Revere Paul Variable Annuity Contract Accmulation Fund 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: 811-01356

THE PAUL REVERE VARIABLE ANNUITY

CONTRACT ACCUMULATION FUND

(Exact name of Registrant as specified in charter)

18 Chestnut Street

Worcester, MA 10608

(Address of principal executive offices)

CT Corporation System

101 Federal Street

Boston, MA 02110

(Name and address of agent for service)

Registrant’s telephone number, including area code: (508) 792-6358

Date of fiscal year end: December 31

Date of reporting period: June 30, 2004

Item 1. Reports to Stockholders.

Board of Managers

The Accumulation Fund

Donald E. Boggs, Chairman

Gordon T. Miller, Vice Chairman

David G. Fussell

Joan Sadowsky

H. C. Goodwin

THE PAUL REVERE VARIABLE ANNUITY

CONTRACT ACCUMULATION FUND

A Separate Account of The Paul Revere

Variable Annuity Insurance Company

This report and the financial statements attached are submitted for the general information of contract owners and are not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. Nothing herein contained is to be considered an offer of sale of The Paul Revere Variable Annuity Insurance Company contracts. Such offering is made only by prospectus, which includes details as to offering price and other material information.

Semi-Annual Report

June 30, 2004

TO OUR CONTRACT OWNERS AND PARTICIPANTS:

THE PAUL REVERE VARIABLE ANNUITY

CONTRACT ACCUMULATION FUND

VARIABLE ANNUITY CONTRACTS

In the first half of 2004, we think stocks were caught in a tug-of-war between positive fundamentals and negative investor sentiment. We saw improvement in most economic measures of the U. S. economy – fundamental factors such as employment, consumer spending, and corporate capital expendures. In addition, corporate earnings, which in our experience have been the most consistent engine of stock market growth, appeared to us to be in the midst of a solid upward cycle. For the most part, however, these positive fundamentals were not reflected in stock prices, which climbed only modestly in the first half of the year.

We believe the key factor holding back equity markets was investor concern about geopolitical instability. The March 2004 train bombings in Spain brought geopolitical concerns back to the forefront of investors’ minds, and subsequent events in Iraq and Saudi Arabia made the world look less stable to investors. The economic issue was, and at mid-year remained, investors’ concern that geopolitics could constrict oil supplies, cause oil prices to spike, and potentially slow down the global recovery. While we would allow that these geopolitical concerns have validity, our experience has been that, over the longer term, positive market fundamentals have usually outweighed shorter-term negative events.

Stock valuations became more attractive, in our opinion, in the first six months of 2004. Last year, many market watchers expressed concern that valuations (stock prices in relation to factors such as earnings and cash flow growth) had become higher than long-term averages. In our view, stock valuations became more attractive in the first half of 2004 as prices stagnated while earnings and other fundamental factors improved. It could be argued, we believe, that an environment of improving fundamentals and negative investor sentiment represents an attractive long-term buying opportunity.

Against the backdrop, among large cap U. S. growth stocks, later stage cyclicals (that is, companies that usually perform well after the economic rebound is underway) industrials, energy, and transportation performed well while financial services, advertising-sensitive, and semiconductor names lagged. The portfolio performed in-line with the Russell 1000 Growth Index during the first half of 2004. The top three sectors that contributed to performance were utilities and communications, retailing, and special products and services. The sectors that detracted the most were leisure and health care.

The portfolio’s philosophy and approach remain consistent. We continue to work closely with our team of fundamental research analysts to identify companies capable of delivering and sustaining above average earnings growth.

Sincerely,
/s/	Donald E. Boggs
Donald E. Boggs
Chairman, Board of Managers      The Paul Revere Variable Annuity      Contract Accumulation Fund

The Paul Revere Variable Annuity Contract Accumulation Fund

Financial Statements

(Unaudited)

June 30, 2004

Statements of Assets and Liabilities	1
Statements of Changes in Net Assets	2
Statements of Operations	3
Schedule of Investments	4
Supplementary Information	7
Notes to Financial Statements	9

Statements of Assets and Liabilities

(Unaudited)

	June 30, 2004
	Series Q (Qualified)		Series N (Non-Qualified)
ASSETS
Investments in securities at market value
(Cost: Series Q - $8,846,734)
(Cost: Series N - $1,593,122)
(see Schedule of Investments)	$	9,405,446	$	1,681,549
Cash		70		31,689
Dividends and interest receivable		5,736		1,027
Receivable from The Paul Revere Variable Annuity Insurance Company		282		71
Receivable for investments sold		195,418		11,778
Total assets		9,606,952		1,726,114
LIABILITIES
Payable for investments purchased		103,585		23,371
Payable to The Paul Revere Variable Annuity Insurance Company		32,982		6,628
Total liabilities		136,567		29,999
TOTAL NET ASSETS	$	9,470,385	$	1,696,115
CONTRACT OWNERS’ EQUITY
Deferred contracts terminable by owner	$	7,368,818	$	872,874
Currently payable contracts		2,101,567		823,241
Total net assets	$	9,470,385	$	1,696,115
ACCUMULATION UNITS OUTSTANDING		813,676		151,158
NET ASSET VALUE PER ACCUMULATION UNIT	$	11.639	$	11.221

1

Statements of Changes in Net Assets

(Unaudited)

	Six Months Ended June 30, 2004 Series Q (Qualified)			Year Ended December 31, 2003 Series Q (Qualified)
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment loss	$	(35,970	)	$	(66,003	)
Net realized gain on investments		380,174			69,435
Net increase (decrease) in unrealized appreciation of investments		(221,083	)		1,831,411
Increase in net assets from operations		123,121			1,834,843
Contract receipts:
Gross purchase payments received		—			6,459
Deductions from purchase payments		—			201
Net purchase payments received		—			6,258
Payments to contract owners:
Annuity payments to contract owners		129,955			250,445
Terminations and withdrawals to contract owners		11,024			85,113
Total payments to contract owners		140,979			335,558
Net contract payments to contract owners		(140,979	)		(329,300	)
Total increase (decrease) in net assets		(17,858	)		1,505,543
NET ASSETS
Beginning of period		9,488,243			7,982,700
End of period	$	9,470,385		$	9,488,243

	Six Months Ended June 30, 2004 Series N (Non-Qualified)			Year Ended December 31, 2003 Series N (Non-Qualified)
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment loss	$	(8,625	)	$	(17,684	)
Net realized gains on investments		61,044			22,977
Net increase (decrease) in unrealized appreciation of investments		(39,012	)		331,245
Increase in net assets from operations		13,407			336,538
Payments to contract owners:
Annuity payments to contract owners		26,685			64,419
Terminations and withdrawals to contract owners		25,753			528
Total payments to contract owners		52,438			64,498
Net contract payments to contract owners		(52,438	)		(64,498	)
Total increase (decrease) in net assets		(39,031	)		271,590
NET ASSETS
Beginning of period		1,735,146			1,463,556
End of period	$	1,696,115		$	1,735,146

See accompanying notes to financial statements.

2

Statements of Operations

(Unaudited)

	Six Months Ended June 30, 2004 Series Q (Qualified)
INVESTMENT LOSS
Income:
Dividends	$	35,244
Interest		5,612
Total income		40,856
Expenses:
Mortality and expense risk fees		47,084
Investment management and advisory service fees		23,542
Professional services		6,200
Total expenses		76,826
Net investment loss		(35,970	)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on investments sold		380,174
Net decrease in unrealized appreciation of investments		(221,083	)
Net realized and unrealized gain on investments		159,091
Increase in net assets from operations	$	123,121

	Six Months Ended June 30, 2004 Series N (Non-Qualified)
INVESTMENT LOSS
Income:
Dividends	$	6,328
Interest		1,538
Total income		7,866
Expenses:
Mortality and expense risk fees	��	8,514
Investment management and advisory service fees		4,257
Professional services		3,720
Total expenses		16,491
Net investment loss		(8,625	)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gains on investments sold		61,044
Net decrease in unrealized appreciation of investments		(39,012	)
Net realized and unrealized gain on investments		22,032
Increase in net assets from operations	$	13,407

See accompanying notes to financial statements.

3

Schedule of Investments

June 30, 2004

(Unaudited)

	Number of Shares	Series Q (Qualified)				% of Net Assets		Number of Shares	Series N (Non –Qualified)				% of Net Assets
Securities of Unaffiliated Companies		Cost		Market Value					Cost		Market Value
Common Stocks
Aerospace / Defense
Lockheed Martin Corporation	2,300	$	117,517	$	119,784	1.26	%	400	$	20,463	$	20,832	1.23	%
Agriculture
Monsanto Company	1,500		53,030		57,750	0.61	%	300		10,562		11,550	0.68	%
Apparel
NIKE, Inc. Class B	1,100		74,089		83,325			200		13,503		15,150
Reebok International Ltd.	1,800		65,431		64,764			300		10,909		10,794
			139,520		148,089	1.56	%			24,412		25,944
Beverages
PepsiCo, Inc.	2,790		124,690		150,325	1.59	%	450		20,335		24,246	1.43	%
Broadcasting & Media
Clear Channel Communications, Inc. *	2,760		105,599		101,982			500		19,907		18,475
Comcast Corporation Class A *	4,700		145,942		131,741			900		28,185		25,227
Cox Communications, Inc. *	2,800		89,887		77,812			500		15,975		13,895
EchoStar Communications Corporation	2,000		69,097		61,500			400		13,727		12,300
Fox Entertainment Group, Inc. Class A *	400		11,629		10,680			100		2,913		2,670
Getty Images, Inc. *	1,000		57,164		60,000			200		11,740		12,000
Time Warner, Inc.	3,100		53,829		54,498			540		9,347		9,493
Viacom, Inc. Class B *	3,110		124,587		111,089			596		24,721		21,289
			657,734		609,302	6.43	%			126,515		115,349	6.80	%
Business Services
Lamar Advertising Company *	660		22,083		28,611	0.30	%	80		2,678		3,468	0.20	%
Computer – Systems & Services
Akamai Technologies, Inc. *	4,900		73,965		87,955			800		12,073		14,360
Dell, Inc. *	5,830		171,799		208,831			980		30,438		35,104
eBay, Inc. *	1,600		91,372		147,120			300		19,298		27,585
Fiserv, Inc. *	2,200		84,602		85,558			400		15,398		15,556
International Business Machines Corporation	2,080		169,965		183,352			390		31,550		34,379
Lexmark International, Inc. *	800		75,361		77,224			100		9,470		9,653
Microsoft Corporation	15,780		417,025		450,677			2,800		74,146		79,967
Network Appliance, Inc. *	900		19,284		19,377			200		4,285		4,306
Oracle Corporation *	3,840		41,136		45,811			650		7,021		7,755
Red Hat, Inc. *	3,100		67,351		71,207			600		13,126		13,782
Symantec Corporation *	2,500		113,063		109,450			400		17,985		17,512
VERITAS Software Corporation *	4,565		137,461		126,450			850		25,525		22,714
Yahoo!, Inc. *	3,300		88,626		119,889			600		15,936		21,798
			1,551,010		1,732,901	18.30	%			276,251		304,471	17.95	%
Consumer Goods & Services
Avon Products, Inc.	1,560		39,496		71,978			240		6,158		11,074
Colgate-Palmolive Company	900		49,556		52,605			200		11,026		11,690
IAC/InterActiveCorp *	2,300		75,888		69,322			400		13,214		12,056
			164,940		193,905	2.05	%			30,398		34,820	2.05	%
Education
Apollo Group, Inc. *	700		45,248		61,803			100		6,341		8,829
Career Education Corporation *	1,200		53,373		54,672			200		9,526		9,112
			107,051		116,475	1.23	%			15,867		17,941	1.06	%

See accompanying notes to financial statements.

4

Schedule of Investments (continued)

June 30, 2004

(Unaudited)

	Number Of Shares	Series Q (Qualified)		% of Net Assets		Number Of Shares	Series N (Non -Qualified)		% of Net Assets
		Cost	Market Value				Cost	Market Value
Electrical Equipment
General Electric Company	10,393	309,202	336,733	3.56	%	1,820	54,409	58,968	3.48	%
Electronics
Emerson Electric Company	1,300	80,484	82,615			200	12,288	12,710
Waters Corporation	2,200	86,966	105,116			400	16,108	19,112
		167,450	187,731	1.98	%		28,396	31,822	1.87	%
Financial Institutions
American Express Company	3,300	152,703	169,554			600	28,427	30,828
Citigroup, Inc.	3,624	149,878	168,516			596	25,552	27,714
Goldman Sachs Group, Inc.	810	61,751	76,270			180	13,717	16,949
MBNA Corporation	2,100	51,102	54,159			400	9,758	10,316
Merrill Lynch & Company, Inc.	1,480	73,619	79,890			270	11,919	14,575
		489,053	548,389	5.79	%		89,373	100,382	5.92	%
Food
Outback Steakhouse, Inc.	1,300	51,874	53,768	0.57	%	200	7,428	8,272	0.49	%
Insurance
ACE Ltd. ADR	1,990	73,509	84,137			360	12,401	15,221
American International Group, Inc.	3,000	183,701	213,840			500	30,649	35,640
Hartford Financial Services Group, Inc.	1,200	78,609	82,488			200	13,114	13,748
		335,819	380,465	4.02	%		56,164	64,609	3.81	%
Leisure & Tourism
Carnival Corporation	3,200	143,582	150,400			600	26,990	28,200
Harley-Davidson, Inc.	900	51,874	55,746			200	11,527	12,388
Southwest Airlines Company	5,300	84,128	88,881			1,000	15,883	16,770
		279,584	295,027	3.12	%		54,400	57,358	3.38	%
Machinery
Caterpillar, Inc.	1,100	83,251	87,384	0.92	%	200	15,095	15,888	0.94	%
Manufacturing
Illinois Tool Works, Inc.	800	62,179	76,712	0.81	%	150	11,951	14,384	0.85	%
Medical & Health Products
Abbott Laboratories	4,300	173,790	175,268			800	32,584	32,608
Amgen, Inc. *	3,080	156,858	168,076			550	29,127	30,014
C. R. Bard, Inc.	1,800	99,409	101,970			300	16,645	16,995
Celgene Corporation *	800	45,845	45,808			100	5,698	5,726
Eli Lilly and Company	2,100	150,690	146,811			400	28,713	27,964
Genentech, Inc. *	600	10,549	33,720			140	2,461	7,868
Genzyme Corp. *	3,600	175,073	170,388			700	34,186	33,131
Gilead Sciences, Inc. *	2,600	148,855	174,200			500	28,989	33,500
Guidant Corporation	1,100	51,573	61,468			200	9,392	11,176
Johnson & Johnson	6,460	346,723	359,822			1,150	61,575	64,055
Medtronic, Inc.	3,750	178,137	182,700			680	33,049	33,129
Pfizer, Inc.	7,360	233,889	252,301			1,350	43,808	46,278
Wyeth	3,500	152,007	126,560			600	26,246	21,696
		1,923,398	1,999,092	21.11	%		352,473	364,140	21.47	%

See accompanying notes to financial statements.

5

Schedule of Investments (continued)

June 30, 2004

(Unaudited)

	Number Of Shares	Series Q (Qualified)				% of Net Assets		Number Of Shares	Series N (Non - Qualified)				% of Net Assets
		Cost		Market Value					Cost		Market Value
Semiconductors
Analog Devices, Inc.	3,570		127,205		168,076			620		22,668		29,190
Intel Corporation	6,180		157,741		170,568			1,120		28,381		30,912
Linear Technology Corporation	1,310		42,793		51,706			250		8,269		9,867
Maximum Integrated Products	1,040		45,113		54,517			170		6,557		8,911
Novellus Systems, Inc. *	1,750		64,792		55,020			320		11,399		10,061
Texas Instruments, Inc.	4,730		124,748		114,371			890		23,933		21,520
Xilinx, Inc	2,400		70,553		79,944			400		12,091		13,324
			632,945		694,202	7.33	%			113,298		123,785	7.30	%
Stores
Best Buy Company, Inc.	2,100		111,952		106,554			400		21,298		20,296
CVS Corporation	3,400		123,132		142,868			600		21,685		25,212
Coach, Inc.	800		29,853		36,152			100		3,799		4,519
Kohl’s Corporation *	2,970		154,841		125,572			560		28,655		23,677
Lowe’s Companies, Inc.	1,600		87,481		84,080			300		16,414		15,765
Pacific Sunwear of California *	2,900		68,051		56,753			500		11,959		9,785
Petsmart, Inc.	2,300		63,643		74,635			400		11,094		12,980
Target Corporation	4,230		164,276		179,648			800		31,225		33,976
			803,229		806,262	8.51	%			146,129		146,210	8.62	%
Telecommunications
Adtran, Inc.	2,900		90,398		96,773			500		15,702		16,685
Andrew Corporation *	4,100		68,980		82,041			700		11,796		14,007
Cisco Systems, Inc. *	15,140		405,436		358,818			2,730		72,768		64,700
Corning, Inc. *	5,500		64,543		71,830			1,000		11,721		13,060
Sprint Corporation-FON Group	3,800		50,066		66,880			700		9,279		12,320
			679,423		676,342	7.14	%			121,266		120,772	7.12	%
Transportation
FedEx Corporation	1,300		98,182		106,197	1.12	%	200		15,259		16,338	0.96	%
Total Investments		$	8,846,734	$	9,405,446	99.31	%		$	1,593,122	$	1,681,549	99.14	%
Other Assets Less Liabilities					64,939	0.69	%					14,566	0.86	%
Total Net Assets				$	9,470,385	100.00	%				$	1,696,115	100.00	%

* Non – income producing security

See accompanying notes to financial statements.

6

Supplementary Information

Selected Per Unit Data and Ratios

(Unaudited)

	Six Months Ended June 30, 2004			Years Ended December 31,
				2003			2002			2001			2000
PER UNIT DATA (a)
Series Q (Qualified)
Investment income	$	0.050		$	0.093		$	0.099		$	0.094		$	0.117
Expenses		0.094			0.172			0.180			0.226			0.374
Net investment loss		(0.044	)		(0.079	)		(0.081	)		(0.132	)		(0.257	)
Net realized and unrealized gains (losses) on investments		0.195			2.272			(4.481	)		(4.577	)		(1.398	)
Net increase (decrease) in net asset value		0.151			2.193			(4.562	)		(4.709	)		(1.655	)
Accumulation unit net asset value:
Beginning of period		11.488			9.295			13.857			18.566			20.221
End of period	$	11.639		$	11.488		$	9.295		$	13.857		$	18.566
Series N (Non-Qualified)
Investment income	$	0.053		$	0.087		$	0.094		$	0.090		$	0.094
Expenses		0.111			0.199			0.204			0.251			0.397
Net investment loss		(0.058	)		(0.112	)		(0.110	)		(0.161	)		(0.303	)
Net realized and unrealized gains (losses) on investments		0.148			2.241			(4.563	)		(5.177	)		(1.498	)
Net increase (decrease) in net asset value		0.090			2.129			(4.673	)		(5.338	)		(1.801	)
Accumulation unit net asset value:
Beginning of period		11.131			9.002			13.675			19.013			20.814
End of period	$	11.221		$	11.131		$	9.002		$	13.675		$	19.013

^(a) The per unit amounts represent the proportionate distribution of actual investment results as related to the change in unit net asset values for the period.

	Six Months Ended June 30, 2004		Years Ended December 31,
			2003		2002		2001		2000
RATIOS
Series Q (Qualified)
Operating expenses to average accumulation fund balance	1.63	%*	1.67	%	1.63	%	1.55	%	1.57	%
Net investment loss to average accumulation fund balance	(0.76	%)*	(0.77	%)	(0.73	%)	(0.90	%)	(1.08	%)
Portfolio turnover rate	42	%	83	%	102	%	79	%	102	%
Accumulation units outstanding at the end of the period (in thousands)	814		826		859		925		1,187
Series N (Non-Qualified)
Operating expenses to average accumulation fund balance	1.94	%*	2.00	%	1.91	%	1.70	%	1.64	%
Net investment loss to average accumulation fund balance	(1.01	%)*	(1.12	%)	(1.03	%)	(1.09	%)	(1.25	%)
Portfolio turnover rate	41	%	83	%	104	%	78	%	101	%
Accumulation units outstanding at the end of the period (in thousands)	151		156		163		182		263

* Annualized

See accompanying notes to financial statements.

7

Supplementary Information

Selected Per Unit Data and Ratios (continued)

(Unaudited)

	Years Ended December 31,
	1999			1998				1997			1996		1995
PER UNIT DATA (a)
Series Q (Qualified)
Investment income	$	0.094		$	0.116			$	0.177		$	0.153	$	0.119
Expenses		0.277			0.202				0.159			0.133		0.096
Net investment income (loss)		(0.183	)		(0.086	)			0.018			0.020		0.023
Net realized and unrealized gains (losses) on investments		5.280			3.836				2.723			1.551		1.711
Net increase (decrease) in net asset value		5.097			3.750				2.741			1.571		1.734
Accumulation unit net asset value:
Beginning of year		15.124			11.374				8.633			7.062		5.328
End of year	$	20.221		$	15.124			$	11.374		$	8.633	$	7.062
Series N (Non-Qualified)
Investment income	$	0.083		$	0.096			$	0.135		$	0.137	$	0.117
Expenses		0.296			0.212				0.166			0.134		0.109
Net investment income (loss)		(0.213	)		(0.116	)			(0.031	)		0.003		0.008
Net realized and unrealized gains (losses) on investments		5.894			3.891				2.660			1.459		1.769
Net increase (decrease) in net asset value		5.681			3.775		��		2.629			1.462		1.777
Accumulation unit net asset value:
Beginning of year		15.133			11.358				8.729			7.267		5.490
End of year	$	20.814		$	15.133			$	11.358		$	8.729	$	7.267

^(a) The per unit amounts represent the proportionate distribution of actual investment results as related to the change in unit net asset values for the year.

	Years Ended December 31,
	1999		1998		1997		1996		1995
RATIOS
Series Q (Qualified)
Operating expenses to average accumulation fund balance	1.56	%	1.57	%	1.59	%	1.57	%	1.55	%
Net investment income (loss) to average accumulation fund balance	(1.03	%)	(0.67	%)	0.18	%	0.24	%	0.38	%
Portfolio turnover rate	98	%	143	%	130	%	78	%	64	%
Accumulation units outstanding at the end of the year (in thousands)	1,385		1,715		1,887		2,093		5,491
Series N (Non-Qualified)
Operating expenses to average accumulation fund balance	1.62	%	1.63	%	1.67	%	1.69	%	1.71	%
Net investment income (loss) to average accumulation fund balance	(1.16	%)	(0.90	%)	(0.31	%)	0.04	%	0.13	%
Portfolio turnover rate	103	%	143	%	139	%	94	%	67	%
Accumulation units outstanding at the end of the year (in thousands)	342		475		530		566		586

See accompanying notes to financial statements.

8

Notes to Financial Statements

June 30, 2004

(Unaudited)

1. Organization

The Paul Revere Variable Annuity Contract Accumulation Fund (“the Fund”) is a separate account of The Paul Revere Variable Annuity Insurance Company (“Paul Revere Variable”), and is registered under the Investment Company Act of 1940 as an open-end diversified investment company. Paul Revere Variable is a wholly-owned subsidiary of The Paul Revere Life Insurance Company (“Paul Revere Life”) which in turn is wholly-owned by The Paul Revere Corporation which is wholly-owned by UnumProvident Corporation, formerly Provident Companies, Inc. (“Provident”). The Fund is the investment vehicle for Paul Revere Variable’s tax-deferred group annuity contracts.

2. Accounting policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in those statements and accompanying notes. Actual results may differ from such estimates.

Common stocks are stated at market values which are based on the last sales prices at June 30, 2004, as reported on national security exchanges or the closing bid prices for unlisted securities as reported by investment dealers. Short-term notes are stated at amortized cost which approximates market value. Unrealized investment gains and losses are included in contract owners’ equity. Realized gains and losses on investments sold are determined on the basis of specific identification of investments. Security transactions are accounted for on the day after the securities are purchased or sold. Dividend income is recorded on the ex-dividend date. Interest income is accrued on a daily basis.

The Fund does not distribute net investment income and net realized capital gains through dividends to contract owners. The allocation of net investment income and net realized capital gains occurs automatically in the daily determination of unit net asset values. They are, therefore, included in the value of the contracts in force and in payments to contract owners.

Contract owners’ equity is comprised of two components. Deferred contracts terminable by owner represents amounts attributable to contracts which have not yet annuitized. Currently payable contracts include amounts equivalent to the annuity reserves relating to contracts with current annuities. Annuity reserves are computed for currently payable contracts according to the 1900 Progressive Annuity Mortality Table. The assumed interest rate is either 3.5% or 5% according to the option elected by the annuitant at the time of conversion. Paul Revere Variable bears all the mortality risk associated with these contracts.

3. Investment advisor

Paul Revere Variable acts as investment advisor and underwriter to the Fund and provides mortality and expense guarantees to holders of variable annuity contracts. For these services, Paul Revere Variable receives mortality and expense risk fees and investment management and advisory service fees as shown on the statement of operations which, on an annual basis, will not exceed 2% of the average daily net asset value of the Fund.

Certain administrative services of the Fund are provided by The Variable Annuity Life Insurance Company (“VALIC”) under a contract dated May 15, 1998. These services include processing of unit transactions and daily unit value calculations subsequent to December 1, 1998 as well as accounting and other services.

4. Investment sub-advisor

Under an investment sub-advisory agreement with MFS Institutional Advisors, Inc. (“MFSI”), MFSI provides investment management services to Paul Revere Variable for a fee which, on an annual basis, will equal 0.35% of the average daily net assets of each series of the Fund. This fee is borne by Paul Revere Variable only and does not represent an additional charge to the Fund.

9

Notes to Financial Statements (continued)

June 30, 2004

(Unaudited)

5. Federal income taxes

The Fund’s operations are included with those of Paul Revere Variable, which is taxed as a life insurance company under the Internal Revenue Code and is included in a consolidated federal tax return filed by Paul Revere Life. In the opinion of Paul Revere Variable management, current law provides that investment income and capital gains from assets maintained in the Fund for the exclusive benefit of the contract owners are generally not subject to federal income tax. However, to the extent that Paul Revere Variable incurs federal income taxes based on the income from the Fund’s assets, the Fund will be charged. No charges for federal income taxes have been made since the inception of the Fund.

6. Security transactions

The aggregate cost of securities purchased and proceeds of securities sold, other than securities with maturities of one year or less, were as follows:

	Series Q (Qualified)				Series N (Non-Qualified)
	Purchases		Sales		Purchases		Sales
June 30, 2004	$	3,960,505	$	4,133,670	$	696,316	$	768,916
December 31, 2003	$	6,934,164	$	7,071,940	$	1,276,070	$	1,347,273

At June 30, 2004, net unrealized appreciation of investments in Series Q, amounting to $558,712, consisted of unrealized gains of $783,387 and unrealized losses of $224,675, net unrealized appreciation of investments in Series N, amounting to $88,427, consisted of unrealized gains of $131,950 and unrealized losses of $43,523.

7. Accumulation units

The change in the number of accumulation units outstanding were as follows:

	Series Q (Qualified)
	Six Months Ended June 30, 2004		Year Ended December 31, 2003
Units outstanding at beginning of period	825,922		858,770
Units credited to contracts:
Net purchase payments	—		729
Units withdrawn from contracts:
Annuity payments	11,277		24,269
Terminations and withdrawals	968		9,308
Net units withdrawn	12,245		33,577
Contract units withdrawn in excess of units credited	(12,245	)	(32,848	)
Units outstanding at end of period	813,677		825,922

10

Notes to Financial Statements (continued)

June 30, 2004

(Unaudited)

7. Accumulation units (continued)

	Series N (Non-Qualified)
	Six Months Ended June 30, 2004		Year Ended December 31, 2003
Units outstanding at beginning of period	155,878		162,573
Units withdrawn from contracts:
Annuity payments	2,394		6,634
Terminations and withdrawals	2,326		61
Net units withdrawn	4,720		6,695
Contract units withdrawn in excess of units credited	(4,720	)	(6,695	)
Units outstanding at end of period	151,158		155,878

11

Item 2. Code of Ethics.

(a) The Registrant has adopted a Code of Ethics that applies to its principal executive officer, principal financial officer and principal accounting officer. A copy of the Registrant’s Code of Ethics is filed herewith as Exhibit 10(a)(1).

(b) During the period covered by this report, no amendments were made to the provisions of the Code of Ethics described in 2(a) above.

(c) During the period covered by this report, no implicit or explicit waivers of the provisions of the Code of Ethics described in 2(a) above were granted.

Item 3. Audit Committee Financial Expert.

The Fund has assets of under $10 million. It has no audit committee and no audit committee financial expert. The Board of Managers of the Fund consists of independent directors that control 3/5 of the Board. The Board receives quarterly reports on the transactions in the Fund. Because of the nature of the Fund’s business there are no sensitive accounting estimates used in preparation of the financial statements of the Fund.

Item 4. Principal Accountant Fees and Services.

Not applicable.

Item 5. Audit Committee of Listed Registrants.

Not applicable.

Item 6. Schedule of Investments. [Reserved]

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

Not applicable.

Item 8. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. [Reserved]

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

Not applicable.

Item 10. Controls and Procedures.

(a) Within the 90-day period prior to the filing of this report, the Registrant’s management, including the person serving as both the Registrant’s Chief Executive Officer and Chief Financial Officer conducted an evaluation of the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures as defined in Investment Company Act Rule 30a-3(c). Based on that evaluation, the Chief Executive Officer/Chief Financial Officer concluded that the Registrant’s disclosure controls and procedures were effective as of the date of that evaluation.

(b) No change in the Registrant’s internal control over financial reporting that materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting, occurred during the Registrant’s most recent second fiscal half-year.

Item 11. Exhibits.

The following exhibits are attached to this Form N-CSR:

(a) Code of Ethics that is the subject of the disclosure required by Item 2, attached hereto as Exhibit 10(a)(1).

(b) Certification filed pursuant to Rule 30a-2(a) under the Act (17 C.F.R. 270.30a-2(a)), attached hereto as Exhibit 31.

(c) Certification furnished pursuant to Rule 30a-2(b) under the Act (17 C.F.R. 270.30a-2(b)), attached hereto as Exhibit 32.

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.

The Paul Revere Variable Annuity Contract Accumulation Fund
By (Signature and Title):	/s/ Donald E. Boggs
	Donald E. Boggs, Chairman, Board of Managers
	Signing in the capacity of Chief Executive Officer and Chief Financial Officer

Date: August 30, 2004.

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following person on behalf of the Registrant and in the capacities and on the dates indicated.

By (Signature and Title):	/s/ Donald E. Boggs
	Donald E. Boggs, Chairman, Board of Managers
	Signing in the capacity of Chief Executive Officer and Chief Financial Officer

Date: August 30, 2004.