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 811-10523 --------------------- Nuveen Virginia Dividend Advantage Municipal Fund 2 ------------------------------------------------------------------------------ (Exact name of registrant as specified in charter) Nuveen Investments 333 West Wacker Drive Chicago, IL 60606 - ------------------------------------------------------------------------------ (Address of principal executive offices) (Zip code) Jessica R. Droeger Nuveen Investments 333 West Wacker Drive Chicago, IL 60606 - ------------------------------------------------------------------------------ (Name and address of agent for service) Registrant's telephone number, including area code: (312) 917-7700 ------------------- Date of fiscal year end: May 31 ------------------ Date of reporting period: May 31, 2006 ------------------ Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORTS TO STOCKHOLDERS. ANNUAL REPORT May 31, 2006 Nuveen Investments Municipal Exchange-Traded Closed-End Funds NUVEEN MARYLAND PREMIUM INCOME MUNICIPAL FUND NMY NUVEEN MARYLAND DIVIDEND ADVANTAGE MUNICIPAL FUND NFM NUVEEN MARYLAND DIVIDEND ADVANTAGE MUNICIPAL FUND 2 NZR NUVEEN MARYLAND DIVIDEND ADVANTAGE MUNICIPAL FUND 3 NWI NUVEEN VIRGINIA PREMIUM INCOME MUNICIPAL FUND NPV NUVEEN VIRGINIA DIVIDEND ADVANTAGE MUNICIPAL FUND NGB NUVEEN VIRGINIA DIVIDEND ADVANTAGE MUNICIPAL FUND 2 NNB Photo of: Man, woman and child at the beach. Photo of: A child. DEPENDABLE, TAX-FREE INCOME BECAUSE IT'S NOT WHAT YOU EARN, IT'S WHAT YOU KEEP.(R) Logo: NUVEEN Investments Photo of: Woman Photo of: Man and child Photo of: Woman NOW YOU CAN RECEIVE YOUR NUVEEN FUND REPORTS FASTER. NO MORE WAITING. SIGN UP TODAY TO RECEIVE NUVEEN FUND INFORMATION BY E-MAIL. It only takes a minute to sign up for E-Reports. Once enrolled, you'll receive an e-mail as soon as your Nuveen Investments Fund information is ready -- no more waiting for delivery by regular mail. Just click on the link within the e-mail to see the report, and save it on your computer if you wish. ------------------------ DELIVERY DIRECT TO YOUR E-MAIL INBOX ------------------------ IT'S FAST, EASY & FREE: WWW.INVESTORDELIVERY.COM if you get your Nuveen Fund dividends and statements from your financial advisor or brokerage account. OR WWW.NUVEEN.COM/ACCOUNTACCESS if you get your Nuveen Fund dividends and statements directly from Nuveen. (Be sure to have the address sheet that accompanied this report handy. You'll need it to complete the enrollment process.) Logo: NUVEEN Investments Photo of: Timothy R. Schwertfeger Timothy R. Schwertfeger Chairman of the Board Chairman's LETTER TO SHAREHOLDERS Once again, I am pleased to report that over the twelve month period covered by this report your Fund continued to provide you with attractive monthly tax-free income. For more details about the management strategy and performance of your Fund, please read the Portfolio Manager's Comments, the Dividend and Share Price Information, and the Performance Overview sections of this report. Municipal bonds can be an important building block in a well balanced investment portfolio. In addition to providing attractive tax-free monthly income, a municipal bond investment like your Fund may help you achieve and benefit from greater portfolio diversification. Portfolio diversification is a recognized way to try to reduce some of the risk that comes with investing. I encourage you to contact your personal financial advisor who can help explain this important investment strategy. "PORTFOLIO DIVERSIFICATION IS A RECOGNIZED WAY TO TRY TO REDUCE SOME OF THE RISK THAT COMES WITH INVESTING." Nuveen Investments is pleased to offer you choices when it comes to receiving your fund reports. In addition to mailed print copies, you can also sign up to receive future Fund reports and other Fund information by e-mail and the Internet. The inside front cover of this report contains information on how you can sign up. We are grateful that you have chosen us as a partner as you pursue your financial goals, and we look forward to continuing to earn your trust in the months and years ahead. At Nuveen Investments, our mission continues to be to assist you and your financial advisor by offering investment services and products that can help you to secure your financial objectives. Sincerely, /s/ Timothy R. Schwertfeger Timothy R. Schwertfeger Chairman of the Board July 11, 2006 Nuveen Investments Municipal Exchange-Traded Closed-End Funds NMY, NFM, NZR, NWI, NPV, NGB, NNB Portfolio Manager's COMMENTS Portfolio manager Paul Brennan examines economic and municipal market conditions at both the national and state levels, key investment strategies, and the annual performance of these seven Nuveen Funds. Paul, who has 15 years of investment experience, has managed NMY and NPV since 1999; NFM, NZR, NGB, and NNB since 2001; and NWI since 2002. WHAT FACTORS AFFECTED THE U.S. ECONOMY AND MUNICIPAL MARKET DURING THE ANNUAL REPORTING PERIOD ENDED MAY 31, 2006? During this reporting period, we saw a general increase in interest rates across the yield curve, although rates at the long end of the curve remained more stable than short-term rates during much of the period. Between June 1, 2005 and May 31, 2006, the Federal Reserve announced eight increases of 0.25% each in the fed funds rate, raising this short-term target by 200 basis points from 3% to 5%. By comparison, the yield on the benchmark 10-year U.S. Treasury note ended May 2006 at 5.11%, up from 4.01% 12 months earlier, while the yield on the Bond Buyer 25 Revenue Bond Index, a widely followed measure of longer-term municipal market rates, was 5.22% at the end of May 2006, an increase of 44 basis points from the beginning of June 2005. As interest rates increased, bond valuations generally declined, and the yield curve flattened as shorter-term rates approached the levels of longer-term rates. Even with rising interest rates, increased energy prices, and indications of slowing momentum in the manufacturing sector, the economy remained resilient, with a healthy pattern of growth. After expanding at a rate of 3.3% in the second quarter of 2005, the U.S. gross domestic product (GDP) grew by 4.1% in the third quarter before slowing to 1.7% in the fourth quarter (all GDP numbers annualized). In the first quarter of 2006, the GDP rebounded sharply to 5.6%, fueled by upturns in consumer and federal spending and accelerated business investment in equipment. The overall employment picture remained positive, with national unemployment at 4.6% in May 2006, down from 5.1% in May 2005. Despite an increase in inflation expectations, the year-over-year increase in the Consumer Price Index as of May 2006 was 4.2%. However, during the first five months of 2006, the pace of inflation picked up noticeably, rising at a rate of 5.2% annualized, compared with 3.4% for all of 2005. Over the 12 months ended May 2006, municipal bond supply nationwide remained strong, as $403.6 billion in new securities came to market, up 6% from the previous 12 months. However, following record levels of issuance in calendar year 2005, we saw a sharp in supply during the first five months of 2006, when municipal issuance totaled $133.8 billion, off 19% from the same period in 2005. A major factor in 2006's decline in supply was the substantial reduction in pre-refunding volume, which dropped 56% from 4 last year's levels as rising interest rates made advance refundings less economically attractive to issuers. Overall, demand for municipal bonds, especially those offering higher yields, continued to be strong and broad-based, with retail investors, property and casualty insurance companies, and hedge funds--all participating in the market. HOW WERE THE ECONOMIC AND MARKET ENVIRONMENTS IN MARYLAND AND VIRGINIA DURING THIS PERIOD? The Maryland economy continued to exhibit healthy growth during this reporting period, driven by the government sector and professional and business services, education, and healthcare. Due to the proximity of Washington D.C., the federal government continued to play a dominant role in the state's economy. Maryland also relied heavily on the healthcare and higher education sectors, with Johns Hopkins Hospital, Johns Hopkins University, and the University of Maryland Health System ranking among the state's largest employers. Maryland has below-median exposure to the manufacturing sector, which has been a positive factor over the past few years as manufacturing continued to struggle. In May 2006, Maryland's jobless rate was 3.8%, down from 4.2% in May 2005, putting unemployment in the state close to its pre-recession level of 3.6% in 2000. As was the case in many states and municipalities, an improving economy resulted in tax revenues that are exceeding projections. By the end of fiscal 2006, Maryland's general fund surplus was expected to total $1.2 billion. The $12.8 billion fiscal 2007 state budget, which provided additional funding for schools, healthcare, and higher education, represented a conservative 5% increase over fiscal 2006. As of May 2006, Moody's and Standard & Poor's maintained their ratings on Maryland general obligation (GO) debt at Aaa/AAA. During the 12 months ended May 31, 2006, issuance in the state totaled $6.8 billion, an increase of 30% over the previous 12-month period. For January-May 2006, contrary to national trends, Maryland saw $2.4 billion in new municipal paper, up 10% from the first five months of 2005. Plans call for Maryland to issue an additional $690 million in long-term GO debt in fiscal 2007. Overall, Maryland's debt levels were above the national medians. According to Moody's, Maryland ranked 15th among the 50 states in tax-supported debt and 17th in terms of debt per capita. With a strong and diverse economic base, highly skilled work force, and relatively low business costs, Virginia's economy continued to perform well during this period, led by the government sector and professional and business services. In 2005, Virginia ranked as the seventh fastest growing state in the nation, with a gross state product of $5.6 billion compared with the national average of $3.5 billion. As in Maryland, Virginia's proximity to Washington D.C. meant that federal spending, especially in the defense sector, continued to be an important factor in the commonwealth's economy, with the Hampton Roads area 5 serving as home to the nation's largest concentration of military installations. Technology also played an increasing role in Virginia's economy as manufacturing, especially in the south and southwestern portions of the commonwealth, continued to decline. In May 2006, Virginia's unemployment rate was the second lowest in the nation at 3.0%, down from 3.5% in May 2005. The commonwealth's biennium budget for 2005-2006 restored structural balance using a variety of actions, including sales and cigarette tax increases as well as expenditure reductions. Revenues for fiscal 2006 were projected to come in $124 million ahead of plan, and Virginia's rainy day fund has been restored to $664 million. In February 2006, Moody's reconfirmed its rating on Virginia GO debt at Aaa with a stable outlook, and S&P confirmed its AAA rating with a stable outlook. During the 12 months ended May 31, 2006, issuance in Virginia totaled $9.9 billion, an increase of 26% over the previous 12 months. However, the first five months of 2006 saw issuance fall off sharply to $1.7 billion, down 63% from the first five months of 2005. Some of this decline was due to the fact that 2005's numbers included a large tobacco deal issued by Virginia in May 2005. According to Moody's, Virginia's per capita debt was lower than the national median. WHAT KEY STRATEGIES WERE USED TO MANAGE THESE FUNDS DURING THIS REPORTING PERIOD? As interest rates rose and the yield curve flattened during this 12-month period, we continued to emphasize careful duration1 management, part of which included efforts to more closely align the duration and yield curve positioning of these Funds. Strategically, our purchase activity focused on attractively priced bonds maturing in 10 to 20 years. As the curve continued to flatten and the incremental yield on bonds with longer maturities decreased, we believed that bonds in the 10-year to 20-year range of the curve generally offered reward opportunities more commensurate with their risk levels. However, at various times during this 12-month period, we found that bonds available in longer parts of the yield curve offered more favorable characteristics, and we actively pursued these opportunities. To help us maintain the Funds' durations within our preferred strategic range, we were also selectively selling holdings with shorter durations, such as bonds priced to short call dates, bonds that were currently callable, and short-dated pre-refunded bonds. Selling these shorter duration bonds and reinvesting further out in the 10-year to 20-year part of the yield curve also helped to improve the Funds' overall call protection profile. 1 Duration is a measure of a bond's price sensitivity as interest rates change, with longer duration bonds displaying more sensitivity to these changes than bonds with shorter durations. 6 With yields rising during this period, we also found some opportunities to sell a few of our holdings that were purchased when yields were lower and replace them with similar, newer credits that yielded comparatively more. This process allowed us to maintain the Funds' current portfolio characteristics while strengthening their income potential. In looking for potential purchase candidates, we kept an opportunistic eye toward all types of issuance that we believed could add value to the Funds' portfolios. Overall, portfolio activity was relatively light. As previously mentioned, while supply in Maryland remained strong over the period, Virginia saw a sharp decline in municipal issuance during the first five months of 2006. Since both Maryland and Virginia are high-quality states, much of the new supply was highly rated and/or insured, and the majority of our new purchases were higher-rated credits. During the latter part of this period, we took advantage of opportunities to add housing bonds across all of these Funds, which benefited their performance for the period. We also continued to emphasize maintaining the Funds' weightings of bonds rated BBB or lower and non-rated bonds. However, tighter supply in Virginia during 2006 meant fewer interesting lower-rated credit opportunities than usual in that market. While we did find some attractive lower-rated issues to add to the Maryland Funds, the Virginia Funds' allocations of lower quality bonds generally remained stable over this period. Overall, both the Maryland and Virginia Funds continued to have good exposure to this market segment. Over the past 12 months, our duration management strategies also included the use of forward interest rate swaps, a type of derivative financial instrument, in NFM, NZR, NWI, and NNB. As discussed in our last shareholder report, we began using these swaps in late 2004 in an effort to reduce the interest rate risk in these four Funds. These hedges were not an attempt to profit from correctly predicting the timing and direction of interest rate movements. Instead, our sole objective was to reduce the durations (and resulting pricing sensitivity) of these Funds without having a negative impact on their income streams or common share dividends over the short term. The hedging strategy was effective in helping to reduce the net asset value (NAV) volatility of NFM, NZR, and NNB, and we removed the hedges from NFM in June 2005 and from NZR and NNB during the first quarter of 2006. During this period, the hedges performed as expected. 7 HOW DID THE FUNDS PERFORM? Individual results for these Maryland and Virginia Funds, as well as relevant benchmark and peer group information, are presented in the accompanying table. TOTAL RETURNS ON NET ASSET VALUE* For periods ended 5/31/06 MARYLAND FUNDS 1-YEAR 5-YEAR 10-YEAR - -------------------------------------------------------------------------------- NMY 1.08% 7.11% 6.89% - -------------------------------------------------------------------------------- NFM 1.95% 7.16% NA - -------------------------------------------------------------------------------- NZR 1.14% NA NA - -------------------------------------------------------------------------------- NWI 1.55% NA NA - -------------------------------------------------------------------------------- VIRGINIA FUNDS - -------------------------------------------------------------------------------- NPV 0.71% 6.65% 7.21% - -------------------------------------------------------------------------------- NGB 1.74% 7.71% NA - -------------------------------------------------------------------------------- NNB 1.53% NA NA - -------------------------------------------------------------------------------- Lehman Brothers Municipal Bond Index2 1.90% 5.27% 5.95% - -------------------------------------------------------------------------------- Lipper Other States Municipal Debt Funds Average3 1.74% 7.13% 6.92% - -------------------------------------------------------------------------------- *Annualized. Past performance is not predictive of future results. Current performance may be higher or lower than the data shown. Returns do not reflect the deduction of taxes that shareholders may have to pay on Fund distributions or upon the sale of Fund shares. For additional information, see the individual Performance Overview for your Fund in this report. For the 12 months ended May 31, 2006, the total return on NAV for NFM exceeded the return on the Lehman Brothers Municipal Bond Index. The remaining six Funds underperformed this benchmark. NFM and NGB outperformed and matched, respectively, the average return for the Lipper Other States peer group, while the other five funds trailed the Lipper average. Shareholders should note that the performance of the Lipper Other States category represents the overall average of returns for funds from 10 different states with a wide variety of municipal market conditions, making direct comparisons less meaningful. One factor that affected the annual performance of these Funds, especially in relation to that of the unleveraged Lehman Brothers Municipal Bond Index, was the use of financial leverage. Although leveraging provides opportunities for additional income and total returns for common shareholders when interest rates fall or remain consistently low, this benefit is reduced when interest rates rise. With the increases in interest rates during this period, the decline in value of the bonds in the underlying portfolios of these Funds was exacerbated by the effects of leveraging. During periods of low short-term rates, these Funds generally pay lower dividends to their MuniPreferred shareholders, which 2 The Lehman Brothers Municipal Bond Index is an unleveraged, unmanaged national index comprising a broad range of investment-grade municipal bonds. Results for the Lehman index do not reflect any expenses. 3 The Lipper Other States Municipal Debt Funds category average is calculated using the returns of all exchange-traded closed-end funds in this category for each period as follows: 1 year, 46; 5 years, 27; and 10 years, 18. Fund and Lipper returns assume reinvestment of dividends. 8 can leave more earnings to support common share dividends. Conversely, when short-term interest rates rise, as they did during this reporting period, the Funds' borrowing costs also rise, impacting the Funds' income streams and total returns. However, we remain convinced that, over the long term, the use of financial leverage should work to the benefit of the Funds. This is demonstrated by the five-year and ten-year return performance--both absolute and relative--of NMY, NFM, NPV, and NGB. Other influences on the Funds' total returns for this period included market factors such as rising interest rates and credit spread tightening as well as fund-specific factors such as yield curve and duration positioning, allocations to lower-rated credits, sector weightings, and pre-refunding activity. As the yield curve continued to flatten over the course of this period, yield curve and duration positioning played important roles in the Funds' performances. On the whole, bonds in the Lehman Brothers Municipal Bond Index with maturities between 6 and 8 years were the most adversely impacted by recent changes in the yield curve, and they underperformed longer bonds (those with maturities of at least 22 years) by more than 200 basis points. Yield curve positioning or, more specifically, greater exposure to the longer parts of the yield curve that performed well helped the performance of these Funds during this period. However, NPV had less exposure to the longest part of the curve, which hurt its performance relative to the other Funds. With bonds rated BBB or lower and nonrated bonds generally outperforming other credit quality sectors during this period, all of these Funds benefited from their allocations of lower-quality credits. The performance of this sector was largely the result of investor demand for the higher yields typically associated with lower-quality bonds, which drove up their value and tightened credit spreads. As of May 31, 2006, the Maryland Funds had weightings of BBB, sub-investment grade and nonrated bonds ranging from 16% in NMY to 17% in NZR and 19% in NFM and NWI, while the Virginia Funds had allocations of 10% in NPV, 11% in NNB, and 14% in NGB. NPV's lighter exposure to bonds in this market segment, especially to bonds rated BB and lower, detracted from its 12-month performance. Among the lower-rated holdings making contributions to the Funds' total returns for this period were industrial development revenue and resource recovery bonds, healthcare (including hospitals), and tobacco, all of which ranked among the top performing revenue sectors in the Lehman Brothers Municipal Bond Index. Housing bonds were also among some of the best performing credits in the Funds' portfolios, as rising interest rates lessened the incidence and impact of prepayments and bond 9 calls. Both multifamily and single-family housing bonds were positive contributors across all of these Funds. With a weighting of 16%, NFM, which took advantage of the ample opportunities to purchase housing bonds during the Fund's initial investment period in 2001, had the highest exposure to these credits, while NPV had the lowest, at 5%. During this period, we continued to see a number of advance refundings4, which benefit the Funds through price appreciation and enhanced credit quality. As the yield curve flattened, more lower coupon bonds were being pre-refunded, which meant that, in general, the positive impact from refinancings was less than in the previous reporting period. While advance refundings generally enhanced performance for this 12-month period, the rising interest rate environment--especially at the short end of the yield curve--meant that the Funds' holdings of older, previously pre-refunded bonds tended to underperform the general municipal market, due primarily to the shorter effective maturities of these bonds. This was especially true in NMY and NZR. Other sectors that tended to underperform the general municipal market included general obligation bonds and special tax-backed issues. HOW WERE THE FUNDS POSITIONED IN TERMS OF CREDIT QUALITY AND BOND CALLS AS OF MAY 31, 2006? We continued to believe that maintaining overall strong credit quality was an important technique. As of May 31, 2006, all seven of these Funds continued to offer excellent overall credit quality, with allocations of bonds rated AAA/U.S. guaranteed and AA ranging from 67% in NFM to 73% in NMY, 74% in NZR and NWI, and 78% in NGB to 82% in NNB and 83% in NPV. As of May 31, 2006, potential call exposure for the period from June 2006 through the end of 2007 ranged from zero in NNB, 2% in NFM, NZR, NWI, and NGB, and 4% in NPV to 15% in NMY. In general, NMY continued to hold many of these callable bonds during the period, in part due to their performance potential. The number of actual bond calls in all of these Funds depends largely on future market interest rates. 4 Advance refundings, also known as pre-refundings or refinancings, occur when an issuer sells new bonds and uses the proceeds to fund principal and interest payments of older existing bonds. This process often results in lower borrowing costs for bond issuers. 10 Dividend and Share Price INFORMATION As previously noted, all of the Funds in this report use leverage to potentially enhance opportunities for additional income for common shareholders. During periods of rising short-term interest rates, as was the case during this reporting period, the Funds' borrowing costs also rise, reducing the extent of the benefits of leveraging. The Funds' income streams were also impacted as the proceeds from older, higher-yielding bonds that matured or were called were reinvested into bonds generally offering lower yields, especially in the older Funds. These factors resulted in one monthly dividend reduction in NFM, NGB, and NNB and two in NMY, NZR, and NPV over the 12-month period ended May 31, 2006. The dividend of NWI remained stable throughout this reporting period, due in part to the hedging strategy in place in this Fund. Due to capital gains generated by normal portfolio activity, common shareholders of the following Funds received capital gains and net ordinary income distributions at the end of December 2005, as follows: LONG-TERM CAPITAL GAINS ORDINARY INCOME (PER SHARE) (PER SHARE) - -------------------------------------------------------------------------------- NMY $0.0245 $0.0069 - -------------------------------------------------------------------------------- NZR $0.0275 $0.0001 - -------------------------------------------------------------------------------- NPV $0.2431 -- - -------------------------------------------------------------------------------- NNB $0.0666 -- - -------------------------------------------------------------------------------- These distributions, which represented an important part of the total returns of these four Funds for this period, were generated by bond calls and sales of appreciated securities. This had a slight negative impact on the earning power per common share of these Funds and was a minor factor in the common share dividend reductions noted above. All of the Funds in this report seek to pay stable dividends at rates that reflect each Fund's past results and projected future performance. During certain periods, each Fund may pay dividends at a rate that may be more or less than the amount of net investment income actually earned by the Fund during the period. If a Fund has cumulatively earned more than it has paid in dividends, it holds the excess in reserve as undistributed net investment income (UNII) as part of the Fund's NAV. Conversely, if a Fund has cumulatively paid dividends in excess of its earnings, the excess constitutes negative UNII that is likewise reflected in the Fund's NAV. Each Fund will, over time, pay all of its net investment income as dividends to shareholders. As of May 31, 2006, all of the Funds in this report except NWI had a positive UNII balance for both financial statement and tax purposes. NWI had a positive UNII balance for tax purposes, and a negative UNII balance for financial statement purposes. 11 At the end of the reporting period, the Funds' share prices were trading at premiums or discounts to their NAVs as shown in the accompanying chart: 5/31/06 12-MONTH AVERAGE PREMIUM/DISCOUNT PREMIUM/DISCOUNT - -------------------------------------------------------------------------------- NMY +0.35% +2.31% - -------------------------------------------------------------------------------- NFM +4.26% +7.10% - -------------------------------------------------------------------------------- NZR 0.00% +4.51% - -------------------------------------------------------------------------------- NWI -3.35% -2.13% - -------------------------------------------------------------------------------- NPV +0.13% +7.01% - -------------------------------------------------------------------------------- NGB +14.69% +12.91% - -------------------------------------------------------------------------------- NNB +9.19% +9.04% - -------------------------------------------------------------------------------- 12 Nuveen Maryland Premium Income Municipal Fund NMY Performance OVERVIEW As of May 31, 2006 Pie Chart: CREDIT QUALITY (as a % of total investments) AAA/U.S. Guaranteed 48% AA 25% A 11% BBB 9% BB or Lower 5% N/R 2% Bar Chart: 2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 Jun 0.069 Jul 0.069 Aug 0.069 Sep 0.0655 Oct 0.0655 Nov 0.0655 Dec 0.062 Jan 0.062 Feb 0.062 Mar 0.062 Apr 0.062 May 0.062 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 6/01/05 15.75 15.76 15.8 15.78 15.62 15.63 15.65 15.65 15.78 15.75 15.65 15.57 15.65 15.53 15.69 15.63 15.68 15.72 15.73 15.84 15.84 15.98 16.1 15.99 15.84 15.85 15.69 15.69 15.69 15.64 15.61 15.57 15.63 15.58 15.64 15.58 15.68 15.58 15.59 15.47 15.59 15.59 15.59 15.6 15.62 15.83 16.01 16.12 15.9 16 16 15.95 15.64 15.7 15.83 15.83 15.8 15.81 15.79 15.9 15.91 16 15.81 15.94 16.01 15.86 16.05 16.13 16.1 15.86 15.94 16.05 16.02 15.93 15.93 15.81 15.93 15.78 15.8 15.68 15.5 15.29 15.26 15.28 15.32 15.38 15.4 15.36 15.58 15.54 15.52 15.4 15.46 15.48 15.39 15.21 15.09 15.05 15.08 15 14.95 15.46 15.3 15.18 14.92 14.99 15.01 14.99 15.05 15.1 15.1 14.92 14.95 15.16 14.85 14.94 14.75 14.69 14.67 14.69 14.36 14.49 14.39 14.28 14.25 14.3 14.52 14.43 14.45 14.4 14.25 14.01 14 14.07 13.96 13.93 13.96 13.75 13.73 13.88 13.94 13.96 13.8 13.77 13.84 13.95 13.98 14.09 14.11 14.18 14.18 14.16 14.25 14.35 14.48 14.46 14.63 14.7 14.73 14.97 14.74 14.72 14.96 14.96 14.9 15.26 15.1 14.99 14.83 15.05 15.04 15.09 15 14.88 14.9 14.85 14.85 14.91 14.83 14.68 14.62 14.6 14.61 14.64 14.51 14.65 14.63 14.78 14.76 14.8 14.98 15.05 14.98 15.01 15.1 14.96 14.97 15 15 15.09 14.98 15.16 15.16 15.15 15.21 15.16 15.21 15.29 15.28 15.21 15.27 15.12 15.22 15.24 15.25 15.22 15.2 14.91 14.83 14.71 14.68 14.95 15 14.85 14.85 14.71 14.89 14.88 14.81 14.78 14.86 14.95 14.95 14.76 14.75 14.5 14.68 14.67 14.62 14.52 14.52 14.53 14.54 14.65 14.65 14.67 14.59 14.56 14.6 14.54 14.57 14.57 14.47 14.42 5/31/06 14.52 FUND SNAPSHOT - ------------------------------------ Common Share Price $14.52 - ------------------------------------ Common Share Net Asset Value $14.47 - ------------------------------------ Premium/(Discount) to NAV 0.35% - ------------------------------------ Market Yield 5.12% - ------------------------------------ Taxable-Equivalent Yield1 7.47% - ------------------------------------ Net Assets Applicable to Common Shares ($000) $153,834 - ------------------------------------ Average Effective Maturity on Securities (Years) 15.69 - ------------------------------------ Leverage-Adjusted Duration 8.56 - ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 3/18/93) - ------------------------------------ ON SHARE PRICE ON NAV - ------------------------------------ 1-Year -2.94% 1.08% - ------------------------------------ 5-Year 3.87% 7.11% - ------------------------------------ 10-Year 7.01% 6.89% - ------------------------------------ INDUSTRIES (as a % of total investments) - ------------------------------------ Tax Obligation/General 23.6% - ------------------------------------ Health Care 14.8% - ------------------------------------ Tax Obligation/Limited 14.4% - ------------------------------------ Education and Civic Organizations 13.3% - ------------------------------------ U.S. Guaranteed 12.5% - ------------------------------------ Housing/Multifamily 10.5% - ------------------------------------ Other 10.9% - ------------------------------------ 1 Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a combined federal and state income tax rate of 31.5%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. 2 The Fund paid shareholders capital gains and net ordinary income distributions in December 2005 of $0.0314 per share. 13 Nuveen Maryland Dividend Advantage Municipal Fund NFM Performance OVERVIEW As of May 31, 2006 Pie Chart: CREDIT QUALITY (as a % of total investments) AAA/U.S. Guaranteed 47% AA 20% A 14% BBB 12% BB or Lower 2% N/R 5% Bar Chart: 2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE Jun 0.0715 Jul 0.0715 Aug 0.0715 Sep 0.0715 Oct 0.0715 Nov 0.0715 Dec 0.0715 Jan 0.0715 Feb 0.0715 Mar 0.068 Apr 0.068 May 0.068 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 6/01/05 15.71 15.95 15.96 15.8 15.86 15.87 15.77 15.54 15.51 15.71 15.85 15.57 15.8 15.8 16.07 16.15 16.4 16.29 16.29 16.35 16.3 16.08 16.1 15.79 15.9 15.9 15.85 15.94 15.74 15.85 15.94 16.02 16.1 15.79 15.85 15.78 15.78 15.7 15.75 15.6 15.76 15.81 15.81 15.84 15.72 15.8 15.78 15.72 15.72 15.81 15.92 15.93 16.05 15.95 16.23 16.3 16.4 16.5 16.75 16.69 16.46 16.57 16.5 16.73 16.63 16.6 16.58 16.69 16.8 17.2 16.6 16.6 16.64 16.3 16.3 16.2 16.25 16.35 16.23 15.99 15.84 15.75 15.78 15.66 15.73 15.7 15.61 15.92 15.99 15.9 15.93 15.95 15.99 15.99 15.71 15.6 15.6 15.89 15.75 15.9 15.75 15.75 15.76 15.9 15.8 15.83 15.6 15.58 15.65 15.6 15.65 15.33 15.25 15.53 15.5 15.5 15.41 15.36 15.2 15.06 14.9 14.75 14.7 14.84 14.61 14.74 14.67 14.91 14.77 15 14.93 14.8 14.7 14.92 14.92 14.85 14.71 14.75 14.7 14.69 14.69 14.85 15.14 15.5 15.16 15 15.28 15.42 15.5 15.25 15.25 15.17 15.7 15.65 15.7 15.78 15.85 15.73 15.9 16 15.95 15.75 16.1 15.95 16.04 15.95 15.9 15.85 16.17 16.5 16.49 16.45 16.42 16.39 16.5 16.35 16.5 16.77 16.7 16.7 16.77 16.99 16.73 16.67 16.69 16.8 16.72 16.75 16.72 17 16.86 17 16.67 16.67 16.55 16.6 16.6 16.73 16.85 16.8 16.8 16.87 17.09 16.6 16.35 16.15 16.15 16.05 16.3 16.36 16.36 16.25 16.05 16.05 16.15 16.2 15.9 15.9 15.65 15.6 15.7 15.65 15.9 15.95 15.95 15.65 16 15.9 15.75 15.8 15.81 15.83 15.83 15.82 15.83 15.75 15.9 15.85 15.95 15.98 15.9 15.5 15.46 15.35 15.29 15.39 15.26 15.33 15.33 15.23 15.2 15.33 15.21 15.27 5/31/06 15.19 FUND SNAPSHOT - ------------------------------------ Common Share Price $15.19 - ------------------------------------ Common Share Net Asset Value $14.57 - ------------------------------------ Premium/(Discount) to NAV 4.26% - ------------------------------------ Market Yield 5.37% - ------------------------------------ Taxable-Equivalent Yield1 7.84% - ------------------------------------ Net Assets Applicable to Common Shares ($000) $60,762 - ------------------------------------ Average Effective Maturity on Securities (Years) 18.47 - ------------------------------------ Leverage-Adjusted Duration 7.59 - ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 1/23/01) - ------------------------------------ ON SHARE PRICE ON NAV - ------------------------------------ 1-Year 2.51% 1.95% - ------------------------------------ 5-Year 4.69% 7.16% - ------------------------------------ Since Inception 5.89% 6.36% - ------------------------------------ INDUSTRIES (as a % of total investments) - ------------------------------------ Tax Obligation/General 24.2% - ------------------------------------ Health Care 17.0% - ------------------------------------ U.S. Guaranteed 13.6% - ------------------------------------ Tax Obligation/Limited 12.9% - ------------------------------------ Housing/Multifamily 12.8% - ------------------------------------ Education and Civic Organizations 8.9% - ------------------------------------ Other 10.6% - ------------------------------------ 1 Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a combined federal and state income tax rate of 31.5%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. 14 Nuveen Maryland Dividend Advantage Municipal Fund 2 NZR Performance OVERVIEW As of May 31, 2006 Pie Chart: CREDIT QUALITY (as a % of total investments) AAA/U.S. Guaranteed 49% AA 25% A 9% BBB 9% BB or Lower 3% N/R 5% Bar Chart: 2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 Jun 0.073 Jul 0.073 Aug 0.073 Sep 0.0695 Oct 0.0695 Nov 0.0695 Dec 0.0695 Jan 0.0695 Feb 0.0695 Mar 0.066 Apr 0.066 May 0.066 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 6/01/05 15.51 15.42 15.55 15.5 15.47 15.6 15.46 15.41 15.3 15.43 15.38 15.53 15.87 15.52 15.53 15.73 15.94 15.93 16.11 15.8 15.98 15.89 16.39 16.6 16.45 16 15.93 15.96 16.07 16.23 15.88 16.04 15.96 16.19 16.1 16.23 16.02 15.76 15.54 15.68 15.69 15.61 15.61 15.47 15.4 15.35 15.49 15.5 15.64 15.75 15.86 15.8 15.85 15.88 16.2 16.17 16.17 15.85 15.86 15.85 15.93 15.77 15.8 16.18 16.14 16.14 16 15.96 16.07 16.13 16.05 16 16.07 15.79 15.99 15.99 15.8 16.11 16.19 16.3 16.11 16 15.95 16.09 15.91 15.93 15.9 15.98 16.05 16.05 16 16.12 15.93 15.89 15.7 15.78 15.65 15.59 15.6 15.3 15.23 15.55 15.45 15.35 15.08 15.3 15.46 15.55 15.49 15.54 15.65 15.8 15.8 16 16.1 16.1 15.95 15.9 15.7 15.78 15.51 15.6 15.47 15.45 15.4 15.4 15.49 15.32 15.72 15.97 15.63 15.68 15.51 15.65 15.53 15.52 15.59 15.66 16 16.05 16.06 16.05 16.05 16.3 16.24 16.08 16.34 16.37 16.22 16.33 16.33 16.38 16.19 16.28 16.42 16.42 16.55 16.55 16.5 16.5 16.33 16.5 16.23 16.14 16.21 16.15 16.05 16.15 15.95 16.2 16.05 16.5 16.6 16.48 16.5 16.15 16.45 16.8 16.5 16.31 16.43 16.6 16.69 16.52 16.42 16.35 16.15 16.25 16.2 16.39 16.65 16.8 16.67 16.3 16.3 16.3 16.05 15.92 15.9 16.2 16.05 15.84 15.84 15.65 15.4 15.2 15.2 14.95 14.99 15.03 14.93 14.92 15.05 15.28 15.15 15.12 15.3 15.12 15.3 15.13 15.4 15.38 15.41 15.36 15.26 14.95 15 15.03 15.23 15.05 14.9 15.15 15.15 14.95 14.98 14.7 14.88 14.9 15 15.12 15.17 15.23 15.2 15.15 15 14.97 15.02 14.95 15.05 14.95 14.98 14.94 14.9 14.98 5/31/06 14.76 FUND SNAPSHOT - ------------------------------------ Common Share Price $14.76 - ------------------------------------ Common Share Net Asset Value $14.76 - ------------------------------------ Premium/(Discount) to NAV 0.00% - ------------------------------------ Market Yield 5.37% - ------------------------------------ Taxable-Equivalent Yield1 7.84% - ------------------------------------ Net Assets Applicable to Common Shares ($000) $61,726 - ------------------------------------ Average Effective Maturity on Securities (Years) 17.16 - ------------------------------------ Leverage-Adjusted Duration 8.05 - ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 9/25/01) - ------------------------------------ ON SHARE PRICE ON NAV - ------------------------------------ 1-Year 1.13% 1.14% - ------------------------------------ Since Inception 5.35% 6.47% - ------------------------------------ INDUSTRIES (as a % of total investments) - ------------------------------------ Tax Obligation/General 25.7% - ------------------------------------ U.S. Guaranteed 16.4% - ------------------------------------ Health Care 14.4% - ------------------------------------ Tax Obligation/Limited 13.3% - ------------------------------------ Education and Civic Organizations 11.2% - ------------------------------------ Housing/Multifamily 7.0% - ------------------------------------ Other 12.0% - ------------------------------------ 1 Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a combined federal and state income tax rate of 31.5%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. 2 The Fund paid shareholders capital gains and net ordinary income distributions in December 2005 of $0.0276 per share. 15 Nuveen Maryland Dividend Advantage Municipal Fund 3 NWI Performance OVERVIEW As of May 31, 2006 Pie Chart: CREDIT QUALITY (as a % of total investments) AAA/U.S. Guaranteed 42% AA 32% A 7% BBB 12% BB or Lower 3% N/R 4% Bar Chart: 2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE Jun 0.0595 Jul 0.0595 Aug 0.0595 Sep 0.0595 Oct 0.0595 Nov 0.0595 Dec 0.0595 Jan 0.0595 Feb 0.0595 Mar 0.0595 Apr 0.0595 May 0.0595 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 6/01/05 14.38 14.47 14.54 14.2 14.31 14.2 14.26 14.23 14.16 14.08 14.14 14.25 14.41 14.45 14.42 14.48 14.69 14.61 14.55 14.55 14.65 14.56 14.67 14.76 14.5 14.66 14.63 14.51 14.53 14.4 14.27 14.35 14.11 14.03 14.02 14.1 14.15 14.44 14.36 14.4 14.39 14.45 14.45 14.5 14.4 14.5 14.49 14.41 14.32 14.55 14.32 14.27 14.54 14.46 14.55 14.42 14.29 14.55 14.31 14.36 14.57 14.67 14.8 14.59 14.52 14.52 14.5 14.49 14.48 14.55 14.56 14.55 14.54 14.67 14.49 14.4 14.12 14.3 14.53 14.75 14.81 14.82 14.68 14.64 14.63 14.37 14.66 14.66 14.62 14.62 14.55 14.5 14.44 14.41 14.24 14.17 14.1 14.19 14.12 14.04 14.01 14.12 14.25 14.31 14.35 14.1 14.1 14.27 14.41 14.4 14.04 14.26 14.32 14.48 14.14 14 14.01 14 14.29 14.07 14.3 14.1 14.1 14.06 13.97 14 14.04 14.09 13.98 13.84 14.01 13.84 13.85 14.05 14.15 14.11 13.75 13.6 13.55 13.59 13.56 13.56 13.57 13.7 13.73 13.76 13.79 13.98 14 14.35 14.35 14.34 14.11 14.2 14.29 14.1 14.27 14.2 14.31 14.35 14.19 14.09 14.19 14.35 14.3 14.18 14.35 14.62 14.39 14.53 14.45 14.34 14.29 14.27 14.22 14.19 14.15 14.13 14.24 14.43 14.58 14.24 14.45 14.56 14.39 14.65 14.34 14.65 14.55 14.6 14.35 14.36 13.98 14 14.2 14.51 14.4 14.15 14.38 14.54 14.51 14.65 14.4 14.4 14.04 14.01 14.02 14 14.07 14 14.04 13.96 14.07 14 14.08 14.55 14.38 14.08 13.99 13.9 13.9 14.1 14.2 14.2 14.25 14.3 14.3 14.24 14.11 13.98 14.14 14.4 14.4 14.4 13.98 14 13.95 13.95 13.93 13.93 13.98 13.98 13.91 13.8 14 13.82 13.7 13.7 13.7 13.64 13.76 13.78 13.81 13.77 5/31/06 13.85 FUND SNAPSHOT - ------------------------------------ Common Share Price $13.85 - ------------------------------------ Common Share Net Asset Value $14.33 - ------------------------------------ Premium/(Discount) to NAV -3.35% - ------------------------------------ Market Yield 5.16% - ------------------------------------ Taxable-Equivalent Yield1 7.53% - ------------------------------------ Net Assets Applicable to Common Shares ($000) $76,809 - ------------------------------------ Average Effective Maturity on Securities (Years) 17.21 - ------------------------------------ Leverage-Adjusted Duration 7.83 - ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 9/25/02) - ------------------------------------ ON SHARE PRICE ON NAV - ------------------------------------ 1-Year 1.09% 1.55% - ------------------------------------ Since Inception 3.14% 5.30% - ------------------------------------ INDUSTRIES (as a % of total investments) - ------------------------------------ Tax Obligation/Limited 23.0% - ------------------------------------ U.S. Guaranteed 16.4% - ------------------------------------ Tax Obligation/General 15.9% - ------------------------------------ Health Care 12.1% - ------------------------------------ Housing/Multifamily 10.0% - ------------------------------------ Education and Civic Organizations 9.0% - ------------------------------------ Other 13.6% - ------------------------------------ 1 Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a combined federal and state income tax rate of 31.5%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. 16 Nuveen Virginia Premium Income Municipal Fund NPV Performance OVERVIEW As of May 31, 2006 Pie Chart: CREDIT QUALITY (as a % of total investments) AAA/U.S. Guaranteed 52% AA 31% A 7% BBB 6% BB or Lower 1% N/R 3% Bar Chart: 2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 Jun 0.069 Jul 0.069 Aug 0.069 Sep 0.069 Oct 0.069 Nov 0.069 Dec 0.0655 Jan 0.0655 Feb 0.0655 Mar 0.062 Apr 0.062 May 0.062 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 6/01/05 17.68 17.88 18 18.02 18.02 18.03 18.07 18.07 17.95 17.95 17.81 17.4 17.39 17.28 17.4 17.47 17.33 17.34 17.44 17.39 17.4 17.51 17.91 17.85 17.87 17.69 17.95 18.1 17.91 17.45 17.3 17.12 17.13 17.02 17.06 16.85 16.75 16.72 16.8 16.78 16.94 17.09 17.09 16.95 16.92 16.81 16.87 16.93 16.94 16.92 16.96 16.78 16.86 16.85 16.89 16.59 16.75 16.66 16.65 16.7 16.85 16.94 17.19 17.49 17.23 17.29 17.22 17.44 17.4 17.26 17.56 17.42 17.53 17.49 17.53 17.57 17.5 17.35 17.3 17.2 17.05 16.79 16.63 16.62 16.98 17 17.1 17.45 17.35 17.52 17.55 17.7 17.55 17.9 17.88 17.6 17.6 17.58 17.7 17.53 17.07 17.18 17.09 17.25 17 17.12 17.1 16.98 16.95 16.65 16.99 16.8 16.96 16.82 16.82 16.73 16.85 16.65 16.5 16.43 16.47 16.45 16.14 16.1 16 16.12 16.11 16.19 16.1 16.28 16.34 16.34 16.29 16.06 16.09 16.01 16.17 15.8 15.65 15.82 15.76 15.54 15.22 15.22 15.26 15.37 15.75 15.8 15.9 15.97 15.97 15.98 16.18 15.93 15.85 16.14 16.09 15.6 15.75 15.76 15.78 15.79 16.05 16 15.85 16.1 16.27 16.4 16.5 16.1 15.9 15.8 15.76 15.61 15.51 15.57 15.55 15.71 15.75 15.76 15.95 16.08 16.11 15.66 15.86 15.76 15.95 16.18 16.15 16.4 16.5 16.3 15.8 15.83 15.72 15.4 15.45 15.75 15.75 16.15 16.19 16.18 16 15.85 16.14 15.54 15.5 15.5 15.41 15.5 15.41 15.41 15.44 15.27 15.5 15.55 15.48 15.19 15.35 15.1 14.95 15.05 14.9 15.21 15.28 15.27 15.5 15.39 15.6 15.75 15.65 15.3 15.3 15.51 15.87 15.78 15.35 15.37 15.1 15.19 15.11 14.91 14.99 15.11 15.12 14.9 15.15 14.98 14.92 14.85 15.1 15.1 15.19 15.05 5/31/06 14.91 FUND SNAPSHOT - ------------------------------------ Common Share Price $14.91 - ------------------------------------ Common Share Net Asset Value $14.89 - ------------------------------------ Premium/(Discount) to NAV 0.13% - ------------------------------------ Market Yield 4.99% - ------------------------------------ Taxable-Equivalent Yield1 7.34% - ------------------------------------ Net Assets Applicable to Common Shares ($000) $132,626 - ------------------------------------ Average Effective Maturity on Securities (Years) 15.24 - ------------------------------------ Leverage-Adjusted Duration 8.22 - ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 3/18/93) - ------------------------------------ ON SHARE PRICE ON NAV - ------------------------------------ 1-Year -9.98% 0.71% - ------------------------------------ 5-Year 4.24% 6.65% - ------------------------------------ 10-Year 6.72% 7.21% - ------------------------------------ INDUSTRIES (as a % of total investments) - ------------------------------------ Tax Obligation/Limited 22.5% - ------------------------------------ Tax Obligation/General 19.1% - ------------------------------------ Health Care 11.6% - ------------------------------------ U.S. Guaranteed 10.3% - ------------------------------------ Transportation 9.1% - ------------------------------------ Utilities 8.1% - ------------------------------------ Education and Civic Organizations 4.8% - ------------------------------------ Other 14.5% - ------------------------------------ 1 Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a combined federal and state income tax rate of 32%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. 2 The Fund paid shareholders a capital gains distribution in December 2005 of $0.2431 per share. 17 Nuveen Virginia Dividend Advantage Municipal Fund NGB Performance OVERVIEW As of May 31, 2006 Pie Chart: CREDIT QUALITY (as a % of total investments) AAA/U.S. Guaranteed 49% AA 29% A 8% BBB 5% BB or Lower 4% N/R 5% Bar Chart: 2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE Jun 0.0755 Jul 0.0755 Aug 0.0755 Sep 0.072 Oct 0.072 Nov 0.072 Dec 0.072 Jan 0.072 Feb 0.072 Mar 0.072 Apr 0.072 May 0.072 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 6/01/05 17.05 17.15 17.25 17.2 17.15 17.2 17.2 17 17.01 17.1 17.18 17.18 17.3 17.24 17.15 17.47 17.47 17.47 17.4 17.36 17.35 17.22 17.34 17.94 17.6 17.72 17.93 17.98 17.98 17.89 17.99 17.99 18.13 18.2 18.2 18.06 18.51 18.42 18.4 18.6 18.76 18.8 18.8 19 18.98 18.85 18.56 18.72 18.82 18.93 18.7 17.77 17.8 17.31 17.51 17.6 17.63 17.63 17.71 17.57 17.53 17.83 18.05 18 18.05 18.15 18.2 18.25 18.25 18.17 18.41 18.41 18.41 18.41 18.38 18.09 18 17.72 17.69 17.67 17.47 17.46 17.31 17.31 17.25 17.25 17.61 17.77 17.85 17.55 17.55 17.55 17.64 17.32 17.23 17.34 17.34 17.4 17.22 17.37 16.62 16.75 16.79 16.75 16.71 16.51 16.45 16.3 16.41 16.29 16.25 16.04 15.81 15.6 15.86 15.33 15.4 15.36 15.4 15.68 15.33 15.34 15.41 15.1 15.15 15.15 15.24 15.35 15.48 15.8 16.27 16.26 16.55 16.05 15.9 15.98 15.95 15.79 16 15.99 15.65 15.84 16.05 16.04 16 16 16 16.15 16.25 16.3 16.3 16.35 16.52 16.75 16.55 17 16.99 17 17 17 17.17 17.55 17.55 17.74 17.75 17.65 17.88 17.86 17.95 18 18 17.92 17.35 17.2 17.1 17.41 17.45 17.4 17.11 17.3 17.3 17.3 17.34 16.83 16.73 16.69 16.95 17 17.3 17.3 17.25 17.45 17.19 17.19 17.19 17.24 17 17.01 17.05 17.29 17.29 17.4 17.5 17.67 17.75 17.16 17.16 16.75 16.95 17.09 17.09 16.8 16.9 17.16 17.27 17.28 17.28 17.27 17.43 17.43 17.3 17.12 17.12 16.96 16.88 16.95 17.2 17.04 17.13 17.06 17.2 17.25 17.25 17.4 17.66 17.8 17.61 17.51 17.55 17.35 17.35 17.4 17.4 17.25 17.25 17.25 17.12 17.45 17.55 17.55 17.05 17.07 17.05 17.1 5/31/06 17.1 FUND SNAPSHOT - ------------------------------------ Common Share Price $17.10 - ------------------------------------ Common Share Net Asset Value $14.91 - ------------------------------------ Premium/(Discount) to NAV 14.69% - ------------------------------------ Market Yield 5.05% - ------------------------------------ Taxable-Equivalent Yield1 7.43% - ------------------------------------ Net Assets Applicable to Common Shares ($000) $46,626 - ------------------------------------ Average Effective Maturity on Securities (Years) 15.99 - ------------------------------------ Leverage-Adjusted Duration 8.09 - ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 1/26/01) - ------------------------------------ ON SHARE PRICE ON NAV - ------------------------------------ 1-Year 5.86% 1.74% - ------------------------------------ 5-Year 8.14% 7.71% - ------------------------------------ Since Inception 8.12% 6.85% - ------------------------------------ INDUSTRIES (as a % of total investments) - ------------------------------------ Tax Obligation/General 21.0% - ------------------------------------ Tax Obligation/Limited 16.5% - ------------------------------------ Transportation 16.1% - ------------------------------------ U.S. Guaranteed 11.7% - ------------------------------------ Education and Civic Organizations 9.4% - ------------------------------------ Health Care 7.3% - ------------------------------------ Consumer Staples 3.2% - ------------------------------------ Other 14.8% - ------------------------------------ 1 Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a combined federal and state income tax rate of 32%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. 18 Nuveen Virginia Dividend Advantage Municipal Fund 2 NNB Performance OVERVIEW As of May 31, 2006 Pie Chart: CREDIT QUALITY (as a % of total investments) AAA/U.S. Guaranteed 51% AA 31% A 7% BBB 5% BB or Lower 2% N/R 4% Bar Chart: 2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 Jun 0.0715 Jul 0.0715 Aug 0.0715 Sep 0.0715 Oct 0.0715 Nov 0.0715 Dec 0.0715 Jan 0.0715 Feb 0.0715 Mar 0.068 Apr 0.068 May 0.068 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 6/01/05 16.96 16.59 16.64 16.65 16.63 16.7 16.66 16.6 16.71 16.69 16.89 16.85 16.78 16.82 16.81 17 16.99 17 17.03 17 17.3 17.4 16.95 17.11 17.32 17.15 17.2 17.3 17.16 17.2 17.15 17.2 17.2 17.15 17.08 17.11 17.2 17.25 17.39 17.38 17.2 17.28 17.28 17.32 17.11 16.84 16.95 17.17 17.31 17.31 17.36 17.15 17.2 17.4 17.6 17.3 17.32 17.2 17.1 17.11 17.12 17.15 17.32 17.49 17.21 17.13 17.22 17.38 17.5 17.5 17.45 17.44 17.19 17.14 17.14 16.95 16.97 17 16.75 16.8 16.65 16.2 16.25 16.3 16.67 17 17.2 17.08 17.07 17.07 17.09 16.98 16.84 17 16.8 16.77 16.71 16.81 16.51 16.4 16.5 16.63 16.65 16.6 16.65 16.45 16.65 16.52 16.58 16.6 16.63 16.63 16.55 16.3 16.3 16.17 16.22 16.19 15.95 15.95 15.88 15.96 16 15.95 15.89 15.89 15.95 15.97 15.97 16 16.14 16.46 16.5 16.44 16.6 16.62 16.55 16.5 16.5 16.26 16.09 16.09 16.25 16.26 16.39 16.39 16.6 16.63 16.65 16.64 16.64 16.95 17.4 17.25 16.9 17.07 17 16.9 16.81 16.8 16.8 16.85 16.7 16.9 16.8 17 17.01 16.9 16.89 16.89 17.15 17.3 17.27 16.9 17.15 17.35 17.37 17.11 17.25 17.05 17.05 17.05 17 17 17.05 16.91 16.95 17.15 17 16.91 16.85 16.55 16.4 16.4 16.6 16.45 16.49 16.94 16.94 17.09 17.09 17.11 16.75 16.46 16.55 16.11 16.12 16.5 16.49 16.46 16.75 16.65 16.85 16.75 17.04 17.04 17.04 17.18 16.88 16.6 16.21 16.2 16.18 16.05 16.02 16.1 16 15.75 15.91 15.94 15.94 15.97 15.97 15.95 16.1 16.15 16.3 16.15 16.22 16.45 16.35 16.45 16.4 16.42 16.21 16.3 16.38 16.16 16.15 16.15 16.3 16.45 16.4 16.13 5/31/06 16.4 FUND SNAPSHOT - ------------------------------------ Common Share Price $16.40 - ------------------------------------ Common Share Net Asset Value $15.02 - ------------------------------------ Premium/(Discount) to NAV 9.19% - ------------------------------------ Market Yield 4.98% - ------------------------------------ Taxable-Equivalent Yield1 7.32% - ------------------------------------ Net Assets Applicable to Common Shares ($000) $85,887 - ------------------------------------ Average Effective Maturity on Securities (Years) 16.26 - ------------------------------------ Leverage-Adjusted Duration 8.22 - ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 11/15/01) - ------------------------------------ ON SHARE PRICE ON NAV - ------------------------------------ 1-Year 3.45% 1.53% - ------------------------------------ Since Inception 7.93% 7.25% - ------------------------------------ INDUSTRIES (as a % of total investments) - ------------------------------------ Tax Obligation/General 25.6% - ------------------------------------ Tax Obligation/Limited 13.8% - ------------------------------------ Health Care 12.0% - ------------------------------------ U.S. Guaranteed 11.7% - ------------------------------------ Water and Sewer 10.4% - ------------------------------------ Housing/Single Family 6.5% - ------------------------------------ Education and Civic Organizations 6.0% - ------------------------------------ Other 14.0% - ------------------------------------ 1 Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a combined federal and state income tax rate of 32%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. 2 The Fund paid shareholders a capital gains distribution in December 2005 of $0.0666 per share. 19 Report of INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM THE BOARD OF TRUSTEES AND SHAREHOLDERS NUVEEN MARYLAND PREMIUM INCOME MUNICIPAL FUND NUVEEN MARYLAND DIVIDEND ADVANTAGE MUNICIPAL FUND NUVEEN MARYLAND DIVIDEND ADVANTAGE MUNICIPAL FUND 2 NUVEEN MARYLAND DIVIDEND ADVANTAGE MUNICIPAL FUND 3 NUVEEN VIRGINIA PREMIUM INCOME MUNICIPAL FUND NUVEEN VIRGINIA DIVIDEND ADVANTAGE MUNICIPAL FUND NUVEEN VIRGINIA DIVIDEND ADVANTAGE MUNICIPAL FUND 2 We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of Nuveen Maryland Premium Income Municipal Fund, Nuveen Maryland Dividend Advantage Municipal Fund, Nuveen Maryland Dividend Advantage Municipal Fund 2, Nuveen Maryland Dividend Advantage Municipal Fund 3, Nuveen Virginia Premium Income Municipal Fund, Nuveen Virginia Dividend Advantage Municipal Fund and Nuveen Virginia Dividend Advantage Municipal Fund 2 (the Funds) as of May 31, 2006, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods indicated therein. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Funds' internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of May 31, 2006, by correspondence with the custodian and brokers. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial positions of Nuveen Maryland Premium Income Municipal Fund, Nuveen Maryland Dividend Advantage Municipal Fund, Nuveen Maryland Dividend Advantage Municipal Fund 2, Nuveen Maryland Dividend Advantage Municipal Fund 3, Nuveen Virginia Premium Income Municipal Fund, Nuveen Virginia Dividend Advantage Municipal Fund and Nuveen Virginia Dividend Advantage Municipal Fund 2 at May 31, 2006, the results of their operations for the year then ended, changes in their net assets for each of the two years in the period then ended, and their financial highlights for each of the periods indicated therein in conformity with U.S. generally accepted accounting principles. /s/ Ernst & Young LLP Chicago, Illinois July 14, 2006 20 Nuveen Maryland Premium Income Municipal Fund (NMY) Portfolio of INVESTMENTS May 31, 2006 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER DISCRETIONARY - 1.4% (1.0% OF TOTAL INVESTMENTS) $ 2,100 Baltimore, Maryland, Senior Lien Convention Center Hotel 9/16 at 100.00 AAA $ 2,218,314 Revenue Bonds, Series 2006A, 5.250%, 9/01/39 - XLCA Insured - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER STAPLES - 2.0% (1.4% OF TOTAL INVESTMENTS) 3,095 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 3,151,669 Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33 - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 19.8% (13.3% OF TOTAL INVESTMENTS) 1,250 Frederick County, Maryland, Educational Facilities Revenue 9/16 at 100.00 BBB- 1,302,788 Bonds, Mount Saint Mary's College, Series 2006, 5.625%, 9/01/38 Frederick County, Maryland, Educational Facilities Revenue Bonds, Mount St. Mary's College, Series 2001A: 200 5.750%, 9/01/25 3/10 at 101.00 BBB- 206,828 200 5.800%, 9/01/30 3/10 at 101.00 BBB- 206,502 1,000 Hartford County, Maryland, Economic Development Revenue 4/14 at 100.00 A+ 1,034,500 Bonds, Battelle Memorial Institute, Series 2004, 5.250%, 4/01/34 Maryland Economic Development Corporation, Utility Infrastructure Revenue Bonds, University of Maryland - College Park, Series 2001: 1,000 5.375%, 7/01/15 - AMBAC Insured 7/11 at 100.00 AAA 1,068,340 1,000 5.375%, 7/01/16 - AMBAC Insured 7/11 at 100.00 AAA 1,069,290 Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Bullis School, Series 2000: 750 5.250%, 7/01/25 - FSA Insured 1/11 at 101.00 AAA 788,888 500 5.250%, 7/01/30 - FSA Insured 1/11 at 101.00 AAA 525,925 1,250 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A- 1,273,550 Revenue Bonds, Goucher College, Series 2004, 5.125%, 7/01/34 1,460 Maryland Health and Higher Educational Facilities Authority, 6/11 at 100.00 Baa1 1,508,720 Revenue Bonds, Maryland Institute College of Art, Series 2001, 5.625%, 6/01/36 1,500 Maryland Health and Higher Educational Facilities Authority, 7/07 at 102.00 AA 1,555,095 Revenue Refunding Bonds, Johns Hopkins University, Series 1997, 5.625%, 7/01/27 9,445 Morgan State University, Maryland, Student Tuition and Fee No Opt. Call AAA 11,177,021 Revenue Refunding Bonds, Academic Fees and Auxiliary Facilities, Series 1993, 6.100%, 7/01/20 - MBIA Insured University of Maryland, Auxiliary Facility and Tuition Revenue Bonds, Series 2003A: 5,645 5.000%, 4/01/15 4/13 at 100.00 AA 5,975,176 2,680 5.000%, 4/01/19 4/13 at 100.00 AA 2,813,544 - ------------------------------------------------------------------------------------------------------------------------------------ 27,880 Total Education and Civic Organizations 30,506,167 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTH CARE - 22.0% (14.8% OF TOTAL INVESTMENTS) 1,525 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A2 1,594,205 Revenue Bonds, Calvert Memorial Hospital, Series 2004, 5.500%, 7/01/36 3,250 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 3,390,140 Revenue Bonds, Carroll County General Hospital, Series 2002, 5.800%, 7/01/32 1,665 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 AA 1,685,363 Revenue Bonds, Civista Medical Center, Series 2005, 5.000%, 7/01/37 - RAAI Insured 1,400 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 1,420,384 Revenue Bonds, Frederick Memorial Hospital, Series 2002, 5.125%, 7/01/35 1,500 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A+ 1,513,335 Revenue Bonds, Greater Baltimore Medical Center, Series 2001, 5.000%, 7/01/34 21 Nuveen Maryland Premium Income Municipal Fund (NMY) (continued) Portfolio of INVESTMENTS May 31, 2006 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HEALTH CARE (continued) $ 1,000 Maryland Health and Higher Educational Facilities Authority, 7/08 at 101.00 AAA $ 1,026,810 Revenue Bonds, Johns Hopkins Hospital, Howard County General Hospital Acquisition, Series 1998, 5.000%, 7/01/19 - MBIA Insured 2,000 Maryland Health and Higher Educational Facilities Authority, 6/09 at 101.00 A+ 2,080,660 Revenue Bonds, Kaiser Permanente System, Series 1998A, 5.375%, 7/01/15 3,800 Maryland Health and Higher Educational Facilities Authority, 7/13 at 100.00 Baa2 3,904,006 Revenue Bonds, Kennedy Krieger Institute, Series 2003, 5.500%, 7/01/33 1,540 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A 1,569,014 Revenue Bonds, LifeBridge Health System, Series 2004A, 5.125%, 7/01/34 1,750 Maryland Health and Higher Educational Facilities Authority, 8/14 at 100.00 BBB+ 1,817,935 Revenue Bonds, MedStar Health, Series 2004, 5.375%, 8/15/24 3,250 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 A3 3,406,455 Revenue Bonds, Union Hospital of Cecil County, Series 2002, 5.625%, 7/01/32 1,500 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 A+ 1,617,690 Revenue Bonds, University of Maryland Medical System, Series 2002, 6.000%, 7/01/22 1,000 Maryland Health and Higher Educational Facilities Authority, 7/13 at 100.00 AAA 1,036,200 Revenue Bonds, University of Maryland Medical System, Series 2004B, 5.000%, 7/01/24 - AMBAC Insured Prince George's County, Maryland, Revenue Bonds, Dimensions Health Corporation, Series 1994: 3,080 5.375%, 7/01/14 7/06 at 100.00 B3 2,783,612 6,000 5.300%, 7/01/24 7/06 at 100.00 B3 4,989,240 - ------------------------------------------------------------------------------------------------------------------------------------ 34,260 Total Health Care 33,835,049 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 15.6% (10.5% OF TOTAL INVESTMENTS) Howard County, Maryland, FHA-Insured Mortgage Revenue Refunding Bonds, Normandy Woods III Apartments, Series 1996A: 700 6.000%, 7/01/17 7/06 at 102.00 AAA 714,686 2,000 6.100%, 7/01/25 7/06 at 102.00 AAA 2,041,760 1,450 Maryland Community Development Administration, FNMA 2/11 at 101.00 Aaa 1,522,181 Multifamily Development Revenue Bonds, Edgewater Village Apartments, Series 2000B, 5.800%, 8/01/20 (Alternative Minimum Tax) 2,500 Maryland Community Development Administration, Housing 1/09 at 101.00 Aa2 2,532,775 Revenue Bonds, Series 1999A, 5.350%, 7/01/41 (Alternative Minimum Tax) 880 Maryland Community Development Administration, Housing 1/10 at 100.00 Aa2 914,320 Revenue Bonds, Series 1999B, 6.250%, 7/01/32 (Alternative Minimum Tax) 1,000 Maryland Economic Development Corporation, Senior Lien 10/13 at 100.00 Ba2 962,440 Student Housing Revenue Bonds, University of Maryland - Baltimore, Series 2003A, 5.625%, 10/01/23 1,000 Maryland Economic Development Corporation, Student Housing 6/09 at 102.00 Baa3 1,043,500 Revenue Bonds, Collegiate Housing Foundation - Salisbury State University, Series 1999A, 6.000%, 6/01/19 1,145 Maryland Economic Development Corporation, Student Housing 6/16 at 100.00 AAA 1,179,064 Revenue Refunding Bonds, University of Maryland College Park Projects, Series 2006, 5.000%, 6/01/33 - CIFG Insured 3,830 Montgomery County Housing Opportunities Commission, 7/08 at 101.00 Aaa 3,889,020 Maryland, FNMA/FHA-Insured Multifamily Housing Development Bonds, Series 1998A, 5.200%, 7/01/30 360 Montgomery County Housing Opportunities Commission, 7/06 at 101.00 Aa2 366,138 Maryland, GNMA/FHA-Insured Multifamily Housing Revenue Bonds, Series 1995A, 5.900%, 7/01/15 1,500 Montgomery County Housing Opportunities Commission, 7/06 at 102.00 Aaa 1,531,230 Maryland, Multifamily Housing Development Bonds, Series 1996B, 5.900%, 7/01/26 2,000 Montgomery County Housing Opportunities Commission, 7/10 at 100.00 Aaa 2,096,400 Maryland, Multifamily Housing Development Bonds, Series 2000A, 6.100%, 7/01/30 540 Prince George's County Housing Authority, Maryland, GNMA 9/09 at 102.00 AAA 564,538 Collateralized Mortgage Revenue Bonds, University Landing Apartments, Series 1999, 6.100%, 3/20/41 (Alternative Minimum Tax) 900 Prince George's County Housing Authority, Maryland, GNMA 11/06 at 100.00 AAA 900,531 Collateralized Mortgage Revenue Refunding Bonds, Foxglenn Apartments, Series 1998A, 5.450%, 11/20/14 (Alternative Minimum Tax) 22 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY (continued) Prince George's County Housing Authority, Maryland, GNMA Collateralized Mortgage Revenue Refunding Bonds, Overlook Apartments, Series 1995A: $ 2,000 5.700%, 12/20/15 6/06 at 102.00 AAA $ 2,042,060 1,670 5.750%, 12/20/19 6/06 at 102.00 AAA 1,702,047 - ------------------------------------------------------------------------------------------------------------------------------------ 23,475 Total Housing/Multifamily 24,002,690 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 1.4% (0.9% OF TOTAL INVESTMENTS) 1,200 Maryland Community Development Administration, Department 9/15 at 100.00 Aa2 1,209,420 of Housing and Community Development, Residential Revenue Bonds, Series 2006F, 4.900%, 9/01/26 (Alternative Minimum Tax) 600 Maryland Community Development Administration, Residential 9/15 at 100.00 Aa2 600,624 Revenue Bonds, Series 2006B, 4.750%, 9/01/25 (Alternative Minimum Tax) 20 Prince George's County Housing Authority, Maryland, 8/10 at 100.00 AAA 20,636 FHLMC/FNMA/GNMA Collateralized Single Family Mortgage Revenue Bonds, Series 2000A, 6.150%, 8/01/19 (Alternative Minimum Tax) 325 Puerto Rico Housing Finance Authority, Mortgage-Backed 6/13 at 100.00 AAA 327,356 Securities Program Home Mortgage Revenue Bonds, Series 2003A, 4.875%, 6/01/34 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 2,145 Total Housing/Single Family 2,158,036 - ------------------------------------------------------------------------------------------------------------------------------------ LONG-TERM CARE - 1.8% (1.2% OF TOTAL INVESTMENTS) 1,000 Carroll County, Maryland, Revenue Refunding Bonds, EMA 1/09 at 101.00 AA 1,044,860 Obligated Group, Series 1999A, 5.625%, 1/01/25 - RAAI Insured 1,645 Maryland Economic Development Corporation, Health and 4/11 at 102.00 N/R 1,775,860 Mental Hygiene Providers Revenue Bonds, Series 1996A, 7.625%, 4/01/21 - ------------------------------------------------------------------------------------------------------------------------------------ 2,645 Total Long-Term Care 2,820,720 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 35.1% (23.6% OF TOTAL INVESTMENTS) 2,030 Anne Arundel County, Maryland, General Obligation Bonds, 4/14 at 100.00 AA+ 2,158,235 Series 2004, 5.000%, 4/01/16 Anne Arundel County, Maryland, General Obligation Bonds, Series 2006: 1,310 5.000%, 3/01/21 3/16 at 100.00 AA+ 1,388,207 1,000 5.000%, 3/01/21 3/16 at 100.00 AA+ 1,059,700 685 Anne Arundel County, Maryland, Water and Sewer Revenue 3/16 at 100.00 AA+ 733,642 Bonds, Series 2006, 5.000%, 3/01/17 Baltimore County, Maryland, Metropolitan District Special Assessment Bonds, 67th Issue: 2,500 5.000%, 6/01/25 6/11 at 101.00 AAA 2,586,325 3,500 5.000%, 6/01/26 6/11 at 101.00 AAA 3,633,455 1,000 Baltimore, Maryland, Consolidated General Obligation Public No Opt. Call A+ 1,076,500 Improvement Bonds, Series 1989B, 7.150%, 10/15/08 1,540 Baltimore, Maryland, General Obligation Consolidated Public 10/14 at 100.00 AAA 1,616,707 Improvement Bonds, Series 2004A, 5.000%, 10/15/22 - AMBAC Insured 700 Carroll County, Maryland, Consolidated Public Improvement 12/15 at 100.00 AA 750,127 Bonds, Series 2005A, 5.000%, 12/01/16 Charles County, Maryland, Consolidated General Obligation Public Improvement Bonds, Series 2006: 2,185 5.000%, 3/01/14 No Opt. Call AA 2,344,002 820 5.000%, 3/01/16 No Opt. Call AA 882,320 1,500 Frederick County, Maryland, General Obligation Public No Opt. Call AA 1,622,820 Facilities Bonds, Series 2006, 5.000%, 11/01/20 615 Frederick County, Maryland, Special Obligation Bonds, 7/10 at 102.00 AA 659,040 Villages of Lake Linganore Community Development Authority, Series 2001A, 5.700%, 7/01/29 - RAAI Insured Howard County, Maryland, Consolidated Public Improvement Bonds, Series 2004B: 735 5.000%, 8/15/16 2/14 at 100.00 AAA 781,930 1,625 5.000%, 8/15/17 2/14 at 100.00 AAA 1,722,126 1,180 5.000%, 8/15/19 2/14 at 100.00 AAA 1,245,101 1,725 Howard County, Maryland, Metropolitan District Refunding 2/12 at 100.00 AAA 1,838,902 Bonds, Series 2002A, 5.250%, 8/15/18 1,190 Maryland National Capital Park Planning Commission, Prince 1/14 at 100.00 AA 1,258,972 George's County, General Obligation Bonds, Park Acquisition and Development, Series 2004EE-2, 5.000%, 1/15/17 23 Nuveen Maryland Premium Income Municipal Fund (NMY) (continued) Portfolio of INVESTMENTS May 31, 2006 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL (continued) $ 2,500 Maryland, General Obligation Bonds, Series 2005, 5.000%, 8/01/17 8/15 at 100.00 AAA $ 2,672,900 3,520 Montgomery County, Maryland, Consolidated General Obligation No Opt. Call AAA 3,792,730 Public Improvement Bonds, Series 2005A, 5.000%, 7/01/15 Montgomery County, Maryland, Consolidated General Obligation Public Improvement Refunding Bonds, Series 2001: 1,750 5.250%, 10/01/13 10/11 at 101.00 AAA 1,883,490 2,000 5.250%, 10/01/18 10/11 at 101.00 AAA 2,139,060 925 Northern Mariana Islands, General Obligation Bonds, 6/10 at 100.00 A 970,001 Series 2000A, 6.000%, 6/01/20 - ACA Insured 1,000 Prince George's County, Maryland, General Obligation 12/11 at 101.00 AAA 1,073,670 Consolidated Public Improvement Bonds, Series 2001, 5.250%, 12/01/20 - FGIC Insured 2,000 Prince George's County, Maryland, General Obligation 9/12 at 101.00 AA 1,954,380 Consolidated Public Improvement Bonds, Series 2002, 4.100%, 9/15/19 5,770 Prince George's County, Maryland, General Obligation 10/13 at 100.00 AA 6,083,369 Consolidated Public Improvement Bonds, Series 2003A, 5.000%, 10/01/18 Washington Suburban Sanitary District, Montgomery and Prince George's Counties, Maryland, Sewerage Disposal Bonds, Series 2005: 2,000 5.000%, 6/01/16 6/15 at 100.00 AAA 2,146,320 1,235 5.000%, 6/01/23 6/15 at 100.00 AAA 1,303,197 1,235 5.000%, 6/01/24 6/15 at 100.00 AAA 1,300,369 1,235 5.000%, 6/01/25 6/15 at 100.00 AAA 1,299,430 - ------------------------------------------------------------------------------------------------------------------------------------ 51,010 Total Tax Obligation/General 53,977,027 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 21.4% (14.4% OF TOTAL INVESTMENTS) Baltimore Board of School Commissioners, Maryland, Revenue Bonds, City Public School System, Series 2003A: 1,500 5.000%, 5/01/16 5/13 at 100.00 AA+ 1,588,320 1,000 5.000%, 5/01/18 5/13 at 100.00 AA+ 1,052,150 2,900 Baltimore, Maryland, Project Revenue Bonds, Series 2006, 7/16 at 100.00 AAA 3,015,18 5.000%, 7/01/31 - AMBAC Insured 300 Baltimore, Maryland, Special Obligation Bonds, North Locust 9/15 at 101.00 N/R 302,664 Point Project, Series 2005, 5.500%, 9/01/34 900 Hyattsville, Maryland, Special Obligation Bonds, University 7/14 at 102.00 N/R 934,479 Town Center Project, Series 2004, 5.750%, 7/01/34 Maryland Department of Transportation, Certificates of Participation, Mass Transit Administration Project, Series 2000: 875 5.500%, 10/15/19 (Alternative Minimum Tax) 10/10 at 101.00 AA+ 924,919 925 5.500%, 10/15/20 (Alternative Minimum Tax) 10/10 at 101.00 AA+ 977,771 4,250 Maryland Department of Transportation, Consolidated No Opt. Call AA 4,725,363 Transportation Revenue Bonds, Series 2002, 5.500%, 2/01/16 2,000 Maryland Department of Transportation, Consolidated No Opt. Call AA 2,139,060 Transportation Revenue Bonds, Series 2004, 5.000%, 5/01/13 1,875 Maryland Economic Development Corporation, Lease Revenue 6/12 at 100.50 AA+ 2,019,225 Bonds, Department of Transportation Headquarters Building, Series 2002, 5.375%, 6/01/19 1,700 Maryland Stadium Authority, Lease Revenue Bonds, 6/13 at 100.00 AA+ 1,761,557 Montgomery County Conference Center Facilities, Series 2003, 5.000%, 6/15/24 2,455 Maryland Stadium Authority, Lease Revenue Bonds, Sports 9/06 at 101.00 AAA 2,483,503 Facilities, Series 1996, 5.750%, 3/01/18 - AMBAC Insured 1,365 Montgomery County, Maryland, Lease Revenue Bonds, College 5/15 at 100.00 A1 1,429,947 of Arts Center Project, Series 2005A, 5.000%, 5/01/19 1,000 Montgomery County, Maryland, Lease Revenue Bonds, 6/12 at 100.00 AA 1,037,480 Metrorail Garage, Series 2002, 5.000%, 6/01/21 675 Montgomery County, Maryland, Special Obligation Bonds, 7/12 at 101.00 AA 712,550 West Germantown Development District, Senior Series 2002A, 5.500%, 7/01/27 - RAAI Insured 24 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED (continued) $ 635 New Baltimore City Board of School Commissioners, Maryland, 11/10 at 100.00 AA+ $ 668,103 School System Revenue Bonds, Series 2000, 5.125%, 11/01/15 2,100 Puerto Rico Municipal Finance Agency, Series 2002A, 8/12 at 100.00 AAA 2,232,636 5.250%, 8/01/21 - FSA Insured 1,000 Puerto Rico, Highway Revenue Bonds, Highway and 7/16 at 100.00 BBB+ 1,058,670 Transportation Authority, Series 1996Y, 5.500%, 7/01/36 1,500 Puerto Rico, Highway Revenue Bonds, Highway and No Opt. Call AAA 1,679,415 Transportation Authority, Series 2003AA, 5.500%, 7/01/19 - MBIA Insured 2,000 Virgin Islands Public Finance Authority, Gross Receipts Taxes 10/10 at 101.00 BBB 2,191,240 Loan Note, Series 1999A, 6.500%, 10/01/24 - ------------------------------------------------------------------------------------------------------------------------------------ 30,955 Total Tax Obligation/Limited 32,934,240 - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 2.5% (1.7% OF TOTAL INVESTMENTS) 1,060 Baltimore, Maryland, Revenue Refunding Bonds, Parking No Opt. Call AAA 1,153,863 System Facilities, Series 1998A, 5.250%, 7/01/17 - FGIC Insured Maryland Health and Higher Educational Facilities Authority, Parking Facilities Revenue Bonds, Johns Hopkins Medical Institution, Series 2004B: 355 5.000%, 7/01/13 - AMBAC Insured No Opt. Call AAA 378,387 380 5.000%, 7/01/14 - AMBAC Insured No Opt. Call AAA 405,878 2,075 Puerto Rico Ports Authority, Special Facilities Revenue Bonds, 6/06 at 102.00 CCC 1,884,017 American Airlines Inc., Series 1996A, 6.250%, 6/01/26 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 3,870 Total Transportation 3,822,145 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 18.6% (12.5% OF TOTAL INVESTMENTS) (4) 2,500 Baltimore County, Maryland, Consolidated General Obligation 8/12 at 100.00 AAA 2,662,275 Public Improvement Bonds, Series 2002, 5.000%, 8/01/18 (Pre-refunded 8/01/12) 2,000 Baltimore, Maryland, Revenue Refunding Bonds, Water Projects, No Opt. Call AAA 2,109,280 Series 1998A, 5.000%, 7/01/28 - FGIC Insured (ETM) 2,000 Baltimore, Maryland, Revenue Refunding Bonds, Water System No Opt. Call AAA 2,149,800 Projects, Series 1994A, 5.000%, 7/01/24 - FGIC Insured (ETM) 3,000 Frederick County, Maryland, General Obligation Public 7/09 at 101.00 AAA 3,166,860 Facilities Bonds, Series 1999, 5.250%, 7/01/18 (Pre-refunded 7/01/09) Frederick County, Maryland, General Obligation Public Facilities Bonds, Series 2002: 1,000 5.000%, 11/01/21 (Pre-refunded 11/01/12) 11/12 at 101.00 AA (4) 1,073,340 1,000 5.000%, 11/01/22 (Pre-refunded 11/01/12) 11/12 at 101.00 AA (4) 1,073,340 2,550 Gaithersburg, Maryland, Hospital Facilities Revenue Refunding No Opt. Call AAA 2,804,108 and Improvement Bonds, Shady Grove Adventist Hospital, Series 1995, 6.500%, 9/01/12 - FSA Insured (ETM) 575 Howard County, Maryland, Consolidated Public Improvement 2/12 at 100.00 AAA 617,832 Refunding Bonds, Series 2002A, 5.250%, 8/15/18 (Pre-refunded 2/15/12) 1,000 Howard County, Maryland, Consolidated Public Improvement 8/12 at 100.00 AAA 1,065,160 Refunding Bonds, Series 2003A, 5.000%, 8/15/22 (Pre-refunded 8/15/12) 2,250 Maryland Economic Development Corporation, Student Housing 6/09 at 102.00 Baa2 (4) 2,415,825 Revenue Bonds, Collegiate Housing Foundation - College Park, Series 1999A, 5.750%, 6/01/24 (Pre-refunded 6/01/09) 3,200 Maryland Health and Higher Educational Facilities Authority, No Opt. Call AAA 3,411,776 Revenue Bonds, Helix Health, Series 1997, 5.000%, 7/01/27 - AMBAC Insured (ETM) 3,125 Maryland Health and Higher Educational Facilities Authority, 7/06 at 100.00 Aaa 3,196,188 Revenue Bonds, Howard County General Hospital, Series 1993, 5.500%, 7/01/25 (ETM) 760 Maryland Health and Higher Educational Facilities Authority, 7/10 at 101.00 A3 (4) 852,849 Revenue Bonds, University of Maryland Medical System, Series 2000, 6.750%, 7/01/30 (Pre-refunded 7/01/10) 240 Maryland Transportation Authority, Revenue Refunding Bonds, No Opt. Call AAA 273,895 Transportation Facilities Projects, First Series 1978, 6.800%, 7/01/16 (ETM) 1,000 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 1,074,730 Obligation Bonds, Series 2000A, 5.500%, 10/01/20 25 Nuveen Maryland Premium Income Municipal Fund (NMY) (continued) Portfolio of INVESTMENTS May 31, 2006 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED (4) (continued) $ 635 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA $ 661,924 Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20 (Pre-refunded 7/01/10) - ------------------------------------------------------------------------------------------------------------------------------------ 26,835 Total U.S. Guaranteed 28,609,182 - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 5.9% (3.9% OF TOTAL INVESTMENTS) 6,500 Calvert County, Maryland, Pollution Control Revenue Refunding 7/06 at 100.00 A2 6,515,860 Bonds, Baltimore Gas and Electric Company, Series 1993, 5.550%, 7/15/14 (Pre-refunded 7/15/06) 2,500 Maryland Energy Financing Administration, Revenue Bonds, 9/07 at 100.00 N/R 2,525,550 AES Warrior Run Project, Series 1995, 7.400%, 9/01/19 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 9,000 Total Utilities 9,041,410 - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 1.4% (0.8% OF TOTAL INVESTMENTS) 1,045 Baltimore, Maryland, Revenue Refunding Bonds, Water System No Opt. Call AAA 1,123,270 Projects, Series 1994A, 5.000%, 7/01/24 - FGIC Insured 860 Maryland Water Quality Financing Administration, Revolving No Opt. Call AAA 926,444 Loan Fund Revenue Bonds, Series 2005A, 5.000%, 9/01/15 - ------------------------------------------------------------------------------------------------------------------------------------ 1,905 Total Water and Sewer 2,049,714 - ------------------------------------------------------------------------------------------------------------------------------------ $ 219,175 Total Investments (cost $223,010,894) - 148.9% 229,126,363 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.5% 3,807,494 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (51.4)% (79,100,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 153,833,857 ==================================================================================================================== (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's or Moody's rating. Ratings below BBB by Standard & Poor's Group or Baa by Moody's Investor Service, Inc. are considered to be below investment grade. (4) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. N/R Not rated. (ETM) Escrowed to maturity. See accompanying notes to financial statements. 26 Nuveen Maryland Dividend Advantage Municipal Fund (NFM) Portfolio of INVESTMENTS May 31, 2006 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER DISCRETIONARY - 2.6% (1.7% OF TOTAL INVESTMENTS) $ 205 Baltimore, Maryland, Pollution Control Revenue Bonds, General No Opt. Call B $ 197,659 Motors Corporation, Series 1993, 5.350%, 4/01/08 1,000 Baltimore, Maryland, Senior Lien Convention Center Hotel 9/16 at 100.00 AAA 1,056,340 Revenue Bonds, Series 2006A, 5.250%, 9/01/39 - XLCA Insured 310 Baltimore, Maryland, Subordinate Lien Convention Center 9/16 at 100.00 Ba1 323,904 Hotel Revenue Bonds, Series 2006B, 5.875%, 9/01/39 - ------------------------------------------------------------------------------------------------------------------------------------ 1,515 Total Consumer Discretionary 1,577,903 - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER STAPLES - 2.6% (1.7% OF TOTAL INVESTMENTS) 1,545 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 1,573,289 Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33 - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 13.3% (8.9% OF TOTAL INVESTMENTS) Frederick County, Maryland, Educational Facilities Revenue Bonds, Mount St. Mary's College, Series 2001A: 465 5.700%, 9/01/20 3/10 at 101.00 BBB- 481,531 500 5.750%, 9/01/25 3/10 at 101.00 BBB- 517,070 645 Hartford County, Maryland, Economic Development Revenue 4/14 at 100.00 A+ 667,253 Bonds, Battelle Memorial Institute, Series 2004, 5.250%, 4/01/34 1,000 Maryland Economic Development Corporation, Utility 7/11 at 100.00 AAA 1,044,850 Infrastructure Revenue Bonds, University of Maryland - College Park, Series 2001, 5.000%, 7/01/19 - AMBAC Insured 1,500 Maryland Health and Higher Educational Facilities Authority, 7/08 at 102.00 BBB- 1,549,395 Educational Facilities Leasehold Mortgage Revenue Bonds, McLean School, Series 2001, 6.000%, 7/01/31 500 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A- 509,420 Revenue Bonds, Goucher College, Series 2004, 5.125%, 7/01/34 625 Maryland Health and Higher Educational Facilities Authority, 6/11 at 100.00 Baa1 642,706 Revenue Bonds, Maryland Institute College of Art, Series 2001, 5.500%, 6/01/32 400 Maryland Industrial Development Financing Authority, Revenue 5/15 at 100.00 N/R 423,604 Bonds, Our Lady of Good Counsel High School, Series 2005A, 6.000%, 5/01/35 Puerto Rico Industrial, Tourist, Educational, Medical and Environmental Control Facilities Financing Authority, Higher Education Revenue Bonds, Ana G. Mendez University System, Series 1999: 215 5.375%, 2/01/19 2/09 at 101.00 BBB- 219,199 410 5.375%, 2/01/29 2/09 at 101.00 BBB- 414,768 University of Maryland, Auxiliary Facility and Tuition Revenue Bonds, Series 2003A: 1,000 5.000%, 4/01/15 4/13 at 100.00 AA 1,058,490 500 5.000%, 4/01/19 4/13 at 100.00 AA 524,915 - ------------------------------------------------------------------------------------------------------------------------------------ 7,760 Total Education and Civic Organizations 8,053,201 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTH CARE - 25.4% (17.0% OF TOTAL INVESTMENTS) 1,000 Maryland Health and Higher Educational Facilities Authority, 7/08 at 101.00 AAA 1,029,420 Revenue Bonds, Anne Arundel Medical Center, Series 1998, 5.125%, 7/01/28 - FSA Insured 1,000 Maryland Health and Higher Educational Facilities Authority, 7/08 at 102.00 A2 1,008,770 Revenue Bonds, Calvert Memorial Hospital, Series 1998, 5.000%, 7/01/28 1,000 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 1,059,370 Revenue Bonds, Carroll County General Hospital, Series 2002, 6.000%, 7/01/26 750 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 AA 759,173 Revenue Bonds, Civista Medical Center, Series 2005, 5.000%, 7/01/37 - RAAI Insured 27 Nuveen Maryland Dividend Advantage Municipal Fund (NFM) (continued) Portfolio of INVESTMENTS May 31, 2006 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HEALTH CARE (continued) $ 500 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 $ 507,280 Revenue Bonds, Frederick Memorial Hospital, Series 2002, 5.125%, 7/01/35 650 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A+ 655,779 Revenue Bonds, Greater Baltimore Medical Center, Series 2001, 5.000%, 7/01/34 1,250 Maryland Health and Higher Educational Facilities Authority, 5/11 at 100.00 AA- 1,279,963 Revenue Bonds, Johns Hopkins Hospital, Series 2001, 5.000%, 5/15/21 2,225 Maryland Health and Higher Educational Facilities Authority, 6/09 at 101.00 A+ 2,314,734 Revenue Bonds, Kaiser Permanente System, Series 1998A, 5.375%, 7/01/15 1,000 Maryland Health and Higher Educational Facilities Authority, 7/13 at 100.00 Baa2 1,027,370 Revenue Bonds, Kennedy Krieger Institute, Series 2003, 5.500%, 7/01/33 585 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A 596,021 Revenue Bonds, LifeBridge Health System, Series 2004A, 5.125%, 7/01/34 700 Maryland Health and Higher Educational Facilities Authority, 8/14 at 100.00 BBB+ 727,174 Revenue Bonds, MedStar Health, Series 2004, 5.375%, 8/15/24 1,000 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A- 1,027,480 Revenue Bonds, Mercy Medical Center, Series 2001, 5.625%, 7/01/31 2,000 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A+ 2,044,600 Revenue Bonds, University of Maryland Medical System, Series 2001, 5.250%, 7/01/28 570 Maryland Health and Higher Educational Facilities Authority, 7/08 at 101.00 A3 576,452 Revenue Refunding Bonds, Union Hospital of Cecil County, Series 1998, 5.100%, 7/01/22 Prince George's County, Maryland, Revenue Bonds, Dimensions Health Corporation, Series 1994: 290 5.375%, 7/01/14 7/06 at 100.00 B3 262,093 700 5.300%, 7/01/24 7/06 at 100.00 B3 582,078 - ------------------------------------------------------------------------------------------------------------------------------------ 15,220 Total Health Care 15,457,757 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 19.1% (12.8% OF TOTAL INVESTMENTS) 750 Baltimore County, Maryland, GNMA Collateralized Revenue 10/08 at 102.00 AAA 762,720 Refunding Bonds, Cross Creek Apartments, Series 1998A, 5.250%, 10/20/33 2,000 Maryland Community Development Administration, Housing 7/08 at 101.00 Aa2 2,041,560 Revenue Bonds, Series 1998A, 5.625%, 1/01/40 (Alternative Minimum Tax) 10 Maryland Community Development Administration, Insured 5/11 at 100.00 Aa2 10,243 Multifamily Housing Mortgage Loan Revenue Bonds, Series 2001B, 5.350%, 5/15/32 (Alternative Minimum Tax) 1,000 Maryland Community Development Administration, Multifamily 12/11 at 100.00 Aaa 1,025,840 Housing Revenue Bonds, Princess Anne Apartments, Series 2001D, 5.450%, 12/15/33 (Alternative Minimum Tax) Maryland Economic Development Corporation, Senior Lien Student Housing Revenue Bonds, University of Maryland - Baltimore, Series 2003A: 215 4.250%, 10/01/10 No Opt. Call B1 204,947 50 5.000%, 10/01/15 10/13 at 100.00 B1 47,403 210 5.625%, 10/01/23 10/13 at 100.00 Ba2 202,112 1,800 Maryland Economic Development Corporation, Student Housing 7/11 at 101.00 A 1,910,052 Revenue Bonds, Sheppard Pratt University Village, Series 2001, 6.000%, 7/01/33 - ACA Insured 475 Maryland Economic Development Corporation, Student Housing 6/16 at 100.00 AAA 489,131 Revenue Refunding Bonds, University of Maryland College Park Projects, Series 2006, 5.000%, 6/01/33 - CIFG Insured 750 Montgomery County Housing Opportunities Commission, 7/08 at 101.00 Aaa 761,377 Maryland, FNMA/FHA-Insured Multifamily Housing Development Bonds, Series 1998A, 5.250%, 7/01/29 (Alternative Minimum Tax) 2,000 Montgomery County Housing Opportunities Commission, 7/10 at 100.00 Aaa 2,079,540 Maryland, Multifamily Housing Development Bonds, Series 2000B, 6.200%, 7/01/30 (Alternative Minimum Tax) 2,000 Montgomery County Housing Opportunities Commission, 7/11 at 100.00 Aaa 2,053,280 Maryland, Multifamily Housing Development Bonds, Series 2001A, 5.600%, 7/01/42 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 11,260 Total Housing/Multifamily 11,588,205 - ------------------------------------------------------------------------------------------------------------------------------------ 28 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 4.3% (2.9% OF TOTAL INVESTMENTS) $ 300 Maryland Community Development Administration, Department 9/15 at 100.00 Aa2 $ 302,355 of Housing and Community Development, Residential Revenue Bonds, Series 2006F, 4.900%, 9/01/26 (Alternative Minimum Tax) 45 Maryland Community Development Administration, Residential 9/09 at 100.00 Aa2 45,763 Revenue Bonds, Series 1999E, 5.700%, 9/01/17 550 Maryland Community Development Administration, Residential 9/10 at 100.00 Aa2 567,864 Revenue Bonds, Series 2001B, 5.450%, 9/01/32 (Alternative Minimum Tax) 1,000 Maryland Community Development Administration, Residential 3/11 at 100.00 Aa2 1,029,130 Revenue Bonds, Series 2001F, 5.600%, 9/01/28 (Alternative Minimum Tax) 600 Maryland Community Development Administration, Residential 9/15 at 100.00 Aa2 600,624 Revenue Bonds, Series 2006B, 4.750%, 9/01/25 (Alternative Minimum Tax) 75 Maryland Community Development Administration, Single 10/10 at 100.00 Aa2 75,230 Family Program Bonds, First Series 2001, 5.000%, 4/01/17 - ------------------------------------------------------------------------------------------------------------------------------------ 2,570 Total Housing/Single Family 2,620,966 - ------------------------------------------------------------------------------------------------------------------------------------ INDUSTRIALS - 1.7% (1.1% OF TOTAL INVESTMENTS) 1,000 Northeast Maryland Waste Disposal Authority, Baltimore, 1/09 at 101.00 BBB 1,015,430 Resource Recovery Revenue Bonds, RESCO Retrofit Project, Series 1998, 4.750%, 1/01/12 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ LONG-TERM CARE - 0.8% (0.5% OF TOTAL INVESTMENTS) 500 Maryland Health and Higher Educational Facilities Authority, 4/11 at 101.00 N/R 485,380 Revenue Bonds, Collington Episcopal Life Care Community Inc., Series 2001A, 6.750%, 4/01/23 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 36.1% (24.2% OF TOTAL INVESTMENTS) Anne Arundel County, Maryland, General Obligation Bonds, Series 2006: 730 5.000%, 3/01/21 3/16 at 100.00 AA+ 773,581 565 5.000%, 3/01/21 3/16 at 100.00 AA+ 598,731 3,500 Baltimore County, Maryland, Metropolitan District Special 6/11 at 101.00 AAA 3,630,267 Assessment Bonds, 67th Issue, 5.000%, 6/01/27 300 Carroll County, Maryland, Consolidated Public Improvement 12/15 at 100.00 AA 321,483 Bonds, Series 2005A, 5.000%, 12/01/16 500 Frederick County, Maryland, General Obligation Public Facilities No Opt. Call AA 540,940 Bonds, Series 2006, 5.000%, 11/01/20 Frederick, Maryland, General Obligation Bonds, Series 2005: 600 5.000%, 8/01/16 - MBIA Insured 8/15 at 100.00 AAA 641,970 500 5.000%, 8/01/17 - MBIA Insured 8/15 at 100.00 AAA 532,615 1,360 Howard County, Maryland, Consolidated Public Improvement 2/09 at 101.00 AAA 1,377,884 Bonds, Series 2001A, 4.750%, 2/15/21 1,000 Maryland National Capital Park Planning Commission, 1/14 at 100.00 AA 1,057,960 Prince George's County, General Obligation Bonds, Park Acquisition and Development, Series 2004EE-2, 5.000%, 1/15/17 1,000 Maryland, General Obligation Bonds, Series 2005, 8/15 at 100.00 AAA 1,069,160 5.000%, 8/01/17 1,360 Montgomery County, Maryland, Consolidated General Obligation No Opt. Call AAA 1,465,373 Public Improvement Bonds, Series 2005A, 5.000%, 7/01/15 430 Northern Mariana Islands, General Obligation Bonds, 6/10 at 100.00 A 450,919 Series 2000A, 6.000%, 6/01/20 - ACA Insured 740 Ocean City, Maryland, General Obligation Bonds, Series 2001, 3/11 at 101.00 AAA 766,847 4.875%, 3/01/19 - FGIC Insured 1,500 Prince George's County, Maryland, General Obligation 12/11 at 101.00 AAA 1,610,505 Consolidated Public Improvement Bonds, Series 2001, 5.250%, 12/01/20 - FGIC Insured 1,000 Prince George's County, Maryland, General Obligation 10/13 at 100.00 AA 1,054,640 Consolidated Public Improvement Bonds, Series 2003A, 5.000%, 10/01/17 Washington Suburban Sanitary District, Montgomery and Prince George's Counties, Maryland, General Obligation Construction Bonds, Series 2001: 895 5.000%, 6/01/22 6/11 at 100.00 AAA 928,831 935 5.000%, 6/01/23 6/11 at 100.00 AAA 969,576 985 5.000%, 6/01/24 6/11 at 100.00 AAA 1,020,293 1,035 5.000%, 6/01/25 6/11 at 100.00 AAA 1,070,718 29 Nuveen Maryland Dividend Advantage Municipal Fund (NFM) (continued) Portfolio of INVESTMENTS May 31, 2006 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL (continued) $ 700 Washington Suburban Sanitary District, Montgomery and 6/15 at 100.00 AAA $ 751,212 Prince George's Counties, Maryland, Sewerage Disposal Bonds, Series 2005, 5.000%, 6/01/16 1,290 Washington Suburban Sanitary District, Montgomery and 6/11 at 100.00 AAA 1,318,483 Prince George's Counties, Maryland, Water Supply Bonds, Series 2001, 4.750%, 6/01/20 - ------------------------------------------------------------------------------------------------------------------------------------ 20,925 Total Tax Obligation/General 21,951,988 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 19.3% (12.9% OF TOTAL INVESTMENTS) 625 Annapolis, Maryland, Special Obligation Bonds, Park Place 1/15 at 101.00 N/R 630,331 Project, Series 2005A, 5.350%, 7/01/34 675 Anne Arundel County, Maryland, Tax Increment Financing No Opt. Call N/R 684,329 Revenue Bonds, Parole Town Center Project, Series 2002, 5.000%, 7/01/12 500 Baltimore Board of School Commissioners, Maryland, Revenue 5/13 at 100.00 AA+ 526,075 Bonds, City Public School System, Series 2003A, 5.000%, 5/01/18 500 Baltimore, Maryland, Project Revenue Bonds, Series 2006, 7/16 at 100.00 AAA 519,860 5.000%, 7/01/31 - AMBAC Insured 350 Hyattsville, Maryland, Special Obligation Bonds, University 7/14 at 102.00 N/R 363,409 Town Center Project, Series 2004, 5.750%, 7/01/34 1,500 Maryland Department of Transportation, Consolidated No Opt. Call AA 1,667,775 Transportation Revenue Bonds, Series 2002, 5.500%, 2/01/16 1,000 Maryland Department of Transportation, Consolidated No Opt. Call AA 1,069,530 Transportation Revenue Bonds, Series 2004, 5.000%, 5/01/13 1,405 Maryland Economic Development Corporation, Lease Revenue 6/12 at 100.50 AA+ 1,513,073 Bonds, Department of Transportation Headquarters Building, Series 2002, 5.375%, 6/01/19 370 Maryland Economic Development Corporation, Lease Revenue 9/12 at 100.00 AA+ 393,055 Bonds, Montgomery County Town Square Parking Garage, Series 2002A, 5.000%, 9/15/13 615 Montgomery County, Maryland, Lease Revenue Bonds, College 5/15 at 100.00 A1 641,949 of Arts Center Project, Series 2005A, 5.000%, 5/01/20 740 Prince George's County, Maryland, Lease Revenue Bonds, 6/13 at 100.00 AAA 784,992 Upper Marlboro Justice Center, Series 2003A, 5.000%, 6/30/14 - MBIA Insured 270 Prince George's County, Maryland, Special Obligation Bonds, 7/15 at 100.00 N/R 268,604 National Harbor Project, Series 2005, 5.200%, 7/01/34 450 Prince George's County, Maryland, Special Tax District Bonds, 7/13 at 100.00 N/R 450,113 Victoria Falls Project, Series 2005, 5.250%, 7/01/35 700 Puerto Rico, Highway Revenue Bonds, Highway and No Opt. Call AAA 783,727 Transportation Authority, Series 2003AA, 5.500%, 7/01/19 - MBIA Insured 1,290 Virgin Islands Public Finance Authority, Gross Receipts Taxes 10/10 at 101.00 BBB 1,414,924 Loan Note, Series 1999A, 6.375%, 10/01/19 - ------------------------------------------------------------------------------------------------------------------------------------ 10,990 Total Tax Obligation/Limited 11,711,746 - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 1.6% (1.1% OF TOTAL INVESTMENTS) 650 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 AAA 665,931 Parking Facilities Revenue Bonds, Johns Hopkins Hospital, Series 2001, 5.000%, 7/01/27 - AMBAC Insured Maryland Health and Higher Educational Facilities Authority, Parking Facilities Revenue Bonds, Johns Hopkins Medical Institution, Series 2004B: 150 5.000%, 7/01/13 - AMBAC Insured No Opt. Call AAA 159,882 135 5.000%, 7/01/14 - AMBAC Insured No Opt. Call AAA 144,194 - ------------------------------------------------------------------------------------------------------------------------------------ 935 Total Transportation 970,007 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 20.3% (13.6% OF TOTAL INVESTMENTS) (4) Anne Arundel County, Maryland, Various Purpose General Obligation Bonds, Series 2001: 580 4.800%, 2/15/18 (Pre-refunded 2/15/11) 2/11 at 101.00 AA+ (4) 612,045 500 5.000%, 2/15/28 (Pre-refunded 2/15/11) 2/11 at 101.00 AA+ (4) 531,905 1,500 Baltimore County, Maryland, Consolidated General Obligation 8/12 at 100.00 AAA 1,597,365 Public Improvement Bonds, Series 2002, 5.000%, 8/01/18 (Pre-refunded 8/01/12) 30 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED (4) (continued) $ 1,015 Baltimore, Maryland, Revenue Refunding Bonds, Water No Opt. Call AAA $ 1,070,460 Projects, Series 1998A, 5.000%, 7/01/28 - FGIC Insured (ETM) 1,000 Frederick County, Maryland, General Obligation Public Facilities 11/12 at 101.00 AA (4) 1,073,340 Bonds, Series 2002, 5.000%, 11/01/22 (Pre-refunded 11/01/12) 500 Howard County, Maryland, Consolidated Public Improvement 8/12 at 100.00 AAA 532,580 Refunding Bonds, Series 2003A, 5.000%, 8/15/15 (Pre-refunded 8/15/12) 895 Maryland Transportation Authority, Revenue Refunding Bonds, No Opt. Call AAA 1,021,401 Transportation Facilities Projects, First Series 1978, 6.800%, 7/01/16 (ETM) Puerto Rico Infrastructure Financing Authority, Special Obligation Bonds, Series 2000A: 2,300 5.500%, 10/01/32 10/10 at 101.00 AAA 2,453,824 1,700 5.500%, 10/01/40 10/10 at 101.00 AAA 1,812,999 1,590 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 1,657,416 Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20 (Pre-refunded 7/01/10) - ------------------------------------------------------------------------------------------------------------------------------------ 11,580 Total U.S. Guaranteed 12,363,335 - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 1.7% (1.1% OF TOTAL INVESTMENTS) 1,000 Maryland Energy Financing Administration, Revenue Bonds, 9/07 at 100.00 N/R 1,010,220 AES Warrior Run Project, Series 1995, 7.400%, 9/01/19 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 0.6% (0.5% OF TOTAL INVESTMENTS) 355 Maryland Water Quality Financing Administration, Revolving No Opt. Call AAA 382,427 Loan Fund Revenue Bonds, Series 2005A, 5.000%, 9/01/15 - ------------------------------------------------------------------------------------------------------------------------------------ $ 87,155 Total Investments (cost $88,532,004) - 149.4% 90,761,854 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 3.3% 2,000,092 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (52.7)% (32,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 60,761,946 ==================================================================================================================== (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's or Moody's rating. Ratings below BBB by Standard & Poor's Group or Baa by Moody's Investor Service, Inc. are considered to be below investment grade. (4) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. N/R Not rated. (ETM) Escrowed to maturity. See accompanying notes to financial statements. 31 Nuveen Maryland Dividend Advantage Municipal Fund 2 (NZR) Portfolio of INVESTMENTS May 31, 2006 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER DISCRETIONARY - 2.9% (1.9% OF TOTAL INVESTMENTS) $ 190 Baltimore, Maryland, Pollution Control Revenue Bonds, General No Opt. Call B $ 183,196 Motors Corporation, Series 1993, 5.350%, 4/01/08 1,200 Baltimore, Maryland, Senior Lien Convention Center Hotel 9/16 at 100.00 AAA 1,267,608 Revenue Bonds, Series 2006A, 5.250%, 9/01/39 - XLCA Insured 310 Baltimore, Maryland, Subordinate Lien Convention Center Hotel 9/16 at 100.00 Ba1 323,904 Revenue Bonds, Series 2006B, 5.875%, 9/01/39 - ------------------------------------------------------------------------------------------------------------------------------------ 1,700 Total Consumer Discretionary 1,774,708 - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER STAPLES - 2.6% (1.7% OF TOTAL INVESTMENTS) 775 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 789,190 Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33 800 Tobacco Settlement Financing Corporation, Virgin Islands, 5/11 at 100.00 Baa3 785,984 Tobacco Settlement Asset-Backed Bonds, Series 2001, 5.000%, 5/15/31 - ------------------------------------------------------------------------------------------------------------------------------------ 1,575 Total Consumer Staples 1,575,174 - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 16.7% (11.2% OF TOTAL INVESTMENTS) 1,100 Anne Arundel County, Maryland, Economic Development 9/12 at 102.00 A3 1,139,193 Revenue Bonds, Community College Project, Series 2002, 5.125%, 9/01/22 500 Frederick County, Maryland, Educational Facilities Revenue 9/16 at 100.00 BBB- 521,115 Bonds, Mount Saint Mary's College, Series 2006, 5.625%, 9/01/38 Frederick County, Maryland, Educational Facilities Revenue Bonds, Mount St. Mary's College, Series 2001A: 100 5.750%, 9/01/25 3/10 at 101.00 BBB- 103,414 100 5.800%, 9/01/30 3/10 at 101.00 BBB- 103,251 645 Hartford County, Maryland, Economic Development Revenue 4/14 at 100.00 A+ 667,253 Bonds, Battelle Memorial Institute, Series 2004, 5.250%, 4/01/34 250 Maryland Health and Higher Educational Facilities Authority, 7/08 at 102.00 BBB- 258,233 Educational Facilities Leasehold Mortgage Revenue Bonds, McLean School, Series 2001, 6.000%, 7/01/31 415 Maryland Health and Higher Educational Facilities Authority, 1/11 at 101.00 AAA 436,518 Revenue Bonds, Bullis School, Series 2000, 5.250%, 7/01/30 - FSA Insured 500 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A- 509,420 Revenue Bonds, Goucher College, Series 2004, 5.125%, 7/01/34 1,250 Maryland Health and Higher Educational Facilities Authority, 6/11 at 100.00 Baa1 1,285,413 Revenue Bonds, Maryland Institute College of Art, Series 2001, 5.500%, 6/01/32 425 Maryland Industrial Development Financing Authority, Revenue 5/15 at 100.00 N/R 450,079 Bonds, Our Lady of Good Counsel High School, Series 2005A, 6.000%, 5/01/35 500 Morgan State University, Maryland, Student Tuition and Fee 7/12 at 100.00 AAA 521,490 Revenue Bonds, Academic Fees and Auxiliary Facilities, Series 2001, 4.900%, 7/01/21 - FGIC Insured 500 Morgan State University, Maryland, Student Tuition and Fee 7/13 at 100.00 AAA 524,490 Revenue Bonds, Academic Fees and Auxiliary Facilities, Series 2003A, 5.000%, 7/01/20 - FGIC Insured University of Maryland, Auxiliary Facility and Tuition Revenue Bonds, Series 2001B: 1,580 4.375%, 4/01/17 4/11 at 100.00 AA 1,591,218 1,140 4.500%, 4/01/19 4/11 at 100.00 AA 1,150,043 1,000 University of Maryland, Auxiliary Facility and Tuition Revenue 4/13 at 100.00 AA 1,049,830 Bonds, Series 2003A, 5.000%, 4/01/19 - ------------------------------------------------------------------------------------------------------------------------------------ 10,005 Total Education and Civic Organizations 10,310,960 - ------------------------------------------------------------------------------------------------------------------------------------ 32 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HEALTH CARE - 21.4% (14.4% OF TOTAL INVESTMENTS) $ 1,000 Maryland Health and Higher Educational Facilities Authority, 7/08 at 101.00 AAA $ 1,029,420 Revenue Bonds, Anne Arundel Medical Center, Series 1998, 5.125%, 7/01/33 - FSA Insured 775 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A2 810,170 Revenue Bonds, Calvert Memorial Hospital, Series 2004, 5.500%, 7/01/36 1,000 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 1,059,370 Revenue Bonds, Carroll County General Hospital, Series 2002, 6.000%, 7/01/26 750 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 AA 759,173 Revenue Bonds, Civista Medical Center, Series 2005, 5.000%, 7/01/37 - RAAI Insured 500 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 507,280 Revenue Bonds, Frederick Memorial Hospital, Series 2002, 5.125%, 7/01/35 650 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A+ 655,779 Revenue Bonds, Greater Baltimore Medical Center, Series 2001, 5.000%, 7/01/34 1,000 Maryland Health and Higher Educational Facilities Authority, 7/13 at 100.00 Baa2 1,027,370 Revenue Bonds, Kennedy Krieger Institute, Series 2003, 5.500%, 7/01/33 525 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A 534,891 Revenue Bonds, LifeBridge Health System, Series 2004A, 5.125%, 7/01/34 700 Maryland Health and Higher Educational Facilities Authority, 8/14 at 100.00 BBB+ 727,174 Revenue Bonds, MedStar Health, Series 2004, 5.375%, 8/15/24 1,500 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A- 1,541,220 Revenue Bonds, Mercy Medical Center, Series 2001, 5.625%, 7/01/31 2,000 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A+ 2,044,600 Revenue Bonds, University of Maryland Medical System, Series 2001, 5.250%, 7/01/28 1,610 Montgomery County, Maryland, Economic Development Revenue 12/11 at 100.00 AA- 1,650,669 Bonds, Trinity Healthcare Group, Series 2001, 5.125%, 12/01/22 Prince George's County, Maryland, Revenue Bonds, Dimensions Health Corporation, Series 1994: 300 5.375%, 7/01/14 7/06 at 100.00 B3 271,131 700 5.300%, 7/01/24 7/06 at 100.00 B3 582,078 - ------------------------------------------------------------------------------------------------------------------------------------ 13,010 Total Health Care 13,200,325 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 10.4% (7.0% OF TOTAL INVESTMENTS) 55 Maryland Community Development Administration, Insured 5/11 at 100.00 Aa2 55,895 Multifamily Housing Mortgage Loan Revenue Bonds, Series 2001A, 5.100%, 5/15/28 40 Maryland Community Development Administration, Insured 5/11 at 100.00 Aa2 40,972 Multifamily Housing Mortgage Loan Revenue Bonds, Series 2001B, 5.350%, 5/15/32 (Alternative Minimum Tax) 435 Maryland Community Development Administration, Insured 5/12 at 100.00 Aa2 451,178 Multifamily Housing Mortgage Loan Revenue Bonds, Series 2002A, 5.300%, 5/15/22 3,145 Maryland Community Development Administration, 12/11 at 100.00 Aaa 3,226,267 Multifamily Development Revenue Bonds, Waters Towers Senior Apartments, Series 2001F, 5.450%, 12/15/33 (Alternative Minimum Tax) 1,110 Maryland Community Development Administration, Multifamily 12/11 at 100.00 Aaa 1,138,682 Housing Revenue Bonds, Princess Anne Apartments, Series 2001D, 5.450%, 12/15/33 (Alternative Minimum Tax) 1,000 Maryland Economic Development Corporation, Senior Lien 10/13 at 100.00 Ba2 962,440 Student Housing Revenue Bonds, University of Maryland - Baltimore, Series 2003A, 5.625%, 10/01/23 520 Maryland Economic Development Corporation, Student 6/16 at 100.00 AAA 535,470 Housing Revenue Refunding Bonds, University of Maryland College Park Projects, Series 2006, 5.000%, 6/01/33 - CIFG Insured - ------------------------------------------------------------------------------------------------------------------------------------ 6,305 Total Housing/Multifamily 6,410,904 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 2.9% (2.0% OF TOTAL INVESTMENTS) 300 Maryland Community Development Administration, 9/15 at 100.00 Aa2 302,355 Department of Housing and Community Development, Residential Revenue Bonds, Series 2006F, 4.900%, 9/01/26 (Alternative Minimum Tax) 885 Maryland Community Development Administration, Residential 9/10 at 100.00 Aa2 898,585 Revenue Bonds, Series 2001H, 5.350%, 9/01/32 (Alternative Minimum Tax) 33 Nuveen Maryland Dividend Advantage Municipal Fund 2 (NZR) (continued) Portfolio of INVESTMENTS May 31, 2006 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY (continued) $ 600 Maryland Community Development Administration, 9/15 at 100.00 Aa2 $ 600,624 Residential Revenue Bonds, Series 2006B, 4.750%, 9/01/25 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 1,785 Total Housing/Single Family 1,801,564 - ------------------------------------------------------------------------------------------------------------------------------------ INDUSTRIALS - 1.9% (1.3% OF TOTAL INVESTMENTS) 1,150 Northeast Maryland Waste Disposal Authority, Baltimore, 1/09 at 101.00 BBB 1,167,745 Resource Recovery Revenue Bonds, RESCO Retrofit Project, Series 1998, 4.750%, 1/01/12 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ LONG-TERM CARE - 0.4% (0.3% OF TOTAL INVESTMENTS) Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Collington Episcopal Life Care Community Inc., Series 2001A: 31 6.750%, 4/01/20 4/09 at 100.00 N/R 30,146 25 6.750%, 4/01/23 4/11 at 101.00 N/R 24,269 Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Collington Episcopal Life Care Community Inc., Series 2001B: 25 8.000%, 4/01/22 10/06 at 100.00 N/R 24,993 5 6.400%, 4/01/23 (Mandatory put 4/01/07) 4/23 at 100.00 N/R 4,876 Prince George's County, Maryland, Revenue Bonds, Collington Episcopal Life Care Community Inc., Series 1994A: 15 5.625%, 4/01/09 4/09 at 100.00 N/R 14,566 200 6.000%, 4/01/13 4/13 at 100.00 N/R 190,718 - ------------------------------------------------------------------------------------------------------------------------------------ 301 Total Long-Term Care 289,568 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 38.3% (25.7% OF TOTAL INVESTMENTS) 750 Anne Arundel County, Maryland, General Obligation Bonds, 8/09 at 101.00 AA+ 758,055 Consolidated Water and Sewerage, Series 1999, 4.500%, 8/01/19 Anne Arundel County, Maryland, General Obligation Bonds, Series 2006: 845 5.000%, 3/01/21 3/16 at 100.00 AA+ 895,447 650 5.000%, 3/01/21 3/16 at 100.00 AA+ 688,805 750 Baltimore, Maryland, General Obligation Consolidated Public 10/14 at 100.00 AAA 787,357 Improvement Bonds, Series 2004A, 5.000%, 10/15/22 - AMBAC Insured 300 Carroll County, Maryland, Consolidated Public Improvement 12/15 at 100.00 AA 321,483 Bonds, Series 2005A, 5.000%, 12/01/16 Cecil County, Maryland, Consolidated General Obligation Public Improvement Bonds, Series 2001B: 975 4.600%, 8/01/18 8/11 at 101.00 AA- 997,113 1,020 4.600%, 8/01/19 8/11 at 101.00 AA- 1,040,604 750 Frederick County, Maryland, General Obligation Public Facilities No Opt. Call AA 811,410 Bonds, Series 2006, 5.000%, 11/01/20 Frederick, Maryland, General Obligation Bonds, Series 2005: 600 5.000%, 8/01/16 - MBIA Insured 8/15 at 100.00 AAA 641,970 500 5.000%, 8/01/17 - MBIA Insured 8/15 at 100.00 AAA 532,615 510 Frederick, Maryland, General Obligation Refunding and 12/11 at 101.00 AA- 527,325 Improvement Bonds, Series 2001, 4.750%, 12/01/19 1,000 Howard County, Maryland, Consolidated Public Improvement 2/14 at 100.00 AAA 1,063,850 Bonds, Series 2004B, 5.000%, 8/15/16 1,000 Maryland, General Obligation Bonds, Series 2005, 5.000%, 8/01/17 8/15 at 100.00 AAA 1,069,160 1,500 Maryland, General Obligation Bonds, State and Local Facilities No Opt. Call AAA 1,636,815 Loan, First Series 2001, 5.500%, 3/01/12 4,730 Montgomery County, Maryland, Consolidated General 10/11 at 101.00 AAA 5,058,873 Obligation Public Improvement Refunding Bonds, Series 2001, 5.250%, 10/01/18 Prince George's County, Maryland, General Obligation Consolidated Public Improvement Bonds, Series 2001: 1,000 5.250%, 12/01/20 - FGIC Insured 12/11 at 101.00 AAA 1,073,670 2,820 5.250%, 12/01/21 - FGIC Insured 12/11 at 101.00 AAA 3,012,296 770 Puerto Rico, General Obligation and Public Improvement Bonds, 7/11 at 100.00 AAA 801,485 Series 2001, 5.000%, 7/01/24 - FSA Insured 34 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL (continued) $ 800 Washington Suburban Sanitary District, Montgomery and 6/15 at 100.00 AAA $ 858,528 Prince George's Counties, Maryland, Sewerage Disposal Bonds, Series 2005, 5.000%, 6/01/16 1,000 Washington Suburban Sanitary District, Montgomery and 6/15 at 100.00 AAA 1,073,160 Prince George's Counties, Maryland, Water Supply Bonds, Series 2005, 5.000%, 6/01/16 - ------------------------------------------------------------------------------------------------------------------------------------ 22,270 Total Tax Obligation/General 23,650,021 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 19.8% (13.3% OF TOTAL INVESTMENTS) 625 Annapolis, Maryland, Special Obligation Bonds, Park Place 1/15 at 101.00 N/R 630,331 Project, Series 2005A, 5.350%, 7/01/34 675 Anne Arundel County, Maryland, Tax Increment Financing No Opt. Call N/R 684,329 Revenue Bonds, Parole Town Center Project, Series 2002, 5.000%, 7/01/12 530 Baltimore Board of School Commissioners, Maryland, Revenue 5/13 at 100.00 AA+ 561,206 Bonds, City Public School System, Series 2003A, 5.000%, 5/01/15 Baltimore County, Maryland, Certificates of Participation, Health and Social Services Building Project, Series 2001: 1,580 5.000%, 8/01/20 8/11 at 101.00 AA+ 1,635,537 1,660 5.000%, 8/01/21 8/11 at 101.00 AA+ 1,716,789 500 Baltimore, Maryland, Project Revenue Bonds, Series 2006, 7/16 at 100.00 AAA 519,860 5.000%, 7/01/31 - AMBAC Insured 350 Hyattsville, Maryland, Special Obligation Bonds, University 7/14 at 102.00 N/R 363,409 Town Center Project, Series 2004, 5.750%, 7/01/34 1,000 Maryland Department of Transportation, Consolidated No Opt. Call AA 1,111,850 Transportation Revenue Bonds, Series 2002, 5.500%, 2/01/16 1,000 Maryland Department of Transportation, Consolidated No Opt. Call AA 1,069,530 Transportation Revenue Bonds, Series 2004, 5.000%, 5/01/13 1,405 Maryland Economic Development Corporation, Lease Revenue 6/12 at 100.50 AA+ 1,513,073 Bonds, Department of Transportation Headquarters Building, Series 2002, 5.375%, 6/01/19 590 Montgomery County, Maryland, Lease Revenue Bonds, 5/15 at 100.00 A1 619,718 College of Arts Center Project, Series 2005A, 5.000%, 5/01/18 1,000 Montgomery County, Maryland, Special Obligation Bonds, 7/12 at 101.00 AA 1,055,630 West Germantown Development District, Senior Series 2002A, 5.500%, 7/01/27 - RAAI Insured 270 Prince George's County, Maryland, Special Obligation Bonds, 7/15 at 100.00 N/R 268,604 National Harbor Project, Series 2005, 5.200%, 7/01/34 475 Prince George's County, Maryland, Special Tax District Bonds, 7/13 at 100.00 N/R 475,119 Victoria Falls Project, Series 2005, 5.250%, 7/01/35 - ------------------------------------------------------------------------------------------------------------------------------------ 11,660 Total Tax Obligation/Limited 12,224,985 - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 3.2% (2.2% OF TOTAL INVESTMENTS) Maryland Health and Higher Educational Facilities Authority, Parking Facilities Revenue Bonds, Johns Hopkins Hospital, Series 2001: 650 5.000%, 7/01/27 - AMBAC Insured 7/11 at 100.00 AAA 665,931 1,000 5.000%, 7/01/34 - AMBAC Insured 7/11 at 100.00 AAA 1,019,950 Maryland Health and Higher Educational Facilities Authority, Parking Facilities Revenue Bonds, Johns Hopkins Medical Institution, Series 2004B: 155 5.000%, 7/01/13 - AMBAC Insured No Opt. Call AAA 165,211 135 5.000%, 7/01/14 - AMBAC Insured No Opt. Call AAA 144,194 - ------------------------------------------------------------------------------------------------------------------------------------ 1,940 Total Transportation 1,995,286 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 24.4% (16.4% OF TOTAL INVESTMENTS) (4) 1,500 Baltimore County, Maryland, Consolidated General Obligation 8/12 at 100.00 AAA 1,597,365 Public Improvement Bonds, Series 2002, 5.000%, 8/01/18 (Pre-refunded 8/01/12) 3,000 Frederick County, Maryland, General Obligation Public Facilities 12/10 at 101.00 AAA 3,211,440 Bonds, Series 2000, 5.200%, 12/01/19 (Pre-refunded 12/01/10) 1,000 Frederick County, Maryland, General Obligation Public Facilities 11/12 at 101.00 AA (4) 1,073,340 Bonds, Series 2002, 5.000%, 11/01/20 (Pre-refunded 11/01/12) 35 Nuveen Maryland Dividend Advantage Municipal Fund 2 (NZR) (continued) Portfolio of INVESTMENTS May 31, 2006 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED (4) (continued) $ 750 Howard County, Maryland, Consolidated Public Improvement 8/12 at 100.00 AAA $ 798,870 Refunding Bonds, Series 2003A, 5.000%, 8/15/15 (Pre-refunded 8/15/12) 1,260 Maryland Health and Higher Educational Facilities Authority, No Opt. Call AAA 1,326,490 Revenue Bonds, Helix Health, Series 1997, 5.000%, 7/01/17 - AMBAC Insured (ETM) 1,260 Maryland Transportation Authority, Revenue Refunding Bonds, No Opt. Call AAA 1,437,950 Transportation Facilities Projects, First Series 1978, 6.800%, 7/01/16 (ETM) 3,000 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 3,199,410 Obligation Bonds, Series 2000A, 5.500%, 10/01/40 1,230 Puerto Rico, General Obligation and Public Improvement Bonds, 7/11 at 100.00 AAA 1,303,148 Series 2001, 5.000%, 7/01/24 (Pre-refunded 7/01/11) - FSA Insured 1,000 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 1,086,190 Asset-Backed Bonds, Series 2000, 6.000%, 7/01/26 (Pre-refunded 7/01/10) - ------------------------------------------------------------------------------------------------------------------------------------ 14,000 Total U.S. Guaranteed 15,034,203 - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 3.3% (2.2% OF TOTAL INVESTMENTS) 1,000 Guam Power Authority, Revenue Bonds, Series 1999A, 10/09 at 101.00 AAA 1,044,800 5.250%, 10/01/34 - MBIA Insured 1,000 Maryland Energy Financing Administration, Revenue Bonds, 9/07 at 100.00 N/R 1,010,220 AES Warrior Run Project, Series 1995, 7.400%, 9/01/19 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 2,000 Total Utilities 2,055,020 - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 0.6% (0.4% OF TOTAL INVESTMENTS) 355 Maryland Water Quality Financing Administration, Revolving No Opt. Call AAA 382,427 Loan Fund Revenue Bonds, Series 2005A, 5.000%, 9/01/15 - ------------------------------------------------------------------------------------------------------------------------------------ $ 88,056 Total Investments (cost $89,550,637) - 148.8% 91,872,890 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 3.0% 1,853,324 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (51.8)% (32,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 61,726,214 ==================================================================================================================== (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's or Moody's rating. Ratings below BBB by Standard & Poor's Group or Baa by Moody's Investor Service, Inc. are considered to be below investment grade. (4) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. N/R Not rated. (ETM) Escrowed to maturity. See accompanying notes to financial statements. 36 Nuveen Maryland Dividend Advantage Municipal Fund 3 (NWI) Portfolio of INVESTMENTS May 31, 2006 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER DISCRETIONARY - 2.2% (1.5% OF TOTAL INVESTMENTS) $ 220 Baltimore, Maryland, Pollution Control Revenue Bonds, No Opt. Call B $ 212,122 General Motors Corporation, Series 1993, 5.350%, 4/01/08 1,000 Baltimore, Maryland, Senior Lien Convention Center Hotel 9/16 at 100.00 AAA 1,056,340 Revenue Bonds, Series 2006A, 5.250%, 9/01/39 - XLCA Insured 380 Baltimore, Maryland, Subordinate Lien Convention Center 9/16 at 100.00 Ba1 397,043 Hotel Revenue Bonds, Series 2006B, 5.875%, 9/01/39 - ------------------------------------------------------------------------------------------------------------------------------------ 1,600 Total Consumer Discretionary 1,665,505 - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER STAPLES - 3.6% (2.4% OF TOTAL INVESTMENTS) 2,695 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 2,744,345 Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33 - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 13.4% (9.0% OF TOTAL INVESTMENTS) 225 Anne Arundel County, Maryland, Economic Development 9/12 at 102.00 A3 233,017 Revenue Bonds, Community College Project, Series 2002, 5.125%, 9/01/22 625 Frederick County, Maryland, Educational Facilities Revenue 9/16 at 100.00 BBB- 651,394 Bonds, Mount Saint Mary's College, Series 2006, 5.625%, 9/01/38 Frederick County, Maryland, Educational Facilities Revenue Bonds, Mount St. Mary's College, Series 2001A: 100 5.750%, 9/01/25 3/10 at 101.00 BBB- 103,414 100 5.800%, 9/01/30 3/10 at 101.00 BBB- 103,251 690 Hartford County, Maryland, Economic Development Revenue 4/14 at 100.00 A+ 713,805 Bonds, Battelle Memorial Institute, Series 2004, 5.250%, 4/01/34 625 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A- 636,775 Revenue Bonds, Goucher College, Series 2004, 5.125%, 7/01/34 1,000 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 AA 1,022,840 Revenue Bonds, Johns Hopkins University, Series 2002A, 5.000%, 7/01/32 525 Maryland Industrial Development Financing Authority, Revenue 5/15 at 100.00 N/R 555,980 Bonds, Our Lady of Good Counsel High School, Series 2005A, 6.000%, 5/01/35 1,000 Morgan State University, Maryland, Student Tuition and Fee 7/13 at 100.00 AAA 1,033,990 Revenue Bonds, Academic Fees and Auxiliary Facilities, Series 2003A, 5.000%, 7/01/32 - FGIC Insured 985 University of Maryland, Auxiliary Facility and Tuition Revenue 4/11 at 100.00 AA 995,146 Bonds, Series 2001B, 4.625%, 4/01/21 2,000 University of Maryland, Auxiliary Facility and Tuition Revenue 4/12 at 100.00 AA 2,100,000 Bonds, Series 2002A, 5.125%, 4/01/22 University of Maryland, Auxiliary Facility and Tuition Revenue Bonds, Series 2003A: 1,000 5.000%, 4/01/15 4/13 at 100.00 AA 1,058,490 1,000 5.000%, 4/01/19 4/13 at 100.00 AA 1,049,830 - ------------------------------------------------------------------------------------------------------------------------------------ 9,875 Total Education and Civic Organizations 10,257,932 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTH CARE - 17.9% (12.1% OF TOTAL INVESTMENTS) 1,000 Maryland Health and Higher Educational Facilities Authority, 7/08 at 101.00 AAA 1,029,420 Revenue Bonds, Anne Arundel Medical Center, Series 1998, 5.125%, 7/01/33 - FSA Insured 775 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A2 810,170 Revenue Bonds, Calvert Memorial Hospital, Series 2004, 5.500%, 7/01/36 1,250 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 1,303,900 Revenue Bonds, Carroll County General Hospital, Series 2002, 5.800%, 7/01/32 37 Nuveen Maryland Dividend Advantage Municipal Fund 3 (NWI) (continued) Portfolio of INVESTMENTS May 31, 2006 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HEALTH CARE (continued) $ 870 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 AA $ 880,640 Revenue Bonds, Civista Medical Center, Series 2005, 5.000%, 7/01/37 - RAAI Insured 700 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 710,192 Revenue Bonds, Frederick Memorial Hospital, Series 2002, 5.125%, 7/01/35 800 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A+ 807,112 Revenue Bonds, Greater Baltimore Medical Center, Series 2001, 5.000%, 7/01/34 1,000 Maryland Health and Higher Educational Facilities Authority, 5/11 at 100.00 AA- 1,023,970 Revenue Bonds, Johns Hopkins Hospital, Series 2001, 5.000%, 5/15/21 1,000 Maryland Health and Higher Educational Facilities Authority, 7/13 at 100.00 Baa2 1,027,370 Revenue Bonds, Kennedy Krieger Institute, Series 2003, 5.500%, 7/01/33 725 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A 738,659 Revenue Bonds, LifeBridge Health System, Series 2004A, 5.125%, 7/01/34 900 Maryland Health and Higher Educational Facilities Authority, 8/14 at 100.00 BBB+ 934,938 Revenue Bonds, MedStar Health, Series 2004, 5.375%, 8/15/24 650 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A- 667,862 Revenue Bonds, Mercy Medical Center, Series 2001, 5.625%, 7/01/31 1,845 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 A3 1,933,818 Revenue Bonds, Union Hospital of Cecil County, Series 2002, 5.625%, 7/01/32 775 Maryland Health and Higher Educational Facilities Authority, 1/13 at 101.00 Baa2 817,524 Revenue Refunding Bonds, Adventist Healthcare, Series 2003A, 5.750%, 1/01/25 Prince George's County, Maryland, Revenue Bonds, Dimensions Health Corporation, Series 1994: 350 5.375%, 7/01/14 7/06 at 100.00 B3 316,320 900 5.300%, 7/01/24 7/06 at 100.00 B3 748,386 - ------------------------------------------------------------------------------------------------------------------------------------ 13,540 Total Health Care 13,750,281 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 14.7% (10.0% OF TOTAL INVESTMENTS) 980 Maryland Community Development Administration, Housing 7/12 at 100.00 Aa2 980,314 Revenue Bonds, Series 2002B, 4.950%, 7/01/32 (Alternative Minimum Tax) 1,250 Maryland Economic Development Corporation, Senior Lien 10/13 at 100.00 Ba2 1,203,050 Student Housing Revenue Bonds, University of Maryland - Baltimore, Series 2003A, 5.625%, 10/01/23 Maryland Economic Development Corporation, Student Housing Revenue Bonds, Sheppard Pratt University Village, Series 2001: 20 5.875%, 7/01/21 - ACA Insured 7/11 at 101.00 A 21,181 150 6.000%, 7/01/33 - ACA Insured 7/11 at 101.00 A 159,171 475 Maryland Economic Development Corporation, Student Housing 6/16 at 100.00 AAA 489,131 Revenue Refunding Bonds, University of Maryland College Park Projects, Series 2006, 5.000%, 6/01/33 - CIFG Insured Montgomery County Housing Opportunities Commission, Maryland, Multifamily Housing Development Bonds, Series 2002B: 515 5.100%, 7/01/33 (Alternative Minimum Tax) 7/12 at 100.00 Aaa 518,966 3,000 5.200%, 7/01/44 (Alternative Minimum Tax) 7/12 at 100.00 Aaa 3,030,060 4,860 Prince George's County Housing Authority, Maryland, GNMA 11/12 at 100.00 AAA 4,918,028 Collateralized Mortgage Revenue Bonds, Fairview and Hillside Projects, Series 2002A, 4.700%, 11/20/22 - ------------------------------------------------------------------------------------------------------------------------------------ 11,250 Total Housing/Multifamily 11,319,901 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 0.8% (0.5% OF TOTAL INVESTMENTS) 600 Maryland Community Development Administration, Department 9/15 at 100.00 Aa2 604,710 of Housing and Community Development, Residential Revenue Bonds, Series 2006F, 4.900%, 9/01/26 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ INDUSTRIALS - 1.3% (0.9% OF TOTAL INVESTMENTS) 1,000 Northeast Maryland Waste Disposal Authority, Baltimore, 1/09 at 101.00 BBB 1,015,430 Resource Recovery Revenue Bonds, RESCO Retrofit Project, Series 1998, 4.750%, 1/01/12 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 38 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ LONG-TERM CARE - 0.6% (0.4% OF TOTAL INVESTMENTS) $ 280 Maryland Health and Higher Educational Facilities Authority, 4/11 at 101.00 N/R $ 271,813 Revenue Bonds, Collington Episcopal Life Care Community Inc., Series 2001A, 6.750%, 4/01/23 Prince George's County, Maryland, Revenue Bonds, Collington Episcopal Life Care Community Inc., Series 1994A: 30 5.625%, 4/01/09 4/09 at 100.00 N/R 29,132 140 6.000%, 4/01/13 4/13 at 100.00 N/R 133,503 - ------------------------------------------------------------------------------------------------------------------------------------ 450 Total Long-Term Care 434,448 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 23.6% (15.9% OF TOTAL INVESTMENTS) 1,000 Annapolis, Maryland, General Obligation Public Improvement 4/12 at 101.00 AA 1,013,530 Refunding Bonds, Series 2002, 4.375%, 4/01/17 Anne Arundel County, Maryland, General Obligation Bonds, Series 2006: 845 5.000%, 3/01/21 3/16 at 100.00 AA+ 895,447 650 5.000%, 3/01/21 3/16 at 100.00 AA+ 688,805 1,000 Calvert County, Maryland, General Obligation Public Improvement 1/12 at 101.00 AA 1,028,110 Bonds, Series 2002, 4.500%, 1/01/16 380 Carroll County, Maryland, Consolidated Public Improvement 12/15 at 100.00 AA 407,212 Bonds, Series 2005A, 5.000%, 12/01/16 1,260 Charles County, Maryland, Consolidated General Obligation 1/12 at 101.00 AA 1,286,132 Public Improvement Bonds, Series 2002, 4.400%, 1/15/16 500 Frederick County, Maryland, General Obligation Public No Opt. Call AA 540,940 Facilities Bonds, Series 2006, 5.000%, 11/01/20 245 Frederick County, Maryland, Special Obligation Bonds, Villages 7/10 at 102.00 AA 262,515 of Lake Linganore Community Development Authority, Series 2001A, 5.600%, 7/01/20 - RAAI Insured Frederick, Maryland, General Obligation Bonds, Series 2005: 710 5.000%, 8/01/16 - MBIA Insured 8/15 at 100.00 AAA 759,665 535 5.000%, 8/01/17 - MBIA Insured 8/15 at 100.00 AAA 569,898 1,000 Maryland National Capital Park Planning Commission, 1/14 at 100.00 AA 1,057,960 Prince George's County, General Obligation Bonds, Park Acquisition and Development, Series 2004EE-2, 5.000%, 1/15/17 1,500 Maryland, General Obligation Bonds, Series 2005, 8/15 at 100.00 AAA 1,603,740 5.000%, 8/01/17 1,440 Montgomery County, Maryland, Consolidated General No Opt. Call AAA 1,551,571 Obligation Public Improvement Bonds, Series 2005A, 5.000%, 7/01/15 1,000 Prince George's County, Maryland, General Obligation 10/13 at 100.00 AA 1,054,640 Consolidated Public Improvement Bonds, Series 2003A, 5.000%, 10/01/17 1,000 Prince George's County, Maryland, General Obligation No Opt. Call AA 1,064,060 Consolidated Public Improvement Bonds, Series 2004C, 5.000%, 12/01/11 1,000 St. Mary's County, Maryland, General Obligation Hospital No Opt. Call AA- 1,066,350 Bonds, Series 2002, 5.000%, 10/01/12 25 Washington Suburban Sanitary District, Montgomery and 6/11 at 101.00 AAA 26,329 Prince George's Counties, Maryland, General Obligation Construction Bonds, Second Series 2001, 5.000%, 6/01/17 1,000 Washington Suburban Sanitary District, Montgomery and No Opt. Call AAA 1,072,520 Prince George's Counties, Maryland, Sewerage Disposal Bonds, Series 2004, 5.000%, 6/01/13 1,000 Washington Suburban Sanitary District, Montgomery and 6/15 at 100.00 AAA 1,073,160 Prince George's Counties, Maryland, Sewerage Disposal Bonds, Series 2005, 5.000%, 6/01/16 1,000 Washington Suburban Sanitary District, Montgomery and 6/15 at 100.00 AAA 1,073,160 Prince George's Counties, Maryland, Water Supply Bonds, Series 2005, 5.000%, 6/01/16 - ------------------------------------------------------------------------------------------------------------------------------------ 17,090 Total Tax Obligation/General 18,095,744 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 33.9% (23.0% OF TOTAL INVESTMENTS) 750 Annapolis, Maryland, Special Obligation Bonds, Park Place 1/15 at 101.00 N/R 756,397 Project, Series 2005A, 5.350%, 7/01/34 1,000 Baltimore Board of School Commissioners, Maryland, Revenue 5/13 at 100.00 AA+ 1,058,880 Bonds, City Public School System, Series 2003A, 5.000%, 5/01/15 600 Baltimore, Maryland, Project Revenue Bonds, Series 2006, 7/16 at 100.00 AAA 623,832 5.000%, 7/01/31 - AMBAC Insured 39 Nuveen Maryland Dividend Advantage Municipal Fund 3 (NWI) (continued) Portfolio of INVESTMENTS May 31, 2006 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED (continued) $ 450 Hyattsville, Maryland, Special Obligation Bonds, University 7/14 at 102.00 N/R $ 467,240 Town Center Project, Series 2004, 5.750%, 7/01/34 5,000 Maryland Department of Transportation, Consolidated No Opt. Call AA 5,559,250 Transportation Revenue Bonds, Series 2002, 5.500%, 2/01/16 1,000 Maryland Department of Transportation, Consolidated No Opt. Call AA 1,069,530 Transportation Revenue Bonds, Series 2004, 5.000%, 5/01/13 2,200 Maryland Economic Development Corporation, Lease Revenue 6/12 at 100.50 AA+ 2,238,654 Bonds, Department of Transportation Headquarters Building, Series 2002, 4.750%, 6/01/22 450 Maryland Economic Development Corporation, Lease Revenue 9/12 at 100.00 AA+ 478,039 Bonds, Montgomery County Town Square Parking Garage, Series 2002A, 5.000%, 9/15/13 2,935 Maryland Economic Development Corporation, Lease Revenue 9/12 at 100.00 AA+ 3,136,869 Bonds, Montgomery County Wayne Avenue Parking Project, Series 2002A, 5.250%, 9/15/16 Maryland Stadium Authority, Lease Revenue Bonds, Montgomery County Conference Center Facilities, Series 2003: 1,465 5.000%, 6/15/21 6/13 at 100.00 AA+ 1,521,285 1,620 5.000%, 6/15/23 6/13 at 100.00 AA+ 1,680,442 710 Montgomery County, Maryland, Lease Revenue Bonds, 5/15 at 100.00 A1 745,763 College of Arts Center Project, Series 2005A, 5.000%, 5/01/18 460 Prince George's County, Maryland, Special Obligation Bonds, 7/15 at 100.00 N/R 457,622 National Harbor Project, Series 2005, 5.200%, 7/01/34 575 Prince George's County, Maryland, Special Tax District Bonds, 7/13 at 100.00 N/R 575,144 Victoria Falls Project, Series 2005, 5.250%, 7/01/35 Puerto Rico Public Buildings Authority, Guaranteed Government Facilities Revenue Bonds, Series 2002G: 1,000 5.250%, 7/01/17 7/12 at 100.00 BBB 1,034,650 1,205 5.250%, 7/01/20 7/12 at 100.00 BBB 1,240,945 1,275 5.250%, 7/01/21 7/12 at 100.00 BBB 1,312,013 1,000 Puerto Rico Public Finance Corporation, Commonwealth No Opt. Call AAA 1,083,640 Appropriation Bonds, Series 1998A, 5.125%, 6/01/24 - AMBAC Insured 235 Puerto Rico Public Finance Corporation, Commonwealth 2/12 at 100.00 BBB- 243,354 Appropriation Bonds, Series 2002E, 5.500%, 8/01/29 700 Puerto Rico, Highway Revenue Bonds, Highway and No Opt. Call AAA 783,727 Transportation Authority, Series 2003AA, 5.500%, 7/01/19 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 24,630 Total Tax Obligation/Limited 26,067,276 - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 0.4% (0.4% OF TOTAL INVESTMENTS) Maryland Health and Higher Educational Facilities Authority, Parking Facilities Revenue Bonds, Johns Hopkins Medical Institution, Series 2004B: 190 5.000%, 7/01/13 - AMBAC Insured No Opt. Call AAA 202,517 175 5.000%, 7/01/14 - AMBAC Insured No Opt. Call AAA 186,918 - ------------------------------------------------------------------------------------------------------------------------------------ 365 Total Transportation 389,435 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 24.2% (16.4% OF TOTAL INVESTMENTS) (4) 10 Anne Arundel County, Maryland, General Obligation Bonds, 5/09 at 101.00 AA+ (4) 10,469 Consolidated General Improvements, Series 1999, 5.000%, 5/15/19 (Pre-refunded 5/15/09) 100 Frederick County, Maryland, General Obligation Public 7/09 at 101.00 AAA 105,562 Facilities Bonds, Series 1999, 5.250%, 7/01/17 (Pre-refunded 7/01/09) Frederick County, Maryland, General Obligation Public Facilities Bonds, Series 2002: 1,830 5.000%, 11/01/20 (Pre-refunded 11/01/12) 11/12 at 101.00 AA (4) 1,964,212 2,035 5.000%, 11/01/21 (Pre-refunded 11/01/12) 11/12 at 101.00 AA (4) 2,184,247 2,500 5.000%, 11/01/22 (Pre-refunded 11/01/12) 11/12 at 101.00 AA (4) 2,683,350 1,210 Howard County, Maryland, Consolidated Public Improvement 2/09 at 101.00 AAA 1,256,174 Bonds, Series 2001A, 4.750%, 2/15/19 (Pre-refunded 2/15/09) 40 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED (4) (continued) $ 1,215 Howard County, Maryland, Consolidated Public Improvement 8/12 at 100.00 AAA $ 1,294,169 Refunding Bonds, Series 2003A, 5.000%, 8/15/15 (Pre-refunded 8/15/12) 285 Maryland Health and Higher Educational Facilities Authority, No Opt. Call AAA 300,039 Revenue Bonds, Helix Health, Series 1997, 5.000%, 7/01/17 - AMBAC Insured (ETM) 1,080 Maryland Transportation Authority, Revenue Refunding Bonds, No Opt. Call AAA 1,232,528 Transportation Facilities Projects, First Series 1978, 6.800%, 7/01/16 (ETM) 2,000 Montgomery County, Maryland, Consolidated General 2/12 at 101.00 AAA 2,139,280 Obligation Public Improvement Bonds, Series 2002A, 5.000%, 2/01/20 (Pre-refunded 2/01/12) 3,500 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 3,732,645 Obligation Bonds, Series 2000A, 5.500%, 10/01/40 700 Puerto Rico Public Finance Corporation, Commonwealth 2/12 at 100.00 Aaa 759,297 Appropriation Bonds, Series 2002E, 5.500%, 8/01/29 (Pre-refunded 2/01/12) 880 Puerto Rico, General Obligation and Public Improvement Bonds, 7/11 at 100.00 AAA 937,385 Series 2001, 5.125%, 7/01/30 (Pre-refunded 7/01/11) - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 17,345 Total U.S. Guaranteed 18,599,357 - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 7.2% (4.8% OF TOTAL INVESTMENTS) 1,250 Maryland Energy Financing Administration, Revenue Bonds, 9/07 at 100.00 N/R 1,262,775 AES Warrior Run Project, Series 1995, 7.400%, 9/01/19 (Alternative Minimum Tax) 4,025 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/10 at 101.00 AAA 4,234,622 Series 2000HH, 5.250%, 7/01/29 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 5,275 Total Utilities 5,497,397 - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 4.0% (2.7% OF TOTAL INVESTMENTS) 2,570 Baltimore, Maryland, Revenue Refunding Bonds, Wastewater 7/12 at 100.00 AAA 2,636,665 Projects, Series 2002A, 5.125%, 7/01/42 - FGIC Insured 430 Maryland Water Quality Financing Administration, Revolving No Opt. Call AAA 463,222 Loan Fund Revenue Bonds, Series 2005A, 5.000%, 9/01/15 - ------------------------------------------------------------------------------------------------------------------------------------ 3,000 Total Water and Sewer 3,099,887 - ------------------------------------------------------------------------------------------------------------------------------------ $ 108,715 Total Investments (cost $112,293,408) - 147.8% 113,541,648 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 3.0% 2,267,579 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (50.8)% (39,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 76,809,227 ==================================================================================================================== FORWARD SWAPS OUTSTANDING AT MAY 31, 2006: FIXED RATE FLOATING RATE PAID FIXED RATE RECEIVED FLOATING RATE UNREALIZED NOTIONAL BY THE FUND PAYMENT BY THE FUND PAYMENT EFFECTIVE TERMINATION APPRECIATION COUNTERPARTY AMOUNT (ANNUALIZED) FREQUENCY BASED ON FREQUENCY DATE (5) DATE (DEPRECIATION) -------------------------------------------------------------------------------------------------------------------------- Goldman Sachs $1,600,000 4.013% Quarterly BMA Quarterly 9/14/06 9/14/26 $ 76,206 Merrill Lynch 2,900,000 4.021 Quarterly BMA Quarterly 9/21/06 9/21/26 135,717 -------------------------------------------------------------------------------------------------------------------------- $211,923 ========================================================================================================================== BMA - The daily arithmetic average of the weekly BMA (Bond Market Association) Municipal Swap Index. (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's or Moody's rating. Ratings below BBB by Standard & Poor's Group or Baa by Moody's Investor Service, Inc. are considered to be below investment grade. (4) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. (5) Effective date represents the date on which both the Fund and counterparty commence interest payment accruals on each forward swap contract. N/R Not rated. (ETM) Escrowed to maturity. See accompanying notes to financial statements. 41 Nuveen Virginia Premium Income Municipal Fund (NPV) Portfolio of INVESTMENTS May 31, 2006 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER STAPLES - 4.2% (2.9% OF TOTAL INVESTMENTS) Tobacco Settlement Financing Corporation of Virginia, Tobacco Settlement Asset-Backed Bonds, Series 2005: $ 1,575 5.250%, 6/01/19 6/15 at 100.00 BBB $ 1,598,121 3,850 5.500%, 6/01/26 6/15 at 100.00 BBB 3,936,355 - ------------------------------------------------------------------------------------------------------------------------------------ 5,425 Total Consumer Staples 5,534,476 - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 7.0% (4.8% OF TOTAL INVESTMENTS) 1,000 Prince William County Industrial Development Authority, 10/13 at 101.00 A3 1,037,460 Virginia, Educational Facilities Revenue Bonds, Catholic Diocese of Arlington, Series 2003, 5.500%, 10/01/33 500 Prince William County Park Authority, Virginia, Park Facilities 10/09 at 101.00 A3 530,800 Revenue Refunding and Improvement Bonds, Series 1999, 6.000%, 10/15/28 700 Puerto Rico Industrial, Tourist, Educational, Medical and 12/12 at 101.00 BBB- 719,775 Environmental Control Facilities Financing Authority, Higher Education Revenue Refunding Bonds, Ana G. Mendez University System, Series 2002, 5.375%, 12/01/21 500 Rockbridge County Industrial Development Authority, Virginia, 7/11 at 100.00 B2 500,395 Horse Center Revenue Refunding Bonds, Series 2001C, 6.850%, 7/15/21 475 The Rector and Visitors of the University of Virginia, General 6/15 at 100.00 AAA 503,785 Revenue Bonds, Series 2005, 5.000%, 6/01/18 2,120 Virginia College Building Authority, Educational Facilities 9/11 at 100.00 AA+ 2,176,413 Revenue Bonds, Public Higher Education Financing Program, Series 2001A, 5.000%, 9/01/26 2,000 Virginia College Building Authority, Educational Facilities No Opt. Call Aa1 2,137,400 Revenue Bonds, Public Higher Education Financing Program, Series 2004B, 5.000%, 9/01/13 1,635 Virginia Commonwealth University, Revenue Bonds, 5/14 at 101.00 AAA 1,724,909 Series 2004A, 5.000%, 5/01/17 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 8,930 Total Education and Civic Organizations 9,330,937 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTH CARE - 16.9% (11.6% OF TOTAL INVESTMENTS) 2,000 Albemarle County Industrial Development Authority, 10/12 at 100.00 A2 2,038,460 Virginia, Hospital Revenue Bonds, Martha Jefferson Hospital, Series 2002, 5.250%, 10/01/35 4,850 Fairfax County Industrial Development Authority, Virginia, No Opt. Call AA+ 5,075,622 Hospital Revenue Refunding Bonds, Inova Health System, Series 1993A, 5.000%, 8/15/23 1,250 Fredericksburg Industrial Development Authority, Virginia, 6/12 at 100.00 A3 1,264,200 Revenue Bonds, MediCorp Health System, Series 2002B, 5.125%, 6/15/33 1,000 Hanover County Industrial Development Authority, Virginia, No Opt. Call AAA 1,156,070 Hospital Revenue Bonds, Memorial Regional Medical Center, Series 1995, 6.375%, 8/15/18 - MBIA Insured 1,500 Henrico County Economic Development Authority, Virginia, 11/12 at 100.00 A- 1,558,725 Revenue Bonds, Bon Secours Health System Inc., Series 2002A, 5.600%, 11/15/30 1,500 Henrico County Industrial Development Authority, Virginia, No Opt. Call AAA 1,786,305 Healthcare Revenue Bonds, Bon Secours Health System, Series 1996, 6.250%, 8/15/20 - MBIA Insured 1,500 Manassas Industrial Development Authority, Virginia, Hospital 4/13 at 100.00 A2 1,541,025 Revenue Bonds, Prince William Hospital, Series 2002, 5.250%, 4/01/33 4,750 Medical College of Virginia Hospital Authority, General Revenue 7/08 at 102.00 AAA 4,871,553 Bonds, Series 1998, 5.125%, 7/01/23 - MBIA Insured 3,000 Roanoke Industrial Development Authority, Virginia, Hospital 7/12 at 100.00 AAA 3,185,010 Revenue Bonds, Carilion Health System, Series 2002A, 5.500%, 7/01/19 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 21,350 Total Health Care 22,476,970 - ------------------------------------------------------------------------------------------------------------------------------------ 42 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 4.6% (3.2% OF TOTAL INVESTMENTS) $ 1,435 Arlington County Industrial Development Authority, Virginia, 5/10 at 100.00 Aaa $ 1,529,523 Multifamily Housing Revenue Bonds, Patrick Henry Apartments, Series 2000, 6.050%, 11/01/32 (Mandatory put 11/01/20) (Alternative Minimum Tax) Danville Industrial Development Authority, Virginia, Student Housing Revenue Bonds, Collegiate Housing Foundation, Averett College, Series 1999A: 500 6.875%, 6/01/20 6/09 at 102.00 N/R 491,640 1,500 7.000%, 6/01/30 6/09 at 102.00 N/R 1,471,830 1,495 Henrico County Economic Development Authority, Virginia, 7/09 at 102.00 AAA 1,599,904 GNMA Mortgage-Backed Securities Program Assisted Living Revenue Bonds, Beth Sholom, Series 1999A, 5.900%, 7/20/29 1,000 Lynchburg Redevelopment and Housing Authority, Virginia, 4/10 at 102.00 AAA 1,030,470 Vistas GNMA Mortgage-Backed Revenue Bonds, Series 2000A, 6.200%, 1/20/40 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 5,930 Total Housing/Multifamily 6,123,367 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 2.1% (1.5% OF TOTAL INVESTMENTS) 340 Puerto Rico Housing Finance Authority, Mortgage-Backed 6/13 at 100.00 AAA 342,465 Securities Program Home Mortgage Revenue Bonds, Series 2003A, 4.875%, 6/01/34 (Alternative Minimum Tax) 1,000 Virginia Housing Development Authority, Commonwealth 7/11 at 100.00 AAA 1,025,090 Mortgage Bonds, Series 2001H-1, 5.350%, 7/01/31 - MBIA Insured 1,500 Virginia Housing Development Authority, Commonwealth 1/15 at 100.00 AAA 1,461,405 Mortgage Bonds, Series 2005C-C2, 4.750%, 10/01/32 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 2,840 Total Housing/Single Family 2,828,960 - ------------------------------------------------------------------------------------------------------------------------------------ INDUSTRIALS - 1.6% (1.0% OF TOTAL INVESTMENTS) 2,000 Charles County Industrial Development Authority, Virginia, No Opt. Call BBB 2,037,660 Solid Waste Disposal Facility Revenue Refunding Bonds, USA Waste of Virginia Inc., Series 1999, 4.875%, 2/01/09 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ MATERIALS - 1.9% (1.2% OF TOTAL INVESTMENTS) 500 Bedford County Industrial Development Authority, Virginia, 2/08 at 102.00 B2 490,415 Industrial Development Revenue Refunding Bonds, Nekoosa Packaging Corporation, Series 1998, 5.600%, 12/01/25 (Alternative Minimum Tax) (5) 1,000 Goochland County Industrial Development Authority, Virginia, 12/08 at 101.00 B2 980,900 Industrial Development Revenue Refunding Bonds, Nekoosa Packaging Corporation Project, Series 1998, 5.650%, 12/01/25 (Alternative Minimum Tax) (5) 1,000 Isle of Wight County Industrial Development Authority, 5/07 at 102.00 BBB 1,030,280 Virginia, Solid Waste Disposal Facilities Revenue Bonds, Union Camp Corporation, Series 1997, 6.100%, 5/01/27 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 2,500 Total Materials 2,501,595 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 27.8% (19.1% OF TOTAL INVESTMENTS) 900 Alexandria, Virginia, General Obligation Bonds, Series 2004B, No Opt. Call AAA 964,881 5.000%, 6/15/13 1,400 Arlington County, Virginia, General Obligation Bonds, 5/15 at 100.00 AAA 1,500,996 Series 2005, 5.000%, 5/15/16 1,500 Arlington County, Virginia, General Obligation Bonds, 8/16 at 100.00 AAA 1,597,740 Series 2006, 5.000%, 8/01/20 Chesapeake, Virginia, General Obligation Water and Sewerage Bonds, Series 2003B: 1,880 5.000%, 6/01/21 6/13 at 100.00 AA 1,952,493 2,060 5.000%, 6/01/23 6/13 at 100.00 AA 2,134,407 1,355 Harrisonburg, Virginia, General Obligation Bonds, Public 7/12 at 101.00 AAA 1,418,563 Safety and Steam Plant, Series 2002, 5.000%, 7/15/19 - FGIC Insured 1,390 Henrico County, Virginia, General Obligation Bonds, 7/15 at 100.00 AAA 1,491,345 Series 2005, 5.000%, 7/15/16 105 Loudoun County, Virginia, General Obligation Public Improvement 5/12 at 100.00 AAA 111,510 Bonds, Series 2002A, 5.250%, 5/01/22 1,920 Loudoun County, Virginia, General Obligation Public Improvement No Opt. Call AAA 2,064,480 Bonds, Series 2005A, 5.000%, 7/01/14 43 Nuveen Virginia Premium Income Municipal Fund (NPV) (continued) Portfolio of INVESTMENTS May 31, 2006 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL (continued) $ 1,435 Loudoun County, Virginia, General Obligation Public Improvement 6/15 at 100.00 AAA $ 1,527,500 Bonds, Series 2005B, 5.000%, 6/01/18 1,185 Lynchburg, Virginia, General Obligation Bonds, Series 2004, 6/14 at 100.00 AA 1,241,880 5.000%, 6/01/21 Newport News, Virginia, General Obligation Bonds, General Improvement and Water Projects, Series 2002A: 2,770 5.000%, 7/01/19 7/13 at 100.00 AA 2,898,944 1,000 5.000%, 7/01/20 7/13 at 100.00 AA 1,042,630 1,350 Newport News, Virginia, General Obligation Bonds, 5/14 at 101.00 AA 1,438,682 Series 2004C, 5.000%, 5/01/16 1,400 Northern Mariana Islands, General Obligation Bonds, 6/10 at 100.00 A 1,468,110 Series 2000A, 6.000%, 6/01/20 - ACA Insured 1,280 Portsmouth, Virginia, General Obligation Bonds, Series 2005A, No Opt. Call AAA 1,371,930 5.000%, 4/01/15 - MBIA Insured 1,480 Richmond, Virginia, General Obligation Bonds, Series 2004A, 7/14 at 100.00 AAA 1,550,833 5.000%, 7/15/21 - FSA Insured Richmond, Virginia, General Obligation Bonds, Series 2005A: 1,500 5.000%, 7/15/17 - FSA Insured 7/15 at 100.00 AAA 1,592,895 1,715 5.000%, 7/15/20 - FSA Insured 7/15 at 100.00 AAA 1,805,381 1,430 Roanoke, Virginia, General Obligation Public Improvement 10/12 at 101.00 AA 1,510,723 Bonds, Series 2002A, 5.000%, 10/01/17 1,135 Suffolk, Virginia, General Obligation Bonds, Series 2005, No Opt. Call Aa2 1,217,299 5.000%, 12/01/15 2,155 Virginia Beach, Virginia, General Obligation Bonds, 5/13 at 100.00 AA+ 2,283,223 Series 2003B, 5.000%, 5/01/15 1,100 Virginia Beach, Virginia, General Obligation Bonds, 1/16 at 100.00 AA+ 1,160,544 Series 2005, 5.000%, 1/15/20 1,425 Virginia Beach, Virginia, General Obligation Public Improvement 6/11 at 101.00 AA+ 1,485,021 Bonds, Series 2001, 5.000%, 6/01/20 - ------------------------------------------------------------------------------------------------------------------------------------ 34,870 Total Tax Obligation/General 36,832,010 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 32.7% (22.5% OF TOTAL INVESTMENTS) Buena Vista Public Recreational Facilities Authority, Virginia, Lease Revenue Bonds, Golf Course Project, Series 2005A: 335 5.250%, 7/15/25 - ACA Insured 7/15 at 100.00 A 346,263 260 5.500%, 7/15/35 - ACA Insured 7/15 at 100.00 A 269,511 2,400 Commonwealth Transportation Board of Virginia, Federal No Opt. Call AA 2,572,584 Highway Reimbursement Anticipation Notes, Series 2005, 5.000%, 9/28/15 1,340 Culpeper Industrial Development Authority, Virginia, Lease 1/15 at 100.00 AAA 1,401,305 Revenue Bonds, School Facilities Project, Series 2005, 5.000%, 1/01/20 - MBIA Insured Cumberland County, Virginia, Certificates of Participation, Series 1997: 1,075 6.200%, 7/15/12 No Opt. Call N/R 1,138,232 1,350 6.375%, 7/15/17 No Opt. Call N/R 1,483,083 500 Dinwiddie County Industrial Development Authority, Virginia, 2/07 at 102.00 N/R 513,525 Lease Revenue Bonds, Dinwiddie County School Facilities, Series 1997A, 6.000%, 2/01/18 1,000 Dinwiddie County Industrial Development Authority, Virginia, 2/14 at 100.00 AAA 1,062,530 Lease Revenue Bonds, Series 2004B, 5.125%, 2/15/16 - MBIA Insured 1,000 Fairfax County Economic Development Authority, Virginia, 5/16 at 100.00 AA+ 1,060,760 Lease Revenue Bonds, Joint Public Uses Community Project, Series 2006, 5.000%, 5/15/18 Fairfax County Economic Development Authority, Virginia, Lease Revenue Bonds, Laurel Hill Public Facilities Projects, Series 2003: 2,260 5.000%, 6/01/14 6/13 at 101.00 AA+ 2,411,510 2,165 5.000%, 6/01/22 6/13 at 101.00 AA+ 2,260,498 1,660 Front Royal and Warren County Industrial Development 4/14 at 100.00 AAA 1,739,298 Authority, Virginia, Lease Revenue Bonds, Series 2004B, 5.000%, 4/01/18 - FSA Insured 1,270 James City County Economic Development Authority, Virginia, 7/15 at 100.00 AA- 1,334,973 Revenue Bonds, County Government Projects, Series 2005, 5.000%, 7/15/19 1,930 Prince William County, Virginia, Certificates of Participation, 6/15 at 100.00 Aaa 2,029,221 County Facilities, Series 2005, 5.000%, 6/01/18 - AMBAC Insured 2,000 Puerto Rico Highway and Transportation Authority, Highway 7/12 at 100.00 AAA 2,052,100 Revenue Bonds, Series 2002D, 5.000%, 7/01/32 - FSA Insured 44 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED (continued) Puerto Rico Public Buildings Authority, Guaranteed Government Facilities Revenue Refunding Bonds, Series 2002D: $ 265 5.250%, 7/01/27 7/12 at 100.00 BBB $ 272,060 320 5.250%, 7/01/36 7/12 at 100.00 BBB 326,659 1,110 Spotsylvania County Industrial Development Authority, Virginia, 8/13 at 100.00 AAA 1,109,945 Lease Revenue Bonds, School Facilities, Series 2003B, 4.375%, 8/01/20 - AMBAC Insured 2,000 Virgin Islands Public Finance Authority, Gross Receipts Taxes 10/10 at 101.00 BBB 2,191,240 Loan Note, Series 1999A, 6.500%, 10/01/24 1,400 Virginia Beach Development Authority, Public Facilities Revenue 5/15 at 100.00 AA 1,490,902 Bonds, Series 2005A, 5.000%, 5/01/16 2,000 Virginia College Building Authority, Educational Facilities 2/12 at 100.00 AA+ 2,074,620 Revenue Bonds, 21st Century College Program, Series 2002A, 5.000%, 2/01/22 2,000 Virginia Public School Authority, School Financing Bonds, 8/10 at 101.00 AA+ 2,092,840 1997 Resolution, Series 2000B, 5.000%, 8/01/18 1,950 Virginia Public School Authority, School Financing Bonds, No Opt. Call AA+ 2,080,631 1997 Resolution, Series 2004C, 5.000%, 8/01/13 1,625 Virginia Public School Authority, School Financing Bonds, 8/15 at 100.00 AA+ 1,723,361 1997 Resolution, Series 2005C, 5.000%, 8/01/17 Virginia Resources Authority, Infrastructure Revenue Bonds, Pooled Loan Bond Program, Series 2000B: 1,120 5.500%, 5/01/20 - FSA Insured 5/10 at 101.00 AAA 1,194,603 3,060 5.500%, 5/01/30 - FSA Insured 5/10 at 101.00 AAA 3,249,812 1,740 Virginia Resources Authority, Infrastructure Revenue Bonds, 5/11 at 101.00 AA 1,819,796 Pooled Loan Bond Program, Series 2002A, 5.000%, 5/01/19 2,000 Virginia Transportation Board, Transportation Revenue Bonds, 5/14 at 100.00 AA+ 2,128,080 U.S. Route 58 Corridor Development Program, Series 2004B, 5.000%, 5/15/15 - ------------------------------------------------------------------------------------------------------------------------------------ 41,135 Total Tax Obligation/Limited 43,429,942 - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 13.2% (9.1% OF TOTAL INVESTMENTS) 755 Metropolitan District of Columbia Airports Authority, Virginia, 10/07 at 101.00 Aa3 776,261 Airport System Revenue Bonds, Series 1997A, 5.375%, 10/01/23 4,000 Norfolk Airport Authority, Virginia, Airport Revenue Bonds, 7/11 at 100.00 AAA 4,101,160 Series 2001A, 5.125%, 7/01/31 - FGIC Insured 1,000 Norfolk, Virginia, Parking System Revenue Bonds, Series 2005A, 2/15 at 100.00 AAA 1,046,090 5.000%, 2/01/23 - MBIA Insured 530 Pocahontas Parkway Association, Virginia, Senior Lien Revenue 8/08 at 102.00 BB- 547,707 Bonds, Route 895 Connector Toll Road, Series 1998A, 5.500%, 8/15/28 2,500 Richmond Metropolitan Authority, Virginia, Revenue Refunding No Opt. Call AAA 2,760,200 Bonds, Expressway System, Series 2002, 5.250%, 7/15/22 - FGIC Insured 6,065 Virginia Port Authority, Revenue Bonds, Port Authority 7/07 at 101.00 AAA 6,221,170 Facilities, Series 1997, 5.600%, 7/01/27 - MBIA Insured (Alternative Minimum Tax) 2,000 Virginia Resources Authority, Airports Revolving Fund Revenue 2/11 at 100.00 Aa2 2,089,760 Bonds, Series 2001A, 5.250%, 8/01/23 - ------------------------------------------------------------------------------------------------------------------------------------ 16,850 Total Transportation 17,542,348 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 15.0% (10.3% OF TOTAL INVESTMENTS) (4) 3,500 Alexandria Industrial Development Authority, Virginia, Fixed Rate 10/10 at 101.00 AAA 3,835,195 Revenue Bonds, Institute for Defense Analyses, Series 2000A, 5.900%, 10/01/30 (Pre-refunded 10/01/10) - AMBAC Insured 750 Bristol, Virginia, General Obligation Utility System Revenue No Opt. Call AAA 804,788 Bonds, Series 2002, 5.000%, 11/01/24 - FSA Insured (ETM) Fairfax County Water Authority, Virginia, Water Revenue Refunding Bonds, Series 2002: 925 5.375%, 4/01/19 (Pre-refunded 4/01/12) 4/12 at 100.00 AAA 999,777 200 5.000%, 4/01/27 (Pre-refunded 4/01/12) 4/12 at 100.00 AAA 212,280 45 Nuveen Virginia Premium Income Municipal Fund (NPV) (continued) Portfolio of INVESTMENTS May 31, 2006 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED (4) (continued) Greater Richmond Convention Center Authority, Virginia, Hotel Tax Revenue Bonds, Convention Center Expansion Project, Series 2000: $ 600 6.125%, 6/15/25 (Pre-refunded 6/15/10) 6/10 at 101.00 AAA $ 658,458 2,000 6.125%, 6/15/29 (Pre-refunded 6/15/10) 6/10 at 101.00 AAA 2,194,860 2,000 Hampton, Virginia, General Obligation Public Improvement 2/10 at 102.00 AA (4) 2,191,580 Bonds, Series 2000, 6.000%, 2/01/20 (Pre-refunded 2/01/10) Loudoun County Industrial Development Authority, Virginia, Hospital Revenue Bonds, Loudoun Hospital Center, Series 2002A: 375 6.000%, 6/01/22 (Pre-refunded 6/01/12) 6/12 at 101.00 BBB (4) 419,273 800 6.100%, 6/01/32 (Pre-refunded 6/01/12) 6/12 at 101.00 BBB (4) 898,688 480 Loudoun County, Virginia, General Obligation Public 5/12 at 100.00 AAA 516,605 Improvement Bonds, Series 2002A, 5.250%, 5/01/22 (Pre-refunded 5/01/12) 2,500 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 2,666,175 Obligation Bonds, Series 2000A, 5.500%, 10/01/40 Puerto Rico Public Buildings Authority, Guaranteed Government Facilities Revenue Refunding Bonds, Series 2002D: 735 5.250%, 7/01/27 (Pre-refunded 7/01/12) 7/12 at 100.00 BBB (4) 787,633 880 5.250%, 7/01/36 (Pre-refunded 7/01/12) 7/12 at 100.00 BBB (4) 943,017 1,035 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 1,078,884 Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20 (Pre-refunded 7/01/10) 1,000 Virginia College Building Authority, Educational Facilities 4/10 at 101.00 A+ (4) 1,088,820 Revenue Bonds, Hampton University, Series 2000, 6.000%, 4/01/20 (Pre-refunded 4/01/10) 500 Virginia Resources Authority, Clean Water State Revolving 10/10 at 100.00 AAA 538,700 Fund Revenue Bonds, Series 1999, 5.625%, 10/01/22 (Pre-refunded 10/01/10) - ------------------------------------------------------------------------------------------------------------------------------------ 18,280 Total U.S. Guaranteed 19,834,733 - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 11.8% (8.1% OF TOTAL INVESTMENTS) Bristol, Virginia, Utility System Revenue Refunding Bonds, Series 2003: 1,705 5.250%, 7/15/14 - MBIA Insured 7/13 at 100.00 AAA 1,838,399 1,800 5.250%, 7/15/15 - MBIA Insured 7/13 at 100.00 AAA 1,937,358 2,775 5.250%, 7/15/23 - MBIA Insured 7/13 at 100.00 AAA 2,954,376 2,500 Mecklenburg County Industrial Development Authority, Virginia, 10/12 at 100.00 A3 2,783,675 Revenue Bonds, UAE Mecklenburg Cogeneration LP, Series 2002, 6.500%, 10/15/17 (Alternative Minimum Tax) 3,500 Richmond, Virginia, Public Utility Revenue Refunding Bonds, 1/08 at 101.00 AAA 3,586,695 Series 1998A, 5.125%, 1/15/28 - FGIC Insured Richmond, Virginia, Public Utility Revenue Refunding Bonds, Series 2002: 750 5.000%, 1/15/27 - FSA Insured 1/12 at 100.00 AAA 770,093 1,700 5.000%, 1/15/33 - FSA Insured 1/12 at 100.00 AAA 1,739,610 - ------------------------------------------------------------------------------------------------------------------------------------ 14,730 Total Utilities 15,610,206 - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 6.8% (4.7% OF TOTAL INVESTMENTS) Fairfax County Water Authority, Virginia, Water Revenue Refunding Bonds, Series 2002: 105 5.375%, 4/01/19 4/12 at 100.00 AAA 112,637 800 5.000%, 4/01/27 4/12 at 100.00 AAA 823,376 1,770 Henrico County, Virginia, Water and Sewer System Revenue 5/09 at 102.00 AA+ 1,819,188 Refunding Bonds, Series 1999, 5.000%, 5/01/28 1,000 Loudoun County Sanitation Authority, Virginia, Water and 1/15 at 100.00 AA+ 1,040,660 Sewerage System Revenue Bonds, Series 2004, 5.000%, 1/01/26 46 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER (continued) Norfolk, Virginia, Water Revenue Refunding Bonds, Series 2001: $ 1,310 5.000%, 11/01/21 - FGIC Insured 11/11 at 100.00 AAA $ 1,359,806 1,380 5.000%, 11/01/22 - FGIC Insured 11/11 at 100.00 AAA 1,433,144 2,250 Virginia Beach, Virginia, Storm Water Utility Revenue Bonds, 9/10 at 101.00 Aa3 2,449,305 Series 2000, 6.000%, 9/01/24 - ------------------------------------------------------------------------------------------------------------------------------------ 8,615 Total Water and Sewer 9,038,116 - ------------------------------------------------------------------------------------------------------------------------------------ $ 183,455 Total Investments (cost $186,748,162) - 145.6% 193,121,320 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.5% 3,305,178 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (48.1)% (63,800,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 132,626,498 ==================================================================================================================== (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's or Moody's rating. Ratings below BBB by Standard & Poor's Group or Baa by Moody's Investor Service, Inc. are considered to be below investment grade. (4) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. (5) The issuer has received a preliminary adverse determination from the Internal Revenue Service (the "IRS") regarding the tax-exempt status of the bonds' coupon payments. The Fund will continue to treat coupon payments as tax-exempt income until such time that it is formally determined that the interest on the bonds should be treated as taxable. N/R Not rated. (ETM) Escrowed to maturity. See accompanying notes to financial statements. 47 Nuveen Virginia Dividend Advantage Municipal Fund (NGB) Portfolio of INVESTMENTS May 31, 2006 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER STAPLES - 4.8% (3.2% OF TOTAL INVESTMENTS) Guam Economic Development Authority, Tobacco Settlement Asset-Backed Bonds, Series 2001A: $ 85 5.000%, 5/15/22 5/11 at 100.00 Baa3 $ 85,967 850 5.400%, 5/15/31 5/11 at 100.00 Baa3 858,985 Tobacco Settlement Financing Corporation of Virginia, Tobacco Settlement Asset-Backed Bonds, Series 2005: 550 5.250%, 6/01/19 6/15 at 100.00 BBB 558,074 725 5.500%, 6/01/26 6/15 at 100.00 BBB 741,262 - ------------------------------------------------------------------------------------------------------------------------------------ 2,210 Total Consumer Staples 2,244,288 - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 14.0% (9.4% OF TOTAL INVESTMENTS) 500 Danville Industrial Development Authority, Virginia, Educational 3/11 at 102.00 N/R 506,475 Facilities Revenue Bonds, Averett University, Series 2001, 6.000%, 3/15/22 500 Prince William County Industrial Development Authority, 10/13 at 101.00 A3 518,730 Virginia, Educational Facilities Revenue Bonds, Catholic Diocese of Arlington, Series 2003, 5.500%, 10/01/33 850 Prince William County Park Authority, Virginia, Park Facilities 10/09 at 101.00 A3 902,360 Revenue Refunding and Improvement Bonds, Series 1999, 6.000%, 10/15/28 Puerto Rico Industrial, Tourist, Educational, Medical and Environmental Control Facilities Financing Authority, Higher Education Revenue Bonds, Ana G. Mendez University System, Series 1999: 160 5.375%, 2/01/19 2/09 at 101.00 BBB- 163,125 320 5.375%, 2/01/29 2/09 at 101.00 BBB- 323,722 330 Rockbridge County Industrial Development Authority, Virginia, No Opt. Call B2 325,159 Horse Center Revenue Refunding Bonds, Series 2001B, 6.125%, 7/15/11 1,000 Rockbridge County Industrial Development Authority, Virginia, 7/11 at 100.00 B2 1,000,790 Horse Center Revenue Refunding Bonds, Series 2001C, 6.850%, 7/15/21 160 The Rector and Visitors of the University of Virginia, General 6/15 at 100.00 AAA 169,696 Revenue Bonds, Series 2005, 5.000%, 6/01/18 1,325 Virginia College Building Authority, Educational Facilities 9/10 at 100.00 AA+ 1,376,132 Revenue Bonds, Public Higher Education Financing Program, Series 2000A, 5.000%, 9/01/17 700 Virginia College Building Authority, Educational Facilities No Opt. Call Aa1 748,090 Revenue Bonds, Public Higher Education Financing Program, Series 2004B, 5.000%, 9/01/13 500 Virginia College Building Authority, Educational Facilities 7/08 at 101.00 AA 510,590 Revenue Refunding Bonds, Marymount University, Series 1998, 5.100%, 7/01/18 - RAAI Insured - ------------------------------------------------------------------------------------------------------------------------------------ 6,345 Total Education and Civic Organizations 6,544,869 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTH CARE - 11.0% (7.3% OF TOTAL INVESTMENTS) 100 Fairfax County Industrial Development Authority, Virginia, No Opt. Call AA+ 104,652 Hospital Revenue Refunding Bonds, Inova Health System, Series 1993A, 5.000%, 8/15/23 1,000 Fauquier County Industrial Development Authority, Virginia, 10/12 at 102.00 AA 1,050,870 Hospital Revenue Bonds, Fauquier Hospital, Series 2002, 5.250%, 10/01/25 - RAAI Insured 1,500 Fredericksburg Industrial Development Authority, Virginia, 6/07 at 102.00 AAA 1,549,215 Hospital Facilities Revenue Refunding Bonds, MediCorp Health System Obligated Group, Series 1996, 5.250%, 6/15/16 - AMBAC Insured 500 Fredericksburg Industrial Development Authority, Virginia, 6/12 at 100.00 A3 505,680 Revenue Bonds, MediCorp Health System, Series 2002B, 5.125%, 6/15/33 500 Henrico County Economic Development Authority, Virginia, 11/12 at 100.00 A- 519,575 Revenue Bonds, Bon Secours Health System Inc., Series 2002A, 5.600%, 11/15/30 48 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HEALTH CARE (continued) $ 525 Manassas Industrial Development Authority, Virginia, Hospital 4/13 at 100.00 A2 $ 539,359 Revenue Bonds, Prince William Hospital, Series 2002, 5.250%, 4/01/33 800 Norton Industrial Development Authority, Virginia, Hospital 12/11 at 101.00 A 852,328 Revenue Refunding and Improvement Bonds, Norton Community Hospital, Series 2001, 6.000%, 12/01/22 - ACA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 4,925 Total Health Care 5,121,679 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 4.4% (2.9% OF TOTAL INVESTMENTS) 1,000 Arlington County Industrial Development Authority, Virginia, 11/11 at 102.00 AAA 1,018,770 Multifamily Housing Mortgage Revenue Bonds, Arlington View Terrace Apartments, Series 2001, 5.150%, 11/01/31 (Mandatory put 11/01/19) (Alternative Minimum Tax) 1,000 Virginia Housing Development Authority, Rental Housing Bonds, 10/10 at 100.00 AA+ 1,031,660 Series 2000G, 5.625%, 10/01/20 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 2,000 Total Housing/Multifamily 2,050,430 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 3.5% (2.3% OF TOTAL INVESTMENTS) 1,000 Virginia Housing Development Authority, Commonwealth 7/11 at 100.00 AAA 1,025,090 Mortgage Bonds, Series 2001H-1, 5.350%, 7/01/31 - MBIA Insured 600 Virginia Housing Development Authority, Commonwealth 1/15 at 100.00 AAA 584,562 Mortgage Bonds, Series 2005C-C2, 4.750%, 10/01/32 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 1,600 Total Housing/Single Family 1,609,652 - ------------------------------------------------------------------------------------------------------------------------------------ INDUSTRIALS - 0.2% (0.1% OF TOTAL INVESTMENTS) 50 Charles County Industrial Development Authority, Virginia, No Opt. Call BBB 50,941 Solid Waste Disposal Facility Revenue Refunding Bonds, USA Waste of Virginia Inc., Series 1999, 4.875%, 2/01/09 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ LONG-TERM CARE - 4.4% (3.0% OF TOTAL INVESTMENTS) 500 Albemarle County Industrial Development Authority, Virginia, 1/12 at 100.00 N/R 516,675 Residential Care Facility Revenue Bonds, Westminster Canterbury of the Blue Ridge First Mortgage, Series 2001, 6.200%, 1/01/31 350 Chesterfield County Health Center Commission, Virginia, 12/15 at 100.00 N/R 347,648 Mortgage Revenue Bonds, Lucy Corr Village, Series 2005, 5.625%, 12/01/39 650 James City County Industrial Development Authority, Virginia, 3/12 at 101.00 N/R 685,653 Residential Care Facility First Mortgage Revenue Refunding Bonds, Williamsburg Landing Inc., Series 2003A, 6.000%, 3/01/23 350 Virginia Beach Development Authority, Virginia, Residential 11/15 at 100.00 N/R 348,047 Care Facility Mortgage Revenue Bonds, Westminster Canterbury on Chesapeake Bay, Series 2005, 5.000%, 11/01/22 175 Winchester Industrial Development Authority, Virginia, 1/15 at 100.00 N/R 175,870 Residential Care Facility Revenue Bonds, Westminster- Canterbury of Winchester Inc., Series 2005A, 5.200%, 1/01/27 - ------------------------------------------------------------------------------------------------------------------------------------ 2,025 Total Long-Term Care 2,073,893 - ------------------------------------------------------------------------------------------------------------------------------------ MATERIALS - 1.7% (1.2% OF TOTAL INVESTMENTS) 100 Bedford County Industrial Development Authority, Virginia, 2/08 at 102.00 B2 98,083 Industrial Development Revenue Refunding Bonds, Nekoosa Packaging Corporation, Series 1998, 5.600%, 12/01/25 (Alternative Minimum Tax) (5) 20 Bedford County Industrial Development Authority, Virginia, 12/09 at 101.00 B2 20,584 Industrial Development Revenue Refunding Bonds, Nekoosa Packaging Corporation, Series 1999A, 6.550%, 12/01/25 (Alternative Minimum Tax) (5) 220 Goochland County Industrial Development Authority, Virginia, 12/08 at 101.00 B2 215,798 Industrial Development Revenue Refunding Bonds, Nekoosa Packaging Corporation Project, Series 1998, 5.650%, 12/01/25 (Alternative Minimum Tax) (5) 500 Hopewell Industrial Development Authority, Virginia, No Opt. Call CCC+ 479,240 Environmental Improvement Revenue Bonds, Smurfit Stone Container Corporation, Series 2005, 5.250%, 6/01/15 - ------------------------------------------------------------------------------------------------------------------------------------ 840 Total Materials 813,705 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 31.4% (21.0% OF TOTAL INVESTMENTS) 330 Alexandria, Virginia, General Obligation Bonds, No Opt. Call AAA 353,790 Series 2004B, 5.000%, 6/15/13 49 Nuveen Virginia Dividend Advantage Municipal Fund (NGB) (continued) Portfolio of INVESTMENTS May 31, 2006 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL (continued) $ 500 Arlington County, Virginia, General Obligation Bonds, 5/15 at 100.00 AAA $ 536,070 Series 2005, 5.000%, 5/15/16 600 Arlington County, Virginia, General Obligation Bonds, 8/16 at 100.00 AAA 639,096 Series 2006, 5.000%, 8/01/20 2,000 Chesterfield County, Virginia, General Obligation Public 1/11 at 100.00 AAA 2,080,120 Improvement Bonds, Series 2001, 5.000%, 1/15/21 500 Henrico County, Virginia, General Obligation Bonds, 7/15 at 100.00 AAA 536,455 Series 2005, 5.000%, 7/15/16 3,310 Leesburg, Virginia, General Obligation Public Improvement 1/11 at 101.00 AAA 3,476,953 Bonds, Series 2000, 5.125%, 1/15/21 - FGIC Insured 660 Loudoun County, Virginia, General Obligation Public No Opt. Call AAA 709,665 Improvement Bonds, Series 2005A, 5.000%, 7/01/14 500 Loudoun County, Virginia, General Obligation Public 6/15 at 100.00 AAA 532,230 Improvement Bonds, Series 2005B, 5.000%, 6/01/18 845 Newport News, Virginia, General Obligation Bonds, 5/14 at 101.00 AA 900,508 Series 2004C, 5.000%, 5/01/16 320 Northern Mariana Islands, General Obligation Bonds, 6/10 at 100.00 A 335,568 Series 2000A, 6.000%, 6/01/20 - ACA Insured Richmond, Virginia, General Obligation Bonds, Series 2005A: 620 5.000%, 7/15/17 - FSA Insured 7/15 at 100.00 AAA 658,397 500 5.000%, 7/15/20 - FSA Insured 7/15 at 100.00 AAA 526,350 400 Suffolk, Virginia, General Obligation Bonds, Series 2005, No Opt. Call Aa2 429,004 5.000%, 12/01/15 400 Virginia Beach, Virginia, General Obligation Bonds, Series 2005, 1/16 at 100.00 AA+ 422,016 5.000%, 1/15/20 2,425 Virginia Beach, Virginia, General Obligation Public Improvement 6/11 at 101.00 AA+ 2,515,477 Bonds, Series 2001, 5.000%, 6/01/21 - ------------------------------------------------------------------------------------------------------------------------------------ 13,910 Total Tax Obligation/General 14,651,699 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 24.7% (16.5% OF TOTAL INVESTMENTS) 239 Bell Creek Community Development Authority, Virginia, Special 3/13 at 101.00 N/R 251,765 Assessment Bonds, Series 2003A, 6.750%, 3/01/22 500 Broad Street Community Development Authority, Virginia, 6/13 at 102.00 N/R 551,845 Revenue Bonds, Series 2003, 7.500%, 6/01/33 Buena Vista Public Recreational Facilities Authority, Virginia, Lease Revenue Bonds, Golf Course Project, Series 2005A: 120 5.250%, 7/15/25 - ACA Insured 7/15 at 100.00 A 124,034 95 5.500%, 7/15/35 - ACA Insured 7/15 at 100.00 A 98,475 800 Commonwealth Transportation Board of Virginia, Federal No Opt. Call AA 857,528 Highway Reimbursement Anticipation Notes, Series 2005, 5.000%, 9/28/15 1,000 Culpeper Industrial Development Authority, Virginia, Lease 1/15 at 100.00 AAA 1,042,830 Revenue Bonds, School Facilities Project, Series 2005, 5.000%, 1/01/22 - MBIA Insured 500 Fairfax County Economic Development Authority, Virginia, 5/16 at 100.00 AA+ 530,380 Lease Revenue Bonds, Joint Public Uses Community Project, Series 2006, 5.000%, 5/15/18 580 Prince William County, Virginia, Certificates of Participation, 6/15 at 100.00 Aaa 606,291 County Facilities, Series 2005, 5.000%, 6/01/20 - AMBAC Insured 1,000 Spotsylvania County Industrial Development Authority, Virginia, 8/13 at 100.00 AAA 1,050,860 Lease Revenue Bonds, School Facilities, Series 2003B, 5.125%, 8/01/23 - AMBAC Insured 960 Virgin Islands Public Finance Authority, Gross Receipts Taxes 10/10 at 101.00 BBB 1,052,966 Loan Note, Series 1999A, 6.375%, 10/01/19 500 Virginia Beach Development Authority, Public Facilities 5/15 at 100.00 AA 532,465 Revenue Bonds, Series 2005A, 5.000%, 5/01/16 500 Virginia College Building Authority, Educational Facilities 2/12 at 100.00 AA+ 518,655 Revenue Bonds, 21st Century College Program, Series 2002A, 5.000%, 2/01/22 350 Virginia Gateway Community Development Authority, 3/13 at 102.00 N/R 379,327 Prince William County, Special Assessment Bonds, Series 2003, 6.375%, 3/01/30 2,000 Virginia Public School Authority, School Financing Bonds, 8/11 at 101.00 AA+ 2,092,680 1997 Resolution, Series 2001A, 5.000%, 8/01/19 50 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED (continued) $ 800 Virginia Public School Authority, School Financing Bonds, No Opt. Call AA+ $ 853,592 1997 Resolution, Series 2004C, 5.000%, 8/01/13 345 Virginia Public School Authority, School Financing Bonds, 8/15 at 100.00 AA+ 365,883 1997 Resolution, Series 2005C, 5.000%, 8/01/17 560 Virginia Transportation Board, Transportation Revenue Bonds, 5/14 at 100.00 AA+ 595,862 U.S. Route 58 Corridor Development Program, Series 2004B, 5.000%, 5/15/15 - ------------------------------------------------------------------------------------------------------------------------------------ 10,849 Total Tax Obligation/Limited 11,505,438 - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 24.0% (16.1% OF TOTAL INVESTMENTS) 1,000 Capital Region Airport Authority, Richmond, Virginia, Revenue 7/15 at 100.00 AAA 1,050,220 Bonds, Richmond International Airport, Series 2005A, 5.000%, 7/01/18 - FSA Insured 1,000 Chesapeake Bay Bridge and Tunnel Commission, Virginia, No Opt. Call AAA 1,141,710 General Resolution Revenue Refunding Bonds, Series 1998, 5.500%, 7/01/25 - MBIA Insured 3,000 Metropolitan Washington D.C. Airports Authority, Airport 10/11 at 101.00 AAA 3,186,600 System Revenue Bonds, Series 2001A, 5.500%, 10/01/27 - MBIA Insured (Alternative Minimum Tax) 250 Metropolitan Washington D.C. Airports Authority, Airport 10/11 at 101.00 AAA 257,433 System Revenue Bonds, Series 2001B, 5.000%, 10/01/21 - MBIA Insured 1,500 Norfolk Airport Authority, Virginia, Airport Revenue Bonds, 7/11 at 100.00 AAA 1,537,935 Series 2001A, 5.125%, 7/01/31 - FGIC Insured 500 Norfolk, Virginia, Parking System Revenue Bonds, 2/15 at 100.00 AAA 523,045 Series 2005A, 5.000%, 2/01/23 - MBIA Insured Pocahontas Parkway Association, Virginia, Senior Lien Revenue Bonds, Route 895 Connector Toll Road, Series 1998A: 200 5.250%, 8/15/07 No Opt. Call BB- 202,430 200 5.500%, 8/15/28 8/08 at 102.00 BB- 206,682 500 Richmond Metropolitan Authority, Virginia, Revenue Refunding No Opt. Call AAA 552,040 Bonds, Expressway System, Series 2002, 5.250%, 7/15/22 - FGIC Insured 1,225 Virginia Resources Authority, Airports Revolving Fund 2/11 at 100.00 Aa2 1,279,978 Revenue Bonds, Series 2001A, 5.250%, 8/01/23 1,250 Virginia Resources Authority, Airports Revolving Fund Revenue 2/11 at 100.00 Aa2 1,266,925 Bonds, Series 2001B, 5.125%, 8/01/27 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 10,625 Total Transportation 11,204,998 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 17.6% (11.7% OF TOTAL INVESTMENTS) (4) 1,000 Bristol, Virginia, Utility System Revenue Refunding Bonds, 7/11 at 102.00 AAA 1,056,290 Series 2001, 5.000%, 7/15/21 - FSA Insured (ETM) 425 Loudoun County Industrial Development Authority, Virginia, 6/12 at 101.00 BBB (4) 475,176 Hospital Revenue Bonds, Loudoun Hospital Center, Series 2002A, 6.000%, 6/01/22 (Pre-refunded 6/01/12) 1,540 Loudoun County, Virginia, General Obligation Public 1/11 at 101.00 AAA 1,653,082 Improvement Bonds, Series 2001B, 5.250%, 1/01/20 (Pre-refunded 1/01/11) Puerto Rico Infrastructure Financing Authority, Special Obligation Bonds, Series 2000A: 1,500 5.500%, 10/01/32 10/10 at 101.00 AAA 1,600,320 1,500 5.500%, 10/01/40 10/10 at 101.00 AAA 1,599,705 415 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 432,596 Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20 (Pre-refunded 7/01/10) 1,300 Richmond, Virginia, General Obligation Refunding and Public 1/10 at 101.00 AAA 1,374,269 Improvement Bonds, Series 1999A, 5.125%, 1/15/24 (Pre-refunded 1/15/10) - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 7,680 Total U.S. Guaranteed 8,191,438 - ------------------------------------------------------------------------------------------------------------------------------------ 51 Nuveen Virginia Dividend Advantage Municipal Fund (NGB) (continued) Portfolio of INVESTMENTS May 31, 2006 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 3.5% (2.3% OF TOTAL INVESTMENTS) $ 1,000 Mecklenburg County Industrial Development Authority, 10/12 at 100.00 A3 $ 1,113,470 Virginia, Revenue Bonds, UAE Mecklenburg Cogeneration LP, Series 2002, 6.500%, 10/15/17 (Alternative Minimum Tax) 500 Richmond, Virginia, Public Utility Revenue Refunding Bonds, 1/12 at 100.00 AAA 513,395 Series 2002, 5.000%, 1/15/27 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 1,500 Total Utilities 1,626,865 - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 4.4% (3.0% OF TOTAL INVESTMENTS) 2,000 Henrico County, Virginia, Water and Sewer System Revenue 5/09 at 102.00 AA+ 2,066,120 Refunding Bonds, Series 1999, 5.000%, 5/01/22 - ------------------------------------------------------------------------------------------------------------------------------------ $ 66,559 Total Investments (cost $67,558,091) - 149.6% 69,756,015 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 1.9% 869,496 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (51.5)% (24,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 46,625,511 ==================================================================================================================== (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's or Moody's rating. Ratings below BBB by Standard & Poor's Group or Baa by Moody's Investor Service, Inc. are considered to be below investment grade. (4) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. (5) The issuer has received a preliminary adverse determination from the Internal Revenue Service (the "IRS") regarding the tax-exempt status of the bonds' coupon payments. The Fund will continue to treat coupon payments as tax-exempt income until such time that it is formally determined that the interest on the bonds should be treated as taxable. N/R Not rated. (ETM) Escrowed to maturity. See accompanying notes to financial statements. 52 Nuveen Virginia Dividend Advantage Municipal Fund 2 (NNB) Portfolio of INVESTMENTS May 31, 2006 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER STAPLES - 4.5% (3.0% OF TOTAL INVESTMENTS) Tobacco Settlement Financing Corporation of Virginia, Tobacco Settlement Asset-Backed Bonds, Series 2005: $ 1,050 5.250%, 6/01/19 6/15 at 100.00 BBB $ 1,065,414 2,700 5.500%, 6/01/26 6/15 at 100.00 BBB 2,760,561 - ------------------------------------------------------------------------------------------------------------------------------------ 3,750 Total Consumer Staples 3,825,975 - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 8.8% (6.0% OF TOTAL INVESTMENTS) 1,000 Fairfax County Economic Development Authority, Virginia, 9/09 at 101.00 Aaa 1,047,750 Revenue Bonds, National Wildlife Federation, Series 1999, 5.375%, 9/01/29 - MBIA Insured 1,000 Prince William County Industrial Development Authority, 10/13 at 101.00 A3 1,037,460 Virginia, Educational Facilities Revenue Bonds, Catholic Diocese of Arlington, Series 2003, 5.500%, 10/01/33 1,500 Puerto Rico Industrial, Tourist, Educational, Medical and 12/12 at 101.00 BBB- 1,542,375 Environmental Control Facilities Financing Authority, Higher Education Revenue Refunding Bonds, Ana G. Mendez University System, Series 2002, 5.375%, 12/01/21 500 Rockbridge County Industrial Development Authority, Virginia, 7/11 at 100.00 B2 500,395 Horse Center Revenue Refunding Bonds, Series 2001C, 6.850%, 7/15/21 275 The Rector and Visitors of the University of Virginia, General 6/15 at 100.00 AAA 291,665 Revenue Bonds, Series 2005, 5.000%, 6/01/18 1,000 Virginia College Building Authority, Educational Facilities No Opt. Call Aa1 1,068,700 Revenue Bonds, Public Higher Education Financing Program, Series 2004B, 5.000%, 9/01/13 2,000 Winchester Industrial Development Authority, Virginia, 10/08 at 102.00 AAA 2,089,640 Educational Facilities First Mortgage Revenue Bonds, Shenandoah University, Series 1998, 5.250%, 10/01/28 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 7,275 Total Education and Civic Organizations 7,577,985 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTH CARE - 17.6% (12.0% OF TOTAL INVESTMENTS) 1,500 Albemarle County Industrial Development Authority, Virginia, 10/12 at 100.00 A2 1,528,845 Hospital Revenue Bonds, Martha Jefferson Hospital, Series 2002, 5.250%, 10/01/35 3,000 Fauquier County Industrial Development Authority, Virginia, 10/12 at 102.00 AA 3,152,610 Hospital Revenue Bonds, Fauquier Hospital, Series 2002, 5.250%, 10/01/25 - RAAI Insured 675 Fredericksburg Industrial Development Authority, Virginia, 6/12 at 100.00 A3 682,668 Revenue Bonds, MediCorp Health System, Series 2002B, 5.125%, 6/15/33 1,000 Henrico County Economic Development Authority, Virginia, 11/12 at 100.00 A- 1,039,150 Revenue Bonds, Bon Secours Health System Inc., Series 2002A, 5.600%, 11/15/30 1,155 Manassas Industrial Development Authority, Virginia, Hospital 4/13 at 100.00 A2 1,186,589 Revenue Bonds, Prince William Hospital, Series 2002, 5.250%, 4/01/33 1,000 Medical College of Virginia Hospital Authority, General Revenue 7/08 at 102.00 AAA 1,044,980 Bonds, Series 1998, 5.250%, 7/01/14 - MBIA Insured 1,200 Norton Industrial Development Authority, Virginia, Hospital 12/11 at 101.00 A 1,278,492 Revenue Refunding and Improvement Bonds, Norton Community Hospital, Series 2001, 6.000%, 12/01/22 - ACA Insured 1,000 Prince William County Industrial Development Authority, 10/08 at 102.00 Aaa 1,032,820 Virginia, Hospital Facility Revenue Refunding Bonds, Potomac Hospital Corporation of Prince William, Series 1998, 5.000%, 10/01/18 - FSA Insured 3,915 Roanoke Industrial Development Authority, Virginia, Hospital 7/12 at 100.00 AAA 4,156,438 Revenue Bonds, Carilion Health System, Series 2002A, 5.500%, 7/01/20 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 14,445 Total Health Care 15,102,592 - ------------------------------------------------------------------------------------------------------------------------------------ 53 Nuveen Virginia Dividend Advantage Municipal Fund 2 (NNB) (continued) Portfolio of INVESTMENTS May 31, 2006 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 9.5% (6.5% OF TOTAL INVESTMENTS) $ 7,485 Virginia Housing Development Authority, Commonwealth 7/11 at 100.00 AAA $ 7,672,798 Mortgage Bonds, Series 2001H-1, 5.350%, 7/01/31 - MBIA Insured 500 Virginia Housing Development Authority, Commonwealth 1/15 at 100.00 AAA 487,135 Mortgage Bonds, Series 2005C-C2, 4.750%, 10/01/32 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 7,985 Total Housing/Single Family 8,159,933 - ------------------------------------------------------------------------------------------------------------------------------------ LONG-TERM CARE - 3.7% (2.6% OF TOTAL INVESTMENTS) 165 Albemarle County Industrial Development Authority, Virginia, 1/12 at 100.00 N/R 170,503 Residential Care Facility Revenue Bonds, Westminster Canterbury of the Blue Ridge First Mortgage, Series 2001, 6.200%, 1/01/31 650 Chesterfield County Health Center Commission, Virginia, 12/15 at 100.00 N/R 645,632 Mortgage Revenue Bonds, Lucy Corr Village, Series 2005, 5.625%, 12/01/39 1,350 James City County Industrial Development Authority, Virginia, 3/12 at 101.00 N/R 1,424,048 Residential Care Facility First Mortgage Revenue Refunding Bonds, Williamsburg Landing Inc., Series 2003A, 6.000%, 3/01/23 650 Virginia Beach Development Authority, Virginia, Residential 11/15 at 100.00 N/R 646,373 Care Facility Mortgage Revenue Bonds, Westminster Canterbury on Chesapeake Bay, Series 2005, 5.000%, 11/01/22 325 Winchester Industrial Development Authority, Virginia, 1/15 at 100.00 N/R 326,615 Residential Care Facility Revenue Bonds, Westminster- Canterbury of Winchester Inc., Series 2005A, 5.200%, 1/01/27 - ------------------------------------------------------------------------------------------------------------------------------------ 3,140 Total Long-Term Care 3,213,171 - ------------------------------------------------------------------------------------------------------------------------------------ MATERIALS - 1.9% (1.2% OF TOTAL INVESTMENTS) 165 Bedford County Industrial Development Authority, Virginia, 2/08 at 102.00 B2 161,837 Industrial Development Revenue Refunding Bonds, Nekoosa Packaging Corporation, Series 1998, 5.600%, 12/01/25 (Alternative Minimum Tax) (5) 460 Goochland County Industrial Development Authority, Virginia, 12/08 at 101.00 B2 451,214 Industrial Development Revenue Refunding Bonds, Nekoosa Packaging Corporation Project, Series 1998, 5.650%, 12/01/25 (Alternative Minimum Tax) (5) 1,000 Hopewell Industrial Development Authority, Virginia, No Opt. Call CCC+ 958,480 Environmental Improvement Revenue Bonds, Smurfit Stone Container Corporation, Series 2005, 5.250%, 6/01/15 - ------------------------------------------------------------------------------------------------------------------------------------ 1,625 Total Materials 1,571,531 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 37.5% (25.6% OF TOTAL INVESTMENTS) 600 Alexandria, Virginia, General Obligation Bonds, Series 2004B, No Opt. Call AAA 643,254 5.000%, 6/15/13 1,000 Arlington County, Virginia, General Obligation Bonds, 5/15 at 100.00 AAA 1,072,140 Series 2005, 5.000%, 5/15/16 500 Arlington County, Virginia, General Obligation Bonds, 8/16 at 100.00 AAA 532,580 Series 2006, 5.000%, 8/01/20 1,750 Chesapeake, Virginia, General Obligation Bonds, Series 2001, 12/11 at 100.00 AA 1,894,795 5.500%, 12/01/16 1,730 Loudoun County, Virginia, General Obligation Public Improvement 11/11 at 101.00 AAA 1,765,517 Bonds, Series 2001C, 4.500%, 11/01/17 95 Loudoun County, Virginia, General Obligation Public Improvement 5/12 at 100.00 AAA 100,890 Bonds, Series 2002A, 5.250%, 5/01/22 1,200 Loudoun County, Virginia, General Obligation Public Improvement No Opt. Call AAA 1,290,300 Bonds, Series 2005A, 5.000%, 7/01/14 1,000 Loudoun County, Virginia, General Obligation Public Improvement 6/15 at 100.00 AAA 1,064,460 Bonds, Series 2005B, 5.000%, 6/01/18 1,840 Newport News, Virginia, General Obligation Bonds, General 7/13 at 100.00 AA 1,918,439 Improvement and Water Projects, Series 2002A, 5.000%, 7/01/20 1,000 Newport News, Virginia, General Obligation Bonds, 11/13 at 100.00 AA 1,038,860 Series 2003B, 5.000%, 11/01/22 565 Portsmouth, Virginia, General Obligation Public Utility Refunding 6/08 at 100.00 AAA 576,085 Bonds, Series 2001B, 5.000%, 6/01/21 - FGIC Insured Powhatan County, Virginia, General Obligation Bonds, Series 2001: 660 5.000%, 1/15/23 - AMBAC Insured 1/11 at 101.00 AAA 684,057 1,000 5.000%, 1/15/27 - AMBAC Insured 1/11 at 101.00 AAA 1,025,290 1,000 Richmond, Virginia, General Obligation Bonds, Series 2004A, 7/14 at 100.00 AAA 1,047,860 5.000%, 7/15/21 - FSA Insured 54 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL (continued) $ 1,000 Richmond, Virginia, General Obligation Bonds, Series 2005A, 7/15 at 100.00 AAA $ 1,052,700 5.000%, 7/15/20 - FSA Insured Roanoke, Virginia, General Obligation Public Improvement Bonds, Series 2002A: 2,400 5.000%, 10/01/18 10/12 at 101.00 AA 2,532,672 2,435 5.000%, 10/01/19 10/12 at 101.00 AA 2,562,375 1,280 Roanoke, Virginia, General Obligation Public Improvement 10/12 at 101.00 AAA 1,352,256 Bonds, Series 2002B, 5.000%, 10/01/15 - FGIC Insured (Alternative Minimum Tax) Salem, Virginia, General Obligation Public Improvement Bonds, Series 2002: 1,145 5.375%, 1/01/21 1/12 at 100.00 Aa3 1,217,158 1,200 5.375%, 1/01/22 1/12 at 100.00 Aa3 1,275,624 1,260 5.375%, 1/01/23 1/12 at 100.00 Aa3 1,339,405 1,325 5.375%, 1/01/24 1/12 at 100.00 Aa3 1,408,502 1,000 Staunton, Virginia, General Obligation Bonds, Series 2004, 2/14 at 101.00 AAA 1,145,350 6.250%, 2/01/25 - AMBAC Insured 600 Virginia Beach, Virginia, General Obligation Bonds, Series 2005, 1/16 at 100.00 AA+ 633,024 5.000%, 1/15/20 1,500 Virginia Beach, Virginia, General Obligation Public Improvement 6/11 at 101.00 AA+ 1,568,910 Bonds, Series 2001, 5.000%, 6/01/19 1,420 Virginia Beach, Virginia, General Obligation Refunding and 3/12 at 100.00 AA+ 1,483,304 Public Improvement Bonds, Series 2002, 5.000%, 3/01/21 - ------------------------------------------------------------------------------------------------------------------------------------ 30,505 Total Tax Obligation/General 32,225,807 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 20.3% (13.8% OF TOTAL INVESTMENTS) 441 Bell Creek Community Development Authority, Virginia, Special 3/13 at 101.00 N/R 464,554 Assessment Bonds, Series 2003A, 6.750%, 3/01/22 1,000 Broad Street Community Development Authority, Virginia, 6/13 at 102.00 N/R 1,103,690 Revenue Bonds, Series 2003, 7.500%, 6/01/33 Buena Vista Public Recreational Facilities Authority, Virginia, Lease Revenue Bonds, Golf Course Project, Series 2005A: 210 5.250%, 7/15/25 - ACA Insured 7/15 at 100.00 A 217,060 165 5.500%, 7/15/35 - ACA Insured 7/15 at 100.00 A 171,036 800 Commonwealth Transportation Board of Virginia, Federal No Opt. Call AA 857,528 Highway Reimbursement Anticipation Notes, Series 2005, 5.000%, 9/28/15 800 Fairfax County Economic Development Authority, Virginia, 5/16 at 100.00 AA+ 848,608 Lease Revenue Bonds, Joint Public Uses Community Project, Series 2006, 5.000%, 5/15/18 1,800 Loudoun County Industrial Development Authority, Virginia, 3/13 at 100.00 AA+ 1,882,044 Lease Revenue Refunding Bonds, Public Facility Project, Series 2003, 5.000%, 3/01/19 400 Puerto Rico Public Buildings Authority, Guaranteed Government 7/12 at 100.00 BBB 410,656 Facilities Revenue Refunding Bonds, Series 2002D, 5.250%, 7/01/27 455 Puerto Rico Public Finance Corporation, Commonwealth 2/12 at 100.00 BBB- 471,175 Appropriation Bonds, Series 2002E, 5.500%, 8/01/29 1,000 Spotsylvania County Industrial Development Authority, Virginia, 8/13 at 100.00 AAA 1,050,860 Lease Revenue Bonds, School Facilities, Series 2003B, 5.125%, 8/01/23 - AMBAC Insured 800 Virginia Beach Development Authority, Public Facilities Revenue 5/15 at 100.00 AA 851,944 Bonds, Series 2005A, 5.000%, 5/01/16 1,790 Virginia College Building Authority, Educational Facilities 2/12 at 100.00 AA+ 1,856,785 Revenue Bonds, 21st Century College Program, Series 2002A, 5.000%, 2/01/22 690 Virginia Gateway Community Development Authority, 3/13 at 102.00 N/R 747,815 Prince William County, Special Assessment Bonds, Series 2003, 6.375%, 3/01/30 2,540 Virginia Public School Authority, School Financing Bonds, 8/11 at 101.00 AA+ 2,657,704 1997 Resolution, Series 2001B, 5.000%, 8/01/19 700 Virginia Public School Authority, School Financing Bonds, No Opt. Call AA+ 746,893 1997 Resolution, Series 2004C, 5.000%, 8/01/13 570 Virginia Public School Authority, School Financing Bonds, 8/15 at 100.00 AA+ 604,502 1997 Resolution, Series 2005C, 5.000%, 8/01/17 55 Nuveen Virginia Dividend Advantage Municipal Fund 2 (NNB) (continued) Portfolio of INVESTMENTS May 31, 2006 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED (continued) $ 1,265 Virginia Resources Authority, Infrastructure Revenue Bonds, 5/10 at 101.00 AA $ 1,294,538 Pooled Loan Bond Program, Series 2001D, 5.000%, 5/01/26 1,100 Virginia Transportation Board, Transportation Revenue Bonds, 5/14 at 100.00 AA+ 1,170,444 U.S. Route 58 Corridor Development Program, Series 2004B, 5.000%, 5/15/15 - ------------------------------------------------------------------------------------------------------------------------------------ 16,526 Total Tax Obligation/Limited 17,407,836 - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 4.1% (2.8% OF TOTAL INVESTMENTS) 1,000 Metropolitan Washington D.C. Airports Authority, Airport System 10/12 at 100.00 AAA 1,023,200 Revenue Bonds, Series 2002A, 5.125%, 10/01/26 - FGIC Insured (Alternative Minimum Tax) 1,500 Norfolk, Virginia, Parking System Revenue Bonds, Series 2005A, 2/15 at 100.00 AAA 1,569,135 5.000%, 2/01/23 - MBIA Insured Pocahontas Parkway Association, Virginia, Senior Lien Revenue Bonds, Route 895 Connector Toll Road, Series 1998A: 300 5.250%, 8/15/07 No Opt. Call BB- 303,645 325 5.500%, 8/15/28 8/08 at 102.00 B 335,858 300 Virginia Resources Authority, Airports Revolving Fund Revenue 2/11 at 100.00 Aa2 315,450 Bonds, Series 2001A, 5.250%, 8/01/17 - ------------------------------------------------------------------------------------------------------------------------------------ 3,425 Total Transportation 3,547,288 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 17.1% (11.7% OF TOTAL INVESTMENTS) (4) 1,000 Bristol, Virginia, General Obligation Utility System Revenue No Opt. Call AAA 1,073,050 Bonds, Series 2002, 5.000%, 11/01/24 - FSA Insured (ETM) 195 Fairfax County Water Authority, Virginia, Water Revenue 4/12 at 100.00 AAA 206,973 Refunding Bonds, Series 2002, 5.000%, 4/01/27 (Pre-refunded 4/01/12) Loudoun County Industrial Development Authority, Virginia, Hospital Revenue Bonds, Loudoun Hospital Center, Series 2002A: 250 6.000%, 6/01/22 (Pre-refunded 6/01/12) 6/12 at 101.00 BBB (4) 279,515 600 6.100%, 6/01/32 (Pre-refunded 6/01/12) 6/12 at 101.00 BBB (4) 674,016 445 Loudoun County, Virginia, General Obligation Public Improvement 5/12 at 100.00 AAA 478,936 Bonds, Series 2002A, 5.250%, 5/01/22 (Pre-refunded 5/01/12) 2,750 Puerto Rico Infrastructure Financing Authority, Special Obligation 10/10 at 101.00 AAA 2,932,793 Bonds, Series 2000A, 5.500%, 10/01/40 1,100 Puerto Rico Public Buildings Authority, Guaranteed Government 7/12 at 100.00 BBB (4) 1,178,771 Facilities Revenue Refunding Bonds, Series 2002D, 5.250%, 7/01/27 (Pre-refunded 7/01/12) 1,345 Puerto Rico Public Finance Corporation, Commonwealth 2/12 at 100.00 Aaa 1,458,935 Appropriation Bonds, Series 2002E, 5.500%, 8/01/29 (Pre-refunded 2/01/12) 500 Virginia Beach, Virginia, Water and Sewerage System Revenue 8/10 at 100.00 AA (4) 527,490 Bonds, Series 2000, 5.125%, 8/01/14 (Pre-refunded 8/01/10) 500 Virginia Public Building Authority, Public Facilities Revenue 8/10 at 100.00 AA+ (4) 539,455 Bonds, Series 2000A, 5.750%, 8/01/20 (Pre-refunded 8/01/10) 1,710 Virginia Transportation Board, Transportation Revenue Bonds, 5/11 at 100.00 AA+ (4) 1,808,188 Northern Virginia Transportation District Program, Series 2001A, 5.000%, 5/15/26 (Pre-refunded 5/15/11) Virginia Transportation Board, Transportation Revenue Bonds, U.S. Route 58 Corridor Development Program, Series 2001B: 1,705 5.000%, 5/15/22 (Pre-refunded 5/15/11) 5/11 at 100.00 AA+ (4) 1,802,901 1,665 5.000%, 5/15/23 (Pre-refunded 5/15/11) 5/11 at 100.00 AA+ (4) 1,760,604 - ------------------------------------------------------------------------------------------------------------------------------------ 13,765 Total U.S. Guaranteed 14,721,627 - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 6.4% (4.4% OF TOTAL INVESTMENTS) 2,000 Mecklenburg County Industrial Development Authority, Virginia, 10/12 at 100.00 A3 2,226,940 Revenue Bonds, UAE Mecklenburg Cogeneration LP, Series 2002, 6.500%, 10/15/17 (Alternative Minimum Tax) 3,125 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/10 at 101.00 AAA 3,287,750 Series 2000HH, 5.250%, 7/01/29 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 5,125 Total Utilities 5,514,690 - ------------------------------------------------------------------------------------------------------------------------------------ 56 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 15.3% (10.4% OF TOTAL INVESTMENTS) $ 805 Fairfax County Water Authority, Virginia, Water Revenue 4/12 at 100.00 AAA $ 828,522 Refunding Bonds, Series 2002, 5.000%, 4/01/27 Henry County Public Service Authority, Virginia, Water and Sewerage Revenue Refunding Bonds, Series 2001: 1,000 5.500%, 11/15/17 - FSA Insured No Opt. Call AAA 1,111,080 3,000 5.500%, 11/15/19 - FSA Insured No Opt. Call AAA 3,363,210 Norfolk, Virginia, Water Revenue Refunding Bonds, Series 2001: 1,130 5.000%, 11/01/18 - FGIC Insured 11/11 at 100.00 AAA 1,182,149 1,190 5.000%, 11/01/19 - FGIC Insured 11/11 at 100.00 AAA 1,244,918 1,450 5.000%, 11/01/23 - FGIC Insured 11/11 at 100.00 AAA 1,504,491 1,525 5.000%, 11/01/24 - FGIC Insured 11/11 at 100.00 AAA 1,580,510 2,250 Virginia Resources Authority, Water and Sewerage System 5/11 at 101.00 AA 2,302,043 Revenue Bonds, Caroline County Public Improvements Project, Series 2001, 5.000%, 5/01/32 - ------------------------------------------------------------------------------------------------------------------------------------ 12,350 Total Water and Sewer 13,116,923 - ------------------------------------------------------------------------------------------------------------------------------------ $ 119,916 Total Investments (cost $121,203,298) - 146.7% 125,985,358 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.2% 1,901,648 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (48.9)% (42,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 85,887,006 ==================================================================================================================== (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's or Moody's rating. Ratings below BBB by Standard & Poor's Group or Baa by Moody's Investor Service, Inc. are considered to be below investment grade. (4) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. (5) The issuer has received a preliminary adverse determination from the Internal Revenue Service (the "IRS") regarding the tax-exempt status of the bonds' coupon payments. The Fund will continue to treat coupon payments as tax-exempt income until such time that it is formally determined that the interest on the bonds should be treated as taxable. N/R Not rated. (ETM) Escrowed to maturity. See accompanying notes to financial statements. 57 Statement of ASSETS AND LIABILITIES May 31, 2006 MARYLAND MARYLAND MARYLAND MARYLAND PREMIUM DIVIDEND DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NMY) (NFM) (NZR) (NWI) - ------------------------------------------------------------------------------------------------------------------------------------ ASSETS Investments, at value (cost $223,010,894, $88,532,004, $89,550,637 and $112,293,408, respectively) $229,126,363 $90,761,854 $91,872,890 $113,541,648 Cash -- 185,781 390,285 435,080 Receivables: Interest 3,950,158 1,588,068 1,511,394 1,679,591 Investments sold 1,185,690 275,000 -- -- Unrealized appreciation on forward swaps -- -- -- 211,923 Other assets 7,657 7,814 4,528 4,611 - ------------------------------------------------------------------------------------------------------------------------------------ Total assets 234,269,868 92,818,517 93,779,097 115,872,853 - ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES Cash overdraft 1,116,298 -- -- -- Accrued expenses: Management fees 124,974 30,582 26,923 31,294 Other 57,473 21,095 21,065 29,682 Preferred share dividends payable 37,266 4,894 4,895 2,650 - ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 1,336,011 56,571 52,883 63,626 - ------------------------------------------------------------------------------------------------------------------------------------ Preferred shares, at liquidation value 79,100,000 32,000,000 32,000,000 39,000,000 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares $153,833,857 $60,761,946 $61,726,214 $ 76,809,227 ==================================================================================================================================== Common shares outstanding 10,631,702 4,171,579 4,181,768 5,360,346 ==================================================================================================================================== Net asset value per Common share outstanding (net assets applicable to Common shares, divided by Common shares outstanding) $ 14.47 $ 14.57 $ 14.76 $ 14.33 ==================================================================================================================================== NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF: - ------------------------------------------------------------------------------------------------------------------------------------ Common shares, $.01 par value per share $ 106,317 $ 41,716 $ 41,818 $ 53,603 Paid-in surplus 147,671,172 59,183,089 59,319,733 75,655,887 Undistributed (Over-distribution of) net investment income 266,281 52,442 187,990 (84,856) Accumulated net realized gain (loss) from investments and derivative transactions (325,382) (745,151) (145,580) (275,570) Net unrealized appreciation (depreciation) of investments and derivative transactions 6,115,469 2,229,850 2,322,253 1,460,163 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares $153,833,857 $60,761,946 $61,726,214 $ 76,809,227 ==================================================================================================================================== Authorized shares: Common Unlimited Unlimited Unlimited Unlimited Preferred Unlimited Unlimited Unlimited Unlimited ==================================================================================================================================== See accompanying notes to financial statements. 58 VIRGINIA VIRGINIA VIRGINIA PREMIUM DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 (NPV) (NGB) (NNB) - ------------------------------------------------------------------------------------------------------------------------------------ ASSETS Investments, at value (cost $186,748,162, $67,558,091 and $121,203,298, respectively) $193,121,320 $69,756,015 $125,985,358 Cash 196,831 -- 205,313 Receivables: Interest 3,086,029 1,091,042 1,763,572 Investments sold 185,000 70,000 -- Unrealized appreciation on forward swaps -- -- -- Other assets 9,357 7,744 6,305 - ------------------------------------------------------------------------------------------------------------------------------------ Total assets 196,598,537 70,924,801 127,960,548 - ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES Cash overdraft -- 244,488 -- Accrued expenses: Management fees 105,626 23,278 36,677 Other 44,532 18,315 30,423 Preferred share dividends payable 21,881 13,209 6,442 - ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 172,039 299,290 73,542 - ------------------------------------------------------------------------------------------------------------------------------------ Preferred shares, at liquidation value 63,800,000 24,000,000 42,000,000 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares $132,626,498 $46,625,511 $ 85,887,006 ==================================================================================================================================== Common shares outstanding 8,909,930 3,126,624 5,717,565 ==================================================================================================================================== Net asset value per Common share outstanding (net assets applicable to Common shares, divided by Common shares outstanding) $ 14.89 $ 14.91 $ 15.02 ==================================================================================================================================== NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF: - ------------------------------------------------------------------------------------------------------------------------------------ Common shares, $.01 par value per share $ 89,099 $ 31,266 $ 57,176 Paid-in surplus 125,433,889 44,335,492 81,140,511 Undistributed (Over-distribution of) net investment income 501,200 132,605 163,523 Accumulated net realized gain (loss) from investments and derivative transactions 229,152 (71,776) (256,264) Net unrealized appreciation (depreciation) of investments and derivative transactions 6,373,158 2,197,924 4,782,060 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares $132,626,498 $46,625,511 $ 85,887,006 ==================================================================================================================================== Authorized shares: Common Unlimited Unlimited Unlimited Preferred Unlimited Unlimited Unlimited ==================================================================================================================================== See accompanying notes to financial statements. 59 Statement of OPERATIONS Year Ended May 31, 2006 MARYLAND MARYLAND MARYLAND MARYLAND PREMIUM DIVIDEND DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NMY) (NFM) (NZR) (NWI) - ------------------------------------------------------------------------------------------------------------------------------------ INVESTMENT INCOME $11,406,310 $ 4,480,097 $ 4,415,973 $ 5,182,865 - ------------------------------------------------------------------------------------------------------------------------------------ EXPENSES Management fees 1,494,390 600,193 608,030 748,541 Preferred shares - auction fees 197,976 80,091 80,123 97,611 Preferred shares - dividend disbursing agent fees 20,000 10,000 10,000 10,000 Shareholders' servicing agent fees and expenses 27,494 2,413 1,698 1,427 Custodian's fees and expenses 62,923 28,936 28,887 36,596 Trustees' fees and expenses 4,995 1,990 2,051 2,488 Professional fees 17,829 12,620 12,587 13,600 Shareholders' reports - printing and mailing expenses 41,343 16,515 17,001 22,015 Stock exchange listing fees 10,237 355 355 456 Investor relations expense 26,860 11,852 12,070 14,297 Other expenses 17,686 12,960 12,702 13,322 - ------------------------------------------------------------------------------------------------------------------------------------ Total expenses before custodian fee credit and expense reimbursement 1,921,733 777,925 785,504 960,353 Custodian fee credit (24,444) (12,877) (13,247) (13,080) Expense reimbursement -- (266,219) (285,215) (374,535) - ------------------------------------------------------------------------------------------------------------------------------------ Net expenses 1,897,289 498,829 487,042 572,738 - ------------------------------------------------------------------------------------------------------------------------------------ Net investment income 9,509,021 3,981,268 3,928,931 4,610,127 - ------------------------------------------------------------------------------------------------------------------------------------ REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) from investments 83,005 (25,376) (1,124) 163,785 Net realized gain (loss) from forward swaps -- (62,612) (77,385) (75,241) Net realized gain (loss) from futures -- -- -- (156) Change in net unrealized appreciation (depreciation) of investments (6,030,163) (2,009,294) (2,456,188) (2,948,764) Change in net unrealized appreciation (depreciation) of forward swaps -- 64,747 98,762 406,799 - ------------------------------------------------------------------------------------------------------------------------------------ Net realized and unrealized gain (loss) (5,947,158) (2,032,535) (2,435,935) (2,453,577) - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO PREFERRED SHAREHOLDERS From net investment income (1,920,310) (790,032) (772,031) (978,804) From accumulated net realized gains (31,400) -- (14,225) -- - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Preferred shareholders (1,951,710) (790,032) (786,256) (978,804) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from operations $ 1,610,153 $ 1,158,701 $ 706,740 $ 1,177,746 ==================================================================================================================================== See accompanying notes to financial statements. 60 VIRGINIA VIRGINIA VIRGINIA PREMIUM DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 (NPV) (NGB) (NNB) - ------------------------------------------------------------------------------------------------------------------------------------ INVESTMENT INCOME $ 9,470,695 $ 3,426,052 $ 6,086,844 - ------------------------------------------------------------------------------------------------------------------------------------ EXPENSES Management fees 1,271,052 457,972 829,011 Preferred shares - auction fees 159,682 60,069 105,120 Preferred shares - dividend disbursing agent fees 20,000 10,000 10,000 Shareholders' servicing agent fees and expenses 23,449 1,497 1,824 Custodian's fees and expenses 49,681 24,740 34,612 Trustees' fees and expenses 4,301 1,457 2,763 Professional fees 17,335 12,518 14,038 Shareholders' reports - printing and mailing expenses 32,714 12,248 19,237 Stock exchange listing fees 10,268 266 485 Investor relations expense 23,814 8,249 14,580 Other expenses 16,717 11,813 14,071 - ------------------------------------------------------------------------------------------------------------------------------------ Total expenses before custodian fee credit and expense reimbursement 1,629,013 600,829 1,045,741 Custodian fee credit (26,759) (8,859) (19,466) Expense reimbursement -- (203,149) (389,150) - ------------------------------------------------------------------------------------------------------------------------------------ Net expenses 1,602,254 388,821 637,125 - ------------------------------------------------------------------------------------------------------------------------------------ Net investment income 7,868,441 3,037,231 5,449,719 - ------------------------------------------------------------------------------------------------------------------------------------ REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) from investments 1,639,045 255,078 147,265 Net realized gain (loss) from forward swaps -- -- (161,404) Net realized gain (loss) from futures -- -- -- Change in net unrealized appreciation (depreciation) of investments (7,073,360) (1,918,503) (3,264,225) Change in net unrealized appreciation (depreciation) of forward swaps -- -- 216,228 - ------------------------------------------------------------------------------------------------------------------------------------ Net realized and unrealized gain (loss) (5,434,315) (1,663,425) (3,062,136) - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO PREFERRED SHAREHOLDERS From net investment income (1,304,947) (541,517) (1,029,859) From accumulated net realized gains (231,433) -- (42,756) - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Preferred shareholders (1,536,380) (541,517) (1,072,615) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from operations $ 897,746 $ 832,289 $ 1,314,968 ==================================================================================================================================== See accompanying notes to financial statements. 61 Statement of CHANGES IN NET ASSETS MARYLAND PREMIUM MARYLAND DIVIDEND MARYLAND DIVIDEND INCOME (NMY) ADVANTAGE (NFM) ADVANTAGE 2 (NZR) ---------------------------- ----------------------------- ---------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 5/31/06 5/31/05 5/31/06 5/31/05 5/31/06 5/31/05 - ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 9,509,021 $ 9,757,516 $ 3,981,268 $ 4,077,418 $ 3,928,931 $ 3,931,942 Net realized gain (loss) from investments 83,005 795,306 (25,376) 114,678 (1,124) 274,944 Net realized gain (loss) from forward swaps -- -- (62,612) (186,945) (77,385) (171,422) Net realized gain (loss) from futures -- -- -- -- -- -- Change in net unrealized appreciation (depreciation) of investments (6,030,163) 9,023,910 (2,009,294) 3,306,967 (2,456,188) 3,746,058 Change in net unrealized appreciation (depreciation) of forward swaps -- -- 64,747 (64,747) 98,762 (98,762) Distributions to Preferred Shareholders: From net investment income (1,920,310) (1,044,071) (790,032) (417,536) (772,031) (392,360) From accumulated net realized gains (31,400) -- -- -- (14,225) (15,798) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from operations 1,610,153 18,532,661 1,158,701 6,829,835 706,740 7,274,602 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (8,311,346) (9,572,060) (3,532,953) (3,885,205) (3,484,393) (3,655,367) From accumulated net realized gains (260,035) -- -- -- (115,219) (256,385) - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (8,571,381) (9,572,060) (3,532,953) (3,885,205) (3,599,612) (3,911,752) - ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Common shares: Offering costs adjustments -- -- -- -- -- -- Net proceeds from shares issued to shareholders due to reinvestment of distributions 298,649 429,038 84,704 65,542 119,407 56,507 Preferred shares offering costs adjustments -- -- -- -- -- 16,302 - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from capital share transactions 298,649 429,038 84,704 65,542 119,407 72,809 - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares (6,662,579) 9,389,639 (2,289,548) 3,010,172 (2,773,465) 3,435,659 Net assets applicable to Common shares at the beginning of year 160,496,436 151,106,797 63,051,494 60,041,322 64,499,679 61,064,020 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of year $153,833,857 $160,496,436 $60,761,946 $63,051,494 $61,726,214 $64,499,679 ==================================================================================================================================== Undistributed (Over-distribution of) net investment income at the end of year $ 266,281 $ 989,129 $ 52,442 $ 395,654 $ 187,990 $ 516,056 ==================================================================================================================================== See accompanying notes to financial statements. 62 MARYLAND DIVIDEND VIRGINIA PREMIUM VIRGINIA DIVIDEND ADVANTAGE 3 (NWI) INCOME (NPV) ADVANTAGE (NGB) ---------------------------- ----------------------------- ---------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 5/31/06 5/31/05 5/31/06 5/31/05 5/31/06 5/31/05 - ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 4,610,127 $ 4,588,042 $ 7,868,441 $ 8,242,308 $ 3,037,231 $ 3,106,588 Net realized gain (loss) from investments 163,785 94,606 1,639,045 1,338,639 255,078 277,377 Net realized gain (loss) from forward swaps (75,241) (447,668) -- -- -- -- Net realized gain (loss) from futures (156) -- -- -- -- -- Change in net unrealized appreciation (depreciation) of investments (2,948,764) 5,755,731 (7,073,360) 6,847,395 (1,918,503) 3,250,753 Change in net unrealized appreciation (depreciation) of forward swaps 406,799 (194,876) -- -- -- -- Distributions to Preferred Shareholders: From net investment income (978,804) (514,154) (1,304,947) (765,695) (541,517) (282,554) From accumulated net realized gains -- (2,976) (231,433) -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from operations 1,177,746 9,278,705 897,746 15,662,647 832,289 6,352,164 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (3,826,714) (4,164,157) (7,081,332) (7,997,824) (2,732,873) (2,913,141) From accumulated net realized gains -- (40,734) (2,160,808) -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (3,826,714) (4,204,891) (9,242,140) (7,997,824) (2,732,873) (2,913,141) - ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Common shares: Offering costs adjustments -- -- -- -- -- -- Net proceeds from shares issued to shareholders due to reinvestment of distributions 15,363 -- 630,496 553,214 52,481 46,268 Preferred shares offering costs adjustments -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from capital share transactions 15,363 -- 630,496 553,214 52,481 46,268 - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares (2,633,605) 5,073,814 (7,713,898) 8,218,037 (1,848,103) 3,485,291 Net assets applicable to Common shares at the beginning of year 79,442,832 74,369,018 140,340,396 132,122,359 48,473,614 44,988,323 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of year $76,809,227 $79,442,832 $132,626,498 $140,340,396 $46,625,511 $48,473,614 ==================================================================================================================================== Undistributed (Over-distribution of) net investment income at the end of year $ (84,856) $ 110,535 $ 501,200 $ 1,047,355 $ 132,605 $ 370,691 ==================================================================================================================================== See accompanying notes to financial statements. 63 Statement of CHANGES IN NET ASSETS (continued) VIRGINIA DIVIDEND ADVANTAGE 2 (NNB) ---------------------------- YEAR ENDED YEAR ENDED 5/31/06 5/31/05 - ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 5,449,719 $ 5,449,338 Net realized gain (loss) from investments 147,265 886,193 Net realized gain (loss) from forward swaps (161,404) (378,231) Net realized gain (loss) from futures -- -- Change in net unrealized appreciation (depreciation) of investments (3,264,225) 6,118,300 Change in net unrealized appreciation (depreciation) of forward swaps 216,228 (216,228) Distributions to Preferred Shareholders: From net investment income (1,029,859) (505,130) From accumulated net realized gains (42,756) (60,997) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from operations 1,314,968 11,293,245 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (4,841,986) (5,047,084) From accumulated net realized gains (380,508) (1,070,956) - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (5,222,494) (6,118,040) - ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Common shares: Offering costs adjustments 10,292 -- Net proceeds from shares issued to shareholders due to reinvestment of distributions 148,139 202,523 Preferred shares offering costs adjustments 10,038 -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from capital share transactions 168,469 202,523 - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares (3,739,057) 5,377,728 Net assets applicable to Common shares at the beginning of year 89,626,063 84,248,335 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of year $85,887,006 $89,626,063 ==================================================================================================================================== Undistributed (Over-distribution of) net investment income at the end of year $ 163,523 $ 592,424 ==================================================================================================================================== See accompanying notes to financial statements. 64 Notes to FINANCIAL STATEMENTS 1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES The funds (the "Funds") covered in this report and their corresponding Common share stock exchange symbols are Nuveen Maryland Premium Income Municipal Fund (NMY), Nuveen Maryland Dividend Advantage Municipal Fund (NFM), Nuveen Maryland Dividend Advantage Municipal Fund 2 (NZR), Nuveen Maryland Dividend Advantage Municipal Fund 3 (NWI), Nuveen Virginia Premium Income Municipal Fund (NPV), Nuveen Virginia Dividend Advantage Municipal Fund (NGB) and Nuveen Virginia Dividend Advantage Municipal Fund 2 (NNB). Common shares of Maryland Premium Income (NMY) and Virginia Premium Income (NPV) are traded on the New York Stock Exchange while Common shares of Maryland Dividend Advantage (NFM), Maryland Dividend Advantage 2 (NZR), Maryland Dividend Advantage 3 (NWI), Virginia Dividend Advantage (NGB) and Virginia Dividend Advantage 2 (NNB) are traded on the American Stock Exchange. The Funds are registered under the Investment Company Act of 1940, as amended, as closed-end management investment companies. Each Fund seeks to provide current income exempt from both regular federal and designated state income taxes by investing primarily in a diversified portfolio of municipal obligations issued by state and local government authorities within a single state or certain U.S. territories. The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements in accordance with U.S. generally accepted accounting principles. Investment Valuation The prices of municipal bonds in each Fund's investment portfolio are provided by a pricing service approved by the Fund's Board of Trustees. When market price quotes are not readily available (which is usually the case for municipal securities), the pricing service establishes fair value based on yields or prices of municipal bonds of comparable quality, type of issue, coupon, maturity and rating, indications of value from securities dealers, evaluations of anticipated cash flows or collateral and general market conditions. Prices of forward swap contracts are also provided by an independent pricing service approved by each Fund's Board of Trustees. If the pricing service is unable to supply a price for a municipal bond or a forward swap contract, each Fund may use a market price or fair market value quote provided by a major broker/dealer in such investments. If it is determined that the market price or fair market value for an investment is unavailable or inappropriate, the Board of Trustees of the Funds, or its designee, may establish a fair value for the investment. Temporary investments in securities that have variable rate and demand features qualifying them as short-term investments are valued at amortized cost, which approximates market value. Investment Transactions Investment transactions are recorded on a trade date basis. Realized gains and losses from transactions are determined on the specific identification method. Investments purchased on a when-issued or delayed delivery basis may have extended settlement periods. Any investments so purchased are subject to market fluctuation during this period. The Funds have instructed the custodian to segregate assets with a current value at least equal to the amount of the when-issued/delayed delivery purchase commitments. At May 31, 2006, there were no such outstanding purchase commitments in any of the Funds. Investment Income Interest income, which includes the amortization of premiums and accretion of discounts for financial reporting purposes, is recorded on an accrual basis. Investment income also includes paydown gains and losses, if any. Income Taxes Each Fund is a separate taxpayer for federal income tax purposes. Each Fund intends to distribute substantially all net investment income and net capital gains to shareholders and to otherwise comply with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies. Therefore, no federal income tax provision is required. Furthermore, each Fund intends to satisfy conditions which will enable interest from municipal securities, which is exempt from regular federal and designated state income taxes, to retain such tax-exempt status when distributed to shareholders of the Funds. All monthly tax-exempt income dividends paid during the fiscal year ended May 31, 2006, have been designated Exempt Interest Dividends. Net realized capital gains and ordinary income distributions paid by the Funds are subject to federal taxation. Dividends and Distributions to Common Shareholders Dividends from tax-exempt net investment income are declared monthly. Net realized capital gains and/or market discount from investment transactions, if any, are distributed to shareholders not less frequently than annually. Furthermore, capital gains are distributed only to the extent they exceed available capital loss carryforwards. 65 Notes to FINANCIAL STATEMENTS (continued) Distributions to Common shareholders of tax-exempt net investment income, net realized capital gains and/or market discount, if any, are recorded on the ex-dividend date. The amount and timing of distributions are determined in accordance with federal income tax regulations, which may differ from U.S. generally accepted accounting principles. Preferred Shares The Funds have issued and outstanding Preferred shares, $25,000 stated value per share, as a means of effecting financial leverage. Each Fund's Preferred shares are issued in one or more Series. The dividend rate paid by the Funds on each Series is determined every seven days, pursuant to a dutch auction process overseen by the auction agent, and is payable at the end of each rate period. The number of Preferred shares outstanding, by Series and in total, for each Fund is as follows: MARYLAND MARYLAND MARYLAND MARYLAND PREMIUM DIVIDEND DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NMY) (NFM) (NZR) (NWI) - --------------------------------------------------------------------------------------------------------- Number of shares: Series M -- 1,280 -- -- Series T -- -- -- 1,560 Series W 1,404 -- -- -- Series TH 1,760 -- -- -- Series F -- -- 1,280 -- - --------------------------------------------------------------------------------------------------------- Total 3,164 1,280 1,280 1,560 ========================================================================================================= VIRGINIA VIRGINIA VIRGINIA PREMIUM DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 (NPV) (NGB) (NNB) - --------------------------------------------------------------------------------------------------------- Number of shares: Series M -- -- 1,680 Series T 832 -- -- Series W -- 960 -- Series TH 1,720 -- -- Series F -- -- -- - --------------------------------------------------------------------------------------------------------- Total 2,552 960 1,680 ========================================================================================================= Forward Swap Transactions The Funds are authorized to invest in certain derivative financial instruments. The Funds' use of forward interest rate swap transactions is intended to mitigate the negative impact that an increase in long-term interest rates could have on Common share net asset value. Forward interest rate swap transactions involve each Fund's agreement with the counterparty to pay, in the future, a fixed rate payment in exchange for the counterparty paying the Fund a variable rate payment, the accruals for which would begin at a specified date in the future (the "effective date"). The amount of the payment obligation is based on the notional amount of the forward swap contract and would increase or decrease in value based primarily on the extent to which long-term interest rates for bonds having a maturity of the swaps' termination date were to increase or decrease. The Funds may close out a contract prior to the effective date, at which point a realized gain or loss would be recognized. When a forward swap is terminated, it ordinarily does not involve the delivery of securities or other underlying assets or principal, but rather is settled in cash on a net basis. Each Fund intends, but is not obligated to, terminate its forward swaps before the effective date. Accordingly, the risk of loss with respect to the swap counterparty on such transactions is limited to the credit risk associated with a counterparty failing to honor its commitment to pay any realized gain to the Fund upon termination. To minimize such credit risk, all counterparties are required to pledge collateral daily (based on the daily valuation of each swap) on behalf of each Fund with a value approximately equal to the amount of any unrealized gain above a pre-determined threshold. Reciprocally, when any of the Funds have an unrealized loss on a swap contract, the 66 Funds have instructed the custodian to pledge assets of the Funds as collateral with a value approximately equal to the amount of the unrealized loss above a pre-determined threshold. Collateral pledges are monitored and subsequently adjusted if and when the swap valuations fluctuate, either up or down, by at least the predetermined threshold amount. Futures Contracts The Funds may invest in futures contracts for the purposes of hedging against changes in values of a Fund's securities or changes in the prevailing levels of interest rates. Upon entering into a futures contract, a Fund is required to deposit with the broker an amount of cash or liquid securities equal to a specified percentage of the contract amount. This is known as the "initial margin." Subsequent payments ("variation margin") are made or received by a Fund each day, depending on the daily fluctuation of the value of the contract. During the period the futures contract is open, changes in the value of the contract are recognized as an unrealized gain or loss by "marking-to-market" on a daily basis to reflect the changes in market value of the contract. When the contract is closed, a Fund records realized gains or losses equal to the difference between the value of the contract on the closing date and value of the contract when originally entered into. As of May 31, 2006, there were no outstanding futures contracts in any of the Funds. Risks of investments in futures contracts including the possible adverse movement of the securities or indices underlying the contracts, the possibility that there may not be a liquid secondary market for the contracts and/or that a change in the value of the contract may not correlate with a change in the value of the underlying securities. Custodian Fee Credit Each Fund has an arrangement with the custodian bank whereby certain custodian fees and expenses are reduced by credits earned on each Fund's cash on deposit with the bank. Such deposit arrangements are an alternative to overnight investments. Indemnifications Under the Funds' organizational documents, their Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Funds. In addition, in the normal course of business, the Funds enter into contracts that provide general indemnifications to other parties. The Funds' maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, the Funds have not had prior claims or losses pursuant to these contracts and expect the risk of loss to be remote. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets applicable to Common shares from operations during the reporting period. Actual results may differ from those estimates. 2. FUND SHARES Transactions in Common shares were as follows: MARYLAND PREMIUM MARYLAND DIVIDEND MARYLAND DIVIDEND INCOME (NMY) ADVANTAGE (NFM) ADVANTAGE 2 (NZR) ----------------------- ----------------------- ----------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 5/31/06 5/31/05 5/31/06 5/31/05 5/31/06 5/31/05 - --------------------------------------------------------------------------------------------------------------- Common shares issued to shareholders due to reinvestment of distributions 19,420 27,491 5,298 4,162 7,521 3,606 =============================================================================================================== MARYLAND DIVIDEND VIRGINIA PREMIUM VIRGINIA DIVIDEND ADVANTAGE 3 (NWI) INCOME (NPV) ADVANTAGE (NGB) ----------------------- ----------------------- ----------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 5/31/06 5/31/05 5/31/06 5/31/05 5/31/06 5/31/05 - --------------------------------------------------------------------------------------------------------------- Common shares issued to shareholders due to reinvestment of distributions 1,071 -- 38,319 33,307 3,038 2,761 =============================================================================================================== VIRGINIA DIVIDEND ADVANTAGE 2 (NNB) ----------------------- YEAR ENDED YEAR ENDED 5/31/06 5/31/05 - --------------------------------------------------------------------------------------------------------------- Common shares issued to shareholders due to reinvestment of distributions 8,839 12,458 =============================================================================================================== 67 Notes to FINANCIAL STATEMENTS (continued) 3. INVESTMENT TRANSACTIONS Purchases and sales (including maturities but excluding short-term investments and derivative transactions) during the fiscal year ended May 31, 2006, were as follows: MARYLAND MARYLAND MARYLAND MARYLAND PREMIUM DIVIDEND DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NMY) (NFM) (NZR) (NWI) - -------------------------------------------------------------------------------- Purchases $30,398,237 $13,298,560 $13,828,127 $17,042,507 Sales and maturities 30,320,096 13,480,676 14,562,256 16,456,417 ================================================================================ VIRGINIA VIRGINIA VIRGINIA PREMIUM DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 (NPV) (NGB) (NNB) - -------------------------------------------------------------------------------- Purchases $31,517,697 $11,054,670 $12,274,478 Sales and maturities 33,474,326 10,980,879 13,984,060 ================================================================================ 4. INCOME TAX INFORMATION The following information is presented on an income tax basis. Differences between amounts for financial statement and federal income tax purposes are primarily due to the treatment of paydown gains and losses, timing differences in recognizing taxable market discount and timing differences in recognizing certain gains and losses on investment transactions. At May 31, 2006, the cost of investments was as follows: MARYLAND MARYLAND MARYLAND MARYLAND PREMIUM DIVIDEND DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NMY) (NFM) (NZR) (NWI) - -------------------------------------------------------------------------------- Cost of investments $222,781,336 $88,598,808 $89,597,079 $112,384,519 ================================================================================ VIRGINIA VIRGINIA VIRGINIA PREMIUM DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 (NPV) (NGB) (NNB) - -------------------------------------------------------------------------------- Cost of investments $186,484,120 $67,528,199 $121,227,344 ================================================================================ 68 Gross unrealized appreciation and gross unrealized depreciation of investments at May 31, 2006, were as follows: MARYLAND MARYLAND MARYLAND MARYLAND PREMIUM DIVIDEND DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NMY) (NFM) (NZR) (NWI) - -------------------------------------------------------------------------------- Gross unrealized: Appreciation $ 7,709,594 $2,597,406 $2,679,871 $2,052,994 Depreciation (1,364,567) (434,360) (404,060) (895,865) - -------------------------------------------------------------------------------- Net unrealized appreciation (depreciation) of investments $ 6,345,027 $2,163,046 $2,275,811 $1,157,129 ================================================================================ VIRGINIA VIRGINIA VIRGINIA PREMIUM DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 (NPV) (NGB) (NNB) - -------------------------------------------------------------------------------- Gross unrealized: Appreciation $7,482,262 $2,498,573 $5,201,336 Depreciation (845,062) (270,757) (443,322) - -------------------------------------------------------------------------------- Net unrealized appreciation (depreciation) of investments $6,637,200 $2,227,816 $4,758,014 ================================================================================ The tax components of undistributed net investment income and net realized gains at May 31, 2006, were as follows: MARYLAND MARYLAND MARYLAND MARYLAND PREMIUM DIVIDEND DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NMY) (NFM) (NZR) (NWI) - -------------------------------------------------------------------------------- Undistributed net tax-exempt income * $611,838 $310,415 $423,460 $209,736 Undistributed net ordinary income ** -- -- -- 787 Undistributed net long-term capital gains -- -- -- -- ================================================================================ VIRGINIA VIRGINIA VIRGINIA PREMIUM DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 (NPV) (NGB) (NNB) - -------------------------------------------------------------------------------- Undistributed net tax-exempt income * $811,454 $338,785 $496,256 Undistributed net ordinary income ** -- 2,254 -- Undistributed net long-term capital gains 229,152 -- -- ================================================================================ * Undistributed net tax-exempt income (on a tax basis) has not been reduced for the dividend declared on May 1, 2006, paid on June 1, 2006. ** Net ordinary income consists of taxable market discount income and net short-term capital gains, if any. The tax character of distributions paid during the tax years ended May 31, 2006 and May 31, 2005, was designated for purposes of the dividends paid deduction as follows: MARYLAND MARYLAND MARYLAND MARYLAND PREMIUM DIVIDEND DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 2006 (NMY) (NFM) (NZR) (NWI) - -------------------------------------------------------------------------------- Distributions from net tax-exempt income $10,253,086 $4,350,733 $4,281,497 $4,833,094 Distributions from net ordinary income ** 82,432 -- 641 -- Distributions from net long-term capital gains *** 291,303 -- 114,999 -- ================================================================================ VIRGINIA VIRGINIA VIRGINIA PREMIUM DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 2006 (NPV) (NGB) (NNB) - -------------------------------------------------------------------------------- Distributions from net tax-exempt income $8,481,521 $3,279,786 $5,886,854 Distributions from net ordinary income ** -- -- 2,260 Distributions from net long-term capital gains *** 2,392,241 -- 354,292 ================================================================================ 69 Notes to FINANCIAL STATEMENTS (continued) MARYLAND MARYLAND MARYLAND MARYLAND PREMIUM DIVIDEND DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 2005 (NMY) (NFM) (NZR) (NWI) - -------------------------------------------------------------------------------- Distributions from net tax-exempt income $10,630,390 $4,316,846 $4,052,176 $4,686,785 Distributions from net ordinary income ** -- -- 17,820 108 Distributions from net long-term capital gains -- -- 254,971 43,198 ================================================================================ VIRGINIA VIRGINIA VIRGINIA PREMIUM DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 2005 (NPV) (NGB) (NNB) - -------------------------------------------------------------------------------- Distributions from net tax-exempt income $8,771,875 $3,200,407 $5,574,792 Distributions from net ordinary income ** -- -- -- Distributions from net long-term capital gains -- -- 1,131,953 ================================================================================ ** Net ordinary income consists of taxable market discount income and net short-term capital gains, if any. *** The Funds designated as a long-term capital gain dividend, pursuant to the Internal Revenue Code Section 852(b)(3), the amount necessary to reduce the earnings and profits of the Funds related to net capital gain to zero for the tax period ended May 31, 2006. At May 31, 2006, the following Funds had unused capital loss carryforwards available for federal income tax purposes to be applied against future capital gains, if any. If not applied, the carryforwards will expire as follows: MARYLAND MARYLAND MARYLAND VIRGINIA DIVIDEND DIVIDEND DIVIDEND DIVIDEND ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE (NFM) (NZR) (NWI) (NGB) - -------------------------------------------------------------------------------- Expiration year: 2009 $ 7,580 $ -- $ -- $ -- 2010 37,159 -- -- -- 2011 -- -- -- -- 2012 430,282 -- -- 71,775 2013 15,613 -- 28,210 -- 2014 62,054 35,791 130,041 -- - -------------------------------------------------------------------------------- Total $552,688 $35,791 $158,251 $71,775 ================================================================================ The following Funds elected to defer net realized losses from investments incurred from November 1, 2005 through May 31, 2006 ("post-October losses") in accordance with Federal income tax regulations. The post-October losses were treated as having arisen on the first day of the following fiscal year: MARYLAND MARYLAND MARYLAND VIRGINIA PREMIUM DIVIDEND DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 2 (NMY) (NFM) (NZR) (NNB) - -------------------------------------------------------------------------------- $204,066 $95,072 $17,928 $169,715 ================================================================================ 70 5. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES Each Fund's management fee is separated into two components - a complex-level component, based on the aggregate amount of all fund assets managed by Nuveen Asset Management (the "Adviser"), a wholly owned subsidiary of Nuveen Investments, Inc., ("Nuveen"), and a specific fund-level component, based only on the amount of assets within each individual fund. This pricing structure enables Nuveen fund shareholders to benefit from growth in the assets within each individual fund as well as from growth in the amount of complex-wide assets managed by the Adviser. The annual fund-level fee, payable monthly, for each Fund is based upon the average daily net assets (including net assets attributable to Preferred shares) of each Fund as follows: AVERAGE DAILY NET ASSETS MARYLAND PREMIUM INCOME (NMY) (INCLUDING NET ASSETS VIRGINIA PREMIUM INCOME (NPV) ATTRIBUTABLE TO PREFERRED SHARES) FUND-LEVEL FEE RATE - -------------------------------------------------------------------------------- For the first $125 million .4500% For the next $125 million .4375 For the next $250 million .4250 For the next $500 million .4125 For the next $1 billion .4000 For the next $3 billion .3875 For net assets over $5 billion .3750 ================================================================================ MARYLAND DIVIDEND ADVANTAGE (NFM) MARYLAND DIVIDEND ADVANTAGE 2 (NZR) MARYLAND DIVIDEND ADVANTAGE 3 (NWI) AVERAGE DAILY NET ASSETS VIRGINIA DIVIDEND ADVANTAGE (NGB) (INCLUDING NET ASSETS VIRGINIA DIVIDEND ADVANTAGE 2 (NNB) ATTRIBUTABLE TO PREFERRED SHARES) FUND-LEVEL FEE RATE - -------------------------------------------------------------------------------- For the first $125 million .4500% For the next $125 million .4375 For the next $250 million .4250 For the next $500 million .4125 For the next $1 billion .4000 For net assets over $2 billion .3750 ================================================================================ The annual complex-level fee, payable monthly, which is additive to the fund-level fee, for all Nuveen sponsored funds in the U.S., is based on the aggregate amount of total fund assets managed as stated in the table below. As of May 31, 2006, the complex-level fee rate was .1886%. COMPLEX-LEVEL ASSETS(1) COMPLEX-LEVEL FEE RATE - -------------------------------------------------------------------------------- For the first $55 billion .2000% For the next $1 billion .1800 For the next $1 billion .1600 For the next $3 billion .1425 For the next $3 billion .1325 For the next $3 billion .1250 For the next $5 billion .1200 For the next $5 billion .1175 For the next $15 billion .1150 For Managed Assets over $91 billion (2) .1400 ================================================================================ (1) The complex-level fee component of the management fee for the funds is calculated based upon the aggregate Managed Assets ("Managed Assets" means the average daily net assets of each fund including assets attributable to all types of leverage used by the Nuveen funds) of Nuveen-sponsored funds in the U.S. (2) With respect to the complex-wide Managed Assets over $91 billion, the fee rate or rates that will apply to such assets will be determined at a later date. In the unlikely event that complex-wide Managed Assets reach $91 billion prior to a determination of the complex-level fee rate or rates to be applied to Managed Assets in excess of $91 billion, the complex-level fee rate for such complex-wide Managed Assets shall be .1400% until such time as a different rate or rates is determined. The management fee compensates the Adviser for overall investment advisory and administrative services and general office facilities. The Funds pay no compensation directly to those of its Trustees who are affiliated with the Adviser or to their Officers, all of whom receive remuneration for their services to the Funds from the Adviser or its affiliates. The Board of Trustees has adopted a deferred compensation plan for independent Trustees that enables Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from certain Nuveen advised funds. Under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of select Nuveen advised Funds. 71 Notes to FINANCIAL STATEMENTS (continued) For the first ten years of Maryland Dividend Advantage's (NFM) and Virginia Dividend Advantage's (NGB) operations, the Adviser has agreed to reimburse the Funds, as a percentage of average daily net assets (including net assets attributable to Preferred shares), for fees and expenses in the amounts and for the time periods set forth below: YEAR ENDING YEAR ENDING JANUARY 31, JANUARY 31, - -------------------------------------------------------------------------------- 2001* .30% 2007 .25% 2002 .30 2008 .20 2003 .30 2009 .15 2004 .30 2010 .10 2005 .30 2011 .05 2006 .30 ================================================================================ * From the commencement of operations. The Adviser has not agreed to reimburse Maryland Dividend Advantage (NFM) and Virginia Dividend Advantage (NGB) for any portion of its fees and expenses beyond January 31, 2011. For the first ten years of Maryland Dividend Advantage 2's (NZR) operations, the Adviser has agreed to reimburse the Fund, as a percentage of average daily net assets (including net assets attributable to Preferred shares), for fees and expenses in the amounts and for the time periods set forth below: YEAR ENDING YEAR ENDING SEPTEMBER 30, SEPTEMBER 30, - -------------------------------------------------------------------------------- 2001* .30% 2007 .25% 2002 .30 2008 .20 2003 .30 2009 .15 2004 .30 2010 .10 2005 .30 2011 .05 2006 .30 ================================================================================ * From the commencement of operations. The Adviser has not agreed to reimburse Maryland Dividend Advantage 2 (NZR) for any portion of its fees and expenses beyond September 30, 2011. For the first eight years of Maryland Dividend Advantage 3's (NWI) operations, the Adviser has agreed to reimburse the Fund, as a percentage of average daily net assets (including net assets attributable to Preferred shares), for fees and expenses in the amounts and for the time periods set forth below: YEAR ENDING YEAR ENDING SEPTEMBER 30, SEPTEMBER 30, - -------------------------------------------------------------------------------- 2002* .32% 2007 .32% 2003 .32 2008 .24 2004 .32 2009 .16 2005 .32 2010 .08 2006 .32 ================================================================================ * From the commencement of operations. The Adviser has not agreed to reimburse Maryland Dividend Advantage 3 (NWI) for any portion of its fees and expenses beyond September 30, 2010. 72 For the first ten years of Virginia Dividend Advantage 2's (NNB) operations, the Adviser has agreed to reimburse the Fund, as a percentage of average daily net assets (including net assets attributable to Preferred shares), for fees and expenses in the amounts and for the time periods set forth below: YEAR ENDING YEAR ENDING NOVEMBER 30, NOVEMBER 30, - -------------------------------------------------------------------------------- 2001* .30% 2007 .25% 2002 .30 2008 .20 2003 .30 2009 .15 2004 .30 2010 .10 2005 .30 2011 .05 2006 .30 ================================================================================ * From the commencement of operations. The Adviser has not agreed to reimburse Virginia Dividend Advantage 2 (NNB) for any portion of its fees and expenses beyond November 30, 2011. 6. SUBSEQUENT EVENT - DISTRIBUTIONS TO COMMON SHAREHOLDERS The Funds declared Common share dividend distributions from their tax-exempt net investment income which were paid on July 3, 2006, to shareholders of record on June 15, 2006, as follows: MARYLAND MARYLAND MARYLAND MARYLAND PREMIUM DIVIDEND DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NMY) (NFM) (NZR) (NWI) - -------------------------------------------------------------------------------- Dividend per share $.0580 $.0645 $.0640 $.0555 ================================================================================ VIRGINIA VIRGINIA VIRGINIA PREMIUM DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 (NPV) (NGB) (NNB) - -------------------------------------------------------------------------------- Dividend per share $.0590 $.0685 $.0650 ================================================================================ 73 Financial HIGHLIGHTS Selected data for a Common share outstanding throughout each period: Investment Operations Less Distributions --------------------------------------------------------------- -------------------------------- Distributions Distributions from Net from Net Beginning Investment Capital Investment Capital Common Net Income to Gains to Income to Gains to Share Net Realized/ Preferred Preferred Common Common Net Asset Investment Unrealized Share- Share- Share- Share- Value Income Gain (Loss) holders+ holders+ Total holders holders Total ==================================================================================================================================== MARYLAND PREMIUM INCOME (NMY) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 5/31: 2006 $15.12 $ .89 $ (.56) $(.18) $ -- $ .15 $(.78) $(.02) $(.80) 2005 14.28 .92 .92 (.10) -- 1.74 (.90) -- (.90) 2004 15.10 .96 (.81) (.06) -- .09 (.91) -- (.91) 2003 14.04 1.02 1.00 (.07) -- 1.95 (.89) -- (.89) 2002 13.83 1.03 .14 (.13) -- 1.04 (.83) -- (.83) MARYLAND DIVIDEND ADVANTAGE (NFM) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 5/31: 2006 15.13 .95 (.47) (.19) -- .29 (.85) -- (.85) 2005 14.43 .98 .75 (.10) -- 1.63 (.93) -- (.93) 2004 15.47 1.01 (1.07) (.05) -- (.11) (.93) -- (.93) 2003 14.18 1.04 1.18 (.08) -- 2.14 (.86) -- (.86) 2002 13.90 1.04 .22 (.14) -- 1.12 (.84) -- (.84) MARYLAND DIVIDEND ADVANTAGE 2 (NZR) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 5/31: 2006 15.45 .94 (.59) (.18) -- .17 (.83) (.03) (.86) 2005 14.64 .94 .90 (.09) -- 1.75 (.88) (.06) (.94) 2004 15.71 .96 (1.08) (.06) -- (.18) (.87) (.02) (.89) 2003 14.01 .97 1.62 (.09) -- 2.50 (.81) -- (.81) 2002(a) 14.33 .57 (.22) (.06) -- .29 (.46) -- (.46) MARYLAND DIVIDEND ADVANTAGE 3 (NWI) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 5/31: 2006 14.82 .86 (.46) (.18) -- .22 (.71) -- (.71) 2005 13.88 .86 .97 (.10) -- 1.73 (.78) (.01) (.79) 2004 14.89 .87 (1.03) (.06) -- (.22) (.79) -- (.79) 2003(b) 14.33 .52 .75 (.05) -- 1.22 (.46) -- (.46) ==================================================================================================================================== Total Returns --------------------- Based Offering on Costs and Ending Common Preferred Common Based Share Share Share Ending on Net Underwriting Net Asset Market Market Asset Discounts Value Value Value** Value** ============================================================================================= MARYLAND PREMIUM INCOME (NMY) - --------------------------------------------------------------------------------------------- Year Ended 5/31: 2006 $ -- $14.47 $14.52 (2.94)% 1.08% 2005 -- 15.12 15.78 15.64 12.52 2004 -- 14.28 14.45 (10.77) .64 2003 -- 15.10 17.15 15.22 14.33 2002 -- 14.04 15.73 4.77 7.71 MARYLAND DIVIDEND ADVANTAGE (NFM) - --------------------------------------------------------------------------------------------- Year Ended 5/31: 2006 -- 14.57 15.19 2.51 1.95 2005 -- 15.13 15.63 6.22 11.60 2004 -- 14.43 15.62 2.99 (.69) 2003 .01 15.47 16.08 9.98 15.55 2002 -- 14.18 15.44 1.98 8.21 MARYLAND DIVIDEND ADVANTAGE 2 (NZR) - --------------------------------------------------------------------------------------------- Year Ended 5/31: 2006 -- 14.76 14.76 1.13 1.14 2005 -- 15.45 15.41 14.71 12.22 2004 -- 14.64 14.28 (2.90) (1.16) 2003 .01 15.71 15.60 12.71 18.39 2002(a) (.15) 14.01 14.61 .52 1.01 MARYLAND DIVIDEND ADVANTAGE 3 (NWI) - --------------------------------------------------------------------------------------------- Year Ended 5/31: 2006 -- 14.33 13.85 1.09 1.55 2005 -- 14.82 14.40 14.98 12.67 2004 -- 13.88 13.24 (5.97) (1.51) 2003(b) (.20) 14.89 14.90 2.53 7.31 ============================================================================================= Ratios/Supplemental Data --------------------------------------------------------------------------------------------- Before Credit/Reimbursement After Credit/Reimbursement*** ------------------------------ ------------------------------ Ratio of Net Ratio of Net Ratio of Investment Ratio of Investment Ending Expenses Income to Expenses Income to Net to Average Average to Average Average Assets Net Assets Net Assets Net Assets Net Assets Applicable Applicable Applicable Applicable Applicable Portfolio to Common to Common to Common to Common to Common Turnover Shares (000) Shares++ Shares++ Shares++ Shares++ Rate ==================================================================================================================== MARYLAND PREMIUM INCOME (NMY) - -------------------------------------------------------------------------------------------------------------------- Year Ended 5/31: 2006 $153,834 1.23% 6.05% 1.21% 6.07% 13% 2005 160,496 1.24 6.22 1.23 6.22 10 2004 151,107 1.24 6.54 1.23 6.55 16 2003 159,415 1.26 7.00 1.25 7.01 16 2002 147,795 1.32 7.33 1.31 7.34 13 MARYLAND DIVIDEND ADVANTAGE (NFM) - -------------------------------------------------------------------------------------------------------------------- Year Ended 5/31: 2006 60,762 1.26 5.99 .81 6.44 14 2005 63,051 1.26 6.11 .79 6.57 11 2004 60,041 1.24 6.34 .78 6.80 10 2003 64,338 1.26 6.54 .79 7.01 12 2002 58,925 1.35 6.81 .82 7.34 36 MARYLAND DIVIDEND ADVANTAGE 2 (NZR) - -------------------------------------------------------------------------------------------------------------------- Year Ended 5/31: 2006 61,726 1.25 5.76 .77 6.23 15 2005 64,500 1.23 5.74 .77 6.20 10 2004 61,064 1.24 5.90 .78 6.36 11 2003 65,490 1.26 6.07 .80 6.53 12 2002(a) 58,370 1.22* 5.55* .79* 5.99* 21 MARYLAND DIVIDEND ADVANTAGE 3 (NWI) - -------------------------------------------------------------------------------------------------------------------- Year Ended 5/31: 2006 76,809 1.23 5.41 .73 5.91 14 2005 79,443 1.23 5.40 .74 5.89 12 2004 74,369 1.22 5.59 .73 6.08 15 2003(b) 79,700 1.18* 5.01* .70* 5.50* 13 ==================================================================================================================== Preferred Shares at End of Period ----------------------------------------- Aggregate Liquidation Amount and Market Asset Outstanding Value Coverage (000) Per Share Per Share =================================================================== MARYLAND PREMIUM INCOME (NMY) - ------------------------------------------------------------------- Year Ended 5/31: 2006 $79,100 $25,000 $73,620 2005 79,100 25,000 75,726 2004 79,100 25,000 72,758 2003 79,100 25,000 75,384 2002 79,100 25,000 71,712 MARYLAND DIVIDEND ADVANTAGE (NFM) - ------------------------------------------------------------------- Year Ended 5/31: 2006 32,000 25,000 72,470 2005 32,000 25,000 74,259 2004 32,000 25,000 71,907 2003 32,000 25,000 75,264 2002 32,000 25,000 71,035 MARYLAND DIVIDEND ADVANTAGE 2 (NZR) - ------------------------------------------------------------------- Year Ended 5/31: 2006 32,000 25,000 73,224 2005 32,000 25,000 75,390 2004 32,000 25,000 72,706 2003 32,000 25,000 76,164 2002(a) 32,000 25,000 70,601 MARYLAND DIVIDEND ADVANTAGE 3 (NWI) - ------------------------------------------------------------------- Year Ended 5/31: 2006 39,000 25,000 74,237 2005 39,000 25,000 75,925 2004 39,000 25,000 72,672 2003(b) 39,000 25,000 76,090 =================================================================== * Annualized. ** Total Return on Market Value is the combination of changes in the market price per share and the effect of reinvested dividend income and reinvested capital gains distributions, if any, at the average price paid per share at the time of reinvestment. Total Return on Common share Net Asset Value is the combination of changes in Common share net asset value, reinvested dividend income at net asset value and reinvested capital gains distributions at net asset value, if any. Total returns are not annualized. *** After custodian fee credit and expense reimbursement, where applicable. + The amounts shown are based on Common share equivalents. ++ Ratios do not reflect the effect of dividend payments to Preferred shareholders; income ratios reflect income earned on assets attributable to Preferred shares. (a) For the period September 25, 2001 (commencement of operations) through May 31, 2002. (b) For the period September 25, 2002 (commencement of operations) through May 31, 2003. See accompanying notes to financial statements. 74-75 SPREAD FINANCIAL HIGHLIGHTS (continued) Selected data for a Common share outstanding throughout each period: Investment Operations Less Distributions --------------------------------------------------------------- -------------------------------- Distributions Distributions from Net from Net Beginning Investment Capital Investment Capital Common Net Income to Gains to Income to Gains to Share Net Realized/ Preferred Preferred Common Common Net Asset Investment Unrealized Share- Share- Share- Share- Value Income Gain (Loss) holders+ holders+ Total holders holders Total ==================================================================================================================================== VIRGINIA PREMIUM INCOME (NPV) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 5/31: 2006 $15.82 $ .88 $ (.59) $(.15) $(.03) $ .11 $(.80) $(.24) $(1.04) 2005 14.95 .93 .93 (.09) -- 1.77 (.90) -- (.90) 2004 15.93 .97 (.99) (.05) -- (.07) (.91) -- (.91) 2003 14.69 1.00 1.21 (.07) -- 2.14 (.90) -- (.90) 2002 14.59 1.04 .03 (.11) -- .96 (.86) -- (.86) VIRGINIA DIVIDEND ADVANTAGE (NGB) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 5/31: 2006 15.52 .97 (.54) (.17) -- .26 (.87) -- (.87) 2005 14.42 .99 1.13 (.09) -- 2.03 (.93) -- (.93) 2004 15.43 1.02 (1.05) (.05) -- (.08) (.93) -- (.93) 2003 14.23 1.02 1.10 (.07) -- 2.05 (.86) -- (.86) 2002 13.87 1.02 .32 (.13) -- 1.21 (.85) -- (.85) VIRGINIA DIVIDEND ADVANTAGE 2 (NNB) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 5/31: 2006 15.70 .95 (.52) (.18) (.01) .24 (.85) (.07) (.92) 2005 14.79 .96 1.13 (.09) (.01) 1.99 (.89) (.19) (1.08) 2004 16.02 .99 (1.22) (.06) -- (.29) (.89) (.05) (.94) 2003 14.31 .97 1.69 (.08) -- 2.58 (.84) (.03) (.87) 2002(a) 14.33 .41 .09 (.04) -- .46 (.35) -- (.35) ==================================================================================================================================== Total Returns --------------------- Based Offering on Costs and Ending Common Preferred Common Based Share Share Share Ending on Net Underwriting Net Asset Market Market Asset Discounts Value Value Value** Value** =============================================================================================== VIRGINIA PREMIUM INCOME (NPV) - ----------------------------------------------------------------------------------------------- Year Ended 5/31: 2006 $ -- $14.89 $14.91 (9.98)% 0.71% 2005 -- 15.82 17.65 24.54 12.13 2004 -- 14.95 14.95 (10.70) (.42) 2003 -- 15.93 17.67 15.27 14.99 2002 -- 14.69 16.17 6.64 6.71 VIRGINIA DIVIDEND ADVANTAGE (NGB) - ----------------------------------------------------------------------------------------------- Year Ended 5/31: 2006 -- 14.91 17.10 5.86 1.74 2005 -- 15.52 16.99 19.11 14.46 2004 -- 14.42 15.07 (8.11) (.50) 2003 .01 15.43 17.35 21.45 14.92 2002 -- 14.23 15.09 5.10 8.89 VIRGINIA DIVIDEND ADVANTAGE 2 (NNB) - ----------------------------------------------------------------------------------------------- Year Ended 5/31: 2006 -- 15.02 16.40 3.45 1.53 2005 -- 15.70 16.74 21.96 13.75 2004 -- 14.79 14.65 (3.81) (1.84) 2003 -- 16.02 16.14 14.58 18.51 2002(a) (.13) 14.31 14.90 1.71 2.30 =============================================================================================== Ratios/Supplemental Data --------------------------------------------------------------------------------------------- Before Credit/Reimbursement After Credit/Reimbursement*** ------------------------------ ------------------------------ Ratio of Net Ratio of Net Ratio of Investment Ratio of Investment Ending Expenses Income to Expenses Income to Net to Average Average to Average Average Assets Net Assets Net Assets Net Assets Net Assets Applicable Applicable Applicable Applicable Applicable Portfolio to Common to Common to Common to Common to Common Turnover Shares (000) Shares++ Shares++ Shares++ Shares++ Rate ====================================================================================================================== VIRGINIA PREMIUM INCOME (NPV) - ---------------------------------------------------------------------------------------------------------------------- Year Ended 5/31: 2006 $132,626 1.19% 5.75% 1.17% 5.77% 16% 2005 140,340 1.20 5.98 1.19 5.99 17 2004 132,122 1.20 6.33 1.19 6.34 14 2003 140,223 1.25 6.61 1.24 6.62 17 2002 128,655 1.28 7.01 1.27 7.02 14 VIRGINIA DIVIDEND ADVANTAGE (NGB) - ---------------------------------------------------------------------------------------------------------------------- Year Ended 5/31: 2006 46,626 1.26 5.93 .82 6.38 16 2005 48,474 1.28 6.13 .81 6.59 15 2004 44,988 1.24 6.39 .77 6.86 7 2003 48,102 1.28 6.45 .81 6.92 10 2002 44,308 1.37 6.68 .84 7.21 21 VIRGINIA DIVIDEND ADVANTAGE 2 (NNB) - ---------------------------------------------------------------------------------------------------------------------- Year Ended 5/31: 2006 85,887 1.19 5.75 .73 6.21 10 2005 89,626 1.19 5.74 .74 6.19 13 2004 84,248 1.20 5.99 .74 6.44 16 2003 91,065 1.21 6.01 .75 6.47 15 2002(a) 81,325 1.14* 5.00* .70* 5.44* 12 ====================================================================================================================== Preferred Shares at End of Period ----------------------------------------- Aggregate Liquidation Amount and Market Asset Outstanding Value Coverage (000) Per Share Per Share ===================================================================== VIRGINIA PREMIUM INCOME (NPV) - --------------------------------------------------------------------- Year Ended 5/31: 2006 $63,800 $25,000 $76,970 2005 63,800 25,000 79,992 2004 63,800 25,000 76,772 2003 63,800 25,000 79,946 2002 63,800 25,000 75,413 VIRGINIA DIVIDEND ADVANTAGE (NGB) - --------------------------------------------------------------------- Year Ended 5/31: 2006 24,000 25,000 73,568 2005 24,000 25,000 75,493 2004 24,000 25,000 71,863 2003 24,000 25,000 75,106 2002 24,000 25,000 71,154 VIRGINIA DIVIDEND ADVANTAGE 2 (NNB) - --------------------------------------------------------------------- Year Ended 5/31: 2006 42,000 25,000 76,123 2005 42,000 25,000 78,349 2004 42,000 25,000 75,148 2003 42,000 25,000 79,206 2002(a) 42,000 25,000 73,408 ===================================================================== * Annualized. ** Total Return on Market Value is the combination of changes in the market price per share and the effect of reinvested dividend income and reinvested capital gains distributions, if any, at the average price paid per share at the time of reinvestment. Total Return on Common share Net Asset Value is the combination of changes in Common share net asset value, reinvested dividend income at net asset value and reinvested capital gains distributions at net asset value, if any. Total returns are not annualized. *** After custodian fee credit and expense reimbursement, where applicable. + The amounts shown are based on Common share equivalents. ++ Ratios do not reflect the effect of dividend payments to Preferred shareholders; income ratios reflect income earned on assets attributable to Preferred shares. (a) For the period November 15, 2001 (commencement of operations) through May 31, 2002. See accompanying notes to financial statements. 76-77 SPREAD Board Members AND OFFICERS The management of the Funds, including general supervision of the duties performed for the Funds by the Adviser, is the responsibility of the Board Members of the Funds. The number of board members of the Fund is currently set at nine. None of the board members who are not "interested" persons of the Funds has ever been a director or employee of, or consultant to, Nuveen or its affiliates. The names and business addresses of the board members and officers of the Funds, their principal occupations and other affiliations during the past five years, the number of portfolios each oversees and other directorships they hold are set forth below. NUMBER OF PORTFOLIOS IN POSITION(S) YEAR FIRST PRINCIPAL OCCUPATION(S) FUND COMPLEX NAME, BIRTHDATE HELD WITH ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY AND ADDRESS THE FUNDS APPOINTED(2) DURING PAST 5 YEARS BOARD MEMBER - ------------------------------------------------------------------------------------------------------------------------------------ BOARD MEMBER WHO IS AN INTERESTED PERSON OF THE FUNDS: - ------------------------------------------------------------------------------------------------------------------------------------ Timothy R. Schwertfeger(1) Chairman of 1994 Chairman (since 1996) and Director of Nuveen Investments, 166 3/28/49 the Board Inc., Nuveen Investments, LLC, Nuveen Advisory Corp. and 333 W. Wacker Drive and Board Nuveen Institutional Advisory Corp.(3); Director (since 1996) Chicago, IL 60606 Member of Institutional Capital Corporation; Chairman and Director (since 1997) of Nuveen Asset Management; Chairman and Director of Rittenhouse Asset Management, Inc. (since 1999); Chairman of Nuveen Investments Advisers Inc. (since 2002). BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS: - ------------------------------------------------------------------------------------------------------------------------------------ Robert P. Bremner Lead Independent 1997 Private Investor and Management Consultant. 166 8/22/40 Board member 333 W. Wacker Drive Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Lawrence H. Brown Board member 1993 Retired (since 1989) as Senior Vice President of The 166 7/29/34 Northern Trust Company; Director (since 2002) Community 333 W. Wacker Drive Advisory Board for Highland Park and Highwood, United Chicago, IL 60606 Way of the North Shore. - ------------------------------------------------------------------------------------------------------------------------------------ Jack B. Evans Board member 1999 President, The Hall-Perrine Foundation, a private philanthropic 166 10/22/48 corporation (since 1996); Director and Vice Chairman, United 333 W. Wacker Drive Fire Group, a publicly held company; Adjunct Faculty Member, Chicago, IL 60606 University of Iowa; Director, Gazette Companies; Life Trustee of Coe College and Iowa College Foundation; formerly, Director, Alliant Energy; formerly, Director, Federal Reserve Bank of Chicago; formerly, President and Chief Operating Officer, SCI Financial Group, Inc., a regional financial services firm. - ------------------------------------------------------------------------------------------------------------------------------------ William C. Hunter Board member 2004 Dean, Tippie College of Business, University of Iowa (since 166 3/6/48 June 2006); formerly, Dean and Distinguished Professor of Finance, 333 W. Wacker Drive School of Business at the University of Connecticut (2003-2006); Chicago, IL 60606 previously, Senior Vice President and Director of Research at the Federal Reserve Bank of Chicago (1995-2003); Director (since 1997), Credit Research Center at Georgetown University; Director (since 2004) of Xerox Corporation; Director, SS&C Technologies, Inc. (May 2005 - October 2005). - ------------------------------------------------------------------------------------------------------------------------------------ David J. Kundert Board member 2005 Retired (since 2004) as Chairman, JPMorgan Fleming Asset 164 10/28/42 Management, President and CEO, Banc One Investment 333 W. Wacker Drive Advisors Corporation, and President, One Group Mutual Chicago, IL 60606 Funds; prior thereto, Executive Vice President, Banc One Corporation and Chairman and CEO, Banc One Investment Management Group; Board of Regents, Luther College; member of the Wisconsin Bar Association; member of Board of Directors, Friends of Boerner Botanical Gardens. 78 NUMBER OF PORTFOLIOS IN POSITION(S) YEAR FIRST PRINCIPAL OCCUPATION(S) FUND COMPLEX NAME, BIRTHDATE HELD WITH ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY AND ADDRESS THE FUNDS APPOINTED(2) DURING PAST 5 YEARS BOARD MEMBER - ------------------------------------------------------------------------------------------------------------------------------------ BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS (CONTINUED): - ------------------------------------------------------------------------------------------------------------------------------------ William J. Schneider Board member 1997 Chairman of Miller-Valentine Partners Ltd., a real estate 166 9/24/44 investment company; formerly, Senior Partner and Chief 333 W. Wacker Drive Operating Officer (retired, 2004) of Miller-Valentine Chicago, IL 60606 Group; formerly, Vice President, Miller-Valentine Realty; Board Member, Chair of the Finance Committee and member of the Audit Committee of Premier Health Partners, the not-for-profit company of Miami Valley Hospital; Vice President, Dayton Philharmonic Orchestra Association; Board Member, Regional Leaders Forum, which promotes cooperation on economic development issues; Director, Dayton Development Coalition; formerly, Member, Community Advisory Board, National City Bank, Dayton, Ohio and Business Advisory Council, Cleveland Federal Reserve Bank. - ------------------------------------------------------------------------------------------------------------------------------------ Judith M. Stockdale Board member 1997 Executive Director, Gaylord and Dorothy Donnelley 166 12/29/47 Foundation (since 1994); prior thereto, Executive Director, 333 W. Wacker Drive Great Lakes Protection Fund (from 1990 to 1994). Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Eugene S. Sunshine Board member 2005 Senior Vice President for Business and Finance, 166 1/22/50 Northwestern University (since 1997); Director (since 2003), 333 W. Wacker Drive Chicago Board Options Exchange; Director (since 2003), Chicago, IL 60606 National Mentor Holdings, a privately-held, national provider of home and community-based services; Chairman (since 1997), Board of Directors, Rubicon, a pure captive insurance company owned by Northwestern University; Director (since 1997), Evanston Chamber of Commerce and Evanston Inventure, a business development organization. NUMBER OF PORTFOLIOS IN POSITION(S) YEAR FIRST FUND COMPLEX NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) OVERSEEN BY AND ADDRESS THE FUNDS APPOINTED(4) DURING PAST 5 YEARS OFFICER - ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS OF THE FUND: - ------------------------------------------------------------------------------------------------------------------------------------ Gifford R. Zimmerman Chief 1988 Managing Director (since 2002), Assistant Secretary and 166 9/9/56 Administrative Associate General Counsel, formerly, Vice President and 333 W. Wacker Drive Officer Assistant General Counsel, of Nuveen Investments, LLC; Chicago, IL 60606 Managing Director (2002-2004), General Counsel (1998-2004) and Assistant Secretary, formerly, Vice President of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3); Managing Director (since 2002) and Assistant Secretary and Associate General Counsel, formerly, Vice President (since 1997), of Nuveen Asset Management; Managing Director (since 2004) and Assistant Secretary (since 1994) of Nuveen Investments, Inc.; Assistant Secretary of NWQ Investment Management Company, LLC. (since 2002); Vice President and Assistant Secretary of Nuveen Investments Advisers Inc. (since 2002); Managing Director, Associate General Counsel and Assistant Secretary of Rittenhouse Asset Management, Inc. and Symphony Asset Management LLC (since 2003); Chartered Financial Analyst. 79 Board Members AND OFFICERS (CONTINUED) NUMBER OF PORTFOLIOS IN POSITION(S) YEAR FIRST FUND COMPLEX NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) OVERSEEN BY AND ADDRESS THE FUNDS APPOINTED(4) DURING PAST 5 YEARS OFFICER - ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS OF THE FUNDS (CONTINUED): - ------------------------------------------------------------------------------------------------------------------------------------ Julia L. Antonatos Vice President 2004 Managing Director (since 2005), formerly Vice President 166 9/22/63 (since 2002); formerly, Assistant Vice President (since 2000) 333 W. Wacker Drive of Nuveen Investments, LLC; Chartered Financial Analyst. Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Michael T. Atkinson Vice President 2000 Vice President (since 2002), formerly, Assistant Vice 166 2/3/66 and Assistant President (since 2000) of Nuveen Investments, LLC. 333 W. Wacker Drive Secretary Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Peter H. D'Arrigo Vice President 1999 Vice President and Treasurer of Nuveen Investments, LLC 166 11/28/67 and of Nuveen Investments, Inc. (since 1999); Vice President 333 W. Wacker Drive and Treasurer of Nuveen Asset Management (since 2002) Chicago, IL 60606 and of Nuveen Investments Advisers Inc. (since 2002); Assistant Treasurer of NWQ Investment Management Company, LLC. (since 2002); Vice President and Treasurer of Nuveen Rittenhouse Asset Management, Inc. and Symphony Asset Management LLC (since 2003); formerly, Vice President and Treasurer (1999-2004) of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3); Chartered Financial Analyst. - ------------------------------------------------------------------------------------------------------------------------------------ John N. Desmond Vice President 2005 Vice President, Director of Investment Operations, Nuveen 166 8/24/61 Investments, LLC (since January 2005); formerly, Director, 333 W. Wacker Drive Business Manager, Deutsche Asset Management (2003-2004), Chicago, IL 60606 Director, Business Development and Transformation, Deutsche Trust Bank Japan (2002-2003); previously, Senior Vice President, Head of Investment Operations and Systems, Scudder Investments Japan, (2000-2002), Senior Vice President, Head of Plan Administration and Participant Services, Scudder Investments (1995-2002). - ------------------------------------------------------------------------------------------------------------------------------------ Jessica R. Droeger Vice President 1998 Vice President (since 2002), Assistant Secretary and 166 9/24/64 and Secretary Assistant General Counsel (since 1998) formerly, Assistant 333 W. Wacker Drive Vice President (since 1998) of Nuveen Investments, LLC; Chicago, IL 60606 Vice President (2002-2004) and Assistant Secretary (1998-2004) formerly, Assistant Vice President of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3); Vice President and Assistant Secretary (since 2005) of Nuveen Asset Management. - ------------------------------------------------------------------------------------------------------------------------------------ Lorna C. Ferguson Vice President 1998 Managing Director (since 2004), formerly, Vice President of 166 10/24/45 Nuveen Investments, LLC, Managing Director (2004) formerly, 333 W. Wacker Drive Vice President (1998-2004) of Nuveen Advisory Corp. and Chicago, IL 60606 Nuveen Institutional Advisory Corp.(3); Managing Director (since 2005) of Nuveen Asset Management. - ------------------------------------------------------------------------------------------------------------------------------------ William M. Fitzgerald Vice President 1995 Managing Director (since 2002), formerly, Vice President of 166 3/2/64 Nuveen Investments; Managing Director (1997-2004) of 333 W. Wacker Drive Nuveen Advisory Corp. and Nuveen Institutional Advisory Chicago, IL 60606 Corp.(3); Managing Director (since 2001) of Nuveen Asset Management; Vice President (since 2002) of Nuveen Investments Advisers Inc.; Chartered Financial Analyst. 80 NUMBER OF PORTFOLIOS IN POSITION(S) YEAR FIRST FUND COMPLEX NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) OVERSEEN BY AND ADDRESS THE FUNDS APPOINTED(4) DURING PAST 5 YEARS OFFICER - ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS OF THE FUNDS (CONTINUED): - ------------------------------------------------------------------------------------------------------------------------------------ Stephen D. Foy Vice President 1998 Vice President (since 1993) and Funds Controller (since 1998) 166 5/31/54 and Controller of Nuveen Investments, LLC; formerly, Vice President and 333 W. Wacker Drive Funds Controller (1998-2004) of Nuveen Investments, Inc.; Chicago, IL 60606 Certified Public Accountant. - ------------------------------------------------------------------------------------------------------------------------------------ James D. Grassi Vice President 2004 Vice President and Deputy Director of Compliance (since 2004) 166 4/13/56 and Chief of Nuveen Investments, LLC, Nuveen Investments Advisers Inc., 333 W. Wacker Drive Compliance Nuveen Asset Management and Rittenhouse Asset Management, Chicago, IL 60606 Officer Inc.; previously, Vice President and Deputy Director of Compliance (2004) of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3); formerly, Senior Attorney (1994-2004), The Northern Trust Company. - ------------------------------------------------------------------------------------------------------------------------------------ David J. Lamb Vice President 2000 Vice President (since 2000) of Nuveen Investments, 166 3/22/63 LLC; Certified Public Accountant. 333 W. Wacker Drive Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Tina M. Lazar Vice President 2002 Vice President of Nuveen Investments, LLC (since 1999). 166 8/27/61 333 W. Wacker Drive Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Larry W. Martin Vice President 1988 Vice President, Assistant Secretary and Assistant General 166 7/27/51 and Assistant Counsel of Nuveen Investments, LLC; formerly, Vice President 333 W. Wacker Drive Secretary and Assistant Secretary of Nuveen Advisory Corp. and Nuveen Chicago, IL 60606 Institutional Advisory Corp.(3); Vice President (since 2005) and Assistant Secretary of Nuveen Investments, Inc.; Vice President (since 2005) and Assistant Secretary (since 1997) of Nuveen Asset Management; Vice President (since 2000), Assistant Secretary and Assistant General Counsel (since 1998) of Rittenhouse Asset Management, Inc.; Vice President and Assistant Secretary of Nuveen Investments Advisers Inc. (since 2002); Assistant Secretary of NWQ Investment Management Company, LLC (since 2002) and Symphony Asset Management LLC (since 2003). (1) Mr. Schwertfeger is an "interested person" of the Funds, as defined in the Investment Company Act of 1940, because he is an officer and board member of the Adviser. (2) Board members serve an indefinite term until his/her successor is elected. The year first elected or appointed represents the year in which the board member was first elected or appointed to any fund in the Nuveen Complex. (3) Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp. were reorganized into Nuveen Asset Management, effective January 1, 2005. (4) Officers serve one year terms through July of each year. The year first elected or appointed represents the year in which the Officer was first elected or appointed to any fund in the Nuveen Complex. 81 ANNUAL INVESTMENT MANAGEMENT AGREEMENT APPROVAL PROCESS The Board of Trustees is responsible for overseeing the performance of the investment adviser to the Funds and determining whether to continue the advisory arrangements. At a meeting held on May 23-25, 2006 (the "May Meeting"), the Board of Trustees of the Funds, including the independent Trustees, unanimously approved the continuance of the Investment Management Agreement between each Fund and NAM (the "Fund Adviser"). THE APPROVAL PROCESS During the course of the year, the Board received a wide variety of materials relating the services provided by the Fund Adviser and the performance of the Fund. To assist the Board in its evaluation of the advisory contract with the Fund Adviser at the May Meeting, the independent Trustees received extensive materials in advance of their meeting which outlined, among other things: o the nature, extent and quality of services provided by the Fund Adviser; o the organization and business operations of the Fund Adviser, including the responsibilities of various departments and key personnel; o the Fund's past performance, the Fund's performance compared to funds of similar investment objectives compiled by an independent third party and to customized benchmarks; o the profitability of the Fund Adviser and certain industry profitability analyses for unaffiliated advisers; o the expenses of the Fund Adviser in providing the various services; o the advisory fees (gross and net management fees) and total expense ratios of the Fund, including comparisons of such fees and expenses with those of comparable, unaffiliated funds based on information and data provided by Lipper (the "Peer Universe") as well as compared to a subset of funds within the Peer Universe (the "Peer Group") to the respective Fund (as applicable); o the advisory fees the Fund Adviser assesses to other types of investment products or clients; o the soft dollar practices of the Fund Adviser, if any; o from independent legal counsel, a legal memorandum describing, among other things, the duties of the Trustees under the Investment Company Act of 1940 (the "1940 Act") as well as the general principles of relevant state law in reviewing and approving advisory contracts; the requirements of the 1940 Act in such matters; an adviser's fiduciary duty with respect to advisory agreements and compensation; the standards used by courts in determining whether investment company boards of directors have fulfilled their duties and factors to be considered by the board in voting on advisory agreements. At the May Meeting, the Fund Adviser made a presentation to and responded to questions from the Board. After the presentations and after reviewing the written materials, the independent Trustees met privately with their legal counsel to review the Board's duties in reviewing advisory contracts and consider the renewal of the advisory contracts. It is with this background that the Trustees considered the advisory contract with the Fund Adviser. The independent Trustees, in consultation with independent counsel, reviewed the factors set out in judicial decisions and SEC directives relating to the renewal of advisory contracts. As outlined in more detail below, the Trustees considered all factors they believed relevant with respect to each Fund, including the following: (a) the nature, extent and quality of the services to be provided by the Fund Adviser; (b) the investment performance of the Fund and the Fund Adviser; (c) the costs of the services to be provided and profits to be realized by the Fund Adviser and its affiliates from the relationship with the Fund; (d) the extent to which economies of scale would be realized as the Fund grows; and (e) whether fee levels reflect these economies of scale for the benefit of Fund investors. A. NATURE, EXTENT AND QUALITY OF SERVICES In reviewing the Fund Adviser, the Trustees considered the nature, extent and quality of the Fund Adviser's services. The Trustees reviewed materials outlining, among other things, the Fund Adviser's organization and business; the types of services that the Fund Adviser or its affiliates provide and are expected to provide to the Funds; the performance record of the applicable Fund (as described in further detail below) and any initiatives and enhancements Nuveen has taken for its municipal fund product line. In connection with their continued service as Trustees, the Trustees also have a good understanding of each Fund Adviser's organization, operations and personnel. In this regard, the Trustees are familiar with and have evaluated the professional experience, qualifications and credentials of the Fund Adviser's personnel. The Trustees further reviewed materials describing, among other things, the teams and per- 82 sonnel involved in the investment, research, risk-management and operational processes involved in managing municipal funds and their respective functions. Given the Trustees' experience with the Funds and Fund Adviser, the Trustees recognized the demonstrated history of care and depth of experience of the respective personnel in managing these Funds. In this regard, the Trustees considered the continued quality of the Fund Adviser's investment process in making portfolio management decisions as well as additional refinements and improvements adopted to the portfolio management processes noted below. With respect to the services provided to municipal funds, including the Funds, the Trustees noted that the Fund Adviser continues to make refinements to its portfolio management process including, among other things, the increased use of derivatives to enhance management of risk, additional analytical software for research staff and improved municipal pricing processes. In addition to advisory services, the independent Trustees considered the quality of any administrative or non-advisory services provided. The Fund Adviser provides the Funds with such administrative and other services (exclusive of, and in addition to, any such services provided by others for the Funds) and officers and other personnel as are necessary for the operations of the respective Fund. In connection with the review of the Investment Management Agreement, the Trustees considered the extent and quality of these other services which include, among other things, providing: product management (e.g., product positioning, performance benchmarking, risk management); fund administration (e.g., daily net asset value pricing and reconciliation, tax reporting, fulfilling regulatory filing requirements); oversight of third party service providers; administration of board relations (e.g., organizing board meetings and preparing related materials); compliance (e.g., monitoring compliance with investment policies and guidelines and regulatory requirements); and legal support (e.g., helping prepare and file registration statements, amendments thereto, proxy statements and responding to regulatory requests and/or inquiries). As the Funds operate in a highly regulated industry and given the importance of compliance, the Trustees considered, in particular, the additions of experienced personnel to the compliance teams and the enhancements to technology and related systems to support the compliance activities for the Funds (including a new reporting system for quarterly portfolio holdings). In addition to the foregoing, the Trustees also noted the additional services that the Fund Adviser or its affiliates provide to closed-end funds, including, in particular, secondary market support activities. The Trustees recognized Nuveen's continued commitment to supporting the secondary market for the common shares of its closed-end funds through a variety of initiatives designed to raise investor and analyst awareness and understanding of closed-end funds. These efforts include providing advertising and other media relations programs, continued contact with analysts, maintaining and enhancing its website for closed-end funds, and targeted advisor communication programs. With respect to funds that utilize leverage through the issuance of preferred shares, the Trustees noted Nuveen's continued support for the preferred shares by maintaining, among other things, an in-house preferred trading desk; designating a product manager whose responsibilities include creating and disseminating product information and managing relations in connection with the preferred share auction; and maintaining systems necessary to test compliance with rating agency requirements. Based on their review, the Trustees found that, overall, the nature, extent and quality of services provided (and expected to be provided) to the respective Funds under the Investment Management Agreement were of a high level and were satisfactory. B. THE INVESTMENT PERFORMANCE OF THE FUND AND FUND ADVISERS The Board considered the investment performance for each Fund, including the Fund's historic performance as well as its performance compared to funds with similar investment objectives identified by an independent third party (the "Performance Peer Group") and portfolio level performance against customized benchmarks, as described below. In evaluating the performance information, in certain instances, the Trustees noted that the closest Performance Peer Group for a Fund still may not adequately reflect such Fund's investment objectives, strategies and portfolio duration, thereby limiting the usefulness of the comparisons of such Fund's performance with that of the Performance Peer Group. With respect to state specific municipal funds, the Trustees recognized that certain state municipal funds do not have a corresponding state specific Performance Peer Group in which case their performance is measured against a more general municipal category for various states. The closed-end state municipal funds that do not have corresponding state-specific Performance Peer Groups are from Arizona, Connecticut, Georgia, Maryland, Massachusetts, Missouri, North Carolina, Ohio, Texas, and Virginia. Further, due to a lack of state-specific unleveraged categories, certain unleveraged state municipal funds are included in their leveraged state category (such as the California Select Tax-Free Fund, California Municipal Value Fund, New York Select Tax Free Fund and New York Municipal Value Fund). In reviewing performance, the Trustees reviewed performance information including, among other things, total return information compared with the Fund's Performance Peer Group for the one-, three- and five-year periods (as applicable) ending December 31, 2005. The Trustees also reviewed the Fund's portfolio level performance (which does not reflect fund level fees and expenses) compared to customized portfolio-level benchmarks for the one- and three-year periods ending December 31, 2005 (as applicable). This analysis is designed to assess the efficacy of investment decisions against appropriate measures of risk and total return, within specific market segments. This information supplements the Fund performance information provided to the Board at each of their quarterly meetings. Based on their review, the Trustees determined that the respective Fund's absolute and relative investment performance over time had been satisfactory. C. FEES, EXPENSES AND PROFITABILITY 1. FEES AND EXPENSES In evaluating the management fees and expenses of a Fund, the Board reviewed, among other things, the Fund's advisory fees (net and gross management fees) and total expense ratios (before and after expense reimbursements and/or waivers) in absolute terms as well as comparisons to the gross management fees (before waivers), net management fees (after waivers) and total expense ratios (before and after waivers) of comparable funds in the Peer Universe and the Peer Group. The Trustees reviewed data regarding the construction of Peer Groups as well as the methods of measurement for the fee and expense analysis and the performance analysis. In certain cases, due to the small number of peers in the Peer Universe, the Peer Universe and Peer Group 83 ANNUAL INVESTMENT MANAGEMENT AGREEMENT APPROVAL PROCESS (continued) may be the same. Further, the Trustees recognized that in certain cases the closest Peer Universe and/or Peer Group did not adequately reflect the Fund's investment objectives and strategies limiting the usefulness of comparisons. In reviewing comparisons, the Trustees also considered the size of the Peer Universe and/or Peer Group, the composition of the Peer Group (including differences in the use of leverage and insurance) as well as differing levels of fee waivers and/or expense reimbursements. In this regard, the Trustees considered the fund-level and complex-wide breakpoint schedules (described in further detail below) and any fee waivers and reimbursements provided by Nuveen (applicable, in particular, for certain Funds launched since 1999). Based on their review of the fee and expense information provided, the Trustees determined that each Fund's net total expense ratio was within an acceptable range compared to peers. 2. COMPARISONS WITH THE FEES OF OTHER CLIENTS The Trustees further reviewed data comparing the advisory fees of the Fund Adviser with fees the Fund Adviser charges to other clients, including municipal managed accounts. In general, the fees charged for separate accounts are somewhat lower than the fees assessed to the Funds. The Trustees recognized that the differences in fees are attributable to a variety of factors, including the differences in services provided, product distribution, portfolio investment policies, investor profiles, account sizes and regulatory requirements. The Trustees noted, in particular, that the range of services provided to the Funds is more extensive than that provided to managed separate accounts. As described in further detail above, such additional services include, but are not limited to, providing: product management, fund administration, oversight of third party service providers, administration of board relations, and legal support. Funds further operate in a highly regulated industry requiring extensive compliance functions compared to the other investment products. In addition to the costs of the additional services, administrative costs may also be greater for the Funds as the average account size for separate accounts are notably larger than the retail accounts of the Funds. Given the differences in the product structures, particularly the extensive services provided to closed-end municipal funds, the Trustees believe such facts justify the different levels of fees. 3. PROFITABILITY OF FUND ADVISERS In conjunction with its review of fees, the Trustees also considered the profitability of Nuveen Investments for advisory activities (which incorporated Nuveen's wholly-owned affiliated sub-advisers). The Trustees reviewed data comparing Nuveen's profitability with other fund sponsors prepared by three independent third party service providers as well as comparisons of the revenues, expenses and profits margins of various unaffiliated management firms with similar amounts of assets under management prepared by Nuveen. The Trustees further reviewed the 2005 Annual Report for Nuveen Investments. In considering profitability, the Trustees recognized the inherent limitations in determining profitability as well as the difficulties in comparing the profitability of other unaffiliated advisers. Profitability may be affected by numerous factors, including the methodology for allocating expenses, the advisor's business mix, the types of funds managed, the adviser's capital structure and cost of capital. Further, individual fund or product line profitability of other sponsors is generally not publicly available. Accordingly, the profitability information that is publicly available from various investment advisory or management firms may not be representative of the industry. Notwithstanding the foregoing, in reviewing profitability, the Trustees reviewed Nuveen's methodology and assumptions for allocating expenses across product lines to determine profitability. In this regard, the methods of allocation used appeared reasonable. The Trustees also, to the extent available, compared Nuveen's profitability margins (including pre- and post-marketing profit margins) with the profitability of various unaffiliated management firms. The Trustees noted that Nuveen's profitability is enhanced due to its efficient internal business model. The Trustees also recognized that while a number of factors affect profitability, Nuveen's profitability may change as fee waivers and/or expense reimbursement commitments of Nuveen to various funds in the Nuveen complex expire. To keep apprised of profitability and developments that may affect profitability, the Trustees have requested profitability analysis be provided periodically during the year. Based on their review, the Trustees were satisfied that the respective Fund Adviser's level of profitability from its relationship with each Fund was reasonable in light of the services provided. In evaluating the reasonableness of the compensation, the Trustees also considered any other revenues paid to a Fund Adviser as well as any indirect benefits (such as soft dollar arrangements, if any) the Fund Adviser and its affiliates are expected to receive that are directly attributable to their management of the Funds, if any. See Section E below for additional information. Based on their review of the overall fee arrangements of the applicable Fund, the Trustees determined that the advisory fees and expenses of the respective Fund were reasonable. 84 D. ECONOMIES OF SCALE AND WHETHER FEE LEVELS REFLECT THESE ECONOMIES OF SCALE With respect to economies of scale, the Trustees recognized the potential benefits resulting from the costs of a fund being spread over a larger asset base as a fund grows. To help ensure the shareholders share in these benefits, the Trustees have reviewed and considered the breakpoints in the advisory fee schedules that reduce advisory fees as the applicable Fund's assets grow. In addition to advisory fee breakpoints as assets in a respective Fund rise, after lengthy discussions with management, the Board also approved a complex-wide fee arrangement that was introduced on August 1, 2004. Pursuant to the complex-wide fee arrangement, the fees of the funds in the Nuveen complex, including the Funds, are reduced as the assets in the fund complex reach certain levels. In evaluating the complex-wide fee arrangement, the Trustees considered, among other things, the historic and expected fee savings to shareholders as assets grow, the amount of fee reductions at various asset levels, and that the arrangement would extend to all funds in the Nuveen complex. The Trustees noted that 2005 was the first full year to reflect the fee reductions from the complex wide fee arrangement. The Trustees also considered the impact, if any, the complex-wide fee arrangement may have on the level of services provided. Based on their review, the Trustees concluded that the breakpoint schedule and complex-wide fee arrangement currently was acceptable and desirable in providing benefits from economies of scale to shareholders. E. INDIRECT BENEFITS In evaluating fees, the Trustees also considered any indirect benefits or profits the Fund Adviser or its affiliates may receive as a result of its relationship with each Fund. In this regard, the Trustees considered revenues received by affiliates of the Fund Adviser for serving as agent at Nuveen's preferred trading desk and for serving as a co-manager in the initial public offering of new closed-end exchange traded funds. In addition to the above, the Trustees considered whether the Fund Adviser received any benefits from soft dollar arrangements. With respect to NAM, the Trustees noted that NAM does not currently have any soft dollar arrangements and does not pay excess brokerage commissions (or spreads on principal transactions) in order to receive research services; however, the Fund Adviser may from time to time receive and have access to research generally provided to institutional clients. The Trustees did not identify any single factor discussed previously as all-important or controlling. The Trustees, including a majority of independent Trustees, concluded that the terms of the Investment Management Agreements were fair and reasonable, that the Fund Adviser's fees are reasonable in light of the services provided to each Fund, and that the renewal of the Investment Management Agreements should be approved. 85 Reinvest Automatically EASILY AND CONVENIENTLY Sidebar text: NUVEEN MAKES REINVESTING EASY. A PHONE CALL IS ALL IT TAKES TO SET UP YOUR REINVESTMENT ACCOUNT. NUVEEN EXCHANGE-TRADED CLOSED-END FUNDS DIVIDEND REINVESTMENT PLAN Your Nuveen Exchange-Traded Closed-End Fund allows you to conveniently reinvest dividends and/or capital gains distributions in additional fund shares. By choosing to reinvest, you'll be able to invest money regularly and automatically, and watch your investment grow through the power of tax-free compounding. Just like dividends or distributions in cash, there may be times when income or capital gains taxes may be payable on dividends or distributions that are reinvested. It is important to note that an automatic reinvestment plan does not ensure a profit, nor does it protect you against loss in a declining market. EASY AND CONVENIENT To make recordkeeping easy and convenient, each month you'll receive a statement showing your total dividends and distributions, the date of investment, the shares acquired and the price per share, and the total number of shares you own. HOW SHARES ARE PURCHASED The shares you acquire by reinvesting will either be purchased on the open market or newly issued by the Fund. If the shares are trading at or above net asset value at the time of valuation, the Fund will issue new shares at the then-current market price. If the shares are trading at less than net asset value, shares for your account will be purchased on the open market. Dividends and distributions received to purchase shares in the open market will normally be invested shortly after the dividend payment date. No interest will be paid on dividends and distributions awaiting reinvestment. Because the market price of the shares may increase before purchases are completed, the average purchase price per share may exceed the market price at the time of valuation, resulting in the acquisition of fewer shares than if the dividend or distribution had been paid in shares issued by the Fund. A pro rata portion of any applicable brokerage commissions on open market purchases will be paid by Plan participants. These commissions usually will be lower than those charged on individual transactions. FLEXIBLE You may change your distribution option or withdraw from the Plan at any time, should your needs or situation change. Should you withdraw, you can receive a certificate for all whole shares credited to your reinvestment account and cash payment for fractional shares, or cash payment for all reinvestment account shares, less brokerage commissions and a $2.50 service fee. You can reinvest whether your shares are registered in your name, or in the name of a brokerage firm, bank, or other nominee. Ask your investment advisor if his or her firm will participate on your behalf. Participants whose shares are registered in the name of one firm may not be able to transfer the shares to another firm and continue to participate in the Plan. The Fund reserves the right to amend or terminate the Plan at any time. Although the Fund reserves the right to amend the Plan to include a service charge payable by the participants, there is no direct service charge to participants in the Plan at this time. CALL TODAY TO START REINVESTING DIVIDENDS AND/OR DISTRIBUTIONS For more information on the Nuveen Automatic Reinvestment Plan or to enroll in or withdraw from the Plan, speak with your financial advisor or call us at (800) 257-8787. 86 Other Useful INFORMATION QUARTERLY PORTFOLIO OF INVESTMENTS AND PROXY VOTING INFORMATION Each Fund's (i) quarterly portfolio of investments, (ii) information regarding how the Funds voted proxies relating to portfolio securities held during the 12-month period ended June 30, 2006, and (iii) a description of the policies and procedures that the Funds used to determine how to vote proxies relating to portfolio securities are available without charge, upon request, by calling Nuveen Investments toll-free at (800) 257-8787 or on Nuveen's website at www.nuveen.com. You may also obtain this and other Fund information directly from the Securities and Exchange Commission ("SEC"). The SEC may charge a copying fee for this information. Visit the SEC on-line at http://www.sec.gov or in person at the SEC's Public Reference Room in Washington, D.C. Call the SEC at 1-202-942-8090 for room hours and operation. You may also request Fund information by sending an e-mail request to publicinfo@sec.gov or by writing to the SEC's Public References Section at 450 Fifth Street NW, Washington, D.C. 20549. CEO CERTIFICATION DISCLOSURE Each Fund's Chief Executive Officer has submitted to the New York Stock Exchange the annual CEO certification as required by Section 303A.12(a) of the NYSE Listed Company Manual. Each Fund has filed with the Securities and Exchange Commission the certification of its Chief Executive Officer and Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act. GLOSSARY OF TERMS USED IN THIS REPORT AVERAGE ANNUAL TOTAL RETURN: This is a commonly used method to express an investment's performance over a particular, usually multi-year time period. It expresses the return that would have been necessary each year to equal the investment's actual cumulative performance (including change in NAV or market price and reinvested dividends and capital gains distributions, if any) over the time period being considered. AVERAGE EFFECTIVE MATURITY: The average of all the maturities of the bonds in a Fund's portfolio, computed by weighting each maturity date (the date the security comes due) by the market value of the security. This figure does not account for the likelihood of prepayments or the exercise of call provisions. LEVERAGE-ADJUSTED DURATION: Duration is a measure of the expected period over which a bond's principal and interest will be paid, and consequently is a measure of the sensitivity of a bond's or bond Fund's value to changes when market interest rates change. Generally, the longer a bond's or Fund's duration, the more the price of the bond or Fund will change as interest rates change. Leverage-adjusted duration takes into account the leveraging process for a Fund and therefore is longer than the duration of the Fund's portfolio of bonds. MARKET YIELD (ALSO KNOWN AS DIVIDEND YIELD OR CURRENT YIELD): An investment's current annualized dividend divided by its current market price. NET ASSET VALUE (NAV): A Fund's common share NAV per share is calculated by subtracting the liabilities of the Fund (including any MuniPreferred shares issued in order to leverage the Fund) from its total assets and then dividing the remainder by the number of shares outstanding. Fund NAVs are calculated at the end of each business day. TAXABLE-EQUIVALENT YIELD: The yield necessary from a fully taxable investment to equal, on an after-tax basis, the yield of a municipal bond investment. BOARD OF TRUSTEES Robert P. Bremner Lawrence H. Brown Jack B. Evans William C. Hunter David J. Kundert William J. Schneider Timothy R. Schwertfeger Judith M. Stockdale Eugene S. Sunshine FUND MANAGER Nuveen Asset Management 333 West Wacker Drive Chicago, IL 60606 CUSTODIAN State Street Bank & Trust Company Boston, MA TRANSFER AGENT AND SHAREHOLDER SERVICES State Street Bank & Trust Company Nuveen Funds P.O. Box 43071 Providence, RI 02940-3071 (800) 257-8787 LEGAL COUNSEL Chapman and Cutler LLP Chicago, IL INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Ernst & Young LLP Chicago, IL Each Fund intends to repurchase shares of its own common or preferred stock in the future at such times and in such amounts as is deemed advisable. No shares were repurchased during the period covered by this report. Any future repurchases will be reported to shareholders in the next annual or semiannual report. 87 Photo of: 2 women looking at a photo album. Nuveen Investments: SERVING Investors For GENERATIONS Since 1898, financial advisors and their clients have relied on Nuveen Investments to provide dependable investment solutions. For the past century, Nuveen Investments has adhered to the belief that the best approach to investing is to apply conservative risk-management principles to help minimize volatility. Building on this tradition, we today offer a range of high quality equity and fixed-income solutions that are integral to a well-diversified core portfolio. Our clients have come to appreciate this diversity, as well as our continued adherence to proven, long-term investing principles. WE OFFER MANY DIFFERENT INVESTING SOLUTIONS FOR OUR CLIENTS' DIFFERENT NEEDS. Managing more than $145 billion in assets, Nuveen Investments offers access to a number of different asset classes and investing solutions through a variety of products. Nuveen Investments markets its capabilities under four distinct brands: Nuveen, a leader in fixed-income investments; NWQ, a leader in value-style equities; Rittenhouse, a leader in growth-style equities; and Symphony, a leading institutional manager of market-neutral alternative investment portfolios. FIND OUT HOW WE CAN HELP YOU REACH YOUR FINANCIAL GOALS. To learn more about the products and services Nuveen Investments offers, talk to your financial advisor, or call us at (800) 257-8787. Please read the information provided carefully before you invest. Be sure to obtain a prospectus, where applicable. Investors should consider the investment objective and policies, risk considerations, charges and expenses of the Fund carefully before investing. The prospectus contains this and other information relevant to an investment in the Fund. For a prospectus, please contact your securities representative or Nuveen Investments, 333 W. Wacker Dr., Chicago, IL 60606. Please read the prospectus carefully before you invest or send money. o Share prices o Fund details Learn more o Daily financial news about Nuveen Funds at o Investor education WWW.NUVEEN.COM/CEF o Interactive planning tools Logo: NUVEEN Investments EAN-A-0506D ITEM 2. CODE OF ETHICS. As of the end of the period covered by this report, the registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. There were no amendments to or waivers from the Code during the period covered by this report. The registrant has posted the code of ethics on its website at www.nuveen.com/etf. (To view the code, click on the Investor Resources drop down menu box, click on Fund Governance and then click on Code of Conduct.) ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The registrant's Board of Directors or Trustees determined that the registrant has at least one "audit committee financial expert" (as defined in Item 3 of Form N-CSR) serving on its Audit Committee. The registrant's audit committee financial expert is Jack B. Evans, Chairman of the Audit Committee, who is "independent" for purposes of Item 3 of Form N-CSR. Mr. Evans was formerly President and Chief Operating Officer of SCI Financial Group, Inc., a full service registered broker-dealer and registered investment adviser ("SCI"). As part of his role as President and Chief Operating Officer, Mr. Evans actively supervised the Chief Financial Officer (the "CFO") and actively supervised the CFO's preparation of financial statements and other filings with various regulatory authorities. In such capacity, Mr. Evans was actively involved in the preparation of SCI's financial statements and the resolution of issues raised in connection therewith. Mr. Evans has also served on the audit committee of various reporting companies. At such companies, Mr. Evans was involved in the oversight of audits, audit plans, and the preparation of financial statements. Mr. Evans also formerly chaired the audit committee of the Federal Reserve Bank of Chicago. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Nuveen Virginia Dividend Advantage Municipal Fund 2 The following tables show the amount of fees that Ernst & Young LLP, the Fund's auditor, billed to the Fund during the Fund's last two full fiscal years. For engagements with Ernst & Young LLP the Audit Committee approved in advance all audit services and non-audit services that Ernst & Young LLP provided to the Fund, except for those non-audit services that were subject to the pre-approval exception under Rule 2-01 of Regulation S-X (the "pre-approval exception"). The pre-approval exception for services provided directly to the Fund waives the pre-approval requirement for services other than audit, review or attest services if: (A) the aggregate amount of all such services provided constitutes no more than 5% of the total amount of revenues paid by the Fund to its accountant during the fiscal year in which the services are provided; (B) the Fund did not recognize the services as non-audit services at the time of the engagement; and (C) the services are promptly brought to the Audit Committee's attention, and the Committee (or its delegate) approves the services before the audit is completed. The Audit Committee has delegated certain pre-approval responsibilities to its Chairman (or, in his absence, any other member of the Audit Committee). SERVICES THAT THE FUND'S AUDITOR BILLED TO THE FUND AUDIT FEES BILLED AUDIT-RELATED FEES TAX FEES ALL OTHER FEES FISCAL YEAR ENDED TO FUND(1) BILLED TO FUND(2) BILLED TO FUND(3) BILLED TO FUND(4) - ---------------------------------------------------------------------------------------------------------------------------------- May 31, 2006 $ 9,260 $ 0 $ 537 $ 2,850 - ---------------------------------------------------------------------------------------------------------------------------------- Percentage approved 0% 0% 0% 0% pursuant to pre-approval exception - ---------------------------------------------------------------------------------------------------------------------------------- May 31, 2005 $ 8,710 $ 0 $ 583 $ 2,650 - ---------------------------------------------------------------------------------------------------------------------------------- Percentage approved 0% 0% 0% 0% pursuant to pre-approval exception - ---------------------------------------------------------------------------------------------------------------------------------- (1) "Audit Fees" are the aggregate fees billed for professional services for the audit of the Fund's annual financial statements and services provided in connection with statutory and regulatory filings or engagements. (2) "Audit Related Fees" are the aggregate fees billed for assurance and related services reasonably related to the performance of the audit or review of financial statements and are not reported under "Audit Fees". (3) "Tax Fees" are the aggregate fees billed for professional services for tax advice, tax compliance, and tax planning. (4) "All Other Fees" are the aggregate fees billed for products and services other than "Audit Fees", "Audit Related Fees", and "Tax Fees". SERVICES THAT THE FUND'S AUDITOR BILLED TO THE ADVISER AND AFFILIATED FUND SERVICE PROVIDERS The following tables show the amount of fees billed by Ernst & Young LLP to Nuveen Asset Management ("NAM" or the "Adviser"), and any entity controlling, controlled by or under common control with NAM ("Control Affiliate") that provides ongoing services to the Fund ("Affiliated Fund Service Provider"), for engagements directly related to the Fund's operations and financial reporting, during the Fund's last two full fiscal years. The tables also show the percentage of fees subject to the pre-approval exception. The pre-approval exception for services provided to the Adviser and any Affiliated Fund Service Provider (other than audit, review or attest services) waives the pre-approval requirement if: (A) the aggregate amount of all such services provided constitutes no more than 5% of the total amount of revenues paid to Ernst & Young LLP by the Fund, the Adviser and Affiliated Fund Service Providers during the fiscal year in which the services are provided that would have to be pre-approved by the Audit Committee; (B) the Fund did not recognize the services as non-audit services at the time of the engagement; and (C) the services are promptly brought to the Audit Committee's attention, and the Committee (or its delegate) approves the services before the Fund's audit is completed. FISCAL YEAR ENDED AUDIT-RELATED FEES TAX FEES BILLED TO ALL OTHER FEES BILLED TO ADVISER AND ADVISER AND BILLED TO ADVISER AFFILIATED FUND AFFILIATED FUND AND AFFILIATED FUND SERVICE PROVIDERS SERVICE PROVIDERS(1) SERVICE PROVIDERS - ------------------------------------------------------------------------------------------------------------------ May 31, 2006 $ 0 $ 2,200 $ 0 - ------------------------------------------------------------------------------------------------------------------ Percentage approved 0% 0% 0% pursuant to pre-approval exception - ------------------------------------------------------------------------------------------------------------------ May 31, 2005 $ 0 $ 2,200 $ 0 - ------------------------------------------------------------------------------------------------------------------ Percentage approved 0% 0% 0% pursuant to pre-approval exception - ------------------------------------------------------------------------------------------------------------------ (1) The amounts reported for the Fund under the column heading "Tax Fees" represents amounts billed to the Adviser exclusively for the preparation for the Fund's tax return, the cost of which is borne by the Adviser. In the aggregate, for all Nuveen funds for which Ernst & Young LLP serves as independent registered public accounting firm, these fees amounted to $275,000 in 2006 and $282,575 in 2005. NON-AUDIT SERVICES The following table shows the amount of fees that Ernst & Young LLP billed during the Fund's last two full fiscal years for non-audit services. The Audit Committee is required to pre-approve non-audit services that Ernst & Young LLP provides to the Adviser and any Affiliated Fund Services Provider, if the engagement related directly to the Fund's operations and financial reporting (except for those subject to the de minimis exception described above). The Audit Committee requested and received information from Ernst & Young LLP about any non-audit services that Ernst & Young LLP rendered during the Fund's last fiscal year to the Adviser and any Affiliated Fund Service Provider. The Committee considered this information in evaluating Ernst & Young LLP's independence. FISCAL YEAR ENDED TOTAL NON-AUDIT FEES BILLED TO ADVISER AND AFFILIATED FUND SERVICE TOTAL NON-AUDIT FEES PROVIDERS (ENGAGEMENTS BILLED TO ADVISER AND RELATED DIRECTLY TO THE AFFILIATED FUND SERVICE TOTAL NON-AUDIT FEES OPERATIONS AND FINANCIAL PROVIDERS (ALL OTHER BILLED TO FUND REPORTING OF THE FUND) ENGAGEMENTS) TOTAL - ---------------------------------------------------------------------------------------------------------------------------------- May 31, 2006 $ 3,387 $ 2,200 $ 0 $ 5,587 May 31, 2005 $ 3,233 $ 2,200 $ 0 $ 5,433 "Non-Audit Fees billed to Adviser" for both fiscal year ends represent "Tax Fees" billed to Adviser in their respective amounts from the previous table. Audit Committee Pre-Approval Policies and Procedures. Generally, the Audit Committee must approve (i) all non-audit services to be performed for the Fund by the Fund's independent accountants and (ii) all audit and non-audit services to be performed by the Fund's independent accountants for the Affiliated Fund Service Providers with respect to operations and financial reporting of the Fund. Regarding tax and research projects conducted by the independent accountants for the Fund and Affiliated Fund Service Providers (with respect to operations and financial reports of the Fund) such engagements will be (i) pre-approved by the Audit Committee if they are expected to be for amounts greater than $10,000; (ii) reported to the Audit Committee chairman for his verbal approval prior to engagement if they are expected to be for amounts under $10,000 but greater than $5,000; and (iii) reported to the Audit Committee at the next Audit Committee meeting if they are expected to be for an amount under $5,000. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. The registrant's Board of Directors or Trustees has a separately designated Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (15 U.S.C. 78c(a)(58)(A)). The members of the audit committee are Robert P. Bremner, Lawrence H. Brown, Jack B. Evans, William J. Schneider and Eugene S. Sunshine. ITEM 6. SCHEDULE OF INVESTMENTS. See Portfolio of Investments in Item 1. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. The registrant invests its assets primarily in municipal bonds and cash management securities. On rare occasions the registrant may acquire, directly or through a special purpose vehicle, equity securities of a municipal bond issuer whose bonds the registrant already owns when such bonds have deteriorated or are expected shortly to deteriorate significantly in credit quality. The purpose of acquiring equity securities generally will be to acquire control of the municipal bond issuer and to seek to prevent the credit deterioration or facilitate the liquidation or other workout of the distressed issuer's credit problem. In the course of exercising control of a distressed municipal issuer, NAM may pursue the registrant's interests in a variety of ways, which may entail negotiating and executing consents, agreements and other arrangements, and otherwise influencing the management of the issuer. NAM does not consider such activities proxy voting for purposes of Rule 206(4)-6 under the 1940 Act, but nevertheless provides reports to the registrant's Board of Trustees on its control activities on a quarterly basis. In the rare event that a municipal issuer were to issue a proxy or that the registrant were to receive a proxy issued by a cash management security, NAM would either engage an independent third party to determine how the proxy should be voted or vote the proxy with the consent, or based on the instructions, of the registrant's Board of Trustees or its representative. A member of NAM's legal department would oversee the administration of the voting, and ensure that records were maintained in accordance with Rule 206(4)-6, reports were filed with the SEC on Form N-PX, and the results provided to the registrant's Board of Trustees and made available to shareholders as required by applicable rules. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. THE PORTFOLIO MANAGER The following individual has primary responsibility for the day-to-day implementation of the registrant's investment strategies: NAME FUND Cathryn Steeves Nuveen Virginia Dividend Advantage Municipal Fund 2 Other Accounts Managed. In addition to managing the registrant, the portfolio manager is also primarily responsible for the day-to-day portfolio management of the following accounts: TYPE OF ACCOUNT NUMBER OF PORTFOLIO MANAGER MANAGED ACCOUNTS ASSETS* - ------------------------------------------------------------------------------------- Cathryn Steeves Registered Investment Company 67 $13.204 billion Other Pooled Investment Vehicles 0 $0 Other Accounts 0 $0 * Assets are as of May 31, 2006. None of the assets in these accounts are subject to an advisory fee based on performance. Compensation. Portfolio manager compensation consists of three basic elements--base salary, cash bonus and long-term incentive compensation. The compensation strategy is to annually compare overall compensation, including these three elements, to the market in order to create a compensation structure that is competitive and consistent with similar financial services companies. As discussed below, several factors are considered in determining each portfolio manager's total compensation. In any year these factors may include, among others, the effectiveness of the investment strategies recommended by the portfolio manager's investment team, the investment performance of the accounts managed by the portfolio manager, and the overall performance of Nuveen Investments, Inc. (the parent company of NAM). Although investment performance is a factor in determining the portfolio manager's compensation, it is not necessarily a decisive factor. The portfolio manager's performance is evaluated in part by comparing manager's performance against a specified investment benchmark. This fund-specific benchmark is a customized subset (limited to bonds in each Fund's specific state and with certain maturity parameters) of the S&P/Investortools Municipal Bond index, an index comprised of bonds held by managed municipal bond fund customers of Standard & Poor's Securities Pricing, Inc. that are priced daily and whose fund holdings aggregate at least $2 million. As of May 31, 2006, the S&P/Investortools Municipal Bond index was comprised of 46.875 securities with an aggregate current market value of $868 billion. Base salary. Portfolio managers are paid a base salary that is set at a level determined by NAM in accordance with its overall compensation strategy discussed above. NAM is not under any current contractual obligation to increase a portfolio manager's base salary. Cash bonus. Portfolio managers are also eligible to receive an annual cash bonus. The level of this bonus is based upon evaluations and determinations made by each portfolio manager's supervisors, along with reviews submitted by his peers. These reviews and evaluations often take into account a number of factors, including the effectiveness of the investment strategies recommended to the NAM's investment team, the performance of the accounts for which he/she serves as portfolio manager relative to any benchmarks established for those accounts, his/her effectiveness in communicating investment performance to stockholders and their representatives, and his/her contribution to the NAM investment process and to the execution of investment strategies. The cash bonus component is also impacted by the overall performance of Nuveen Investments, Inc. in achieving its business objectives. Long-term incentive compensation. Portfolio managers are eligible to receive bonus compensation in the form of equity-based awards issued in securities issued by Nuveen Investments, Inc. The amount of such compensation is dependent upon the same factors articulated for cash bonus awards but also factors in his long-term potential with the firm. Material Conflicts of Interest. The portfolio manager's simultaneous management of the registrant and the other accounts noted above may present actual or apparent conflicts of interest with respect to the allocation and aggregation of securities orders placed on behalf of the Registrant and the other account. NAM, however, believes that such potential conflicts are mitigated by the fact that the NAM has adopted several policies that address potential conflicts of interest, including best execution and trade allocation policies that are designed to ensure (1) that portfolio management is seeking the best price for portfolio securities under the circumstances, (2) fair and equitable allocation of investment opportunities among accounts over time and (3) compliance with applicable regulatory requirements. All accounts are to be treated in a non-preferential manner, such that allocations are not based upon account performance, fee structure or preference of the portfolio manager. In addition, NAM has adopted a Code of Conduct that sets forth policies regarding conflicts of interest. Beneficial Ownership of Securities. As of the May 31, 2006, the portfolio manager beneficially owned the following dollar range of equity securities issued by the Registrant and other Nuveen Funds managed by NAM's municipal investment team. - ------------------------------------------------------------------------------------------------------------------------ DOLLAR RANGE OF DOLLAR EQUITY RANGE OF SECURITIES EQUITY BENEFICIALLY SECURITIES OWNED IN BENEFICIALLY THE REMAINDER OWNED IN OF NUVEEN FUND FUNDS MANAGED BY NAM'S MUNICIPAL INVESTMENT NAME OF PORTFOLIO MANAGER FUND TEAM - ------------------------------------------------------------------------------------------------------------------------ Cathryn Steeves Nuveen Virginia Dividend Advantage Municipal Fund 2 $0 $10,001-$50,000 - ------------------------------------------------------------------------------------------------------------------------ PORTFOLIO MANAGER BIO: Cathryn Steeves, PhD is currently a portfolio manager for 68 state-specific municipal bond funds. She joined Nuveen in 1996 and worked as a senior analyst in the healthcare sector. Cathryn has an undergraduate degree from Wake Forest University, an MA, MPhil and a PhD from Columbia University. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. During this reporting period, the registrant's Board of Trustees implemented a change to the procedures by which shareholders may recommend nominees to the registrant's board of trustees by amending the registrant's by-laws to include a provision specifying the date by which shareholder nominations for election as trustee at a subsequent meeting must be submitted to the registrant. Shareholders must deliver or mail notice to the registrant not less than forty-five days nor more than sixty days prior to the first anniversary date of the date on which the registrant first mailed its proxy materials for the prior year's annual meeting; provided, however, if and only if the annual meeting is not scheduled to be held within a period that commences thirty days before the first anniversary date of the annual meeting for the preceding year and ends thirty days after such anniversary date (an annual meeting date outside such period being referred to as an "Other Annual Meeting Date" hereafter), the shareholder notice must be given no later than the close of business on the date forty-five days prior to such Other Annual Meeting Date or the tenth business day following the date such Other Annual Meeting Date is first publicly announced or disclosed. The shareholder's notice must be in writing and set forth the name, age, date of birth, business address, residence address and nationality of the person(s) being nominated and the class or series, number of all shares of the registrant owned of record or beneficially be each such person(s), any other information regarding such person required by Item 401 of Regulation S-K or Item 22 of Rule 14a-101 (Schedule 14A) under the Securities Exchange Act of 1934, as amended, any other information regarding the person(s) to be nominated that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitation of proxies for election of trustees, and whether such shareholder believes any nominee is or will be an "interested person" (as that term is defined in the Investment Company Act of 1940, as amended) of the registrant or sufficient information to enable the registrant to make that determination and the written and signed consent of the person(s) to be nominated. ITEM 11. CONTROLS AND PROCEDURES. (a) The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (the "Exchange Act") (17 CFR 240.13a-15(b) or 240.15d-15(b)). (b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated. (a)(1) Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit: Not applicable because the code is posted on registrant's website at www.nuveen.com/etf and there were no amendments during the period covered by this report. (To view the code, click on the Investor Resources drop down menu box, click on Fund Governance and then Code of Conduct.) (a)(2) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the 1940 Act (17 CFR 270.30a-2(a)) in the exact form set forth below: Ex-99.CERT Attached hereto. (a)(3) Any written solicitation to purchase securities under Rule 23c-1 under the 1940 Act (17 CFR 270.23c-1) sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable. (b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act, provide the certifications required by Rule 30a-2(b) under the 1940 Act (17 CFR 270.30a-2(b)); Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR 240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished pursuant to this paragraph will not be deemed "filed" for purposes of Section 18 of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference. Ex-99.906 CERT attached hereto. 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) Nuveen Virginia Dividend Advantage Municipal Fund 2 ----------------------------------------------------------- By (Signature and Title)* /s/ Jessica R. Droeger ---------------------------------------------- Jessica R. Droeger Vice President and Secretary Date: August 8, 2006 ------------------------------------------------------------------- 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/ Gifford R. Zimmerman ---------------------------------------------- Gifford R. Zimmerman Chief Administrative Officer (principal executive officer) Date: August 8, 2006 ------------------------------------------------------------------- By (Signature and Title)* /s/ Stephen D. Foy ---------------------------------------------- Stephen D. Foy Vice President and Controller (principal financial officer) Date: August 8, 2006 ------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature.