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

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES

Investment Company Act file number 811-5047

Tax-Free Fund of Colorado
(Exact name of Registrant as specified in charter)

380 Madison Avenue
New York, New York 10017
(Address of principal executive offices) (Zip code)

Joseph P. DiMaggio
380 Madison Avenue
New York, New York 10017
(Name and address of agent for service)

Registrant's telephone number, including area code: (212) 697-6666

Date of fiscal year end: 12/31

Date of reporting period: 6/30/03

FORM N-CSR

ITEM 1. REPORTS TO STOCKHOLDERS.

TAX-FREE FUND OF COLORADO
Semi-Annual Report June 30, 2003

[Logo of the Aquila Group of Funds: an eagle's head]

AQUILA(SM)
GROUP OF FUNDS

SERVING COLORADO INVESTORS
FOR OVER 15 YEARS

TAX-FREE FUND
OF COLORADO
-----------

380 MADISON AVENUE, SUITE 2300 * NEW YORK, NY 10017
800-437-1020 * 212-697-6666

[Logo of Tax-Free Fund of Colorado: a square with silhouettes of two mountains
and a rising sun]

SEMI-ANNUAL REPORT

TAX-FREE FUND OF COLORADO
STATEMENT OF INVESTMENTS
JUNE 30, 2003
(UNAUDITED)

RATING
FACE MOODY'S/
AMOUNT GENERAL OBLIGATION BONDS (36.2%) S&P VALUE
- ------------ ------------------------------------------------------------- -------- -------------

CITY & COUNTY (2.3%)
-------------------------------------------------------------
Denver Colorado City & County Excise Tax Revenue
$ 2,260,000 5.00%, 09/01/12 FSA Insured .............................. Aaa/AAA $ 2,536,850
1,000,000 5.00%, 09/01/11 FSA Insured .............................. Aaa/AAA 1,133,750
Denver Colorado City and County Art Museum
2,000,000 5.00%, 08/01/15 .......................................... Aa1/AA+ 2,217,500
-------------
5,888,100
-------------

METROPOLITAN DISTRICT (6.9%)
-------------------------------------------------------------
Castle Pines Metropolitan District
1,060,000 5.50%, 12/01/07 FSA Insured .............................. Aaa/AAA 1,216,350
Foothills Park & Recreational District
1,310,000 5.00%, 12/01/12 FSA Insured .............................. Aaa/NR 1,485,213
1,325,000 5.00%, 12/01/13 FSA Insured .............................. Aaa/NR 1,488,969
1,850,000 5.00%, 12/01/17 MBIA Insured ............................. Aaa/NR 2,021,125
Highlands Ranch Metropolitan District #1, Refunding
1,530,000 6.25%, 09/01/06 MBIA Insured ............................. Aaa/AAA 1,541,919
1,000,000 5.75%, 09/01/08 AMBAC Insured ............................ Aaa/AAA 1,167,500
1,730,000 5.75%, 09/01/09 AMBAC Insured ............................ Aaa/AAA 2,047,888
Highlands Ranch Metropolitan District #4
1,000,000 5.80%, 12/01/07 LOC: Swiss Bank, Pre-Refunded ............ NR/NR** 1,116,250
Interstate South Metropolitan District
2,165,000 5.75%, 12/01/09 LOC: US Bank ............................. NR/AA- 2,300,313
South Suburban Park & Recreational District
1,365,000 5.125%, 12/15/09 FGIC Insured ............................ Aaa/AAA 1,545,863
Westglenn Metropolitan District Colorado
1,000,000 6.25%, 12/01/08 Pre-Refunded ............................. NR/A+ 1,048,430
Westglenn Metropolitan District Colorado Jefferson
County Refunding
660,000 5.65%, 12/01/04 ETM ...................................... NR/A+ 674,421
-------------
17,654,241
-------------

SCHOOL DISTRICTS (27.0%)
-------------------------------------------------------------
Adams & Arapahoe County School District 28J
4,000,000 5.00%, 12/01/16 FSA Insured .............................. Aaa/AAA 4,440,000
Adams County School District #12
1,255,000 5.625%, 12/15/08 FGIC Insured ............................ Aaa/AAA 1,465,212
2,000,000 5.00%, 12/15/12 MBIA Insured ............................. Aaa/AAA 2,267,500
Adams County School District #14
1,275,000 5.75%, 12/01/08 FSA Insured .............................. Aaa/AAA 1,493,344
Arapahoe County Cherry Creek School District #5
$ 1,000,000 5.50%, 12/15/08 .......................................... Aa1/AA $ 1,166,250
2,760,000 5.50%, 12/15/11 .......................................... Aa1/AA 3,163,650
2,750,000 5.50%, 12/15/12 .......................................... Aa1/AA 3,145,312
Boulder Valley Colorado School District
1,215,000 5.50%, 12/01/08 FGIC Insured ............................. Aaa/AAA 1,391,175
Clear Creek Colorado School District
1,000,000 5.00%, 12/01/16 FSA Insured .............................. Aaa/AAA 1,101,250
Denver City & County School District #1
1,000,000 5.60%, 06/01/08 .......................................... Aa3/AA- 1,155,000
Douglas & Elbert Counties School District # Re-1,
Series 1992
1,000,000 5.00%, 12/15/10 FGIC Insured ............................. Aaa/AAA 1,128,750
2,000,000 5.25%, 12/15/11 FGIC Insured ............................. Aaa/AAA 2,257,500
El Paso County Colorado School District #2 Harrison
1,000,000 5.00%, 12/01/15, MBIA Insured ............................ Aaa/NR 1,115,000
El Paso County School District #11
1,330,000 6.25%, 12/01/08 .......................................... Aa3/AA- 1,600,988
El Paso County School District #20
1,000,000 6.15%, 12/15/08 MBIA Insured ............................. Aaa/AAA 1,196,250
1,500,000 5.00%, 12/15/14 FGIC Insured ............................. Aaa/NR 1,689,375
El Paso County School District #38
1,110,000 5.70%, 12/01/12 .......................................... Aa3/NR 1,329,225
El Paso County School District #49
1,500,000 5.50%, 12/01/13 FSA Insured .............................. Aaa/AAA 1,794,375
1,000,000 5.25%, 12/01/14 FGIC Insured ............................. Aaa/AAA 1,142,500
1,795,000 5.00%, 12/01/15 FSA Insured .............................. Aaa/AAA 2,019,375
Garfield County Colorado School District
1,250,000 5.00%, 12/01/17 FSA Insured .............................. Aaa/NR 1,365,625
Jefferson County School District # R-1
3,000,000 5.50%, 12/15/09 FGIC Insured ............................. Aaa/AAA 3,536,250
2,340,000 5.25%, 12/15/11 FGIC Insured ............................. Aaa/AAA 2,644,200
1,000,000 5.50%, 12/15/13 FGIC Insured ............................. Aaa/AAA 1,178,750
2,500,000 4.00%, 12/15/14 FSA Insured .............................. Aaa/AAA 2,637,500
La Plata County Colorado School District #9
1,500,000 5.00%, 11/01/18 MBIA Insured ............................. Aaa/NR 1,623,750
Larimer County School District
$ 2,100,000 5.25%, 12/15/11 .......................................... Aa3/AA- $ 2,344,125
Larimer Weld and Boulder County Thompson S.D.
2,000,000 5.90%, 12/15/05 .......................................... A1/AA- 2,135,000
Mesa County School District #51
1,065,000 6.00%, 12/01/06 MBIA Insured ............................. Aaa/AAA 1,218,094
1,000,000 5.20%, 12/01/09 MBIA Insured ............................. Aaa/AAA 1,126,250
Pueblo County Colorado School District # 70
1,040,000 5.50%, 12/01/09 AMBAC Insured ............................ Aaa/AAA 1,188,200
1,000,000 5.00%, 12/01/15 FGIC Insured ............................. Aaa/AAA 1,105,000
3,440,000 5.00%, 12/01/16 FGIC Insured ............................. Aaa/AAA 3,758,200
Weld & Adams County School District 3J
1,000,000 5.50%, 12/15/10 AMBAC Insured, Pre-Refunded .............. Aaa/AAA 1,181,250
Weld County Colorado School District # 2
1,315,000 5.00%, 12/01/15 FSA Insured .............................. Aaa/AAA 1,466,225
Weld County Colorado School District # 6
1,195,000 5.00%, 12/01/15 FSA Insured .............................. Aaa/AAA 1,320,475
Weld County Colorado School District # 8
1,115,000 5.00%, 12/01/15 FSA Insured .............................. Aaa/AAA 1,243,225
1,385,000 5.25%, 12/01/17 FSA Insured .............................. Aaa/AAA 1,556,394
-------------
68,690,544
-------------
Total General Obligation Bonds ........................ 92,232,885
-------------

REVENUE BONDS (63.8%)
-------------------------------------------------------------

ELECTRIC (2.3%)
-------------------------------------------------------------
Colorado Springs Utilities Revenue
1,660,000 5.00%, 11/15/17 .......................................... Aa2/AA 1,815,625
Moffat County Colorado Pollution Control
2,125,000 5.625%, 11/01/06 AMBAC Insured ........................... Aaa/AAA 2,398,594
Platte River Power Authority
1,500,000 6.00%, 06/01/07 MBIA Insured ............................. Aaa/AAA 1,728,750
-------------
5,942,969
-------------
HIGHER EDUCATION (10.1%)
-------------------------------------------------------------
Boulder County Colorado UCAR Revenue
1,760,000 5.00%, 09/01/16 MBIA Insured ............................. Aaa/AAA 1,933,800
City of Aurora Colorado Educational Development
Refunding Bonds Series 1994
$ 1,580,000 6.00%, 10/15/07 .......................................... NR/BBB $ 1,662,950
Colorado Educational & Cultural Facility Authority
2,110,000 5.00%, 07/01/17 AMBAC Insured ............................ Aaa/AAA 2,297,262
Colorado Educational & Cultural Facility Authority
Johnson & Wales
860,000 5.00%, 04/01/18 XLCI Insured ............................. Aaa/AAA 915,900
Colorado Educational and Cultural Facilities Authorities
1,865,000 5.375%, 07/01/18 AMBAC Insured ........................... Aaa/AAA 2,102,787
Colorado Post Secondary Educational Facility
1,170,000 5.50%, 03/01/08 MBIA Insured ............................. Aaa/AAA 1,336,725
Colorado Post Secondary Educational Facility
Authority Refunding Series 93
1,000,000 5.95%, 03/01/09 AMBAC Insured ............................ A2/AAA 1,013,410
Colorado State Board of Agriculture Revenue,
University of Southern Colorado Auxiliary Facility
1,000,000 6.25%, 08/01/07 AMBAC Insured ............................ Aaa/AAA 1,003,370
Colorado State University System
1,530,000 5.00%, 03/01/17 AMBAC Insured ............................ Aaa/NR 1,675,350
University of Colorado Enterprise System
1,000,000 5.00%, 06/01/11 .......................................... Aa3/AA- 1,140,000
2,325,000 5.00%, 06/01/15 AMBAC Insured ............................ Aaa/AAA 2,580,750
1,735,000 5.00%, 06/01/16 .......................................... Aa3/AA- 1,915,006
1,000,000 5.25%, 06/01/17 FGIC Insured ............................. Aaa/AAA 1,125,000
University of Northern Colorado Auxiliary Facilities
1,500,000 5.75%, 06/01/07 MBIA Insured, Pre-Refunded ............... Aaa/AAA 1,581,435
1,745,000 5.75%, 06/01/08 MBIA Insured ............................. Aaa/AAA 2,013,294
1,390,000 5.00%, 06/01/15 AMBAC Insured ............................ Aaa/AAA 1,527,262
-------------
25,824,301
-------------
HOSPITAL (5.2%)
-------------------------------------------------------------
Colorado Health Facility Authority Hospital
Revenue, Catholic Health
1,000,000 5.375%, 12/01/09 ......................... Aa2/AA 1,108,750
Colorado Health Facility Authority Hospital
Revenue North Colorado Medical Center
2,030,000 5.60%, 05/15/05 MBIA Insured ............................. Aaa/AAA 2,078,212
Colorado Health Facilities Authority Revenue,
Refunding (Boulder Community Hospital)
$ 1,410,000 5.65%, 10/01/06 MBIA Insured ............................. Aaa/AAA $ 1,506,937
Colorado Health Facility Authority Hospital
Revenue, Sisters of Charity-Leavenworth
1,000,000 5.50%, 12/01/08 MBIA Insured ............................. Aaa/AAA 1,148,750
1,500,000 5.25%, 12/01/10 MBIA Insured ............................. Aaa/AAA 1,676,250
Colorado Health Facility Authority Sisters of
Charity Health Care
1,000,000 6.25%, 05/15/09 AMBAC Insured, ETM ....................... Aaa/AAA 1,196,250
Colorado Health Facility Community Provider
Pooled Loan Revenue
313,000 7.20%, 07/15/05 FSA Insured .............................. Aaa/AAA 314,042
Colorado Springs Hospital Revenue
1,460,000 5.50%, 12/15/06 MBIA Insured ............................. Aaa/AAA 1,620,600
Poudre Valley Hospital District, Refunding
1,000,000 5.375%, 11/15/07 ......................................... Aa/NR 1,012,120
University Colorado Hospital Authority
Hospital Revenue
1,475,000 5.50%, 11/15/07 AMBAC Insured ............................ Aaa/NR 1,685,187
-------------
13,347,098
-------------
HOUSING (3.7%)
-------------------------------------------------------------
Adams County Colorado Multi-Family Housing
Revenue, Brittany Station Series A
1,600,000 5.40%, 09/01/25 FNMA Insured ............................. NR/AAA 1,704,000
Colorado Housing Finance Authority
960,000 5.00%, 08/01/13 Series 2001 .............................. A1/A+ 1,002,000
1,850,000 6.05%, 10/01/16 Series 1999A3 ............................ Aa2/AA+ 1,944,812
60,000 6.125%, 11/01/23 Series 1998D3 ........................... Aa2/NR 64,950
Colorado Housing Finance Authority, SFM
20,000 6.00%, 12/01/04 Series 1994C ............................. Aa2/NR 20,254
445,000 5.625%, 06/01/10 Series 1995D ............................ Aa2/NR 449,049
190,000 5.75%, 11/01/10 Series 1996A ............................. Aa2/A+ 193,040
185,000 6.25%, 12/01/12 Series 1994C ............................. Aa2/NR 185,590
Colorado Housing Finance Authority, Single Family
Program 2000C3
$ 375,000 5.70%, 10/01/22 .......................................... Aa2/AA $ 398,437
Colorado Housing Finance Authority, Single Family
Program Sub. 2000D
610,000 5.40%, 10/01/12 .......................................... A1/A+ 643,550
Denver Colorado Single Family Mortgage Revenue
490,000 5.00%, 11/01/15 GNMA Insured ............................. NR/AAA 517,563
Littleton Assisted Living Building Authority, Amity
Plaza Project Multi-Family Housing Revenue
Bond Series 1994
640,000 6.10%, 03/01/06 .......................................... NR/A+ 658,400
Snowmass Village Multi-Family Revenue Refunding
1,500,000 6.30%, 12/15/08 FSA Insured .............................. Aaa/AAA 1,533,750
-------------
9,315,395
-------------
LEASE (6.5%)
-------------------------------------------------------------
Aurora Colorado COP
2,105,000 5.25%, 12/01/13 AMBAC Insured ............................ Aaa/AAA 2,381,281
Broomfield Colorado COP
2,500,000 5.10%, 12/01/12 AMBAC Insured ............................ Aaa/NR 2,815,625
Denver Colorado City and County COP Roslyn Fire
1,835,000 5.00%, 12/01/15 .......................................... Aa2/AA 2,032,263
El Paso County COP
1,100,000 5.25%, 12/01/09 MBIA Insured ............................. Aaa/AAA 1,277,375
El Paso County COP Pikes Peak Regional Dev. Auth.
1,925,000 5.00%, 12/01/18 AMBAC Insured ............................ Aaa/AAA 2,091,031
El Paso County Colorado COP Judicial Building
1,760,000 5.00%, 12/01/16 AMBAC Insured ............................ Aaa/AAA 1,938,200
Lakewood Colorado COP
1,440,000 5.20%, 12/01/13 AMBAC Insured ............................ Aaa/AAA 1,621,800
Northern Colorado Water Conservancy District
1,000,000 5.00%, 10/01/15 MBIA Insured ............................. Aaa/AAA 1,113,750
Westminster, Colorado COP
1,055,000 5.35%, 09/01/11 MBIA Insured ............................. Aaa/AAA 1,200,063
-------------
16,471,388
-------------

SALES TAX (11.2%)
-------------------------------------------------------------
City of Boulder Colorado
$ 1,045,000 5.25%, 08/15/10 AMBAC Insured ............................ Aaa/AAA $ 1,191,300
Boulder Colorado Open Space Acquisition
1,250,000 5.50%, 08/15/12 .......................................... Aa1/AA+ 1,435,937
Boulder County Colorado Open Space Capital
Improvement
3,065,000 5.00%, 07/15/16 MBIA Insured ............................. Aaa/AAA 3,367,669
Boulder County Colorado Open Space & Use Tax
Revenue Bonds Series 1994
1,740,000 5.75%, 12/15/04, FGIC Insured ............................ Aaa/AAA 1,855,275
Boulder County Colorado Sales & Use Tax Open
Space Series A
1,000,000 5.45%, 12/15/12 FGIC Insured ............................. Aaa/AAA 1,140,000
Colorado Springs Colorado Sales & Use Tax
Revenue Service Sales
1,320,000 5.00%, 12/01/12 .......................................... A1/AA 1,453,650
City & County of Denver Colorado Excise Tax Revenue
2,000,000 5.375%, 09/01/10 FSA Insured ............................. Aaa/AAA 2,300,000
Douglas County Colorado Sales & Use Tax Open
Space Revenue
1,780,000 5.50%, 10/15/12 FSA Insured .............................. Aaa/AAA 2,047,000
Golden Colorado Sales & Use Tax
1,265,000 5.00%, 12/01/12 AMBAC Insured ............................ Aaa/AAA 1,434,194
Jefferson County Open Space Sales Tax
1,245,000 5.00%, 11/01/11 FGIC Insured ............................. Aaa/AAA 1,385,063
1,600,000 5.00%, 11/01/13 AMBAC Insured ............................ Aaa/AAA 1,796,000
1,080,000 5.00%, 11/01/14 AMBAC Insured ............................ Aaa/AAA 1,202,850
Lakewood Colorado Sales & Use Tax Revenue
1,040,000 5.25%, 12/01/09 .......................................... NR/AA 1,199,900
Larimer County Colorado Sales Tax Revenue Bond
1,000,000 5.50%, 12/15/12 AMBAC Insured ............................ Aaa/AAA 1,152,500
Longmont Colorado Sales & Use Tax
1,875,000 5.50%, 11/15/14 .......................................... NR/AA 2,160,938
Thornton Colorado Sales Tax
$ 1,000,000 5.00%, 09/01/14 FSA Insured .............................. Aaa/AAA $ 1,111,250
Westminster Colorado Sales Tax Revenue
1,175,000 5.50%, 12/01/07 FGIC Insured ............................. Aaa/AAA 1,348,313
1,000,000 5.00%, 12/01/17 AMBAC Insured ............................ NR/AAA 1,092,500
-------------
28,674,339
------------
- -
TRANSPORTATION (5.2%)
-------------------------------------------------------------
Arapahoe County Colorado E-470 Vehicle
Registration Revenue Bonds
1,000,000 5.45%, 08/31/07 MBIA Insured Pre-Refunded ................ Aaa/AAA 1,117,500
Colorado Dept. of Transportation-Transportation
Revenue Anticipation Note
1,000,000 6.00%, 06/15/13 AMBAC Insured, Pre-Refunded .............. Aaa/AAA 1,208,750
Colorado Department of Transportation Rev.
1,565,000 5.00%, 06/15/15 MBIA Insured ............................. Aaa/AAA 1,791,925
Northwest Pkwy. Pub. Hwy. Auth. Series A
2,515,000 5.15%, 06/15/14 AMBAC Insured ............................ Aaa/AAA 2,854,525
Regional Transportation District Colorado CTFS
1,190,000 5.00%, 06/01/15 AMBAC Insured ............................ Aaa/AAA 1,316,438
1,510,000 4.85%, 06/01/18 AMBAC Insured ............................ Aaa/AAA 1,613,813
Regional Transportation District Sales Tax Revenue
2,000,000 5.00%, 11/01/13 FGIC Insured ............................. Aaa/AAA 2,240,000
1,000,000 5.00%, 11/01/16 FGIC Insured ............................. Aaa/AAA 1,087,500
-------------
13,230,451
-------------

WATER & SEWER (15.9%)
-------------------------------------------------------------
Boulder Colorado Water & Sewer Revenue
1,000,000 5.40%, 12/01/14 .......................................... Aa2/AA+ 1,142,500
Broomfield Colorado Water Activity Enterprise
1,500,000 5.30%, 12/01/12 MBIA Insured ............................. Aaa/NR 1,721,250
1,730,000 5.25%, 12/01/13 MBIA Insured ............................. Aaa/NR 1,970,037
2,190,000 5.00%, 12/01/16 MBIA Insured ............................. Aaa/NR 2,411,737
2,290,000 5.00%, 12/01/17 MBIA Insured ............................. Aaa/NR 2,501,825
Broomfield Colorado Sewer and Waste Water Revenue
1,985,000 5.00%, 12/01/15 AMBAC Insured ............................ Aaa/NR 2,208,312
1,000,000 5.00%, 12/01/16 AMBAC Insured ............................ Aaa/NR 1,100,000
Centennial Water & Sewer District
$ 1,750,000 5.80%, 12/01/07 FSA Insured .............................. Aaa/AAA $ 1,933,750
Colorado Clean Water Revenue
1,000,000 5.375%, 09/01/10 ......................................... Aaa/AAA 1,133,750
Colorado Water Res. & Power Development Authority
215,000 6.00%, 09/01/06 .......................................... Aaa/AAA 217,455
1,000,000 5.50%, 09/01/09 .......................................... Aaa/AAA 1,145,000
1,635,000 5.00%, 09/01/12 .......................................... Aaa/AAA 1,857,769
1,000,000 5.55%, 11/01/13 FGIC Insured ............................. Aaa/AAA 1,145,000
1,160,000 4.00%, 09/01/15 .......................................... Aaa/AAA 1,202,050
Denver Colorado City and County Wastewater
1,560,000 5.00%, 11/01/15 FGIC Insured ............................. Aaa/AAA 1,737,450
Denver Colorado City & County Water Board
2,570,000 4.75%, 12/01/17 FSA Insured .............................. Aaa/AAA 2,765,962
1,885,000 4.75%, 12/01/18 FSA Insured .............................. Aaa/AAA 2,009,881
Lafayette Colorado Water Revenue
1,625,000 5.00%, 12/01/17 MBIA Insured ............................. Aaa/AAA 1,787,500
Left Hand Water District, Series 1996
1,530,000 5.75%, 11/15/08 MBIA Insured ............................. Aaa/AAA 1,717,425
Metro Wastewater Reclamation District
1,270,000 5.25%, 04/01/09 .......................................... Aa2/AA 1,425,575
Northglenn Colorado Water & Sewer
1,010,000 5.75%, 12/01/06 FSA Insured .............................. Aaa/AAA 1,147,613
Pueblo Colorado Board Water Works
1,000,000 5.50%, 11/01/10 FSA Insured .............................. Aaa/AAA 1,177,500
Thornton, Colorado, Refunding
2,000,000 5.60%, 12/01/06 FSA Insured .............................. Aaa/AAA 2,262,500
Westminster Colorado Water & Wastewater
Utility Revenue
1,000,000 5.70%, 12/01/04 AMBAC Insured ............................ Aaa/AAA 1,063,750
Ute Water Conservancy District
1,570,000 5.50, 6/15/12 MBIA Insured ............................... Aaa/AAA 1,795,688
-------------
40,581,279
-------------

MISCELLANEOUS REVENUE (3.7%)
-------------------------------------------------------------
Denver Colorado City & County Helen Bonfils Project
$ 2,275,000 5.875%, 12/01/09 ......................................... NR/AA- $ 2,596,344
Denver Colorado Convention Center Hotel
3,000,000 4.00%, 12/01/14 XLCI Insured ............................. Aaa/AAA 3,112,500
South Suburban Park & Recreational District
1,000,000 6.00%, 11/01/07 .......................................... Baa3/NR 1,126,250
Thornton, Colorado Development Authority
1,230,000 5.75%, 12/01/06 MBIA Insured ............................. Aaa/AAA 1,397,587
Westminster, Colorado Golf Course Activity
1,000,000 5.40%, 12/01/13 Asset Guaranty Insured ................... NR/AA 1,091,250
-------------
9,323,931
-------------
Total Revenue Bonds ................................... 162,711,151
-------------

Total Investments (cost $234,675,116*) ...................... 100.0% 254,944,036
Other assets less liabilities ............................... 0.0 102,116
----- -------------
Net Assets .................................................. 100.0% $ 255,046,152
===== =============

* See note 4.

** Any security not rated has been determined by the
Investment Sub-Adviser to have sufficient quality to be
ranked in the top four credit ratings if a credit rating
were to be assigned by a rating service.

PORTFOLIO ABBREVIATIONS:
-----------------------------------------------
AMBAC - American Municipal Bond Assurance Corp.
COP - Certificates of Participation
ETM - Escrowed to Maturity
FGIC - Financial Guaranty Insurance Co.
FNMA - Federal Housing Administration
FSA - Financial Security Assurance
GNMA - Government National Mortgage Association
LOC - Letter of Credit
MBIA - Municipal Bond Investors Assurance Corp.
SFM - Single Family Mortgage
XLCI - XL Capital Assurance Inc.

See accompanying notes to financial statements.

TAX-FREE FUND OF COLORADO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2003 (UNAUDITED)

ASSETS
Investments at value (cost $234,675,116) ................................................. $ 254,944,036
Interest receivable ...................................................................... 1,744,934
Receivable for Fund shares sold .......................................................... 690,213
Receivable for investment securities sold ................................................ 197,427
Other assets ............................................................................. 10,525
-------------
Total assets ............................................................................. 257,587,135
-------------
LIABILITIES
Cash overdraft ........................................................................... 1,943,879
Payable for Fund shares redeemed ......................................................... 173,375
Dividends payable ........................................................................ 242,606
Management fee payable ................................................................... 104,887
Distribution fees payable ................................................................ 46,284
Accrued expenses ......................................................................... 29,952
-------------
Total liabilities ........................................................................ 2,540,983
-------------
NET ASSETS ..................................................................................... $ 255,046,152
=============
Net Assets consist of:
Capital Stock - Authorized an unlimited number of shares, par value $.01 per share ....... $ 232,069
Additional paid-in capital ............................................................... 234,730,283
Net unrealized appreciation on investments (note 4) ...................................... 20,268,920
Accumulated net realized gain on investments ............................................. 59,814
Distributions in excess of net investment income ......................................... (244,934)
-------------
$ 255,046,152
=============
CLASS A
Net Assets ............................................................................... $ 231,211,343
=============
Capital shares outstanding ............................................................... 21,037,571
=============
Net asset value and redemption price per share ........................................... $ 10.99
=============
Offering price per share (100/96 of $10.99 adjusted to nearest cent) ..................... $ 11.45
=============

CLASS C
Net Assets ............................................................................... $ 14,199,668
=============
Capital shares outstanding ............................................................... 1,294,534
=============
Net asset value and offering price per share ............................................. $ 10.97
=============
Redemption price per share (*a charge of 1% is imposed on the redemption
proceeds of the shares, or on the original price, whichever is lower, if redeemed
during the first 12 months after purchase) .......................................... $ 10.97*
=============

CLASS I
Net Assets ............................................................................... $ 5,118
=============
Capital shares outstanding ............................................................... 466
=============
Net asset value, offering and redemption price per share ................................. $ 10.99
=============

CLASS Y
Net Assets ............................................................................... $ 9,630,023
=============
Capital shares outstanding ............................................................... 874,368
=============
Net asset value, offering and redemption price per share ................................. $ 11.01
=============

See accompanying notes to financial statements.

TAX-FREE FUND OF COLORADO
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2003
(UNAUDITED)

INVESTMENT INCOME:

Interest income ............................................ $ 5,487,428

Expenses:

Management fee (note 3) .................................... $ 600,725
Distribution and service fees (note 3) ..................... 112,343
Transfer and shareholder servicing agent fees .............. 60,925
Trustees' fees and expenses (note 8) ....................... 40,771
Shareholders' reports and proxy statements ................. 31,983
Legal fees ................................................. 27,966
Auditing fees .............................................. 14,079
Custodian fees ............................................. 13,528
Registration fees and dues ................................. 8,040
Miscellaneous .............................................. 23,820
-----------
Total expenses ............................................. 934,180

Expenses paid indirectly (note 6) .......................... (5,803)
-----------
Net expenses ............................................... 928,377
-----------
Net investment income ...................................... 4,559,051

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:

Net realized gain (loss) from securities transactions ...... 59,960
Change in unrealized appreciation on investments ........... 4,073,893
-----------

Net realized and unrealized gain (loss) on investments ..... 4,133,853
-----------
Net change in net assets resulting from operations ......... $ 8,692,904
===========

See accompanying notes to financial statements.

TAX-FREE FUND OF COLORADO
STATEMENTS OF CHANGES IN NET ASSETS

SIX MONTHS ENDED
JUNE 30, 2003 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2002
---------------- -----------------

OPERATIONS:
Net investment income ......................................... $ 4,559,051 $ 8,460,610
Net realized gain (loss) from securities transactions ......... 59,960 156,615
Change in unrealized appreciation on investments .............. 4,073,893 10,045,867
------------- -------------
Change in net assets from operations ....................... 8,692,904 18,663,092
------------- -------------

DISTRIBUTIONS TO SHAREHOLDERS (NOTE 10):
Class A Shares:
Net investment income ......................................... (4,462,502) (8,388,584)

Class C Shares:
Net investment income ......................................... (175,962) (161,987)

Class I Shares:
Net investment income ......................................... (46)+ --

Class Y Shares:
Net investment income ......................................... (176,945) (276,796)
------------- -------------
Change in net assets from distributions .................... (4,815,455) (8,827,367)
------------- -------------

CAPITAL SHARE TRANSACTIONS (NOTE 7):
Proceeds from shares sold ..................................... 26,628,134 45,269,037
Reinvested dividends and distributions ........................ 2,848,472 5,281,641
Cost of shares redeemed ....................................... (10,093,813) (21,843,527)
------------- -------------
Change in net assets from capital share transactions .......... 19,382,793 28,707,151
------------- -------------
Change in net assets ....................................... 23,260,242 38,542,876

NET ASSETS:
Beginning of period ........................................... 231,785,910 193,243,034
------------- -------------
End of period* ................................................ $ 255,046,152 $ 231,785,910
============= =============

* Includes undistributed (overdistributed) net investment
income of: $ (244,934) $ 11,470
============= =============

- ----------
+ For the period April 2, 2003 to June 30, 2003.

See accompanying notes to financial statements.

TAX-FREE FUND OF COLORADO
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)

1. ORGANIZATION

Tax-Free Fund of Colorado (the "Fund"), a non-diversified, open-end
investment company, was organized in February, 1987 as a Massachusetts business
trust and commenced operations on May 21, 1987. The Fund is authorized to issue
an unlimited number of shares and, since its inception to April 30, 1996,
offered only one class of shares. On that date, the Fund began offering two
additional classes of shares, Class C and Class Y shares. All shares outstanding
prior to that date were designated as Class A shares and are sold with a
front-payment sales charge and bear an annual distribution fee. Class C shares
are sold with a level-payment sales charge with no payment at time of purchase
but level service and distribution fees from date of purchase through a period
of six years thereafter. A contingent deferred sales charge of 1% is assessed to
any Class C shareholder who redeems shares of this Class within one year from
the date of purchase. Class C Shares, together with a pro-rata portion of all
Class C Shares acquired through reinvestment of dividends and other
distributions paid in additional Class C Shares, automatically convert to Class
A Shares after 6 years. The Class Y shares are only offered to institutions
acting for an investor in a fiduciary, advisory, agency, custodian or similar
capacity and are not offered directly to retail investors. Class Y shares are
sold at net asset value without any sales charge, redemption fees, contingent
deferred sales charge or distribution or service fees. On April 30, 1998, the
Fund established Class I shares, which are offered and sold only through
financial intermediaries and are not offered directly to retail investors. Class
I Shares are sold at net asset value without any sales charge, redemption fees,
or contingent deferred sales charge. Class I Shares carry a distribution and
service fee. All classes of shares represent interests in the same portfolio of
investments and are identical as to rights and privileges but differ with
respect to the effect of sales charges, the distribution and/or service fees
borne by each class, expenses specific to each class, voting rights on matters
affecting a single class and the exchange privileges of each class.

2. SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies followed by
the Fund in the preparation of its financial statements. The policies are in
conformity with accounting principles generally accepted in the United States of
America for investment companies.

a) PORTFOLIO VALUATION: Municipal securities which have remaining maturities
of more than 60 days are valued at fair value each business day based upon
information provided by a nationally prominent independent pricing service
and periodically verified through other pricing services; in the case of
securities for which market quotations are readily available, securities
are valued at the mean of bid and asked quotations and, in the case of
other securities, at fair value determined under procedures established by
and under the general supervision of the Board of Trustees. Securities
which mature in 60 days or less are valued at amortized cost if their term
to maturity at purchase is 60 days or less, or by amortizing their
unrealized appreciation or depreciation on the 61st day prior to maturity,
if their term to maturity at purchase exceeds 60 days.

b) SECURITIES TRANSACTIONS AND RELATED INVESTMENT INCOME: Securities
transactions are recorded on the trade date. Realized gains and losses
from securities transactions are reported on the identified cost basis.
Interest income is recorded daily on the accrual basis and is adjusted for
amortization of premium and accretion of original issue and market
discount.

c) FEDERAL INCOME TAXES: It is the policy of the Fund to qualify as a
regulated investment company by complying with the provisions of the
Internal Revenue Code applicable to certain investment companies. The Fund
intends to make distributions of income and securities profits sufficient
to relieve it from all, or substantially all, Federal income and excise
taxes.

d) ALLOCATION OF EXPENSES: Expenses, other than class-specific expenses, are
allocated daily to each class of shares based on the relative net assets
of each class. Class-specific expenses, which include distribution and
service fees and any other items that are specifically attributed to a
particular class, are charged directly to such class.

e) USE OF 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.

3. FEES AND RELATED PARTY TRANSACTIONS

a) MANAGEMENT ARRANGEMENTS:

Aquila Management Corporation (the "Manager"), the Fund's founder and
sponsor, serves as the Manager for the Fund under an Advisory and Administration
Agreement with the Fund. The portfolio management of the Fund has been delegated
to a Sub-Adviser as described below. Under the Advisory and Administration
Agreement, the Manager provides all administrative services to the Fund, other
than those relating to the day-to-day portfolio management. The Manager's
services include providing the office of the Fund and all related services as
well as overseeing the activities of the Sub-Adviser and all the various support
organizations to the Fund such as the shareholder servicing agent, custodian,
legal counsel, auditors and distributor and additionally maintaining the Fund's
accounting books and records. For its services, the Manager is entitled to
receive a fee which is payable monthly and computed as of the close of business
each day at the annual rate of 0.50% on the Fund's net assets.

KPM Investment Management, Inc. (the "Sub-Adviser"), a wholly-owned
subsidiary of KFS Corporation, a member of the nationally oriented Mutual of
Omaha Companies, serves as the Investment Sub-Adviser for the Fund under a
Sub-Advisory Agreement between the Manager and the Sub-Adviser. Under this
agreement, the Sub-Adviser continuously provides, subject to oversight of the
Manager and the Board of Trustees of the Fund, the investment program of the
Fund and the composition of its portfolio, arranges for the purchases and sales
of portfolio securities, and provides for daily pricing of the Fund's portfolio.
For its services, the Sub-Adviser is entitled to receive a fee from the Manager
which is payable monthly and computed as of the close of business each day at
the annual rate of 0.20 of 1% on the Fund's average net assets.

Specific details as to the effect of the Fund's payments under its
Distribution Plan, as described below, on the above management fees and as to
the nature and extent of the services provided by the Manager and the
Sub-Adviser are more fully defined in the Fund's Prospectus and Statement of
Additional Information.

b) DISTRIBUTION AND SERVICE FEES:

The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule
12b-1 (the "Rule") under the Investment Company Act of 1940. Under one part of
the Plan, with respect to Class A Shares, the Fund is authorized to make service
fee payments to broker-dealers or others ("Qualified Recipients") selected by
Aquila Distributors, Inc. (the "Distributor"), including, but not limited to,
any principal underwriter of the Fund, with which the Distributor has entered
into written agreements contemplated by the Rule and which have rendered
assistance in the distribution and/or retention of the Fund's shares or
servicing of shareholder accounts. The Fund currently makes payment of this
distribution fee at the annual rate of 0.05% of the Fund's average net assets
represented by Class A Shares. The Board of Trustees and shareholders approved
an amendment to the Fund's Distribution Plan applicable to Class A Shares which
will permit the Fund to make service fee payments at the rate of up to 0.15 of
1% on the entire net assets represented by Class A Shares. For the six months
ended June 30, 2003, service fees on Class A Shares amounted to $55,046 of which
the Distributor retained $2,190.

Under another part of the Plan, the Fund is authorized to make payments
with respect to Class C Shares to Qualified Recipients which have rendered
assistance in the distribution and/or retention of the Fund's Class C shares or
servicing of shareholder accounts. These payments are made at the annual rate of
0.75% of the Fund's average net assets represented by Class C Shares and for the
six months ended June 30, 2003, amounted to $42,971. In addition, under a
Shareholder Services Plan, the Fund is authorized to make service fee payments
with respect to Class C Shares to Qualified Recipients for providing personal
services and/or maintenance of shareholder accounts. These payments are made at
the annual rate of 0.25% of the Fund's average net assets represented by Class C
Shares and for the six months ended June 30, 2003 amounted to $14,323. The total
of these payments with respect to Class C Shares amounted to $57,294 of which
the Distributor retained $6,015.

Under another part of the Plan, the Fund is authorized to make payments
with respect to Class I Shares to Qualified Recipients. Class I payments, under
the Plan, may not exceed for any fiscal year of the Fund a rate (currently
0.25%), set from time to time by the Board of Trustees, of not more than 0.25%
of the average annual net assets represented by the Class I Shares. In addition,
Class I has a Shareholder Services Plan under which it may pay service fees
(currently 0.15%) of not more than 0.25% of the average annual net assets
represented by Class I Shares. That is, the total payments under both plans will
not exceed 0.50% of such net assets. For the period April 2, 2003 through June
30, 2003, these payments were made at the average annual rate of 0.40% of such
net assets and amounted to $5 of which $3 related to the Plan and $2 related to
the Shareholder Services Plan.

Specific details about the Plans are more fully defined in the Fund's
Prospectus and Statement of Additional Information.

Under a Distribution Agreement, the Distributor serves as the exclusive
distributor of the Fund's shares. Through agreements between the Distributor and
various broker-dealer firms ("dealers"), the Fund's shares are sold primarily
through the facilities of these dealers having offices within Colorado, with the
bulk of sales commissions inuring to such dealers. For the six months ended June
30, 2003, total commissions on sales of Class AShares amounted to $442,872 of
which the Distributor received $53,123.

c) OTHER RELATED PARTY TRANSACTIONS:

For the six months ended June 30, 2003, the Fund incurred $27,625 of legal
fees allocable to Hollyer Brady Smith & Hines LLP, counsel to the Fund, for
legal services in conjunction with the Fund's ongoing operations. The Secretary
of the Fund is a Partner of Hollyer Brady Smith & Hines LLP.

4. PURCHASES AND SALES OF SECURITIES

During the six months ended June 30, 2003, purchases of securities and
proceeds from the sales of securities aggregated $28,159,962 and $5,995,885,
respectively.

At June 30, 2003, the aggregate tax cost for all securities was
$234,661,499. At June 30, 2003 the aggregate gross unrealized appreciation for
all securities in which there is an excess of market value over tax cost
amounted to $20,420,611 and aggregate gross unrealized depreciation for all
securities in which there is an excess of tax cost over market value amounted to
$138,074 for a net unrealized appreciation of $20,282,537.

5. PORTFOLIO ORIENTATION

Since the Fund invests principally and may invest entirely in double
tax-free municipal obligations of issuers within Colorado, it is subject to
possible risks associated with economic, political, or legal developments or
industrial or regional matters specifically affecting Colorado and whatever
effects these may have upon Colorado issuers' ability to meet their obligations.

6. EXPENSES

The Fund has negotiated an expense offset arrangement with its custodian
wherein it receives credit toward the reduction of custodian fees and other Fund
expenses whenever there are uninvested cash balances. The Statement of
Operations reflects the total expenses before any offset, the amount of offset
and the net expenses. It is the general intention of the Fund to invest, to the
extent practicable, some or all of cash balances in income-producing assets
rather than leave cash on deposit.

7. CAPITAL SHARE TRANSACTIONS

Transactions in Capital Shares of the Fund were as follows:

SIX MONTHS ENDED
JUNE 30, 2003 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2002
----------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------

CLASS A SHARES:
Proceeds from shares sold .... 1,666,093 $ 18,182,545 2,861,228 $ 30,423,801
Reinvested distributions ..... 250,499 2,726,261 486,558 5,156,250
Cost of shares redeemed ...... (774,374) (8,429,520) (1,582,400) (16,725,358)
------------ ------------ ------------ ------------
Net change ................ 1,142,218 12,479,286 1,765,386 18,854,693
------------ ------------ ------------ ------------

CLASS C SHARES:
Proceeds from shares sold .... 497,386 5,406,367 696,460 7,376,485
Reinvested distributions ..... 9,973 108,462 10,218 108,404
Cost of shares redeemed ...... (56,589) (615,426) (48,328) (514,095)
------------ ------------ ------------ ------------
Net change ................ 450,770 4,899,403 658,350 6,970,794
------------ ------------ ------------ ------------

CLASS I SHARES:
Proceeds from shares sold .... 463 5,000 -- --
Reinvested distributions ..... 3 31 -- --
Cost of shares redeemed ...... -- -- -- --
------------ ------------ ------------ ------------
Net change ................ 466* 5,031* -- --
------------ ------------ ------------ ------------

CLASS Y SHARES:
Proceeds from shares sold .... 279,056 3,034,222 701,513 7,468,751
Reinvested distributions ..... 1,257 13,718 1,591 16,987
Cost of shares redeemed ...... (96,254) (1,048,867) (430,013) (4,604,074)
------------ ------------ ------------ ------------
Net change ................ 184,059 1,999,073 273,091 2,881,664
------------ ------------ ------------ ------------

Total transactions in Fund
shares ........................... 1,777,513 $ 19,382,793 2,696,827 $ 28,707,151
============ ============ ============ ============

* For the period April 2, 2003 to June 30, 2003.

8. TRUSTEES' FEES AND EXPENSES

During the prior fiscal year there were seven Trustees, two of whom are
affiliated with the Manager and are not paid any trustee fees. Each Trustee's
fees paid during the year were at the annual rate of $7,100 for carrying out
their responsibilities and attendance at regularly scheduled Board Meetings. A
meeting of the independent trustees is held prior to each quarterly Board
Meeting for which each attendee is paid a fee of $100. If additional or special
meetings are scheduled for the Fund, separate meeting fees are paid for each
such meeting to those Trustees in attendance. The Fund also reimburses the
Trustees for expenses such as travel, accomodations, and meals incurred in
connection with attendance at regularly scheduled or special Board Meetings and
at the Annual Meeting and outreach meetings of Shareholders. For the fiscal year
ended December 31, 2002 such reimbursements averaged approximately $5,600 per
Trustee.

9. SECURITIES TRADED ON A WHEN-ISSUED BASIS

The Fund may purchase or sell securities on a when-issued basis.
When-issued transactions arise when securities are purchased or sold by the Fund
with payment and delivery taking place in the future in order to secure what is
considered to be an advantageous price and yield to the Fund at the time of
entering into the transaction. Beginning on the date the Fund enters into a
when-issued transaction, cash or other liquid securities are segregated in an
amount equal to or greater than the amount of the when-issued transaction. These
transactions are subject to market fluctuations and their current value is
determined in the same manner as for other securities.

10. DISTRIBUTIONS

The Fund declares dividends daily from net investment income and makes
payments monthly in additional shares at the net asset value per share, in cash,
or in a combination of both, at the shareholder's option. Net realized capital
gains, if any, are distributed annually and are taxable.

The Fund intends to maintain, to the maximum extent possible, the
tax-exempt status of interest payments received from portfolio municipal
securities in order to allow dividends paid to shareholders from net investment
income to be exempt from regular Federal and State of Colorado income taxes.
However, due to differences between financial statement reporting and Federal
income tax reporting requirements, distributions made by the Fund may not be the
same as the Fund's net investment income, and/or net realized securities gains.
Further, a small portion of the dividends may, under some circumstances, be
subject to taxes at ordinary income and/or capital gain rates. For certain
shareholders, some dividend income may, under some circumstances, be subject to
the alternative minimum tax.

TAX-FREE FUND OF COLORADO
FINANCIAL HIGHLIGHTS

FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

CLASS A CLASS I
------------------------------------------------------------------ -----------
SIX MONTHS PERIOD
ENDED YEAR ENDED DECEMBER 31, ENDED
06/30/03 -------------------------------------------------- 06/30/03(1)
(UNAUDITED) 2002 2001 2000 1999 1998 (UNAUDITED)
----------- ------ ------ ------ ------ ------ -----------

Net asset value, beginning of period .......... $10.82 $10.32 $10.31 $9.98 $10.63 $10.62 $10.80
------ ------ ------ ------ ------ ------ ------
Income (loss) from investment operations:
Net investment income+ ..................... 0.21 0.43 0.45 0.46 0.46 0.47 0.21
Net gain (loss) on securities (both
realized and unrealized) ................ 0.18 0.52 0.02 0.35 (0.55) 0.04 0.08
------ ------ ------ ------ ------ ------ ------
Total from investment operations ........... 0.39 0.95 0.47 0.81 (0.09) 0.51 0.29
------ ------ ------ ------ ------ ------ ------
Less distributions (note 10):
Dividends from net investment income ....... (0.22) (0.45) (0.46) (0.48) (0.48) (0.46) (0.10)
Distributions from capital gains ........... - - - - (0.08) (0.04) -
------ ------ ------ ------ ------ ------ ------
Total distributions ........................... (0.22) (0.45) (0.46) (0.48) (0.56) (0.50) (0.10)
------ ------ ------ ------ ------ ------ ------
Net asset value, end of period ................ $10.99 $10.82 $10.32 $10.31 $9.98 $10.63 $10.99
====== ====== ====== ====== ====== ====== ======

Total return (not reflecting sales charge) .... 3.63%++ 9.36% 4.64% 8.30% (0.84)% 4.92% 2.68%++

Ratios/supplemental data
Net assets, end of period
(in thousands) ........................... $231,211 $215,195 $187,022 $179,816 $190,698 $208,771 $5
Ratio of expenses to average
net assets ............................... 0.73%* 0.75% 0.76% 0.78% 0.76% 0.75% 1.01%*
Ratio of net investment income to
average net assets ....................... 3.84%* 4.05% 4.27% 4.53% 4.41% 4.47% 3.39%*
Portfolio turnover rate .................... 2.50%++ 6.95% 14.56% 22.45% 13.08% 15.20% 2.50%++

The expense ratios after giving effect to the expense offset for uninvested cash balances were:

Ratio of expenses to average
net assets ........................... 0.73%* 0.74% 0.75% 0.77% 0.75% 0.73% 1.00%*

- ----------
(1) For the period April 2, 2003 to June 30, 2003.
+ Per share amounts have been calculated using the monthly average shares
method.
++ Not annualized.
* Annualized.

See accompanying notes to financial statements.

TAX-FREE FUND OF COLORADO
FINANCIAL HIGHLIGHTS (CONTINUED)

FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

CLASS C
SIX MONTHS --------------------------------------------------
ENDED YEAR ENDED DECEMBER 31,
06/30/03 --------------------------------------------------
(UNAUDITED) 2002 2001 2000 1999 1998
----------- ------ ------ ------ ------ ------

Net asset value, beginning of period .............. $10.80 $10.30 $10.29 $9.97 $10.61 $10.60
------ ------ ------ ------ ------ ------
Income (loss) from investment operations:
Net investment income+ ......................... 0.15 0.31 0.34 0.37 0.36 0.37
Net gain (loss) on securities (both
realized and unrealized) .................... 0.19 0.53 0.03 0.33 (0.54) 0.04
------ ------ ------ ------ ------ ------
Total from investment operations ............... 0.34 0.84 0.37 0.70 (0.18) 0.41
------ ------ ------ ------ ------ ------
Less distributions (note 10):
Dividends from net investment income ........... (0.17) (0.34) (0.36) (0.38) (0.38) (0.36)
Distributions from capital gains ............... - - - - (0.08) (0.04)
------ ------ ------ ------ ------ ------
Total distributions ............................ (0.17) (0.34) (0.36) (0.38) (0.46) (0.40)
------ ------ ------ ------ ------ ------
Net asset value, end of period .................... $10.97 $10.80 $10.30 $10.29 $9.97 $10.61
====== ====== ====== ====== ====== ======

Total return (not reflecting sales charge) ........ 3.15%++ 8.32% 3.64% 7.18% (1.70)% 3.92%

Ratios/supplemental data
Net assets, end of period (in thousands) ....... $14,200 $9,109 $1,909 $897 $1,932 $1,328
Ratio of expenses to average net assets ........ 1.68%* 1.68% 1.69% 1.73% 1.70% 1.69%
Ratio of net investment income to
average net assets .......................... 2.85%* 2.99% 3.25% 3.60% 3.44% 3.50%
Portfolio turnover rate ........................ 2.50%++ 6.95% 14.56% 22.45% 13.08% 15.20%

The expense ratios after giving effect to the expense offset for uninvested cash balances were:

Ratio of expenses to average net assets ........ 1.68%* 1.67% 1.68% 1.72% 1.69% 1.68%

CLASS Y
SIX MONTHS --------------------------------------------------
ENDED YEAR ENDED DECEMBER 31,
06/30/03 --------------------------------------------------
(UNAUDITED) 2002 2001 2000 1999 1998
----------- ------ ------ ------ ------ ------

Net asset value, beginning of period .............. $10.84 $10.33 $10.33 $10.00 $10.65 $10.64
------ ------ ------ ------ ------ ------
Income (loss) from investment operations:
Net investment income+ ......................... 0.21 0.44 0.45 0.46 0.46 0.48
Net gain (loss) on securities (both
realized and unrealized) ..................... 0.18 0.52 0.02 0.35 (0.54) 0.04
------ ------ ------ ------ ------ ------
Total from investment operations ............... 0.39 0.96 0.47 0.81 (0.08) 0.52
------ ------ ------ ------ ------ ------
Less distributions (note 10):
Dividends from net investment income ........... (0.22) (0.45) (0.47) (0.48) (0.49) (0.47)
Distributions from capital gains ............... - - - - (0.08) (0.04)
------ ------ ------ ------ ------ ------
Total distributions ............................ (0.22) (0.45) (0.47) (0.48) (0.57) (0.51)
------ ------ ------ ------ ------ ------
Net asset value, end of period .................... $11.01 $10.84 $10.33 $10.33 $10.00 $10.65
====== ====== ====== ====== ====== ======
Total return (not reflecting sales charge) ........ 3.65%++ 9.50% 4.59% 8.36% (0.79)% 4.97%

Ratios/supplemental data
Net assets, end of period (in thousands) ....... $9,630 $7,482 $4,312 $4,417 $5,416 $7,047
Ratio of expenses to average net assets ........ 0.68%* 0.69% 0.71% 0.73% 0.71% 0.69%
Ratio of net investment income to
average net assets ........................... 3.87%* 4.07% 4.32% 4.58% 4.45% 4.50%
Portfolio turnover rate ........................ 2.50%++ 6.95% 14.56% 22.45% 13.08% 15.20%

The expense ratios after giving effect to the expense offset for uninvested cash balances were:

Ratio of expenses to average net assets ........ 0.68%* 0.69% 0.70% 0.72% 0.70% 0.68%

- ----------
+ Per share amounts have been calculated using the monthly average shares
method.
++ Not annualized.
* Annualized.

See accompanying notes to financial statements.

SHAREHOLDER MEETING RESULTS (UNAUDITED)

The Annual Meeting of Shareholders of Tax-Free Fund for Colorado (the "Fund")
was held on June 23, 2003. The holders of shares representing 81% of the total
net asset value of the shares entitled to vote were present in person or by
proxy. At the meeting, the following matters were voted upon and approved by the
shareholders (the resulting votes are presented below).

1. To elect Trustees.

Number of Votes:

TRUSTEE FOR WITHHELD
------- --- --------
Lacy B. Herrmann 17,772,961 285,205
Tucker Hart Adams 17,926,756 131,410
Gary C. Cornia 17,938,723 119,443
Diana P. Herrmann 17,765,429 292,738
John C. Lucking 17,955,546 102,620
Anne J. Mills 17,942,240 115,927
J. William Weeks 17,931,408 126,758

2. To ratify the selection of KPMG LLP as the Fund's independent auditors.

Number of Votes:

FOR AGAINST ABSTAIN
--- ------- -------
17,833,204 78,047 146,914

MANAGER AND FOUNDER
AQUILA MANAGEMENT CORPORATION
380 Madison Avenue, Suite 2300
New York, New York 10017

INVESTMENT SUB-ADVISER
KPM INVESTMENT MANAGEMENT, INC.
1600 Broadway, Suite 1100
Denver, Colorado 80202

BOARD OF TRUSTEES
Lacy B. Herrmann, Chairman
Tucker Hart Adams
Gary C. Cornia
Diana P. Herrmann
John C. Lucking
Anne J. Mills
J. William Weeks

OFFICERS
Diana P. Herrmann, President
James M. McCullough, Senior Vice President
Emily T. Rae, Vice President
Joseph P. DiMaggio, Chief Financial Officer
and Treasurer
Edward M.W. Hines, Secretary

DISTRIBUTOR
AQUILA DISTRIBUTORS, INC.
380 Madison Avenue, Suite 2300
New York, New York 10017

CUSTODIAN
BANK ONE TRUST COMPANY, N.A.
1111 Polaris Parkway
Columbus, Ohio 43240

TRANSFER AND SHAREHOLDER SERVICING AGENT
PFPC Inc.
400 Bellevue Parkway
Wilmington, Delaware 19809

INDEPENDENT AUDITORS
KPMG LLP
757 Third Avenue
New York, New York 10017

Further information is contained in the Prospectus, which must precede or
accompany this report.

SEMI-ANNUAL
REPORT

JUNE 30, 2003

[Logo of Tax-Free Fund of Colorado: a square with silhouettes of two mountains
and a rising sun]

TAX-FREE FUND
OF
COLORADO

A TAX-FREE INCOME INVESTMENT

[Logo of the Aquila Group of Funds: an eagle's head]

ONE OF THE
AQUILA(SM) GROUP OF FUNDS

ITEM 2. CODE OF ETHICS.
Not applicable.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.

ITEM 6. [RESERVED]

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

905: Not applicable.

ITEM 8. [RESERVED]

ITEM 9. CONTROLS AND PROCEDURES.

(a) Based on their evaluation of the registrant's disclosure controls and
procedures (as defined in Rule 30a-2(c) under the Investment Company Act of
1940) as of a date within 90 days of the fling of this report, the registrant's
chief financial and executive officers have concluded that the disclosure
controls and procedures of the registrant are appropriately designed to ensure
that information required to be disclosed in the registrant's reports that are
filed under the Securities Exchange Act of 1934 are accumulated and communicated
to registrant's management, including its principal executive officer(s) and
principal financial officer(s), to allow timely decisions regarding required
disclosure and is recorded, processed, summarized and reported, within the time
periods specified in the rules and forms adopted by the Securities and Exchange
Commission.

(b) There have been no significant changes in registrant's internal controls or
in other factors that could significantly affect registrant's internal controls
subsequent to the date of the most recent evaluation, including no significant
deficiencies or material weaknesses that required corrective action.

ITEM 10. EXHIBITS.

(a)(1) Not applicable.
(a)(2) Certifications of principal executive officer and principal financial
officer as required by Rule 30a-2(a) under the Investment Company Act of
1940.

(b) Certifications of principal executive officer and principal financial
officer as required by Rule 30a-2(b) under the Investment Company Act
of 1940.

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.

TAX-FREE FUND OF COLORADO

By: /s/ Lacy B. Herrmann
- ---------------------------------
Chairman of the Board
September 8, 2003

By: /s/ Diana P. Herrmann
- ---------------------------------
President
September 8, 2003

By: /s/ Joseph P. DiMaggio
- -----------------------------------
Chief Financial Officer
September 8, 2003

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: /s/ Lacy B. Herrmann
- ---------------------------------
Lacy B. Herrmann
Chairman of the Board
September 8, 2003

By: /s/ Diana P. Herrmann
- ---------------------------------
Diana P. Herrmann
President
September 8, 2003

By: /s/ Joseph P. DiMaggio
- -----------------------------------
Joseph P. DiMaggio
Chief Financial Officer
September 8, 2003

TAX-FREE FUND OF COLORADO

EXHIBIT INDEX

(a) (2) Certifications of principal executive officer
and principal financial officer as required by Rule 30a-2(a)
under the Investment Company Act of 1940.

(b) Certification of chief executive officer and chief financial
officer as required by Rule 30a-2(b) of the Investment Company Act
of 1940.