1,069.60		1.11	%		5.79
Hypothetical 5% Return (5% return before expenses)
Standard Class	$	1,000.00	$	1,020.87		0.86	%	$	4.38
Service Class		1,000.00		1,019.61		1.11	%		5.65

*"Expenses Paid During Period" are equal to the Series' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

Small Cap Value Series- 3

Delaware VIP Trust — Delaware VIP Small Cap Value Series
Sector Allocation and Top 10 Holdings

As of December 31, 2006

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

Sector	Percentage of Net Assets
Common Stock		94.97	%
Basic Industry/Capital Goods		11.23	%
Business Services		1.97	%
Capital Spending		6.05	%
Consumer Cyclical		2.79	%
Consumer Services		13.94	%
Consumer Staples		2.56	%
Energy		5.79	%
Financial Services		18.72	%
Health Care		6.22	%
Real Estate		4.58	%
Technology		14.28	%
Transportation		3.36	%
Utilities		3.48	%
Repurchase Agreements		5.14	%
Securities Lending Collateral		7.36	%
Fixed Rate Note		1.39	%
Variable Rate Notes		5.97	%
Total Market Value of Securities		107.47	%
Obligation to Return Securities Lending Collateral		(7.36	%)
Liabilities Net of Receivables and Other Assets		(0.11	%)
Total Net Assets		100.00	%

Holdings are for informational purposes only and are subject to change at any time. They are not a recommendation to buy, sell, or hold any security.

Top 10 Holdings	Percentage of Net Assets
Colonial BancGroup		1.54	%
Bank of Hawaii		1.36	%
Whiting Petroleum		1.33	%
Berkley (W.R.)		1.33	%
Brandywine Realty Trust		1.32	%
Brink's		1.29	%
Emulex		1.26	%
W-H Energy Services		1.23	%
Crown		1.21	%
Compuware		1.17	%

Small Cap Value Series-4

Delaware VIP Trust — Delaware VIP Small Cap Value Series
Statement of Net Assets

December 31, 2006

	Number of Shares		Market Value
COMMON STOCK–94.97%
Basic Industry/ Capital Goods–11.23%
Albemarle		190,500	$	13,677,900
† Alpha Natural Resources		369,900		5,263,677
Arch Coal		174,100		5,228,223
Bowater		374,200		8,419,500
Chaparral Steel		159,400		7,056,638
Crane		247,500		9,068,400
† Crown		687,700		14,386,684
FMC		151,700		11,612,635
† Griffon		299,530		7,638,015
IPSCO		131,100		12,306,357
* MacDermid		26,334		897,989
† PolyOne		679,400		5,095,500
* Spartech		314,100		8,235,702
* Texas Industries		128,000		8,221,440
Valspar		315,800		8,728,712
Westlake Chemical		229,000		7,186,020
				133,023,392
Business Services–1.97%
Brink's		239,700		15,321,624
† United Stationers		171,100		7,988,659
				23,310,283
Capital Spending–6.05%
† Casella Waste Systems		482,400		5,899,752
Gibraltar Industries		323,700		7,610,187
Harsco		145,900		11,102,990
† Insituform Technologies Class A		205,800		5,321,988
* Mueller Industries		277,500		8,796,750
Mueller Water Products Class A		315,600		4,692,972
† Mueller Water Products Class B		253,484		3,776,912
Timken		253,800		7,405,884
Wabtec		425,800		12,935,804
Walter Industries		153,400		4,149,470
				71,692,709
Consumer Cyclical–2.79%
* Beazer Homes USA		234,300		11,014,443
Furniture Brands International		227,100		3,685,833
* KB HOME		107,500		5,512,600
* MDC		143,800		8,203,790
† WCI Communities		241,600		4,633,888
				33,050,554
Consumer Services–13.94%
Applebee's International		476,700		11,760,189
* Belo Class A		324,500		5,964,310
Borders Group		480,900		10,748,115
Brunswick		277,500		8,852,250
* Cato Class A		481,800		11,038,038
*† CEC Entertainment		297,500		11,974,375
† Dollar Tree Stores		361,800		10,890,180
* Kenneth Cole Productions Class A		187,400		4,495,726
*† Lenox Group		153,000		979,200
Men's Wearhouse		230,100		8,803,626
Meredith		190,000		10,706,500
PETsMART		251,500		7,258,290
Ross Stores		351,600		10,301,880

	Number of Shares		Market Value
COMMON STOCK (continued)
Consumer Services (continued)
* Stage Stores		331,550	$	10,075,805
* Thor Industries		165,100		7,262,749
† Timberland Class A		222,200		7,017,076
Tuesday Morning		345,400		5,370,970
* Wolverine World Wide		325,650		9,287,538
† Zale		440,500		12,426,505
				165,213,322
Consumer Staples–2.56%
American Greetings Class A		316,600		7,557,242
Bunge Limited		33,200		2,407,332
† Constellation Brands Class A		360,600		10,464,612
Del Monte Foods		896,600		9,889,498
				30,318,684
Energy–5.79%
† Grey Wolf		1,001,800		6,872,348
† Newfield Exploration		293,400		13,481,730
Southwest Gas		288,800		11,081,256
*† TODCO		200,200		6,840,834
*† W-H Energy Services		299,400		14,577,786
† Whiting Petroleum		338,900		15,792,740
				68,646,694
Financial Services–18.72%
Bank of Hawaii		298,600		16,109,470
BankUnited Financial Class A		397,400		11,111,304
Berkley (W.R.)		456,543		15,755,299
* Boston Private Financial		427,200		12,051,312
Colonial BancGroup		707,400		18,208,476
First Midwest Bancorp		194,000		7,503,920
First Republic Bank		340,200		13,295,016
* Greater Bay Bancorp		440,300		11,593,099
* Harleysville Group		183,500		6,389,470
* Independent Bank		128,900		4,644,267
* Infinity Property & Casualty		211,900		10,253,841
*† KBW		19,800		581,922
MAF Bancorp		221,500		9,898,835
NBT Bancorp		212,000		5,408,120
* Ohio Casualty		388,600		11,584,166
Platinum Underwriters		393,100		12,162,514
Protective Life		203,700		9,675,750
Provident Bankshares		344,100		12,249,960
StanCorp Financial		219,200		9,874,960
Sterling Financial		339,420		11,475,790
† Triad Guaranty		218,800		12,005,556
				221,833,047
Health Care–6.22%
Arrow International		278,600		9,856,868
† Community Health Systems		220,900		8,067,268
* Owens & Minor		330,200		10,325,354
† Pediatrix Medical		281,900		13,784,910
Service Corp International		1,227,400		12,580,850
STERIS		394,400		9,927,048
Universal Health Services Class B		164,900		9,140,407
				73,682,705

Small Cap Value Series- 5

Delaware VIP Small Cap Value Series
Statement of Net Assets (continued)

	Number of Shares		Market Value
COMMON STOCK (continued)
Real Estate–4.58%
* Ashford Hospitality Trust		605,900	$	7,543,455
* Brandywine Realty Trust		470,933		15,658,522
* Education Realty Trust		273,000		4,032,210
Highland Hospitality		593,100		8,451,675
Highwoods Properties		238,500		9,721,260
* Washington Real Estate Investment Trust		222,500		8,900,000
				54,307,122
Technology–14.28%
Acxiom		474,600		12,173,490
† BEA Systems		939,700		11,821,426
† Bell Microproducts		536,200		3,780,210
*† Brocade Communications Systems		736,600		6,047,486
*† Checkpoint Systems		392,200		7,922,440
*† CommScope		430,000		13,106,400
† Compuware		1,669,000		13,902,770
† Emulex		764,700		14,919,297
† Entegris		671,600		7,266,712
† Insight Enterprises		337,800		6,374,286
† NETGEAR		262,900		6,901,125
† Parametric Technology		692,800		12,484,256
*† Premiere Global Services		982,100		9,271,024
* QAD		358,500		3,007,815
† Sybase		472,200		11,663,340
† Synopsys		457,900		12,239,667
Technitrol		400,600		9,570,334
† Vishay Intertechnology		499,000		6,756,460
				169,208,538
Transportation–3.36%
Alexander & Baldwin		283,800		12,583,692
† Kirby		332,500		11,348,225
† Saia		129,900		3,014,979
SkyWest		291,500		7,436,165
† YRC Worldwide		144,400		5,448,212
				39,831,273
Utilities–3.48%
Black Hills		162,600		6,006,444
*† El Paso Electric		407,000		9,918,590
* FairPoint Communications		335,500		6,357,725
* Otter Tail		244,100		7,606,156
PNM Resources		364,750		11,343,725
				41,232,640
Total Common Stock (cost $884,452,761)				1,125,350,963

	Principal Amount		Market Value
REPURCHASE AGREEMENTS–5.14%
With BNP Paribas 4.80% 1/2/07 (dated 12/29/06, to be repurchased at $23,177,355, collateralized by $24,234,000 U.S. Treasury Bills due 6/28/07, market value $23,651,246)	$	23,165,000	$	23,165,000
With Cantor Fitzgerald 4.82% 1/2/07 (dated 12/29/06, to be repurchased at $27,846,906, collateralized by $2,401,000 U.S. Treasury Notes 4.00% due 6/15/09, market value $2,366,267, $14,910,000 U.S. Treasury Notes 6.125% due 8/15/07, market value $15,355,382 and $9,940,000 U.S. Treasury Notes 6.50% due 2/15/10, market value $10,692,192)		27,832,000		27,832,000
With UBS Warburg 4.75% 1/2/07 (dated 12/29/06, to be repurchased at $9,945,246, collateralized by $10,267,000 U.S. Treasury Bills due 3/29/07, market value $10,147,603)		9,940,000		9,940,000
Total Repurchase Agreements (cost $60,937,000)				60,937,000
Total Market Value of Securities Before Securities Lending Collateral–100.11% (cost $945,389,761)				1,186,287,963
SECURITIES LENDING COLLATERAL**–7.36%
Short-Term Investments–7.36%
Fixed Rate Note–1.39%
Citigroup Global Markets 5.32% 1/2/07		16,505,500		16,505,500
				16,505,500
• Variable Rate Notes–5.97%
American Honda Finance 5.32% 2/21/07		2,134,445		2,134,445
ANZ National 5.35% 1/29/08		474,321		474,321
Australia New Zealand 5.35% 1/29/08		2,371,605		2,371,605
Bank of America 5.32% 2/23/07		3,083,087		3,083,087
Bank of New York 5.34% 1/29/08		1,897,284		1,897,284
Barclays New York 5.31% 5/18/07		3,083,087		3,083,087
Bayerische Landesbank 5.40% 1/29/08		2,371,605		2,371,605
Bear Stearns 5.41% 6/29/07		2,845,926		2,845,926
BNP Paribas 5.35% 1/29/08		2,371,605		2,371,605
Canadian Imperial Bank 5.33% 1/29/09		1,660,124		1,660,124
CDC Financial 5.36% 1/29/07		3,083,087		3,083,087
Citigroup Global Markets 5.38% 1/5/07		3,083,087		3,083,087
Commonwealth Bank 5.35% 1/29/08		2,371,605		2,371,605
Deutsche Bank 5.34% 2/23/07		2,845,926		2,845,926
Dexia Bank 5.33% 9/28/07		3,320,238		3,319,758
Goldman Sachs 5.45% 12/28/07		3,083,087		3,083,087
Marshall & Ilsley Bank 5.33% 1/29/08		2,608,766		2,608,766
Merrill Lynch Mortgage Capital 5.41% 1/8/07		3,083,087		3,083,087
Morgan Stanley 5.49% 1/29/08		3,083,087		3,083,087

Small Cap Value Series-6

Delaware VIP Small Cap Value Series
Statement of Net Assets (continued)

	Principal Amount		Market Value
SECURITIES LENDING COLLATERAL (continued)
Short-Term Investments (continued)
Variable Rate Notes (continued)
National Australia Bank 5.32% 3/7/07	$	2,940,790	$	2,940,790
National City Bank 5.32% 3/2/07		2,846,011		2,846,182
National Rural Utilities 5.34% 1/29/08		3,747,136		3,747,136
Nordea Bank New York 5.31% 5/16/07		1,185,795		1,185,773
Nordea Bank Norge 5.36% 1/29/08		2,371,605		2,371,605
Royal Bank of Scotland 5.34% 1/29/08		2,371,605		2,371,605
Societe Generale 5.32% 1/29/08		1,185,803		1,185,802
Toronto Dominion 5.32% 5/29/07		2,845,926		2,845,926
Wells Fargo 5.36% 1/29/08		2,371,605		2,371,605
				70,721,003
Total Securities Lending Collateral (cost $87,226,503)				87,226,503

TOTAL MARKET VALUE OF SECURITIES–107.47% (cost $1,032,616,264)	$	1,273,514,466	v
OBLIGATION TO RETURN SECURITIES LENDING COLLATERAL**–(7.36%)		(87,226,503	)
LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS–(0.11%)		(1,306,001	)
NET ASSETS APPLICABLE TO 35,513,185 SHARES OUTSTANDING–100.00%	$	1,184,981,962
NET ASSET VALUE-DELAWARE VIP SMALL CAP VALUE SERIES STANDARD CLASS ($502,800,670 / 15,047,015 Shares)	$	33.42
NET ASSET VALUE-DELAWARE VIP SMALL CAP VALUE SERIES SERVICE CLASS ($682,181,292 / 20,466,170 Shares)	$	33.33
COMPONENTS OF NET ASSETS AT DECEMBER 31, 2006:
Shares of beneficial interest (unlimited authorization-no par)	$	844,984,406
Undistributed net investment income		4,707,941
Accumulated net realized gain on investments		94,391,647
Net unrealized appreciation of investments and foreign currencies		240,897,968
Total net assets	$	1,184,981,962

  *  Fully or partially on loan.

  **  See Note 8 in "Notes to Financial Statements."

v  Includes $85,039,366 of securities loaned.

  †  Non-income producing security for the year ended December 31, 2006.

  •  Variable rate security. The interest rate shown is the rate as of December 31, 2006.

See accompanying notes

Small Cap Value Series-7

Delaware VIP Trust — Delaware VIP Small Cap Value Series
Statement of Operations

Year Ended December 31, 2006

INVESTMENT INCOME:
Dividends	$	10,810,091
Interest		2,897,556
Securities lending income		235,995
Foreign tax withheld		(10,043	)
		13,933,599
EXPENSES:
Management fees		7,749,325
Distribution expenses - Service Class		1,812,870
Accounting and administration expenses		430,821
Reports and statements to shareholders		241,112
Trustees' fees and benefits		197,476
Legal fees		112,500
Dividend disbursing and transfer agent fees and expenses		107,705
Audit and tax		49,187
Insurance fees		39,989
Consulting fees		32,974
Custodian fees		32,140
Registration fees		12,587
Dues and services		8,349
Trustees' expenses		6,763
Taxes (other than taxes on income)		2,897
Pricing fees		1,030
		10,837,725
Less waiver of distribution expenses - Service Class		(302,145	)
Less expense paid indirectly		(6,538	)
Total operating expenses		10,529,042
NET INVESTMENT INCOME		3,404,557
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on:
Investments		97,476,738
Foreign currencies		(404	)
Net realized gain		97,476,334
Net change in unrealized appreciation/depreciation of investments and foreign currencies		52,899,077
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCIES		150,375,411
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	153,779,968

See accompanying notes

Delaware VIP Trust — Delaware VIP Small Cap Value Series
Statements of Changes in Net Assets

	Year Ended
	12/31/06			12/31/05
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income	$	3,404,557		$	2,287,107
Net realized gain on investments and foreign currencies		97,476,334			65,405,303
Net change in unrealized appreciation/ depreciation of investments and foreign currencies		52,899,077			7,533,798
Net increase in net assets resulting from operations		153,779,968			75,226,208
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Standard Class		(1,141,559	)		(1,473,097	)
Service Class		(137,447	)		(662,000	)
Net realized gain on investments:
Standard Class		(30,306,999	)		(27,988,835	)
Service Class		(37,402,855	)		(29,872,730	)
		(68,988,860	)		(59,996,662	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Standard Class		156,545,638			137,932,285
Service Class		157,234,652			111,030,783
Net asset value of shares issued upon reinvestment of dividends and distributions:
Standard Class		31,448,558			29,461,932
Service Class		37,540,302			30,534,730
��		382,769,150			308,959,730
Cost of shares repurchased:
Standard Class		(135,422,040	)		(98,348,749	)
Service Class		(72,512,278	)		(39,373,596	)
		(207,934,318	)		(137,722,345	)
Increase in net assets derived from capital share transactions		174,834,832			171,237,385
NET INCREASE IN NET ASSETS		259,625,940			186,466,931
NET ASSETS:
Beginning of year		925,356,022			738,889,091
End of year (including undistributed net investment income of $4,707,941 and $2,582,794, respectively)	$	1,184,981,962		$	925,356,022

See accompanying notes

Small Cap Value Series- 8

Delaware VIP Trust — Delaware VIP Small Cap Value Series
Financial Highlights

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

	VIP Small Cap Value Series Standard Class
	Year Ended
	12/31/06			12/31/05			12/31/04			12/31/03			12/31/02
Net asset value, beginning of period	$	30.830		$	30.450		$	25.640		$	18.140		$	19.530
Income (loss) from investment operations:
Net investment income1		0.146			0.121			0.122			0.068			0.101
Net realized and unrealized gain (loss) on investments and foreign currencies		4.703			2.539			5.270			7.513			(1.149	)
Total from investment operations		4.849			2.660			5.392			7.581			(1.048	)
Less dividends and distributions from:
Net investment income		(0.082	)		(0.114	)		(0.053	)		(0.081	)		(0.104	)
Net realized gain on investments		(2.177	)		(2.166	)		(0.529	)		–			(0.238	)
Total dividends and distributions		(2.259	)		(2.280	)		(0.582	)		(0.081	)		(0.342	)
Net asset value, end of period	$	33.420		$	30.830		$	30.450		$	25.640		$	18.140
Total return2		16.19	%		9.42	%		21.48	%		41.98	%		(5.60	%)
Ratios and supplemental data:
Net assets, end of period (000 omitted)	$	502,801		$	413,633		$	339,542		$	265,739		$	170,630
Ratio of expenses to average net assets		0.84	%		0.85	%		0.83	%		0.86	%		0.85	%
Ratio of net investment income to average net assets		0.46	%		0.41	%		0.46	%		0.32	%		0.52	%
Portfolio turnover		36	%		32	%		37	%		41	%		43	%

¹The average shares outstanding method has been applied for per share information.

²Total 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.

See accompanying notes

Small Cap Value Series- 9

Delaware VIP Small Cap Value Series
Financial Highlights (continued)

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

	VIP Small Cap Value Series Service Class
	Year Ended
	12/31/06			12/31/05			12/31/04			12/31/03			12/31/02
Net asset value, beginning of period	$	30.760		$	30.390		$	25.610		$	18.130		$	19.520
Income (loss) from investment operations:
Net investment income1		0.066			0.048			0.056			0.020			0.072
Net realized and unrealized gain (loss) on investments and foreign currencies		4.689			2.536			5.258			7.512			(1.147	)
Total from investment operations		4.755			2.584			5.314			7.532			(1.075	)
Less dividends and distributions from:
Net investment income		(0.008	)		(0.048	)		(0.005	)		(0.052	)		(0.077	)
Net realized gain on investments		(2.177	)		(2.166	)		(0.529	)		–			(0.238	)
Total dividends and distributions		(2.185	)		(2.214	)		(0.534	)		(0.052	)		(0.315	)
Net asset value, end of period	$	33.330		$	30.760		$	30.390		$	25.610		$	18.130
Total return2		15.89	%		9.15	%		21.16	%		41.66	%		(5.72	%)
Ratios and supplemental data:
Net assets, end of period (000 omitted)	$	682,181		$	511,723		$	399,347		$	248,930		$	124,241
Ratio of expenses to average net assets		1.09	%		1.10	%		1.08	%		1.08	%		1.00	%
Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly		1.14	%		1.15	%		1.13	%		1.11	%		1.00	%
Ratio of net investment income to average net assets		0.21	%		0.16	%		0.21	%		0.10	%		0.37	%
Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly		0.16	%		0.11	%		0.16	%		0.07	%		0.37	%
Portfolio turnover		36	%		32	%		37	%		41	%		43	%

¹The average shares outstanding method has been applied for per share information.

²Total 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. Total investment return reflects waivers and payment of fees by the distributor, as applicable. Performance would have been lower had the expense limitation and waiver not been in effect.

See accompanying notes

Small Cap Value Series- 10

Delaware VIP Trust — Delaware VIP Small Cap Value Series
Notes to Financial Statements

December 31, 2006

Delaware VIP Trust (the "Trust") is organized as a Delaware statutory trust and offers 15 series: Delaware VIP Balanced Series, Delaware VIP Capital Reserves Series, Delaware VIP Cash Reserve Series, Delaware VIP Diversified Income Series, Delaware VIP Emerging Markets Series, Delaware VIP Global Bond Series, Delaware VIP Growth Opportunities Series, Delaware VIP High Yield Series, Delaware VIP International Value Equity Series, Delaware VIP REIT Series, Delaware VIP Select Growth Series, Delaware VIP Small Cap Value Series, Delaware VIP Trend Series, Delaware VIP U.S. Growth Series and Delaware VIP Value Series. These financial statements and the related notes pertain to Delaware VIP Small Cap Value Series (the "Series"). The Trust is an open-end investment company. The Series is considered diversified under the Investment Company Act of 1940, as amended, and offers Standard Class and Service Class shares. The Standard Class shares do not c arry a 12b-1 fee and the Service Class shares carry a 12b-1 fee. The shares of the Series are sold only to separate accounts of life insurance companies.

The investment objective of the Series is to seek capital appreciation.

1. Significant Accounting Policies

The following accounting policies are in accordance with U.S. generally accepted accounting principles and are consistently followed by the Series.

Security Valuation—Equity securities, except those traded on the Nasdaq Stock Market, Inc. (Nasdaq) are valued at the last quoted sales price as of the time of the regular close of the New York Stock Exchange (NYSE) on the valuation date. Securities traded on the Nasdaq are valued in accordance with the Nasdaq Official Closing Price, which may not be the last sales price. If on a particular day an equity security does not trade, then the mean between the bid and asked prices will be used. Short-term debt securities having less than 60 days to maturity are valued at amortized cost, which approximates market value. Securities lending collateral is valued at amortized cost, which approximates market value. 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 the Series' Board of Trustees. 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 with respect to foreign securities, aftermarket trading, or significant events after local market trading (e.g., government actions or pronouncements, trading volume or volatility on markets, exchanges among dealers, or news events).

In September 2006, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 157 "Fair Value Measurements" (Statement 157). Statement 157 establishes a framework for measuring fair value in generally accepted accounting principles, clarifies the definition of fair value within that framework, and expands disclosures about the use of fair value measurements. Statement 157 is intended to increase consistency and comparability among fair value estimates used in financial reporting. Statement 157 is effective for fiscal years beginning after November 15, 2007. Management does not expect the adoption of Statement 157 to have an impact on the amounts reported in the financial statements.

Federal Income Taxes—The Series intends to continue to qualify for federal income tax purposes as a regulated investment company and make the requisite distributions to shareholders. Accordingly, no provision for federal income taxes has been made in the financial statements.

On July 13, 2006, FASB released FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Series' 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 would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. Recent SEC guidance allows implementing FIN 48 in Series net asset value calculations as late as the Series' last net asset value calculation in the first required fi nancial statement reporting period. As a result, the Series will incorporate FIN 48 in its semiannual report on June 30,2007. Although the Series' tax positions are currently being evaluated, management does not expect the adoption of FIN 48 to have a material impact on the Series' financial statements.

Class Accounting—Investment income, common expenses and realized and unrealized gain (loss) on investments are allocated to the classes of the Series on the basis of daily net assets of each class. Distribution expenses relating to a specific class are charged directly to that class.

Repurchase Agreements—The Series may invest in a pooled cash account along with other members of the Delaware Investments^® Family of Funds pursuant to an exemptive order issued by the Securities and Exchange Commission. The aggregate daily balance of the pooled cash account is invested in repurchase agreements secured by obligations of the U.S. government. The respective collateral is held by the Series' custodian bank until the maturity of the respective repurchase agreements. Each repurchase agreement is at least 102% collateralized. However, in the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral may be subject to legal proceedings.

Use of Estimates—The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of 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.

Other—Expenses directly attributable to the Series are charged directly to the Series. 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. Dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis. Distributions received from investments in Real Estate Investment Trusts are recorded as dividend income on ex-dividend date, subject to reclassification upon notice of the ch aracter of such distribution by the issuer.

Small Cap Value Series- 11

Delaware VIP Small Cap Value Series
Notes to Financial Statements (continued)

1. Significant Accounting Policies (continued)

The Series declares and pays dividends from net investment income and distributions from net realized gain on investments, if any, following the close of the fiscal year.

Subject to seeking best execution, the Series may direct certain security trades to brokers who have agreed to rebate a portion of the related brokerage commission to the Series in cash. Such commission rebates are included in realized gain on investments in the accompanying financial statements and totaled $35,474 for the year ended December 31, 2006. In general, best execution refers to many factors, including the price paid or received for a security, the commission charged, the promptness and reliability of execution, the confidentiality and placement accorded the order, and other factors affecting the overall benefit obtained by the Series on the transaction.

The Series receives earnings credits from its custodian when positive cash balances are maintained, which are used to offset custody fees. The expense paid under this arrangement is included in custodian fees on the Statement of Operations with the corresponding expense offset shown as "expense paid indirectly."

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

In accordance with the terms of its investment management agreement, the Series pays Delaware Management Company (DMC), a series of Delaware Management Business Trust and the investment manager, an annual fee which is calculated daily at the rate of 0.75% on the first $500 million of average daily net assets of the Series, 0.70% on the next $500 million, 0.65% on the next $1.5 billion, and 0.60% on average daily net assets in excess of $2.5 billion.

DMC has contractually agreed to waive that portion, if any, of its management fee and reimburse the Series to the extent necessary to ensure that annual operating expenses, exclusive of taxes, interest, brokerage commissions, distribution fees, certain insurance costs and extraordinary expenses, do not exceed 1.03% of average daily net assets of the Series through April 30, 2007. Prior to May 1, 2006 the expense limitation was 0.95% of average daily net assets. No reimbursement was due for the year ended December 31, 2006.

Delaware Service Company, Inc. (DSC), an affiliate of DMC, provides accounting, administration, dividend disbursing and transfer agent services. The Series pays DSC a monthly fee computed at the annual rate of 0.04% of the Series' average daily net assets for accounting and administrative services. The Series pays DSC a monthly fee based on average net assets for dividend disbursing and transfer agent services.

Pursuant to a distribution agreement and distribution plan, the Series pays Delaware Distributors, L.P. (DDLP), the distributor and an affiliate of DMC, an annual distribution and service fee not to exceed 0.30% of the average daily net assets of the Service Class shares. DDLP has contracted to waive distribution and service fees through April 30, 2007 in order to prevent distribution and service fees of the Service Class shares from exceeding 0.25% of average daily net assets. Standard Class shares pay no distribution and service expenses.

At December 31, 2006, the Series had liabilities payable to affiliates as follows:

Investment Management Fee Payable to DMC		Dividend Disbursing, Transfer Agent, Accounting and Administration and Other Expenses Payable to DSC		Distribution Fees Payable to DDLP		Other Expenses Payable to DMC and Affiliates*
$	719,176	$	56,087	$	144,847	$	94,713

*DMC, as part of its administrative services, pays operating expenses on behalf of the Series and is reimbursed on a periodic basis. Such expenses include items such as printing of shareholder reports, fees for audit, legal and tax services, custodian fees and trustees' fees.

As provided in the investment management agreement, the Series bears the cost of certain legal and tax services, including internal legal and tax services provided to the Series by DMC and/or its affiliates' employees. For the year ended December 31, 2006, the Series was charged $51,720 for internal legal and tax services provided by DMC and/or its affiliates' employees.

Trustees' fees and benefits include expenses accrued by the Series for each Trustee's retainer, per meeting fees and retirement benefits. Independent Trustees with over five years of uninterrupted service are eligible to participate in a retirement plan that provides for the payment of benefits upon retirement. The amount of the retirement benefit is based on factors set forth in the plan, including the number of years of service. On November 16, 2006, the Board of Trustees unanimously voted to terminate the retirement plan. Payments equal to the net present value of the earned benefits will be made in 2007 to those independent trustees so entitled. The retirement benefit payout for the Series is $138,000. Certain officers of DMC, DSC and DDLP are officers and/or trustees of the Trust. These officers and trustees are paid no compensation by the Series.

3. Investments

For the year ended December 31, 2006, the Series made purchases and sales of investment securities other than short-term investments as follows:

Purchases	$	461,224,943
Sales		370,943,426

Small Cap Value Series-12

Delaware VIP Small Cap Value Series
Notes to Financial Statements (continued)

3. Investments (continued)

At December 31, 2006, the cost of investments for federal income tax purposes and unrealized appreciation (depreciation) for the Series were as follows:

Cost of Investments		Aggregate Unrealized Appreciation		Aggregate Unrealized Depreciation			Net Unrealized Appreciation
$	1,033,039,430	$	259,389,346	$	(18,914,310	)	$	240,475,036

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. generally accepted accounting principles. Additionally, gains (losses) on foreign currency transactions and 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 December 31, 2006 and 2005 was as follows:

	Year Ended 12/31/06		Year Ended 12/31/05
Ordinary income	$	20,780,190	$	19,979,753
Long term capital gain		48,208,670		40,016,909
Total	$	68,988,860	$	59,996,662

5. Components of Net Assets on a Tax Basis

As of December 31, 2006, the components of net assets on a tax basis were as follows:

Shares of beneficial interest	$	844,984,406
Undistributed ordinary income		20,870,270
Undistributed long-term capital gain		78,652,484
Unrealized appreciation of investments and foreign currencies		240,474,802
Net assets	$	1,184,981,962

The differences between book basis and tax basis components of net assets are primarily attributable to tax deferral of losses on wash sales.

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 gain (loss) on foreign currency transactions. Results of operations and net assets were not affected by these reclassifications. For the year ended December 31, 2006, the Series recorded the following reclassifications:

Undistributed Net Investment Income			Accumulated Net Realized Gain (Loss)
$	(404	)	$	404

Small Cap Value Series-13

Delaware VIP Small Cap Value Series
Notes to Financial Statements (continued)

6. Capital Shares

Transactions in capital shares were as follows:

	Year Ended 12/31/06			Year Ended 12/31/05
Shares sold:
Standard Class		4,980,616			4,608,864
Service Class		4,932,974			3,758,275
Shares issued upon reinvestment of dividends and distributions:
Standard Class		999,954			1,042,531
Service Class		1,194,030			1,080,493
		12,107,574			10,490,163
Shares repurchased:
Standard Class		(4,349,582	)		(3,386,928	)
Service Class		(2,294,511	)		(1,345,123	)
		(6,644,093	)		(4,732,051	)
Net increase		5,463,481			5,758,112

7. Line of Credit

The Series, along with certain other funds in the Delaware Investments^® Family of Funds (the "Participants"), participates in a $225,000,000 revolving line of credit facility to be used for temporary or emergency purposes as an additional source of liquidity to fund redemptions of investor shares. The Participants are charged an annual commitment fee, which is allocated across the Participants on the basis of each Participant's allocation of the entire facility. The Participants may borrow up to a maximum of one third of their net assets under the agreement. The Series had no amounts outstanding as of December 31, 2006 or at any time during the year then ended.

8. Securities Lending

The Series, along with other funds in the Delaware Investments^® Family of Funds, may lend its securities pursuant to a security lending agreement (Lending Agreement) with JPMorgan Chase. Initial security loans made pursuant to the Lending Agreement are required to be secured by U.S. government obligations and/or cash collateral not less than 102% of the market value of the securities issued in the United States and 105% of the market value of securities issued outside the United States. With respect to each loan, if the aggregate market value of the collateral held on any business day is less than the aggregate market value of the securities which are the subject of such loan, the borrower will be notified to provide additional collateral not less than the applicable collateral requirements. Cash collateral received is invested in fixed income securities, with a weighted average maturity not to exceed 90 days, rated in one of the top two tiers by Standard & Poor's Ratings Group or Moody's Investors Service, Inc. or repurchase agreements collateralized by such securities. However, in the event of default or bankruptcy by the lending agent, realization and/or retention of the collateral may be subject to legal proceedings. In the event the borrower fails to return loaned securities and the collateral received is insufficient to cover the value of the loaned securities and provided such collateral shortfall is not the result of investment losses, the lending agent has agreed to pay the amount of the shortfall to the Series, or at the discretion of the lending agent, replace the loaned securities. The Series continues to record dividends on the securities loaned and is subject to change in value of the securities loaned that may occur during the term of the loan. The Series has the right under the Lending Agreement to recover the securities from the borrower on demand. The security lending agent and the borrower retain a portion of the earnings from the collateral investments. The Series records security lending income net of such allocation.

At December 31, 2006, the market value of securities on loan was $85,039,366, for which cash collateral was received and invested in accordance with the Lending Agreement. Such investments are presented on the Statement of Net Assets under the caption "Securities Lending Collateral."

9. Credit and Market Risk

The Series invests a significant portion of its assets in small companies and may be subject to certain risks associated with ownership of securities of such companies. Investments in small-sized companies may be more volatile than investments in larger companies for a number of reasons, which include limited financial resources or a dependence on narrow product lines.

The Series may invest up to 10% of its total 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 the Series 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, the Series' Board of Trustees has delegated to DMC the day-to-day functions of determining whether individual securities are liquid for purposes of the Series' limitation on investments in illiquid assets. At December 31, 2006, there were no Rule 144A securities and no securities have been determined to be illiquid under the Series' Liquidity Procedures.

Small Cap Value Series-14

Delaware VIP Small Cap Value Series
Notes to Financial Statements (continued)

10. Contractual Obligations

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

11. Tax Information (Unaudited)

For the fiscal year ended December 31, 2006, the Series designates dividends and distributions paid during the year as follows:

(A) Long-Term Capital Gain Distributions (Tax Basis)			(B) Ordinary Income Distributions (Tax Basis)			Total Distributions (Tax Basis)			(C) Qualifying Dividends1
	70	%		30	%		100	%		45	%

(A) and (B) are based on a percentage of the Series' total distributions.

(C) is based on a percentage of the Series' ordinary income distributions.

¹ Qualifying dividends represent dividends which qualify for the corporate dividends received deduction.

Small Cap Value Series- 15

Delaware VIP Trust — Delaware VIP Small Cap Value Series
Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees
Delaware VIP Trust–Delaware VIP Small Cap Value Series

We have audited the accompanying statement of net assets of the Delaware VIP Small Cap Value Series (one of the series constituting Delaware VIP Trust) (the "Series") as of December 31, 2006, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Series' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits 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 and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Series' internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Series' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant es timates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2006, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Delaware VIP Small Cap Value Series of Delaware VIP Trust at December 31, 2006, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

  

Philadelphia, Pennsylvania

February 14, 2007

The Series files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Series' Forms N-Q, as well as a description of the policies and procedures that the Series uses to determine how to vote proxies (if any) relating to portfolio securities is available without charge (i) upon request, by calling 800-523-1918; (ii) on the Series' website at http://www.delawareinvestments.com; and (iii) on the Commission's website at http://www.sec.gov. The Series' Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Information (if any) regarding how the Series voted proxies relating to portfolio securities during the most recently disclosed 12-month period ended June 30 is available without charge (i) through the Series' website at http://www.delawareinvestments.com; and (ii) on the Commission's website at http://www.sec.gov.

Small Cap Value Series- 16

Delaware Investments® Family of Funds

board of trustees/directors and officers addendum

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 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.

Name, Address, and Birth Date	Position(s) Held with Fund(s)	Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee or Officer		Other Directorships Held by Trustee or Officer
interested trustees
Patrick P. Coyne1 2005 Market Street Philadelphia, PA 19103 April 14, 1963	Chairman, President, Chief Executive Officer, and Trustee	Chairman and Trustee since August 16, 2006 President and Chief Executive Officer since August 1, 2006	Patrick P. Coyne has served in various executive capacities at different times at Delaware Investments.2		84	None
independent trustees
Thomas L. Bennett 2005 Market Street Philadelphia, PA 19103 October 4, 1947	Trustee	Since March 2005	Private Investor – (March 2004 – Present) Investment Manager – Morgan Stanley & Co. (January 1984 – March 2004)		84	None
John A. Fry 2005 Market Street Philadelphia, PA 19103 May 28, 1960	Trustee	Since January 2001	President – Franklin & Marshall College (June 2002 – Present) Executive Vice President – University of Pennsylvania (April 1995 – June 2002)		84	Director – Community Health Systems Director – Allied Barton Security Holdings
Anthony D. Knerr 2005 Market Street Philadelphia, PA 19103 December 7, 1938	Trustee	Since April 1990	Founder and Managing Director – Anthony Knerr & Associates (Strategic Consulting) (1990 – Present)		84	None
Lucinda S. Landreth 2005 Market Street Philadelphia, PA 19103 June 24, 1947	Trustee	Since March 2005	Chief Investment Officer – Assurant, Inc. (Insurance) (2002 – 2004)		84	None
Ann R. Leven 2005 Market Street Philadelphia, PA 19103 November 1, 1940	Trustee	Since September 1989	Consultant – ARL Associates (Financial Planning) (1983 – Present)		84	Director and Audit Committee Chairperson – Andy Warhol Foundation Director and Audit Committee Member – Systemax, Inc.

Small Cap Value Series- 17

Name, Address, and Birth Date	Position(s) Held with Fund(s)	Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee or Officer		Other Directorships Held by Trustee or Officer
independent trustees (continued)
Thomas F. Madison 2005 Market Street Philadelphia, PA 19103 February 25, 1936	Trustee	Since May 1997	President and Chief Executive Officer – MLM Partners, Inc. (Small Business Investing and Consulting) (January 1993 – Present)		84	Director – Banner Health Director – CenterPoint Energy Director and Audit Committee Member – Digital River, Inc. Director and Audit Committee Member – Rimage Corporation Director – Valmont Industries, Inc.
Janet L. Yeomans 2005 Market Street Philadelphia, PA 19103 July 31, 1948	Trustee	Since April 1999	Vice President (January 2003 – Present) and Treasurer (January 2006 – Present) 3M Corporation Ms. Yeomans has held various management positions at 3M Corporation since 1983.		84	None
J. Richard Zecher 2005 Market Street Philadelphia, PA 19103 July 3, 1940	Trustee	Since March 2005	Founder – Investor Analytics (Risk Management) (May 1999 – Present) Founder – Sutton Asset Management (Hedge Fund) (September 1998 – Present)		84	Director and Audit Committee Member – Investor Analytics Director and Audit Committee Member – Oxigene, Inc.
officers
David F. Connor 2005 Market Street Philadelphia, PA 19103 December 2, 1963	Vice President, Deputy General Counsel, and Secretary	Vice President since September 21, 2000 and Secretary since October 2005	David F. Connor has served as Vice President and Deputy General Counsel of Delaware Investments since 2000.		84	None3
David P. O'Connor 2005 Market Street Philadelphia, PA 19103 February 21, 1966	Senior Vice President, General Counsel, and Chief Legal Officer	Senior Vice President, General Counsel, and Chief Legal Officer since October 2005	David P. O'Connor has served in various executive and legal capacities at different times at Delaware Investments.		84	None3
John J. O'Connor 2005 Market Street Philadelphia, PA 19103 June 16, 1957	Senior Vice President and Treasurer	Treasurer since February 2005	John J. O'Connor has served in various executive capacities at different times at Delaware Investments.		84	None3
Richard Salus 2005 Market Street Philadelphia, PA 19103 October 4, 1963	Senior Vice President and Chief Financial Officer	Chief Financial Officer since November 1, 2006	Richard Salus has served in various executive capacities at different times at Delaware Investments.		84	None3

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

² Delaware 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.

³ David F. Connor, David P. O'Connor, John J. 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. John J. O'Connor also serves in a similar capacity for Lincoln Variable Insurance Products Trust, which has the same investment advisor as the registrant.

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.

Small Cap Value Series- 18

Delaware VIP Trust — Delaware VIP Trend Series

For the 12-month period, the Delaware VIP Trend Series had positive returns of 7.59% for Standard Class shares and 7.34% for Service Class shares (both reflect all distributions reinvested). The benchmark, the Russell 2000 Growth Index, gained 13.35% (source: Lipper).

In general, value stocks strongly outperformed growth stocks, a disparity that reflected, in part, almost indiscriminate risk aversion by investors from late April to early August due to fears about inflation and rising interest rates. The attendant disconnect between price action and fundamentals hit smaller-cap growth stocks hard, and sectors and industries where we had a significant portion of the portfolio positioned — technology, biotech and medical tech, and consumer-related industries — were further punished.

This severe investor pessimism eventually gave way in August, as commodity prices dropped and the Federal Reserve finally paused its two-plus-year regimen of successive rate hikes. Large-cap stocks were the initial beneficiaries, followed in the fourth quarter by a rally in small-cap stocks.

For the year, the Series received a strong contribution from its consumer non-durables holdings. Specialty retailer/apparel manufacturers Under Armour, Crocs, and DSW were up 79%, 57%, and 47%, respectively, on continued strong growth driven by resurgent consumer spending. Stock selection in the business services and basic industry sectors also added value.

Unfortunately, these positive contributions were offset by the adverse impact of some problematic holdings in the Series' technology and healthcare holdings. FDA rejection of Neurocrine Bioscience's insomnia drug caught investors completely by surprise, sending the stock down considerably and providing evidence of an increasingly cautious FDA with respect to new drug approval. The Series holdings in Neurocrine Bioscience were sold before Dec. 31, 2006.

Nervousness in the technology sector was exacerbated by the SEC investigation into past options-granting practices. Some technology holdings were adversely affected by these events, though many later rebounded. Overall, sector selection for the year moderately hindered performance, primarily due to underweights in energy and basic industry.

The views expressed are current as of the date of this report and are subject to change.

The performance data quoted below and on the next page represent past performance; past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please obtain the performance data for the most recent month end by calling the number noted on the page related to this Series in the introductory section of this report.

You should consider the investment objectives, risks, charges, and expenses of the investment carefully before investing. The Delaware VIP Trend Series prospectus contains this and other important information about the Series. To obtain a prospectus, contact the company noted on the page related to this Series in the introductory section of this report, either by phone or through the company Web site. We advise you to read the prospectus carefully before you invest.

Delaware VIP Trend Series Average Annual Total Returns For the periods ending Dec. 31, 2006

1 Year

5 Years

10 Years

Lifetime

Standard Class Shares*

+7.59

%

+6.77

%

+10.13

%

+11.50

%

Service Class Shares**

+7.34

%

+6.53

%

NA

-0.31

%

  *  Commenced operations on Dec. 27, 1993

  **  Commenced operations on May 1, 2000

Trend Series- 1

Delaware VIP Trust — Delaware VIP Trend Series (continued)

The chart shows a $10,000 investment in the Delaware VIP Trend Series Standard Class shares for the period from Dec. 31, 1996 through Dec. 31, 2006. All distributions were reinvested. The chart also shows $10,000 invested in the Russell 2000 Growth Index for the period from Dec. 31, 1996 through Dec. 31, 2006.

Russell 2000 Growth Index measures the performance of those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values. An index is unmanaged and does not reflect the costs of operating a mutual fund, such as the costs of buying, selling, and holding securities. You cannot invest directly in an index.

Earnings from a variable annuity or variable life investment compound tax free until withdrawal, so no adjustments were made for income taxes.

An expense limitation was in effect for the Delaware VIP Trend Series during the periods shown.

Performance of Service Class shares will vary due to different charges and expenses.

Performance does not reflect insurance fees related to a variable annuity or variable life investment or the deferred sales charge that would apply to certain withdrawals of investments held for fewer than eight years. Performance shown here would have been reduced if such fees were included and the expense limitation was removed. For more information about fees, consult your variable annuity or variable life prospectus.

Investments in variable products involve risk. Series that invest in small and/or medium-sized companies typically involve greater risk, particularly in the short term, than those investing in larger, more established companies. Some portfolios offer more risk than others. Please read both the contract and underlying prospectus for specific details regarding the product's risk profile.

Trend Series- 2

Delaware VIP Trust — Delaware VIP Trend Series
Disclosure of Series Expenses

For the Period July 1, 2006 to December 31, 2006

As a shareholder of the Series, you incur ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Series expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Series and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2006 to December 31, 2006.

Actual Expenses

The first section of the table shown, "Actual Series 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 the period.

Hypothetical Example for Comparison Purposes

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

Please note that the expenses shown in the table are meant to highlight your ongoing costs only. As a shareholder of the Series, you do not incur any transaction costs, such as sales charges (loads), redemption fees or exchange fees, but shareholders of other funds may incur such costs. Also, the fees related to the variable annuity investment or the deferred sales charge that could apply have not been included. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. The Series' actual expenses shown in the table reflect fee waivers in effect for Service Class shares. The expenses shown in the table assume reinvestment of all dividends and distributions.

Expense Analysis of an Investment of $1,000

	Beginning Account Value 7/1/06		Ending Account Value 12/31/06		Annualized Expense Ratios			Expenses Paid During Period 7/1/06 to 12/31/06*
Actual Series Return
Standard Class	$	1,000.00	$	1,064.80		0.89	%	$	4.63
Service Class		1,000.00		1,063.50		1.14	%		5.93
Hypothetical 5% Return (5% return before expenses)
Standard Class	$	1,000.00	$	1,020.72		0.89	%	$	4.53
Service Class		1,000.00		1,019.46		1.14	%		5.80

*"Expenses Paid During Period" are equal to the Series' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

Trend Series- 3

Delaware VIP Trust — Delaware VIP Trend Series
Sector Allocation and Top 10 Holdings

As of December 31, 2006

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

Sector	Percentage of Net Assets
Common Stockw		98.43	%
Basic Industry/Capital Goods		9.59	%
Business Services		4.87	%
Consumer Durables		1.18	%
Consumer Non-Durables		13.02	%
Consumer Services		4.48	%
Energy		5.32	%
Financials		9.91	%
Health Care		19.95	%
Technology		27.37	%
Transportation		2.74	%
Repurchase Agreements		1.64	%
Securities Lending Collateral		24.47	%
Fixed Rate Note		4.63	%
Variable Rate Notes		19.84	%
Total Market Value of Securities		124.54	%
Obligation to Return Securities Lending Collateral		(24.47	%)
Liabilities Net of Receivables and Other Assets		(0.07	%)
Total Net Assets		100.00	%

w  Narrow industries are utilized for compliance purposes for diversification whereas broad sectors are used for financial reporting.

Holdings are for informational purposes only and are subject to change at any time. They are not a recommendation to buy, sell, or hold any security.

Top 10 Holdings	Percentage of Net Assets
Coach		2.87	%
Under Armour Class A		2.54	%
Dick's Sporting Goods		2.22	%
Akamai Technologies		2.06	%
Bucyrus International		2.01	%
NuVasive		1.97	%
Sciele Pharma		1.96	%
Hologic		1.94	%
United Therapeutics		1.93	%
Polycom		1.88	%

Trend Series- 4

Delaware VIP Trust — Delaware VIP Trend Series
Statement of Net Assets

December 31, 2006

		Number of Shares		Market Value
COMMON STOCK–98.43%w
Basic Industry/Capital Goods–9.59%
* AMCOL International			169,600	$	4,704,704
* Bucyrus International Class A			209,650		10,851,484
Carpenter Technology			54,300		5,566,836
*† Energy Conversion Devices			151,800		5,158,164
*† Hexcel			220,300		3,835,423
*† Itron			117,900		6,111,936
† Mettler-Toledo International			109,400		8,626,190
MSC Industrial Direct Class A			174,800		6,843,420
					51,698,157
Business Services–4.87%
*† Advisory Board			138,600		7,420,644
*† Bright Horizons Family Solutions			61,900		2,393,054
*† Geo Group			203,000		7,616,560
† Monster Worldwide			189,500		8,838,280
					26,268,538
Consumer Durables–1.18%
*† THQ			196,300		6,383,676
					6,383,676
Consumer Non-Durables–13.02%
† Bare Escentuals			93,900		2,917,473
*† Carter's			189,000		4,819,500
† Coach			360,700		15,495,672
*† Crocs			198,100		8,557,920
*† Dick's Sporting Goods			244,400		11,973,156
*† DSW Class A			206,600		7,968,562
*† J Crew			54,000		2,081,700
*† Tractor Supply			60,500		2,704,955
*† Under Armour Class A			270,900		13,666,905
					70,185,843
Consumer Services–4.48%
* Jackson Hewitt Tax Service			161,800		5,496,346
*† Sonic			262,964		6,297,988
*† Texas Roadhouse Class A			494,900		6,562,374
*† Wynn Resorts			61,600		5,781,160
	��				24,137,868
Energy–5.32%
* Carbo Ceramics			151,350		5,655,950
*† Helix Energy Solutions			225,800		7,083,346
*† Hydril			102,800		7,729,532
† North American Energy Partners			167,400		2,725,272
† Veritas DGC			63,800		5,463,194
					28,657,294
Financials–9.91%
* Aspen Insurance			158,200		4,170,152
Bankunited Financial Class A			80,800		2,259,168
City National			77,200		5,496,640
Delphi Financial Class A			163,950		6,633,417
Hanover Insurance			154,900		7,559,120
*† Investment Technology			94,600		4,056,448
*† Nasdaq Stock Market			110,500		3,402,295
Waddell & Reed Financial Class A			338,800		9,269,568
* Webster Financial			119,800		5,836,656
* Whitney Holding			145,500		4,746,210
					53,429,674

	Number of Shares		Market Value
COMMON STOCK (continued)
Health Care–19.95%
*† Align Technology		254,400	$	3,553,968
*† Cepheid		387,200		3,291,200
*† Conceptus		311,200		6,625,448
*† Cubist Pharmaceuticals		225,200		4,078,372
*† CV Therapeutics		406,500		5,674,740
*† Digene		141,200		6,766,304
*† Hologic		221,100		10,453,608
*† LifeCell		118,800		2,867,832
*† MannKind		74,300		1,225,207
*† MGI Pharma		309,000		5,688,690
*† Nektar Therapeutics		185,500		2,821,455
*† NuVasive		458,600		10,593,660
*† PDL BioPharma		414,900		8,356,086
*† Progenics Pharmaceuticals		298,700		7,688,538
*† Sciele Pharma		439,800		10,555,200
*† Techne		85,000		4,713,250
† Telik		499,400		2,212,342
† United Therapeutics		191,000		10,384,670
				107,550,570
Technology–27.37%
*† Akamai Technologies		209,100		11,107,391
† American Reprographics		177,500		5,912,525
† Cymer		120,800		5,309,160
† Emulex		314,500		6,135,895
† F5 Networks		98,600		7,317,106
*† Foundry Networks		514,600		7,708,708
† Guidance Software		32,500		506,025
*† Informatica		299,200		3,653,232
† Knot		78,100		2,049,344
† Macrovision		178,700		5,050,062
*† Microsemi		431,600		8,480,940
*† NutriSystem		146,900		9,311,991
*† Opsware		922,700		8,138,214
† Polycom		328,500		10,153,935
*† Powerwave Technologies		1,056,500		6,814,425
*† Rackable Systems		252,100		7,807,537
*† salesforce.com		152,000		5,540,400
*† Shutterfly		214,500		3,088,800
† Silicon Laboratories		168,600		5,841,990
*† SiRF Technology		156,800		4,001,536
† TIBCO Software		719,500		6,792,080
*† Trident Microsystems		334,700		6,084,846
*† Varian Semiconductor Equipment		128,900		5,867,528
*† Wind River Systems		477,400		4,893,350
				147,567,020
Transportation–2.74%
* Hunt (J.B.) Transport Services		258,200		5,362,814
UTi Worldwide		313,600		9,376,640
				14,739,454
Total Common Stock (cost $408,739,889)				530,618,094

Trend Series- 5

Delaware VIP Trend Series
Statement of Net Assets (continued)

	Principal Amount		Market Value
REPURCHASE AGREEMENTS–1.64%
With BNP Paribas 4.80% 1/2/07 (dated 12/29/06, to be repurchased at $3,354,788, collateralized by $3,508,000 U.S. Treasury Bills due 6/28/07, market value $3,423,273)	$	3,353,000	$	3,353,000
With Cantor Fitzgerald 4.82% 1/2/07 (dated 12/29/06, to be repurchased at $4,030,157, collateralized by $347,000 U.S. Treasury Notes 4.00% due 6/15/09, market value $342,493, $2,158,000 U.S. Treasury Notes 6.125% due 8/15/07, market value $2,222,533 and $1,439,000 U.S. Treasury Notes 6.50% due 2/15/10, market value $1,547,584)		4,028,000		4,028,000
With UBS Warburg 4.75% 1/2/07 (dated 12/29/06, to be repurchased at $1,439,759, collateralized by $1,486,000 U.S. Treasury Bills due 3/29/07, market value $1,468,760)		1,439,000		1,439,000
Total Repurchase Agreements (cost $8,820,000)				8,820,000
Total Market Value of Securities Before Securities Lending Collateral–100.07% (cost $417,559,889)				539,438,094
SECURITY LENDING COLLATERAL**–24.47%
Short-Term Investments –24.47%
Fixed Rate Note–4.63%
Citigroup Global Markets 5.32% 1/2/07		24,961,949		24,961,949
				24,961,949
• Variable Rate Notes–19.84%
American Honda Finance 5.32% 2/21/07		3,228,009		3,228,009
ANZ National 5.35% 1/29/08		717,335		717,335

	Principal Amount		Market Value
SECURITY LENDING COLLATERAL (continued)
Short-Term Investments (continued)
• Variable Rate Notes (continued)
Australia New Zealand 5.35% 1/29/08	$	3,586,676	$	3,586,676
Bank of America 5.32% 2/23/07		4,662,679		4,662,679
Bank of New York 5.34% 1/29/08		2,869,341		2,869,341
Barclays New York 5.31% 5/18/07		4,662,679		4,662,679
Bayerische Landesbank 5.40% 1/29/08		3,586,676		3,586,677
Bear Stearns 5.41% 6/29/07		4,304,012		4,304,012
BNP Paribas 5.35% 1/29/08		3,586,676		3,586,676
Canadian Imperial Bank 5.33% 1/29/09		2,510,674		2,510,674
CDC Financial 5.36% 1/29/07		4,662,679		4,662,679
Citigroup Global Markets 5.38% 1/5/07		4,662,679		4,662,679
Commonwealth Bank 5.35% 1/29/08		3,586,676		3,586,677
Deutsche Bank 5.34% 2/23/07		4,304,012		4,304,012
Dexia Bank 5.33% 9/28/07		5,021,334		5,020,608
Goldman Sachs 5.45% 12/28/07		4,662,679		4,662,679
Marshall & Ilsley Bank 5.33% 1/29/08		3,945,344		3,945,344
Merrill Lynch Mortgage Capital 5.41% 1/8/07		4,662,679		4,662,679
Morgan Stanley 5.49% 1/29/08		4,662,679		4,662,679
National Australia Bank 5.32% 3/7/07		4,447,479		4,447,479
National City Bank 5.32% 3/2/07		4,304,139		4,304,399
National Rural Utilities 5.34% 1/29/08		5,666,949		5,666,949
Nordea Bank New York 5.31% 5/16/07		1,793,327		1,793,294
Nordea Bank Norge 5.36% 1/29/08		3,586,676		3,586,677
Royal Bank of Scotland 5.34% 1/29/08		3,586,676		3,586,677
Societe Generale 5.32% 1/29/08		1,793,338		1,793,338
Toronto Dominion 5.32% 5/29/07		4,304,012		4,304,012
Wells Fargo 5.36% 1/29/08		3,586,676		3,586,677
				106,954,296
Total Securities Lending Collateral (cost $131,916,245)				131,916,245

Trend Series-6

Delaware VIP Trend Series
Statement of Net Assets (continued)

TOTAL MARKET VALUE OF SECURITIES–124.54% (cost $549,476,134)	$	671,354,339	v
OBLIGATION TO RETURN SECURITIES LENDING COLLATERAL**–(24.47%)		(131,916,245	)
LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS–(0.07%)		(362,145	)
NET ASSETS APPLICABLE TO 15,450,324 SHARES OUTSTANDING–100.00%	$	539,075,949
NET ASSET VALUE–DELAWARE VIP TREND SERIES STANDARD CLASS ($410,166,829 / 11,717,566 Shares)	$	35.00
NET ASSET VALUE–DELAWARE VIP TREND SERIES SERVICE CLASS ($128,909,120 / 3,732,758 Shares)	$	34.53
COMPONENTS OF NET ASSETS AT DECEMBER 31, 2006:
Shares of beneficial interest (unlimited authorization-no par)	$	416,520,640
Accumulated net realized gain on investments		677,104
Net unrealized appreciation of investments		121,878,205
Total net assets	$	539,075,949

  *  Fully or partially on loan.

  **  See Note 8 in "Notes to Financial Statements."

v  Includes $128,007,449 of securities loaned.

  †  Non-income producing security for the year ended December 31, 2006.

  •  Variable rate security. The interest rate shown is the rate as of December 31, 2006.

w  Narrow industries are utilized for compliance purposes for diversification whereas broad sectors are used for financial reporting.

See accompanying notes

Trend Series-7

Delaware VIP Trust — Delaware VIP Trend Series
Statement of Operations

Year Ended December 31, 2006

Delaware VIP Trust — Delaware VIP Trend Series
Statements of Changes in Net Assets

INVESTMENT INCOME:
Dividends	$	1,822,236
Interest		887,133
Securities lending income		695,844
		3,405,213
EXPENSES:
Management fees		4,201,053
Distribution expenses – Service Class		379,277
Accounting and administration expenses		225,774
Reports and statements to shareholders		141,162
Trustees' fees and benefits		97,342
Legal fees		62,589
Dividend disbursing and transfer agent fees and expenses		56,444
Audit and tax		36,166
Custodian fees		17,661
Insurance fees		14,949
Consulting fees		14,795
Taxes (other than taxes on income)		7,531
Dues and services		5,109
Trustees' expenses		2,873
Pricing fees		645
Registration fees		46
		5,263,416
Less waiver of distribution expenses – Service Class		(63,213	)
Less expense paid indirectly		(1,395	)
Total operating expenses		5,198,808
NET INVESTMENT LOSS		(1,793,595	)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments		80,485,296
Net change in unrealized appreciation/depreciation of investments		(39,974,574	)
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCIES		40,510,722
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	38,717,127

See accompanying notes

	Year Ended
	12/31/06			12/31/05
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment loss	$	(1,793,595	)	$	(2,335,580	)
Net realized gain on investments and foreign currencies		80,485,296			61,610,042
Net change in unrealized appreciation/ depreciation of investments and foreign currencies		(39,974,574	)		(31,267,940	)
Net increase in net assets resulting from operations		38,717,127			28,006,522
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Standard Class		52,564,087			9,925,534
Service Class		30,100,215			28,703,461
		82,664,302			38,628,995
Cost of shares repurchased:
Standard Class		(123,021,971	)		(102,222,054	)
Service Class		(29,169,880	)		(25,751,185	)
		(152,191,851	)		(127,973,239	)
Decrease in net assets derived from
capital share transactions		(69,527,549	)		(89,344,244	)
NET DECREASE IN NET ASSETS		(30,810,422	)		(61,337,722	)
NET ASSETS:
Beginning of year		569,886,371			631,224,093
End of year (there was no undistributed net investment income at either year end)	$	539,075,949		$	569,886,371

See accompanying notes

Trend Series- 8

Delaware VIP Trust — Delaware VIP Trend Series
Financial Highlights

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

	Delaware VIP Trend Series Standard Class
	Year Ended
	12/31/06			12/31/05			12/31/04			12/31/03			12/31/02
Net asset value, beginning of period	$	32.530		$	30.730		$	27.290		$	20.200		$	25.230
Income (loss) from investment operations:
Net investment loss1		(0.088	)		(0.108	)		(0.108	)		(0.082	)		(0.085	)
Net realized and unrealized gain (loss) on investments and foreign currencies		2.558			1.908			3.548			7.172			(4.945	)
Total from investment operations		2.470			1.800			3.440			7.090			(5.030	)
Net asset value, end of period	$	35.000		$	32.530		$	30.730		$	27.290		$	20.200
Total return2		7.59	%		5.86	%		12.60	%		35.10	%		(19.94	%)
Ratios and supplemental data:
Net assets, end of period (000 omitted)	$	410,167		$	450,525		$	521,392		$	515,829		$	415,098
Ratio of expenses to average net assets		0.87	%		0.87	%		0.84	%		0.84	%		0.84	%
Ratio of net investment loss to average net assets		(0.26	%)		(0.36	%)		(0.38	%)		(0.36	%)		(0.38	%)
Portfolio turnover		64	%		63	%		48	%		50	%		43	%

¹The average shares outstanding method has been applied for per share information.

²Total 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.

See accompanying notes

Trend Series- 9

Delaware VIP Trend Series
Financial Highlights (continued)

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

	Delaware VIP Trend Series Service Class
	Year Ended
	12/31/06			12/31/05			12/31/04			12/31/03			12/31/02
Net asset value, beginning of period	$	32.170		$	30.460		$	27.120		$	20.120		$	25.170
Income (loss) from investment operations:
Net investment loss1		(0.171	)		(0.182	)		(0.178	)		(0.135	)		(0.117	)
Net realized and unrealized gain (loss) on investments and foreign currencies		2.531			1.892			3.518			7.135			(4.933	)
Total from investment operations		2.360			1.710			3.340			7.000			(5.050	)
Net asset value, end of period	$	34.530		$	32.170		$	30.460		$	27.120		$	20.120
Total return2		7.34	%		5.61	%		12.32	%		34.79	%		(20.06	%)
Ratios and supplemental data:
Net assets, end of period (000 omitted)	$	128,909		$	119,361		$	109,832		$	55,662		$	22,136
Ratio of expenses to average net assets		1.12	%		1.12	%		1.09	%		1.06	%		0.99	%
Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly		1.17	%		1.17	%		1.14	%		1.09	%		0.99	%
Ratio of net investment loss to average net assets		(0.51	%)		(0.61	%)		(0.63	%)		(0.58	%)		(0.53	%)
Ratio of net investment loss to average net assets prior to expense limitation and expenses paid indirectly		(0.56	%)		(0.66	%)		(0.68	%)		(0.61	%)		(0.53	%)
Portfolio turnover		64	%		63	%		48	%		50	%		43	%

¹The average shares outstanding method has been applied for per share information.

²Total 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. Total investment return reflects waivers and payment of fees by the distributor, as applicable. Performance would have been lower had the expense limitation not been in effect.

See accompanying notes

Trend Series- 10

Delaware VIP Trust — Delaware VIP Trend Series
Notes to Financial Statements

December 31, 2006

Delaware VIP Trust (the "Trust") is organized as a Delaware statutory trust and offers 15 series: Delaware VIP Balanced Series, Delaware VIP Capital Reserves Series, Delaware VIP Cash Reserve Series, Delaware VIP Diversified Income Series, Delaware VIP Emerging Markets Series, Delaware VIP Global Bond Series, Delaware VIP Growth Opportunities Series, Delaware VIP High Yield Series, Delaware VIP International Value Equity Series, Delaware VIP REIT Series, Delaware VIP Select Growth Series, Delaware VIP Small Cap Value Series, Delaware VIP Trend Series, Delaware VIP U.S. Growth Series and Delaware VIP Value Series. These financial statements and the related notes pertain to Delaware VIP Trend Series (the "Series"). The Trust is an open-end investment company. The Series is considered diversified under the Investment Company Act of 1940, as amended, and offers Standard Class and Service Class shares. The Standard Class shares do not carry a 12b - -1 fee and the Service Class shares carry a 12b-1 fee. The shares of the Series are sold only to separate accounts of life insurance companies.

The investment objective of the Series is to seek long-term capital appreciation.

1. Significant Accounting Policies

The following accounting policies are in accordance with U.S. generally accepted accounting principles and are consistently followed by the Series.

Security Valuation—Equity securities, except those traded on the Nasdaq Stock Market, Inc. (Nasdaq), are valued at the last quoted sales price as of the time of the regular close of the New York Stock Exchange (NYSE) on the valuation date. Securities traded on the Nasdaq are valued in accordance with the Nasdaq Official Closing Price, which may not be the last sales price. If on a particular day an equity security does not trade, then the mean between the bid and asked prices will be used. Short-term debt securities having less than 60 days to maturity are valued at amortized cost, which approximates market value. Securities lending collateral is valued at amortized cost, which approximates market value. 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 the Series' Board of Trustees. 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 with respect to foreign securities, aftermarket trading, or significant events after local market trading (e.g., government actions or pronouncements, trading volume or volatility on markets, exchanges among dealers, or news events).

In September 2006, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 157 "Fair Value Measurements" (Statement 157). Statement 157 establishes a framework for measuring fair value in generally accepted accounting principles, clarifies the definition of fair value within that framework, and expands disclosures about the use of fair value measurements. Statement 157 is intended to increase consistency and comparability among fair value estimates used in financial reporting. Statement 157 is effective for fiscal years beginning after November 15, 2007. Management does not expect the adoption of Statement 157 to have an impact on the amounts reported in the financial statements.

Federal Income Taxes—The Series intends to continue to qualify for federal income tax purposes as a regulated investment company and make the requisite distributions to shareholders. Accordingly, no provision for federal income taxes has been made in the financial statements.

On July 13, 2006, FASB released FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Series' 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 would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. Recent SEC guidance allows implementing FIN 48 in Series net asset value calculations as late as the Series' last net asset value calculation in the first required fi nancial statement reporting period. As a result, the Series will incorporate FIN 48 in its semiannual report on June30,2007. Although the Series' tax positions are currently being evaluated, management does not expect the adoption of FIN 48 to have a material impact on the Series' financial statements.

Class Accounting—Investment income, common expenses and realized and unrealized gain (loss) on investments are allocated to the classes of the Series on the basis of daily net assets of each class. Distribution expenses relating to a specific class are charged directly to that class.

Repurchase Agreements—The Series may invest in a pooled cash account along with other members of the Delaware Investments^® Family of Funds pursuant to an exemptive order issued by the Securities and Exchange Commission. The aggregate daily balance of the pooled cash account is invested in repurchase agreements secured by obligations of the U.S. government. The respective collateral is held by the Series' custodian bank until the maturity of the respective repurchase agreements. Each repurchase agreement is at least 102% collateralized. However, in the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral may be subject to legal proceedings.

Use of Estimates—The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of 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.

Other—Expenses directly attributable to the Series are charged directly to the Series. 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. Dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis.

The Series declares and pays dividends from net investment income and distributions from net realized gain on investments, if any, following the close of the fiscal year.

Trend Series- 11

Delaware VIP Trend Series
Notes to Financial Statements (continued)

1. Significant Accounting Policies (continued)

Subject to seeking best execution, the Series may direct certain security trades to brokers who have agreed to rebate a portion of the related brokerage commission to the Series in cash. Such commission rebates are included in realized gain on investments in the accompanying financial statements and totaled $47,150 for the year ended December 31, 2006. In general, best execution refers to many factors, including the price paid or received for a security, the commission charged, the promptness and reliability of execution, the confidentiality and placement accorded the order, and other factors affecting the overall benefit obtained by the Series on the transaction.

The Series receives earnings credits from its custodian when positive cash balances are maintained, which are used to offset custody fees. The expense paid under this arrangement is included in custodian fees on the Statement of Operations with the corresponding expense offset shown as "expense paid indirectly."

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

In accordance with the terms of its investment management agreement, the Series pays Delaware Management Company (DMC), a series of Delaware Management Business Trust and the investment manager, an annual fee which is calculated daily at the rate of 0.75% on the first $500 million of average daily net assets of the Series, 0.70% on the next $500 million, 0.65% on the next $1.5 billion, and 0.60% on average daily net assets in excess of $2.5 billion.

DMC has contractually agreed to waive that portion, if any, of its management fee and reimburse the Series to the extent necessary to ensure that annual operating expenses, exclusive of taxes, interest, brokerage commissions, distribution fees, certain insurance costs and extraordinary expenses, do not exceed 0.92% of average daily net assets of the Series through April 30, 2007. Prior to May 1, 2006, the expense limitation was 0.95% of average daily net assets. No reimbursement was due for the year ended December 31, 2006.

Delaware Service Company, Inc. (DSC), an affiliate of DMC, provides accounting, administration, dividend disbursing and transfer agent services. The Series pays DSC a monthly fee computed at the annual rate of 0.04% of the Series' average daily net assets for accounting and administrative services. The Series pays DSC a monthly fee based on average net assets for dividend disbursing and transfer agent services.

Pursuant to a distribution agreement and distribution plan, the Series pays Delaware Distributors, L.P. (DDLP), the distributor and an affiliate of DMC, an annual distribution and service fee not to exceed 0.30% of the average daily net assets of the Service Class shares. DDLP has contracted to waive distribution and service fees through April 30, 2007 in order to prevent distribution and service fees of the Service Class shares from exceeding 0.25% of average daily net assets. Standard Class shares pay no distribution and service expenses.

At December 31, 2006, the Series had liabilities payable to affiliates as follows:

Investment Management Fee Payable to DMC		Dividend Disbursing, Transfer Agent, Accounting and Administration Fees and Other Expenses Payable to DSC		Distribution Fees Payable to DDLP		Other Expenses Payable to DMC and Affiliates*
$	348,593	$	26,066	$	27,878	$	67,800

*DMC, as part of its administrative services, pays operating expenses on behalf of the Series and is reimbursed on a periodic basis. Such expenses include items such as printing of shareholder reports, fees for audit, legal and tax services, custodian fees and trustees' fees.

As provided in the investment management agreement, the Series bears the cost of certain legal and tax services, including internal legal and tax services provided to the Series by DMC and/or its affiliates' employees. For the year ended December 31, 2006, the Series was charged $26,558 for internal legal and tax services provided by DMC and/or its affiliates' employees.

Trustees' fees and benefits include expenses accrued by the Series for each Trustee's retainer, per meeting fees and retirement benefits. Independent Trustees with over five years of uninterrupted service are eligible to participate in a retirement plan that provides for the payment of benefits upon retirement. The amount of the retirement benefit is based on factors set forth in the plan, including the number of years of service. On November 16, 2006, the Board of Trustees unanimously voted to terminate the retirement plan. Payments equal to the net present value of the earned benefits will be made in 2007 to those independent trustees so entitled. The retirement benefit payout for the Series is $66,232. Certain officers of DMC, DSC and DDLP are officers and/or trustees of the Trust. These officers and trustees are paid no compensation by the Series.

3. Investments

For the year ended December 31, 2006, the Series made purchases and sales of investment securities other than short-term investments as follows:

Purchases	$	349,521,147
Sales		414,678,446

Trend Series- 12

Delaware VIP Trend Series
Notes to Financial Statements (continued)

3. Investments (continued)

At December 31, 2006, the cost of investments for federal income tax purposes and unrealized appreciation (depreciation) for the Series were as follows:

Cost of Investments		Aggregate Unrealized Appreciation		Aggregate Unrealized Depreciation			Net Unrealized Appreciation
$	552,389,775	$	149,738,922	$	(30,774,358	)	$	118,964,564

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. generally accepted accounting principles. Additionally, net short-term gains on sales of investment securities are treated as ordinary income for federal income tax purposes. There were no dividends and distributions paid for the years ended December 31, 2006 and 2005.

5. Components of Net Assets on a Tax Basis

As of December 31, 2006, the components of net assets on a tax basis were as follows:

Shares of beneficial interest	$	416,520,640
Undistributed long-term capital gains		3,590,745
Unrealized appreciation of investments		118,964,564
Net assets	$	539,075,949

The differences between book basis and tax basis components of net assets are primarily attributable to tax deferral of losses on wash sales.

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 net operating losses. Results of operations and net assets were not affected by these reclassifications. For the year ended December 31, 2006, the Series recorded the following reclassifications:

Accumulated Net Investment Loss		Paid-in Capital
$	1,793,595	$	(1,793,595	)

For federal income tax purposes, capital loss carryforwards may be carried forward and applied against future capital gains. $76,589,457 was utilized in 2006.

6. Capital Shares

Transactions in capital shares were as follows:

	Year Ended 12/31/06			Year Ended 12/31/05
Shares sold:
Standard Class		1,664,925			333,284
Service Class		899,447			978,144
		2,564,372			1,311,428
Shares repurchased:
Standard Class		(3,796,588	)		(3,453,560	)
Service Class		(876,515	)		(873,580	)
		(4,673,103	)		(4,327,140	)
Net decrease		(2,108,731	)		(3,015,712	)

Trend Series- 13

Delaware VIP Trend Series
Notes to Financial Statements (continued)

7. Line of Credit

The Series, along with certain other funds in the Delaware Investments® Family of Funds (the "Participants"), participates in a $225,000,000 revolving line of credit facility to be used for temporary or emergency purposes as an additional source of liquidity to fund redemptions of investor shares. The Participants are charged an annual commitment fee, which is allocated across the Participants on the basis of each Participant's allocation of the entire facility. The Participants may borrow up to a maximum of one third of their net assets under the agreement. The Series had no amounts outstanding as of December 31, 2006, or at any time during the year then ended.

8. Securities Lending

The Series, along with other funds in the Delaware Investments® Family of Funds, may lend its securities pursuant to a security lending agreement (Lending Agreement) with JPMorgan Chase. Initial security loans made pursuant to the Lending Agreement are required to be secured by U.S. government obligations and/or cash collateral not less than 102% of the market value of the securities issued in the United States and 105% of the market value of securities issued outside the United States. With respect to each loan, if the aggregate market value of the collateral held on any business day is less than the aggregate market value of the securities which are the subject of such loan, the borrower will be notified to provide additional collateral not less than the applicable collateral requirements. Cash collateral received is invested in fixed income securities, with a weighted average maturity not to exceed 90 days, rated in one of the top two tiers by Standard & Poor's Ratings Group or Moody's Investors Service, Inc. or repurchase agreements collateralized by such securities. However, in the event of default or bankruptcy by the lending agent, realization and/or retention of the collateral may be subject to legal proceedings. In the event the borrower fails to return loaned securities and the collateral received is insufficient to cover the value of the loaned securities and provided such collateral shortfall is not the result of investment losses, the lending agent has agreed to pay the amount of the shortfall to the Series, or at the discretion of the lending agent, replace the loaned securities. The Series continues to record dividends on the securities loaned and is subject to change in value of the securities loaned that may occur during the term of the loan. The Series has the right under the Lending Agreement to recover the securities from the borrower on demand. The security lending agent and the borrower retain a portion of the earn ings from the collateral investments. The Series records security lending income net of such allocation.

At December 31, 2006, the market value of securities on loan was $128,007,449, for which cash collateral was received and invested in accordance with the Lending Agreement. Such investments are presented on the Statement of Net Assets under the caption "Securities Lending Collateral."

9. Credit and Market Risk

The Series invests a significant portion of its assets in small companies and may be subject to certain risks associated with ownership of securities of such companies. Investments in small-sized companies may be more volatile than investments in larger companies for a number of reasons, which include limited financial resources or a dependence on narrow product lines.

The Series may invest up to 10% of its total 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 the Series 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, the Series' Board of Trustees has delegated to DMC the day-to-day functions of determining whether individual securities are liquid for purposes of the Series' limitation on investments in illiquid assets. At December 31, 2006, there were no Rule 144A securities and no securities have been determined to be illiquid under the Series' Liquidity Procedures.

10. Contractual Obligations

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

Trend Series- 14

Delaware VIP Trust — Delaware VIP Trend Series
Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees
Delaware VIP Trust–Delaware VIP Trend Series

We have audited the accompanying statement of net assets of the Delaware VIP Trend Series (one of the series constituting Delaware VIP Trust) (the "Series") as of December 31, 2006, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Series' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits 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 and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Series' internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Series' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant es timates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2006, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Delaware VIP Trend Series of Delaware VIP Trust at December 31, 2006, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

  

Philadelphia, Pennsylvania

February 14, 2007

The Series files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Series' Forms N-Q, as well as a description of the policies and procedures that the Series uses to determine how to vote proxies (if any) relating to portfolio securities is available without charge (i) upon request, by calling 800-523-1918; (ii) on the Series' website at http://www.delawareinvestments.com; and (iii) on the Commission's website at http://www.sec.gov. The Series' Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Information (if any) regarding how the Series voted proxies relating to portfolio securities during the most recently disclosed 12-month period ended June 30 is available without charge (i) through the Series' website at http://www.delawareinvestments.com; and (ii) on the Commission's website at http://www.sec.gov.

Trend Series- 15

Delaware Investments® Family of Funds

board of trustees/directors and officers addendum

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 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.

Name, Address, and Birth Date	Position(s) Held with Fund(s)	Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee or Officer		Other Directorships Held by Trustee or Officer
interested trustees
Patrick P. Coyne1 2005 Market Street Philadelphia, PA 19103 April 14, 1963	Chairman, President, Chief Executive Officer, and Trustee	Chairman and Trustee since August 16, 2006 President and Chief Executive Officer since August 1, 2006	Patrick P. Coyne has served in various executive capacities at different times at Delaware Investments.2		84	None
independent trustees
Thomas L. Bennett 2005 Market Street Philadelphia, PA 19103 October 4, 1947	Trustee	Since March 2005	Private Investor – (March 2004 – Present) Investment Manager – Morgan Stanley & Co. (January 1984 – March 2004)		84	None
John A. Fry 2005 Market Street Philadelphia, PA 19103 May 28, 1960	Trustee	Since January 2001	President – Franklin & Marshall College (June 2002 – Present) Executive Vice President – University of Pennsylvania (April 1995 – June 2002)		84	Director – Community Health Systems Director – Allied Barton Security Holdings
Anthony D. Knerr 2005 Market Street Philadelphia, PA 19103 December 7, 1938	Trustee	Since April 1990	Founder and Managing Director – Anthony Knerr & Associates (Strategic Consulting) (1990 – Present)		84	None
Lucinda S. Landreth 2005 Market Street Philadelphia, PA 19103 June 24, 1947	Trustee	Since March 2005	Chief Investment Officer – Assurant, Inc. (Insurance) (2002 – 2004)		84	None
Ann R. Leven 2005 Market Street Philadelphia, PA 19103 November 1, 1940	Trustee	Since September 1989	Consultant – ARL Associates (Financial Planning) (1983 – Present)		84	Director and Audit Committee Chairperson – Andy Warhol Foundation Director and Audit Committee Member – Systemax, Inc.

Trend Series- 16

Name, Address, and Birth Date	Position(s) Held with Fund(s)	Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee or Officer		Other Directorships Held by Trustee or Officer
independent trustees (continued)
Thomas F. Madison 2005 Market Street Philadelphia, PA 19103 February 25, 1936	Trustee	Since May 1997	President and Chief Executive Officer – MLM Partners, Inc. (Small Business Investing and Consulting) (January 1993 – Present)		84	Director – Banner Health Director – CenterPoint Energy Director and Audit Committee Member – Digital River, Inc. Director and Audit Committee Member – Rimage Corporation Director – Valmont Industries, Inc.
Janet L. Yeomans 2005 Market Street Philadelphia, PA 19103 July 31, 1948	Trustee	Since April 1999	Vice President (January 2003 – Present) and Treasurer (January 2006 – Present) 3M Corporation Ms. Yeomans has held various management positions at 3M Corporation since 1983.		84	None
J. Richard Zecher 2005 Market Street Philadelphia, PA 19103 July 3, 1940	Trustee	Since March 2005	Founder – Investor Analytics (Risk Management) (May 1999 – Present) Founder – Sutton Asset Management (Hedge Fund) (September 1998 – Present)		84	Director and Audit Committee Member – Investor Analytics Director and Audit Committee Member – Oxigene, Inc.
officers
David F. Connor 2005 Market Street Philadelphia, PA 19103 December 2, 1963	Vice President, Deputy General Counsel, and Secretary	Vice President since September 21, 2000 and Secretary since October 2005	David F. Connor has served as Vice President and Deputy General Counsel of Delaware Investments since 2000.		84	None3
David P. O'Connor 2005 Market Street Philadelphia, PA 19103 February 21, 1966	Senior Vice President, General Counsel, and Chief Legal Officer	Senior Vice President, General Counsel, and Chief Legal Officer since October 2005	David P. O'Connor has served in various executive and legal capacities at different times at Delaware Investments.		84	None3
John J. O'Connor 2005 Market Street Philadelphia, PA 19103 June 16, 1957	Senior Vice President and Treasurer	Treasurer since February 2005	John J. O'Connor has served in various executive capacities at different times at Delaware Investments.		84	None3
Richard Salus 2005 Market Street Philadelphia, PA 19103 October 4, 1963	Senior Vice President and Chief Financial Officer	Chief Financial Officer since November 1, 2006	Richard Salus has served in various executive capacities at different times at Delaware Investments.		84	None3

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

² Delaware 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.

³ David F. Connor, David P. O'Connor, John J. 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. John J. O'Connor also serves in a similar capacity for Lincoln Variable Insurance Products Trust, which has the same investment advisor as the registrant.

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.

Trend Series- 17

Delaware VIP Trust — Delaware VIP U.S. Growth Series

For the 12-month period ended Dec. 31, 2006, the Delaware VIP U.S. Growth Series Standard Class shares with distributions reinvested returned +2.31% and Service Class shares returned +2.06% with distributions reinvested. The benchmark is Russell 1000 Growth Index, which gained 9.07% (source: Lipper).

Our investment approach focuses on individual companies that we believe have particularly good long-term growth prospects over the next five years or longer. The Series' investment portfolio is typically balanced between two types of stocks found in the large-cap growth universe — those of aggressive growth and steady growth companies. During the fiscal period, two stocks that we considered aggressive growth holdings were eBay and Google, which have emerged as leaders in fast-growing segments of the technology market. Holdings in the group of typically steady growers were office products retailer Staples and Walgreen's drug stores.

As long-term investors, we typically seek to avoid large-scale changes as long as we remain confident in the names we own. However, we do respond to new investment opportunities as they become available. For example, we believe that a number of our more aggressive holdings were unreasonably penalized during the fiscal year as investors became more risk averse, and we believe this presented us with attractive buying opportunities. We reduced our positions in Walgreen and Intuit, which have performed well, in order to add to existing positions in Qualcomm and Seagate Technology. The latter two stocks were weak performers on the year; we believed they had growth potential, and they were trading at attractive valuations.

The views expressed are current as of the date of this report and are subject to change.

The performance data quoted below and on the next page represent past performance; past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please obtain the performance data for the most recent month end by calling the number noted on the page related to this Series in the introductory section of this report.

You should consider the investment objectives, risks, charges, and expenses of the investment carefully before investing. The Delaware VIP U.S. Growth Series prospectus contains this and other important information about the Series. To obtain a prospectus, contact the company noted on the page related to this Series in the introductory section of this report, either by phone or through the company Web site. We advise you to read the prospectus carefully before you invest.

Average Annual Total Returns For the periods ending Dec. 31, 2006	1 Year			5 Years			Lifetime
Standard Class Shares*		+2.31	%		+1.19	%		-2.86	%
Service Class Shares**		+2.06	%		+0.98	%		-4.51	%

  *  Commenced operations on Nov. 15, 1999

  **  Commenced operations on May 1, 2000

U.S. Growth Series- 1

Delaware VIP Trust — Delaware VIP U.S. Growth Series (continued)

The chart shows a $10,000 investment in the Delaware VIP U.S. Growth Series Standard Class shares for the period from the Series' inception Nov. 15, 1999 through Dec. 31, 2006. All distributions were reinvested. The chart also shows $10,000 invested in the Russell 1000 Growth Index for the period from Nov. 15, 1999 through Dec. 31, 2006.

The Russell 1000 Growth Index measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. An index is unmanaged and does not reflect the costs of operating a mutual fund, such as the costs of buying, selling, and holding securities. You cannot invest directly into an index.

Earnings from a variable annuity or variable life investment compound tax free until withdrawal, so no adjustments were made for income taxes.

An expense limitation was in effect for the Delaware VIP U.S. Growth Series during the periods shown.

Performance of Service Class shares will vary due to different charges and expenses.

Performance does not reflect insurance fees related to a variable annuity or variable life investment or the deferred sales charge that would apply to certain withdrawals of investments held for fewer than eight years. Performance shown here would have been reduced if such fees were included and the expense limitation was removed. For more information about fees, consult your variable annuity or variable life prospectus.

Investments in variable products involve risk. Some portfolios offer more risk than others. Please read both the contract and underlying prospectus for specific details regarding the product's risk profile.

U.S. Growth Series- 2

Delaware VIP Trust — Delaware VIP U.S. Growth Series

Disclosure of Series Expenses

For the Period July 1, 2006 to December 31, 2006

As a shareholder of the Series, you incur ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Series expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Series and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2006 to December 31, 2006.

Actual Expenses

The first section of the table shown, "Actual Series 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 the period.

Hypothetical Example for Comparison Purposes

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

Please note that the expenses shown in the table are meant to highlight your ongoing costs only. As a shareholder of the Series, you do not incur any transaction costs, such as sales charges (loads), redemption fees or exchange fees, but shareholders of other funds may incur such costs. Also, the fees related to the variable annuity investment or the deferred sales charge that could apply have not been included. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. The Series' actual expenses shown in the table reflect fee waivers in effect for Service Class shares. The expenses shown in the table assume reinvestment of all dividends and distributions.

Expense Analysis of an Investment of $1,000

	Beginning Account Value 7/1/06		Ending Account Value 12/31/06		Annualized Expense Ratios			Expenses Paid During Period 7/1/06 to 12/31/06*
Actual Series Return
Standard Class	$	1,000.00	$	1,051.50		0.78	%	$	4.03
Service Class		1,000.00		1,049.00		1.03	%		5.32
Hypothetical 5% Return (5% return before expenses)
Standard Class	$	1,000.00	$	1,021.27		0.78	%	$	3.97
Service Class		1,000.00		1,020.01		1.03	%		5.24

*"Expenses Paid During Period" are equal to the Series' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

U.S. Growth Series- 3

Delaware VIP Trust — Delaware VIP U.S. Growth Series

Sector Allocation and Top 10 Holdings

As of December 31, 2006

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

Sector	Percentage of Net Assets
Common Stock		99.28	%
Basic Industry/Capital Goods		3.52	%
Business Services		17.05	%
Consumer Non-Durables		15.38	%
Consumer Services		17.01	%
Financials		8.13	%
Health Care		17.61	%
Technology		20.58	%
Repurchase Agreements		2.31	%
Total Market Value of Securities		101.59	%
Liabilities Net of Receivables and Other Assets		(1.59	%)
Total Net Assets		100.00	%

Holdings are for informational purposes only and are subject to change at any time.
They are not a recommendation to buy, sell, or hold any security.

Top 10 Holdings	Percentage of Net Assets
QUALCOMM		4.91	%
UnitedHealth Group		4.85	%
Genentech		4.81	%
IntercontinentalExchange		4.39	%
Seagate Technology		4.34	%
United Parcel Service Class B		4.23	%
Allergan		4.19	%
Procter & Gamble		4.17	%
Google Class A		4.16	%
eBay		4.16	%

U.S. Growth Series- 4

Delaware VIP Trust — Delaware VIP U.S. Growth Series
Statement of Net Assets

December 31, 2006

	Number of Shares		Market Value
COMMON STOCK–99.28%
Basic Industry/Capital Goods–3.52%
Praxair		105,000	$	6,229,650
				6,229,650
Business Services–17.05%
Expeditors International Washington		150,000		6,075,000
Moody's		90,000		6,215,400
Paychex		160,000		6,326,400
† Research in Motion		32,000		4,088,960
United Parcel Service Class B		100,000		7,498,000
				30,203,760
Consumer Non-Durables–15.38%
Procter & Gamble		115,000		7,391,050
Staples		270,000		7,209,000
Walgreen		160,000		7,342,400
Wal-Mart Stores		115,000		5,310,700
				27,253,150
Consumer Services–17.01%
† eBay		245,000		7,367,150
International Game Technology		135,000		6,237,000
† MGM MIRAGE		115,000		6,595,250
Weight Watchers International		110,000		5,778,300
Western Union		185,000		4,147,700
				30,125,400
Financials–8.13%
Chicago Mercantile Exchange Class A		13,000		6,626,750
† IntercontinentalExchange		72,000		7,768,800
				14,395,550
Health Care–17.61%
Allergan		62,000		7,423,880
† Genentech		105,000		8,518,650
UnitedHealth Group		160,000		8,596,800
† Zimmer		85,000		6,662,300
				31,201,630
Technology–20.58%
† Google Class A		16,000		7,367,680
† Intuit		205,000		6,254,550
QUALCOMM		230,000		8,691,700
† SanDisk		150,000		6,454,500
Seagate Technology		290,000		7,685,000
				36,453,430
Total Common Stock (cost $153,810,381)				175,862,570

	Principal Amount		Market Value
REPURCHASE AGREEMENTS–2.31%
With BNP Paribas 4.80% 1/2/07 (dated 12/29/06, to be repurchased at $1,556,830, collateralized by $1,628,000 U.S. Treasury Bills due 6/28/07, market value $1,588,601)	$	1,556,000	$	1,556,000
With Cantor Fitzgerald 4.82% 1/2/07 (dated 12/29/06, to be repurchased at $1,870,001, collateralized by $161,000 U.S. Treasury Notes 4.00% due 6/15/09, market value $158,937, $1,001,000 U.S. Treasury Notes 6.125% due 8/15/07, market value $1,031,386 and $668,000 U.S. Treasury Notes 6.50% due 2/15/10, market value $718,170)		1,869,000		1,869,000
With UBS Warburg 4.75% 1/2/07 (dated 12/29/06, to be repurchased at $668,353, collateralized by $690,000 U.S. Treasury Bills due 3/29/07, market value $681,591)		668,000		668,000
Total Repurchase Agreements (cost $4,093,000)				4,093,000

U.S. Growth Series- 5

Delaware VIP U.S. Growth Series
Statement of Net Assets (continued)

TOTAL MARKET VALUE OF SECURITIES–101.59% (cost $157,903,381)	$	179,955,570
LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS–(1.59%)		(2,811,071	)
NET ASSETS APPLICABLE TO 22,285,981 SHARES OUTSTANDING–100.00%	$	177,144,499
NET ASSET VALUE–DELAWARE VIP U.S. GROWTH SERIES STANDARD CLASS ($138,547,902 / 17,412,803 Shares)	$	7.96
NET ASSET VALUE–DELAWARE VIP U.S. GROWTH SERIES SERVICE CLASS ($38,596,597 / 4,873,178 Shares)	$	7.92
COMPONENTS OF NET ASSETS AT DECEMBER 31, 2006:
Shares of beneficial interest (unlimited authorization-no par)	$	171,173,502
Accumulated net realized loss on investments		(16,081,192	)
Net unrealized appreciation of investments		22,052,189
Total net assets	$	177,144,499

  †  Non-income producing security for the year ended December 31, 2006.

See accompanying notes

U.S. Growth Series-6

Delaware VIP Trust — Delaware VIP U.S. Growth Series
Statement of Operations

Year Ended December 31, 2006

Delaware VIP Trust — Delaware VIP U.S. Growth Series
Statements of Changes in Net Assets

INVESTMENT INCOME:
Dividends	$	825,069
Interest		101,628
		926,697
EXPENSES:
Management fees		830,969
Distribution expenses – Service Class		116,949
Accounting and administration expenses		51,137
Trustees' fees and benefits		24,794
Audit and tax		12,877
Legal fees		12,852
Dividend disbursing and transfer agent fees and expenses		12,783
Reports and statements to shareholders		8,932
Insurance fees		6,823
Registration fees		6,561
Custodian fees		5,192
Consulting fees		2,838
Dues and services		1,443
Trustees' expenses		832
Taxes (other than taxes on income)		567
Pricing fees		222
		1,095,771
Less waiver of distribution expenses – Service Class		(19,491	)
Less expense paid indirectly		(373	)
Total operating expenses		1,075,907
NET INVESTMENT LOSS		(149,210	)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investments		(5,942,640	)
Net change in unrealized appreciation/depreciation of investments		11,250,393
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS		5,307,753
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	5,158,543

See accompanying notes

	Year Ended
	12/31/06			12/31/05
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment loss	$	(149,210	)	$	(142,189	)
Net realized gain (loss) on investments		(5,942,640	)		1,289,624
Net change in unrealized appreciation/ depreciation of investments		11,250,393			7,020,019
Net increase in net assets resulting from operations		5,158,543			8,167,454
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Standard Class		–			(58,346	)
Service Class		–			(147,794	)
		–			(206,140	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Standard Class		102,645,141			36,446,938
Service Class		4,028,901			6,320,210
Net asset value of shares issued upon reinvestment of dividends and distributions:
Standard Class		–			58,346
Service Class		–			147,794
		106,674,042			42,973,288
Cost of shares repurchased:
Standard Class		(14,132,286	)		(3,859,090	)
Service Class		(8,271,201	)		(7,451,404	)
		(22,403,487	)		(11,310,494	)
Increase in net assets derived from capital share transactions		84,270,555			31,662,794
NET INCREASE IN NET ASSETS		89,429,098			39,624,108
NET ASSETS:
Beginning of year		87,715,401			48,091,293
End of year (there was no undistributed net investment income at either year end)	$	177,144,499		$	87,715,401

See accompanying notes

U.S. Growth Series-7

Delaware VIP Trust — Delaware VIP U.S. Growth Series
Financial Highlights

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

	Delaware VIP U.S. Growth Series Standard Class
	Year Ended
	12/31/06			12/31/05			12/31/04			12/31/03			12/31/02
Net asset value, beginning of period	$	7.780		$	6.830		$	6.620		$	5.370		$	7.600
Income (loss) from investment operations:
Net investment income (loss)1		(0.003	)		(0.005	)		0.049			0.010			0.010
Net realized and unrealized gain (loss) on investments		0.183			0.997			0.169			1.251			(2.215	)
Total from investment operations		0.180			0.992			0.218			1.261			(2.205	)
Less dividends and distributions from:
Net investment income		–			(0.042	)		(0.008	)		(0.011	)		(0.025	)
Total dividends and distributions		–			(0.042	)		(0.008	)		(0.011	)		(0.025	)
Net asset value, end of period	$	7.960		$	7.780		$	6.830		$	6.620		$	5.370
Total return2		2.31	%		14.65	%		3.30	%		23.75	%		(29.24	%)
Ratios and supplemental data:
Net assets, end of period (000 omitted)	$	138,548		$	45,653		$	10,438		$	11,862		$	9,595
Ratio of expenses to average net assets		0.77	%		0.81	%		0.76	%		0.75	%		0.75	%
Ratio of net investment income (loss) to average net assets		(0.04	%)		(0.07	%)		0.77	%		0.17	%		0.15	%
Portfolio turnover		21	%		91	%		167	%		102	%		101	%

¹The average shares outstanding method has been applied for per share information.

²Total 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.

See accompanying notes

U.S. Growth Series- 8

Delaware VIP U.S. Growth Series
Financial Highlights (continued)

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

	Delaware VIP U.S. Growth Series Service Class
	Year Ended
	12/31/06			12/31/05			12/31/04			12/31/03			12/31/02
Net asset value, beginning of period	$	7.760		$	6.810		$	6.610		$	5.360		$	7.590
Income (loss) from investment operations:
Net investment income (loss)1		(0.022	)		(0.023	)		0.033			(0.005	)		0.001
Net realized and unrealized gain (loss) on investments		0.182			0.999			0.167			1.257			(2.218	)
Total from investment operations		0.160			0.976			0.200			1.252			(2.217	)
Less dividends and distributions from:
Net investment income		–			(0.026	)		–			(0.002	)		(0.013	)
Total dividends and distributions		–			(0.026	)		–			(0.002	)		(0.013	)
Net asset value, end of period	$	7.920		$	7.760		$	6.810		$	6.610		$	5.360
Total return2		2.06	%		14.41	%		3.03	%		23.37	%		(29.26	%)
Ratios and supplemental data:
Net assets, end of period (000 omitted)	$	38,596		$	42,062		$	37,653		$	9,718		$	666
Ratio of expenses to average net assets		1.02	%		1.06	%		1.01	%		0.97	%		0.90	%
Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly		1.07	%		1.11	%		1.06	%		1.00	%		0.90	%
Ratio of net investment income (loss) to average net assets		(0.29	%)		(0.32	%)		0.52	%		(0.05	%)		0.00	%
Ratio of net investment income (loss) to average net assets prior to expense limitation and expenses paid indirectly		(0.34	%)		(0.37	%)		0.47	%		(0.08	%)		0.00	%
Portfolio turnover		21	%		91	%		167	%		102	%		101	%

¹The average shares outstanding method has been applied for per share information.

²Total 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. Total investment return reflects waivers and payment of fees by the distributor, as applicable. Performance would have been lower had the expense limitation and waiver not been in effect.

See accompanying notes

U.S. Growth Series- 9

Delaware VIP Trust — Delaware VIP U.S. Growth Series
Notes to Financial Statements

December 31, 2006

Delaware VIP Trust (the "Trust") is organized as a Delaware statutory trust and offers 15 series: Delaware VIP Balanced Series, Delaware VIP Capital Reserves Series, Delaware VIP Cash Reserve Series, Delaware VIP Diversified Income Series, Delaware VIP Emerging Markets Series, Delaware VIP Global Bond Series, Delaware VIP Growth Opportunities Series, Delaware VIP High Yield Series, Delaware VIP International Value Equity Series, Delaware VIP REIT Series, Delaware VIP Select Growth Series, Delaware VIP Small Cap Value Series, Delaware VIP Trend Series, Delaware VIP U.S. Growth Series and Delaware VIP Value Series. These financial statements and the related notes pertain to Delaware VIP U.S. Growth Series (the "Series"). The Trust is an open-end investment company. The Series is considered diversified under the Investment Company Act of 1940, as amended, and offers Standard Class and Service Class shares. The Standard Class shares do not carry a 12b-1 fee and the Service Class shares carry a 12b-1 fee. The shares of the Series are sold only to separate accounts of life insurance companies.

The investment objective of the Series is to seek long-term capital appreciation.

1. Significant Accounting Policies

The following accounting policies are in accordance with U.S. generally accepted accounting principles and are consistently followed by the Series.

Security Valuation—Equity securities, except those traded on the Nasdaq Stock Market, Inc. (Nasdaq), are valued at the last quoted sales price as of the time of the regular close of the New York Stock Exchange (NYSE) on the valuation date. Securities traded on the Nasdaq are valued in accordance with the Nasdaq Official Closing Price, which may not be the last sales price. If on a particular day an equity security does not trade, then the mean between the bid and asked prices will be used. Short-term debt securities having less than 60 days to maturity are valued at amortized cost, which approximates market value. 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 the Series' Board of Trustees. In determining whether market quotations are readily availab le or fair valuation will be used, various factors will be taken into consideration, such as market closures, or with respect to foreign securities, aftermarket trading or significant events after local market trading (e.g., government actions or pronouncements, trading volume or volatility on markets, exchanges among dealers, or news events).

In September 2006, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 157 "Fair Value Measurements" (Statement 157). Statement 157 establishes a framework for measuring fair value in generally accepted accounting principles, clarifies the definition of fair value within that framework, and expands disclosures about the use of fair value measurements. Statement 157 is intended to increase consistency and comparability among fair value estimates used in financial reporting. Statement 157 is effective for fiscal years beginning after November 15, 2007. Management does not expect the adoption of Statement 157 to have an impact on the amounts reported in the financial statements.

Federal Income Taxes—The Series intends to continue to qualify for federal income tax purposes as a regulated investment company and make the requisite distributions to shareholders. Accordingly, no provision for federal income taxes has been made in the financial statements.

On July 13, 2006, FASB released FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Series' 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 would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. Recent SEC guidance allows implementing FIN 48 in Series net asset value calculations as late as the Series' last net asset value calculation in the first required fi nancial statement reporting period. As a result, the Series will incorporate FIN 48 in its semiannual report on June 30, 2007. Although the Series' tax positions are currently being evaluated, management does not expect the adoption of FIN 48 to have a material impact on the Series' financial statements.

Class Accounting—Investment income, common expenses and realized and unrealized gain (loss) on investments are allocated to the classes of the Series on the basis of daily net assets of each class. Distribution expenses relating to a specific class are charged directly to that class.

Repurchase Agreements—The Series may invest in a pooled cash account along with other members of the Delaware Investments® Family of Funds pursuant to an exemptive order issued by the Securities and Exchange Commission. The aggregate daily balance of the pooled cash account is invested in repurchase agreements secured by obligations of the U.S. government. The respective collateral is held by the Series' custodian bank until the maturity of the respective repurchase agreements. Each repurchase agreement is at least 102% collateralized. However, in the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral may be subject to legal proceedings.

Use of Estimates—The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of 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.

Other—Expenses directly attributable to the Series are charged directly to the Series. 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. Dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis.

The Series declares and pays dividends from net investment income and distributions from net realized gain on investments, if any, following the close of the fiscal year.

U.S. Growth Series- 10

Delaware VIP U.S. Growth Series
Notes to Financial Statements (continued)

1. Significant Accounting Policies (continued)

Subject to seeking best execution, the Series may direct certain security trades to brokers who have agreed to rebate a portion of the related brokerage commission to the Series in cash. Such commission rebates are included in realized gain on investments in the accompanying financial statements and totaled $17,921 for the year ended December 31, 2006. In general, best execution refers to many factors, including the price paid or received for a security, the commission charged, the promptness and reliability of execution, the confidentiality and placement accorded the order, and other factors affecting the overall benefit obtained by the Series on the transaction.

The Series receives earnings credits from its custodian when positive cash balances are maintained, which are used to offset custody fees. The expense paid under this arrangement is included in custodian fees on the Statement of Operations with the corresponding expense offset shown as "expense paid indirectly."

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

In accordance with the terms of its investment management agreement, the Series pays Delaware Management Company (DMC), a series of Delaware Management Business Trust and the investment manager, an annual fee which is calculated daily at the rate of 0.65% on the first $500 million of average daily net assets of the Series, 0.60% on the next $500 million, 0.55% on the next $1.5 billion and 0.50% on average daily net assets in excess of $2.5 billion.

DMC has contractually agreed to waive that portion, if any, of its management fee and reimburse the Series to the extent necessary to ensure that annual operating expenses, exclusive of taxes, interest, brokerage commissions, distribution fees, certain insurance costs and extraordinary expenses, do not exceed 0.87% of average daily net assets of the Series through April 30, 2007. Prior to May 1, 2006, the expense limitation was 0.80% of average daily net assets. No reimbursement was due for the year ended December 31, 2006.

Delaware Service Company, Inc. (DSC), an affiliate of DMC, provides accounting, administration, dividend disbursing and transfer agent services. The Series pays DSC a monthly fee computed at the annual rate of 0.04% of the Series' average daily net assets for accounting and administrative services. The Series pays DSC a monthly fee based on average net assets for dividend disbursing and transfer agent services.

Pursuant to a distribution agreement and distribution plan, the Series pays Delaware Distributors, L.P. (DDLP), the distributor and an affiliate of DMC, an annual distribution and service fee not to exceed 0.30% of the average daily net assets of the Service Class shares. DDLP has contracted to waive distribution and service fees through April 30, 2007 in order to prevent distribution and service fees of the Service Class shares from exceeding 0.25% of average daily net assets. Standard Class shares pay no distribution and service expenses.

At December 31, 2006, the Series had liabilities payable to affiliates as follows:

Investment Management Fee Payable to DMC		Dividend Disbursing, Transfer Agent, Accounting and Administration Fees and Other Expenses Payable to DSC		Distribution Fees Payable to DDLP		Other Expenses Payable to DMC and Affiliates*
$	95,884	$	8,152	$	8,197	$	6,705

*DMC, as part of its administrative services, pays operating expenses on behalf of the Series and is reimbursed on a periodic basis. Such expenses include items such as printing of shareholder reports, fees for audit, legal and tax services, custodian fees and trustees' fees.

As provided in the investment management agreement, the Series bears the cost of certain legal and tax services, including internal legal and tax services provided to the Series by DMC and/or its affiliates' employees. For the year ended December 31, 2006, the Series was charged $6,332 for internal legal and tax services provided by DMC and/or its affiliates' employees.

Trustees' fees and benefits include expenses accrued by the Series for each Trustee's retainer, per meeting fees and retirement benefits. Independent Trustees with over five years of uninterrupted service are eligible to participate in a retirement plan that provides for the payment of benefits upon retirement. The amount of the retirement benefit is based on factors set forth in the plan, including the number of years of service. On November 16, 2006, the Board of Trustees unanimously voted to terminate the retirement plan. Payments equal to the net present value of the earned benefits will be made in 2007 to those independent trustees so entitled. The retirement benefit payout for the Series is $17,853. Certain officers of DMC, DSC and DDLP are officers and/or trustees of the Trust. These officers and trustees are paid no compensation by the Series.

U.S. Growth Series- 11

Delaware VIP U.S. Growth Series
Notes to Financial Statements (continued)

3. Investments

For the year ended December 31, 2006, the Series made purchases and sales of investment securities other than short-term investments as follows:

Purchases	$	110,715,987
Sales		26,426,857

At December 31, 2006, the cost of investments for federal income tax purposes and unrealized appreciation (depreciation) for the Series were as follows:

Cost of Investments		Aggregate Unrealized Appreciation		Aggregate Unrealized Depreciation			Net Unrealized Appreciation
$	157,903,763	$	22,948,145	$	(896,338	)	$	22,051,807

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. generally accepted accounting principles. Additionally, net short-term gains on sales of investment securities are treated as ordinary income for federal income tax purposes. There were no distributions paid during the year ended December 31, 2006. The tax character of dividends and distributions paid during the year ended December 31, 2005 was as follows:

	Year Ended 12/31/05
Ordinary income	$	206,140

5. Components of Net Assets on a Tax Basis

As of December 31, 2006, the components of net assets on a tax basis were as follows:

Shares of beneficial interest	$	171,173,502
Capital loss carryforwards		(14,949,348	)
Post-October losses		(1,131,462	)
Unrealized appreciation of investments		22,051,807
Net assets	$	177,144,499

The differences between book basis and tax basis components of net assets are primarily attributable to tax deferral of losses on wash sales.

Post-October losses represent losses realized on investment transactions from November 1, 2006 through December 31, 2006 that, in accordance with federal income tax regulations, the Series has elected to defer and treat as having arisen in the following fiscal year.

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 net operating losses. Results of operations and net assets were not affected by these reclassifications. For the year ended December 31, 2006, the Series recorded the following reclassificiations:

Accumulated Net Investment Loss		Paid-in Capital
$	149,210	$	(149,210	)

For federal income tax purposes, capital loss carryforwards may be carried forward and applied against future capital gains. Capital loss carryforwards remaining at December 31, 2006 will expire as follows: $75,384 expires in 2008, $4,507,939 expires in 2009, $3,675,553 expires in 2010, $1,428,622 expires in 2011, $450,672 expires in 2012 and $4,811,178 expires in 2014.

U.S. Growth Series- 12

Delaware VIP U.S. Growth Series
Notes to Financial Statements (continued)

6. Capital Shares

Transactions in capital shares were as follows:

	Year Ended 12/31/06			Year Ended 12/31/05
Shares sold:
Standard Class		13,447,718			4,883,834
Service Class		525,533			922,111
Shares issued upon reinvestment of dividends and distributions:
Standard Class		–			9,018
Service Class		–			22,878
		13,973,251			5,837,841
Shares repurchased:
Standard Class		(1,906,393	)		(550,181	)
Service Class		(1,073,004	)		(1,050,132	)
		(2,979,397	)		(1,600,313	)
Net increase		10,993,854			4,237,528

7. Line of Credit

The Series, along with certain other funds in the Delaware Investments^® Family of Funds (the "Participants"), participates in a $225,000,000 revolving line of credit facility to be used for temporary or emergency purposes as an additional source of liquidity to fund redemptions of investor shares. The Participants are charged an annual commitment fee, which is allocated across the Participants on the basis of each Participant's allocation of the entire facility. The Participants may borrow up to a maximum of one third of their net assets under the agreement. The Series had no amounts outstanding as of December 31, 2006, or at any time during the year then ended.

8. Credit and Market Risk

The Series may invest up to 15% of its total 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 the Series 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, the Series' Board of Trustees has delegated to DMC the day-to-day functions of determining whether individual securities are liquid for purposes of the Series' limitation on investments in illiquid assets. At December 31, 2006, there were no Rule 144A securities and no securities have been determined to be illiquid under the Series' Liquidity Procedures.

9. Contractual Obligations

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

U.S. Growth Series- 13

Delaware VIP Trust — Delaware VIP U.S. Growth Series
Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees
Delaware VIP Trust — Delaware VIP U.S. Growth Series

We have audited the accompanying statement of net assets of the Delaware VIP U.S. Growth Series (one of the series constituting Delaware VIP Trust) (the "Series") as of December 31, 2006, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Series' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits 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 and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Series' internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Series' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant es timates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2006, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Delaware VIP U.S. Growth Series of Delaware VIP Trust at December 31, 2006, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and its financial highlights for each of five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

  

Philadelphia, Pennsylvania

February 14, 2007

The Series files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Series' Forms N-Q, as well as a description of the policies and procedures that the Series uses to determine how to vote proxies (if any) relating to portfolio securities is available without charge (i) upon request, by calling 800-523-1918; (ii) on the Series' website at http://www.delawareinvestments.com; and (iii) on the Commission's website at http://www.sec.gov. The Series' Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Information (if any) regarding how the Series voted proxies relating to portfolio securities during the most recently disclosed 12-month period ended June 30 is available without charge (i) through the Series' website at http://www.delawareinvestments.com; and (ii) on the Commission's website at http://www.sec.gov.

U.S. Growth Series- 14

Delaware Investments® Family of Funds

board of trustees/directors and officers addendum

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 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.

Name, Address, and Birth Date	Position(s) Held with Fund(s)	Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee or Officer		Other Directorships Held by Trustee or Officer
interested trustees
Patrick P. Coyne1 2005 Market Street Philadelphia, PA 19103 April 14, 1963	Chairman, President, Chief Executive Officer, and Trustee	Chairman and Trustee since August 16, 2006 President and Chief Executive Officer since August 1, 2006	Patrick P. Coyne has served in various executive capacities at different times at Delaware Investments.2		84	None
independent trustees
Thomas L. Bennett 2005 Market Street Philadelphia, PA 19103 October 4, 1947	Trustee	Since March 2005	Private Investor – (March 2004 – Present) Investment Manager – Morgan Stanley & Co. (January 1984 – March 2004)		84	None
John A. Fry 2005 Market Street Philadelphia, PA 19103 May 28, 1960	Trustee	Since January 2001	President – Franklin & Marshall College (June 2002 – Present) Executive Vice President – University of Pennsylvania (April 1995 – June 2002)		84	Director – Community Health Systems Director – Allied Barton Security Holdings
Anthony D. Knerr 2005 Market Street Philadelphia, PA 19103 December 7, 1938	Trustee	Since April 1990	Founder and Managing Director – Anthony Knerr & Associates (Strategic Consulting) (1990 – Present)		84	None
Lucinda S. Landreth 2005 Market Street Philadelphia, PA 19103 June 24, 1947	Trustee	Since March 2005	Chief Investment Officer – Assurant, Inc. (Insurance) (2002 – 2004)		84	None
Ann R. Leven 2005 Market Street Philadelphia, PA 19103 November 1, 1940	Trustee	Since September 1989	Consultant – ARL Associates (Financial Planning) (1983 – Present)		84	Director and Audit Committee Chairperson – Andy Warhol Foundation Director and Audit Committee Member – Systemax, Inc.

U.S. Growth Series- 15

Name, Address, and Birth Date	Position(s) Held with Fund(s)	Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee or Officer		Other Directorships Held by Trustee or Officer
independent trustees (continued)
Thomas F. Madison 2005 Market Street Philadelphia, PA 19103 February 25, 1936	Trustee	Since May 1997	President and Chief Executive Officer – MLM Partners, Inc. (Small Business Investing and Consulting) (January 1993 – Present)		84	Director – Banner Health Director – CenterPoint Energy Director and Audit Committee Member – Digital River, Inc. Director and Audit Committee Member – Rimage Corporation Director – Valmont Industries, Inc.
Janet L. Yeomans 2005 Market Street Philadelphia, PA 19103 July 31, 1948	Trustee	Since April 1999	Vice President (January 2003 – Present) and Treasurer (January 2006 – Present) 3M Corporation Ms. Yeomans has held various management positions at 3M Corporation since 1983.		84	None
J. Richard Zecher 2005 Market Street Philadelphia, PA 19103 July 3, 1940	Trustee	Since March 2005	Founder – Investor Analytics (Risk Management) (May 1999 – Present) Founder – Sutton Asset Management (Hedge Fund) (September 1998 – Present)		84	Director and Audit Committee Member – Investor Analytics Director and Audit Committee Member – Oxigene, Inc.
officers
David F. Connor 2005 Market Street Philadelphia, PA 19103 December 2, 1963	Vice President, Deputy General Counsel, and Secretary	Vice President since September 21, 2000 and Secretary since October 2005	David F. Connor has served as Vice President and Deputy General Counsel of Delaware Investments since 2000.		84	None3
David P. O'Connor 2005 Market Street Philadelphia, PA 19103 February 21, 1966	Senior Vice President, General Counsel, and Chief Legal Officer	Senior Vice President, General Counsel, and Chief Legal Officer since October 2005	David P. O'Connor has served in various executive and legal capacities at different times at Delaware Investments.		84	None3
John J. O'Connor 2005 Market Street Philadelphia, PA 19103 June 16, 1957	Senior Vice President and Treasurer	Treasurer since February 2005	John J. O'Connor has served in various executive capacities at different times at Delaware Investments.		84	None3
Richard Salus 2005 Market Street Philadelphia, PA 19103 October 4, 1963	Senior Vice President and Chief Financial Officer	Chief Financial Officer since November 1, 2006	Richard Salus has served in various executive capacities at different times at Delaware Investments.		84	None3

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

² Delaware 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.

³ David F. Connor, David P. O'Connor, John J. 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. John J. O'Connor also serves in a similar capacity for Lincoln Variable Insurance Products Trust, which has the same investment advisor as the registrant.

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.

U.S. Growth Series- 16

Delaware VIP Trust — Delaware VIP Value Series

For the 12-month period ended Dec. 31, 2006, the Delaware VIP Value Series Standard Class shares showed a positive return of 24.10% with distributions reinvested, as Service Class shares returned +23.79% with distributions reinvested. The Series benchmark, the Russell 1000 Value Index, gained 22.25% (source: Lipper).

We regularly look to invest in undervalued companies with good business models that we believe are priced well below their intrinsic value. During the most recent period, we focused on companies that we believed to have particularly sound balance sheets, strong dividend yields, and the potential to continue generating relatively stable earnings, even in a weaker economy.

This approach led us to hold small positions in the energy and industrial sectors relative to the benchmark index. As the fiscal year progressed, we found an increasing number of opportunities among technology stocks and added a position in Intel. We continued to hold a relatively large position in the traditionally defensive healthcare sector compared to the benchmark. Several consumer discretionary stocks generated strong gains during the fiscal period, and in healthcare the Series gained from its holding in Merck.

Our holdings in the financial sector were often among our weakest performers. For example, Huntington Bancshares encountered difficulty as the company's earnings suffered from the less profitable lending activities, caused by a challenging interest rate environment. Insurance company Hartford Financial Services also underperformed relative to the overall stock market, hindered by increased competition and a slowdown in the growth of auto insurance premiums, among other factors. Because we still like the outlook for these two companies, we retained these holdings in the portfolio.

The views expressed are current as of the date of this report and are subject to change.

The performance data quoted below and on the next page represent past performance; past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please obtain the performance data for the most recent month end by calling the number noted on the page related to this Series in the introductory section of this report.

You should consider the investment objectives, risks, charges, and expenses of the investment carefully before investing. The Delaware VIP Value Series prospectus contains this and other important information about the Series. To obtain a prospectus, contact the company noted on the page related to this Series in the introductory section of this report, either by phone or through the company Web site. We advise you to read the prospectus carefully before you invest.

Instances of high double-digit returns are unusual, cannot be sustained, and were achieved primarily during favorable market conditions.

Delaware VIP Value Series Average Annual Total Returns For the periods ending Dec. 31, 2006

1 Year

5 Years

10 Years

Lifetime

Standard Class Shares*

+24.10

%

+9.55

%

+9.10

%

+10.21

%

Service Class Shares**

+23.79

%

+9.31

%

NA

+8.82

%

  *  Commenced operations on July 28, 1988

  **  Commenced operations on May 1, 2000

Value Series- 1

Delaware VIP Trust — Delaware VIP Value Series (continued)

The chart shows a $10,000 investment in the Delaware VIP Value Series Standard Class shares for the period from Dec. 31, 1996 through Dec. 31, 2006. All distributions were reinvested. The chart also shows $10,000 invested in the Russell 1000 Value Index for the period from Dec. 31, 1996 through Dec. 31, 2006.

The Russell 1000 Value Index measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values. An index is unmanaged and does not reflect the costs of operating a mutual fund, such as the costs of buying, selling, and holding securities. You cannot invest directly in an index.

Earnings from a variable annuity or variable life investment compound tax free until withdrawal, so no adjustments were made for income taxes.

An expense limitation was in effect for the Delaware VIP Value Series during the periods shown.

Performance of Service Class shares will vary due to different charges and expenses.

Performance does not reflect insurance fees related to a variable annuity or variable life investment or the deferred sales charge that would apply to certain withdrawals of investments held for fewer than eight years. Performance shown here would have been reduced if such fees were included and the expense limitation was removed. For more information about fees, consult your variable annuity or variable life prospectus.

Investments in variable products involve risk. Some portfolios offer more risk than others. Please read both the contract and underlying prospectus for specific details regarding the product's risk profile.

Value Series- 2

Delaware VIP Trust — Delaware VIP Value Series
Disclosure of Series Expenses

For the Period July 1, 2006 to December 31, 2006

As a shareholder of the Series, you incur ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Series expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Series and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2006 to December 31, 2006.

Actual Expenses

The first section of the table shown, "Actual Series 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 the period.

Hypothetical Example for Comparison Purposes

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

Please note that the expenses shown in the table are meant to highlight your ongoing costs only. As a shareholder of the Series, you do not incur any transaction costs, such as sales charges (loads), redemption fees or exchange fees, but shareholders of other funds may incur such costs. Also, the fees related to the variable annuity investment or the deferred sales charge that could apply have not been included. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. The Series' actual expenses shown in the table reflect fee waivers in effect. The expenses shown in the table assume reinvestment of all dividends and distributions.

Expense Analysis of an Investment of $1,000

	Beginning Account Value 7/1/06		Ending Account Value 12/31/06		Annualized Expense Ratios			Expenses Paid During Period 7/1/06 to 12/31/06*
Actual Series Return
Standard Class	$	1,000.00	$	1,164.70		0.73	%	$	3.98
Service Class		1,000.00		1,163.30		0.98	%		5.34
Hypothetical 5% Return (5% return before expenses)
Standard Class	$	1,000.00	$	1,021.53		0.73	%	$	3.72
Service Class		1,000.00		1,020.27		0.98	%		4.99

*"Expenses Paid During Period" are equal to the Series' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

Value Series- 3

Delaware VIP Trust — Delaware VIP Value Series
Sector Allocation and Top 10 Holdings

As of December 31, 2006

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

Sector	Percentage of Net Assets
Common Stock		98.00	%
Consumer Discretionary		8.56	%
Consumer Staples		12.21	%
Energy		6.31	%
Financials		23.50	%
Health Care		17.74	%
Industrials		5.82	%
Information Technology		11.88	%
Materials		2.94	%
Telecommunications		6.10	%
Utilities		2.94	%
Repurchase Agreements		1.74	%
Securities Lending Collateral		9.20	%
Fixed Rate Note		1.74	%
Variable Rate Notes		7.46	%
Total Market Value of Securities		108.94	%
Obligation to Return Securities Lending Collateral		(9.20	%)
Receivables and Other Assets Net of Liabilities		0.26	%
Total Net Assets		100.00	%

Holdings are for informational purposes only and are subject to change at any time. They are not a recommendation to buy, sell, or hold any security.

Top 10 Holdings

	Percentage of Net Assets
ConocoPhillips		3.30	%
Safeway		3.25	%
Morgan Stanley		3.07	%
Hewlett-Packard		3.06	%
AT&T		3.05	%
Bristol-Myers Squibb		3.05	%
Verizon Communications		3.05	%
International Business Machines		3.03	%
Kimberly-Clark		3.02	%
Wyeth		3.01	%

Value Series- 4

Delaware VIP Trust — Delaware VIP Value Series
Statement of Net Assets

December 31, 2006

	Number of Shares		Market Value
COMMON STOCK–98.00%
Consumer Discretionary–8.56%
* Gap		948,800	$	18,501,600
*† Idearc		24,305		696,338
Limited Brands		629,600		18,220,624
* Mattel		769,900		17,445,934
				54,864,496
Consumer Staples–12.21%
ConAgra Foods		706,500		19,075,500
* Heinz (H.J.)		422,400		19,012,224
Kimberly-Clark		285,300		19,386,135
* Safeway		602,200		20,812,032
				78,285,891
Energy–6.31%
Chevron		262,500		19,301,625
* ConocoPhillips		294,100		21,160,495
				40,462,120
Financials–23.50%
Allstate		288,700		18,797,257
* Aon		520,700		18,401,538
Chubb		363,400		19,227,494
Hartford Financial Services		192,500		17,962,175
* Huntington Bancshares		768,300		18,247,125
Morgan Stanley		241,900		19,697,917
Wachovia		338,100		19,254,795
* Washington Mutual		418,700		19,046,663
				150,634,964
Health Care–17.74%
Abbott Laboratories		389,500		18,972,545
Baxter International		407,700		18,913,203
* Bristol-Myers Squibb		742,200		19,534,704
Merck		405,800		17,692,880
Pfizer		743,100		19,246,290
Wyeth		379,200		19,308,864
				113,668,486
Industrials–5.82%
Donnelley (R.R.) & Sons		523,100		18,590,974
Waste Management		509,200		18,723,284
				37,314,258
Information Technology–11.88%
Hewlett-Packard		475,500		19,585,845
Intel		914,500		18,518,625
International Business Machines		200,200		19,449,430
† Xerox		1,097,000		18,594,150
				76,148,050
Materials–2.94%
* duPont (E.I.) deNemours		386,300		18,816,673
				18,816,673
Telecommunications–6.10%
* AT&T		547,424		19,570,408
Verizon Communications		524,400		19,528,656
				39,099,064

	Number of Shares		Market Value
COMMON STOCK (continued)
Utilities–2.94%
* Progress Energy		383,400	$	18,817,272
				18,817,272
Total Common Stock (cost $507,265,134)				628,111,274
	Principal Amount
REPURCHASE AGREEMENTS–1.74%
With BNP Paribas 4.80% 1/2/07 (dated 12/29/06, to be repurchased at $4,247,264, collateralized by $4,441,000 U.S. Treasury Bills due 6/28/07, market value $4,334,593)	$	4,245,000		4,245,000
With Cantor Fitzgerald 4.82% 1/2/07 (dated 12/29/06, to be repurchased at $5,103,732, collateralized by $440,000 U.S. Treasury Notes 4.00% due 6/15/09, market value $433,669, $2,733,000 U.S. Treasury Notes 6.125% due 8/15/07, market value $2,814,200 and $1,822,000 U.S. Treasury Notes 6.50% due 2/15/10, market value $1,959,571)		5,101,000		5,101,000
With UBS Warburg 4.75% 1/2/07 (dated 12/29/06, to be repurchased at $1,822,962, collateralized by $1,882,000 U.S. Treasury Bills due 3/29/07, market value $1,859,764)		1,822,000		1,822,000
Total Repurchase Agreements (cost $11,168,000)				11,168,000
Total Market Value of Securities Before Securities Lending Collateral–99.74% (cost $518,433,134)				639,279,274
SECURITIES LENDING COLLATERAL**–9.20%
Short-Term Investments–9.20%
Fixed Rate Note–1.74%
Citigroup Global Markets 5.32% 1/2/07		11,153,622		11,153,622
				11,153,622
• Variable Rate Notes–7.46%
American Honda Finance 5.32% 2/21/07		1,442,355		1,442,355
ANZ National 5.35% 1/29/08		320,523		320,523
Australia New Zealand 5.35% 1/29/08		1,602,616		1,602,616
Bank of America 5.32% 2/23/07		2,083,401		2,083,401
Bank of New York 5.34% 1/29/08		1,282,093		1,282,093
Barclays New York 5.31% 5/18/07		2,083,401		2,083,401
Bayerische Landesbank 5.40% 1/29/08		1,602,616		1,602,616
Bear Stearns 5.41% 6/29/07		1,923,140		1,923,140

Value Series-5

Delaware VIP Value Series
Statement of Net Assets (continued)

	Principal Amount		Market Value
SECURITY LENDING COLLATERAL (continued)
Short-Term Investments (continued)
• Variable Rate Notes (continued)
BNP Paribas 5.35% 1/29/08	$	1,602,617	$	1,602,617
Canadian Imperial Bank 5.33% 1/29/09		1,121,832		1,121,832
CDC Financial 5.36% 1/29/07		2,083,402		2,083,402
Citigroup Global Markets 5.38% 1/5/07		2,083,402		2,083,402
Commonwealth Bank 5.35% 1/29/08		1,602,617		1,602,617
Deutsche Bank 5.34% 2/23/07		1,923,140		1,923,140
Dexia Bank 5.33% 9/28/07		2,243,657		2,243,333
Goldman Sachs 5.45% 12/28/07		2,083,402		2,083,402
Marshall & Ilsley Bank 5.33% 1/29/08		1,762,878		1,762,878
Merrill Lynch Mortgage Capital 5.41% 1/8/07		2,083,402		2,083,402

	Principal Amount		Market Value
SECURITY LENDING COLLATERAL** (continued)
Short-Term Investments (continued)
• Variable Rate Notes (continued)
Morgan Stanley 5.49% 1/29/08	$	2,083,402	$	2,083,402
National Australia Bank 5.32% 3/7/07		1,987,245	��	1,987,245
National City Bank 5.32% 3/2/07		1,923,197		1,923,313
National Rural Utilities 5.34% 1/29/08		2,532,134		2,532,134
Nordea Bank New York 5.31% 5/16/07		801,303		801,288
Nordea Bank Norge 5.36% 1/29/08		1,602,617		1,602,617
Royal Bank of Scotland 5.34% 1/29/08		1,602,617		1,602,617
Societe Generale 5.32% 1/29/08		801,308		801,308
Toronto Dominion 5.32% 5/29/07		1,923,140		1,923,140
Wells Fargo 5.36% 1/29/08		1,602,617		1,602,617
				47,789,851
Total Securities Lending Collateral (cost $58,943,473)				58,943,473

TOTAL MARKET VALUE OF SECURITIES–108.94% (cost $577,376,607)		698,222,747	v
OBLIGATION TO RETURN SECURITIES LENDING COLLATERAL**–(9.20%)		(58,943,473	)
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES–0.26%		1,651,193
NET ASSETS APPLICABLE TO 27,897,521 SHARES OUTSTANDING–100.00%	$	640,930,467
NET ASSET VALUE–DELAWARE VIP VALUE SERIES STANDARD CLASS ($497,525,355 / 21,646,474 Shares)	$	22.98
NET ASSET VALUE–DELAWARE VIP VALUE SERIES SERVICE CLASS ($143,405,112 / 6,251,047 Shares)	$	22.94
COMPONENTS OF NET ASSETS AT DECEMBER 31, 2006:
Shares of beneficial interest (unlimited authorization–no par)	$	497,125,261
Undistributed net investment income		10,435,756
Accumulated net realized gain on investments		12,523,310
Net unrealized appreciation of investments		120,846,140
Total net assets	$	640,930,467

  *  Fully or partially on loan.

  **  See Note 8 in "Notes to Financial Statements."

v  Includes $57,324,118 of securities loaned.

  †  Non-income producing security for the year ended December 31, 2006.

  •  Variable rate security. The interest rate shown is the rate as of December 31, 2006.

See accompanying notes

Value Series- 6

Delaware VIP Trust — Delaware VIP Value Series
Statement of Operations

Year Ended December 31, 2006

INVESTMENT INCOME:
Dividends	$	13,761,147
Interest		531,568
Securities lending income		30,297
		14,323,012
EXPENSES:
Management fees		3,267,224
Distribution expenses – Service Class		305,610
Accounting and administration expenses		201,912
Reports and statements to shareholders		113,682
Trustees' fees and benefits		95,455
Dividend disbursing and transfer agent fees and expenses		50,478
Legal fees		48,024
Audit and tax		30,684
Insurance fees		24,115
Custodian fees		13,180
Consulting fees		11,868
Registration fees		8,691
Dues and services		3,235
Trustees' expenses		3,075
Pricing fees		313
		4,177,546
Less management fees absorbed or waived		(238,227	)
Less waiver of distribution expenses – Service Class		(50,935	)
Less expense paid indirectly		(2,839	)
Total operating expenses		3,885,545
NET INVESTMENT INCOME		10,437,467
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments		18,468,335
Net change in unrealized appreciation/depreciation of investments		83,021,350
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS		101,489,685
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	111,927,152

See accompanying notes

Delaware VIP Trust — Delaware VIP Value Series
Statements of Changes in Net Assets

	Year Ended
	12/31/06			12/31/05
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income	$	10,437,467		$	7,271,468
Net realized gain on investments		18,468,335			15,751,969
Net change in unrealized appreciation/ depreciation of investments		83,021,350			(751,957	)
Net increase in net assets resulting from operations		111,927,152			22,271,480
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Standard Class		(6,076,791	)		(5,331,963	)
Service Class		(1,195,237	)		(567,103	)
Net realized gain on investments:
Standard Class		(8,040,632	)		—
Service Class		(1,846,025	)		—
		(17,158,685	)		(5,899,066	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Standard Class		228,533,309			67,835,208
Service Class		65,252,069			46,375,696
Net asset value of shares issued upon reinvestment of dividends and distributions:
Standard Class		14,117,423			5,331,963
Service Class		3,041,262			567,103
		310,944,063			120,109,970
Cost of shares repurchased:
Standard Class		(169,612,666	)		(48,165,366	)
Service Class		(20,390,780	)		(7,441,636	)
		(190,003,446	)		(55,607,002	)
Increase in net assets derived from capital share transactions		120,940,617			64,502,968
NET INCREASE IN NET ASSETS		215,709,084			80,875,382
NET ASSETS:
Beginning of year		425,221,383			344,346,001
End of year (including undistributed net investment income of $10,435,756, and $7,270,317, respectively)	$	640,930,467		$	425,221,383

See accompanying notes

Value Series- 7

Delaware VIP Trust — Delaware VIP Value Series
Financial Highlights

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

	Delaware VIP Value Series Standard Class
	Year Ended
	12/31/06			12/31/05			12/31/04			12/31/03			12/31/02
Net asset value, beginning of period	$	19.230		$	18.460		$	16.330		$	13.000		$	16.210
Income (loss) from investment operations:
Net investment income1		0.437			0.369			0.313			0.265			0.235
Net realized and unrealized gain (loss) on investments and foreign currencies		4.075			0.722			2.082			3.337			(3.215	)
Total from investment operations		4.512			1.091			2.395			3.602			(2.980	)
Less dividends and distributions from:
Net investment income		(0.328	)		(0.321	)		(0.265	)		(0.272	)		(0.230	)
Net realized gain on investments		(0.434	)		–			–			–			–
Total dividends and distributions		(0.762	)		(0.321	)		(0.265	)		(0.272	)		(0.230	)
Net asset value, end of period	$	22.980		$	19.230		$	18.460		$	16.330		$	13.000
Total return2		24.10	%		6.03	%		14.93	%		28.29	%		(18.68	%)
Ratios and supplemental data:
Net assets, end of period (000 omitted)	$	497,525		$	349,443		$	310,704		$	302,266		$	240,752
Ratio of expenses to average net assets		0.72	%		0.73	%		0.70	%		0.70	%		0.70	%
Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly		0.77	%		0.78	%		0.75	%		0.75	%		0.75	%
Ratio of net investment income to average net assets		2.12	%		1.98	%		1.87	%		1.88	%		1.61	%
Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly		2.07	%		1.93	%		1.82	%		1.83	%		1.56	%
Portfolio turnover		14	%		23	%		124	%		79	%		100	%

¹The average shares outstanding method has been applied for per share information.

²Total 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. Total investment return reflects waivers and payment of fees by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes

Value Series- 8

Delaware VIP Value Series
Financial Highlights (continued)

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

	Delaware VIP Value Series Service Class
	Year Ended
	12/31/06			12/31/05			12/31/04			12/31/03			12/31/02
Net asset value, beginning of period	$	19.200		$	18.430		$	16.320		$	12.990		$	16.200
Income (loss) from investment operations:
Net investment income1		0.385			0.323			0.271			0.233			0.214
Net realized and unrealized gain (loss) on investments and foreign currencies		4.070			0.726			2.072			3.348			(3.218	)
Total from investment operations		4.455			1.049			2.343			3.581			(3.004	)
Less dividends and distributions from:
Net investment income		(0.281	)		(0.279	)		(0.233	)		(0.251	)		(0.206	)
Net realized gain on investments		(0.434	)		–			–			–			–
Total dividends and distributions		(0.715	)		(0.279	)		(0.233	)		(0.251	)		(0.206	)
Net asset value, end of period	$	22.940		$	19.200		$	18.430		$	16.320		$	12.990
Total return2		23.79	%		5.79	%		14.59	%		28.10	%		(18.81	%)
Ratios and supplemental data:
Net assets, end of period (000 omitted)	$	143,405		$	75,778		$	33,642		$	14,737		$	5,463
Ratio of expenses to average net assets		0.97	%		0.98	%		0.95	%		0.92	%		0.85	%
Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly		1.07	%		1.08	%		1.05	%		1.00	%		0.90	%
Ratio of net investment income to average net assets		1.87	%		1.73	%		1.62	%		1.66	%		1.46	%
Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly		1.77	%		1.63	%		1.52	%		1.58	%		1.41	%
Portfolio turnover		14	%		23	%		124	%		79	%		100	%

¹The average shares outstanding method has been applied for per share information.

²Total 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. Total investment return reflects waivers and payment of fees by the manager and distributor. Performance would have been lower had the waiver not been in effect.

See accompanying notes

Value Series- 9

Delaware VIP Trust — Delaware VIP Value Series
Notes to Financial Statements

December 31, 2006

Delaware VIP Trust (the "Trust") is organized as a Delaware statutory trust and offers 15 series: Delaware VIP Balanced Series, Delaware VIP Capital Reserves Series, Delaware VIP Cash Reserve Series, Delaware VIP Diversified Income Series, Delaware VIP Emerging Markets Series, Delaware VIP Global Bond Series, Delaware VIP Growth Opportunities Series, Delaware VIP High Yield Series, Delaware VIP International Value Equity Series, Delaware VIP REIT Series, Delaware VIP Select Growth Series, Delaware VIP Small Cap Value Series, Delaware VIP Trend Series, Delaware VIP U.S. Growth Series and Delaware VIP Value Series. These financial statements and the related notes pertain to Delaware VIP Value Series (the "Series"). The Trust is an open-end investment company. The Series is considered diversified under the Investment Company Act of 1940, as amended, and offers Standard Class and Service Class shares. The Standard Class shares do not carry a 12b - -1 fee and the Service Class shares carry a 12b-1 fee. The shares of the Series are sold only to separate accounts of life insurance companies.

The investment objective of the Series is to seek long-term capital appreciation.

1. Significant Accounting Policies

The following accounting policies are in accordance with U.S. generally accepted accounting principles and are consistently followed by the Series.

Security Valuation—Equity securities, except those traded on the Nasdaq Stock Market, Inc. (Nasdaq), are valued at the last quoted sales price as of the time of the regular close of the New York Stock Exchange (NYSE) on the valuation date. Securities traded on the Nasdaq are valued in accordance with the Nasdaq Official Closing Price, which may not be the last sales price. If on a particular day an equity security does not trade, then the mean between the bid and asked prices will be used. Short-term debt securities having less than 60 days to maturity are valued at amortized cost, which approximates market value. Securities lending collateral is valued at amortized cost, which approximates market value. 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 the Series' Board of Trustees. 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 with respect to foreign securities, aftermarket trading, or significant events after local market trading (e.g., government actions or pronouncements, trading volume or volatility on markets, exchanges among dealers, or news events).

In September 2006, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 157 "Fair Value Measurements" (Statement 157). Statement 157 establishes a framework for measuring fair value in generally accepted accounting principles, clarifies the definition of fair value within that framework, and expands disclosures about the use of fair value measurements. Statement 157 is intended to increase consistency and comparability among fair value estimates used in financial reporting. Statement 157 is effective for fiscal years beginning after November 15, 2007. Management does not expect the adoption of Statement 157 to have an impact on the amounts reported in the financial statements.

Federal Income Taxes—The Series intends to continue to qualify for federal income tax purposes as a regulated investment company and make the requisite distributions to shareholders. Accordingly, no provision for federal income taxes has been made in the financial statements.

On July 13, 2006, FASB released FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented, and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Series' 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 would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. Recent SEC guidance allows implementing FIN 48 in Series net asset value calculations as late as the Series' last net asset value calculation in the first required f inancial statement reporting period. As a result, the Series will incorporate FIN 48 in its semiannual report on June 30, 2007. Although the Series tax positions are currently being evaluated, management does not expect the adoption of FIN 48 to have a material impact on the Series financial statements.

Class Accounting—Investment income, common expenses and realized and unrealized gain (loss) on investments are allocated to the classes of the Series on the basis of daily net assets of each class. Distribution expenses relating to a specific class are charged directly to that class.

Repurchase Agreements—The Series may invest in a pooled cash account along with other members of the Delaware Investments^® Family of Funds pursuant to an exemptive order issued by the Securities and Exchange Commission. The aggregate daily balance of the pooled cash account is invested in repurchase agreements secured by obligations of the U.S. government. The respective collateral is held by the Series' custodian bank until the maturity of the respective repurchase agreements. Each repurchase agreement is at least 102% collateralized. However, in the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral may be subject to legal proceedings.

Use of Estimates—The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of 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.

Other—Expenses directly attributable to the Series are charged directly to the Series. 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. Dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis.

The Series declares and pays dividends from net investment income and distributions from net realized gain on investments, if any, following the close of the fiscal year.

Value Series- 10

Delaware VIP Value Series
Notes to Financial Statements (continued)

1. Significant Accounting Policies (continued)

Subject to seeking best execution, the Series may direct certain security trades to brokers who have agreed to rebate a portion of the related brokerage commission to the Series in cash. Such commission rebates are included in realized gain on investments in the accompanying financial statements and totaled $9,233 for the year ended December 31, 2006. In general, best execution refers to many factors, including the price paid or received for a security, the commission charged, the promptness and reliability of execution, the confidentiality and placement accorded the order, and other factors affecting the overall benefit obtained by the Series on the transaction.

The Series receives earnings credits from its custodian when positive cash balances are maintained, which are used to offset custody fees. The expense paid under this arrangement is included in custodian fees on the Statement of Operations with the corresponding expense offset shown as "expense paid indirectly."

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

In accordance with the terms of its investment management agreement, the Series pays Delaware Management Company (DMC), a series of Delaware Management Business Trust and the investment manager, an annual fee which is calculated daily at the rate of 0.65% on the first $500 million of average daily net assets of the Series, 0.60% on the next $500 million, 0.55% on the next $1.5 billion, and 0.50% on average daily net assets in excess of $2.5 billion. DMC has voluntarily agreed to waive management fees in the amount of 0.05% on the first $500 million of average daily net assets until such time as the waiver is discontinued.

DMC has also contractually agreed to waive that portion, if any, of its management fee and reimburse the Series to the extent necessary to ensure that annual operating expenses, exclusive of taxes, interest, brokerage commissions, distribution fees, certain insurance costs and extraordinary expenses, do not exceed 0.86% of average daily net assets of the Series through April 30, 2007. Prior to May 1, 2006 the expense limitation was 0.80% of average daily net assets. No reimbursement was due for the year ended December 31, 2006 under either limitation agreement.

Delaware Service Company, Inc. (DSC), an affiliate of DMC, provides accounting, administration, dividend disbursing and transfer agent services. The Series pays DSC a monthly fee computed at the annual rate of 0.04% of the Series' average daily net assets for accounting and administrative services. The Series pays DSC a monthly fee based on average net assets for dividend disbursing and transfer agent services.

Pursuant to a distribution agreement and distribution plan, the Series pays Delaware Distributors, L.P. (DDLP), the distributor and an affiliate of DMC, an annual distribution and service fee not to exceed 0.30% of the average daily net assets of the Service Class shares. DDLP has contracted to waive distribution and service fees through April 30, 2007 in order to prevent distribution and service fees of the Service Class shares from exceeding 0.25% of average daily net assets. Standard Class shares pay no distribution and service expenses.

At December 31, 2006, the Series had liabilities payable to affiliates as follows:

Investment Management Fee Payable to DMC		Dividend Disbursing, Transfer Agent, Accounting and Administration Fees and Other Expenses Payable to DSC		Distribution Fee Payable To DDLP		Other Expenses Payable to DMC and Affiliates*
$	320,513	$	29,569	$	29,641	$	40,177

*DMC, as part of its administrative services, pays operating expenses on behalf of the Series and is reimbursed on a periodic basis. Such expenses include items such as printing of shareholder reports, fees for audit, legal and tax services, custodian fees and trustees' fees.

As provided in the investment management agreement, the Series bears the cost of certain legal and tax services, including internal legal and tax services provided to the Series by DMC and/or its affiliates' employees. For the year ended December 31, 2006, the Series was charged $24,585 for internal legal and tax services provided by DMC and/or its affiliates' employees.

Trustees' fees and benefits include expenses accrued by the Series for each Trustee's retainer, per meeting fees and retirement benefits. Independent Trustees with over five years of uninterrupted service are eligible to participate in a retirement plan that provides for the payment of benefits upon retirement. The amount of the retirement benefit is based on factors set forth in the plan, including the number of years of service. On November 16, 2006, the Board of Trustees unanimously voted to terminate the retirement plan. Payments equal to the net present value of the earned benefits will be made in 2007 to those independent trustees so entitled. The retirement benefit payout for the Series is $67,805. Certain officers of DMC, DSC and DDLP are officers and/or trustees of the Trust. These officers and trustees are paid no compensation by the Series.

3. Investments

For the year ended December 31, 2006, the Series made purchases and sales of investment securities other than short-term investments as follows:

Purchases	$	177,443,745
Sales		70,896,543

Value Series- 11

Delaware VIP Value Series
Notes to Financial Statements (continued)

3. Investments (continued)

At December 31, 2006, the cost of investments for federal income tax purposes and unrealized appreciation (depreciation) for the Series were as follows:

Cost of Investments		Aggregate Unrealized Appreciation		Aggregate Unrealized Depreciation		Net Unrealized Appreciation
$	578,494,038	$	119,728,709	$	–	$	119,728,709

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. generally accepted accounting principles. Additionally, 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 December 31, 2006 and 2005 was as follows:

	Year Ended 12/31/06		Year Ended 12/31/05
Ordinary income	$	7,279,764	$	5,899,066
Long-term capital gain		9,878,921		–
	$	17,158,685	$	5,899,066

5. Components of Net Assets on a Tax Basis

As of December 31, 2006, the components of net assets on a tax basis were as follows:

Shares of beneficial interest	$	497,125,261
Undistributed ordinary income		12,055,699
Undistributed long-term capital gain		15,457,654
*Capital loss carryforwards		(3,436,856	)
Unrealized appreciation of investments		119,728,709
Net assets	$	640,930,467

The differences between book basis and tax basis components of net assets are primarily attributable to tax deferral of losses on wash sales.

For federal income tax purposes, capital loss carryforwards may be carried forward and applied against future capital gains. $859,214 was utilized in 2006. Capital loss carryforwards remaining at December 31, 2006 will expire as follows: $1,956,870 expires in 2009 and $1,479,986 expires in 2010.

*The amount of this loss which can be utilized in subsequent years is subject to an annual limitation in accordance with the Internal Revenue Code due to the fund merger with Delaware VIP Devon Series in 2003.

6. Capital Shares

Transactions in capital shares were as follows:

	Year Ended 12/31/06			Year Ended 12/31/05
Shares sold:
Standard Class		11,365,108			3,617,312
Service Class		3,147,358			2,487,125
Shares issued upon reinvestment of dividends and distributions:
Standard Class		713,001			296,056
Service Class		153,599			31,488
		15,379,066			6,431,981
Shares repurchased:
Standard Class		(8,598,802	)		(2,581,332	)
Service Class		(996,179	)		(397,840	)
		(9,594,981	)		(2,979,172	)
Net increase		5,784,085			3,452,809

Value Series- 12

Delaware VIP Value Series
Notes to Financial Statements (continued)

7. Line of Credit

The Series, along with certain other funds in the Delaware Investments^® Family of Funds (the "Participants"), participates in a $225,000,000 revolving line of credit facility to be used for temporary or emergency purposes as an additional source of liquidity to fund redemptions of investor shares. The Participants are charged an annual commitment fee, which is allocated across the Participants on the basis of each fund's allocation of the entire facility. The Participants may borrow up to a maximum of one third of their net assets under the agreement. The Series had no amounts outstanding as of December 31, 2006, or at any time during the year then ended.

8. Securities Lending

The Series, along with other funds in the Delaware Investments Family^® of Funds, may lend its securities pursuant to a security lending agreement (Lending Agreement) with JPMorgan Chase. Initial security loans made pursuant to the Lending Agreement are required to be secured by U.S. government obligations and/or cash collateral not less than 102% of the market value of the securities issued in the United States and 105% of the market value of securities issued outside the United States. With respect to each loan, if the aggregate market value of the collateral held on any business day is less than the aggregate market value of the securities which are the subject of such loan, the borrower will be notified to provide additional collateral not less than the applicable collateral requirements. Cash collateral received is invested in fixed income securities, with a weighted average maturity not to exceed 90 days, rated in one of the top two tiers by Standard & Poor's Ratings Group or Moody's Investors Service, Inc. or repurchase agreements collateralized by such securities. However, in the event of default or bankruptcy by the lending agent, realization and/or retention of the collateral may be subject to legal proceedings. In the event the borrower fails to return loaned securities and the collateral received is insufficient to cover the value of the loaned securities and provided such collateral shortfall is not the result of investment losses, the lending agent has agreed to pay the amount of the shortfall to the Series, or at the discretion of the lending agent, replace the loaned securities. The Series continues to record dividends on the securities loaned and is subject to change in value of the securities loaned that may occur during the term of the loan. The Series has the right under the Lending Agreement to recover the securities from the borrower on demand. The security lending agent and the borrower retain a portion of the earnings from the collateral investments. The Series records security lending income net of such allocation.

At December 31, 2006, the market value of securities on loan was $57,324,118, for which cash collateral was received and invested in accordance with the Lending Agreement. Such investments are presented on the Statement of Net Assets under the caption "Securities Lending Collateral."

9. Credit and Market Risk

The Series may invest up to 10% of its total 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 the Series 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, the Series' Board of Trustees has delegated to DMC the day-to-day functions of determining whether individual securities are liquid for purposes of the Series' limitation on investments in illiquid assets. At December 31, 2006, there were no Rule 144A securities and no securities have been determined to be illiquid under the Series' Liquidity Procedures.

10. Contractual Obligations

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

11. Tax Information (Unaudited)

For the fiscal year ended December 31, 2006, the Series designates distributions paid during the year as follow:

(A) Long-Term Capital Gains Distributions (Tax Basis)			(B) Ordinary Income Distributions (Tax Basis)			Total Distribution (Tax Basis)			(C) Qualifying Dividends1
	58	%		42	%		100	%		100	%

(A) and (B) are based on a percentage of the Series' total distributions.

(C) is based on a percentage of the Series' ordinary income distributions.

¹ Qualifying dividends represent dividends which qualify for the corporate dividends received deduction.

Value Series- 13

Delaware VIP Trust — Delaware VIP Value Series
Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees
Delaware VIP Trust–Delaware VIP Value Series

We have audited the accompanying statement of net assets of the Delaware VIP Value Series (one of the series constituting Delaware VIP Trust) (the "Series") as of December 31, 2006, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Series' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits 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 and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Series' internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Series' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant es timates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2006, by correspondence with the custodian and brokers. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Delaware VIP Value Series of Delaware VIP Trust at December 31, 2006, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and its financial highlights for each of the five years in the period the ended, in conformity with U.S. generally accepted accounting principles.

  

Philadelphia, Pennsylvania

February 14, 2007

The Series files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Series' Forms N-Q, as well as a description of the policies and procedures that the Series uses to determine how to vote proxies (if any) relating to portfolio securities is available without charge (i) upon request, by calling 800-523-1918; (ii) on the Series' website at http://www.delawareinvestments.com; and (iii) on the Commission's website at http://www.sec.gov. The Series' Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Information (if any) regarding how the Series voted proxies relating to portfolio securities during the most recently disclosed 12-month period ended December 31 is available without charge (i) through the Series' website at http://www.delawareinvestments.com; and (ii) on the Commission's website at http://www.sec.gov.

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Delaware Investments® Family of Funds

board of trustees/directors and officers addendum

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 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.

Name, Address, and Birth Date	Position(s) Held with Fund(s)	Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee or Officer		Other Directorships Held by Trustee or Officer
interested trustees
Patrick P. Coyne1 2005 Market Street Philadelphia, PA 19103 April 14, 1963	Chairman, President, Chief Executive Officer, and Trustee	Chairman and Trustee since August 16, 2006 President and Chief Executive Officer since August 1, 2006	Patrick P. Coyne has served in various executive capacities at different times at Delaware Investments.2		84	None
independent trustees
Thomas L. Bennett 2005 Market Street Philadelphia, PA 19103 October 4, 1947	Trustee	Since March 2005	Private Investor – (March 2004 – Present) Investment Manager – Morgan Stanley & Co. (January 1984 – March 2004)		84	None
John A. Fry 2005 Market Street Philadelphia, PA 19103 May 28, 1960	Trustee	Since January 2001	President – Franklin & Marshall College (June 2002 – Present) Executive Vice President – University of Pennsylvania (April 1995 – June 2002)		84	Director – Community Health Systems Director – Allied Barton Security Holdings
Anthony D. Knerr 2005 Market Street Philadelphia, PA 19103 December 7, 1938	Trustee	Since April 1990	Founder and Managing Director – Anthony Knerr & Associates (Strategic Consulting) (1990 – Present)		84	None
Lucinda S. Landreth 2005 Market Street Philadelphia, PA 19103 June 24, 1947	Trustee	Since March 2005	Chief Investment Officer – Assurant, Inc. (Insurance) (2002 – 2004)		84	None
Ann R. Leven 2005 Market Street Philadelphia, PA 19103 November 1, 1940	Trustee	Since September 1989	Consultant – ARL Associates (Financial Planning) (1983 – Present)		84	Director and Audit Committee Chairperson – Andy Warhol Foundation Director and Audit Committee Member – Systemax, Inc.

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Name, Address, and Birth Date	Position(s) Held with Fund(s)	Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee or Officer		Other Directorships Held by Trustee or Officer
independent trustees (continued)
Thomas F. Madison 2005 Market Street Philadelphia, PA 19103 February 25, 1936	Trustee	Since May 1997	President and Chief Executive Officer – MLM Partners, Inc. (Small Business Investing and Consulting) (January 1993 – Present)		84	Director – Banner Health Director – CenterPoint Energy Director and Audit Committee Member – Digital River, Inc. Director and Audit Committee Member – Rimage Corporation Director – Valmont Industries, Inc.
Janet L. Yeomans 2005 Market Street Philadelphia, PA 19103 July 31, 1948	Trustee	Since April 1999	Vice President (January 2003 – Present) and Treasurer (January 2006 – Present) 3M Corporation Ms. Yeomans has held various management positions at 3M Corporation since 1983.		84	None
J. Richard Zecher 2005 Market Street Philadelphia, PA 19103 July 3, 1940	Trustee	Since March 2005	Founder – Investor Analytics (Risk Management) (May 1999 – Present) Founder – Sutton Asset Management (Hedge Fund) (September 1998 – Present)		84	Director and Audit Committee Member – Investor Analytics Director and Audit Committee Member – Oxigene, Inc.
officers
David F. Connor 2005 Market Street Philadelphia, PA 19103 December 2, 1963	Vice President, Deputy General Counsel, and Secretary	Vice President since September 21, 2000 and Secretary since October 2005	David F. Connor has served as Vice President and Deputy General Counsel of Delaware Investments since 2000.		84	None3
David P. O'Connor 2005 Market Street Philadelphia, PA 19103 February 21, 1966	Senior Vice President, General Counsel, and Chief Legal Officer	Senior Vice President, General Counsel, and Chief Legal Officer since October 2005	David P. O'Connor has served in various executive and legal capacities at different times at Delaware Investments.		84	None3
John J. O'Connor 2005 Market Street Philadelphia, PA 19103 June 16, 1957	Senior Vice President and Treasurer	Treasurer since February 2005	John J. O'Connor has served in various executive capacities at different times at Delaware Investments.		84	None3
Richard Salus 2005 Market Street Philadelphia, PA 19103 October 4, 1963	Senior Vice President and Chief Financial Officer	Chief Financial Officer since November 1, 2006	Richard Salus has served in various executive capacities at different times at Delaware Investments.		84	None3

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

² Delaware 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.

³ David F. Connor, David P. O'Connor, John J. 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. John J. O'Connor also serves in a similar capacity for Lincoln Variable Insurance Products Trust, which has the same investment advisor as the registrant.

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.

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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 Delaware Investments’ internet website 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 website within five business days of such amendment or waiver and will remain on the website for at least 12 months.

Item 3.  Audit Committee Financial Expert

The registrant’s Board of Trustees/Directors has determined that each member of the registrant’s Audit Committee is an audit committee financial expert, 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. Bennett (1)

Thomas F. Madison

Janet L. Yeomans (1)

J. Richard Zecher

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 $272,100 for the fiscal year ended December 31, 2006.

(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, Chartered Financial Analyst designation, and his experience as a credit analyst, portfolio manager and the manager of other credit analysts and portfolio managers.  The Board of Trustees/Directors has determined that Ms. Yeomans qualifies as an audit committee financial expert by virtue of her education and experience as the Treasurer of a large global corporation.

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 $252,200 for the fiscal year ended December 31, 2005.

(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 December 31, 2006.

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 $28,700 for the registrant’s fiscal year ended December 31, 2006. 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: issuance of report concerning transfer agent’s system of internal accounting control pursuant to Rule 17Ad-13 of the Securities Exchange Act; and issuance of agreed upon procedures report to the registrant’s Board in connection with the pass-through of internal legal cost relating to the operations of the registrant.

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 December 31, 2005.

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 $33,875 for the registrant’s fiscal year ended December 31, 2005. 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: issuance of report concerning transfer agent’s system of internal accounting control pursuant to Rule 17Ad-13 of the Securities Exchange Act; and issuance of agreed upon procedures reports to the registrant’s Board in connection with the annual transfer agent and fund accounting service agent contract renewals and the pass-through of internal legal cost relating to the operations of the registrant.

(c) Tax fees.

The aggregate fees billed by the registrant’s independent auditors for tax-related services provided to the registrant were $51,800 for the fiscal year ended December 31, 2006.  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.

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 $0 for the registrant’s fiscal year ended December 31, 2006.

The aggregate fees billed by the registrant’s independent auditors for tax-related services provided to the registrant were $47,900 for the fiscal year ended December 31, 2005. 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.

The aggregate fees billed by the registrant’s independent auditors for tax-related services provided 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 December 31, 2005.

(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 December 31, 2006.

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 December 31, 2006.

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 December 31, 2005.

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 December 31, 2005.

(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 $306,508 and $243,135 for the registrant’s fiscal years ended December 31, 2006 and December 31, 2005, 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.  Schedule of Investments

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

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

Not applicable.

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

Not applicable.

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

Not applicable.

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

Not applicable.

Item 11. Controls and Procedures

(a)   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.

(b)   Management has made changes that have materially affected, or are reasonably likely to materially affect, registrant’s internal controls over financial reporting.  To seek to increase the controls’ effectiveness, these changes provide for enhanced review of contracts relating to complex transactions and the applicability of generally accepted accounting principles to such transactions, including enhanced consultation with registrant’s independent public accountants in connection with such reviews.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

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:
PATRICK P. COYNE
By:	Patrick P. Coyne
Title:	Chief Executive Officer
Date:	March 9, 2007

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.

PATRICK P. COYNE
By:	Patrick P. Coyne
Title:	Chief Executive Officer
Date:	March 9, 2007
RICHARD SALUS
By:	Richard Salus
Title:	Chief Financial Officer
Date:	March 9, 2007