As filed with the Securities and Exchange Commission on June 8, 2009
Investment Company Act File number 811-8312
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES
Daily Income Fund
(Exact name of registrant as specified in charter)
600 Fifth Avenue
New York, NY 10020
(Address of principal executive offices) (Zip code)
Joseph Jerkovich
c/o Reich & Tang Asset Management, LLC
600 Fifth Avenue
New York, New York 10020
(Name and address of agent for service)
Registrant's telephone number, including area code: 212-830-5200
Date of fiscal year end: March 31
Date of reporting period: March 31, 2009
Item 1: Report to Stockholders
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Daily 600 Fifth Avenue
Income New York, NY 10020
Fund (212)830-5200
================================================================================
Annual
Report
March 31, 2009
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[THIS PAGE INTENTIONALLY LEFT BLANK.]
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DAILY INCOME FUND
TABLE OF CONTENTS
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<table>
<caption>
<s> <c> <c> <c>
Shareholder Letter 4 Municipal Portfolio
Money Market Portfolio Expense Chart 43
Expense Chart 5 Schedule of Investments 45
Schedule of Investments 7 Statement of Assets and Liabilities 57
Statement of Assets and Liabilities 15 Statement of Operations 58
Statement of Operations 16 Statements of Changes in Net Assets 59
Statements of Changes in Net Assets 17 Financial Highlights 60
Financial Highlights 18 Notes to Financial Statements 64
Report of Independent Registered Public
U.S Treasury Portfolio Accounting Firm 76
Expense Chart 23 Additional Information 77
Schedule of Investments 25 Board Approval of Investment
Management Contract 78
Statement of Assets and Liabilities 27
Trustees and Officers Information 80
Statement of Operations 28
Statements of Changes in Net Assets 29
Financial Highlights 30
U.S. Government Portfolio
Expense Chart 34
Schedule of Investments 35
Statement of Assets and Liabilities 37
Statement of Operations 38
Statements of Changes in Net Assets 39
Financial Highlights 40
</table>
<page>
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DAILY INCOME FUND
SHAREHOLDER LETTER
================================================================================
Dear Shareholder:
In a time of uncertainty it is comforting to know that some things never change.
Since its inception in 1974, Reich & Tang Funds has taken a proactive approach
to risk management. Our investment philosophy and process is more credit focused
than yield focused. Our goals of safety and preservation of capital continually
drive our investment analysis and decisions.
On October 2, 2008, the Boards of Directors and Trustees of all U.S.-registered
money market funds advised by Reich & Tang Asset Management, LLC approved the
participation of those funds in the U.S. Treasury Department's Temporary
Guarantee Program for Money Market Funds. The Boards took further action on
April 6, 2009, to approve a second extension of the participation of those funds
in the U.S. Treasury Department's Temporary Guarantee Program for Money Market
Funds. The extension now provides coverage through September 18, 2009.
The Guarantee Program for U.S.-registered money market funds is a timely and
direct response to our troubled markets, providing stability at a time when
investor confidence has been eroded. The Guarantee Program guarantees
shareholders that they will receive $1.00 for each money market fund share held
at the close of business on September 19, 2008.
Below are the essential aspects of the Guarantee Program:
o the guarantee is based upon the number of shares invested in the fund at
the close of business on September 19, 2008;
o any increase in the number of shares held after the close of business on
September 19, 2008 will not be guaranteed;
o if the number of shares fluctuates over the period, investors will be
covered for either the number of shares held as of the close of business on
September 19, 2008 or the current amount, whichever is less;
o in the event a customer closes their account with a fund or broker/dealer,
any future investment in the fund will not be guaranteed;
Recently, a number of proposals, concerning the money market industry, have been
made in the interest of providing greater stability, including recommendations
from the Investment Company Institute Money Market Working Group, the Group of
30 headed by Paul Volcker, and from the Federal Reserve Chairman Ben Bernanke.
As the money market industry grapples with the appropriateness and impact of
these initiatives, rest assured that Reich & Tang Funds continues to be very
cautious given the recent events in our markets. As an organization, we continue
to believe that thorough, fundamental credit analysis is the key to continued
success in our business. Our credit analysts are constantly monitoring the
activity in the credit markets. Throughout this period of market turbulence, we
have not owned any securities that have experienced credit delinquency or have
been downgraded below Tier 1, however current and future portfolio holdings are
subject to market risk.
Reich & Tang is proud to be part of Natixis Global Asset Management, one of the
world's largest money management organizations. Natixis brings together the
expertise of multiple specialized investment managers based in the United
States, Europe and Asia to offer a wide spectrum of equi7ty, fixed income and
alternative investment strategies. For more information on Natixis Global Asset
Management, please visit us at www.natixis.com.
We appreciate your support during this turbulent period and thank you for your
business. While it is difficult to predict the future as we navigate through
multiple complex factors in the market, we believe that our fundamental approach
to money market funds and our corporate structure enable us to continue to be a
leader in providing funds that focus on preservation of capital and liquidity
for our shareholders and valued clients.
We welcome any questions you may have about the investments in any of our
portfolios and stand ready to respond to you as we have for 35 years.
Sincerely,
\s\Michael P. Lydon
Michael P. Lydon
President
<page>
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DAILY INCOME FUND
MONEY MARKET PORTFOLIO
EXPENSE CHART
FOR THE SIX MONTHS ENDED MARCH 31, 2009
(UNAUDITED)
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As a shareholder of the Portfolio, you incur the following ongoing costs:
management fees and other Portfolio expenses. You may also incur distribution
and/or service (12b-1) fees. This example is intended to help you understand
your ongoing costs (in dollars) of investing in the Portfolio 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 October 1, 2008 through March 31, 2009.
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use information in this line, 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
line under the heading entitled "Expenses Paid During the Period" to estimate
the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Portfolio's 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 Portfolio and other funds. To do so, compare this 5%
hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), redemption fees, or exchange fees that you may incur in other
mutual funds. Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds.
<table>
<caption>
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Institutional Class Shares
("Institutional Shares") & Pinnacle Beginning Account Ending Account Value Expenses Paid Annualized
Class Shares ("Pinnacle Shares") Value 10/01/08 03/31/09 During the Period * Expense Ratio *
- ---------------------------------------------------------------------------------------------------------------------------
<c> <c> <c> <c>
Actual $1,000.00 $1,010.20 $1.25 0.25%
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Hypothetical (5% return before expenses) $1,000.00 $1,023.68 $1.26 0.25%
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Institutional Service Class Shares Beginning Account Ending Account Value Expenses Paid Annualized
("Institutional Service Shares") Value 10/01/08 03/31/09 During the Period * Expense Ratio *
- ---------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,009.00 $2.50 0.50%
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Hypothetical (5% return before expenses) $1,000.00 $1,022.44 $2.52 0.50%
---------------------------------------------------------------------------------------------------------------------------
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Investor Class Shares Beginning Account Ending Account Value Expenses Paid Annualized
("Investor Shares") Value 10/01/08 03/31/09 During the Period * Expense Ratio *
- ---------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,008.00 $3.50 0.70%
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Hypothetical (5% return before expenses) $1,000.00 $1,021.44 $3.53 0.70%
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Short Term Income Shares Class Shares Beginning Account Ending Account Value Expenses Paid Annualized
("Short Term Income Shares") Value 10/01/08 03/31/09 During the Period * Expense Ratio *
- ---------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,006.50 $4.95 0.99%
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Hypothetical (5% return before expenses) $1,000.00 $1,020.00 $4.99 0.99%
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</table>
<page>
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DAILY INCOME FUND
MONEY MARKET PORTFOLIO
EXPENSE CHART (CONTINUED)
FOR THE SIX MONTHS ENDED MARCH 31, 2009
(UNAUDITED)
================================================================================
<table>
<caption>
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Retail Class Shares Beginning Account Ending Account Value Expenses Paid Annualized
("Retail Shares") Value 10/01/08 03/31/09 During the Period * Expense Ratio *
- ---------------------------------------------------------------------------------------------------------------------------
<c> <c> <c> <c>
Actual $1,000.00 $1,006.20 $5.25 1.05%
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Hypothetical (5% return before expenses) $1,000.00 $1,019.70 $5.29 1.05%
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Advantage Primary Liquidity Fund Beginning Account Ending Account Value Expenses Paid Annualized
("Advantage Shares") Value 10/01/08 03/31/09 During the Period * Expense Ratio *
- ---------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,006.10 $5.35 1.07%
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Hypothetical (5% return before expenses) $1,000.00 $1,019.60 $5.39 1.07%
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money market Xpress Fund Beginning Account Ending Account Value Expenses Paid Annualized
("Xpress Shares") Value 10/01/08 03/31/09 During the Period * Expense Ratio *
- ---------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,005.00 $6.45 1.29%
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Hypothetical (5% return before expenses) $1,000.00 $1,018.45 $6.49 1.29%
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<fn>
* Expenses are equal to the Portfolio's annualized expense ratios multiplied by the average account value over the period (October
1, 2008 through March 31, 2009), multiplied by 182/365 (to reflect the most recent fiscal half-year).
</fn>
</table>
<page>
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DAILY INCOME FUND
MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS
MARCH 31, 2009
================================================================================
<table>
<caption>
Face Maturity Interest Value
Amount Date Rate (Note 1)
------ ---- ---- -------
Eurodollar Certificates of Deposit (9.66%)
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<s> <c> <c> <c> <c>
$ 125,000,000 Credit Agricole Indosuez 06/05/09 1.30% $ 125,002,249
125,000,000 Credit Industriel et Commerical 05/19/09 1.06 125,001,663
100,000,000 HSBC Bank PLC 06/22/09 1.03 100,000,000
100,000,000 Norddeutsche Landesbank Girozentrale 04/22/09 1.17 100,000,582
- -------------- --------------
450,000,000 Total Eurodollar Certificates of Deposit 450,004,494
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Foreign Commercial Paper (2.14%)
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$ 100,000,000 Anglo Irish Bank Corporation PLC (1) 05/05/09 1.54% $ 99,855,500
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100,000,000 Total Foreign Commercial Paper 99,855,500
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Letter of Credit Commercial Paper (6.88%)
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$ 40,000,000 ICICI Bank Ltd.
LOC Bank of America, N.A. 04/07/09 1.53% $ 39,989,867
30,000,000 ICICI Bank Ltd.
LOC Bank of America, N.A. 04/21/09 1.28 29,978,666
100,000,000 ICICI Bank Ltd.
LOC Bank of America, N.A. 05/20/09 1.35 99,816,250
19,000,000 ICICI Bank Ltd.
LOC Bank of America, N.A. 06/09/09 1.45 18,947,196
45,112,000 Louis Dreyfus Corporation
LOC Calyon 04/24/09 1.41 45,071,650
28,000,000 Medical Building Funding IX, LLC
LOC KBC Bank/Bank of Nova Scotia 04/09/09 3.00 28,000,000
58,700,000 Vermont EDA Economic Development Capitalization Program-Series A
LOC Calyon 04/21/09 1.05 58,700,000
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320,812,000 Total Letter of Credit Commercial Paper 320,503,629
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Loan Participations (5.05%)
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$ 135,000,000 Army & Air Force Exchange Service with JPMorgan Chase as agent 05/12/09 1.50% $ 135,000,000
100,000,000 Army & Air Force Exchange Service with JPMorgan Chase as agent 05/13/09 1.55 100,000,000
- -------------- --------------
235,000,000 Total Loan Participations 235,000,000
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Repurchase Agreement (3.22%)
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$ 150,000,000 Annaly Mortgage Management, purchased on 03/31/09, repurchase
proceeds at maturity $150,001,583 (Collateralized by $205,884,584
FHLMC, 1.11% to 6.00%, due 07/15/24 to 04/15/36,
value $157,182,840,FNMA, 1.06%, due 05/25/36, value $317,161) 04/01/09 0.38% $ 150,000,000
- -------------- --------------
150,000,000 Total Repurchase Agreement 150,000,000
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Time Deposit (9.70%)
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$ 220,000,000 BNP Paribas 04/01/09 0.24% $ 220,000,000
217,000,000 National Bank of Canada 04/01/09 0.25 217,000,000
15,000,000 Royal Bank of Canada 04/01/09 0.20 15,000,000
- -------------- --------------
452,000,000 Total Time Deposit 452,000,000
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</table>
The accompanying notes are an integral part of these financial statements.
<page>
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DAILY INCOME FUND
MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MARCH 31, 2009
================================================================================
<table>
<caption>
Face Maturity Interest Value
Amount Date Rate (Note 1)
------ ---- ---- -------
Variable Rate Demand Instruments (8.60%) (2)
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<s> <c> <c> <c> <c>
$ 2,000,000 1212 Jackson LLC - Series 2004
LOC Fifth Third Bank 09/01/24 4.10% $ 2,000,000
1,785,000 1800 Indian Wood Ltd. - Series 2005
LOC Fifth Third Bank 04/01/26 4.10 1,785,000
1,545,000 2150 Investment Company - Series 1997
LOC Fifth Third Bank 02/01/17 4.10 1,545,000
4,060,000 A&M Associates Project - Series 2002
LOC U.S. Bank, N.A. 12/01/34 2.32 4,060,000
800,000 Atlantic Tool & Die Company - Series 1996
LOC Key Bank, N.A. 12/01/11 1.90 800,000
1,455,000 Atlantic Tool & Die Company - Series 2002
LOC Key Bank, N.A. 03/01/17 1.90 1,455,000
1,678,000 Aztec Properties, LLC
LOC U.S. Bank, N.A. 08/01/20 3.00 1,678,000
1,030,000 Bank of Kentucky Building, LLC - Series 1999
LOC U.S. Bank, N.A. 12/01/19 3.00 1,030,000
41,485,000 Bass Pro Rossford Development Company, LLC - Series 2007
LOC Fifth Third Bank 11/01/27 4.10 41,485,000
1,400,000 Burke County, GA Development Authority IDRB
(Lichtenberg Holdings II, LLC Project) - Series 2002
LOC JPMorgan Chase Bank, N.A. 01/01/13 1.00 1,400,000
4,720,000 Bybee Food LLC
LOC Key Bank, N.A. 11/01/26 1.90 4,720,000
315,000 Capital One Funding Corporation
Floating Rate Option Notes - Series 1997 D
LOC JPMorgan Chase Bank, N.A. 07/02/18 1.30 315,000
935,000 Central Michigan Inns, LLC (Pohlcat Inc) - Series 2000A
LOC Wachovia Bank, N.A. 04/01/30 2.00 935,000
4,100,000 Charles K. Blandin Foundation - Series 2004 ((3))
LOC Wells Fargo Bank, N.A. 05/01/19 1.20 4,100,000
2,475,000 Cinnamon Properties, Inc.
LOC U.S. Bank, N.A. 04/01/20 3.00 2,475,000
1,805,000 Cirrus Development Ltd. - Series 1999
LOC U.S. Bank, N.A. 05/01/14 3.00 1,805,000
1,900,000 CMW Real Estate, LLC - Series 2000
LOC U.S. Bank, N.A. 06/01/20 4.45 1,900,000
3,510,000 Columbus Area, Inc. - Series 2004
LOC Key Bank 07/01/24 1.90 3,510,000
2,770,000 Columbus, GA Development Authority RB
(Columbus Economic Development Corporation/
Bricken Financial Project) - Series 2006
LOC Wachovia Bank, N.A. 02/01/26 2.00 2,770,000
660,000 Community Limited Care Dialysis Center - Series 1997
LOC Fifth Third Bank 12/01/12 3.00 660,000
1,185,000 Consolidated Equities, LLC - Series 1995
LOC Fifth Third Bank 12/01/25 4.10 1,185,000
50,000 D&G Conduit LLC
LOC Regions Bank 10/01/23 3.25 50,000
</table>
The accompanying notes are an integral part of these financial statements.
<page>
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================================================================================
<table>
<caption>
Face Maturity Interest Value
Amount Date Rate (Note 1)
------ ---- ---- -------
Variable Rate Demand Instruments (2) (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
$ 8,450,000 D.G.Y. Real Estate LP - Series 2000A
LOC PNC Bank, N.A. 05/01/20 2.10% $ 8,450,000
1,655,000 Delta Capital LLC - Series 1996B
LOC JPMorgan Chase Bank, N.A. 10/01/26 2.10 1,655,000
1,730,000 Devin F. & Janis L. McCarthy - Series 1997
LOC U.S. Bank, N.A. 07/01/17 3.00 1,730,000
2,460,000 Eckert Seamans Cherin & Mellott, LLC - Series 2000
LOC PNC Bank, N.A. 01/01/15 1.60 2,460,000
6,450,000 El Dorado Enterprises of Miami, Inc. - Series 2000
LOC Wachovia Bank, N.A. 06/01/20 1.50 6,450,000
2,145,000 Erie County, NY IDA RB
(Niagara-Maryland LLC Project) - Series 2003
LOC Manufacturers and Traders Trust Co. 06/01/23 3.60 2,145,000
1,000,000 Falls Village Realty, LLC - Series 2004
LOC Fifth Third Bank 12/01/29 4.10 1,000,000
4,382,407 Federal Home Loan Mortgage Corporation
Class A Certificates - Series M006 10/15/45 1.70 4,382,407
44,465,000 Fiddler's Business Improvement District City of Greenwoed Village, CO
General Obligation Refunding and Improvement Bonds - Series 2008
LOC Key Bank, N.A. 12/01/37 1.60 44,465,000
1,060,000 GCG Portage L.L.C.
LOC Old Kent Bank & Trust Company 02/01/26 2.10 1,060,000
2,280,000 GMC Financing LLC, - Series 2005
LOC Federal Home Loan Bank 06/01/30 1.00 2,280,000
1,225,000 Goson Project - Series 1997
Guaranteed by Federal Home Loan Bank 11/01/17 3.27 1,225,000
430,000 Graves Lumber Co. Project - Series 2000
Guaranteed by Federal Home Loan Bank of Cincinnati 11/01/10 3.11 430,000
1,205,000 Great Expectations Ltd. (Bass Chevrolet) - Series 1996
LOC Fifth Third Bank 07/01/17 6.25 1,205,000
1,145,000 HCH, LLC - Series 2000
LOC Key Bank, N.A. 08/01/15 1.90 1,145,000
997,000 HCS & DJS Leasing - Series 2004
LOC Fifth Third Bank 06/01/34 4.35 997,000
3,165,000 Healtheum, LLC - Series 2004
LOC Wells Fargo Bank, N.A. 11/01/29 1.75 3,165,000
14,320,200 Herman & Kittle Capital, LLC - Series 2005 ((3))
LOC Fifth Third Bank 06/01/55 3.40 14,320,200
1,655,000 HFA of Lee County, FL MHRB
(University Club Apartments) - Series 2002B
Guaranteed by Federal National Mortgage Association 05/15/35 1.25 1,655,000
1,600,000 Hoosier Stamping Manufacturing Corp. - Series 2004
LOC Fifth Third Bank 07/01/36 4.10 1,600,000
730,000 Hope Realty, Ltd. & Harmony Realty, Ltd. (Kurtz Bros., Inc.)-Series 2000
LOC Key Bank, N.A. 08/01/15 1.90 730,000
2,725,000 Hostun LLC - Series 2004
LOC Fifth Third Bank 12/01/27 4.10 2,725,000
</table>
The accompanying notes are an integral part of these financial statements.
<page>
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DAILY INCOME FUND
MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MARCH 31, 2009
================================================================================
<table>
<caption>
Face Maturity Interest Value
Amount Date Rate (Note 1)
------ ---- ---- -------
Variable Rate Demand Instruments (2) (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
$ 4,630,000 IHA Capital Development LLC - Series 2007A
LOC Key Bank, N.A. 12/01/37 1.90% $ 4,630,000
1,500,000 IHA Capital Development LLC - Series 2003-A
LOC Fifth Third Bank 07/01/28 3.40 1,500,000
900,000 Indian Creek Christian Church Inc.
LOC Fifth Third Bank 12/01/55 4.10 900,000
1,510,000 IOP Properties LLC
LOC Fifth Third Bank 04/01/44 4.10 1,510,000
2,270,000 Jacksons Food Stores, Inc. - Series 2006
LOC Key Bank, N.A. 03/01/16 1.90 2,270,000
910,000 James B. Krewatch & Marden H. Krewatch
Revocable Living Trust - Series 2005
LOC Fifth Third Bank 11/01/25 4.35 910,000
3,950,000 Jeff Wyler Automotive Family, Inc.
LOC U.S. Bank, N.A. 01/02/26 3.00 3,950,000
1,235,000 Joe Holland Chevrolet, Inc. - Joe Holland Chrysler LLC
(The Holland Family Limited Partnership Number 1) - Series 2004
LOC Fifth Third Bank 07/01/24 4.10 1,235,000
1,735,000 Keating Meuthing Klekamp
LOC Fifth Third Bank 11/01/24 4.10 1,735,000
2,275,000 Kenwood County Club, Incorporated - Series 2005
LOC U.S. Bank, N.A. 12/01/15 3.00 2,275,000
2,633,000 KFDT LP - Series 2005
LOC Fifth Third Bank 03/01/35 4.10 2,633,000
1,915,000 Kingston Healthcare Company - Series 1997A
LOC Fifth Third Bank 11/01/17 3.40 1,915,000
1,495,000 Kingston Healthcare Company - Series 1998A
LOC Fifth Third Bank 03/01/18 3.40 1,495,000
700,000 Kit Carson County, CO Agricultural Development RB
(Midwest Farms, LLC) - Series 1997
LOC Wells Fargo Bank, N.A. 06/01/27 1.25 700,000
3,650,000 Kool Capital, LLC
LOC Bank of America, N.A. 04/01/29 2.05 3,650,000
1,850,000 L3 Corporation - Series 2002
LOC Fifth Third Bank 11/01/17 4.10 1,850,000
1,800,000 Lauren Company, LLC - Series 2003
LOC Wells Fargo Bank, N.A. 07/01/33 1.50 1,800,000
850,000 Le Sportsac Inc. - Series 2005
LOC Fifth Third Bank 11/01/14 4.10 850,000
435,000 LRC - B Wadsworth Investors, Ltd. - Series 1997
LOC U.S. Bank, N.A. 09/01/17 3.00 435,000
900,000 LRC Meadows Investor LLC
LOC JPMorgan Chase Bank, N.A. 12/01/34 3.75 900,000
405,000 Machining Center Inc. - Series 1997
LOC Comerica Bank 10/01/27 2.10 405,000
3,280,000 Maryland Health & Higher Educational Facilities Authority
(Glen Meadows Retirement Community) - Series 1999B
LOC Wachovia Bank, N.A. 07/01/29 1.00 3,280,000
</table>
The accompanying notes are an integral part of these financial statements.
<page>
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================================================================================
<table>
<caption>
Face Maturity Interest Value
Amount Date Rate (Note 1)
------ ---- ---- -------
Variable Rate Demand Instruments (2) (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
$ 300,000 Mayfair Village Retirement Center, Inc., KY - Series 1995
LOC PNC Bank, N.A. 05/15/09 1.60% $ 300,000
5,785,000 M-B Companies, Inc. - Series 2008
LOC US Bank, N.A. 03/01/48 3.40 5,785,000
1,680,000 Mercer County, OH HealthCare Facilities RB
LOC Fifth Third Bank 04/01/23 4.10 1,680,000
1,845,000 Michigan City, IN Economic Development RB
(Consolidated Biscuit Co., Project) - Series 1998
LOC Fifth Third Bank 10/01/13 4.10 1,845,000
1,735,000 Michigan HEFA RB (Hope College Project) - Series 1996A
LOC Old Kent Bank & Trust Co. 10/01/16 4.00 1,735,000
865,000 Milwaukee, WI (Historic Third Ward Parking Project)
LOC Northern Trust Bank 09/01/28 2.10 865,000
2,500,000 Mississippi Business Finance Corporation IDRB
(Attala Steel Industries, LLC Project) - Series 2005
Guaranteed by Federal Home Loan Bank of Dallas 07/01/20 1.00 2,500,000
7,225,000 Mississippi Business Finance Corporation IDRB
(Lextron - Visteon Leasing, LLC Project) - Series 2003
LOC JPMorgan Chase Bank, N.A. 12/01/27 2.00 7,225,000
4,300,000 Mississippi Business Finance Corporation IDRB
(Pottery Barn Inc. Project) - Series 2004
LOC Bank of America, N.A. 06/01/24 1.52 4,300,000
905,000 MMR Development Corp. - Series 2003
LOC Fifth Third Bank 05/01/23 4.10 905,000
6,260,000 Montgomery County, PA MHRB
(Brookside Manor Apartments) - Series 2001A
Collateralized by Federal National Mortgage Association 08/15/31 1.75 6,260,000
2,865,000 Mount Ontario Holdings LLC - Series 2001((3))
LOC U.S. Bank, N.A. 04/01/21 1.20 2,865,000
1,715,000 Mrs. K.C. Jordan & Associates, Inc.
LOC Fifth Third Bank 04/01/23 4.10 1,715,000
2,540,000 Nebar Investments, LLC - Series 2005
LOC Fifth Third Bank 07/01/50 3.40 2,540,000
3,745,000 New Hampshire Health & Educational Facility Authority RB
(Weeks Medical Center Issue) - Series 2005B
LOC Allied Irish Bank PLC 07/01/35 2.02 3,745,000
1,310,000 New Lexington Clinic, P.S.C. - Series 2003
LOC Fifth Third Bank 05/01/18 4.10 1,310,000
500,000 New York State HFA RB (345 East 94th Street)
Guaranteed by Federal Home Loan Mortgage Corporation 11/01/30 1.00 500,000
1,500,000 NO S Properties, LLC - Series 2004
LOC Fifth Third Bank 08/01/24 4.10 1,500,000
1,605,000 NPI Capital, LLC - Series 1999A
LOC Bank of America, N.A. 07/01/29 2.10 1,605,000
6,900,000 Olathe, KS IDRB (Diamant Board Project) - Series 1997B
LOC Svenska Handelsbanken 03/01/27 1.50 6,900,000
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MARCH 31, 2009
================================================================================
<table>
<caption>
Face Maturity Interest Value
Amount Date Rate (Note 1)
------ ---- ---- -------
Variable Rate Demand Instruments (2) (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
$ 930,000 Oswego County, NY IDA Facilities
(OH Properties, Inc Project - B)
LOC Manufacturers & Traders Trust Company 06/01/24 1.64% $ 930,000
1,925,000 Parisi Investment, LP & Supply Co. - Series 1998
LOC U.S. Bank, N.A. 05/01/18 3.00 1,925,000
1,300,000 Pennsylvania EDFA Taxable Development RB
(West 914 Incorporation Project) - Series 1991A
LOC PNC Bank, N.A. 05/01/21 1.45 1,300,000
3,805,000 Pomegranate Development Ltd - Series 2006
LOC Key Bank, N.A. 12/01/27 1.90 3,805,000
4,880,000 Real Estate, LLC and White Wilson Medical Center
LOC Fifth Third Bank 05/01/57 4.10 4,880,000
3,215,000 Robert C. Fox Jr. (Fox Racing Shoe Project) - Series A
LOC Comerica Bank 06/01/33 1.75 3,215,000
8,670,000 Rural Electric Cooperative Grantor Trust Certificates
(Kansas Electric Power Cooperative, Inc.) - Series 1997
LOC U.S. Government 12/18/17 2.00 8,670,000
920,000 S & S Partnership (Model Graphics) - Series 1999
LOC U.S. Bank, N.A. 09/01/19 3.00 920,000
1,180,000 Sand Run Nursery & Preserve LLC - Series 2004
LOC U.S. Bank, N.A. 03/01/24 3.00 1,180,000
2,210,000 Savoy Properties, Ltd. - Series 2000
LOC Key Bank, N.A. 08/01/20 1.90 2,210,000
2,875,000 Shepherd Capital LLC
LOC Fifth Third Bank 03/15/49 3.00 2,875,000
11,315,000 Southwestern Group Limited - Series 2001
LOC U.S. Bank, N.A. 07/01/21 3.00 11,315,000
10,155,000 St. Johns County IDA First Mortgage RB
(Presbyterian Retirement Communities Project) - Series 2004B
LOC Allied Irish Bank PLC 08/01/34 1.25 10,155,000
900,000 State Crest Limited - Series 2003
LOC Fifth Third Bank 06/01/23 4.10 900,000
9,805,000 Stonegate-Partners I, LLC (Stonegate Partners Project) - Series 2002
LOC U.S. Bank, N.A. 06/01/34 2.32 9,805,000
1,900,000 Tampa Bay, FL (Elders Land Development) - Series 2003
LOC Fifth Third Bank 09/01/23 4.10 1,900,000
4,340,000 Tedia Company, Inc. - Series 2006
LOC Key Bank, N.A. 10/01/26 1.90 4,340,000
1,115,000 The Wilmington Iron & Metal Company, Inc. - Series 1999
LOC JPMorgan Chase Bank, N.A. 08/01/14 3.00 1,115,000
6,555,000 Three Reading LP
LOC Federal Home Loan Bank of Pittsburg 06/01/24 0.83 6,555,000
3,445,000 Tom Richards, Inc. (Team Land, LLC / Team Industries)
Guaranteed by Federal Home Loan Bank of Cincinnati 12/01/16 2.96 3,445,000
1,240,000 Trendway Corporation - Series 1996
LOC Bank of America, N.A. 12/01/26 2.10 1,240,000
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
================================================================================
<table>
<caption>
Face Maturity Interest Value
Amount Date Rate (Note 1)
------ ---- ---- -------
Variable Rate Demand Instruments (2) (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
$ 5,265,000 Triple Crown Investments, LLC - Series 2004
LOC Federal Home Loan Bank of Dallas 08/01/25 1.15% $ 5,265,000
680,000 Vincent Enterprise & Partners - Series 2000
LOC Key Bank, N.A. 03/01/20 1.90 680,000
3,038,000 Washington State HFC Non-Profit Housing RB
(Rockwood Program) - Series B ((3))
LOC Wells Fargo Bank, N.A. 01/01/30 1.00 3,038,000
12,205,000 Wellington Green, LLC - Series 1999
LOC RBS Citizens Bank 04/01/29 4.50 12,205,000
8,400,000 Wellstone Mills LLC - Series 2004A
LOC PNC Bank, N.A. 12/15/24 1.60 8,400,000
1,600,000 Westchester County, NY IDA RB
(B.W.P. Distributors Inc.) - Series 1997
LOC Wachovia Bank, N.A. 10/01/28 2.00 1,600,000
360,000 Westchester Presbyterian Church
LOC U.S. Bank, N.A. 09/01/13 3.00 360,000
1,614,342 Wilmington Trust Company (Amtrak Trust 93-A) - Series B Notes
Guaranteed by General Electric Company 01/01/11 8.02 1,614,342
790,000 Windsor Medical Center, Inc. - Series 1997
LOC Federal Home Loan Bank 12/03/18 2.96 790,000
- -------------- --------------
400,477,949 Total Variable Rate Demand Instruments 400,477,949
- -------------- --------------
Yankee Certificates of Deposit (54.87%)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 100,000,000 Banco Bilbao de Vizcaya Argentaria 06/05/09 0.92% $ 100,001,801
75,025,000 Banco Bilbao de Vizcaya Argentaria 06/17/09 0.92 75,039,370
150,000,000 Barclays Bank PLC 05/11/09 1.35 150,000,000
50,000,000 Barclays Bank PLC 05/12/09 1.34 50,000,567
87,000,000 Bayerische Hypo-Und Vereinsbank 04/23/09 1.24 87,000,530
148,500,000 Bayerische Hypo-Und Vereinsbank 05/18/09 1.19 148,501,934
48,500,000 Bayerische Landesbank Girozentrale 04/14/09 1.20 48,500,175
100,000,000 Bayerische Landesbank Girozentrale 04/20/09 1.20 100,000,527
85,000,000 Bayerische Landesbank Girozentrale 05/11/09 1.20 85,000,942
85,000,000 Dexia Credit Local de France 04/14/09 1.20 85,000,306
125,000,000 Dexia Credit Local de France 05/29/09 1.05 125,002,010
200,000,000 HBOS Treasury Services PLC 04/06/09 1.15 200,008,179
125,000,000 Kreditbank 04/14/09 1.34 125,000,450
209,500,000 Landesbank Baden Wurtemburg 05/12/09 1.15 209,502,381
100,000,000 Landesbank Hessen-Thueringen Girozentrale 04/14/09 1.45 100,000,360
125,000,000 Landesbank Hessen-Thueringen Girozentrale 06/09/09 1.40 125,002,387
50,000,000 Norddeutsche Landesbank Girozentral 05/12/09 1.27 50,000,568
75,000,000 Norddeutsche Landesbank Girozentral 05/26/09 1.38 75,001,142
199,100,000 Royal Bank of Scotland 04/14/09 1.43 199,100,358
195,000,000 Societe Generale 06/08/09 0.95 195,001,837
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MARCH 31, 2009
================================================================================
<table>
<caption>
Face Maturity Interest Value
Amount Date Rate (Note 1)
------ ---- ---- -------
Yankee Certificates of Deposit (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
$ 98,500,000 Standard Chartered Bank PLC 04/22/09 1.15% $ 98,500,573
125,000,000 Standard Chartered Bank PLC 05/05/09 1.27 125,001,177
- -------------- --------------
2,556,125,000 Total Yankee Certificates of Deposit 2,556,167,574
- -------------- --------------
Total Investments (100.12%) (Cost $4,664,009,146+) 4,664,009,146
Liabilities in excess of cash and other assets (-0.12%) (5,544,728)
--------------
Net Assets (100.00%) $4,658,464,418
==============
<fn>
+ Aggregate cost for federal income tax purposes is identical. All securities are valued at amortized cost and
as a result, there is no unrealized appreciation and depreciation.
</fn>
</table>
FOOTNOTES:
1) Security purchased in a transaction exempt from registration under the
Securities Act of 1933, as amended. The security may be resold pursuant to
an exemption from registration under the 1933 Act, typically to qualified
institutional buyers. The aggregate value of this security at the time of
this statement was $99,855,500, which represented 2.14% of the Portfolio's
net assets. Unless otherwise indicated, these securities are not considered
to be illiquid.
2) Securities payable on demand at par including accrued interest (usually
with seven days notice) and where indicated are unconditionally secured as
to principal and interest by a bank letter of credit. The interest rates
are adjustable and are based on bank prime rates or other interest rate
adjustment indices. The rate shown is the rate in effect at the date of
this statement.
3) Securities payable on demand at par including accrued interest (with one
day notice). Interest rate is adjusted daily. The rate shown is the rate in
effect at the date of this statement.
<table>
<caption>
KEY:
<s> <c> <c> <c> <c> <c>
EDA = Economic Development Authority HFC = Housing Finance Commission
EDFA = Economic Development Finance Authority IDA = Industrial Development Authority
FHLMC = Federal Home Loan Mortgage Corporation IDRB = Industrial Development Revenue Bond
FNMA = Federal National Mortgage Association LOC = Letter of Credit
HEFA = Health and Education Finance Authority MHRB = Multi-Family Housing Revenue Bond
HFA = Housing Finance Authority RB = Revenue Bond
</table>
BREAKDOWN OF PORTFOLIO HOLDINGS BY MATURITY (unaudited):
<table>
<caption>
- --------------------------------------------------------------------------------------
Securities Maturing in Value % of Portfolio
- --------------------------------------------------------------------------------------
<s> <c> <c>
Less than 31 Days $ 2,347,330,171 50.33%
31 through 60 Days 1,577,684,135 33.83
61 through 90 Days 738,994,840 15.84
91 through 120 Days -0- -0-
121 through 180 Days -0- -0-
Over 180 Days -0- -0-
- --------------------------------------------------------------------------------------
Total $ 4,664,009,146 100.00%
- --------------------------------------------------------------------------------------
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
MONEY MARKET PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2009
================================================================================
<table>
<caption>
ASSETS
<s> <c>
Investments in securities, at amortized cost (Note 1)............................. $ 4,514,009,146
Repurchase agreements............................................................. 150,000,000
Accrued interest receivable....................................................... 6,435,080
Prepaid expenses.................................................................. 358,416
Other receivables................................................................. 700
------------------
Total assets............................................................... 4,670,803,342
------------------
LIABILITIES
Payable to affiliates (Note 2).................................................... 1,439,606
Due to Custodian.................................................................. 9,656,624
Accrued expenses.................................................................. 909,899
Dividends payable................................................................. 325,012
Other payable..................................................................... 7,783
------------------
Total liabilities.......................................................... 12,338,924
------------------
Net assets........................................................................ $ 4,658,464,418
==================
SOURCE OF NET ASSETS
Net capital paid in on shares of capital stock (Note 5)........................... $ 4,660,388,590
Accumulated net realized loss..................................................... (1,853,630)
Accumulated overdistributed net investment income................................. (70,542)
------------------
Net assets........................................................................ $ 4,658,464,418
==================
</table>
<table>
<caption>
Net asset value, per share (Note 5):
Class Name Net Assets Shares Outstanding Net Asset Value
<s> <c> <c> <c>
Institutional Shares........................ $295,039,054 295,157,534 $1.00
Institutional Service Shares................ $199,697,013 199,777,207 $1.00
Investor Shares............................. $337,700,872 337,836,484 $1.00
Short Term Income Shares.................... $262,237,466 262,342,774 $1.00
Retail Class Shares......................... $1,384,773,689 1,385,329,779 $1.00
Pinnacle Shares............................. $202,946,241 203,027,739 $1.00
Advantage Shares............................ $1,704,902,702 1,705,587,348 $1.00
Xpress Shares............................... $271,167,381 271,276,275 $1.00
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
MONEY MARKET PORTFOLIO
STATEMENT OF OPERATIONS
YEAR ENDED MARCH 31, 2009
================================================================================
<table>
<caption>
INVESTMENT INCOME
<s> <c>
Income:
Interest........................................................................ $ 149,572,511
------------------
Expenses: (Note 2)
Investment management fee....................................................... 6,631,019
Administration fee.............................................................. 2,762,925
Shareholder servicing fee (Institutional Service Shares)........................ 796,673
Shareholder servicing fee (Investor Shares)..................................... 794,283
Shareholder servicing fee (Short Term Income Shares)............................ 666,577
Shareholder servicing fee (Retail Shares)....................................... 3,544,993
Shareholder servicing fee (Advantage Shares).................................... 5,488,075
Shareholder servicing fee (Xpress Shares)....................................... 655,003
Distribution fee (Investor Shares).............................................. 635,427
Distribution fee (Short Term Income Shares)..................................... 1,199,838
Distribution fee (Retail Shares)................................................ 9,216,981
Distribution fee (Advantage Shares)............................................. 16,464,225
Distribution fee (Xpress Shares)................................................ 1,965,010
Sub-Accounting fee (Xpress Shares).............................................. 151,761
Custodian expenses.............................................................. 258,431
Shareholder servicing and related shareholder expenses+......................... 2,866,930
Legal, compliance and filing fees............................................... 1,154,418
Audit and accounting............................................................ 744,021
Trustees' fees and expenses..................................................... 432,330
Other........................................................................... 1,440,864
------------------
Total expenses.................................................................. 57,869,784
Less: Fees waived (Note 2)............................................... (9,311,207)
Expenses paid indirectly (Note 4).................................. (9,824)
------------------
Net expenses.................................................................... 48,548,753
------------------
Net investment income........................................................... 101,023,758
REALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments............................................. (1,853,397)
------------------
Increase in net assets from operations.............................................. $ 99,170,361
==================
<fn>
+ Includes class specific transfer agency expenses of $55,562, $66,484, $165,957, $205,517, $712,849, and $19,199 for
the Institutional, Institutional Service, Investor, Short Term Income, Retail and Pinnacle Shares respectively.
</fn>
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
MONEY MARKET PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED MARCH 31, 2009 AND 2008
================================================================================
<table>
<caption>
2009 2008
INCREASE (DECREASE) IN NET ASSETS ---- ----
<s> <c> <c>
Operations:
Net investment income............................................ $ 101,023,758 $ 281,728,468
Net realized gain (loss) on investments.......................... (1,853,397) (233)
--------------- ----------------
Increase in net assets from operations............................... 99,170,361 281,728,235
Dividends to shareholders from net investment income:
Institutional Shares............................................. (13,991,358) (29,254,977)
Institutional Service Shares..................................... (7,356,861) (11,820,882)
Investor Shares.................................................. (6,230,173) (9,893,960)
Short-Term Income Shares......................................... (4,555,500) (8,887,585)
Retail Shares.................................................... (23,229,468) (51,609,017)
Pinnacle Shares.................................................. (4,600,060) (8,183,099)
Advantage Shares................................................. (37,383,828) (131,002,246)
Xpress Shares.................................................... (3,676,510) (31,076,702)
--------------- ----------------
Total dividends to shareholders............................. (101,023,758) (281,728,468)
--------------- ----------------
Distributions to shareholders from realized gains on investments:
Institutional Shares............................................. (8,619) (5)
Institutional Service Shares..................................... (5,660) (2)
Investor Shares.................................................. (3,429) (2)
Short-Term Income Shares......................................... (3,074) -0-
Retail Shares.................................................... (16,139) (7)
Pinnacle Shares.................................................. (1,904) (1)
Advantage Shares................................................. (28,594) (23)
Xpress Shares.................................................... (3,083) -0-
--------------- ----------------
Total distributions to shareholders......................... (70,502) (40)
--------------- ----------------
Capital share transactions (Note 5):
Institutional Shares............................................. (456,371,209) 111,959,237
Institutional Service Shares..................................... (60,829,508) (7,255,798)
Investor Shares.................................................. 21,292,828 27,257,449
Short-Term Income Shares......................................... (35,162,097) 199,669,738
Retail Shares.................................................... (54,510,269) 505,196,112
Pinnacle Shares.................................................. 24,817,334 7,184,587
Advantage Shares................................................. (1,746,069,230) 338,089,059
Xpress Shares.................................................... (932,810) 272,212,871
Net asset value of shares issued in connection with merger of Cortland
General Money Market into Retail Shares.......................... -0- 36,753,053
Net asset value of shares issued in connection with merger of Short Term
Money Market Class A into Short Term Income Shares............... -0- 40,741,544
Net asset value of shares issued in connection with merger of Short Term
Money Market Class B into Investor Shares........................ -0- 137,343,403
--------------- ----------------
Total capital share transactions........................... (2,307,764,961) 1,669,151,255
--------------- ----------------
Total increase/(decrease) ....................................... (2,309,688,860) 1,669,150,982
Net assets:
Beginning of year................................................ 6,968,153,278 5,299,002,296
--------------- ----------------
End of year...................................................... $ 4,658,464,418 $ 6,968,153,278
=============== ================
Overdistributed net investment income................................ $ (70,542) $ (40)
=============== ================
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS
================================================================================
<table>
<caption>
Years Ended March 31,
--------------------------------------------------------------
Institutional shares 2009 2008 2007 2006 2005
- -------------------- --------- ---------- ---------- ---------- ---------
<s> <c> <c> <c> <c> <c>
Per Share Operating Performance:
(for a share outstanding throughout the year)
Net asset value, beginning of year................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- ---------- ---------- ---------- ---------
Income from investment operations:
Net investment income........................... 0.024 0.048 0.051 0.036 0.016
Net realized and unrealized gain(loss) on investments 0.000 0.000 0.000 -- 0.000
--------- ---------- ---------- ---------- ---------
Total from investment operations................ 0.024 0.048 0.051 0.036 0.016
Less distributions from:
Dividends from net investment income............ (0.024) (0.048) (0.051) (0.036) (0.016)
Net realized gain(loss) on investment........... (0.000) 0.000 0.000 -- (0.000)
--------- ---------- ---------- ---------- ---------
Total Distributions............................. (0.024) (0.048) (0.051) (0.036) (0.016)
--------- ---------- ---------- ---------- ---------
Net asset value, end of year....................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========== ========== ========== =========
Total Return....................................... 2.46% 4.91% 5.19% 3.63% 1.61%
Ratios/Supplemental Data
Net assets, end of year (000's).................... $ 295,039 $ 751,532 $ 639,573 $ 372,721 $ 215,314
Ratios to average net assets:
Expenses (net of fees waived) (a)............... 0.22% 0.20% 0.20% 0.20% 0.20%
Net investment income........................... 2.52% 4.78% 5.10% 3.66% 1.63%
Management and administration fees waived....... 0.06% 0.02% 0.03% 0.06% 0.08%
Transfer agency fees waived..................... 0.01% 0.01% -- 0.02% 0.02%
Expenses paid indirectly........................ 0.00% 0.00% 0.00% 0.00% 0.00%
Years Ended March 31,
--------------------------------------------------------------
Institutional Service shares 2009 2008 2007 2006 2005
- ---------------------------- --------- ---------- ---------- ---------- ---------
Per Share Operating Performance:
(for a share outstanding throughout the year)
Net asset value, beginning of year................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income........................... 0.022 0.046 0.048 0.033 0.013
Net realized and unrealized gain(loss) on investments 0.000 0.000 0.000 -- 0.000
--------- ---------- ---------- ---------- ---------
Total from investment operations................ 0.022 0.046 0.048 0.033 0.013
Less distributions from:
Dividends from net investment income............ (0.022) (0.046) (0.048) (0.033) (0.013)
Net realized gain(loss) on investment........... (0.000) (0.000) 0.000 -- (0.000)
--------- ---------- ---------- ---------- ---------
Total Distributions............................. (0.022) (0.046) (0.048) (0.033) (0.013)
--------- ---------- ---------- ---------- ---------
Net asset value, end of year....................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========== ========== ========== =========
Total Return....................................... 2.21% 4.65% 4.92% 3.36% 1.34%
Ratios/Supplemental Data
Net assets, end of year (000's).................... $ 199,697 $ 260,609 $ 267,865 $ 224,050 $ 119,898
Ratios to average net assets:
Expenses (net of fees waived) (a)............... 0.47% 0.45% 0.45% 0.47% 0.47%
Net investment income........................... 2.31% 4.50% 4.83% 3.39% 1.49%
Management and administration fees waived....... 0.06% 0.02% 0.03% 0.06% 0.08%
Shareholder servicing fees waived............... 0.01% 0.01% -- -- --
Transfer agency fees waived..................... -- -- -- 0.01% 0.02%
Expenses paid indirectly........................ 0.00% 0.00% 0.00% 0.00% 0.00%
<fn>
(a) Includes expenses paid indirectly, if applicable.
</fn>
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
================================================================================
<table>
<caption>
Investor shares Years Ended March 31, Commencement of Operations
- --------------- -------------------------------- November 28, 2006 through
Per Share Operating Performance: 2009 2008 March 31, 2007
(for a share outstanding throughout the period) ---- ---- --------------
<s> <c> <c> <c>
Net asset value, beginning of period................... $ 1.00 $ 1.00 $ 1.00
--------- --------- ---------
Income from investment operations:
Net investment income............................... 0.020 0.044 0.016
Net realized and unrealized gain(loss) on investments 0.000 0.000 0.000
--------- --------- ---------
Total from investment operations.................... 0.020 0.044 0.016
Less distributions from:
Dividends from net investment income................ (0.020) (0.044) (0.016)
Net realized gain on investments.................... (0.000) (0.000) (0.000)
--------- --------- ---------
Total Distributions................................. (0.020) (0.044) (0.016)
--------- --------- ---------
Net asset value, end of period......................... $ 1.00 $ 1.00 $ 1.00
========= ========= =========
Total Return........................................... 2.01% 4.44% 1.62%(a)
Ratios/Supplemental Data
Net assets, end of period (000's)...................... $ 337,701 $ 316,547 $ 151,947
Ratios to average net assets:
Expenses (net of fees waived) (b)................... 0.68% 0.65% 0.65%(c)
Net investment income............................... 1.96% 4.25% 4.76%(c)
Management and administration fees waived........... 0.06% 0.02% 0.03%(c)
Shareholder servicing and distribution fees waived.. 0.04% 0.04% --
Transfer Agency Account fees waived................. -- -- 0.03%(c)
Expenses paid indirectly ........................... 0.00% 0.00% 0.00%(c)
Short Term Income shares Years Ended March 31, Commencement of Operations
- ------------------------ -------------------------------- February 12, 2007 through
Per Share Operating Performance: 2009 2008 March 31, 2007
(for a share outstanding throughout the period) ---- ---- --------------
Net asset value, beginning of period................... $ 1.00 $ 1.00 $ 1.00
--------- --------- ---------
Income from investment operations:
Net investment income............................... 0.017 0.041 0.006
Net realized and unrealized gain(loss) on investments 0.000 0.000 0.000
--------- --------- ---------
Total from investment operations.................... 0.017 0.041 0.006
Less distributions from:
Dividends from net investment income................ (0.017) (0.041) (0.006)
Net realized gain on investments.................... (0.000) (0.000) (0.000)
--------- --------- ---------
Total Distributions................................. (0.017) (0.041) (0.006)
--------- --------- ---------
Net asset value, end of period......................... $ 1.00 $ 1.00 $ 1.00
========= ========= =========
Total Return........................................... 1.71% 4.14% 0.59%(a)
Ratios/Supplemental Data
Net assets, end of period (000's)...................... $ 262,237 $ 297,508 $ 57,097
Ratios to average net assets:
Expenses (net of fees waived) (b)................... 0.96% 0.94% 0.94%(c)
Net investment income............................... 1.71% 3.92% 4.47%(c)
Management and administration fees waived........... 0.06% 0.02% 0.03%(c)
Distribution fees waived............................ 0.03% 0.01% --
Expenses paid indirectly............................ 0.00% 0.00% 0.00%(c)
<fn>
(a) Unannualized
(b) Includes expenses paid indirectly, if applicable.
(c) Annualized
</fn>
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS (CONTINUED)
================================================================================
<table>
<caption>
Retail Shares Years Ended March 31, Commencement of Operations
- ------------- -------------------------------- November 28, 2006 through
Per Share Operating Performance: 2009 2008 March 31, 2007
(for a share outstanding throughout the period) ---- ---- --------------
<s> <c> <c> <c>
Net asset value, beginning of period................... $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------
Income from investment operations:
Net investment income............................... 0.016 0.040 0.015
Net realized and unrealized gain(loss) on investments 0.000 0.000 0.000
---------- ---------- ---------
Total from investment operations.................... 0.016 0.040 0.015
Less distributions from:
Dividends from net investment income................ (0.016) (0.040) (0.015)
Net realized gain on investments.................... (0.000) (0.000) (0.000)
---------- ---------- ---------
Total Distributions................................. (0.016) (0.040) (0.015)
---------- ---------- ---------
Net asset value, end of period......................... $ 1.00 $ 1.00 $ 1.00
========== ========== =========
Total Return........................................... 1.65% 4.08% 1.49%(a)
Ratios/Supplemental Data
Net assets, end of period (000's)...................... $1,384,774 $1,439,855 $ 897,904
Ratios to average net assets:
Expenses (net of fees waived) (b)................... 1.02% 1.00% 1.00%(c)
Net investment income............................... 1.64% 3.95% 4.39%(c)
Management and administration fees waived........... 0.06% 0.02% 0.03%(c)
Shareholder servicing and distribution fees waived.. 0.14% 0.14% 0.10%(c)
Transfer Agency Account fees waived................. -- -- 0.03%(c)
Expenses paid indirectly............................ 0.00% 0.00% 0.00%(c)
</table>
<table>
<Caption>
Years Ended March 31,
--------------------------------------------------------------
Institutional Service shares 2009 2008 2007 2006 2005
- ---------------------------- --------- ---------- ---------- ---------- ---------
<s> <c> <c> <c> <c> <c>
Per Share Operating Performance:
(for a share outstanding throughout the year)
Net asset value, beginning of year................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income............................... 0.024 0.048 0.051 0.036 0.016
Net realized and unrealized gain(loss) on investments 0.000 0.000 0.000 -- 0.000
--------- ---------- ---------- ---------- ---------
Total from investment operations.................... 0.024 0.048 0.051 0.036 0.016
Less distributions from:
Dividends from net investment income................ (0.024) (0.048) (0.051) (0.036) (0.016)
Net realized gain(loss) on investment............... (0.000) (0.000) 0.000 -- (0.000)
--------- ---------- ---------- ---------- ---------
Total Distributions................................. (0.024) (0.048) (0.051) (0.036) (0.016)
--------- ---------- ---------- ---------- ---------
Net asset value, end of year....................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========== ========== ========== =========
Total Return........................................... 2.46% 4.91% 5.19% 3.63% 1.61%
Ratios/Supplemental Data
Net assets, end of year (000's)........................ $ 202,946 $ 178,213 $ 171,028 $ 134,682 $ 114,792
Ratios to average net assets:
Expenses (net of fees waived) (b)................... 0.23% 0.20% 0.20% 0.20% 0.20%
Net investment income............................... 2.40% 4.79% 5.08% 3.66% 1.63%
Management and administration fees waived........... 0.06% 0.02% 0.03% 0.06% 0.08%
Transfer agency fees waived......................... 0.01% 0.01% -- 0.02% 0.02%
Expenses paid indirectly............................ 0.00% 0.00% 0.00% 0.00% 0.00%
<fn>
(a) Unannualized
(b) Includes expenses paid indirectly, if applicable.
(c) Annualized
</fn>
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
================================================================================
<table>
<caption>
Advantage Shares Years Ended March 31, Commencement of Operations
- ---------------- -------------------------------- November 1, 2006 through
Per Share Operating Performance: 2009 2008 March 31, 2007
(for a share outstanding throughout the period) --------------
<s> <c> <c> <c>
Net asset value, beginning of period................... $ 1.00 $ 1.00 $ 1.00
---------- ---------- ----------
Income from investment operations:
Net investment income............................... 0.016 0.040 0.018
Net realized and unrealized gain(loss) on investments 0.000 0.000 0.000
---------- ---------- ----------
Total from investment operations.................... 0.016 0.040 0.018
Less distributions from:
Dividends from net investment income................ (0.016) (0.040) (0.018)
Net realized gain on investments.................... (0.000) (0.000) (0.000)
---------- ---------- ----------
Total Distributions................................. (0.016) (0.040) (0.018)
---------- ---------- ----------
Net asset value, end of period......................... $ 1.00 $ 1.00 $ 1.00
========== ========== ==========
Total Return........................................... 1.63% 4.06% 1.81%(a)
Ratios/Supplemental Data
Net assets, end of period (000's)...................... $1,704,903 $3,451,676 $3,113,588
Ratios to average net assets:
Expenses (net of fees waived) (b)................... 1.04% 1.02% 1.02%(c)
Net investment income............................... 1.70% 3.95% 4.35%(c)
Management and administration fees waived........... 0.06% 0.02% 0.03%(c)
Distribution fees waived............................ 0.17% 0.17% 0.16%(c)
Expenses paid indirectly............................ 0.00% 0.00% 0.00%(c)
</table>
<table>
<caption>
Commencement of Operations
Year Ended June 20, 2007 through
Xpress shares March 31, 2009 March 31, 2008
- -------------- -------------- --------------
<s> <c> <c>
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period................... $ 1.00 $ 1.00
--------- ----------
Income from investment operations:
Net investment income............................... 0.014 0.028
Net realized and unrealized gain(loss) on investments 0.000 0.000
--------- ----------
Total from investment operations.................... 0.014 0.028
Less distributions from:
Dividends from net investment income................ (0.014) (0.028)
Net realized gain on investments.................... (0.000) (0.000)
--------- ----------
Total Distributions................................. (0.014) (0.028)
--------- ----------
Net asset value, end of period......................... $ 1.00 $ 1.00
--------- ----------
Total Return........................................... 1.40% 2.88%(a)
========= ===========
Ratios/Supplemental Data
Net assets, end of period (000's)...................... $ 271,167 $ 272,213
Ratios to average net assets:
Expenses (net of fees waived) (b)................... 1.27% 1.25%(c)
Net investment income............................... 1.40% 3.82%(c)
Management and administration fees waived........... 0.06% 0.02%(c)
Distribution fees waived............................ 0.00% --
Expenses paid indirectly............................ 0.00% 0.00%(c)
<fn>
(a) Unannualized
(b) Includes expenses paid indirectly, if applicable.
(c) Annualized
</fn>
</table>
The accompanying notes are an integral part of these financial statements.
<page>
[THIS PAGE INTENTIONALLY LEFT BLANK.]
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
U.S. TREASURY PORTFOLIO
EXPENSE CHART
FOR THE SIX MONTHS ENDED MARCH 31, 2009
(UNAUDITED)
================================================================================
As a shareholder of the Portfolio, you incur the following ongoing costs:
management fees and other Portfolio expenses. You may also incur distribution
and/or service (12b-1) fees. This example is intended to help you understand
your ongoing costs (in dollars) of investing in the Portfolio 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 October 1, 2008 through March 31, 2009.
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use information in this line, 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
line under the heading entitled "Expenses Paid During the Period" to estimate
the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Portfolio's 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 Portfolio and other funds. To do so, compare this 5%
hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), redemption fees, or exchange fees that you may incur in other
mutual funds. Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds.
<table>
<caption>
- ---------------------------------------------------------------------------------------------------------------------------
Institutional Class Shares
("Institutional Shares") & Pinnacle Beginning Account Ending Account Value Expenses Paid Annualized
Class Shares ("Pinnacle Shares") Value 10/01/08 03/31/09 During the period* Expense Ratio
- ---------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
Actual $1,000.00 $1,001.20 $1.25 0.25%
- ---------------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,023.68 $1.26 0.25%
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
Institutional Service Class Shares Beginning Account Ending Account Value Expenses Paid Annualized
("Institutional Service Shares") Value 10/01/08 03/31/09 During the Period* Expense Ratio
- ---------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,000.30 $2.19 0.44%
- ---------------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,022.74 $2.22 0.44%
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
Investor Class Shares Beginning Account Ending Account Value Expenses Paid Annualized
("Investor Shares") Value 10/01/08 03/31/09 During the Period* Expense Ratio
- ---------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,000.20 $2.29 0.46%
- ---------------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,022.64 $2.32 0.46%
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
Short Term Income Shares Class Shares Beginning Account Ending Account Value Expenses Paid Annualized
("Short Term Income Shares") Value 10/01/08 03/31/09 During the Period* Expense Ratio
- ---------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,000.10 $2.34 0.47%
- ---------------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,022.59 $2.37 0.47%
- ---------------------------------------------------------------------------------------------------------------------------
</table>
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
U.S. TREASURY PORTFOLIO
EXPENSE CHART
FOR THE SIX MONTHS ENDED MARCH 31, 2009
(UNAUDITED)
================================================================================
<table>
- ----------------------------------------------------------------------------------------------------------------------------
Retail Class Shares ("Retail Shares") Beginning Account Ending Account Value Expenses Paid Annualized
Value 10/01/08 03/31/09 During the Period* Expense Ratio
- ----------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
Actual $1,000.00 $1,000.10 $2.34 0.47%
- ----------------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,022.59 $2.37 0.47%
- ----------------------------------------------------------------------------------------------------------------------------
<fn>
* Expenses are equal to the Portfolio's annualized expense ratios multiplied by the average account value over the
period (October 1, 2008 through March 31, 2009), multiplied by 182/365 (to reflect the most recent fiscal
half-year).
</fn>
</table>
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
U.S. TREASURY PORTFOLIO
SCHEDULE OF INVESTMENTS
MARCH 31, 2009
================================================================================
<table>
<caption>
Face Maturity Interest Value
Amount Date Rate (Note 1)
------ ---- ---- --------
Repurchase Agreements (37.69%)
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
$ 173,000,000 Bank of America Securities, LLC, purchased on 03/31/09, repurchase
proceeds at maturity $173,000,721 (Collateralized by $1,206,555,421,
GNMA, 0.00% to 8.05%, due 01/16/23 to 10/16/48, value
$176,460,001) 04/01/09 0.15% $ 173,000,000
100,000,000 Goldman Sachs, purchased on 03/31/09, repurchase proceeds at
maturity $100,000,417 (Collateralized by $1,460,001,394, GNMA
4.00% to 11.00%, due 12/15/13 to 03/15/39, value
$102,000,000) 04/01/09 0.15 100,000,000
197,000,000 JPMorgan Chase & Co., purchased on 03/31/09, repurchase proceeds
at maturity $197,000,985 (Collateralized by $820,908,659 GNMA,
3.63% to 13.00%, due 05/15/09 to 06/15/50, value $200,943,908) 04/01/09 0.18 197,000,000
- ---------------- --------------
470,000,000 Total Repurchase Agreements 470,000,000
- ---------------- --------------
Floating Rate Securities (3.60%)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 20,000,000 Bank of America Corporation
Guaranteed by FDIC 07/31/09 0.77% $ 19,948,239
25,000,000 Bank of America, N.A.
Guaranteed by FDIC 02/05/10 1.19 25,000,000
- ---------------- --------------
45,000,000 Total Floating Rate Securities 44,948,239
- ---------------- --------------
U.S. Government Obligations (59.35%)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 100,000,000 U.S. Treasury Bill 04/02/09 0.02% $ 99,999,944
100,000,000 U.S. Treasury Bill 04/02/09 0.04 99,999,889
30,000,000 U.S. Treasury Bill 04/23/09 1.36 29,975,250
100,000,000 U.S. Treasury Bill 04/29/09 0.16 99,987,556
25,000,000 U.S. Treasury Bill 06/24/09 1.33 24,923,292
100,000,000 U.S. Treasury Bill 06/24/09 0.62 99,855,333
50,000,000 U.S. Treasury Bill 07/16/09 0.29 49,957,306
50,000,000 U.S. Treasury Bill 08/20/09 0.51 49,902,083
60,000,000 U.S. Treasury Bill 11/19/09 0.58 59,779,600
40,000,000 U.S. Treasury Note, 4.85% 05/31/09 2.06 40,182,278
50,000,000 U.S. Treasury Note, 4.85% 06/30/09 2.62 50,272,415
35,000,000 U.S. Treasury Note, 4.85% 08/15/09 2.24 35,337,329
- ---------------- --------------
740,000,000 Total U.S. Government Obligations 740,172,275
- ---------------- --------------
Total Investments (100.64%) (Cost $1,255,120,514+) 1,255,120,514
Liabilities in excess of cash and other assets (-0.64%) (8,003,396)
--------------
Net Assets (100.00%) $1,247,117,118
==============
+ Aggregate cost for federal income tax purposes is identical. All securities are valued at
amortized cost and as a result, there is no unrealized appreciation and depreciation.
</table>
<table>
<caption>
KEY:
<s> <c> <c>
GNMA = Government National Mortgage Association
FDIC = Federal Deposit Insurance Corporation
</table>
The accompanying notes are an integral part of these financial statements.
<page>
<table>
- ------------------------------------ ------------------------ -------------------------
Securities Maturing in Value % of Portfolio
- ------------------------------------ ------------------------ -------------------------
<s> <c> <c>
Less than 31 Days $ 799,962,639 63.74%
31 through 60 Days 25,000,000 1.99
61 through 90 Days 164,960,904 13.14
91 through 120 Days 100,229,720 7.99
121 through 180 Days 105,187,651 8.38
Over 180 Days 59,779,600 4.76
- ------------------------------------ ------------------------ -------------------------
Total $1,255,120,514 100.00%
- ------------------------------------ ------------------------ -------------------------
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
U.S. TREASURY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2009
================================================================================
<table>
<caption>
ASSETS
<s> <c>
Investments in securities, at amortized cost (Note 1)............................. $ 785,120,514
Repurchase agreements............................................................. 470,000,000
Accrued interest receivable....................................................... 1,525,000
Prepaid expenses.................................................................. 127,316
------------------
Total assets............................................................... 1,256,772,830
------------------
LIABILITIES
Payable to affiliates (Note 2).................................................... 205,514
Due to custodian.................................................................. 9,336,920
Accrued expenses.................................................................. 50,487
Dividends payable................................................................. 62,791
------------------
Total liabilities.......................................................... 9,655,712
------------------
Net assets........................................................................ $ 1,247,117,118
==================
SOURCE OF NET ASSETS
Net capital paid in on shares of capital stock (Note 5)........................... $ 1,247,117,118
------------------
Net assets........................................................................ $ 1,247,117,118
==================
</table>
<table>
<caption>
Net asset value, per share (Note 5):
Class Name Net Assets Shares Outstanding Net Asset Value
<s> <c> <c> <c>
Institutional Shares........................ $526,946,888 526,937,867 $1.00
Institutional Service Shares................ $233,270,105 233,266,111 $1.00
Investor Shares............................. $212,705,914 212,702,272 $1.00
Short Term Income Shares.................... $188,138,352 188,135,131 $1.00
Retail Shares............................... $10,409,446 10,409,268 $1.00
Pinnacle Shares............................. $75,646,413 75,645,118 $1.00
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
U.S. TREASURY PORTFOLIO
STATEMENT OF OPERATIONS
YEAR ENDED MARCH 31, 2009
================================================================================
<table>
<caption>
INVESTMENT INCOME
Income:
<s> <c>
Interest........................................................................ $ 16,338,485
------------------
Expenses: (Note 2)
Investment management fee....................................................... 1,630,302
Administration fee.............................................................. 679,293
Shareholder servicing fee (Institutional Service Shares)........................ 666,690
Shareholder servicing fee (Investor Shares)..................................... 637,429
Shareholder servicing fee (Short Term Income Shares)............................ 435,711
Shareholder servicing fee (Retail Shares)....................................... 44,807
Distribution fee (Investor Shares).............................................. 509,943
Distribution fee (Short Term Income Shares)..................................... 784,279
Distribution fee (Retail Shares)................................................ 116,498
Custodian expenses.............................................................. 62,325
Shareholder servicing and related shareholder expenses+......................... 460,244
Legal, compliance and filing fees............................................... 218,460
Audit and accounting............................................................ 214,613
Trustees' fees and expenses..................................................... 105,698
Other........................................................................... 286,903
------------------
Total expenses.................................................................. 6,853,195
Less: Fees waived (Note 2)............................................... (1,468,543)
Expense paid indirectly (Note 4)................................... (1,701)
------------------
Net expenses.................................................................... 5,382,951
------------------
Net investment income........................................................... 10,955,534
REALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments............................................. -0-
------------------
Increase in net assets from operations.............................................. $ 10,955,534
==================
<fn>
+ Includes class specific transfer agency expenses of $111,495, $55,260, $127,186, $86,855, $12,180, and $17,451
for the Institutional, Institutional Service, Investor, Short Term Income, Retail Shares, and Pinnacle
respectively.
</fn>
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
U.S. TREASURY PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED MARCH 31, 2009 AND 2008
================================================================================
<table>
<caption>
2009 2008
INCREASE (DECREASE) IN NET ASSETS ---- ----
<s> <c> <c>
Operations:
Net investment income......................................... $ 10,955,534 $ 49,756,628
Net realized gain (loss) on investments....................... -0- -0-
--------------- ----------------
Increase in net assets from operations............................ 10,955,534 49,756,628
Dividends to shareholders from net investment income:
Institutional Shares.......................................... (5,196,692) (26,167,548)
Institutional Service Shares.................................. (2,203,320) (9,579,659)
Investor Shares............................................... (1,729,551) (7,173,722)
Short Term Income Shares...................................... (938,502) (4,577,752)
Retail Shares................................................. (83,259) (62,001)
Pinnacle Shares............................................... (804,210) (2,195,946)
--------------- ----------------
Total dividends to shareholders.......................... (10,955,534) (49,756,628)
--------------- ----------------
Distributions to shareholders from realized gains on investments:
Institutional Shares.......................................... -0- -0-
Institutional Service Shares.................................. -0- -0-
Investor Shares............................................... -0- -0-
Short Term Income Shares...................................... -0- -0-
Retail Shares................................................. -0- -0-
Pinnacle Shares............................................... -0- -0-
--------------- ----------------
Total distributions to shareholders...................... -0- -0-
--------------- ----------------
Capital share transactions (Note 5):
Institutional Shares.......................................... (17,798,924) (45,508,503)
Institutional Service Shares.................................. (97,938,921) 82,247,669
Investor Shares............................................... (57,572,615) 82,110,572
Short Term Income Shares...................................... 13,298,274 136,417,283
Retail Shares................................................. (10,566,880) 20,604,784
Pinnacle Shares............................................... 5,014,875 31,003,640
Net asset value of shares issued in connection with merger of Short Term
Government Class A into Short Term Income Shares.............. -0- 15,759,403
Net asset value of shares issued in connection with merger of Short Term
Government Class B into Investor Shares....................... -0- 53,257,284
--------------- ----------------
Total capital share transactions........................ (165,564,191) 375,892,132
--------------- ----------------
Total increase (decrease) .................................... (165,564,191) 375,892,132
Net assets:
Beginning of year............................................. 1,412,681,309 1,036,789,177
--------------- ----------------
End of year.................................................. $ 1,247,117,118 $ 1,412,681,309
=============== ================
Undistributed net investment income............................... $ -0- $ -0-
=============== ================
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
U.S. TREASURY PORTFOLIO
FINANCIAL HIGHLIGHTS
================================================================================
<table>
<caption>
Years Ended March 31,
--------------------------------------------------------------
Institutional shares 2009 2008 2007 2006 2005
- -------------------- ---------- ---------- ---------- ---------- ---------
<s> <c> <c> <c> <c> <c>
Per Share Operating Performance:
(for a share outstanding throughout the year)
Net asset value, beginning of year................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ---------
Income from investment operations:
Net investment income.................... 0.010 0.041 0.049 0.034 0.014
Net realized and unrealized gain(loss) on investments -- -- -- 0.000 0.000
---------- ---------- ---------- ---------- ---------
Total from investment operations......... 0.010 0.041 0.049 0.034 0.014
Less distributions from:
Dividends from net investment income..... (0.010) (0.041) (0.049) (0.034) (0.014)
Net realized gain(loss) on investment.... -- -- -- (0.000) (0.000)
---------- ---------- ---------- ---------- ---------
Total Distributions...................... (0.010) (0.041) (0.049) (0.034) (0.014)
---------- ---------- ---------- ---------- ---------
Net asset value, end of year................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== =========
Total Return................................ 0.97% 4.18% 5.02% 3.48% 1.44%
Ratios/Supplemental Data
Net assets, end of year (000's)............. $ 526,947 $ 544,746 $ 590,254 $ 829,714 $ 484,434
Ratios to average net assets:
Expenses (net of fees waived)(a)......... 0.23% 0.20% 0.20% 0.20% 0.20%
Net investment income.................... 0.93% 4.17% 4.89% 3.51% 1.45%
Management and administration fees waived 0.03% 0.03% 0.03% 0.05% 0.03%
Expenses paid indirectly................. 0.00% 0.00% 0.00% 0.00% 0.00%
</table>
<table>
<caption>
Years Ended March 31,
--------------------------------------------------------------
Institutional Service shares 2009 2008 2007 2006 2005
- ---------------------------- ---------- ---------- ---------- ---------- ---------
<s> <c> <c> <c> <c> <c>
Per Share Operating Performance:
(for a share outstanding throughout the year)
Net asset value, beginning of year................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income.................... 0.007 0.039 0.047 0.032 0.012
Net realized and unrealized gain(loss) on investments -- -- -- 0.000 0.000
---------- ---------- ---------- ---------- ----------
Total from investment operations......... 0.007 0.039 0.047 0.032 0.012
---------- ---------- ---------- ---------- ----------
Less distributions from:
Dividends from net investment income..... (0.007) (0.039) (0.047) (0.032) (0.012)
Net realized gain(loss) on investment.... -- -- -- (0.000) (0.000)
---------- ---------- ---------- ---------- ----------
Total Distributions...................... (0.007) (0.039) (0.047) (0.032) (0.012)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== =========
Total Return................................ 0.75% 3.92% 4.76% 3.22% 1.19%
Ratios/Supplemental Data
Net assets, end of year (000's)............. $ 233,270 $ 331,209 $ 248,962 $ 304,168 $ 236,621
Ratios to average net assets:
Expenses (net of fees waived)(a)......... 0.44% 0.45% 0.45% 0.45% 0.45%
Net investment income.................... 0.83% 3.76% 4.65% 3.17% 1.18%
Management and administration fees waived 0.03% 0.03% 0.03% 0.05% 0.03%
Shareholder Servicing fees waived........ 0.03% -- -- -- --
Expenses paid indirectly................. 0.00% 0.00% 0.00% 0.00% 0.00%
<fn>
(a) Includes expenses paid indirectly, if applicable.
</fn>
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
================================================================================
<table>
<caption>
Years Ended March 31, Commencement of Operations
-------------------------------- February 21, 2007 through
Investor shares 2009 2008 March 31, 2007
- --------------- --------- --------- -----------------
<s> <c> <c> <c>
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period................... $ 1.00 $ 1.00 $ 1.00
--------- --------- --------
Income from investment operations:
Net investment income............................... 0.006 0.037 0.005
Net realized and unrealized gain(loss) on investments -- -- --
--------- --------- --------
Total from investment operations.................... 0.006 0.037 0.005
Less distributions from:
Dividends from net investment income................ (0.006) (0.037) (0.005)
Net realized gain on investments.................... -- -- --
--------- --------- --------
Total Distributions................................. (0.006) (0.037) (0.005)
--------- --------- --------
Net asset value, end of period......................... $ 1.00 $ 1.00 $ 1.00
========= ========= ========
Total Return........................................... 0.65% 3.73% 0.50%(a)
Ratios/Supplemental Data
Net assets, end of period (000's)...................... $ 212,706 $ 270,279 $134,911
Ratios to average net assets:
Expenses (net of fees waived) (b)................... 0.55% 0.63% 0.63%(c)
Net investment income............................... 0.68% 3.51% 4.62%(c)
Administration fees waived.......................... 0.03% 0.03% 0.03%(c)
Shareholder servicing and distribution fees waived.. 0.15% 0.05% 0.05%(c)
Expenses paid indirectly............................ 0.00% 0.00% 0.00%(c)
</table>
<table>
<caption>
Years Ended March 31, Commencement of Operations
------------------------------- November 2, 2006 through
Short Term Income Shares 2009 2008 March 31, 2007
- ------------------------ --------- -------- -----------------
<s> <c> <c> <c>
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period................... $ 1.00 $ 1.00 $ 1.00
--------- --------- --------
Income from investment operations:
Net investment income............................... 0.005 0.034 0.018
Net realized and unrealized gain(loss) on investments -- -- --
--------- --------- --------
Total from investment operations.................... 0.005 0.034 0.018
Less distributions from:
Dividends from net investment income................ (0.005) (0.034) (0.018)
Net realized gain on investments.................... -- -- --
--------- --------- --------
Total Distributions................................. (0.005) (0.034) (0.018)
--------- --------- --------
Net asset value, end of period......................... $ 1.00 $ 1.00 $ 1.00
========= ========= ========
Total Return........................................... 0.51% 3.46% 1.80%(a)
Ratios/Supplemental Data
Net assets, end of period (000's)...................... $ 188,138 $ 174,840 $ 22,663
Ratios to average net assets:
Expenses (net of fees waived) (b)................... 0.70% 0.90% 0.90%(c)
Net investment income............................... 0.54% 3.03% 4.32%(c)
Administration fees waived.......................... 0.03% 0.03% 0.03%(c)
Shareholder servicing and distribution fees waived.. 0.26% 0.03% 0.03%(c)
Expenses paid indirectly............................ 0.00% 0.00% 0.00%(c)
<fn>
(a) Unannualized
(b) Includes expenses paid indirectly, if applicable.
(c) Annualized
</fn>
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
U.S. TREASURY PORTFOLIO
FINANCIAL HIGHLIGHTS (CONTINUED)
================================================================================
<table>
<caption>
Years Ended March 31, Commencement of Operations
------------------------------ December 12, 2006 through
Retail shares 2009 2008 March 31, 2007
- ------------- --------- --------- --------------
<s> <c> <c> <c>
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period................... $ 1.00 $ 1.00 $ 1.00
Income from investment operations:
--------- --------- ---------
Net investment income............................... 0.005 0.033 0.013
Net realized and unrealized gain(loss) on investments -- -- --
--------- --------- ---------
Total from investment operations.................... 0.005 0.033 0.013
Less distributions from:
Dividends from net investment income................ (0.005) (0.033) (0.013)
Net realized gain on investments.................... -- -- --
--------- --------- ---------
Total Distributions................................. (0.005) (0.033) (0.013)
--------- --------- ---------
Net asset value, end of period......................... $ 1.00 $ 1.00 $ 1.00
========= ========= =========
Total Return........................................... 0.46% 3.36% 1.28%(a)
Ratios/Supplemental Data
Net assets, end of period (000's)...................... $ 10,410 $ 20,976 $ 371
Ratios to average net assets:
Expenses (net of fees waived) (b)................... 0.73% 0.99% 1.00%(c)
Net investment income............................... 0.46% 1.90% 4.22%(c)
Administration fees waived.......................... 0.03% 0.03% 0.03%(c)
Shareholder Servicing and Distribution fees waived.. 0.44% 0.14% 0.10%(c)
Transfer Agency Account fees waived................. -- -- 0.03%(c)
Expenses paid indirectly............................ 0.00% 0.00% 0.00%(c)
</table>
<table>
<caption>
Years Ended March 31,
--------------------------------------------------------------
Pinnacle Shares 2009 2008 2007 2006 2005
- ------------------ --------- ---------- ---------- ---------- ---------
<s> <c> <c> <c> <c> <c>
Per Share Operating Performance:
(for a share outstanding throughout the year)
Net asset value, beginning of year..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income............................... 0.010 0.041 0.049 0.034 0.014
Net realized and unrealized gain(loss) on investments -- -- -- 0.000 0.000
---------- ---------- ---------- ---------- ----------
Total from investment operations.................... 0.010 0.041 0.049 0.034 0.014
Less distributions from:
Dividends from net investment income................ (0.010) (0.041) (0.049) (0.034) (0.014)
Net realized gain(loss) on investment............... -- -- -- (0.000) (0.000)
---------- ---------- ---------- ---------- ----------
Total Distributions................................. (0.010) (0.041) (0.049) (0.034) (0.014)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year........................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $1.00
========== ========== ========== ========== =========
Total Return........................................... 0.97% 4.18% 5.02% 3.48% 1.44%
Ratios/Supplemental Data
Net assets, end of year (000's)........................ $ 75,646 $ 70,632 $ 39,628 $ 28,505 $ 39,809
Ratios to average net assets:
Expenses (net of fees waived)(b).................... 0.23% 0.20% 0.20% 0.20% 0.20%
Net investment income............................... 0.92% 3.89% 4.93% 3.51% 1.45%
Management and administration fees waived........... 0.03% 0.03% 0.03% 0.05% 0.03%
Expenses paid indirectly............................ 0.00% 0.00% 0.00% 0.00% 0.00%
<fn>
(a) Unannualized
(b) Includes expenses paid indirectly, if applicable.
(c) Annualized
</fn>
</table>
The accompanying notes are an integral part of these financial statements.
<page>
[THIS PAGE INTENTIONALLY LEFT BLANK.]
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
U.S. GOVERNMENT PORTFOLIO
EXPENSE CHART
FOR THE SIX MONTHS ENDED MARCH 31, 2009
(UNAUDITED)
================================================================================
As a shareholder of the Portfolio, you incur the following ongoing costs:
management fees and other Portfolio expenses. You may also incur distribution
and/or service (12b-1) fees. This example is intended to help you understand
your ongoing costs (in dollars) of investing in the Portfolio 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 October 1, 2008 through March 31, 2009.
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use information in this line, 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
line under the heading entitled "Expenses Paid During the Period" to estimate
the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Portfolio's 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 Portfolio and other funds. To do so, compare this 5%
hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), redemption fees, or exchange fees that you may incur in other
mutual funds. Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds
..
<table>
<caption>
- ---------------------------------------------------------------------------------------------------------------------------
Institutional Service Class Shares Beginning Account Ending Account Value Expenses Paid Annualized
("Institutional Service Shares") Value 10/01/08 03/31/09 During the Period* Expense Ratio*
- ---------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
Actual $1,000.00 $1,003.20 $2.50 0.50%
- ---------------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before $1,000.00 $1,022.44 $2.52 0.50%
expenses)
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
Retail Class Shares Beginning Account Ending Account Value Expenses Paid Annualized
("Retail Shares") Value 10/01/08 03/31/09 During the Period* Expense Ratio*
- ---------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,000.80 $4.94 0.99%
- ---------------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,020.00 $4.99 0.99%
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
Advantage Government Liquidity Fund Beginning Account Ending Account Value Expenses Paid Annualized
("Advantage Shares") Value 10/01/08 03/31/09 During the Period* Expense Ratio*
- ---------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,000.90 $4.84 0.97%
- ---------------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,020.09 $4.89 0.97%
- ---------------------------------------------------------------------------------------------------------------------------
<fn>
* Expenses are equal to the Portfolio's annualized expense ratios multiplied by the average account value over the
period (October 1, 2008 through March 31, 2009), multiplied by 182/365 (to reflect the most recent fiscal
half-year).
</fn>
</table>
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
U.S. GOVERNMENT PORTFOLIO
SCHEDULE OF INVESTMENTS
MARCH 31, 2009
================================================================================
<table>
<caption>
Face Maturity Interest Value
Amount Date Rate (Note 1)
------ ---- ---- --------
Loan Participations (5.09%)
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
$ 45,000,000 Army & Air Force Exchange Service with JPMorgan Chase as agent 04/21/09 1.40% $ 45,000,000
15,000,000 Army & Air Force Exchange Service with JPMorgan Chase as agent 05/12/09 1.50 15,000,000
- ---------------- --------------
60,000,000 Total Loan Participations 60,000,000
- ---------------- --------------
Repurchase Agreements (15.51%)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 148,000,000 Bank of America Securities, LLC, purchased on 03/31/09, repurchase
proceeds at maturity $148,000,617 (Collateralized by $160,284,857
GNMA, 6.00% due 09/20/38, value $150,960,001) 04/01/09 0.15% $ 148,000,000
35,000,000 UBS Securities, LLC, purchased on 03/31/09, repurchase proceeds
at maturity $35,000,146 (Collateralized by $35,885,000, FNMA
6.00%, due 04/18/36, value $35,700,176) 04/01/09 0.15 35,000,000
- ---------------- --------------
183,000,000 Total Repurchase Agreements 183,000,000
- ---------------- --------------
Floating Rate Securities (16.87%)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 24,000,000 Bank of America Libor Floater
Guaranteed by FDIC 02/05/10 1.19% $ 24,000,000
50,000,000 Federal Agricultural Mortgage Corporation 05/15/09 1.45 50,000,000
25,000,000 Federal Agricultural Mortgage Corporation 06/25/09 1.16 25,000,000
25,000,000 Federal Agricultural Mortgage Corporation 03/09/10 0.71 25,000,000
25,000,000 Federal Home Loan Bank 02/19/10 0.80 25,000,000
50,000,000 Federal Home Loan Bank 03/05/10 0.81 50,000,000
- ---------------- --------------
199,000,000 Total Floating Rate Securities 199,000,000
- ---------------- --------------
U.S. Government Agency Discount Notes (29.19%)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 50,000,000 Federal Agricultural Mortgage Corporation 04/08/09 0.20% $ 49,998,056
17,800,000 Federal Agricultural Mortgage Corporation 04/23/09 0.35 17,796,301
15,000,000 Federal Farm Credit Bank 04/02/09 0.02 14,999,992
15,000,000 Federal Farm Credit Bank 04/23/10 0.02 14,996,504
19,685,000 Federal Home Loan Bank 05/27/09 2.67 19,605,997
25,000,000 Federal Home Loan Bank 04/28/09 3.09 25,000,000
50,000,000 Federal Home Loan Bank 01/22/10 0.63 50,000,000
40,000,000 Federal Home Loan Bank 01/04/10 0.87 39,737,444
50,000,000 Federal Home Loan Bank 04/08/09 0.10 49,999,028
10,000,000 Federal Home Loan Bank 02/09/10 1.02 9,912,778
2,275,000 Federal Home Loan Bank 02/23/10 1.11 2,273,739
50,000,000 Federal Home Loan Mortgage Corporation 04/13/09 0.10 49,998,333
- ---------------- --------------
344,760,000 Total U.S. Government Agency Discount Notes 344,318,172
- ---------------- --------------
U.S. Government Agency Medium Term Notes (34.01%)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 14,460,000 Federal Agricultural Mortgage Corporation 12/30/09 0.93% $ 14,467,596
23,600,000 Federal Farm Credit Bank 08/25/09 2.85 23,600,000
40,000,000 Federal Farm Credit Bank 11/06/09 1.70 40,000,000
27,000,000 Federal Home Loan Bank 04/14/09 2.25 27,000,000
25,000,000 Federal Home Loan Bank 04/23/09 1.71 25,000,000
10,000,000 Federal Home Loan Bank 05/07/09 2.44 10,001,075
25,000,000 Federal Home Loan Bank 06/10/09 0.52 25,000,000
50,000,000 Federal Home Loan Bank 06/10/09 0.43 50,000,000
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
U.S. GOVERNMENT PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MARCH 31, 2009
================================================================================
<table>
<caption>
Face Maturity Interest Value
Amount Date Rate (Note 1)
------ ---- ---- --------
U.S. Government Agency Medium Term Notes (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
$ 11,000,000 Federal Home Loan Bank 06/25/09 3.15% $ 11,000,000
25,000,000 Federal Home Loan Bank 06/10/09 0.84 25,000,000
25,000,000 Federal Home Loan Bank 07/17/09 3.04 25,000,000
10,000,000 Federal Home Loan Bank 03/11/10 1.10 10,000,000
20,000,000 Federal Home Loan Bank 05/06/09 2.67 20,000,000
25,000,000 Federal Home Loan Bank 02/03/10 0.73 25,002,115
20,000,000 Federal Home Loan Bank 02/26/10 1.10 19,984,765
25,000,000 Federal Home Loan Bank 03/05/10 1.10 24,985,693
25,000,000 Federal Home Loan Bank 08/04/09 1.69 25,073,909
- ---------------- --------------
401,060,000 Total U.S. Government Agency Medium Term Notes 401,115,153
- ---------------- --------------
Total Investments (100.67%) (Cost $1,187,433,325+) 1,187,433,325
Liabilities in excess of cash and other assets (-0.67%) (7,928,401)
--------------
Net Assets (100.00%) $1,179,504,924
==============
<fn>
+ Aggregate cost for federal income tax purposes is identical. All securities are valued at
amortized cost and as a result, there is no unrealized appreciation and depreciation.
</fn>
</table>
<table>
KEY:
<s> <c> <c>
FDIC = Federal Deposit Insurance Corporation
FNMA = Federal National Mortgage Association
GNMA = Government National Mortgage Association
</table>
<table>
<caption>
BREAKDOWN OF PORTFOLIO HOLDINGS BY MATURITY (unaudited):
- ------------------------------------- --------------------------- -----------------------
Securities Maturing in Value % of Portfolio
- ------------------------------------- --------------------------- -----------------------
<s> <c> <c>
Less than 30 Days $ 892,790,329 75.19%
31 through 60 Days 88,607,073 7.46
61 through 90 Days 11,000,000 0.93
91 through 120 Days 25,000,000 2.10
121 through 180 Days 48,673,909 4.10
Over 180 Days 121,362,014 10.22
- ------------------------------------- --------------------------- -----------------------
Total $1,187,433,325 100.00%
- ------------------------------------- --------------------------- -----------------------
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
U.S. GOVERNMENT PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2009
================================================================================
<table>
<caption>
ASSETS
<s> <c>
Investments in securities, at amortized cost (Note 1)............................. $ 1,004,433,325
Repurchase agreements............................................................. 183,000,000
Accrued interest receivable....................................................... 2,293,762
Prepaid expenses.................................................................. 89,232
------------------
Total assets............................................................... 1,189,816,319
------------------
LIABILITIES
Payable to affiliates (Note 2).................................................... 426,094
Due to Custodian.................................................................. 9,798,939
Accrued expenses.................................................................. 69,923
Dividends payable................................................................. 16,439
------------------
Total liabilities.......................................................... 10,311,395
------------------
Net assets........................................................................ $ 1,179,504,924
==================
SOURCE OF NET ASSETS
Net capital paid in on shares of capital stock (Note 5)........................... $ 1,179,541,867
Accumulated undistributed net investment income................................... 42,484
Accumulated net realized loss..................................................... (79,427)
------------------
Net assets........................................................................ $ 1,179,504,924
==================
</table>
<table>
<caption>
Net asset value, per share (Note 5):
Class Name Net Assets Shares Outstanding Net Asset Value
<s> <c> <c> <c>
Institutional Service Shares................ $282,925 282,943 $1.00
Retail Shares............................... $208,911,815 208,925,187 $1.00
Advantage Shares............................ $970,310,184 970,372,292 $1.00
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
U.S. GOVERNMENT PORTFOLIO
STATEMENT OF OPERATIONS
YEAR ENDED MARCH 31, 2009
================================================================================
<table>
<caption>
INVESTMENT INCOME
Income:
<s> <c>
Interest........................................................................ $ 18,965,080
------------------
Expenses: (Note 2)
Investment management fee....................................................... 1,386,192
Administration fee.............................................................. 577,580
Shareholder servicing fee (Institutional Service Shares)........................ 645
Shareholder servicing fee (Retail Shares)....................................... 449,696
Shareholder servicing fee (Advantage Shares).................................... 2,437,541
Distribution fee (Retail Shares)................................................ 1,169,209
Distribution fee (Advantage Shares)............................................. 7,312,623
Custodian expenses.............................................................. 60,172
Shareholder servicing and related shareholder expenses+......................... 206,534
Legal, compliance and filing fees............................................... 248,900
Audit and accounting............................................................ 190,055
Trustees' fees and expenses..................................................... 82,164
Other........................................................................... 260,022
------------------
Total expenses.................................................................. 14,381,333
Less: Fees waived (Note 2)........................................ (2,904,454)
------------------
Net expenses.................................................................... 11,476,879
------------------
Net investment income........................................................... 7,488,201
REALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments............................................. (12,623)
------------------
Increase in net assets from operations.............................................. $ 7,475,578
==================
<fn>
+ Includes class specific transfer agency expenses of $3, $52, and $93,260 for the Institutional,
Institutional Service and Retail Shares respectively.
</fn>
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
U.S. GOVERNMENT PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED MARCH 31, 2009 AND 2008
================================================================================
<table>
<caption>
2009 2008
INCREASE (DECREASE) IN NET ASSETS ---- ----
<s> <c> <c>
Operations:
Net investment income......................................... $ 7,488,201 $ 15,087,433
Net realized gain (loss) on investments....................... (12,623) (54,070)
--------------- ----------------
Increase in net assets from operations........................ 7,475,578 15,033,363
Dividends to shareholders from net investment income:
Institutional Shares ......................................... (130) (455)
Institutional Service Shares ................................. (3,481) (10,130)
Retail Shares................................................. (1,081,041) (3,686,594)
Advantage Shares.............................................. (6,403,549) (11,390,254)
--------------- ----------------
Total dividends to shareholders.......................... (7,488,201) (15,087,433)
--------------- ----------------
Distributions to shareholders from realized gains on investments:
Institutional Shares.......................................... -0- -0-
Institutional Service Shares.................................. -0- -0-
Retail Shares................................................. -0- -0-
Advantage Shares.............................................. -0- -0-
--------------- ----------------
Total capital share transactions........................ -0- -0-
--------------- ----------------
Total increase ............................................... -0- -0-
Capital share transactions (Note 5):
Institutional Shares.......................................... (10,472) 473
Institutional Service Shares.................................. (52,528) 325,729
Retail Shares................................................. 49,649,851 46,204,413
Advantage Shares.............................................. 307,936,811 468,605,201
Net asset value of shares issued in connection with merger of Cortland
Government into Retail Shares................................. -0- 56,013,618
--------------- ----------------
Total capital share transactions........................ 357,523,662 571,149,434
--------------- ----------------
Total increase ............................................... 357,511,039 571,095,364
Net assets:
Beginning of year............................................. 821,993,885 250,898,521
--------------- ----------------
End of year.................................................. $ 1,179,504,924 $ 821,993,885
=============== ================
Undistributed net investment income............................... $ 42,484 $ 42,484
=============== ================
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
U.S. GOVERNMENT PORTFOLIO
FINANCIAL HIGHLIGHTS
================================================================================
<table>
<caption>
For the Period Commencement of Operations
April 1, 2008 through Year Ended October 30, 2006 through
Institutional shares December 11, 2008 March 31, 2008 March 31, 2007
- -------------------- ----------------- -------------- --------------
<s> <c> <c> <c>
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period................... $ 1.00 $ 1.00 $ 1.00
--------- --------- ---------
Income from investment operations:
Net investment income............................... 0.012 0.045 0.009
Net realized and unrealized gain(loss) on investments (0.000) (0.000) 0.000
--------- --------- ---------
Total from investment operations.................... 0.012 0.045 0.009
Less distributions from:
Dividends from net investment income................ (0.012) (0.045) (0.009)
Net realized gain on investments.................... -- -- --
--------- --------- ---------
Total Distributions................................. (0.012) (0.045) (0.009)
--------- --------- ---------
Net asset value, end of period......................... $ 1.00 $ 1.00 $ 1.00
========= ========= =========
Total Return........................................... 1.24%(a) 4.54% 0.88%(a)
Ratios/Supplemental Data
Net assets, end of period (000's)...................... $ -0- $ 10 $ 10
Ratios to average net assets:
Expenses (net of fees waived)....................... 0.25%(b) 0.21% 0.20%(b)
Net investment income............................... 1.76%(b) 4.44% 5.10%(b)
Management and administration fees waived........... 0.05%(b) 0.09% 0.16%(b)
Years Ended March 31, Commencement of Operations
Institutional Service shares ------------------------------- March 19, 2007 through
- ----------------------------- 2009 2008 March 31, 2007
Per Share Operating Performance: --------- --------- --------------
(for a share outstanding throughout the period)
Net asset value, beginning of period................... $ 1.00 $ 1.00 $ 1.00
--------- --------- ---------
Income from investment operations:
Net investment income............................... 0.012 0.042 0.002
Net realized and unrealized gain(loss) on investments (0.000) (0.000) 0.000
--------- --------- ---------
Total from investment operations.................... 0.012 0.042 0.002
Less distributions from:
Dividends from net investment income................ (0.012) (0.042) (0.002)
Net realized gain on investments.................... -- -- --
--------- --------- ---------
Total Distributions................................. (0.012) (0.042) (0.002)
--------- --------- ---------
Net asset value, end of period......................... $ 1.00 $ 1.00 $ 1.00
========= ========= =========
Total Return........................................... 1.23% 4.31% 0.17%(a)
Ratios/Supplemental Data
Net assets, end of period (000's)...................... $ 283 $ 336 $ 10
Ratios to average net assets:
Expenses (net of fees waived)....................... 0.47% 0.45% 0.45%(b)
Net investment income............................... 1.35% 3.82% 4.85%(b)
Management and administration fees waived........... 0.05% 0.09% 0.16%(b)
<fn>
(a) Unannualized
(b) Annualized
</fn>
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
================================================================================
<table>
<caption>
Years Ended March 31, Commencement of Operations
------------------------------- December 12, 2006 through
Retail shares 2009 2008 March 31, 2007
- ------------- --------- --------- --------------
<s> <c> <c> <c>
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period................... $ 1.00 $ 1.00 $ 1.00
--------- --------- ---------
Income from investment operations:
Net investment income............................... 0.007 0.037 0.013
Net realized and unrealized gain(loss) on investments (0.000) (0.000) 0.000
--------- --------- ---------
Total from investment operations.................... 0.007 0.037 0.013
Less distributions from:
Dividends from net investment income................ (0.007) (0.037) (0.013)
Net realized gain on investments.................... -- -- (0.000)
--------- --------- ---------
Total Distributions................................. (0.007) (0.037) (0.013)
--------- --------- ---------
Net asset value, end of period......................... $ 1.00 $ 1.00 $ 1.00
========= ========= =========
Total Return........................................... 0.71% 3.73% 1.30%(a)
Ratios/Supplemental Data
Net assets, end of period (000's)...................... $ 208,912 $ 159,269 $ 57,051
Ratios to average net assets:
Expenses (net of fees waived)....................... 0.99% 1.00% 1.00%(b)
Net investment income............................... 0.60% 3.38% 4.29%(b)
Management and administration fees waived........... 0.05% 0.09% 0.16%(b)
Distribution fees waived............................ 0.17% 0.13% 0.10%(b)
Transfer Agency Account fees waived................. -- -- 0.03%(b)
</table>
<table>
<caption>
Years Ended March 31, Commencement of Operations
------------------------------- November 2, 2006 through
Advantage Shares 2009 2008 March 31, 2007
- ---------------- --------- --------- --------------
<s> <c> <c> <c>
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period................... $ 1.00 $ 1.00 $ 1.00
--------- --------- ---------
Income from investment operations:
Net investment income............................... 0.007 0.036 0.018
Net realized and unrealized gain(loss) on investments (0.000) (0.000) 0.000
--------- --------- ---------
Total from investment operations.................... 0.007 0.036 0.018
Less distributions from:
Dividends from net investment income................ (0.007) (0.036) (0.018)
Net realized gain on investments.................... -- -- (0.000)
--------- --------- ---------
Total Distributions................................. (0.007) (0.036) (0.018)
--------- --------- ---------
Net asset value, end of period......................... $ 1.00 $ 1.00 $ 1.00
========= ========= =========
Total Return........................................... 0.70% 3.71% 1.77%(a)
Ratios/Supplemental Data
Net assets, end of period (000's)...................... $ 970,310 $662,379 $ 193,827
Ratios to average net assets:
Expenses (net of fees waived)....................... 0.99% 1.02% 1.02%(b)
Net investment income............................... 0.66% 3.37% 4.26%(b)
Management and administration fees waived........... 0.05% 0.09% 0.16%(b)
Distribution fees waived............................ 0.21% 0.16% 0.16%(b)
<fn>
(a) Unannualized
(a) Annualized(b)
</fn>
</table>
The accompanying notes are an integral part of these financial statements.
<page>
[THIS PAGE INTENTIONALLY LEFT BLANK.]
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
MUNICIPAL PORTFOLIO
EXPENSE CHART
FOR THE SIX MONTHS ENDED MARCH 31, 2009
(UNAUDITED)
================================================================================
As a shareholder of the Portfolio, you incur the following ongoing costs:
management fees and other Portfolio expenses. You may also incur distribution
and/or service (12b-1) fees. This example is intended to help you understand
your ongoing costs (in dollars) of investing in the Portfolio 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 October 1, 2008 through March 31, 2009.
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use information in this line, 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
line under the heading entitled "Expenses Paid During the Period" to estimate
the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Portfolio's 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 Portfolio and other funds. To do so, compare this 5%
hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), redemption fees, or exchange fees that you may incur in other
mutual funds. Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds.
<table>
<caption>
- ---------------------------------------------------------------------------------------------------------------------------
Institutional Class Shares Beginning Account Ending Account Value Expenses Paid Annualized
("Institutional Shares") Value 10/01/08 03/31/09 During the Period* Expense Ratio*
- ---------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
Actual $1,000.00 $1,008.30 $1.25 0.25%
- ---------------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,023.68 $1.26 0.25%
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
Institutional Service Class Shares Beginning Account Ending Account Value Expenses Paid Annualized
("Institutional Service Shares") Value 10/01/08 03/31/09 During the Period* Expense Ratio*
- ---------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,007.00 $2.50 0.50%
- ---------------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,022.44 $2.52 0.50%
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
Short Term Income Shares Class Shares Beginning Account Ending Account Value Expenses Paid Annualized
("Short Term Income Shares") Value 10/01/08 03/31/09 During the Period* Expense Ratio
- ---------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,005.40 $4.05 0.81%
- ---------------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,020.89 $4.08 0.81%
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
Retail Class Shares Beginning Account Ending Account Value Expenses Paid Annualized
("Retail Shares") Value 10/01/08 03/31/09 During the Period* Expense Ratio*
- ---------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,004.20 $5.25 1.05%
- ---------------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,019.70 $5.29 1.05%
- ---------------------------------------------------------------------------------------------------------------------------
</table>
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
MUNICIPAL PORTFOLIO
EXPENSE CHART (CONTINUED)
FOR THE SIX MONTHS ENDED MARCH 31, 2009
(UNAUDITED)
================================================================================
<table>
<caption>
- ---------------------------------------------------------------------------------------------------------------------------
Advantage Municipal Liquidity Fund Beginning Account Ending Account Value Expenses Paid Annualized
("Advantage Shares") Value 10/01/08 03/31/09 During the Period* Expense Ratio*
- ---------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
Actual $1,000.00 $1,004.10 $5.35 1.07%
- ---------------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,019.60 $5.39 1.07%
- ---------------------------------------------------------------------------------------------------------------------------
<fn>
* Expenses are equal to the Portfolio's annualized expense ratios multiplied by the average account value over the
period (October 1, 2008 through March 31, 2009), multiplied by 182/365 (to reflect the most recent fiscal
half-year).
</fn>
</table>
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
MUNICIPAL PORTFOLIO
SCHEDULE OF INVESTMENTS
MARCH 31, 2009
================================================================================
<table>
<caption>
Ratings (1)
------------------
Face Maturity Interest Value Standard
Amount Date Rate (Note 1) Moody's & Poor's
----- ---- ----- -------- ------- ---------
Put Bonds (2) (3.88%)
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c> <c> <c>
$ 1,420,000 Oakland County, MI EDC RB (Orchard - Maple Project) (3)
LOC Bank of America, N.A. 05/15/09 3.68% $ 1,420,000 P-1 A-1+
2,510,000 Puerto Rico Industrial, Medical & Environmental
Pollution Control Facilities Financing Authority
(Abbott Laboratories Project) - Series 1983A 03/01/10 2.00 2,510,000 P-1 A-1+
11,740,000 Three Rivers Solid Waste Authority, SC
Solid Waste Disposal Facilities COPs Series 2007A (3)
LOC US Bank, N.A. 04/01/09 3.35 11,740,000 A-1+
- ------------ ------------
15,670,000 Total Put Bonds 15,670,000
- ------------ ------------
Tax Exempt Commercial Paper (5.63%)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 3,700,000 City of San Antonio, TX Water System - Series A 06/03/09 0.60% $ 3,700,000 P-1 A-1+
1,000,000 City of St. Louis, MO Airport RN
(Lambert - St. Louis International Airport) 2004 Program
LOC JPMorgan Chase Bank, N.A. 07/28/09 0.65 1,000,000 P-1 A-1+
5,000,000 New Jersey EDA Exempt Facility RB (Keystone-1992 Project) (3)
LOC BNP Paribas 06/03/09 0.52 5,000,000 VMIG-1 A-1+
3,000,000 New Jersey EDA Exempt Facility RB (Keystone-1992 Project) (3)
LOC BNP Paribas 06/03/09 0.65 3,000,000 VMIG-1 A-1+
5,000,000 Pendleton County, KY Municipal Multi-County Lease RB
(Kentucky Association of Counties Leasing Trust Program)
LOC JPMorgan Chase Bank, N.A. 05/06/09 0.50 5,000,000 P-1 A-1+
5,000,000 Washington D.C Metropolitan Area Transit Authority - Series A
LOC Wachovia Bank, N.A. 06/03/09 0.55 5,000,000 P-1 A-1+
- ------------ ------------
22,700,000 Total Tax-Exempt Commercial Paper 22,700,000
- ------------ ------------
Tax Exempt General Obligation Notes & Bonds (15.81%)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 1,715,000 Clark County, OH BAN (4) 06/10/09 2.00% $ 1,715,806
1,500,000 Commonwealth of Puerto Rico TRAN - Series 2009A
Subseries 2009A4
LOC KBC Bank, N.A. 07/30/09 2.39 1,504,144 MIG-1 SP-1+
2,385,000 Concord Metropolitan District, Douglas County, CO
GO Refunding & Improvement Bonds - Series 2004
LOC Wells Fargo Bank, N.A. 12/01/09 2.00 2,385,000 A-1+
2,000,000 Cooperstown Central School District, Otsego County, NY BAN (4) 07/31/09 2.05 2,004,542
9,800,000 D.C. Everest Area School District, WI TRAN 09/09/09 2.20 9,817,882 A-1
5,000,000 Elkhorn Area School District, WI TRAN (4) 08/21/09 2.15 5,006,664
1,390,000 Fairfield County Airport Improvement, OH BAN (3) (4) 01/20/10 2.40 1,397,646
1,500,000 Lake Mills Area School District , WI TRAN (4) 09/04/09 2.25 1,501,562
3,685,000 Lowell Area Schools, Counties of Kent and Ionia, MI
GO Refunding Bonds - Series 2008 (4) 05/01/09 2.60 3,689,143
1,240,000 Marion County, OH (Legacy Crossing Improvement)
BAN - Series 2008 (4) 04/29/09 1.80 1,240,420
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
MUNICIPAL PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MARCH 31, 2009
================================================================================
<table>
<caption>
Ratings (1)
------------------
Face Maturity Interest Value Standard
Amount Date Rate (Note 1) Moody's & Poor's
----- ---- ----- -------- ------- ---------
Tax Exempt General Obligation Notes & Bonds (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c> <c> <c>
$ 7,200,000 Middleton-Cross Plains Area School District, WI TRAN (4) 09/18/09 2.50% $ 7,208,160
1,740,000 Plymonth Joint School District, WI TRAN (4) 09/30/09 2.40 1,745,076
1,850,000 Ripon Area School District, WI TRAN (4) 09/30/09 4.00 1,851,419
1,500,000 School District of Altoona, WI TRAN (4) 10/30/09 4.00 1,500,836
1,750,000 School District of Bloomer, WI TRAN (4) 09/29/09 2.20 1,752,539
900,000 School District of Cadott Community, WI TRAN (4) 09/30/09 2.35 900,653
1,290,000 School District of Glenwood City, WI TRAN (4) 09/23/09 2.35 1,291,210
5,400,000 School District of Grafton, WI TRAN (4) 10/14/09 2.70 5,408,450
1,000,000 School District of Green Lake, WI TRAN (4) 10/02/09 3.00 1,001,223
1,775,000 School District of New Lisbon, WI TRAN (4) 10/15/09 2.29 1,776,023
1,150,000 School District of Prentice, WI TRAN (4) 09/17/09 2.20 1,151,562
2,600,000 School District of Three Lakes, WI TRAN (4) 08/20/09 2.24 2,601,084
1,800,000 Valders Area School District, Manitowac County, WI TRAN (4) 09/25/09 2.80 1,801,695
3,500,000 Waunakee Community School, WI TRAN (4) 10/19/09 4.00 3,504,631
- ------------ ------------
63,670,000 Total Tax Exempt General Obligation Notes & Bonds 63,757,370
- ------------ ------------
Variable Rate Demand Instruments (73.60%) (5)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 2,000,000 Adams County, PA IDA IDRB (Say Plastics, Inc. Project)
- Series 2007A
LOC Wachovia Bank, N.A. 08/01/32 0.72% $ 2,000,000 P-1 A-1+
6,400,000 BB & T Municipal Trust Floater Certificates - Series 5000 DLL
LOC Rabobank Nederland 10/01/28 0.69 6,400,000 VMIG-1
475,000 Beaver County, PA IDA PCRB
(First Energy Generation Corp.) - Series 2006B
LOC Royal Bank of Scotland, N.A. 12/01/41 0.65 475,000 VMIG-1 A-1+
750,000 Broward County, FL HFA
(Sailboat Bend Artist Lofts Project) - Series 2006 (3)
LOC Citibank, N.A. 04/15/38 0.83 750,000 A-1+
1,860,000 Calcasieu Parish Public Trust Authority Gulf Opportunity Zone RB
(Delta Equine Center LLC Project) - Series 2007 (3) (4)
LOC Branch Banking And Trust Company 01/01/32 0.55 1,860,000
4,590,000 Citigroup Global Markets ROCs Trust II-R Series 11208 Sabine
Neches, TX HFC Single Family Mortgage RB Series 2006 (3)
Guaranteed by Government National Mortgage Association/ Federal National
Mortgage Association/Federal Home Loan Mortgage Corporation 12/01/39 0.66 4,590,000 VMIG-1
2,315,000 Citigroup Global Markets ROCs Trust II-R Series 12211
(State of Florida, Full Faith and Credit, State Board of Education,
Public Education Capital Outlay Bonds, 2003 Series B) 06/01/33 1.04 2,315,000 A-1+
3,720,000 City of Bardstown, KY Industrial Building RB (3) (4)
LOC US Bank, N.A. 10/01/19 2.50 3,720,000
1,735,000 City of Chandler, AZ Multi- Mode IDRB
(Red Rock Stamping Co. Project) - Series 2000 (4)
LOC Key Bank, N.A. 02/01/20 1.35 1,735,000
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
================================================================================
<table>
<caption>
Ratings (1)
------------------
Face Maturity Interest Value Standard
Amount Date Rate (Note 1) Moody's & Poor's
----- ---- ----- -------- ------- ---------
Variable Rate Demand Instruments (5) (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c> <c> <c>
$ 400,000 City of Cohasset, MN RB
(Minnesota Power & Light Company Project) - Series 1997A
LOC LaSalle National Bank, N.A. 06/01/20 0.55% $ 400,000 A-1+
1,285,000 City of Demopolis, AL Industrial Development Board Gulf
Opportunity Zone Bonds (Jackson Paper Company, Inc. Project)
LOC Compass Bank 08/01/22 1.15 1,285,000 P-1 A-1
1,500,000 City of Galesburg, IL RB
(Knox College Project) - Series 1999
LOC LaSalle National Bank, N.A. 07/01/24 0.50 1,500,000 A-1+
5,135,000 City of Milwaukee, WI IDRB
(Midwest Express Airlines, Inc. Project) - Series 1998 (3) (4)
LOC US Bank, N.A. 08/01/30 1.12 5,135,000
9,000,000 City of New York GO Fiscal 1995 F-3
LOC JPMorgan Chase Bank, N.A. 02/15/13 0.38 9,000,000 VMIG-1 A-1+
3,000,000 City of New York GO Fiscal 2006 Series I-8
LOC Bank of America, N.A. 04/01/36 0.35 3,000,000 VMIG-1 A-1+
8,235,000 City of New York, GO Fiscal 2006 Series H Subseries H-2
LOC Dexia CLF 01/01/36 0.33 8,235,000 VMIG-1 A-1+
1,000,000 Collier County, FL HFA Health Facility RB
(The Moorings, Incorporated Project) - Series 2000
LOC Wachovia Bank, N.A. 12/01/24 0.50 1,000,000 A-1+
1,000,000 Collier County, FL IDA RB
(Allete, Inc. Project) - Series 2006 (3)
LOC Wells Fargo Bank, N.A. 10/01/25 0.57 1,000,000 A-1+
3,690,000 Colorado HFA Multifamily Housing RRB
(Coventry Village Project) - 1996 Series B
Collaterized by Federal National Mortgage Association 10/15/16 0.41 3,690,000 A-1+
2,475,000 Colorado HFA Multifamily Housing RRB
(Diamondhead Project) - 1996 Series I
Collaterized by Federal National Mortgage Association 10/15/16 0.41 2,475,000 A-1+
3,000,000 Colorado HFA Solid Waste Disposal RB
(Waste Management, Inc. Project) - Series 2003 (3)
LOC Wachovia Bank, N.A. 08/01/38 0.80 3,000,000 A-1+
2,000,000 Connecticut Development Authority RB
(Pierce Memorial Baptist Home, Inc. Project -1999 Refunding Series)
LOC La Salle National Bank, N.A. 10/01/28 0.35 2,000,000 A-1+
2,000,000 County of Henry, OH Improvement RB, Series 2006
(Henry County Hospital, Inc. Project)
LOC Key Bank, N.A. 03/01/31 0.85 2,000,000 P-1 A-1
3,575,000 County of Lucas, OH MHRB
(The Lakewoods Project) - Series 1998 (4)
LOC Key Bank, N.A. 04/01/37 1.25 3,575,000
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
MUNICIPAL PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MARCH 31, 2009
================================================================================
<table>
<caption>
Ratings (1)
------------------
Face Maturity Interest Value Standard
Amount Date Rate (Note 1) Moody's & Poor's
----- ---- ----- -------- ------- ---------
Variable Rate Demand Instruments (5) (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c> <c> <c>
$ 1,645,000 County of Prince William, VA IDA IDRB
(Mediatech, Inc. Project) - Series 2007 (3)
LOC Branch Banking And Trust Company 11/01/32 0.70% $ 1,645,000 VMIG-1
5,000,000 Deutsche Bank SPEARs/LIFERs Trust, Series DBE-150 Relating
to the IDA of the City of Chandler, AZ IDRB, Series 2007
(Intel Corporation Project) (3) (4)
LOC Deutsche Bank, A.G. 12/01/37 0.55 5,000,000
1,900,000 Development Authority of Carroll County, GA RB
(Royal Metal Products, Inc Project) - Series 2007 (3)
LOC Branch Bank & Trust Company 01/01/27 0.70 1,900,000 VMIG-1
11,030,000 Development Authority of Columbus, GA MHRB
(Avalon Apartments Projects) - Series 2008 (3)
Guaranteed by Federal National Mortgage Association 10/15/40 0.68 11,030,000 A-1+
1,935,000 Development Authority of Dekalb County, GA IDRB
(Qualex Project) - Series 1997 (3)
LOC Comerica Bank 04/01/12 0.93 1,935,000 A-1
3,600,000 Douglas County, NE IDRB
(Phillips Manufacturing Project) - Series 2002 (3)
LOC Wells Fargo Bank, N.A. 12/01/18 0.64 3,600,000 A-1+
2,100,000 Duval County HFA Mutlifamily Housing Mortgage RB
(Camri Green Apartments) - Series 2003 (3)
Guaranteed by Federal National Mortgage Association 11/15/36 0.62 2,100,000 A-1+
10,000,000 Federal Home Loan Mortgage Corporation Class A
Multi-family Certificates, Series M015 (3)
Guaranteed by Federal Home Loan Mortgage Corporation 05/15/46 0.59 10,000,000 A-1+
1,750,000 Florida HFA MHRB
(Springs Colony Project) - Series 1985 FF
Collaterized by Federal National Mortgage Association 09/15/26 0.40 1,750,000 A-1+
1,000,000 Florida Housing Finance Corporation Housing RB
(Heritage Pointe Apartments) - 1999 Series I-1 (3)
Guaranteed by Federal National Mortgage Association 09/15/32 0.63 1,000,000 A-1+
1,280,000 Florida Housing Finance Corporation Multifamily Mortgage Refunding RB
(Lighthouse Bay Apartments) 2002 Series N-1
Guaranteed by Federal Home Loan Mortgage Corporation 11/01/32 0.55 1,280,000 A-1+
1,000,000 Fulton County, KY Industrial Building RB
(The Burke-Parsons-Bowlby Corporation Project) - Series 2006 (3)
LOC Branch Banking And Trust Company 07/01/26 0.95 1,000,000 P-1 A-1+
7,400,000 Housing Authority of Cobb County, GA MHRB
(Highland Ridge Apartments Project) - Series 2008
Guaranteed by Federal Home Loan Mortgage Corporation 07/01/41 0.53 7,400,000 A-1+
2,500,000 Housing Finance Authority of Broward County, FL MHRB
(Palms of Deerfield Beach Apartments) - Series 2006 (3)
LOC Citibank, N.A. 08/15/38 0.70 2,500,000 A-1
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
================================================================================
<table>
<caption>
Ratings (1)
------------------
Face Maturity Interest Value Standard
Amount Date Rate (Note 1) Moody's & Poor's
----- ---- ----- -------- ------- ---------
Variable Rate Demand Instruments (5) (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c> <c> <c>
$ 4,250,000 Illinois Development Finance Authority IDRB
(Trim-Rite Food Corporation Project) - Series 2000 (3)
LOC Fifth Third Bank 12/01/25 4.30% $ 4,250,000 A-1
1,500,000 Illinois Development Finance Authority IDRB
(U.S. Acrylic, Inc. Project) - Series 2003
LOC Fifth Third Bank 08/01/33 4.30 1,500,000 P-1 A-1+
3,000,000 Illinois Development Finance Authority MHRB
(Butterfield Creek Associates Project) - Series 1999 (3)
LOC LaSalle National Bank, N.A. 04/01/39 0.94 3,000,000 A-1
2,435,000 Illinois Finance Authority IDRB
(Pollmann North America, Inc. Project) - Series 2005 (3)
LOC Fifth Third Bank 12/01/25 4.30 2,435,000 P-1 A-1
2,575,000 Illinois Finance Authority RB
(Riverside Health System) - Series 2004
LOC JPMorgan Chase Bank, N.A. 11/15/29 0.47 2,575,000 VMIG-1 A-1+
3,700,000 Iowa Higher Education Loan Authority Private College Facility RB
(University of Dubuque Project) - Series 2007
LOC Northern Trust 04/01/35 0.40 3,700,000 A-1+
1,350,000 Iredell County, NC Industrial Facilities and PCFA
(Riley Technologies Project) - Series 2006 (3) (4)
LOC Branch Banking And Trust Company 11/01/31 0.95 1,350,000
4,500,000 Jackson County, MI EDC
(Thrifty Leoni Inc Project)
LOC Fifth Third Bank 12/01/14 2.15 4,500,000 VMIG-1 A-1+
1,355,000 Jeffersontown, KY (Kentucky League of Cities
Funding Trust Lease Program RB) - Series 2000
LOC US Bank, N.A. 03/01/30 0.55 1,355,000 VMIG-1
4,730,000 JPMorgan Securities, Inc. Puttable Tax-Exempt Receipts Series 2054
(Relating to the City of Chicago MHRB
(Drexel Preservation Project))- Series 2007 (3)
Guaranteed by Federal Housing Authority/Government National
Mortgage Association 12/20/39 0.79 4,730,000 VMIG-1
2,400,000 La Porte County, IN EDRB (Universal Forest Products Indiana
Limited Partnership Project) - Series 2000 (3)
LOC Bank of America, N.A. 11/01/20 0.72 2,400,000 P-1 A-1+
600,000 Loudoun County, VA IDA RB
(Howard Hughes Medical Institute Issue) - Series 2003C 02/15/38 0.35 600,000 VMIG-1 A-1+
5,000,000 Louisiana HFA Qualified Gulf Opportunity Zone Bonds
(Canterbury House Apartments - Sherwood) - Series 2007
LOC Charter One Bank 09/15/40 3.50 5,000,000 VMIG-1
406,000 Marion County, FL IDA MHRB
(Chambrel at Pinecastle Project) - Series 2002 (3)
Guaranteed by Federal National Mortgage Association 11/15/32 0.55 406,000 A-1+
1,180,000 Miami-Dade County IDA IDRB
(Airbus Service Company, Inc. Project) - Series 1998A (3)
LOC Calyon 04/01/30 0.83 1,180,000 A-1+
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
MUNICIPAL PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MARCH 31, 2009
================================================================================
<table>
<caption>
Ratings (1)
------------------
Face Maturity Interest Value Standard
Amount Date Rate (Note 1) Moody's & Poor's
----- ---- ----- -------- ------- ---------
Variable Rate Demand Instruments (5) (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c> <c> <c>
$ 4,170,000 Michigan State Strategic Fund Limited Obligation RB
(DawnBreaking, LLC Project) - Series 1998 (3) (4)
LOC Fifth Third Bank 05/01/18 4.30% $ 4,170,000
1,500,000 Michigan State Strategic Fund Limited Obligation RB
(The Envelope Printery Inc. Project) - Series 2007 (3)
LOC Fifth Third Bank 03/01/27 4.65 1,500,000 P-1 A-1+
1,900,000 Michigan State Strategic Fund Limited Obligation RB
(Grand River Infrastructure, Inc. Project) - Series 2006 (3)
LOC Fifth Third Bank 06/01/14 4.30 1,900,000 P-1 A-1+
920,000 Michigan State Strategic Fund Limited Obligation RB
(Ilmor Engineering, Inc. Project) - Series 2006 (3)
LOC Fifth Third Bank 03/01/36 4.30 920,000 P-1 A-1+
2,275,000 Michigan State Strategic Fund Limited Obligation RB
(Nuvar Properties LLC Project) - Series 2007 (3)
LOC Fifth Third Bank 04/01/37 4.30 2,275,000 P-1 A-1+
1,550,000 Michigan State Strategic Fund Limited Obligation RB
(Sintel, Inc. Project) - Series 2005 (3)
LOC Fifth Third Bank 10/01/30 4.30 1,550,000 P-1 A-1+
2,000,000 Mississippi Business Finance Corporation IDRB
(EPCO CarbonDioxide Products, Inc. Project) - Series 2002 (3)
LOC Comerica Bank 03/01/17 0.93 2,000,000 A-1
5,100,000 Mississippi Business Finance Corporation RB
(Missippi Power Company Project)- Series 1999 (3) 12/01/27 0.55 5,100,000 P-1 A-1+
520,000 Mississippi Home Corporation Single Family Mortgage RB
Wachovia Merlots Trust Series 2000YYY (3)
Guaranteed by Government National Mortgage Association 12/01/31 0.65 520,000 VMIG-1
2,000,000 Nassau County IDA Civic Facility Refunding and Improvement RB
(1999 Cold Spring Harbor Laboratory Project) 01/01/34 0.25 2,000,000 A-1+
6,000,000 Nephi City, UT Multi-Mode IDRB
(Fibertek Insulation West Project), Series 2008 (3)
LOC Key Bank, N.A. 04/01/28 0.85 6,000,000 VMIG-1
3,500,000 Nevada Housing Division MHRB (Golden Apartment) - Series 2007 (3)
LOC Federal Home Loan Mortgage Corporation 10/01/37 1.00 3,500,000 A-1+
5,545,000 Nevada Housing Division Multi-Unit Housing RB
(Help Owens 2 Apartments) - Series 2007 (3)
LOC Citibank, N.A. 10/01/42 0.65 5,545,000 A-1+
2,110,000 Nevada Housing Division Multi-Unit Housing RB
(Maryland Villas Project) - Series 1997A (3)
LOC Federal Home Loan Bank 10/01/30 0.70 2,110,000 A-1+
2,000,000 New Jersey EDA RB
(Stolthaven Perth Amboy Inc. Project) - Series 1998A
LOC Citibank, N.A. 01/15/18 0.30 2,000,000 P-1 A-1+
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
================================================================================
<table>
<caption>
Ratings (1)
------------------
Face Maturity Interest Value Standard
Amount Date Rate (Note 1) Moody's & Poor's
----- ---- ----- -------- ------- ---------
Variable Rate Demand Instruments (5) (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c> <c> <c>
$ 2,000,000 New Jersey Health Care Facilites Financing Authority RB
(AHS Hospital Corp. Issue) - Series 2008B
LOC Bank of America, N.A. 07/01/36 0.40% $ 2,000,000 VMIG-1 A-1+
1,500,000 Ohio Air Quality Development Authority, State of Ohio PCRB
(FirstEnergy Generation Corp. Project) - Series 2006A
LOC Key Bank, N.A. 12/01/23 0.65 1,500,000 VMIG-1 A-1
430,000 Ohio County, KY Industrial Building RB
(Ritatsu Manufacturing, Inc. Project) - Series 2005 (3)
LOC Fifth Third Bank 10/01/20 4.30 430,000 P-1 A-1+
4,600,000 Ohio Water Development Authority, State of Ohio PCRB
(FirstEnergy Nuclear Generation Corp. Project) - Series 2008A (3)
LOC Bank of Nova Scotia 11/01/33 0.65 4,600,000 A-1+
500,000 Orange County, FL Educational Facilties Authority RB
(Rollins College Project) - Series 2001
LOC Bank of America, N.A. 05/01/31 0.35 500,000 VMIG-1
1,000,000 Orange County, FL HFA MHRB
(Post Fountains at Lee Vista Project)- Series 1997E
Guaranteed by Federal National Mortgage Association 06/01/25 0.50 1,000,000 A-1+
1,200,000 Orange County, FL HFA MHRB
(Windsor Pines Project) - Series 2000E (3)
LOC Bank of America, N.A. 03/01/35 0.83 1,200,000 VMIG-1
250,000 Orlando, FL Utilities Commission Water and Electric RB
- Series 2002B 10/01/22 0.50 250,000 VMIG-1 A-1+
2,500,000 Pennsylvania EDFA EDRB 2005 Series B-2
(Joseph R & Nancy L DelSignore Project) (3)
LOC PNC Bank, N.A. 08/01/30 0.74 2,500,000 P-1 A-1+
1,200,000 Pennsylvania EDFA EDRB 2005 Series B-3
(North America Communications, Inc. Project) (3)
LOC PNC Bank, N.A. 08/01/12 0.74 1,200,000 P-1 A-1+
2,000,000 Pennsylvania EDFA (National Railroad Passenger Corporation
Amtrak Project) - Series B of 2001 (3)
LOC JPMorgan Chase Bank, N.A. 11/01/41 0.55 2,000,000 VMIG-1 A-1+
2,000,000 Port Authority of New York and New Jersey Versatile
Structure Obligation- Series 3 06/01/20 0.15 2,000,000 VMIG-1 A-1+
1,975,000 Port Bellingham, WA IDC Environmental Facilities Industrial RB
(BP West Coast Products LLC Project) - Series 2003 (3) 03/01/38 0.40 1,975,000 VMIG-1 A-1+
3,500,000 Riesel, TX IDC Solid Waste Disposal RB
(Sandy Creek Energy Associates, LP Project) - Series 2007 (3)
LOC Credit Suisse 10/01/42 0.65 3,500,000 A-1+
1,600,000 Rockingham County, NC Industrial Facilites and PCFA IDRB
(Eden Custom Processing, LLC Project) Series 2004 (3) (4)
LOC Branch Banking And Trust Company 01/01/17 0.70 1,600,000
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
MUNICIPAL PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MARCH 31, 2009
================================================================================
<table>
<caption>
Ratings (1)
------------------
Face Maturity Interest Value Standard
Amount Date Rate (Note 1) Moody's & Poor's
----- ---- ----- -------- ------- ---------
Variable Rate Demand Instruments (5) (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c> <c> <c>
$ 1,650,000 Rockingham County , NC Industrial Facilites and PCFA IDRB
(Whiteridge Plastics, LLC Project) - Series 2003 (3) (4)
LOC Branch Banking And Trust Company 03/01/15 0.70% $ 1,650,000
840,000 Sampson County, NC Industrial Facilities and PCFA IRB
(DuBose Strapping, Inc. Project) Series 2001 (3) (4)
LOC JPMorgan Chase Bank, N.A. 01/01/12 0.70 840,000
1,760,000 Sampson County, NC Industrial Facilities and PCFA IRB
(DuBose Strapping, Inc. Project) Series 2003 (3) (4)
LOC JPMorgan Chase Bank, N.A. 01/01/14 0.70 1,760,000
6,000,000 South Carolina Jobs- EDA EDRB
(Conco Medical Products Corp. Project) - Series 1990 (3) (4)
LOC Bayerische HypoVereins Bank AG 09/01/10 0.72 6,000,000
4,015,000 South Carolina Jobs EDA EDRB
(DCS Diversified Coating Systems, Inc Project) - Series 2002 (3)
LOC Branch Banking And Trust Company 04/01/17 0.70 4,015,000 VMIG-1
1,000,000 State of Connecticut HEFA RB
(Yale-New Haven Hospital Issue) - Series K-1
LOC JPMorgan Chase Bank, N.A. 07/01/25 0.28 1,000,000 VMIG-1 A-1+
2,000,000 State of Connecticut HEFA RB
(Yale-New Haven Hospital Issue) - Series L-1 07/01/36 0.28 2,000,000 VMIG-1 A-1+
500,000 State of Connecticut HEFA RB
(Greater Hartford YMCA Issue) - Series B
LOC Bank of America, N.A. 07/01/38 0.25 500,000 VMIG-1
1,000,000 State of Connecticut HEFA RB
(Yale University Issue) - Series U-1 07/01/33 0.20 1,000,000 VMIG-1 A-1+
1,400,000 St. Lucie County, FL IDRB
(Freedom Plastics, Inc. - Florida Project) - Series 2000 (3)
LOC Bank of Ameica, N.A. 11/01/20 0.80 1,400,000 A-1+
800,000 Suffolk, VA Redevelopment and Housing Authority MHRB
(Oak Springs Apartments, LLC Project) - Series 1999
Guaranteed by Federal Home Loan Mortgage Corporation 12/01/19 0.55 800,000 VMIG-1
5,000,000 Timnath Development Authority, RB
(In the Town of Timnath, Colorado) - Series 2007
LOC Compass Bank 12/01/29 0.54 5,000,000 A-1
1,150,000 Town of Caledonia, WI IDRB (Caledonia Properties LLC/
Quick Cable Corpoation Project) - Series 1998 (3)
LOC Fifth Third Bank 12/01/18 4.30 1,150,000 P-1 A-1+
370,000 Town of Frisco City, AL Industrial Development Board IDRB (Standard
Furniture Manufacturing Company, Inc. Project) - Series 1999 (3)
LOC Royal Bank of Canada 11/01/09 0.79 370,000 A-1
1,165,000 Tulsa, OK Industrial Authority IDRB, Series 1998
(Indian Health Care Resource Center of Tulsa, Inc. Project)
LOC JPMorgan Chase Bank, N.A. 06/01/14 1.00 1,165,000 VMIG-1 A-1+
265,000 University of North Carolina at Chapel Hill RB - Series 2001 B 12/01/25 0.20 265,000 VMIG-1 A-1+
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
================================================================================
<table>
<caption>
Ratings (1)
------------------
Face Maturity Interest Value Standard
Amount Date Rate (Note 1) Moody's & Poor's
----- ---- ----- -------- ------- ---------
Variable Rate Demand Instruments (5) (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c> <c> <c>
$ 4,800,000 University of North Carolina at Chapel Hill Foundation, Inc.
COPs - Series 1989
LOC Bank of America, N.A. 10/01/09 0.40% $ 4,800,000 VMIG-1
1,400,000 Upper Illinois River Valley Development Authority IDRB
(Advanced Flexible Composites, Inc. Project) Series 2003-A(3) (4)
LOC LaSalle National Bank, N.A. 06/01/25 3.00 1,400,000
4,055,000 Upper Illinois River Valley Development Authority IDRB
(Georgi Holdings, LLC Project) Series 2002(3) (4)
LOC U.S. Bank, N.A. 12/01/37 1.12 4,055,000
1,000,000 Vermont EDA IDRB (Smugglers' Notch Issue Series A) (3)
LOC Key Bank, N.A. 09/01/15 1.15 1,000,000 P-1 A-1
1,200,000 Village of Orland Park, IL IDRB
(Panduit Corporation Project) - Series 1996 (3)
LOC Fifth Third Bank 04/01/31 2.95 1,200,000 A-1+
1,640,000 Virginia Small Business Financing Authority IDRB
(ClarkeCo, LLC Project) - Series 2000 (3)
LOC Branch Banking And Trust Company 07/01/25 0.70 1,640,000 VMIG-1
2,450,000 Volusia County, FL IDA IDRB (Intellitech Project) - Series 2007A (3)
LOC LaSalle National Bank, N.A. 10/01/37 0.80 2,450,000 A-1
4,500,000 Volusia County, FL HFA MHRB
(Cape Morris Cove Apartments) - 2007 Series A (3)
LOC Federal Home Loan Bank 10/15/42 0.63 4,500,000 VMIG-1
2,630,000 Washington State EDFA EDRB
(Summer Building LLC Project) - Series 2005F (3)
LOC Key Bank, N.A. 12/01/30 1.25 2,630,000 P-1 A-1
2,800,000 Washington State HFC MHRB -
(The Seasons Apartment Project) Series 2006 (3)
Collateralized by Federal National Mortgage Association 12/15/40 0.60 2,800,000 VMIG-1
715,000 Washington State HFC Single-Family Program Bonds 2006 Series 2A (3)
Guaranteed by Government National Mortgage Association/
Federal National Mortgage Association/
Federal National Loan Mortgage Corporation 12/01/09 0.79 715,000 VMIG-1
2,000,000 West Des Moines, IA RB
(Woodgrain Millwork, Inc Project) - Series 1995 (3)
LOC Wells Fargo Bank, N.A. 04/01/10 0.72 2,000,000 P-1 A-1+
5,000,000 West Virginia EDA Solid Waste Disposal Facilites RB (Appalachian
Power Company- Mountaineer Project) - Series 2008B (3)
LOC JPMorgan Chase Bank, N.A. 02/01/36 0.83 5,000,000 VMIG-1 A-1+
3,010,000 Will-Kankakee, IL Regional Development Authority IDRB
(Atlas Putty Products Co. Project) Series 2006A (3)
LOC Fifth Third Bank 08/01/36 4.30 3,010,000 P-1 A-1+
1,200,000 Wisconsin HEFA RB (Indian Community
School of Milwaukee, Inc. Project) - Series 2006
LOC JPMorgan Chase Bank, N.A. 12/01/36 0.50 1,200,000 VMIG-1
- ------------ ------------
296,921,000 Total Variable Rate Demand Instruments 296,921,000
- ------------ ------------
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
MUNICIPAL PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MARCH 31, 2009
================================================================================
<table>
<caption>
Ratings (1)
------------------
Face Maturity Interest Value Standard
Amount Date Rate (Note 1) Moody's & Poor's
----- ---- ----- -------- ------- ---------
Variable Rate Demand Instruments - Private Placements (2.09%) (5)
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c> <c> <c>
$ 2,634,000 Anaheim, CA MHRB
(West Anaheim Royale Project) - Series 1985C
LOC Union Bank of California 12/01/15 1.95% $ 2,634,000 P-1 A-1
1,799,000 Anaheim, CA (West Anaheim Convalescent Home)
LOC Union Bank of California 12/01/15 1.95 1,799,000 P-1 A-1
2,613,000 Culver City, CA RDRB (Culver City Royale Project) - Series 1985
LOC Union Bank of California 12/01/15 1.95 2,613,000 P-1 A-1
1,370,400 West Jordan, UT IDRB
(The Lynn Partnership Nursing Home Project) - Series 1985
LOC Bank of America, N.A. 07/01/15 2.11 1,370,400 P-1 A-1+
- ------------ ------------
8,416,400 Variable Rate Demand Instruments - Private Placements 8,416,400
- ------------ ------------
Total Investments (101.01%) (Cost $407,464,770+) 407,464,770
Liabilities in excess of cash and other assets (-1.01%) (4,061,007)
------------
Net Assets (100.00%) $403,403,763
============
<fn>
+ Aggregate cost for federal income tax purposes is identical. All securities are valued at amortized
cost and as a result, there is no unrealized appreciation and depreciation.
</fn>
</table>
FOOTNOTES:
1) Unless the securities are assigned their own ratings, the ratings are those
of the bank whose letter of credit guarantees the issue or the insurance
company who insures the issue. All letters of credit and insurance are
irrevocable and direct pay covering both principal and interest. Ratings
are unaudited.
In addition, certain issuers may have either a line of credit, a liquidity
facility, a standby purchase agreement or some other financing mechanism to
ensure the remarketing of the securities. This is not a guarantee and does
not serve to insure or collateralize the issue.
2) The maturity date indicated for the put bonds is the next put date.
3) Security subject to alternative minimum tax.
4) Securities that are not rated which the Fund's adviser has determined to be
of comparable quality to those rated securities in which the fund invests.
5) Securities payable on demand at par including accrued interest (usually
with seven days notice) and where indicated are unconditionally secured as
to principal and interest by a bank letter of credit. The interest rates
are adjustable and are based on bank prime rates or other interest rate
adjustment indices. The rate shown is the rate in effect at the date of
this statement.
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
================================================================================
<table>
KEY:
<s> <c> <c> <c> <c> <c>
BAN = Bond Anticipation Note IRB = Industrial Revenue Bond
COPs = Certificates of Participation LIFERs = Long Inverse Floating Exempt Receipts
EDA = Economic Development Authority LOC = Letter of Credit
EDC = Economic Development Corporation MHRB = Multi-Family Housing Revenue Bond
EDFA = Economic Development Finance Authority PCFA = Pollution Control Finance Authority
EDRB = Economic Development Revenue Bond PCRB = Pollution Control Revenue Bond
GO = General Obligation RDRB = Residential Development Revenue Bond
HEFA = Health and Education Facilities Authority RB = Revenue Bond
HFA = Housing Finance Authority RN = Revenue Note
HFC = Housing Finance Commission ROCs = Reset Option Certificates
IDA = Industrial Development Authority RRB = Resource Recover Bond
IDC = Industrial Development Corporation SPEARs = Short Puttable Exempt Receipts
IDRB = Industrial Development Revenue Bond TRAN = Tax and Revenue Anticipation Note
</table>
<table>
<caption>
BREAKDOWN OF PORTFOLIO HOLDINGS BY MATURITY (unaudited):
- ------------------------------- --------------------------- ----------------------------
Securities Maturing in Value % of Portfolio
- ------------------------------- --------------------------- ----------------------------
<s> <c> <c>
Less than 30 Days $ 318,317,820 78.12%
31 through 60 Days 10,109,143 2.48
61 through 90 Days 18,415,806 4.52
91 through 120 Days 1,000,000 0.24
121 through 180 Days 33,888,505 8.32
Over 180 Days 25,733,496 6.32
- ------------------------------- --------------------------- ----------------------------
Total $407,464,770 100.00%
- ------------------------------- --------------------------- ----------------------------
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
MUNICIPAL PORTFOLIO
BREAKDOWN OF PORTFOLIO HOLDINGS BY STATE (UNAUDITED)
MARCH 31, 2009
================================================================================
<table>
<caption>
- ------------------------- ----------------------------- ------------------------------
States Value % of Portfolio
- ------------------------- ----------------------------- ------------------------------
<s> <c> <c>
Alabama $ 1,655,000 0.41%
Arizona 6,735,000 1.65
California 7,046,000 1.73
Colorado 16,550,000 4.06
Connecticut 6,500,000 1.60
District of Columbia 5,000,000 1.23
Florida 26,581,000 6.52
Georgia 22,265,000 5.46
Illinois 29,655,000 7.28
Indiana 2,400,000 0.59
Iowa 5,700,000 1.40
Kentucky 11,505,000 2.82
Louisiana 6,860,000 1.68
Michigan 21,924,143 5.38
Minnesota 400,000 0.10
Mississippi 7,620,000 1.87
Missouri 1,000,000 0.25
Nebraska 3,600,000 0.88
Nevada 11,155,000 2.74
New Jersey 14,000,000 3.44
New York 24,239,542 5.95
North Carolina 12,265,000 3.01
Ohio 16,028,871 3.93
Oklahoma 1,165,000 0.29
Pennsylvania 8,175,000 2.01
Puerto Rico 4,014,144 0.98
South Carolina 21,755,000 5.34
Texas 11,790,000 2.89
Utah 7,370,400 1.81
Vermont 1,000,000 0.25
Virginia 4,685,000 1.15
Washington 8,120,000 1.99
West Virginia 5,000,000 1.23
Wisconsin 57,305,670 14.06
Other Territories 16,400,000 4.02
- ------------------------- ----------------------------- ------------------------------
Total $ 407,464,770 100.00%
- ------------------------- ----------------------------- ------------------------------
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
MUNICIPAL PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2009
================================================================================
<table>
<caption>
ASSETS
<s> <c>
Investments in securities, at amortized cost (Note 1)............................. $ 407,464,770
Accrued interest receivable....................................................... 1,491,326
Prepaid expenses.................................................................. 53,627
Other assets...................................................................... 2,424
------------------
Total assets............................................................... 409,012,147
------------------
LIABILITIES
Payable to affiliates (Note 2).................................................... 222,102
Due to Custodian.................................................................. 5,278,091
Accrued expenses.................................................................. 70,886
Dividends payable................................................................. 37,305
------------------
Total liabilities.......................................................... 5,608,384
------------------
Net assets........................................................................ $ 403,403,763
==================
SOURCE OF NET ASSETS
Net capital paid in on shares of capital stock (Note 5)........................... $ 403,310,783
Accumulated net realized gains.................................................... 16,079
Accumulated undistributed net investment income .................................. 76,901
------------------
Net assets........................................................................ $ 403,403,763
==================
</table>
<table>
<caption>
Net asset value, per share (Note 5):
Class Name Net Assets Shares Outstanding Net Asset Value
<s> <c> <c> <c>
Institutional Shares........................ $4,061,039 4,062,309 $1.00
Institutional Service Shares................ $248,488 248,566 $1.00
Short Term Income Shares.................... $60,907,131 60,926,172 $1.00
Retail Shares............................... $151,744,914 151,792,353 $1.00
Advantage Shares............................ $186,442,191 186,500,477 $1.00
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
MUNICIPAL PORTFOLIO
STATEMENT OF OPERATIONS
YEAR ENDED MARCH 31, 2009
================================================================================
INVESTMENT INCOME
<table>
<caption>
Income:
<s> <c>
Interest........................................................................ $ 9,631,352
------------------
Expenses: (Note 2)
Investment management fee....................................................... 533,987
Administration fee.............................................................. 222,495
Shareholder servicing fee (Institutional Service Shares)........................ 508
Shareholder servicing fee (Short Term Income Shares)............................ 195,210
Shareholder servicing fee (Retail Shares)....................................... 412,740
Shareholder servicing fee (Advantage Shares).................................... 494,094
Distribution fee (Short Term Income Shares)..................................... 351,378
Distribution fee (Retail Shares)................................................ 1,073,125
Distribution fee (Advantage Shares)............................................. 1,482,283
Custodian expenses.............................................................. 25,438
Shareholder servicing and related shareholder expenses+......................... 165,727
Legal, compliance and filing fees............................................... 202,671
Audit and accounting............................................................ 181,353
Trustees' fees and expenses..................................................... 42,987
Other........................................................................... 102,212
------------------
Total expenses.................................................................. 5,486,208
Less: Fees waived (Note 2)................................................ (1,110,911)
Expense paid indirectly (Note 4).................................... (1,360)
------------------
Net expenses.................................................................... 4,373,937
------------------
Net investment income........................................................... 5,257,415
REALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments............................................. 26,580
------------------
Increase in net assets from operations.............................................. $ 5,283,995
==================
<fn>
+ Includes class specific transfer agency expenses of $794, $41, $39,042, and $82,547 for the Institutional,
Institutional Service, Short Term Income, and Retail Shares, respectively.
</fn>
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
MUNICIPAL PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED MARCH 31, 2009 AND 2008
================================================================================
<table>
<caption>
2009 2008
---- ----
INCREASE (DECREASE) IN NET ASSETS
<s> <c> <c>
Operations:
Net investment income......................................... $ 5,257,415 $ 10,839,398
Net realized gain on investments.............................. 26,580 34,502
--------------- ----------------
Increase in net assets from operations............................ 5,283,995 10,873,900
Dividends to shareholders from net investment income *:
Institutional Shares ......................................... (76,735) (47,801)
Institutional Service Shares ................................. (3,430) (377)
Short Term Income Shares ..................................... (1,100,222) (3,142,101)
Retail Shares................................................. (1,869,045) (3,506,790)
Advantage Shares.............................................. (2,207,983) (4,142,329)
--------------- ----------------
Total dividends to shareholders.......................... (5,257,415) (10,839,398)
--------------- ----------------
Capital share transactions (Note 5):
Institutional Shares.......................................... 204,579 3,847,231
Institutional Service Shares.................................. 138,155 100,321
Short Term Income Shares...................................... (32,321,570) (5,174,033)
Retail Shares................................................. (19,177,448) 73,422,037
Advantage Shares.............................................. (35,437,062) 85,387,834
Net asset value of shares issued in connection with merger of Cortland
Municipal into Retail Shares.................................. -0- 6,256,528
Net asset value of shares issued in connection with merger of Daily Tax
Free Class A into Retail Shares............................... -0- 28,913,828
Net asset value of shares issued in connection with merger of Daily Tax
Free Class B into Short Term Income Shares.................... -0- 40,438,840
Net asset value of shares issued in connection with merger of Daily Tax
Free Thornburg Shares into Retail Shares...................... -0- 20,445,665
--------------- ----------------
Total capital share transactions........................ (86,593,346) 253,638,251
--------------- ----------------
Total increase (decrease)..................................... (86,566,766) 253,672,753
Net assets:
Beginning of year............................................. 489,970,529 236,297,776
--------------- ----------------
End of year.................................................. $ 403,403,763 $ 489,970,529
=============== ================
Undistributed net investment income............................... $ 76,901 $ 55,255
=============== ================
<fn>
* Designated as exempt-interest dividends for income tax purposes.
</fn>
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
MUNICIPAL PORTFOLIO
FINANCIAL HIGHLIGHTS
================================================================================
<table>
<caption>
Years Ended March 31, Commencement of Operations
------------------------------ October 30, 2006 through
Institutional shares 2009 2008 March 31, 2007
-------------------- --------- --------- --------------
<s> <c> <c> <c>
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period................... $ 1.00 $ 1.00 $ 1.00
--------- --------- ---------
Income from investment operations:
Net investment income.............................. 0.019 0.033 0.006
Net realized and unrealized gain(loss) on investments 0.000 0.000 --
--------- --------- ---------
Total from investment operations................... 0.019 0.033 0.006
--------- --------- ---------
Less distributions from:
Dividends from net investment income............... (0.019) (0.033) (0.006)
Net realized gain on investments................... -- (0.000) --
--------- --------- ---------
Total Distributions................................ (0.019) (0.033) (0.006)
--------- --------- ---------
Net asset value, end of period......................... $ 1.00 $ 1.00 $ 1.00
========= ========= =========
Total Return........................................... 1.96% 3.35% 0.60%(a)
Ratios/Supplemental Data
Net assets, end of period (000's)...................... $ 4,061 $ 3,856 $ 10
Ratios to average net assets:
Expenses (net of fees waived) (b).................. 0.23% 0.20% 0.20%(c)
Net investment income.............................. 1.93% 2.87% 3.44%(c)
Management and administration fees waived.......... 0.10% 0.13% 0.16%(c)
Expenses paid indirectly........................... 0.00% 0.00% --
</table>
<table>
<caption>
Years Ended March 31, Commencement of Operations
-------------------------------- March 19, 2007 through
Institutional Service shares 2009 2008 March 31, 2007
- ---------------------------- --------- --------- --------------
<s> <c> <c> <c>
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period................... $ 1.00 $ 1.00 $ 1.00
--------- --------- ---------
Income from investment operations:
Net investment income.............................. 0.017 0.030 0.001
Net realized and unrealized gain(loss) on investments 0.000 0.000 --
--------- --------- ---------
Total from investment operations................... 0.017 0.030 0.001
--------- --------- ---------
Less distributions from:
Dividends from net investment income............... (0.017) (0.030) (0.001)
Net realized gain on investments................... -- (0.000) --
--------- --------- ---------
Total Distributions................................ (0.017) (0.030) (0.001)
--------- --------- ---------
Net asset value, end of period......................... $ 1.00 $ 1.00 $ 1.00
========= ========= =========
Total Return........................................... 1.70% 3.09% 0.12%(a)
Ratios/Supplemental Data
Net assets, end of period (000's)...................... $ 249 $ 110 $ 10
Ratios to average net assets:
Expenses (net of fees waived) (b).................. 0.48% 0.45% 0.42%(c)
Net investment income.............................. 1.69% 2.81% 3.25%(c)
Management and administration fees waived.......... 0.10% 0.13% 0.16%(c)
Transfer Agency Account fees waived................ -- 0.01% --
Expenses paid indirectly........................... 0.00% 0.00% --
<fn>
(a) Unannualized
(b) Includes expense paid indirectly, if applicable.
(c) Annualized
</fn>
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
================================================================================
<table>
<caption>
Years Ended March 31, Commencement of Operations
------------------------------ February 20, 2007 through
Short Term Income shares 2009 2008 March 31, 2007
- ------------------------ --------- --------- --------------
<s> <c> <c> <c>
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period................... $ 1.00 $ 1.00 $ 1.00
--------- --------- ---------
Income from investment operations:
Net investment income.............................. 0.014 0.027 0.003
Net realized and unrealized gain(loss) on investments 0.000 0.000 --
--------- --------- ---------
Total from investment operations................... 0.014 0.027 0.003
--------- --------- ---------
Less distributions from:
Dividends from net investment income............... (0.014) (0.027) (0.003)
Net realized gain on investments................... -- (0.000) --
--------- --------- ---------
Total Distributions................................ (0.014) (0.027) (0.003)
--------- --------- ---------
Net asset value, end of period......................... $ 1.00 $ 1.00 $ 1.00
========= ========= =========
Total Return........................................... 1.39% 2.78% 0.29%(a)
Ratios/Supplemental Data
Net assets, end of period (000's)...................... $ 60,907 $ 93,233 $ 57,915
Ratios to average net assets:
Expenses (net of fees waived) (b).................. 0.78% 0.76% 0.76%(c)
Net investment income.............................. 1.41% 2.74% 2.89%(c)
Management and administration fees waived.......... 0.10% 0.13% 0.16%(c)
Distribution fees waived........................... 0.17% 0.17% 0.17%(c)
Expenses paid indirectly........................... 0.00% 0.00% --
</table>
<table>
<caption>
Years Ended March 31, Commencement of Operations
------------------------------- December 8, 2006 through
Retail shares 2009 2008 March 31, 2007
- ------------- --------- --------- ---------------
<s> <c> <c> <c>
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period................... $ 1.00 $ 1.00 $ 1.00
--------- --------- ---------
Income from investment operations:
Net investment income.............................. 0.011 0.025 0.008
Net realized and unrealized gain(loss) on investments 0.000 0.000 --
--------- --------- ---------
Total from investment operations................... 0.011 0.025 0.008
--------- --------- ---------
Less distributions from:
Dividends from net investment income............... (0.011) (0.025) (0.008)
Net realized gain on investments................... -- (0.000) --
--------- --------- ---------
Total Distributions................................ (0.011) (0.025) (0.008)
--------- --------- ---------
Net asset value, end of period......................... $ 1.00 $ 1.00 $ 1.00
========= ========= =========
Total Return........................................... 1.15% 2.54% 0.84%(a)
Ratios/Supplemental Data
Net assets, end of period (000's)...................... $ 151,745 $ 170,909 $ 41,817
Ratios to average net assets:
Expenses (net of fees waived) (b).................. 1.02% 1.00% 1.00%(c)
Net investment income.............................. 1.13% 2.38% 2.65%(c)
Management and administration fees waived.......... 0.10% 0.13% 0.16%(c)
Distribution fees waived........................... 0.13% 0.13% 0.10%(c)
Transfer Agency Account fees waived................ -- -- 0.03%(c)
Expenses paid indirectly........................... 0.00% 0.00% --
<fn>
(a) Unannualized
(b) Includes expense paid indirectly, if applicable.
(c) Annualized
</fn>
</table>
The accompanying notes are an integral part of these financial statements.
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
MUNICIPAL PORTFOLIO
FINANCIAL HIGHLIGHTS (CONTINUED)
================================================================================
<table>
<caption>
Years Ended March 31, Commencement of Operations
------------------------------ November 2, 2006 through
Advantage Shares 2009 2008 March 31, 2007
- ---------------- --------- --------- --------------
<s> <c> <c> <c>
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period................... $ 1.00 $ 1.00 $ 1.00
--------- --------- ---------
Income from investment operations:
Net investment income.............................. 0.011 0.025 0.011
Net realized and unrealized gain(loss) on investments (0.000) 0.000 --
--------- --------- ---------
Total from investment operations................... 0.011 0.025 0.011
--------- --------- ---------
Less distributions from:
Dividends from net investment income............... (0.011) (0.025) (0.011)
Net realized gain on investments................... -- (0.000) --
--------- --------- ---------
Total Distributions................................ (0.011) (0.025) (0.011)
--------- --------- ---------
Net asset value, end of period......................... $ 1.00 $ 1.00 $ 1.00
========= ========= =========
Total Return........................................... 1.12% 2.52% 1.09%(a)
Ratios/Supplemental Data
Net assets, end of period (000's)...................... $ 186,442 $ 221,862 $ 136,546
Ratios to average net assets:
Expenses (net of fees waived) (b).................. 1.04% 1.02% 1.02%(c)
Net investment income.............................. 1.12% 2.41% 2.65%(c)
Management and administration fees waived.......... 0.10% 0.13% 0.16%(c)
Distribution fees waived........................... 0.16% 0.16% 0.16%(c)
Expenses paid indirectly........................... 0.00% 0.00% --
<fn>
(a) Unannualized
(b) Includes expense paid indirectly, if applicable.
(c) Annualized
</fn>
</table>
The accompanying notes are an integral part of these financial statements.
<page>
[THIS PAGE INTENTIONALLY LEFT BLANK.]
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
NOTES TO THE FINANCIAL STATEMENTS
================================================================================
1. Summary of Accounting Policies
Daily Income Fund (the "Fund") is a diversified, open-end management investment
company registered under the Investment Company Act of 1940 (the "1940 Act").
The Fund is comprised of four managed portfolios of money market instruments:
the Money Market Portfolio, the U.S. Treasury Portfolio, the U.S. Government
Portfolio and the Municipal Portfolio (each referred to as "Portfolio"). The
investment objective of the Money Market, U.S. Treasury and U.S. Government
Portfolios is to seek as high a level of current income to the extent consistent
with the preservation of capital and the maintenance of liquidity. The
investment objective of the Municipal Portfolio is to seek as high a level of
tax-exempt current income to the extent consistent with the preservation of
capital and the maintenance of liquidity. Each portfolio has five core classes
of stock authorized: Institutional, Institutional Service, Investor, Short Term
Income, and Retail shares. In addition to the core classes the Money Market
Portfolio includes the Pinnacle, Advantage and Xpress shares, the U.S. Treasury
Portfolio includes the Pinnacle shares, the U.S. Government and Municipal
Portfolios include the Advantage shares. Commencement of operations for each of
the share classes began as follows:
<table>
<caption>
Money Market U.S. Treasury U.S. Government Municipal
Share classes Portfolio Portfolio Portfolio Portfolio
------------- --------- --------- ----------- ---------
<s> <c> <c> <c> <c>
Institutional shares............ May 13, 1994 November 18, 1996 Liquidated 12/11/08 October 30, 2006
Institutional Service shares.... April 3, 1995 November 29, 1995 March 19, 2007 March 19, 2007
Investor shares................. November 28, 2006 February 21, 2007 Not Active ("N/A") N/A
Short Term Income shares........ February 12, 2007 November 2, 2006 N/A February 20, 2007
Retail shares................... November 28, 2006 December 12, 2006 December 12, 2006 December 8, 2006
Pinnacle shares................. July 29, 1999 July 29, 1999 Not Offered ("N/O") N/O
Advantage shares................ November 1, 2006 N/O November 2, 2006 November 2, 2006
Xpress shares................... June 20, 2007 N/O N/O N/O
</table>
The Fund's financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America for investment
companies as follows:
a) Valuation of Securities -
Investments are recorded on the basis of amortized cost, which approximates
value, as permitted by Rule 2a-7 under the 1940 Act. Under this method, a
portfolio instrument is valued at cost and any discount or premium is
amortized on a constant basis to the maturity of the instrument. The maturity
of variable rate demand instruments is deemed to be the longer of the period
required before the Fund is entitled to receive payment of the principal
amount or the period remaining until the next interest rate adjustment.
b) Securities Transactions and Investment Income -
Securities transactions are recorded on a trade date basis. Interest income,
adjusted for accretion of discount and amortization of premium, is recorded
on the accrual basis from settlement date. Realized gains and losses on sales
are computed on the basis of specific identification of the securities sold.
c) Repurchase Agreements -
All Portfolios may enter into repurchase agreements. Eligible securities for
collateral are securities consistent with the Portfolio's investment
objectives and may consist of U.S. Government Securities and/or U.S.
Government Sponsored Agency Securities. In connection with transactions in
repurchase agreements, it is the Portfolio's policy that its custodian take
possession of the underlying collateral securities, the fair value of which
exceeds the principal amount of the repurchase transaction, including accrued
interest, at all times. Under these arrangements, the Portfolios are
permitted to deliver or re-pledge these securities. If the seller of a
repurchase agreement fails to repurchase the security in accordance with the
terms of the agreement, the Portfolios might incur expenses in enforcing
their rights, and could experience losses, including a decline in the value
of the collateral and loss of income.
d) Federal Income Taxes -
It is the policy of each Portfolio to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no provision for federal income taxes is required in the financial
statements.
Consistent with Financial Accounting Standards Board ("FASB") Interpretation
No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB
Statement No. 109 ("FIN 48") management evaluates tax positions taken or
expected to be taken in the course of preparing the Fund's tax returns to
determine whether the tax positions are "more-likely-than-not" of being
sustained by the applicable tax authority. Tax positions not deemed to meet
the "more-likely-than-not" threshold are recorded as a component of income
tax expense in the current period with a corresponding adjustment to a
liability for uncertain tax positions. The Fund recognizes interest and
penalties, if any, related to uncertain tax positions as income tax expense
in the statement of operations.
<page>
- --------------------------------------------------------------------------------
================================================================================
1. Summary of Accounting Policies (Continued)
e) Dividends and Distributions -
Dividends from net investment income (excluding long-term capital gains and
losses, if any, and amortization of market discount) are declared daily and
paid monthly. Net realized capital gains, if any, are distributed at least
annually and in no event later than 60 days after the end of the Fund's
fiscal year.
f) Accounting Estimates -
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of increases
and decreases in net assets from operations during the reporting period.
Actual results could differ from those estimates.
g) Representations and Indemnifications -
In the normal course of business the Fund enters into contracts that contain
a variety of representations and warranties which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the
Fund that have not yet occurred. However, based on experience, the Fund
expects the risk of loss to be remote.
h) Allocation of Income and Expenses -
Each Portfolio may allocate among its classes and to the extent allowable, to
specific classes, certain expenses, including shareholder servicing fees,
distribution fees, transfer agent fees, government registration fees, certain
printing and postage costs, and administrative and legal expenses. For the
year ended March 31, 2009, class specific expenses of each Portfolio were
limited to shareholder servicing fees, distribution fees and transfer agent
expenses. Income, expenses (other than expenses attributable to a specific
class), and realized and unrealized gains or losses on investments are
allocated to each class of shares based on its relative net assets. In all
other respects, all share classes represent the same interest in the income
and assets of each Portfolio.
i) Risks -
Investments in obligations issued by agencies and instrumentalities of the
U.S. Government may vary in the level of support they receive from the
government. The government may choose not to provide financial support to
government sponsored agencies or instrumentalities if it is not legally
obligated to do so. In this case, if the issuer defaulted, the underlying
Portfolio holding securities of such issuer might not be able to recover its
investment from the U.S. Government.
The effect on performance from investing in securities issued or guaranteed
by companies in the banking and financial services industries will depend to
a greater extent on the overall condition of those industries. Financial
services companies are highly dependent on the supply of short-term
financing. The value of securities of issuers in the banking and financial
services industry can be sensitive to changes in government regulation and
interest rates and to economic downturns in the United States and abroad.
The value of, payment of interest on, repayment of principal for and the
ability to sell a municipal security may be affected by constitutional
amendments, legislative enactments, executive orders, administrative
regulations, voter initiatives and the economics of the regions in which the
issuers are located.
Since many municipal securities are issued to finance similar projects,
especially those relating to education, housing, health care, transportation
and utilities, conditions in those sectors can affect the overall municipal
securities market and a Portfolio's investment in municipal securities.
There is some risk that a portion or all of the interest received from
certain tax-free municipal securities could become taxable as a result of
determinations by the Internal Revenue Service.
In a low interest rate environment, such as the environment that existed at
March 31, 2009, Reich & Tang Asset Management LLC ("the "Manager") and Reich
& Tang Distributors, Inc. (the "Distributor") have historically waived their
fees to maintain a minimum non-negative yield for all classes of the Fund.
The Manager and Distributor are under no contractual obligation to continue
such waiver in the future.
2. Investment Management Fees and Other Transactions with Affiliates
Under the Investment Management Contract, each Portfolio pays an investment
management fee to the Manager at the annual rate of .12% of the Portfolio's
average daily net assets.
Pursuant to an Administrative Services Contract each Portfolio pays to the
Manager an annual fee of .05% of the Portfolio's average daily net assets.
Pursuant to a Sub-Accounting Agreement, Reich & Tang Services, Inc., (the "TA"),
an affiliate of the Manager, performs or sub-contracts or employs others to
perform certain sub-accounting services for the Advantage and Xpress
shareholders. For its services under the Sub-Accounting Agreement, the TA
receives from the Portfolio a fee up to 0.10% per annum of the average daily net
assets of the Advantage shares and Xpress shares.
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
================================================================================
2. Investment Management Fees and Other Transactions with Affiliates (Continued)
The Fund and the Distributor, an affiliate of the Manager, have entered into a
Shareholder Servicing Agreement and a Distribution Agreement. For its services
under the Shareholder Servicing and Distribution Agreements, the Distributor
receives from each Portfolio a fee, accrued daily and paid monthly, at an annual
rate of each Class's average daily net assets as follows:
<table>
<caption>
Shareholder Servicing Fees Distribution Fees
-------------------------- -----------------
<s> <c> <c>
Institutional Shares........................ -0- -0-
Institutional Service Shares................ 0.25% -0-
Investor Shares............................. 0.25% 0.20%
Short Term Income Shares.................... 0.25% 0.45%
Retail Shares............................... 0.25% 0.65%
Pinnacle Shares............................. -0- -0-
Advantage Shares............................ 0.25% 0.75%
Xpress Shares............................... 0.25% 0.75%
</table>
As of March 31, 2009, the amounts Payable to affiliates included in the
Statement of Assets and Liabilities are broken down as follows:
<table>
<caption>
Money Market U.S. Treasury U.S. Government Municipal
Fee Type/ Affiliate Portfolio Portfolio Portfolio Portfolio
------------------- ---------- ---------- --------- ---------
<s> <c> <c> <c> <c>
Investment management fees/Manager.......... $404,135 $128,104 $122,250 $42,054
Administration fees/Manager................. -0- -0- 50,938 77,522
Shareholder servicing fees/Distributor...... 315,500 46,590 89,187 30,508
Distribution fees/Distributor............... 626,781 491 155,341 62,778
Sub-Accounting Fees/TA...................... 1,313 -0- -0- -0-
Transfer agency fees/TA..................... 91,877 30,329 8,378 9,240
---------- ---------- --------- ---------
Total....................................... $1,439,606 $205,514 $426,094 $222,102
========== ========== ========= =========
</table>
For the year ended March 31, 2009, the following fees were voluntarily waived by
the Manager, Distributor and TA:
<table>
<caption>
Money Market U.S. Treasury U.S. Government Municipal
Portfolio Portfolio Portfolio Portfolio
---------- ---------- ---------- ----------
<s> <c> <s> <s> <s>
Investment management fees.................. $488,414 $-0- $-0- $302,351
Administration fees......................... 2,762,925 471,402 526,642 144,972
Shareholder servicing fees - Institutional Service shares 34,617 77,128 -0- -0-
Shareholder servicing fees - Investor shares 7,100 105,146 N/A N/A
Shareholder servicing fees - Short Term Income shares -0- 69,812 N/A -0-
Shareholder servicing fees - Retail shares.. 3,850 11,518 -0- -0-
Distribution fees - Investor shares......... 127,085 287,274 N/A N/A
Distribution fees - Short Term Income shares 72,201 378,800 N/A 132,743
Distribution fees - Retail shares........... 1,985,196 67,463 303,832 214,625
Distribution fees - Advantage shares........ 3,731,891 N/O 2,073,980 316,220
Distribution fees - Xpress shares........... 37 N/O N/O N/O
Transfer agency fees - Institutional shares. 73,287 -0- -0- -0-
Transfer agency fees - Pinnacle shares...... 24,604 -0- N/O N/O
---------- ---------- ---------- ----------
Total....................................... $9,311,207 $1,468,543 $2,904,454 $1,110,911
========== ========== ========== ==========
<fn>
Included in the above amounts were waivers to maintain a minimum yield in light of market conditions.
</fn>
</table>
<page>
- --------------------------------------------------------------------------------
================================================================================
2. Investment Management Fees and Other Transactions with Affiliates (Continued)
Currently, the Fund's investment manager and distributor have voluntarily agreed
to waive fees and/or reimburse expenses in order to maintain Total Annual
Operating expenses as set forth below ("the Expense Cap Arrangement"). The
Expense Cap Arrangement may not be modified or terminated before August 1, 2009,
without prior approval of the Fund's Board of Trustees.
<table>
<caption>
Money Market U.S. Treasury U.S. Government Municipal
Share classes Portfolio Portfolio Portfolio Portfolio
------------- --------- --------- --------- ---------
<s> <c> <c> <c> <c>
Institutional shares................... 0.25% 0.25% N/A 0.25%
Institutional Service shares........... 0.50% 0.50% 0.50% 0.50%
Investor shares........................ 0.70% 0.68% N/A N/A
Short Term Income shares............... 0.99% 0.95% N/A 0.81%
Retail shares.......................... 1.05% 1.05% 1.05% 1.05%
Pinnacle shares........................ 0.25% 0.25% N/O N/O
</table>
In light of recent market conditions, the Manager and Distributor may
temporarily waive additional fees and/or reimburse additional expenses in an
amount in excess of the amount required under the Expense Cap Arrangement in an
effort to maintain certain net yields. In the event that the Manager and/or
Distributor waive fees and/or reimburse expenses either as a result of the
Expense Cap Arrangement or in an effort to maintain certain net yields, the
Fund's Board of Trustees has agreed that the Manager and Distributor may be
reimbursed, on a class by class basis, for such fee reductions and/or expense
payments. In carrying out this reimbursement to the Manager and/or Distributor,
the annualized expense ratio as of any day in the fiscal year shall not exceed
the rates set forth in the Expense Cap Arrangement. The Manager and Distributor
may not recover fee reductions and/or expense payments with respect to a class
more than 2 years after the end of the fiscal year in which the fee was reduced
or expense borne. The Manager and Distributor have determined and the Fund's
Board of Trustees have approved that the fee waivers eligible for reimbursement
are those occurring after January 31, 2009.
For the period February 1 through March 31, 2009, the following fees may be
reimbursed to the Manager and Distributor in a later period:
<table>
<caption>
Money Market U.S. Treasury U.S. Government Municipal
Portfolio Portfolio Portfolio Portfolio
-------- -------- -------- --------
<s> <c> <c> <c> <c>
Investment management fees.................. $154,938 $-0- $-0- $79,990
Administration fees......................... 387,345 102,733 97,789 33,329
Shareholder servicing fees - Institutional Service shares 3,254 304 -0- -0-
Shareholder servicing fees - Investor shares -0- 2,514 N/A N/A
Shareholder servicing fees - Short Term Income shares -0- 1,757 N/A -0-
Shareholder servicing fees - Retail shares.. -0- 3,020 -0- -0-
Distribution fees - Investor shares......... 21,651 65,759 N/A N/A
Distribution fees - Short Term Income shares 12,510 109,482 N/A 17,843
Distribution fees - Retail shares........... 318,785 11,764 81,832 32,746
-------- -------- -------- --------
Total....................................... $898,483 $297,333 $179,621 $163,908
======== ======== ======== ========
</table>
The Manager's and Distributor's right to receive expense reimbursements for the
above amounts expires on March 31, 2011.
Trustees of the Fund not affiliated with the Manager are paid a fee that is
allocated among multiple funds, as defined below. Each Independent Trustee
receives an annual retainer of $60,000 and a fee of $3,000 for each Board of
Trustees meeting attended. Each Independent Trustee also receives a fee up to
$1,500 at the discretion of the Lead Trustee for telephonic Board meetings and
committee meetings that are not held on the same day as a Board Meeting. In
addition, the Lead Independent Trustee receives an additional annual fee of
$13,800, payable quarterly and the Audit Committee Chairman and Compliance
Oversight Committee Chairman will each receive an additional annual fee of
$9,200, payable quarterly. Each Independent Trustee will also be reimbursed for
all out-of-pocket expenses relating to attendance at such meetings. The fees
noted above are to be allocated at the discretion of the Manager among the Fund,
the California Daily Tax Free Income Fund, Inc., the Connecticut Daily Tax Free
Income Fund, Inc., the Florida Daily Municipal Income Fund, and the New Jersey
Daily Municipal Income Fund, Inc.
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
================================================================================
2. Investment Management Fees and Other Transactions with Affiliates (Continued)
Included in the Statement of Operations under the caption "Shareholder servicing
and related shareholder expenses" are fees pursuant to the Transfer Agency
Agreement between the TA and the Portfolios. The TA, an affiliate of the
Manager, as transfer agent and dividend agent, receives a fee of $17.40 per
account per year or a minimum of (i) 0.05% of the monthly average net assets of
the Investor, Short Term Income, and Retail Shares of the Portfolios or (ii)
0.02% of the monthly average net assets of the Institutional Service,
Institutional and Pinnacle shares of the Portfolios. The Advantage and Xpress
shares do not participate in the Transfer Agency Agreement. For the year ended
March 31, 2009 these fees after waivers amounted to:
<table>
<caption>
Money Market U.S. Treasury U.S. Government Municipal
Portfolio Portfolio Portfolio Portfolio
--------- --------- --------- ----------
Amount % Amount % Amount % Amount %
------ - ------ - ------ - ------ -
<s> <c> <c> <c> <c> <c> <c> <c> <c>
Institutional shares................. $ 37,854 0.01% $111,521 0.02% $ 3 * $ 794 0.02%
Institutional Service shares......... 63,582 0.02% 53,327 0.02% 49 0.02% 33 *
Investor shares...................... 158,859 0.05% 127,378 0.05% N/A N/A
Short Term Income shares............. 172,143 * 87,030 0.05% N/A 39,034 0.05%
Retail shares........................ 708,898 0.05% 11,749 * 89,895 0.05% 82,509 0.05%
Pinnacle shares...................... 13,806 0.01% 17,436 0.02% N/O N/O
---------- -------- ------- --------
Total............................. $1,155,142 $408,441 $89,947 $122,370
========== ======== ======= ========
<fn>
* Per account
</fn>
</table>
The Delafield Fund, Inc., an affiliated fund, invests its excess cash in
accordance with Rule 12d-1 of the 1940 Act into the Daily Income Fund - Money
Market Portfolio - Institutional Class Shares. For the year ended March 31,
2009, The Delafield Fund has invested an average of $89,667,162 and as of March
31, 2009, has an investment of $46,669,000. Natixis Global Asset Management, LP
("NGAM LP"), the parent company of the Manager, invests a portion of its excess
cash balances in Daily Income Fund - Money Market Portfolio - Institutional
shares. For the year ended March 31, 2009, NGAM LP has invested an average of
$310,932,174 and as of March 31, 2009 has an investment of $53,962,750. Also, on
a daily basis, the Manager, Distributor, TA and affiliated investment entities
invest their excess cash in Daily Income Fund that are not material to that
entity.
As of March 31, 2009, certain Trustees, Officers and affiliated entities had
investments in the Portfolios representing less than 1% of each Portfolio.
3. Securities Transactions with Affiliated Funds
The Portfolios are permitted to purchase or sell securities from or to certain
other Reich & Tang Funds under specified conditions outlined in procedures
adopted by the Board of Trustees of the Portfolio. The procedures have been
designed to ensure that any purchase or sale of securities of the Portfolio from
or to another fund or portfolio that is or could be considered an affiliate by
virtue of having a common investment advisor (or affiliated investment
advisors), common Trustees and/or common officers complies with Rule 17a-7 of
the 1940 Act. Further, as defined under the procedures, each transaction is
effected at the current market price. For the year ended March 31, 2009, the
Portfolios engaged in purchases and sales with affiliates, none of which
resulted in any gain or loss, which amounted to:
<table>
<caption>
Money Market U.S. Treasury U.S. Government Municipal
Transaction Type Portfolio Portfolio Portfolio Portfolio
---------------- --------- --------- --------- ---------
<s> <c> <c> <c> <c>
Purchases................................... $269,824,894 $-0- $-0- $239,173,000
Sales....................................... -0- -0- -0- 245,938,000
Gains/(losses).............................. -0- -0- -0- -0-
</table>
<page>
- --------------------------------------------------------------------------------
================================================================================
4. Compensating Balance Arrangement and Other Transactions
The Portfolios are permitted to temporarily overdraft or leave balances in their
accounts with The Bank of New York Mellon (the "Bank"). To compensate the Bank
for such activity the Portfolios may, in the case of the Municipal Portfolio,
leave funds or overdraft funds as a compensating balance in the account so the
Bank or the Portfolios can be compensated for use of funds based upon the agreed
upon formula. Unless agreed otherwise at the end of pre-determined three month
periods, the Portfolio will be charged for average overdrafts or receive an
earnings credit for average positive balances computed at the agreed upon rate
on the last day of the period.
For the Money Market, U.S. Treasury and U.S. Government Portfolios the Bank or
the Portfolios will be compensated by accumulating the daily overdraft charges
and/or earnings credits throughout the month, respectively.
Earnings credit will be offset against the Portfolio's safekeeping fees which
are included as part of the custodian expenses.
For the year ended March 31, 2009, the breakdown of expenses paid indirectly by
each Portfolio were as follows:
<table>
<caption>
Money Market U.S. Treasury U.S. Government Municipal
Portfolio Portfolio Portfolio Portfolio
--------- --------- --------- ---------
<s> <c> <c> <c> <c>
Custodian expenses.......................... $9,824 $1,701 $-0- $1,360
====== ====== ==== ======
</table>
5. Transactions in Shares of Beneficial Interest
At March 31, 2009, an unlimited number of shares of beneficial interest ($0.001
par value) were authorized. Transactions were as follows:
<table>
<caption>
Year Ended Year Ended
Money Market Portfolio March 31, 2009 March 31, 2008
- ---------------------- -------------- --------------
Institutional Shares Net Assets Shares Net Assets Shares
- -------------------- ---------------- --------------- ---------------- ---------------
<s> <c> <c> <c> <c>
Sold......................................$ 25,952,698,568 25,952,698,568 $ 14,990,645,052 14,990,645,052
Issued on reinvestment of dividends....... 14,072,031 14,072,031 29,569,001 29,569,001
Redeemed................................. (26,423,145,467) (26,423,145,467) (14,908,254,816) (14,908,254,816)
Additional paid-in-capital*............... 3,659 -0- -0- -0-
---------------- --------------- ---------------- ---------------
Net increase (decreases) .................$ (456,371,209) (456,374,868) $ 111,959,237 111,959,237
================ =============== ================ ===============
Institutional Service Shares Net Assets Shares Net Assets Shares
- ---------------------------- ---------------- --------------- ---------------- ---------------
Sold......................................$ 2,546,277,747 2,546,277,747 $ 1,810,227,955 1,810,227,955
Issued on reinvestment of dividends....... 7,442,016 7,442,016 12,054,054 12,054,054
Redeemed.................................. (2,614,551,658) (2,614,551,658) (1,829,537,807) (1,829,537,807)
Additional paid-in-capital*............... 2,387 -0- -0- -0-
---------------- --------------- ---------------- ---------------
Net increase (decreases) .................$ (60,829,508) (60,831,895) $ (7,255,798) (7,255,798)
================ =============== ================ ===============
Investor Shares Net Assets Shares Net Assets Shares
- --------------- ---------------- --------------- ---------------- ---------------
Sold......................................$ 1,463,422,535 1,463,422,535 $ 895,721,451 895,721,451
Issued on reinvestment of dividends....... 6,470,811 6,470,811 9,881,325 9,881,325
Redeemed.................................. (1,448,604,571) (1,448,604,571) (878,345,327) (878,345,327)
Shares issued with merger (a)............. -0- -0- 137,343,403 137,343,403
Additional paid-in-capital*............... 4,053 -0- -0- -0-
---------------- --------------- ---------------- ---------------
Net increase (decreases) .................$ 21,292,828 21,288,775 $ 164,600,852 164,600,852
================ =============== ================ ===============
Short Term Income Shares Net Assets Shares Net Assets Shares
- ------------------------ ---------------- --------------- ---------------- ---------------
Sold......................................$ 1,357,867,376 1,357,867,376 $ 1,927,769,280 1,927,769,280
Issued on reinvestment of dividends....... 4,459,548 4,459,548 8,493,927 8,493,927
Redeemed.................................. (1,397,492,153) (1,397,492,153) (1,736,593,469) (1,736,593,469)
Shares issued with merger (a)............. -0- -0- 40,741,544 40,741,544
Additional paid-in-capital*............... 3,132 -0- -0- -0-
---------------- --------------- ---------------- ---------------
Net increase (decreases) .................$ (35,162,097) (35,165,229) $ 240,411,282 240,411,282
================ =============== ================ ===============
</table>
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
================================================================================
5. Transactions in Shares of Beneficial Interest (Continued)
<table>
<caption>
Year Ended Year Ended
Money Market Portfolio March 31, 2009 March 31, 2008
- ---------------------- -------------- --------------
Retail Shares Net Assets Shares Net Assets Shares
- -------------------- --------------- --------------- ---------------- ---------------
<s> <c> <c> <c> <c>
Sold......................................$ 3,651,004,571 3,651,004,571 $ 4,656,278,890 4,656,278,890
Issued on reinvestment of dividends....... 24,257,365 24,257,365 52,018,793 52,018,793
Redeemed.................................. 3,729,788,565) (3,729,788,565) (4,203,101,571) (4,203,101,571)
Shares issued with merger (a)............. -0- -0- 36,753,053 36,756,343
Additional paid-in-capital*............... 16,360 -0- -0- -0-
--------------- --------------- ---------------- ---------------
Net increase (decreases) .................$ (54,510,269) (54,526,629) $ 541,949,165 541,952,455
=============== =============== ================ ===============
Pinnacle Shares Net Assets Shares Net Assets Shares
- -------------------- --------------- --------------- ---------------- ---------------
Sold......................................$ 239,504,424 239,504,424 $ 206,875,371 206,875,371
Issued on reinvestment of dividends....... 4,601,277 4,601,277 8,159,098 8,159,098
Redeemed.................................. (219,290,758) (219,290,758) (207,849,882) (207,849,882)
Additional paid-in-capital*............... 2,391 -0- -0- -0-
--------------- --------------- ---------------- ---------------
Net increase (decreases) ..................$ 24,817,334 24,814,943 $ 7,184,587 7,184,587
=============== =============== ================ ===============
Advantage Shares Net Assets Shares Net Assets Shares
- -------------------- --------------- --------------- ---------------- ---------------
Sold......................................$ 1,725,993,844 1,725,993,844 $ 4,908,390,896 4,908,390,896
Issued on reinvestment of dividends....... 39,150,598 39,150,598 135,201,857 135,201,857
Redeemed.................................. 3,511,234,644) (3,511,234,644) (4,705,503,694) (4,705,503,694)
Additional paid-in-capital*............... 20,972 -0- -0- -0-
--------------- --------------- ---------------- ---------------
Net increase (decreases) .................$(1,746,069,230) (1,746,090,202) $ 338,089,059 338,089,059
=============== =============== ================ ===============
</table>
<table>
<caption>
Commencement of Operations
June 20, 2007 through
March 31, 2008
--------------
Xpress Shares Net Assets Shares Net Assets Shares
- -------------------- --------------- --------------- ---------------- ---------------
<s> <c> <c> <c> <c>
Sold......................................$ 431,916,022 431,916,022 $ 2,717,706,062 2,717,706,062
Issued on reinvestment of dividends....... 3,678,745 3,678,745 31,077,996 31,077,996
Redeemed.................................. (436,531,363) (436,531,363) (2,476,571,187) (2,476,571,187)
Additional paid-in-capital*............... 3,786 -0- -0- -0-
---------------- -------------- ---------------- --------------
Net increase (decreases)..................$ (932,810) (936,596) $ 272,212,871 272,212,871
=============== =============== ================ ===============
</table>
<page>
- --------------------------------------------------------------------------------
================================================================================
5. Transactions in Shares of Beneficial Interest (Continued)
<table>
<caption>
U.S. Treasury Portfolio
Year Ended Year Ended
March 31, 2009 March 31, 2008
-------------- --------------
Institutional Shares Net Assets Shares Net Assets Shares
- -------------------- ---------------- --------------- ---------------- ---------------
<s> <c> <c> <c> <c>
Sold......................................$ 4,897,862,093 4,897,862,093 $ 4,536,481,973 4,536,481,973
Issued on reinvestment of dividends....... 5,411,509 5,411,509 27,132,074 27,132,074
Redeemed.................................. (4,921,081,322) (4,921,081,322) (4,609,122,550) (4,609,122,550)
Additional paid-in-capital*............... 8,796 -0- -0- -0-
--------------- --------------- ---------------- ---------------
Net increase (decreases) .................$ (17,798,924) (17,807,720) $ (45,508,503) (45,508,503)
=============== =============== ================ ===============
Institutional Service Shares Net Assets Shares Net Assets Shares
- ---------------------------- ---------------- --------------- ---------------- ---------------
Sold......................................$ 1,331,082,461 1,331,082,461 $ 1,379,265,207 1,379,265,207
Issued on reinvestment of dividends....... 1,700,463 1,700,463 9,245,471 9,245,471
Redeemed.................................. (1,430,726,067) (1,430,726,067) (1,306,263,009) (1,306,263,009)
Additional paid-in-capital*............... 4,222 -0- -0- -0-
--------------- --------------- ---------------- ---------------
Net increase (decreases) .................$ (97,938,921) (97,943,143) $ 82,247,669 82,247,669
=============== =============== ================ ===============
Investor Shares Net Assets Shares Net Assets Shares
- --------------- ---------------- --------------- ---------------- ---------------
Sold......................................$ 1,395,831,576 1,395,831,576 $ 915,435,582 915,435,582
Issued on reinvestment of dividends....... 1,804,400 1,804,400 7,365,733 7,365,733
Redeemed.................................. (1,455,212,283) (1,455,212,283) (840,690,743) (840,690,743)
Shares issued with merger (a)............. -0- -0- 53,257,284 53,257,284
Additional paid-in-capital*............... 3,692 -0- -0- -0-
--------------- --------------- ---------------- ---------------
Net increase (decreases) .................$ (57,572,615) (57,576,307) $ 135,367,856 135,367,856
=============== =============== ================ ===============
Short Term Income Shares Net Assets Shares Net Assets Shares
- ------------------------ ---------------- --------------- ---------------- ---------------
Sold......................................$ 610,899,466 610,899,466 $ 825,189,251 825,189,251
Issued on reinvestment of dividends....... 963,834 963,834 4,502,404 4,502,404
Redeemed.................................. (598,568,178) (598,568,178) (693,274,372) (693,274,372)
Shares issued with merger (a)............. -0- -0- 15,759,403 15,759,403
Additional paid-in-capital*............... 3,152 -0- -0- -0-
--------------- --------------- ---------------- ---------------
Net increase (decreases) .................$ 13,298,274 13,295,122 $ 152,176,686 152,176,686
=============== =============== ================ ===============
Retail Shares Net Assets Shares Net Assets Shares
- -------------------- --------------- --------------- ---------------- ---------------
Sold......................................$ 201,230,057 201,230,057 $ 71,335,591 71,335,591
Issued on reinvestment of dividends....... 87,535 87,535 58,708 58,708
Redeemed.................................. (211,884,653) (211,884,653) (50,789,515) (50,789,515)
Additional paid-in-capital*............... 181 -0- -0- -0-
--------------- --------------- ---------------- ---------------
Net increase (decreases) .................$ (10,566,880) (10,567,061) $ 20,604,784 20,604,784
=============== =============== ================ ===============
Pinnacle Shares Net Assets Shares Net Assets Shares
- -------------------- --------------- --------------- ---------------- ---------------
Sold......................................$ 116,597,525 116,597,525 $ 98,444,058 98,444,058
Issued on reinvestment of dividends....... 804,579 804,579 2,191,008 2,191,008
Redeemed.................................. (112,388,537) (112,388,537) (69,631,426) (69,631,426)
Additional paid-in-capital*............... 1,308 -0- -0- -0-
--------------- --------------- ---------------- ---------------
Net increase (decreases) .................$ 5,014,875 5,013,567 $ 31,003,640 31,003,640
=============== =============== ================ ===============
</table>
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
================================================================================
5. Transactions in Shares of Beneficial Interest (Continued)
U.S. Government Portfolio
<table>
<caption>
Year Ended Year Ended
March 31, 2009 March 31, 2008
-------------- --------------
Institutional Shares Net Assets Shares Net Assets Shares
- -------------------- ---------------- --------------- ---------------- ---------------
<s> <c> <c> <c> <c>
Sold......................................$ -0- -0- $ 10,429 10,429
Issued on reinvestment of dividends....... 130 130 473 473
Redeemed.................................. (10,603) (10,603) (10,429) (10,429)
Additional paid-in-capital*............... 1 -0- -0- -0-
--------------- --------------- ---------------- ---------------
Net increase (decreases) .................$ (10,472) (10,473) $ 473 473
=============== =============== ================ ===============
Institutional Service Shares Net Assets Shares Net Assets Shares
- ---------------------------- ---------------- --------------- ---------------- ---------------
Sold......................................$ 2,744,688 2,744,688 $ 3,610,769 3,610,769
Issued on reinvestment of dividends....... 3,624 3,624 9,972 9,972
Redeemed.................................. (2,801,098) (2,801,098) (3,295,012) (3,295,012)
Additional paid-in-capital*............... 258 -0- -0- -0-
--------------- --------------- ---------------- ---------------
Net increase (decreases) .................$ (52,528) (52,786) $ 325,729 325,729
=============== =============== ================ ===============
Retail Shares Net Assets Shares Net Assets Shares
- -------------------- --------------- --------------- ---------------- ---------------
Sold......................................$ 1,867,496,574 1,867,496,574 $ 960,561,944 960,561,944
Issued on reinvestment of dividends....... 1,117,796 1,117,796 3,731,782 3,731,782
Redeemed.................................. (1,818,971,118) (1,818,971,118) (918,089,313) (918,089,313)
Shares issued with merger (a)............. -0- -0- 56,013,618 56,026,352
Additional paid-in-capital*............... 6,599 -0- -0- -0-
--------------- --------------- ---------------- ---------------
Net increase (decreases) .................$ 49,649,851 49,643,252 $ 102,218,031 102,230,765
=============== =============== ================ ===============
Advantage Shares Net Assets Shares Net Assets Shares
- -------------------- --------------- --------------- ---------------- ---------------
Sold......................................$ 1,626,943,379 1,626,943,379 $ 1,006,741,134 1,006,741,134
Issued on reinvestment of dividends....... 6,547,794 6,547,794 11,591,409 11,591,409
Redeemed.................................. (1,325,551,433) (1,325,551,433) (549,727,342) (549,727,342)
Additional paid-in-capital*............... (2,929) -0- -0- -0-
--------------- --------------- ---------------- ---------------
Net increase (decreases) .................$ 307,936,811 307,939,740 $ 468,605,201 468,605,201
=============== =============== ================ ===============
Municipal Portfolio
Year Ended Year Ended
March 31, 2009 March 31, 2008
-------------- --------------
Institutional Shares Net Assets Shares Net Assets Shares
- -------------------- ---------------- --------------- ---------------- ---------------
Sold......................................$ 284,180 284,180 $ 10,521,314 10,521,314
Issued on reinvestment of dividends....... 78,534 78,534 44,000 44,000
Redeemed.................................. (157,636) (157,636) (6,718,083) (6,718,083)
Additional paid-in-capital*............... (499) -0- -0- -0-
--------------- --------------- ---------------- ---------------
Net increase (decreases) .................$ 204,579 205,078 $ 3,847,231 3,847,231
=============== =============== ================ ===============
Institutional Service Shares Net Assets Shares Net Assets Shares
- ---------------------------- ---------------- --------------- ---------------- ---------------
Sold......................................$ 306,045 306,045 $ 110,288 110,288
Issued on reinvestment of dividends....... 3,405 3,405 321 321
Redeemed.................................. (171,205) (171,205) (10,288) (10,288)
Additional paid-in-capital*............... (90) -0- -0- -0-
--------------- --------------- ---------------- ---------------
Net increase (decreases) .................$ 138,155 138,245 $ 100,321 100,321
=============== =============== ================ ===============
</table>
<page>
- --------------------------------------------------------------------------------
================================================================================
5. Transactions in Shares of Beneficial Interest (Continued)
Municipal Portfolio
<table>
<caption>
Year Ended Year Ended
March 31, 2009 March 31, 2008
-------------- --------------
Short Term Income Shares Net Assets Shares Net Assets Shares
- ------------------------ ---------------- --------------- ---------------- ---------------
<s> <c> <c> <c> <c>
Sold......................................$ 405,335,530 405,335,530 $ 1,121,360,019 1,121,360,019
Issued on reinvestment of dividends....... 1,046,329 1,046,329 2,765,057 2,765,057
Redeemed.................................. (438,718,143) (438,718,143) (1,129,299,109) (1,129,299,109)
Shares issued with merger (a)............. -0- -0- 40,438,840 40,521,480
Additional paid-in-capital*............... 14,714 -0- -0- -0-
--------------- --------------- ---------------- ---------------
Net increase (decreases) .................$ (32,321,570) (32,336,284) $ 35,264,807 35,347,447
=============== =============== ================ ===============
Retail Shares Net Assets Shares Net Assets Shares
- -------------------- --------------- --------------- ---------------- ---------------
Sold......................................$ 790,943,350 790,943,350 $ 917,892,821 917,892,821
Issued on reinvestment of dividends....... 1,802,909 1,802,909 3,335,826 3,335,826
Redeemed.................................. (811,918,034) (811,918,034) (847,806,610) (847,806,610)
Shares issued with merger (a)............. -0- -0- 55,616,021 55,725,216
Additional paid-in-capital*............... (5,673) -0- -0- -0-
--------------- --------------- ---------------- ---------------
Net increase (decreases) .................$ (19,177,448) (19,171,775) $ 129,038,058 129,147,253
=============== =============== ================ ===============
Advantage Shares Net Assets Shares Net Assets Shares
- -------------------- --------------- --------------- ---------------- ---------------
Sold......................................$ 435,561,702 435,561,702 $ 697,837,046 697,837,046
Issued on reinvestment of dividends....... 2,260,266 2,260,266 4,230,809 4,230,809
Redeemed.................................. (473,255,216) (473,255,216) (616,680,021) (616,680,021)
Additional paid-in-capital*............... (3,814) -0- -0- -0-
--------------- --------------- ---------------- ---------------
Net increase (decreases) .................$ (35,437,062) (35,433,248) $ 85,387,834 85,387,834
=============== =============== ================ ===============
<fn>
*During the fiscal year ended March 31, 2009, the TA allocated amounts to the Fund related to aged items below $50 or
for which shareholder data was unavailable.
</fn>
</table>
(a) On November 19, 2007, the Fund acquired assets and liabilities of the
Cortland Trust, Inc., the Daily Tax Free Income Fund, Inc. and the Short Term
Income Fund, Inc., pursuant to a plan of reorganization approved by the
Cortland Trust, Inc., the Daily Tax Free Income Fund, Inc. and the Short Term
Income Fund, Inc. on November 5, 2008. The transaction was structured to
qualify as a tax free reorganization under the Internal Revenue Code of 1986,
as amended.
6. Tax Information
The tax character of all dividends and distributions paid during the years ended
March 31, 2009 and 2008 were as follows:
<table>
<caption>
Money Market U.S. Treasury U.S. Government Municipal
Portfolio Portfolio Portfolio Portfolio
--------- --------- --------- ---------
2009 2008 2009 2008 2009 2008 2009 2008
---- ---- ---- ---- ---- ---- ---- ----
<s> <c> <c> <c> <c> <c> <c> <c> <c>
Ordinary Income $101,094,260 $281,728,508 $10,955,534 $49,756,628 $7,488,201 $15,087,433 $ 21,646 $ 1,883
Tax-Exempt Income $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- $5,235,769 $10,837,515
</table>
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
================================================================================
6. Tax Information (Continued)
At March 31, 2009, the Fund had capital loss transactions available for Federal
income tax purposes and to be applied against future gains, if any. The capital
loss transactions were as follows:
<table>
<caption>
Capital Loss Capital Loss Expiration of
Utilized Remaining Carryforwards
<s> <c> <c> <c>
Money Market Portfolio -0- $ 233 2016
1,853,397 2017
-----------
Total Money Market Portfolio 1,853,630
U.S. Treasury Portfolio -0- -0- N/A
U.S. Government Portfolio -0- 12,734 2014
54,070 2016
12,623 2017
-----------
Total U.S. Government Portfolio 79,427
Municipal Portfolio $10,501 -0- N/A
</table>
At March 31, 2009, there were distributable earnings of $254,470, $62,791,
$58,923 and $130,286 for the Money Market, U.S. Treasury, U.S. Government, and
Municipal Portfolios, respectively.
As of and during the year ended March 31, 2009, the Fund did not have a
liability for any uncertain tax positions, and did not incur any interest or
penalties. Each of the tax years in the four year period ended March 31, 2009
remains subject to examination by the Internal Revenue Service and state tax
authorities. Management's determination regarding FIN 48 may be subject to
review and adjustment at a later date based on factors, including, but not
limited to an ongoing analysis of tax laws, regulations, and interpretations
thereof.
7. Fair Valuation Measurements
The Fund adopted Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 157, "Fair Value Measurements" ("FAS 157") on April 1,
2008. FAS 157 defines fair value as the price that the Fund would receive to
sell an asset or pay to transfer a liability in an orderly transaction between
market participants at the measurement date. FAS 157 establishes a framework for
measuring fair value and three level hierarchy for fair value measurements based
on the transparency of inputs to the valuation of an asset or liability. Inputs
may be observable or unobservable and refer broadly to the assumptions that
market participants would use in pricing the asset or liability. Observable
inputs reflect the assumptions market participants would use in pricing the
asset or liability based on market data obtained from sources independent of the
Fund. Unobservable inputs reflect the Fund's own assumptions about the
assumptions that market participants would use in pricing the asset or liability
developed based on the best information available in the circumstances. A Fund
investment in its entirety is assigned a level based upon the inputs which are
significant to the overall valuation. Various inputs may be used to determine
the value of the Fund's investments. These inputs are summarized in three broad
levels:
Level 1 - quoted prices in active markets for identical securities
Level 2 - other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit risk,etc.)
Level 3 - significant unobservable inputs (including the Fund's own assumptions
used to determine the fair value of investments).
The inputs or methodologies used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities. Money
market securities may be valued using amortized cost, in accordance with the
1940 Act. Generally, amortized cost approximates the current fair value of a
security, but as the value is not obtained from a quoted price in an active
market, such securities are reflected as a Level 2.
<page>
- --------------------------------------------------------------------------------
================================================================================
7. Fair Valuation Measurements (Continued)
The following table summarizes the inputs used to value the Portfolio's
investments as of March 31, 2009:
<table>
<caption>
Valuation Inputs Money Market Portfolio U.S. Treasury Portfolio U.S. Government Portfolio Municipal Portfolio
- ---------------- ---------------------- ----------------------- ------------------------- -------------------
<s> <c> <c> <c> <c>
Level 1 - Quoted Prices $ -0- $ -0- $ -0- $ -0-
Level 2 - Other Significant
Observable Inputs 4,664,009,146 1,255,120,514 1,187,433,325 407,464,770
Level 3 - Significant
Unobservable Inputs -0- -0- -0- -0-
----------------- -------------------- ------------------ -------------------
Total $ 4,664,009,146 $ 1,255,120,514 $ 1,187,433,325 $ 407,464,770
================= ==================== ================== ===================
</table>
For the year ended March 31, 2009, there were no Level 1 or 3 investments.
8. Temporary Guarantee Program for Money Market Funds
While the Fund has maintained its $1.00 share price, there can be no assurance
that the Fund will be able to continue to do so. On October 2, 2008, the Board
of Trustees of the Fund approved the participation by the Fund in the U.S.
Treasury Department's Temporary Guarantee Program for Money Market Funds through
December 18, 2008 (the "Program"). Under the Program, if the Fund's market
value per share drops below $0.995 on any day while the Program is in effect,
shareholders of record on that date who also held shares in the Fund on
September 19, 2008 may be eligible to receive a payment from the Treasury upon
liquidation of the Fund, provided the Fund is liquidated soon after the day on
which the Fund's market value per share drops below $0.995. The Program
requires the Fund to pay the U.S. Department of Treasury a fee equal to 0.01%
multiplied by the number of shares outstanding as of September 19, 2008, which
were 8,305,776,028. This expense is borne by the Fund.
On December 4, 2008, the Board of Trustees of the Fund approved the extension of
the Fund's participation in the Program. The extension provides coverage through
April 30, 2009. The extension of the Program requires the Fund to pay the U.S.
Department of Treasury a fee equal to 0.015% multiplied by the number of shares
outstanding as of September 19, 2008. This expense is borne by the Fund.
9. Subsequent Event
On April 6, 2009, the Board of Trustees of the Fund approved a second extension
of the Fund's participation in the Program. The extension provides coverage
through September 18, 2009. The extension of the Program requires the Fund to
pay the U.S. Department of Treasury a fee equal to 0.015% multiplied by the
number of shares outstanding as of September 19, 2008. This expense is borne by
the Fund.
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
================================================================================
To The Board of Trustees and Shareholders of
Daily Income Fund
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of each of the Money Market Portfolio,
U.S. Treasury Portfolio, U.S. Government Portfolio and Municipal Portfolio
(individual portfolios constituting Daily Income Fund, hereafter referred to as
the "Fund") at March 31, 2009, and the results of each of their operations, the
changes in each of their net assets and the financial highlights for each of the
periods presented, in conformity with accounting principles generally accepted
in the United States of America. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at March 31, 2009 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
May 27, 2009
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
ADDITIONAL INFORMATION
(UNAUDITED)
================================================================================
ADDITIONAL INFORMATION ABOUT PORTFOLIO HOLDINGS
The Fund is required to file its complete schedule of portfolio holdings with
the Securities and Exchange Commission ("SEC") on Form N-Q for its first and
third fiscal quarters. The Fund's Form N-Q is available without charge on the
SEC's website (http://www.sec.gov) or by calling the Fund toll free at (800)
433-1918. You can also obtain copies of the Fund's Form N-Q by visiting the
SEC's Public Reference Room in Washington, DC (please call the SEC at (800)
732-0330 for information on the operation of the Public Reference Room).
INFORMATION ABOUT PROXY VOTING
Information regarding the Fund's proxy voting record for the 12 month period
ending June 30 of each year is filed with the SEC on Form N-PX no later than
August 31 of each year. The Fund's Form N-PX is available without charge, upon
request, by calling the Fund at (800) 433-1918 and on the SEC's website
(http//www.sec.gov). The Fund does not presently invest in voting securities and
has therefore not adopted proxy voting policies and procedures.
QUALIFIED INTEREST INCOME
For the fiscal year ended March 31, 2009, the Funds' designate the following
percentages of ordinary distributions paid during the fiscal year that are from
qualified interest income to foreign shareholders:
<table>
<Caption>
Qualified Interest
Income
------
<s> <c>
Daily Income Fund - Money Market Portfolio 30%
Daily Income Fund - U.S. Treasury Portfolio 100%
Daily Income Fund - U.S. Government Portfolio 100%
</table>
TAX EXEMPT INCOME DISTRIBUTION
For the fiscal year ended March 31, 2009, the Municipal Portfolio paid
tax-exempt distributions in the amount of $5,257,415.
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
BOARD APPROVAL OF INVESTMENT MANAGEMENT CONTRACT
(UNAUDITED)
================================================================================
On March 5, 2009, the Board of Trustees approved the continuance of the
Investment Management Contract. Specifically, with regards to the approval of
the continuance of the Investment Management Contract, the Board of Trustees
(the "Trustees") of the Daily Income Fund (the "Fund") had considered the
following factors:
1) The nature, extent and quality of services provided by the Manager.
The Trustees reviewed in detail the nature and extent of the services
provided by the Manager under the terms of the Fund's Investment Management
Contract and the quality of those services over the past year. The Trustees
noted that the services include managing the investment and reinvestment of the
Fund's assets; the provision of reports to the Board regarding changes in
portfolio holdings, important developments affecting the entities whose
securities are included in the Fund's portfolio, and the money market industry
and the economy in general; and the payment of compensation of all officers,
trustees and employees of the Fund who are officers of the Manager or its
affiliates. The Board also observed that the Manager provides various
administrative services to the Fund pursuant to the terms of a separate
Administrative Services Contract and considered the nature, extent and quality
of services provided under that agreement as well. The Trustees evaluated these
factors based on their direct experience with the Manager and in consultation
with counsel to the independent Trustees. The Trustees concluded that the nature
and extent of the services provided under the Investment Management Contract
were reasonable and appropriate in relation to the management fees, that the
level of services provided by the Manager had not diminished over the past year
and that the quality of services continues to be high. The Trustees reviewed the
personnel responsible for providing advisory services to the Fund and concluded,
based on their experience and interaction with the Manager, that (i) the Manager
was able to retain quality portfolio managers and other personnel; (ii) the
Manager exhibited a high level of diligence and attention to detail in carrying
out its advisory responsibilities under the Investment Management Contract;
(iii) the Manager was responsive to requests of the Trustees; and (iv) the
Manager had kept the Trustees apprised of developments relating to the Fund and
the industry in general. The Trustees also focused on the Manager's reputation
and long-standing relationship with the Fund and, in particular, the experience
of the Manager in advising money market funds. The Trustees also noted the high
quality of services provided by the Manager under the Administrative Services
Contract.
2) The performance of the Fund and the Manager.
The Trustees reviewed the investment performance of the Fund's Money Market
Portfolio, U.S. Treasury Portfolio, U.S. Government Portfolio and Municipal
Portfolio (each, a "Portfolio" and together, the "Portfolios"), on an absolute
basis and on a gross basis, as compared to various Lipper peer group categories
("Performance Peer Groups") for the one-month and one-, three-, five- and
ten-year periods ended December 31, 2008 for the Money Market Portfolio and U.S.
Treasury Portfolio and for the one-month and one-year periods ended December 31,
2008 for the U.S. Government Portfolio and Municipal Portfolio. The peer group
categories included: (i) the Fund's Money Market Portfolio and 14 other
institutional money market funds, as classified by Lipper, as the peer group for
the Money Market Portfolio; the Fund's U.S. Treasury Portfolio and eight other
institutional U.S. Treasury money market funds, as classified by Lipper, as the
peer group for the U.S. Treasury Portfolio; the Fund's U.S. Government Portfolio
and seven other U.S. government money market funds, as classified by Lipper, as
the peer group for the U.S. Government Portfolio; and the Fund's Municipal
Portfolio and nine other tax-exempt money market funds, as classified by Lipper,
as the peer group for the Municipal Portfolio; (ii) a competitors' class peer
group for the Portfolios, representing the Fund's Money Market Portfolio and
seven other institutional money market funds that are considered to be
competitors of the Money Market Portfolio with similar distribution channels;
the Fund's U.S. Treasury Portfolio and three other institutional U.S. Treasury
money market funds that are considered to be competitors of the U.S. Treasury
Portfolio with similar distribution channels; the Fund's U.S. Government
Portfolio and five other U.S. Government money market funds that are considered
to be competitors of the U.S. Government Portfolio with similar distribution
channels; and the Fund's Municipal Portfolio and five other tax-exempt money
market funds and one institutional tax-exempt money market fund that are
considered to be competitors of the Municipal Portfolio with similar
distribution channels (these competitor's were provided by the Manager); and
(iii) a peer group for the Money Market Portfolio of all institutional money
market funds regardless of asset size or primary channel of distribution; a peer
group for the U.S. Treasury Portfolio of all institutional U.S. Treasury money
market funds regardless of asset size or primary channel of distribution; a peer
group for the U.S. Government Portfolio of all retail U.S. Government money
market funds regardless of asset size or primary channel of distribution; a peer
group for the Municipal Portfolio of all retail tax-exempt money market funds
regardless of asset size or primary channel of distribution (the "Peer
Universe"). The Manager advised the Board that it does not advise or
sub-advise other types of accounts, such as institutional and pension accounts,
with similar investment policies to the Portfolios. The Trustees used each
Portfolio's performance against their respective Peer Groups to provide
objective comparative benchmarks against which they could assess each
Portfolio's performance. The Trustees considered those comparisons as helpful in
their assessment as to whether the Manager was obtaining for the Fund's
shareholders the performance that was available in the marketplace given each
Portfolio's investment objectives, strategies, limitations and restrictions. In
reviewing each Portfolio's performance, the Trustees noted that (i) the Money
Market Portfolio's ranking against its Lipper performance universe was in the
1st quintile for the one-month, one-year, three-year, five-year and ten-year
periods; (ii) the U.S. Treasury Portfolio's ranking against its Lipper
performance universe was in the 4th quintile for the one-month period, the 3rd
quintile for the one-year, three-year and five-year periods and the 2nd quintile
for the ten-year period; (iii) the U.S. Government Portfolio's ranking against
its Lipper performance universe was in the 5th quintile for the one-month period
and the 4th quintile for the one-year period; and (iv) the Municipal Portfolio's
ranking against its Lipper performance universe was in the 1st quintile for the
one-month and one-year periods (the 1st quintile is the highest quintile).
<page>
- --------------------------------------------------------------------------------
================================================================================
2) The performance of the Fund and the Manager, continued.
In connection with its assessment of the performance of the Manager, the
Trustees considered the Manager's financial condition and whether it has the
resources necessary to continue to carry out its obligations under the
Investment Management Contract. The Trustees took into account, in this regard,
the payments made by the Manager from its own resources to securities brokers,
banks and financial institutions or other industry professionals or
organizations whose customers are shareholders of the Fund ("Participating
Organizations") in connection with distribution assistance and shareholder
servicing provided by the Participating Organizations. The Trustees concluded
that the Manager had the financial resources necessary to continue to perform
its obligations under the Investment Management Contract and to continue to
provide the high quality services that it had provided to the Fund to date.
3) The cost of the advisory services and the profits to the Manager and
its affiliates from the relationship with the Fund.
In connection with the Trustees' consideration of the level of the management
fees, the Trustees considered a number of factors. The Trustees compared the
level of the management fees for the Portfolios and the level of the combined
management-administrative fees against fees covering both advisory and
administrative services charged to the funds in their respective Expense Peer
Groups (noting that the only difference in the Expense Peer Groups from the
Performance Peer Groups was that the Performance Universe was slightly larger
than the Expense Universe). The Trustees also considered comparative total fund
expenses of each class of the Portfolios and their respective Expense Peer
Groups. The Trustees used this combined fee information and total expense data
as a guide to help assess the reasonableness of each Portfolio's management fee,
although they acknowledged that it was difficult to make precise comparisons
with other funds since the exact nature of services provided under the
respective Expense Peer Groups fund agreements is often not apparent. The
Trustees also viewed the respective Expense Peer Groups fee information as a
whole as useful in assessing whether the Manager was providing services at a
cost that was competitive with other, similar funds. In assessing this
information, the Trustees considered both the comparative contract rates as well
as the level of the management fees after waivers and/or reimbursements. The
Board noted that the contract rate of each Portfolio's management fee and
combined fees (management and administrative) were reasonable when compared to
the combined fees of the respective Peer Groups. The Trustees also noted that
the Manager did not advise or sub-advise any other types of accounts, such as
institutional or pension accounts, with similar investment policies to the
Portfolios. The Trustees concluded that the level of each Portfolio's management
fee was reasonable in light of these factors.
The Trustees also considered the profitability to the Manager and its
affiliates arising out of their relationships with the Fund. In this regard the
Trustees reviewed profitability data relating to the Manager and its affiliates
for the year ended December 31, 2008. The Trustees considered revenues received
by the Manager under the Investment Management Contract and Administrative
Services Contract. In reviewing the Manager's profitability reports, the
Trustees and the Manager discussed the Manager's associated costs and the impact
of such costs on the Manager's net profitability. The Trustees concluded that
the profitability of the Fund to the Manager and its affiliates was not
excessive.
4) The extent to which economies of scale will be realized as the Fund
grows and whether fee levels reflect those economies of scale.
With respect to the Trustees' consideration of economies of scale, the
Trustees discussed with the Manager whether economies of scale would be realized
by it in its management of the Fund at higher asset levels. The Trustees also
discussed with the Manager whether certain of the Manager's costs would increase
if asset levels rise and observed that as assets rise, the Manager and its
affiliates may be required to pay increased fees to Participating Organizations.
The Trustees also reviewed the respective Peer Groups data to assess whether the
respective Peer Groups funds had advisory or administrative fee breakpoints and,
if so, at what asset levels. The Trustees concluded that they were unable to
assess at this time whether economies of scale would be realized if the Fund
were to experience significant asset growth. In the event of significant asset
growth in the future, the Trustees determined to reassess whether the management
fees appropriately took into account any economies of scale that had been
realized as a result of that growth.
5) Other Factors.
In addition to the above factors, the Trustees acknowledged the importance of
the ability of the Manager's affiliate, the distributor, to market the Fund
through its distribution networks, including its customer service and
administration system with banks and bank customers.
Based on a consideration of all these factors in their totality, the
Trustees, including all of the disinterested Trustees, determined that the
Fund's management fees were fair and reasonable with respect to the quality of
services that the Manager provides and in light of the other factors described
above that the Trustees deemed relevant. The Trustees based their decision on
evaluations of all these factors as a whole and did not consider any one factor
as all-important or controlling. The disinterested Trustees were also assisted
by the advice of independent counsel in making this determination.
<page>
- --------------------------------------------------------------------------------
DAILY INCOME FUND
TRUSTEES AND OFFICERS INFORMATION
(UNAUDITED)
================================================================================
<table>
<caption>
Trustees and Officers Information
March 31, 2009(1)
- -------------------------- ---------- -------------- -------------------------------- ------------------- ------------------
<s> <c> <c> <c> <c> <c>
Position(s) Term of Principal Occupation(s) Number of Other
Name, Address(2), Held with Office During Past Portfolios in Directorships
and Age Fund and Length of 5 Years Fund Complex held by
Time Overseen by Trustee
Served(3) Trustee
- -------------------------- ---------- -------------- -------------------------------- ------------------- ------------------
Disinterested Trustees:
- -------------------------- ---------- -------------- -------------------------------- ------------------- ------------------
Albert R. Dowden, Trustee Since 2006 Corporate Director/Trustee for Director/Trustee Director/Trustee
Age 67 Annuity & Life Re (Holdings) of eight for Annuity &
Ltd., Boss Group, Ltd., portfolios Life Re
Homeowners of American Holding (Holdings) Ltd.,
Corporation, Homeowners of Boss Group,
America Insurance Company and Ltd., Homeowners
AIM Funds. of America
Holding
Corporation, AIM
Funds and
CompuDyne
Corporation.
- -------------------------- ---------- -------------- -------------------------------- ------------------- ------------------
Carl Frischling, Esq., Trustee Since 2006 Partner of Kramer Levin Director/Trustee Director of AIM
Age 72 Naftalis & Frankel LLP (a law of eight Funds.
firm) with which he has been portfolios
associated with since 1994.
- -------------------------- ---------- -------------- -------------------------------- ------------------- ------------------
Edward A. Kuczmarski, Trustee Since 2006 Certified Public Accountant Director/Trustee Trustee of the
Age 59 and Partner of Hays & Company of ten Empire Builder
LLP since 1980. portfolios Tax Free Bond
Fund and
Director of ISI
Funds.
- -------------------------- ---------- -------------- -------------------------------- ------------------- ------------------
William Lerner, Esq., Trustee Since 2006 Self-employed consultant to Director/Trustee Director of MTM
Age 72 business entities and of eight Technologies,
entrepreneurs for corporate portfolios Inc.
governance and corporate
secretarial services.
- -------------------------- ---------- -------------- -------------------------------- ------------------- ------------------
Dr. W. Giles Mellon, Trustee Since 1987 Professor Emeritus of Business Director/Trustee None
Age 78 Administration in the Graduate of nine portfolios
School of Management, Rutgers
University with which he has
been associated with since
1966.
- -------------------------- ---------- -------------- -------------------------------- ------------------- ------------------
James L. Schultz, Trustee Since 2006 Self-employed as a consultant. Director/Trustee Director of
Age 72 of eight Computer
portfolios Research, Inc.
- -------------------------- ---------- -------------- -------------------------------- ------------------- ------------------
Robert Straniere, Esq., Trustee Since 1987 Owner, Straniere Law Firm since Director/Trustee Director of
Age 68 1980, NYS Assemblyman from 1981 of nine portfolios Sparx Japan Funds
to 2004. Partner,
Hantor-Davidoff law firm since
May, 2006. Partner, Gotham
Global Group since June, 2005.
President, NYC Hot Dog Co.,
since November, 2005. Counsel at
Fisher & Fisher from 1995 to
2006.
- -------------------------- ---------- -------------- -------------------------------- ------------------- ------------------
Dr. Yung Wong, Trustee Since 1987 Managing Director of Abacus Director/Trustee Director of
Age 70 Associates, an investment of nine portfolios KOAH, Inc.,
firm, since 1996. Director of the
Senior Network
and Director of
Terion, Inc.
- -------------------------- ---------- -------------- -------------------------------- ------------------- ------------------
</table>
<page>
- --------------------------------------------------------------------------------
================================================================================
<table>
<caption>
Trustees and Officers Information
March 31, 2009(1)
- -------------------------- ---------- -------------- -------------------------------- ------------------- ------------------
<s> <c> <c> <c> <c> <c>
Position(s) Term of Principal Occupation(s) Number of Other
Name, Address(2), Held with Office During Past Portfolios in Directorships
and Age Fund and Length of 5 Years Fund Complex held by
Time Overseen by Trustee
Served(3) Trustee
- -------------------------- ---------- -------------- -------------------------------- ------------------- ------------------
- -
Interested Trustees/Officers:
- -------------------------- ---------- -------------- -------------------------------- ------------------- ------------------
Steven W. Duff, Trustee(4) Since 1994 President and Chief Executive Director/Trustee None
Age 55 Officer of Reich & Tang Asset of nine
Management, LLC ("RTAM, LLC"), a portfolios
President 1994 to 2007 registered Investment Advisor and
and Chief Investment Officer of the
Trustee Mutual Funds Division of RTAM,
LLC. Mr. Duff has been associated
with RTAM, LLC since 1994. Mr.
Duff is also Director/Trustee of
five other funds in the Reich &
Tang Fund Complex. Prior to
December 2007 Mr. Duff was
President of the Fund and
President of eight other funds in
the Reich & Tang Fund Complex,
Principal Executive Officer of
Delafield Fund, Inc., and
President and Chief Executive
Officer of Tax Exempt Proceeds
Fund, Inc. Mr. Duff also serves as
a Director of Reich & Tang
Services, Inc. and Director, Chief
Executive Officer and President of
Reich & Tang Distributors, Inc.
- -------------------------- ---------- -------------- -------------------------------- ------------------- ------------------
Michael P. Lydon, President Since 2007 Executive Vice President of RTAM, None
Age 45 and LLC and President and Chief Director/Trustee
Trustee(4) Executive Officer of the Mutual of eight
Funds division of RTAM, LLC. portfolios
Vice 2005 to 2007 Associated with RTAM, LLC since
President January 2005. Mr. Lydon was Vice
President at Automatic Data
Processing from July 2000 to
December 2004. Mr. Lydon is also
President and Director/Trustee of
four other funds in the Reich &
Tang Fund Complex, President to
New York Daily Tax Free Income
Fund, Inc., Principal Executive
Officer of Delafield Fund, Inc.,
and President and Chief Executive
Officer of Tax Exempt Proceeds
Fund, Inc. Mr. Lydon also serves
as President, Chief Executive
Officer and Director for Reich &
Tang Services, Inc. and Executive
Vice President and Director of
Reich & Tang Distributors Inc.
Prior to 2007, Mr. Lydon was Vice
President of eleven other Funds
in the Reich & Tang Fund Complex.
- -------------------------- ---------- -------------- -------------------------------- ------------------- ------------------
Mia Bottarini, Vice Since 2008 Vice President of RTAM LLC. Ms. N/A N/A
Age 42 President Bottarini is also Vice President
and and Assistant Treasurer of seven
Assistant other funds in the Reich & Tang
Treasurer Complex. Ms. Bottarini has been
associated with RTAM LLC and its
predecessors since June 1984.
- -------------------------- ---------- -------------- -------------------------------- ------------------- ------------------
</table>
<page>
================================================================================
DAILY INCOME FUND
TRUSTEES AND OFFICERS INFORMATION (CONTINUED)
(UNAUDITED)
- --------------------------------------------------------------------------------
<table>
<caption>
Trustees and Officers Information
March 31, 2009(1)
- --------------------- ----------- --------------- ----------------------------------------- ----------------- --------------
<s> <c> <c> <c> <c> <c>
Position(s) Term of Principal Occupation(s Number of Other
Name, Address(2), Held with Office During Past Portfolios in Directorships
and Age Fund and Length of 5 Years Fund Complex held by
Time Overseen by Trustee
Served(3) Trustee
- --------------------- ----------- --------------- ----------------------------------------- ----------------- --------------
Christopher Brancazio, Chief Since 2007 Senior Vice President, Chief Compliance N/A N/A
Officer since September 2007. Mr. Brancazio is
and AML also Chief Compliance Officer and AML
Officer Officer of seven other funds in the
Reich & Tang Fund Complex. From
February 2007 to August 2007, Mr.
Brancazio was a Compliance Officer at
Bank of New York Asset Management.
From March 2002 to February 2007 Mr.
Brancazio served as Vice President,
Chief Compliance Officer and AML
Officer of Trainer Wortham & Co. Inc.,
and the Trainer Wortham Mutual Funds.
Mr. Brancazio also serves as Senior
Vice President, Chief Compliance
Officer and AML Officer of Reich & Tang
Services, Inc. and Reich & Tang
Distributors, Inc.
- --------------------- ----------- --------------- ----------------------------------------- ----------------- --------------
Richard De Sanctis, Vice Since 2005 Executive Vice President and Chief N/A N/A
Age 52 President Operating Officer of RTAM LLC.
Associated with RTAM, LLC since 1990
Treasurer 1992 to 2004 Mr. De Sanctis is Vice President of
and seven other funds in the Reich & Tang
Assistant Fund Complex. Executive Vice President,
Secretary Chief Financial Officer and Director of
Reich & Tang Services, Inc. Executive
Vice President, Chief Financial Officer
and Chief Operating Officer of Reich &
Tang Distributors, Inc. Prior to
December 2004, Mr. De Sanctis was
Treasurer and Assistant Secretary of
eleven funds in the Reich & Tang Fund
Complex and Vice President, Treasurer
and Assistant Secretary of Cortland
Trust, Inc.
- --------------------- ----------- --------------- ----------------------------------------- ----------------- --------------
Chris Gill, Vice Since 2008 Senior Vice President and Assistant N/A N/A
Age 44 President Secretary of RTAM LLC. Mr. Gill has
been associated with RTAM LLC and its
predecessor since February 1994. Mr.
Gill is also Vice President of seven
other funds in the Reich & Tang
Complex. Mr. Gill is also a Senior Vice
President and Director of Reich & Tang
Services, Inc.
- --------------------- ----------- --------------- ----------------------------------------- ----------------- --------------
Joseph Jerkovich, Treasurer Since 2008 Senior Vice President and Chief N/A N/A
Age 41 and Financial Officer of RTAM, LLC and of
Assistant Reich & Tang Services, Inc. Associated
Secretary with RTAM, LLC since September 2004.
Mr. Jerkovich is Treasurer and Assistant
Secretary of seven other funds in the
Reich & Tang Fund Complex. From 2007 to
Vice 2007 to 2008 2008 Mr. Jerkovich was Vice President of
President eight Funds in the Reich & Tang Fund
Complex. Mr. Jerkovich was Vice
President and Chief Investment Officer
at Winklevoss Consulting from May 2002
to June 2004. Mr. Jerkovich is also
Senior Vice President and Controller of
Reich & Tang Distributors, Inc.
- --------------------- ----------- --------------- ----------------------------------------- ----------------- --------------
</table>
<page>
- --------------------------------------------------------------------------------
================================================================================
<table>
<caption>
Trustees and Officers Information
March 31, 2009(1)
- --------------------- ---------- --------------- -------------------------------------- -------------- ---------------------
<s> <c> <c> <c> <c> <c>
Position(s) Term of Principal Occupation(s) Number of Other
Name, Address(2), Held with Office During Past Portfolios in Directorships
and Age Fund and Length of 5 Years Fund Complex held by
Time Overseen by Trustee
Served(3) Trustee
- --------------------- ---------- --------------- -------------------------------------- -------------- ---------------------
Interested Trustees/Officers (continued):
- --------------------- ---------- --------------- -------------------------------------- -------------- ---------------------
Christine Manna, Secretary Since 2007 Vice President and Secretary of N/A N/A
Age 39 RTAM, LLC. Ms. Manna is also
Secretary of seven other funds in
the Reich & Tang Complex. Ms. Manna
has been associated with RTAM, LLC
and its predecessors since June
1995. Ms. Manna is also a Vice
President and Assistant Secretary of
Reich & Tang Services, Inc. and
Reich & Tang Distributors, Inc.
- --------------------- ---------- --------------- -------------------------------------- -------------- ---------------------
Robert Rickard, Vice Since 2007 Senior Vice President of RTAM LLC. N/A N/A
Age 40 President Associated with RTAM, LLC since
December 1991. Mr. Rickard is also
Vice President of seven other funds
in the Reich & Tang Fund Complex and
is also Senior Vice President of
Reich & Tang Distributors, Inc.
- --------------------- ---------- --------------- -------------------------------------- -------------- ---------------------
<fn>
(1) The Statement of Additional Information includes additional information
about Daily Income Fund (the "Fund") trustees/officers and is available,
without charge, upon request by calling the Fund's transfer agent at (800)
433-1918.
(2) The address for each of the above trustees /officers of the Fund is Reich &
Tang Asset Management, LLC, 600 Fifth Avenue, New York, NY 10020.
(3) Each Trustee will hold office for an indefinite term until the earliest of
(i) the next meeting of shareholders, if any, called for the purpose of
considering the election or re-election of such Trustee and until the
election and qualification of his or her successor, if any, elected at such
meeting, or (ii) the date a Trustee resigns or retires, or a Trustee is
removed by the Board of Trustees or shareholders, in accordance with the
Fund's Articles of Incorporation, as amended, and Amended and Restated
By-Laws. Each officer will hold office for an indefinite term until the date
he or she resigns or retires or until his\her successor is elected and
qualifies.
(4) Steven W. Duff and Michael P. Lydon are deemed interested persons of the
Fund due to their affiliation with Reich & Tang Asset Management, LLC, the
Fund's investment advisor.
</fn>
</table>
<page>
- --------------------------------------------------------------------------------
This report is submitted for the general information of the shareholders of the
Fund. It is not authorized for distribution to prospective investors in the Fund
unless preceded or accompanied by an effective prospectus, which includes
information regarding the Fund's objectives and policies, experience of its
management, marketability of shares, and other information.
- --------------------------------------------------------------------------------
Daily Income Fund
600 Fifth Avenue
New York, New York 10020
Manager
Reich & Tang Asset Management, LLC
600 Fifth Avenue
New York, New York 10020
Custodian
The Bank of New York Mellon
2 Hanson Place, 7th Floor,
Brooklyn, New York 11217
Transfer Agent &
Dividend Disbursing Agent
Reich & Tang Services, Inc.
600 Fifth Avenue
New York, New York 10020
DIF 3/09
Item 2: Code of Ethics
The registrant has adopted a Code of Ethics applicable to its Principal
Executive and Senior Financial Officers. Please note that this Code was last
updated on June 5, 2008 to reflect a change in the Principal Financial Officer
of the Fund. To date there have been no waivers granted from a provision of the
Code of Ethics for a key officer
Item 3: Audit Committee Financial Expert
The registrant's Board of Trustees has determined that there is an audit
committee financial expert serving on its audit committee, Edward A. Kuczmarski,
who is "independent," as defined in the instructions to this Item.
Item 4: Principal Accountant Fees and Services
FYE 3/31/2009 FYE 3/31/2008
4(a) Audit Fees $149,000 $195,251
4(b) Audit Related Fees $ 0 $ 0
4(c) Tax Fees $ 17,400 $ 16,000
4(d) All Other Fees $ 0 $ 0
4(e)(1) The audit committee has adopted pre-approval policies and procedures
whereby the audit committee has pre-approved the provision of certain enumerated
tax services to the registrant by the registrant's principal accountant to the
extent the fee is less than $5,000 per occurrence.
4(e)(2) None
4(f) Not applicable.
4(g) $17,400 and $58,475, respectively, were the amount of non-audit fees that
were billed by the registrant's accountant for services rendered to (i) the
registrant, and (ii) the registrant's investment adviser and any control person
of the adviser that provides ongoing services to the registrant for the fiscal
year ended March 31, 2009. $16,000 and $52,950, respectively, were the amount of
non-audit fees that were billed by the registrant's accountant for services
rendered to (i) the registrant, and (ii) the registrant's investment adviser and
any control person of the adviser that provides ongoing services to the
registrant for the fiscal year ended March 31, 2008.
Tax fees for the fiscal year-end March 31, 2009, includes fees billed for the
preparation and review of tax returns. Tax fees for the fiscal year-end March
31, 2008, includes fees billed for the preparation and review of tax returns.
4(h) The registrant's audit committee has considered whether its principal
accountant's provision of non-audit services that were rendered to the
registrant's investment adviser, and any control persons of the investment
adviser that provides ongoing services to the registrant, that were not
pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, is
compatible with maintaining the principal accountant's independence.
Item 5: Audit Committee of Listed Registrants
Not applicable.
Item 6: Schedule of Investments
Schedule of Investments in securities of unaffiliated issuers is included under
Item 1.
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
Not applicable.
Item 9: Submission of Matters to a Vote of Security Holders
There were no material changes to the procedures by which shareholders may
recommend nominees to the registrant's board of directors that were implemented
after the registrant last provided disclosure in response to the requirements of
Item 7(d)(2)(ii)(G) of Schedule 14A, or this Item 9.
Item 10: Controls and Procedures
(a) The registrant's Principal Executive Officer and Principal Financial
Officer have evaluated the design and operation of the registrant's
disclosure controls and procedures within 90 days of this filing and have
concluded that the registrant's disclosure controls and procedures were
effective in ensuring that information required to be disclosed by the
registrant in this Form N-CSR was recorded, processed, summarized and
reported on a timely basis.
(b) There were no changes in the registrant's internal controls over financial
reporting that occurred during the second fiscal quarter of the period
covered by this report that have materially affected, or are reasonably
likely to affect, the registrant's internal controls over financial
reporting.
Item 11: Exhibits
(a)(1) Code of Ethics.
(a)(2) Certifications of Principal Executive Officer and Principal Financial
Officer, under Rule 30a-2 of the Investment Company Act of 1940.
(a)(3) Not applicable.
(b) Certifications of Principal Executive Officer and Principal Financial
Officer, under Section 906 of the Sarbanes-Oxley Act of 2002 and 18
U.S.C. ss.1350.
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. (Registrant)
Daily Income Fund
By (Signature and Title)*/s/ Joseph Jerkovich
Joseph Jerkovich, Treasurer and Assistant Secretary
Date: June 8, 2009
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Michael P. Lydon
Michael P. Lydon, President
Date: June 8, 2009
By (Signature and Title)*/s/ Joseph Jerkovich
Joseph Jerkovich, Treasurer and Assistant Secretary
Date: June 8, 2009
* Print the name and title of each signing officer under his or her signature.